/raid1/www/Hosts/bankrupt/TCR_Public/250117.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, January 17, 2025, Vol. 29, No. 16
Headlines
3251 DEL ROSA: Voluntary Chapter 11 Case Summary
5630 CHESTNUT: Case Summary & Three Unsecured Creditors
AMERICAN TIRE: Selects DIP Lenders' Bid in Asset Sale
AMWINS GROUP: S&P Rates Proposed First-Lien Term Loan B 'B+'
APPLES TREE: Commences Subchapter V Bankruptcy Process
ARAMARK SERVICES: $555MM Loan Add-on No Impact on Moody's 'Ba2' CFR
ARCUTIS BIOTHERAPEUTICS: Posts Prelim 4Q, Full-Year 2024 Results
ASPIRA WOMEN'S: Registers 16MM Common Shares at $0.75 Per Share
ASSOCIATION MOTOR: Unsecureds Owed $5M to Get 4% over 5 Years
AVALON GLOBOCARE: Inks Securities Exchange Deal w/ Board Chairman
B. RILEY: Inks $80MM Telecom Credit Agreement
BIOLASE INC: Unsecureds Will Get 5% of Claims in Liquidating Plan
BIT MINING: Shareholders OK Increased Authorized Share Capital
BLUM HOLDINGS: Plans to Acquire Mt. Tam Ventures II for $3.9-Mil.
BOSTON BOATWORKS: Seeks Chapter 11 Bankruptcy Protection
BRIGHT HORIZONS: Moody's Ups CFR to Ba3 & Alters Outlook to Stable
BRUNDAGE-BONE CONCRETE: Moody's Rates New Second Lien Notes 'B2'
BUCKEYE PARTNERS: Fitch Assigns 'BB' Rating on Sr. Unsecured Notes
CAPROCK MILLING: Court OKs Agricultural Equipment Sale at Auction
CAPSTONE COMPANIES: Jeffrey Postal Holds 18.5% Equity Stake
CAREPOINT HEALTH: Disclosures, Plan Draw Multiple Objections
CCC INTELLIGENT: Moody's Alters Outlook on 'B1' CFR to Positive
CHAMPION WELDING: Carol Fox Named Subchapter V Trustee
CHARLOTTE BUYER: Moody's Cuts Rating on First Lien Loans to B3
CLARIOS GLOBAL: Fitch Rates New First Lien Sr. Secured Notes 'B+'
CLARIOS GLOBAL: Moody's Rates New $1.2BB Senior Secured Notes 'B1'
CLEM INVESTMENTS: Seeks to Use Cash Collateral
CNBX PHARMACEUTICALS: Posts $34K Net Loss for 3Mos Ended Nov 2024
COMTECH TELECOMMUNICATIONS: J. Ratigan Steps Down as CEO, Director
COMTECH TELECOMMUNICATIONS: K. Traub Named President, CEO
COMTECH TELECOMMUNICATIONS: Posts $148MM Net Loss for Oct 2024 Q
COOPER-STANDARD: Thrivent Financial for Lutherans Holds 9.3% Stake
COVERED BRIDGE: U.S. Trustee Appoints Creditors' Committee
CREATIVE ARTISTS: $300MM Loan Add-on No Impact on Moody's 'B2' CFR
CRICKET AUTOMOTIVE: Gets Interim OK to Use Cash Collateral
CROUSE HEALTH: Fitch Alters Outlook on 'BB' IDR to Negative
CRUCIBLE INDUSTRIES: Russell R. Johnson Represents Utilities
DALRADA FINANCIAL: Posts $23.2MM Net Loss for FY Ended June 2024
DELTA APPAREL: Forager Fund, Affiliates Cease Ownership of Shares
DIGITAL MEDIA: Gets Court Okay for Chapter 11 Wind-Down Plan
DURECT CORP: R. Scott Ansen Holds 9.92% Equity Stake
EASTERN COLORADO SEEDS: Case Summary & 20 Top Unsecured Creditors
EDUCATIONAL DEVELOPMENT: Posts $835K Net Loss for Nov. 2024 Quarter
EMX ROYALTY: Sells Four U.S Projects to Pacific Ridge Exploration
ERO COPPER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
FIREFLY NEUROSCIENCE: Christopher Finn and Affiliates Report Stakes
FOOT LOCKER: Moody's Lowers CFR to 'Ba3' & Alters Outlook to Stable
FORESTAR GROUP: S&P Upgrades ICR to 'BB-' on Revenue Growth
GREAT OUTDOORS: Moody's Rates New $4.5BB Amended Term Loan 'B3'
H&E EQUIPMENT: Moody's Puts 'Ba3' CFR Under Review for Upgrade
H&E EQUIPMENT: S&P Places 'BB-' ICR on CreditWatch Positive
HARE TAYLOR: Gets Court OK to Use Cash Collateral Until Feb. 28
HARRIS FAMILY: Paula Beran Named Subchapter V Trustee
HASTY GROUP: U.S. Trustee Unable to Appoint Committee
HYPERSCALE DATA: Sells Series G Preferred Stock, Warrants for $365K
HYPHA LABS: Posts $785K Net Loss for Year Ended Sept. 2024
IAMGOLD CORP: Moody's Upgrades CFR to B2, Outlook Remains Stable
IDEAL PROPERTY: Court Extends Use of Cash Collateral Until Jan. 31
IMAGE DIRECT: Case Summary & 20 Largest Unsecured Creditors
INFINITE PRODUCT: Court OKs Bid to Prohibit Cash Collateral Access
INTERNATIONAL HOLDINGS: Case Summary & Two Unsecured Creditors
INTRUM AB: Says Opposing Bondholders Are In Contempt of Court
JEWELRY DESIGNER: Nathaniel Wasserstein Named Subchapter V Trustee
JOANN INC: Columbus Store to Remain Open Amid 2nd Chapter 11 Filing
JOANN INC: Jan. 23 Deadline Set for Panel Questionnaires
JUBILEE ACADEMIC: Moody's Affirms 'Ba2' Revenue Bond Rating
K&N PARENT: Moody's Withdraws 'Caa3' Corporate Family Rating
KMC MINING: Offers Assets for Sale Under CCAA Process
KNIGHT HEALTH: Moody's Affirms 'Caa2' CFR, Outlook Stable
LE CONTE: Seeks Chapter 11 Bankruptcy Protection in California
LEXARIA BIOSCIENCE: Posts $2.7MM Net Loss for 3 Mos Ended Nov. 2024
LIFEPOINT HEALTH: Moody's Rates New $700MM Sr. Secured Notes 'B2'
LIGADO NETWORKS: Kirkland & Cole Schotz Advise Cross-Holder Group
LITTLE MINT: Parker Poe Represents Performance Food & Track West
LOVE PROPERTIES: Unsecureds Will Get 4% Dividend over 5 Years
MADDIEBRIT PRODUCTS: To Sell Business to Grove for $2.2-Mil.
MANNING LAND: Claims to be Paid From Property Sale Proceeds
MBMG HOLDING: Unsecureds Will Get 12% of Claims in Liquidating Plan
MEADOWBROOK SERVICES: Unsecureds Will Get 52% over 3 Years
METAL CHECK: Unsecureds Will Get 100% of Claims in Plan
MIDCAP FINANCIAL: S&P Rates $300MM Senior Unsecured Term Loan 'B+'
MIDWEST MOBILE: Gets Interim OK to Use Cash Collateral
MONTOUX LTD: Seeks Chapter 15 Bankruptcy After Trade Secret Suit
MOTORS ACCEPTANCE: Gets Final OK to Use Collateral Until Jan. 31
MP REORGANIZATION: Updates Competing & Other Secured Claims Pay
NORTH CAROLINA PROPERTIES: Case Summary & Two Unsecured Creditors
NORTH CAROLINA: Begins Subchapter V Bankruptcy Proceeding
NORTHVOLT AB: Sweden Seizes Co.'s Funds Despite U.S. Bankruptcy
NOVA LIFESTYLE: Sells 250K Shares to Huge Energy for $150K
NYREES LIMITED: Seeks Chapter 11 Bankruptcy Protection
OUTFRONT MEDIA: Implements 1-for-1.024549 Reverse Stock Split
PANZER BUILDING: To Sell Mixed-Used Property in Public Auction
PARLEMENT TECHNOLOGIES: Unsecureds to Recover Up to 25% of Claims
PARTY CITY: Fox Rothschild & Moore File Rule 2019 Statement
PORTSMOUTH SQUARE: Affiliate Defaults in $106MM Loan Agreements
PRESBYTERIAN HOMES: Court Extends Use of Cash Collateral to Jan. 31
PROOFPOINT INC: Term Loan Upsizing No Impact on Moody's 'B2' CFR
PROSPECT MEDICAL: Court Approves "First Day" Motions
PROSPECT MEDICAL: Faces Landlord Dispute, Financial Strain in Ch.11
PSSI HOLDINGS: Moody's Appends LD to Prob. of Default Rating
REBORN COFFEE: Inks $121K Promissory Note w/ 1800 Diagonal Lending
RED RIVER: UST Challenges Bid to Hire Brown Rudnick, Paul Hastings
REITER BROTHERS: Tarek Kiem of Kiem Law Named Subchapter V Trustee
REMARK HOLDINGS: Posts $9.6MM Net Loss for Quarter Ended Sept. 2024
RIVER DREAMERS: Case Summary & Five Unsecured Creditors
RIVER DREAMERS: Sec. 341(a) Meeting of Creditors on February 20
ROOME ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
RUTGERS CASUALTY: A.M. Best Cuts Fin. Strength Rating to B-(Fair)
SCOTLAND MEADOWS: Case Summary & Six Unsecured Creditors
SCOTLAND MEADOWS: Files Bankruptcy Protection in Massachusetts
SIGNIA LTD: Unsecureds to Get Share of Net Profits for 5 Years
SINCLAIR INC: S&P Downgrades ICR to 'B-', Outlook Stable
SINCLAIR TELEVISION: Moody's Cuts CFR & Senior Secured Notes to B3
SIYATA MOBILE: Postpones Press Conference for Market Opportunities
SMYRNA READY: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
SOLUNA HOLDINGS: Issues Business Update for December 2024
SOUTHERN PINESTRAW: Daniel Etlinger Named Subchapter V Trustee
SPIRIT AIRLINES: To Lay Off 200 Employees to Cut Costs
STAFFING 360: Inks 1st Amendment to A36 Plan of Merger
STAFFING 360: Loan Commitment Expiry Date Extended to Jan. 2025
SUNATION ENERGY: Adds Bitcoin to Treasury Management Program
TBOTG DEVELOPMENT: Files Amended Plan; Confirmation Hearing March 6
TD&H INC: To Sell Vehicles to SDS Logistics for $115-Mil.
TONIX PHARMACEUTICALS: Appoints Gary Ainsworth as VP, Market Access
TRI-CITY SERVICE: Gets Final OK to Use Cash Collateral
TROY 3440: Claims Will be Paid from Property Sale/Refinance
UNITED RENTALS: H&E Equipment Deal No Impact on Moody's 'Ba1' CFR
VH NUTRITION: Court Extends Use of Cash Collateral Until Feb. 12
VH NUTRITION: Has Deal on Cash Collateral Access
VIA MIZNER OWNER I: Case Summary & 20 Largest Unsecured Creditors
VIA MIZNER PLEDGOR: Case Summary & 20 Largest Unsecured Creditors
VIGILANT HEALTH: Gets OK to Use Cash Collateral Until Feb. 12
VISION CAPITAL: Property Sale Proceeds to Fund Plan Payments
VOBEV LLC: Clyde Snow Represents Stolle Europe & Alsco
W&T OFFSHORE: Fitch Rates Proposed $350MM Second Lien Note 'B-'
W&T OFFSHORE: Moody's Rates New 2nd Lien Notes Due 2029 'B3'
WASTE PRO: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
WASTE PRO: Moody's Upgrades CFR to 'B2' & Alters Outlook to Stable
WESTFALL ENTERTAINMENT: Seeks Chapter 11 Bankruptcy Protection
WESTPHALIA DEV: Restructures Under CCAA Protection
WINSTON AND DUKE: Unsecureds Will Get 12.34% of Claims in Plan
WYNNE TRANSPORTATION: Jan. 21 Deadline Set for Panel Questionnaires
X4 PHARMACEUTICALS: Inks License & Supply Deal with Norgine Pharma
XTI AEROSPACE: Implements 1-for-250 Reverse Stock Split
YELLOW CORP: Teamsters Dispute Liquidation Defense for Layoffs
[*] Atty. Jeffery Phillips Joins DeWitt's Madison Office as Partner
*********
3251 DEL ROSA: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: 3251 Del Rosa LLC
3251 Del Rosa Ave
San Bernardino CA 92404
Business Description: 3251 Del Rosa is a single asset real estate
debtor, as defined in 11 U.S.C. Section
101(51B). It is the fee simple owner of a
raw land, with an estimated value of $2
million, based on a broker's opinion of
value.
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
Central District of California
Case No.: 25-10200
Debtor's Counsel: James Mortensen, Esq.
SOCAL LAW GROUP, PC
2855 Michelle Drive 120
Irvine CA 92606
Tel: 213-387-7414
E-mail: pimmsno1@aol.com
Total Assets: $2,000,000
Total Liabilities: $709,000
The petition was signed by Yolanda V. Gonzalez as manager.
The Debtor filed a list of its 20 largest unsecured creditors, but
the list was empty.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/YQNSSEA/3251_Del_Rosa_LLC__cacbke-25-10200__0001.0.pdf?mcid=tGE4TAMA
5630 CHESTNUT: Case Summary & Three Unsecured Creditors
-------------------------------------------------------
Debtor: 5630 Chestnut OZB LLC
5630 Chestnut Street
Philadelphia, PA 19139
Business Description: The Company owns the property located at
5630 Chestnut Street, Philadelphia, PA
19139, with a comparable sale value of $2
million.
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
Eastern District of Pennsylvania
Case No.: 25-10175
Judge: Hon. Patricia M Mayer
Debtor's Counsel: John Everett Cook, Esq.
THE LAW OFFICES OF EVERETT COOK PC
1605 N Cedar Crest Blvd
Allentown, PA 18104
Tel: (610) 351-3566
E-mail: bankruptcy@everettcooklaw.com
Total Assets: $2,000,000
Total Liabilities: $53,486
A full-text copy of the petition, which includes a list of the
Debtor's three unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/KF7CSJA/5630_Chestnut_OZB_LLC__paebke-25-10175__0001.0.pdf?mcid=tGE4TAMA
AMERICAN TIRE: Selects DIP Lenders' Bid in Asset Sale
-----------------------------------------------------
Dorothy Ma of Bloomberg Law reports that bankrupt American Tire
Distributors has selected Asphalt Buyer LLC, a group formed by
certain DIP lenders, as the winning bidder for its key asset sale,
according to a court filing on January 12.
The sales hearing, initially scheduled for January 15, has been
postponed to February 2025, according to the report. The company
stated that no other qualified bids were submitted. The winning
offer, which also served as the stalking-horse bid, includes $585
million in pre-petition term loan claims and new money DIP claims
to acquire nearly all of ATD's assets, court documents revealed.
About American Tire Distributors
Headquartered in Huntersville, N.C., American Tire Distributors
Inc. and its affiliates are the largest distributor of replacement
tires in North America based on dollar amount of wholesale sales.
With their network of over 115 distribution centers and 1,500
delivery vehicles, the Debtors service a geographic region covering
more than 90 percent of the replacement tire market for passenger
vehicles and light trucks in the United States. The Debtors carry
many of the nation's leading tire brands including Michelin,
Pirelli, and Continental. In addition, the Debtors' proprietary
Hercules brand is a leading private tire brand in North America.
American Tire Distributors and its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 24-12391) on October 22, 2024. In its petition, American Tire
Distributors reported $1 billion to $10 billion in both assets and
liabilities.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Kirkland & Ellis as bankruptcy counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware counsel; AP
Services, LLC as restructuring advisor; and Moelis & Company, LLC
as financial advisor. Donlin, Recano & Company, Inc. is the notice
and claims agent and administrative advisor.
AMWINS GROUP: S&P Rates Proposed First-Lien Term Loan B 'B+'
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue rating to Amwins Group
Inc.'s proposed first-lien term loan B (TLB) of $4,135 million due
2032. The recovery rating is '3', indicating its expectation for
meaningful (50%-70%; rounded estimate: 50%) recovery of principal
in the event of default.
Subsequent to this launch, Amwins is also seeking to issue an
additional $500 million of debt, which we have factored into our
analysis. In addition it will secure a new undrawn senior secured
revolving credit facility (RCF) of up to $600 million due 2030,
replacing its current $300 million RCF due 2026.
S&P said, "We expect Amwins to use the proceeds of the debt to
refinance the existing $3,336 million TLB, pay a dividend to the
owners, and add cash to the balance sheet for general corporate
purposes. While the company upsized the RCF to $600 million from
$300 million, we assume it will use the facility sparingly, as
shown by its use of the previous facility and the underlying
business' strong cash flow.
"Our 'B+' long-term issuer credit rating on Amwins is unaffected by
the transaction. Leverage in the 12 months ended Sept. 30, 2024,
was approximately 5.9x pro forma the new debt, up from 4.7x, and
remains within rating tolerance. Our leverage calculation includes
existing debt, operating leases, contingent earnouts, and
annualized earnings contributions from closed acquisitions."
Amwins' performance remained favorable in 2024. On a
rolling-12-month basis, revenue grew approximately 15%, reflecting
the benefits of market conditions and management execution. Its S&P
Global Ratings-adjusted EBITDA margin of 38% for the 12 months
ended Sept. 30, 2024, was also a notable improvement from 36.5% as
of year-end 2023. S&P expects this favorable performance will
continue in 2025, enabling modest deleveraging throughout the
year.
APPLES TREE: Commences Subchapter V Bankruptcy Process
------------------------------------------------------
On January 14, 2025, Apples Tree Top Liquors LLC filed Chapter 11
protection in the U.S. Bankruptcy Court for the Southern District
of Indiana.
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 Apples Tree Top Liquors LLC
Apples Tree Top Liquors LLC is a retail liquor store business.
Apples Tree Top Liquors LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Ind. Case No. 25-90025) on
January 14, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Andrea K. Mccord handles the case.
The Debtor is represented by Michael W. McClain, Esq., at McClain
Law Group, PLLC, in Louisville, Kentucky.
ARAMARK SERVICES: $555MM Loan Add-on No Impact on Moody's 'Ba2' CFR
-------------------------------------------------------------------
Moody's Ratings said Aramark Services, Inc.'s Ba2 corporate family
rating and Ba2-PD probability of default rating are not affected by
the company's proposed $555 million add-on to its senior secured
term loan B-8 due June 2030. All other ratings at the company and
its subsidiaries, including the Ba1 rating on its senior secured
debt, B1 rating on its senior unsecured debt, and stable outlooks
remain unchanged.
Net proceeds from the add-on will be used to refinance the existing
5% senior unsecured notes due 2025 and pay transaction related fees
and expenses. The total amount of debt outstanding will remain
unchanged and will be leverage neutral with pro forma financial
leverage remaining at 4.1x as of September 27, 2024. Moody's note
the transaction changes the mix of secured and unsecured debt and
that further shifts in the proportion of secured to total debt
could lead to a downgrade of the senior secured debt ratings.
RATINGS RATIONALE
The Ba2 CFR reflects Moody's expectations for revenue,
profitability and free cash flow to improve in 2025. The rating
also incorporates Moody's expectation that management will maintain
balanced financial policies in regard to its leverage target,
particularly as it addresses its remaining April 2025 debt
maturity. Moody's consider Aramark's business generally stable and
predictable, with long term contracts and fixed asset investments
providing high revenue visibility and meaningful competitive
barriers. Aramark faces a competitive environment against other
large food and facilities services providers, but Moody's
anticipate the company will maintain market share and remain well
positioned to win new customers. The company is a leading provider
of food and support services in the United States with operations
in 15 other countries and provides services on a more limited basis
in several additional countries and in offshore locations.
Aramark's operations feature thousands of highly recurring customer
contracts, providing strong support for the ratings.
Aramark (NYSE:ARMK), based in Philadelphia, PA, is a global
provider of food and facilities services to education, healthcare,
business & industry, and sports, leisure & corrections clients.
Moody's expect fiscal 2025 (ends September) revenue of around $18.4
billion.
ARCUTIS BIOTHERAPEUTICS: Posts Prelim 4Q, Full-Year 2024 Results
----------------------------------------------------------------
Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT), a commercial-stage
biopharmaceutical company focused on developing meaningful
innovations in immuno-dermatology, on January 12, 2025, announced
certain preliminary unaudited financial information for the fourth
quarter and full-year 2024.
* Preliminary unaudited product revenue for the fourth quarter of
2024 is expected to be approximately $63 million, representing
growth of approximately 366% as compared to the fourth quarter of
2023 and approximately 41% as compared to the third quarter of
2024. Preliminary unaudited product revenue for the full-year 2024
is expected to be approximately $160 million, representing growth
of approximately 449% vs. 2023
* Revenue growth in the fourth quarter across the franchise was
driven by strong demand for all ZORYVE® (roflumilast) indications,
while GTN was similar to the prior quarter
* Preliminary cash, cash equivalents, restricted cash, and
marketable securities as of December 31, 2024 are expected to be
approximately $229 million
* The Company repaid $100 million of its long-term debt held by SLR
Investment Corp. and has the option to re-draw approximately $100
million by the first half of 2026 making total liquidity as of
December 31, 2024 from cash, cash equivalents, restricted cash,
marketable securities, and available debt equal to approximately
$329 million
"We are excited by the significant sales momentum and robust
revenue growth we continue to generate in our business, driven by
expanding demand for our entire ZORYVE franchise," said Frank
Watanabe, president and chief executive officer of Arcutis. "We
anticipate sustained ZORYVE sales growth throughout 2025 as our
multiple product launches gain further traction and we secure new
approvals, expand insurance coverage, and broaden access to primary
care and pediatric practices through our commercial partnership
with Kowa."
Management will host in-person investor meetings in San Francisco,
CA, around the 43rd Annual J.P. Morgan Healthcare Conference, being
held January 13-16, 2025.
Arcutis has not completed preparation of its financial statements
for the fourth quarter or full-year 2024. The financial information
as of and for the fourth quarter and full-year 2024 presented in
this release are preliminary and unaudited and are subject to the
close of the quarter and year, completion of our quarter-end and
year-end closing procedures, and further financial review. Our
independent registered public accounting firm has not audited,
reviewed, compiled or performed any procedures with respect to this
financial information. Our actual results may differ from these
estimates as a result of the completion of our quarter-end and
year-end closing procedures, review adjustments and other
developments that may arise between now and the time our financial
results for the fourth quarter and full year are finalized.
Arcutis will report complete fourth quarter and full-year 2024
financial results and provide a business update on Tuesday,
February 25, 2025 after the U.S. financial markets close. The
Company will also host a conference call and webcast the same day
at 4:30 p.m. EST. A live webcast of the call and the presentation
materials will be available on the "Events" section of the
Company's website. An archived replay of the webcast will be
available on the Arcutis investor website following the conference
call.
Contacts:
Media
Amanda Sheldon, Head of Corporate Communications
media@arcutis.com
Investors
Latha Vairavan, Vice President, Finance and Corporate Controller
lvairavan@arcutis.com
About Arcutis
Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT) -- www.arcutis.com --
is a commercial-stage medical dermatology company. It owns a
growing portfolio of products for a range of inflammatory
dermatological conditions including scalp and body psoriasis,
atopic dermatitis, and alopecia areata.
Los Angeles, California-based Ernst & Young LLP, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Feb. 27, 2024, citing that the Company has not yet
met
a requirement under its loan agreement to raise capital by April
1,
2024, has recurring losses from operations, and has stated that
substantial doubt exists about the Company's ability to continue
as
a going concern.
Arcutis Biotherapeutics' net loss for the year ended December 31,
2023, was approximately $262.1 million. As of June 30, 2024,
Arcutis Biotherapeutics had $444.8 million in total assets, $258.3
million in total liabilities, and $186.4 million in total
stockholders' equity.
ASPIRA WOMEN'S: Registers 16MM Common Shares at $0.75 Per Share
---------------------------------------------------------------
Aspira Women's Health Inc. filed a preliminary prospectus on Form
S-1 with the U.S. Securities and Exchange Commission to offer up to
16,000,000 shares of its common stock at an assumed public offering
price of $0.75 per share, the last reported sale price of the
common stock as reported on The Nasdaq Capital Market on January 7,
2025.
The actual public offering price per share of common stock will be
determined between the Company and the underwriters at the time of
pricing and may be at a discount to this assumed offering price.
Therefore, the assumed public offering price used throughout the
prospectus may not be indicative of the final offering price.
Aspira is also offering up to 16,000,000 pre-funded warrants to
purchase up to 16,000,000 shares of its common stock, exercisable
at an exercise price of $0.001 per share, to those purchasers whose
purchase of common stock in this offering would otherwise result in
the purchaser, together with its affiliates and certain related
parties, beneficially owning more than 4.99% (or, at the election
of the purchaser, 9.99%) of the outstanding shares of common stock
immediately following the consummation of the offering. The
purchase price of each Pre-funded Warrant is equal to the price per
share of common stock being sold to the public in this offering,
minus $0.001. The Pre-funded Warrants will be immediately
exercisable and may be exercised at any time until all of the
Pre-funded Warrants are exercised in full. For each Pre-funded
Warrant the Company sells, the number of shares of common stock
that it is offering will be decreased on a one-for-one basis
Underwriters' over-allotment option:
Aspira have granted the underwriters a 45 day option from January
8, 2025, exercisable one or more times in whole or in part, to
purchase up to an additional 2,400,000 shares of common stock
and/or up to an additional 2,400,000 Pre-funded Warrants (15% of
the total number of shares of common stock and/or Pre-funded
Warrants to be offered by us in the offering), solely to cover
over-allotments, if any.
Number of shares of common stock to be outstanding after this
offering:
-- 33,529,793 shares, (or 35,929,793 shares if the underwriters
exercise the option to purchase additional shares in full, assuming
no sale of the Pre-funded Warrants)
Use of proceeds:
Aspira said, "We expect to receive net proceeds, after deducting
underwriting discounts and estimated expenses payable by us, of
approximately $10.6 million (or approximately $12.3 million if the
underwriters exercise their option to purchase additional shares
and/or Pre-funded Warrants in full), assuming a public offering
price of $0.75 per share, the last reported sale price of our
common stock on The Nasdaq Capital Market on January 7, 2025, after
deducting underwriting discounts and commissions and other
estimated offering expenses payable by us, and assuming no sale of
any Pre-funded Warrants. We intend to use the net proceeds from
this offering for working capital and general corporate purposes.
We may also use a portion of the net proceeds to in-license,
acquire or invest in complementary businesses, technologies or
products, however, we have no current commitments or obligations to
do so."
Aspira's common stock is listed on The Nasdaq Capital Market under
the symbol "AWH". On January 7, 2025, the closing price of the
Company's common stock on The Nasdaq Capital Market was $0.75.
There is no established trading market for the Pre-funded Warrants
and it does not intend to list the Pre-funded Warrants on any
securities exchange or nationally recognized trading system.
About Aspira Women's Health
Formerly known as Vermillion, Inc., Aspira Women's Health Inc. --
http://www.aspirawh.com-- is dedicated to the discovery,
development, and commercialization of noninvasive, AI-powered tests
to aid in the diagnosis of gynecologic diseases. OvaWatch and
Ova1Plus are offered to clinicians as OvaSuiteSM. Together, they
provide a comprehensive portfolio of blood tests to aid in the
detection of ovarian cancer for the 1.2+ million American women
diagnosed with an adnexal mass each year. OvaWatch provides a
negative predictive value of 99% and is used to assess ovarian
cancer risk for women where initial clinical assessment indicates
the mass is indeterminate or benign, and thus surgery may be
premature or unnecessary. Ova1Plus is a reflex process of two
FDA-cleared tests, Ova1 and Overa, to assess the risk of ovarian
malignancy in women planned for surgery.
Boston, Massachusetts-based BDO USA, P.C., the Company's auditor
since 2012, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has suffered
recurring losses from operations and expects to continue to incur
substantial losses in the future, which raises substantial doubt
about its ability to continue as a going concern.
Aspira Women's Health reported a net loss of $16.69 million for the
year ended Dec. 31, 2023, compared to a net loss of $29.88 million
for the year ended Dec. 31, 2022. As of June 30, 2024, Aspira
Women's Health had $3.96 million in total assets, $7.67 million in
total liabilities, and $3.7 million in total stockholders' deficit.
ASSOCIATION MOTOR: Unsecureds Owed $5M to Get 4% over 5 Years
-------------------------------------------------------------
Association Motor Club, LLC, d/b/a Auto Spa Bistro, filed with the
U.S. Bankruptcy Court for the Northern District of Georgia a
Disclosure Statement for Plan of Reorganization dated January 13,
2025.
The Debtor owns and operates a hand car wash and a small
restaurant, or bistro,1 at 348 W. 14th Street NW in Midtown
Atlanta. At all times prior to the commencement of this Case,
Lemont Bradley has served as Manager of this Georgia limited
liability company, and he is the owner of 100% of its membership
units.
In 2011, the Company began by leasing its real property under a
lease-purchase agreement. In 2018, the company purchased the
property, 348 W. 14th St. NW, Atlanta, Fulton County, Georgia 30318
(the "348 Property") for $2,831,138.00 with a loan from First
Savings Bank ("FSB").
On November 29, 2018, the Company purchased the land and building
next to it, 328 W. 14th St. NW, Atlanta, Fulton County, Georgia,
30318 (the "328 Property") which was a chiropractor's office
located in a two-story house, for $577,017, also with a loan from
First Savings Bank.
The Plan contemplates the reorganization, consolidation, and
ongoing business operations of Debtor and the resolution of the
outstanding Claims against and Interests in the Debtor pursuant to
sections 1129 and 1123 of the Bankruptcy Code. The Plan classifies
all Claims against and Interests in Debtor into separate Classes.
Class 6 shall consist of unsecured claims less than or equal to
$3,000.00. Holders of Allowed Class 6 Claims (or Holders which
voluntarily reduce their Allowed claim to no more than $3,000.00)
shall be paid, at the option of each Holder of a Class 6 Claim,
either (Option 1) 50% of their Allowed claim within 60 days of the
Effective Date, or (Option 2) 30% of their Allowed claim within 60
days of the Effective Date and an additional 60% of their Allowed
Claim on the first anniversary of the Effective Date, including
interest of 4.5% APR through and including the date of the second
and final payment. The allowed unsecured claims total $8,085.72.
Class 6 is Impaired.
Class 7 consists of General Unsecured Claims. Class 7 shall receive
pro rata share of annual payments totaling $200,000 over 5 years.
The allowed unsecured claims total $5,245,476.45. This Class will
receive a distribution of 4% of their allowed claims. Holders of
Allowed Class 7 Claims are Impaired and entitled to vote to accept
or reject the Plan.
The Plan proposes to treat all general unsecured creditors equally.
Beginning on December 31, 2025, and continuing on that date each
year for five years, Debtor shall pay all Unsecured Creditors,
including the Holders of Allowed Class 7 Claims, equal annual
pro-rata payments based on a total amount as follows:
12/31/2025 $30,000
12/31/2026 $35,000
12/31/2027 $40,000
12/31/2028 $45,000
12/31/2029 $50,000
Class 8 shall consist of all Interests in the Debtor. Upon entry of
the Confirmation Order, the prepetition membership interests in the
Debtor will remain the same, and the Debtor shall retain all of
Debtor's assets free and clear of any claims, liens, or
encumbrances except as specifically set forth in the Plan.
In the event Impaired Classes do not vote to accept the Plan, the
Debtor proposes that its sole member, Lemont Bradley the owner and
operator of the Debtor, shall provide "new value" in the form of a
$12,000 cash infusion paid as $1,000 per month for 12 months,
commencing on the last day of the month of the Effective Date and
continuing by the 28th day of each subsequent month (or the next
Business Day if the 28th day is not a Business Day). Such new value
payments will be used to satisfy (i) the plan obligations of the
Debtor (ii) any administrative claims, and (iii) to support the
general operations of the Debtor.
The sources of funds for the payments pursuant to the Plan are the
ongoing operations of the Debtor, a contribution of "new value" by
the Debtor's owner, and potentially, the sale of the the 328
Property, the empty lot next door, at a sale price above its
current fair market value of $400,000.
Specifically regarding the 328 Property, after the Confirmation
Date, the Debtor is authorized to sell or refinance the 328
Property located at 328 14th Street NW, Fulton County, Georgia,
30318 for a price at or above the current $400,000 fair market
value the ("Minimum Sales Price") minus the payment of customary
closing costs including broker fees and other items customarily
attributed to the seller (in a sale) and borrower (in a
refinancing) (the "Closing Costs"), leaving the net proceeds from
the sale (the "Net Proceeds").
Upon the closing of a sale of the 328 Property over the Minimum
Sales Price, the Net Proceeds will be used, first, to cover any ad
valorem property taxes associated with the particular property,
after which the remaining Net Proceeds after the Closing Costs will
be given to FSB up to the amount of the remaining Allowed Class 5
Claim after accounting for any other payments already made (the
"FSB Sale Proceeds"). After the FSB Sale Proceeds are paid to FSB,
the Debtor's regular plan payments to FSB will be suspended until
the total suspended payments equal 50% or more of the FSB Sale
Proceeds, whereupon the regular plan payments will resume.
A full-text copy of the Disclosure Statement dated January 13, 2025
is available at https://urlcurt.com/u?l=7crEfQ from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Brad Fallon
Fallon Law PC
1201 W. Peachtree St. NW, Suite 2625
Atlanta, Georgia 30309
Tel: (404) 849-2199
Fax: (470) 994-0579
E-mail: brad@fallonbusinesslaw.com
About Association Motor Club
Association Motor Club, LLC, doing business as Auto Spa Bistro, is
an Atlanta-based company engaged in cleaning, washing and waxing
automotive vehicles.
Association Motor Club sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-57098) on July 9,
2024, with assets of $100,000 to $500,000 and liabilities of $1
million to $10 million. Lemont Bradley, company owner, signed the
petition.
Judge Lisa Ritchey Craig oversees the case.
The Debtor is represented by William Rountree, Esq., at Rountree,
Leitman, Klein & Geer, LLC.
AVALON GLOBOCARE: Inks Securities Exchange Deal w/ Board Chairman
-----------------------------------------------------------------
On January 9, 2025, Avalon GloboCare Corp. entered into an exchange
agreement with Wenzhao Lu, the Chairman of the Board of Directors
of the Company, pursuant to which Lu exchanged 9,000 shares of
Series A Preferred Stock of the Company for 5,000 shares of Series
D Preferred Stock of the Company pursuant to an exemption from
registration under Section 3(a)(9) of the Securities Act of 1933,
as amended. Upon consummation of the Exchange, there were no shares
of Series A Preferred Stock of the Company outstanding.
The securities have not been registered under the Securities Act of
1933, as amended, or the securities laws of any state, and were
offered and sold in reliance on the exemption from registration
under the Securities Act afforded by Section 4(a)(2) thereof.
On January 6, 2025, the Company filed a certificate of designations
of preferences, rights, and limitations of Series D Convertible
Preferred Stock (the "Series D Certificate of Designations") with
the Department of State, Division of Corporations, of the State of
Delaware, which provides for the designation of 5,000 shares of
Series D Preferred Stock of the Company, par value $0.0001 per
share, upon the terms and conditions as set forth in the Series D
Certificate of Designations. Each share of Series D Preferred Stock
has a stated value of $1,000 (the "Stated Value").
The Series D Preferred Stock shall rank (i) senior to the Company's
common stock (the "Common Stock") and any other class or series of
capital stock of the Company created hereafter, the terms of which
specifically provide that such class or series shall rank junior to
the Series D Preferred Stock, (ii) pari passu with any class or
series of capital stock of the Company created hereafter
specifically ranking, by its terms, on par with the Series D
Preferred Stock, (iii) pari passu with the Series B Convertible
Preferred Stock of the Company (the "Series B Preferred Stock")
with respect to its rights, preferences and restrictions, and (iv)
pari passu with the Series C Convertible Preferred Stock of the
Company (the "Series C Preferred Stock").
Holders of the Series D Preferred Stock have no voting power except
as otherwise required by the Delaware General Corporation Law.
Upon any liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary (a "Liquidation"), the holders of
the Series D Preferred Stock shall be entitled to receive out of
the assets available for distribution to stockholders, (i) after
and subject to the payment in full of all amounts required to be
distributed to the holders of another class or series of stock of
the Company ranking on liquidation prior and in preference to the
Series D Preferred Stock, including the Series A Preferred Stock,
(ii) ratably with any class or series of stock ranking on
liquidation on parity with the Series D Preferred Stock and (iii)
in preference and priority to the holders of the shares of Common
Stock, an amount equal to 100% of the Stated Value of the Series D
Preferred Stock, in proportion to the full and preferential amount
that all shares of the Series D Preferred Stock are entitled to
receive.
Each share of Series D Preferred Stock shall be convertible into
Common Stock (the "Conversion Shares") at a conversion per share
equal to $2.41, at the option of the holder, at any time after the
Company has obtained shareholder approval for the issuance of the
Conversion Shares pursuant to the rules of the Nasdaq Stock Market.
In addition, the holder shall not have the right to convert any
portion of the Series D Preferred Stock if, after giving effect to
the conversion, such holder (together with its affiliates) would
beneficially own in excess of 4.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the
issuance of the respective Conversion Shares.
The foregoing description of the terms of the Series D Certificate
of Designations, and the transactions contemplated thereby, does
not purport to be complete and is qualified in its entirety by
reference to the Series D Certificate of Designations filed hereto
as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=CiD4Fh
Avalon Globocare
Headquartered in Freehold, New Jersey, Avalon Globocare --
http://www.avalon-globocare.com/-- is a commercial-stage company
dedicated to developing and delivering innovative, transformative
precision diagnostics and clinical laboratory services. Avalon
aims to establish a leading role in diagnostic testing innovation,
utilizing proprietary technology to deliver precise,
genetics-driven results. The Company also provides laboratory
services, offering a broad portfolio of diagnostic tests,
including
drug testing, toxicology, and various other services ranging from
general bloodwork to anatomic pathology and urine toxicology.
New York, NY-based Marcum LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April
15, 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.
B. RILEY: Inks $80MM Telecom Credit Agreement
---------------------------------------------
On January 6, 2025, certain indirect wholly owned subsidiaries of
B. Riley Financial, Inc., BRPI Acquisition Co LLC, United Online,
Inc., YMAX Corporation, and Lingo Management, LLC, entered into an
amended and restated credit agreement with the Banc of California,
in the capacity as agent and lender and with the other lenders
party thereto from time to time.
Certain of the Borrowers' U.S. subsidiaries are guarantors of all
obligations under the Telecom Credit Agreement and are parties to
the Telecom Credit Agreement in such capacity. In addition, the
Company and B. Riley Principal Investments, LLC, the parent
corporation of BRPAC and an indirect subsidiary of the Company, are
guarantors of the obligations under the Telecom Credit Agreement
pursuant to standalone guaranty agreements pursuant to which the
outstanding membership interests of BRPAC are pledged as
collateral. The Telecom Credit Agreement amends and restates (i)
that certain credit agreement, dated as of December 19, 2018, by
and among BRPAC, United Online, YMax, the secured guarantors party
thereto, the lenders party thereto, and Banc of California as
administrative agent, as amended from time to time and (ii) that
certain credit agreement, dated as of August 16, 2022, by and among
Lingo, the secured guarantors party thereto, the lenders party
thereto, and Banc of California as administrative agent, as amended
from time to time.
The obligations under the Telecom Credit Agreement are secured by
first-priority liens on, and first priority security interest in,
substantially all of the assets of the Credit Parties, including a
pledge of (a) 100% of the equity interests of the Credit Parties;
(b) 65% of the equity interests in United Online Software
Development (India) Private Limited, a private limited company
organized under the laws of India; and (c) 65% of the equity
interests in magicJack VocalTec Ltd., an Israel corporation. Such
security interests are evidenced by pledge, security, and other
related agreements.
Pursuant to the Telecom Credit Agreement, the lenders made a new
five-year $80,000,000 term loan to the Borrowers, the proceeds of
which were used to repay in full the obligations under the Original
Credit Agreements and for working capital and general corporate
purposes. The Borrowers also made certain distributions to the
parent company of the Borrowers from the proceeds. The Telecom
Credit Agreement also builds in provisions for incremental term
loans up to $40,000,000 and the Borrowers were permitted to make
certain distributions to the parent company of the Borrowers from
the proceeds of such incremental term loans.
The borrowings under the Telecom Credit Agreement bear interest
equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per
annum, depending on the Borrowers' consolidated total funded debt
ratio as defined in the Telecom Credit Agreement. The interest rate
is subject to a margin level of 3.25%. As of the Closing Date, the
outstanding principal amount was $80,000,000. Principal outstanding
under the Telecom Credit Agreement is due in quarterly installments
in the amount of $4,000,000 and the remaining principal balance is
due at final maturity on January 6, 2030.
The Borrowers paid a commitment fee and an arrangement fee, each
based on a percentage of the aggregate commitments and upon the
closing of the Telecom Credit Agreement.
The Telecom Credit Agreement contains certain covenants, including
those limiting the Credit Parties', and their subsidiaries',
ability to incur indebtedness, incur liens, sell or acquire assets
or businesses, change the nature of their businesses, engage in
transactions with related parties, make certain investments or pay
dividends. In addition, the Telecom Credit Agreement requires the
Credit Parties to maintain certain financial ratios. The Telecom
Credit Agreement also contains customary representations and
warranties, affirmative covenants, and events of default, including
payment defaults, breach of representations and warranties,
covenant defaults and cross defaults. If an event of default
occurs, the agent would be entitled to take various actions,
including the acceleration of outstanding amounts due under the
Telecom Credit Agreement.
On January 3, 2025, the Company and BR Financial Holdings, LLC, as
borrower, entered into Amendment No. 6 to their credit agreement
(the “Sixth Amendment”) with each of the lenders party thereto
and the administrative agent, pursuant to which the parties agreed
to permit under certain conditions the contribution by BRPI of 100%
of the equity interests in Lingo to BRPAC in connection with the
entry into the Telecom Credit Agreement. There was no fee charged
in connection with the Sixth Amendment.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=YZBc1G
About B. Riley Financial
B. Riley Financial -- http://www.brileyfin.com/-- is a
diversified
financial services company that delivers tailored solutions to
meet
the strategic, operational, and capital needs of its clients and
partners. B. Riley leverages cross-platform expertise to provide
clients with full service, collaborative solutions at every stage
of the business life cycle. Through its affiliated subsidiaries,
B. Riley provides end-to-end financial services across investment
banking, institutional brokerage, private wealth and investment
management, financial consulting, corporate restructuring,
operations management, risk and compliance, due diligence,
forensic
accounting, litigation support, appraisal and valuation, auction,
and liquidation services. B. Riley opportunistically invests to
benefit its shareholders, and certain affiliates originate and
underwrite senior secured loans for asset-rich companies.
BIOLASE INC: Unsecureds Will Get 5% of Claims in Liquidating Plan
-----------------------------------------------------------------
November 26, Inc. f/k/a Biolase, Inc., and its Debtor Affiliates
submitted an Amended Combined Joint Plan of Liquidation and
Disclosure Statement dated January 13, 2025.
The Plan provides for the disposition of the Debtors' Assets and
the distribution of the proceeds in accordance with the priorities
and requirements of the Bankruptcy Code. As of the expected
Confirmation Date, the Assets will largely consist of Cash and
Retained Causes of Action.
The Plan provides for creation of a Liquidation Trust and the
appointment of the Liquidation Trustee to serve as the sole
director, officer, shareholder, and manager of the Debtors. The
Liquidation Trustee will ultimately wind down the Debtors' business
affairs and be empowered to, among other things, administer and
liquidate all Assets, object to and settle Claims, and prosecute
Retained Causes of Action in accordance with the Plan.
The Plan provides for the payment of Wind Down Expenses and
Distributions to Holders of Allowed Claims, including
Administrative Claims, Professional Fee Claims, Priority Tax
Claims, Other Priority Claims, Statutory Fees, Secured Claims, and
General Unsecured Claims. In addition, the Plan cancels all
Interests in the Debtors and provides for the dissolution and wind
up of the Debtors' affairs.
On January 4, 2023, PIPStek filed the PIPStek Action alleging that
Biolase's Waterlase dental laser product infringed PIPStek's
patents. PIPStek's complaint sought unspecified damages, injunctive
relief, and costs and attorneys' fees. On May 3, 2023, Biolase
answered denying PIPStek's allegations, asserting defenses of
non-infringement, invalidity, and unenforceability due to unclean
hands, and denying PIPStek is entitled to any relief whatsoever. As
explained, and subject to the Bankruptcy Court's approval, the
Debtors, PIPStek and Sonendo have entered into a settlement that
resolves the PIPStek Action and other claims.
On January 6, 2025, the Debtors, PIPStek and Sonendo agreed to
settle their respective claims pursuant to a settlement agreement
whereby (i) Sonendo would be deemed to have withdrawn its claims
filed against Biolase; (ii) PIPStek agreed to dismiss the PIPStek
Action; (iii) the Debtors, PIPStek and Sonendo agreed to customary
mutual releases; and (iv) the Debtors returned the PIPStek
Deposit.
Class 2 consists of Other Priority Claims. Except to the extent
that the Holder of an Allowed Other Priority Claims agrees to less
favorable treatment, each Holder of an Allowed Other Priority Claim
shall receive payment in full in Cash of the Allowed amount of such
Claim (as determined by settlement or Final Order of the Bankruptcy
Court) on the Effective Date, or as soon as reasonably practicable,
or such other treatment rendering such Claim Unimpaired. The amount
of claim in this Class total $357,009. This Class will receive a
distribution of 100% of their allowed claims.
Class 3 consists of all General Unsecured Claims (including the SWK
Deficiency Claims). Except to the extent that the Holder of an
Allowed General Unsecured Claim agrees to less favorable treatment,
each holder of an Allowed General Unsecured Claim shall receive (i)
its pro rata share of the Liquidation Trust Interests and (ii) the
lesser of (A) its pro rata share of the GUC Recovery Amount, and
(B) its 10% GUC Distribution. The allowed unsecured claims total
$5,943,581. This Class will receive a distribution of 5% of their
allowed claims.
Payments to be made under the Plan shall be funded from (i) Cash
held by the Debtors as of the Effective Date, including the
Liquidating Trust Funding Amount, Administrative Claim Contingency
Amount and the GUC Recovery Amount; and (ii) net proceeds of
Retained Causes of Action and other remaining Assets of the
Estates, including Interests in the Non-Debtor Affiliates.
On or prior to the Effective Date, the Debtors will execute the
Liquidation Trust Agreement and will take all other steps necessary
to establish the Liquidation Trust pursuant to the Liquidation
Trust Agreement. On the Effective Date or as soon as reasonably
practicable thereafter, and in accordance with the terms of the
Plan, the Debtors will transfer to the Liquidation Trust all of
their rights, title, and interests in all of the Liquidation Trust
Assets.
A full-text copy of the Amended Combined Liquidating Plan and
Disclosure Statement dated January 13, 2025 is available at
https://urlcurt.com/u?l=mdlLqy from Epiq Corporate Restructuring,
LLC, claims agent.
Co-Counsel to the Debtors:
M. Blake Cleary, Esq.
Brett M. Haywood, Esq.
Maria Kotsiras, Esq.
Shannon A. Forshay, Esq.
POTTER ANDERSON & CORROON LLP
1313 N. Market Street, 6th Floor
Wilmington, Delaware 19801
Tel: (302) 984-6000
Fax: (302) 658-1192
Email: bcleary@potteranderson.com
bhaywood@potteranderson.com
mkotsiras@potteranderson.com
sforshay@potteranderson.com
Joshua D. Morse, Esq.
Claire K. Wu, Esq.
PILLSBURY WINTHROP SHAW PITTMAN LLP
Four Embarcadero Center, 22nd Floor
San Francisco, CA 94111-5998
Tel: (415) 983-1000
Fax: (415) 983-1200
Email: joshua.morse@pillsburylaw.com
claire.wu@pillsburylaw.com
- and -
Dania Slim, Esq.
Caroline Tart, Esq.
PILLSBURY WINTHROP SHAW PITTMAN LLP
31 West 52nd Street
New York, NY 10019-6131
Tel: (212) 858-1000
Fax: (212) 858-1500
Email: dania.slim@pillsburylaw.com
caroline.tart@pillsburylaw.com
About Biolase, Inc.
Biolase, Inc., a company in Foothill Ranch, Calif., and its
affiliates manufacture and market dental laser systems. The
Debtors' proprietary systems allow dentists, periodontists,
endodontists, pediatric dentists, oral surgeons, and other dental
specialists to perform a broad range of minimally invasive dental
procedures, including cosmetic, restorative, and complex surgical
applications.
Biolase and its affiliates filed Chapter 11 petitions (Bankr. D.
Del. Lead Case No. 24-12245) on Oct. 1, 2024. John Beaver,
president and chief executive officer, signed the petitions.
The Debtors reported total assets of $30,641,000 and total
liabilities of $32,767,000 as of June 30, 2024.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Potter Anderson & Corroon, LLP and Pillsbury
Winthrop Shaw Pittman, LLP as legal counsel; SSG Capital Advisors
as investment banker; and B. Riley Financial, Inc., as financial
advisor. Epiq Corporate Restructuring, LLC, is the Debtors'
administrative advisor and claims and noticing agent.
BIT MINING: Shareholders OK Increased Authorized Share Capital
--------------------------------------------------------------
BIT Mining Limited announced the results of its annual general
meeting of shareholders held on January 7, 2025.
At the AGM, the shareholders of the Company passed the resolution
increasing the authorized share capital of the Company to
US$440,000 divided into 8,399,935,000 Class A Ordinary Shares of a
nominal or par value of US$0.00005 each, 65,000 Class A Preference
Shares of a nominal or par value of US$0.00005 each, and
400,000,000 Class B Ordinary Shares of a nominal or par value of
US$0.00005 each, by the creation of 6,800,000,000 Class A Ordinary
Shares of a nominal or par value of US$0.00005 each.
About BIT Mining Ltd.
Akron, Ohio-based BIT Mining (NYSE: BTCM) --
https://www.btcm.group/ -- is a technology-driven cryptocurrency
mining company, with a long-term strategy to create value across
the cryptocurrency industry. Its business covers cryptocurrency
mining, mining pool, and data center operation.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2020, issued a "going concern" qualification in its report dated
May 15, 2024, citing that the Company has incurred recurring losses
and operating cash outflows that raises substantial doubt about its
ability to continue as a going concern.
As of June 30, 2024, BIT Mining had US$63.3 million in total
assets, US$17.4 million in total liabilities, and US$45.9 million
in total shareholders' equity.
BLUM HOLDINGS: Plans to Acquire Mt. Tam Ventures II for $3.9-Mil.
-----------------------------------------------------------------
Blum Holdings, Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on January 2, 2025, it
entered into a binding term sheet with Mt. Tam Ventures II, LLC
pursuant to which the Company intends to negotiate and enter into
an Acquisition Agreement or Share Exchange Agreement, or similarly
situated document, pursuant to which the Company shall acquire 100%
of the membership interests of MTV II.
Upon closing of the Transaction, the Company shall pay $250,000 in
cash to MTV II and issue 1,931,152 shares of Common Stock of the
Company to the various holders of the membership interests of MTV
II. The Company shall also issue to the Sellers a common stock
purchase warrant to purchase up to 238,368 shares of the Company
with an exercise price of $0.54. The aggregate value exchanged
shall be equal to $3,927,676. Closing of the Transaction is subject
to the execution of definitive agreements and regulatory approvals
among other customary conditions.
MTV II is an investment holding company with a minority investment
in Cookies Creative Productions & Consulting, Inc. Douglas
Rosenberg is the Founder of MTV II. The Company has an Unsecured
Promissory Note dated December 31, 2024 in the principal amount of
$800,000 with Mr. Rosenberg. The Unsecured Promissory Note was
filed as Exhibit 10.1 to the Current Report on Form 8-K filed on
January 7, 2025. Blum, through its subsidiary, operates a
Cookies-branded store. Additionally, Blum partners with Cookies to
participate in events such as Hall of Flowers and the Emerald Cup.
Sabas Carrillo, the CEO of Blum, served as Chief Financial Officer
of Cookies from 2018 to 2020. Sabas is also a Co-Founder, Board
Member and CFO at Mesh Ventures, and a General Partner and Limited
Partner at both Mesh Ventures and 1212 Ventures.
About Blum Holdings
Blum Holdings, Inc., headquartered in Santa Ana, California, is a
cannabis company engaged in retail and distribution across
California. The company focuses on providing high-quality medical
and adult-use cannabis products and is known for its Korova brand,
which offers high-potency products in various categories. Blum
Holdings operates several dispensaries, including Blum OC in Orange
County, and locations under The Spot and Blum brands in Santa Ana,
Oakland, and San Leandro.
Costa Mesa, California-based Marcum LLP, the company's auditor
since 2018, issued a "going concern" qualification in its report
dated April 15, 2024. The report indicated a significant working
capital deficiency, substantial losses, and the need for additional
funds to meet obligations and sustain operations, raising
substantial doubt about Blum Holdings' ability to continue as a
going concern.
BOSTON BOATWORKS: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
On January 14, 2025, Boston Boatworks LLC filed Chapter 11
protection in the U.S. Bankruptcy Court for the District of
Massachusetts.
According to court filing, the Debtor reports between $1 million
and $10 million in debt owed to 1 and 49 creditors. The petition
states funds will not be available to unsecured creditors.
About Boston Boatworks LLC
Boston Boatworks LLC builds ocean-going yachts using composite
materials and cutting-edge manufacturing techniques. The company
also operates a service business offering boat storage,
maintenance, and improvement. For years prior to the Petition Date,
the Debtor built luxury yachts for other companies. In 2021, the
Debtor began designing its own line of luxury yachts.
Boston Boatworks LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 25-10071) on January 14,
2025. In its petition, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Christopher J. Panos handles the
case.
The Debtor is represented by D. Ethan Jeffery, Esq., at MURPHY &
KING, PROFESSIONAL CORPORATION, in Boston, Massachusetts.
BRIGHT HORIZONS: Moody's Ups CFR to Ba3 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings upgraded Bright Horizons Family Solutions LLC's
(Bright Horizons or BFAM) Corporate Family Rating to Ba3 from B1,
Probability of Default Rating to Ba3-PD from B1-PD, and the ratings
of its senior secured first lien bank credit facilities (revolver
and term loans) to Ba3 from B1. The company's Speculative Grade
Liquidity (SGL) rating remains unchanged at SGL-1. The outlook
changed to stable from positive.
The upgrades reflect Bright Horizons' continued recovery in
operating performance, including improved occupancy rates within
its full-service segment and the expansion of service offerings
within its back-up care and educational advisory segments. This has
resulted in consistent strong free cash flow generation,
deleveraging through earnings growth, and improved EBITDA margins.
Moody's expect Bright Horizons to maintain a disciplined approach
to potential acquisitions and to resume share repurchases from
internally generated cash and cash on hand while maintaining
leverage around 3x, while growing organically and through
acquisitions.
Moody's expect that Bright Horizons' operating performance,
including aggregate center occupancy rates, will continue to
recover in 2025. Shifts in demand patterns due to the pandemic such
as more hybrid work arrangements have slowed the rebound in
occupancy rates in the markets the company operates in, but the
aggregate center occupancy rate is expected to trend up to the
mid-60% range, still below its pre-pandemic level of approximately
70%+. Back-up care segment has been the primary growth engine for
the company since the pandemic, with revenue growing 18% in the LTM
September 2024 period. Moody's expect 2025 revenue to grow in the
high single-digit percent range, driven by full-service tuition
price increases in the mid-single digits and continued ramp-up in
enrollment, while back-up care continues to see gains from higher
utilization and new users. Moody's expect EBITDA to grow at a
faster rate as margins recover in the full-service child centers
segment, partially constrained by higher wages. With expected
earnings growth, Moody's adjusted debt-to-EBITDA leverage is
projected to decline from 3.5x as of LTM September 2024 to 3x in
2026. Additionally, Bright Horizons is expected to maintain strong
liquidity, with $110 million in cash as of LTM September 2024,
access to an undrawn $400 million revolver due May 2026, and free
cash flow generation in the range of $180 to $200 million
annually.
However, the company will need to execute well to improve center
occupancy back to pre-pandemic levels, given the negative impact of
greater hybrid work arrangements. Moody's also note the existence
of event risk related to acquisitions aimed at bolstering the
company's growth. To sustain lower leverage and improved free cash
flow to debt, Bright Horizons will need to maintain prudent
financial policies.
The upgrades also reflect governance considerations, including the
company's commitment to maintaining moderate financial leverage.
The company's occupancy rates and expansion of service offerings
are driving good growth in the Back-up care and Ed Advisory
segments. The improvement in credit metrics positions Bright
Horizons more favorable to withstand future challenges. Moody's
changed Bright Horizons' financial strategy and risk management
score to 3 from 4, the governance issuer profile score to G-3 from
G-4 and the credit impact score to CIS-3 from CIS-4, reflecting
these governance factors.
RATINGS RATIONALE
Bright Horizons' Ba3 CFR broadly reflects its moderate financial
leverage and the ongoing operating challenges in the aftermath of
the pandemic, particularly due to increasing hybrid work
arrangements in the markets the company operates in. Moody's expect
debt-to-EBITDA leverage to improve to around 3x by 2026 with
continued earnings recovery. The credit profile also reflects
business risks, including exposure to general economic conditions
and cyclical employment. Additionally, the rating accounts for
Bright Horizons' relatively high level of capital expenditures and
its history of aggressive share repurchase activities. However, the
rating is supported by the company's market-leading position in the
employer-sponsored child-care industry, good diversification by
customer and industry verticals, and relatively long-term
contracts. A good track record of solid free cash flow generation,
which has exceeded $120 million in each of the last five years and
is projected by us to be in the range of $180 to $200 million
annually over the next year, drives good operating flexibility and
very good liquidity. The rating also considers favorable long-term
demographic and social factors, such as the increasing percentage
of dual-income families and the increased focus on early childhood
education, partially offset by a declining US birth rate.
The SGL-1 Speculative Grade Liquidity Rating reflects Bright
Horizons' very good liquidity supported by Moody's expectations of
continued favorable earnings trends translating into strong free
cash flow in the range of $180 to $200 million per year, expected
ample availability under its $400 million revolving credit facility
expiring in 2026. These cash sources provide good coverage for the
approximate $26 million of required annual term loan amortization
in 2025. Moody's also expect Bright Horizons to maintain good
cushion under the net leverage financial maintenance covenant for
the revolver and term loan A. There are no financial maintenance
covenants on the term loan B. Potential uses of free cash flow
and/or revolving credit facility for funding of acquisitions and
share repurchases somewhat constrain the company's liquidity but
are discretionary.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable rating outlook reflects Moody's expectations that Bright
Horizons will continue to see a recovery of its positive enrollment
trends, grow revenue and earnings, and continue to successfully
execute its child-care center expansion strategy, while maintaining
a disciplined approach to acquisitions and share repurchases.
The ratings could be upgraded if operating performance and
earnings, including occupancy rates, continue to improve with
Moody's adjusted debt-to-EBITDA leverage sustained below 3x and
free cash flow-to-debt maintained over 12.5%. Additionally, the
company would need to demonstrate a conservative approach with
respect to acquisitions, shareholder distributions and share
repurchase activities in order to sustain lower leverage.
The ratings could be downgraded if operating performance fails to
improve as expected because of enrollment declines, lower pricing
or an increase in costs, or if Moody's adjusted debt-to-EBITDA
leverage is sustained above 4x. A material debt-financed
acquisition, aggressive share repurchase activity, or liquidity
deterioration could also lead to a ratings downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Bright Horizons Family Solutions LLC, based in Newton,
Massachusetts, is a provider of employer-based childcare services,
back-up dependent care, and other educational advisory services. As
of September 2024, the company operated 1,028 childcare and early
education centers (603 in North America, 273 in the UK, 70 in the
Netherlands, and 82 in Australia) with the capacity to serve
approximately 115,000 children. The company is publicly traded
under ticker "BFAM" on the NYSE and generated approximately $2.6
billion in revenue as of the last 12 months ending September 2024.
BRUNDAGE-BONE CONCRETE: Moody's Rates New Second Lien Notes 'B2'
----------------------------------------------------------------
Moody's Ratings assigned a B2 rating to the proposed backed senior
secured second lien notes issued by Brundage-Bone Concrete Pumping
Holdings Inc., a subsidiary of Concrete Pumping Holdings, Inc.
("CPH"). CPH's B1 corporate family rating, B1-PD probability of
default rating and the speculative grade liquidity rating (SGL) of
SGL-2 all remain unchanged. The outlook is stable.
The note proceeds will be used to refinance the company's existing
backed senior secured second lien notes, add a modest amount of
cash to the balance sheet and pay transaction fees and expenses.
