/raid1/www/Hosts/bankrupt/TCR_Public/250327.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, March 27, 2025, Vol. 29, No. 85
Headlines
1261229 BC: Moody's Rates New Sec. Term Loan and Notes 'Caa1'
23ANDME HOLDING: Users' Data Listed for Sale After Demise
2835 OCTAVIA: Seeks Chapter 11 Bankruptcy in California
330 WESTMINSTER: U.S. Trustee Unable to Appoint Committee
A-AG MIDCO: S&P Alters Outlook to Negative, Affirms 'B' ICR
AAGS HOLDINGS: Equity Interests Set for Auction on May 9
ABC TECHNOLOGIES: S&P Assigns 'B' ICR, Outlook Stable
ACCOUNTING LAB: Case Summary & 16 Unsecured Creditors
AKOUSTIS TECHNOLOGIES: Gets Extension to Access Cash Collateral
ALVOGEN PHARMA: Moody's Ups CFR to Caa1 & Rates 2nd Lien Loan Caa2
AMERICAN CLINICAL: CION Marks $13.7 Million 1L Loan at 14% Off
AMERICAN IMPACT: Seeks Chapter 11 Bankruptcy in Florida
ANTHEM SPORTS: CION Marks $45.1 Million 1L Secured Debt at 23% Off
ANYWHERE REAL: Moody's Cuts CFR to 'B3', Outlook Stable
APPALACHIAN RESOURCE: CION Marks $11.1 Million 1L Debt at 26% Off
APPLE CENTRAL: Court Stays Applebee's Franchisor v. Georgas Case
APPLIED DNA: Implements 1-for-50 Reverse Stock Split
ARMIN DIRK VAN DAMME: Court Dismisses Chapter 11 Bankruptcy Case
ARTIFICIAL INTELLIGENCE: To Unveil AI Security at ISC West 2025
AUCTION.COM LLC: Moody's Cuts CFR to 'Caa1', Outlook Stable
AVALARA INC: Fitch Assigns 'B' LongTerm IDR, Outlook Positive
AVONDALE HOMES: Seeks Chapter 11 Bankruptcy in Georgia
AZEK GROUP: S&P Places 'BB-' ICR on CreditWatch Positive
B. RILEY FINANCIAL: Oaktree Capital Holds 5.66% Equity Stake
B2 UNITED: Gets Final OK to Use Cash Collateral
BABY K'TAN: Unsecureds to Split $43,500 in Subchapter V Plan
BARBARA FALATICO-BRODOCK: MSB Awarded $32,432.77 in Fees, Expenses
BARRETTS MINERALS: Says Talc Injury Claims Are Part of Ch.11 Estate
BEASLEY BROADCAST: GAMCO, 2 Others Hold 8.57% Equity Stake
BEELINE HOLDINGS: Names David Kittle as Special Advisor
BELLEVUE HOSPITAL: U.S. Trustee Unable to Appoint Committee
BERRY CORP: Posts $19 Million Net Income for 2024
BILLY J. CUEVAS ITHIER: Wins Bid to Dismiss Bankruptcy Case
BLUE STAR: Files Registration Statement for Resale of 18K Shares
BOY SCOUTS: Documentary Copied Storytelling Style, Claims Atty.
BW REAL ESTATE: Fitch Assigns 'BB-' Rating on Preferred Stock
BW REAL ESTATE: Moody's Rates New Preferred Securities 'Ba2(hyb)'
CALIFORNIA PROUD: Case Summary & Two Unsecured Creditors
CAPSTONE COPPER: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
CAPSTONE COPPER: Moody's Assigns 'Ba3' CFR, Outlook Stable
CARETRUST REIT: Fitch Puts 'BB+' LongTerm IDR on Watch Positive
CARNIVAL CORP: S&P Upgrades ICR to 'BB+', Outlook Stable
CELSIUS NETWORK: Court Narrows Claims in Into the Block Lawsuit
CHARGING ROBOTICS: Hires Brightman Almagor Zohar & Co. as Auditor
CHARTERCARE HEALTH: S&P Assigns 'BB-' Rating on Revenue Bonds
CHRIS' COLLISION: Gets Final OK to Use Cash Collateral
CINEMARK HOLDINGS: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
CLEAN HARBORS: Moody's Hikes CFR to Ba1 & Alters Outlook to Stable
COACH USA: Previous Owner Wants WARN Lawsuit Dismissed
COMMSCOPE HOLDING: Declares Dividend on Series A Preferred Shares
COMMUNITY SCHOOL: Moody's Affirms 'Ba1' Revenue Bond Rating
COMTECH TELECOMMUNICATIONS: Magnetar Holds 40.95% Equity Stake
COSMOS HEALTH: A. Bovopoulos Holds 7% Equity Stake
CP ATLAS: S&P Rates New $161MM Incremental Term Loan B 'B-'
CRAIG CAVILEER: Secured Party to Sell Assets May 6
CRYPTO MARKET: Case Summary & Six Unsecured Creditors
CUTERA INC: Pension Fund Moves to Exclude Class from Ch.11 Releases
DCERT BUYER: Fitch Lowers LongTerm IDR to 'B-', Outlook Stable
DELTA APPAREL: Gets Court OK to Convert Chapter 11 to Chapter 7
DOCUDATA SOLUTIONS: U.S. Trustee Appoints Creditors' Committee
DOUBLE HELIX: To Sell Non-Real Estate Assets to K-LOVE for $4.3MM
E.W SCRIPPS: Fitch Lowers Rating on LongTerm IDR to 'CCC-'
E.W. SCRIPPS: Swings to $146.2 Million Net Income in 2024
ECHOSTAR CORP: Wellington Management Holds 0.1% Equity Stake
ECHOSTAR CORP: Wellington Trust Holds 0.04% Equity Stake
EISNER BROS: Voluntary Chapter 11 Case Summary
EL DORADO: To Sell Fair Oaks Ranch to Dana & Charles Keller
ELITA 7 LLC: Gets Extension to Access Cash Collateral
ENGLOBAL CORP: Seeks Court Approval for $2.5M DIP Financing
ESSENTIAL MINERALS: Gets Interim OK to Use Cash Collateral
EYENOVIA INC: Files Registration Statement for 350K Shares
FARDAD LLC: U.S. Trustee Unable to Appoint Committee
FELTRIM TUSCANY: Seeks Subchapter V Bankruptcy in Florida
FF FUND: Court Dismisses Franzone Appeal as Equitably Moot
FRISCO BAKING: Gets Final OK to Use Cash Collateral
FULCRUM BIOENERY: Court Approves Disclosure Statement
FULCRUM LOAN: U.S. Trustee Unable to Appoint Committee
GARUDA HOTELS: Court Extends Cash Collateral Access to April 17
GO LAB: Case Summary & 20 Largest Unsecured Creditors
GOEASY LTD: S&P Rates New US$400MM Senior Unsecured Notes 'BB-'
GREENLEAF 2 CPE: Gets Final OK to Use Cash Collateral
GUADALUPE REGIONAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
HARVEY CEMENT: Gets Three-Month Extension to Use Cash Collateral
HVI CAT: GLR LLC, et al. Suit Remanded to California Superior Court
I-ON DIGITAL: Series C Voting Rights Up to 20 Per Share
IAMGOLD CORP: Fitch Hikes LongTerm IDR to B+, Outlook Stable
IMAGINE SCHOOL: Moody's Downgrades Revenue Bond Rating to B1
INFINITE GLOW: Gets Interim OK to Use Cash Collateral Until April 8
INSPIREMD INC: Reports $32 Million Net Loss in 2024
INSTANT WEB: CION Marks $50.9 Million Loan at 28% Off
INSULET CORP: Moody's Hikes CFR to 'Ba3', Outlook Remains Positive
JAMES MARITIME: Files Prospectus for Resale of 3.1MM Shares
JJJ CONTRACTING: Court Extends Cash Collateral Access to May 1
JP INTERMEDIATE: CION Marks $53.7 Million Loan at 21% Off
KING STATE: Court OKs Tampa Property Sale to Foxtail Coffee
KLX ENERGY: Completes New $232 Million Senior Secured Notes
KLX ENERGY: Reports Q4, Full-Year 2024 Results
LEARFIELD COMMUNICATIONS: Moody's Ups CFR to 'B3', Outlook Positive
LEE FRANCHISE: Court Extends Cash Collateral Access to April 21
LESLIE'S POOLMART: Moody's Lowers CFR to Caa1, Outlook Stable
LEVEL 3 FINANCING: Fitch Rates New 1st Lien Secured Term Loan 'B+'
LOTUS OASIS: U.S. Trustee Unable to Appoint Committee
MAD ENGINE: Moody's Affirms 'Caa2' CFR & Alters Outlook to Positive
MAYFLOWER RETIREMENT: Fitch Affirms 'BB+' IDR, Outlook Stable
MGM RESORTS: Fitch Affirms 'BB-' IDR, Outlook Stable
MIDCAP FINANCIAL: S&P Affirms 'BB-' ICR, Outlook Stable
MIDCAP FINCO: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
MIS INTERMEDIATE: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
MODIVCARE INC: AI Catalyst Holds 14.9% Equity Stake
MODIVCARE INC: Moody's Rates New 2nd Lien PIK Toggle Notes 'Caa2'
MOHEGAN TRIBAL: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
MONTEREY CAPITOLA: Gets Extension to Access Cash Collateral
MURPHY OIL: Moody's Affirms 'Ba2' CFR & Alters Outlook to Stable
MY SIZE: Oren Elmaliah Named CFO; Roy Golan Joins Board
NETCAPITAL INC: Investors Exercise Warrants, Company Raises $143K
NEWPORT VENTURES: Jay Zimmerman Appointed as New Committee Member
NEWSCYCLE SOLUTIONS: CION Marks $12.8 Million Loan at 23% Off
NINE ENERGY: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative
NORTHERN DYNASTY: Kopernik Global Holds 12.7% Equity Stake
NOVA CHEMICALS: Moody's Affirms 'Ba2' CFR, Outlook Remains Stable
OMERS RELIEF: Moody's Lowers CFR to Caa1 & Alters Outlook to Stable
OMNIQ CORP: Gets $4.4M Order for Rugged Mobile Devices in Logistics
ONCOCYTE CORP: Board OKs Executive Salary Raises, Bonuses
ONCOCYTE CORP: James Liu Named VP Accounting, Controller
OWENS & MINOR: Fitch Assigns 'BB+' Rating on Senior Secured Notes
PAVMED INC: Lucid Diagnostics Closes $14.5-Mil. Stock Offering
POWER CITY: Gets Extension to Access Cash Collateral
PPS 77 LLC: Case Summary & 10 Unsecured Creditors
PREMIER GLOBAL: April 30 Claims Filing Deadline Set
RE/MAX HOLDINGS: Moody's Cuts CFR to B2 & Alters Outlook to Stable
REALPAGE INTERMEDIATE: Fitch Affirms B LongTerm IDR, Outlook Stable
ROCHESTER DIOCESE: CNA Loses Bid to Seal Pfau Lift Stay Motion
ROCK N CONCEPTS: Court Extends Cash Collateral Access to April 8
RUSSEL INVESTMENTS: Moody's Affirms 'B1' CFR, Outlook Negative
SAFE & GREEN: Closes $100M ELOC Agreement With Tysadco
SAFE & GREEN: Issues $360K Promissory Note to GS Capital Partners
SARIT ABIKZER: Secured Party Sets April 10 Public Auction
SAVVYAN TECHNOLOGIES: Reaches Settlement w/ Themesoft; Amends Plan
SCILEX HOLDING: Dividend Record Date Moved to April 11
SEA WEST: Seeks Subchapter V Bankruptcy in Alaska
SEQUOIA HEALTHCARE: CION Marks $8.5 Million Loan at 51% Off
SERVANT GROUP: Case Summary & 13 Unsecured Creditors
SHRIJEE LLC: Case Summary & 20 Largest Unsecured Creditors
SOLANO HOME: Claims to be Paid From Disposable Income
SOLID BIOSCIENCES: Files S-3 Statement for Resale of 364K Shares
SOUTHFIELD VENTURES: Case Summary & Five Unsecured Creditors
SOUTHWEST BAPTIST: S&P Cuts GO Debt Rating to 'BB+', Outlook Neg.
SPEARMAN AEROSPACE: Gets OK to Use Cash Collateral Until April 30
SPINAL USA: CION Marks $17.9 Million 1L Loan at 45% Off
SPINAL USA: CION Marks $813,000 Loan at 46% Off
SPINAL USA: CION Marks $975,000 Loan at 49% Off
STARWOOD PROPERTY: S&P Rates $400MM Senior Unsecured Bonds 'BB-'
STONEYBROOK FAMILY: Gets Final OK to Use Cash Collateral
SULLIVAN MECHANICAL: Court OKs Vehicle Sale
SUNATION ENERGY: Bigger Capital Fund, 6 Others Hold 9.78% Stake
SUNOCO LP: Fitch Assigns 'BB+' Rating on Senior Unsecured Notes
SUNOCO LP: Moody's Rates New $750MM Unsec. Notes Due 2033 'Ba1'
SUSHI GARAGE: Creditors to Get Proceeds From Liquidation
SWC INDUSTRIES: Deborah Jans Out as Committee Member
TENET HEALTHCARE: Fitch Hikes IDR to 'BB-', Outlook Stable
TINY FROG: Case Summary & 20 Largest Unsecured Creditors
TRADEMARK GLOBAL: CION Marks $18.1 Million Loan at 18% Off
TUPPERWARE BRANDS: U.S. Trustee Appoints Retiree Committee
UNISYS CORP: Moody's Lowers CFR to 'B2' & Alters Outlook to Stable
UNIVISION COMMUNICATIONS: S&P Affirms 'B+' Issuer Credit Rating
UPSCALE DEVELOPMENT: Creditors to Get Proceeds From Liquidation
URBAN CHESTNUT: Court Extends Cash Collateral Access Until April 11
V1 TECH: Unsecured Creditors to Split $120K over 5 Years
VILLAGE ROADSHOW: In Chapter 11, Eyes May 21 Auction for Films
VISION CARE: Court Tosses Remaining Claim in Besse Medical Suit
VISTA GLOBAL: Fitch Affirms 'B+' LongTerm Issuer Default Rating
WA3 PROPERTIES TALBOT: Case Summary & 7 Unsecured Creditors
WA3 PROPERTIES UNIV: Case Summary & 11 Unsecured Creditors
WATCHTOWER FIREARMS: U.S. Trustee Appoints Creditors' Committee
WEISS MULTI-STRATEGY: Founder Personally Liable Under Forbearance A
WILLIAMS INDUSTRIAL: CION Marks $1.5 Million Loan at 58% Off
WILLIAMS INDUSTRIAL: CION Marks $325,000 Loan at 58% Off
WMG ACQUISITION: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
WORKHORSE GROUP: Secures $3 Million Release From Lockbox Account
XPLR OPCO: Fitch Rates New Senior Unsecured Notes 'BB+'
[^] Recent Small-Dollar & Individual Chapter 11 Filings
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1261229 BC: Moody's Rates New Sec. Term Loan and Notes 'Caa1'
-------------------------------------------------------------
Moody's Ratings assigned a Caa1 rating to the new backed senior
secured first lien term loan, backed senior secured first lien
revolving credit facility and backed senior secured first lien
notes of 1261229 B.C. Ltd., a restricted subsidiary of Bausch
Health Companies Inc. (Bausch Health). At the same time, Moody's
affirmed Bausch Health's Caa2 Corporate Family Rating, Caa3-PD
Probability of Default Rating, Caa1 senior secured notes and senior
secured bank credit facility ratings, Caa3 second lien senior
secured notes rating, and the Ca senior unsecured notes rating.
Moody's also affirmed the B1 senior secured ratings of Bausch +
Lomb Corporation and Bausch + Lomb Escrow Corp. The Ca backed
senior unsecured ratings of Bausch Health Americas, Inc. were also
affirmed. There is no change to the SGL-3 Speculative Grade
Liquidity Rating. The outlook remains stable.
At the conclusion of the refinancing, Moody's anticipates
withdrawing the rating on the existing senior secured term loan and
revolving credit facility of Bausch Health Companies Inc., as well
as the ratings on certain senior secured notes and senior unsecured
notes that are being refinanced.
The refinancing is credit positive due to extending the company's
maturity profile.
The direct obligator of the new senior secured notes and term loan
is 1261229 B.C. Ltd. (also known as NumberCo), an existing
subsidiary of Bausch Health that will become a restricted
subsidiary in connection with the closing of the transactions. The
proceeds of the notes and term loan will be used to fund an
intercompany loan to Bausch Health Companies Inc., with the loan
proceeds used for reduction of other debt including upcoming debt
maturities in 2025, 2026, 2027 and 2028. Collateral for the new
senior secured notes and term loan includes NumberCo's shares in
Bausch + Lomb Corporation and assets of the subsidiaries of Bausch
Health that secure the existing secured notes. The new instruments
are guaranteed by the same subsidiaries guaranteeing existing debt
obligations of Bausch Health Companies Inc., as well as the parent
company. NumberCo will not guarantee the existing Bausch Health
debt. Compared to existing senior secured indebtedness, Moody's
views the new senior secured instruments as having somewhat better
recovery prospects in the event of default due to the Bausch + Lomb
shares, but not enough to differentiate the ratings.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following:
Incremental pari passu debt capacity up to $1,600 million, subject
to additional BLCO share pledges and no prior drop down financing.
There is no inside maturity sublimit.
The deal contemplates $1,600 million of drop down capacity in lieu
of incremental, subject to 4.25x first lien net leverage and other
conditions.
Investments in non-guarantors restricted subsidiaries are not
permitted, subject to limited exceptions to be included in the
final documentation.
The credit agreement is expected to include J. Crew, Chewy, Serta
and Envision protections.
RATINGS RATIONALE
Bausch Health's Caa2 Corporate Family Rating reflects its high
financial leverage, with gross debt/EBITDA of roughly 7x on a
consolidated basis using Moody's calculations. The rating is
constrained by generic exposures facing Xifaxan, the company's
largest product. Although several recent court decisions reduce the
likelihood of a generic launch over the next few years, the matter
remains unresolved due to several other legal proceedings in
process. Further, in the most favorable case to the company,
generics will launch in January 2028 and the financial impact will
be very material given high financial leverage. Amid these
challenges, a planned separation of Bausch + Lomb would increase
business risks of the remaining company due to reduced scale and
diversity. The likelihood and timing of a separation remain
uncertain as the company evaluates many factors including legal
exposures related to the proposed separation and the tenability of
the remaining company's capital structure.
These risks are tempered by the company's significant global scale
and diversity. Underlying utilization trends of most of the
company's core products are solid. The rating is supported by
solid, rising free cash flow prior to any generic Xifaxan launch.
Bausch Health's SGL-3 Speculative Grade Liquidity Rating reflects
adequate liquidity, reflecting solid cash flow over the next 12 to
18 months if there is no Xifaxan generic launch. In addition, the
company has good capacity under the revolving credit agreements of
Bausch Health and Bausch + Lomb, with adequate cushion under the
first-lien net leverage financial maintenance covenant of Bausch
Health's revolving credit facility assuming no Xifaxan generic
launch. The refinancing transaction will improve the company's debt
maturity profile.
The outlook for all entities is stable, reflecting Moody's
expectations for solid performance over the next 12-18 months but
the continuing of high financial leverage and the overhang of
approaching Xifaxan generic competition.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade of Bausch Health's ratings
include consistent earnings growth, successful pipeline execution
of new rifaximin formulations, and significant resolution of
outstanding legal matters including the Xifaxan patent challenge.
Factors that could lead to a downgrade of Bausch Health's ratings
include operating setbacks, large litigation-related cash outflows,
or an adverse outcome in the unresolved Xifaxan patent challenge.
Factors that could lead to an upgrade of Bausch + Lomb's ratings
include solid operating performance and executing the separation
from Bausch Health. Factors that could lead to a downgrade of
Bausch + Lomb's ratings include failure to effect the separation
combined with a degradation in Bausch Health's credit quality.
Bausch Health Companies Inc. is a global company that develops,
manufactures and markets a range of pharmaceutical, medical device
and over-the-counter products. These are primarily in the
therapeutic areas of eye health, gastroenterology and dermatology.
Revenues in 2024 totaled approximately $9.6 billion.
LIST OF AFFECTED RATINGS
Issuer: Bausch Health Companies Inc.
Affirmations:
Corporate Family Rating, Affirmed Caa2
Probability of Default Rating, Affirmed Caa3-PD
Senior Secured Second Lien Regular Bond/Debenture, Affirmed Caa3
Senior Unsecured Regular Bond/Debenture, Affirmed Ca
Senior Secured Bank Credit Facility, Affirmed Caa1
Senior Secured Regular Bond/Debenture, Affirmed Caa1
Outlook Actions:
Outlook, Remains Stable
Issuer: Bausch + Lomb Corporation
Affirmations:
Senior Secured Bank Credit Facility, Affirmed B1
Outlook Actions:
Outlook, Remains Stable
Issuer: Bausch + Lomb Escrow Corp.
Affirmations:
Senior Secured Regular Bond/Debenture, Affirmed B1
Outlook Actions:
Outlook, Remains Stable
Issuer: Bausch Health Americas, Inc.
Affirmations:
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ca
Outlook Actions:
Outlook, Remains Stable
Issuer: 1261229 B.C. Ltd.
Assignments:
Backed Senior Secured First Lien Bank Credit Facility, Assigned
Caa1
Backed Senior Secured First Lien Regular Bond/Debenture, Assigned
Caa1
Outlook Actions:
Outlook, Assigned Stable
The principal methodology used in these ratings was Pharmaceuticals
published in November 2021.
23ANDME HOLDING: Users' Data Listed for Sale After Demise
---------------------------------------------------------
Jonathan Randles of Bloomberg News reports that millions of
Americans who submitted their DNA to 23andMe for ancestry and
health insights now face the risk of their genetic information
being sold. Following its bankruptcy filing, the company plans a
May 14 auction of its assets, including data from over 15 million
users -- one of the world's largest crowdsourced genetic research
databases.
This raises concerns about privacy and security, particularly after
a 2023 data breach compromised seven million users' information,
the report notes. While bankruptcy laws provide some safeguards,
customer data is often treated as a valuable asset in corporate
restructuring.
According to the report, 23andMe has assured customers they can
delete their data without contacting customer support and that any
buyer must comply with privacy laws. However, California and
Connecticut officials have issued consumer alerts, advising users
on how to remove their genetic information. Connecticut Attorney
General William Tong has pledged to oversee the proceedings to
protect consumer privacy.
Under U.S. bankruptcy law, a consumer privacy ombudsman may be
appointed to ensure data is handled responsibly. Retired bankruptcy
judge Keith Lundin stressed the need for strict safeguards in any
sale of personal information.
23andMe has reported $277.4 million in assets and $214.7 million in
liabilities. The company is seeking court approval for the asset
sale and up to $35 million in Chapter 11 financing. The case is
filed in the U.S. Bankruptcy Court for the Eastern District of
Missouri.
About 23andMe
23andMe is a genetics-led consumer healthcare and biotechnology
company empowering a healthier future. Through its
direct-to-consumer genetic testing, 23andMe offers personalized
insights into ancestry, genetic traits, and health risks. The
Company has developed a large database of genetic information from
over 15 million customers, enabling it to provide health and
carrier status reports and collaborate on genetic research for drug
development. On the Web: http://www.23andme.com/
On March 23, 2025, 23andMe Holding Co. and 11 affiliated debtors
each filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. E.D. Mo. Lead Case No.
25-40976).
The Company disclosed $277,422,000 in total assets against
$214,702,000 in total liabilities as of Dec. 31, 2024.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Morgan, Lewis &
Bockius LLP are serving as legal counsel to 23andMe and Alvarez &
Marsal North America, LLC as restructuring advisor. Moelis &
Company LLC is serving as investment banker and Goodwin Procter LLP
is serving as legal advisor to the Special Committee of 23andMe's
Board of Directors. Reevemark and Scale are serving as
communications advisors to the Company. Kroll is the claims agent.
2835 OCTAVIA: Seeks Chapter 11 Bankruptcy in California
-------------------------------------------------------
On March 19, 2025, 2835 Octavia LLC filed Chapter 11 protection in
the U.S. Bankruptcy Court for the Northern District of California.
According to court filing, the Debtor reports between $1 million
and $10 million in debt owed to 1 and 49 creditors. The petition
states funds will be available to unsecured creditors.
About 2835 Octavia LLC
2835 Octavia LLC is a single asset real estate debtor, as defined
in 11 U.S.C. Section 101(51B).
2835 Octavia LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 25-30213) on March 19,
2025. In its petition, the Debtor reports estimated assets and
liabilities between $1 million and $10 million.
Honorable Bankruptcy Judge Dennis Montali handles the case.
The Debtor is represented byMatthew D. Metzger, Esq. at BELVEDERE
LEGAL, PC.
330 WESTMINSTER: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee for Region 9 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of 330 Westminster St MI, LLC.
About 330 Westminster St. MI
330 Westminster St MI, LLC filed Chapter 11 bankruptcy petition
(Bankr. E.D. Mich. Case No. 25-41260) on Feb. 11, 2025, listing up
to $1 million in both assets and liabilities.
Judge Thomas J. Tucker oversees the case.
The Debtor is represented by Resurgent Legal Services, PLC.
A-AG MIDCO: S&P Alters Outlook to Negative, Affirms 'B' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on A-AG Midco Ltd.'s (dba
Grain & Protein Technologies; GPT) to negative from stable and
affirmed all of its ratings, including our 'B' issuer credit rating
on GPT and 'B' issue-level rating on the first-lien credit
facilities issued by its subsidiary A-AG US GSI Bidco Inc.
The negative outlook indicates that S&P could lower its rating on
the company over the next 12 months if it is unable to reduce its
S&P Global Ratings-adjusted debt to EBITDA below 6x and generate
positive free operating cash flow (FOCF) due to
weaker-than-anticipated demand, slower-than-expected operating
improvements, or a combination of these factors.
S&P forecasts GPT's 2025 debt leverage and free cash flow will be
weaker than it previously expected due to lower demand for grain
equipment and operating challenges at its Cimbria subsidiary.
Cyclically stronger demand and continued operating improvements
across the business in 2026 should bring credit metrics in line
with S&P's previous expectations.
In addition, GPT announced the acquisition of a portion of Munters
AB, which manufactures fan, cooling systems, heaters, and other
climate solutions for poultry and swine production, which it plans
to finance with a $100 million incremental first-lien term loan and
$20 million of common equity contribution from its sponsor. S&P
views the additional protein production exposure as improving the
strength of GPT's business.
Weaker demand and operating challenges will pressure GPT's credit
metrics in 2025. S&P said, "We expect North American grain bin
demand will fall in 2025. U.S. corn prices are about 35% lower than
two years ago and are unlikely to rise over the next year.