The new $400 million notes will refinance the existing $375 million
notes and will extend the company's maturity profile. The new notes
will mature seven years after close and the ABL will mature 180
days prior to the notes maturity. However, Moody's expect the
interest rate on the new notes to be higher than the 6% rate on the
existing notes. Moody's will withdraw the existing notes rating
upon close of the transaction.
RATINGS RATIONALE
The B2 rating on the senior secured second lien notes, one notch
below the company's CFR, reflects the notes' junior position to the
ABL facility. Concrete Pumping Holdings, Inc. and US operating
subsidiaries are guarantors of the Brundage-Bone Concrete Pumping
Holdings issuance. Moody's expect leverage to increase slightly to
3.7x debt/EBITDA as a result of the transaction.
CPH's B1 CFR benefits from the company's service capabilities and
solid industry position compared to its peers in the fragmented
concrete pumping industry. Customer diversification is good with no
single customer accounting for more than 10% of revenue.
Additionally, the company benefits from solid adjusted EBITDA
margins of around 27%, providing stability and predictability of
operating results and supporting strong free cash flow generation.
The B1 CFR is constrained by its moderate leverage and small scale
of less than $500 million in revenue. CPH serves cyclical end
markets in the residential, nonresidential and infrastructure
construction space, which can introduce volatility in operating
results. The company is susceptible to weather and equipment
over-saturation impacting the utilization of its equipment.
The stable outlook reflects Moody's expectation that CPH will
maintain solid credit metrics consistent with its historical track
record and good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade the ratings if CPH continues to improve its
credit metrics while the company expands its scale. Specifically,
the ratings could be upgraded if the company maintains good
liquidity, debt/EBITDA approaches 2.5x and retained cash flow/net
debt rises above 25%.
Moody's could downgrade the ratings if the company's credit metrics
deteriorate with significant capital spending or acquisitions.
Specifically, the ratings could be downgraded if there is a
deterioration in liquidity, debt/EBITDA rises above 4.0x or
retained cash flow/net debt falls below 15%.
Headquartered in Thornton, Colorado, Concrete Pumping Holdings,
Inc. (CPH) is a leading provider of concrete pumping services and
concrete environmental waste management solutions in the US and the
UK. The company generated over $400 million in revenue in 2024. CPH
became a public company (Nasdaq: BBCP) in 2018 through a
special-purpose acquisition company (SPAC) transaction. The SPAC
was sponsored by Argand Partners, which still holds about 28% of
CPH's shareholding. Another 22% of shareholding is held by PGP
Investors, which belongs to a former owner of the company's
business.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
BUCKEYE PARTNERS: Fitch Assigns 'BB' Rating on Sr. Unsecured Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB' with a Recovery Rating of 'RR4'
to Buckeye Partners, L.P.'s proposed senior unsecured notes
offering. The notes will rank equally with the existing senior
unsecured notes. Proceeds from the offering will be used for
repayment of existing indebtedness including repayment of the
senior unsecured notes maturing in 2025 and partial repayment of
the Term Loan B due in 2026. The Rating Outlook is Stable.
Buckeye received a large cash contribution from its parent, Buckeye
Energy Holdings (Holdings), related to certain asset sale proceeds
generated by Holdings' other subsidiaries, and reduced debt. Fitch
expects Buckeye's EBITDA leverage to be comfortably below the 6.0x
at YE 2024 and remain below 6.0x over the forecast period.
The Stable Outlook reflects expectations for steady demand for the
company's services, set within the Fitch price deck for commodity
prices. Additionally, the Stable Outlook incorporates expectations
for modest growth capital spending, focused entirely on Buckeye's
midstream portfolio, with Buckeye operating as a standalone
business separate from Holdings' other subsidiaries.
Key Rating Drivers
Near-Term Leverage Improvement: Buckeye received a large cash
contribution from its parent, related certain asset sale proceeds
generated by Holdings' other subsidiaries, and reduced debt. With
financial results being largely as expected in 2024, Fitch expects
2024 EBITDA leverage to be around 5.5x, comfortably below the 6.0x
negative leverage sensitivity level set for the company. FLNG
Liquefaction 2, LLC (FLIQ2; BBB/Stable) has fully resumed normal
operations and, with those expected distributions to Buckeye, along
with a modest growth capital spending outlook, Fitch expects
Buckeye's leverage to remain appropriate for the rating over the
forecast period.
Steady Operating Metrics: Buckeye has benefited from a stable
operating environment, leading to modest growth in pipeline volumes
and terminal throughput through 2024. Average daily pipeline
throughput increased by about 2% yoy through the first nine months
of 2024. Additionally, terminal throughput volumes were up roughly
1% yoy YTD as of the end of September. Steady demand for Buckeye's
assets in this segment provides a reliable base of cash flows,
supporting Buckeye's credit quality.
Improving trends in the utilization of Buckeye's storage assets
have bolstered results for the company in 2024. Utilization
exceeded 70% in 3Q24, up from around 63% in the same period last
year. Due to the strength in this segment through the first nine
months of 2024, full-year results are likely to slightly exceed
Fitch's current expectations.
Removal of Credit Support: The majority of credit support
previously provided by Buckeye to Holdings' alternative energy
business has been released. The remaining credit support provided
to Holdings' alternative energy business as of 4Q24 is in the form
of roughly $21 million in letters of credit (LOCs) under Buckeye's
revolving credit facility (RCF). Fitch expects these LOCs to be
released in the very near-term, following the sale of the related
assets.
Rating Linkages: There is a parent-subsidiary relationship between
Holdings and Buckeye. Fitch believes Buckeye has a stronger
Standalone Credit Profile (SCP) than Holdings, and views Holdings'
SCP on a consolidated basis. Fitch sees Holdings' SCP as in line
with a low-'BB' category Issuer Default Rating (IDR), and therefore
follows the stronger subsidiary path.
Legal ring-fencing is assessed as 'Open' due to the ability to move
cash freely between the entities. Fitch views access and control as
'Porous' as Fitch expects a mixture of external and intercompany
funding. These linkage considerations lead Fitch to limit the
difference between Holdings and Buckeye to one notch.
Derivation Summary
The 'BB' rating reflects Buckeye's diverse asset base, size and
scale, and higher relative leverage, in addition to its secured
debt structure and private equity ownership. Buckeye has higher
leverage than investment-grade peers that operate in the crude oil
and refined-product pipelines, terminalling and storage subsectors,
such as Plains All American Pipeline L.P. (PAA; BBB/Stable).
Fitch expects Buckeye's leverage to decline to below 6.0x in 2024
and beyond, from elevated levels around 7x in 2023. Fitch forecasts
leverage at PAA to be approximately 3.2x in 2025, in line with the
company's net leverage target range of 3.25x to 3.75x. The
significantly lower leverage is the primary driver of the
three-notch difference in the respective IDRs.
Key Assumptions
- Pipeline and terminal throughput volumes grow at low single
digits in 2025 and storage utilization remains near levels seen in
2024;
- Full operations at FLIQ2 supporting continued dividend payments
to Buckeye over the forecast period;
- Growth capital to average around $150 million annually over the
forecast;
- Credit support from Buckeye to its affiliates in the form of LOCs
removed in the very near term;
- Base interest rates applicable to variable rate exposed debt
instruments reflect Fitch's Global Economic Outlook;
- Gross distributions from Buckeye to Holdings range between $250
million to $500 million annually over the forecast period. Fitch
assumes the level of dividends paid by Buckeye is driven by the
achievement of internally set financial policies related to
leverage.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Expected EBITDA leverage at or above 6.0x for a sustained period
of time;
- Increases in capital spending and/or acquisitions which
significantly increase Buckeye's overall business risk. Fitch will
review large capital projects and acquisitions, including expected
financing, on a case by case basis;
- Due to the rating linkage with Holdings, should Fitch deem
Holdings' SCP weaker than a low-'BB' category IDR;
- Should Fitch expect a significant deviation from the sponsor's
currently supportive leverage and distributions policies, as well
as the sponsor's intention to maintain Buckeye as a distinctly
separate entity.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage expected to be sustained at or below 5.0x;
- Favorable changes in the business mix, including but not limited
to a meaningful increase in the percentage of EBITDA coming from
revenue assurance-type contracts and/or a significant increase in
the remaining weighted-average life of existing revenue
assurance-type contracts.
Liquidity and Debt Structure
Adequate Liquidity: Buckeye had approximately $1.1 billion of
available liquidity as of Sept. 30, 2024. There were approximately
$75 million of outstanding borrowings and about $30 million of LOCs
on the company's $1.2 billion senior secured RCF. Buckeye also had
just over $8 million of cash and cash equivalents on the balance
sheet as of Sept. 30, 2024.
Debt maturities are manageable with $400 million due in March 2025
and $600 million due in December 2026. Fitch notes Buckeye has
sufficient room on its RFC to repay maturing notes due over the
next six months.
Issuer Profile
Buckeye is a large liquid petroleum product pipeline and terminals
operator with assets located across the East Coast, Midwest, Gulf
Coast and Southeast region of the U.S. as well as in the Caribbean.
Buckeye is wholly owned by IFM Global Infrastructure Fund.
Summary of Financial Adjustments
Cash distributions from equity investments such as FLIQ2 are added
to EBITDA and equity earnings from such investments are excluded.
Date of Relevant Committee
02-Jan-2025
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
Buckeye Partners, L.P. has an ESG Relevance Score of '4' for Group
Structure due to related-party transactions and credit support to
affiliate companies, which has a negative impact on the credit
profile, and is relevant to the rating[s] in conjunction with other
factors.
Buckeye Partners, L.P. has an ESG Relevance Score of '4' for
Financial Transparency due to its affiliate structure without
transparency into affiliates, which has a negative impact on the
credit profile, and is relevant to the rating[s] in conjunction
with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Buckeye Partners, L.P.
senior unsecured LT BB New Rating RR4
CAPROCK MILLING: Court OKs Agricultural Equipment Sale at Auction
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Amarillo Division, has granted Caprock Milling & Crushing LLC to
sell its equipment, free and clear of all liens and other claims.
The Debtor is a limited liability company that was dealing
primarily in the processing and storage of agricultural commodities
based in Amarillo.
The Debtor is authorized to sell 2019 Caterpillar Front-End Loader
Model No. 966M-JV, serial number OEJA03157 via online auction by
Ritchie Bros. Auctioneers (America), Inc. / IronPlanet, Inc.
The Court ordered that the net sales proceeds from the sale of the
Equipment shall be deposited into the IOLTA account of Debtor's
counsel, to be held in trust pending resolution of Adversary
Proceeding No. 24-02004-rlj and pending determination of the
amount, if any, owed to Alban Tractor, LLC.
The Court also recognized the rights of Alban Tractor, LLC, Stone X
Commodity Solutions LLC or Laurie Rea, the Chapter 11 Trustee of
CapRock Land Company, LLC and any rights with respect to any liens
or ownership claims against the Equipment, which liens and claims
that are attached to the net sales proceeds.
About Caprock Milling & Crushing
CapRock Milling & Crushing, LLC is engaged in grain and oilseed
milling based in Amarillo, Texas.
Caprock filed Chapter 11 petition (Bankr. N.D. Texas Case No.
23-20251) on Nov. 3, 2023, with $10 million to $50 million in
assets and $1 million to $10 million in liabilities. Thomas
Bunkley, member of Caprock, signed the petition.
Judge Robert L. Jones oversees the case.
The Debtor tapped Mullin Hoard & Brown, LLP as bankruptcy counsel;
Charhon Callahan Robson & Garza, PLLC as special counsel; and
William Hood & Company as investment banker.
CAPSTONE COMPANIES: Jeffrey Postal Holds 18.5% Equity Stake
-----------------------------------------------------------
Jeffrey Postal disclosed in a Schedule 13D/A filed with the U.S.
Securities and Exchange Commission that as of December 20, 2024, he
may be deemed to beneficially own, directly or indirectly, and
individually, with his spouse and through a trust, a total of
9,034,120 shares of Common Stock of Capstone Companies, Inc., which
is 18.5% of the issued and outstanding shares of Common Stock
(based on 48,826,864 shares as reported in the Form 10-Q Report
filed by CAP with the Commission on November 14, 2024).
Mr. Postal was a director of CAP until December 4, 2024, and is a
10%+ beneficial owner of shares of Common Stock. Mr. Postal has
business interests and activities outside of being a shareholder of
CAP and is an active entrepreneur and business owner in South
Florida.
Mr. Postal may be reached at:
144-V 10 Fairway Drive, Suite 100,
Deerfiled Beach, FL, 33441
Tel: (954) 557-8000
A full-text copy of Mr. Postal's SEC Report is available at:
https://tinyurl.com/5f7ztjjs
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 September 30, 2024, Capstone Companies had $1,378,848 in
total assets, $4,102,475 in total liabilities, and $2,723,627 in
total stockholders' deficit.
CAREPOINT HEALTH: Disclosures, Plan Draw Multiple Objections
------------------------------------------------------------
Ben Zigterman of Law360 Bankruptcy Authority reports that CarePoint
Health Systems Inc., a New Jersey hospital operator, faced more
than a half dozen objections to its proposed disclosure statement
and Chapter 11 plan, including from former owners, a potential
buyer, an insurance company, and the U.S. Trustee's Office.
The debtor's reorganization proposal was criticized as "skeletal"
and "patently flawed," according to the report.
About Carepoint Health
CarePoint Health is a New Jersey hospital chain.
Carepoint Health sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-12538) on November 3,
2024. In its petition, the Debtor reports estimated assets and
liabilities up to $50,000.
The Debtor is represented by Peter C. Hughes of Dilworth Paxson
LLP.
CCC INTELLIGENT: Moody's Alters Outlook on 'B1' CFR to Positive
---------------------------------------------------------------
Moody's Ratings affirmed CCC Intelligent Solutions Holdings Inc.'s
(collectively with CCC Intelligent Solutions Inc., referred to as
"CCC") corporate family rating at B1 and probability of default
rating at B1-PD. The rating for CCC Intelligent Solutions Inc.'s
senior secured first lien bank credit facilities was also affirmed
at B1. Moody's also assigned a B1 rating to CCC Intelligent
Solutions Inc.'s new senior secured first lien term loan. The
outlook for CCC Intelligent Solutions Holdings Inc. was changed to
positive from stable. The outlook for CCC Intelligent Solutions
Inc. is positive. The company's SGL speculative grade liquidity
score remains unchanged at SGL-1.
The affirmation of the B1 CFR reflects CCC's good free cash flow
and strong EBITDA margin, offset in part the company's modest scale
and the limited independence of its board of directors. The outlook
change to positive reflects Moody's view that, despite its recent
acquisition, CCC's financial leverage will decline further over the
next 12-18 months.
This rating action follows the company's acquisition of EvolutionIQ
for $730 million. Funding for the acquisition will come from a $225
million fungible incremental first lien term loan, approximately
$300 million of common stock and $200 million of cash. The
transaction closed on January 6, 2025.
The acquisition of EvolutionIQ will temporarily increase
debt/EBITDA by 1.0x and at the same time, it will also modestly
expand and diversify its revenue base. EvolutionIQ offers AI
empowered claims solutions for group and individual disability and
workers' compensation. CCC will be able to bring technological
advances from EvolutionIQ to its own suite of products, further
enhancing its own offerings.
RATINGS RATIONALE
The B1 CFR reflects CCC's strong revenue growth, high recurring
revenues, good EBITDA margin and consistent free cash flow
generation. It also reflects Moody's expectation for double-digit
earnings growth in 2025-2026 that will facilitate debt/EBITDA
declining to roughly 3.5 times over that timeframe. Earnings growth
will be supported by high single-digit revenue growth driven by new
cross-selling and up-selling opportunities, as well as new customer
wins. Growth will also be supported by continuing investments in
the digitization of the automobile claims supply chain. Moody's
expect CCC's EBITDA margin to significantly expand in 2025 and
beyond as the company reduces its stock based compensation expense,
which Moody's treat as an operating expense. At the same time, the
rating also reflects Moody's concerns about the board composition,
given that there are only three independent members on the eight
seat board. Moody's project that free cash flow will exceed $200
million per annum; however, the company is likely to direct a
significant amount of free cash flow toward share repurchases
following the implementation of a $300 million share repurchase
program.
The positive outlook reflects Moody's expectation for further
deleveraging during 2025-2026, primarily supported by good earnings
growth.
The SGL-1 speculative grade liquidity rating reflects Moody's view
that CCC will have very good liquidity over the next year.
Liquidity is supported by Moody's expectation for consistent strong
free cash flow and access to its $250 million revolver. The company
also had $286 million of cash as of Sept. 30, 2024; however,
approximately $200 million was used for the EvolutionIQ acquisition
in January 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company sustains strong
revenue growth leading to increased scale while diversifying
revenue sources and maintaining strong profitability. The ratings
could also be upgraded if CCC demonstrates more conservative
financial policies, with debt/EBITDA sustained below 3.5 times and
free cash flow to debt maintained above 15%. If there was movement
to a substantially independent board, the ratings could also be
upgraded.
The ratings could be downgraded if there was a significant decline
in either revenue or profitability. A downgrade could occur if
there was a debt funded acquisition or other leveraging transaction
without a clear path to deleveraging, such that Moody's expect
debt/EBITDA to be sustained above 5.0x. A deterioration in
liquidity and/or more aggressive financial policies could also
prompt a downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Chicago, Illinois, CCC Intelligent Solutions
Holdings Inc. develops, markets and supplies a variety of software
services that enable automobile insurance companies, collision
repair facilities, independent appraisers, parts suppliers and
automobile dealers to manage the automobile claim and restoration
process. It is a public company that is controlled by private
equity sponsor Advent International. Its wholly-owned subsidiary is
CCC Intelligent Solutions Inc., the borrower of the debt. Revenue
for the twelve months ended Sept. 30, 2024 was $927 million.
CHAMPION WELDING: Carol Fox Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed Carol Fox of GlassRatner
as Subchapter V trustee for Champion Welding Services, LLC.
Ms. Fox will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Fox declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Carol Fox
GlassRatner
200 East Broward Blvd., Suite 1010
Fort Lauderdale, FL 33301
Tel: 954.859.5075
Email: cfox@brileyfin.com
About Champion Welding Services
Champion Welding Services, LLC, a company in Miami Lakes, Fla.,
operates as a structural steel and miscellaneous metals
fabricator.
Champion Welding Services filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
25-10133) on January 7, 2025, with $100,000 to $500,000 in both
assets and liabilities.
Judge Corali Lopez-Castro handles the case.
Ido J. Alexander, Esq., at Alignx Law, represents the Debtor as
bankruptcy counsel.
CHARLOTTE BUYER: Moody's Cuts Rating on First Lien Loans to B3
--------------------------------------------------------------
Moody's Ratings affirmed Charlotte Buyer, Inc.'s (Charlotte Buyer,
d/b/a Gentiva) B3 Corporate Family Rating, B3-PD Probability of
Default Rating, and Caa2 senior secured second lien term loan
rating. At the same time, Moody's downgraded Charlotte Buyer's
senior secured first lien revolving credit facility and senior
secured first lien term loan B ratings to B3 from B2. These actions
follow the company's partial paydown of its senior secured second
lien debt using the proceeds from the sale of its Personal Care
Business. The outlook is stable.
In December 2024, Charlotte Buyer received $280 million in net
proceeds from the sale of its Personal Care Business. The company
used $200 million to reduce the outstanding balance on its senior
secured second lien term loan from $450 million to $250 million.
The company further intends to use the remaining $80 million in
proceeds to partially pay down its outstanding balance on its
senior secured first lien revolver or senior secured first lien
term loan B.
The downgrade of the ratings on the senior secured first lien
credit facilities reflects material reduction of first-loss
absorption cushion provided by the second lien term loan. Even
after allocation of the remaining $80 million to partially repay
the revolving facility/senior secured first lien term loan B, the
first lien debt will represent the preponderance of the company's
obligations.
The affirmation of the CFR and PDR reflects Moody's view that the
paydown of debt using proceeds from the Personal Care Business sale
will have slight deleveraging effect. Moody's anticipate that the
company's debt/EBITDA, after excluding the EBITDA contribution from
the Personal Care Business and after partial debt paydown will
remain in the low-to-mid 7.0 times range over the next 12-18 months
and the company will generate a small positive free cash flow in
2025.
RATINGS RATIONALE
Charlotte Buyer's B3 CFR reflects the company's moderate size and
scale and the presence of considerable competition in the highly
fragmented hospice industry. The CFR is constrained by the
company's very high financial leverage and a predominantly narrow
focus on providing hospice care which is largely funded by
Medicare. Hospice services is an industry which is facing
increasing regulatory oversight including evolving landscape for
Medicare reimbursements. The company's CFR is supported by its
strong market position as a leading hospice provider in the US The
CFR also benefits from the company's geographically
well-diversified business footprint with nearly 470 hospice sites
of service in 38 states.
Moody's expect that Charlotte Buyer will maintain adequate
liquidity over the next 12 months. Moody's estimate the company
will generate some modestly positive free cash flow over the next
12 months. The company had $9.3 million in cash at the end of
September 30, 2024, and assuming $80 million paydown of revolver
using proceeds from the Personal Care Business sale, it will have
approximately $330 million borrowing capacity.
The company's first lien senior secured bank credit facility is
comprised of a revolver expiring in August 2027 and a term loan
maturing in February 2028. These instruments are rated B3, at the
same level as the company's Corporate Family Rating and reflect the
preponderance of the first lien debt in the company's capital
structure. The company's second lien senior secured term loan,
recently reduced from $450 million to $250 million, matures in
August 2028. The second lien term loan is rated Caa2 reflecting its
junior position relative to a significant amount of first lien
debt.
Charlotte Buyer's CIS-4 credit impact score indicates the rating is
lower than it would have been if ESG risk exposure did not exist.
The CIS-4 score reflects social risk exposures (S-5) from customer
relations, increasing concerns around the access and affordability
of healthcare services in the US, and aging demographic trends. The
company is also exposed to human capital owing to susceptibility to
labor shortages, particularly with skilled nurses. Governance
considerations (G-4) reflect the company's aggressive financial
policy driven by its majority private equity ownership, though
tempered by Humana Inc.'s meaningful minority ownership stake.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company's operating
performance deteriorates, liquidity weakens, or if regulatory
changes result in significant reimbursement rate cuts. Further,
debt-funded shareholder distributions, large acquisitions or other
aggressive financial policies could also result in a downgrade.
The ratings could be upgraded if the company effectively manages
its growth with prudent financial policies and demonstrates a track
record of positive free cash flow generation. Increased scale and
business line diversity could also support an upgrade. Further, the
ratings could be upgraded if adjusted debt to EBITDA is sustained
below 6.0 times.
Headquartered in Atlanta, GA, Charlotte Buyer, Inc. (d/b/a
"Gentiva") is a leading hospice provider in the US The company has
nearly 468 hospice, 31 palliative care, and 17 home health sites of
service across 38 states. For the twelve months ended September 30,
2024, the company generated approximately $2.3 billion in revenue.
Charlotte Buyer is 65 percent majority-owned by equity sponsor
Clayton, Dubilier & Rice (CD&R), with the remaining 35 percent
owned by Humana Inc.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CLARIOS GLOBAL: Fitch Rates New First Lien Sr. Secured Notes 'B+'
-----------------------------------------------------------------
Fitch Ratings has assigned a rating of 'B+' with a Recovery Rating
of 'RR3' to Clarios Global LP's proposed first lien senior secured
notes. The proposed notes will be pari passu with Clarios Global's
existing first lien debt.
Clarios Global is a subsidiary of Clarios International Inc.
(Clarios). Both Clarios and Clarios Global have a Long-Term Issuer
Default Rating (IDR) of 'B' with a Stable Rating Outlook.
Fitch recently revised Clarios' Outlook to Stable from Positive,
reflecting the expected increase in leverage resulting from the
company's plan to issue debt to fund a distribution to its
sponsors.
Key Rating Drivers
Proposed Notes: On Jan. 6, 2025, Clarios announced that it planned
to issue debt to fund a special distribution to its sponsors.
Proceeds from the proposed notes, along with proceeds from the new
first lien secured U.S. dollar and euro term loans that were
launched Jan. 8, 2025, will be used to fund the planned
distribution. The total amount distribution is expected to be $4.5
billion.
Leverage Expected to Rise Significantly: Between fiscal YE 2020 and
YE 2024, Clarios' debt (including off-balance-sheet factoring)
declined by about $2.1 billion. Over this time, EBITDA gross
leverage (calculated according to Fitch's methodology) declined to
4.6x from 10.0x. The company reduced debt through term loan
prepayments, open-market purchases of outstanding notes and the
retirement of its 2025 senior secured notes with cash on-hand.
Fitch's EBITDA calculation currently excludes Clarios' Inflation
Reduction Act (IRA) Section 45 tax credits.
Looking ahead, Fitch expects gross EBITDA leverage to return to
above 6.0x due to the incremental debt to fund the special
distribution. Fitch now expects leverage at fiscal YE 2025 to be
near the mid-6x range, including off-balance-sheet factoring.
Despite the increase in debt, Fitch expects Clarios to have
opportunities to reduce debt over the long term. EBITDA leverage
could decline toward 6.0x or lower over the next couple years if
the company targets FCF toward debt reduction.
Solid FCF Expected: Fitch expects Clarios to generate solid FCF
over the next several years. However, near-term FCF margin will
likely be held back by increased cash interest expense on the
higher debt. Fitch expects Clarios to generate FCF margins
(according to Fitch's methodology) of around 4.5% in fiscal 2025,
down from 5.8% in fiscal 2024. Over the long term, the shift toward
advanced batteries and continued cost savings could increase the
FCF margin above 5.0%. Fitch expects capex as a percentage of
revenue to be in the 4.0%-4.5% range over the next few years.
Sub-3.0x EBITDA Interest Coverage Expected: Fitch expects Clarios'
EBITDA interest coverage to fall below 3.0x following the issuance
of the new debt. Actual coverage will depend on the pricing of the
new debt, but using market interest rates, Fitch expects EBITDA
interest coverage to be in the upper-2x range for the next couple
of years. Actual EBITDA interest coverage at fiscal YE 2024 was
3.4x. Clarios typically uses hedges to convert a portion of its
floating-rate debt to fixed rates, mitigating the effect of
fluctuating rates on the company's interest expense.
Derivation Summary
Clarios has a very strong competitive position as the largest
low-voltage vehicle battery manufacturer in the world, with the
company responsible for about one-third of the industry's total
global production. Although Clarios counts many global original
equipment (OE) manufacturers as customers, roughly 80% of its sales
are typically derived from the global vehicle aftermarket.
Clarios' strong aftermarket presence provides it with a more stable
revenue stream through the cycle than auto suppliers that are
predominantly tied to new vehicle production, such as BorgWarner
Inc. (BBB+/Stable) or Aptiv PLC (BBB/Stable). The company's heavy
aftermarket weighting makes it more comparable with global tire
manufacturers, such as Compagnie Generale des Etablissements
Michelin (A-/Stable) and The Goodyear Tire & Rubber Company
(BB-/Negative) or other suppliers with a significant aftermarket
concentration, such as First Brands Group LLC (B+/Stable) or
Tenneco Inc. (B/Positive).
Clarios' margins are strong for an auto supplier, with forecasted
EBITDA margins (according to Fitch's methodology) running in the
high teens in percentage terms over the next several years, which
is stronger than many investment-grade auto suppliers, such as
BorgWarner or Aptiv. It's forecasted FCF margins in the low- to
mid-single-digit range are also consistent with investment-grade
auto suppliers. However, Clarios' leverage is relatively high and
consistent with auto suppliers in the 'B+' rating category.
Over the long term, Fitch expects Clarios' leverage to continue to
decline as a result of higher EBITDA from sales growth tied to the
rising global vehicle population and a richer mix of advanced
batteries. Fitch also expects the company to continue to actively
seek opportunities to reduce debt, which would further accelerate
leverage reduction.
Parent/Subsidiary Linkage
Fitch rates the IDRs of Clarios and its Clarios Global subsidiary
on a consolidated basis, using the weak parent/strong subsidiary
approach and open access and control factors, as discussed in
Fitch's "Parent and Subsidiary Linkage Rating Criteria". This is
based on the entities operating as a single enterprise with strong
legal and operational ties.
Key Assumptions
- Clarios Global issues new senior secured first lien debt, which
is used to fund a distribution to the company's sponsors;
- Global automotive battery demand rises in the low-single-digit
range in fiscal 2025, due to ongoing increases in global vehicle
production and replacement battery demand. Beyond 2025, global
demand continues to rise in the low single-digit range annually;
- In addition to volume growth, revenue is supported over the next
several years by the mix shifting to higher-priced advanced
batteries, as well as modest price increases on traditional
batteries;
- Margins are roughly flat in fiscal 2025 (excluding section 45x
credits) and then generally grow over the next several years as a
result of operating leverage on higher production levels, positive
pricing and mix, and savings associated with cost-reduction
initiatives;
- Capex as a percentage of revenue is in the 4.0%-4.5% range over
the next few years;
- The company uses a portion of its excess cash to reduce debt over
the next several years;
- Most debt maturities are refinanced at prevailing interest rates
prior to maturity;
- Fitch has not incorporated the effect of any potential IPO into
its forecasts;
- Fitch has incorporated the following interest rate assumptions
into its forecasts: SOFR of 4.05%, 3.74%, 3.65% and 3.57% in fiscal
2025, 2026, 2027 and 2028, respectively. EURIBOR: 1.87%, 1.94%,
2.02% and 2.12% in fiscal 2025, 2026, 2027 and 2028, respectively.
Recovery Analysis
Fitch's recovery analysis assumes Clarios would be considered a
going concern (GC) in bankruptcy and would be reorganized rather
than liquidated. Fitch has assumed a 10% administrative claim in
the recovery analysis.
Clarios' recovery analysis reflects a potential severe downturn in
vehicle battery demand and estimates the GC EBITDA at $1.6 billion,
which reflects Fitch's view of a sustainable, post-reorganization
EBITDA level upon which the valuation of the company would be based
following a hypothetical default.
The GC EBITDA is about $200 million higher than the level used in
Fitch's previous recovery analysis and incorporates changes to the
company's business profile, including the shift toward advance
batteries and cost-saving activities, which Fitch believes would
increase the company's valuation. The sustainable,
post-reorganization EBITDA is for analytical valuation purposes
only and does not reflect a level of EBITDA at which Fitch believes
the company would fall into distress.
The GC EBITDA considers Clarios' stable operations, high operating
margins, significant percentage of aftermarket revenue and the
nondiscretionary nature of its products. The $1.6 billion ongoing
EBITDA assumption is 23% lower than Fitch's calculated actual
EBITDA of $2.1 billion for fiscal 2024.
Fitch utilizes a 6.0x enterprise value (EV) multiple based on
Clarios' strong global market position and the nondiscretionary
nature of the company's batteries. In addition, Brookfield Asset
Management Inc.'s acquisition of Clarios in 2019 valued the company
at an EV over 8.0x (excluding expected post-acquisition cost
savings). All of Clarios' rated debt is guaranteed by certain
foreign and domestic subsidiaries.
According to Fitch's "Automotive Bankruptcy Enterprise Values and
Creditor Recoveries" report published in April 2024, 52% of
auto-related defaulters had exit multiples above 5.0x, with 30% in
the 5.0x to 7.0x range. However, the median multiple observed
across 23 bankruptcies was only 5.1x.
Within the report, Fitch observed that 87% of the bankruptcy cases
analyzed were resolved as a GC. Automotive defaulters were
typically weighed down by capital structures that became untenable
during a period of severe demand weakness, either due to economic
cyclicality or the loss of a significant customer, or they were
subject to significant operational issues.
While Clarios has a highly leveraged capital structure, Fitch
believes the company's business profile is stronger than most of
the issuers included in the automotive bankruptcy observations.
Consistent with Fitch's criteria, the recovery analysis assumes
that $1.7 billion of off-balance-sheet factoring is replaced with a
super-senior facility that has the highest priority in the
distribution of value. Fitch also assumes a full draw on the $800
million ABL revolver, which was not constrained by the borrowing
base limit as of Sept. 30, 2024. The ABL receives second priority
in the distribution of value after the factoring. Due to the ABL's
first lien claim on ring-fenced collateral, the facility receives a
Recovery Rating of 'RR1' with a waterfall generated recovery
computation (WGRC) in the 91%-100% range.
The analysis also assumes a full draw on the $800 million cash flow
revolver. Including this, the first lien secured debt totals $11.7
billion outstanding (including the estimated new debt) and receives
a lower priority than the ABL in the distribution of value
hierarchy, in part due to its second lien claim on the ABL's
collateral. This results in a Recovery Rating of 'RR3' with a WGRC
in the 50%-70% range.
The $1.6 billion of outstanding senior unsecured notes has the
lowest priority in the distribution of value. This results in a
Recovery Rating of 'RR6' with a WGRC in the 0%-10% range, owing to
the significant amount of secured debt positioned above it in the
distribution waterfall.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Gross EBITDA leverage above 7.0x without a clear path to
de-levering on a sustained basis;
- EBITDA interest coverage approaching 1.5x on a sustained basis;
- A decline in the Fitch-calculated EBITDA margin below 10% and FCF
margin near 1.0%, both on a sustained basis.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Financial policy-driven debt reduction that leads to gross EBITDA
leverage of 5.5x on a sustained basis;
- EBITDA interest coverage of 2.5x on a sustained basis;
- Fitch-calculated EBITDA margins in the low teens in percentage
terms and FCF margin of 2.5%, both on a sustained basis.
Liquidity and Debt Structure
Solid Liquidity: Liquidity as of Sept. 30, 2024, included $344
million of cash and cash equivalents, augmented by significant
revolver capacity. Revolver capacity includes both an $800 million
ABL facility and an $800 million first lien secured cash flow
revolver. As of Sept. 30, 2024, a total of about $1.6 billion was
available on the two revolvers, with full availability on the cash
flow revolver and $753 million available on the ABL, after
accounting for $47 million of letters of credit backed by the
facility.
The ABL and revolver both mature in 2028. However, a springing
maturity provision that applies to both facilities could accelerate
the maturities to as early as February 2026 if the company's senior
secured notes due 2026 are not refinanced or redeemed prior to that
time.
Debt obligations (excluding Fitch's factoring adjustments) are
light in FY 2025, but the company has $1.7 billion of debt maturing
in FY 2026 and $1.6 billion maturing in FY 2027.
Fitch expects Clarios' FCF to generally be sufficient to cover its
seasonal cash needs. As a result, based on its criteria, Fitch has
treated all of Clarios' cash as readily available.
Debt Structure: As of Sept. 30, 2024, Clarios had about $9.6
billion of debt outstanding, including off-balance-sheet factoring.
This consisted of $6.4 billion of first lien secured debt,
comprising U.S. dollar- and euro-denominated term loans and secured
notes, as well as about $1.6 billion of senior unsecured notes. The
remaining debt consisted of $1.7 billion of off-balance-sheet
factoring. Fitch excludes finance leases from its debt
calculations.
Clarios' term loans provide it with prepayment flexibility.
However, Clarios also has a significant amount of non-amortizing
debt that could lead to refinancing risk over the long term. That
said, the company's senior secured notes due 2026, as well as its
senior unsecured notes, became callable in May 2022.
Issuer Profile
Clarios is the world's largest manufacturer and distributor of
low-voltage, advanced automotive batteries. It provides one in
every three automotive lead-acid batteries globally, servicing
cars, heavy duty trucks, motorcycles, marine and power sports
vehicles in the OE and aftermarket channels.
Date of Relevant Committee
19 December 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
----------- ------ --------
Clarios Global LP
senior secured LT B+ New Rating RR3
CLARIOS GLOBAL: Moody's Rates New $1.2BB Senior Secured Notes 'B1'
------------------------------------------------------------------
Moody's Ratings assigned a B1 rating to Clarios Global LP's
proposed $1.2 billion backed senior secured notes. Moody's existing
ratings assigned to Clarios, including the B2 corporate family
rating, the B2-PD probability of default rating, the B1 ratings on
the backed senior secured bank credit facilities, the B1 senior
secured notes ratings, and the Caa1 senior unsecured debt rating,
are not affected by the transaction. The stable outlook is
unchanged.
Clarios seeks to issue new $1.2 billion senior secured notes. On
January 8th, the company announced a transaction to raise new USD
and EURO senior secured first lien term loan tranches totaling $3.3
billion. The company intends to use the proceeds from the new
senior secured debt to fund a $4.5 billion distribution to its
shareholders.
Therefore, Moody's expect debt-to-LTM EBITDA to increase to 6.0x
over the next 12-18 months from 4.5x at the end of September 2024,
excluding Section 45X tax credits. The high leverage will be
partially offset by higher earnings.
RATINGS RATIONALE
Clarios' B2 CFR reflects the company's good scale and strong market
position in automotive batteries supported by its long-standing
customer relationships. Roughly 80% of Clarios' global unit volume
is from more stable and higher margin aftermarket sales. The
industry has high barriers to entry given the environmental
liability risks related to the handling and processing of lead.
However, Clarios has exposure to commodity price fluctuations, in
particular lead. The company has high leverage, and Moody's expect
debt-to-EBITDA (including approximately $1.68 billion in accounts
receivable securitization) to increase to around 6.0x over the next
12 to 18 months, excluding Section 45X tax credits. In addition,
the high interest expense burden of the considerable debt load
constrains free cash flow and limits interest coverage.
Clarios will benefit materially from Section 45X tax credits,
assuming they remain in place, for the domestic manufacturing of
batteries. However, the deployment of cash from the tax credits
remains uncertain.
Liquidity will be good over the next 12 months, supported by cash
and cash equivalents of around $344 million as of the end of
September 2024 and Moody's expectation for free cash flow to exceed
$150 million over the next 12 months, excluding any tax refund from
Section 45X tax credits and the $4.5 billion distribution payment.
Additional liquidity is provided by an $800 million asset-based
revolving credit facility (ABL facility) expiring in March 2028 and
a $800 million cash flow revolving credit facility expiring in
January 2030. Moody's expect both of these facilities to be undrawn
when the transaction closes (although there are $47 million of
letters of credit against the ABL facility).
These figures are calculated excluding the earnings impact of
Section 45X tax credits that Moody's believe Clarios will likely
receive over the next 12-18 months.
The stable outlook reflects Moody's expectation that Clarios'
revenue will grow 3.5% per year over the next 12-18 months due to
higher unit sales and favorable pricing, and that Clarios will
continue to win new battery electric vehicle platforms. Moody's
also expect the company will improve its EBIT margin because of
higher revenue contribution from its advanced batteries and strong
cost control efforts.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Excluding Section 45X tax credits, the ratings could be upgraded
with consistent improvement in cash flow and continued debt
reduction. More specifically the ratings could be upgraded if
debt-to-EBITDA is sustained below 5.5x and EBITDA-to-interest is
sustained above 2.5x. The ratings could also be upgraded with
sufficient evidence that Clarios is eligible for annual tax credits
in relation to its domestic battery manufacturing operations under
Section 45X of the Internal Revenue Code; and a balanced financial
policy with prudent deployment of cash from Section 45X tax
credits.
Excluding Section 45X tax credits, the ratings could be downgraded
if revenue or profitability declines such that debt-to-EBITDA is
sustained above 6.5x. Further, an adverse development involving
environmental liabilities or deteriorating liquidity could result
in a ratings downgrade.
The principal methodology used in this rating was Automotive
Suppliers published in December 2024.
Headquartered in Glendale, WI, Clarios Global LP is a global
supplier of low-voltage automotive batteries for virtually every
type of passenger car, light truck and utility vehicle. About 70%
of volume is traditional starting, light and ignition (SLI)
lead-acid batteries, while roughly 30% is advanced battery
technologies to power start-stop, hybrid and electric vehicles.
Revenue for the twelve months ended September 30, 2024 was
approximately $10.6 billion. Clarios has been owned by affiliates
of Brookfield Business Partners L.P. and other institutional
partners including Caisse de dépôt et placement du Québec.
CLEM INVESTMENTS: Seeks to Use Cash Collateral
----------------------------------------------
Clem Investments I, LLC asked the U.S. Bankruptcy Court for the
Middle District of Florida, Tampa Division, for authority to use
cash collateral.
The company requires the use of cash collateral to fund its
operating expenses and costs of administration in its Chapter 11
case.
Gulfside Bank may hold a lien against the company's assets.
Clem estimates that the claim of the secured creditor is secured by
$21,999 in assets consisting of $15,026 in cash and $6,972 in
inventory.
As adequate protection for the use of cash collateral, Clem offers
the secured creditor a post-petition replacement lien on the assets
to the same extent and with the same validity and priority as its
pre-bankruptcy lien.
Gulfside Bank is represented by:
Stephanie C. Lieb, Esq.
Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullis,
P.A.
101 East Kennedy Boulevard, Suite 2700
Tampa, Florida 33602
Tel: (813) 223-7474 | Fax: (813) 229-6553
Email: slieb@trenam.com
About Clem Investments I
Clem Investments I, LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-07492) on December
20, 2024. In its petition, the Debtor reported assets between
$50,000 and $100,000 and liabilities between $500,000 and $1
million.
Judge Roberta A. Colton handles the case.
The Debtor is represented by Buddy D. Ford, Esq., at Buddy D. Ford,
P.A.
CNBX PHARMACEUTICALS: Posts $34K Net Loss for 3Mos Ended Nov 2024
-----------------------------------------------------------------
CNBX Pharmaceuticals Inc. filed a Form 10-Q with the U.S.
Securities and Exchange Commission disclosing $34,352 in net loss
over zero revenue for the three months ended November 30, 2024,
compared to $178,523 in net loss over $89,437 in revenues for the
three months ended November 30, 2023.
The Company also disclosed that it had $22,308 in total assets,
$2,536,640 in total liabilities, and $2,514,332 in total
stockholders' deficit at November 30, 2024.
The accompanying unaudited financial statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. The Company has incurred a net loss of $34,352 for the
three months ended November 30, 2024; and has incurred cumulative
losses since inception of $24,988,752. These conditions raise
substantial doubt about the ability of the Company to continue as a
going concern.
The ability of the Company to continue as a going concern is
dependent upon its abilities to generate revenues, to continue to
raise investment capital, and develop and implement its business
plan. No assurance can be given that the Company will be successful
in these efforts.
Due to the uncertainty of its ability to meet its current operating
and capital expenses, its independent auditors included an
explanatory paragraph in their report on the audited financial
statements for the year ended August 31, 2023, regarding concerns
about its ability to continue as a going concern. Its financial
statements contain additional note disclosures describing the
circumstances that lead to this disclosure by its independent
auditors.
Its unaudited financial statements have been prepared on a going
concern basis, which assumes the realization of assets and
settlement of liabilities in the normal cits se of business. Its
ability to continue as a going concern is dependent upon its
ability to generate profitable operations in the future and/or to
obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they
become due. The outcome of these matters cannot be predicted with
any certainty at this time and raise substantial doubt that we will
be able to continue as a going concern. Its unaudited financial
statements do not include any adjustments to the amount and
classification of assets and liabilities that may be necessary
should we be unable to continue as a going concern.
There is no assurance that its operations will be profitable. Its
continued existence and plans for future growth depend on its
ability to obtain the additional capital necessary to operate
either through the generation of revenue or the issuance of
additional debt or equity.
A full-text copy of the Form 10-Q is available at
https://urlcurt.com/u?l=2t3O2M
About CNBX Pharmaceuticals
Headquartered in Bethesda, MD, CNBX Pharmaceuticals Inc. is a
clinical-stage company specializing in the discovery, development
and commercialization of novel cannabinoid-based products and
innovative technologies for the treatment of cancer. The
Company's
first lead product candidate is Cannabics SR the oral capsule
developed for the treatment of patients with advanced cancer and
cancer anorexia cachexia syndrome (CACS), showed promising results
in a peer-reviewed clinical study that concluded the results
justify a larger clinical study. For oncology, the Company
intends
to pursue a broad strategy of combining its technology platforms
with conventional oncology therapies, based on their mechanisms of
action, safety profiles and versatility. The Company's leading
anti-neoplastic drug candidate under development for Colorectal
Cancer (CRC) is RCC-33, a first-in-class therapy being developed
primarily in two settings: one to reduce tumor cell activity in
CRC
patients as a standalone in neoadjuvant treatment or "window of
opportunity" at the time after colonoscopy, prior to cancer
staging; and another for patients with refractory to therapy and
adjuvant to surgery also at the time after colonoscopy.
Neoadjuvant treatment is the administration of antitumor therapy
as
a first step to shrink a cancerous tumor prior to surgical
intervention. Upon fundraising the Company intends to initiate a
Phase I/II clinical trials for both candidates in 2026.
COMTECH TELECOMMUNICATIONS: J. Ratigan Steps Down as CEO, Director
------------------------------------------------------------------
Comtech Telecommunications Corp. disclosed in a Form 8-K filing
with the U.S. Securities and Exchange Commission the mutually
agreed separation of John Ratigan as President, CEO and member of
the Board of Directors, effective as of January 13, 2025.
The Company has entered into a separation agreement and release,
dated January 10, 2025, with Mr. Ratigan. Pursuant to the
Separation Agreement, Mr. Ratigan will cease to serve as President,
CEO and a member of the Board and has withdrawn his candidacy for
election as a director at the Company's upcoming annual meeting.
In addition, in exchange for a release of claims and continued
compliance with the restrictive covenants set forth in that certain
employment agreement by and between Mr. Ratigan and the Company,
dated as of October 28, 2024, and the Company's clawback policies
and provisions in effect as of the Separation Date, Mr. Ratigan is
entitled to receive (i) accrued obligations through the Separation
Date (which includes base salary, any unpaid or unreimbursed
expenses, any benefits provided under the Company's employee
benefit plans, including the Company's 2023 Equity and Incentive
Plan and related award grants, and all rights to indemnification
and directors and officers liability insurance coverage), (ii) a
lump sum cash severance payment in the amount of $750,000, which
amount will be paid on the sixtieth day following the Separation
Date (in both cases, subject to all withholdings for applicable
taxes and other authorized withholdings), and (iii) subject to his
election of COBRA coverage, reimbursement of a monthly amount equal
to the monthly health premiums for such coverage paid by Mr.
Ratigan for himself and his eligible dependents until the earlier
of (x) 12 months following the Separation Date, (y) the date Mr.
Ratigan is no longer eligible to receive COBRA continuation
coverage, and (z) the date on which Mr. Ratigan becomes eligible to
receive substantially similar coverage from another employer. The
Separation Agreement also contains customary restrictive covenants,
including non-disparagement and confidentiality provisions.
About Comtech Telecommunications Corp.
Headquartered in Chandler, Arizona, Comtech Telecommunications
Corp. -- www.comtech.com -- is a global provider of
next-generation
911 emergency systems and secure wireless and satellite
communications technologies. This includes the critical
communications infrastructure that people, businesses, and
governments rely on when durable, trusted connectivity is
required,
no matter where they are - on land, at sea, or in the air - and no
matter what the circumstances -- from armed conflict to a natural
disaster. The Company's solutions are designed to fulfill its
customers' needs for secure wireless communications in the most
demanding environments, including those where traditional
communications are unavailable or cost-prohibitive, and in
mission-critical and other scenarios where performance is crucial.
Jericho, New York-based Deloitte & Touche LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Oct. 30, 2024, citing that the Company has suffered
recurring losses and negative cash outflows from operations, and
may be unable to maintain compliance with financial covenants
required by its credit agreement that raise substantial doubt
about
its ability to continue as a going concern.
COMTECH TELECOMMUNICATIONS: K. Traub Named President, CEO
---------------------------------------------------------
On January 13, 2025, Comtech Telecommunications Corp. announced
that Mr. Kenneth Traub, who currently serves as the Company's
Executive Chairman, has been appointed to serve as President and
Chief Executive Officer of the Company in addition to his current
role, effective as of January 13, 2025.
In connection with Mr. Traub's appointment, the Company amended Mr.
Traub's Existing Employment Agreement to reflect his new positions
and responsibilities. Pursuant to the Amendment, Mr. Traub will
receive an annualized base salary of $1,000,000 and will be
eligible to receive a sign-on bonus equal to $650,000, payable as
follows: $225,000 on the first regularly scheduled payroll date
following February 28, 2025 and $425,000 on the first regularly
scheduled payroll date following May 31, 2025. If the Company
terminates Mr. Traub's employment for "Cause" or if Mr. Traub
voluntarily terminates employment without "Good Reason" prior to
January 13, 2026, then Mr. Traub shall be obligated to immediately
return to the Company the full amount of the Sign-On Bonus paid
through the date of termination. If the Company terminates Mr.
Traub's employment without Cause (other than due to Mr. Traub's
death or disability) or Mr. Traub terminates his employment for
Good Reason, Mr. Traub will, in addition to the benefits set forth
in the Existing Employment Agreement, be entitled to receive a
pro-rata portion of the Sign-On Bonus.
There are no transactions since the beginning of the Company's last
fiscal year in which the Company is a participant and in which Mr.
Traub or any members of his immediate family have any interest that
are required to be reported under Item 404(a) of Regulation S-K. No
family relationships exist between Mr. Traub and any of the
Company's directors or executive officers. The appointment of Mr.
Traub was not pursuant to any arrangement or understanding between
him and any person, other than a director or executive officer of
the Company acting in his or her official capacity.
Mr. Traub is leading a comprehensive transformation of Comtech.
Some highlights of this transformation include:
-- Operational Discipline and Rightsizing. Comtech is taking
decisive action to improve processes, streamline product lines,
optimize staffing and sharpen its organizational focus. These
actions are expected to result in significant cost savings and
working capital efficiencies, particularly in the Company's
Satellite & Space Communications segment, and position Comtech to
generate sustainable positive cash flow.
-- Support and Grow Successful Business Units. The Company's
Terrestrial & Wireless Networks segment is poised for continued
strong growth, driven by the need for nontraditional methods to
request emergency help from new devices and the segment's new
initiatives in public safety technologies. The growth of the
Company's carrier business will be supported by its latest
cloud-agnostic 5G passive and emergency location, messaging and
alerting services. In the S&S segment, Comtech is strong in
designing, manufacturing and supporting sophisticated
communications equipment for both defense and commercial users that
rely on the Company to provide mission-critical communications
infrastructure. Comtech will prudently invest in and support these
successful businesses and capitalize on opportunities to build and
monetize these valuable assets.
-- Strategic Alternatives Process. The Comtech Board, under Mr.
Traub's leadership, will conduct a comprehensive review of
strategic alternatives and explore a range of potential
transactions to enhance Comtech’s strategic focus and strengthen
the Company's balance sheet. This process is a broadening of the
previously announced review of strategic alternatives for the T&W
segment and will include various alternatives for the S&S segment.
-- Strengthening the Capital Structure. Comtech had available
liquidity of approximately $30 million of cash and equivalents as
of both October 31, 2024 and January 10, 2025. The Company is
positioned to generate positive cash flow over the coming months
through implementation of the initiatives described above and will
consider opportunities to strengthen its capital structure.
Mr. Traub commented, "While Comtech's recent historical performance
has been unsatisfactory, the Company has great assets, including
its people, technologies, reputation, customers and relationships.
Since I joined the Company as Executive Chairman about six weeks
ago, I have learned a lot, which gives me confidence that we can
overcome the challenges and create new opportunities to strengthen
the business and drive value. We are implementing a comprehensive
set of initiatives to better position Comtech for the future
including improving operational discipline, streamlining
operations, supporting profitable growth initiatives, undertaking a
broad review of strategic alternatives and strengthening the
capital structure. I am honored to expand my role as President and
CEO today, and look forward to leading the Company into a stronger
and brighter future."
"The Board is fully supportive of Ken's leadership and committed to
his strategy that will deliver immediate and necessary improvements
for Comtech," said former Army Chief Information Officer,
Lieutenant General (Retired) Bruce T. Crawford, Lead Independent
Director of the Comtech Board.
There can be no assurance that the exploration of strategic
alternatives will result in a transaction or other strategic
changes or outcomes. There is no timeframe for the conclusion of
the process, and the Company does not intend to comment further
regarding this matter unless and until further disclosure is
determined to be appropriate or necessary.
About Kenneth H. Traub
Mr. Traub has served as a director on Comtech's Board since October
2024 and was named as Executive Chairman in November 2024. He is a
visionary and transformational corporate leader with a successful
track record of building sustainable shareholder value. Mr. Traub
has over 30 years of experience as a Chairman, CEO, director and
active investor with a demonstrated record of accomplishment in
driving strategic, financial, operational and governance
improvements. Mr. Traub is adept at managing business challenges,
executing turnarounds, optimizing capital allocation, driving
operational improvements, implementing M&A and other strategic
initiatives and capitalizing on strategic growth opportunities. Mr.
Traub received a BA from Emory College in 1983 and an MBA from
Harvard Business School in 1988.
About Comtech Telecommunications Corp.
Headquartered in Chandler, Arizona, Comtech Telecommunications
Corp. -- www.comtech.com -- is a global provider of
next-generation
911 emergency systems and secure wireless and satellite
communications technologies. This includes the critical
communications infrastructure that people, businesses, and
governments rely on when durable, trusted connectivity is
required,
no matter where they are - on land, at sea, or in the air - and no
matter what the circumstances -- from armed conflict to a natural
disaster. The Company's solutions are designed to fulfill its
customers' needs for secure wireless communications in the most
demanding environments, including those where traditional
communications are unavailable or cost-prohibitive, and in
mission-critical and other scenarios where performance is crucial.
Jericho, New York-based Deloitte & Touche LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Oct. 30, 2024, citing that the Company has suffered
recurring losses and negative cash outflows from operations, and
may be unable to maintain compliance with financial covenants
required by its credit agreement that raise substantial doubt
about
its ability to continue as a going concern.
COMTECH TELECOMMUNICATIONS: Posts $148MM Net Loss for Oct 2024 Q
----------------------------------------------------------------
Comtech Telecommunications Corp. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
$148,407,000 net loss on $14,516,000 gross profit for the three
months ended October 31, 2024, compared to a $1,437,000 net loss on
$47,882,000 gross profit for the three months ended October 31,
2023.
The Company also disclosed $793,203,000 in total assets,
$494,139,000 in total liabilities, and $150,364,000 in total
stockholders equity at October 31, 2024.
Over the past three fiscal years, the Company incurred operating
losses of $79,890,000, $14,660,000 and $33,752,000 in fiscal 2024,
2023 and 2022, respectively. More recently, the Company recognized
an operating loss of $129,170,000 in the three months ended October
31, 2024. In addition, over the past three fiscal years, net cash
used in operating activities was $54,495,000 and $4,433,000 in
fiscal 2024 and 2023, respectively, and net cash provided by
operating activities was $1,997,000 in fiscal 2022. More recently,
net cash used in operating activities was $21,806,000 in the three
months ended October 31, 2024. The Company's ability to meet future
anticipated liquidity needs over the next year beyond the issuance
date will largely depend on its ability to generate positive cash
inflows from operations, maximize its borrowing capacity under its
Credit Facility, and/or secure other sources of outside capital.
While the Company believes it will be able to generate sufficient
positive cash inflows, maximize its borrowing capacity and secure
outside capital, there can be no assurance its plans will be
successfully implemented and, as such, it may be unable to continue
as a going concern over the next year beyond the issuance date.
On June 17, 2024, the Company entered into a $222,000,000 credit
facility with a new syndicate of lenders, which replaced its prior
credit facility. The Company subsequently amended the credit
facility on October 17, 2024. The Credit Facility consists of a
committed $162,000,000 term loan and $60,000,000 revolving loan. At
October 31, 2024 and January 10, 2025 (the date closest to the
issuance date), total outstanding borrowings under the Credit
Facility were $199,495,000. At both October 31, 2024 and January
10, 2025, $32,500,000 was drawn on the Revolver Loan. As of the
issuance date, its available sources of liquidity approximate
$28,500,000, consisting solely of qualified cash and cash
equivalents. That is, its available sources of liquidity do not
include the remaining portion of the committed Revolver Loan due to
the revolving lender's and Agent's consent right, discussed below,
to any borrowings that exceed $32,500,000.
The Credit Facility, among other things, requires compliance with
new restrictive and financial covenants, including: a maximum Net
Leverage Ratio of 3.25x commencing with the fiscal quarter ending
January 31, 2025; a minimum Fixed Charge Coverage Ratio of 1.20x
commencing with the fits fiscal quarter period ending January 31,
2025; a minimum Average Liquidity requirement at each quarter end
of $20,000,000; and a minimum EBITDA of $35,000,000 for the fits
fiscal quarter period ending October 31, 2025. Such ratios and
minimum EBITDA adjust under the Credit Facility in future periods.
Over the next twelve months beyond the issuance date, commencing
with its fiscal quarter ending January 31, 2025, the Company
believes that the Company will not be able to comply with one or
more of these covenants.
The Credit Facility was amended on October 17, 2024 to waive
certain defaults or events of default, including in connection with
its Net Leverage Ratio and Fixed Charge Coverage Ratio covenants as
of July 31, 2024. The amendment also, among other things: (i)
increased the interest rate margins applicable to the loans; (ii)
modified certain financial and collateral reporting requirements;
(iii) provided a consent right to the revolving lender and Agent
with respect to $27,500,000 of Revolver Loan borrowings above
$32,500,000; (iv) permitted the incurrence of $25,000,000 of senior
unsecured subordinated debt (as described below); (v) amended the
maturity date to the earlier of (x) July 31, 2028 or (y) 90 days
prior to the earliest date that the debt under the Subordinated
Credit Agreement (as defined below) becomes due and payable; and
(vi) suspended certain financial covenant testing through the end
of its fiscal quarter ending January 31, 2025.
In addition, the Company entered into a Subordinated Credit
Agreement with the existing holders of its Convertible Preferred
Stock on October 17, 2024, which provides a subordinated unsecured
term loan facility in the aggregate principal amount of
$25,000,000. The proceeds of the Subordinated Credit Facility: (i)
cured its default on certain financial covenants under the Credit
Facility; (ii) provided additional liquidity to us; and (iii)
funded its general working capital needs.
Its ability to meet its current obligations as they become due may
be impacted by its ability to remain compliant with the financial
covenants required by the Credit Facility, or to obtain future
waivers or amendments from the lenders in the event compliance is
not maintained. While the Company believes the Company will be able
to secure such waivers or amendments, as needed, there can be no
assurance such waivers or amendments will be secured or on terms
that are acceptable to us. If the Company is unable to secure
waivers or amendments, the lenders may declare an event of default,
which would cause an immediate acceleration and repayment of all
outstanding principal, interest and fees due under its Credit
Facility. Absent its ability to repay the forgoing amounts upon the
declaration of an event of default, the lenders may exercise their
rights and remedies under the Credit Facility, which may include,
among others, a seizure of substantially all of its assets and/or
the liquidation of its operations. If an event of default occurs
that allows the lenders to exercise these rights and remedies over
the next year beyond the issuance date, the Company will be unable
to continue as a going concern.
As of the issuance date, its plans to address its ability to
continue as a going concern include, among other things:
* executing a strategy to transform Comtech (ongoing and future
actions supporting its transformation strategy include: an
exploration of strategic alternatives for its various businesses
and product lines; the pursuit of further portfolio-shaping
opportunities to enhance profitability, efficiency and focus; and
the implementation of additional operational initiatives to both
achieve profitable results from operations as well as to align its
go-forward cost structure with its future state business), as
discussed further in Note (21) – Cost Reduction and Restructuring
Related Activities;
* pursuing initiatives to reduce investments in working capital,
namely accounts receivable and inventory;
* improving process disciplines to attain and maintain profitable
operations by entering into more favorable sales or service
contracts;
* reevaluating its business plans to identify opportunities (e.g.,
within each of its segments) to focus future investment on its most
strategic, high-margin revenue opportunities;
* reevaluating its business plans to identify opportunities to
further reduce capital expenditures;
* seeking opportunities to improve liquidity through any
combination of debt and/or equity financing (including possibly
restructuring its Credit Facility, Convertible Preferred Stock
and/or Subordinated Credit Facility); and
* seeking other strategic transactions and/or measures including,
but not limited to, the potential sale or divestiture of assets in
addition to the wind down of its steerable antenna product line in
Basingstoke, U.K.
While the Company believes the implementation of some or all of the
elements of its plans over the next year beyond the issuance date
will be successful, these plans are not all solely within
management’s control and, as such, the Company can provide no
assurance its plans are probable of being effectively implemented
as of the issuance date. Therefore, the adverse conditions and
events described above are uncertainties that raise substantial
doubt about its ability to continue as a going concern. The
accompanying Condensed Consolidated Financial Statements have been
prepared on the basis that the Company will continue to operate as
a going concern, which contemplates the Company will be able to
realize assets and settle liabilities and commitments in the normal
course of business for the foreseeable future. Accordingly, the
accompanying Condensed Consolidated Financial Statements do not
include any adjustments that may result from the outcome of these
uncertainties.
Cost-Savings and Profit Improvement Initiatives
The Company is conducting a thorough review of processes, product
lines, staffing levels and cost structures to identify actions that
are expected to meaningfully reduce costs, enable a more efficient
and effective organization and improve its cash conversion cycle.
To that end, the Company notes that since July 2024, it has
significantly progressed with its plans to wind down its steerable
antenna operations located in the U.K. (GAAP operating losses
related to this product line in fiscal 2024, 2023 and 2022 were
$32.3 million, $8.2 million and $9.9 million, respectively). In
addition to discontinuing approximately 70 products within the
Company’s satellite ground infrastructure product line to focus
on higher margin revenue opportunities, the Company has also
reduced its global workforce by approximately 13% since July 31,
2024, which represents approximately $26 million in annualized
labor costs. Severance associated with such actions approximated
$2.8 million, of which $1.1 million will be expensed in the second
quarter of fiscal 2025.
Liquidity
Comtech's cash and cash equivalents were approximately $30 million
as of both October 31, 2024 and January 10, 2025. As previously
disclosed, on June 17, 2024, the Company entered into a new $222.0
million credit facility. The credit facility was subsequently
amended on October 17, 2024, to, among other things, suspend
financial covenant testing for the Company's first fiscal quarter
ended October 31, 2024. On October 17, 2024, the Company also
entered into a $25.0 million subordinated credit facility.
As of quarter end, aggregated outstanding debt under these two
credit facilities was approximately $225 million, before
consideration of GAAP related adjustments to reflect offsetting
deferred financing costs and discounts related to each facility.
Over the next twelve months, commencing with its fiscal quarter
ending January 31, 2025, when financial covenant testing resumes,
the Company believes that it will not be able to comply with one or
more of these covenants. As a result, such debt was presented as
"current" on the Company's condensed consolidated balance sheet as
of October 31, 2024.
Strengthening the balance sheet is a top priority for the Company.
This includes lowering investments in working capital, reducing
debt levels and cash interest costs and regaining compliance with
financial covenants. The Comtech Board is confident that Mr. Traub
possesses the requisite skill set, track record and experience to
oversee these initiatives.
The Company's Board is conducting a comprehensive review of
strategic alternatives. This process will include evaluating
capital-raising and de-levering opportunities.
Investor Relations Contact
Maria Ceriello
631-962-7115
Maria.Ceriello@comtech.com
Media Contact
Jamie Clegg
480-532-2523
Jamie.Clegg@comtech.com
A full-text copy of the Form 10-Q is available at
https://urlcurt.com/u?l=wBDH9C
About Comtech Telecommunications Corp.
Headquartered in Chandler, Arizona, Comtech Telecommunications
Corp. -- www.comtech.com -- is a global provider of
next-generation
911 emergency systems and secure wireless and satellite
communications technologies. This includes the critical
communications infrastructure that people, businesses, and
governments rely on when durable, trusted connectivity is
required,
no matter where they are - on land, at sea, or in the air - and no
matter what the circumstances -- from armed conflict to a natural
disaster. The Company's solutions are designed to fulfill its
customers' needs for secure wireless communications in the most
demanding environments, including those where traditional
communications are unavailable or cost-prohibitive, and in
mission-critical and other scenarios where performance is crucial.
Jericho, New York-based Deloitte & Touche LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Oct. 30, 2024, citing that the Company has suffered
recurring losses and negative cash outflows from operations, and
may be unable to maintain compliance with financial covenants
required by its credit agreement that raise substantial doubt
about
its ability to continue as a going concern.
COOPER-STANDARD: Thrivent Financial for Lutherans Holds 9.3% Stake
------------------------------------------------------------------
Thrivent Financial for Lutherans disclosed in a Schedule 13G/A
filed with the U.S. Securities and Exchange Commission that as of
December 31, 2024, it beneficially owned 1,616,000 shares of
Cooper-Standard Holdings Inc.'s common stock, representing 9.3% of
the 17,326,531 shares of Cooper-Standard's Common Stock outstanding
on October 25, 2024.
Thrivent Financial may be reached at:
David S. Royal
Chief Financial Officer
901 Marquette Avenue, Suite 2500
Minneapolis, MN 55402
Tel: 612-340-7215
A full-text copy of Thrivent Financial's SEC Report is available
at:
https://tinyurl.com/4xpbkpnh
About Cooper-Standard
Cooper-Standard Holdings Inc. (www.cooperstandard.com),
headquartered in Northville, Mich., with locations in 21 countries,
is a global supplier of sealing and fluid handling systems and
components. Utilizing the Company's materials science and
manufacturing expertise, the Company creates innovative and
sustainable engineered solutions for diverse transportation and
industrial markets.
* * *
S&P Global Ratings revised its outlook on U.S.-based
Cooper-Standard Holdings Inc. to positive from negative and
affirmed our 'CCC+' Company credit rating.
S&P said, "At the same time we affirmed our 'CCC+' issue-level on
the senior secured first-lien notes due in 2027; the recovery
ratings are unchanged at '4' (30%-50%; rounded estimate: 45%). We
affirmed our 'CCC-' issue-level rating on the senior secured
third-lien notes due in 2027; the recovery ratings are unchanged at
'6' (0%-10%; rounded estimate: 0%). We also affirmed our 'CCC-'
issue-level rating on the company's senior unsecured notes; the
recovery ratings are unchanged at '6' (0%-10%; rounded estimate:
0%).
"The positive outlook reflects the potential that we could raise
our ratings within the next 12 months if we anticipate the company
to further improve its earnings and free cash flow generation even
as we expect capex to increase in the longer term."
COVERED BRIDGE: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Covered
Bridge Newtown, LLC.
The committee members are:
1. Shock Electrical Contractors, Inc.
c/o Jean A. Belansky, Secretary of Corporation
178 Osborne Street
Danbury, CT 06810
Telephone: (203) 748-5690
Email: Shockelectric81@hotmail.com
2. BFZ Electric, LLC
c/o Brian Zadrozny, Manager
9 Newcastle Place
Unionville, CT 06085
Telephone: (860) 235-9043
Email: brianz@bfzelectric.com
3. Carpets Unlimited, Inc.
c/o Jill Eberhardt, Credit Manager
44 Gordon Street, Unit 7
Danvers, MA 01923
Telephone: (978) 739-4500, ext. 16
Email: Jeberhardt@cuifloors.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 Covered Bridge Newtown
Covered Bridge Newtown LLC 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.
Covered Bridge Newtown LLC and Covered Bridge Newtown I, LLC sought
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ct.
Lead Case No. 24-50833) on December 8, 2024. In the petitions
filed
by Anthony O. Lucera, member, each Debtor reports estimated assets
and liabilities between $50 million and $100 million.
Honorable Bankruptcy Judge Julie A. Manning handles the case.
The Debtors tapped Green & Sklarz LLC as counsel; R.J. Reuter, LLC
as an independent financial advisor; Cohen & Wolf, PC as special
counsel; and Landwehr & Spaho, CPAS, LLC as accountant.
CREATIVE ARTISTS: $300MM Loan Add-on No Impact on Moody's 'B2' CFR
------------------------------------------------------------------
Moody's Ratings said Creative Artists Agency, LLC's ("CAA" or the
"company") B2 corporate family rating, B2 ratings on the senior
secured first-lien bank credit facilities and stable outlook are
not impacted by the company's announcement that it plans to issue
an additional $300 million term loan to its existing $2.1 billion
outstanding senior secured first-lien term loan due 2031.
Net proceeds from the fungible add-on will be used to pay a
shareholder distribution and add cash to the balance sheet for
general corporate purposes. The incremental term loan will be
executed via an amendment under the credit agreement governing the
existing bank credit facilities and contain the same terms and
conditions.
While the transaction is credit neutral, pro forma restricted
credit group leverage, as measured by total debt to cash EBITDA,
increases to 7.3x from 6.4x at FYE September 30, 2024 due to the
term loan add-on. Leverage metrics are Moody's adjusted including
Moody's standard lease adjustments with cash EBITDA defined as
funds from operations less stock based compensation plus interest
expense plus taxes. Pro forma leverage rises above the 6.5x
downgrade threshold, which means CAA's financial flexibility within
the B2 CFR will be constrained until EBITDA expands and/or debt is
repaid. Despite this, Moody's continue to expect restricted group
leverage will decrease to below 6x by FYE 2025 as operating
performance continues to recover from the impact of the 2023 double
Hollywood strikes driven by the quickening ramp up of film and
episodic TV production and continued growth in sports, music and
other services.
CAA's credit profile reflects the company's elevated restricted
group leverage counterbalanced by its size as one of the largest
talent agencies in the world with diversified operations
representing a wide range of clients. The company has leading
positions in motion pictures, television, music, publishing, and
sports and includes commercial endorsements, and other business
services. While the diversified service offering has helped to
somewhat reduce the effect of recent disruptions to live
entertainment and film/TV content production, these revenue streams
remain concentrated at over 50% of total revenue. Nonetheless, a
substantial amount of CAA's costs are also variable and contractual
revenue streams will continue to be a recurring source of revenue
and cash flow. Moody's expect mid-to high single digit revenue
growth in 2025 as the pace of content production continues to
rebound.
CAA will benefit from the need for original content worldwide from
traditional media companies and streaming services, however Moody's
expect the pace of content spend will continue to moderate from
prior levels as the large media companies focus on improving
profitability and the industry undergoes consolidation. Concert
related revenue is a modest portion of CAA's total revenue, but
will likely continue to contribute to growth through 2025 given the
strong demand for live entertainment. Sports related revenue
benefits from largely contractual revenue streams and will expand
further as athletes' compensation rises, sports advisory services
grow and sporting events continue to transition to streaming
platforms owing to strong demand for sports content. CAA will
evaluate additional acquisitions to further increase its scale,
geographic footprint, and the range of services offered, which may
be funded in part with additional debt. Liquidity remains adequate
with restricted group cash balances totaling $293 million (as of
September 30, 2024) and $300 million of undrawn revolver capacity
under the $350 million upsized revolver maturing October 2029 (with
roughly $49 million of outstanding letters of credit). Moody's
expect free cash flow (FCF) to be negative in FY 2025, chiefly due
to the one-time debt financed dividend distribution (FCF is defined
by Moody's as CFO less capital expenditures less dividends).
Creative Artists Agency, LLC is a global talent representation
agency with leading positions in motion pictures, television,
music, publishing, and sports and includes television packaging
rights, commercial endorsements, and other business services.
Artémis (the Pinault family's investment company) acquired a
majority ownership position from TPG Capital L.P. and other
investors in September 2023. Restricted group revenue for the
fiscal year ended 30 September 2024 totaled around $1.7 billion.
CRICKET AUTOMOTIVE: Gets Interim OK to Use Cash Collateral
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina granted Cricket Automotive Center, LLC interim
authorization to use cash collateral.
The interim order approved the use of cash collateral to pay
operating expenses set forth in the company's budget, which shows
total expenses of $117,440 for January.
Secured creditors will receive a post-petition replacement lien on
the company's post-petition property of the same type that secured
the company's indebtedness to the creditors.
Additionally, Cricket Automotive Center was ordered to pay $2,000
to Cricket Service Center, LLC and make lease payments to Texaco
Since 1949, LLC and Rollback at Ward, LLC due this month.
The next hearing will be held on Jan. 27.
About Cricket Automotive Center
Cricket Automotive Center, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-04172) on
December 2, 2024, with $100,001 to $500,000 in assets and $500,001
to $1 million in liabilities.
Judge David M. Warren presides over the case.
The Debtor is represented by:
William P Janvier
Stevens Martin Vaughn & Tadych, PLLC
Tel: 919-582-2300
Email: wjanvier@smvt.com
CROUSE HEALTH: Fitch Alters Outlook on 'BB' IDR to Negative
-----------------------------------------------------------
Fitch Ratings has affirmed Crouse Health System's (NY) Issuer
Default Rating (IDR) at 'BB'. Fitch has also affirmed the rating on
the series 2024A and series 2024B revenue bonds issued by the
Onondaga Civic Development Corporation on behalf of Crouse at
'BB'.
The Rating Outlook has been revised to Negative from Stable.
Entity/Debt Rating Prior
----------- ------ -----
Crouse Health
System, Inc. (NY) LT IDR BB Affirmed BB
Crouse Health
System, Inc. (NY)
/General Revenues/1 LT LT BB Affirmed BB
The Outlook revision to Negative reflects considerable uncertainty
regarding recent and unexpected changes to New York State's
Directed Payment Template (DPT) funding. While the initial DPT
changes present unambiguous pressure on Crouse's cash flow,
management is working with the state to request that either DPT
funding will be restored to historical levels for state fiscal year
(SFY) 2026 or to obtain an alternate commensurate funding source.
Absent either of these, Crouse will face rating pressure. Absent a
funding stream to restore DPT cash flows, Crouse will trigger its
debt service coverage (DSC) covenant. Management expects to exceed
its liquidity covenant that requires Crouse to maintain at least 30
days cash on hand (DCOH) at FYE 2024.
Despite the uncertainty around DPT, the fundamentals underlying
Crouse's 'BB' Long-Term IDR remain in place, and the system
continues to make investments to drive margin improvement and
balance sheet growth. Although Crouse has experienced persistent
operating losses and thin operating EBITDA margins in recent years,
the system should generate stronger operating EBITDA margins over
time, if DPT funding can be restored.
Crouse's current capital-related ratios are modest, with
cash-to-adjusted debt of just over 60% at audited FYE 2023 (56% at
unaudited Sept. 30, 2024). Balance sheet metrics should improve
over time in Fitch's forward-looking scenario analysis (even in a
stress case), if Crouse can restore DPT funding. Capital spending
plans can be adjusted depending on the level of state support and
fundraising.
SECURITY
Revenue bonds are supported by a revenue pledge and a debt service
reserve fund (DSRF). Crouse Health Hospital represents the
obligated group (OG). The OG represents about 95% of system assets
and 93% of system operating revenue.
KEY RATING DRIVERS
Revenue Defensibility - 'bb'
Local Competition with Somewhat Modest Payor Mix
Crouse's revenue defensibility is modest, given the level of
competition in the market and the system's payor mix. Crouse is one
of three health systems in the region, competing against
SUNY-Upstate and St. Joseph's Health Hospital (a member of AA-
rated Trinity Health). SUNY-Upstate is the clear leader for total
inpatient admission, with about 44% share as of 2023, followed by
Crouse with nearly 29% and St. Joseph's with just over 27%.
Despite the degree of competition, Crouse maintains a clear market
lead for key service lines, including OB (58% as of 2023, with St.
Joseph's at 27%) and NICU (77%). Crouse also has central New York's
only perinatal center for high-risk pregnancies. Crouse is also the
market leader for substance abuse treatment, capturing 50% share.
One area where Crouse has lagged the market is cardiac care,
capturing just under 18% share, while St. Joseph's is the leader
with nearly 55% and SUNY-Upstate captures about 27%. In June 2024,
Crouse submitted certificate of need (CON) application to New York
State to add an open-heart surgery program. This new service line
is expected to add significant cash flows as Crouse currently
refers out approximately 600 open heart surgeries each year from
its own employed physicians. Crouse is waiting for final
determination from the state.
Crouse is a safety net provider, and its payor mix is modestly weak
with combined Medicaid and self pay accounting for about 25%-26% of
gross revenue (including 25% in FY 2023). Demographics in the
service area are reasonably stable. Onondaga County represents the
primary service area (PSA), and the secondary and tertiary service
areas cover a broad section of central upstate New York that
reaches south to the Pennsylvania border and north to the Canadian
border. The median household income level in the county is just
below the national average, and the unemployment rate in the county
is in-line with the U.S. average. The population growth rate in the
county is positive, but below the national average.
A favorable investment in the service area of note is the Micron
chip manufacturing plant to be located in Clay, NY (less than 15
miles north of downtown Syracuse). The $100 billion investment is
supported by $10 billion of incentives from the federal CHIPS Act.
Construction is expected to begin in 2025, and the project is
estimated to support 9,000 direct jobs once fully operational.
Crouse was donated a building in the area that the system plans to
renovate for clinical purposes.
Operating Risk - 'bb'
Modest Results Recently; Potential Operating Trajectory Could be
Derailed by DPT Funding Loss
Fitch assesses Crouse's operating risk as weak and that could be
pressured further depending on the outcome of DPT. In September
2024 Crouse was notified by the state about updates to the DPT
funding formula that, as it currently stands, reduces Crouse's
funding from the program from $65.1 million in SFY 2024 (New York
State has a March 31 FYE) to about $37 million in SFY 2025.
This $28.1 million reduction has a profound negative effect on
Crouse's cash flows; to put this in perspective, in FY 2023
(December 31 FYE), Crouse recorded $13.3 million in operating
EBITDA (2.2% operating EBITDA margin). In other words, all else
equal, the DPT change would eliminate Crouse's free cash flow from
operations, although management notes there are accretive offsets
such as rejoining 340B and a Medicare wage adjustment for the
region that partially offset the DPT funding loss. Unless funding
is retroactively restored for FY 2024, Crouse will violate its 1x
DSC covenant.
Crouse is working with the state to develop remedies to make up for
the lost DPT funding. One path Crouse is pursuing is New York
State's new Safety Net Transformation Program (SNTP). Crouse
received an application from the state to apply for funding under
SNTP, which may be an avenue to restore the loss of DPT funding.
While Crouse continues to work with the state, failure to restore
the funding will likely pressure the rating. On the other hand,
securing SNTP funding commensurate with the lost DPT funding could
move the Outlook back to Stable from negative.
Outside of the considerable revenue compression from the DPT
change, key operating fundamentals for Crouse have actually held up
well through nine-months FY 2024. Volume trends have been positive
in the interim period, with discharges up 6.3%, observation stays
up 5.5%, and surgeries up 7.4%.
Prior to FY 2024, Crouse's operating margins had been modest.
Between by FY 2019 and FY 2023 the operating margin averaged -3.1%
and the operating EBITDA margin averaged 1.3% (including -1.3% and
2.2%, respectively, in FY 2023). Like the rest of the healthcare
industry, Crouse has contended with macro challenges such as the
pandemic and subsequent labor and inflationary pressures. Through
nine-months FY 2024 (as of September 30), Crouse's operating margin
was -3.4% and the operating EBITDA margin was -0.1%.
If Crouse can replace the lost DPT funding, the system's operating
margins should show improvement in the coming years. A number of
factors should contribute to this, including: (a) the
aforementioned open heart surgery program, should the CON be
approved, which requires limited capex and hiring, as the system
already has cardiac physicians on staff; (b) the aforementioned
340B program (which Crouse rejoined in 2024) and Medicare wage
index adjustment (effective January 2024 and management estimates
is worth $28 million net annually to Crouse); and (c) the Micron
chip plant should contribute significantly to added economic
activity, including for healthcare service providers, over the
longer term.
Management is also implementing core operating improvements, some
of which are accelerated because of the DPT funding loss. These
include enhanced accounts receivable and revenue cycle, reducing
denials, lowering length of stay, and realizing savings from the
2024 debt refinancing. Crouse also benefited from a decline in
nurse turnover in 2024. Management's long-term goal is to improve
results such that Crouse can generate sufficient operating margins
without DPT/SNTP funding, but that will take a number of years.
Healthcare is inherently a variable operating industry, and while
there is some uncertainty as to how beneficial some of the
aforementioned initiatives will be, in Fitch's opinion Crouse's
financial results should improve over the long term, again, if a
DPT or similar funding source can be restored.
Capital Spending: Crouse's capital spending has been comparatively
light in recent years, in part to preserve the balance sheet during
compressed operating margins. The capital spending ratio averaged
less than 40% between FY 2019 and FY 2023, and the average age of
plant measured a high 20 years at FYE 2023. Nevertheless, Crouse
has invested in facilities and technology that have kept the system
competitive in the market.
Routine capex is targeted at about $9 million over the next five
years, but annual spending could exceed $30 million depending on
external support. Highlighted projects that are being considered
but depend on state support or fundraising include deployment of
the Epic EMR ($46 million), expansion and renovation of the NICU
($45 million), ambulatory upgrades ($21 million), an increase in
staffed inpatient beds ($5 million), and renovation of the
inpatient addiction treatment center ($6 million).
Financial Profile - 'bb'
Current Balance Sheet Metrics are Weak, but Should Improve if DPT
Funding is Restored
Crouse's current balance sheet ratios are modest, but metrics
should improve if DPT funding is replaced or restored, and capital
spending is largely supported externally. Fitch notes that it is
common for New York State hospitals to have more modest liquidity.
The absence of restoring DPT or commensurate replacement funding
could pressure the balance sheet further, absent considerable cash
flow savings.
At FYE 2023, Crouse had about $74 million in unrestricted cash and
investments and debt measured approximately $122 million. These
translated to modest cash on hand of about 45 DCOH and cash-to-debt
of barely 60%. Ratios held up reasonably well at unaudited Sept.
30, 2024, with 39 DCOH and 56% cash-to-debt. Management expects to
exceed at FYE 2024 its liquidity covenant that requires a minimum
of 30 DCOH despite the DPT funding loss. Crouse's liquidity profile
should improve over time if DPT funding is restored.
Crouse terminated its defined benefit (DB) pension in 2021. As part
of the DB pension termination, Crouse filed a distressed
termination with the Pension Benefit Guaranty Corporation (PBGC).
As part of the settlement with PBGC, Crouse agreed to settle its
pension for $30 million, with level amortization over 10 years. As
of FYE 2023 the outstanding pension settlement was just under $23
million, which Fitch includes as part of Crouse's debt.
Fitch's forward-looking stress scenario applies operational and
investment stresses. Crouse's balance sheet should hold up during a
stress case, although much depends on the extent to which, if at
all, DPT funding is restored or replaced, otherwise the balance
sheet could be stressed considerably.
Asymmetric Additional Risk Considerations
There are no asymmetric risks affecting the rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to restore DPT (or a comparable program);
- Failure to improve operating margins, particularly if operating
losses persist and the operating EBITDA margin remains below the
4%-5% range;
- Failure to sustain current balance sheet ratios, particularly if
cash-to-adjusted debt were expected to remain below 50% in a
forward-looking stress case.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Reversion of the Outlook to Stable is contingent on Crouse
resolving DPT funding and demonstration of operating margins
continuing a trend of improvement;
- Sustained improvement in operating margins, resulting in an
operating EBITDA margin at least in the 5% range;
- Improved balance sheet, particularly if cash-to-adjusted debt
were expected to be sustained close to 100%.
PROFILE
Crouse is a 355 staffed bed tertiary referral hospital system based
in Syracuse, NY. The system has a teaching relationship and other
affiliations with SUNY-Upstate. Crouse recorded operating revenue
in excess of $600 million in FY 2023 (December 31 FYE).
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.
CRUCIBLE INDUSTRIES: Russell R. Johnson Represents Utilities
------------------------------------------------------------
Russell R. Johnson III of the Law Firm of Russell R. Johnson III,
PLC filed a verified statement pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure to disclose that in the Chapter 11
case of Crucible Industries, LLC, the firm represents utility
companies (the "Utilities") that provided prepetition utility
goods/services to the Debtors.
The names and addresses of the Utilities represented by the Firm
are:
1. Niagara Mohawk Power Corporation
Attn: Vicki Piazza, D-1
National Grid
300 Erie Boulevard West
Syracuse, NY 13202
2. Sprague Operating Resources LLC
Attn: Derrick Mosher, Director of Credit
185 International Drive
Portsmouth, New Hampshire 03801
3. Constellation NewEnergy, Inc.
Attn: Renee E. Suglia, Esq., Assistant General Counsel
Niagara Mohawk Power Corporation and Constellation NewEnergy, Inc.
have unsecured claims against the Debtor arising from prepetition
utility usage.
Sprague Operating Resources LLC is the beneficiary under two
standby letters of credit that Sprague will draw upon for the
payment of the prepetition debt that the Debtor owes to Sprague.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the Utilities in December 2024.
The law firm can be reached at:
Russell R. Johnson III, Esq.
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
2258 Wheatlands Drive
Manakin-Sabot, Virginia 23103
Telephone: (804) 749-8861
Email: russell@russelljohnsonlawfirm.com
About Crucible Industries
Crucible Industries, LLC, is a New York-based company that
manufactures and exports steel products.
Crucible Industries filed a Chapter 11 petition (Bankr. N.D.N.Y.
Case No. 24-31059) on Dec. 12, 2024. In its petition, the Debtor
reported $10 million to $50 million in both assets and
Liabilities.
Judge Wendy A. Kinsella oversees the case.
Charles J. Sullivan, Esq., at of Bond, Schoeneck & King, PLLC, is
the Debtor's legal counsel.
DALRADA FINANCIAL: Posts $23.2MM Net Loss for FY Ended June 2024
----------------------------------------------------------------
Dalrada Financial Corporation filed with the U.S. Securities and
Exchange Commission its Form 10-K disclosing $23,250,181 in net
loss over $23,461,914 in revenue for the year ended June 30, 2024,
compared to $20,627,721 in net loss over $27,456,223 in revenue for
the year ended June 30, 2023.
The Company also disclosed $27,604,808 in total assets, $19,166,203
in total liabilities, and $8,438,605 in total stockholders' equity
at June 30, 2024.
These condensed consolidated financial statements have been
prepared on a going concern basis, which implies that the Company
will continue to realize its assets and discharge its liabilities
in the normal course of business. As of June 30, 2024, and 2023,
the Company had a positive working capital deficit of $377,228 and
$202,420, respectively. The Company incurred negative cash flows
from operations for the years ended June 30, 2024, and 2023, and
raises substantial doubt about the Company's ability to continue as
a going concern. The continuation of the Company as a going concern
is dependent upon the successful financing through equity and/or
debt investors and growing the subsidiaries anticipated to be
profitable while reducing investments in areas that are not
expected to have long-term benefits. The Company expects to fund
any short-term operational deficits primarily through collection of
outstanding accounts receivable from medical insurance providers,
Medicare, pharmaceutical sales, the sale of DCT commercial and
residential heat pumps as well as loans from related parties.
As of June 30, 2024, the Company had current assets of $13,145,412
and current liabilities of $13,844,784 compared with current assets
of $9,817,045 and current liabilities of $10,019,465 at June 30,
2023. The continuation of the Company as a going concern is
dependent upon successful financing through equity and/or debt
investors and growing the subsidiaries anticipated to be profitable
while reducing investments in areas that are not expected to have
long-term benefits.
The Company anticipates an increase in sales of Likido's
Likido(R)ONE heat pump through its current and future customer
base. Furthermore, the United States General Services
Administration (GSA) and the Department of Energy (DOE) have chosen
the Company's Likido(R)ONE heat pump to help reduce greenhouse
emissions from commercial buildings through high performance,
low-carbon solutions set forth by the Green Proving Ground (GPG)
program.
A full-text copy of the Form 10-K is available at
https://urlcurt.com/u?l=wZtPPS
About Dalrada
Dalrada Financial Corporation has five business divisions:
Genefic,
Dalrada Climate Technology, Dalrada Precision Manufacturing,
Dalrada Technologies, and Dalrada Corporate. Within each of these
divisions, the Company drives transformative innovation while
creating solutions that are sustainable, accessible, and
affordable. Dalrada's global solutions directly address climate
change, gaps in the health care industry, and technology needs
that
facilitate a new era of human behavior and interaction and ensure
a
bright future for the world around us.
Going Concern
In its Quarterly Report for the three months ended March 31, 2024,
Dalrada disclosed that the continuation of the Company as a going
concern is dependent upon the continued financial support from
related parties, its ability to identify future investment
opportunities, obtain the necessary debt or equity financing, and
generate profitable operations. The Company had net losses of
approximately $13.1 million, accumulated deficit of $154.8
million,
and net cash used in operations of $5.7 million for the nine
months
ended March 31, 2024. These factors raise substantial doubt
regarding the Company's ability to continue as a going concern for
a period of 12 months from the issue date of the report.
As of March 31, 2024, Dalrada had $30.17 million in total assets,
$21.35 million in total liabilities, and $8.82 million in total
stockholders' equity.
DELTA APPAREL: Forager Fund, Affiliates Cease Ownership of Shares
-----------------------------------------------------------------
Forager Fund, L.P. and affiliates -- Forager Capital Management,
LLC, Kissel Edward Urban, MacArthur Robert Symmes -- disclosed in a
Schedule 13D/A filed with the U.S. Securities and Exchange
Commission that they acquired beneficial ownership of an aggregate
of 100 shares of Common Stock for $704.50 using working capital
from the GP. As of September 9, 2024, each Reporting Person ceased
to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock of Delta Apparel, Inc.
Forager Fund, L.P. may be reached at:
Attn: Edward Kissel, 2025
3rd Ave. N, Suite 350
Birmingham, AL, 35203
205-383-4763
A full-text copy of Forager Fund's SEC Report is available at:
https://tinyurl.com/5x8kzd46
About Delta Apparel
Headquartered in Duluth, Georgia, Delta Apparel, Inc. --
https://www.deltaapparelinc.com/ -- is a vertically integrated,
international apparel company with approximately 6,800 employees
worldwide. The Company designs, manufactures, sources, and markets
a diverse portfolio of core activewear and lifestyle apparel
products under its primary brands of Salt Life, Soffe, and Delta.
The Company specializes in selling casual and athletic products
through a variety of distribution channels and tiers, including
outdoor and sporting goods retailers, independent and specialty
stores, better department stores and mid-tier retailers, mass
merchants, eRetailers, the U.S. military, and through its
business-to-business digital platform.
Delta Apparel sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 24-11469) on June 30, 2024. In the
petition signed by J. Tim Pruban, as chief restructuring officer,
the Debtor estimated assets and liabilities between $100 million
and $500 million each.
Polsinelli PC, led by Christopher A. Ward, is the Debtor's counsel.
DIGITAL MEDIA: Gets Court Okay for Chapter 11 Wind-Down Plan
------------------------------------------------------------
Yun Park of Law360 Bankruptcy Authority reports that a Texas
bankruptcy judge on January 15 approved Digital Media Solutions
Inc.'s proposed Chapter 11 plan, despite objections from the U.S.
Trustee who claimed the plan unlawfully included nonconsensual
third-party releases.
About Digital Media Solutions
Founded in 2012, Digital Media Solutions, Inc. is a
technology-enabled digital advertising company in Clearwater, Fla.,
that leverages its advanced technology and proprietary customer
data to efficiently and effectively connect its customers with
their target consumers. As of Sept. 11, 2024, DMS and its
affiliates operate in at least 15 countries and territories around
the world and employ 247 individuals in the United States and
Canada.
Digital Media Solutions and 36 affiliates commenced voluntary
Chapter 11 proceedings (Bankr. N.D. Tex. Lead Case No. 24-90468) on
Sept. 11, 2024. At the time of the filing, Digital Media Solutions
reported $100 million to $500 million in both assets and
liabilities.
Judge Alfredo R. Perez oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Porter Hedges, LLP as
legal counsel; Portage Point Partners as restructuring advisor; and
Houlihan Lokey Capital, Inc. as investment banker. Omni Agent
Solutions is the claims agent.
DURECT CORP: R. Scott Ansen Holds 9.92% Equity Stake
----------------------------------------------------
R. Scott Asen disclosed in a Schedule 13G filed with the U.S.
Securities and Exchange Commission that as of December 31, 2024, he
beneficially owned 3,080,000 shares of DURECT Corporation's common
stock, representing 9.92% of the shares outstanding.
The 9.92% consists of:
(1) 2,550,000 shares owned directly by the Reporting Person,
which represent approximately 8.21% of the issued and outstanding
shares of Common Stock of the Company,
(2) 30,000 shares owned by the Foundation, which represent
approximately 0.10% of the issued and outstanding shares of Common
Stock of the Company and
(3) 500,000 shares owned by the Managed Accounts, which
represent approximately 1.61% of the issued and outstanding shares
of Common Stock of the Company.
The percentages are calculated based on 31,041,981 shares of Common
Stock outstanding as of September 30, 2024, as reported in the
Company's quarterly report on Form 10-Q filed with the Securities
and Exchange Commission on November 14, 2024.
Mr. Asen directly owns 2,550,000 shares. He is a trustee of The
Asen Foundation, a not-for-profit foundation which owns 30,000
shares, and has been delegated investment authority for the
Foundation by the other trustee of the Foundation. Additionally,
Mr. Asen is the President of Asen and Co., which provides certain
advisory services to accounts that own 500,000 shares. Mr. Asen may
be deemed to beneficially own the shares held by the Foundation and
by the Managed Accounts, but he disclaims beneficial ownership of
such shares except to the extent of his pecuniary interest.
A full-text copy of Mr. Asen's SEC Report is available at:
https://tinyurl.com/4nk6urxf
About DURECT Corporation
Headquartered in Cupertino, Calif., DURECT is a late-stage
biopharmaceutical company pioneering the development of epigenetic
therapies that target dysregulated DNA methylation to transform the
treatment of serious and life-threatening conditions, including
acute organ injury and cancer. Larsucosterol, DURECT's lead drug
candidate, binds to and inhibits the activity of DNA
methyltransferases (DNMTs), epigenetic enzymes that are elevated
and associated with hypermethylation found in alcohol-associated
hepatitis (AH) patients. Larsucosterol is in clinical development
for the potential treatment of AH, for which the FDA has granted a
Fast Track and a Breakthrough Therapy designation; metabolic
dysfunction-associated steatohepatitis (MASH) is also being
explored. In addition, POSIMIR (bupivacaine solution) for
infiltration use, a non-opioid analgesic utilizing the innovative
SABER platform technology, is FDA-approved and is exclusively
licensed to Innocoll Pharmaceuticals for sale and distribution in
the United States.
San Francisco, Calif.-based Ernst & Young LLP, the Company's
auditor since 1998, issued a "going concern" qualification in its
report dated March 28, 2024, citing that the Company has an
accumulated deficit as well as negative cash flows from operating
activities and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
EASTERN COLORADO SEEDS: Case Summary & 20 Top Unsecured Creditors
-----------------------------------------------------------------
Debtor: Eastern Colorado Seeds LLC
47500 US Hwy 24
Burlington, CO 80807
Business Description: Eastern Colorado Seeds, LLC is a full-
service seed company offering a wide range
of agricultural seeds, including grains,
forages, reclamation seeds, and specialty
products like pulses, millets, and
sunflowers. With locations in Burlington,
CO, Dumas, TX, and Clovis, NM, the company
ensures efficient delivery and a consistent
supply of high-quality products to its
customers. The knowledgeable team at
Eastern Colorado Seeds specializes in crop
advisory, precision technology, and
livestock nutrition.
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
District of Colorado
Case No.: 25-10244
Judge: Hon. Joseph G Rosania Jr.
Debtor's Counsel: Andrew W. Johnson, Esq.
ONSAGER | FLETCHER | JOHNSON | PALMER LLC
600 17th Street, Suite 425N
Denver, CO 80202
Tel: 302-512-1123
Email: ajohnson@OFJlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Clayton Russel Smith as president.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/VLEZDAY/Eastern_Colorado_Seeds_LLC__cobke-25-10244__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Arkansas Valley Seed $78,415
4300 N Monaco Pkwy
Denver, CO 80216
Tel: 877-907-3337
2. B & L Ag, Inc. $50,215
1806 7th St NE
Watertown, SD 57201
Email: brent@blaginc.com
3. BerganKDV $62,500
417 1st Ave SE Ste 300
Cedar Rapids, IA 52401
Email: alex.smith@creativeplanning.com
4. CHS $57,205
2700 Trott Ave SW
Willmar, MN 56201
Email: cnwcar@chsinc.com
5. Colorado Wheat $31,153
4026 S Timberline
Rd Ste 100
Fort Collins, CO 80525
Email: info@coloradowheat.org
Phone: 970-449-6994
6. Cross Bell Farms $47,203
Kyle Miller
2114 Antler Ridge Dr
Garden City, KS 67735
Email: clay.smith@ecseeds.com
7. EGE Products $101,115
450 CR C
Minneola, KS 67865
Email: sales@egebio.com;
accounting@egebio.com
8. Farmers Coop $69,841
Elevator Assn.
414 Evening Tower Road
Levelland, TX 79336
Email: ap@fcelevelland.com
9. Frontier Ag Inc. $24,036
1202 West Hwy 24
Goodland, KS
67735-0998
Email: customerservice@frontieraginc.com
Phone: 785-899-3681
10. Gene Ziegler $118,731
5223 County Road
AA
Grainfield, KS 67737
11. LG Seeds $805,176
54542 840th Rd
Battle Creek, NE 68715
Email: terri.kilmurry@lgseeds.com
12. M&M Erker Farms $204,179
48030 Cottonwood Lane
Burlington, CO 80807
Email: darrenerker@hotmail.com
13. Millborn Seeds $299,938
2132 32nd Ave
Brookings, SD 57006
Tel: 605-697-6306
14. Miller Ranch Inc. $65,198
495 Main St
Sanford, CO 81151
Tel: 719-843-5790
15. Nutrien Ag Solutions $108,776
19148 County Road 52
Burlington, CO 80807
Email: nancy.reichert@nutrien.com
16. Oklahoma Ag Transports $24,876
900 Victory Lane
Kingfisher, OK 73750
Email: aglinestan@hotmail.com
Phone: 405-375-4740
17. Olsen Custom Farms LLC $168,878
1355 300th St
Hendricks, MN 56136
Email: olsencustomfarms.com
Phone: 507-275-3176
18. Penn Millers Insurance Company $22,256
436 Walnut Street
Philadelphia, PA 19106
Tel: 908-572-2371
19. Trical Superior Forage LLC $103,015
701 Dewey Blvd
#4248
Butte, MT 59701
Email: kinsko@tricalforage.com
Phone: 406-498-0790
20. Western Packaging $39,775
Solutions
16766
Transcanadienne
Kirkland QC H9H
4M7
Canada
Tel: 514-509-2119
EDUCATIONAL DEVELOPMENT: Posts $835K Net Loss for Nov. 2024 Quarter
-------------------------------------------------------------------
Educational Development Corp filed a Form 10-Q with the U.S.
Securities and Exchange Commission disclosing $835,700 in net loss
over $11,052,100 in net revenue for the three months ended November
30, 2024, compared to $1,972,100 in net earnings over $16,944,800
in net revenue for the three months ended November 30, 2023.
The Company also disclosed $3,918,100 in net loss over $27,554,700
in net revenue for the nine months ended November 30, 2024,
compared to $2,161,000 in net earnings over $42,061,800 in net
revenue for the nine months ended November 30, 2023.
The Company further disclosed $83,601,800 in total assets,
$41,795,100 in total liabilities, and $41,806,700 in total
shareholders' equity at November 30, 2024.
Liquidity
In accordance with ASC 205-40, Going Concern, the Company has
evaluated whether there are conditions and events, considered in
the aggregate, that raise substantial doubt about the Company's
ability to continue as a going concern within one year after the
date that the financial statements are issued.
Determining the extent to which conditions or events raise
substantial doubt about its ability to continue as a going concern
and the extent to which mitigating plans sufficiently alleviate any
such substantial doubt requires significant judgment and estimation
by us. Its significant estimates related to this analysis may
include identifying business factors such as completing the planned
sale of owned real estate, changes in its Brand Partners, sales
growth and profitability used in the forecasted financial results
and liquidity. Further, the Company make assumptions about the
probability that management's plans will be effectively implemented
and alleviate substantial doubt and its ability to continue as a
going concern. The Company believe that the estimated values used
in its going concern analysis are based on reasonable assumptions.
However, such assumptions are inherently uncertain, and actual
results could differ materially from those estimates.
The short-term duration of the Revolving Loan and uncertainty of
the bank's ongoing support beyond April 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. On September 19, 2024,
the Company executed a letter of intent to sell the Hilti Complex
for $38,250,000, the closing of which remains subject to the
satisfaction of various closing conditions. On October 28, 2024,
the Company executed the Asset Purchase Sale Agreement with the
buyer that started the due diligence period. Upon closing, 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 number of 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 its obligations as they
become due over the next twelve months.
Risks and Uncertainties
In accordance with ASC 205-40, Going Concern, the Company has
evaluated whether there are conditions and events, considered in
the aggregate, that raise substantial doubt about the Company’s
ability to continue as a going concern within one year after the
date the financial statements are issued.
The short-term duration of the Revolving Loan and uncertainty of
the bank's ongoing support beyond April 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 its obligations as they become due over the next
twelve months.
A full-text copy of the Form 10-Q is available at
https://urlcurt.com/u?l=Z6BXYV
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.
EMX ROYALTY: Sells Four U.S Projects to Pacific Ridge Exploration
-----------------------------------------------------------------
EMX Royalty Corporation announced that it has executed four
separate option agreements, all dated January 7, 2025, with Pacific
Ridge Exploration Ltd. (TSX-V: PEX) for the Ripsey West, Royston,
Red Star, and Mineral Hill projects located in Arizona, Nevada,
Utah, and Wyoming, respectively.
The Agreements provide EMX with cash payments, an equity stake in
PEX, and required work commitments on the Projects during the
earn-in period. Additionally, upon earn-in for a given Project, a
3% net smelter return royalty, annual advance royalty payments, and
milestone payments provide a strong foundation for future upside as
the Projects advance.
The Ripsey West Project is a shallow copper porphyry target in
central Arizona's Laramide copper province with exploration
potential for both supergene and hypogene mineralization. The
Royston Project in western Nevada targets a late Triassic-early
Jurassic copper porphyry system. Of note, porphyries of this age
have not traditionally been explored for in the region, even though
this age of magmatic activity generally displays a stronger gold
affinity than Laramide systems. The Red Star Project is a copper
porphyry target adjacent to the historical Star mining district in
Utah, and has added potential for skarn, manto, and
carbonate-replacement deposit (CRD) styles of mineralization. The
Mineral Hill Project in eastern Wyoming is centered on an alkaline
intrusive complex, which displays both epithermal and copper-gold
porphyry exploration potential.
EMX acquired the Projects through the staking of open ground after
recognizing overlooked opportunities in districts with historical
exploration. EMX's track record of organically generating new
targets in historical mining districts underscores the strength of
the Company's project generation business model.
Commercial Terms Overview (all dollar amounts in USD). Under the
terms of the Agreements, subject to the approval of the TSX Venture
Exchange, Pacific Ridge can earn 100% interest in each Project over
a five-year option period by satisfying the following terms on a
per-Project basis: a) upon receipt of regulatory approval, Pacific
Ridge will pay $60,000 in cash and issue 200,000 Pacific Ridge
shares (on a post 10:1 consolidation basis), and b) Pacific Ridge
will also make option payments totaling $180,000, issue 1,175,000
additional shares, and complete $2,250,000 in exploration
expenditures over the five-year term of the option agreement.
Upon option exercise by Pacific Ridge, EMX will retain a 3% NSR
royalty on each applicable Project; 1% of the royalty may be bought
back by first completing an initial 0.5% royalty buyback for a
payment of $1,000,000 to the Company prior to the eighth
anniversary of the Effective Date of the Agreement. If the first
buyback is completed, then the remaining 0.5% of the royalty
buyback can be purchased any time prior to production for
$3,000,000. Pacific Ridge will also make AAR payments of $25,000
per Project, which will increase by $10,000 per year until reaching
a cap of $75,000 per year. In addition, Pacific Ridge will make
Project milestone payments consisting of: a) $500,000 upon
completion of a Preliminary Economic Assessment, b) $1,000,000 upon
completion of a Pre-Feasibility study, and c) $2,000,000 upon
completion of a Feasibility Study.
Project Overviews
Ripsey West: The Ripsey West Project spans over 2,161 hectares and
consists of 36 unpatented mining claims and eight state exploration
leases in central Arizona's prolific Laramide copper province.
Historical exploration by Conoco, Bear Creek, Noranda, BHP,
Freeport-McMoRan, and others concentrated on altered and
mineralized outcrops adjacent to EMX's primary target area. These
outcrops display distal chlorite-epidote and sericitic alteration
over a broad footprint measuring approximately four by six
kilometers, with a central zone of moderate sericitic alteration.
Locally, structurally controlled zones exhibit strong sericitic
alteration and variable copper mineralization. Through a detailed
compilation of historical drilling and an iterative structural
study, EMX determined that the district has undergone significant
tilting of approximately 90 degrees. The historically explored area
represents distal alteration and mineralization, along the
paleo-eastern margin of the tilted and dismembered porphyry copper
system, whereas EMX's Ripsey West Project targets the core of the
system several kilometers to the west. Exploration by a previous
partner included two drill holes totaling 649 meters which
primarily tested the depth to bedrock. Beneath the post-mineral
alluvium, the alteration in the drill holes matches well with the
predictive interpretation of the system, but left the target and
the core of the porphyry system untested at depth.
Red Star: The Red Star Project covers 3,005 hectares and consists
of unpatented mining claims adjacent to the historical Star mining
district in Beaver County, Utah. Geologic observations indicate
that the source of polymetallic fissure veins and replacements in
the Star mining district may be a concealed porphyry copper system.
Although historical workers explored for the source porphyry, they
misunderstood the timing relationships between the exposed
mineralization and intrusive rocks in the area as well as
erroneously mapped normal faults as thrust faults. Structural
reinterpretation and geochemical zonation patterns in outcropping
stratigraphy indicate a westward vector towards a down-faulted
block, or blocks, within the Red Star Project. The strongest copper
and pathfinder geochemical anomalies occur at the western side of
the exposed Paleozoic sedimentary package, coincident with the
highest abundance of prospects in the Star district. Recent
geophysical datasets, including drone magnetics, induced
polarization (IP), and magnetotelluric (MT) surveys, are supportive
of a target in the same area independently predicted by geological
and geochemical vectors. The abundance of Paleozoic carbonate rocks
in the host stratigraphy indicates potential for skarn, manto, and
CRD-style mineralization at the Red Star Project, in addition to
the target Cu-Mo porphyry.
Royston: The Royston Project spans over 1,830 hectares and consists
of 227 unpatented mining claims northwest of Tonopah, Nevada. The
Royston Project represents a compelling porphyry prospect within a
belt of Jurassic to late Triassic intrusive rocks in the western
US, which are underexplored with respect to copper mineralization.
Surface exposures and historical drilling reveal a significant zone
of quartz-pyrite-sericite "QSP" style alteration in porphyry dikes
and surrounding host rocks. Subsequent geological, geochemical, and
geophysical work advanced EMX's understanding of the system and led
to the identification of strong vectors based on system-scale
zoning of alteration and mineralization. A reconnaissance
reverse-circulation ("RC") drilling campaign was recently conducted
which further validated the target concept and outlined a robust
porphyry system which has undergone significant post-mineral
tilting. Two of the RC drill holes were cased for re-entry with a
core rig due to the shallow intersections of intense QSP (-clay)
alteration with increasing base metal mineralization downhole.
Follow-up core drilling will target the high temperature core of
the porphyry system, which has not previously been intersected in
drilling.
Mineral Hill: The Mineral Hill Project in eastern Wyoming spans
over 600 hectares across 77 unpatented and 19 patented mining
claims. The Project is centered on a zoned Eocene-age alkaline
intrusive complex with an outer ring, interior intrusive zones, and
a central breccia. Historical mining in the late 19th and early
20th centuries produced gold from alluvial deposits, gold and
silver from the Treadwell Mine, and gold and copper from the
Interocean Mine. EMX and previous partners recognized that the gold
and silver mineralization at the Treadwell Mine is associated with
lower-temperature adularia-bearing potassic alteration and is
consistent with epithermal-style mineralization. In contrast, the
gold and copper mineralization at the Interocean Mine is associated
with higher-temperature potassic alteration mineral assemblages
(including potassium feldspar and biotite), consistent with a
porphyry system. Reconnaissance drill programs with previous
partners confirmed these two distinct mineralization styles, but
never followed up on initial drill results. Mineral Hill's
proximity to significant historical producers, such as the
Homestake and Wharf mines, highlights the potential for additional
discoveries in this productive belt.
EMX and Pacific Ridge look forward to commencing work on the
Projects.
This transaction is another example of the execution of EMX's
business model in providing turn-key and drill ready exploration
projects to its partner companies in exchange for royalty
interests.
More information on the Projects can be found at
www.EMXroyalty.com.
About EMX
EMX Royalty Corporation -- https://emxroyalty.com/ -- is a precious
and base metals royalty company. EMX's investors are provided with
discovery, development, and commodity price optionality while
limiting exposure to risks inherent to operating companies. The
Company's common shares are listed on the NYSE American Exchange
and TSX Venture Exchange under the symbol "EMX."
Vancouver, Canada-based Davidson & Company LLP, the Company's
auditor since 2002, issued a "going concern" qualification in its
report dated March 21, 2024, citing that the Company has a working
capital deficiency that raises substantial doubt about its ability
to continue as a going concern.
ERO COPPER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Ero Copper Corp.'s Long-Term Issuer
Default Rating (IDR) at 'B'. Fitch has also affirmed Ero's senior
unsecured notes at 'B' with a Recovery Rating of 'RR4'. The Rating
Outlook is Stable.
Ero's ratings benefit from its average-cost copper mine, increasing
mine diversification, strong mine longevity, and moderate capital
structure. Fitch expects Ero's credit metrics to remain relatively
low within its rating category over the rating horizon, with gross
and net leverage averaging around 2.2x and 2.0x. Ero's credit
profile is limited by its small scale and execution risks in
ramping up a second significant copper mine to reduce reliance on
its single copper and gold mine sites in Brazil.
Key Rating Drivers
Operational Challenges Delay Ramp Up: Fitch anticipates a recovery
in copper production for 2025 following setbacks in 2024. Caraiba's
2024 production guidance was cut by 19% due to slow underground
development by third-party contractors; an additional contractor at
the Pilar mine is expected to assist in production recovery.
Tucuma faced a 55% reduction in its 2024 guidance due to power
disruptions, but has since implemented a power management solution
and restored full power, achieving initial production in 3Q24 with
full capacity expected in 2025, when it is projected to contribute
half of the revenue. Meanwhile, Xavantina's gold production
expectations remain solid.
Exploration Strategy Remains: Ero has a history of extending mine
life, with stabilized reserves-to-production ratios at Caraiba (16
years), Tucuma (seven years), and Xavantina (seven years). Tucuma's
drill program aims to delineate high-grade copper for future
underground operations. Exploration at Xavantina targets the down
plunge extension of Santo Antonio and Bras Veins. Furnas began a
drill program for a scoping study, marking the first of three
phases to secure 60% ownership from Vale Base Metals.
Average Costs Improvement: With Tucuma's entrance and eventual full
capacity in 2025 or early 2026, the company's average AISC profile
is expected to improve to the mid-third quartile, thanks to
Tucuma's favorable first to second quartile cost position.
Currently, high sustaining capex, and other factors, such as
royalties have been driving Caraiba's AISC into the mid-fourth
quartile of the copper All-in Sustaining Cost curve, as per CRU
Group.
Nearing Neutral FCF: Fitch projects that Ero will generate
approximately USD375 million of EBITDA in 2025 as copper prices
decrease towards Fitch's mid-cycle price deck. With the end of
Tucuma construction, capex is forecast to reduce to USD250 million,
from USD350 million in 2024. The construction of the new external
shaft and ongoing underground development at Caraiba are expected
to last until 2026. No dividends or share buybacks are assumed.
While Fitch expects the FCF margin of 2024to be negative, it is
projected to turn positive when the full capacity of Tucuma
consolidates in late 2025 or early 2026.
Adequate Leverage: Ero is anticipated to maintain a manageable
leverage profile during the production ramp-up of Tucuma. Gross and
net leverage ratios are expected to decrease to 1.6x and 1.4x in
2025, from 2.8x and 2.5x in 2024, with gross debt averaging below
USD600 million as EBITDA generation is spurred by the start of
Tucuma. The ramp-up phase led to drawdowns on Ero's credit
facility, available up to USD150 million and the use of a USD50
million copper prepayment facility.
Derivation Summary
Ero's production scale and diversification, with copper and gold
spread across multiple sites, is larger and less concentrated than
Taseko Mines (B-/Stable) and comparable to Aris Mining (B+/Stable),
but smaller than Eldorado Gold (B+/Stable), Hudbay Minerals
(BB-/Stable), and IAMGOLD (B-/Positive).
Copper comprises over 80% of Ero's revenue. Peers like Taseko and
Hudbay have concentrated revenue on copper, while Aris, Eldorado,
and IAMGOLD focus on gold. Hudbay also diversifies into gold, zinc,
molybdenum, and silver.
Ero's mine life is 16 years at Caraiba and 11 years for copper,
comparable to Aris and shorter than Taseko's 22 years but longer
than IAMGOLD's five years.
Ero's cost position in the third to fourth quartile is worse than
Hudbay's first and Eldorado's second but better than Taseko's and
IAMGOLD's fourth.
Ero's expected average gross leverage for 2024-2025 should be
around 2.0x, which is lower than Taseko's 2.9x, Eldorado's 2.3x,
similar to Aris' 2.2x, Hudbay's 2.1x but higher than IAMGOLD's
1.6x.
Key Assumptions
- Copper price at USD8,500/tonne, USD7,500/tonne, and
USD7,500/tonne in 2025, 2026, and 2027;
- Gold price at USD2,100/oz, USD1,800/oz, and USD1,700/oz in 2025,
2026, and 2027;
- Copper sold from Caraiba at 39,000 MT, 42,000 MT, and 45,000 MT
in 2025, 2026, and 2027;
- Copper sold from Tucuma at 40,000 MT, 45,000 MT, and 45,000 MT in
2025, 2026, and 2027;
- Gold sold from Xavantina at 58,000 oz in 2025, 2026, and 2027;
- Tucuma reaches full production in 2026;
- No dividends or share-repurchases;
- Capex (investing cash flow in additions to mineral PPE,
exploration and evaluation assets) including exploration USD250
million, USD200 million, and USD140 million in 2025-2027;
- BRL/USD at 5.80 in 2025, 2026, and 2027.
Recovery Analysis
Key Recovery Rating Assumptions
The recovery analysis assumes Ero would be reorganized as a
going-concern in bankruptcy rather than liquidated. Fitch assumed a
10% administrative claim and the USD150 million revolver and USD75
million copper prepayment facility are fully drawn. Ero's
going-concern EBITDA assumption is based on copper at USD8,000/ton
in 2025 when capital spending is elevated and additional funding or
a project delay would be required. The going-concern EBITDA
estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation in a low copper price environment.
An enterprise valuation (EV) multiple of 5x EBITDA is applied to
the going-concern EBITDA to calculate a post-reorganization EV. The
choice of this multiple considered the following factors: the
historical bankruptcy case study exit multiples for peer companies
were 4.0x-6.0x.
Fitch applies a waterfall analysis to the post-default EV based on
the relative claims of the debt in the capital structure. The debt
waterfall assumptions consider the company's total debt. These
assumptions result in a recovery rate for the unsecured debt within
the 'RR1' range, but due to the soft cap of Brazil at 'RR4', Ero
copper's senior secured are rated at 'B'/'RR4' with a recovery
expectation of 45%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Increased costs or material disruption at Caraiba;
- Total debt/EBITDA after minority distributions anticipated to be
sustained above 4.0x;
- Large debt-funded acquisitions;
- Negative FCF on a sustained basis and debt funding;
- Material deterioration in liquidity and difficulties to access
funding.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- On time and on budget completion of the Tucuma project;
- Increasing size and diversification over the medium term;
- Financial policies in place resulting in consolidated total
debt/EBITDA after minority distributions anticipated to be
sustained below 3.0x.
Liquidity and Debt Structure
As of Sept. 30, 2024, Ero held approximately USD20 million of cash
and cash equivalents. It also has a USD80 million of undrawn
availability under a revolving credit facility due in December
2026, of which it has a net drawdown of USD70 million. In addition,
Ero counts with a USD25 million availability in a copper prepayment
facility with a bank syndicate with which it already withdrew USD50
million. Ero's senior unsecured USD400 million bond is due in
2030.
Fitch expects that the entrance of the Tucuma mine will bolster
Ero's cash generation and will allow for credit facility repayments
in the short to mid-term, depending on copper prices.
Issuer Profile
Ero Copper Corp. (Ero), headquartered in Vancouver, B.C., owns a
99.6% interest in the Caraiba copper operations in Bahia, Brazil
and 97.6% in the Xavantina gold mine located in Mato Grosso,
Brazil. Ero also owns the Tucuma Iron Oxide Copper Gold type
development copper project located in Para, Brazil.
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
----------- ------ -------- -----
Ero Copper Corp. LT IDR B Affirmed B
senior unsecured LT B Affirmed RR4 B
FIREFLY NEUROSCIENCE: Christopher Finn and Affiliates Report Stakes
-------------------------------------------------------------------
Christopher Finn, Eadwacer Holdings, LLC, and Harleston Capital LLC
disclosed in a Joint Schedule 13G/A filed with the U.S. Securities
and Exchange Commission that as of December 31, 2024, they
beneficially owned shares of Firefly's common stock:
* Christopher Finn holds 349,223 shares, representing 4.1% of
the shares outstanding.
* Eadwacer Holdings holds 180,756 shares, representing 2.1% of
the shares outstanding.
* Harleston Capital holds 168,467 shares, representing 2% of
the shares outstanding.
A full-text copy of Christopher Finn's SEC Report is available at:
https://tinyurl.com/bd88rav4
About Firefly
Firefly (NASDAQ: AIFF) (formerly WaveDancer, Inc.) is an Artificial
Intelligence company developing innovative solutions that improve
brain health outcomes for patients with neurological and mental
disorders. Firefly's FDA-510(k) cleared Brain Network Analytics
(BNA) technology revolutionizes diagnostic and treatment monitoring
methods for conditions such as depression, dementia, anxiety
disorders, concussions, and ADHD. Over the past 15 years, Firefly
has built a comprehensive database of brain wave tests, securing
patent protection, and achieving FDA clearance . The Company is now
launching BNA commercially, targeting pharmaceutical companies
engaged in drug research and clinical trials, as well as medical
practitioners for clinical use.
Tysons, Virginia-based CohnReznick LLP, the Company's auditor since
2012, issued a "going concern" qualification in its report dated
March 20, 2024, citing that the Company has suffered recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern.
FOOT LOCKER: Moody's Lowers CFR to 'Ba3' & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Ratings downgraded Foot Locker, Inc.'s corporate family
rating to Ba3 from Ba2, probability of default rating to Ba3-PD
from Ba2-PD, and senior unsecured notes rating to B1 from Ba3. The
outlook was changed to stable from negative. The speculative grade
liquidity (SGL) rating remains unchanged at SGL-2.
The downgrade reflects Moody's view that Foot Locker's earnings and
cash flow recovery will be more prolonged than previously
anticipated, given the promotional retail environment and
challenges at its key vendor NIKE. Foot Locker's reduced 2024
operating income guidance reflects elevated promotional activity in
apparel, particularly in its European region and NIKE product
franchises. Nonetheless, Foot Locker's banners recorded positive
comparable sales and gross margin expansion in Q3 2024, as the
company made progress in the execution of its Lace Up strategic
plan. Moody's project Moody's-adjusted EBIT/interest expense of
2.2x and debt/EBITDA of 2.8x in 2025, as earnings improve but
remain well below historical levels.
RATINGS RATIONALE
Foot Locker's Ba3 CFR reflects the company's scale and
well-recognized Foot Locker brand with a strong position in the
premium athletic footwear market in North America and Europe. The
Foot Locker and Kids Foot Locker chains have differentiated
offerings with significant scale in the sector and provide a key
distribution channel for vendors, particularly in the basketball,
premium and kids categories. Despite the short-term negative impact
of NIKE's high promotional activity, Moody's expect that over time,
NIKE's return to a balanced marketplace across wholesale and DTC
will benefit Foot Locker. Further, Foot Locker's track record of
maintaining a low level of funded debt relative to earnings
provides key credit support. Moody's project good overall liquidity
over the next 12-18 months, including modestly positive free cash
flow, ample revolver capacity and a lack of near-term debt
maturities.
The credit profile is constrained by the company's weak operating
performance, with operating income remaining significantly below
historical levels after steep declines in 2022 and 2023. Following
positive momentum in comparable sales and gross profit year-to-date
2024, Moody's expect earnings to start to recover in Q4 2024, as
the company's cost savings and Lace Up strategic plan generate more
significant benefits. Nevertheless, Moody's expect non-GAAP
operating margins to remain under 5%. As a result, Moody's project
2025 free cash flow to still be modest, in the $50-100 million
range. The ratings are also constrained by the high business risk
inherent in the intensely competitive, fragmented and
fashion-sensitive footwear sector. Foot Locker also has a
concentrated vendor base and is exposed to mall traffic trends in
over half of its locations.
The stable outlook reflects the expectation that progress on the
Lace Up plan will result in revenue and earnings growth and good
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company demonstrates earnings
recovery and strong positive free cash flow generation. An upgrade
would also require continued progress in the implementation of the
company's Lace Up plan and a return to growth with its key vendor
NIKE. Quantitatively, the ratings could be upgraded if
Moody's-adjusted EBIT/interest expense is maintained above 2.75x.
The ratings could be downgraded if liquidity weakens for any
reason, including negative free cash flow or a reduced cash
balance. More aggressive financial strategies, including a return
to dividend distributions before material improvement in earnings,
could also lead to a downgrade. A reduction in Foot Locker's access
to key traffic-driving product from major vendors, persistent
underperformance relative to industry peers or a material and
lasting shift in consumer preference away from premium athletic
shoes could also result in a downgrade. Quantitatively, the ratings
could be downgraded should Moody's-adjusted EBIT/interest expense
be sustained below 2.0x.