Additionally, unrestricted subsidiary Cimbria is recovering from
weak demand and operating challenges in 2024, and we anticipate its
EBITDA will be negative this year. We forecast this will push GPT's
S&P Global Ratings-adjusted debt to EBITDA to 6x-6.5x, pro forma
for the acquisition, and prevent it from generating FOCF in 2025."
This includes acquisition-related and restructuring costs as
operating costs.
The acquisition of Munters' FoodTech Equipment business is likely
leverage neutral. The purchase price was a low multiple of the S&P
Global Ratings-adjusted EBITDA we anticipate the acquired business
will generate. Sponsor AIP will contribute $20 million of cash
equity, which reduces debt financing. The acquisition improves our
view of the business by increasing exposure to protein, balancing
the mix and expanding the product range. S&P said, "We believe
restructuring costs will be a small share of EBITDA, reducing it
only moderately in 2025. If its EBITDA turns out to be lower than
we had expected, for example due to higher-than-anticipated
restructuring costs, we could lower our rating."
S&P said, "Our forecast for better credit metrics in 2026 supports
our rating. GPT manufactures equipment for the cyclical and
competitive agriculture industry. This is a disadvantage compared
with the broad range of small specialty manufacturers we rate, many
of which serve multiple industries. The commodity nature of farming
limits the industry's profitability. In addition, we believe
technological barriers to entry are low. Though its brand and
distribution network offset these weaknesses somewhat, our rating
incorporates our expectation that GPT will generally maintain S&P
Global Ratings-adjusted debt to EBITDA below 6x.
"We also expect GPT to prevent FOCF from remaining negative. GPT
has ample liquidity, considering its $84 million cash balance,
undrawn $90 million asset-based lending (ABL) facility, and $10
million revolving credit facility (RCF). Cash outflows are thus
unlikely to pressure its liquidity position. That said, we see some
risk that FOCF could be slightly negative in 2025. FOCF that
remains negative or even neutral would compare unfavorably with the
range of manufacturers we rate 'B'.
"We anticipate stronger North American grain equipment demand in
2026. Though U.S. farmer income in 2023 and 2024 was above the
20-year average, it was significantly lower than the record levels
of 2022. Lower corn prices at the end of last year hurt this year's
demand for grain equipment. The USDA forecasts farmer income will
increase in 2025, partially due to higher government payments. We
expect this, in combination with relatively flat corn prices, will
allow grain bin demand to recover in 2026. The timing of a full
recovery is unclear, so our 2026 forecast is uncertain. If next
year's demand is weaker than we anticipated, credit metrics will
likely underperform.
"Operating improvements should continue to benefit GPT's
performance. We expect GPT will continue to take advantage of cost
structure and revenue opportunities. For example, a more sensible
strategy of aligning steel purchases with grain bin orders has
already improved its profitability. We estimate its S&P Global
Ratings-adjusted gross margins at the business excluding Cimbria
increased in 2024, despite sales falling 3%. The company will also
work with its dealer network to capture a larger share of
aftermarket parts demand for its installed base of equipment."
Cimbria will likely continue to weigh on GPT's credit metrics in
2026. Cimbria is an unrestricted subsidiary manufacturing equipment
for processing, handling, and storing grain, seeds, and other bulk
products. In general, S&P Global Ratings considers all entities
over which the parent has direct or indirect control to be part of
the parent. As a result, all GPT's S&P Global Ratings-adjusted
credit metrics include Cimbria. This business experienced
significant operating challenges during 2023 and 2024, including
relating to an ERP software implementation. Its EBITDA was
significantly negative over this period. S&P said, "We anticipate
this business will make significant improvement in 2025 and further
progress 2026. We forecast the negative contribution to S&P Global
Ratings adjusted-EBITDA will stop by the end of this period."
Grain end-market demand should continue to offset protein
end-market demand. Grain is a key input for protein producers. A
decrease in the profits of grain-focused farmers hurts demand for
grain bins, as demonstrated in the second half of 2024 and, S&P
anticipates, in 2025. However, lower grain prices fatten the
margins for protein producers, increasing demand for related
equipment.
The negative outlook indicates that S&P could lower its rating on
the company over the next 12 months if it is unable to reduce its
S&P Global Ratings-adjusted debt to EBITDA below 6x and generate
positive FOCF due to weaker-than-anticipated demand,
slower-than-expected operating improvements, or a combination of
these factors.
S&P could lower its rating on GPT if it believes:
-- Its S&P Global Ratings-adjusted debt to EBITDA will be remain
above 6x;
-- FOCF will break even or be negative; or
-- It will pursue a more aggressive financial policy, including
further debt-funded acquisitions or dividends to its financial
sponsor.
S&P could revise its outlook on GPT to stable if it believes:
-- Its S&P Global Ratings-adjusted debt to EBITDA will fall below
6x.
-- FOCF will be positive; and
-- The company's financial sponsors are committed to maintaining
this level of leverage throughout the business cycle.
AAGS HOLDINGS: Equity Interests Set for Auction on May 9
--------------------------------------------------------
CPIF MRA LLC will sell at public auction all limited liability
company interests held by DS Partners LIC LLC and QPS EJA LLC
("Pledgors") in AAGS Holdings LLC ("Pledged Entity"). The equity
interests secure indebtedness owing by pledged entity to secured
party in a principal amount of not less than $56,900,000 plus
unpaid interests, attorneys' fees and other charges including the
costs to sell the equity interests ("Debt").
The public auction sale will be held on May 9, 2025, at 10:30 a.m.
(ET) by virtual bidding via Zoom via the following zoom meeting
link: https://bit.ly/QueensPlazaUCC (case sensitive), meeting ID:
814-8021 4147, passcode: 261455 or by telephone at +1 646 931 3860
(US), using same meeting ID and passcode.
The public sale will be conducted by Matthew D. Mannion of Mannion
Auctions LLC.
Parties interested in bidding on the equity interests must contact
Stephen Schwalb at Newmark ("Broker"), secured party's broker at +1
469 467 2084 or stephen.schwalb@nmrk.com. Upon execution of
standard non-disclosure agreement, additional documentation and
information will be available. Interested parties who do not
contact the Broker and register before the public sale may not be
permitted to participate in bidding at the public sale.
Additional information can be found at
https://tinyurl.com/y6fvj9wx
About AAGS Holdings
AAGS Holdings LLC sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 19-13029) on Sept. 20, 2019. Robinson Brog Leinwand
Greene Genovese & Gluck P.C. is the Debtor's counsel.
AAGS Holdings is a a limited liability company currently under
contract to purchase the real property located at 23-10 Queens
Plaza South, Queens, New York. The property is currently owned by
QPS 23-10 Development LLC ("Seller"). The Debtor and Seller
entered into an Agreement of Purchase and Sale dated July 17, 2019
(the "APS") to sell the Property to the Debtor for a purchase price
of $27,500,000, with closing scheduled for Sept. 20, 2019. The
Debtor's emergency filing was precipitated by the Debtor's need for
additional time to consummate the APS with the Seller and to avoid
losing its rights under the APS and its $100,000 deposit.
ABC TECHNOLOGIES: S&P Assigns 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to ABC
Technologies Inc. and its 'B' issue-level rating and '3' recovery
rating to its proposed senior secured debt ($500 million revolver
and $900 million term loan B). The '3' recovery rating indicates
its expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default.
S&P will withdraw its ratings on TI Fluid Systems PLC and its debt
following close of this transaction and the repayment of its
existing debt.
The stable outlook reflects S&P expectation that ABC Technologies
Inc. will maintain leverage of below 6.0x while generating positive
free operating cash flow (FOCF) over the next 12 months.
The rating reflects the combined companies' established position as
a supplier to original equipment manufacturers (OEM), as well as
the new entity's substantial debt burden, aggressive financial
policy under its financial-sponsor ownership, depressed credit
metrics due to its significant restructuring initiatives, and
potential tariff-related volatility. S&P said, "Following the close
of the transaction, we expect ABC Technologies' pro forma leverage
will be about 5.1x in fiscal year 2025. This reflects the company's
high debt load and EBITDA margins, which are burdened by its
substantial cost-savings and restructuring-related costs. Through
the merger of TI and ABC Technologies, the company and its sponsors
plan to realize ambitious cost savings across selling, general, and
administrative (SG&A) expenses, materials, R&D, and conversion
costs--with lower scrap and fixed overhead, which it will action
over the next two years. We expect the entity's sales will decline
by 2% in 2025 due to softer OEM production levels and moderating
fuel tank sales due to the ongoing shift toward electrification. We
forecast ABC Technologies' margins will be about 11.1% in 2025
reflecting its elevated restructuring cost burdens and weaker
production volume."
S&P said, "We forecast the company will expand its sales by 1.8% in
2026 on a recovery in OEM production volumes and stronger demand
for thermal management products, which will partially be offset by
declining fuel tank volumes. Despite ABC Technologies' higher
restructuring costs in 2026, we anticipate it will realize some
synergies and improve its operating leverage such that its margins
rise to 11.2%." However, this will only modestly reduce the
company's leverage to 5.0x in 2026. Furthermore, due to the high
interest burden and restructuring costs over the next two years, we
forecast ABC Technologies will generate FOCF to debt of 1.7% in
2025 and 1.8% in 2026. While the company will likely further expand
its margins toward 12% in 2027 as its restructuring costs
normalize, its ability to achieve this improvement will depend on
whether it targets further restructuring opportunities or maintains
elevated restructuring levels to support additional mergers and
acquisitions (M&A).
S&P said, "The potential implementation of U.S. tariffs on goods
imported from Mexico and Canda would also lead to a modest downside
relative to our base forecast. While the company is less exposed to
direct potential tariffs due to its localized manufacturing bases
across the world, it would be negatively affected by a reduction in
OEM production volumes. We believe ABC Technologies will be able to
pass on any increase in its costs stemming from the imposition of
tariff to its customers, given its scale and history of successful
cost pass throughs." Tier 2 and 3 suppliers will also face
increased pressure if tariffs are implemented, which would increase
the level of volatility in the overall automotive supply chain
volatility. Tariffs on semiconductors, steel, aluminum and other
inputs could further increase costs for end consumers and lead to
additional production downside.
The combined company is a leading OEM supplier across many of its
core product categories, with decent geographic and customer
diversity. The combined company generated approximately $5.4
billion of revenue in 2024, with its main product segments
comprising interior and exterior components (29% of revenue), fuel
tanks and delivery systems (30%), brake and fluid systems (32%),
and thermal management (9%). While ABC Technologies maintains
leading market shares across all of its product categories, it
faces competition from larger peers in the thermal management and
fuel tanks segments. Additionally, the thermal management market is
more fragmented and smaller due to currently depressed electric
vehicle (EV) production volumes. Nevertheless, the company's
product expertise, scaled manufacturing base, and global footprint
position it well for to expand its share across its major
categories.
ABC Technologies' customer diversity is also a moderate strength
relative to its peers in the auto OEM supplier space, given that
its top five customers account for only 52% of its revenue and no
single customer accounts for more than 15%. This reduces the
company's reliance on any one customer, mitigating the risks
associated with potential production weakness. Furthermore, ABC
Technologies is typically the sole supplier for the products its
provides and has a track record of retaining its customers. The
company's geographic exposure is also somewhat diverse, given that
it derives 29% of its revenue from Europe, the Middle East, and
Africa (EMEA) and 20% from the Asia-Pacific region (APAC), though
it has an overweight exposure to the Americas, which account for
51% of its revenue. This high concentration in the Americas,
particularly compared to TI's stand-alone exposure, stems from
legacy ABC Technology's interior and exterior components business,
which is primarily based in the Americas. The company also has a
globally diversified manufacturing footprint that is localized for
its OEM customers. ABC Technologies has strong pass-through
mechanisms for raw material costs and typically achieves 80%-85%
pass-throughs, which helps mitigate its profit volatility.
The merger of ABC and TI Fluid will create a more-diverse company
with greater product breadth, though it will continue to face
modest risk from the long-term shift toward electrification.
Approximately 70% of the company's revenue is powertrain agnostic;
however, its fuel tanks and delivery systems, along with certain
fluid systems products, rely on the continued production of
internal combustion engines (ICE) or hybrid electric vehicles
(HEV). As a mature and consolidated business, ABC Technologies'
fuel tanks and delivery systems business is highly profitable.
However, as the OEMs electrify their powertrains, particularly in
EMEA and APAC, the market for ICE products will gradually decline,
which will likely weaken its fuel tanks division's revenue and
profitability.
S&P said, "That said, the company's thermal management business,
which we expect will expand along with the increasing content on
EVs, including battery cooling products, somewhat offsets this
risk. However, the revenue contribution from this segment is
currently much smaller and its margins are significantly lower than
those of ABC Technologies' core business. We anticipate the company
will gradually improve its margin as it phases out its existing
lower-margin programs, quotes new programs at higher margins, and
improves its operating leverage on its increasing volumes.
Nonetheless, we do not expect ABC Technologies will achieve margin
parity between its thermal management and fuel tanks and delivery
systems segments until it significantly scales its volumes, which
will occur beyond our forecast horizon.
"We expect the company will remain acquisitive and maintain
leverage of more than 5x over the longer term. We consider ABC
Technologies' financial policy to be aggressive, particularly given
the influence of its financial-sponsor owners. We expect the
company's leverage will remain above 5x over the long term due to
the potential for debt-funded M&A or shareholder returns. Under
Apollo's ownership, ABC Technologies acquired TI Fluid Systems PLC
in 2025, WGMT and Plastikon in 2023, and dhBOWLES and Etzel in
2022. We believe the company will continue to pursue acquisitions
of additional auto suppliers to expand its scale, enhance its
product portfolio, and capitalize on cross-selling opportunities.
This, in turn, could entail further restructuring costs, which will
suppress its margin expansion. However, if ABC Technologies
establishes a less-aggressive track record of acquisitions or
shareholder returns, such that it maintains leverage of less than
5x and FOCF to debt approaching 5%, we may view its financial
policy as less aggressive, which could support an upgrade.
"The stable outlook reflects our expectation that ABC Technologies
will sustain leverage below 6x while generating positive free cash
flow, despite facing more volatile industry conditions and
incurring significant restructuring costs.
"We could lower our rating on ABC Technologies if it maintains
leverage of more than 6x or its FOCF to debt remains near
breakeven. This could occur if the company's margins deteriorate
further due to volume declines, it faces inflationary costs that it
cannot pass through to its customers, or it significantly misses
its cost-savings targets. Additionally, we could downgrade ABC
Technologies if its sponsor increases its leverage to finance large
acquisitions or dividends.
"We could raise our ratings on ABC Technologies if its FOCF to debt
approaches 5% and its debt to EBITDA remains below 5x on a
sustained basis. This would likely occur if it successfully
achieves the majority of its expected cost savings and benefits
from the roll-off of its restructuring costs. Additionally, we
would need to have greater confidence that its financial sponsor
would be willing to maintain these more-conservative credit metrics
over the long term before raising the rating."
ACCOUNTING LAB: Case Summary & 16 Unsecured Creditors
-----------------------------------------------------
Debtor: The Accounting Lab Group LLC
1540 International Parkway
Suite 2000
Lake Mary, FL 32746
Business Description: The Accounting Lab Group LLC is a Florida-
based firm specializing in accounting, tax
planning, and business management services.
The Company provides tailored solutions to
help business owners minimize taxes,
optimize revenue, reduce overhead, and
streamline operations. The Company works
closely with professionals such as
physicians, dentists, veterinarians, and
small businesses to enhance their financial
performance and efficiency.
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 25-01659
Judge: Hon. Lori V Vaughan
Debtor's Counsel: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
201 S. Orange Avenue
Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: dvelasquez@lathamluna.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by R. Corico McCray Sr. as managing
member.
A full-text copy of the petition, which includes a list of the
Debtor's 16 unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/RIXAROI/The_Accounting_Lab_Group_LLC__flmbke-25-01659__0001.0.pdf?mcid=tGE4TAMA
AKOUSTIS TECHNOLOGIES: Gets Extension to Access Cash Collateral
---------------------------------------------------------------
Akoustis Technologies, Inc. and its affiliates obtained a court
order extending the companies' authority to use cash collateral
from March 28 to April 25.
The U.S. Bankruptcy Court for the District of Delaware granted the
companies another extension due to extensions incorporated into its
order approving the bid process governing the sale of most of the
companies' assets.
Thus, the new budget, which has been extended through April 25,
will allow for the completion of the sale, according to court
filings.
The companies' authority to use cash collateral terminates on April
25 or upon the appointment of a trustee; the confirmation of a
bankruptcy plan; or the dismissal or conversion of their Chapter 11
cases to proceedings under Chapter 7.
About Akoustis Technologies
Akoustis Technologies, Inc. -- http://www.akoustis.com/-- is a
high-tech BAW RF filter solutions company that is pioneering
next-generation materials science and MEMS wafer manufacturing to
address the market requirements for improved RF filters --
targeting higher bandwidth, higher operating frequencies and higher
output power compared to legacy polycrystalline BAW technology. The
Company utilizes its proprietary and patented XBAW(R) manufacturing
process to produce bulk acoustic wave RF filters for mobile and
other wireless markets, which facilitate signal acquisition and
accelerate band performance between the antenna and digital back
end. Superior performance is driven by the significant advances of
poly-crystal, single-crystal, and other high purity piezoelectric
materials and the resonator-filter process technology which enables
optimal trade-offs between critical power, frequency and bandwidth
performance specifications.
Akoustis owns and operates a 125,000 sq. ft. ISO-9001:2015
registered commercial wafer-manufacturing facility located in
Canandaigua, NY, which includes a class 100 / class 1000 cleanroom
facility -- tooled for 150-mm diameter wafers -- for the design,
development, fabrication and packaging of RF filters, MEMS and
other semiconductor devices. Akoustis is headquartered in the
Piedmont technology corridor near Charlotte, North Carolina.
Akoustis and three affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 24-12796) on Dec. 16, 2024. Akoustis
disclosed $53,371,000 in total assets against $122,586,000 in total
debt as of Sept. 30, 2024.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped K&L Gates, LLP as bankruptcy counsel; Landis
Rath & Cobb, LLP as local counsel. Raymond James & Associates, Inc.
as investment banker; Getzler Henrich & Associates, LLC as
financial advisor; and C Street Advisory Group as strategic
communications advisor. Stretto is the claims agent and has
launched the page https://cases.stretto.com/Akoustis.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
ALVOGEN PHARMA: Moody's Ups CFR to Caa1 & Rates 2nd Lien Loan Caa2
------------------------------------------------------------------
Moody's Ratings upgraded the ratings of Alvogen Pharma US, Inc.
("Alvogen"), including the Corporate Family Rating to Caa1 from
Caa2, the Probability of Default Rating to Caa1-PD from Caa2-PD.
Concurrently Moody's withdrew the Caa2 rating on the company's
senior secured term loan due 2025, and assigned Caa2 rating to the
new senior secured second lien term loan due 2029. The outlook is
stable.
The ratings upgrade reflects Alvogen's extension of essentially all
of its debt maturities, with issuance of senior secured first lien
term loan (unrated) and senior secured second lien term loan due
2028 and 2029, respectively, as well as ABL revolver (unrated)
extended to 2028. Alvogen's pro forma financial leverage is modest
post-refinancing at roughly 1.9x (not inclusive of preferred
equity). However, Moody's believes growing competitive pressures in
2026 will result in significant erosion in profitability of
company's two top products. Furthermore, while Alvogen's pipeline
of new drug launches provides potential to offset erosion of the
existing portfolio of products, there is a degree of uncertainty
around the timing and success of their launches. Moody's believes
should Alvogen experience delays or is unable to launch new
products, company's credit metrics and liquidity will materially
weaken in 2026.
The Caa2 rating of the new senior secured second lien term loan due
2029 is one notch below the Caa1 CFR, reflecting its subordination
to the ABL revolver facility and first lien senior secured term
loan. The instrument rating reflects Moody's views of the ultimate
recovery in a default scenario based on an estimated value of the
assets relative to the rank and size of these claims in the
company's capital structure.
RATINGS RATIONALE
Alvogen's Caa1 Corporate Family Rating reflects its moderate size
and scale with revenues of approximately $1.0 billion for the last
twelve months ended December 31, 2024, in the highly competitive
generic pharmaceutical industry. Alvogen benefits from modest pro
forma financial leverage of 1.9x debt/EBITDA (not inclusive of
preferred equity), following refinancing. While Alvogen's growth
and profitability are largely driven by contribution from top two
drugs, pipeline product launches could provide for opportunities to
offset any erosion of the existing portfolio, over the next several
years. Moody's expects the company to remain free cash flow
positive in 2025.
Moody's expects Alvogen's liquidity to remain adequate over the
next twelve months. The cash balance at the close of restructuring
was approximately $68 million. Moody's estimates the company to be
free cash flow positive over the next 12 months. Alvogen's
liquidity is supported by a $240 million ABL revolving credit
facility expiring in May 2028. There was roughly $147 million drawn
on the ABL revolver, at the close of the restructuring. The senior
secured first lien term loan contains maximum first lien net
leverage ratio set at 3.25x, with subsequent step-downs.
The stable outlook incorporates Moody's expectations that Alvogen
will maintain moderate financial leverage. Additionally, Moody's
expects the company will generate meaningful free cash flow in
2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if Alvogen successfully
demonstrates proven ability to more than offset base business
declines with new product launches. An upgrade would also require
debt/EBITDA sustained below 6.5x. Additionally, the company would
need to generate consistently positive free cash flow, for upgrade
to be considered.
Factors that could lead to a downgrade include inability to offset
base business declines with new product launches. Additionally,
weakening of liquidity profile, including sustained negative free
cash flow could lead to a downgrade.
Alvogen Pharma US, Inc. ("Alvogen") is a subsidiary of Alvogen Lux
Holdings S.a.r.l. ("LuxCo"). Alvogen Pharma US, Inc. comprises the
US generic and branded pharmaceuticals divisions and contract
manufacturing operations of LuxCo. For the twelve months ended
December 31, 2024, Alvogen Pharma US, Inc. reported revenues of
approximately $1.0 billion. Alvogen Pharma US, Inc. is owned by a
consortium of private equity firms including CVC Capital and
Temasek. The company's Chairman Robert Wessman also owns a
significant stake in the company.
The principal methodology used in these ratings was Pharmaceuticals
published in November 2021.
AMERICAN CLINICAL: CION Marks $13.7 Million 1L Loan at 14% Off
--------------------------------------------------------------
CION Investment Corp. has marked its $13,733,000 loan extended to
American Clinical Solutions LLC to market at $11,742,000 or 86% of
the outstanding amount, according to CION'S Form 10-K for the
fiscal year ended December 31, 2024, filed with the U.S. Securities
and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to
American Clinical Solutions LLC. The debt accrues interest at a
rate of S+700, 1.00% SOFR Floor per annum. The debt matures on June
30, 2025.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
CĪON Investment Corporation
100 Park Avenue, 25th Floor
New York, NY
About American Clinical Solutions LLC
American Clinical Solutions LLC is a drug confirmation service
provider. The company delivers accurate and reliable testing
results for both prescription and illicit narcotics to healthcare
providers and medical facilities across the country.
AMERICAN IMPACT: Seeks Chapter 11 Bankruptcy in Florida
-------------------------------------------------------
On March 19, 2025, American Impact Windows & Doors LLC filed
Chapter 11 protection in the U.S. Bankruptcy Court for
the Southern District of Florida. According to court filing, the
Debtor reports between $1 million and $10 million in debt owed to
1 and 49 creditors. The petition states funds will not be available
to unsecured creditors.
About American Impact Windows & Doors LLC
American Impact Windows & Doors LLC installs and replaces
impact-resistant windows and doors for residential and commercial
clients. The Company's products are built to withstand severe
weather, including hurricanes, making them perfect for the region's
tough climate. The Company offers easy installations, a variety of
window and door options, and financing plans. It also provides
custom solutions like glass rails and storefront doors, along with
permit expediting services.
American Impact Windows & Doors LLC sought relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Fla. ) on March 19, 2025.
In its petition, the Debtor reports estimated asserts up to $50,000
and estimated liabilities between $1 million and $10 million.
Honorable Bankruptcy Judge Laurel M Isicoff handles the case.
The Debtor is represented by Carlos E. Sardi, Esq. at SARDI LAW,
PLLC.
ANTHEM SPORTS: CION Marks $45.1 Million 1L Secured Debt at 23% Off
------------------------------------------------------------------
CION Investment Corp. has marked its $45,166,000 loan extended to
Anthem Sports & Entertainment Inc. to market at $34,778,000 or 77%
of the outstanding amount, according to CION'S Form 10-K for the
fiscal year ended December 31, 2024, filed with the U.S. Securities
and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to Anthem
Sports & Entertainment Inc. The debt accrues interest at a rate of
S+950, 1.00% SOFR Floor per annum. The debt matures on November 15,
2026.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
CĪON Investment Corporation
100 Park Avenue, 25th Floor
New York, NY
About Anthem Sports & Entertainment Inc.
Anthem Sports & Entertainment Inc. is a Canadian multinational
media company based in Toronto, Ontario and founded by Leonard
Asper. Anthem is majority-controlled by Asper via Sygnus
Corporation.
ANYWHERE REAL: Moody's Cuts CFR to 'B3', Outlook Stable
-------------------------------------------------------
Moody's Ratings downgraded Anywhere Real Estate Group LLC's
(Anywhere Real Estate and Anywhere) corporate family rating to B3
from B2, probability of default rating to B3-PD from B2-PD, senior
secured first lien bank credit facility rating to Ba3 from Ba2, and
backed senior secured second lien notes to B2 from B1. The senior
unsecured notes were affirmed at Caa1. The speculative grade
liquidity (SGL) score was downgraded to SGL-4 from SGL-2. The
outlook is stable.
The ratings downgrades reflect Moody's views that liquidity has
become weak, as also reflected in the SGL-4, and refinancing risk
has increased over the past year. The company must address the
maturity of its unrated 0.25% $403 million exchangeable notes,
which if left in place, would accelerate the maturity of the
company's $1.1 billion revolving credit facility to March 2026 from
July 2027. While Moody's expects the company will refinance this
debt before the March 2026 deadline, there is uncertainty as to how
potentially higher borrowing costs and incremental debt from a
refinancing would impact Moody's expectations for financial
leverage and cash flow. Moody's expects the company will generate
around negative $70 to $80 million of free cash flow in 2025
including around $114 million of one-time legal costs. As of
February 21, 2025, the company has a $585 million balance on its
$1.1 billion revolver, which increased partially after using it to
repay its term loan A, due February 2025, in the third quarter of
2024. Moody's do not believe that the remaining revolver capacity
is sufficient to repay the company's unrated notes, satisfy the
one-time legal items, and meet seasonal working capital needs over
the next 12 to 18 months.
Governance considerations were a key ESG driver of the rating
action, reflecting the company's tolerance for financial strategies
that lead to increasing refinancing risk.