Headquartered in New York, NY, Foot Locker, Inc. is a specialty
retailer that sells primarily athletic footwear, apparel, and
accessories through over 2,400 stores globally, as well as its
websites and mobile apps. Banners include Foot Locker, Kids Foot
Locker, Champs Sports, WSS and atmos. Revenue for the twelve months
ended November 2, 2024 was around $8.1 billion.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
FORESTAR GROUP: S&P Upgrades ICR to 'BB-' on Revenue Growth
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Forestar
Group Inc. to 'BB-' from 'B+' and maintained its stable outlook.
At the same time, S&P revised its recovery rating on the company's
unsecured notes to '3' from '2', indicating its expectation for
meaningful (50%-70%; rounded estimate: 65%) recovery in the event
of a payment default. The issue-level ratings on the company's
unsecured notes remain unchanged at 'BB-'.
S&P said, "Our stable outlook on Forestar is based on our view that
the company will grow modestly over the next 12 months as steady
demand from shareholder D.R. Horton enables it to continue to take
market share from less-well-capitalized developers. Given these
conditions, we forecast Forestar will maintain leverage at 3x
EBITDA and near 30% of total capitalization."
Forestar has significantly increased its size, scale, and diversity
since its initial rating in 2018 and is now a leading land
developer. S&P said, "We initially rated Forestar in 2018, when
the company generated about $110 million in revenue and operated in
14 states and 24 markets. Since then, it has grown to 24 states and
59 markets while generating revenues of about $1.5 billion in 2024.
The increase in size and scale resulted in a change to our
assessment of its business risk to "weak" from "vulnerable."
Forestar is now among the top of its peer group and has guided
another $2 billion in acquisition and development spend in 2025,
with goals of capturing 5% market share of the U.S. single-family
residential lot development industry."
Arlington, Texas-based land developer Forestar has significantly
grown its scale and now forecasted to generate approx. $1.6 billion
of revenue in fiscal year 25. S&P said, "We expect revenues to
rise about 7% to $1.6 billion in 2025 before stabilizing in the 2%
area in 2026. This is due to the company's increased spending in
land acquisition and development and unique position as a leading
developer of finished lots. Furthermore, we anticipate its EBITDA
margins will decline slightly toward 18.1% through the end of
fiscal 2025 from 18.6% in 2024, resulting in debt to EBITDA of
2.5x-3.0x over the next 12-24 months."
S&P said, "We now forecast debt of approximately $858 million
through 2026 and believe the company will generate EBITDA of $293
million-$302 million in 2025 and 2026, improving through growth in
residential lot sales.
"We expect Forestar's near-term performance to remain linked to
that of its controlling shareholder, D.R. Horton. D.R. Horton
(NYSE: DHI) is the nation's largest homebuilder by unit sales and
is Forestar's largest shareholder, with a 62% ownership stake as of
Sept. 30, 2024. A master supply agreement formalizes D.R. Horton's
land purchases from Forestar, which accounted for over 88% of lot
sales in fiscal year 2024 (ended Sept. 30, 2024). Given this
linkage, we expect Forestar's revenue growth and profit margin
trends to closely mirror those of D.R. Horton in the near term.
"Additionally, we expect D.R. Horton would provide support to
Forestar in some unforeseeable adverse circumstances because of
this linkage. Thus, Forestar's issuer credit rating is one notch
higher than it otherwise would be on a stand-alone basis. For more
information on our view of D.R. Horton's credit quality, refer to
"D.R. Horton Inc.," published August 7, 2024.
"Our stable outlook on Forestar reflects our expectation for 2025
debt to EBITDA at or below 3x and debt to total capitalization of
30%."
S&P could lower its rating on Forestar if:
-- The company's debt to EBITDA climbs to and remains at 4x or
above; or
-- D.R. Horton sells off its majority stake in Forestar such that
it no longer views the homebuilder's investment in the company as
moderately strategic.
S&P said, "We view an upgrade as unlikely over the next year as it
would be contingent upon Forestar lowering leverage by about a full
turn to below 2x. We view this as unlikely over the next 12 months
given that the inventory spending required to materially grow scale
would likely also entail a corresponding amount of additional
debt."
GREAT OUTDOORS: Moody's Rates New $4.5BB Amended Term Loan 'B3'
---------------------------------------------------------------
Moody's Ratings assigned a B1 rating to Great Outdoors Group, LLC's
("GAO", f.k.a. Bass Pro Group, L.L.C's) proposed $4.5 billion
amended and extended senior secured term loan B3. Concurrently,
Moody's affirmed the company's Ba3 corporate family rating, Ba3-PD
probability of default rating, and the B1 rating on the existing
senior secured term loan B2 due 2028. The outlook remains stable.
Proceeds from GAO's proposed $4.5 billion term loan B3 due 2032
will be used to refinance the company's existing term loan due
2028. GAO also plans to extend the maturity of its existing $1.275
billion asset based lending facility ("ABL") (unrated) to 2030 from
2026. The rating on the existing term loan will be withdrawn upon
its full repayment at the close of the transaction.
The affirmations reflects the company's well-recognized brand names
and its solid market position and operational execution as well as
the company's good liquidity. Partially offsetting these strengths
are GAO's relatively aggressive financial strategies which has
supported moderately high leverage.
RATINGS RATIONALE
GAO's Ba3 CFR is supported by its well-recognized brand names and
leading position in the outdoor recreational products retail
sector. The company's margins benefit from its sizable and stable
credit card income stream and significant owned brand penetration.
In addition, GAO's business model as a destination experiential
retailer sets it apart from mass market and big box competitors
that do not provide the level of in-store customer service that is
the foundation underpinning its loyal customer base. Further, its
diverse product assortment and value price points mitigate earnings
pressure in economic downturns.
Partially offsetting these strengths are GAO's relatively
aggressive financial strategies which has supported moderately high
leverage, reflecting the use of cash flow and incremental debt
historically for redemption of preferred and common equity
interests, issued by GAO's parent and member distributions
primarily for tax purposes. Moody's believe the company's financial
strategies will continue to support opportunistic acquisitions
which could raise leverage. For the LTM ended Sept. 28, 2024
debt/EBITDA was 5.1x and EBITA/interest expense was 2.2x, which
reflects some deterioration in earnings in the company's boating
and fishing/marine segments, but was offset by good growth in
apparel and footwear and its credit card business. Operating
performance could weaken over the next 12 months due to reduced
consumer spending, but Moody's expect the company's leverage and
coverage metrics to remain relatively flat for the period.
GAO will benefit from good liquidity over the next 12 months which
is evidenced by its historically good free cash flow and $1.275
billion of revolving borrowing capacity, which is largely
available.
The stable outlook reflects Moody's belief that credit metrics will
remain fairly steady despite pressures on consumer spending. The
outlook also reflects Moody's view that the company will have good
liquidity over the next 12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if operating performance materially
deteriorates, financial policies become more aggressive, or
liquidity weakens. Quantitatively, the ratings could be downgraded
if Moody's-adjusted debt/EBITDA is sustained above 5.5x or
EBITA/interest expense is below 1.75x.
The ratings could be upgraded if the company demonstrates the
ability and willingness to reduce debt/EBITDA (on a Moody's
adjusted basis) below 4.0x and EBITA/interest expense above 2.5x on
a sustained basis, while maintaining at least good liquidity.
Headquartered in Springfield, Missouri, Great Outdoors Group, LLC,
a wholly-owned subsidiary of The Great American Outdoors Group LLC,
operates Bass Pro Shops and Cabela's, retailers of outdoor
recreational products throughout the US and Canada. The company
also manufactures and sells recreational boats and related marine
products under the Tracker, Mako, Tahoe, Nitro, Ranger Boats, and
Triton brand names. The company also owns the Big Cedar Lodge in
Ridgedale, Missouri and Big Cypress Lodge in Memphis, Tennessee.
Bass Pro is majority owned by its founder, John Morris. The company
generates about $7.6 billion in annual revenue.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
H&E EQUIPMENT: Moody's Puts 'Ba3' CFR Under Review for Upgrade
--------------------------------------------------------------
Moody's Ratings placed the ratings of H&E Equipment Services, Inc.
on review for upgrade following the announcement that the company
has entered into a definitive agreement to be acquired by United
Rentals (North America), Inc. (CFR Ba1). The ratings affected by
the review for upgrade include H&E's Ba3 corporate family rating,
Ba3-PD probability of default rating, and B1 senior unsecured
rating. The outlook is revised to ratings under review from stable.
H&E's speculative grade liquidity rating of SGL-2 is unchanged.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
H&E has entered into an agreement to be acquired by United Rentals
for $4.9 billion in cash. The transaction will be structured as a
tender offer for shares and will include H&E's rental fleet, 157
locations, approximately 2,900 employees, and is expected to close
in the first quarter of 2025.
Moody's placed the ratings of H&E on review for upgrade because the
company's existing debt is expected to be repaid in connection with
the transaction. Moody's plan to withdraw the ratings of H&E upon
the close of the transaction.
Moody's review will be completed when H&E's debt is repaid.
The principal methodology used in these ratings was Equipment and
Transportation Rental published in December 2024.
H&E Equipment Services, Inc. (NASDAQ: HEES) is a multi-regional
equipment rental company with over 150 locations spanning 32 states
with a presence in the West Coast, Intermountain, Southwest, Gulf
Coast, Mid-Atlantic, and Southeast regions of the United States.
H&E EQUIPMENT: S&P Places 'BB-' ICR on CreditWatch Positive
-----------------------------------------------------------
S&P Global Ratings placed all its ratings on H&E Equipment Services
Inc., including its 'BB-' issuer credit rating, on CreditWatch with
positive implications.
On Jan. 14, 2025, H&E Equipment Services Inc. announced that it
entered into a definitive agreement to be acquired by United
Rentals Inc. (URI; BB+/Stable/--), the largest equipment rental
provider in the U.S., at a purchase price of $5 billion.
S&P said, "The CreditWatch placement reflects our view that there
is at least a one-in-two likelihood that we could raise our ratings
on H&E by one or more notches following the announced acquisition
by URI.
"We anticipate resolving the CreditWatch placement at transaction
close, which we expect will take place in the first quarter of
2025, subject to shareholder and regulatory approvals.
"Following the transaction, we expect a full integration of H&E
with URI's existing operations. The announced transaction will
involve URI acquiring 100% ownership of H&E at an enterprise value
of $5 billion. We expect URI will retire H&E's existing debt, which
consists of a $750 million asset-backed lending facility ($276
million drawn as of Sept. 30, 2024) and $1.25 billion of senior
unsecured notes.
"We expect URI will maintain our existing 'BB+' rating after
acquiring H&E. As a result of this debt-funded acquisition, we
expect a modest increase in URI's forecast S&P Global
Ratings-adjusted leverage to the 2.0x area at year-end 2025, in
line with our existing 'BB+' rating and stable outlook on the
company."
"The CreditWatch placement reflects our view that there is at least
a one-in-two likelihood that we could raise our ratings on H&E by
one or more notches when the acquisition closes. We could raise the
ratings if we view H&E as at least moderately strategic to URI."
HARE TAYLOR: Gets Court OK to Use Cash Collateral Until Feb. 28
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Florida
issued a preliminary order granting Hare Taylor, LLC authorization
to use cash collateral until Feb. 28.
The preliminary order authorized the company to use cash collateral
to pay operating expenses set forth in its budget, with a 10%
variance allowed.
The budget shows total projected expenses of $210,082 for the next
13 weeks.
The U.S. Small Business Administration will be provided with
adequate protection in the form of a monthly payment of $981
starting on Feb. 1, and a post-petition lien on the cash collateral
to the same extent and with the same validity and priority as the
pre-bankruptcy lien.
The final hearing is scheduled for Feb. 26.
About Hare Taylor
Hare Taylor, LLC is a full-service accounting firm with offices in
Panama City and Chipley, Fla. It offers a broad range of services
for business owners, executives, and independent professionals.
Hare Taylor filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 24-50181) on
Dec. 6, 2024, with up to $10 million in both assets and
liabilities. Gerald W. Taylor, manager of Hare Taylor, signed the
petition.
Judge Karen K. Specie oversees the case.
The Debtor is represented by:
Brian G. Rich
Berger Singerman LLP
Tel: 850-561-3010
Email: brich@bergersingerman.com
HARRIS FAMILY: Paula Beran Named Subchapter V Trustee
-----------------------------------------------------
The Acting U.S. Trustee for Region 4 appointed Paula Beran, Esq.,
at Tavenner & Beran, PLC as Subchapter V trustee for Harris Family
Holdings, LLC.
Ms. Beran will be paid an hourly fee of $480 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Beran declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Paula S. Beran, Esq.
Tavenner & Beran, PLC
20 North 8th Street
Richmond, Virginia 23219
Phone: (804) 783-8300
Email: Beran@TB-LawFirm.com
About Harris Family Holdings
Harris Family Holdings, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Va. Case No. 25-70024) on
January 9, 2025, with up to $1 million in assets and up to $50,000
in liabilities.
Judge Paul M. Black presides over the case.
Michael Dean Hart, Esq., at Michael D. Hart, PC represents the
Debtor as legal counsel.
HASTY GROUP: 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 The Hasty Group, LLC.
About The Hasty Group
The Hasty Group, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No.
24-21592) on Dec. 13, 2024, listing under $1 million in both assets
and liabilities.
Judge Dale L. Somers oversees the case.
Erlene Krigel, Esq., at Krigel Nugent + Moore, PC represents the
Debtor as counsel.
HYPERSCALE DATA: Sells Series G Preferred Stock, Warrants for $365K
-------------------------------------------------------------------
Hyperscale Data, Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that the Company, pursuant
to the Securities Purchase Agreement entered into with Ault &
Company, Inc. on December 21, 2024, sold 365 shares of Series G
convertible preferred stock, and warrants to purchase 61,676 shares
of the Company's common stock to Ault & Company, for a purchase
price of $365,000.
As of January 6, 2025, Ault & Company has purchased an aggregate of
860 shares of Series G Convertible Preferred Stock and Series G
Warrants to purchase an aggregate of 145,319 Warrant Shares, for an
aggregate purchase price of $860,000. The Agreement provides that
Ault & Company may purchase up to $25 million of Series G
Convertible Preferred Stock and Series G Warrants in one or more
closings.
About Hyperscale Data
Hyperscale Data, Inc., formerly known as Ault Alliance, Inc., is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through the Company's wholly and majority-owned
subsidiaries and strategic investments, the Company owns and/or
operates data centers at which it mines Bitcoin and offers
colocation and hosting services for the emerging artificial
intelligence ecosystems and other industries, and provides
mission-critical products that support a diverse range of
industries, including a metaverse platform, oil exploration, crane
services, defense/aerospace, industrial, automotive,
medical/biopharma, consumer electronics, and textiles.
New York, New York-based Marcum LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 16, 2024, citing that the Company has a working capital
deficiency, has incurred net 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.
HYPHA LABS: Posts $785K Net Loss for Year Ended Sept. 2024
----------------------------------------------------------
Hypha Labs, Inc., filed a Form 10-K with the U.S. Securities and
Exchange Commission disclosing $785,429 in net loss over zero
revenue for the year ended September 30, 2024, compared to $246,774
in net income over zero revenue for the year ended September 30,
2023.
The Company also disclosed $493,805 in total assets, $1,420,498 in
total liabilities, and $1,260,293 in total stockholders' deficit at
September 30, 2024.
The Company has incurred recurring losses from operations resulting
in an accumulated deficit of $20,547,426, and as of September 30,
2024, the Company's cash on hand may not be sufficient to sustain
operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The accompanying
consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a
going concern.
The consolidated financial statements do not include any
adjustments that might result from the outcome of any uncertainty
as to the Company's ability to continue as a going concern. These
financial statements also do not include any adjustments relating
to the recoverability and classification of recorded asset amounts
or amounts and classifications of liabilities that might be
necessary should the Company be unable to continue as a going
concern.
As a result of recurring net losses and insufficient cash reserves,
the Company's independent certified public accountant has added a
paragraph to its report on the Company's financial statements for
the year ended September 30, 2024 questioning its ability to
continue as a going concern. The Company's ability to continue as a
going concern is dependent upon its ability to raise additional
capital and to achieve sustainable revenues and profitable
operations. Since inception, the Company has raised funds primarily
through the sale of equity securities and convertible notes. The
Company will need additional funds to commercially launch and then
operate its business. No assurance can be given that any future
financing will be available or, if available, that it will be on
terms that are satisfactory to the Company. Even if the Company is
able to obtain additional financing, it may contain undue
restrictions on its operations or cause substantial dilution for
its stockholders. If the Company is unable to obtain additional
funds, its ability to carry out and implement its planned business
objectives and strategies will be significantly delayed, limited or
may not occur. The Company cannot guarantee that its will ever
generate revenue and become profitable. Even if the Company
achieves profitability, given the competitive and evolving nature
of the industry in which its operates, it may not be able to
sustain or increase profitability and its failure to do so would
adversely affect our business, including its ability to raise
additional funds.
A full-text copy of the Form 10-K is available at
https://urlcurt.com/u?l=8uzX50
About Hypa Labs
Formerly Digipath, Inc., Hypha Labs, Inc.'s mission was to provide
pharmaceutical-grade analysis and testing to the cannabis
industry,
under ISO-17025:2017 guidelines, to ensure consumers and patients
knew exactly what was in the cannabis they ingest and to help
maximize the quality of its clients' products through research,
development, and standardization. Hypha Labs had been operating a
cannabis-testing lab in Nevada since 2015. On Feb. 20, 2024, the
Company completed the sale of the net assets of its subsidiary
Digipath Labs. As of that date the Company was no longer in
business as a service-oriented independent testing laboratory,
data
analytics and media firm focused on the developing cannabis and
hemp markets, which supported the cannabis industry's best
practices for reliable testing, cannabis education and training.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2023, issued a "going concern"
qualification in its report dated Jan. 16, 2024, citing that the
Company has an accumulated deficit, recurring losses from
operations and has cash on hand that may not be sufficient to
sustain its operations. These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.
IAMGOLD CORP: Moody's Upgrades CFR to B2, Outlook Remains Stable
----------------------------------------------------------------
Moody's Ratings upgraded IAMGOLD Corporation's corporate family
rating to B2 from B3, the probability of default rating to B2-PD
from B3-PD, and senior unsecured notes to Caa1 from Caa2. The
Speculative Grade Liquidity Rating (SGL) was changed to SGL-2 from
SGL-3. The outlook remains stable.
"IAMGOLD's ratings upgrade reflects Moody's expectation that the
company will generate positive cash flow and see a reduction in
financial leverage through both debt repayments and increased
earnings with the Cote Gold mine now producing,", said Jamie
Koutsoukis, Moody's Rating analyst. "The upgrade also incorporates
the increase in production and earnings that will be generated in
Canada improving the company's geopolitical risk profile."
RATINGS RATIONALE
IAMGOLD's CFR benefits from: (1) modest financial leverage that
will remain below 2x; (2) its growing exposure to Canada with the
ramp up of production at its Cote Gold project with a long mine
life of over 15 years; and (3) free cash flow generation. The
ratings are constrained by: (1) IAMGOLD's execution risk related to
ramping up the Coté Gold project and production reaching planned
levels; (2) geopolitical risk (Essakane mine in Burkina Faso); (3)
its moderate scale (3 mines and ~800 thousand attributable gold
ounces expected in 2025); (4) exposure to variable gold prices;
and (5) a short mine life at the Essakane mine
IAMGOLD successfully completed the construction of its Cote Gold
mine in Ontario, Canada, with the first gold pour occurring on
March 31, 2024 and achieving commercial production in August 2024.
The mine will produce over 250 thousand ounces in 2025 at a cash
cost below $1000 per ounce and account for about 35% of production.
The project enhances the company's business profile by
significantly increasing production and improving the overall cost
structure. Additionally, IAMGOLD's geopolitical risk profile is
positively impacted by incremental cash flow from Canada,
considered a stable mining jurisdiction.
IAMGOLD has good liquidity (SGL-2), with about $710 million of
total sources against minimal uses to the end of 2025. Proforma its
repurchase of the 9.7% interest of the Cote Gold mine ($377 million
purchase price) and upsizing of its credit facility in December
2024, IAMGOLD's sources consist of about $250 million of cash,
approximately $425 million available on its $650 million committed
facility (expiring December 2028), and Moody's expectation of about
$35 million of free cash flow in 2025. Uses are minimal with no
material debt maturities or amortization over the next 12 months.
IAMGOLD's credit facility and term loan include financial covenants
which Moody's believe the company will remain in compliance with.
Alternate liquidity is limited due to the company's small and
concentrated asset base.
The Caa1 rating on the company's senior unsecured notes, is two
notches below the B2 CFR, reflecting the subordination of the
unsecured notes to the secured revolving credit facility and
second-lien secured term loan.
The stable rating outlook reflects Moody's expectation that the
company will generate positive free cash flow and maintain strong
credit metrics over the next 12-18 months, on the back of increased
production from Cote Gold.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company enhances its
operational diversity, especially given the relatively short
lifespan of the Essakane mine. An upgrade would also require
IAMGOLD to show it can consistently generate positive free cash
flow at various commodity prices, driven by Cote Gold's expected
lower operational cash costs. Moody's would also consider an
upgrade if the company maintains an adjusted leverage of below
2.5x.
The ratings could be downgraded if free cash flow is negative on a
sustained basis or if the company experiences material operational
issues at one of its mines which could result in lowered production
and higher costs. Moody's would also consider a downgrade if the
leverage ratio increases to and is sustained above 3.5x.
IAMGOLD Corporation, based in Toronto, Canada, operates three gold
mines: Cote Gold (70% ownership) and Westwood (100%) in Canada, and
Essakane (90%) in Burkina Faso.
The principal methodology used in these ratings was Mining
published in October 2021.
IDEAL PROPERTY: Court Extends Use of Cash Collateral Until Jan. 31
------------------------------------------------------------------
Ideal Property Investments, LLC received fifth interim approval
from the U.S. Bankruptcy Court for the Eastern District of
Washington to use cash collateral.
The fifth interim order authorized the company to use cash
collateral until Jan. 31 to pay professional fees and business
expenses, subject to the approved budget.
The budget shows total projected operational expenses of $946,395
for the period from Jan. 3 to Feb. 7.
As adequate protection, secured lenders will receive payments from
the company and will be granted replacement liens on the company's
post-petition collateral.
The next hearing is scheduled for Jan. 29.
About Ideal Property Investments
Ideal Property Investments, LLC is primarily engaged in renting and
leasing real estate properties. The company is based in Everett,
Wash.
Ideal Property Investments filed Chapter 11 petition (Bankr. E.D.
Wash. Case No. 24-01421) on September 5, 2024, with $50 million to
$100 million in assets and $100 million to $500 million in
liabilities.
Judge Frederick P. Corbit oversees the case.
Laurie Thornton, Esq., at DBS Law is the Debtor's bankruptcy
counsel.
IMAGE DIRECT: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Image Direct Group LLC
200 Monroe Ave., Suite 4
Frederick MD 21701
Business Description: Image Direct is a company that specializes
in providing printing and direct mail
services. Its services include printing,
envelope production, direct mail campaigns,
invoicing, advertising and marketing
materials, mail tracking, commingling
services, and postage optimization. The
company focuses on helping businesses with
their direct marketing efforts, including
the creation and distribution of physical
marketing materials. The company emphasizes
the effectiveness of direct mail marketing,
which is more profitable compared to email
marketing.
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
District of Maryland
Case No.: 25-10353
Debtor's Counsel: Lawrence Heffner, Jr., Esq.
RUSSELL & HEFFNER, LLC
153 W Patrick St Ste D
Frederic MD 21701
Tel: (301) 695-2977
E-mail: lheffner@prodigy.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dilip Parthasarathy as president and
sole owner.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free on PacerMonitor at:
https://www.pacermonitor.com/view/ODC5IIY/Image_Direct_Group_LLC__mdbke-25-10353__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/L5XKC4Q/Image_Direct_Group_LLC__mdbke-25-10353__0001.0.pdf?mcid=tGE4TAMA
INFINITE PRODUCT: Court OKs Bid to Prohibit Cash Collateral Access
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado issued an
order prohibiting Infinite Product Company from using cash
collateral.
In the same order, the court confirmed the objection from the
Colorado Department of Revenue to the use of its cash collateral
after the company did not respond to the objection.
The Colorado Department of Revenue is a first priority secured
creditor of the company and its bankruptcy estate.
Based on its schedules, the company's only asset was inventory with
an estimated value of $25,000 on the petition date. The ongoing
business may also have value upon which the agency holds a first
priority lien.
The Colorado Department of Revenue is represented by:
Deanna L. Westfall, Esq.
Senior Assistant Attorney General
Colorado Department of Law
Ralph L. Carr Colorado Judicial Center
1300 Broadway, 8th Floor
Denver, Colorado 80203
Direct dial: 720-508-6342
Email: deanna.westfall@coag.gov
About Infinite Product Company
Infinite Product Company, doing business as Infinite CBD, is an
industry expert in consumer manufacturing. It is based in Lakewood,
Colo.
Infinite Product Company sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No.
24-16245) on October 22, 2024, with $100,000 to $500,000 in assets
and $1 million to $10 million in liabilities. John Ramsay, chief
executive officer, signed the petition.
Judge Joseph G. Rosania Jr. oversees the case.
The Debtor is represented by Keri L. Riley, Esq., at Kutner Brinen
Dickey Riley, PC.
INTERNATIONAL HOLDINGS: Case Summary & Two Unsecured Creditors
--------------------------------------------------------------
Debtor: International Holdings, LLC
14238 Corkwood Lane
Astatula, FL 34705
Business Description: International Holdings is a single asset
real estate, as defined in 11 U.S.C.
Section 101(51B).
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 25-00242
Judge: Hon. Lori V. Vaughan
Debtor's Counsel: Ronald Cutler, Esq.
RONALD CUTLER P.A.
1162 Pelican Bay Drive
Daytona Beach, FL 32119-1381
Tel: (386) 788-4480
Fax: (386) 788-6040
E-mail: thelawoffice@ronaldcutlerpa.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Darrell Kelley as manager.
A full-text copy of the petition, which includes a list of the
Debtor's two unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/BEPFJDA/International_Holdings_LLC__flmbke-25-00242__0001.0.pdf?mcid=tGE4TAMA
INTRUM AB: Says Opposing Bondholders Are In Contempt of Court
-------------------------------------------------------------
Libby Cherry of Bloomberg Law reports that Intrum AB, a debt
collector, is claiming that a group of its bondholders should be
found in contempt of court for challenging its debt restructuring
in Sweden.
In a filing on January 15, Intrum's lawyers argued that the
bondholders holding Intrum's 2025 bonds are attempting to "revisit
factual allegations already addressed" by a US bankruptcy court in
Texas. According to the report, they assert that the court should
enforce its orders and hold the minority bondholders in civil
contempt, the report states.
About Intrum AB
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 plas 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:
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 ervices 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 percent of the total commitments under the
RCF (the "RCF Steerco Group").
JEWELRY DESIGNER: Nathaniel Wasserstein Named Subchapter V Trustee
------------------------------------------------------------------
The U.S. Trustee for Region 2 appointed Nathaniel Wasserstein,
Esq., at Lindenwood Associates, LLC as Subchapter V trustee for
Jewelry Designer Showcase, Inc.
Mr. Wasserstein will be paid an hourly fee of $485 for his services
as Subchapter V trustee and will be reimbursed for work related
expenses incurred.
Mr. Wasserstein declared that he is a disinterested person
according to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Nat Wasserstein, Esq.
Lindenwood Associates, LLC
328 North Broadway, 2nd Floor
Upper Nyack, New York 10960
Telephone: (845) 398-9825
Facsimile: (212) 208-4436
Email: nat@lindenwoodassociates.com
About Jewelry Designer Showcase
Jewelry Designer Showcase Inc. is a jewelry designer in Staten
Island, N.Y. It conducts business under the name Dannunzio
Designed.
Jewelry Designer Showcase filed Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 25-40076) on January 9, 2025, with up to $50,000
in assets and up to $10 million in liabilities.
Judge Elizabeth S. Stong handles the case.
Avrum J. Rosen, Esq., at the Law Offices of Avrum J. Rosen, PLLC,
is the Debtor's bankruptcy counsel.
JOANN INC: Columbus Store to Remain Open Amid 2nd Chapter 11 Filing
-------------------------------------------------------------------
Olivia Yepez of News3 reports that after filing for bankruptcy for
the second time on January 15, JOANN's Columbus location confirmed
that it is open and operating as normal. JOANN Inc. filed for
Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for
the District of Delaware.
A manager at the Whittlesey Boulevard store confirmed that the
location is maintaining regular business hours, though no
additional comments were provided, the report states.
"The retail environment has presented significant challenges, and
combined with our financial situation and inventory constraints, we
have had to take this step," said Michael Prendergast, JOANN's
interim CEO, in a statement.
According to News3, JOANN first filed for Chapter 11 in March 2024
and later became a private company to prevent store closures. A
pre-recorded message confirms that the company operates over 800
stores nationwide. Less than 10 months later, JOANN filed for
Chapter 11 again, this time seeking court approval to sell its
assets to Gordon Brothers Retail Partners, LLC as the "stalking
horse" bidder.
The company is open to receiving "higher and better offers," with
the Gordon Brothers bid setting the starting point for the asset
auction.
"After considering all strategic options, we believe that a
court-supervised sale process is the best way to maximize the value
of the business," Prendergast said.
JOANN also confirmed that "team members continue to receive pay and
benefits," but it did not address potential store closures
resulting from the ongoing restructuring.
About Joann Inc.
JOANN operates in the fabric and sewing industry with one of the
largest assortments of arts and crafts products. JOANN has
transformed itself into a fully-integrated, digitally-connected
omni-channel retailer.
JOANN reported a net loss of $200.6 million for the year ended Jan.
28, 2023.
On March 18, 2024, JOANN Inc. and 9 affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 24-10418). JOANN listed
$2,257,700,000 in assets against $2,440,700,000 in liabilities as
of Oct. 28, 2023.
Judge Craig T. Goldblatt oversees the case.
The Debtors tapped Latham & Watkins, LLP as legal counsel; Houlihan
Lokey Capital, Inc. as investment banker; and Alvarez & Marsal
North America, LLC, as financial advisor. Kroll Restructuring
Administration, LLC is the noticing agent.
JOANN Inc., on April 30, 2024 successfully emerged from its
court-supervised financial restructuring process.
2nd Attempt
Joann Inc. sought voluntary Chapter 11 petition for the second time
under U.S. Bankruptcy Code (Bankr. D. Del. Case No. 25-10068) on
January 15, 2025.
Kirkland & Ellis is serving as legal counsel to JOANN, with
Centerview Partners LLC serving as financial advisor and Alvarez &
Marsal North America, LLC serving as restructuring advisor.
JOANN INC: Jan. 23 Deadline Set for Panel Questionnaires
--------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of Joann Inc., et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/4fdwvbvs and return by email it to
Malcolm M. Bates@usdoj.gov - Malcolm.M.Bates@usdoj.gov - at the
Office of the United States Trustee so that it is received no later
than Thursday, January 23, 2025, at 4:00 p.m. (E.T.).
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Joann Inc.
JOANN operates in the fabric and sewing industry with one of the
largest assortments of arts and crafts products. JOANN has
transformed itself into a fully-integrated, digitally connected
omni-channel retailer.
JOANN reported a net loss of $200.6 million for the year ended Jan.
28, 2023.
On March 18, 2024, JOANN Inc. and certain of its affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10418). JOANN listed
$2,257,700,000 in assets against $2,440,700,000 in liabilities as
of Oct. 28, 2023. Judge Craig T. Goldblatt oversaw the cases.
The Debtors tapped Latham & Watkins, LLP as legal counsel; Houlihan
Lokey Capital, Inc. as investment banker; and Alvarez & Marsal
North America, LLC, as financial advisor. Kroll Restructuring
Administration, LLC is the noticing agent.
On April 30, 2024, JOANN Inc. successfully emerged from its
court-supervised financial restructuring process.
On January 15, 2025, JOANN Inc. and twelve of its affiliates filed
for Chapter 11 bankruptcy protection for the second time (Bankr. D.
Del. Lead Case No. 25-10068).
In petitions signed by Michael Prendergast as interim chief
executive officer, the Debtors reported estimated assets and
estimated liabilities of $ $1 billion to $10 billion.
In their 2025 cases, the Debtors tapped Kirkland & Ellis LLP and
Kirkland & Ellis International LLP as restructuring counsel. Cole
Schotz has been tapped to serve as Delaware restructuring counsel
to the Debtors. Alvarez & Marsal LLC serves as restructuring
advisor to the Debtors; Centerview Partners, LLC serves as
financial advisor and investment banker; and Kroll Restructuring
Administration LLC as serves as notice and claims agent.
JUBILEE ACADEMIC: Moody's Affirms 'Ba2' Revenue Bond Rating
-----------------------------------------------------------
Moody's Ratings has affirmed Jubilee Academic Center Inc., TX's Ba2
revenue rating. The charter school network has approximately $144.3
million in outstanding revenue-backed bonded debt. The outlook
remains stable.
RATINGS RATIONALE
The Ba2 rating reflects the charter school network's sizable
operating scale and satisfactory financial operations, moderate
available liquidity, a declining competitive position and moderate
long-term leverage ratios. The network's weakening student demand
resulted in the temporary closure of three of its thirteen campuses
over the past two fiscal years and a nearly 17% decline in
enrollment from fiscal 2023 to fiscal 2025. Despite the reduced
enrollment, the network maintained sound financial operations, with
a fiscal 2024 year-end cash position of 110 days and annual debt
service coverage of an adequate 1.4x. Despite the recent issuance
of new revenue bonds in December 2024 to finance capital
improvements and facility acquisitions, the school's debt leverage
remains moderate. The rating also reflects the network's history of
charter renewals from the state's authorizing agency, with the
expectation of receiving another 10-year renewal before the current
charter expires on July 31, 2025.
RATING OUTLOOK
The stable outlook reflects the charter network's satisfactory
financial metrics, including its available spendable liquidity,
which provides a buffer as management adjusts operations to address
declining student enrollment. Further weakening of demand, or a
reduction in cash reserves or debt service coverage, could likely
result in downward credit pressure.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Materially strengthening of the network's competitive profile,
including stable to growing enrollment and improved academic
performance
-- Maintenance of spendable liquidity above 100 days cash on hand,
annual cash flow margins above 15%, and debt service coverage
exceeding 1.5x
-- Moderation of leverage relative to liquidity and operating
revenue
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Further deterioration to the network's competitive profile
including ongoing enrollment loss, decommissioning of additional
campuses, or declining academic performance
-- Narrowing of spendable liquidity to below 75 days cash on hand,
annual cash flow margins below 10%, or debt service coverage less
than 1.2x
-- Material increases to the network's leverage ratios
LEGAL SECURITY
The network's outstanding parity bonds are special, limited
obligations of the New Hope Cultural Education Facilities Finance
Corporation (the issuer), payable solely from revenues derived from
a loan agreement with Jubilee Academic Center (the company). Under
the loan agreement, the company has pledged to make payments
derived from Jubilee Academic Center's principal source of revenue
which is primarily comprised of state funding from its charter
school operations. The company has also executed a deed of trust
and leasehold mortgage covering its real estate (of participating
schools) as a source of payment for the debt.
Notable bond covenants include the maintenance of a debt service
coverage ratio of 1.1x to 1.0x for each fiscal year the bonds are
outstanding, along with the maintenance of a year-end liquidity
minimum of at least 40 days cash on hand. Additionally, a debt
service reserve fund (DSRF) has been set at the standard
three-prong test.
PROFILE
Jubilee Academic Center is a non-profit open-enrollment charter
school network incorporated on March 15, 2000. The network is
currently composed of 13 school campuses (three of which are
currently dormant) in the cities of San Antonio (Aaa stable),
Kingsville, Harlingen (Aa3), Brownsville (Aa3), and Austin (Aa1
stable). The network offers preK-12th grade education based on the
Texas Essential Knowledge and Skills (TEKS) curriculum model and
enrolls approximately 5,150 students for the fiscal 2025 school
year. The network is governed by a seven-member Board of Directors.
Its 10-year charter with the state's Texas Education Agency (TEA)
authorizing body is valid through July 31, 2025.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in April 2024.
K&N PARENT: Moody's Withdraws 'Caa3' Corporate Family Rating
------------------------------------------------------------
Moody's Ratings has withdrawn K&N Parent, Inc.'s (K&N) ratings
including the Caa3 corporate family rating and the Caa3-PD
probability of default rating. Moody's also withdrew the B3 rating
on the company's backed senior secured first lien priority term
loan facility and the Ca rating on the backed senior secured first
lien term loan. Prior to the withdrawal, the outlook was negative.
RATINGS RATIONALE
Moody's have decided to withdraw the rating(s) following a review
of the issuer's request to withdraw its rating(s).
Headquartered in California, K&N Parent, Inc. is a designer and
manufacturer of performance automotive aftermarket products. The
company's products include air filters, air intakes, oil filters,
exhausts and accessories.
KMC MINING: Offers Assets for Sale Under CCAA Process
-----------------------------------------------------
KMC Mining Corporation on January 10, 2025, was granted an Order of
the Alberta Court of King's Bench as amended and restated from time
to time under the provisions of the Companies Creditors Arrangement
Act. R.S.C. 1985, c. C-36. The Initial Order appointed FTI
Consulting Canada Inc. as the Monitor of KMC.
KMC, with the assistance of Ernst & Young Orenda Corporate Finance
Inc., and Ernst & Young Corporate Finance (Canada) Inc. and the
supervision of the Monitor, intends to offer all of its assets and
business for sale pursuant to the terms of the Court approved order
approving the sales and investment solicitation process.
Assets include over 120 pieces of heavy equipment and over 100
pieces of maintenance support equipment, including:
-- Komatsu 930E;
-- Komatsu 830E;
-- CAT 793D;
-- CAT 777D/F;
-- Komatsu HD1500-5;
-- Shovels - Komatsu PC-8000, Demag/Komatsu H685, O&K RH-400 (CAT
6090), O&K RH-340 (CAT 6060), O&K RH-200 (CAT 6040);
-- Dozers - D11T, D9T, D375-8, and D8T;
-- Hydraulic Excavators;
-- Motor Graders (24M and 16H);
-- Maintenance support equipment; and
-- Inventory and capital spares.
The SISP is a two-phased process with a Qualified Phase I Bid
deadline of February 28, 2025. Offers for assets that will be
considered include offers en bloc, offers on fleets of assets, and
/ or offers on individual assets.
Copies of documents filed in the CCAA proceedings and the SISP may
be obtained from the Monitor's website at
http://cfcanada.fticonsulting.com/kmcmining/
About KMC Mining
KMC Mining Corporation is a leading Edmonton, Alberta based private
corporation providing heavy civil contract mining services. The
Company offers a full suite of open-pit mining solutions across the
project lifecycle, primarily in surface mining related to the
Canadian oil sands.
KNIGHT HEALTH: Moody's Affirms 'Caa2' CFR, Outlook Stable
---------------------------------------------------------
Moody's Ratings affirmed Knight Health Holdings LLC's (aka
"ScionHealth") Caa2 Corporate Family Rating and the Caa2 senior
secured term loan B. Concurrently, Moody's affirmed the Caa2-PD
Probability of Default Rating and appended a limited default "/LD"
designation, changing it to Caa2-PD/LD from Caa2-PD, following the
company's debt exchange transaction recently finalized with a
majority of certain existing lenders. Moody's will remove the "/LD"
designation from the PDR in approximately three business days. The
outlook is stable.
ScionHealth recently announced that it has consummated a
transaction in which the majority of its ABL debt holders will
extend the maturity by 18 months through June 30, 2028. This debt
extension is considered a distressed exchange by us because the
debt is being extended in order to avoid a potential default when
the debt was set to mature in December 2026. A distressed exchange
is considered a form of default under Moody's criteria. The "/LD"
designation will be removed in approximately three business days.
The Caa2 CFR affirmation reflects Moody's view that ScionHealth's
weak liquidity contributes to an unsustainable capital structure
and that the probability of a default, by way of another distressed
exchange, is high. Moody's anticipate that leverage will remain
elevated as operating expenses, namely high interest expense, will
continue to pressure profitability and liquidity in the near term.
As such, ScionHealth may need to continue to rely on external and
alternate sources of liquidity to fund operational deficiencies,
working capital swings, upcoming debt maturities and funds borrowed
under UnitedHealth Group Incorporated (United)'s advances related
to Change Healthcare.
RATINGS RATIONALE
Knight Health Holdings LLC's Caa2 CFR reflects its weak liquidity
profile and near term debt maturities. Additionally, ScionHealth
has elevated financial leverage, high operating costs and low
organic growth outlook for the overall business. Moody's calculate
ScionHealth's debt to EBITDA to be roughly 6.9x LTM September 30,
2024 pro forma for the transaction. Moody's anticipate that
leverage will remain elevated as operating expenses, namely higher
interest expense, will continue to pressure profitability and
liquidity in the near term. As such, ScionHealth may need to
continue to rely on external and alternate sources of liquidity to
fund operations.
ScionHealth's minimal reliance on a single state Medicaid program
or a single commercial payer bolsters the credit profile as the
company operates in 28 states and has a diverse mix of payors.
Further, ScionHealth benefits from its large scale with over $3.6
billion in combined revenue and diversified service line offering.
Moody's anticipate that ScionHealth will maintain weak liquidity.
Pro forma for the transaction, the Company has a $537 million ABL
revolving credit facility that has about $151 million of available
capacity and about $166 million of cash on hand on as of September
30, 2024. Moody's forecast ScionHealth will likely need to rely on
external and alternate sources for liquidity to fund operational
deficiencies, working capital swings, upcoming debt maturities and
funds borrowed under United's advances related to Change
Healthcare. Further, Moody's expect that ScionHealth will continue
to burn cash in 2025. The absence of any interest rate hedges
currently leaves ScionHealth vulnerable to high interest rates.
ScionHealth has a springing fixed charge coverage ratio covenant in
its ABL revolving credit facility that springs when the ABL
revolver is 87.5% or more drawn. Moody's expect that the company
will maintain adequate covenant buffers but will be tested.
The Caa2 rating on the $450 million senior secured term loan, is at
the same level of the corporate family rating, as it reflects the
preponderance of debt in the capital structure despite the
instrument's effective subordination to the unrated $537 million
ABL with respect to the collateralized asset pool. The ABL facility
has a first priority lien on all liquid assets of the company
including cash, accounts receivable and inventories (collectively,
"ABL collateral") and a second lien on all other tangible and
intangible property. The secured term loan has a second priority
lien on the ABL collateral and first lien interest in substantially
all other tangible and intangible assets.
The stable outlook reflects Moody's view that ScionHealth's
operating performance and profitability will remain constrained and
that the default probability is high, given weak liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if ScionHealth experiences further
operating or cash flow disruption. Further rising likelihood of
debt impairment would also lead to a rating downgrade.
Ratings could be upgraded if ScionHealth substantially improves
operating performance and materially reduces leverage to a more
sustainable level. ScionHealth will also need to demonstrate a
track record of effectively managing its aggressive growth
strategy. A material improvement in liquidity could also lead to an
upgrade.
Knight Health Holdings LLC is a leading provider of a
community-based acute and post-acute care, with 76 Specialty
hospitals, 17 community hospitals and two senior living communities
across 28 states. Revenue is approximated at $3.6 billion as of
September 30, 2024. The company is owned by private equity firm
Apollo Funds & Management.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
LE CONTE: Seeks Chapter 11 Bankruptcy Protection in California
--------------------------------------------------------------
On January 14, 2025, Le Conte Westwood Development LLC filed
Chapter 11 protection in the U.S. Bankruptcy Court for the Central
District of California.
According to court filing, 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 Le Conte Westwood Development LLC
Le Conte Westwood Development LLC is a limited liability company.
Le Conte Westwood Development LLC sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No.: 25-10261) on
January 14, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $10 million and $50 million each.
Honorable Bankruptcy Judge Vincent P. Zurzolo handles the case.
The Debtor is represented by Gary E. Klausner, Esq., at LEVENE,
NEALE, BENDER, YOO & GOLUBCHIK L.L.P., in Los Angeles, California.
LEXARIA BIOSCIENCE: Posts $2.7MM Net Loss for 3 Mos Ended Nov. 2024
-------------------------------------------------------------------
Lexaria Bioscience Corp. filed a Form 10-Q with the U.S. Securities
and Exchange Commission disclosing $2,706,628 in net loss over
$183,923 in revenue for the three months ended November 30, 2024,
compared to $1,185,038 in net loss over $151,278 in revenue for the
three months ended November 30, 2023.
The Company also disclosed $9,793,774 in total assets, $399,718 in
total liabilities, and $9,394,056 in total stockholders' equity at
November 30, 2024.
The Company's consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and in accordance with accounting
principles generally accepted in the United States ("US GAAP")
applicable to a going concern, which assumes the Company will have
sufficient funds to meet its financial obligations for a period of
at least 12 months from the date of this report.
Since inception, the Company has incurred significant operating and
net losses. Net losses attributable to shareholders were $2.7
million and $1.2 million for the three-months ended November 30,
2024, and 2023, respectively. As of November 30, 2024, the Company
had an accumulated deficit of $54.3 million. The Company expects to
continue to incur significant operational expenses and net losses
in the upcoming 12 months. Its net losses may fluctuate
significantly from quarter to quarter and year to year, depending
on the stage and complexity of its research and development (R&D)
studies and corporate expenditures, additional revenues received
from the licensing of its technology, if any, and the receipt of
payments under any current or future collaborations into which the
Company may enter.
During the three months ended November 30, 2024, the Company raised
$4.3 million in net proceeds from the sale of securities pursuant
to its registered direct and At the Market offerings which closed
in October, 2024.
The Company may offer securities in response to market conditions
or other circumstances if the Company believes such a plan of
financing is required to advance the Company's business plans.
There is no certainty that future equity or debt financing will be
available or that it will be at acceptable terms and the outcome of
these matters is unpredictable. A lack of adequate funding may
force us to reduce spending, curtail or suspend planned programs or
possibly liquidate assets. Any of these actions could adversely and
materially affect its business, cash flow, financial condition,
results of operations, and potential prospects. The sale of
additional equity may result in additional dilution to its
stockholders. Entering into additional licensing agreements,
collaborations, partnerships, alliances marketing, distribution, or
licensing arrangements with third parties to increase its capital
resources is also possible. If the Company does so, the Company may
have to relinquish valuable rights to its technologies, future
revenue streams, research programs or product candidates or grant
licenses on terms that may not be favorable to us.
Based on existing cash resources, management believes that current
funding will be sufficient to meet the Company's financial
obligations for a period of at least twelve months from the date of
this report.
Funding Requirements
The Company anticipates that its expenditures will increase in
connection with its ongoing R&D program, specifically with respect
to its animal and human clinical trials of its DehydraTECH
formulations for the purposes of its investigations with GLP-1
drugs and treating hypertension. As the Company moves forward with
its planned R&D studies in 2025, the Company anticipates that its
expenditures will further increase and accordingly, the Company
expect to incur increased operating losses and negative cash flows
for the foreseeable future.
Through November 30, 2024, the Company has funded its operations
primarily through the proceeds from the sale of common stock. The
Company has consistently incurred recurring losses and negative
cash flows from operations, including net losses of $2,706,628 and
$1,185,038 for the three-months ended November 30, 2024, and 2023,
respectively.
The continuation of Lexaria as a going concern depends on raising
additional capital and/or attaining and maintaining profitable
operations. The accompanying financial statements do not include
any adjustment relating to the recovery and classification of
recorded asset amounts or the amount and classification of
liabilities that might be necessary should its Company discontinue
operations. The recurring losses from operations and net capital
deficiency may raise substantial doubt about the Company's ability
to continue as a going concern within one year following the date
that these consolidated financial statements are issued.
During the three months ended November 30, 2024, the Company raised
$4.3 million in net proceeds from the sale of securities pursuant
to its registered direct and At the Market offerings which closed
in October, 2024.
The Company has performed a review of its cash flow forecast and
have concluded that funds on hand, combined with those expected
from executed license agreements, will be sufficient to meet the
Company's financial obligations for the twelve-month period
following the filing of these consolidated financial statements on
Form 10-Q.
Liquidity and Capital Resources
Since inception, the Company has incurred significant operating and
net losses. Net losses attributable to shareholders were $2.70
million and $1.18 million for the three-months ended November 30,
2024, and 2023, respectively. As of November 30, 2024, the Company
had an accumulated deficit of $54.26 million. The Company expects
to continue to incur significant operational expenses and net
losses in the upcoming 12 months. Its net losses may fluctuate
significantly from quarter to quarter and year to year, depending
on the stage and complexity of its R&D studies and corporate
expenditures, additional revenues received from the licensing of
its technology, if any, and the receipt of payments under any
current or future collaborations into which the Company may enter.
The recurring losses and negative net cash flows raise substantial
doubt as to the Company's ability to continue as a going concern.
Sources of Liquidity
During the three-months ended November 30, 2024, the Company has
completed the following:
* Entered into a Securities Purchase Agreement whereby on October
16, 2024, the Company issued 1,633,987 shares of common stock at a
purchase price of $3.06 per share for gross and net proceeds of
$5.0 million and $4.5 million, respectively. Concurrently, the
Company issued, by way of a private placement transaction,
4,551,019 share purchase warrants, entitling the holder thereof to
purchase up to 4,551,019 shares of common stock at a price of $3.06
per share for a period of five years from the date of shareholder
approval for such warrant issuance. The shares registered pursuant
to a take down of the Company's Form S-3 registration statement and
the warrants and related warrant shares were registered pursuant to
a Form S-3 registration statement As part of the terms and
conditions of the warrant issuance, the sole investor agreed to
cancel the 2,917,032 share purchase warrants bearing an exercise
price of $4.75 that were issued to them in the April 30, 2024
financing. The Company also issued the placement agent warrants to
purchase up to 57,190 shares at an exercise price of $3.825 per
share.
* In October 2024, the Company sold 8,402 shares of common stock
through an At the Market (ATM) offering for gross proceeds of
$26,146. Share issuance costs related to the ATM offering of
$144,812 were charged to additional paid in capital.
The Company may also offer securities in response to market
conditions or other circumstances if the Company believes such a
plan of financing is required to advance the Company's business
plans. There is no certainty that future equity or debt financing
will be available or that it will be at acceptable terms and the
outcome of these matters is unpredictable. A lack of adequate
funding may force us to reduce spending, curtail or suspend planned
programs or possibly liquidate assets. Any of these actions could
adversely and materially affect its business, cash flow, financial
condition, results of operations, and potential prospects. The sale
of additional equity may result in additional dilution to its
stockholders. Entering into additional licensing agreements,
collaborations, partnerships, alliances marketing, distribution, or
licensing arrangements with third parties to increase its capital
resources is also possible. If the Company does so the Company may
have to relinquish valuable rights to its technologies, future
revenue streams, research programs or product candidates or grant
licenses on terms that may not be favorable to us.
The Company has evaluated whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the
Company's ability to continue as a going concern. As of November
30, 2024, the Company had cash and cash equivalents of
approximately $8.1 million to settle $0.3 in current liabilities.
The Company has performed a review of its cash flow forecast and
have concluded that its existing cash, combined with those expected
from executed license agreements, will be sufficient to meet the
Company's financial obligations for the twelve-month period
following the filing of these consolidated financial statements on
Form 10-Q.
A full-text copy of the Form 10-Q is available at
https://urlcurt.com/u?l=OikDC7
About Lexaria
Headquartered in Kelowna, BC, Canada, Lexaria Bioscience Corp. --
http://www.lexariabioscience.com/-- is a biotechnology company
developing the enhancement of the bioavailability of a broad range
of fat-soluble active molecules and active pharmaceutical
ingredients using its patented DehydraTECHâ„¢ drug delivery
technology. DehydraTECH combines lipophilic molecules or APIs with
specific long-chain fatty acids and carrier compounds that improve
the way they enter the bloodstream, increasing their effectiveness
and allowing for lower overall dosing while promoting healthier
oral ingestion methods.
Lexaria reported a net loss of $6.71 million for the year ended
Aug. 31, 2023, compared to a net loss of $7.38 million for the
year
ended Aug. 31, 2022. As of May 31, 2024, Lexaria Bioscience had
$10.02 million in total assets, $271,375 in total liabilities, and
$9.75 million in total stockholders' equity.
Going Concern
"The continuation of Lexaria as a going concern depends on raising
additional capital and/or attaining and maintaining profitable
operations. The accompanying financial statements do not include
any adjustment relating to the recovery and classification of
recorded asset amounts or the amount and classification of
liabilities that might be necessary should our Company discontinue
operations. The recurring losses from operations and net capital
deficiency may raise substantial doubt about the Company's ability
to continue as a going concern within one year following the date
that these consolidated financial statements are issued," Lexaria
said in its Quarterly Report for the period ended May 31, 2024.
LIFEPOINT HEALTH: Moody's Rates New $700MM Sr. Secured Notes 'B2'
-----------------------------------------------------------------
Moody's Ratings assigned a B2 rating to Lifepoint Health, Inc.'s
new $700 million senior secured notes due in 2032. There are no
changes to the existing ratings including the B3 Corporate Family
Rating, the B3-PD Probability of Default Rating, the B2 backed
senior secured term loan B, the B2 senior secured notes ratings and
the Caa2 senior unsecured ratings. The outlook is unchanged at
positive.
Proceeds from the offering are expected to be used to repay,
redeem, or repurchase at or prior to maturity Lifepoint Health,
Inc.'s existing $600 million senior secured notes due in 2027 and
add $100 million of cash to the balance sheet to be used for
general corporate purposes. The offering will have minimal increase
to the financial leverage and will lengthen LifePoint's debt
maturity profile and improve liquidity.
RATINGS RATIONALE
Lifepoint's B3 CFR reflects the company's elevated financial
leverage, with gross debt to EBITDA of 5.8x pro forma for the
transaction. Moody's expect improvement in Lifepoint's leverage and
cash flow due to ongoing cost reduction initiatives, contract
negotiations and improved reimbursement in key states as well as
the changing segment mix with a higher percentage of behavioral
health that carries higher margins. Moody's anticipate that the
company will remain balanced in its approach to M&A and new
facility additions. Lifepoint's combination of acute care,
rehabilitation and behavioral health supports solid organic growth
with many opportunities for expansion with acute care hospitals
serving as referral source to its other business lines. Lifepoint's
rating is also supported by the company's large scale and good
geographic diversity.
Moody's expect that Lifepoint will maintain good liquidity for the
next year. The company will have about $216 million in pro forma
cash following the transaction, which together with revolver
availability provides a buffer against negative free cash flow. The
company's $800 million ABL revolver (unrated, expiring in January
2028), has about $225 million used as of September 30, 2024.
The company's senior secured term loans and senior secured notes
are rated B2, one notch higher than the B3 corporate family rating.
The notching reflects the secured debt effective subordination to
the asset-based revolver which has a first lien on certain accounts
receivable. The secured debt benefits from the material level of
junior capital provided by the $1.3 billion of unsecured debt. The
Caa2 rating on the company's unsecured notes is two notches below
the B3 corporate family rating and reflects their effective
subordination to a material level of secured debt.
The positive outlook reflects the potential for Lifepoint to reduce
leverage to below 6.0x in the next 12-18 months while generating
positive free cash flow. Moody's positive outlook also includes the
expectation that Lifepoint will look to repay a portion of its ABL
facility and maintain adequate availability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade the ratings if Lifepoint improves
profitability and maintains balanced financial policies and good
liquidity. Good liquidity would include positive free cash flow
generation and maintaining availability on the revolving credit
facility. Ratings could be upgraded if debt/EBITDA is sustained at
6.0 times and if earnings quality improves through a greater
convergence of reported and adjusted earnings with fewer and
pro-forma adjustments.
Moody's could downgrade the ratings if the company's liquidity
weakens or if the operating environment weakens significantly
including ongoing margin pressure. Ratings could be downgraded if
financial policies become more aggressive including debt-financed
dividends or leveraging acquisitions.
Lifepoint Health, Inc., headquartered in Brentwood, Tennessee, is
an operator of general acute care hospitals, community hospitals,
regional health systems, physician practices, outpatient centers
and post-acute care facilities in non-urban markets. Inclusive of
Springstone, the company operates 60 community hospitals in 31
states, approximately 45 rehabilitation facilities and 23
behavioral health hospitals, and 200 outpatient centers under the
private ownership of funds affiliated with Apollo Global
Management, LLC. Revenues totaled over $9.8 billion for the LTM
September 30, 2024.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
LIGADO NETWORKS: Kirkland & Cole Schotz Advise Cross-Holder Group
-----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the Ad Hoc Cross-Holder Group filed a verified statement in the
Chapter 11 cases of Ligado Networks LLC, formerly LightSquared, et
al.
Kirkland and Cole Schotz do not have any disclosable economic
interest (as that term is defined in Bankruptcy Rule 2019(a)(1)) in
relation to the Debtors.
Kirkland and Cole Schotz do not represent the interests of any
creditors, party in interest or other entity in connection with the
Debtors' chapter 11 cases other than the Ad Hoc Cross-Holder Group.
No member of the Ad Hoc Cross Holder Group represents or purports
to represent any other member in connection with the Chapter 11
Cases.
In addition, no member of the Ad Hoc Cross-Holder Group (i) assumes
any fiduciary or other duties to any other member of the Ad Hoc
Cross-Holder Group and (ii) does not purport to act or speak on
behalf of any other member of the Ad Hoc Cross-Holder Group in
connection with the Chapter 11 Cases.
The Ad Hoc Cross-Holder Group Members' address and the nature and
amount of disclosable economic interests held in relation to the
Debtors are:
1. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by CERBERUS CAPITAL MANAGEMENT L.P., or a
subsidiary or an affiliate thereof
875 Third Avenue
10th Floor
New York, NY 10022
* First Lien Notes ($670,054,025.00)
* First Lien First Out Term Loans ($57,598,745.01)
* First Lien Senior Pari Term Loans ($33,716,156.19)
* 1.5L Term Loans ($67,348,438.73)
* Second Lien Notes ($344,523,195.00)
2. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by FORTRESS CREDIT ADVISORS LLC, or a subsidiary
or an affiliate thereof
1345 Avenue of the Americas
16th Floor
New York, NY 10105
* First Lien Notes ($482,483,164.00)
* First Lien First Out Term Loans ($45,753,241.40)
* First Lien Senior Pari Term Loans ($33,716,156.21)
* 1.5L Term Loans ($198,605,733.84)
* Second Lien Notes ($492,044,057.00)
3. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by HUDSON BAY CAPITAL MANAGEMENT LP, or a
subsidiary or an affiliate thereof
290 Harbor Drive
3rd Floor
Stamford, CT 06902
* First Lien Notes ($221,555,512.00)
* First Lien First Out Term Loans ($27,791,573.00)
* First Lien Senior Pari Term Loans ($5,927,882.00)
* 1.5L Term Loans ($5,627,326.00)
* Second Lien Notes ($91,902,662.00)
4. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by RUBRIC CAPITAL MANAGEMENT LP, or a subsidiary
or an affiliate thereof
155 East 44th Street
Suite 1630
New York, NY 10017
* First Lien Notes ($217,962,477.00)
* First Lien First Out Term Loans ($10,752,690.80)
* First Lien Senior Pari Term Loans ($6,372,473.17)
* 1.5L Term Loans ($50,779,030.87)
* Second Lien Notes ($68,139,193.00)
5. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by BLACKROCK FINANCIAL MANAGEMENT, INC, or a
subsidiary or an affiliate thereof
50 Hudson Yards
New York, NY 10001
* First Lien Notes ($148,288,040.00)
* First Lien First Out Term Loans ($18,337,874.31)
* First Lien Senior Pari Term Loans ($14,819,705.14)
* 1.5L Term Loans ($21,807,025.04)
* Second Lien Notes ($113,123,768.00)
6. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by MSD PARTNERS, L.P., or a subsidiary or an
affiliate thereof
One Vanderbilt
26th Floor
New York, NY 10017
* First Lien Notes ($77,322,786.00)
* First Lien First Out Term Loans ($5,872,285.51)
* First Lien Senior Pari Term Loans ($3,641,413.26)
* 1.5L Term Loans ($7,562,600.99)
* Second Lien Notes ($50,208,084.00)
7. Certain funds and/or accounts, or subsidiaries of such funds
and/or accounts, managed, advised
or controlled by PHILOSOPHY CAPITAL MANAGEMENT LLC, or a
subsidiary or an affiliate thereof
3201 Danville Boulevard
Suite 100
Alamo, CA 94507
* First Lien Notes ($19,000,000.00)
Counsel for the Ad Hoc Cross-Holder Group:
Seth Van Aalten, Esq.
Justin R. Alberto, Esq.
Stacy L. Newman, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, Delaware 19801
Telephone: (302) 652-3131
Facsimile: (302) 652-3117
Email: svanaalten@coleschotz.com
jalberto@coleschotz.com
snewman@coleschotz.com
-and-
Joshua A. Sussberg, Esq.
Brian Schartz, Esq.
Derek I. Hunter, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Facsimile: (212) 446-4900
Email: joshua.sussberg@kirkland.com
brian.schartz@kirkland.com
derek.hunter@kirkland.com
-and-
Patrick J. Nash Jr., Esq.
Alan McCormick, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
Email: patrick.nash@kirkland.com
alan.mccormick@kirkland.com
About Ligado Networks
Ligado Networks, formerly LightSquared, provides mobile satellite
services. The Company's satellite and terrestrial solutions,
combined with powerful, lower mid-band spectrum, serve to
supplement and broaden mobile coverage across the United States and
Canada. On the Web: http://www.ligado.com/
On January 5, 2025, Ligado Networks LLC and certain of its
affiliates each filed a voluntary petition for relief under Chapter
11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case
No. 25-10006).
Perella Weinberg Partners LP is serving as investment banker to
Ligado, FTI Consulting, Inc., is serving as financial advisor,
Milbank LLP is serving as legal counsel, and Richards, Layton &
Finger P.A. is serving as co-counsel. Omni Agent Solutions LLC is
the claims agent.
An ad hoc group of first lien creditors is being advised by
Guggenheim Securities, LLC, as financial advisor, and by Sidley
Austin LLP as counsel. An ad hoc group of crossholding creditors
is being advised by Kirkland & Ellis LLP.
LITTLE MINT: Parker Poe Represents Performance Food & Track West
----------------------------------------------------------------
Brian D. Darer of the law firm Parker Poe Adams & Bernstein, LLP
filed a verified statement pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure to disclose that in the Chapter 11
case of The Little Mint Inc., the firm represents:
1. Performance Food Group, Inc. ("PFG")
12500 West Creek Parkway
Richmond, Virginia 23238
2. Track West Partners ("Tract West")
1962 Howell Mill Road #210
Atlanta, Georgia 30318
and the following related entities:
TWP Brunswick Retail, LLC
TWP PCP Fay Retail, LLC
TWP Law Retail, LLC
TWP PCP LOC I Retail, LLC
TWP MF Retail, LLC
TWP PCP State Retail, LLC
TWP Way Retail, LLC
TWP Wylie Retail, LLC
TWP PCP Gall Retail, LLC
TWP PCP ATHTX Retail, LLC
TWP PCP Marion Retail, LLC (collectively, the "TWP Related
Entities", together with Tractor
West, "TWP")
Parker Poe represents PFG in its capacity as a creditor and party
in interest. Parker Poe represents TWP in its capacity as a
creditor and party in interest.
PFG and TWP have been informed of the joint representation and
believe that there is no conflict of interest with respect to the
joint representation.
Parker Poe claims no interest or amounts with respect to this case,
but instead represents the clients named herein and its claims
and/or interests.
The law firm can be reached at:
Brian D. Darer, Esq.
Parker Poe Adams & Bernstein LLP
301 Fayetteville Street, Suite 1400
Raleigh, North Carolina 27601
(919) 828-0564
Email: briandarer@parkerpoe.com
About The Little Mint Inc.
The Little Mint Inc., doing business as Hwy 55 Burgers Shakes &
Fries, owns multiple Hwy 55 Burgers, Shakes & Fries restaurants.
The Little Mint Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 24-04510) on Dec. 31,
2024. In its petition, the Debtor estimated assets between $1
million and $10 million and estimated liabilities between $10
million and $50 million.
Judge Joseph N. Callaway presides over the case.
Rebecca F. Redwine, Esq. of HENDREN, REDWINE & MALONE, PLLC, is the
Debtor's counsel.
LOVE PROPERTIES: Unsecureds Will Get 4% Dividend over 5 Years
-------------------------------------------------------------
Love Properties, LLC, submitted a Combined First Amended Plan and
Disclosure Statement dated January 10, 2025.
The Debtor will rent the nine-unit building to Section 8 tenants
who will pay an average of $700 per month per unit. These funds
will be sufficient to pay Midwest's secured claim over time.
In addition, the Debtor will attempt to collect its accounts
receivable. Any funds collected will be used first to satisfy any
administrative claims and second to pay Class 2 unsecured claims.
Class 1 consists of the Secured Claim of Midwest. Midwest has filed
a secured claim against the Debtor in the amount of $542,758.20.
The Debtor disputes the amount of this claim. This claim is secured
by mortgages and/or a judicial mortgage on all of the Debtor's
property. This claim will be treated as secured in the amount of
$250,000.00. This secured claim will be amortized over 20 years
with interest at the rate of 5.25% per annum with payments in the
amount of $1,684.61 per month.
The first payment will become due on the effective date. Subsequent
payments will be made on the first day of each month thereafter,
until the secured claim is paid in full. The balance remaining on
the secured claim will come due in a balloon payment in the
approximate amount of $209,560.53 on the 60th month of the plan.
The remainder of this claim will be treated as a Class 2 General
Unsecured Claim.
Class 2 consists of Unsecured Claims. All allowed unsecured claims
will be paid a pro-rata portion of $12,000.00, payable at the rate
of $200.00 per month over 60 months. The first payment will be due
on the effective date and subsequent payments will be made on the
first day of each month thereafter. The payments will be completed
in five years.
If any disputed claim is allowed and not paid by insurance
proceeds, then that creditor will receive a pro rata share of
$200.00 per month and the payments on all other allowed claims will
be reduced accordingly. Based on approximate unsecured claims of
$292,759.20, these payments will result in an approximate 4%
dividend to unsecured creditors.
The Debtor's assets will be sold and the funds paid to creditors.
A full-text copy of the Combined First Amended Plan and Disclosure
Statement dated January 10, 2025 is available at
https://urlcurt.com/u?l=XparJW from PacerMonitor.com at no charge.
Counsel to the Debtor:
Tom St. Germain, Esq.
Weinstein & St. Germain, LLC
1103 W. University Ave
Lafayette, LA 70506
Telephone: (337) 235-4001
About Love Properties
Love Properties, LLC is a real estate company.
The Debtor filed a Chapter 11 petition (Bankr. W.D. La. Case No.
24-50100) on Feb. 19, 2024, with up to $500,000 in both assets and
liabilities. Tanisha Wiltz, member, signed the petition.
Judge John W. Kolwe oversees the case.
Tom St. Germain, Esq., at Weinstein & St. Germain, LLC, is the
Debtor's legal counsel.
MADDIEBRIT PRODUCTS: To Sell Business to Grove for $2.2-Mil.
------------------------------------------------------------
Maddiebrit Products LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California, Northern Division, at
a hearing on January 24, 2025 9:00 a.m. to sell substantially all
of its Assets, free and clear of any and all liens, claims,
encumbrances and interests, to Grove Collaborative, Inc., as
stalking horse purchaser.
The Debtor is a consumer products company which sells a variety of
eco-friendly and high-quality household cleaning products,
including laundry, kitchen, household cleaners and air care items,
under its well-established Grab Green(R) brand.
According to the Debtor, it was mired in financial distress caused
by extrinsic conditions, such as increased product costs and
increased marketing / advertising costs, which severely impacted
MaddieBrit's margins and cashflow. In addition, the Debtor's
indebtedness to secured lender BP, on a secured credit agreement,
exacerbated the Debtor's cashflow problems and crippled its debt
servicing capacity, forcing the Debtor to seek bankruptcy relief.
BP consents to the Asset Sale under the instant Motion to the
Stalking Horse Bidder, or the best and highest overbidder, free and
clear of the BP Lien and BP Secured Claim.
The Debtor will pay BP an adequate protection payment in the amount
of $57,655 for the month of December 2024. BP agrees (despite an
existing Bankruptcy Court order for such monthly adequate
protection payments) that the Debtor will not be obligated to make
the adequate protection payment for the month of January 2025.
BP consents to the Stalking Horse Bidder's engagement of the
Debtor's insiders, CEO Michael Edell and President Patricia
Spencer, as consultants from and after the Effective Date.
Upon the Effective Date, except for the obligations created by or
arising out of the BP Settlement Agreement, each party will release
its claims against the other and the The BP Settlement Agreement is
conditioned upon the entry of a final order approving the BP
Settlement Agreement.
Among the assets of the Debtors are its deposit and investment
accounts, accounts receivable, raw and finished goods inventory,
and its intellectual property.
In early July 2024, Grove (the Stalking Horse Bidder) became
involved in the bidding process and, after conducting its due
diligence, submitted a non-binding letter of intent to purchase
substantially all of the Debtor's assets for $2,250,000 on July 30,
2024. Spurred by Grove's bid, numerous proposals and counter
proposals were exchanged between the Debtor, BP and Grove, leading
to an increase in the offered purchase price. The Asset Sale
includes the Stalking Horse Bidder assuming liability for all the
Debtor's outstanding accounts payable and purchase orders as of the
closing of the Asset Sale.
While the Debtor is prepared to consummate the sale with the
Stalking Horse Bidder, it is also interested in obtaining the
maximum price for the Asset Sale and asks approval of the bidding
procedures for the Stalking Hose Bid by Grove.
The Debtor believes that the Proposed Bidding Procedures, notice of
which has been given to all creditors and interested parties, will
maximize the price ultimately obtained for the Asset Sale as well
as protect the estate from parties who may wish to participate in
the overbid procedure, but who are ultimately unable to consummate
the sale transaction.
The Debtor asserts that the proposed sale will generate net
proceeds for the estate of approximately $489,008 to the Estate.
The Sale will also provide for a distribution to all unsecured
creditors in the estimated amount of $27,400.
The Debtor also seeks approval to assume and assign the Executory
Contracts to MacPac
Fulfillment, LLC, 1. MacPac Fulfillment, LLC , and V.I.P. Soap
Products Ltd.
About Maddiebrit Products LLC
MaddieBrit Products, LLC offers eco-friendly cleaning products that
provide healthier, effective, and safer alternatives to
conventional home cleaning products.
MaddieBrit Products filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
24-10682) on July 18, 2024. In the petition signed by Michael
Edell, chief executive officer, the Debtor disclosed up to $10
million in both assets and liabilities.
Judge Ronald A. Clifford, III oversees the case.
The Debtor tapped Craig Margulies, Esq., at Margulies Faith, LLP as
counsel and Brent Meyer, CPA & Associates, Inc. as accountant.
MANNING LAND: Claims to be Paid From Property Sale Proceeds
-----------------------------------------------------------
Manning Land Company, LLC, and its affiliates filed with the U.S.
Bankruptcy Court for the Central District of California a Second
Amended Disclosure Statement describing Chapter 11 Plan dated
January 13, 2025.
The Debtors are a vertically integrated enterprise in the business
of manufacturing and preparing meats and/or meat food products for
sale in commerce.
Debtor Salvatore Anthony DiMaria has a sole proprietorship
operating under the name of DiMaria Cattle and is the owner,
chairman of the board, and/or officer of Debtors Manning Land
Company, LLC, ADD Enterprises, Inc., Manning's Beef LLC, RNCK Inc.,
and Charlie DiMaria & Son Inc. ("DiMaria & Son" and collectively
with Manning Land, ADD, Manning's Beef, and RNCK, the "Entity
Debtors").
Each of the Debtors play a specific role in the Debtors' integrated
operations. Specifically, Anthony DiMaria/DiMaria Cattle and ADD
purchase substantially all of the cattle used in the Debtors'
operations, DiMaria & Son slaughters and processes the cattle, RNCK
processes and sells the inedible portions of the cattle, and ADD
sells the beef from the cattle. Manning Land owns 9531 Beverly
Road, Pico Rivera, California (the "Real Property") which is the
real property that each of the Debtors operates on, and Manning's
Beef provides backoffice support to each of the Debtors in the form
of payroll and tax services.
During the pendency of these Cases, the Debtors have operated
pursuant to that certain Agreement for Use of PASA Trust Assets
(the "Producers Agreement") entered into with its largest supplier
Producers Livestock Marketing Association ("Producers") which was
approved by the Court on October 25, 2024.
While the Debtors have attempted to consensually resolve the issues
with Producers, Producers ceased supplying cattle to the Debtors in
or around December 2024.
As a result, the Debtors intend to engage in a postpetition
marketing and sale process under section 363 of the Bankruptcy
Code. Specifically, the Debtors intend to sell the assets of the
Entity Debtors (the "Business Assets"), including the Real
Property, in one or more sale transactions (the "Sale
Transactions"). Pending the Sale Transactions, the Debtors will
continue to operate in the ordinary course of business in order to
preserve the value of the Business Assets. The Debtors anticipate
that any proceeds generated from such Sale Transactions will be
sufficient to pay the allowed amounts of the claims of the Debtors'
creditors in full. In the event that such proceeds are insufficient
to pay all creditors in full, the Debtor's creditors shall be paid
their pro rata share of the proceeds as set forth herein.
The value of all assets equals $96,977,663.92. Total scheduled
liabilities equal $43,844,357.36, of which approximately
$15,000,000 constitute scheduled, undisputed, noncontingent, and
liquidated unsecured claims. Excluding the value of Anthony
DiMaria's equity interests in the Debtors, the liquidation value of
the assets equals $45,477,663.92.
Class #2b consists of General Unsecured Claims. Each member of
Class #2b will be paid a pro rata share of a fund created by the
proceeds generated by the Sale Transactions along with the
creditors in Class #2c after satisfaction of the claims of Class #4
creditors. Pro rata means the entire fund amount divided by the
total of all allowed claims in this class.
Dollar amount of undisputed scheduled and filed General Unsecured
Claims total $16,005,082.04.
The Debtors will have sufficient cash on hand to make any and all
payments required on the Effective Date from their net operating
income preceding the Sale Transactions along with the proceeds
generated by such Sale Transactions.
A full-text copy of the Second Amended Disclosure Statement dated
January 13, 2025 is available at https://urlcurt.com/u?l=t22ELn
from PacerMonitor.com at no charge.
Counsel to the Debtor:
Leonard M. Shulman, Esq.
Ryan D. O’Dea, Esq.
Max Casal, Esq.
Brooke S. Thompson, Esq.
SHULMAN BASTIAN FRIEDMAN & BUI LLP
100 Spectrum Center Drive, Suite 600
Irvine, CA 92618
Tel: (949) 340-3400
Fax: (949) 340-3000
Email: lshulman@shulmanbastian.com
rodea@shulmanbastian.com
mcasal@shulmanbastian.com
thompson@shulmanbastian.com
About Manning Land Company
Manning Land Company and its affiliates operate a meat product
manufacturing business.
Manning Land Company, LLC, and its affiliates filed their voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. C.D. Cal. Lead Case No. 24-16757) on Aug. 22, 2024. The
petitions were signed by Salvatore Anthony DiMaria as managing
member. At the time of filing, Manning Land listed $10 million to
$50 million in both assets and liabilities.
Judge Vincent P. Zurzolo oversees the cases.
The Debtors tapped Leonard M. Shulman, at Shulman Bastian Friedman
& Bui LLP as bankruptcy counsel and Roxborough Pomerance Nye &
Adreani, LLP as special litigation counsel.
MBMG HOLDING: Unsecureds Will Get 12% of Claims in Liquidating Plan
-------------------------------------------------------------------
MBMG Holding, LLC, and its affiliates filed with the U.S.
Bankruptcy Court for the Southern District of Florida a Disclosure
Statement for the Joint Chapter 11 Plan dated January 13, 2025.
The Debtors are a leading independent primary care and integrated
physician group focused on value-based, multi-specialty healthcare
services. As of the Petition Date, the Debtors deliver health and
wellness services to approximately 35,000 patients across 26
primary care centers in Central and South Florida, with half of
those centers being in Miami-Dade County.
The Debtor's corporate headquarters is in Miami, Florida. The
Debtors' patient population consists primarily of high-risk,
underserved and dual-eligible populations (i.e., eligible for both
Medicare and Medicaid), many of whom live in economically
disadvantaged and minority communities.
On September 29, 2023, notice of a Sale Trigger was provided by the
First Lien Agent to Sun Capital, Sun MBMG GP, Ultimate Holding,
MBMG Holding, and Intermediate Holding. The Initial Marketing
Process resulted in the Debtors receiving five indications of
interest and the Second Marketing Process resulted in the Debtors
receiving two indications of interest. After extensive marketing
efforts, the only viable proposal was that submitted by the Buyer,
as memorialized by the Asset Purchase Agreement negotiated with the
Buyer.
The Buyer is an affiliate of Humana, and since its founding, the
Debtors have worked closely with Humana and its affiliates,
including the Buyer. For example, MBMG and Care Plus, a Humana
affiliate, both were founded in South Florida and have worked
together ever since. Pursuant to the Asset Purchase Agreement, the
Buyer purchased substantially all assets of the Debtors (excluding
the Excluded Assets, including, inter alia, cash on hand, accounts
receivable, and Avoidance Actions) for a total purchase price of
$45 million, subject to certain adjustments described in the Asset
Purchase Agreement.
On December 12, 2024, the Sellers closed the Sale to the Buyer. In
accordance with the Final DIP Order, the Debtors utilized the Sale
proceeds for a variety of purposes, including to establish certain
reserves for the winddown of the Debtors. In accordance with the
Final DIP Order and the Sale Order, the Debtors paid all DIP Claims
in full, in Cash, from proceeds of the Sale Transaction. A portion
of the Sale proceeds were also used by the Debtors to pay the First
Lien Agent on account of First Lien Credit Agreement Claims.
The Plan provides for, among other things, the appointment of a
Plan Administrator, as of the Effective Date, to carry out and
implement all provisions of the Plan, including, without
limitation, to: (1) control and effectuate the Claims
reconciliation process; (2) make distributions to holders of
Allowed Claims in accordance with the Plan; (3) exercise reasonable
business judgment to direct and control the wind down, liquidation,
sale and/or abandonment of the remaining assets of the Debtors
under the Plan; (4) exercise its reasonable business judgement to
direct and control the dissolution, liquidation, striking off, or
similar action to winddown each of the Debtors; (5) subject to
Bankruptcy Court approval when necessary prosecute all Causes of
Action on behalf of the Debtors, elect not to pursue any Causes of
Action, and determine whether and when to compromise, settle,
abandon, dismiss, or otherwise dispose of any such Causes of
Action; and (6) prepare and file any and all informational returns,
reports, statements, returns or disclosures relating to the Debtors
that are required hereunder, by any Governmental Unit or applicable
law.
The Debtors believe that the Plan will allow for a prompt
resolution of the Debtors' Chapter 11 Cases and will achieve the
best possible result for General Unsecured Creditors. The following
is a brief overview of the Plan and is qualified by reference to
the Plan itself.
Following the sale of the Purchased Assets, the remaining assets in
the Estates include, inter alia, cash on hand, accounts receivable,
and Avoidance Actions.
Class 6 consists of General Unsecured Claims. On the Effective
Date, or as soon thereafter as is reasonably practicable, except to
the extent that a holder of an Allowed General Unsecured Claim
agrees to less favorable treatment of such Allowed General
Unsecured Claim or such Allowed General Unsecured Claim has been
paid before the Effective Date, each holder of an Allowed General
Unsecured Claim shall receive, in full and final satisfaction of
such Claim, its Pro Rata share of (i) the Plan Cash, and (ii) the
Recovery Proceeds in accordance with the Recovery Waterfall. In no
event shall the holder of a General Unsecured Claim receive
distributions on account of such Claim in excess of the Allowed
amount of such Claim.
The allowed unsecured claims total $479,000. This Class will
receive a distribution of 12% of their allowed claims. Class 6 is
impaired.
Holders of Existing Equity Interests shall receive no distributions
under the Plan, and on the Effective Date, all Existing Equity
Interests shall be deemed cancelled.
The Plan is a joint chapter 11 plan for each of the Debtors, with
the Plan for each Debtor being non-severable and mutually dependent
on the Plan for each other Debtor.
After the Chapter 11 Cases of the Debtors have been fully
administered, the Plan Administrator shall promptly seek authority
from the Bankruptcy Court to close the Debtors' Chapter 11 Cases in
accordance with the Bankruptcy Code, the Bankruptcy Rules, and the
Local Rules. Nothing in the Plan shall authorize the closing of any
case nunc pro tunc to a date that precedes the date any such order
is entered. Any request for nunc pro tunc relief shall be made on
motion served on the U.S. Trustee, and the Bankruptcy Court shall
rule on such request after notice and a hearing.
A full-text copy of the Disclosure Statement dated January 13, 2025
is available at https://urlcurt.com/u?l=6Vwz1X from Epiq Corporate
Restructuring, LLC, claims agent.
Counsel to the Debtors:
Paul Steven Singerman, Esq.
Jordi Guso, Esq.
Christopher Andrew Jarvinen, Esq.
Samuel J. Capuano, Esq.
Clay Roberts, Esq.
BERGER SINGERMAN LLP
1450 Brickell Avenue, Ste. 1900
Miami, FL 33131
Telephone: (305) 755-9500
Facsimile: (305) 714-4340
Email: singerman@bergersingerman.com
About MBMG Holding
MBMG Holding, LLC and its affiliates The Debtors are an independent
primary care and integrated physician group focused on value based,
multi-specialty healthcare services. The Debtors deliver health and
wellness services to approximately 35,000 patients across 26
primary care centers in Florida, with half of those centers being
in Miami-Dade County. In addition to primary care services, the
Debtors provide several in-house and ancillary support services to
patients, including dental, vision, in-home, telehealth, case
management, podiatry, chiropractic, pain management, lab, x-ray,
and transportation services, and operate wellness centers that
provide meal support and social activities.
MBMG Holding, LLC and its affiliates commenced voluntary Chapter 11
proceedings (Bankr. S.D. Fla. Lead Case No. 24-20576) on Oct. 13,
2024. In the petitions signed by Nicholas K. Campbell, chief
restructuring officer, MBMG Holding disclosed up to $50,000 in
estimated assets and up to $500 million in estimated liabilities.
Judge Corali Lopez-Castro oversees the cases.
The Debtors tapped Berger Singerman LLP as legal counsel; Meru, LLC
as restructuring advisor; and Oppenheimer & Co. Inc. as investment
banker. Epiq Corporate Restructuring, LLC, is the claims agent.
MEADOWBROOK SERVICES: Unsecureds Will Get 52% over 3 Years
----------------------------------------------------------
Meadowbrook Services, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Ohio a First Amended Small Business Plan
of Reorganization under Subchapter V dated January 10, 2025.
The Debtor is an Ohio limited liability company that provides home
healthcare and job placement services to adults with developmental
disabilities. The Debtor currently provides services to
approximately twenty-six developmentally disabled adults.
The Company had previously taken out a number of merchant cash
advance ("MCA") loans. Despite a good faith effort to repay those
MCA loans, the MCA creditors became aggressive in their collection
efforts and commenced litigation in New York and Florida. These
collection efforts and in particular the attempt to garnish the
Company's bank accounts, prompted the filing of this bankruptcy
case to preserve the Company's ability to operate, serve its
clients, and operate to return value in the best interest of all
creditors.
The primary objectives of the Plan are: (a) to alter the Debtor's
capital structure to permit it to emerge from its chapter 11 case
with a viable capital structure; (b) to maximize the value of the
ultimate recoveries to all creditors on a fair and equitable basis;
and (c) to settle, compromise or otherwise dispose of certain
claims and interests on the terms that the Debtor believes to be
fair and reasonable and in the best interests of its estate and
creditors.
The Plan provides for, among other things: (a) the cancellation of
certain indebtedness in exchange for cash or other property of the
Debtor, (b) the assumption or rejection of executory contracts and
unexpired leases to which the Debtor is a party, and (c) the
restructuring of obligations the Debtor owe to certain secured and
creditors.
Class B treated as Wholly Unsecured Claims & General Unsecured
Claims The alleged secured claim of Pearl Delta Funding, LLC [Claim
No. 2] in the amount of $57,299.20 shall be treated as a wholly
unsecured claim in Class B. All other Allowed Claims that are
General Unsecured Claims shall be included in Class B. The Debtor
estimates total claims in Class B to be $61,099.20. Specifically,
the scheduled Disputed Claims of Carahsoft Technology Corp.,
Fundation and Fundfi Merchant Funding, LLC shall not receive a
distribution under the Plan.
In full satisfaction of all Class B Nonpriority Unsecured Claims
and the Wholly Unsecured Claims treated as Class B Claims, such
creditors shall receive a pro-rata portion of Distributable Cash
Estimated to be not less than ($31,884.81) for an estimated pro
rata distribution of (52%) and paid in quarterly installments
starting within 3 months of the Effective Date. The payment under
this Plan to holders of Allowed Class B Claims shall be made in
quarterly payments for up to three years and commencing within
three months of the Effective Date. This Class is impaired.
Class C consists of Holders of Interests in Debtor. Holders of
Class C claims shall not receive a distribution under the Plan but
shall retain ownership interest in the Debtor.
Through Restructuring Transactions, the Debtor will restructure its
finances by committing its projected disposable income to plan
payments and by modifying certain secured obligations.
A full-text copy of the First Amended Plan dated January 10, 2025
is available at https://urlcurt.com/u?l=cq0fvy from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Michael A. Steel, Esq.
2950 W. Market St. Suite G
Fairlawn, Ohio 44333
Telephone: 330. 223. 5050
Facsimile: 330. 223. 5509
Email: msteel@steelcolaw.com
About Meadowbrook Services
Meadowbrook Services, LLC, sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-51266) on
August 21, 2024, with $100,001 to $500,000 in assets and
liabilities.
Judge Alan M. Koschik presides over the case.
Michael A. Steel, Esq., is the Debtor's legal counsel.
METAL CHECK: Unsecureds Will Get 100% of Claims in Plan
-------------------------------------------------------
Metal Check, Inc., and Diana Kay Salazar filed with the U.S.
Bankruptcy Court for the Western District of Oklahoma a Disclosure
Statement describing Chapter 11 Plan dated January 10, 2025.
The Debtor is an Oklahoma Corporation that operates a scap and
salvage yard located at 5700 S. High, Oklahoma City, Oklahoma.
Debtor purchases scrap metal, processes such scrap, and sells it to
regional scrap metal purchasers.
The business is owned by Diana Salazar, Debtor in this
jointly-administered case. Ms. Salazar owns the real estate located
at 5700 S High and leases the property to Debtor for its business.
Ms. Salazar is personally liable for the majority of Debtor's debts
via personal guarantees, and her finances are intertwined with
Debtor's.
The Debtor's primary secured Creditor, First United Bank, agreed to
refinance its $484,532.08 debt, which is now amortized over a
15-year period. This loan modification allowed Metal Check the
funds to continue operating its business and to resolve pending
remediation costs related to its case with the Oklahoma Department
of Environmental Quality.
Class 3 consists of on-priority unsecured creditors that filed
timely unsecured claims. Class 3 to get 100% at zero percent
interest beginning in March 2026. This Class is impaired.
* MA+ Architechture has a claim amount of $33,085.85 and shall
receive a monthly payment of $689.28.
* Geomet Recycling, LLC has a claim amount of $106,506.80 and
shall receive a monthly payment of $2,218.89.
* IOU Central Inc. has a claim amount of $139,752.48 and shall
receive a monthly payment of $2,911.57.
* Alliance Funding Group (Claim No. 7) has a claim amount of
$32,789.94 and shall receive a monthly payment of $683.12.
* Alliance Funding Group (Claim No. 8) has a claim amount of
$24,052.22 and shall receive a monthly payment of $501.08.
* Alliance Funding Group (Claim No. 9) has a claim amount of
$31,260.48 and shall receive a monthly payment of $651.26.
* Alliance Funding Group (Claim No. 10) has a claim amount of
$14,398.55 and shall receive a monthly payment of $299.96.
* Total Quality Logistics has a claim amount of $1,487.21 and
shall receive a monthly payment of $30.98.
* Zurich American Ins. Co. has a claim amount of $1 and shall
receive a monthly payment of $1.
* ODK Capital (Claim No. 13) has a claim amount of $33,376.22
and shall receive a monthly payment of $695.33.
* ODK Captial (Claim No. 14) has a claim amount of $52,884.27
and shall receive a monthly payment of $1,101.75.
* Financial Pacific Leasing has a claim amount of $95,254.15
and shall receive a monthly payment of $1,984.46.
* Trilink Restoration Svcs LLC has a claim amount of $7,387.40
and shall receive a monthly payment of $153.90.
* Regions Bank dba Ascentium Capital (Claim No. 17) has a
claim amount of $23,786.22 and shall receive a monthly payment of
$495.54.
* Regions Bank dba Ascentium Capital (Claim No. 18) has a
claim amount of $3,496.79 and shall receive a monthly payment of
$72.84.
* CompSource Mutual Ins. Co. has a claim amount of $164,143.12
and shall receive a monthly payment of $3,419.64.
* Commercial Metals Co. has a claim amount of $43,469.14 and
shall receive a monthly payment of $905.60.
Payments and distributions under the Plan will be funded by future
income from Debtor's business operations. Payments will be made
monthly be Debtor.
A full-text copy of the Disclosure Statement dated January 10, 2025
is available at https://urlcurt.com/u?l=5lp0k1 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Mike Rose, Esq.
MICHAEL J ROSE PC
4101 Perimeter Center Drive, Suite 120
Oklahoma City, OK 73112
Tel: (405) 605-3757
Fax: (405) 605-3758
Email: mrose@coxinet.net
About Metal Check
Metal Check, Inc., a company in Oklahoma City, filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D.
Okla. Case No. 23-11279) on May 16, 2023, with $841,675 in assets
and $2,033,069 in liabilities. Stephen Moriarty, Esq., at Fellers
Snider Blankenship Bailey & Tippens, PC has been appointed as
Subchapter V trustee.
Judge Janice D. Loyd oversees the case.
The Debtor tapped Christopher Wood, Esq., at Christopher A. Wood &
Associates, P.C. as legal counsel and Mark D. Cain P.C. as
accountant. Mike Rose, Esq, of Michael J Rose PC wil replace Mr.
Woods and Christopher A. Wood & Associates, P.C.
MIDCAP FINANCIAL: S&P Rates $300MM Senior Unsecured Term Loan 'B+'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue rating to MidCap
Financial Issuer Trust's amended and extended $300 million 8.25%
senior unsecured term loan due 2032.
As part of the transaction, MidCap (BB-/Stable/--) lowered the
fixed interest rate to 8.25% from 10.00% and extended the maturity
by approximately 4.2 years. MidCap also paid a one-time fee of 1%
paid in-kind at closing, which raises the effective balance to $303
million. The unsecured term loan will be pari passu with existing
unsecured notes.
S&P said, "Our 'B+' rating on MidCap's senior unsecured debt is one
notch below the issuer credit rating, reflecting significant
amounts of priority senior secured debt. As of Sept. 30, 2024,
priority debt remained well above 30% of total debt, and the ratio
of unencumbered assets to unsecured debt was around 1.2x. We expect
MidCap to keep that ratio above 1.0x; otherwise, we could lower our
rating on its unsecured term loan and debt, to 'B'.
"The stable outlook on the issuer credit rating in the next 12
months reflects our expectation that--despite macroeconomic
headwinds--MidCap will operate with debt to adjusted total equity
(ATE) of 4.0x-4.5x and maintain its underwriting record. We also
expect that MidCap will maintain adequate liquidity to meet its
operational needs and maintain its existing funding mix.
"We could lower our ratings on MidCap over the next 12 months if
debt to ATE is sustained above 4.5x; if asset quality or earnings
materially weaken; or if MidCap's available liquidity is strained,
in our view."
S&P views an upgrade as being unlikely in the next 12 months.
MIDWEST MOBILE: Gets Interim OK to Use Cash Collateral
------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri,
Southern Division, granted Midwest Mobile Imaging, LLC interim
authorization to use cash collateral to pay its operating
expenses.
As adequate protection, Community First Bank, a secured creditor,
was granted a replacement security interests in, and liens on, all
post-petition property of the company that is the same type of
property that the bank holds a pre-bankruptcy interest, lien, or
security interest.
In addition, Midwest Mobile Imaging was ordered to maintain
sufficient insurance on its property.
The adequate protection granted is without prejudice to Community
First Bank seeking additional protection, according to the interim
order.
The final hearing is scheduled for Jan. 23.
About Midwest Mobile Imaging
Midwest Mobile Imaging, LLC is a full-service mobile diagnostic
x-ray services provider in Springfield, Mo.
Midwest Mobile Imaging sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Mo. Case No. 25-60002) on January
3, 2025, with up to $500,000 in assets and up to $10 million in
liabilities. Dan Taylor, a member of Midwest Mobile Imaging, signed
the petition.
Judge Brian T. Fenimore oversees the case.
The Debtor is represented by:
Colin N. Gotham
Evans & Mullinix, P.A.
Tel: 913-962-8700
Email: cgotham@emlawkc.com
MONTOUX LTD: Seeks Chapter 15 Bankruptcy After Trade Secret Suit
----------------------------------------------------------------
Vince Sullivan of Law360 reports that a New Zealand company that
develops AI-powered actuarial software filed for Chapter 15
bankruptcy in Delaware on January 14, attributing its financial
struggles to ongoing trade secrets litigation that has negatively
affected its sales and operations.
About Montoux Ltd.
Montoux Ltd. is a global provider of actuarial artificial
intelligence and modelling tools designed to assist actuaries and
insurance companies assess and manage risk.
Montoux Ltd. sought relief under Chapter 15 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 25-10043) on January 14, 2025.
Honorable Bankruptcy Judge Mary F. Walrath handles the case.
The Foreign Proceeding is a liquidation under the New Zealand
Companies Act (1993).
The Foreign Representative is Heath Leslie Gair of Palliser
Insolvency Limited, represented by Kenneth J. Enos, Esq., at YOUNG
CONAWAY STARGATT & TAYLOR, LLP, in Wilmington, Delaware.
MOTORS ACCEPTANCE: Gets Final OK to Use Collateral Until Jan. 31
----------------------------------------------------------------
Motors Acceptance Corporation received final approval from the U.S.
Bankruptcy Court for the Middle District of Georgia to use cash
collateral.
The final order signed by Judge John Laney, III approved the use of
cash collateral until Jan. 31, unless extended by Source Capital or
further court order.
About Motors Acceptance
Motors Acceptance Corporation, a company in Columbus, Ga., filed
its voluntary petition for Chapter 11 protection (Bankr. M.D. Ga.
Case No. 24-40483) on August 15, 2024, listing $1 million to $10
million in both assets and liabilities. Shannon Arnette, vice
president of Motors Acceptance, signed the petition.
Judge John T. Laney, III oversees the case.
The Debtor is represented by:
Wesley J. Boyer, Esq.
Boyer Terry, LLC
Tel: 478-742-6481
Email: wes@boyerterry.com
MP REORGANIZATION: Updates Competing & Other Secured Claims Pay
---------------------------------------------------------------
Empery Tax Efficient, LP, submitted a Fourth Amended Plan of
Liquidation for MP Reorganization f/k/a Musclepharm Corporation
dated January 10, 2025.
This Plan constitutes the chapter 11 plan of reorganization for
Debtor. Except for the Claims addressed in Article II, all Claims
against the Debtor are placed in Classes. Class 5 consists of
Equity Interests.
Class 2 consists of all Competing Secured Claims, including but not
limited to the Empery Prepetition Secured Claim, Drexler
Prepetition Secured Claim, Prestige Prepetition Secured Claim, and
the White Winston Prepetition Secured Claim. Each prepetition
secured claim shall be classified in its own separate sub-class for
voting purposes, as follows: 2(a) Drexler Prepetition Secured
Claim; 2(b) Empery Prepetition Secured Claim; 2(c) Prestige
Prepetition Secured Claim; and 2(d) White Winston Prepetition
Secured Claim.
Pursuant to the Secured Claims Dec. Relief Action, this Court shall
establish the extent, validity, priority and amount of the
Competing Secured Claims. All Competing Secured Claims as to which
the Court determines that the value of the Competing Secured
Claimant's interest in the Estate's interest in Estate Assets is of
inconsequential value, shall become and be treated as holders of
General Unsecured claims in Class 4, and the liens in Estate
property securing their claims shall be deemed extinguished and
released consistent with Section 506(a)(1) of the Bankruptcy Code.
As soon as is reasonably practicable after entry of a Confirmation
Order that has become a Final Order, the Liquidating Trustee shall
distribute the Net Sale Proceeds to the Competing Secured
Creditor(s) having a valid security interest to the extent of the
value of the Competing Secured Creditor’s interest in the Net
Sale Proceeds.
Empery Carve Outs: If Empery is determined to be the senior
prepetition secured claimholder, pursuant to the Secured Claims
Dec. Relief Action or otherwise, Empery shall provide a carve out
of its Allowed Secured Claim in one of the following ways:
* Empery Carve Out: If one of the three conditions are
satisfied, Empery will provide the Empery Carve Out to the
Liquidation Trust: he Court determines that there is no Competing
Secured Creditor, or other secured creditor, with a valid secured
interest in the Net Sale Proceeds that is of more than
inconsequential value, whose secured claim will not be satisfied by
the distribution of the Net Sales Proceeds in accordance with the
provisions of section A.2.(b) of this Article; any creditor junior
to Empery but senior to the Class 4 General Unsecured Class
consents; or the Court otherwise enters an order authorizing the
Empery Carve Out.
* If the Empery Carve Out is deemed impermissible for any
reason, then Empery agrees to advance a sum equivalent to 12.5% of
the amount it receives on its Allowed Secured Claim as a Class 2
secured creditor under this Plan (the "Empery Contribution") on or
within the later of 10 business days following (1) the Effective
Date of the Plan or (2) entry of any order determining Empery is
the senior prepetition secured claimholder and Empery receives
payment on account of its Allowed Secured Claim, so long as the
Court determines that the Empery Contribution is not violative of
existing law. If the Empery Contribution is made, Empery shall not
make the Empery Carve Out. The Empery Contribution shall be free
and clear of any liens and administered in accordance with the
terms of the Plan. The Empery Contribution is not a loan and Empery
will not be entitled to repayment of the Empery Contribution.
Class 3 consists of the Other Secured Claims against the Debtor,
other than the Competing Secured Claims. The legal, contractual,
and equitable rights of the holders of the Other Secured Claims
shall not be impaired by this Plan. Each holder of an allowed Other
Secured Claim will be paid in full in cash or otherwise realize the
value of its interest in collateral, unless otherwise agreed by
such holder, and subject to any subordination agreements
enforceable pursuant to section 510(a) of the Bankruptcy Code.
Class 3 will include separate subclasses for each applicable
secured creditor.
Like in the prior iteration of the Plan, each holder of an Allowed
General Unsecured Claim shall receive its pro rata share of any
Remaining Assets.
The Debtor shall continue to exist after the Effective Date as a
separate corporate entity, limited liability company or limited
partnership, with all the powers of a corporation, limited
liability company or limited partnership pursuant to laws of the
State of Nevada and pursuant to the certificate of incorporation
and bylaws (or other formation documents) in effect prior to the
Effective Date, except to the extent such certificate of
incorporation or bylaws (or other formation documents) are amended
by or in connection with the Plan or otherwise and, to the extent
such documents are amended, such documents are deemed to be
authorized pursuant hereto and without the need for any other
approvals, authorizations, actions or consents.
On or before the Effective Date, the Debtors and the Liquidating
Trustee shall execute the Liquidating Trust Agreement and shall
have established the Liquidating Trust pursuant to the Plan. The
Liquidating Trust shall be established for the primary purpose of
liquidation and distributing the assets transferred to it, in
accordance with Treas. Reg. § 301.7701-4(d), with no objective to
continue or engage in the conduct of a trade or business, except to
the extent reasonably necessary to, and consistent with, the
liquidation purpose of the Liquidating Trust.
A full-text copy of the Fourth Amended Liquidating Plan dated
January 10, 2025 is available at https://urlcurt.com/u?l=viEtsN
from PacerMonitor.com at no charge.
Attorneys for Empery Tax Efficient, LP:
Garman Turner Gordon LLP
Gregory E. Garman, Esq.
William M. Noall, Esq.
Teresa M. Pilatowicz, Esq.
7251 Amigo Street, Suite 210
Las Vegas, Nevada 89119
Telephone (725) 777-3000
Facsimile (725) 777-3112
E-mail: ggarman@gtg.legal
E-mail: wnoall@gtg.legal
E-mail: tpilatowicz@gtg.legal
About MP Reorganization
MP Reorganization was a scientifically-driven, performance
lifestyle company.
The Debtor sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Nev. Case No. 22-14422) on Dec. 15, 2022, listing
up to $50 million in both assets and liabilities.
Judge Natalie M. Cox oversees the case.
Schwartz Law, PLLC is the Debtor's bankruptcy counsel.
Nathan F. Smith was appointed as trustee in this Chapter 11 case.
He tapped Todd C. Ringstad, Esq., at Ringstad & Sanders LLP as his
counsel.
NORTH CAROLINA PROPERTIES: Case Summary & Two Unsecured Creditors
-----------------------------------------------------------------
Debtor: North Carolina Properties LLC
1502 Brittain Rd
Akron, OH 44310-3605
Business Description: The Debtor is the fee simple owner of six
properties, all located in Jefferson, NC,
with a total estimated value of $1.01
million.
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
Northern District of Ohio
Case No.: 25-50059
Judge: Hon. Alan M Koschik
Debtor's Counsel: Anthony J. DeGirolamo, Esq.
ANTHONY J. DEGIROLAMO, ATTORNEY AT LAW
3930 Fulton Dr., N.W.,Ste.100B
Canton OH 44718
Tel: (330) 305-9700
E-mail: tony@ajdlaw7-11.com
Total Assets: $1,157,432
Total Liabilities: $2,588,791
The petition was signed by Andrew Martines as member.
A full-text copy of the petition, which includes a list of the
Debtor's two unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/2NF3XQQ/North_Carolina_Properties_LLC__ohnbke-25-50059__0001.0.pdf?mcid=tGE4TAMA
NORTH CAROLINA: Begins Subchapter V Bankruptcy Proceeding
---------------------------------------------------------
On January 15, 2025, North Carolina Properties LLC filed Chapter
11 protection in the U.S. Bankruptcy Court for the Northern
District of Ohio. 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 North Carolina Properties LLC
North Carolina Properties LLC is an Ohio-based real estate company
headquartered in Akron.
North Carolina Properties LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 25-50059) on
January 15, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Alan M. Koschik handles the case.
The Debtor is represented by Anthony J. DeGirolamo, Esq., in
Canton, Ohio.
NORTHVOLT AB: Sweden Seizes Co.'s Funds Despite U.S. Bankruptcy
---------------------------------------------------------------
Charles Daly and Rafaela Lindeberg of Bloomberg News report that
Sweden's debt collection authority has taken funds from Northvolt
AB's bank accounts to address claims from local creditors impacted
by the company's U.S. bankruptcy filing.
This move by Sweden's Enforcement Authority restricts Northvolt's
access to funds as the electric vehicle manufacturer seeks
additional financing and works to expand battery-cell production
under Chapter 11 protection, according to the report.
Sami Lundqvist, section manager at the authority in Skelleftea,
where Northvolt's main plant is located, said, "The U.S. bankruptcy
process does not affect our actions. We will continue to collect
any debts owed," the report relates.
About Northvolt AB
Northvolt AB was established in 2016 in Stockholm, Sweden.
Pioneering a sustainable model for battery manufacturing, the
company has received orders from several leading automotive
companies. The company is currently delivering batteries from its
first gigafactory, Northvolt Ett, in Skelleftea, Sweden and from
its R&D and industrialization campus, Northvolt Labs, in Vasteras,
Sweden.
On Nov. 21, 2024, Northvolt AB and eight affiliated debtors filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-90577).
The cases are before the Honorable Alfredo R. Perez.
Northvolt is being advised by Teneo as its restructuring and
communications advisor. Kirkland & Ellis LLP, A&O Shearman and
Mannheimer Swartling Advokatbyra AB are serving as legal counsel.
The company has also engaged Rothschild & Co to run its marketing
process. Stretto is the claims agent.
NOVA LIFESTYLE: Sells 250K Shares to Huge Energy for $150K
----------------------------------------------------------
On January 6, 2025, Nova LifeStyle, Inc., entered into a Securities
Purchase Agreement with Huge Energy International Limited pursuant
to which the Company agreed to sell to the Purchaser in a private
placement 250,000 shares of the Company's common stock, par value
$0.001 per share at a purchase price of $0.60 per share for an
aggregate price of $150,000. The Private Placement will be
completed pursuant to the exemption from registration provided by
Regulation S promulgated under the Securities Act of 1933, as
amended.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=ZrhAwX
About Nova Lifestyle
Headquartered in Commerce, Calif., Nova LifeStyle, Inc. is a
distributor of contemporary styled residential and commercial
furniture incorporated into a dynamic marketing and sales platform
offering retail as well as online selection and global purchase
fulfillment. The Company monitors popular trends and products to
create design elements that are then integrated into the Company's
product lines that can be used as both stand-alone or whole-room
and home furnishing solutions. Through its global network of
retailers, e-commerce platforms, stagers, and hospitality
providers, Nova LifeStyle also sells (through an exclusive
third-party manufacturing partner) a managed variety of
high-quality bedding foundation components.
San Mateo, Calif.-based WWC, P.C., the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 12, 2024, citing that the Company incurred a net loss for
the
years ended Dec. 31, 2023, and 2022, and the accumulated deficit
increased from $36.71 million to $44.43 million from 2022 to 2023.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
NYREES LIMITED: Seeks Chapter 11 Bankruptcy Protection
------------------------------------------------------
On January 14, 2025, Nyrees Limited Liability Co. filed Chapter 11
protection in the U.S. Bankruptcy Court for the Central District
of California.
According to court filing, the Debtor reports between $1 million
and $10 million in debt owed to 1 and 49 creditors. The petition
states funds will be available to unsecured creditors.
About Nyrees Limited Liability Co.
Nyrees Limited Liability Co. is a Corona, California-based business
services company.
Nyrees Limited Liability Co. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 25-10185) on
January 14, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Scott H. Yun handles the case.
The Debtor is represented by Krystina T. Tran, Esq., at LAW OFFICES
OF KRYSTINA T TRAN, in Huntington Beach, California.
OUTFRONT MEDIA: Implements 1-for-1.024549 Reverse Stock Split
-------------------------------------------------------------
OUTFRONT Media Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on January 8, 2025, it
announced a 1-for-1.024549 reverse stock split on the Company's
common stock, $0.01 par value per share, such that every holder of
Common Stock will receive one share of Common Stock for every
1.024549 shares of Common Stock outstanding as of January 17, 2025.
The Reverse Stock Split is scheduled to take effect on January 17,
2025.
As previously disclosed, the Company's board of directors approved
the Reverse Stock Split to offset the dilutive impact of the Common
Stock portion of a special dividend that was paid by the Company on
December 31, 2024. As a result of the Reverse Stock Split, the
number of outstanding shares of Common Stock as of January 17,
2025, will be reduced from approximately 170,060,678 to
approximately 165,985,890, which is substantially similar to the
outstanding shares of Common Stock prior to the Special Dividend.
The Company's authorized shares of Common Stock and par value of
each share of Common Stock will remain unchanged. Trading in the
Company's Common Stock on a split adjusted basis is expected to
begin at the market open on January 17, 2025. The Company's Common
Stock will continue trading on the New York Stock Exchange under
the symbol "OUT" but under a new CUSIP number 69007J-304. Cash will
be paid in lieu of fractional shares.
About OUTFRONT Media Inc.
Headquartered in New York, OUTFRONT Media Inc. leases advertising
space on out-of-home advertising structures and sites.
OUTFRONT Media reported a net loss attributable to the Company of
$430.4 million for the year ended December 31, 2023, compared to a
net income of $147.9 million for the year ended December 31, 2022.
* * *
Egan-Jones Ratings Company, on September 10, 2024, maintained its
'CCC' foreign currency and local currency senior unsecured ratings
on debt issued by OUTFRONT Media Inc.
PANZER BUILDING: To Sell Mixed-Used Property in Public Auction
--------------------------------------------------------------
Panzer Building Corp. seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York, to sell its real property to
the highest and best bidder in public auction, free and clear of
all liens, claims, and interests.
The Debtor's Real Property are comprised of mixed-use property
consisting of approximately 20 residential units and two commercial
retail units located at 651 West 169th Street, New York, New York
a/k/a 226/230 Fort Washington Avenue, New York, New York.
The Property is subject to the credit bid rights of 651 West 169th
Lender LLC.
The Property is being managed by David Goldwasser, the Lender's
Loan Workout Manager.
The Property will be made subject to a robust auction process to be
conducted under a reasonable time frame pursuant to the proposed
bidding procedures.
According to the Debtor, although the case has lagged through its
first year, the Debtor hopes to commence the auction sale process
as soon as possible and seeks Bankruptcy Court approval of the Bid
Procedures which contains conventional terms and deadlines.
The Property is subject to a mortgage held by 651 West
collateralizing a total debt in the pre-petition amount of
$6,160,646. The Lender will also retain full credit bid rights to
bid the allowed amount of its secured claim during the auction of
the Property.
There is no stalking horse contract, and the Debtor has engaged
Northgate Real Estate Group as the broker to market the Property.
The Bid Procedures shall govern the timing of events, eligibility
requirements to become a qualified bidder and the scope of the
Lender's credit bid rights.
Given the extent of the secured debt, the proposed sale with the
Lender’s support provides the best opportunity to maximize the
value of the Property.
About Panzer Building Corp.
Panzer Building Corp. owns a mixed-used apartment building located
at 651 West 169th Street, New York, NY. The Property is located in
the immediate vicinity of Columbia Presbyterian Hospital and is
improved by a five-story elevator building with 20 residential
apartments and two commercial stores, including a Subway fast food
restaurant and Premier Deli.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-11924) on Dec. 4,
2023, with $8,064,000 in assets and $6,660,619 in liabilities.
Nancy J. Haber, authorized representative, signed the petition.
Judge John P. Mastando III presides over the case.
Kevin Nash, Esq., at GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP, is the
Debtor's legal counsel.
PARLEMENT TECHNOLOGIES: Unsecureds to Recover Up to 25% of Claims
-----------------------------------------------------------------
Parlement Technologies, Inc., and NDMAscendant, LLC, filed with the
U.S. Bankruptcy Court for the District of Delaware a Joint Combined
Chapter 11 Plan of Liquidation and Disclosure Statement dated
January 13, 2025.
The Debtor is a privately owned corporation formed under the laws
of Delaware, on June 21, 2022, and was the parent company of the
conservative social media platform Parler. The Parler platform was
a microblogging service that was both a website and app.
The Debtor filed the Chapter 11 Case to market and sell all of the
Debtor's assets. On October 25 and October 28, 2024, pursuant to
the Bidding Procedures Order, the Debtor commenced the Auction for
the sale of the Assets. Mr. Vuong was named as the successful
bidder for the Assets, as described in the Vuong Asset Purchase
Agreement. With respect to the assets of Alchemy and Dynascale
included in Mr. Vuong's successful bid, Mr. Vuong conducted an
Article 9 foreclosure sale.
Mr. Vuong's bid consisted of $6.35 million, comprising a
combination of cash and credit applied in connection with the Vuong
Prepetition Secured Debt and Mr. Vuong's entitlements under the DIP
Facility, as set forth in the Vuong Asset Purchase Agreement. After
a successful auction and a hearing to approve the Sale, on November
1, 2024, the Bankruptcy Court entered the Order (A) Approving Asset
Purchase Agreement by and Among the Debtor, Dynascale Inc., Alchemy
Data Center, LLC and Vinh Vuong; (B) Authorizing the Sale of the
Parlement Assets to Vinh Vuong or his Designee, Free and Clear of
All Liens, Claims, Encumbrances and Interests, and (C) Granting
Related Relief. The Sale closed on November 26, 2024.
The Combined Plan and Disclosure Statement is a liquidating chapter
11 plan for the Debtor. The Purchased Assets from the Sale have
been transferred from the Debtor to the Purchaser as part of
closing of the Sale. The Combined Plan and Disclosure Statement
provides that, upon the Effective Date, the Liquidating Trust
Assets will be transferred to the Liquidating Trust and the Debtor
will be dissolved. The Liquidating Trust Assets will be
administered and distributed as soon as practicable pursuant to the
terms of the Combined Plan and Disclosure Statement and Liquidating
Trust Agreement.
Holders of Miscellaneous Secured Claims (classified in Class 1) are
not Impaired and will receive, either (a) such other treatment as
may be agreed upon by any such holder of a Miscellaneous Secured
Claim, the Debtor (prior to the Effective Date), and the
Liquidation Trustee (after the Effective Date); or (b) at option of
the Debtor or the Liquidating Trustee: (i) payment in cash of the
allowed amount of such Miscellaneous Secured Claim (as determined
by settlement or order of the Bankruptcy Court), (ii) return of all
collateral secured by a valid, perfected, first priority
unavoidable lien securing such Miscellaneous Secured Claim, or
(iii) treatment consistent with the provisions of section
1129(a)(9) of the Bankruptcy Code.
Mr. Vuong, as Holder of the Remaining Vuong Prepetition Secured
Claim (classified in Class 2) is Impaired, and will receive either
(i) all collateral remaining at the Debtor (prior to the Effective
Date) or the Liquidating Trust (after the Effective Date) securing
the Remaining Vuong Prepetition Secured Claim; (ii) Liquidating
Trust Interests net of Allowed Professional Fee Claims, Allowed
Administrative Expense Claims, and Liquidating Trust Expenses, up
to the amount of the Remaining Vuong Prepetition Secured Claim; or
(iii) such other treatment as may be agreed upon by Mr. Vuong, the
Debtor (prior to the Effective Date) or the Liquidating Trustee
(after the Effective Date).
Holders of Non-Tax Priority Claims (classified in Class 3) are not
Impaired and will be paid in full in cash on the Effective Date,
the allowed amount of such claim, or receive such other treatment
as may be agreed upon by the holder of a Non-Tax Priority Claim,
the Debtor (prior to the Effective Date), and the Liquidation
Trustee (after the Effective Date).
Holders of General Unsecured Claims (classified in Class 4) are
Impaired and will receive their Pro Rata share of Liquidation Trust
Interests, net of the Remaining Vuong Prepetition Secured Claim,
Allowed Professional Fee Claims, Allowed Administrative Expense
Claims, Allowed Priority Tax Claims, Allowed Non-Tax Priority
Claims, and the administrative expenses of the Liquidating Trustee
and his or her professionals.
Holders of Existing Equity (classified in Class 5) are Impaired,
are deemed to reject the Combined Plan and Disclosure Statement,
and are not entitled to receive any Distribution.
Class 4 consists of the General Unsecured Claims. In full and
complete satisfaction of an Allowed General Unsecured Claim against
the Debtor, each Holder of an Allowed Class 4 General Unsecured
Claim shall receive its Pro Rata share of Liquidating Trust
Interests, net of the Remaining Prepetition Vuong Secured Claim,
Allowed Professional Fee Claims, Allowed Administrative Expense
Claims, Allowed Priority Tax Claims, Allowed Non-Tax Priority
Claims, and Liquidating Trust Expenses.
The allowed unsecured claims total $6,000,000 to $1,610,450,000.
This Class will receive a distribution of 0% to 25% of their
allowed claims. Holders of General Unsecured Claims in Class 4 are
Impaired and therefore, are entitled to vote to accept or reject
the Combined Plan and Disclosure Statement.
Class 5 consists of all Existing Equity. On the Effective Date,
existing equity of the Debtor shall be cancelled, and the Holders
of existing equity interests shall receive no Distribution under
the Combined Plan and Disclosure Statement.
The Liquidating Trust will be formed on the Effective Date in
accordance with the Combined Plan and Disclosure Statement and
pursuant to the Liquidating Trust Agreement for the purpose of,
among other things, (i) implementing the Combined Plan and
Disclosure Statement; (ii) investigating and, if appropriate,
prosecuting the Causes of Action (including Avoidance Actions,
Nevada Counterclaims, D&O Claims, Olympic Claims, and Thurston
Claims); (iii) administering, monetizing and/or liquidating the
Liquidating Trust Assets; (iv) resolving all Disputed Claims; and
(v) making all Distributions to Holders of Allowed Claims from the
Liquidating Trust and as provided for in the Combined Plan and
Disclosure Statement and the Liquidating Trust Agreement.
A full-text copy of the Joint Combined Chapter 11 Plan of
Liquidation and Disclosure Statement dated January 13, 2025 is
available at https://urlcurt.com/u?l=8kn8E7 from PacerMonitor.com
at no charge.
Parlement Technologies, Inc. is represented by:
Jeremy W. Ryan, Esq.
R. Stephen McNeill, Esq.
Sameen Rizvi, Esq.
Potter Anderson & Corroon, LLP
Hercules Plaza
1313 North Market Street, 6th Floor
P.O. Box 951
Wilmington, DE 19801
Telephone: (302) 984-6108
Email: jryan@potteranderson.com
Counsel for NDMAscendant, LLC:
SAUL EWING LLP
Mark Minuti, Esq.
1201 N. Market Street, Suite 2300
Wilmington, Delaware 19801
Telephone: (302) 421-680
Facsimile: (302) 421-6813
Email: mark.minuti@saul.com
-and-
BROWN RUDNICK LLP
William R. Baldiga, Esq.
Sharon I. Dwoskin, Esq.
One Financial Center
Boston, Massachusetts 02111
Telephone: (617) 856-8200
Facsimile: (617) 856-8201
Email: wbaldiga@brownrudnick.com
sdwoskin@brownrudnick.com
About Parlement Technologies
Parlement Technologies, Inc. is a technology services company in
Nashville, Tenn., serving businesses and organizations of all
sizes.
Parlement Technologies filed a Chapter 11 petition (Bankr. D. Del.
Case No. 24-10755) on April 15, 2024, listing up to $50 million in
both assets and liabilities. Craig Jalbert, chief restructuring
officer, signed the petition.
Judge Craig T. Goldblatt oversees the case.
Jeremy W. Ryan, Esq., at Potter Anderson & Corroon, LLP serves as
the Debtor's bankruptcy counsel.
PARTY CITY: Fox Rothschild & Moore File Rule 2019 Statement
-----------------------------------------------------------
The law firms of Fox Rothschild LLP and Moore & Van Allen PLLC
filed a verified statement pursuant to Rule 2019 of the Federal
Rules of Bankruptcy Procedure to disclose that in the Chapter 11
cases of Party City Holdco Inc. and affiliates, the firms represent
Anagram International, Inc. and Anagram Holdings, Inc.
Each client has been made aware of Counsel's other representations
in these cases. The clients are affiliated entities. Pursuant to
Bankruptcy Rule 2019, no represented party has a disclosable
economic interest in relation to the Debtors.
Formed after due inquiry, Counsel does not hold any claims against
or equity interests in the Debtors.
The law firms can be reached at:
Trey A. Monsour, Esq.
FOX ROTHSCHILD LLP
2501 N. Harwood Street
Suite 1800
Dallas, TX 7201
Telephone: (214)231-5796
Facsimile: (972) 404-0516
Email: tmonsour@foxrothschild.com
– and –
Zachary H. Smith, Esq.
William D. Curtis, Esq.
MOORE & VAN ALLEN PLLC
100 North Tryon Street
Suite 4700
Charlotte, NC 28202-4003
Telephone: (704) 331-1000
Email: zacharysmith@mvalaw.com
williamcurtis@mvalaw.com
About Party City Holdco
Party City Holdco Inc. (NYSE: PRTY) is the global leader in the
celebrations' industry, with its offerings spanning more than 70
countries around the world. It is also the largest designer,
manufacturer, distributor, and retailer of party goods in North
America. Party City Holdco had 761 company-owned stores as of
September 2022. It is headquartered in Woodcliff Lake, N.J. with
additional locations throughout the Americas and Asia.
Party City Holdco and its domestic subsidiaries sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead
Case No. 23-90005). As of Sept. 30, 2022, Party City Holdco had
total assets of $2,869,248,000 against total debt of
$3,022,960,000.
Judge David R. Jones oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP,
as legal counsel; Moelis & Company, LLC as investment banker;
AlixPartners, LLP as financial advisor; A&G Realty Partners as real
estate advisor; and Kroll as the claims agent.
PricewaterhouseCoopers LLP (PwC) provides accounting and valuation
advisory services, tax-related services, and internal audit
Sarbanes-Oxley Act support services.
Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and
investment banker, respectively, to the ad hoc group of first lien
holders.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases. The
committee is represented by Pachulski Stang Ziehl & Jones, LLP.
PORTSMOUTH SQUARE: Affiliate Defaults in $106MM Loan Agreements
---------------------------------------------------------------
On January 3, 2025, Portsmouth Square, Inc., was made aware of a
Notice of Termination Event issued to Justice Operating Company,
LLC, which is wholly owned subsidiary of Portsmouth Square, Inc.
and received by Justice as of that date.
The Notice states that the $97 million principal amount in loans
made to Justice by various institutional lenders, known as Loan
No.: M300801016 / Reference No.: SS57524 and Loan No.: M300801015 /
Reference No.: SS57523, a termination event has occurred as a
result of Borrower's failure to pay Lender the entire debt on or
before the Forbearance Expiration date of January 1, 2025 under the
Forbearance Agreement dated April 29, 2024.