RATINGS RATIONALE
The B3 CFR reflects Anywhere's high debt to EBITDA leverage of 8.6x
for the twelve months ended December 31, 2024 and Moody's
expectations for negative free cash flow after one-time items in
2025, driven by a slow recovery in US existing home sales from
still-high interest rates. Moody's believes Anywhere's financial
performance will gradually improve due to low single-digit revenue
growth supported by modest home price appreciation, stable
commission rates, and flat transaction volumes. Additionally,
ongoing cost reduction initiatives are expected to drive earnings
growth, reducing the debt to EBITDA ratio to 7.5x over the next 12
to 18 months. However, uncertainty around the timeline and pace of
the potential recovery in real estate transaction volumes is
elevated.
All financial metrics cited reflect Moody's standard adjustments.
Anywhere's financial performance, particularly revenue and profits,
are strongly linked to fluctuations in average home sale prices,
transaction volumes, and commission rates. Transaction numbers have
remained muted following a decline in the high teens percentage
rates during 2023, but the pace of the decline has slowed
dramatically since early 2024, leading us to anticipate revenue for
2025 will grow modestly or remain flat. Average home sale prices
have generally increased or remained near their post-pandemic peak
despite high borrowing costs, which has supported brokerage fees
per transaction. While interest rates are still elevated and
housing inventories in certain markets remain below pre-pandemic
levels, consumer interest and investment in housing creates a floor
on US residential volumes at around the high 3 to low 4 million
range and provides support for an eventual recovery if interest
rates decline. However, the existing home sale market is also
cyclical, so strong revenue, profit and free cash flow growth will
require robust economic conditions, which may not remain in place
if interest rates decline.
Anywhere's strong competitive position and investments in its
brands and technology bolster its capability to attract and retain
sales professionals amid market downturns, positioning the company
well to benefit immediately once a recovery takes hold. The
company's financial and operating strategies, emphasizing cash
generation and cost management, further reinforce the expectation
for a recovery in debt leverage, interest coverage and other
financial strength metrics once revenue returns to growth.
The senior secured first lien revolver is rated Ba3, three notches
above the B3 CFR, reflecting its priority position in the capital
structure and first-loss absorption provided by the substantial
amount of junior ranking debt and non-debt obligations. The
revolver is secured by a first-priority pledge of substantially all
of the company's domestic assets (other than excluded entities and
excluding accounts receivable pledged for the securitization of the
facility) and 65% of the stock of certain foreign subsidiaries.
The senior secured second lien notes are rated B2, one notch above
the B3 CFR, reflecting its junior position with respect to the
first lien claims and priority position in the capital structure
and first-loss absorption provided by the unsecured claims. The
debt is secured by a second-priority pledge of substantially all of
the company's domestic assets and 65% of the stock of certain
foreign subsidiaries.
The senior unsecured notes are rated Caa1, one notch below the B3
CFR, reflecting their effective subordination to all the secured
debt. The senior notes are guaranteed by substantially all of the
company's domestic subsidiaries. The unrated 0.25% exchangeable
notes due June 2026 are ranked pari passu with Anywhere's rated
unsecured notes in Moody's hierarchy of claims at default.
The SGL-4 speculative grade liquidity score reflects Anywhere's
weak liquidity profile. Moody's anticipates that free cash flow,
cash, and availability under its revolving credit facility may not
be enough to cover its required debt maturity during the next 12 to
18 months. The company has until March 2026 to address the maturity
of its unrated $403 million exchangeable notes, which if not
refinanced or extended past October 2027, would accelerate the
maturity of the company's $1.1 billion revolving credit facility to
March 2026 from July 2027. As of December 31, 2024, Anywhere had a
cash balance of $118 million. As of February 21, 2025, there were
$585 million of outstanding borrowings under the $1.1 billion
revolving credit facility, which Moody's expects could increase up
to $700 million during under peak seasonal borrowings during the
first quarter. Anywhere's cash flow is seasonal, with negative cash
flow typically in the first fiscal quarter.
The stable outlook reflects Moody's anticipations that Anywhere's
revenue and profit rates will improve as the existing home sale
market gradually recovers and cost reductions at the company take
hold, driving debt to EBITDA to approach 7.5x and EBITA to interest
expense above 1.0x. The stable outlook anticipates Anywhere will
address its 2026 debt maturity before the end of 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Anywhere will
sustain, through market cycles: 1) debt to EBITDA below 6.0x, 2)
EBITA to interest expense approaching 1.5x, 3) free cash flow to
debt approaching the mid-single digit percentage range; and 4)
maintain balanced financial strategies, including an emphasis upon
repaying debt and extending its debt maturity profile.
The ratings could be downgraded if: 1) revenue growth and
profitability rates decline; 2) liquidity deteriorates further,
including Moody's expectations for cash flow; or 3) financial
strategies becomes more aggressive including increased debt
financed acquisitions or shareholder returns, leading us to
anticipate the company's debt to EBITDA will be sustained above
8x.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Anywhere Real Estate Group LLC (formerly known as Realogy Group
LLC) is an indirect subsidiary of publicly-traded Anywhere Real
Estate Inc. (NYSE:HOUS, formerly known as Realogy Holdings Corp.)
and is based in Madison, NJ. Anywhere provides franchise and
brokerage operations as well as national title, settlement, and
relocation services, and nationally scaled mortgage origination and
underwriting joint ventures. The company operates in three
segments: Franchise Group, Brokerage Group, and Title Group. The
franchise brand portfolio includes Better Homes and Gardens® Real
Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker
Commercial®, Corcoran®, ERA®, and Sotheby's International
Realty®. Moody's expects revenue of nearly $5.9 billion in 2025.
APPALACHIAN RESOURCE: CION Marks $11.1 Million 1L Debt at 26% Off
-----------------------------------------------------------------
CION Investment Corp. has marked its $11,137,000 loan extended to
Appalachian Resource Company, LLC to market at $8,231,000 or 74% of
the outstanding amount, according to CION'S Form 10-K for the
fiscal year ended December 31, 2024, filed with the U.S. Securities
and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to
Appalachian Resource Company, LLC. The debt accrues interest at a
rate of S+500, 1.00% SOFR Floor per annum. The debt was scheduled
to mature September 30, 2024.
"While the maturity date of this loan has passed, the Company
expects all interest and principal to be collected," CION says.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
CĪON Investment Corporation
100 Park Avenue, 25th Floor
New York, NY
About Appalachian Resource Company, LLC
Appalachian Resource Company, LLC is in the metals and mining
industry, providing management, scientific research and technical
consulting services. According to a Wood Mackenzie report,
Appalachian Resource Company operates one underground mine and two
surface mines in Central Appalachia and one underground mine in
Northern Appalachia. Appalachian Resource Company was the stalking
horse bidder for Rhino Resource Partners Chapter 11 bankruptcy. It
acquired the assets in September 2020 and had also cut production
to better align with sales. The company produces roughly thermal
and metallurgical coal.
APPLE CENTRAL: Court Stays Applebee's Franchisor v. Georgas Case
----------------------------------------------------------------
Magistrate Judge Brooks G. Severson of the United States District
Court for the District of Kansas granted the defendants' motion to
stay the case captioned as APPLEBEE'S FRANCHISOR LLC, Plaintiff,
vs. WILLIAM J. GEORGAS, individually and in his capacity as Trustee
of the WJG Revocable Trust, et al., Defendants, Case No.
24-2497-HLT-BGS (D. Kan.).
Plaintiff is a franchisor of Applebee's restaurants. Defendants are
William J. Georgas, individually; William G. Georgas, in his
capacity as Trustee of the WJG Revocable Trust dated July 7, 2020;
Steven B. Steinmetz, in his capacity as Trustee of the Sophia K.
Georgas 2020 Irrevocable Trust dated December 22, 2020; and Steven
B. Steinmetz, in his capacity as Trustee of the John W. Georgas
2020 Irrevocable Trust dated December 22, 2020.
Defendants move for a stay of the present case pending resolution
of a related litigation currently pending in the United States
Bankruptcy Court for the District of Kansas. That related
litigation involves claims asserted by Plaintiff against Apple
Central KC, LLC and by ACKC in an adversary proceeding filed in the
bankruptcy case against Plaintiff.
ACKC entered into a number of franchise agreements/lease
assignments with Plaintiff for certain Applebee's restaurants in
Kansas City. Plaintiff contends that the franchise agreements were
signed by Defendant Georgas as a "Principal Shareholder" of ACKC,
thereby guaranteeing certain financial obligations of ACKC to
Plaintiff. Plaintiff further contends that an amendment to the
franchise agreement regarding one restaurant was signed by the
Trust Defendants as "Principal Shareholders," thus allegedly
guaranteeing certain financial obligations of ACKC to Plaintiff as
to that sole location.
On Oct. 30, 2024, ACKC filed a petition for relief under Chapter 11
of the Bankruptcy Code in the United States Bankruptcy Court for
the District of Kansas. Also on that day, Plaintiff filed the
instant case alleging Defendants are obligated to pay Plaintiff
millions of dollars under the franchise agreements and lease
agreements. Plaintiff asserts claims for breach of contract against
Defendants in their capacity as guarantors of the financial
obligations of ACKC under franchise agreements with Plaintiff.
Plaintiff contends that ACKC breached the agreements by
unilaterally and improperly closing eight restaurants in October
2024 without the prior, written consent of Plaintiff, which
allegedly caused Plaintiff to suffer losses in future royalties and
advertising fees as well as to incur liability for rent and other
payments under the related lease agreements. Plaintiff continues
that because ACKC's financial obligations were guaranteed by
Defendants, including ACKC's indemnification obligation, Plaintiff
seeks to recover damages from Defendants, including reasonable
attorneys' fees. Defendants have denied Plaintiff's allegations.
Further, Defendants assert that Plaintiff committed numerous
breaches of its obligations under the franchise agreements, which
resulted in damages to ACKC and excuse performance by Defendants
and ACKC.
Plaintiff filed a Proof of Claim in the Bankruptcy Court against
ACKC on Jan. 8, 2025, asserting damages against ACKC based on what
Defendants contend are the very same alleged breaches of the very
same franchise agreements and lease assignments for the Applebee's
locations that are alleged by Plaintiff in this lawsuit.
ACKC filed its Complaint against Plaintiff in the bankruptcy case
on Jan. 13, 2025, which commenced the adversary proceeding. The
adversary proceeding includes claims by ACKC against Plaintiff for
breach of contract, breach of the duty of good faith and fair
dealing, and to disallow Plaintiff's Proof of Claim. According to
Defendants, ACKC's claims in the adversary proceeding are
substantially similar to the answer and affirmative defenses that
Defendants filed in this lawsuit. Defendants continue that ACKC's
claims are also a core proceeding over which the Bankruptcy Court
has jurisdiction to hear and determine.
Plaintiff has requested that the District Court withdraw the
reference of the adversary proceeding and that the Bankruptcy Court
abstain from hearing it, which would result in the most efficient
path forward: consolidation of all issues and parties into a single
proceeding before the District Court that has actual authority to
enter final judgment on the state-law claims. Plaintiff also
contends that Defendants have failed to identify any legitimate
burden to them or any legitimate public interest in a stay.
The District Court finds that judicial economy would be best served
by staying this case pending a decision on the request to the
Bankruptcy Court to withdraw the reference. The stay will encompass
the Bankruptcy Judge's written recommendation on the withdrawal of
the reference to the Bankruptcy Court pursuant to D. Kan. R.
83.8.6(c) as well as any potential written objection to that
recommendation from the parties pursuant to Bankr. R. 9033(b). The
stay will continue while the District Court reviews the written
recommendation and resolves the motion to withdraw the bankruptcy
reference pursuant to Bankr. R. 9033(d).
A copy of the Court's decision is available at
https://urlcurt.com/u?l=HTBT3V from PacerMonitor.com.
About Apple central KC
Apple Central KC LLC is a Kansas Limited Liability Company formed
in 2015 for the purpose of acquiring 23 Applebee's restaurants in
the Kansas City market area.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Kan. Case No. 24-21427) on
October 30, 2024. In the petition signed by Michael Rummel,
authorized signatory, the Debtor disclosed up to $10 million in
assets and up to $50 million in liabilities.
Judge Dale L. Somers oversees the case.
Frank Wendt, Esq., at Brown & Ruprecht, PC represents the Debtor as
legal counsel.
APPLIED DNA: Implements 1-for-50 Reverse Stock Split
----------------------------------------------------
At a Special Meeting of Stockholders held on September 30, 2024,
the stockholders of Applied DNA Sciences, Inc. authorized the board
of directors of the Company, in its discretion, to amend the
Company's Certificate of Incorporation, as amended, to effect a
reverse split of the Company's outstanding common stock, par value
$0.001, at a ratio between one-for-five (1:5) and one-for-fifty
(1:50), with such final ratio to be determined by the Board. The
Board determined to set the reverse stock split ratio at
one-for-fifty (1:50) and approved the final form of the Certificate
of Amendment to the Certificate of Incorporation to effectuate the
Reverse Stock Split. The Certificate of Amendment was filed with
the Secretary of State of the State of Delaware on March 13, 2025,
and the Reverse Stock Split became effective in accordance with the
terms of the Certificate of Amendment at 12:01 a.m. Eastern Time on
Friday, March 14, 2025.
As previously reported on its Current Report on Form 8-K dated
November 12, 2024, the Company received written notice from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
notifying the Company that it is not in compliance with the minimum
bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2)
for continued listing on The Nasdaq Capital Market. Based on the
closing bid price of the Company's Common Stock for the 31
consecutive business days from September 27, 2024 to November 11,
2024, the Company no longer meets the requirements of the Bid Price
Rule. The Reverse Stock Split is intended to bring the Company into
compliance with the Bid Price Rule.
At the Effective Time, every 50 shares of Common Stock issued and
outstanding will be automatically combined into one share of issued
and outstanding Common Stock, without any change in the par value
per share. After the Effective Time, the number of outstanding
shares of Common Stock of the Company will be reduced from
approximately 55.2 million to approximately 1.1 million.
Fractional shares will not be issued as a result of the Reverse
Stock Split. Instead, any fractional shares of the Company's Common
Stock that would have otherwise resulted from the Reverse Stock
Split will be rounded up to the nearest whole share.
Stockholders who hold their shares in brokerage accounts or "street
name" are not required to take any action and will see the impact
of the Reverse Stock Split automatically reflected in their
accounts.
The Common Stock began trading on The Nasdaq Capital Market on a
Reverse Stock Split-adjusted basis on Friday, March 14, 2025. There
will be no change in the Company's Nasdaq ticker symbol, "APDN". In
connection with the Reverse Stock Split, the CUSIP number for the
Common Stock has been changed to 03815U508.
The Reverse Stock Split will result in a proportionate adjustment
to the per share exercise price and the number of shares of Common
Stock issuable upon the exercise of outstanding stock options and
warrants, as well as the number of shares of Common Stock eligible
for issuance under the Company's 2005 Incentive Stock Plan and 2020
Equity Incentive Plan.
About Applied DNA Sciences
Applied DNA Sciences -- adnas.com -- is a biotechnology company
developing technologies to produce and detect deoxyribonucleic acid
("DNA"). Using the polymerase chain reaction ("PCR") to enable both
the production and detection of DNA, the Company currently operates
in three primary business markets: (i) the enzymatic manufacture of
synthetic DNA for use in the production of nucleic acid-based
therapeutics and the development and sale of a proprietary RNA
polymerase ("RNAP") for use in the production of mRNA therapeutics;
(ii) the detection of DNA and RNA in molecular diagnostics and
genetic testing services; and (iii) the manufacture and detection
of DNA for industrial supply chain security services.
Melville, NY-based Marcum LLP, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated Dec. 17,
2024, citing that the Company has incurred significant losses and
needs to raise additional funds to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
"We will continue to seek to raise additional working capital
through public equity, private equity or debt financings. If we
fail to raise additional working capital, or do so on commercially
unfavorable terms, it would materially and adversely affect our
business, prospects, financial condition and results of operations,
and we may be unable to continue as a going concern. If we seek
additional financing to fund our business activities in the future
and there remains substantial doubt about our ability to continue
as a going concern, investors or other financing sources may be
unwilling to provide additional funding to us on commercially
reasonable terms, if at all," the Company mentioned in its Annual
Report for the year ending Sept. 30, 2024.
As of December 31, 2024, Applied DNA Sciences had $16 million in
total assets, $3.4 million in total liabilities, and $12.5 in total
equity.
ARMIN DIRK VAN DAMME: Court Dismisses Chapter 11 Bankruptcy Case
----------------------------------------------------------------
The Honorable Gary Spraker of the United States Bankruptcy Court
for the District of Nevada granted the motion filed by U.S. Bank
National Association and its servicer, Wells Fargo Bank, N.A., to
dismiss the Chapter 11 case of Armin Van Damme.
The debtor, Armin Van Damme, and his then wife, Geraldine, borrowed
$740,000 from BNC Mortgage, Inc. pursuant to a
Sept. 21, 2004 promissory note that they both signed. The loan was
secured by a deed of trust, signed by both Armin and Geraldine Van
Damme.
The debtor filed his current bankruptcy on Jan. 21, 2025, three
days prior to the scheduled foreclosure of a deed of trust against
real property securing a loan for which no payment has been
received since 2009. This is the debtor's fourth bankruptcy since
2009. Because the debtor dismissed his third bankruptcy on Nov. 8,
2024, the automatic stay in this case expired on February 20, 2025,
pursuant to 11 U.S.C. Sec. 362(c)(3) after the court declined to
extend the automatic stay. U.S. Bank National Association, as
Trustee, successor in interest to Bank of America, N.A., as
Trustee, successor by merger to LaSalle Bank National Association,
as Trustee for Structured Asset Investment Loan Trust Mortgage
Pass-Through Certificates, Series 2004-11 (U.S. Bank) has advised
the court that it foreclosed on its deed of trust on Feb. 24, 2025.
Shortly after the debtor filed the present bankruptcy case,
however, U.S. Bank and Wells Fargo moved to dismiss the bankruptcy
under 11 U.S.C. Sec. 1112(b). They argue that the debtor filed this
bankruptcy in bad faith to continue his challenges to U.S. Bank's
secured debt and further delay foreclosure. The Court agrees. The
movants also request the Court to bar Van Damme from filing any
other bankruptcy cases for two years.
The Court has found that Van Damme filed the current bankruptcy in
bad faith. Considering the movant's request to bar any further
bankruptcy filings for two years, the Court notes that Van Damme
has been discharged from personal liability on the secured debt for
more than a decade. And he has not held an interest in the Property
since Aug. 22, 2022. Still, he has filed two civil lawsuits and two
bankruptcy cases since August 2022. Van Damme's opposition, filed
after the foreclosure sale, further demonstrates that he intends to
continue to challenge U.S. Bank's secured debt and the foreclosure.
Nothing in the record suggests that Van Damme will be dissuaded
from continuing this litigation even after the foreclosure sale.
The movants have submitted compelling evidence of bad faith in the
filing of this case, which includes Van Damme's repeated litigation
of decided matters. This has included his use of bankruptcy to
further that litigation strategy rather than pursue any valid
bankruptcy goal. Accordingly, under Sec. 349, as interpreted by
Leavitt, the Court shall exercise its discretion to bar any further
bankruptcy filings submitted by Van Damme for two years after entry
of the order of dismissal to prevent further bankruptcy litigation
of the same issues involving U.S. Bank's secured claim.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=93xsyr from PacerMonitor.com.
Armin Dirk Van Damme filed for Chapter 11 bankruptcy protection
(Bankr. D. Nev. Case No. 25-10329) on January 21, 2025, listing
under $1 million in both assets and liabilities.
ARTIFICIAL INTELLIGENCE: To Unveil AI Security at ISC West 2025
---------------------------------------------------------------
In a bold move that challenges the traditional security industry,
Artificial Intelligence Technology Solutions, Inc., (OTCPK:AITX) is
unveiling its full portfolio of groundbreaking, AI-driven solutions
designed to transform how businesses and organizations approach
safety, operational efficiency, and cost reduction. Despite raising
far less capital than typical tech companies in this space, AITX
has built a remarkable suite of integrated products that offer
autonomous, real-time detection, deterrence, and response to
threats.
The complete line of AITX's innovative security technologies will
be on full display at the upcoming ISC West in Las Vegas from April
2 through April 4 under the company's subsidiary Robotic Assistance
Devices, Inc. (RAD), at booth #21131. The company will showcase its
advanced solutions, including AVA Gen4, ROAMEO, Firearm Detection,
RAD Light My Way, RADSOC, RADCAM, SARA, HERO, and more.
"From day one, we set out to develop technologies that would
transform the way organizations approach security and operational
management," said Steve Reinharz, CEO of AITX. "What makes AITX
truly remarkable is our ability to create a complete ecosystem of
solutions, all developed with a vision of autonomous, real-time
response. We've been able to achieve all of this while operating as
a unique OTC-listed company, raising a fraction of the capital
typically required for such groundbreaking technology. It's a
testament to our team's ingenuity and commitment to pushing the
boundaries of what's possible with AI-driven automation."
AITX Portfolio Highlights:
* SARA (Speaking Autonomous Response Assistant)
SARA is an AI-powered security assistant that autonomously detects
and responds to incidents in real time. This solution is quickly
gaining traction and aims to revolutionize security call centers
that currently manage video and alarm inputs as it offers greater
functionality at lower cost than legacy solutions.
* HERO (Human Enhanced Response Officer)
HERO is an AI-powered robot designed to support and augment
security personnel. It assists with routine tasks like patrolling,
monitoring, and reporting, enabling human officers to focus on
higher-priority duties, improving both efficiency and safety.
* RIO Series (Robotic Intelligent Observation Series)
The RIO Series offers mobile, AI-driven surveillance for large,
dynamic environments. With advanced analytics and real-time alerts,
it provides continuous 360-degree monitoring, integrating
seamlessly with existing security systems. RAD's highest revenue
generating solution, RIO boasts some incredible Fortune 50
clients.
* ROAMEO (Rugged Observation Assistance Mobile Electronic
Officer)
ROAMEO is an autonomous outdoor security robot designed for rugged
environments. Equipped with AI for human detection, license plate
recognition, and 360-degree surveillance, it replaces roving guards
and is generating a significant backlog of interested parties.
* AVA Gen4 (Automated Verified Assistance)
AVA Gen4 is a compact, AI-powered security device that provides
real-time surveillance, incident detection, and communication. It
replaces human guards with its advanced facial and vehicle
recognition capabilities, offering an autonomous, scalable
solution.
* Firearm Detection
The Firearm Detection solution uses AI and advanced sensors to
identify firearms in real time. It provides early detection and
immediate alerts, allowing security personnel to respond quickly
and prevent potential threats. RAD is proud to offer this analytic
for free to any public school (k-12).
* RAD Light My Way
RAD Light My Way is a mobile security solution that autonomously
illuminates and monitors dark or expansive areas. It enhances
safety by providing light, communication, and real-time alerts to
security personnel.
Other notable products in the AITX ecosystem include RADSOC,
RADCAM, RADDOG LE2, and ROSA Gen4 each designed to address specific
challenges in security and operations, from access control to video
surveillance and more.
"AITX stands out because we've not only created a suite of
products, but we've also designed an integrated, scalable system
that works seamlessly across various industries," Reinharz
continued. "We are redefining the way businesses view security and
operational efficiency, empowering them with AI that can detect,
deter, and respond to threats faster and more effectively than
traditional systems."
AITX has achieved these remarkable advancements with significantly
lower funding compared to its competitors, demonstrating the
company's ability to maximize resources and deliver impactful
solutions without the typical financial backing. This lean approach
to innovation has allowed AITX to maintain flexibility, agility,
and control over its vision.
"We are just getting started," Reinharz concluded. "Our mission is
clear: to continue developing the most advanced, AI-powered
security technologies that help businesses operate more efficiently
and securely while making the world a safer place."
For more information about AITX and its full range of security
solutions, visit www.aix.ai.
AITX, through its subsidiary, Robotic Assistance Devices, Inc.
(RAD), is redefining the nearly $50 billion (US) security and
guarding services industry through its broad lineup of innovative,
AI-driven Solutions-as-a-Service business model. RAD solutions are
specifically designed to provide cost savings to businesses of
between 35%-80% when compared to the industry's existing and costly
manned security guarding and monitoring model. RAD delivers these
tremendous cost savings via a suite of stationary and mobile
robotic solutions that complement, and at times, directly replace
the need for human personnel in environments better suited for
machines. All RAD technologies, AI-based analytics and software
platforms are developed in-house.
RAD has a prospective sales pipeline of over 35 Fortune 500
companies and numerous other client opportunities. RAD expects to
continue to attract new business as it converts its existing sales
opportunities into deployed clients generating a recurring revenue
stream. Each Fortune 500 client has the potential of making
numerous reorders over time.
About Artificial Intelligence Technology
Headquartered in Ferndale, Mich., Artificial Intelligence
Technology Solutions Inc. is an innovator in the delivery of
artificial intelligence-based solutions that empower organizations
to gain new insight, solve complex challenges, and fuel new
business ideas. Through its next-generation robotic product
offerings, AITX's RAD, RAD-R, RAD-M, and RAD-G companies help
organizations streamline operations, increase ROI, and strengthen
business. AITX technology improves the simplicity and economics of
patrolling and guard services, allowing experienced personnel to
focus on more strategic tasks. Customers augment the capabilities
of existing staff and gain higher levels of situational awareness,
all at drastically reduced costs. AITX solutions are well-suited
for use in multiple industries such as enterprises, government,
transportation, critical infrastructure, education, and
healthcare.
Deer Park, Illinois-based L J Soldinger Associates, LLC, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated May 9, 2024, citing that the
Company had a net loss of approximately $20.7 million, an
accumulated deficit of approximately $133.0 million, and
stockholders' deficit of approximately $40.2 million as of and for
the year ended Feb. 29, 2024, which raise substantial doubt about
its ability to continue as a going concern.
As of November 30, 2024, Artificial Intelligence had $9,797,318 in
total assets, $56,814,939 in total liabilities, and $47,017,621 in
total stockholders' deficit.
AUCTION.COM LLC: Moody's Cuts CFR to 'Caa1', Outlook Stable
-----------------------------------------------------------
Moody's Ratings downgraded Auction.com, LLC's corporate family
rating to Caa1 from B3, probability of default rating to Caa1-PD
from B3-PD, and senior secured first lien bank credit facility
ratings to Caa1 from B3. The outlook is stable.
The downgrade of Auction.com's ratings reflect Moody's expectations
for revenue and earnings declines, weak credit metrics including
very high debt to EBITDA, and about $20 million of negative free
cash flow in 2025. Moody's believes foreclosure transaction volumes
in 2025 will remain relatively unchanged from still high borrowing
costs facing prospective homebuyers and from low foreclosure rates
compared to pre-pandemic levels from several years of strong
homeowner equity growth and a stable US labor market. Given the
company's very high debt to EBITDA of around 14x for the twelve
months ended September 30, 2024, or 18.3x after expensing
capitalized software costs, Moody's are concerned that the company
may not have sufficient time to grow revenue and strengthen credit
metrics to permit a successful refinancing of the debt before the
senior secured term loan matures in May 2028.
Governance considerations were a key ESG driver of the rating
action, reflecting the company's tolerance to sustain a highly
levered capital structure and increasing refinancing risk.