Accordingly, the forbearance as granted by Lender under the
Forbearance Agreement has terminated.
The Notice states that the lenders shall immediately be entitled to
exercise any of the Lender's rights and remedies under the
Forbearance Agreement and the Loan Documents, in equity or at law.
The Lender's rights as a result of such termination, include, but
are not limited to, acceleration of the loans, foreclosure on
collateral and other rights and remedies under the loan documents
and otherwise available under law.
The Company cannot predict if or when the Lender will exercise any
of these rights and remedies.
In an effort to refinance the Hotel's aforementioned debt, in May
2024, Justice entered into a financing procurement agreement with a
global provider of financial advisory services to real estate
owners; however, refinancing the company's hotel debt has been
extremely challenging due to obstacles beyond the Company's
control. Justice will endeavor to refinance the aforementioned
loans as soon as possible or seek alternative solutions to resolve
this situation.
Additionally, in October 2024, Justice entered into an agreement
with Hart Advisors Group LLC to assist the Company in the
negotiations of loan modifications for its senior and mezzanine
loans with maturity date of January 1, 2025. Justice and its
mezzanine lender PCCP have submitted proposed loan modification
terms to the senior lender's special servicer LNR Partners, LLC and
other parties that are part of the loan. There is no assurance that
any negotiations will be resolved in favor of Justice nor do these
negotiations in any way limit the lenders' rights.
As of January 3, 2025, the outstanding principal and accrued
interest, including default interest for senior and mezzanine loans
are approximately $78,640,922 and $27,501,893, respectively.
About Portsmouth
Headquartered in Los Angeles, California, Portsmouth Square, Inc.,
is a California corporation, incorporated on July 6, 1967, for the
purpose of acquiring a hotel property in San Francisco, California
through a California limited partnership, Justice Investors
Limited
Partnership. As of June 30, 2024, approximately 75.7% of the
outstanding common stock of Portsmouth was owned by The InterGroup
Corporation, a public company (NASDAQ: INTG). As of June 30,
2024,
the Company's Chairman of the Board and Chief Executive Officer,
John V. Winfield, owns approximately 2.5% of the outstanding
common
shares of the Company. Mr. Winfield also serves as the President,
Chairman of the Board and Chief Executive Officer of InterGroup
and
owns approximately 69.4% of the outstanding common shares of
InterGroup as of June 30, 2024.
East Brunswick, N.J.-based WithumSmith+Brown, PC, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated Sept. 30, 2024, citing that the outstanding balance
as
of June 30, 2024 of the hotel's mortgage notes payable consists of
a senior mortgage loan and mezzanine loan totaling $100,783,000,
net of debt issuance costs amounting to $679,000. Both loans
matured on Jan. 1, 2024, and were subsequently extended to Jan. 1,
2025 through forbearance agreements. In addition, the Company has
recurring losses and has an accumulated deficit of $117,102,000.
These factors and the Company's ability to successfully refinance
the debt on favorable terms in the current lending environment
raise substantial doubt about the Company's ability to continue as
a going concern for one year after the financial statement
issuance
date.
PRESBYTERIAN HOMES: Court Extends Use of Cash Collateral to Jan. 31
-------------------------------------------------------------------
Presbyterian Homes and Services of Kentucky, Inc. received interim
approval from the U.S. Bankruptcy Court for the Western District of
Kentucky, Louisville Division, to use cash collateral until Jan.
31, marking the second extension since the company's Chapter 11
filing.
The court previously issued an interim order, allowing the company
to access cash collateral until Jan. 10 only.
Hardin KY Opco and Hardin KY Propco and Stock Yards Bank & Trust
Company assert an interest in the cash collateral.
As adequate protection, the secured creditors will be granted a
replacement lien on all of the property of Presbyterian that is
similar to or traceable to their pre-bankruptcy interest in its
property,
In the event that the replacement lien granted to the secured
creditors fails to adequately protect their interests in the cash
collateral, such creditors will be granted an administrative
expense claim, with priority over other administrative expenses.
An evidentiary hearing is scheduled for Feb. 5.
Stock Yards Bank & Trust Company is represented by:
Edward M. King, Esq.
Jamie Brodsky, Esq.
Frost Brown Todd, LLP
400 W. Market Street, 32nd Floor
Louisville, Kentucky 40202
Telephone: (502) 589-5400
Hardin KY Opco and Hardin KY Propco are represented by:
Mary Elisabeth Naumann, Esq.
Chacey R. Malhouitre, Esq.
Jackson Kelly, PLLC
100 W. Main Street, Ste. 700
Lexington, KY 40507
Telephone: (859) 255-9500
Facsimile: (859) 252-0688
Email: mnaumann@jacksonkelly.com
chacey.malhouitre@jacksonkelly.com
About Presbyterian Homes and Services
of Kentucky Inc.
Presbyterian Homes and Services of Kentucky, Inc. sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Ky. Case
No. 24-33060) on December 15, 2024, with up to $10 million in both
assets and liabilities. Hattie H. Wagner, president and chief
executive officer of Presbyterian, signed the petition.
Judge Alan C. Stout oversees the case.
Charity S. Bird, Esq., at Kaplan Johnson Abate & Bird, LLP,
represents the Debtor as legal counsel.
PROOFPOINT INC: Term Loan Upsizing No Impact on Moody's 'B2' CFR
----------------------------------------------------------------
Moody's Ratings said there was no impact to Proofpoint Inc.'s
ratings including the B2 corporate family rating, B2 senior secured
debt ratings or negative outlook on the dividend and term loan
upsizing. Proofpoint recently announced an increase in the new term
loan to $1.35 billion from the originally announced $1.0 billion.
The new term loan is being used to fund a dividend to
shareholders.
The increase results in driving Moody's adjusted closing leverage
to 8.9x but Moody's expect leverage can still fall to 6.5x by the
end of 2026 and the company will be cash flow positive before
employee restricted stock (RSU) payments in 2025. Cash balances
remain well above remaining RSU payment obligations and effectively
fund the payment. The initial ratings and negative outlook
accommodated a moderate amount of term loan upsizing. However,
flexibility within the rating category is greatly reduced by this
upsizing.
PROSPECT MEDICAL: Court Approves "First Day" Motions
----------------------------------------------------
Prospect Medical Holdings, Inc. announced on January 15, 2025, that
it has received approvals from the United States Bankruptcy Court
for the Northern District of Texas for certain "first day" motions
related to the Company's voluntary chapter 11 petitions filed
beginning on January 11, 2025.
The Bankruptcy Court granted Prospect Holdings interim approval to
access new money term loans in an aggregate principal amount of up
to $100 million, of which $29 million is available immediately, in
debtor-in-possession financing from JMB Capital Partners Lending,
LLC. The Bankruptcy Court also granted Prospect Holdings interim
approval to obtain a revolving credit facility provided by eCapital
Healthcare Corp. in an aggregate principal amount of up to $90
million. This financing, together with cash generated from the
Company's ongoing operations, is expected to provide sufficient
liquidity to support the Company's financial obligations and
day-to-day operations during the court-supervised process.
The Bankruptcy Court has also authorized Prospect Holdings to
continue to pay employee wages and benefits without interruption,
among other customary relief. A "second day" hearing to approve
certain of the Company's motions on a final basis is scheduled for
February 12, 2025, at 1:30 p.m. Central Time. Prospect Holdings
also intends to pay vendors in full under normal terms for goods
and services provided after the filing date.
"We are pleased to have received prompt Bankruptcy Court approval
of these first day motions, which will enable Prospect Holdings to
continue operating and serving patients in the normal course," said
Von Crockett, Prospect Holdings' Chief Executive Officer. "With
this Court relief and the support of our lenders, we look forward
to moving through this process and ensuring that patients receive
the quality and compassionate care they deserve."
Mr. Crockett continued, "Having now achieved this initial
milestone, Prospect Holdings is positioned to continue paying our
physicians and employees and delivering a coordinated and
personalized care experience for our patients without interruption.
We thank our patients, health care partners, vendors and other
stakeholders for their continued partnership, as well as our
physicians and employees for their hard work and dedication to
Prospect Holdings."
As previously announced, Prospect Holdings is proceeding on a
strategic pathway to continue an expedited process to transition
its East Coast facilities, realign its organizational focus outside
of California and return to fulfilling its original mission of
operating community hospitals in California, providing vital care
to underserved communities, and promoting patient and physician
continuity. Implementing the contemplated restructuring plan will
enable the Company to facilitate its organizational realignment as
expeditiously as possible, while ensuring continued provision of
critical and tailored healthcare.
Prospect Holdings' hospitals, medical centers, and physicians'
offices remain open throughout the chapter 11 process, and patient
care and services are continuing uninterrupted.
About Prospect Medical Holdings, Inc.
Prospect Medical Holdings, Inc. consists of hospitals and
affiliated medical groups working for the benefit of every person
who comes to us for care. Our comprehensive networks aim to provide
coordinated, personalized care to California, Connecticut,
Pennsylvania, and Rhode Island.
Advisors
Sidley Austin LLP is serving as legal counsel, Houlihan Lokey
Capital Inc. is serving as investment banker, and Alvarez & Marsal
North America, LLC is serving as financial advisor to Prospect
Holdings.
PROSPECT MEDICAL: Faces Landlord Dispute, Financial Strain in Ch.11
-------------------------------------------------------------------
Dorothy Ma and Jonathan Randles of Bloomberg News report that
Prospect Medical Holdings Inc., the bankrupt hospital chain, has
been granted court approval to access its $100 million Chapter 11
financing, despite opposition from its landlord, Medical Properties
Trust Inc. (MPT).
Judge Stacey G.C. Jernigan authorized the move late Tuesday,
January 14, 2025, after company advisers testified that Prospect's
cash reserves had dropped to just $3 million before filing for
bankruptcy protection on January 11, according to the report. MPT
contested the financing, arguing it improperly places the new debt
ahead of its liens, the report said.
"We need to keep these hospitals open," Judge Jernigan remarked.
About Prospect Medical Holdings
Prospect Medical Holdings owns Roger Williams Medical Center, Our
Lady of Fatima Hospital, and several other healthcare facilities.
Prospect Medical Holdings sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80002) on
January 11, 2025. In the petition filed by Paul Rundell, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $1 billion and $10 billion each.
Honorable Bankruptcy Judge Stacey G. Jernigan handles the case.
The Debtors' General Bankruptcy Counsel is Thomas R. Califano,
Esq., and Rakhee V. Patel, Esq., at SIDLEY AUSTIN LLP, in Dallas,
Texas, and William E. Curtin, Esq., Patrick Venter, Esq., and Anne
G. Wallice, Esq., at SIDLEY AUSTIN LLP, in New York.
The Debtors' Financial Advisor is ALVAREZ & MARSAL NORTH AMERICA,
LLC.
The Debtors' Investment Banker is HOULIHAN LIKEY, INC.
The Debtors' Claims, Noticing & Solicitation Agent is OMNI AGENT
SOLUTIONS, INC.
PSSI HOLDINGS: Moody's Appends LD to Prob. of Default Rating
------------------------------------------------------------
Moody's Ratings affirmed PSSI Holdings, LLC's ("PSSI") Ca Corporate
Family Rating and downgraded the rating for the senior secured
first lien bank credit facilities (revolver and term loan) to Ca
from Caa3 for Packers Holdings, LLC. Concurrently, Moody's affirmed
a Ca-PD Probability of Default Rating to PSSI and appended a
limited default (LD) designation, changing it to Ca-PD/LD. The /LD
designation is to reflect there was a limited default in PSSI's
capital structure with regards to the recent amendment to exchange
the unrated senior unsecured notes ($307 million) into first lien
term loans. The portion of the unsecured notes exchanged into the
new first lien term loans has the option to pay interest in kind,
instead of cash, until maturity (March 2028). Moody's view the
exchange as a distressed exchange default ("DE") because of the
economic losses incurred by the lenders of the unsecured notes, as
well as PSSI's inability to fund its interest burden given weak
operating performance, very high debt load, weak liquidity with
large cash burn, and looming maturity for its revolver. The PDR
will revert to Ca-PD and the /LD designation will be removed in
approximately three business days. The outlook remains negative.
The affirmation of the Ca CFR reflects Moody's view that PSSI's
capital structure with a very high debt load is unsustainable in
its current form given weak operating performance. Liquidity is
expected to remain weak over the next year as Moody's expect a
continued free cash flow deficit. This, coupled with the revolver
becoming current in March, presents high near-term refinancing
risk.
The downgrade of the first lien credit facilities (consisting of a
$54 million revolver due March 2026 and a roughly $1.46 billion
term loan maturing in March 2028) to the same level as the Ca CFR
is the result of the exchange of the senior unsecured notes into
first lien term loan, thus removing the loss absorption support to
the company's first lien debt in the event of default from
subordinated debt.
RATINGS RATIONALE
PSSI's Ca CFR reflects Moody's view that the company's capital
structure with a very high debt load is unsustainable in its
current form given weak operating performance. The US Department of
Labor investigation (DOL) and fine from earlier 2023 affected
PSSI's operations significantly and, as a result of lost contracts
and significantly higher wage and other operating expenses, revenue
and especially earnings have experienced declines in the past year.
In addition to loss of contracts due to the DOL settlement, PSSI
has been experiencing a declining plant count over the past few
years due to consolidation of plants by customers in the protein
industry as they seek efficiencies. Furthermore, as a result of
costs pressures related to wages and chemicals and higher
compliance spending, PSSI's margins have been deteriorating faster
than revenue decline, adding to earnings pressure. The CFR
acknowledges the non-discretionary need for the daily sanitation
services it provides to protein and other food manufacturers, and
the strict regulatory environment in the food processing industry.
The negative outlook reflects the near-term refinancing risk given
PSSI's weak operating performance, very high debt load, and weak
liquidity with upcoming refinancing needs regarding to its
revolver. The negative outlook also reflects the potential for
lower recovery expectations in the event of default as negative
operating trends continue.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Although not likely in the near term given the negative outlook,
the ratings could be upgraded through a substantial improvement in
operating performance, allowing the company to de-lever. The
company's ability to address its near-term maturities and an
improvement in its liquidity position would also support an
upgrade.
The ratings could be downgraded if operating performance weakens
further, the potential for a distressed exchange or other default
increases for any reason, or Moody's estimated recovery values
weaken.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
PSSI Holdings, LLC ("PSSI"), founded in 1972 and headquartered in
Kieler, Wisconsin, is a provider of contract sanitation services to
the food processing industry in the U.S. and Canada. In May 2018
PSSI was acquired by Blackstone Group L.P. PSSI generated
approximately $965 million in revenue in for the last twelve months
ending September 30, 2024.
REBORN COFFEE: Inks $121K Promissory Note w/ 1800 Diagonal Lending
------------------------------------------------------------------
On January 6, 2025, Reborn Coffee, Inc., entered into a securities
purchase agreement with 1800 Diagonal Lending LLC, pursuant to
which the Company issued and sold to the Investor a promissory note
in the original principal amount of $121,900. The Investor paid a
purchase price of $106,000 to the Company for the Note.
The Note incurred a one-time interest charge of 14%, applied on the
date of issuance to the principal amount; provided, however, that
the Note will also bear interest at a rate of 22% per annum if any
amount thereunder is not paid when due. Beginning on July 15, 2025,
the Company is required to make a payment of $69,483 on the Note,
and continuing on the same day of each successive calendar month
thereafter, the Company is required to make installment payments on
the Note of $17,370.75 until it is fully repaid or the Investor has
converted the outstanding balance into shares of the Company's
common stock, par value $0.0001. At any time after the occurrence
of an event of default, subject to certain ownership limitations,
the Investor may convert any portion of the outstanding and unpaid
principal, interest, or other amounts outstanding under the Note
into Common Stock at a price equal to 75% of the lowest trading
price of the Common Stock on Nasdaq during the ten trading days
prior to the conversion.
Each of the Purchase Agreement and the Note contains customary
representations and warranties for the benefit of the Investor.
Allison Naidich, Esq. -- allison@nwlaw.com -- at Naidich Wurman
LLP, in Great Neck, New York, is one of the lawyers facilitating
the transaction.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=cIorkq
About Reborn Coffee
Brea, Calif.-based Reborn Coffee, Inc. (NASDAQ: REBN) is focused
on
serving high quality, specialty-roasted coffee at retail
locations,
kiosks, and cafes. Reborn is an innovative company that strives
for
constant improvement in the coffee experience through exploration
of new technology and premier service, guided by traditional
brewing techniques. Reborn believes they differentiate themselves
from other coffee roasters through innovative techniques,
including
sourcing, washing, roasting, and brewing their coffee beans with a
balance of precision and craft. For more information, please visit
www.reborncoffee.com.
Going Concern
The Company cautioned in its Form 10-Q Report filed with the U.S.
Securities and Exchange Commission for the quarterly period ended
March 31, 2024, that substantial doubt exists about its ability to
continue as a going concern. According to the Company, it had
incurred a net comprehensive loss of $990,544 during the three
months ended March 31, 2024, and has an accumulated deficit of
$17,747,468 as of March 31, 2024.
As of June 30, 2024, Reborn Coffee had $10,529,006 in total
assets,
$7,986,318 in total liabilities, and $2,542,688 in total
stockholders' equity.
RED RIVER: UST Challenges Bid to Hire Brown Rudnick, Paul Hastings
------------------------------------------------------------------
James Nani of Bloomberg Law reports that Brown Rudnick LLP and Paul
Hastings LLP cannot serve as counsel for the talc claimants'
committee in the bankruptcy case of Johnson & Johnson's subsidiary
unless they waive approximately $5.6 million in outstanding fees
owed for prior work performed for other creditors, according to the
Justice Department's bankruptcy division.
In an objection filed Tuesday, January 14, 2025, with the U.S.
Bankruptcy Court for the Southern District of Texas, the U.S.
Trustee argued that the unpaid fees create conflicts of interest,
rendering the firms unqualified to represent the official talc
claimants' committee in the bankruptcy of J&J's holding company,
Red River Talc LLC.
"Neither Paul Hastings nor Brown Rudnick meets the standard of
disinterestedness and should not be approved as counsel," the U.S.
Trustee stated.
Case Overview
Red River filed for Chapter 11 bankruptcy in September to address
thousands of claims related to ovarian and gynecological cancers.
This marks J&J's third attempt to resolve its talc liabilities
through bankruptcy, following two prior dismissals in New Jersey.
J&J now seeks approval for its $8.2 billion settlement plan, which
it claims has the backing of 83% of tort claimants.
The U.S. Trustee noted that Paul Hastings previously represented a
creditor group during J&J's second bankruptcy attempt and is still
owed more than $2 million for that engagement. Similarly, Brown
Rudnick disclosed that it is owed approximately $3.5 million for
representing another talc claimant group. The U.S. Trustee argued
that these unpaid debts make the firms creditors in the Red River
bankruptcy, creating a conflict of interest with the talc
claimants' committee.
Additional Concerns
The U.S. Trustee also opposed the committee's decision to hire
Susman Godfrey LLP as special litigation counsel, describing the
move as "excessive and unnecessary at this stage."
Separately, Red River has objected to Brown Rudnick's involvement,
citing the firm's "extreme positions" against J&J's bankruptcy
strategy. Brown Rudnick has been a longstanding representative of
plaintiffs opposing J&J's use of bankruptcy to address talc-related
claims and was recently appointed co-counsel for the official
committee under an agreement among competing claimant groups.
Hunter J. Shkolnik, a partner at Napoli Shkolnik and counsel for
the committee's co-chair, rejected the objections, arguing that the
unpaid fees are irrelevant in the broader context of the case.
"These are two of the most respected bankruptcy firms representing
ovarian cancer victims. Denying their appointment would be a severe
injustice to the women affected," Shkolnik said.
Representatives for Brown Rudnick, Paul Hastings, and Red River did
not immediately respond to requests for comment.
Red River Talc is represented by Jones Day and Porter Hedges LLP.
About J&J Talc Units
LLT Management, LLC (formerly known as LTL Management LLC) was a
subsidiary of Johnson & Johnson that was formed to manage and
defend thousands of talc-related claims and oversee the operations
of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue
streams, including royalty revenue streams based on third-party
sales of LACTAID, MYLANTA/MYLICON and ROGAINE products.
LTL Management first filed a petition for Chapter 11 protection
(Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time
of the filing, the Debtor was estimated to have $1 billion to $10
billion in both assets and liabilities.
In the 2021 case, LTL Management tapped Jones Day and Rayburn
Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP
and Shook, Hardy & Bacon LLP as special counsel; McCarter &
English, LLP as litigation consultant; Bates White, LLC as
financial consultant; and AlixPartners, LLP as restructuring
advisor. Epiq Corporate Restructuring, LLC, served as the claims
agent.
On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9
reconstituted the talc claimants' committee and appointed two
separate committees: (i) the official committee of talc claimants
I, which represents ovarian cancer claimants, and (ii) the official
committee of talc claimants II, which represents mesothelioma
claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing this Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an order
denying LTL's stay motion on March 31, 2023, and, on the dame day,
issued its mandate directing the Bankruptcy Court to dismiss the
2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in connection
with LTL's initial bankruptcy filing in October 2021. LTL also has
secured commitments from over 60,000 current claimants to support a
global resolution on these terms.
In August 2023, U.S. Bankruptcy Judge Michael Kaplan in Trenton,
New Jersey, ruled that the second bankruptcy case should be
dismissed.
3rd Try
In May 2024, J&J announced its subsidiary LLT Management LLC is
soliciting support for a consensual prepackaged bankruptcy plan to
resolve its talc-related liabilities. Under the terms of the plan,
a trust would be funded with over $5.4 billion in the first three
years and more than $8 billion over the course of 25 years, which
J&J calculates to have a net present value of $6.475 billion.
Claimants must cast their vote to accept or reject the Plan by 4:00
p.m. (Central Time) on July 26, 2024. A solicitation package may be
requested at www.OfficialTalcClaims.com or by calling
1-888-431-4056. If the Plan is accepted by at least 75% of voters,
a bankruptcy may be filed under the case name In re: Red River Talc
LLC in a bankruptcy court in Texas or in the bankruptcy court of
another jurisdiction. Epiq Corporate Restructuring, LLC is serving
as balloting and solicitation agent for LLT.
On Sept. 20, 2024, Red River Talc LLC filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Tex. Case No. 24-90505).
Porter Hedges LLP and Jones Day serve as counsel in the new Chapter
11 case. Epiq is the claims agent.
Paul Hastings LLP is counsel to the Ad Hoc Committee of Supporting
Counsel. Randi S. Ellis is the proposed prepetition legal
representative of future claimants.
REITER BROTHERS: Tarek Kiem of Kiem Law Named Subchapter V Trustee
------------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tarek Kiem, Esq., at Kiem
Law, PLLC as Subchapter V trustee for Reiter Brothers, Inc.
Mr. Kiem will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kiem declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tarek Kiem, Esq.
Kiem Law, PLLC
8461 Lake Worth Road, Suite 114
Lake Worth, FL 33467
Tel: (561) 600-0406
Email: tarek@kiemlaw.com
About Reiter Brothers Inc.
Reiter Brothers Inc. is a Hollywood, Florida-based furniture
manufacturer operating as Vannucchi Brothers.
Reiter Brothers filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 25-10190) on January
9, 2025, with $50,000 to $100,000 in assets and $500,000 to $1
million in liabilities.
Judge Scott M. Grossman oversees the case.
Stiberman Law, P.A. is the Debtor's legal counsel.
REMARK HOLDINGS: Posts $9.6MM Net Loss for Quarter Ended Sept. 2024
-------------------------------------------------------------------
Remark Holdings, Inc., disclosed in a Form 10-Q filing with the
U.S. Securities and Exchange Commission $9,614,000 in net loss on
$320,000 in revenue for the three months ended September 30, 2024,
compared to $7,172,000 in net loss on $183,000 in revenue for the
three months ended September 30, 2023.
The Company also disclosed $28,664,000 in net loss over $4,406,000
in revenue for the nine months ended September 30, 2024, compared
to $21,208,000 in net loss over $4,176,000 in revenue for the nine
months ended September 30, 2023.
The Company further disclosed $2,612,000 in total assets,
$58,227,000 in total liabilities, and $55,615,000 in total
stockholders' deficit at September 30, 2024.
During the nine months ended September 30, 2024, and in each fiscal
year since its inception, the Company have incurred operating
losses which have resulted in a stockholders' deficit of $55.6
million as of September 30, 2024. Additionally, its operations have
historically used more cash than they have provided. Net cash used
in operating activities was $7.0 million during the nine months
ended September 30, 2024. As of September 30, 2024, its cash
balance was less than $0.1 million. Also, the Company has accrued
approximately $1.4 million of delinquent payroll taxes. As of the
date of this Form 10-Q, the Company is also delinquent in the
payment of approximately $0.1 million of lease payments related to
its office space in Las Vegas and are actively negotiating a
modified payment timeline with the landlord.
Its history of recurring operating losses, working capital
deficiencies and negative cash flows from operating activities give
rise to, and management has concluded that there is, substantial
doubt regarding its ability to continue as a going concern. Its
independent registered public accounting firm, in its report on its
consolidated financial statements for the year ended December 31,
2023, has also expressed substantial doubt about its ability to
continue as a going concern. Its consolidated financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.
The Company intend to fund its future operations and meet its
financial obligations through revenue growth from its AI and data
analytics offerings. The Company cannot, however, provide assurance
that revenue, income and cash flows generated from its businesses
will be sufficient to sustain its operations in the twelve months
following the filing of this Form 10-Q. As a result, the Company
are actively evaluating strategic alternatives including debt and
equity financings.
Conditions in the debt and equity markets, as well as the
volatility of investor sentiment regarding macroeconomic and
microeconomic conditions (in particular, as a result of global
supply chain disruptions, inflation and other cost increases, and
the geopolitical conflict in Ukraine), will play primary roles in
determining whether the Company can successfully obtain additional
capital. The Company cannot be certain that the Company will be
successful at raising additional capital.
A variety of factors, many of which are outside of its control,
may affect its cash flow; those factors include regulatory issues,
competition, financial markets and other general business
conditions. Based on financial projections, the Company believe
that the Company will be able to meet its ongoing requirements for
at least the next 12 months with existing cash and based on the
probable success of one or more of the following plans:
* develop and grow new product line(s)
* obtain additional capital through debt and/or equity issuances.
However, projections are inherently uncertain and the success of
its plans is largely outside of its control. As a result, there
is substantial doubt regarding its ability to continue as a going
concern, and the Company may fully utilize its cash resits ces
prior to March 31, 2025.
A full-text copy of the Form 10-Q is available at
https://urlcurt.com/u?l=VxRkkQ
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- is a diversified global
technology
business with leading artificial intelligence and data analytics,
as well as a portfolio of digital media properties. The Company's
innovative artificial intelligence and data analytics solutions
continue to gain worldwide awareness and recognition through
comparative testing, product demonstrations, media exposure, and
word of mouth. The Company continues to see positive responses and
increased acceptance of its software and applications in a growing
number of industries.
Los Angeles, California-based Weinberg & Company, P.A., the
Company's auditor since 2020, issued a "going concern"
qualification in its report dated April 15, 2024, citing that the
Company has suffered recurring losses from operations and negative
cash flows from operating activities and has a negative working
capital and a stockholders' deficit that raise substantial doubt
about its ability to continue as a going concern.
Remark Holdings reported a net loss of $29.15 million for the year
ended Dec. 31, 2023, compared to a net loss of $55.48 million for
the year ended Dec. 31, 2022. As of March 31, 2024, the Company
had
$10.14 million in total assets, $52.57 million in total
liabilities, and a total stockholders' deficit of $42.44 million.
RIVER DREAMERS: Case Summary & Five Unsecured Creditors
-------------------------------------------------------
Debtor: River Dreamers RV Park LLC
14001 I-10 N Frontage Road
Ehrenberg, AZ 85334
Business Description: River Dreamers RV Park is a recreational
park that caters to RV enthusiasts, nature
lovers, and outdoor adventurers. The park
offers various amenities, including an
outdoor pool, an onsite restaurant, a
boardwalk, and cabanas, set along the
Colorado River. It provides a peaceful and
scenic environment for visitors to enjoy
activities such as camping, bird-watching,
and exploring nature. The park welcomes RVs
of all sizes and offers a relaxing escape
for those seeking tranquility or adventure.
Chapter 11 Petition Date: January 14, 2025
Court: United States Bankruptcy Court
District of Arizona
Case No.: 25-00303
Judge: Hon. Scott H Gan
Debtor's Counsel: Mark J. Giunta, Esq.
LAW OFFICE OF MARK J. GIUNTA
531 East Thomas Road
Suite 200
Phoenix, AZ 85012
Tel: 602-307-0837
Fax: 602-307-0838
E-mail: markgiunta@giuntalaw.com
Total Assets: $3,705,593
Total Liabilities: $2,357,067
The petition was signed by Alex Antunes as owner.
A full-text copy of the petition, which includes a list of the
Debtor's five unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/N64WNNA/RIVER_DREAMERS_RV_PARK_LLC__azbke-25-00303__0001.0.pdf?mcid=tGE4TAMA
RIVER DREAMERS: Sec. 341(a) Meeting of Creditors on February 20
---------------------------------------------------------------
On January 14, 2025, River Dreamers RV Park LLC filed Chapter 11
protection in the U.S. Bankruptcy Court for the District of
Arizona.
According to court filing, the Debtor reports between $1 million
and $10 million in debt owed to 1 and 49 creditors. The petition
states funds will be available to unsecured creditors.
A meeting of creditors under Sec. 341(a) to be held on February 20,
2025 at 02:00 PM as a Telephonic Meeting.
About River Dreamers RV Park LLC
River Dreamers RV Park LLC operates a recreational vehicle park and
campground facility along the Colorado River in Ehrenberg, Arizona.
River Dreamers RV Park LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 25-00303) on January
14, 2025. In its petition, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Scott H. Gan handles the case.
The Debtor is represented by Mark J. Giunta, Esq., at LAW OFFICE OF
MARK J. GIUNTA, in Phoenix, Arizona.
ROOME ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Roome Enterprises, Inc.
d/b/a ServiceMaster by Roome
d/b/a ServiceMaster Cleaning and Restoration by Roome
5974 W Seltice Way,
Post Falls, ID 83854-8256
Business Description: ServiceMaster is a restoration services
company that specializes in providing
emergency cleanup and restoration after
incidents such as water damage, fire damage,
smoke damage, sewage backups, trauma or
vandalism, and mold growth. The Company
offers 24/7/365 services to both residential
and commercial clients, partnering with
insurance companies and property management
firms to restore peace of mind after these
types of disasters.
Chapter 11 Petition Date: January 14, 2025
Court: United States Bankruptcy Court
District of Idaho
Case No.: 25-20010
Debtor's Counsel: Matthew W. Grimshaw, Esq.
GRIMSHAW LAW GROUP, P.C.
800 W. Main Street
Suite 1460
Boise, ID 83702
Tel: 208-391-7860
E-mail: matt@grimshawlawgroup.com
Total Assets: $1,201,963
Total Liabilities: $2,969,007
The petition was signed by Adolphe R Rome as owner and president.
A full-text copy of the petition, which includes a list of the
Debtor's 20 largest unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/FQABEKY/Roome_Enterprises_Inc__idbke-25-20010__0001.0.pdf?mcid=tGE4TAMA
RUTGERS CASUALTY: A.M. Best Cuts Fin. Strength Rating to B-(Fair)
-----------------------------------------------------------------
AM Best has downgraded the Financial Strength Rating to B-(Fair)
from B (Fair) and the Long-Term Issuer Credit Ratings to "bb-"
(Fair) from "bb+" (Fair) of Rutgers Casualty Insurance Company and
American European Insurance Company, which operate an intercompany
reinsurance pooling agreement, and are collectively known as AEIG
or the group. Both companies are headquartered in Cherry Hill, NJ.
Concurrently, these Credit Ratings (ratings) have been placed under
review with negative implications.
The ratings reflect AEIG's balance sheet strength, which AM Best
assesses as adequate, as well as its marginal operating
performance, limited business profile and marginal enterprise risk
management (ERM).
The rating downgrades reflect the revision of the balance sheet
assessment and change in ERM assessment to marginal from
appropriate. AEIG's risk-adjusted capitalization, as measured by
Best's Capital Adequacy Ratio (BCAR), has deteriorated due to lower
policyholder surplus as a result of persistent underwriting and
operating losses, as well as the payment of sizeable legal
settlements in 2024 related to several non-standard auto claims in
Nevada. While surplus dropped, the material growth of homeowners'
premium with higher exposure to catastrophe losses increased the
capital requirements putting significant pressure on the group's
risk-adjusted capitalization. AM Best considers that these negative
developments resulted in part from insufficient ERM practices and
oversight. The group's management is evaluating several options to
improve its capital position including equity capital and increased
reinsurance utilization, specifically geared to improve the
company's capital position, net leverage, retained exposure and
liquidity. However, there are concerns that if these corrective
actions are insufficient or delayed, the assessments of balance
sheet may be under further pressure. The ratings will remain under
review with negative implications pending the outcome of these
initiatives and AM Best's assessment of changes in AEIG's capital
position.
SCOTLAND MEADOWS: Case Summary & Six Unsecured Creditors
--------------------------------------------------------
Debtor: Scotland Meadows LLC
420 Lafayette St.
Salem, MA 01970
Business Description: Scotland Meadows is a single asset real
estate debtor, as defined in 11 U.S.C.
Section 101(51B).
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 25-10072
Judge: Hon. Janet E Bostwick
Debtor's Counsel: Kenneth E. Lindauer, Esq.
LAW OFFICES OF KENNETH E. LINDAUER
The Rufus Choate House
14 Lynde Street
Salem, MA 01970-3404
Tel: 978-744-5861
Email: ken@lindauer.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by William Luster as manager.
A copy of the Debtor's list of six unsecured creditors is available
for free on PacerMonitor at:
https://www.pacermonitor.com/view/EUO5QCA/Scotland_Meadows_LLC__mabke-25-10072__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/HF76CXQ/Scotland_Meadows_LLC__mabke-25-10072__0001.0.pdf?mcid=tGE4TAMA
SCOTLAND MEADOWS: Files Bankruptcy Protection in Massachusetts
--------------------------------------------------------------
On January 15, 2025, Scotland Meadows LLC filed Chapter 11
protection in the U.S. Bankruptcy Court for the District of
Massachusetts.
According to court filing, the Debtor reports up to $50,000 in
debt owed to 1 and 49 creditors. The petition states funds will
not be available to unsecured creditors.
About Scotland Meadows LLC
Scotland Meadows LLC is a single asset real estate company located
in Salem, Massachusetts.
Scotland Meadows LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 25-10072) on January 15,
2025. In its petition, the Debtor reports estimated assets between
$1 million and $10 million and estimated liabilities up to
$50,000.
Honorable Bankruptcy Judge Janet E. Bostwick handles the case.
The Debtor is represented by Kenneth E. Lindauer, Esq., at Law
Offices of Kenneth E. Lindauer, in Salem, Massachusetts.
SIGNIA LTD: Unsecureds to Get Share of Net Profits for 5 Years
--------------------------------------------------------------
Signia, Ltd., filed with the U.S. Bankruptcy Court for the District
of Colorado a Disclosure Statement describing First Amended Plan of
Reorganization dated January 13, 2025.
The Debtor is in the business of providing marketing and customer
services to targeted business and customer groups. The Debtor
provides both business-to-business and business-to-consumer sales
and marketing services.
The Plan provides for the continued operation of the Debtor,
payments as required under the Bankruptcy Code to the Holders of
Allowed Administrative and Priority Tax Claims, and payments over a
five-year period to the Holders of Allowed Unsecured Claims,
initially funded with 75% of the Debtor's Net Profits until
reserves in the amount of $120,000 have been established, after
which time the Debtor will pay 100% of Net profits to such
claimants. As set forth in the projections, the Debtor projects
distributing $511,000 to the Holders of Allowed Unsecured Claims
over the life of the Plan.
In addition, the Plan contemplates the approval of a settlement
agreement with various insiders that reduces the total amount of
Unsecured Claims by approximately $1.8 million and the elimination
of approximately $3.5 million in contingent liabilities. As a
result, the Debtor projects Holders of Allowed Unsecured Claims
will receive payment of 8% of their Allowed Claims. The Debtor has
appealed an adverse pre-petition judgment. If the appeal is
successful, some or all of the approximately $4.5 million Claim
relating to the judgment could be eliminated, thereby substantially
increasing the percentage distributions made to the Holders of
Allowed Unsecured Claims. If he entire judgment Claim is
disallowed, the percentage distribution would increase to 24%.
There are 33 unsecured claims in the total filed and scheduled
amount of $11,954,277.98. The Debtor anticipates Allowed Unsecured
Claims for purposes of Plan distributions will total $6,624,391.
The Debtor has appealed an adverse pre-petition judgment. If the
appeal is successful, some or all of the approximately $4.5 million
Claim relating to the judgment could be eliminated, thereby
substantially reducing the total amount of Allowed Unsecured
Claims.
Class 3 consists of all Allowed Unsecured Claims. The Holders of
Allowed Class 3 Claims shall be paid their Pro Rata share of the
Net Profits Fund, on a quarterly basis for 20 quarters beginning
after the first full calendar quarter after the effective date.
Distributions to Class 3 claimants shall not exceed the amount of
the Allowed Unsecured Claims. This Class is impaired.
The claims of Equity Interest Holders are treated under Class 4 of
the Plan. On the effective date, existing shares of the Debtor
shall be cancelled. On the effective date, 100% of the common stock
of the Reorganized Debtor shall be issued to Sulit Group, Ltd. in
satisfaction of $50,000 of the amount lent to the Debtor pursuant
to the approved Debtor-In-Possession Loan Agreement and converted
to equity pursuant to the Plan.
Sulit has agreed to this treatment which benefits other creditors
because it reduces administrative expenses that would otherwise be
due and payable on the Plan's Effective Date. With a loan draw
limit of $200,000, this treatment could have the effect of
eliminating of $150,000 in administrative expenses, which would
reduce the payments to unsecured creditors by the same amount.
Payments due under the Plan will be made from cash generate from
the Reorganized Debtor's post-Confirmation operations.
A full-text copy of the Disclosure Statement dated January 13, 2025
is available at https://urlcurt.com/u?l=X4RnIi from
PacerMonitor.com at no charge.
Signia, Ltd., is represented by:
David V. Wadsworth, Esq.
Aaron J. Conrardy, Esq.
Wadsworth Garber Warner Conrardy, P.C.
2580 West Main Street, Suite 200
Littleton, CO 80120
Tel: (303) 296-1999
Fax: (303) 296-7600
Email: dwadsworth@wgwc-law.com
aconrardy@wgwc-law.com
About Signia, Ltd.
SIGNIA provides the full spectrum of customer service and care from
order and payment processing to customer inquiries and timely
follow-up to Tier 1 support.
Signia, Ltd., filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. 24-13438) on June 20, 2024,
listing $507,431 in assets and $10,081,009 in liabilities. The
petition was signed by Jeffrey Fell as CEO.
Judge Thomas B. Mcnamara presides over the case.
David V. Wadsworth, Esq., at WADSWORTH GARBER WARNER CONRARDY,
P.C., is the Debtor's counsel.
SINCLAIR INC: S&P Downgrades ICR to 'B-', Outlook Stable
--------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Sinclair
Inc. to 'B-' from 'B'.
At the same time, S&P lowered the issue-level rating on the
company's existing senior secured debt to 'B' from 'B+' and placed
it on CreditWatch with negative implications.
S&P also lowered the issue-level rating on the company's existing
senior unsecured debt to 'CCC' from 'CCC+'.
The stable outlook reflects the company's prolonged debt maturity
profile following the proposed transaction along with S&P's
expectation that FOCF will remain positive over a political cycle
and EBITDA interest coverage will remain comfortably above 1.5x.
Sinclair Television Group Inc. (STG), an indirect subsidiary of
Sinclair Inc., has entered into a transaction support agreement
(TSA) with lenders representing about 80% of the principal amount
outstanding of its senior secured term loans and about 75% of the
principal amount outstanding of its senior secured notes due 2030.
While the transaction will extend the company's debt maturity
profile, it will also increase the total amount of debt outstanding
and annual interest expense. At the same time, S&P continues to
expect that secular pressures facing linear TV will weigh on the
company's future cash flows.
S&P said, "We expect S&P Global Ratings-adjusted FOCF to debt will
remain below 5% over a political cycle. Sinclair Inc.'s financial
and credit metrics include the consolidated operations of
subsidiaries Sinclair Broadcast Group Inc. (SBG; the parent of STG,
the local media segment) and Sinclair Ventures (the holder of the
company's nonbroadcast media assets and nonmedia assets).
"We forecast Sinclair's FOCF to debt will be about 0% in 2024,
-1.5% in 2025, about 7.5% in 2026, and about 1.5% in 2027. Assuming
full participation under the proposed transaction, the total amount
of debt outstanding will increase by about $90 million and annual
interest expense will increase by about $50 million in 2025 due to
higher rates on the new debt. Significant one-time payments in 2024
and 2025 are also affecting FOCF, including a legal settlement with
Diamond Sports Group (DSG) in 2024 ($347 million paid by STG, $148
million paid by Sinclair Ventures) and expected tax payments
following DSG's emergence from bankruptcy in 2025 (STG is expected
to pay about $120 million). We also continue to believe
distribution and core advertising revenue will begin to decline in
2026 amid ongoing secular pressures, which will weigh on the
company's future cash flows.
"The proposed transaction, which we view as opportunistic, will
extend the company's debt maturity profile. Under the TSA, STG
plans to:
-- Raise approximately $1,428 million of new first-out first-lien
debt (existing lenders will provide a $1,175 million backstop
first-out first-lien term loan B-5), in which the proceeds will be
used to repay the $1,175 million balance of its term loan B-2
maturing in 2026, pay down $104 million of its senior unsecured
notes due 2027 at 97 cents on the dollar ($274 million
outstanding), and pay down $59 million of senior secured notes due
2030 at 84 cents on the dollar.
-- Offer to exchange its term loan B-3 ($714 million outstanding)
maturing in 2028 for a new second-out first-lien term loan B-6
maturing in 2029 with a 30-basis-point rate increase.
-- Offer to exchange its term loan B-4 ($731 million outstanding)
maturing in 2029 for a new second-out first-lien term loan B-7
maturing in 2030 with a 35-basis-point rate increase.
-- Offer to exchange $246 million of its secured notes due 2030
for new second-out first-lien notes due 2032 with a 25-basis-point
rate increase.
-- Exchange $432 million of its secured notes due 2030 (held by
one holder) for new 9.75% second-lien notes due 2033.
-- Pro forma for the transaction, the company's next debt maturity
will be its senior unsecured notes due 2027. S&P expects the
company will repay the remaining $170 million balance with cash
following healthy FOCF generation in 2026 given political
advertising revenue associated with the U.S. midterm elections. The
company's next meaningful debt maturity will be the term loan B-6
($714 million) in December 2029.
S&P said, "In our view, the exchange offers are not distressed, as
the company does not face a realistic possibility of a conventional
default over the next two years. Absent the transaction, we believe
the company could still generate positive FOCF over a political
cycle if it had to refinance its upcoming 2026 and 2027 debt
maturities at current yields.
"We placed the issue-level rating on the company's existing senior
secured debt on CreditWatch with negative implications. Holders of
the company's existing senior secured revolving credit facility and
term loans that do not participate in the proposed exchanges will
have their liens subordinated and will become third-lien
debtholders. Holders of the company's existing senior secured notes
due 2030 that do not participate in the proposed exchange will have
their liens released and will become unsecured debtholders. We do
not expect any remaining value for nonparticipating lenders in a
hypothetical default scenario and as a result, expect to revise our
recovery rating on the company's existing senior secured debt to
'6' from '2' and to lower the issue level rating on this debt to
'CCC' from 'B' when the transaction is launched.
"We do not forecast any recovery for existing unsecured debtholders
in our current recovery analysis. As a result, the 'CCC'
issue-level rating and '6' recovery rating on this debt will remain
unchanged when the transaction is launched.
"We believe distribution and core advertising revenue will begin to
decline in 2026. We expect Sinclair's distribution and core
advertising revenue will increase in 2025 following the renewal of
nearly all of its traditional big-four network subscribers in 2024
and the sales benefit from investments made in its advertising
capabilities over the past few years. However, starting in 2026, we
believe distribution revenue will decline in the low-single-digit
percent area as annual price escalators are insufficient to offset
annual subscriber churn. We believe the next material renewal cycle
with pay-TV distributors (after the recent cycle in 2024) will be
2027, at which point we believe it will be more difficult to
increase prices (given the already high cost of pay-TV, declining
TV audiences, weaker broadcast network content, and less exclusive
broadcast network content). After 2025, we expect core advertising
revenue will decline in the low-single-digit percent area annually,
performing better in odd years without displacement from political
advertising revenue.
"We expect declines in gross retransmission revenue will be
manageable over the next several years. We have also seen a
significant moderation in the growth rate of reverse retransmission
fees in recent years and believe Sinclair and its peers will look
to further moderate this growth or potentially reduce these fees in
upcoming contract negotiations with the broadcast networks
(reflecting the reduced exclusivity of network programming). This
could help offset expected low-single-digit declines in gross
retransmission revenue. However, the majority of Sinclair's
affiliate deals are up for renewal in the second half of 2026
(including ABC, FOX, and CBS), so it will take time to determine
the potential benefit from these renewals.
"The stable outlook reflects the company's prolonged debt maturity
profile following the proposed transaction along with our
expectation that FOCF will remain positive over a political cycle
and that EBITDA interest coverage will remain comfortably above
1.5x.
"While unlikely, we could lower the rating if we expect EBITDA
interest coverage will decline to the low-1x area or we believe it
cannot generate sustainably positive FOCF, resulting in its capital
structure becoming unsustainable." This could occur if:
-- Net retransmission revenue declines due to either
lower-than-expected price increases with pay-TV distributors during
upcoming contract renewals or growth in reverse retransmission fees
do not moderate as we currently expect; or
-- A severe or prolonged economic slowdown causes its core
advertising revenue to decline.
S&P could raise the rating if it expects the company to generate
FOCF to debt above 5% (over a political cycle) on a sustained basis
with net leverage at both Sinclair and STG remaining below 6x. S&P
believes this would likely entail:
-- Revenue growth across the company's various segments (likely
due to a significant improvement in cord cutting), along with
expense reductions; and
-- The company uses substantially all its FOCF for voluntary debt
repayment.
SINCLAIR TELEVISION: Moody's Cuts CFR & Senior Secured Notes to B3
------------------------------------------------------------------
Moody's Ratings downgraded Sinclair Television Group, Inc.'s ("STG"
or the "company") corporate family rating to B3 from B2 and
probability of default rating to Caa1-PD from B2-PD. Concurrently,
Moody's downgraded STG's backed senior secured bank credit
facilities and senior secured notes to B3 from B2 and senior
unsecured notes to Caa2 from Caa1. The company's Speculative Grade
Liquidity (SGL) rating was downgraded to SGL-3 from SGL-2. The
outlook remains negative.
RATINGS RATIONALE
The ratings downgrade reflects STG's elevated financial leverage
due to lower EBITDA and higher gross debt levels relative to
Moody's expectations. Though STG's political ad revenue in last
year's presidential election will be near Moody's forecast and 16%
higher than its political revenue in the 2020 presidential election
(excluding ad spend associated with the 2020 Georgia double senate
run-off), based on the STG's current guidance for 2024, EBITDA is
expected to fall short of Moody's prior forecast due to flattish
net retransmission revenue growth and core advertising revenue
below Moody's estimate. In addition, the company did not
meaningfully repay debt with excess cash (consisting of free cash
flow (FCF) and cash-on-hand), which Moody's expected. The bulk of
excess cash was diverted to pay $347 million of the $495 million
Diamond Sports Group, LLC ("Diamond Sports") litigation settlement
in Q2 2024. The settlement payment occurred immediately before Q3
2024, the quarter in which there was an influx of high margin
political cash flow, which STG used to replenish cash balances that
fell to $52 million at the end of Q2 2024 from $337 million at the
end of Q1 2024 after the payment. At LTM September 30, 2024, total
debt to EBITDA was 6x, and Moody's expect it will increase to the
6x-7x range over the rating horizon (leverage metrics are Moody's
adjusted on a two-year average EBITDA basis).
The downgrade also reflects Moody's medium to long-term expectation
for continued pressure on net retransmission revenue growth due to
the increasing pace of subscriber losses arising from secular
cord-cutting trends, as well as the ongoing weakness in STG's
linear TV core advertising growth. These trends will continue to
weigh on STG's future operating performance leading to EBITDA
declines and debt protection measures that are consistent with B3
CFR broadcasting and non-broadcasting peers.
Finally, the downgrade considers the recent Form 8-K filing [1]
from STG's ultimate parent, Sinclair Inc. ("Sinclair"), announcing
that the company has entered into a transaction support agreement
("TSA") with roughly 80% of existing term loan lenders and 75% of
existing senior secured noteholders to extend maturities via debt
exchanges. Moody's view the contemplated exchanges as a balance
sheet restructuring. Upon completion, Moody's will consider these
transactions as distressed exchanges, which is a "default" under
Moody's definition, and factored in the downgrade of the PDR to
Caa1-PD. At that time, Moody's will append the "/LD" designation to
the PDR. The "/LD" appendage will be removed in about three
business days from the time it is appended. Hence, governance risk
considerations were also a key driver of the rating actions
reflecting STG's highly leveraged balance sheet and pending
distressed exchange transactions.
Specifically, the contemplated exchanges/extensions of the B-3 and
B-4 term loans maturing April 2028 and April 2029, respectively
(the "TLB-3" and "TLB-4"), as well as the 4.125% senior secured
notes due December 2030 (the "2030 Secured Notes"), will be
considered distressed exchanges because the effect of these
extensions is default avoidance with respect to facilitating a
potential capital markets refinancing/extension of the B-2 term
loan due September 2026 (the "TLB-2") via a new super priority
first-out first-lien debt obligation. The exchanges will have the
effect of subordinating prepayment and collateral rights of certain
existing debtholders participating in the exchanges as well as
those debtholders not participating. As part of the TSA, certain
lenders have provided a backstop commitment to refinance the TLB-2.
To the extent STG is unable to refinance the TLB-2 in the capital
markets, the company has the option to execute the refinancing via
an exchange/extension with existing TLB-2 holders via a new super
priority first-out first-lien debt obligation, which Moody's would
also view as a distressed exchange.
STG's B3 CFR reflects the company's somewhat aggressive financial
policy characterized by a tolerance for high leverage and
shareholder-friendly activities at a time when the operating model
was experiencing accelerating secular pressures over the past four
years. The focus on shareholder priorities is evidenced by a
history of distributions upstreamed to Sinclair to help fund share
repurchases and dividend payments at that entity, as well as the
2023 transfer of EBITDA generating assets from the restricted
lender group to the Ventures portfolio. While Sinclair's share
repurchases have ceased or moderated in recent periods, the
preference to deploy cash flow to return capital to shareholders
rather than meaningfully repay debt to reduce leverage also weighs
on the ratings.
STG's revenue model benefits from a mix of recurring retransmission
fees that historically helped to offset the inherent volatility of
traditional advertising revenue. Over the next several years,
however, Moody's expect retransmission revenue will continue to
experience pressure as the rate of traditional subscriber losses
outpaces annual fee increases, which constrains the rating. In even
numbered years, revenue benefits from material political
advertising spend, especially during presidential election years,
which can mask pressure in retransmission revenue, but also boosts
EBITDA. During election years, STG generates good operating cash
flow, which declines during non-election years.
The ratings are supported by STG's established brand, scale and
significant reach. The company is one of the largest US
broadcasters with 185 owned and/or operated television stations in
86 markets broadcasting 638 channels. Around 50%+ of STG's news
operations rank #1 or #2 in their respective markets. However, the
credit profile is negatively impacted by the industry's ongoing
structural decline in linear TV core advertising as non-political
TV advertising budgets continue to erode in favor of digital media.
Moody's expect STG's linear TV core ad revenue will continue to be
pressured, which could worsen during periods of weak CPM (cost per
thousand impressions) pricing, depressed TV ratings, deteriorating
macroeconomic conditions and/or displacement during election years.
To offset these challenges and diversify its operations, STG has
invested in new technologies (i.e., NextGen TV broadcast),
businesses (i.e., Ventures) and over-the-top (OTT) distribution,
however this burdens cash flows and creates operational risk in the
short-term until these assets become profitable and can contribute
meaningfully to EBITDA.
The negative outlook reflects the structural and secular pressures
in STG's business, coupled with the likely debt exchange
transactions and Moody's view that the company's credit metrics are
weakly positioned within the B3 CFR. While 2024's political
advertising revenue will boost EBITDA, Moody's expect leverage will
rise to the 6x-7x area over the rating horizon due to stalled
growth in core advertising and net retransmission revenue, and
absence of political revenue in 2025 (leverage metrics are Moody's
adjusted on a two-year average EBITDA basis). Given the continuing
pressures in the TV broadcast industry, which heighten operating
challenges resulting in low growth in STG's core revenue,
lower-than-expected EBITDA could lead to downside risk to Moody's
leverage forecast. Since 80% of the company's multichannel video
programming distributor (MVPD) contracts were renewed in 2024,
Moody's expect net retransmission growth over the next two years
will be flat to down driven by mid-to-high single digit percentage
subscriber declines (comprising traditional MVPDs and vMVPDs) that
will exceed annual contractual escalators.
Moody's expect STG will maintain adequate liquidity over the next
12-18 months, as reflected in the SGL-3 Speculative Grade Liquidity
rating. At LTM September 30, 2024, FCF totaled around -$51 million
(Moody's adjusted, defined as cash flow from operations less capex
less dividend distributions), cash and cash equivalents were $202
million and both tranches of the $650 million revolving credit
facility (RCF) were undrawn. Excluding the company's one-time $347
million Diamond Sports litigation settlement paid in Q2 2024 (which
was classified as a distribution), FCF was positive $296 million at
LTM September 30, 2024. In FY 2024 (presidential election year),
Moody's forecast FCF of around $0 to -$45 million inclusive of the
settlement payment or $310 to $350 million excluding it. In FY 2025
(non-election year), Moody's project FCF of -$130 to -$190 million
due to a one-time cash tax payment associated with the Diamond
Sports bankruptcy exit or -$10 to -$70 million excluding it.
ESG CONSIDERATIONS
STG's ESG credit impact score was changed to CIS-5 from CIS-4,
driven by governance risks. The credit impact score reflects
increasing exposure to governance risk, chiefly influenced by
financial strategy and risk management as well as management
credibility and track record given the pending distressed exchange
transactions and aggressive financial policies characterized by a
tolerance for high leverage at a time when operating performance is
challenged by structural and secular industry pressures.
STRUCTURAL CONSIDERATIONS
The ratings on the senior secured bank debt obligations are lower
than the implied outcome under Moody's Loss Given Default (LGD)
framework to reflect the risk that a significant proportion of
existing senior secured debtholders will become contractually
subordinated by the creation of a new super-priority first-out
first-lien senior secured debt class that will rank ahead of them.
It also reflects the diminished collateral that will be available
to existing senior secured debtholders since the existing
collateral pool will be prioritized to a new super-priority
first-out first-lien senior secured debt class.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
While unlikely near-term given the structural and secular industry
pressures, over the longer-term ratings could be upgraded if STG
sustains leverage comfortably well below 5x (Moody's adjusted on a
two-year average EBTIDA basis) and FCF to debt above 6% (Moody's
adjusted on a two-year average FCF basis). STG would also need to:
(i) exhibit organic revenue growth and stable-to-improving EBITDA
margins on a two-year average basis; (ii) adhere to conservative
financial policies; and (iii) maintain at least good liquidity to
be considered for an upgrade.
Ratings could be downgraded if STG's leverage was sustained above
6x (Moody's adjusted on a two-year average EBITDA basis) as a
result of weak operating performance or more aggressive financial
policies. A downgrade could also arise if FCF to debt was sustained
below 2% (Moody's adjusted on a two-year average FCF basis), STG
experienced deterioration in liquidity or covenant compliance
weakness, or the company is unable to consummate a capital markets
refinancing of its TLB-2 and resorts to an exchange/extension of
this obligation via the backstop commitment provided by existing
TLB-2 debtholders. To the extent Moody's believe there is risk of
another balance sheet restructuring and/or distressed exchange
transaction in the future, subsequent to the one that is pending,
this could also result in a ratings downgrade.
Sinclair Television Group, Inc., headquartered in Hunt Valley, MD
and founded in 1986, is a leading US television broadcaster. With
185 owned and/or operated television stations in 86 markets across
the US, the station group reaches around 25% of the US population
taking into account the UHF discount (38% coverage without). STG's
net revenue at LTM September 30, 2024 was $3 billion.
The principal methodology used in these ratings was Media published
in June 2021.
SIYATA MOBILE: Postpones Press Conference for Market Opportunities
------------------------------------------------------------------
Siyata Mobile Inc. postponed its upcoming press conference,
originally set for January 9, 2025, to focus on advancing an
immediate business opportunity.
"At Siyata Mobile, we are committed to seizing opportunities that
enhance shareholder value. Postponing the press conference was a
strategic decision made to ensure we fully capitalize on these
developments. We believe the steps we are taking will significantly
strengthen our company's future and I urge shareholders to stay
engaged, as we anticipate sharing transformative updates throughout
January," said Marc Seelenfreund, CEO.
In addition, the Company announced that it has received an order
from a major transit authority for over two thousand SD7 handsets
and accessories to replace the authority's mobile land radios. The
order is expected to be delivered in the first quarter of 2025.
About Siyata Mobile
British Columbia, Canada-based Siyata Mobile Inc. is a B2B global
developer and vendor of next-generation Push-To-Talk over Cellular
handsets and accessories. Its portfolio of rugged PTT handsets and
accessories enables first responders and enterprise workers to
instantly communicate over a nationwide cellular network of choice,
to increase situational awareness and save lives. Police, fire, and
ambulance organizations as well as schools, utilities, security
companies, hospitals, waste management companies, resorts and many
other organizations use Siyata PTT handsets and accessories.
Jerusalem, Israel-based Barzily and Co., the Company's auditor
since 2023, issued a "going concern" qualification in its report
dated April 3, 2024, citing that the Company has suffered recurring
losses from operations, high accumulated losses, outstanding bank
loan and an outstanding balance in respect of the sale of future
receipts, that raise substantial doubt about its ability to
continue as a going concern.
SMYRNA READY: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has assigned 'BB-' Long-Term Issuer Default Ratings
(IDRs) to Smyrna Ready Mix Concrete, LLC (Smyrna) and Hollingshead
Holding Company, LLC. Fitch has also rated Smyrna's ABL credit
facility 'BB+' with a Recovery Rating of 'RR1' and its senior
secured notes and term loan facility 'BB+'/'RR2'. The term loan
facility includes a proposed $200 million add-on. The Rating
Outlook is Stable.
The 'BB-' IDR reflects Smyrna's leading market positions, good
liquidity, moderate barriers to entry, vertically integrated
operating model and modest geographic diversity. Credit risks
include high leverage, the construction industry's seasonal and
cyclical nature, high fixed costs and management's willingness to
increase leverage with an aggressive growth strategy.
The Stable Outlook reflects Fitch's forecast of stable near-term
demand and Fitch's expectation that EBITDA leverage will decline
over the next few years from margin improvement and debt reduction.
However, significant declines in demand, lack of margin improvement
and neutral or negative FCF could prompt negative rating actions.
Key Rating Drivers
Elevated Leverage: Smyrna's EBITDA leverage is currently elevated
due to debt incurred from previous acquisitions, weak demand so far
in 2024 and lower margins. EBITDA leverage was around 5x on a pro
forma basis for the LTM period ending Sept. 30, 2024 and is
forecast to remain at this level at the end of 2024, which is
meaningfully above its negative rating sensitivity of EBITDA
leverage above 4.3x. Management has a leverage target of
3.0x-3.75x, but has exceeded the upper end of the range for
strategic acquisitions.
The rating and Outlook reflect Fitch's expectation that EBITDA
leverage will decline to 4.4x at the end of 2025 and be at or below
4x by the end of 2026. Its rating case forecast assumes EBITDA
margin improvement and debt reduction in 2025 and 2026.
Leadership Position: Smyrna is the largest ready-mix producer with
560 concrete plants, 27 aggregates quarries and 12 cement
terminals. Smyrna is vertically integrated in key markets and
derives a portion of its revenue from aggregates and cement
distribution. Fitch believes the company's scale and vertical
integration is a competitive advantage, including lower costs from
economies of scale, consistent supply of raw materials, and
flexibility during economic and construction downturns.
Focus on Strategic Growth: Since 2021, the company has actively
pursued acquisitions, investing about $1.8 billion. This has
meaningfully improved the company's scale and geographic diversity,
but also resulted in significantly higher debt levels. Fitch views
the growth strategy positively over the long term as it provides
Smyrna with economies of scale and diversification to withstand
regional downturns. Fitch expects Smyrna will refrain from
completing large acquisitions in the medium term until leverage
declines closer to its target levels.
Margin Pressure: Fitch forecasts EBITDA margin to decline 200
bps-250 bps to around 17% in 2024 due to lower operating leverage
and higher SG&A for continued investment in headcount and corporate
functions to support growth. Fitch forecasts margin improvement in
2025 and 2026, with EBITDA margin of 19% to 20% as the company
realizes the benefits of its cost reduction initiatives and volumes
recover. Fitch's EBITDA margin forecast for 2025 and 2026 remain
below the levels reported in 2020-2022.
Free Cash Flow: Smyrna typically generates positive free cash flow
(FCF), owing to its strong EBITDA margin despite high capital
expenditures. Fitch expects the company will generate negative FCF
in 2024 due to lower profitability and higher capex to support
long-term growth. Its rating case forecast assumes the company
generates FCF margin of 3.5%-4.5% in 2025 and 4%-5% in 2026 as
EBITDA margin recovers and capex declines to 8%-9% of revenue,
compared to about 10.5% in 2024. Fitch expects FCF to be used for
debt reduction in 2025 and 2026.
Stable Operating Environment: Fitch forecasts fairly stable demand
in 2025 and 2026 for building materials companies. Modest growth in
public construction, driven by federal and state funding, supports
a positive outlook for highways and infrastructure activities over
the next several years. Weakness in non-residential construction in
2025 is forecast to be offset by higher residential construction
spending.
Diverse Revenue Sources: Revenue is balanced between residential
and non-residential construction, with some public construction
exposure. While private construction's cyclicality poses
profitability risks, market diversity helps insulate the company
from downturns, as residential and non-residential construction
cycles differ. Smyrna's modest geographic diversity offers
additional protection against regional downturns, and the company
is well-positioned to benefit from high-growth construction markets
like Texas and the Southeast.
Barriers to Entry: Barriers to entry in the ready-mix concrete
industry are moderate due to the high initial capital investment
required for production facilities. In contrast, the aggregates
industry faces higher barriers due to stringent zoning and
environmental restrictions that limit new quarry development. Fitch
believes these conditions can deter new entrants and somewhat limit
competition, thereby supporting the sustainability of the company's
leading market positions and modest pricing power over the
intermediate to long term.
Ownership Structure: Smyrna is a privately held company with
concentrated ownership, which poses an increased risk of
shareholder-friendly activities relative to publicly traded peers.
However, management has so far been disciplined with its capital
allocation strategy, including refraining from cash distributions
to its shareholders. Its rating case forecast assumes modest cash
distributions in 2025 and beyond.
Derivation Summary
Smyrna's EBITDA leverage and EBITDA margin are comparable to Eco
Material Technologies Inc. (B/Stable). Smyrna is meaningfully
larger than Eco Material and generates more consistent cash flow.
Smyrna also has better product diversification, but Eco Material
has a more diversified geographic footprint. Smyrna is more exposed
to the private construction market, while a large majority of Eco
Material's products are directed toward the public infrastructure
sector.
Smyrna's credit metrics are weaker than its large investment grade
peers Martin Marietta Materials, Inc. (BBB/Positive) and Vulcan
Materials Company (BBB/Positive). These companies are significantly
larger than Smyrna and have more balanced end-market
diversification. Both Martin Marietta and Vulcan are focused on
their aggregates businesses, which have demonstrated more stable
pricing than concrete and cement over the construction cycle.
Key Assumptions
- Revenue growth of 8.5%-9% in 2024, 4%-5% in 2025 and 1%-2% in
2026;
- EBITDA margin of 16.5%-17% in 2024 and 19%-20% in 2025 and 2026;
- Debt reduction of $200 million to $250 million in 2025 and 2026;
- EBITDA leverage of 5.0x-5.5x at year-end 2024, 4.0x-4.5x at the
end of 2025 and below 4.3x at year-end 2026;
- (CFO-capex)/debt is negative in 2024 and above 4% in 2025 and
2026.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 4.3x;
- FCF margin consistently neutral or negative;
- (CFO-capex)/debt sustained below 3%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 3.8x;
- (CFO-capex)/debt consistently above 7%.
Liquidity and Debt Structure
Smyrna has a good liquidity position, supported by $220 million of
availability under its $425 million ABL facility that matures in
October 2027 and $87.7 million of cash. Pro forma for the proposed
$200 million add-on to its existing term loan facility, ABL
availability will be about $420 million.
Smyrna's debt maturities are well-laddered with no major debt
maturities until November 2028, when $1.1 billion of senior secured
notes mature. The next maturity is in 2029, when its $720 million
term loan facility (pro forma for the proposed add-on) becomes due.
However, the term loan also matures in 2028 if the senior secured
notes due 2028 is not refinanced. Annual principal amortization
under the term loan facility is manageable at $7.4 million annually
on a pro forma basis.
Issuer Profile
Founded in 1999, Hollingshead Holding Company, LLC (d/b/a Smyrna
Ready Mix Concrete, LLC) is the largest producer of ready-mix
concrete with 560 concrete plants, 27 quarries and 12 cement
terminals serving customers across 22 states.
Summary of Financial Adjustments
Fitch adds back non-recurring and discretionary items to EBITDA.
Date of Relevant Committee
03 January 2025
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
----------- ------ --------
Smyrna Ready Mix
Concrete, LLC LT IDR BB- New Rating
senior secured LT BB+ New Rating RR1
senior secured LT BB+ New Rating RR2
Hollingshead Holding
Company, LLC LT IDR BB- New Rating
SOLUNA HOLDINGS: Issues Business Update for December 2024
---------------------------------------------------------
Soluna Holdings, Inc. announced its December 2024 project
site-level operations, developments, and updates.
The Company has provided the following Corporate and Site Updates.
Corporate Highlights:
* AI Deal Signed with San Francisco Compute Company: Soluna
will deliver custom AI cloud solutions to its first customer
following strategic collaboration with Hewlett Packard Enterprise
(HPE) GreenLake.
* AI Deal Signed with Atlas Cloud: Soluna will provide Atlas
with 64 Nvidia H100 GPUs and potentially scale to more to support
Atlas' advanced AI video processing workloads.
* Convertible Notes, Final Convert, and Payoff: Soluna
announced the completion of a final conversion and payoff of
outstanding convertible notes.
* Flexible Financing for Sustainable AI: Soluna launched its
partnership with Gynger to offer flexible financing options for AI
enterprises.
* Advisory Board: Soluna announced the appointment of data
center expert Ernest Popescu to the Advisory Board.
* New Podcast: Soluna's new limited series explores the
intersection of AI and sustainability.
* Curtailed Energy Milestone: As of November, Project Dorothy
reached a milestone of over 100GWh of curtailed energy
monetization. This is equivalent to powering approximately 11,500
H100s for a year.
* New Video: CEO John Belizaire shares Soluna's story and the
future of Renewable Computing from the grounds of Project Dorothy.
Key Project Updates:
Project Dorothy 1A (25 MW, Bitcoin Hosting) / Project Dorothy 1B
(25 MW, Bitcoin Prop-Mining):
* Two new customer deployments totaling 20 MW of upgraded
equipment are nearing completion at Project Dorothy 1A.
* Transformer failure impacted self-mining hashrate, incurring
3 weeks of downtime for 2 MDCs at Project Dorothy 1B. This issue
has been resolved.
* Project Dorothy 1A and 1B will each incur a 1-week outage in
mid-January to support the substation interconnection work planned
and required for Project Dorothy 2.
Project Dorothy 2 (48 MW, Bitcoin Hosting):
* The substation interconnection planning is complete with the
electrical tie-in scheduled for mid-January.
* Phase 1 construction – the first 16 MW – continues to
progress as major electrical equipment for each MDC is in the
process of being set.
* Phase 1 commissioning preparation is underway with the core
network installation planned for mid-January and the interviewing
of full-time staff in process.
Project Grace (2 MW at Dorothy 2, AI Cloud/Hosting):
* Microgrid concept design, Phase 1 is nearing completion.
This will inform timelines and layout.
* Helix Phase 1 concept design is nearing completion.
Project Ada (1 MW, AI Cloud with HPE):
* Fluidstack signed a Letter of Intent to reserve 512 H100
GPUs by the end of January or early February.
* SFCompute usage continued to ramp through the holidays, and
the first revenue report is due in mid-January.
* 128 additional H100 GPUs are slated for a new serverless
offering with Atlas Cloud. We are negotiating terms.
* Proposals were sent to several new prospects for over 544
GPUs with 3, 6, and 12-month terms.
* The AI pipeline now conservatively exceeds 864 H100 GPUs.
Project Sophie (25 MW, Bitcoin Hosting with Profit Share, AI
Hosting):
* Site operations remain very strong and at full capacity.
Project Kati (166 MW, Bitcoin Hosting and AI):
* Requests for quotes (RFQ) have been sent on long-lead
electrical infrastructure.
* The design scope is being finalized for the first 83 MW of
Bitcoin Hosting with an EPC bid process to be facilitated in
February.
* Final round of negotiations are underway with the landowner
and expect to complete by the end of January.
Customer Success:
* Agreement reached and in the process of deploying a 3rd
expansion request with customer Bit Digital.
* Deploying the first batch of next-generation units (S21s)
with upgraded site infrastructure at Project Dorothy.
* Agreement reached and in the process of deploying a 2nd
expansion request with customer Bitmine Immersion Technologies.
* Request for proposals for Dorothy 2 Bitcoin Hosting
launched.
About Soluna Holdings
Headquartered in Albany, New York, Soluna Holdings designs,
develops, and operates digital infrastructure that transforms
surplus renewable energy into global computing resources. The
Company's modular data centers can be co-located with wind, solar,
or hydroelectric power plants and support compute-intensive
applications, including Bitcoin mining, generative AI, and
scientific computing. This approach aids in energizing a greener
grid while providing cost-effective and sustainable computing
solutions.
Going Concern
The Company was in a net loss, has negative working capital, and
has significant outstanding debt as of March 31, 2024. These
factors, among others, indicate that there is substantial doubt
about the Company's ability to continue as a going concern within
one year after the issuance of the Company's condensed financial
statements, according to the Company's Quarterly Report for the
period ended March 31, 2024.
As of June 30, 2024, Soluna Holdings reported $98.68 million in
total assets, $48.74 million in total liabilities, and $49.93
million in total equity.
SOUTHERN PINESTRAW: Daniel Etlinger Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Daniel Etlinger of
Underwood Murray, P.A. as Subchapter V trustee for Southern
Pinestraw, Inc.
Mr. Etlinger will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Etlinger declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Daniel E. Etlinger
Underwood Murray, P.A.
100 N. Tampa Street, Suite 2325
Tampa Florida 33602
(813) 540-8401
Email: detlinger@underwoodmurray.com
About Southern Pinestraw
Southern Pinestraw Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Fla. Case No.
25-10003) on January 7, 2025. In its petition, the Debtor reported
$500,000 to $1 million in both assets and liabilities.
Lisa Caryl Cohen, Esq., at Ruff & Cohen, P.A. represents the Debtor
as legal counsel.
SPIRIT AIRLINES: To Lay Off 200 Employees to Cut Costs
------------------------------------------------------
Investing.com reports that Spirit Airlines (OTC:SAVEQ) is laying
off about 200 employees as part of a larger plan to reduce costs
and adjust to its smaller operational scale, CEO Ted Christie told
staff on Wednesday, January 15, 2024, evening. The airline had
previously signaled that job reductions could be necessary in order
to meet its goal of cutting $80 million in annual expenses,
according to the report.
"As you all know, we are dealing with significant challenges,"
Christie wrote in a message to employees, shared with The Wall
Street Journal. "Ultimately, we need to operate a smaller airline
and regain our financial strength."
However, Christie assured employees that the bankruptcy process is
progressing as planned, with the airline expected to exit Chapter
11 by the end of this quarter, the report states.
Along with the layoffs, Spirit had already furloughed pilots and
offered extended voluntary leave to flight attendants. Although the
airline has met its cost-cutting target, Christie stressed that
Spirit is still seeking additional ways to reduce expenses and
boost revenue, according to report.
By the end of 2024, Spirit employed nearly 13,000 people, including
about 2,000 nonunion workers, according to bankruptcy court
filings.
Last 2024, Spirit filed for bankruptcy due to substantial debt and
growing competition within the budget travel market. The airline
also faced a setback after a federal judge blocked its merger with
JetBlue. However, Spirit has faced major financial difficulties,
losing over $2.2 billion since 2020, nearly wiping out the profits
generated by its ultralow-cost model introduced in 2006, the report
relays.
About Spirit Airlines
Spirit Airlines, Inc. (NYSE: SAVE) is a low-fare carrier committed
to delivering the best value in the sky by offering an enhanced
travel experience with flexible, affordable options. Spirit serves
destinations throughout the United States, Latin America and the
Caribbean with its Fit Fleet, one of the youngest and most
fuel-efficient fleets in the U.S. On the Web:
http://wwww.spirit.com/
Spirit Airlines filed Chapter 11 petition (Bankr. S.D.N.Y. Case No.
24-11988) on Nov. 18, 2024, after reaching terms of a pre-arranged
plan with bondholders. At the time of the filing, Spirit Airlines
reported $1 billion to $10 billion in both assets and liabilities.
Judge Sean H. Lane oversees the case.
The Debtor tapped Davis Polk & Wardwell, LLP as legal counsel;
Alvarez & Marsal North America, LLC as financial advisor; and Epiq
Corporate Restructuring, LLC as claims agent.
Paul Hastings, LLP and Ducera Partners, LLC serve as legal counsel
for the Ad Hoc Group of Convertible Noteholders.
Akin Gump Strauss Hauer & Feld, LLP and Evercore Group LLC
represent the Ad Hoc Group of Senior Secured Noteholders.
STAFFING 360: Inks 1st Amendment to A36 Plan of Merger
------------------------------------------------------
On January 7, 2025, Staffing 360 Solutions, Inc. Atlantic
International Corp., and A36 Merger Sub Inc., a Delaware
Corporation and a wholly-owned subsidiary of Atlantic, entered into
that certain First Amendment to the Agreement and Plan of Merger.
Pursuant to the Amendment, upon completion of the merger (the
"Merger"), each share Series H Convertible Preferred Stock ("Series
H Preferred Stock") and Series I Preferred Stock (the "Series I
Preferred Stock") immediately prior to the effective time of the
Merger, other than certain excluded shares, will be canceled and
converted into the right to receive a number of shares of validly
issued, fully paid and nonassessable shares of common stock of
Atlantic, par value of $0.00001 per share (the "Atlantic Common
Stock"), equal to the applicable Exchange Ratio for the Series H
Preferred Stock and the Series I Preferred Stock, with any
resulting fractional shares to be rounded to the nearest whole
share.
Pursuant to the Amendment, at or prior to the closing of the Merger
(the "Closing"), the Company shall enter into a signed settlement
agreement (the "Jackson Agreement") with Jackson Investment Group,
LLC ("Jackson"). Pursuant to the Jackson Agreement, (i) all
interest accrued and payable to Jackson will be waived or forgiven
and (ii) the principal amount of the Loan will be converted into
5,600,000 shares of Series I Preferred Stock. Additionally,
pursuant to the Amendment and further agreement between the
applicable parties, Jackson shall enter into a lock-up agreement
such that the Merger Consideration (as defined in the Merger
Agreement) for all of the Series I Preferred Stock are subject to a
lock up period for the one year after the Closing, provided,
however, that 600,000 shares of Merger Consideration shall be
freely tradable following the Closing.
Pursuant to the Amendment, at or prior to the Closing, the
applicable parties shall enter into signed agreements, pursuant to
which any amounts owed in Earned Contingent Cash Payment (as
defined in the Merger Agreement) shall be converted into 5,000,000
shares of Series H Preferred Stock and any interest/dividends or
other payments due from the Company related to the Series H
Preferred Stock shall be waived. Additionally, pursuant to the
Amendment, the applicable parties shall enter into lock-up
agreements such that the Merger Consideration for all shares of
Series H Preferred Stock are (A) subject to a lock up for the 6
months after Closing as follows; (B) 1,750,000 shares of Atlantic
Common Stock are subject to a lock-up for the period starting on 6
months after Closing until 9 months after Closing; (C) 875,000
shares of Atlantic Common Stock are subject to a lock-up for the
period starting on 9 months after Closing until 12 months after
Closing; (D) the lock-up shall terminate 12 months after Closing
and (E) the lock-up shall not apply to the extent shares of
Atlantic Common Stock must be sold to pay any taxes from such
applicable holder.
Additionally, pursuant to the Amendment, the Termination Date is
extended to March 31, 2025.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=QuwG03
About Staffing 360
Headquartered in New York, Staffing 360 Solutions, Inc. is engaged
in the execution of a buy-integrate-build strategy through the
acquisition of domestic and international staffing organizations
in
the United States. The Company believes that the staffing industry
offers opportunities for accretive acquisitions and, as part of
its
targeted consolidation model, is pursuing acquisition targets in
the finance and accounting, administrative, engineering, IT, and
light industrial staffing space.
New York, NY-based RBSM LLP, the Company's auditor since 2024,
issued a "going concern" qualification in its report dated June
11,
2024, citing that the Company has incurred substantial operating
losses and will require additional capital to continue as a going
concern. This raises substantial doubt about the Company's ability
to continue as a going concern.
As of Sept. 28, 2024, Staffing 360 Solutions had $62.22 million in
total assets, $76.86 million in total liabilities, and a total
stockholders' deficit of $14.64 million.
STAFFING 360: Loan Commitment Expiry Date Extended to Jan. 2025
---------------------------------------------------------------
On January 2, 2025, Staffing 360 Solutions, Inc., entered into
Amendment No. 35 to Credit and Security Agreement and Limited
Waiver, effective as of December 27, 2024, by and among the
Company, as Parent, Monroe Staffing Services, LLC, a Delaware
limited liability company, Faro Recruitment America, Inc., a New
York corporation, Lighthouse Placement Services, Inc., a
Massachusetts corporation, Key Resources, Inc., a North Carolina
Corporation, Headway Workforce Solutions, Inc., a Delaware
corporation, Headway Employer Services LLC, a Delaware limited
liability company, Headway Payroll Solutions, LLC, a Delaware
limited liability company, Headway HR Solutions, Inc., a New York
corporation, and NC PEO Holdings, LLC, a Delaware limited liability
company, collectively, as borrowers, and MidCap Funding IV Trust,
as agent for the lenders and the lenders party thereto from time to
time, which such Amendment No. 35 amends that certain Credit and
Security Agreement, dated as of April 8, 2015, by and among the
Company, the Borrowers, MidCap and the Lenders.
Pursuant to Amendment No. 35, the Commitment Expiry Date is
extended to January 3, 2025.
On January 8, 2025, the Company, the Borrowers, MidCap, and the
Lenders entered into Amendment No. 36 to Credit and Security
Agreement ("Amendment No. 36"), effective as of January 3, 2025.
Pursuant to Amendment No. 36, (i) the Commitment Expiry Date is
extended to January 10, 2025, and (ii) the Additional Reserve
Amount (as defined in the Credit and Security Agreement) is amended
to be, as of any date of determination, $490,000.
Additionally, in consideration for MidCap's agreement to enter into
Amendment No. 36, the Company has agreed to pay to MidCap a
modification fee of $150,000, which such fee shall be
non-refundable and fully earned as of January 3, 2025.
Limited Consents to Intercreditor Agreement
On January 2, 2025, and January 8, 2025, in connection with
Amendment No. 35 and Amendment No. 36, respectively, the Company
entered into Limited Consents to the Intercreditor Agreement, dated
as of September 15, 2017, as amended, by and between the Company
and Jackson, which each such Limited Consent permits the Company's
entry into Amendment No. 35 and Amendment No. 36, respectively.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=QuwG03
About Staffing 360
Headquartered in New York, Staffing 360 Solutions, Inc. is engaged
in the execution of a buy-integrate-build strategy through the
acquisition of domestic and international staffing organizations
in
the United States. The Company believes that the staffing industry
offers opportunities for accretive acquisitions and, as part of
its
targeted consolidation model, is pursuing acquisition targets in
the finance and accounting, administrative, engineering, IT, and
light industrial staffing space.
New York, NY-based RBSM LLP, the Company's auditor since 2024,
issued a "going concern" qualification in its report dated June
11,
2024, citing that the Company has incurred substantial operating
losses and will require additional capital to continue as a going
concern. This raises substantial doubt about the Company's ability
to continue as a going concern.
As of Sept. 28, 2024, Staffing 360 Solutions had $62.22 million in
total assets, $76.86 million in total liabilities, and a total
stockholders' deficit of $14.64 million.
SUNATION ENERGY: Adds Bitcoin to Treasury Management Program
------------------------------------------------------------
SUNation Energy, Inc. (Nasdaq: SUNE) announced on Jan. 7, 2025,
that its Board of Directors has approved the inclusion of bitcoin
(BTC) as an asset in the Company's treasury management program.
As part of this strategy, SUNation plans to allocate up to 30% of
its excess cash, calculated based on its estimated six-month
operating expenses, toward BTC purchases. This allocation will be
subject to, among other factors, market conditions and the
Company's operational requirements, including in support of its
planned expansion strategy.
Strategic Diversification and Innovation
Bitcoin, recognized as a decentralized store of value, has been
adopted to diversify the Company's treasury holdings, which are
currently limited to U.S. dollars. Additionally, this initiative
aligns with SUNation's goal to enable BTC as a payment option for
its customers and suppliers as part of its core mission to make
solar more accessible.
Scott Maskin, Chief Executive Officer and Founder of SUNation
Energy, commented:
"We acknowledge the growing global acceptance of Bitcoin, which has
been bolstered by substantial capital inflows in 2024. Across
sectors, public and private companies, financial institutions,
institutional investors, and even governments are integrating
Bitcoin into their financial and commercial strategies as a hedge
against inflation, macroeconomic instability, and geopolitical
risks facing the global economy. We are excited to adopt this
strategy which we believe will help position SUNation as a leader
in the New Energy Economy."
Sustainable Energy for the Digital Economy
Mr. Maskin further noted:
"As a leader in sustainable solar energy, SUNation Energy is
uniquely positioned to support the evolving, energy-intensive
digital economy with more efficient, resilient, and sustainable
energy solutions. By leveraging our ability to produce clean, green
energy, we can help mitigate the environmental impact of owning
digital currencies. Our BTC treasury strategy not only positions us
as a forward-thinking company but also offers institutional
investors an opportunity to gain BTC exposure per diluted share
while supporting a sustainable energy future.
Expanding Sustainable Solutions
in the Cryptocurrency Sector
Since 2003, SUNation has been designing, developing, and providing
solar energy solutions tailored to customers in the information
technology and technology sectors. The Company believes this BTC
initiative further solidifies its role in supporting the new
digital economy and its expanding energy needs in an
environmentally conscious manner.
For more information about SUNation Energy and its commitment to
innovation, sustainability, and growth, please visit
sunation.com/corporate.
About SUNation Energy,
fka Pineapple Energy Inc.
SUNation Energy Inc., formerly known as Pineapple Energy Inc. is
focused on growing leading local and regional solar, storage, and
energy services companies nationwide.
Melville, N.Y.-based UHY LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated March
29, 2024, citing that the Company's current financial position and
the Company's forecasted future cash flows for 12 months beyond the
date of issuance of the financial statements indicate that the
Company will not have sufficient cash to make the first SUNation
earnout payment in the second quarter of 2024 or the first
principal payment of the Long-Term Note due on November 9, 2024,
factors which raise substantial doubt about the Company's ability
to continue as a going concern.
TBOTG DEVELOPMENT: Files Amended Plan; Confirmation Hearing March 6
-------------------------------------------------------------------
TBOTG Development, Inc., d/b/a The Bluffs On The Guadalupe,
submitted a Disclosure Statement in support of Third Amended
Chapter 11 Plan of Reorganization dated January 13, 2025.
Since the Petition Date, the Debtor has obtained permission to sell
four lots located within the Property. Additionally, since the
Petition Date, utilizing the DIP financing provided by FTB, the
Debtor has substantially completed the required infrastructure
necessary to sell interior lots.
A focus of the Bankruptcy Case has been litigation with WIP over
the removal of the Comal County Litigation. The Debtor removed the
Comal County Litigation to the Bankruptcy Court on April 17, 2024,
when the Comal County District Court informed the parties that it
intended to hold a hearing despite the filing of the Bankruptcy
Case. In June of 2024, the Bankruptcy Court remanded the Comal
County Litigation.
WIP has requested relief from stay to continue the Comal County
Litigation and, on November 25, 2024, the Bankruptcy Court made an
oral ruling granting specific relief from stay, with a written
order to follow imminently. The Debtor filed an adversary
proceeding to determine that the Property is owned by the Debtor.
WIP is the sole defendant in that adversary proceeding. WIP moved
to dismiss or abate the adversary proceeding. The Court denied the
motion to dismiss, but granted an abatement of the adversary
proceeding due to the pending Comal County Litigation.
The Comal County Litigation remains pending, although, as noted,
WIP did not file a proof of claim against the Debtor, and it is the
Debtor's contention that if this Plan is confirmed, by its terms,
WIP will be forever barred and enjoined from asserting claims, at
law or in equity, against the Debtor or its Property. The Debtor's
position is that in order to preserve a pre-petition Claim for a
right to payment or an equitable remedy (such as imposition of a
constructive trust), WIP was required to timely file a proof of
claim in the Bankruptcy Case. The bar date for filing a proof of
claim was August 6, 2024.
The Debtor believes and contends that WIP knowingly and
intentionally elected not to timely file a proof of claim in
connection with its jurisdictional positions and strategies in the
Bankruptcy Case. No constructive trust had been imposed in the
Comal County Litigation as of the Petition Date. The equitable
remedy of a constructive trust remained unliquidated and untried as
of the Petition Date. A proof of claim was therefore necessary, the
Debtor contends, to preserve WIP's ability to maintain and assert
such a Claim.
Although the Bankruptcy Court has remanded the Comal County
Litigation and has orally granted relief from stay to allow the
Comal County Litigation to proceed, the Bankruptcy Court has
expressly not determined the issues relating to the lack of a proof
of claim filed by WIP or the impact this Plan may have on any Claim
of WIP against the Debtor and the Reorganized Debtor or the
Property of the Debtor or the Reorganized Debtor. It is the
Debtor's position that if this Plan is confirmed, the Property of
the Debtor will revest in the Reorganized Debtor free and clear of
any unpreserved claim, interest, or equitable remedy, of WIP in
such Property.
Like in the prior iteration of the Plan, each holder of an Allowed
Unsecured Claim in Class 5 shall be paid its Allowed Claim in full,
in Cash, via Quarterly Plan Payments from the following sources:
(1) net proceeds of each sale and/or sales of the Property
available after payments made to FTB, Allowed Administrative
Claims, Allowed Priority Claims, and Allowed Secured Claims of
Governmental Entities; and/or (2) a refinancing and payoff of the
Allowed Secured Claims of FTB; provided, however, that regardless
of the source, with an outside payment in full date of January 1,
2026.
Except as otherwise provided in the Plan, on the Effective Date,
the Property of the Estate of the Debtor shall revest in the
Reorganized Debtor. Subject to the terms and conditions of the
Plan, the Reorganized Debtor may operate its business and use,
acquire, and disburse Property, including all revenues generated by
its operations, without supervision by the Court and free of any
restrictions of the Bankruptcy Code or the Bankruptcy Rules. As of
the Effective Date, all Property of the Reorganized Debtor shall be
free and clear of all Claims, Liens, encumbrances and other
interests of Creditors, except as otherwise provided in the Plan.
The Bankruptcy Court has entered an order fixing March 6, 2025, as
the date, time and place for the initial commencement of a hearing
on the confirmation of the Plan, and February 24, 2025 by 5:00
P.M., as the date upon which all objections to Confirmation of the
Plan must be filed with the Bankruptcy Court and served on counsel
for the Debtor.
Ballots indicating acceptance or rejection of the Plan must be
received by the Debtor's counsel by February 24, 2025.
A full-text copy of the Disclosure Statement dated January 13, 2025
is available at https://urlcurt.com/u?l=PfszcR from
PacerMonitor.com at no charge.
TBOTG Development, Inc., is represented by:
Kell C. Mercer, Esq.
Kell C. Mercer, P.C.
901 S. Mopac Expy. Bldg. 1, Ste. 300
Austin, TX 78746
Telephone: (512) 627-3512
Email: kell.Mercer@mercer-law-pc.com
About TBOTG Development
TBOTG Development, Inc., owns and operates The Bluffs on The
Guadalupe, a subdivision in Comal County, Texas, having an
appraised value of $32.1 million.
TBOTG Development filed a Chapter 11 petition (Bankr. W.D. Tex.
Case No. 24-10411) on April 16, 2024, with $35,996,538 in total
assets and $22,885,007 in total liabilities. William T. Korioth,
president, signed the petition.
Judge Shad Robinson oversees the case.
Kell C. Mercer, PC and Armbrust & Brown, PLLC serve as the Debtor's
bankruptcy counsel and special litigation counsel, respectively.
TD&H INC: To Sell Vehicles to SDS Logistics for $115-Mil.
---------------------------------------------------------
TD&H, Inc. seeks permission from the U.S. Bankruptcy Court for the
Middle District of North Carolina, Greensboro Division, to sell
certain vehicles, free and clear of liens and other interest, to
SDS Logistics Corp, a Georgia corporation.
The Debtor owns three vehicles purchased and financed pursuant to a
promissory note and commercial security agreement dated October 10,
2024 with Pinnacle Bank. The Petition Date balance owed to Pinnacle
was $90,474.65 and the three vehicles are as follows:
a. 2022 Ford E350 10ft box truck, VIN ending 9723;
b. 2022 Ford E350 10ft box truck, VIN ending 9711; and
c. 2020 Ford F59P700, VIN ending 4879 collectively known as
Pinnacle Vehicles.
The Purchaser has offered to purchase the Pinnacle Vehicles for a
total purchase price of $55,000.00, which the Debtor believes
represents and fair and reasonable price for the Pinnacle Vehicles
based on the current age and condition.
Pinnacle consents to the sale of the Pinnacle Vehicles free and
clear of all liens and other interests, so long as the sale is
consummated and payment remitted to Pinnacle on or February 15,
2025.
The Debtor also owns two vehicles purchased and financed with
Frist-Citizens Bank & Trust Company:
a. 2021 Ford F59 P1200, VIN ending -5139, pursuant to a promissory
note and commercial security agreement dated October 28, 2021 with
a Petition Date balance of $38,021.98; and
b. 2022 GMC Savanna G3500, VIN ending -7224, pursuant to a
promissory note and commercial security agreement dated November
16, 2022 with a Petition Date balance of $24,725.83, collectively
known as First Citizens Vehicles.
SDS Logistics has offered to purchase the First Citizens Vehicles
for a purchase price of $46,000.00, which the Debtor believes
represents and fair and reasonable price for the First Citizens
Vehicles based on the current age and condition.
First Citizens consents to the sale of the First Citizens Vehicles
free and clear of all liens and other interests, so long as the
sale is consummated and payment remitted to First Citizens on or
before February 15, 2025.
The Debtor also owns a 2022 GMC Savanna, VIN ending -6492 known as
Truist Vehicles, purchased and financed pursuant to a promissory
note and commercial security agreement dated November 30, 2022 with
Truist Bank. The Petition Date balance owed to Truist was
$61,600.00. Three other vehicles, which Debtor desires to retain,
are collateral for this promissory note and security agreement.
The Purchaser has offered to purchase the Truist Vehicle for a
purchase price of $16,000.00 and Truist consents to the sale of the
Truist Vehicle free and clear of all liens and other interests, so
long as the sale is consummated and payment remitted to Truist on
or before February 15, 2025.
Moreover, the Debtor owns a 2017 Freightliner P1200, VIN ending
1125 and a 2017 Ford Econoline E450, VIN ending 3906 known as Free
and Clear Vehicles, both of which are free and clear of liens and
encumbrances, and the purchaser offered to the vehicles for a total
purchase price of $30,000.00.
The Debtor believes the proposed sale to be in the Debtor's and the
bankruptcy estate's best interests rather than subject the vehicles
to a public auction, with uncertain results.
The Debtor will distribute the sale proceeds of the vehicles in the
total purchase price of $115,000.000 to lien holders including:
a. $55,000.00 to Pinnacle Bank for the purchase of the 2022 Ford
E350 10ft box truck, VIN ending -9723; 2022 Ford E350 10ft box
truck, VIN ending -9711; and 2020 Ford F59 P700, VIN ending -4879;
b. $30,000.00 to First-Citizens Bank & Trust Company for the
purchase of the 2021 Ford F59 P1200, VIN ending -5139 and 2022 GMC
Savanna G3500, VIN ending -7224;
c. $16,0000.00 to Truist Bank for the purchase of the 2022 GMC
Savanna, VIN ending -6492; and
d. $30,000.00 to the Debtor for the purchase of the 2017
Freightliner P1200, VIN ending -1125 and a 2017 Ford Econoline
E450, VIN ending -3906;
About TD&H, Inc.
TD&H, Inc. filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 24-10392) on June
25, 2024, listing $652,317 in assets and $2,207,775 in liabilities.
The petition was signed by Huntly Nero, president.
Judge Benjamin A. Kahn presides over the case.
Samantha K. Brumbaugh, Esq. at Ivey, Mcclellan, Siegmund, Brumbaugh
& Mcdonough, LLP represents the Debtor as legal counsel.
TONIX PHARMACEUTICALS: Appoints Gary Ainsworth as VP, Market Access
-------------------------------------------------------------------
Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the
Company), a fully-integrated biopharmaceutical company with
marketed products and a pipeline of development candidates,
announced on January 8, 2025, the appointment of Gary Ainsworth as
Vice President, Market Access, effective immediately. Mr. Ainsworth
is an accomplished executive with leadership in market access
strategies from both large pharmaceutical companies and healthcare
consultancies.
"Gary has a significant track record of success building market
access functions, developing launch-ready access and reimbursement
strategies and payer-focused resources, including those for
fibromyalgia and migraine treatment options," said Thomas Englese,
EVP Commercial of Tonix Pharmaceuticals. "His extensive experience
will be especially valuable as we work towards the potential
approval and commercial launch of TNX-102 SL for the management of
fibromyalgia this year."
Most recently, Mr. Ainsworth was Managing Director, Head of Market
Access at Eversana Intouch, where he led the agency function and
the efforts to optimize the Company's vast market access
capabilities and services. Prior to that, he was the founder and
Managing Director at Havas Gemini, the Market Access Business Unit
of Havas Health & You that developed innovative market access
strategies and solutions for their clients. Mr. Ainsworth also had
a distinguished career leading pharmaceutical organizations' market
access functions. Mr. Ainsworth was the Vice President of Corporate
Accounts and Customer Operations for Baxter International within
the Anesthesia, Critical Care and Oncology Division where he led a
team of national account managers and a patient services
telemarketing center. Mr. Ainsworth also led the National Accounts
and Managed Care Marketing function at Roche Laboratories and held
a variety of market access leadership positions with the
predecessor companies to Sanofi. Mr. Ainsworth holds a Master of
Business Administration from Rockhurst University and a Bachelor of
Arts in Business Administration and a Bachelor of Arts in Public
Relations from William Jewell College.
"Joining the Tonix team presents an exciting and fulfilling
opportunity to help advance a treatment for the millions of
individuals with fibromyalgia," said Mr. Ainsworth. "I look forward
to providing additional expertise to a seasoned leadership team
with the goal of bringing meaningful therapeutics to patients in
need."
At the end of December 2024, Tonix announced that the U.S. Food and
Drug Administration (FDA) assigned a Prescription Drug User Fee Act
(PDUFA) goal date of August 15, 2025, for a decision on marketing
authorization for TNX-102 SL (cyclobenzaprine HCl sublingual
tablets) for fibromyalgia. TNX-102 SL is a non-opioid,
centrally-acting analgesic. Fibromyalgia is a common chronic pain
condition that affects mostly women.
About Tonix Pharmaceuticals
Chatham, N.J.-based Tonix Pharmaceuticals Holding Corp., through
its wholly owned subsidiary Tonix Pharmaceuticals, Inc., is a fully
integrated biopharmaceutical company focused on developing and
commercializing therapeutics to treat and prevent human disease and
alleviate suffering.
As of September 30, 2024, Tonix had $95 million in total assets,
$20.8 million in total liabilities, and $74.2 million in total
equity.
Going Concern
The Company cautioned in its Form 10-Q report for the quarter ended
March 31, 2024, that there is substantial doubt about its ability
to continue as a going concern. The Company has suffered recurring
losses from operations and negative cash flows from operating
activities. As of March 31, 2024, the Company had working capital
of approximately $9.6 million and an accumulated deficit of
approximately $615.6 million. The Company held cash and cash
equivalents of approximately $7 million as of March 31, 2024.
During the fourth quarter of 2023, the Company engaged CBRE, an
international real estate brokerage firm, to potentially find a
strategic partner for or buyer of its Advanced Development Center
in North Dartmouth, Massachusetts, to align with its current
business objectives and priorities. As of March 31, 2024, the
Company does not have a commitment in place to sell the building.
The Company believes that its cash resources at March 31, 2024, and
the gross proceeds of $4.4 million raised from an equity offering
in the second quarter of 2024, will not meet its operating and
capital expenditure requirements through the second quarter of
2025.
TRI-CITY SERVICE: Gets Final OK to Use Cash Collateral
------------------------------------------------------
Tri-City Service, LLC received final approval from the U.S.
Bankruptcy Court for the Eastern District of North Carolina to use
cash collateral.
The final order authorized the company to use cash collateral to
pay its operating expenses in accordance with its budget, which
shows projected expenses of $104,711.15.
Secured creditors were granted a post-petition replacement lien and
security interest on all collateral securing their indebtedness,
with the same validity, priority and enforceability as their
pre-bankruptcy liens.
Tri-City's authority to use cash collateral terminates upon failure
by the company to comply with the terms and conditions of the final
order or failure to file a Chapter 11 plan.
About Tri-City Service LLC
Tri-City Service LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
24-04063) on Nov. 21, 2024, listing up to $50,000 in assets and $1
million to $10 million in liabilities. The petition was signed by
Yehia Hussein as manager.
Judge Pamela W. Mcafee presides over the case.
The Debtor is represented by:
Rebecca F. Redwine
Hendren Redwine & Malone, PLLC
Tel: 919-420-0941
Email: rredwine@hendrenmalone.com
Jason L. Hendren
Hendren Redwine & Malone, PLLC
Tel: 919-573-1422
Email: jhendren@hendrenmalone.com
TROY 3440: Claims Will be Paid from Property Sale/Refinance
-----------------------------------------------------------
Troy 3440 LLC filed with the U.S. Bankruptcy Court for the Central
District of California a Disclosure Statement describing Chapter 11
Plan.
The Debtor is an LLC formed in early 2022 to acquire and hold Real
Property to wit, a Residence for investment asset. The Debtor is a
single-asset Chapter 11.
The Debtor discovered and maintains that the holder of the Note and
Deed of Trust is not licensed in the State of California as a
lender. As well, lender has charged unauthorized interest. The
Debtor did not remain current with monthly service payments on the
Note and Foreclosure was commenced. A trustee sale was to be held
on November 14, 2024 which was postponed due to the filing of the
instant Chapter 11 case.
The Debtor's sole asset is the four-bedroom single family residence
located at 3440 Troy Dr., Los Angeles, CA valued at $3,950,000.
Procedures to resolve financial problems involve the sale or
refinance of the sole asset. Upon sale of the sole asset or shortly
thereafter of close of escrow on same, the Debtor LLC will be
dissolved.
Classes 1 and 2 consist of claims secured by Collateral which
generally are entitled to be paid in full, over time, with
interest. Class 1 is reserved for claims only by real estate that
is an individual Debtor's principal residence. Class 2 contains all
other secured claims.
Upon Sale or Re-Finance of the real property asset within 365 days
of effective date. The property has been listed for sale.
A full-text copy of the Disclosure Statement dated January 13, 2025
is available at https://urlcurt.com/u?l=8IrlMq from
PacerMonitor.com at no charge.
About Troy 3440 LLC
Troy 3440 LLC is a Single Asset Real Estate debtor (as defined in
11 U.S.C. Section 101(51B)).
Troy 3440 LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Cal. Case No. 24-11896) on Nov. 14, 2024. In the
petition filed by Avis Copelin, as CEO, the Debtor estimated assets
and liabilities between $1 million and $10 million each.
Bankruptcy Judge Martin R. Barash handles the case.
The Debtor is represented by:
George J. Paukert, Esq.
8584 Alpine Vineyards Court
Las Vegas NV 89139
Tel: (310) 850-0231
E-mail: paukburt@aol.com
UNITED RENTALS: H&E Equipment Deal No Impact on Moody's 'Ba1' CFR
-----------------------------------------------------------------
Moody's Ratings said United Rentals (North America), Inc.'s
announcement that it has reached a definitive agreement to acquire
H&E Equipment Services, Inc. (NASDAQ: HEES) in a debt-funded
transaction is credit negative. However, United Rentals' Ba1
corporate family rating and stable outlook are unaffected at this
time.
Moody's view the transaction as credit negative because it will be
funded entirely with debt, which will increase United Rentals' pro
forma debt-to-EBITDA to 2.4 times for the period ended LTM
September 30, 2024 from about 2.0 times prior to the acquisition
(including Moody's standard adjustments). The composition of the
incremental debt is undetermined at this time. Also, the
acquisition does present integration risk and is subject to
regulatory approvals and other customary closing conditions. The
transaction is expected to close during the first quarter of 2025.
However, the transaction will increase United Rentals' size and
scale, including workforce, rental inventory, and real estate
position. Moody's expect United Rentals will realize over $125
million of annual cost synergies, and incremental revenue of more
than $100 million from targeted cross-sell opportunities across
various service areas. United Rentals will also pause its share
repurchase program to support near-term deleveraging.
Headquartered in Stamford, CT, United Rentals is the largest North
American equipment rental company with a rental fleet of
approximately 1 million units. The company operates through 1,571
rental locations across North America (and 39 branches in Europe
and 56 in Australia/New Zealand).
VH NUTRITION: Court Extends Use of Cash Collateral Until Feb. 12
----------------------------------------------------------------
VH Nutrition, LLC received interim approval from the U.S.
Bankruptcy Court for the Central District of California to use cash
collateral.
The interim order authorized the company to use cash collateral
until Feb. 12 to pay its operating expenses.
VH Nutrition is not allowed to pay the U.S. Trustee's fees or
salaries to principals from the cash collateral prior to compliance
with the U.S. Trustee's guidelines for insider compensation
requests.
The U.S. Small Business Administration and other creditors
asserting liens will receive a replacement lien on the company's
assets with the same validity, extent and priority as their
pre-bankruptcy liens. As additional protection, SBA will receive
monthly payments from the company.
The next hearing is scheduled for Feb. 12.
About VH Nutrition
VH Nutrition, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 25-10005) on January
3, 2025, with up to $500,000 in assets and up to $10 million in
liabilities. Drew Littlejohns, chief executive officer of VH
Nutrition, signed the petition.
Judge Ronald A. Clifford, III oversees the case.
The Debtor is represented by:
William C Beall
Beall And Burkhardt, Apc
Tel: 805-966-6774
Email: will@beallandburkhardt.com
VH NUTRITION: Has Deal on Cash Collateral Access
------------------------------------------------
VH Nutrition, LLC and the U.S. Small Business Administration
entered into a stipulation allowing the company to use the agency's
cash collateral.
The stipulation, which is subject to court approval, allows the
company to use cash collateral from Jan. 3 to March 31 for the
payment of post-petition expenses.
As adequate protection, SBA will receive a replacement lien,
effective as of the petition date, on all post-petition revenues of
the company to the same extent and with the same priority and
validity as its pre-bankruptcy lien.
The U.S. Bankruptcy Court for the Central District of California
will hold a hearing on Feb. 12 to consider approval of the
stipulation.
Prior to its Chapter 11 filing, VH Nutrition executed a U.S. Small
Business Administration note, pursuant to which the company
obtained a COVID Economic Injury Disaster Loan in the amount of
$150,000.
The terms of the modified note require the company to pay principal
and interest payments of $731 every month beginning 24 months from
the date of the note (subject to certain Congressionally approved
extensions) over the 30-year term of the SBA loan. The SBA loan has
an annual rate of interest of 3.75% and may be prepaid at any time
without notice or penalty.
As of the petition date, the amount due on the SBA loan was
$154,675.
A copy of the stipulation is available at
https://urlcurt.com/u?l=aSUu1k from PacerMonitor.com.
About VH Nutrition
VH Nutrition, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 25-10005) on January
3, 2025, with up to $500,000 in assets and up to $10 million in
liabilities. Drew Littlejohns, chief executive officer of VH
Nutrition, signed the petition.
Judge Ronald A. Clifford, III oversees the case.
William C. Beall, Esq., at Beall & Burkhardt, APC, represents the
Debtor as legal counsel.
VIA MIZNER OWNER I: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Via Mizner Owner I, LLC
1515 N. Federal Hwy, Ste 306
Boca Raton, FL 33432
Business Description: Via Mizner Owner is a single asset real
estate debtor, as defined in 11 U.S.C.
Section 101(51B).
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 25-10369
Judge: Hon. Erik P Kimball
Debtor's Counsel: Bradley S. Shraiberg, Esq.
SHRAIBERG PAGE PA
2385 NW Executive Center Dr., Suite 300
Boca Raton, FL 33431
Tel: 561-443-0800
E-mail: bss@slp.law
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petition was signed by Mark Gensheimer as manager.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/KF3YUNQ/Via_Mizner_Owner_I_LLC__flsbke-25-10369__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Advanced Control Corporation $2,710
6001 N.E. 14th Avenue
Fort Lauderdale, FL 33334
2. AJ Staps Interior Design $2,250
2808 NE 16 AVE
Wilton Manors, FL 33334
3. All Florida Mechanical Services, LLC $27,831
1602 W Timberlane Dr
Plant City, FL 33566
4. ASSA Abloy Hospitality $4,343
631 International Parkway
Ste 100
Richardson, TX 75081
5. Automated Valet $1,550
Parking Manager LLC
13798 NW 4th St,
Ste 300
Sunrise, FL 33325
6. Barfield, McCain Ayoub P.A. $1,410
4460 Medical Center Way
West Palm Beach, FL 33407
7. Best Office Coffee $5,893
Service, Inc.
13130 SW 130th Ter
Miami, FL 33186
8. BrightView Landscape Services, Inc. $2,154
980 Jolly Rd Ste 300
Blue Bell, PA 19422
9. Ecolo Odor Control $2,445
715 N. Dixie Hwy
Hallandale Beach,
FL 33009
10. Elevated Living $3,930
840 SW 10th St
Fort Lauderdale, FL 33315
11. Ferguson Enterprises, Inc. $24,781
Pittsburgh
PO Box 644054
Pittsburgh, PA 15264
12. HD Supply Facilities $4,785
Maintenance Ltd
PO Box 509058
San Diego, CA 92150
13. LeaseHawk $1,525
16435 N Scottsdale
Rd #280
Scottsdale, AZ 85254
14. Parking Boss $1,239
2911 1/2 Hewitt Ave,
Ste 8
Everett, WA 98201
15. Platinum Group Security Security $132,041
P.G. Security, Inc. Payables
PO Box 4017
Boca Raton, FL 33429
16. PooPrints BioPet Vet Lab Inc $3,537
409 Bearden Park Circle
Knoxville, TN 37919
17. RealPage Inc. $9,580
Attn: Legal Dept
2201 Lakeside Blvd
Richardson, TX 75082
18. United Realty Group, Inc. $1,500
1200 S. Pine Island
Rd, Ste 600
Plantation, FL 33324
19. WL General Services $68,463
1800 N. Congress
Ave, Ste 331
Boynton Beach, FL 33426
20. ZRS Management Outstanding $780,189
2001 Summit Park Payables
Dr #300
Orlando, FL 32810
VIA MIZNER PLEDGOR: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Via Mizner Pledgor I, LLC
1515 N. Federal Hwy, Ste 306
Boca Raton, FL 33432
Business Description: Via Mizner is a single asset real estate
debtor, as defined in 11 U.S.C. Section
101(51B).
Chapter 11 Petition Date: January 15, 2025
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 25-10371
Judge: Hon. Erik P Kimball
Debtor's Counsel: Bradley S. Shraiberg, Esq.
SHRAIBERG PAGE PA
2385 NW Executive Center Dr
Suite 300
Boca Raton, FL 33431
Tel: 561-443-0800
Email: bss@slp.law
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petition was signed by Mark Gensheimer as manager.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/KPL444Y/Via_Mizner_Pledgor_I_LLC__flsbke-25-10371__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Advanced Control Corporation $2,710
6001 N.E. 14th Avenue
Fort Lauderdale, FL 33334
2. AJ Staps Interior Design $2,250
2808 NE 16 AVE
Wilton Manors, FL 33334
3. All Florida Mechanical $27,831
Services, LLC
1602 W Timberlane Dr
Plant City, FL 33566
4. ASSA Abloy Hospitality $4,343
631 International Parkway
Ste 100
Richardson, TX 75081
5. Automated Valet $1,550
Parking Manager LLC
13798 NW 4th St,
Ste 300
Sunrise, FL 33325
6. Barfield, McCain Ayoub P.A. $1,410
4460 Medical Center Way
West Palm Beach, FL 33407
7. Best Office Coffee Service, Inc. $5,893
13130 SW 130th
Ter
Miami, FL 33186
8. BrightView Landscape Services, Inc. $2,154
980 Jolly Rd Ste 300
Blue Bell, PA 19422
9. Ecolo Odor Control $2,445
715 N. Dixie Hwy
Hallandale Beach,
FL 33009
10. Elevated Living $3,930
840 SW 10th St
Fort Lauderdale, FL 33315
11. Ferguson Enterprises, Inc. $24,781
Pittsburgh
PO Box 644054
Pittsburgh, PA 15264
12. HD Supply Facilities $4,785
Maintenance Ltd
PO Box 509058
San Diego, CA 92150
13. LeaseHawk $1,525
16435 N Scottsdale
Rd #280
Scottsdale, AZ 85254
14. Parking Boss $1,239
2911 1/2 Hewitt Ave,
Ste 8
Everett, WA 98201
15. Platinum Group Security Security $132,041
P.G. Security, Inc. Payables
PO Box 4017
Boca Raton, FL 33429
16. PooPrints $3,537
BioPet Vet Lab Inc
409 Bearden Park Circle
Knoxville, TN 37919
17. RealPage Inc. $9,580
Attn: Legal Dept
2201 Lakeside Blvd
Richardson, TX 75082
18. United Realty Group, Inc. $1,500
1200 S. Pine Island
Rd, Ste 600
Plantation, FL 33324
19. WL General Services $68,463
1800 N. Congress
Ave, Ste 331
Boynton Beach, FL 33426
20. ZRS Management Outstanding $780,189
2001 Summit Park Payables
Dr #300
Orlando, FL 32810
VIGILANT HEALTH: Gets OK to Use Cash Collateral Until Feb. 12
-------------------------------------------------------------
Vigilant Health Network, Inc. and affiliates got the green light
from the U.S. Bankruptcy Court for the Middle District of
Tennessee, Nashville Division, to use cash collateral until Feb.
12.
The order signed by Judge Charles Walker on Jan. 14 approved the
use of cash collateral on an interim basis to pay the companies'
operating expenses in accordance with its projected budget.
The companies' monthly budget shows $646,860 in total revenue and
$587,071 in total expenses.
Origin Bank asserts a secured claim in the approximate amount of
$500,000 and claims an interest in the companies' accounts
receivable and other assets, which constitute cash collateral. All
other secured creditors of the companies are merchant cash advance
lenders.
As adequate protection for the use of their cash collateral,
secured creditors were granted a replacement security interest in
the companies' post-petition property
and proceeds thereof, to the same extent and with the same priority
as their purported security interest in the companies'
pre-bankruptcy property and the proceeds thereof, according to the
Jan. 14 interim order.
The final hearing is set for Feb. 12.
Origin Bank can be reached at:
Origin Bank
1101 Roc Lane
Ruston, LA 71270
Email: zdavis@origin.bank
About Vigilant Health Network, Inc.
Vigilant Health Network, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Tenn. Case No. 25-00100) on
January 9, 2025, with up to $10 million in both assets and
liabilities. G. Austin Triggs, Jr., executive chairman of Vigilant
Health Network, signed the petition.
Judge Charles M. Walker oversees the case.
Robert J. Gonzales, Esq., at EmergeLaw, PLC, represents the Debtor
as bankruptcy counsel.
VISION CAPITAL: Property Sale Proceeds to Fund Plan Payments
------------------------------------------------------------
Vision Capital Holdings, Ltd, Co., filed with the U.S. Bankruptcy
Court for the Northern District of Georgia a Disclosure Statement
describing Chapter 11 Plan dated January 13, 2025.
The Debtor was incorporated in Georgia on January 8, 2014. The
entity was formed for the acquisition, rehabilitation, rental and
lease of properties acquired in the state of Georgia. On March 22,
2022, Christie, Thayer & Witt, Ltd. Co. ("Christie Thayer"), a
company related to the Debtor, purchased the Property.
On February 9, 2023, Christie Thayer transferred the Property to
Debtor, and Debtor agreed to assume Christie Thayer's obligations
to Plymouth Prager secured by the Property. Proceeds of the
Plymouth Prager loan were used to complete necessary repairs to the
Property. and maximize value. The Debtor's Managing Member Julia
Burton runs the day-to-day operations, including acquisitions and
renovations of properties.
On December 3, 2024 the Debtor filed its Plan of Reorganization
proposing payment of 100% of obligations due to unsecured
creditors. On January 13, 2024, Debtor filed its Plan of
Liquidation providing for marketing and sale of the Property for
the benefit of creditors (the "Plan").
The Debtor's only asset is the Property with a value as determined
by the Court of $3,579,600.00.
Class 3 consists of the claims held by unsecured creditors. Holders
of Allowed General Unsecured Claims shall receive Distributions
equal to each holder's pro-rata portion of the proceeds from the
sale of the Property after Plymouth Prager, Principle Builders,
Newell and all priority claimants have been paid in full. The
allowed unsecured claims total $75,587.23. This Class is
unimpaired.
Class 5 consists of equity interest holder Julia Burton. Equity
Security Holders shall receive Distributions equal to each Member's
prorata portion of the proceeds from the sale of the Property after
Plymouth Prager, Principle Builders, Newell, all priority claimants
and all unsecured claimants have been paid in full.
Upon the Confirmation Order becoming a Final Order (the "Final
Order Date") the Debtor will market and sell the Property for the
best price available ("Sale Event"). Upon a Sale Event, the Debtor
will pay or segregate sufficient funds to pay (i) all reasonable
and ordinary costs of sale, including broker commissions, (ii) all
outstanding property taxes not otherwise prorated between the
Debtor and the purchaser at closing, (iii) the Class 1 Claim of
Plymouth Prager, (iv) the Class 2 Claims of Principle Builders and
Newell (v) any unpaid professional fee claims, including post
confirmation professional fee claims, (v) the balance owed the
holders of priority tax claims, and (vi) the Class 3 and 4
Distributions.
In the event that no agreement for the purchase of the Property is
fully executed on or before August 1, 2025, the Debtor will seek
authorization from the Court to employ an auctioneer and arrange
for the Property to be auctioned to the highest bidder in a
reasonable period of time based upon the auctioneer's
recommendations for realizing the highest value for the Property.
Any shortfall from the sale of the Property will be supplemented by
contributions from Burton.
A full-text copy of the Disclosure Statement dated January 13, 2025
is available at https://urlcurt.com/u?l=ljgg9u from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Theodore N. Stapleton, Esq.
Theodore N. Stapleton, P.C.
2802 Paces Ferry Road SE, Suite 100-B
Atlanta, GA 30339
Tel: (770) 436-3334
Email: tstaple@tstaple.com
About Vision Capital Holdings
Vision Capital Holdings Ltd. Co. sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-59271) on
Sept. 3, 2024. In the petition signed by Julia Burton, as managing
member, the Debtor reports estimated assets and liabilities between
$1 million and $10 million each.
Judge Barbara Ellis-Monro presides over the case.
The Debtor is represented by Theodore N. Stapleton, Esq., of
THEODORE N. STAPLETON, PC.VISION CAPITAL.
VOBEV LLC: Clyde Snow Represents Stolle Europe & Alsco
------------------------------------------------------
The law firm of Clyde Snow & Sessions, P.C., filed a verified
statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure to disclose that in the Chapter 11 case of Vobev LLC, the
firm represents:
1. Stolle Europe Ltd.
c/o Christopher L. Perkins
Eckert Seamans Cherin & Mellott, LLC
909 East Main Street, Suite 1300
Richmond, VA 23219
2. Alsco, Inc.
c/o Adelaide Maudsley, General Counsel
505 East 200 South
Salt Lake City, Utah 84102
Each Creditor has pre-petition claims relating to contracts entered
into between Debtor and the respective Creditor. Stolle, who is
represented independently by co-counsel Mr. Perkins, holds claims
relating to certain equipment and related payment and performance
obligations. Alsco holds claims relating to a service agreement
between Alsco and Debtor for the provision of uniforms and related
supplies.
The law firm can be reached at:
James W. Anderson, Esq.
Landon S. Troester, Esq.
CLYDE SNOW & SESSIONS
201 South Main Street, Suite 2200
Salt Lake City, Utah 84111
Telephone/Facsimile: (801) 322-2516
Emails: jwa@clydesnow.com
lst@clydesnow.com
About Vobev LLC
Vobev LLC, a Salt Lake City-based beverage can manufacturer, 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
disclosed between $500 million and $1 billion in both assets and
liabilities.
Bankruptcy Judge Joel T. Marker handles the case.
The Debtor tapped Ray Quinney & Nebeker PC as counsel, Houlihan
Lokey Capital, Inc. as investment banker, and FTI Consulting, Inc.
as financial advisor. Kroll Restructuring Administration LLC is the
Debtor's claims and noticing agent.
W&T OFFSHORE: Fitch Rates Proposed $350MM Second Lien Note 'B-'
---------------------------------------------------------------
Fitch Ratings has assigned a 'B-'/'RR4' rating to W&T Offshore,
Inc.'s (WTI) proposed $350 million senior secured second lien note.
This new note rating is one notch below the current 'B'/'RR3'
rating on the $275 million February 2026 senior secured second lien
note given the increase in debt quantum under WTI. At closing, the
current note along with the Mobile Bay Properties Term Loan (not
rated) will be repaid with the proposed note issuance along with
cash on hand.
In addition, Fitch has affirmed the Long-Term Issuer Default Rating
(IDR) at 'B-' for WTI and affirmed the 'BB-'/'RR1' rating to WTI's
first priority lien secured reserve-based lending credit facility
(RBL). The Rating Outlook is Stable.
WTI's rating reflects its positioning with low-decline Gulf of
Mexico (GoM) assets and leverage of around 3.5x over the forecast
period. Offsetting factors include its smaller operational scale,
with 3Q24 production of 31.0 thousand barrels of oil equivalent per
day (mboepd), possession of more natural gas assets than its peers
and growing capex over the forecast period. WTI also has
significant environmental remediation costs relating to higher
plugging and abandonment (P&A) costs, and relatively higher
operating costs.
Fitch will subsequently withdraw the rating on the $275 million
February 2026 senior secured second lien note following repayment.
Key Rating Drivers
Refinancing Risk Reduced: Fitch believes the proposed refinancing
of the 2026 note and repayment of the term loan facility with the
$350 million senior secured second lien note facility is credit
positive and reduces near-term refinancing risk. Following the
refinancing, WTI will have approximately $140 million cash on the
balance sheet and an undrawn $50 million senior secured RBL
facility. WTI also benefits from $70 million from the sale of
certain non-core assets and insurance proceeds.
In addition, WTI will enter into a new four-year reserve-based
lending facility that will provide medium-term liquidity as the
previous RBL facility had tenors as short as one-month extensions.
WTI has not drawn on this facility recently. Overall, capital
market access risk remains in the medium term as WTI bond have a
higher coupon and trade at higher yields than other energy issuers,
which may limit future access.
Limited Scale, High Cost Operator: WTI has daily production of
31,022boe/d in 3Q24, ranking it as one of the smaller exploration
and production (E&P) companies under its coverage. Natural gas
comprised about 48% of production, which is relatively high
compared with its diversified peers. WTI's production is also
impacted by a relatively large NGL component in its liquids mix of
9%. Currently two of the six fields acquired under the COX
acquisition are shut-in. They are expected to provide additional
production upside once they return to production in 2025.
The limited scale and production mix, coupled with high cost of
operations, limits negotiating and operating leverage relative to
competitors that are larger and can benefit from economies of scale
and diversification between onshore and offshore assets. High
production expenses have been a key driver behind the company's
below-average Fitch-calculated netbacks, which consider realized
pricing and relevant cash operating expenses. In 3Q24, WTI had a
cash netback of $4.7/boe after interest expense versus the
high-$20's to mid-$30's range for peers. Some portions of the GoM
present challenges for operators due to third-party pipeline
outages, maintenance and weather-related incidents, which hurts
costs and production schedules. However, management expects costs
to reduce in the near term.