RATINGS RATIONALE
Auction.com's Caa1 CFR reflects Moody's expectations for revenue
declines, weak credit metrics, and negative cash flow as a
consequence of low distressed home sale volumes in the US
residential real estate market. Moody's expects debt to EBITDA will
remain well above 10x until foreclosure volumes grow. Although the
company has around $136 million of cash as of September 30, 2024,
Moody's expects that this will be needed to fund cash flow deficits
of around $15 to $20 million per year, should foreclosure volumes
remain at current levels. While foreclosure activities resumed in
2022, overall foreclosure volumes and brought-to-auction rates
remain consistently below pre-pandemic levels with US foreclosure
start volumes also declining slightly in 2024 compared to 2023.
High regulatory risk, and opportunistic and aggressive financial
policies also remain a rating constraint and expose the company to
event risk.
The credit profile benefits from the company's status as a category
leader in a niche market and by its substantial cash position
without which liquidity is limited given Moody's expectations for
negative cash flow. The company has established relationships with
major financial institutions. Despite recent lower foreclosure
volumes, Moody's expects the long-term secular shift of
foreclosures to online auctions will disproportionally benefit
Auction.com's entrenched position in the online space. Prior to the
pandemic, Auction.com consistently grew earnings despite declining
foreclosure volumes in the US. A gradual recovery in foreclosure
volumes will support profitability and earnings growth at
Auction.com; however, volumes have stagnated since 2022, and
Moody's expects will remain relatively flat over the next 12 to 18
months.
Moody's views Auction.com's liquidity as very good, largely
supported by the company's cash on hand ($136 million as of
September 30, 2024) and a lack of funded debt maturities until
2028, but constrained by its track record of annual negative cash
flow since 2021. Auction.com's debt service consists of $4.5
million first lien debt amortization as well as interest payments.
Moody's expects $15 to $20 million of negative cash flow in 2025.
The $27 million revolver expiring in November 2027 is undrawn but
is restricted to $9.45 million of availability from a springing
maximum first lien net leverage ratio of 6.75x when the revolver is
more than 35% used ($9.45 million). Moody's do not expect the
company would pass the covenant test at any point through the 2028
maturity.
The Caa1 senior secured first lien bank credit facility rating,
consisting of a $27 million revolving credit facility expiring
November 2027 and a $426.4 million (original principal) term loan
due May 2028, is in line with the Caa1 CFR and reflects its
position as the vast majority of debt in the capital structure.
Moody's do not include the non-convertible senior preferred equity
and convertible junior preferred equity for analytical credit
metrics.
The stable outlook reflects Moody's views that the company has
strong enough cash balances to operate up to its 2028 debt
maturity. Moody's expects that financial leverage will remain
sustained at current high levels from flat foreclosure volumes in
2025, but recognize that the US residential foreclosure market is
highly unpredictable and cyclical which affords the company time
for volumes to improve. The stable outlook also incorporates
Moody's expectations that the company will maintain at least
adequate liquidity, supported by maintaining strong cash balances
over the next 12 to 15 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if foreclosure volumes increase
resulting in sustained revenue and earnings growth such that debt
to EBITDA improves to 6.5x with sustained break-even or better free
cash flow.
The ratings could be downgraded if revenue and earnings continue to
decline, liquidity deteriorates faster than expected, or
foreclosure volumes fall from current levels. A significant market
share loss or a loss of a significant customer could also lead to a
downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Auction.com, LLC provides asset sale services for the US
residential real estate markets. The company enables auction-based
sales of bank-owned and foreclosure residential properties using
either the company's online transaction site or via live local
auctions in counties throughout the US. The company is
majority-owned by affiliates of Thomas H. Lee Partners L.P. and
co-investors. Revenue for the last twelve months ended September
30, 2024 was $119 million.
AVALARA INC: Fitch Assigns 'B' LongTerm IDR, Outlook Positive
-------------------------------------------------------------
Fitch Ratings has assigned first-time Long-Term Issuer Default
Ratings (IDRs) of 'B' to Lava Intermediate, Inc. and Avalara, Inc.
The Rating Outlook is Positive. Fitch has also assigned Avalara's
new $300 million first lien senior secured revolver and $2.5
billion term loan ratings of 'BB-' with a Recovery Rating of
'RR2'.
The 'B' IDR reflects Avalara's position as a leading provider of
cloud-based tax compliance solutions, serving a diverse and
expanding customer base across multiple industries. The Positive
Outlook indicates Fitch's expectation of continued double-digit
revenue growth driven by increasing demand for automated tax
compliance services amid a complex regulatory environment.
While Avalara currently exhibits a weak leverage profile, Fitch
expects strong FCF growth and improving leverage metrics, driven by
robust EBITDA growth from strong revenue growth and improved
margins from cost-cutting initiatives. The rating also considers
the competitive landscape and Avalara's reliance on integration
with third-party platforms.
Key Rating Drivers
Improving Credit Metrics: Avalara's credit metrics have been under
pressure since its take-private transaction in 2022 by Vista Equity
Partners. In FY23, Avalara's EBITDA leverage stood at 13.8x, with
(CFO-capex)/debt at -8.7% and EBITDA interest coverage at 0.6x.
However, FY24 saw notable improvements, with gross leverage
decreasing to approximately 6.6x, (CFO-capex)/debt improving to
-5.9%, and interest coverage rising to 1.2x.
In FY25, Fitch expects Avalara's financial profile to strengthen
further, supported by robust EBITDA growth, as gross leverage is
expected to fall below 5.5x, (CFO-capex)/debt is projected to reach
approximately 7%, and EBITDA interest coverage is forecasted to
improve to around 2.0x.
Industry Tailwinds Supporting Growth: Avalara is positioned for
strong growth, supported by favorable industry tailwinds. The
company primarily operates in the U.S. tax compliance software
market, which has an estimated total addressable market of about
$15 billion. More than half of this market lies within the small
and medium-sized business (SMB) segment, which is less penetrated
compared to larger enterprises and is a focus area for Avalara.
Fitch expects the SMB tax compliance market to grow at a CAGR in
the low-to-mid teens over the next five years. Key drivers for SMB
growth include the constantly evolving sales and use tax
regulations in the U.S. and the rapid rise of e-commerce, which
increases businesses' exposure to complex tax liabilities. Avalara
also has additional opportunities for expansion beyond the U.S.
Strong Revenue Visibility: Avalara is a global leader in the
rapidly growing market for transactional tax compliance and
e-invoicing. Its expansion into a multi-product platform is a
multi-billion-dollar opportunity, further diversifying its revenue
streams. The company has a resilient business model that has
historically performed well in both favorable and challenging
economic conditions. As of FY24, Avalara's recurring revenue rate
was 95%, up from 91% in FY21, with a net retention rate of 109% and
a gross retention rate of 89%. This highly recurring and
predictable revenue model, coupled with significant whitespace for
growth, underscores Avalara's strong revenue visibility and
expansion potential.
Market Leader with Diversified Customer Base: Avalara holds a
leading position in the industry with a diverse customer base,
which enhances its resilience to macroeconomic or demand
fluctuations. The company's market share is estimated at 30% of the
U.S. tax compliance market, with 60% greater revenue than its
closest competitor in the SMB subsector. Avalara serves over 43,000
direct customers globally across various industries, including
retail, lodging and hospitality, manufacturing, and technology. As
of Dec. 31, 2024, no single customer represented more than 10% of
revenue, underscoring the stability and breadth of its customer
base.
Strategic Differentiation and Margin Expansion: Avalara's
comprehensive integration into enterprise resource planning (ERP)
and accounting systems has differentiated it from competitors by
offering robust solutions for complex tax compliance challenges.
Its extensive, continually updated tax database enhances accuracy.
Operational efficiencies, including marketing restructuring and
leveraging low-cost regions, have driven margin improvements. These
strategies, combined with upselling to existing customers,
expanding product offerings, and expanding into higher tier
enterprise and international customers position Avalara for
sustainable growth and profitability in a competitive market.
Peer Analysis
Fitch assesses Avalara's performance as aligning with industry
peers, with credit metrics comparable to other 'B'-rated entities.
Software industry peer, Project Everest Ultimate Parent, LLC
(Conga, B+/Stable), has stronger leverage metrics than Avalara, but
Fitch expects it to generate slower revenue growth and softer
margins. Another 'B+' peer, UKG Inc. (B+/Stable), has demonstrated
strong market penetration and profitability, offering broader
market reach compared to Avalara. RealPage Intermediate Holdings,
Inc. (B/Stable) shares Avalara's focus on niche markets and
demonstrates competitive operational efficiency, although Fitch
expects Avalara to generate stronger FCF growth.
In contrast, Motus Group, LLC (B-/Stable) and Tungsten CayCo, Ltd.
(B-/Stable) have weaker credit metrics compared to Avalara, due to
higher operating costs and interest burdens.
Key Assumptions
- Total revenue growing mid-teens through the forecast period via
organic growth and acquisitions.
- $150 million per year spent on tuck-in acquisitions starting
FY26, funded by FCF.
- No debt repayments assumed beyond the mandatory 1% amortization.
- Operating expenses declining modestly as percentages to total
revenues as the company scales and while cost cutting initiatives
mostly complete.
- Capex intensity around 3% through the forecast period.
- Restricted cash balance keep increasing and remains around 9% of
total revenues.
Recovery Analysis
Key Recovery Rating Assumptions
- The recovery analysis assumes that the issuer would be
reorganized as a going concern in bankruptcy rather than
liquidated.
- A 10% administrative claim is assumed.
- The revolver is assumed to be fully drawn.
Going-Concern (GC) Approach
Going Concern EBITDA: Industry tailwinds are supporting Avalara's
grow. Fitch assumes a bankruptcy scenario where the company
experiences a higher customer churn and decreasing revenue. Avalara
could lose its top customers and downsell to other existing
customers, leading to a 10% - 15% decrease from the projected FY25
revenue. There could be more cost reductions in the reorganization
process, leading to a GC EBITDA margin in the low-to-mid 20% range.
$325 million is used as the GC EBITDA.
EV Multiple: The EV/EBITDA multiple used in this recovery analysis
for Avalara, Inc. is 7.0x. Fitch believes that the multiple is
supported by the following.
- Comparable Reorganizations: In its "Telecom, Media and Technology
Bankruptcy Enterprise Values and Creditor Recoveries" case study,
Fitch notes the median TMT multiple of reorganization EV/EBITDA is
~5.9x. Of these companies, five were in the Software subsector:
SunGard Availability Services Capital, Inc., Aspect Software, Inc.,
Allen Systems Group, Inc., Avaya, Inc. and Riverbed Technology
Software, which received recovery multiples of 4.6x, 5.5x, 8.4x,
7.5x and 8.3x, respectively.
- Comparable Recovery Assumptions: The multiple has been between
5.5x and 7.0x for 'B'/'CCC' rated software as a service peers with
similar products/services and operating profiles as providers of
specialty software to client bases where market shares are
defensible.
- Business Profile: The issuer has a market leader position with
high retention rates historically (over 90% gross and over 100%
net). The company also has highly recurring revenue model providing
significant revenue visibility. All these business profile factors
support a high EV multiple.
The GC EBITDA of $325 million and recovery multiple of 7.0x result
in a post-reorganization enterprise value of approximately $2
billion after the deduction of administrative claims, resulting in
an 'RR2' Recovery Rating for the 1L senior secured revolver and TL,
two notches above the issuer's IDR.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA interest coverage below 1.5x on a sustained basis;
- EBITDA leverage sustained above 7.5x;
- (CFO-Capex)/Debt sustained below 3%.
- EBITDA leverage sustained above 5.5x would result in a
stabilization of the ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 5.5x;
- (CFO-Capex)/Debt sustained above 7%.
Liquidity and Debt Structure
Pro forma for the refinancing transaction, Avalara is expected to
have sufficient liquidity, with approximately $300 million in
unrestricted cash and equivalents, and an undrawn $300 million
revolver. While FCF has been negative in recent years as the
company has focused on driving cost savings and managing growth
initiatives, Fitch expects FCF to turn sharply positive in FY25,
aided by margin expansion. Pro forma for the refinancing, the
company is expected to have no near-term maturities with the
revolver maturing in 2030 and the secured first lien term loan
maturing in 2032.
Issuer Profile
Avalara provides software solutions that help businesses meet
transaction tax and compliance requirements. It offers solutions
for various taxes including sales and use, value-added, energy,
beverage alcohol, cross-border (such as tariffs and duties),
lodging, property, communications, and insurance premiums.
Date of Relevant Committee
18-Mar-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
----------- ------ --------
Lava Intermediate, Inc. LT IDR B New Rating
Avalara, Inc. LT IDR B New Rating
senior secured LT BB- New Rating RR2
AVONDALE HOMES: Seeks Chapter 11 Bankruptcy in Georgia
------------------------------------------------------
On March 21, 2025, Avondale Homes LLC filed Chapter 11 protection
in the U.S. Bankruptcy Court for the Northern District of Georgia.
According to court filing, the Debtor reports between $50 million
and $100 million in debt owed to 1 and 49 creditors. The petition
states funds will be available to unsecured creditors.
About Avondale Homes LLC
Avondale Homes LLC is a property lessor engaged in multiple
construction and development projects throughout the United
States.
Avondale Homes LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 25-53097) on March 21,
2025. In its petition, the Debtor reports estimated assets up to
$50,000 and estimated liabilities between $50 million and $100
million.
Honorable Bankruptcy Judge Lisa Ritchey Craig handles the case.
The Debtor is represented by William Rountree, Esq. of ROUNTREE,
LEITMAN, KLEIN & GEER, LLC.
AZEK GROUP: S&P Places 'BB-' ICR on CreditWatch Positive
--------------------------------------------------------
S&P Global Ratings placed all its ratings on Chicago-based
manufacturer of outdoor living and building products The Azek Group
LLC, including its 'BB-' issuer credit rating, on CreditWatch with
positive implications.
S&P plans to resolve the CreditWatch placement, which it
anticipates will likely be in the second half of calendar 2025.
The CreditWatch placement indicates the proposed transaction could
potentially benefit Azek's credit quality because it is being
acquired by a much larger and higher-rated company. The placement
follows the announcement that James Hardie and Azek entered into a
definitive merger agreement, under which James Hardie will acquire
Azek for $26.45 per share. The deal is still subject to shareholder
approval and the fulfillment of customary closing conditions.
S&P expects to resolve the CreditWatch placement once the
transaction closes, likely in the second half of calendar 2025.
B. RILEY FINANCIAL: Oaktree Capital Holds 5.66% Equity Stake
------------------------------------------------------------
Oaktree Capital Holdings, LLC, and Oaktree Capital Group Holdings
GP, LLC, disclosed in a Schedule 13G filing with the U.S.
Securities and Exchange Commission that as of February 26, 2025,
they beneficially own 1,832,289.96 shares of B. Riley Financial,
Inc.'s common stock, representing 5.66% of the company's
outstanding shares of stock.
RPVOF Broker CTB, LLC, also disclosed that as of February 26, 2025,
it beneficially owns 89,133.58 shares of the Company's common
stock, representing 0.28% of the company's outstanding shares of
stock.
OPIF Broker Holdings, L.P., further disclosed that as of February
26, 2025, it beneficially owns 38,740.11 shares of the Company's
common stock, representing 0.12% of the company's outstanding
shares of stock.
Oaktree-Copley Investments, LLC, disclosed that as of February 26,
2025, it beneficially owns 58,286.98 shares of the Company's common
stock, representing 0.18% of the company's outstanding shares of
stock.
Opps XII Broker E Holdings, L.P., disclosed that as of February 26,
2025, it beneficially owns 959,020.57 shares of the Company's
common stock, representing 2.96% of the company's outstanding
shares of stock.
OCM SSF III Broker Debt Holdings, L.P., disclosed that as of
February 26, 2025, it beneficially owns 687,108.74 shares of the
Company's common stock, representing 2.12% of the company's
outstanding shares of stock.
About B. Riley Financial
B. Riley Financial, Inc. -- 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.
As of June 30, 2024, B. Riley Financial had $3.2 billion in total
assets, $3.4 billion in total liabilities, and $143.1 million in
total deficit.
B2 UNITED: Gets Final OK to Use Cash Collateral
-----------------------------------------------
B2 United, LLC received final approval from the U.S. Bankruptcy
Court for the Northern District of Texas, Fort Worth Division, to
use cash collateral.
The final order authorized the company to use cash collateral to
pay the expenses set forth in its budget, with a 10% variance
allowed.
The company projects total operational expenses of $23,070.82.
B2 United's primary creditor, IOU Central Inc., holds a security
interest in certain assets of the company, including cash,
inventory and accounts receivable.
As protection, IOU Central was granted a replacement lien on the
cash collateral to the same extent and with the same validity and
priority as its pre-bankruptcy lien.
The replacement lien is subject to a carve-out for fees payable to
the Subchapter V trustee in the amount of up to $1,000 per month;
and fees and expenses of professionals retained by the company to
the extent approved by the court.
About B2 United LLC
B2 United, LLC operates a convenience store and gas station in
Arlington, Texas.
B2 United filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Texas Case No. 25-40492) on February
10, 2025, listing up to $500,000 in both assets and liabilities.
Katharine Battaia Clark of Thompson Coburn, LLP serves as
Subchapter V trustee.
Judge Mark X. Mullin oversees the case.
The Debtor is Represented By:
Warren V. Norred, Esq.
Norred Law, PLLC
Tel: 817-704-3984
Email: warren@norredlaw.com
BABY K'TAN: Unsecureds to Split $43,500 in Subchapter V Plan
------------------------------------------------------------
Baby K'Tan, LLC filed with the U.S. Bankruptcy Court for the
Southern District of Florida a Subchapter V Plan of Reorganization
dated March 3, 2025.
The Debtor owns the "Baby K' tan" trademark, a patent, and related
trade names. The Debtor is a retailer of a popular patented unique
baby carrier and has had tremendous success over the years in
marketing and selling its niche products.
Since petitioning for bankruptcy relief, the Debtor has made
significant progress in its turnaround, increasing sales,
sustaining manufacturing and trade lines, and developing new
partnerships. Key to the the Debtor's post-petition successes thus
far has been the support of its DIP Lender and Strategic Partner
Upright Ventures Holdings, Co., experts in online digital
marketing.
The Debtor has engaged in substantial negotiations with its primary
secured creditor Regions Bank, N. A. in an effort to present the
Plan on an agreed basis. Those negotiations remain ongoing.
The Debtor's financial projections show that the Debtor will be
able to distribute projected disposable income to the holders of
allowed administrative, priority tax, secured, and unsecured
creditors. The Debtor anticipates that the Plan will be confirmed
in April 2025, distributions to administrative and secured
creditors will begin on May 1, 2025.
Payments to Class 3 unsecured creditors shall be made monthly
commencing May 1, 2028, and ending May 1, 2030. The Debtor projects
that total distributions to unsecured creditors will be
approximately $43,500. The distributions under the Plan will be
derived from (i) existing cash on hand on the Effective Date, (ii)
revenues generated by continued business operations; and (iii) net
proceeds from the sale of excess inventory and equipment.
This Plan of Reorganization proposes to pay creditors of the Debtor
from its net disposable income.
Class 3 consists of all non-priority unsecured claims allowed under
§ 502 of the Bankruptcy Code. The Debtor estimates that Class 3
claims will total approximately $1,295,009. Class 3 is impaired by
the Plan.
Every holder of a non-priority unsecured claim against the Debtor
shall receive its pro-rata share of the Debtor's projected
disposable income as defined by Section 1191(d) of the Bankruptcy
Code, after payment of administrative, priority tax, and secured
claims as set forth in Section 4B-C and Classes 1 through 2.
Payments shall be made monthly commencing in or about June 2028.
The Debtor projects that total distributions to unsecured creditors
will be approximately $43,500.
Class 4 is comprised of all equity interests in the Debtor, which
are owned by Michal Chesal and Isaac Wernick (the "Founders"). The
Founders will retain their equity interests in the Debtor, subject
to the option of Upright to convert its administrative claim to
equity interest in the Debtor. No distributions will be made to the
Founders or Upright on account of their equity interests until the
distributions to Class 3 have been made.
Payments required under the Plan will be funded from (i) existing
cash on hand on the Effective Date and (ii) revenues generated by
continued operations.
A full-text copy of the Subchapter V Plan dated March 3, 2025 is
available at https://urlcurt.com/u?l=xm4gCd from PacerMonitor.com
at no charge.
Counsel for the Debtor:
DGIM Law, PLLC
Monique D. Hayes, Esq.
2875 NE 191st Street, Suite 705
Aventura, FL 33180
Phone: (305) 763-8708
Email: monique@dgimlaw.com
About Baby K'tan LLC
Baby K'tan, LLC manufactures and sells ready-to-wear and soft
fabric wrap pet and baby carrier. The Pet K'tan Pet Carrier is a
patented ready-to-wear soft fabric wrap that allows the caregiver
to wear their pet in several positions without any complicated
wrapping or buckling. The Baby K'tan Baby Carrier has a patented
double-loop design that functions as a sling, wrap and baby
carrier, yet there is no wrapping, no buckling, and no adjusting
any rings.
Baby K'tan sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-22671) on December 3,
2024, with up to $1 million in assets and up to $10 million in
liabilities. Maria Yip, a certified public accountant and managing
partner at Yip Associates, serves as Subchapter V trustee.
Judge Peter D. Russin oversees the case.
The Debtor is represented by Isaac M Marcushamer, Esq., at DGIM
Law, PLLC.
Regions Bank, as secured creditor, can be reached through:
Ronald B. Cohn, Esq.
Burr & Forman, LLP
201 North Franklin Street, Suite 3200
Tampa, FL 33602
Telephone: (813) 221-2626
Facsimile: (813) 221-7335
Email: rcohn@burr.com
BARBARA FALATICO-BRODOCK: MSB Awarded $32,432.77 in Fees, Expenses
------------------------------------------------------------------
The Honorable Robert E. Littlefield, Jr. of the United States
Bankruptcy Court for the Northern District of New York McManimon
Scotland & Baumann, LLC awarded McManimon Scotland & Baumann, LLC,
attorneys for Barbara Falatico-Brodock, a total fee of $31,925.70
and $507.07 in expenses.
Currently before the Court is MSB's first interim fee application.
On Aug. 30, 2024 MSB filed the Fee App seeking $65,513.00 in fees
and $507.07 in expenses from April 21, 2024 to Aug. 15, 2024.
The United States Trustee objects to the Fee App.
The UST's objection states:
(1) the Applicant has not adequately demonstrated that the tasks
performed were reasonable or necessary;
(2) the Applicant has not explained why they tasked two
attorneys to attend each court hearing, 341 meeting, and other
hearings;
(3) the billing records contain impermissible block billing; and
(4) the Applicant separately billed for overheads.
MSB maintains that all work done was actual, necessary and
benefitted the estate. It contends the litigation work done was
necessary to facilitate the plan. MSB further argues it was
appropriate for two attorneys to attend the Sec. 341 meeting of
creditors. It concludes by arguing the overheads were properly
billed.
It is appropriate for the Court to disallow vague entries because
billing records can be too vague to sufficiently document the hours
claimed.
Based upon the Court's discretion, the Fee App will be reduced by
5% for vagueness. As with the vague entries, the Court reduces the
total fee awarded by 5% for lumping. All approved fees will thus
be reduced by 10% (5% for each vagueness and lumping for a total of
10%). The Court will also approve all requested expenses.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=TsaSkD from PacerMonitor.com.
Attorneys for the Debtor:
Sari Blair Placona, Esq.
Anthony Sodono, III, Esq.
MCMANIMON SCOTLAND & BAUMANN, LLC
75 Livingston Avenue, Suite 201
Roseland, NJ 07068
E-mail: splacona@msbnj.com
asodono@msbnj.com
Barbara Falatico-Brodock filed for Chapter 11 bankruptcy protection
(Bankr. N.D.N.Y. Case No. 24-60308) on April 21, 2024, listing
under $1 million in both assets and liabilities. The Debtor is
represented by Sari Placona, Esq.
BARRETTS MINERALS: Says Talc Injury Claims Are Part of Ch.11 Estate
-------------------------------------------------------------------
Yun Park of Law360 reports that talc miner Barretts Minerals Inc.
has urged a Texas bankruptcy court to declare that talc injury
claims tied to inadequate asbestos testing belong to its Chapter 11
estate, calling the issue a critical hurdle in settlement
negotiations with affiliates, unsecured creditors, and the future
claims representative.
About Barretts Minerals Inc.
Barretts Minerals Inc.'s current operations are focused on the
mining, beneficiating, processing, and sale of industrial talc. It
historically supplied a relatively minor percentage of its sales
into cosmetic applications. Barretts Minerals' talc is sold to
distributors and third-party manufacturers for use in such parties'
products, which are then incorporated into downstream products
eventually sold to consumers.
Barretts Minerals and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90794) on Oct. 2, 2023. In the petition signed by its chief
restructuring officer, David J. Gordon, Barretts Minerals disclosed
$50 million to $100 million in assets and $10 million to $50
million in liabilities.
The case was initially assigned to Judge David R. Jones before
Judge Marvin Isgur took over.
The Debtors tapped Porter Hedges, LLP and Latham& Watkins, LLP as
legal counsel; M3 Partners, LP as financial advisor; Jefferies, LLC
as investment banker; and DJG Services, LLC as restructuring
advisor. David J. Gordon of DJG Services serves as the Debtors'
chief restructuring officer. Stretto, Inc. is the claims, noticing
and solicitation agent and administrative advisor.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Caplin & Drysdale, Chartered and Province, LLC serve as the
committee's legal counsel and financial advisor, respectively.
BEASLEY BROADCAST: GAMCO, 2 Others Hold 8.57% Equity Stake
----------------------------------------------------------
GAMCO Asset Management Inc., and its affiliates disclosed in
Amendment No. 57 of a Schedule 13D filing with the Securities and
Exchange Commission that as of March 6, 2025, they beneficially own
a total of 80,416 shares Beasley Broadcast Group, Inc.'s common
stock, representing 8.57% of the 938,690 shares outstanding at
September 30, 2024.
GAMCO Asset Management disclosed that it owns 54,316 shares of the
Company's common stock, representing 5.79% of the 938,690 shares
outstanding at September 30, 2024. Gabelli Funds LLC disclosed that
it owns 24,000 shares of the Company's common stock, representing
2.6% of the 938,690 shares outstanding at September 30, 2024.
Teton Advisors, Inc., disclosed that it owns 2,100 shares of the
Company's common stock, representing 0.2% of the 938,690 shares
outstanding at September 30, 2024.
GAMCO Investors, Inc., et al., GGCP, Inc., Associated Capital
Group, Inc., and Mario Gabelli disclosed that they beneficially own
zero shares of the Company.
About Beasley
Naples, Florida-based Beasley Broadcast Group, Inc. was founded in
1961 and owns 61 AM and FM stations in 14 large- and mid-size
markets in the United States. Beasley reaches approximately 29
million unique consumers weekly over the air, online, and on
smartphones and tablets, and millions regularly engage with the
Company's brands and personalities through digital platforms such
as Facebook, Twitter, text, apps, and email.
* * *
The Troubled Company Reporter reported on Sept. 30, 2024, that S&P
Global Ratings withdrew all of its ratings on Beasley Broadcast
Group Inc., including the 'CC' issuer credit rating, at the
issuer's request. At the time of the withdrawal, S&P outlook on the
company was negative.
BEELINE HOLDINGS: Names David Kittle as Special Advisor
-------------------------------------------------------
Beeline Holdings, Inc. announced that mortgage industry leader
David G. Kittle, CMB has been appointed as Special Advisor to the
company and its Board of Directors.
Mr. Kittle brings 49 years of experience in the mortgage sector,
having played a pivotal role in shaping the industry. He is
currently the Co-Founder and Partner of The Mortgage Collaborative,
a nationwide network of independent mortgage bankers, credit
unions, and banks.
Throughout his distinguished career, Mr. Kittle has built, managed,
and led multiple mortgage and mortgage-related companies, beginning
on the title side before expanding into executive leadership.
Notably, in 2009, he served as Chairman of the Mortgage Bankers
Association, a testament to his expertise and influence in the
field.
Mr. Kittle has been closely involved with Beeline since its
inception, serving on the company's principal subsidiary's Board of
Directors from 2020 to 2024. His new role as Special Advisor will
allow him to work directly with Beeline's executive team, providing
strategic guidance as the company continues its rapid expansion.
"As Special Advisor, David brings invaluable expertise to Beeline,
collaborating closely with our leadership to drive innovation and
market growth," said Nick Liuzza, CEO of Beeline Holdings. "We are
in full growth mode, gaining market share against larger, more
established lenders. David's insight and industry connections will
be instrumental in accelerating our success."
This appointment follows Beeline's recent approval for listing on
Nasdaq, where it now trades under the symbol BLNE.
About Beeline Holdings Inc.
Beeline Holdings f/k/a Eastside Distilling, Inc. is a
forward-thinking mortgage lender leveraging cutting-edge technology
to simplify and streamline the home financing process. The company
is committed to providing a seamless, customer-centric experience
while expanding its presence in the mortgage industry.
The Woodlands, Texas-based M&K CPAS, PLLC, Beeline's former
auditor, issued a "going concern" qualification in its report dated
April 1, 2024, citing that the Company suffered a net loss from
operations and used cash in operations, which raises substantial
doubt about its ability to continue as a going concern.
Beeline incurred a net loss of $7.5 million during the year ended
December 31, 2023. As of June 30, 2024, Beeline had $16,589,000 in
total assets, $18,523,000 in total liabilities, and $1,934,000 in
total stockholders' deficit.
BELLEVUE HOSPITAL: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------------
The U.S. Trustee for Region 9 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of The Bellevue Hospital.
About The Bellevue Hospital
The Bellevue Hospital is a healthcare provider offering a range of
services, including cancer care, cardiac and pulmonary rehab,
diagnostic imaging, emergency care, and surgery. It serves
residents of Bellevue, Clyde, Fremont, and surrounding areas,
providing care 24/7. The organization is governed by a board of
trustees and operates as a not-for-profit corporation. Bellevue
Hospital was founded in 1914 and has interests in several
subsidiary entities, including The Bellevue Hospital Foundation,
Bellevue Professional Services, Inc., Bellevue Hospital Pain
Management, LLC, Prairie Ridge, LLC, and Bellevue Hospital Medical
Holdings, LLC.
Bellevue Hospital filed Chapter 11 petition (Bankr. N.D. Ohio Case
No. 25-30191) on February 5, 2025, listing between $10 million and
$50 million in both assets and liabilities. Sara K. Brokaw, chief
executive officer of Bellevue Hospital, signed the petition.
Judge Mary Ann Whipple oversees the case.
Richard K. Stovall, Esq., at Allen Stovall Neuman & Ashton LLP,
represents the Debtor as legal counsel.
Fifth Third Bank, as senior secured creditor, is represented by:
Carrie M. Brosius, Esq.
Vorys, Sater, Seymour and Pease LLP
200 Public Square, Suite 1400 Cleveland, OH 44114
Telephone: (216) 479-6189
Email: cmbrosius@vorys.com
Firelands Regional Health System, as DIP lender, is represented
by:
Ellen Arvin Kennedy. Esq.
Dinsmore & Shohl, LLP
100 W. Main Street, Suite 900
Lexington, Kentucky 40507
Phone: (859) 425-1000
Facsimile: (859) 425-1099
Email: ellen.kennedy@dinsmore.com
BERRY CORP: Posts $19 Million Net Income for 2024
-------------------------------------------------
Berry Corporation announced financial and operating results for the
fourth quarter and full year 2024, as well as a quarterly cash
dividend of $0.03 per share. Berry has provided a supplemental
slide deck on its results, which can be found at www.bry.com.
Full Year 2024 Highlights:
* Delivered results better than the midpoint of guidance on
production, operational expenses, G&A and capital expenditures
* Reported net income of $19 million, or $0.25 per diluted
share and Adjusted Net Income(1) of $52 million, or $0.68 per
diluted share
* Generated operating cash flow of $210 million, Adjusted
EBITDA(1) of $292 million and Free Cash Flow(1) of $108 million
* Produced 25.4 MBoe/d (93% oil), in upper end of guidance and
even to prior year
* Reduced LOE (net of hedges) by 12% year-over-year; lowered
G&A compared to 2023 including 6% reduction in Adjusted G&A(1)
* Reduced methane emissions by over 80%, with execution
completed ahead of plan
* Finalized year-end proved reserves of 107 MMBoe, up 4% over
prior year, with a reserve replacement ratio of 147%(1) and an SEC
PV-10 value of $2.3 billion(2)
Fourth Quarter 2024 Highlights:
* Reported a net loss of $2 million, or $(0.02) per diluted
share, Adjusted Net Income(1) of $17 million, or $0.21 per diluted
share
* Generated operating cash flow of $41 million, Adjusted
EBITDA(1) of $82 million and Free Cash Flow(1) of $24 million
* Produced 26.1 MBoe/d (93% oil), a 5% increase over third
quarter and 1% increase year-over-year
* Declared a fixed dividend of $0.03 per share, which
represents a 3% yield(3) on an annual basis
2025 Outlook:
* Full year estimated production of 24.8 - 26.0 MBoe/d, with
oil production expected to comprise ~93% of total
* Full year capital program of $110 - $120 million, with
flexibility to adjust as commodity prices dictate
* Approximately 40% of Berry's 2025 capital will be directed
to Utah compared to 25% in 2024
MANAGEMENT COMMENTS
Fernando Araujo, Berry's Chief Executive Officer, said, "Our fourth
quarter and year-end results highlight our continued success
advancing our long-term strategy of generating sustainable free
cash flow with high rate of return projects, while improving
capital efficiency and our cost structure. Our thermal diatomite
asset continues to deliver value enhancing results and provides a
catalyst for future opportunities. In 2024, we successfully drilled
28 sidetracks with exceptional results and a rate of return
exceeding 100%. These results have unlocked the potential to drill
an additional 115 more sidetracks in this asset over the next few
years, including up to 34 planned for 2025. Additionally, we
expanded development of our 100,000 net acre position in the Uinta
Basin. We executed two farm-ins/acreage exchanges providing
critical technical data from 6 horizontal wells with peak rates up
to 2,000 Boe/d. We closed the year with a refinancing to strengthen
our balance sheet and entered 2025 with a disciplined plan designed
to ensure capital for development and create value for
shareholders."
Araujo continued, "It's an exciting time to be at Berry. In
addition to operating and developing our existing assets
efficiently, we are actively pursuing scale and diversification and
evaluating accretive deals both large and small. We have the
roadmap and the options to enhance our cash flows and sustain
production, while simultaneously expanding our inventory and
strengthening our balance sheet. Our team has an established track
record of delivering on key objectives through cycles and
regulatory challenges, and we have a compelling pipeline of value
enhancing opportunities."
About Berry Corporation
Berry Corporation is a company primarily engaged in hydrocarbon
exploration in California, the Uintah Basin, and the Piceance
Basin. As of December 31, 2021, the company had 97 million barrels
of oil equivalent of estimated proved reserves, of which 87% was
petroleum and 13% was natural gas.
As of September 30, 2024, Berry Corporation had $1.5 billion in
total assets, $784.9 million in total liabilities, and $732.2
million in total stockholders' equity.
* * *
In September 2024, S&P Global Ratings lowered its Company credit
rating to 'CCC+' from 'B-' on Dallas-based oil and gas exploration
and production (E&P) company Berry Corp. S&P also lowered the
issue-level rating on Berry's unsecured notes due February 2026 to
'B-' from 'B'. The recovery rating remains '2', reflecting its
expectation for substantial (70%-90%; rounded estimate: 85%)
recovery in the event of a payment default.
The negative outlook reflects S&P's view that Berry is dependent on
favorable conditions to refinance its unsecured notes due February
2026 in a timely manner. However, its leverage remains modest, and
S&P forecasts average funds from operations (FFO) to debt of about
40% and debt to EBITDA of about 2.25x.
Refinancing risk is heightened for Berry's RBL facility due August
2025 and senior unsecured notes due February 2026.
In December 2024, S&P Global Ratings revised its outlook on
Dallas-based oil and gas exploration and production (E&P) company
Berry Corp. to stable from negative on the improved debt maturity
profile and affirmed the 'CCC+' Company credit rating.
S&P said, "We assigned a 'B' issue-level rating to the new
first-lien term loan. The recovery rating is '1', reflecting our
expectation for very high (90%-100%; rounded estimate: 95%)
recovery in the event of a payment default.
"The stable outlook reflects our view that Berry will maintain
approximately flat production in 2025 as it shifts a portion of
development spend away from California's more restrictive
regulatory environment to its Utah acreage. We also expect
discretionary cash flow after mandatory debt amortization to be
slightly negative in 2025, which constrains liquidity in our view.
However, leverage remains modest and we forecast average funds from
operation (FFO) to debt of about 30% and debt to EBITDA of
2.25x-2.5x."
BILLY J. CUEVAS ITHIER: Wins Bid to Dismiss Bankruptcy Case
-----------------------------------------------------------
Judge María de los Angeles Gonzalez of the United States
Bankruptcy Court for the District of Puerto Rico granted Billy J.
Cuevas Ithier's motion for voluntary dismissal of his bankruptcy
case. RB's Puerto Rico Inc.'s request for the dismissal to include
a bar to refile for one year and for the court to impose sanctions
against Debtor in the form of attorney's fees
is denied.
Debtor acknowledges Claim No. 9 filed by RB's Puerto Rico, Inc. in
the amount of $143,815.79 and will not be objecting to such claim.
The loan made by RB's Puerto Rico to Debtor's corporation is
guaranteed by Debtor in his personal capacity. Debtor also stated
that he owns another corporation which operates a Marco's Pizza in
Guayama and that this restaurant does not generate any additional
income for him because it breaks even each month.
On July 5, 2024, RB's filed an objection to confirmation of the
amended Chapter 11 Plan arguing, inter alia, that Debtor is the
sole owner of two limited liabilities companies: ANJ Restaurant,
LLC and BFC Enterprise, LLC and failed to account for the value of
these entities in the liquidation value.
On July 16, 2024, Debtor filed a response to RB's objection to
confirmation stating, inter alia, that he does not have an
obligation to include the value of ANF or BFC, or their assets,
because they are separate legal entities.
On Oct. 16, 2024, RB's filed a motion to dismiss or convert under
11 U.S.C. Sec. 1112(b) for cause due to Debtor's alleged failure to
disclose the value of his interest in ANJ and BFC, failure to
disclose income from related entities, and failure to comply with
court orders by not disclosing all his assets in the amended Plan
and not producing the requested discovery.
Debtor seeks voluntary dismissal because he is convinced that he
will be unable to modify or amend the plan in order to obtain
confirmation and requests dismissal without prejudice. Debtor
argues that he had no obligation to disclose any of the assets of
ANJ and BFC or their value because they are separate legal entities
and their assets are not property of the bankruptcy estate. Debtor
also challenges RB's standing by stating that such creditor
obtained a judgment in state court against ANJ and such judgment
does not include any liability regarding Debtor.
RB's does not oppose the dismissal of the case but argues that
there is cause for such dismissal to include a twelve-month bar to
refile pursuant to 11 U.S.C. Secs. 105 and 349(a) because Debtor
failed to disclose his interest in ANJ and BFC in the schedules or
to include their value in the liquidation analysis and failed to
timely produce all documents requested by RB's as ordered by the
court.
The parties' disagreement regarding the value of Debtor's interest
in ANJ and BFC and the value of the franchise agreement were
matters that had not been adjudicated at the time of the filing of
the motion for voluntary dismissal. As such, the court cannot
conclude that Debtor failed to properly account for the value of
his interest in such entities in the liquidation analysis.
Regarding Debtor's failure to produce all documents and information
requested by RB's, RB's filed a motion to compel discovery that the
court had not been adjudicated at the time Debtor moved for the
voluntary dismissal of the case on the following day. As such, the
court cannot find that Debtor's alleged failure to produce the
requested documents and information constitutes egregious
misconduct sufficient to warrant dismissal with a bar to refile of
one year. For these reasons, RB's request for dismissal of this
case to include a bar to refile of one year is denied. The court
notes that in the event of a subsequent bankruptcy, RB's is not
devoid of remedies including those available under 11 U.S.C. Sec.
362(c)(3)(A).
In this case, RB's did not point to any statutory authority for the
court to grant attorney's fees. The court finds that Debtor's
conduct does not meet the heightened justification required under
In re Charbono, 790 F.3d 80, 87 (1st Cir. 2015) for the imposition
of sanctions in the form of attorney's fees.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=pcRuZt from PacerMonitor.com.
Billy J Cuevas Ithier filed for Chapter 11 bankruptcy protection
(Bankr. D.P.R. Case No. 23-02673) on August 29, 2023, listing under
$1 million in both assets and liabilities. The Debtor was
represented by Alexandra Bigas Valedon, Esq. At the Debtor's
request, the case was dismissed on March 12, 2025.
BLUE STAR: Files Registration Statement for Resale of 18K Shares
----------------------------------------------------------------
Blue Star Foods Corp. filed a Form S-1 with the U.S. Securities and
Exchange Commission relating to the potential offer and resale of
18,526,735 shares of the Company's common stock, $0.0001 par value
per share, consisting of (i) up to 1,000,000 shares issuable upon
conversion of the principal and accrued interest at maturity of
convertible promissory notes in the aggregate principal amount of
$550,000 issued to Jefferson Street Capital, LLC, and Quick
Capital, LLC, in August 2024, and (ii) up to 17,526,735 shares
issuable pursuant to that certain purchase agreement dated May 16,
2023, by and between ClearThink Capital Partners, LLC, and the
Company.
The Company is represented by in connection with the offering by:
Mark Crone, Esq.
Joe Laxague, Esq.
Cassi Olson, Esq.
The Crone Law Group, P.C.
420 Lexington Avenue, Suite 2446
New York, New York 10170
Tel: (775) 234-5221
Email: mcrone@cronelawgroup.com
jlaxague@cronelawgroup.com
colson@cronelawgroup.com
A full-text copy of the Form S-1 is available at
https://tinyurl.com/mrreeddt
About Blue Star Foods Corp.
Blue Star Foods Corp., headquartered in Miami, Florida, is an
international seafood company that imports, packages, and sells
refrigerated pasteurized crab meat and other premium seafood
products. The Company's current source of revenue is from
importing
blue and red swimming crab meat primarily from Indonesia, the
Philippines, and China, and distributing it in the United States
and Canada under several brand names such as Blue Star, Oceanica,
Pacifika, Crab & Go, First Choice, Good Stuff, and Coastal Pride
Fresh. The Company also distributes steelhead salmon and rainbow
trout fingerlings produced under the brand name Little Cedar Farms
for distribution in Canada. The Company sells primarily to food
service distributors, wholesalers, retail establishments, and
seafood distributors.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor
since
2014, issued a "going concern" qualification in its report dated
April 1, 2024, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that
raises
substantial doubt about its ability to continue as a going concern.
BOY SCOUTS: Documentary Copied Storytelling Style, Claims Atty.
---------------------------------------------------------------
Ryan Harroff of Law360 reports that a New Jersey trial lawyer suing
Netflix for copyright infringement over its Boy Scouts of America
abuse documentary challenged the company's dismissal bid, claiming
the film replicated the storytelling structure of his own
documentary.
Aaron Moss of Copyright Lately reported that New Jersey trial
attorney Bruce Nagel's production company, B. Nagel Films, claims
that Netflix's 2023 documentary, Scouts Honor: The Secret Files of
the Boy Scouts of America, is a near replica of his own film. Both
documentaries tackle the same explosive subject matter: decades of
child sexual abuse within the Boy Scouts of America and the
organization's alleged cover-ups. But Nagel contends that Netflix's
film goes beyond merely sharing the same basic idea, alleging that
it also appropriates his documentary's stylistic choices and
narrative elements, resulting in a "wholesale copying" of Nagel's
film, the report related.
A full-text copy of the Complaint is available at
https://tinyurl.com/va23fsvh
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC, as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
The Debtors obtained confirmation of their Third Modified Fifth
Amended Chapter 11 Plan of Reorganization (with Technical
Modifications) on September 8, 2022. The Order was affirmed on
March 28, 2023. The Plan was declared effective on April 19, 2023.
The Hon. Barbara J. House (Ret.) has been appointed as trustee of
the BSA Settlement Trust.
BW REAL ESTATE: Fitch Assigns 'BB-' Rating on Preferred Stock
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' rating to the preferred stock
issuance by BW Real Estate Inc. (BWRE), a real estate investment
trust (REIT) owned by Western Alliance Bancorporation (WAL). The
issuance aims to enhance Tier 1 capital levels and benefits from
preferential tax treatment. BWRE is almost entirely funded via
contributed capital from Western Alliance Bank and Western Alliance
Bancorporation. It uses this capital to buy 100% participation in
the bank's mortgage loans and mortgage-backed securities.
Key Rating Drivers
The rating for BWRE's preferred issuance is notched four notches
below WAL's Viability Rating (VR) of 'bbb'. This reflects the
standard notching for hybrid securities according to Fitch's "Bank
Rating Criteria." The REIT preferred issuance will automatically
convert to bank preferred stock at regulators' discretion upon
certain conditions. This exchange clause influences the rating,
capping it at WAL's preferred debt rating of 'BB-', consistent with
the parent company rating notching.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The rating is subject to any negative change in WAL's VR.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The rating is subject to any positive change in WAL's VR.
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
----------- ------
BW Real Estate, Inc.
preferred LT BB- New Rating
BW REAL ESTATE: Moody's Rates New Preferred Securities 'Ba2(hyb)'
-----------------------------------------------------------------
Moody's Ratings has assigned a Ba2(hyb) rating to the Exchangeable
Perpetual Non-Cumulative Preferred Securities being issued by BW
Real Estate, Inc., a subsidiary of Western Alliance Bank, which
itself is a wholly-owned subsidiary of Western Alliance
Bancorporation, collectively referred to as "Western Alliance".
Beyond the assigned rating, Western Alliance's other ratings are
unaffected by this action.
RATINGS RATIONALE
The assigned rating considers Western Alliance Bank's current
ratings (baseline credit assessment (BCA) at baa2 and issuer rating
at Baa3 with a stable outlook), the relative priority of claim of
the securities within Western Alliance's capital stack, and the
securities' structural features. The securities have a conditional
exchange feature that effectively ranks BW Real Estate, Inc.'s
preferred stock as preferred stock of Western Alliance Bank.
Specifically, upon the occurrence of a supervisory event, such as
anticipation by Western Alliance's federal banking regulators that
Western Alliance Bank will become undercapitalized under its prompt
corrective action regulations, the securities are automatically
exchanged for non-cumulative preferred stock of Western Alliance
Bank.
Relative to Western Alliance Bank's baa2 BCA, the Ba2(hyb) rating
assigned to BW Real Estate, Inc.'s non-cumulative preferred
securities captures the securities' dividend deferral features and
is derived from the application of Moody's advanced Loss Given
Failure (LGF) analysis to the liability structure of Western
Alliance Bancorporation and its subsidiaries, a key component of
Moody's Banks methodology.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The key factor that could lead to an upgrade of BW Real Estate,
Inc.'s preferred stock is an upgrade of Western Alliance Bank.
Western Alliance's ratings could be upgraded if its commercial real
estate (CRE) credit costs do not rise materially, even in a more
challenging economic environment, if it continues to enhance its
risk governance, if its capitalization as measured by Moody's
tangible common equity (TCE) to risk-weighted assets (RWA) ratio
continues to exceed 11.0% throughout the cycle and if it further
strengthens its deposit franchise such that the granularity of its
deposit base continues to improve. Sustained improvement in
profitability could also support positive rating pressure.
The key factor that could lead to a downgrade of BW Real Estate,
Inc.'s preferred stock is a downgrade of Western Alliance Bank.
Western Alliance's ratings could be downgraded if its capital as
measured by TCE/RWA moves back below 11.0%, if its liquidity
weakens from current levels, if its CRE credit costs rise
substantially or if Moody's believes that its risk appetite has
become more aggressive, which would most likely be observed by loan
growth that noticeably exceeds deposit growth.
The principal methodology used in these ratings was Banks published
in November 2024.
CALIFORNIA PROUD: Case Summary & Two Unsecured Creditors
--------------------------------------------------------
Debtor: Carolina Proud Investment Group, LLC
a/k/a CPIG
411 River Branch Rd.
Greenville, NC 27858
Business Description: The Debtor's business involves owning and
managing a portfolio of residential and
commercial properties, including rental
units and vacant land, across multiple
locations in North Carolina and Ohio.
Chapter 11 Petition Date: March 24, 2025
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 25-01063
Judge: Hon. Pamela W McAfee
Debtor's Counsel: C. Scott Kirk, Esq.
SCOTT KIRK
1025C Director Court
Greenville, NC 27858
Tel: (252) 689-6249
Email: scott@csklawoffice.com
Total Assets: $1,035,550
Total Liabilities: $797,689
The petition was signed by Anna Hromyak as member-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/TCMBI5Q/Carolina_Proud_Investment_Group__ncebke-25-01063__0001.0.pdf?mcid=tGE4TAMA
CAPSTONE COPPER: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has assigned Capstone Copper Corp. (Capstone) a
first-time Long-Term Issuer Default Rating (IDR) of 'BB-' with a
Stable Rating Outlook. Fitch has also assigned a 'BB+' with a
Recovery Rating of 'RR2 to the company's senior secured revolving
credit facility', and a 'BB-'/'RR4' rating to the company's
proposed senior unsecured notes.
The ratings and Outlook reflect Capstone's mid-tier size,
concentration in four mines, improving but relatively high cost
position, and Fitch's expectation that EBITDA leverage will be
sustained below 3.5x.
Key Rating Drivers
High, But Improving Cost Position: Fitch sees cost position is a
key driver of through-the-cycle profitability and cash flow,
although Fitch expects copper prices to remain above marginal cost.
Cozamin in Mexico (13% of 2024 consolidated production) is in the
first quartile of CRU International Ltd's 2025 global all-in
sustaining cost curve, Mantos Blancos in Chile (24% of 2024
consolidated production) is in the third quartile, while Mantoverde
in Chile (32% of 2024 consolidated production) and Pinto Valley
U.S. (31% of 2024 consolidated production) are in the fourth
quartile.
Capstone expects unit cash costs net of by-product credits to drop
to $2.20-$2.50/lb in 2025 from 2.77/lb in 2024.This improvement
primarily results from the continued ramp-up at Mantos Blancos and
Mantoverde. Mantoverde's cost position should further improve if
the project to increase throughput of the sulphide concentrator to
45,000 from32,000 tonnes of ore per day advances as expected. The
project is expected to cost roughly $146 million and would advance
if a DIA permit amendment is received. Capstone anticipates
obtaining the amended permit by mid-2025.
Copper Exposure: Fitch views the copper market as fairly volatile,
but supported by near-term tight balances and long-term deficits.
Roughly 97% of 2024 gross revenues were from the sale of copper.
Fitch estimates that a 10% change in copper prices from its 2025
rating case assumption of $8,800/tonne (t), adjusted for currently
hedged production, would change 2025 EBITDA by $180 million, all
else being equal.
Capstone's average realized copper price was $4.16/lb in 2024,
compared with $3.84/lb in 2023 and $3.76/lb in2022. Spot prices are
approximately $4.42/lb compared with Fitch's rating case
assumptions of $8,800/t (about $3.99/lb) in 2025, $8,000/t (about
$3.62/lb) in 2026 and 2027, and $7,500/t (about $3.40/lb)
thereafter.
Conservative Financial Policies: Fitch views Capstone's financial
policy, which targets a maximum net leverage of 2.0x at
conservative copper price assumptions, as favorable to its credit
profile. Fitch expects leverage significantly below that target
prior to advancing Santo Domingo, though the company allows
deviations during the construction of major development projects.
Capstone prioritizes operational improvements and low-risk,
low-capital brownfield expansions before pursuing large-scale
greenfield projects.
De-leveraging post 2026: Absent Santo Domingo development spending,
Fitch expects meaningful deleveraging after 2026 as Mantoverde is
fully ramped-up, the company's cost position improves, and capex
declines. Higher-than-expected copper prices could enable the
company to repay revolver balances earlier, which would result in
more rapid deleveraging.
Santo Domingo Potential: Fitch views the $2.3 billion, fully
permitted project favorably given its production, cost and
mine-life outlined in the technical report effective July 31, 2024.
Its rating case excludes Santo Domingo production and capital
spending, except for minimal capex, since Fitch does not expect the
project to be approved before 2026. Capstone expects funding from
the sale of a noncontrolling interest, ongoing participation in
funding from this partner, additional gold stream deposits totaling
$260 million, non-recourse project debt, cash on hand, and FCF.
Peer Analysis
Capstone has larger production and more mines than peer Hudbay
Minerals Inc. (BB-/Stable). Capstone's 2024 production was 184,460
tonnes and the company guides to 2025 production of 220,000-255,000
tonnes of copper from its four mines as Mantoverde continues to
ramp up. This compares with Hudbay's 2024 guidance of
137,000-176,000 tonnes of contained copper from its three mines.
Hudbay's lower cost profile and significant gold production results
in higher EBITDA. Capstone's 2024 EBITDA was about $453 million for
Capstone compared with about $842 million for Hudbay. Fitch expects
EBITDA after distributions to noncontrolling interest for the two
companies to be fairly similar beginning in 2025 as Mantoverde
ramps up.
Capstone's EBITDA leverage was 2.2x at Dec. 31, 2024, compared with
Hudbay's EBITDA leverage at about 1.4x. Fitch expects 2025 leverage
for the two companies to be similar in 2025.
Fitch views Capstone's exposure to Chile and Hudbay's exposure to
Peru as relatively low jurisdictional risk exposure.