Growing Capex, Midcycle Leverage Around 3.5x: Fitch expects WTI to
increase capex from its 2024 run rate to achieve mid-single-digit
production growth in 2025 and 2026, before moderating thereafter.
Fitch expects WTI to manage its capital allocation policies in a
manner that continues to support neutral to positive FCF. The low
decline rate of its wells allows substantial capex cuts during
periods of low oil prices with a relatively modest impact on
production and, historically, WTI has benefitted from this dynamic
by slashing capex in lower price environments to maintain positive
FCF. Fitch's base case forecasts EBITDA leverage of 3.0x at YE
2024, which will rise to around 3.5x toward Fitch's $57/bbl
midcycle. WTI's maturity profile remains manageable in the near
term.
Substantial Decommissioning Costs: WTI's environmental remediation
costs for P&A are high compared with those of its onshore peers due
to its focus on mature offshore assets and an active M&A strategy.
Asset retirement obligations (AROs) as of Sep. 30, 2024 totaled
$555.0 million. Fitch recognizes that the AROs are long dated.
WTI expects annual P&A costs of $35 million to $40 million in 2025,
a range Fitch expects the company to maintain over the forecast
horizon. Fitch believes there is potential for reduced outlays to
the degree the company is able to extend the lives of fields
through recompletions and workovers.
Litigation Uncertainty: WTI filed a complaint in the U.S. District
Court seeking declaratory relief against providers of
government-mandated surety bonds, which secure decommissioning
obligations related to certain oil and gas assets, in accordance
with the federal Bureau of Ocean Energy Management (BOEM)
requirements.
WTI is seeking for the court to stop insurance companies' $250
million demand for additional collateral beyond what the company
has already contracted for bonds backing its production activities,
despite never having missed a previous payment. Fitch's forecasts
do not currently make assumptions around this business risk given
the uncertainty and timing until a final resolution.
Offshore GoM E&P: WTI fully operates as an offshore E&P company in
the GoM. The company's asset base differs materially from that of
an onshore producer. In general, GoM assets can typically be
acquired at relatively lower costs, have lower decline rates and
benefit from extensive midstream infrastructure, providing direct
access to Gulf Coast refineries, which typically brings higher
price realizations.
These strengths are offset by significantly higher P&A obligations,
exploration projects that require substantial capital requirements,
longer spud to first oil times, higher environmental remediation
costs, and additional tail risks from hurricane activity and
potential oil spills.
Limited Hedging Program: Historically, excluding its
special-purpose vehicle (SPV), WTI has no hedging requirements with
no oil hedges in place and only natural gas purchased calls for
2025. In 2025, WTI has 63.3 one million British thermal units per
day (mmbtupd) of swaps in place at $2.72 and 62.2mmbtupd of
purchased puts in place at $2.27. The hedging (swaps and purchased
puts) at the Mobile Bay SPV is required to cover most of the debt
servicing. Additional oil and gas hedging would be credit positive,
as it supports development funding and reduces cash flow risks.
Derivation Summary
WTI operates on a smaller scale than its Fitch-rated E&P peers.
With 3Q24 production at 31.0 mboe/d (52.0% liquids), the company
produces significantly less than Talos Energy pro-forma the closing
of the QuarterNorth acquisition (B/Positive), which has an expected
2024 production range between 91-94 mboepd (3Q24: 96.5 mboepd; 80%
liquids). WTI's production also is lower than onshore operators,
such as HighPeak Energy (B/Stable) at 51.3 mboepd (88% liquids) in
3Q24 and Moss Creek Resources Holdings (B/Stable) at 62.3 mboepd
(70% liquids) in 2Q24.
Fitch expects WTI to operate with debt at or below negative EBITDA
leverage sensitivities through the forecast horizon. Fitch believes
the potential challenges to accessing capital markets, and its
smaller scale relative to that of other E&P issuers are near-term
concerns.
WTI has relatively good proved reserves for a 'B' rated issuer. Pro
forma the Cox acquisition, the company's proven reserves (1P)
excluding ARO were 141.9mmboe with a PV-10 of $1.4 billion. Pro
forma 1P/production was 11.5 years, which is higher than Talos (6.3
years) and Baytex Energy Corp. (9.2 years). The company's offshore
footprint also exposes it to significantly higher P&A costs than
onshore shale-based peers. Operational risks are also higher, given
the severity of any oil spills or hurricane activity on a company
of WTI's size.
Key Assumptions
- West Texas Intermediate prices of $65.00/bbl in 2025, $60.00/bbl
in 2026 and 2027, and $57.00/bbl thereafter;
- Henry Hub prices of $2.50/mcf in 2025, and $2.75/mcf thereafter;
- Production increasing mid-single digits in percentage terms in
2025 and 2026 before declining thereafter;
- Increased capex excluding P&A expense in 2025 and 2026 before
dropping over the forecast period;
- Cash cost of P&A obligations consistent with management guidance
throughout the forecast;
- Assumed successful refinancing of the second-lien notes,
repayment of the term loan and proposed new RBL facility as
outlined;
- No material M&A throughout the forecast following the completion
of the Cox acquisition in 1Q24.
Recovery Analysis
The recovery analysis assumes WTI would be reorganized as a going
concern (GC) in bankruptcy rather than liquidated. Fitch assumed a
10% administrative claim.
Going-Concern Approach
Fitch assumed a bankruptcy scenario exit EBITDA of $80 million.
This estimate considers a prolonged commodity price downturn
causing liquidity constraints and inability to access capital
markets to refinance debt. The GC EBITDA estimate reflects Fitch's
view of a sustainable, post-reorganization EBITDA level upon which
Fitch bases the enterprise valuation.
Fitch applies an EV multiple of 3.0x to the GC EBITDA to calculate
a post-reorganization enterprise value versus the historical energy
upstream sub-sector multiple of 2.8x-5.6x for recent E&P
bankruptcies, and median EV/EBITDA multiples in offshore
transactions of 2.0x-4.0x. The lower multiple also reflects the
impact of AROs.
These assumptions lead to an enterprise valuation of $240 million,
greater than the liquidation valuation.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of the
company's E&P assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors. Fitch used historical transaction
data for the GoM blocks on $/bbl, $/1P, $/2P, $/acre and PDP PV-10
bases to attempt to determine a reasonable sale, based on Talos'
recent M&A transaction, other recent offshore M&A transactions, and
valuations from emerging, offshore bankruptcies of Fieldwood Energy
LLC, Stone Energy Corporation and Arena Energy, LP.
Waterfall Analysis
Fitch assumed the $100 million revolving credit facility was drawn
at 80% to account for downward borrowing base redeterminations as
the company approaches a bankruptcy scenario. The first-priority
lien secured revolver recovers at 'RR1' while the senior secured
second-lien notes recover at 'RR4' level.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to execute proposed refinancing and/or impairment of
liquidity;
- Loss of operational momentum, evidenced by production trending
below 30mboepd and/or deteriorating unit economics;
- Unfavorable regulatory changes or accelerated P&A spending and/or
negative outcome from surety bonds litigation;
- Midcycle EBITDA leverage above 3.5x and/or EBITDA interest
coverage below 2.0x on a sustained basis;
- Implementation of a more aggressive growth strategy operating
outside FCF that negatively affects liquidity or access to the
capital markets.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Increased size and scale evidenced by production trending above
75mboepd;
- Demonstrated ability to manage P&A obligations and reduced AROs
per flowing barrel or proved reserves;
- Midcycle EBITDA leverage maintained below 2.5x.
Liquidity and Debt Structure
Proforma the senior secured second lien note refinancing and term
loan repayment, Fitch does not see material near-term liquidity
needs, and believes the company's refinance risk is moderate given
its neutral to negative FCF over the forecast and material
unrestricted cash on the balance sheet. Management stated capital
budgets would be determined by the company's ability to generate
FCF even in commodity price declines. The company's hedging program
provides limited protection, but an enhanced program would provide
more security.
Proforma the refinancing and $70 million from the sale of certain
non-core assets and insurance proceeds, cash on hand is expected to
be approximately $138.5 million (3Q24: $126.5 million) and the new
senior secured first-priority lien RBL facility is expected to have
$75 million available ($50 million currently) at closing. On Sep.
30, 2024, the company had $4.4 million outstanding in letters of
credit that are cash collateralized.
Current Debt Outstanding:
In February 2023, WTI completed a $275 million 11.75% senior second
lien notes issue due February 2026.
The credit facility matures on Jan. 31, 2025, but it is subject to
the satisfaction of certain conditions on the last date of each
month and so long as the lender does not: deliver a termination
notice; prohibit the use of loan proceeds to pay other
indebtedness; and lower the excess cash balance sweep threshold.
The credit facility is provided by Calculus Lending, LLC, a company
affiliated with and controlled by WTI's chairman and CEO, Tracy
Krohn, who is the sole lender under the credit agreement.
The Mobile Bay SPV has a $114.2 million 7% term loan outstanding,
which is non-recourse to WTI and any subsidiaries other than the
subsidiary borrowers (Aquasition LLC, and Aquasition II, LLC). The
term loan is secured by the first lien security interests in the
equity of the subsidiary borrowers and a first lien mortgage
security interest and mortgages on certain assets of the subsidiary
borrowers (the Mobile Bay properties). In March 2024, WTI completed
a liquidity-enhancing modification that included deferring
principal repayment of $30.1 million due over the four quarters of
2024. Mandatory principal repayments will begin from 1Q25 but there
is no requirement to catch up on deferred obligation.
Issuer Profile
W&T Offshore, Inc. is an independent oil and natural gas producer
with operations in the GoM. It holds working interests in
approximately 53 producing offshore fields in federal (46 fields)
and state waters (7 fields), and leases approximately 673,100 gross
acres (515,400 net).
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
WTI has an ESG Relevance Score of '4' for Waste & Hazardous
Materials Management; Ecological Impacts due to the enterprise-wide
solvency risks that an offshore oil spill poses for an E&P
company.
WTI has an ESG Relevance Score of '4' for Energy Management that
reflects the company's cost competitiveness and financial and
operational flexibility due to scale, business mix and
diversification.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
W&T Offshore, Inc. LT IDR B- Affirmed B-
Senior Secured
2nd Lien LT B- New Rating RR4
senior secured LT BB- Affirmed RR1 BB-
W&T OFFSHORE: Moody's Rates New 2nd Lien Notes Due 2029 'B3'
------------------------------------------------------------
Moody's Ratings assigned a B3 rating to W&T Offshore, Inc.'s
proposed new senior secured second lien notes due 2029 and changed
the company's ratings outlook to stable from negative.
Concurrently, Moody's affirmed W&T's B3 Corporate Family Rating,
B3-PD Probability of Default Rating, and existing Caa1 senior
secured second lien notes rating. Moody's expect to withdraw the
existing Caa1 senior secured notes rating once their redemption is
complete. These rating actions are subject to the completion of the
proposed financing transactions and a review of the final
documentation.
"W&T will apply the proceeds from its secured notes offering to
refinance its second lien notes due in 2026 and its non-recourse
term loan due in 2028, extending its maturity profile and
simplifying its capital structure," said Jake Leiby, Vice President
and Senior Analyst.
RATINGS RATIONALE
W&T's proposed second lien notes due 2029 are rated B3, the same as
the CFR. The proposed second lien notes have a second lien claim on
the assets that secure the first lien revolver, including the
previously carved-out Mobile Bay assets. W&T's new $50 million
revolving credit facility will mature six months earlier than the
proposed second lien notes. The revolving credit facility has a
first lien priority claim on all of the company's assets except for
those that serve as collateral on the $10 million TVPX loan due
2026.
The change in outlook to stable, from negative, reflects the
meaningful reduction in near-term refinancing risks, access to
longer-term sources of funding, and capital structure
simplification that the company's proposed transactions will bring.
The stable outlook also incorporates Moody's expectation that the
company will successfully execute its plans to restore production
and increase cash flow to improve its leverage and interest
coverage metrics.
W&T's B3 CFR reflects the company's extensive history operating in
the U.S. Gulf of Mexico, which is counterbalanced by its small
scale and geographic concentration in the region. The company's
operations in 2024 were negatively impacted by issues with assets
acquired in the first quarter of the year and elevated maintenance
activity at Mobile Bay; however, it has generated free cash flow,
and Moody's expect the issues with the acquired assets to abate
over the course of 2025. W&T's credit profile benefits from the
meaningful amount of debt reduction it completed in the first
quarter of 2023, which has allowed its credit metrics to remain
solid despite a lower commodity price environment and the
aforementioned issues with acquired assets.
The B3 CFR also incorporates W&T's asset retirement obligations,
which totaled $555 million as of September 30, 2024. The company's
operations on the Outer Continental Shelf leave it subject to
regulations requiring it to post base bonds and supplemental
financial assurances of its ability to carry out present and future
financial obligations, including decommissioning activities. W&T is
engaged in litigation with its surety providers, which could result
in a call on its liquidity, negatively impact its bonding costs,
and impact its ability to drill wells in the future. This
litigation and related uncertainties regarding the availability and
cost of necessary financial assurances going forward is a risk that
could pressure the company's ratings and outlook.
W&T's SGL-3 rating reflects Moody's expectation for the company to
maintain adequate liquidity into 2026. Pro forma for the
refinancing transactions, Moody's expect the company to have around
$150 million of liquidity inclusive of cash on hand and available
borrowing capacity under its $50 million revolver. The revolver
contains financial covenants that require W&T to maintain total net
leverage of 2.5x or lower, a current ratio of 1.0x or higher, and a
Proved PV-10 to revolver commitments ratio of greater than 1.0x.
Moody's expect W&T to remain in compliance with its covenants at
least into 2026, but headroom is initially tight and should expand
if the company successfully executes its plans to deliver
production growth and higher EBITDA to reduce its financial
leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of the ratings could be considered if W&T resolves its
ongoing litigation without impairing its liquidity or access to
surety bonding as required by regulators. In addition, an upgrade
would require significantly growing production at competitive costs
and returns, and sustaining RCF/debt above 35%.
W&T's ratings could be downgraded if it faces an adverse outcome in
litigation that weakens its liquidity. A downgrade could also be
considered if the company generates negative free cash flow, its
production meaningfully declines, RCF/debt falls below 20%, or
EBITDA/interest falls below 3x.
W&T Offshore, Inc. (W&T), headquartered in Houston, Texas, is a
publicly traded independent exploration and production company
operating offshore in the US Gulf of Mexico.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
WASTE PRO: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Waste Pro USA Inc.'s (WP) Long-Term
Issuer Default Rating (IDR) at 'B+'. Fitch has also assigned a
'BB-' rating with a Recovery Rating of 'RR3' to the proposed $800
million senior unsecured notes due 2033, and affirmed WP's ABL
rating at 'BB+'/'RR1'. The Rating Outlook is Stable.
Waste Pro's 'B+' IDR reflects the inherent stability of municipal
solid waste (MSW) collection, its multiyear, diversified customer
contracts and an established position in the growing U.S.
Southeast. The rating is also supported by selective contract
bidding and renewals, enhancing route density and cost recovery.
Fitch forecasts PF EBITDA leverage and coverage of 4.7x and 3.7x,
respectively, in 2024, expecting similar levels in 2025, consistent
with 'B+' rating tolerances. Growth-oriented capital allocation
might cause credit metric fluctuations, but Fitch believes WP
retains flexibility in its growth capex to prioritize deleveraging
after leveraging transactions. WP's concentrated ownership poses
governance risks like large distributions, but is mitigated by
management's focus on business investment.
Key Rating Drivers
New Notes Issuance: Waste Pro's plan to issue $800 million in
senior unsecured debt is credit neutral considering it will use the
proceeds to refinance the $480 million of senior unsecured notes
due 2026, ABL borrowings, equipment debt, as well as use a small
portion for general corporate purposes. The ABL was drawn
throughout the year to support M&A and growth capex, which will
support a larger cash flow base.
High 4x Leverage, High 3x Coverage: Fitch forecasts EBITDA leverage
of 4.7x and 4.8x in 2024 (pro forma) and 2025, respectively, which
is consistent with 'B' category environmental service peers and
within Fitch's rating sensitivities. Fitch believes leverage will
remain near the 4.5x-5.0x range considering the pipeline of growth
opportunities. While leverage could fluctuate, management has
indicated that it would prioritize deleveraging following large
transactions.
During 2024, the company completed a series of tuck-in M&As in
collection and post-collection assets as well as invested in trucks
and containers for margin-accretive new contract wins. Fitch
anticipates pro forma EBITDA interest coverage of around 3.7x in
2024 and 2025, which is consistent with the 'B+' rating. Waste
Pro's mix of fixed-rate debt and use of tax-exempt bonds support
coverage levels.
Growth-Linked FCF: Fitch forecasts FCF margin in the negative low
single digits near term, primarily driven by growth capital
spending. Negative FCF concerns are moderated by WP's measured
approach to assuming contracts within profitability targets. There
is high visibility into revenue and cost structures on new
contracts that aid appropriate bidding. WP retains flexibility to
manage FCF by reducing growth investment and repositioning trucks
during downturn or customer loss scenarios. Growth spending is
typically on trucks and containers (roughly half of total capex)
and made after securing contracts.
Operational, Pricing Improvements Enhance Profitability: Fitch
projects EBITDA margins to improve to 20% in 2025 from nearly 20%
in 2024 (pro forma), driven by pricing above cost inflation,
efficiency initiatives and greater internalization of waste stream
from 2024 landfill acquisitions, partially offset by assumed margin
drag from new acquisitions. Fitch expects pricing to remain a large
contributor to margin expansion and in part supported by WP's open
market exposure allowing flexible price adjustments, and industry
peers prioritizing pricing rationality over aggressive volume
growth.
MSW and Contracts Create Stability: About 70% of revenue comes from
stable residential and commercial waste collection, which are
fairly stable through economic cycles. WP's long-term municipal
contracts that can stretch 5-10 years and this, together with its
ability to retain customers, also adds to earnings visibility.
Revenue from construction and demolition is relatively more
susceptible to business cycles, although long-term growth in core
operating regions is backed by secular trends and population shifts
that also supporting construction-driven business.
Business Profile Considerations: WP's ratings are not constrained
by its business profile, which exhibits 'BB' characteristics,
though its regional focus, smaller cash flow scale relative to
investment opportunities and collection-heavy operations are key
credit considerations compared to larger MSW firms. Its geographic
focus introduces region specific competitive, regulatory, political
or weather-related risks though these currently appear manageable.
Large MSW firms benefit from vertical integration with
company-controlled landfill disposal that enhances cost management.
However, WP's focus on disposal-neutral markets offers disposal
flexibility and reduces long-term liability exposure.
Derivation Summary
Fitch compares Waste Pro with other stable and contracted services
companies such as Reworld Holding Corporation (B+/Stable) and Garda
World Security (GW; B+/Stable). Reworld operates a relatively
entrenched network of waste-to-energy incineration facilities
within disposal-constrained markets. Its market position, steady
waste streams and hedged commodity exposure support Reworld's
rating profile despite relatively weaker credit metrics of EBITDA
leverage in the mid- to high 6.0x area and EBITDA interest coverage
in the low 3.0x area.
GW's credit profile benefits from the contracted and stable
recurring demand of manguarding and cash collection operations. It
is a market leader in manguarding with a multinational footprint,
supporting a relatively high degree of diversification and a
consistent growth profile. Fitch expects GW's EBITDA leverage to
trend to the mid-6x area and EBITDA interest coverage to the low
2.0x area as it works through M&A and invests to support new
contract wins.
Key Assumptions
- Organic revenue growth is strong in the 5%-10% range in 2024 and
2025, led by strong pricing reset initiatives and new contract
wins. Subsequently, Fitch assumes organic growth moderates to a
mid-single-digit rate including continued price and volume growth;
- Completed M&A contributes mid- to high single-digit growth in
2025 and is assumed to continue, though at a moderate pace, beyond
2025;
- EBITDA margin expands to 20% in 2025 from nearly 20% in 2024 (pro
forma), benefitting from strong pricing that outpaces cost
inflation, operation efficiencies and accretive landfill
operations, partially offset by assumed margin drag from
acquisitions;
- Capex around 16% of revenue in 2025 and declines to 14% on
tempered revenue growth.
- WP remains growth-oriented and utilizes debt funding but remains
committed to managing its leverage profile, resulting in EBITDA
leverage sustained in the 4.5x-5.0x range over the long term;
- No material shareholder distributions.
Recovery Analysis
The Recovery Rating assumes that Waste Pro would be reorganized as
a going concern (GC) in a bankruptcy scenario rather than
liquidated. A 10% administrative claim on the enterprise value is
assumed.
Fitch estimates a GC EBITDA of $165 million, reflecting pro forma
adjustments for acquisitions (previously $150 million). The GC
EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation. Fitch assumes a hypothetical bankruptcy
scenario could come from a combination of contract losses and
weaker margins stemming from intense competition and a structurally
weaker pricing environment while the company contends with higher
cost inflation.
Fitch assumes Waste Pro will receive a GC recovery multiple of 6x.
This multiple is applied to the GC EBITDA to calculate a
post-reorganization enterprise value (EV). The multiple assumption
is primarily driven by the recurring demand inherent to the waste
management industry and the longer-term and diversified nature of
contracts.
The multiple also reflects the company's vulnerability due to its
regional focus. It is lower than the 6.3x assigned to Reworld which
benefits from its geographically advantaged and regulatorily
constrained incinerator assets. The multiple also considers Waste
Pro and the larger waste companies' historical acquisition
multiples.
Fitch's recovery scenario assumes that the ABL is 80% drawn. The
ABL receives priority above the unsecured debt in the distribution
of value in the recovery waterfall. The Recovery Rating results in
a 'BB+'/'RR1' rating for the ABL (100% recovery percentage) and
'BB-'/'RR3' for the unsecured debt (57% recovery percentage).
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Deviation in capital allocation and financial policy leading to
EBITDA leverage sustained above 5.0x;
- EBITDA interest coverage sustained below 2.5x;
- Reduced financial flexibility indicated by sustained negative FCF
and ABL availability below 75%.
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Demonstrated commitment to credit-conscious capital allocation
strategy that maintains through-the-cycle EBITDA leverage below
4.5x;
- Consistently positive FCF, after growth capex.
Liquidity and Debt Structure
As of September 2024, Waste Pro had $54 million of liquidity,
consisting of $42 million availability on the ABL and $12 million
cash on hand. Pro forma for the transaction, the ABL will be
upsized to $290 million from $260 million and is expected to be
undrawn. The company does not have a major maturity until the
industrial revenue bonds begin maturing in 2029.
Issuer Profile
Waste Pro provides non-hazardous solid waste management services,
focusing on collection for residential, commercial and industrial
customers. The company operates across nine states in the
southeastern U.S.
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
----------- ------ -------- -----
Waste Pro USA, Inc. LT IDR B+ Affirmed B+
senior unsecured LT BB- New Rating RR3
senior secured LT BB+ Affirmed RR1 BB+
WASTE PRO: Moody's Upgrades CFR to 'B2' & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings upgraded the ratings of Waste Pro USA, Inc.,
including the corporate family rating to B2 from B3, probability of
default rating to B2-PD from B3-PD and senior unsecured notes due
2026 to B3 from Caa1. At the same time, Moody's assigned a B3
rating to Waste Pro's proposed senior unsecured notes due 2033.
Moody's also changed the outlook to stable from positive.
Although the proposed $800 million senior unsecured notes increase
Waste Pro's financial leverage, with pro forma debt to LTM EBITDA
near 5.6x at September 30, 2024 (including Moody's standard
adjustments), the upgrades reflect Moody's expectation for credit
metrics to improve over the next 12-18 months. Moody's expect the
leverage ratio to fall toward 4.9x in 2025 and lower in 2026.
Moody's also expect the adjusted EBITDA margin to approach 20%.
This will be aided by ongoing efficiency improvements and continued
revenue growth, with pricing escalators on existing contracts, a
focus on restructuring or exiting lower margin contracts, and
positive momentum with identifying customers willing to pay for
Waste Pro's bespoke (premium) collections service.
Proceeds from the proposed $800 million senior unsecured notes due
2033 will be used primarily to repay the $479.2 existing senior
unsecured notes outstanding due 2026, roughly $206 million
outstanding on the unrated ABL due 2026, $71.5 million of equipment
loans, and add cash of about $34 million. In connection with the
transaction, Waste Pro also plans to replace its existing $260
million revolver with a new $290 million ABL facility (unrated)
expiring in 2030, which is expected to be undrawn at transaction
close in January 2025. Moody's will withdraw the rating on the
existing senior unsecured notes due 2026 once they have been
repaid.
RATINGS RATIONALE
Waste Pro's B2 CFR reflects its modest scale with a regional focus
and particular reliance on the state of Florida. The company also
generates considerably lower margins relative to vertically
integrated industry peers due to its collection-focused operating
model, with less than 5% of revenue from higher-margin
landfill/disposal. Waste Pro also has high leverage and negative
free cash flow constrained by the capital intensity of the
company's operating model, growth-oriented financial policies and a
high interest expense burden. However, free cash flow (cash flow
from operations less total capital expenditures less any dividends)
could be positive if growth capital investments were significantly
reduced. The company often makes growth capital investments after
securing new contracts. Moody's expect the growth strategy to
continue requiring significant upfront capital investments.
However, Moody's also expect that positive pricing dynamics and
continued focus on cost efficiency will help offset moderating
economic growth and enable steady improvement in cash flow.
Waste Pro's business model benefits from the non-discretionary
nature of demand for solid waste services, which translates to the
resiliency of the solid waste industry, and industry-wide pricing
discipline. The company benefits from a premium/personalized
service offering tied to multi-year contracts with built-in price
escalators that provide good revenue visibility. Waste Pro's strong
presence in the Southeastern US, a region of the country
(particularly Florida) that continues to have better economic and
population growth than the US average, will support top line growth
over the next year though Moody's note Florida's economic growth is
moderating.
The stable outlook reflects Moody's expectations for improving
waste volumes with new contract wins and higher pricing to support
moderate organic top line growth and improving margins over the
next year. Moody's also expect the company to maintain at least
adequate liquidity.
Waste Pro's liquidity is adequate despite a historically minimal
cash position and lack of a track record of generating positive
free cash flow. However, scaling back growth capital investments
closer to a maintenance spending level would allow for positive
free cash flow. Still, a majority of growth investments for 2025
are already underway and new opportunities could require additional
capital expenditures. Moody's expect the new $290 million ABL
facility expiring in 2030 will be used to support working capital
needs and growth initiatives, consistent with the company's
history. Pro forma availability at transaction close is expected to
be about $277 million, net of about $12.5 million in letters of
credit. The new facility will be subject to a first-lien net
leverage covenant of 2.0x and fixed charge coverage covenant (FCCR)
of 1.1x, consistent with the existing ABL agreement. However, Waste
Pro recently received an amendment to waive testing of the FCCR
covenant for Q4 2024 as borrowings increased materially to support
growth investments. In connection with ABL's refinancing, the
company is seeking to change to certain terms (from existing),
including reducing the FCCR trigger. Moody's expect the company to
maintain covenant compliance and ample availability on its ABL
facility over the next year.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with an acceleration of profitable
revenue growth and effective cost management that drive stronger
operating margins, such that Moody's expect debt-to-EBITDA to
remain below 4x and EBITDA margin around 25%. The maintenance of
good liquidity, including reduced reliance on the ABL revolving
facility and consistent positive free cash flow (including growth
capital expenditures) would also be important considerations for a
ratings upgrade. Lower geographic concentration with prudent
expansion beyond Florida would also be viewed favorably.
The ratings could be downgraded with contraction in revenue or
sustained deterioration in margins, including from a meaningful
drop in core pricing or a decline in volumes in conjunction with
competitive pressures. Ratings could also be pressured by
increasingly negative free cash flow and debt-to-EBITDA remaining
above 5x. Erosion in the liquidity position, including limited ABL
revolver availability and/or covenant compliance issues with the
ABL facility could also adversely affect the ratings.
The principal methodology used in these ratings was Environmental
Services and Waste Management published in August 2024.
Waste Pro USA, Inc. is a Southeast US regionally concentrated,
non-hazardous solid waste management company focused largely on
waste collection operations. The company also provides transfer,
disposal and recycling services. Net revenue for the year ended
September 30, 2024, was approximately $1.1 billion.
Waste Pro is owned by its founder and current board chairman.
WESTFALL ENTERTAINMENT: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
On January 14, 2025, Westfall Entertainment Complex Inc. filed
Chapter 11 protection in the U.S. Bankruptcy Court for the Middle
District of Pennsylvania.
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 Westfall Entertainment Complex Inc.
Westfall Entertainment Complex Inc. is an entertainment facility
operator based in Shohola, Pike County, Pennsylvania.
Westfall Entertainment Complex Inc. sought relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Pa. Case No. 25-00078) on
January 14, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Mark J. Conway handles the case.
The Debtor is represented by Ronald Santora, Esq., at BRESSET &
SANTORA, LLC, in Forty Fort, Pennsylvania.
WESTPHALIA DEV: Restructures Under CCAA Protection
--------------------------------------------------
Westphalia Dev. Corp. announced on January 15, 2025, a
restructuring filing initiated in the Alberta Court of King's
Bench.
On January 14, 2025, the Corporation obtained an initial order from
the Court commencing proceedings under the Companies' Creditors
Arrangement Act of Canada. Pursuant to the Initial Order, a 10-day
stay of proceedings has been granted in respect of the Corporation
to allow the business to continue to operate without disruption
while the Corporation pursues potential strategic and restructuring
alternatives under Court supervision for the benefit of its
stakeholders. The Court-ordered process will be continued on
January 23, 2025, where the Corporation anticipates seeking further
order(s) from the Court extending the initial stay of proceedings,
among other things.
The decision to commence CCAA proceedings was made following
careful consideration by the Corporation's Board of Directors and
management. The Corporation has operated and can only continue to
operate with the ongoing financial support of certain stakeholders,
including its manager, Walton Global Investments Ltd. The
Corporation has been unable to pay management fees owing to the
Manager (and the Manager's predecessor) since 2016. The Manager has
now advised the Corporation that it cannot continue to provide
services and funding on a go forward basis unless a plan is put in
place to address the Corporation's liquidity and outstanding debts
to the Manager and others. The CCAA process will provide an
opportunity to prepare and file a plan of arrangement and
compromise for consideration by the Corporation's creditors and
other stakeholders with respect to the restructuring of the
Corporation. Under the Initial Order, the Corporation will continue
carrying on business in a manner consistent with the commercially
reasonable preservation of their businesses and assets.
Overview of the Corporation
The Corporation is the shareholder of the largest co-owner of the
Westphalia Town Center in Prince George's County, Maryland. The
property includes residential, commercial and industrial land uses.
The Property Master Plan is designed as a pedestrian-oriented,
mixed-use community. Westphalia Town Center includes
family-friendly neighborhoods, and in the near future community
shopping, restaurants, and potentially an elementary school, a
veteran's hospital, and a hotel.
Through the CCAA process the Corporation received a Court Order
that will allow it to pursue a restructuring of its affairs to
improve its balance sheet while allowing streamlined reporting. The
Manager of the project, Walton Global will assume full operational
responsibility for taking the project through to completion,
arranging for payment of the secured and unsecured creditors
through the proceeds of sale, with the objective of completing the
project to maximize recoveries. The Corporation, with the
assistance of the Manager, has achieved a great deal to date:
-- Much of the required infrastructure is deemed substantially
complete, including roadways and interchanges for Route 4, Route
223 and Presidential Parkway East.
-- Unanimous approval of the Detailed Site Plan from The
Maryland-National Capital Park and Planning Commission for Parcels
A and B, streamlining and accelerating the approval timeline for
the future mixed-use development.
-- Purchase offers have been received for Parcels A and B from
best-in-class retail developers to build a first-class mixed-use
commercial development. Deal terms are currently being negotiated,
and an agreement is expected in 90 days. -- Hired a best-in-class
engineering and planning firm to complete the entitlements for the
remaining 96 acres (approximately), which includes the adjacent
land to the north owned by a related party. The expectation is that
this work will take 2 to 3 years to complete and receive full
approval.
-- Lastly, there is a parcel under contract for industrial use and
another being considered for a future Veteran's hospital.
About Walton Global
Walton Global is a privately-owned, leading land asset management
and global real estate investment company with more than 88,000
acres of land under ownership, management and administration in the
United States and Canada, totaling $4.5 billion. With more than 45
years of experience, Walton has a proven track record of land
investment projects within the path of growth in the
fastest-growing metropolitan areas. A total of $2.7 billion has
been distributed to investors located in 87 countries. The company
works closely with top U.S. home builders, developers and industry
partners. Business lines include exit-focused pre-development land
investments, builder land financing, development projects, DST
offerings, and various fund structures. For more information, visit
walton.com.
FTI Consulting Canada Inc. is the Court-appointed Monitor in the
Corporation's CCAA proceedings. During the CCAA proceedings,
management of the Corporation will remain responsible for managing
day-to-day operations under the general oversight of the Monitor.
Copies of any filed Court materials and updates will be available
on the Monitor's website:
http://cfcanada.fticonsulting.com/westphaliadevcorp
WINSTON AND DUKE: Unsecureds Will Get 12.34% of Claims in Plan
--------------------------------------------------------------
Winston and Duke Inc. filed with the U.S. Bankruptcy Court for the
Western District of Pennsylvania a Chapter 11 Plan of
Reorganization for Small Business dated January 10, 2025.
The Debtor provides precision and specialized manufacturing for
aerospace and defense use. The Debtor operates out of one location
– 2008 W. 16th Street, Erie, PA 16505.
The Debtor traces its roots back to 1966 when it was formed by 5
partners. The current iteration of the Debtor was purchased by John
R. Churchill Jr. in 2013. The Debtor originally provided a wide
range manufacturing and drilling services for aerospace and defense
use. Over the past several years, the Debtor scaled back operations
to more concentrated.
The Plan will be implemented through the continued operations of
the Debtor's business and through the sale of equipment and
machinery.
The Plan proposes to pay administrative and priority claims in full
unless otherwise agreed. The Debtor estimates approximately 12.34%
will be paid on account of general unsecured claims pursuant to the
Plan. The percentage is subject to change based on the allowance of
claims, litigation proceeds, or the proceeds from any sales that
may occur.
The Debtor has continued to operate its business to further
generate revenue and continuing to work with its vendors and
customers to achieve favorable payment arrangements that will
further foster its restructuring. The Debtor is also continuing to
explore various other sales of assets that may generate additional
income.
To the extent that there is determined to be an Allowed Priority
Tax Claim(s), the Priority Tax Claim(s) asserted against the Debtor
will be paid (i) in full on or before the Plan Effective Date, (ii)
in regular monthly payments over sixty months with the requisite
statutory interest, or (iii) as the Debtor and claim holder
otherwise agree.
Class 7 consists of General Unsecured Claims. General Unsecured
Claims shall consist of all other creditors who are not in the
Subordinated Unsecured Claims Class with Allowed Claims not secured
by property of the estate and that are not entitled to priority
under Section 507(a) of the Bankruptcy Code. The creditors in this
Class must have had a claim against the Debtor as of September 13,
2024. The total amount for this Class is approximately $485,869.59,
plus any Allowed Unsecured Claim held by an undersecured creditor
that is to be determined.
The Creditors in this Class will be paid by regular monthly
payments made by the Debtor and distributed on a Quarterly basis.
Beginning on the Plan Effective Date, the Debtor will pay the
Disbursing Agent a fixed monthly payment of $1,000.00.
Distributions to this Class will be made on a quarterly basis. Each
creditor will receive a pro rata distribution of all funds
distributed to the Class. This Class will not be entitled to
interest on their claims. The claims in this Class are not entitled
to post-petition interest, attorney's fees, or costs. In addition
to regular payments, this Class may receive payments through the
proceeds of sale, if any, and through litigation proceeds. This
Class is impaired.
Class 8 consists of the Unsecured Churchill 509 Claim. This
Unsecured Class shall consist of the Claims held by John R.
Churchill Jr. that would be allowed subrogation claims. This Class
will not receive payments from the Debtor during the Plan term.
Once the Plan is completed, the Debtor will begin making payments
to this Class in increments and over a period of time as agreed to
by the Parties. This Class is impaired.
Equity Interests will be retained under the Plan.
The Plan will be implemented through two primary means: (a) the
continued business operations; and (b) the sale of assets. Due to
the niche nature of the Debtor's business, the Debtor has a steady
stream of customers who utilize its services. This leads to a
fairly steady stream of income for the Debtor to utilize year
over-year. The Debtor intends to utilize this income to comply with
its regular operations and plan obligations.
Moreover, the Debtor has various pieces of machinery and equipment,
some of which are no longer critical for ongoing business
operations. The Debtor intends to liquidate those non critical
machinery and equipment to help generate income. Additional sales
may be contemplated by the Debtor on an as-needed basis.
A full-text copy of the Plan of Reorganization dated January 10,
2025 is available at https://urlcurt.com/u?l=K9rKCw from
PacerMonitor.com at no charge.
The Debtor's Counsel:
Donald R. Calaiaro, Esq.
CALAIARO VALENCIK
938 Penn Avenue, 5th Fl.
Suite 501
Pittsburgh, PA 15222
Tel: 412-232-0930
Fax: 412-232-3858
Email: dcalaiaro@c-vlaw.com
About Winston and Duke Inc.
Winston and Duke is a provider of manufacturing support, products,
and services, specializing in close tolerance processes, complex
geometry and super alloy production machining coupled with small to
large run production capability.
Winston and Duke Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
24-10535) on Sept. 13, 2024, listing up to $50,000 in assets and $1
million to $10 million in liabilities. The petition was signed by
John R. Chruchill Jr. as president.
Donald R. Calaiaro, Esq., at CALAIARO VALENCIK, is the Debtor's
counsel.
WYNNE TRANSPORTATION: Jan. 21 Deadline Set for Panel Questionnaires
-------------------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of Wynne Transportation
Holdings, LLC, et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/bdjxwm85 and return by email it to
Richard Schepacarter - Richard.Schepacarter@usdoj.gov - at the
Office of the United States Trustee so that it is received no later
than Tuesday, January 21, 2025.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Wynne Transportation
Wynne Transportation Holdings LLC, operating as U.S. Crew Change
from its Dallas headquarters, provides specialized transportation
services for industrial and emergency sectors, focusing on LNG,
petrochemical, mining, oil and gas, and construction industries.
Wynne Transportation Holdings LLC and six of its affiliates sought
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del.
Lead Case No. 25-10027) on January 10, 2025. In its petition, the
Debtors reported estimated assets and liabilities of $10 million to
$50 million each.
Matthew B. McGuire, Esq., at Landis Rath & Cobb LLP, represents the
Debtors as counsel. Omni Agent Solutions acts as claims agent to
the Debtors.
X4 PHARMACEUTICALS: Inks License & Supply Deal with Norgine Pharma
------------------------------------------------------------------
On January 13, 2025, X4 Pharmaceuticals, Inc., entered into a
License and Supply Agreement with Norgine Pharma UK Limited,
pursuant to which Norgine is granted an exclusive license to (i)
distribute, market and sell the Company's product mavorixafor
(marketed by X4 as XOLREMDI(R) in the United States) for all
indications in the European Economic Area, Switzerland, the United
Kingdom, Australia and New Zealand, following regulatory approval.
Additionally, Norgine was granted a co-exclusive license to
manufacture mavorixafor for the Territory within the Field. The
Company retains all rights to mavorixafor outside the Territory and
specific reserved rights within the Territory. Norgine may grant
sublicenses to its affiliates and certain third parties subject to
the terms of the Agreement, except that it may not sublicense the
commercial rights granted under the Agreement for certain countries
without X4's explicit consent.
Pursuant to the terms of the Agreement, the Company shall receive
the following payments from Norgine: (i) an upfront payment in the
amount of EUR28.5 million, (ii) up to EUR226 million upon the
achievement of certain regulatory, commercial and sales milestones,
and (iii) escalating double-digit royalties of up to mid-twenties
on any future net sales in the Territory. The tiered royalty
payments are subject to royalty stacking, and to a material
reduction on a country-by-country basis if a generic version of
mavorixafor becomes available in the applicable country. X4 and
Norgine will collaborate closely on regulatory filings, with X4
continuing to be responsible for the ongoing global, pivotal Phase
3 4WARD clinical trial evaluating mavorixafor in chronic
neuropathy. Norgine will be responsible for all market access and
commercialization activities and will eventually hold all marketing
authorizations in the licensed territories. X4 will manufacture and
supply mavorixafor to Norgine. Norgine shall be required to pay a
supply price to X4 for the licensed product derived from the CMO
costs plus a low double-teen digit of the CMO costs.
Subject to customary rights of each party to earlier terminate the
Agreement, the term of the Agreement continues, on a
country-by-country basis, until the later of: (i) the tenth (10th)
anniversary of the first commercial sale of mavorixafor, (ii)
expiration of regulatory market exclusivity of mavorixafor or (iii)
expiration of the last-to-expire licensed patent in such country.
The term of the Agreement shall be automatically renewed for
additional three-year terms unless either party provides the other
party written notice of its intent not to renew the Agreement at
least one year prior to the applicable termination date of the
Agreement. In the event of automatic renewal, the royalty payment
rate drops to a single digit royalty.
"This strategic agreement is a significant milestone for X4 as we
seek to maximize the global potential of mavorixafor and bring in
funding for our ongoing global, Phase 3 trial in chronic
neutropenia," said Paula Ragan, Ph.D., President and Chief
Executive Officer of X4 Pharmaceuticals. "We believe Norgine to be
the ideal partner due to their impressive infrastructure and
successful commercialization track record in specialty
pharmaceuticals, as well as a shared focus on putting patients
first. We look forward to expanding access to mavorixafor and
continuing to address the unmet needs of those with rare immune
disorders."
Janneke van der Kamp, Chief Executive Officer of Norgine, commented
on the announcement: "We are very pleased to partner with X4 in
this underserved, rare disease space and expand access to
mavorixafor to patients in Europe, Australia, and New Zealand. If
approved by the respective regulatory bodies, mavorixafor would be
the first treatment targeting a key underlying cause of WHIM
syndrome, a disease characterized by low white blood cell counts
and frequent and/or serious infections. Through this agreement, we
continue to expand our innovative portfolio of products and our
expertise across rare diseases and specialty markets. This
important milestone for our company further underscores Norgine’s
position as a partner of choice across Europe and ANZ."
X4 Company Contact:
Jose Juves
Head of Corporate & Patient Affairs
jose.juves@x4pharma.com
X4 Investor Contact:
Daniel Ferry
Managing Director, LifeSci Advisors
daniel@lifesciadvisors.com
(617) 430-7576
Norgine Media Contact
Neha Bhimbat
contact@norgine.com
About X4 Pharmaceuticals
Boston, Mass.-based X4 Pharmaceuticals, Inc. is a
biopharmaceutical
company focused on discovering, developing, and commercializing
novel therapeutics for the treatment of rare diseases and those
with limited treatment options, particularly conditions resulting
from immune system dysfunction.
The Company cautioned in its Form 10-Q Report for the quarterly
period ended March 31, 2024, that substantial doubt exists about
its ability to continue as a going concern. The Company said,
"Since our inception, we have incurred significant operating
losses
and negative cash flows from our operations. As of March 31, 2024,
our cash and cash equivalents were $60.5 million, our restricted
cash balance was $0.8 million, and our investment in marketable
securities was $20.4 million. We have a covenant under our
Hercules
Loan Agreement that currently requires that we maintain a minimum
level of cash of $20 million through January 31, 2025, subject to
subsequent reductions. Based on our current cash flow projections,
which exclude any benefit from the potential sale of our PRV, no
additional borrowings that may become available on Hercules Loan
Agreement, and with no additional external funding, we believe
that
we will not be able to maintain the minimum cash required to
satisfy this covenant beginning in the first quarter of 2025. In
such event, the lenders could require the repayment of all
outstanding debt."
XTI AEROSPACE: Implements 1-for-250 Reverse Stock Split
-------------------------------------------------------
On January 7, 2025, XTI Aerospace, Inc., a Nevada corporation filed
a certificate of amendment to its Restated Articles of
Incorporation, as amended, with the Secretary of State of the State
of Nevada to effect a reverse stock split of its outstanding common
stock, par value $0.001 per share at a ratio of 1-for-250,
effective as of 12:01 a.m., Eastern Time, on January 10, 2025.
On January 7, 2025, the Company entered into a Placement Agency
Agreement with ThinkEquity LLC pursuant to which the Company agreed
to issue and sell directly to various investors, in a best efforts
public offering an aggregate of 1,454,546 shares of Common Stock on
a post-Reverse Stock Split basis (363,636,364 shares of Common
Stock on a pre-Reverse Stock Split basis) at an offering price of
$13.75 per Share on a post-Reverse Stock Split basis ($0.055 per
Share on a pre-Reverse Stock Split basis). The Company is expected
to receive gross proceeds of approximately $20 million in
connection with the Offering, before deducting placement agent fees
and other offering expenses payable by the Company. The Offering is
expected to close on January 10, 2025.
As part of its compensation for acting as placement agent for the
Offering, the Company also agreed to issue to the Placement Agent,
warrants to purchase 72,727 shares of Common Stock on a
post-Reverse Stock Split basis (18,181,818 shares of Common Stock
on a pre-Reverse Stock Split basis). The Placement Agent Warrants
are exercisable commencing January 10, 2025, expire January 8, 2030
and have an exercise price of $17.1875 per share on a post-Reverse
Stock Split basis ($0.06875 per share on a pre-Reverse Stock Split
basis).
The Reverse Stock Split is a condition to the closing of the
Offering. Accordingly, the Shares and the Placement Agent Warrants
issued at the closing of the Offering will be issued on a
post-Reverse Stock Split basis.
The Shares, the Placement Agent Warrants and the Placement Agent
Warrant Shares were offered and sold pursuant to a registration
statement on Form S-3 (File No. 333-279901), which was filed with
the Securities and Exchange Commission on May 31, 2024, as amended
on June 14, 2024, and was declared effective by the Commission on
June 18, 2024, the base prospectus included therein, as amended and
supplemented by the prospectus supplement dated January 7, 2025.
Mitchell Silberberg & Knupp LLP serves as the Company's counsel in
connection with the filing of the Registration Statement.
Pursuant to the terms of the Agreement, the Company agreed to pay
the Placement Agent a cash fee equal to 7.0% of the gross proceeds
of the Offering and to reimburse the Placement Agent for certain of
its expenses in an aggregate amount up to $175,000. The Company
further agreed not to issue, enter into any agreement to issue or
announce the issuance or proposed issuance of, any shares of Common
Stock or any securities convertible into or exercisable or
exchangeable for shares of Common Stock or file any registration
statement or prospectus, or any amendment or supplement thereto for
a period of 30 days from January 7, 2025, subject to certain
exceptions. Additionally, each of the directors and officers of the
Company, pursuant to lock-up agreements (the "Lock-Up Agreements"),
agreed not to sell or transfer any of the Company securities which
they hold, subject to certain exceptions, for a period of 90 days
from January 7, 2025.
The representations, warranties and covenants contained in the
Agreement were made solely for the benefit of the parties to the
Agreement. In addition, such representations, warranties and
covenants (i) are intended as a way of allocating the risk between
the parties to the Agreement and not as statements of fact, and
(ii) may apply standards of materiality in a way that is different
from what may be viewed as material by stockholders of, or other
investors in, the Company. Moreover, information concerning the
subject matter of the representations and warranties may change
after the date of the Agreement, which subsequent information may
or may not be fully reflected in public disclosures.
In accordance with the terms of the Certificate of Designations of
Preferences and Rights of the Company's Series 9 Preferred Stock,
the Company obtained a written consent, effective as of January 7,
2025 (the "Series 9 Offering Consent"), from 3AM Investments LLC
(an entity controlled by Nadir Ali, the Company's former Chief
Executive Officer and a former director of the Company) ("3AM"),
which is the Required Holder (as defined in the Certificate of
Designations) of the Series 9 Preferred Stock, pursuant to which
such Required Holder consented to the issuance of securities in the
Offering in consideration for the Company's agreement to pay 20% of
the gross proceeds from this offering, which is equal to
approximately $4 million (the "Payment Amount"), which payment
shall be processed within five business days following the closing
of the Offering, (a) first, to those certain employees and other
service providers, including Nadir Ali, Wendy Loundermon (the
Company's former Chief Financial Officer and a former director of
the Company) and Soumya Das (the Company's Chief Executive Officer
of its Real Time Location System Division and a current director of
the Company) (the "Bonus Plan Recipients"), entitled to bonuses
payable pursuant to that certain Transaction Bonus Plan, adopted on
July 24, 2023, as amended from time to time ("Bonus Plan
Payments"); and (b) second, to the extent the Bonus Plan Payments
have been fully satisfied, any remaining portion of the Payment
Amount shall be applied to the redemption of outstanding shares of
the Series 9 Preferred Stock.
Unregistered Sales of Equity Securities
On December 23, 2024, the Company entered into an exchange
agreement with a holder of shares of the Company's Series 9
Preferred Stock pursuant to which the Company and the holder agreed
to exchange 429 shares of Series 9 Preferred Stock with an
aggregate stated value of $450,450 (the "Preferred Shares") for
10,475,581 shares of Common Stock (the "Exchange Shares") at an
effective price per share of $0.043. The Company issued the
Exchange Shares to the holder on December 26, 2024, at which time
the Preferred Shares were cancelled. The Exchange Shares were
issued in reliance on the exemption from registration provided by
Section 3(a)(9) of the Securities Act of 1933, as amended, on the
basis that (a) the Exchange Shares were issued in exchange for
other outstanding securities of the Company; (b) there was no
additional consideration delivered by the holder in connection with
the exchange; and (c) there were no commissions or other
remuneration paid by the Company in connection with the exchange.
As of January 10, 2025, the Company has 1,848,121 shares of Common
Stock outstanding on a post-Reverse Stock Split basis (subject to
adjustment in connection with the rounding of fractional shares),
which excludes the Shares to be issued at the closing of the
Offering.
Because the Exchange Shares constituted less than 5% of the
outstanding Common Stock as of December 23, 2024, the disclosure
under this Item 3.02 is being disclosed voluntarily.
Material Modification to Rights of Security Holders
To the extent required by Item 3.03 of Form 8-K, the information
regarding the Reverse Stock Split contained in Item 5.03 of this
Current Report on Form 8-K is incorporated by reference herein.
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On January 7, 2025, the Company filed the Reverse Stock Split
Amendment with the Secretary of State of the State of Nevada to
effect the Reverse Stock Split at a ratio of 1-for-250, effective
as of 12:01 a.m., Eastern Time, on January 10, 2025. As previously
reported by the Company, the Company held its 2024 annual meeting
of stockholders on December 27, 2024 (the "Annual Meeting"), at
which meeting, the Company's stockholders approved the amendment to
the Articles of Incorporation to effect a reverse stock split of
the Company's Common Stock at a ratio in the range of 1-for-2 to
1-for-250, with such ratio to be determined by the Company's board
of directors (the "Board"). Following the Annual Meeting, the Board
determined to effect the Reverse Stock Split at a ratio of
1-for-250 and approved the corresponding final form of the
Certificate of Amendment.
As a result of the Reverse Stock Split, every 250 shares of issued
and outstanding Common Stock was automatically combined into one
issued and outstanding share of Common Stock. The Common Stock will
begin trading on a Reverse Stock Split-adjusted basis on the Nasdaq
Capital Market on January 10, 2025. The trading symbol for the
Common Stock will remain "XTIA." The new CUSIP number for the
Common Stock following the Reverse Stock Split is 98423K 405.
No fractional shares of Common Stock were issued in connection with
the Reverse Stock Split. If, as a result of the Reverse Stock
Split, a stockholder would otherwise have held a fractional share,
the stockholder received, in lieu of the issuance of such
fractional share, one whole share of Common Stock. The conversion
or exercise price of and the number of shares issuable under the
Company's outstanding securities convertible into or exercisable
for Common Stock adjusted on a per holder basis, and if, as a
result of the Reverse Stock Split, the number of shares issuable
under any securities convertible into or exercisable for Common
Stock would have included a fractional share, such share amount was
rounded up to the next whole share amount, on a per holder basis.
The number of shares of Common Stock available for future issuance
under the Company's 2018 Employee Stock Incentive Plan did not
adjust as a result of the Reverse Stock Split.
Computershare Trust Company, N.A., the Company's transfer agent, is
acting as the exchange agent for the Reverse Stock Split and will
provide instructions to stockholders of record regarding the
process for exchanging shares. Those stockholders holding Common
Stock in "street name" will receive instructions from their
brokers.
At-the-Market (ATM) Program and Series 9 Preferred Stock Holder's
Consent
As previously disclosed, on November 17, 2024, the Company entered
into a Consent Waiver and Release (the "November 2024 Consent")
with 3AM and Streeterville Capital, LLC ("Streeterville", and
together with 3AM, the "Series 9 Holders"), each as a Required
Holder of Series 9 Preferred Stock. Pursuant to the November 2024
Consent, among other things, the Series 9 Holders authorized the
Company to raise up to an additional $5,000,000 (the "ATM
Increase") under the Company's "at the market" offering program
pursuant to that certain Equity Distribution Agreement, dated as of
July 22, 2022, by and between the Company and Maxim Group LLC, the
Company's sales agent, as amended from time to time (the "ATM") in
consideration for the Company's agreement to pay 20% of the
proceeds it receives from sales under the ATM in connection with
the ATM Increase (the "Redemption Proceeds") to the Series 9
Holders to redeem a portion of their Series 9 Preferred Stock, to
be distributed as follows: (i) 75% of the Redemption Proceeds to
Streeterville (15% of all proceeds received from sales under the
ATM) ("15% Redemption Amount"), and (ii) 25% of the Redemption
Proceeds to 3AM (5% of all proceeds received from sales under the
ATM).
3
On December 23, 2024, the Company received a consent and waiver
(the "December 2024 Consent") from the Required Holder of the
Series 9 Preferred Stock, authorizing the Company to raise up to an
additional $5,000,000 under the ATM in consideration for the
Company's agreement to allocate the 15% Redemption Amount to the
Bonus Plan Recipients, in lieu of 3AM, as the remaining holder of
Series 9 Preferred Stock, following the date on which Streeterville
no longer owns any shares of Series 9 Preferred Stock. As of the
date of this Current Report on Form 8-K, Streeterville no longer
owns Series 9 Preferred Stock.
Nasdaq Hearing
On July 9, 2024, Nasdaq notified the Company that for the last 30
consecutive trading days, the bid price for the Common Stock had
closed below the minimum $1.00 per share requirement for continued
listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2) (the
"Bid Price Rule"). In accordance with Nasdaq Listing Rule
5810(c)(3)(A), the Company was provided 180 calendar days, or until
January 6, 2025, to regain compliance with the Bid Price Rule.
On November 7, 2024, the Company received a letter (the "Low Price
Deficiency Letter") from Nasdaq indicating that the bid price for
the Common Stock had closed below $0.10 per share for the
10-consecutive trading day period ended November 6, 2024 and,
accordingly, the Company is subject to the provisions contemplated
under Nasdaq Listing Rule 5810(c)(3)(A)(iii) (the "Low Priced Stock
Rule"). As a result, Nasdaq determined to delist the Common Stock
from the Nasdaq Capital Market (the "Delisting Determination"). In
accordance with the Low Price Deficiency Letter, on November 14,
2024, the Company timely requested a hearing before a Hearings
Panel (the "Panel") to appeal the Delisting Determination, which
stayed the delisting and suspension of the Common Stock pending the
decision of the Panel.
The hearing was held on January 9, 2025, at which time the Company
presented its plans to regain and sustain compliance with the Bid
Price Rule. It is the Company's understanding that the Panel
typically issues its decision within 30 days after the hearing.
However, there can be no assurance that Nasdaq will accept the
Company's plan of compliance or grant the Company any additional
time to demonstrate its ability to regain and sustain compliance
with the continued listing requirements over the long term.
A full-text copy of the Form 8-K is available at
https://urlcurt.com/u?l=4C0Hk1
About XTI Aerospace
XTI Aerospace, Inc. -- https://xtiaerospace.com -- is the parent
company of XTI Aircraft Company headquartered near Denver,
Colorado. XTI Aerospace is developing the TriFan 600, a vertical
lift crossover airplane (VLCA) that combines the vertical takeoff
and landing (VTOL) capabilities of a helicopter with the speed and
range of a fixed-wing business aircraft. The TriFan 600 is
designed to reach speeds of 345 mph and a range of 700 miles.
New York-based Marcum LLP, the Company's auditor since 2012,
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.
YELLOW CORP: Teamsters Dispute Liquidation Defense for Layoffs
--------------------------------------------------------------
Angelica Serrano-Roman of Bloomberg Law reports that a coalition of
unions is urging a court to dismiss the defenses presented by
bankrupt Yellow Corp. as it seeks to lower its liability for
damages to laid-off workers.
In a brief filed Tuesday, January 14, 2025, with the U.S.
Bankruptcy Court for the District of Delaware, the International
Brotherhood of Teamsters argued that the court should reject the
trucking company's claim of being a liquidating fiduciary when it
ceased operations, as well as its assertion that the failure to
provide advance notice of layoffs was made in good faith.
About Yellow Corporation
Yellow Corporation -- http://www.myyellow.com/-- operates
logistics and less-than-truckload (LTL) networks in North America,
providing customers with regional, national, and international
shipping services throughout. Yellow's principal office is in
Nashville, Tenn., and is the holding company for a portfolio of LTL
brands including Holland, New Penn, Reddaway, and YRC Freight, as
well as the logistics company Yellow Logistics.
Yellow Corporation and 23 affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before
the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow
Corporation had $2,152,200,000 in total assets against
$2,588,800,000 in total liabilities. The petitions were signed by
Matthew A. Doheny as chief restructuring officer.
The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel;
Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel;
Kasowitz, Benson and Torres, LLP as special litigation counsel;
Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as
investment banker; and Alvarez and Marsal as financial advisor.
Epiq Bankruptcy Solutions is the claims and noticing agent.
Milbank LLP serves as counsel to certain investment funds and
accounts managed by affiliates of Apollo Capital Management, L.P.
while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve
as counsels to Beal Bank USA and the U.S. Department of the
Treasury, respectively.
On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in the Chapter 11 cases.
The committee tapped Akin Gump Strauss Hauer & Feld, LLP and
Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller
Buckfire as investment banker; and Huron Consulting Services, LLC,
as financial advisor.
[*] Atty. Jeffery Phillips Joins DeWitt's Madison Office as Partner
-------------------------------------------------------------------
DeWitt LLP law firm announced on Jan. 15, 2025, that attorney
Jeffery P. Phillips joined the firm's Madison office as a partner,
where he will focus his practice on assisting creditors and debtors
in bankruptcy, business reorganizations and commercial litigation.
Phillips possesses extensive expertise in bankruptcy law,
representing Wisconsin-based clients as both debtors and creditors
in Chapter 7, Chapter 11, and Chapter 13 cases. His experience also
includes advising and representing debtors, creditors, receivers,
and trustees in Wisconsin Chapter 128 receivership proceedings, as
well as in collections, foreclosures, and various commercial and
business litigation matters. He has worked with clients across
diverse industries such as finance, manufacturing, food and
beverage, and construction. Beyond debtor and creditor rights,
Phillips handles civil litigation matters, including collections,
contract disputes, and construction litigation. Additionally, he is
experienced in business transactions, offering services like
contract drafting, negotiation, and dispute resolution.
"We're very pleased to welcome Jeff to our Madison office. His
contributions have made a significant impact on the legal landscape
in Wisconsin, helping many clients successfully navigate
challenging business issues, transactions, and proceedings. He is a
well-respected litigator who consistently demonstrates his
negotiating skills and deep knowledge of complex financial and
commercial matters. DeWitt is fortunate to have him as a new
partner of the firm," said Michele Perreault, Managing Partner at
DeWitt's Madison office.
Prior to DeWitt, Phillips served as an attorney at a law firm based
out of Madison. He holds a J.D. from the University of Wisconsin
Law School and a B.A. in film, cinema, video from the University of
Michigan.
About DeWitt
Founded in 1903, DeWitt LLP is one of the ten largest law firms
based in Wisconsin, with an additional presence in Minnesota. It
has more than 130 attorneys practicing in Green Bay, Madison and
Greater Milwaukee, Wisconsin and Minneapolis, Minnesota and has the
experience to service clients of all scopes and sizes. DeWitt is
known for its work in a variety of legal areas including family
law, background screening, business law, employee stock ownership
plans, employee benefits, intellectual property, patents,
trademarks and copyright law, construction litigation, employment
relations, environmental, estate planning, family business,
litigation, real estate, tax law, and more. Additional information
is available at dewittllp.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
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2025. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The single-user TCR subscription rate is $1,400 for six months
or $2,350 for twelve months, delivered via e-mail. Additional
e-mail subscriptions for members of the same firm for the term
of the initial subscription or balance thereof are $25 each per
half-year or $50 annually. For subscription information, contact
Peter A. Chapman at 215-945-7000.
*** End of Transmission ***