Key Assumptions
- Average consolidated annual payable copper sold increases from
about 234,000 t in 2025 and 2026 to about 261,000 t in 2027 and
2028;
- Copper prices of $8,800/t in 2025, $8,000/t in 2026 and 2027, and
USD7,500/t thereafter;
- EBITDA margins average about 39% from 2025 through 2028;
- Consolidated capex declines from nearly $670 million in 2025,
including capex for the Mantoverde Optimize project, to roughly
$440 million per year on average from 2026 through 2028;
- Significant Santo Domingo capital spending is not included.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 3.5x;
- Sustained negative FCF before major development capital;
- Failure to improve average cost position.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Improved size and scale; future development projects funded in a
balanced manner.
- EBITDA leverage sustained below 2.5x.
Liquidity and Debt Structure
As of Dec. 31, 2024, cash on hand was $132 million and $374 million
was available under the company's $700 million RCF due Sept. 22,
2027. Debt maturities are modest before the revolver balances are
due September 2027 and the notes are due in 2033. Fitch expects
scant net debt repayment before 2027 and 2028 when capex declines
under its rating case.
Issuer Profile
Capstone Copper Corp. is a mid-sized, Canadian-domiciled, copper
mining company. It owns and operates one mine in Arizona, U.S., one
mine in Mexico, and two mines and one project in Chile.
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
Fitch does not provide ESG relevance scores for Capstone Copper
Corp.
In cases where Fitch does not provide ESG relevance scores in
connection with the credit rating of a transaction, programme,
instrument or issuer, Fitch will disclose any ESG factor that is a
key rating driver in the key rating drivers section of the relevant
rating action commentary.
Entity/Debt Rating Recovery
----------- ------ --------
Capstone Copper Corp. LT IDR BB- New Rating
senior unsecured LT BB- New Rating RR4
senior secured LT BB+ New Rating RR2
CAPSTONE COPPER: Moody's Assigns 'Ba3' CFR, Outlook Stable
----------------------------------------------------------
Moody's Ratings assigned ratings to Capstone Copper Corp.
(Capstone), consisting of a Ba3 corporate family rating, a Ba3-PD
probability of default rating, and a B1 rating to the proposed $500
million senior unsecured notes. At the same time an SGL-2
Speculative Grade Liquidity Rating (SGL) was also assigned. The
outlook was assigned stable.
Proceeds from the new notes will be used to refinance existing
indebtedness, fund transaction costs and for general corporate
purposes.
RATINGS RATIONALE
Capstone's CFR benefits from its: 1) its operational diversity with
four operating mine sites located in favorable mining jurisdictions
(Chile, Mexico and the US); 2) adjusted debt to EBITDA that is at
or below 2x; 3) good liquidity; and 4) long reserve lives at its
mines, including Pinto Valley (15 years), Mantos Blancos (14 years)
and Mantoverde (25 years).
Capstone's rating is constrained by its: 1) modest scale (2025
copper production guidance of 220 to 255 thousand tonnes); 2) cash
costs that are on the higher end when compared to similarly rated
peers ($2.20 – $2.50/lb in 2025); 3) its exposure to commodity
price risk, with the majority of revenue coming from copper sales;
and 4) potential execution risk, that is inherent to any greenfield
project, associated with the company moving forward with its Santo
Domingo project.
Pro-forma for the new notes issuance, Capstone has good liquidity
through December 2025, with sources comprised of cash of around
$130 million as of December 2024 and free cash flow of around $100
million for 2025, under a $4/lb copper price assumption. The
company will have pro forma availability around $550 million under
its $700 million revolving credit facility that expires in
September 2027. Capstone's credit facility includes three financial
maintenance covenants that Moody's expects the company to remain in
compliance with. As well Capstone could access alternative
liquidity through its assets such as forward sales agreements or
minority interests.
The B1 rating on the company's $500 million senior unsecured notes,
one notch below the Ba3 CFR, reflects their subordination to the
unrated secured revolving credit facility.
Governance is the key driver for this rating action reflecting the
expectation that the company will maintain moderate financial
leverage and good liquidity through the ramp up of its Mantoverde
mine. Capstone's CIS-3 credit impact score indicates that ESG
considerations have a limited impact on the current credit rating
with potential for greater negative impact over time. The mining
sector is inherently exposed to environmental and social
challenges, such as the effects on the land used for mining and the
impacts on nearby communities.
The stable outlook reflects Moody's expectations that Capstone will
increase production at the Mantoverde mine in 2025, which will
boost cash flow and improve financial metrics. It also assumes
Capstone will maintain financial discipline in funding new
projects.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Capstone increases its mine
diversity, particularly with respect to operating cash flow by
mine, likely through the successful development of additional mine
projects while maintaining its current cost position. An upgrade
would also require that Capstone maintain adjusted debt to EBITDA
below 2.5x, (CFO - Dividends)/Debt is maintained above 30% and the
company maintains good liquidity.
The ratings could be downgraded if there are issues with the ramp
up of production at Mantoverde, or if Capstone experiences material
operational issues at its other producing mines that results in
lower production and higher costs. A downgrade could also occur if
the adjusted debt to EBITDA is sustained above 3.5x or (CFO -
Dividends)/Debt declines below 20%, or liquidity weakens.
Headquartered in Vancouver, Canada, Capstone is a copper mining
company with its operations being the Pinto Valley copper mine in
Arizona, USA, the Mantos Blancos copper-silver mine in Antofagasta,
Chile, the Cozamin copper-silver mine in Zacatecas, Mexico and the
Mantoverde copper-gold mine in Atacama, Chile (70% interest). It
also holds the Santo Domingo copper-iron-gold-cobalt project in
Atacama, Chile.
The principal methodology used in these ratings was Mining
published in October 2021.
CARETRUST REIT: Fitch Puts 'BB+' LongTerm IDR on Watch Positive
---------------------------------------------------------------
Fitch Ratings has placed the 'BB+' Long-Term Issuer Default Ratings
(IDRs) of CareTrust REIT, Inc. (CTRE), CTR Partnership, L.P., and
issue-level ratings of CTR Partnership, L.P. and CareTrust Capital
Corp. on Rating Watch Positive (RWP).
The RWP placement follows CTRE's announcement of an agreement to
acquire Care REIT, a UK-based healthcare REIT, subject to
shareholder approval. The acquisition adds approximately $66
million in annual contractual rent and significantly enhances
operator and geographic diversification, which have improved over
the past two years. Fitch plans to resolve the Rating Watch after
the transaction closes, expected in 2Q25. Fitch will continue to
monitor the transaction to gain insight into the final
post-transaction capital and organizational structures.
The rating is supported by long-term demographic tailwinds, low
leverage below positive sensitivities, strong financial flexibility
and liquidity, and strong portfolio-level lease coverage. The
Positive Watch may remain in place for longer than six months if
the acquisition takes over six months to close.
Key Rating Drivers
Improving Scale and Diversification Through Investment: CTRE has
completed significant external investment over the past two years,
primarily funded by equity. The company reduced leverage to 0.7x as
of Dec. 31, 2024, and improved its scale and geographic and
operator diversification over time. These factors will further
improve pro forma for the Care REIT acquisition. However, CTRE
remains less diversified by asset type, focusing primarily on
skilled nursing, which is more exposed to reimbursement risk than
senior housing.
Strong Leverage and Financial Flexibility: CTRE's leverage is
extremely low at roughly 0.7x as of Dec. 31, 2024, well below the
4.0x level that Fitch considers consistent with a higher IDR. The
company's financial policy aims to maintain leverage between 4.0x
and 5.0x, and it has been at or below this range in most periods.
CTRE delevered significantly in 2023 and 2024 by raising equity
through its at-the-market program. Additional equity issuances are
likely, which would keep leverage well below the long-term target,
given its current cost of debt relative to equity capital.
CTRE's credit profile further benefits from its limited near-term
maturities and fully unencumbered portfolio. Additionally, improved
diversification and scale following the Care REIT acquisition may
support wider leverage sensitivities at a given rating level.
Tenant Concentration Declining, Mitigated by Quality: At Dec. 31,
2024, CTRE's top five tenants represented 65% of annualized base
rent (ABR), reflecting significant concentration. However,
concentration has declined over time and is expected to approach
50% after the Care REIT acquisition, aligning more closely with
other healthcare REITs. Tenant concentration is balanced by
above-average portfolio-level lease coverage. CTRE's outsized
exposure to The Ensign Group, Inc. (Ensign; 27.6% of ABR in 4Q24)
enhances the portfolio-level coverage ratio, with Ensign's TTM
EBITDARM coverage at a high 4.28x.
Improving Operator Health: Operator profitability has been
recovering since the pandemic, and CTRE's portfolio coverage now
exceeds pre-Covid levels. This improvement is driven by organic
trends like favorable government reimbursement increases and
efforts to reduce reliance on agency labor. As of Sept. 30, 2024,
EBITDARM Coverage was 2.82x, up from 2.38x as of Sept. 30, 2019.
However, some operators, including the Pennant Group with an
EBITDARM coverage of 1.07x, remain relatively weaker within CTRE's
portfolio, falling below the level Fitch considers sustainable.
Long-Term SNF Rental Income Risk Profile Intact: Fitch views the
long-term rental income risk profile of CTRE's skilled nursing
portfolio to be relatively unchanged by the pandemic. Fitch
believes skilled nursing facilities (SNFs) will maintain their role
in the U.S. healthcare system since they deliver complex post-acute
and needs-driven care effectively. However, the slower recovery in
occupancies may indicate that the pandemic accelerated trends
toward lower-cost settings for patients, such as in-home care.
Long-term demographic tailwinds should mitigate these effects.
Peer Analysis
CTRE's ratings reflect its strong financial metrics, including very
low leverage, above-average operator lease coverage and unsecured
borrowing strategy. The ratings also reflect the issuer's
moderately diversified portfolio of triple-net leased healthcare
real-estate properties and long-lease maturity profile, which
should become further diversified upon close of the Care REIT
acquisition. All of CTRE's assets are unencumbered, which provides
contingent liquidity to encumber its assets during periods of
stress and repay its debt maturities, though some of its acquired
properties from Care REIT will be encumbered.
CTRE's leverage policy is similar to or slightly lower than its
SNF-focused peers, Omega Healthcare Investors, Inc (OHI,
BBB-/Stable) and Sabra Health Care REIT, Inc. (SBRA, BBB-/Stable).
OHI and SBRA have more demonstrated access to unsecured public debt
markets and lower tenant concentration relative to CTRE. CTRE
currently has significantly lower leverage despite its policy.
CTRE is comparable with National Health Investors, Inc. (NHI,
BBB-/Stable) in size, as a smaller cap healthcare REIT with similar
tenant diversification, although NHI is more diversified by asset
type. Both REITs have 4x-5x leverage targets, above-average lease
coverage ratios, and long-dated but concentrated debt maturity
profiles. However, CTRE's leverage is currently significantly below
its long-term target.
Fitch rates the IDRs of the parent REIT and its operating
subsidiary, CTR Partnership, L.P. (BB+/RWP), on a consolidated
basis using the weak parent/strong subsidiary approach and open
access and control factors, as the entities operate as a single
enterprise with strong legal and operational ties.
Key Assumptions
- The company experiences same-store net operating income (SSNOI)
growth in the low-single digits;
- Interest paid generally hovers between $40 million and $70
million annually, but is ultimately dependent on how the company's
funding strategy with respect to external investment;
- The company completes the Care REIT acquisition in 2025 and
roughly an additional $300m of acquisitions that year, with an
average of $230 million annually over the rest of the forecast;
- The company raises around $300m in equity proceeds for the Care
REIT acquisition. Other acquisitions are primarily funded using
cash on hand and additional debt, with no additional equity
proceeds forecast. This assumption may be conservative given equity
funding for acquisitions in 2023-2024.
- REIT leverage remains below 5.0x over the ratings horizon; that
said, the actual trajectory of leverage is highly dependent on the
company's pace of external investment and the funding mix for said
investment.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Further pressure on operators through legislation revisions that
result in lower coverages or other changes in regulatory
framework;
- Further secular pressure that results in a reduction in demand
and/or profitability for operator services;
- Fitch's expectation of REIT fixed-charge coverage sustaining
below 2.5x.
- Fitch's expectation of REIT Leverage sustaining above 5.0x;
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Fitch's expectation of CTRE demonstrating long-term cash flow
stability from its underwritten acquisitions and ability to manage
troubled tenants through the cycle;
- Fitch's expectation of CTRE demonstrating more-established access
to capital comparable to investment grade-rated peers;
- Fitch's expectation of CTRE continuing to diversify its property
base reducing tenant and industry concentration without changing
its credit profile.
- Fitch's expectation of REIT Leverage sustaining below 4.0x, or
company policy of Net Leverage below 4.0x;
Fitch expects to resolve the Rating Watch Positive upon the close
of the transaction, and to review the appropriate sensitivities
upon resolution of the Rating Watch.
Liquidity and Debt Structure
CTRE has no debt maturities until 2028 and ample liquidity, with
$214 million of cash on hand and full availability under a $1.2
billion RCF that matures in 2029. It does have some bullet maturity
risk, as all debt matures in 2028, but this is more a function of
the company's relative lack of debt; the company could easily cover
this maturity with cash on hand and revolver availability if
necessary. Fitch views CTRE's access to unsecured public debt
markets to be less established compared to its peers.
Fitch estimates that unencumbered real-estate assets cover
unsecured net debt (UA/UD) by over 4x using a 10.5% stressed cap
rate at Dec. 31, 2024, which is above the 2.0x typical of
investment-grade REITs and has increased from prior periods based
on organic growth and less net debt. Fitch notes that net UA/UD
would likely migrate towards 2x if leverage increased within its
target 4x-5x range.
Issuer Profile
CareTrust REIT (NASDAQ: CTRE) is a publicly traded REIT that owns,
acquires, develops and leases healthcare properties (principally
skilled nursing) across the 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
----------- ------ -------- -----
CareTrust REIT, Inc. LT IDR BB+ Rating Watch On BB+
CTR Partnership, L.P. LT IDR BB+ Rating Watch On BB+
senior unsecured LT BB+ Rating Watch On RR4 BB+
CareTrust
Capital Corp.
senior unsecured LT BB+ Rating Watch On RR4 BB+
CARNIVAL CORP: S&P Upgrades ICR to 'BB+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Global cruise
operator Carnival Corp. to 'BB+' from 'BB.'
S&P said, "We raised our issue-level ratings on Carnival's
unsecured debt by one notch to 'BB+' from 'BB', in line with the
issuer credit upgrade. We affirmed our 'BBB-' issue-level rating on
Carnival's secured debt because we cap our issue-level ratings for
most speculative-grade issuers at 'BBB-' regardless of our recovery
rating.
"The stable outlook reflects our expectation that Carnival's
forward bookings and recently completed refinancings will support
FFO to debt improving above 20% in fiscal 2025 and to approximately
25% in fiscal 2026. It also reflects S&P Global Ratings adjusted
net debt to EBITDA improving to around 3.8x by the end of fiscal
2025."
Carnival's booked position for the remainder of fiscal 2025 and
strong pricing will support continued improvement in credit
measures this year. Carnival continues to experience good
visibility and currently has over 80% of the year's inventory
booked at higher prices. In addition, continued strength in
close-in bookings and onboard revenue during the quarter
contributed to outperformance in Carnival's first fiscal quarter
(ending Feb. 28, 2025) and led the company to raise its net yield
guidance for the year. Carnival now expects net yields on a
constant currency basis to increase 4.7% compared to 4.2%
previously.
S&P said, "We estimate revenue will increase around 4% and EBITDA
will increase about 8% in 2025. As a result, we expect Carnival's
fiscal 2025 S&P Global Ratings-adjusted debt to EBITDA will improve
to approximately 3.8x by the end of the year from 4.4x in fiscal
2024. This level of leverage is well below our 4.5x upgrade
threshold for Carnival.
"In addition, we now forecast FFO to debt will improve to about 21%
in fiscal 2025, above our 20% FFO to debt upgrade threshold. This
compares to about 19% previously. The improved FFO to debt measure
compared to our previous forecast stems from higher EBITDA, as well
as recently completed refinancing transactions that will reduce
interest expense. FFO to debt is improving slower than debt to
EBITDA because FFO remains impaired by the company's higher
interest burden from a much larger quantity of debt than it had
before the pandemic. We expect this measure will continue to
improve as the company focuses on reducing debt balances and
improving interest expense."
Recently completed refinancings will support further interest
reduction and increase cash available for debt reduction, improving
FFO to debt and leverage. Carnival recently refinanced its two
highest cost bonds--$2.03 billion of 10.375% senior priority notes
and $1 billion of 10.5% senior notes. The two new bonds have
interest rates that are 425 basis points (bps) and 475 bps lower,
respectively. S&P said, "As a result, we estimate the company will
save approximately $135 million annually in interest expense. We
previously assumed the company would refinance these bonds in the
second half of 2025 at rates that were at least 300 basis points
lower than the existing interest rates."
In addition, during the first fiscal quarter, Carnival also
repriced its first-priority senior secured term loan facilities due
in 2027 and 2028, reducing the spread by 75 bps. The lower spread
will save Carnival an additional $18 million in annual interest.
The greater-than-anticipated interest savings and the earlier
refinancing should increase FFO to debt to above 20% by the end of
fiscal 2025 and supports the upgrade.
Carnival's ship delivery schedule will support debt repayment over
the next two years, further improving credit measures. Carnival's
ship delivery schedule slows in fiscal 2025 as the company will
take delivery of only one ship this year and no ships in fiscal
2026. This follows three large ship deliveries in fiscal 2024.
Carnival resumed ordering ships earlier this year and has one ship
scheduled for delivery in each of fiscals 2027, 2028, 2029, 2031,
and 2033. These orders align with Carnival's plans to target one to
two ship deliveries per year. This compares to three to five ships
annually from fiscals 2018 to 2022.
Carnival's more measured approach to ordering new ships than
pre-pandemic supports its strategy to repair its balance sheet and
further reduce debt. S&P expects this more measured level of ship
deliveries will allow Carnival to generate significant cash flow
for leverage reduction over the next few years, despite expected
ship debt to finance new deliveries. Carnival stated it could
potentially reduce debt by approximately $5 billion, in aggregate,
in 2025 and 2026 compared to debt balances at the end of fiscal
2024.
Demand for future cruise bookings could decline in a slowing
macroeconomic environment. Vacationers have remained more resilient
than S&P previously expected. However, a decline in savings built
up during the pandemic and uncertainty around the new U.S.
administration's policies, which might diminish consumer confidence
or increase inflation, could lead to tighter personal travel
budgets.
Still, consumers' desire to vacation will likely lead them to
search for deals rather than cut travel spending altogether,
especially if unemployment remains moderate. Cruise operators have
historically used price as a lever to fill their ships in weaker
economic conditions.
In S&P's view, if the global economy unexpectedly slows more than
its current base case, the risk of discounting to fill the ships
may be lower than in previous economic slowdowns. This is because
even though the price differential between a cruise vacation and
comparable land-based vacation has narrowed over the past year, it
remains wider than usual. This gap, along with shorter cruise
itineraries, could benefit cruise operators like Carnival if
customers who want to take a vacation have less money to spend and
are looking for value alternatives or shorter vacations.
Furthermore, cruise operators typically have good revenue
visibility over the next 12 months given a long booking cycle. For
cruise operators, the average booking window has historically been
around six months. However, S&P believes Carnival's current booking
curve exceeds six months as the company has said its booking curve
continues to be the furthest out on record.
Carnival's current booked position for fiscal 2025 and its lower
capacity growth in fiscals 2025 and 2026 are risk mitigants and
provide good revenue visibility. Carnival has the vast majority of
its 2025 inventory already booked, and the industry doesn't usually
see major spikes in cancellations if the economy weakens modestly.
S&P sees more risks to yields, onboard spending, and booking
volumes later in 2025 and into 2026 if the economy begins slowing
this year. However, during the first fiscal quarter of 2025,
Carnival's booking volumes for 2026 sailings and beyond hit records
and at higher prices in constant currency.
S&P said, "The stable outlook reflects our expectation that
Carnival's forward bookings and recently completed refinancings
will support FFO to debt improving above 20% in fiscal 2025 and to
about 25% in fiscal 2026 when the company will benefit from a full
year of interest savings from refinancing its high-cost debt. In
addition, we expect Carnival's S&P Global Ratings adjusted net debt
to EBITDA to improve to around 3.8x by the end of fiscal 2025 from
about 4.4 at the end of fiscal 2024, which represents a good
cushion to our 4.5x leverage threshold. This incorporates our
expectation for good but moderating yield growth in 2025."
S&P could lower its rating on Carnival if S&P believes FFO to debt
will sustain below 20% and S&P Global Ratings adjusted net debt to
EBITDA will increase above 4.5x. This could occur if:
-- Operating performance in 2025 is weaker than we expect; or
-- Bookings for 2026 deteriorate materially.
In S&P's view, an investment-grade rating for Carnival is unlikely
over the next 12 months because of its forecasted credit measures,
as well as macroeconomic uncertainty. However, S&P could upgrade
Carnival to 'BBB-' if:
-- S&P Global Ratings adjusted net debt to EBITDA improves to
below 3.75x;
-- FFO to debt sustains higher than 25%;
-- EBITDA coverage of interest remains above 4.5x; and
-- S&P believes that Carnival has sufficient cushion to sustain
these metrics during the next cyclical downturn, incorporating
future ship orders and shareholder returns.
CELSIUS NETWORK: Court Narrows Claims in Into the Block Lawsuit
---------------------------------------------------------------
Chief Judge Martin Glenn of the United States Bankruptcy Court for
the Southern District of New York granted in part Into the Block
Corp.'s motion to dismiss all counts asserted in the amended
adversary complain captioned as MOHSIN Y. MEGHJI, as Representative
for the Post-Effective Date Debtors, Plaintiff, v. INTO THE BLOCK
CORP., Defendant, Adv. Pro. No. 24-04008-mg (Bankr. S.D.N.Y.).
Counts I, III, IV, and V are dismissed with prejudice. The motion
is granted with respect to Counts I, III, IV, and V with prejudice
and denied with respect to Count II.
Defendant ITB -- a Delaware corporation with its principal place of
business in Miami, Florida -- is a self-described intelligence
company that employs machine learning and statistical modeling to
deliver actionable intelligence for crypto assets and smart
financial software solutions.
To assist in its DeFi trading efforts, Celsius retained ITB as an
independent contractor to help develop certain DeFi trading
strategies.
On Nov. 1, 2024, the Litigation Administrator filed the Amended
Complaint against ITB, commencing an action for breach of fiduciary
duty, breach of contract, negligence, gross negligence, and
turnover.
Central to several of the asserted causes of action is the
Litigation Administrator's allegation that ITB operated as an
unregistered investment adviser to Celsius within the meaning of
the Investment Advisers Act of 1940, 15 U.S.C. Sec. 80b-2.
Specifically, the Litigation Administrator argues that ITB's
engagement in crypto transactions on behalf of Celsius constitutes
an "investment contract" as that term is defined under the IAA, and
therefore falls within the IAA's definition of "security." As an
investment adviser, the Litigation Administrator believes that ITB
served as a fiduciary to Celsius and, as a result, was obligated to
disclose material information.
The Amended Complaint asserts five causes of action:
Count I – A claim for breach of the fiduciary duty ITB owed to
Celsius as an investment adviser and asset manager for ITB's (i)
investment of Celsius's assets that resulted in a 75% loss; (ii)
failure to disclose material risks of its investment and asset
management strategies; and (iii) failure to immediately report the
loss.
Count II – A claim for breach of the Agreement for ITB's failure
to institute appropriate risk parameters in its investment and
management of Celsius's assets under the laws of England and Wales.
Count III – A claim for gross negligence in connection with ITB's
alleged breach of its fiduciary duty owed to Celsius under the laws
of England and Wales.
Count IV – A claim for negligence in connection ITB's alleged
breach of its fiduciary duty owed to Celsius under the laws of
England and Wales.
Count V – A claim for entry of a judgment ordering ITB to turn
over 90 WBTC and all related proceeds, rents, or profits (or their
equivalent value) -- which allegedly constitute
debt or property that the trustee may use, sell, or lease and
remains outstanding -- pursuant to section 542(b) of the Bankruptcy
Code.
The Litigation Administrator seeks entry of an order:
(i) awarding damages in an amount to be proven at trial but no
less than the value of 90 BTC in connection with Counts I, II, III,
and IV;
(ii) directing ITB to turn over 90 BTC and any and all proceeds
to Celsius in connection with Count V;
(iii) awarding costs and fees to the extent appropriate, including
reasonable attorneys' fees; and
(iv) such other relief the Court deems just and equitable.
The Motion seeks dismissal of all counts asserted in the Amended
Complaint with prejudice on grounds that the limitation of
liability clause in the Agreement -- that, by its own terms,
encompasses all claims in the Amended Complaint -- limits ITB's
liability for indirect damages, which is "all that Celsius seeks
here." ITB notes that the Litigation Administrator does not seek to
hold Celsius responsible for amounts directly owed under the
Agreement but rather for alleged losses resulting from the exit
fee.
Moreover, each of the Amended Complaint's five causes of action,
ITB maintains, independently fail to state a claim and should be
dismissed. With respect to Count I, ITB argues that dismissal of
the breach of fiduciary duty claim is appropriate as the Litigation
Administrator fails to adequately plead facts that establish that
(i) the transactions at issue constitute securities, a requirement
to implicate the IAA; (ii) ITB meets the statutory definition of an
"investment adviser" and, in fact, Celsius disclaimed that ITB was
acting as a fiduciary; and (iii) ITB breached any duty since, among
other things, Celsius agreed to the Strategy and the Litigation
Administrator has not pointed to any false statement ITB made.
Moreover, in ITB's mind, Count II should also be dismissed because
the Litigation Administrator has not pled breach of any contractual
obligation. Specifically, the smart contract, ITB states, operated
as "anticipated" (i.e., disassembling Celsius's position after the
exit fee rose above 1%), and the Amended Complaint does not
otherwise point to any specific provision in the Agreement that was
violated. In addition, ITB argues that nothing in the Agreement
makes ITB responsible for trading losses, and consideration of the
September 2022 and May 21 Presentations and other communications
that Celsius allegedly relied on is barred by the Agreement's
merger clause and/or do not support the Litigation Administrator's
position.
ITB also argues that the Litigation Administrator's gross
negligence and negligence claims -- which comprise Counts III and
IV, respectively -- should be dismissed because they are barred by
the "economic loss" doctrine (or the English law equivalent) and
are otherwise insufficiently pled. With respect to the former, the
Litigation Administrator, ITB argues, does not allege physical or
property damage, only economic loss. As to the latter, ITB
indicates that the Litigation Administrator's claim for negligence,
gross or otherwise, fails because (i) as an initial matter, it did
not owe Celsius any duty; and (ii) the Litigation Administrator
failed to allege breach of any "viable" duty or that such alleged
breach was the proximate cause of Celsius's alleged loss. The
Litigation Administrator's claim for gross negligence also fails,
ITB asserts, because the Amended Complaint lacks any facts that
illustrate a "gross deviation" from reasonable standards of care, a
higher standard than mere negligence.
Finally, the claim for turnover similarly fails for two reasons,
ITB argues. First, the Amended Complaint lacks any allegation that
ITB held the lost 90 WBTC at the time of the Jan. 13 liquidity
event or is currently holding the tokens. Instead, the Amended
Complaint pleads facts that demonstrate that these tokens were used
to pay the liquidity pool's exit fee such that ITB is not and was
not holding Celsius's property on Jan. 13. Second, at its core, the
turnover claim is nothing more than a "masked claim" for market
losses for which no repayment obligation exists, seeking recovery
of a disputed pre-petition debt, which cannot serve as the basis of
a turnover claim.
The Amended Complaint does allege that ITB failed to put into place
the "appropriate" risk parameters, suggesting that such parameters
may have existed. To the extent ITB indeed failed to comply, it is
entirely plausible that the loss Celsius suffered was a "direct and
natural consequence" of ITB's actions that could entitle Celsius to
direct damages. However, without the ability to definitively
conclude one way or the other based on the record before it, the
Court declines to dismiss the Amended Complaint on such grounds.
Accordingly, the Court concludes that the limitation of liability
provision set forth in the Agreement does not, at this time,
require dismissal of the Amended Complaint in its entirety.
The Court finds the Amended Complaint has sufficiently pled a claim
for breach of contract. Accordingly, the Motion as to Count II is
denied.
The Court concludes that the Litigation Administrator has failed to
plead facts sufficient to support a finding that there was an
investment contract and therefore, a security. Considering such,
the Litigation Administrator has failed to establish that ITB was
an investment adviser under the IAA.
According to the Court, while the Litigation Administrator makes
much ado about how the services ITB provided to Celsius under the
Agreement "are the hallmarks of investment advisers," ITB cannot be
an investment adviser if it is not, in the first instance, dealing
in securities.
Given the Court's conclusion that the Amended Complaint fails to
plead sufficient facts to establish that ITB was an investment
adviser to Celsius as defined under the IAA, Count I must be
dismissed.
The Amended Complaint pleads only that ITB breached the duty it
owed to Celsius to act with care and loyalty solely in connection
with ITB's alleged role as an investment adviser to Celsius.
However, the Litigation Administrator failed to adequately plead
that ITB was an investment adviser under the IAA, and the Agreement
itself explicitly provides that there is no fiduciary relationship
between Celsius and ITB. Moreover, with respect to the claim for
gross negligence in particular, the Court also notes that the
Amended Complaint does not allege sufficient facts that would
suggest that ITB recklessly disregarded its obligations when it
invested Celsius's assets. Therefore, Counts III and IV must also
be dismissed.
Relief for Count V necessitates, as a threshold matter, a
determination of whether ITB breached the Agreement (i.e.,
resolution of Count II), which would give rise to a "matured" debt
thereunder. As the question of whether the Agreement was breached
remains open, the debt is not "matured," and Count V cannot survive
dismissal. In addition, Count V must also be dismissed for the
Litigation Administrator's failure to address ITB's arguments and
requested dismissal in its opposition.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=THv9hp from PacerMonitor.com.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankruptcy counsels; Fischer (FBC & Co.) as
special counsel; Centerview Partners, LLC as investment banker; and
Alvarez & Marsal North America, LLC as financial advisor. Stretto
is the claims agent and administrative advisor.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP and Huron Consulting
Services, LLC, serve as the examiner's legal counsel and financial
advisor, respectively.
* * *
On November 9, 2023, the Bankruptcy Court entered the Findings of
Fact, Conclusions of Law, and Order Confirming the Modified Joint
Chapter 11 Plan of Celsius Network LLC and Its Debtor Affiliates.
The Effective Date of the Plan occurredJanuary 31, 2024.
CHARGING ROBOTICS: Hires Brightman Almagor Zohar & Co. as Auditor
-----------------------------------------------------------------
Charging Robotics Inc. disclosed in a Form 8-K Report filed with
the U.S. Securities and Exchange Commission that the board of
directors approved the dismissal of Elkana Amitai, CPA as its
independent registered public accounting firm, effective as of
March 10, 2025. The Former Auditor had served as the Company's
independent registered public accounting firm since July 3, 2023.
Except for an explanatory paragraph in the Former Auditor's audit
report regarding substantial doubt about the Company's ability to
continue as a going concern, the audit reports of the Former
Auditor on the Company's financial statements for the fiscal years
ended December 31, 2023 and 2022 contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2023 and 2022, and the
subsequent interim period through the Effective Date, there were:
(i) no "disagreements" (as that term is defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions)
between the Company and the Former Auditor on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of the Former Auditor, would have
caused the Former Auditor to make reference to the subject matter
of the disagreement in its reports on the Company's financial
statements and
(ii) no "reportable events" (as that term is defined in Item
304(a)(1)(v) of Regulation S-K and the related instructions).
Following Elkana Amitai's dismissal, the Board appointed Brightman
Almagor Zohar & Co., Certified Public Accountants, a Firm in the
Deloitte Global Network as the Company's independent registered
public accounting firm for the fiscal year ending December 31,
2024. During the fiscal years ended December 31, 2024 and 2023, and
the subsequent interim period through the Effective Date, neither
the Company, nor anyone on its behalf, consulted the New Auditor
regarding:
(i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Company's financial
statements, and no written report or oral advice was provided to
the Company by the New Auditor that the New Auditor concluded was
an important factor considered by the Company in reaching a
decision as to any accounting, auditing or financial reporting
issue or
(ii) any matter that was the subject of a "disagreement" (as
that term is defined in Item 304(a)(1)(iv) of Regulation S-K and
the related instructions) or a "reportable event" (as that term is
defined in Item 304(a)(1)(v) of Regulation S-K).
About Charging Robotics
Charging Robotics Inc. (formerly Fuel Doctor Holdings Inc.) was
formed in February 2021, as an Israeli corporation, with the main
goal of developing an innovative wireless electric vehicles (EV)
charging technology. At the heart of the technology is a wireless
power transfer module that uses resonance induction coils to
transfer electricity wirelessly.
Mitzpe Netofa, Israel-based Elkana Amitai CPA, the Company's
auditor since 2023, issued a "going concern" qualification in its
report dated March 12, 2024, citing that as of Dec. 31, 2023, the
Company suffered losses from operations and further losses are
anticipated in the development of its business. These and other
factors raise substantial doubt about the Company's ability to
continue as a going concern.
The Company have yet to file its latest Annual Report on Form 10-K.
CHARTERCARE HEALTH: S&P Assigns 'BB-' Rating on Revenue Bonds
-------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' rating to Rhode Island Health
& Educational Building Corp.'s $81.810 million series 2025A
tax-exempt revenue bonds and $56.435 million series 2025B taxable
revenue bonds issued for CharterCARE Health of Rhode Island, Inc.
(CharterCARE). The outlook is negative.
"The rating reflects CharterCARE's cushion of unrestricted reserves
in its opening balance sheet, which we believe gives the
organization time to implement its improvement plans," said S&P
Global Ratings credit analyst Cythia Keller. S&P said, "However, we
also see significant uncertainty about future financial, strategic,
and operating performance as CharterCARE begins to operate
independently from Prospect, which filed for bankruptcy on Jan. 11,
2025. We have incorporated these risks into our rating partly
through the negative outlook, reflecting a one-in-three chance of a
rating downgrade within our one-year outlook period."
S&P said, "The negative outlook reflects our view of the outsized
uncertainty about future operating performance, given the
complexity involved in converting from a for-profit provider under
a bankrupt operator to an independent nonprofit provider. We view
the turnaround plan as promising, and we recognize the hospital's
long history in the market, but also believe that there will be
unforeseen industry challenges that could slow progress.
"A lower rating could be possible if CharterCARE is unable to
largely meet forecast expectations during the outlook period or
with any meaningful change to the enterprise profile, including a
negative shift in market share because of an inability to grow
volumes. Our expectations include break-even-to-slightly positive
operating performance by 2027, as well as maintenance of key
balance-sheet metrics around leverage and unrestricted reserves
that are generally in line with levels posted on the opening
balance sheet. We do not view CharterCARE as having any capacity
for additional debt.
"Within the one-year outlook period, we could consider a stable
outlook and over a longer period, a positive outlook. Any action
would be predicated on receipt of audited financial statements that
show CharterCARE has largely performed as expected and has retained
a sufficient balance-sheet cushion, evidence of compliance with the
state's conditions, and a stable or improving enterprise profile."
CHRIS' COLLISION: Gets Final OK to Use Cash Collateral
------------------------------------------------------
Chris' Collision, LLC received final approval from the U.S.
Bankruptcy Court for the Western District of Kentucky, Louisville
Division, to use cash collateral.
The final order signed by Judge Alan Stout authorized the company
to use cash collateral to pay operating expenses in accordance with
its budget.
The budget may only be modified with the consent of the U.S. Small
Business Administration, a secured creditor, or by further order of
the bankruptcy court.
As protection, SBA and other secured creditors were granted
replacement liens on post-petition property of the company. In
addition, SBA will receive a monthly payment of $4,200.
Chris' Collision was ordered to keep its assets insured as
additional protection to the secured creditors.
About Chris' Collision LLC
Chris' Collision, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Ky. Case No. 24-32902) on
November 11, 2024, listing up to $100,000 in assets and up to $1
million in liabilities. Christopher Clifford, member, signed the
petition.
Judge Alan C. Stout oversees the case.
The Debtor is represented by:
Charity S. Bird, Esq.
Kaplan Johnson Abate & Bird LLP
Tel: 502-540-8285
Email: cbird@kaplanjohnsonlaw.com
CINEMARK HOLDINGS: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Cinemark Holdings, Inc. and Cinemark
USA, Inc.'s Long-Term Issuer Default Ratings (IDRs) at 'B+' with a
Stable Outlook. Cinemark's senior secured debt is affirmed at 'BB+'
with a Recovery Rating of 'RR1', while senior unsecured debt is
affirmed at 'B'/'RR5'. The removal from Under Criteria Observation
(UCO) of Cinemark Holdings, Inc.'s IDR reflects Fitch's application
of the updated "Corporate Rating Criteria - Appendix 1: Leases."
The ratings were placed on UCO following the publication of the
updated criteria on Dec. 6, 2024.
The Stable Outlook highlights promising box office expectations
after a challenging 2024, due to the 2023 Hollywood strikes that
delayed major releases until 2025. This year's film slate is
anticipated to reach about 90% of pre-pandemic levels, with the
domestic box office projected at $9.0 billion-$9.5 billion, an over
10% yoy recovery. Cinemark's resilient business model has improved
margins and leverage through disciplined cost management. For 2025,
Fitch expects EBITDA leverage to decrease to approximately 3.0x,
with strong liquidity and no significant maturities until 2028.
Key Rating Drivers
Strong 2025 Film Slate Forecast: In 2023, the writers' and actors'
unions went on strike for over 110 days, leading to the largest
disruption in American film and television production in recent
history. The strike exacerbated pandemic-related supply chain
challenges, extending delays in the typical film creation cycle
(around 31 months) and causing post-production and release
bottlenecks in 2024. Consequently, approximately $1.5 billion in
film content was rescheduled for release in 2025, resulting in a
significant shortage of tentpole films during 2024.
Fitch anticipates a substantial recovery in fiscal 2025, driven by
a stronger film slate and a more normalized theatrical release
schedule in the short to medium term, as studios continue to
optimize content-creation cycles, especially for blockbuster films.
Fitch expects around 115 wide releases (approximately 90% of
pre-pandemic levels), with box office revenues for 2025 projected
to recover to the $9.0 billion to $9.5 billion range.
Improving Operating Performance and Leverage: Cinemark generated
$3.05 billion in revenue during 2024, reflecting a slight decrease
of 0.6% yoy. The revenue decrease was driven by a disappointing
film slate in 2024, as many large-format films were rescheduled for
2025. However, the company was able to partially offset the
attendance declines with ticket and concessions pricing increases
throughout the year. Adjusted EBITDA for 2024 was $574 million,
with an 18.8% margin, slightly lower than the 19.2% margin in
FY23.
Cinemark's EBITDA leverage was 4.1x by the end of 2024, supported
by the repayment of $150 million senior secured notes due 2025 and
a stable EBITDA margin relative to the prior year. For 2025, Fitch
expects Cinemark's EBITDA and EBITDAR leverage to improve to around
3.0x and 3.3x, respectively, as the result of recovered attendance
levels and margin gains, while maintaining an adequate liquidity
position. Fitch also expects Cinemark to continue implementing a
discipline cost structure and consistent financial policy focused
on maintaining its net leverage ratio target between 2.0x and
3.0x.
Highly Dependent on Studios Production: Movie theater exhibitors
rely on the quality, quantity and timing of film production, all of
which are beyond management's control. Throughout the pandemic,
film studios delayed theatrical releases while redirecting certain
titles to their own direct-to-consumer (DTC) offerings, with
options ranging from day-and-date (i.e., simultaneous) releases on
DTC platforms and theaters to theatrical releases only. Fitch
Ratings sees theatrical exhibition as vital for studios' large
format releases, recognizing its franchise branding potential.
Video-Streaming Platform Competition: Since the pandemic, the
theatrical film industry has experienced increasing competition
from at-home distribution channels, including DTC streaming
services owned by film studios such as Disney+ or Max. As part of
their initial strategy to increase subscribers, these studios
funneled certain films to their platforms, often bypassing the
theatrical exhibition. Over the past three years, studios have
worked to normalize theatrical release schedules, acknowledging the
economic importance of the theatrical window.
Improved Liquidity Position: Cinemark had $1,057 million of
available cash as of Dec. 31, 2024, and full availability of its
new $125 million revolving credit facility maturing in May 2028.
The company generated $302 million of FCF during 2024, reflecting a
significant recovery since 2021 when FCF came in at $58 million for
the year. Fitch expects Cinemark to maintain its margins and
continue to improve its cash flow generation, as the industry
leaves behind film supply challenges derived from the union strikes
in 2023, and the company continues to benefit from investments to
enhance the guest experience.
Diversification and Market Position: Cinemark's ratings are
supported by its scale as the third-largest theater exhibitor in
the U.S., operating 4,255 screens in 304 theaters with a sustained
market share across 42 states. The company also has a dominant
position in Latin America, where it operates 1,398 screens in 193
theaters across 13 countries. Cinemark is the leading theater
exhibitor in Brazil and Argentina and the second-largest exhibitor
in Chile and Colombia.
Updated Corporate Rating Criteria: The updated Corporate criteria
use 'balance sheet as reported' lease liabilities to calculate
leverage for sectors where lease-adjusted leverage is still
relevant, with the ability to adjust the reported figure if it is
misaligned with its peer group or to smooth out variations in lease
length and discount rates. This resulted in an improvement in
Cinemark's EBITDAR leverage compared with its previous method of
calculating lease-equivalent debt, but not to a degree that would
result in a rating action.
Peer Analysis
Cinemark's ratings reflect its higher operating scale and
diversification as the third-largest theater chain in the U.S.,
with a solid presence in key Latin American markets, when compared
to regional peers such as Cineplex Inc. (B/Negative). Cineplex's
scale is significantly smaller than Cinemark's (at about
one-third), but Cineplex enjoys a dominant position with a 73%
market share in Canada. While both issuers focus on enhanced
theatrical experiences and premium offering markets, Cinemark's
model has proven more effective with historically higher EBITDA
margins and FCF generation, and healthier leverage levels than
Cineplex.
Cinemark maintains a more conservative balance sheet and greater
liquidity than its peers, Cineplex and AMC Entertainment, enabling
it to better manage the business through periods of operating and
economic uncertainty.
Key Assumptions
- For FY25, Fitch assumed an attendance increase of approximately
5.0% in the U.S. and about 6.4% in its Latin American operations,
resulting in a consolidated increase of around 5.5%. This growth is
driven by a promising 2025 film slate, which includes films
rescheduled from FY24. For the remainder of the projection, Fitch
expects attendance growth to gradually decrease, reaching around
3.5% by the end of FY28;
- For FY25, Fitch anticipates a recovery in ticket prices compared
to the previous year, with a 4.8% year-over-year increase in the
U.S. and relatively stable pricing in Latin America, leading to an
approximate 1.6% increase in consolidated ticket prices. For the
remainder of the projection, Fitch expects ticket prices to rise by
about 2.5% per year on a consolidated basis;
- For FY25, Fitch anticipates a low single-digit increase in
concession revenue per patron, in line with the ongoing recovery in
attendance. For the remainder of the projection, Fitch assumes a
3.0% annual increase, supported by steady attendance levels and the
strategic pricing of premium offerings;
- For FY25, Fitch anticipates a modest expansion of the EBITDA
margin to 19.2%, up from 18.8% in FY24. This growth is driven by
increased attendance and favorable pricing for tickets and
concessions, reflecting a disciplined cost structure compared to
the performance of the past two years. For the remainder of the
projection, Fitch assumes the EBITDA margin will hover around
19.5%;
- Corporate overhead of 6.8% of revenues in FY25, increasing to
7.0% annually for the rest of the projection;
- Capex of $250 million annually in FY25 and FY26, primarily driven
by maintenance costs, new builds and the enhancement of premium
amenities in existing theaters. For the rest of the projection,
capex intensity is expected to stabilize at 5.0% per year;
- Additional cash outflows of $50 million per year related to cash
impact on foreign-exchange rates and additional working capital
requirements;
- Full repayment of the $460 million 4.50% convertible notes due
August 2025, and the 5.25% senior unsecured notes due 2028 using
cash on hand.
Recovery Analysis
The recovery analysis assumes Cinemark would be considered a going
concern in bankruptcy and that the company would be reorganized
rather than liquidated. Fitch has assumed a 10% administrative
claim.
- EBITDA: Cinemark's going-concern EBITDA is based on a run-rate
pre-pandemic EBITDA of $656 million. Fitch then stresses EBITDA by
assuming theaters close due to operational weakness driven by
accelerated declines in theatrical attendance as a result of
continued media fragmentation and changing consumer preferences.
This results in a going-concern EBITDA of $263 million, or a
roughly 60% stress.
Previous recessions provide limited precedent for stress cases, as
theater attendance increased in six of the last eight due to the
affordability of theatrical exhibitions. However, alternative
platforms like Netflix and Hulu may pressure theaters during future
downturns, especially in urban areas with ticket prices over $15.
Fitch believes membership plans, such as Cinemark's Movie Club,
could support attendance.
- Fitch uses a 5x enterprise value (EV) multiple for
post-reorganization valuation, aligning with the median TMT
emergence EV/EBITDA multiple, incorporating the following analysis
factors:
(1) Fitch believes theater exhibitors have limited tangible asset
value and face long-term disruption risks from new distribution
models like Netflix, which often releases films simultaneously in
theaters and to streaming subscribers, except for awards
contention;
(2)Recent trading multiples (EV/EBITDA) in a range of 6x-17x;
(3) Transaction multiples around 9x include Cineworld's acquisition
of Regal Entertainment for $5.8 billion in February 2018 with a
9.0x EBITDA multiple. AMC bought Carmike for $1.1 billion at 9.2x
in December 2016 and Odeon and UCI for $1.2 billion at 9.1x in
November 2016.
- Fitch estimates an adjusted, distressed enterprise valuation of
$1.2 billion.
- Fitch's recovery analysis assumes a fully drawn revolver since
companies tap credit revolvers under distress. Leases are a key
consideration in Fitch's recovery analysis. While Fitch does not
assign recovery ratings for the company's operating lease
obligations, Fitch assumes rejection of 30% of $1.1 billion in
operating lease commitments (net present value) due to operational
significance, with liability for 15% of rejected values,
emphasizing leased space's importance to core business prospects.
- Cinemark had $2.4 billion in total debt as of Dec. 31, 2024.
- The recovery analysis rates senior secured credit facilities at
'BB+'/'RR1', indicating full recovery prospects. Unsecured notes
are rated 'B'/'RR5', reflecting lower recovery prospects due to
their junior ranking and unsecured position in the capital
structure.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 4.0x and EBITDAR leverage
sustained above 5.0x;
- Significant deterioration in Cinemark's liquidity position;
- Increasing secular pressure, as illustrated by sustained declines
in attendance and/or concession spending per patron.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 3.0x and EBITDAR leverage
sustained below 4.0x;
- FCF margins sustained in the mid- to high-single digits.
Liquidity and Debt Structure
As of Dec. 31, 2024, Cinemark's liquidity was supported by $1,057
million in cash on balance and full availability under its $125
million revolving credit facility, which matures in 2028.
Post-pandemic, Cinemark has shown it can maintain its profitability
and generate positive cash flow, even during periods of low
attendance levels.
During FY24, Cinemark generated $302 million of FCF, reflecting an
increase of its FCF margin to 9.9% from 9.2% last year. Cinemark is
planning to retire the $460 million of 4.50% convertible notes with
cash on hand in 2025; the next significant maturity is the $765
million of 5.25% senior unsecured notes due in July 2028. Going
forward, Fitch expects Cinemark to continue generating positive
free cash flow even after reinstating its cash dividend program and
during temporary periods of high capital expenditures.
The senior secured facility is guaranteed by Cinemark (downstream)
and certain Cinemark USA, Inc. domestic subsidiaries (upstream).
The credit facility is secured by mortgages on certain fee and
leasehold properties and security interests in substantially all of
Cinemark USA's and the guarantor's personal property, including a
pledge on capital stock of certain Cinemark USA's domestic
subsidiaries and 65% of the voting stock of certain foreign
subsidiaries.
Issuer Profile
Cinemark Holdings, Inc. is the third-largest U.S. theatrical
exhibitor, operating 304 theaters across 42 states and 193 theaters
in 13 Latin American countries. It is the leading exhibitor in
Brazil and Argentina and the second largest in Chile and Colombia.
Summary of Financial Adjustments
- Balance sheet lease liabilities are used as lease-equivalent debt
starting in fiscal 2024, in accordance with Fitch's "Corporate
Rating Criteria" dated Dec. 6, 2024. Prior years used an 8x
multiple applied to lease expense for lease-equivalent debt.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Cinemark Holdings, Inc. LT IDR B+ Affirmed B+
Cinemark USA, Inc. LT IDR B+ Affirmed B+
senior secured LT BB+ Affirmed RR1 BB+
senior unsecured LT B Affirmed RR5 B
CLEAN HARBORS: Moody's Hikes CFR to Ba1 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings upgraded Clean Harbors, Inc.'s (CLH) ratings,
including the corporate family rating to Ba1 from Ba2, probability
of default rating to Ba1-PD from Ba2-PD, senior secured bank credit
facility rating to Baa3 from Ba1 and senior unsecured notes rating
to Ba2 from Ba3. Moody's also changed the outlook to stable from
positive. The speculative grade liquidity rating was upgraded to
SGL-1 from SGL-2.
The rating action reflects Moody's expectations for continued
improvement in credit metrics over the next year. This will be
driven by earnings growth and margin expansion as growth in the
environmental services segment more than offsets continued weakness
in the oil re-refining business. There is some volatility and
cyclical exposure within CLH's environmental business. However,
Moody's expects the company to benefit from higher pricing,
recurring waste volumes and higher disposal volumes in the
environmental base business. The company's good cost discipline and
recent acquisition synergies will also support results, including
robust free cash flow. Moody's expects CLH to maintain capital
discipline as it focuses on achieving profitable growth.
RATINGS RATIONALE
The Ba1 CFR reflects Moody's expectations that CLH will maintain a
leading position across its specialty North American hazardous
waste markets. The business model is supported by formidable
barriers to entry anchored by a unique collection of high value
assets and contracts that generate a recurring revenue stream
within several sub-segments of CLH's environmental services
business. Acquisitions will remain key to the growth strategy. The
$400 million debt funded acquisition of HEPACO in 2024 has
increased CLH's scale and capabilities in its field services
business. This includes emergency response services where the
company benefited from some large one-time projects last year.
Moody's expects adjusted debt-to-EBITDA to fall toward 2.6x through
2025, absent significant debt funded acquisitions. This will be
supported by higher earnings and realization of targeted HEPACO
acquisition synergies by year end 2025.
The rating also reflects exposure to the volatility of the oil
re-refining business, which is correlated with oil price movements
and has negatively impacted the company's profitability over the
past year. CLH is also exposed to cyclical industrial end markets
through cautious customer spending during weak economic conditions.
As well, CLH's field service operations are subject to variable
project timing, though often recurring under master service
agreements. However, tailwinds from reshoring, government support
of infrastructure investment and pollution remediation related to
PFAS contamination will support continued demand for CLH's
environmental and waste services. These factors and favorable
disposal pricing will help to offset base oil market pressures and
cost inflation, and support EBITDA margin of around 20% through
2025.
The stable outlook reflects Moody's expectations for CLH to
maintain healthy operating results and strengthening free cash flow
over the next 12-18 months, despite demand and pricing headwinds in
the oil re-refining business and macroeconomic pressures. Moody's
anticipates demand from key environmental end markets, including
the chemical sector, will continue to drive higher value waste
streams to CLH's disposal facilities as well as volume
opportunities presented by rising demand for PFAS remediation
services. Finally, Moody's expects the company to maintain very
good liquidity and a balanced capital approach, with adjusted
debt-to-EBITDA remaining below 3x absent any large acquisitions.
CLH's very good liquidity, as reflected by the SGL-1 speculative
grade liquidity rating, is supported by Moody's expectations of a
healthy cash balance and solid cash flow from operations of over
$800 million over the next year. This will comfortably cover high
capital expenditures through 2025 and mandatory term loan
amortization of about $15 million annually. Moody's expects that
capital spending will moderate following completion of CLH's new
Nebraska incineration plant (Kimball). The plant will ramp up over
the next 12-18 months, with higher tonnage supporting cash flow.
Moody's also expects CLH to maintain ample availability on the
undrawn $600 million ABL facility expiring in June 2029. The
borrowing base of $550 million resulted in availability of $420
million at December 31, 2024, net of letters of credit. The ABL
facility is subject to a fixed charge coverage ratio of 1.0x if
liquidity is less than the greater of (i) $45 million and (ii) 10%
of the commitment. Moody's expects the company to remain in
compliance with this covenant over the next year. There are no
near-term debt maturities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with sustained strength in key
industrial sectors (chemical, manufacturing and energy) driving
high asset utilization rates and landfill and incineration tonnage
trending higher. Resulting EBITDA margin approaching 25% and free
cash flow-to-debt sustained above 12.5% would support an upgrade.
Reduced vulnerability to the energy sector and oil prices and the
maintenance of very good liquidity would also support an upgrade.
Further, an upgrade would require a track record of a well balanced
financial policy such that debt-to-EBITDA is expected to remain
below 3x and the movement toward a capital structure that ensured
maximum financial flexibility.
The ratings could be downgraded with a decline in revenue and
earnings, a materially lower incinerator utilization rate
(typically in the high-80% range), or acquisition integration
challenges. A deterioration in liquidity could also lead to a
downgrade, as could aggressive shareholder friendly initiatives or
debt financed acquisitions that meaningfully weaken credit metrics.
Quantitatively, deteriorating margins, debt-to-EBITDA expected to
remain above 3.5x and/or free cash flow to debt falling toward 7.5%
could also result in a downgrade.
The principal methodology used in these ratings was Environmental
Services and Waste Management published in August 2024.
Clean Harbors, Inc. mainly provides environmental and industrial
waste services throughout North America with services including the
collection, packaging, transportation, recycling, treatment and
disposal of hazardous and non-hazardous waste. The company also
provides emergency spill response, cleaning and remediation, and
oil re-refining services. Clean Harbors operates through two main
segments: Environmental Services and Safety-Kleen Sustainability
Solutions, with the latter focused on oil re-refining by producing
and selling recycled base oil and blended oil products. Revenue for
the twelve months ended December 31, 2024 was approximately $5.9
billion.
COACH USA: Previous Owner Wants WARN Lawsuit Dismissed
------------------------------------------------------
Clara Geoghegan of Law360 reports that the former private equity
owner of bankrupt bus operator Coach USA has urged a New Jersey
federal judge to dismiss a lawsuit alleging it and the company's
executives failed to give the required notice before last summer's
layoffs.
About Coach USA
Coach USA, Inc., a company in Paramus, N.J., is a provider of
ground passenger transportation and mobility solutions in North
America, offering many types of specialized ground transportation
solutions to government agencies, airports, colleges and
universities, and major corporations.
With 25 business segments throughout the United States and Canada
employing approximately 2,700 employees and operating approximately
2,070 buses, the Coach USA network of companies carries millions of
passengers throughout the United States and Canada each year. In
addition to the household name "Coach USA," the company operates
under several other brands, including Megabus, Coach Canada, Coach
USA Airport Express, Dillon's Bus Company, and Go Van Galder.
Coach USA and its affiliates filed Chapter 11 petitions (Bankr. D.
Del. Lead Case No. 24-11258) on June 11, 2024. At the time of the
filing, Coach USA reported $100 million to $500 million in both
assets and liabilities.
Judge Mary F. Walrath oversees the cases.
The Debtors tapped Alston & Bird, LLP and Young Conaway Stargatt &
Taylor, LLP as legal counsels; Houlihan Lokey Capital, Inc. as
investment banker; and CR3 Partners, LLC as restructuring advisor.
Kroll Restructuring Administration, LLC is the Debtors' claims and
noticing agent and administrative advisor.
COMMSCOPE HOLDING: Declares Dividend on Series A Preferred Shares
-----------------------------------------------------------------
As previously disclosed, on April 4, 2019, CommScope Holding
Company, Inc. issued and sold 1,000,000 shares of the Company's
Series A Convertible Preferred Stock, par value $0.01 per share,
for an aggregate purchase price of $1.0 billion, or $1,000 per
share, pursuant to an Investment Agreement by and between the
Company and Carlyle Partners VII S1 Holdings, L.P., dated as of
November 8, 2018. Also, as previously disclosed, through December
31, 2024, the Company has paid dividends in kind in the aggregate
amount of 227,328 shares of Series A Preferred Stock to the holders
of the Series A Preferred Stock.
On March 11, 2025, the Board of Directors of the Company declared a
dividend on the shares of Series A Preferred Stock issued and
outstanding as of the record date for such dividend, as a dividend
in kind in the form of 16,875 shares of Series A Preferred Stock in
the aggregate, plus $760.00 in cash in the aggregate in lieu of
fractional shares. The Company expects to pay the Dividend on
March 31, 2025.
The Dividend is exempt from registration under the Securities Act
of 1933, as amended, pursuant to Section 4(a)(2) of the Securities
Act. Carlyle represented to the Company that it is an "accredited
investor" as defined in Rule 501 of the Securities Act and that the
Series A Preferred Stock is being acquired for investment purposes
and not with a view to, or for sale in connection with, any
distribution thereof, and appropriate legends will be affixed to
any certificates evidencing the shares of Series A Preferred Stock
and/or shares of the Company's common stock, par value $0.01 per
share, issued upon conversion of Series A Preferred Stock.
About CommScope Holding
Headquartered in Hickory, North Carolina, CommScope Holding
Company, Inc. -- https://www.commscope.com -- is a global provider
of infrastructure solutions for communication, data center, and
entertainment networks. The Company's solutions for wired and
wireless networks enable service providers, including cable,
telephone, and digital broadcast satellite operators, as well as
media programmers, to deliver media, voice, Internet Protocol (IP)
data services, and Wi-Fi to their subscribers. This allows
enterprises to experience constant wireless and wired connectivity
across complex and varied networking environments.
As of Dec. 31, 2024, CommScope Holding Company had $8.75 billion in
total assets, $10.98 billion in total liabilities, $1.23 billion in
series A convertible preferred stock, and a total stockholders'
deficit of
$3.46 billion.
* * *
S&P Global Ratings raised its issuer credit rating on CommScope
Holding Co. Inc. to 'CCC+' from 'CCC' and removed all its ratings
on the company from CreditWatch, where S&P placed them with
positive implications on Dec. 23, 2024, as reported by the TCR on
Feb. 14, 2025. S&P said, "The stable outlook reflects our
expectation for reduced default risk over the next 12 months due to
the company's recent debt paydown and refinancing and improving
credit metrics."
In March 2025, Moody's Ratings upgraded CommScope Holding Company,
Inc.'s ratings including the corporate family rating to Caa1 from
Caa2 and the probability of default rating to Caa1-PD from Caa3-PD.
CommScope's speculative grade liquidity (SGL) rating was upgraded
to SGL-3 from SGL-4. The new backed senior secured term loan and
backed senior secured notes issued in December 2024 at CommScope's
subsidiary, CommScope, LLC. were assigned a B3 rating and the
existing secured notes were confirmed at B3. The existing senior
unsecured notes at CommScope, LLC and CommScope Technologies LLC
were upgraded to Caa3 from Ca. The B3 rating on the backed senior
secured term loan due 2026 was withdrawn. The outlook is stable,
previously the ratings were on review for upgrade. These actions
conclude the review for upgrade that was initiated on January 8,
2025.
The ratings upgrade reflects the refinancing of debt due in 2025
and 2026 with a combination of about $2.1 billion in assets sale
proceeds and $4.15 billion in new secured debt as well as Moody's
expectations for a significant improvement in operating performance
that will lead to a reduction in leverage levels well below 9x in
2025. The ratings are constrained by the existing high pro forma
leverage (over 10x as of Q4 2024, including Moody's standard lease
adjustments) and the significant amount of debt due in 2027 ($1.6
billion as of Q4 2024).
COMMUNITY SCHOOL: Moody's Affirms 'Ba1' Revenue Bond Rating
-----------------------------------------------------------
Moody's Ratings has affirmed the Community School of Excellence,
MN's Ba1 revenue rating. The outlook is stable. The school had $51
million of debt outstanding as of fiscal year end (June 30) 2024.
RATINGS RATIONALE
Community School of Excellence's Ba1 rating reflects the school's
good enrollment trends and sound financial management, resulting in
stable operating performance. Academic performance is stable, and
while it remains weaker than that of the local district, the school
outperforms other schools that have a high English Learner student
population in the area. Student demand is primarily driven by the
school's focus on the Hmong culture in an area with a large Hmong
population. The school has struggled with increasing enrollment at
its high school, but management has adjust its operating budget
accordingly to maintain satisfactory operating performance.
Operating performance will remain steady in fiscal 2025, resulting
in projected debt service coverage of about 1.5x and liquidity of
about 150 days cash on hand. Leverage from debt will remain
elevated with a spendable cash and investments to debt ratio of
22%. Debt is manageable from an operating perspective, given that
debt service expense accounts for about 11% of operating revenue.
RATING OUTLOOK
The stable outlook reflects the likelihood that the school will
continue to generate satisfactory operating margins and maintain
steady liquidity and debt service coverage. The stable outlook also
considers the school's ability to adjust to shifts in high school
demand to maintain satisfactory operating performance.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Material reduction in balance sheet leverage with spendable
cash and investments covering debt in excess of 30%
-- Stronger operating cash flow margins in excess of 20% and days
cash on hand above 150 days on a sustained basis
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Weakening of competitive profile as evidenced by declining
enrollment and weakening of academic performance
-- Narrower operating cash flow margins in the low single digits
and coverage below 1.25x and/or days cash on hand below 100 days
PROFILE
Community School of Excellence, MN (CME) is a Hmong culture and
language charter school located in St. Paul, MN. The school opened
in 2007 and currently operates under charter contract with the
Minnesota Guild of Public Charter Schools that is set to expire on
June 30, 2026.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in April 2024.
COMTECH TELECOMMUNICATIONS: Magnetar Holds 40.95% Equity Stake
--------------------------------------------------------------
Magnetar Financial LLC, Magnetar Capital Partners LP, Supernova
Management LLC, and David J. Snyderman disclosed in Amendment No. 7
to a Schedule 13D filing with the U.S. Securities and Exchange
Commission that as of March 3, 2025, they beneficially own
20,352,422.99 shares of Comtech Telecommunications Corp.'s common
stock, representing 40.95% of the outstanding shares of the
Company's common stock.
On March 3, 2025, the Company entered into the Waiver and Amendment
No. 1 to Subordinated Credit Agreement with the guarantors party
thereto, the lenders party thereto and U.S. Bank Trust Company,
National Association, as agent, which amends that certain
Subordinated Credit Agreement, dated October 17, 2024, among the
Company, the guarantors party thereto, the lenders party thereto
and the Subordinated Agent.
Amendment No. 1 (x) waives defaults or events of default under the
Existing Subordinated Credit Agreement, including in connection
with the Company's Net Leverage Ratio and Fixed Charge Coverage
Ratio covenants for the second quarter of fiscal 2025 and (y)
amends the Existing Subordinated Credit Agreement to, amongst other
things, (i) provide for the incurrence of a $40.0 million
incremental facility (as described in further detail below) and
(ii) provide that the fixed charge coverage ratio and the net
leverage ratio covenants in the Amended Subordinated Credit
Agreement have the next test be for the quarter ending on October
31, 2025.
Amendment No. 1 provides for an incremental subordinated unsecured
term loan facility in the aggregate principal amount of $40.0
million.
The Incremental Subordinated Credit Facility is subject to a
Make-Whole Amount with respect to certain repayments or
prepayments. The Make-Whole Amount is an amount equal to (i) from
the closing date of the Incremental Subordinated Credit Facility
through (but not including) the date that is 9 months thereafter,
$40.0 million multiplied by 33.0%, (ii) from the date that is 9
months after the Incremental Closing Date through (but not
including) the date that is the second anniversary of the closing
date, $40.0 million multiplied by 50.0%, (iii) from the second
anniversary of the Incremental Closing Date and thereafter, $40.0
million multiplied by 75.0% plus, in the case of clause (iii),
interest accrued on $40.0 million at the Make-Whole Interest Rate
(as defined below) starting on the second anniversary of the
Incremental Closing Date and calculated as of any such date of
determination. The Make-Whole Interest Rate is a rate equal to
16.0% per annum, which is increased by 2.0% per annum upon the
occurrence and during the continuation of an event of default under
the Amended Subordinated Credit Agreement.
The Incremental Subordinated Credit Facility has the same terms and
is generally subject to the same conditions applicable to the
existing subordinated term loans under the Amended Subordinated
Credit Agreement. The other material terms of the Amended
Subordinated Credit Agreement remain unchanged.
Terms used, but not defined, in this Amendment No.7 have the
meanings set forth in the Amended Credit Agreement or the Amended
Subordinated Credit Agreement, as applicable.
Changes to Convertible Preferred Stock
In connection with the transactions described above, on March 3,
2025, the Company and certain affiliates and related funds of
Magnetar Capital LLC and White Hat Capital Partners LP agreed to
change certain terms of the Company's Series B-2 Convertible
Preferred Stock, par value $0.10 per share. The changes provide (i)
the holders of Series B-3 Convertible Preferred Stock with a board
observer right and (ii) the Investors with certain information
access rights. To effect the changes described above, the Company
and the Investors entered into a Subscription and Exchange
Agreement pursuant to which the Investors (i) exchanged (the "March
2025 Exchange"), in a transaction exempt from registration under
the Securities Act of 1933, as amended, all of the 175,263.58
shares of Series B-2 Convertible Preferred Stock outstanding for
175,263.58 shares of the Company's newly issued Series B-3
Convertible Preferred Stock, par value $0.10 per share, with an
initial liquidation preference of $1,104.48 per share (the per
share liquidation preference of the Series B-2 Convertible
Preferred Stock as of the date of issuance), and (ii) received
2,916.76 additional shares of Series B-3 Convertible Preferred
Stock, of which 2,886.92 shares of Series B-3 Convertible Preferred
Stock in the aggregate were received by the Funds). The Company
will not receive any cash proceeds from the exchange and issuance
of Series B-3 Convertible Preferred Stock.
Voting Agreements
In connection with the closing of the March 2025 Exchange, the
Company entered into Voting Agreements, substantially consistent
with existing agreements, with each of the Investors, pursuant to
which the Investors agreed, among other things, subject to the
qualifications and exceptions set forth in the Voting Agreements,
to vote their shares of Series B-3 Convertible Preferred Stock or
shares issued upon conversion of the Series B-3 Convertible
Preferred Stock that exceed, in the case of the Funds, 16.50% of
the Company's outstanding voting power and, in the case of White
Hat, 3.4999% of the Company's outstanding voting power as of
January 22, 2024, in the same proportion as the vote of all holders
(excluding the Investors) of the Series B-2 Convertible Preferred
Stock or the Company's common stock, par value $0.10 per share, as
applicable. In connection with the exchange and issuance, the
existing voting agreements, each dated as of October 17, 2024, by
and between the Company and the Investors party thereto, were
terminated.
Registration Rights Agreement
In connection with the closing of the exchange and issuance, the
Company also entered into a Registration Rights Agreement,
substantially consistent with existing agreements, with the
Investors, pursuant to which the Company granted the Investors
certain customary registration rights with respect to the shares of
Common Stock issued and issuable upon conversion of Series B-3
Convertible Preferred Stock and upon exercise of Warrants issued in
substitution for the Series B-3 Convertible Preferred Stock in
certain circumstances.
Designation of Series B-3 Convertible Preferred Stock
In connection with the March 2025 Exchange, the Company issued an
aggregate of 178,180.34 shares of Series B-3 Convertible Preferred
Stock to the Investors pursuant to the Certificate of Designations
of the Series B-3 Convertible Preferred Stock filed with the
Secretary of State of Delaware on March 3, 2025 in accordance with
the General Corporation Law of the State of Delaware.
Except for the changes described above, the powers, preferences and
rights of the Series B-3 Convertible Preferred Stock are
substantially the same as those of the Series B-2 Convertible
Preferred Stock, including, without limitation, that the shares of
Series B-3 Convertible Preferred Stock are convertible into shares
of Common Stock at a conversion price of $7.99 per share of Common
Stock (the same as the conversion price of the Series B-2
Convertible Preferred Stock, and subject to the same adjustments).
Warrant
Like the Series B-2 Convertible Preferred Stock, the Series B-3
Convertible Preferred Stock will provide for repurchase of the
Series B-3 Convertible Preferred Stock at the Company's option or
the holders' options upon the occurrence of specified asset sales.
Upon the occurrence of such repurchases by an Investor or the
Company, the Company will issue to each Investor whose shares of
Series B-3 Convertible Preferred Stock were repurchased a warrant
to purchase Common Stock (a "Warrant"). A Warrant will represent
the right to acquire Common Stock, as further described in the
Subscription and Exchange Agreement, for a term of five years and
six months from the issuance of such Warrant, in the amount of (x)
the aggregate Liquidation Preference of shares of Series B-3
Convertible Preferred Stock purchased by the Company divided by (y)
the Conversion Price as of such Optional Repurchase Date or the
Optional Call Date, subject to adjustments set forth in the
Warrant, and with an initial exercise price equal to the Conversion
Price as of such Optional Repurchase Date or the Optional Call
Date, as applicable, in each case, subject to adjustments
substantially similar to the Series B-3 Convertible Preferred
Stock.
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 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.
COSMOS HEALTH: A. Bovopoulos Holds 7% Equity Stake
--------------------------------------------------
Andreas D. Bovopoulos disclosed in a Schedule 13G filing with the
U.S. Securities and Exchange Commission that as of December 31,
2024, he beneficially owns 1,880,772.98 shares of Cosmos Health
Inc.'s common stock, representing 7.0% of the Company's 26,979,875
total outstanding shares as of February 26, 2025.
About Cosmos Health Inc.
Cosmos Health Inc. (Nasdaq: COSM), incorporated in 2009 in Nevada,
is a diversified, vertically integrated global healthcare group.
The Company owns a portfolio of proprietary pharmaceutical and
nutraceutical brands, including Sky Premium Life, Mediterranation,
bio-bebe, and C-Sept. Through its subsidiary, Cana Laboratories
S.A., which is licensed under European Good Manufacturing
Practices
(GMP) and certified by the European Medicines Agency, it
manufactures pharmaceuticals, food supplements, cosmetics,
biocides, and medical devices within the European Union.
Cosmos Health also distributes a broad line of pharmaceuticals and
parapharmaceuticals, including branded generics and OTC
medications, to retail pharmacies and wholesale distributors
through its subsidiaries in Greece and the UK. Furthermore, the
Company has established R&D partnerships targeting major health
disorders such as obesity, diabetes, and cancer, enhanced by
artificial intelligence drug repurposing technologies. It focuses
on the R&D of novel patented nutraceuticals, specialized root
extracts, proprietary complex generics, and innovative OTC
products. Additionally, Cosmos Health has entered the telehealth
space through the acquisition of ZipDoctor, Inc., based in Texas,
USA. With a global distribution platform, the Company is currently
expanding throughout Europe, Asia, and North America, with offices
and distribution centers in Thessaloniki and Athens, Greece, and
in
Harlow, UK.
New York, N.Y.-based RBSM LLP, the Company's auditor since 2024,
issued a "going concern" qualification in its report dated August
5, 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 September 30, 2024, Cosmos Health had $64,519,982 in total
assets, $29,543,383 in total liabilities, and $34,976,599 in total
stockholders' equity.
CP ATLAS: S&P Rates New $161MM Incremental Term Loan B 'B-'
-----------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '3'
recovery rating on CP Atlas Buyer Inc.'s proposed $161 million
incremental term loan B due 2027. The '3' recovery rating indicates
its expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery for debtholders in the event of a default.
S&P said, "We expect the company will use the proceeds from this
proposed issuance to fund an acquisition, pay down its outstanding
revolver borrowings, and pay related transaction fees.
"Our 'B-' issuer credit rating and negative outlook on CP Atlas
Buyer reflect our expectation that its S&P Global Ratings-adjusted
debt to EBITDA will stay above 8x in 2025 while its demand remains
weak amid the challenging macroeconomic environment."
CRAIG CAVILEER: Secured Party to Sell Assets May 6
--------------------------------------------------
Pursuant to (i) Section 9610 of the California Commercial Code,
(ii) that certain pledge agreement dated Nov. 2, 2017, as
subsequently amended between Craig Cavileer and Majestic Realty
Co., and (ii) that certain pledge agreement dated Dec. 18, 2015,
Edwards P. Roski, Jr., Trustee of Edward P. Roski, Jr. Living Trust
UID 11/1/1987 ("Secured Party"), as successor in interest to
Majectic, will sell the assets of Craig Cavileer, individually and
in his capacity as Trustee of the Craig and Charlene Cavileer
Family Trust ("Debtor", "Collateral").
Braun International will, on behalf of the secured party, conduct
an auction on May 6, 2025 noon PT via zoom.
The unpaid principal and interest which is subject to the pledge
agreements as of Feb. 28, 2025 is $77,829,536.21 with interest
continuing to accrue after such date.
To obtain further information about the collateral, bidders must
contact Braun at info@braunco.com; tel: 866.568.6638x100 or via at
Braunco.com or Braunmimx.com and sign a confidentiality agreement
to be provided by Braun.
To participate in the auctions bidders will need to execute a
qualified bidder cerfication bid requirements to be furnished by
Braun. There is no warranty relating to title, possession, quiet
enjoyment or the like in the collateral of the disposition of the
collateral.
The collateral consist of 50% and minority interests in limited
liability companies which own, directly or indirectly, or operate
the following: (i) the Hyatt Place Forth Worth Historic Stockyards
hotel, the Hotel Drover, the Stockyards Hotel, the Stockyards
Station retail complex, historic horse and mule barns, mixed use
complex, the Cowtown Coliseum, a single family residential
building, individual warehouses and undeveloped land all located in
Forth Worth, Texas; (ii) undeveloped land in Pahrump, Nevada, and
(iii) the Hyatt Place Las Vegas Hotel, a Starbucks coffee franchise
and or retail complex all located in Las Vegas, Nevada.
CRYPTO MARKET: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: Crypto Market Real Investment Group, Inc.
8668 Navarre Pkwy
Suite 134
Navarre, FL 32566
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
Northern District of Florida
Case No.: 25-30252
Judge: Hon. Jerry C Oldshue Jr
Debtor's Counsel: Byron W. Wright III, Esq.
BRUNER WRIGHT, P.A.
2868 Remington Green Circle, Suite B
Tallahassee, FL 32308
Tel: (850) 385-0342
Fax: (850) 270-2441
Email: twright@brunerwright.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alex Rios as president.
A full-text copy of the petition, which includes a list of the
Debtor's six unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/EUT5RVQ/Crypto_Market_Real_Investment__flnbke-25-30252__0001.0.pdf?mcid=tGE4TAMA
CUTERA INC: Pension Fund Moves to Exclude Class from Ch.11 Releases
-------------------------------------------------------------------
Clara Geoghegan of Law360 reports that a pension fund leading a
class action against skincare technology firm Cutera has urged a
Texas bankruptcy court to affirm its authority to opt all class
members out of the company's Chapter 11 plan.
About Cutera Inc.
Cutera, Inc., offers aesthetic and dermatological solutions to
medical professionals worldwide. The Company designs, manufactures,
and sells energy-based product platforms for medical use, as well
as distributes third-party skincare products. Its portfolio
includes various system platforms such as AviClear, enlighten,
excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF,
xeo, and xeo+, which allow practitioners to perform a wide range
of
procedures. These procedures include treatments for acne, body
contouring, skin resurfacing and rejuvenation, hair and tattoo
removal, the elimination of benign pigmented lesions, and vascular
conditions. Many of Cutera's systems feature multiple handpieces
and applications, offering customers the flexibility to upgrade
their equipment.
Cutera Inc. and Crystal Sub, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
25-90088) on March 5, 2025, with $200,881,854 in total assets and
$480,459,932 in total liabilities. Taylor Harris, chief executive
officer, signed the petition.
Judge Alfredo R. Perez presides over the case.
The Debtors tapped Hunton Andrews Kurth LLP as local bankruptcy
counsel; Ropes & Gray LLP as general bankruptcy counsel; Houlihan
Lokey Capital, Inc., as investment banker; FTI Consulting, Inc. as
financial advisor and Kurtzman Carson Consultants, LLC d/b/a
Verital Global as notice, claims, solicitation & balloting agent.
DCERT BUYER: Fitch Lowers LongTerm IDR to 'B-', Outlook Stable
--------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
(IDRs) of DCert Buyer, Inc. and DCert Parent, LLC to 'B-' from 'B'.
A Stable Rating Outlook has been assigned on the IDRs following the
downgrade. Fitch has also downgraded the company's $125 million
undrawn first-lien secured revolver and $2.2 billion first-lien
term loan to 'B+' with a Recovery Rating of 'RR2' from 'BB-'/'RR2'
and $496 million second-lien term loan to 'CCC/RR6' from
'CCC+'/'RR6'.
The downgrades reflect Fitch's expectation of prolonged weaker
leverage metrics given recent debt-funded acquisition activity, and
a softer margin profile compared to historical levels. The IDR's
Stable Outlook reflects DCert's continued resilient business model
and a dominant position in the Public Key Infrastructure (PKI) and
Certificate Authority (CA) markets, which are bolstered by the
ongoing growth in digitalization, which continue to support growth
in use cases and internet traffic.
Key Rating Drivers
Weaker Leverage and Coverage Metrics: DCert's EBITDA leverage has
remained above 8x in FY25, exceeding prior expectations, while
(CFO-capex)/debt is expected to have remained negative. Similarly,
EBITDA interest coverage has remained pressured by high interest
expenses and lower margins. Fitch expects DCert's credit metrics to
improve slightly in FY26 but remain weaker than previously expected
over the rating horizon.
These challenges have resulted in part from debt-funded
acquisitions in recent years, such as the significant Vercara
acquisition completed in September 2024, which have resulted in a
higher debt burden along with softer margin levels. Private equity
ownership is likely to limit significant deleveraging efforts, as
sponsors prioritize optimizing return on equity.
Strong Position in Niche Segment: DCert has effectively
consolidated the CA industry with a solid leading position and an
even stronger position in the core Extended Validation (EV) and
Organizational Validation (OV) segments. The company's business
also benefits from industry tailwinds such as heightened awareness
about secure web access, growing necessity to foster confidence
within the expanding base of online customers and the need to
comply with stringent regulations and compliance standards. The
growing adoption of Internet of Things (IoT) and Bring Your Own
Device (BYOD) trends will also boost the demand for authentication
certificates.
Limited Risk of Technological Obsolescence: As the exchange of
information over the internet increases and connected devices grow,
demand for data security rises. SSL and PKI are crucial for
securing data by authenticating devices and encrypting internet
communications. Fitch anticipates SSL and PKI technologies will be
continually enhanced, including adaptations for quantum computing,
by building on existing frameworks to ensure compatibility, rather
than being supplanted by disruptive technologies. This evolution is
likely to benefit established players like DCert.
Browser Lifecycle a High Entry Barrier: CAs must be integrated into
a wide range of access points, which can pose challenges for new
CAs if they are not compatible with older browsers and devices. It
may take five to ten years for these outdated access points to
phase out of the market. Without complete compatibility with all
existing access points, the value of certificates issued by new CAs
is reduced. Fitch considers this lack of full compatibility to be a
significant barrier to entry.
Recurring Revenue: Fitch anticipates that DCert's revenue will
remain fully subscription-based, maintaining alignment with
historical trends and exhibiting a high net retention rate. The
ongoing growth in the demand for CAs is expected to underpin robust
market expansion, contributing to a predictable operating profile
for the company. Due to the concentrated nature of the industry and
significant entry barriers, DCert is likely to continue achieving
strong profitability, albeit at slightly reduced levels compared to
its previous highs.
Peer Analysis
DCert is a CA that enables trusted communications between website
servers and terminal devices such as browsers and smartphone
applications. Increasingly, applications are expanding to include
IoT terminal devices. A CA verifies and authenticates the validity
of websites and their hosting entities, and facilitates the
encryption of data on the internet. CA services are 100%
subscription-based and generally recurring in nature.
DCert's 'B-' IDR reflects the company's solid business model and
generally strong cash flow generation, while also considering
softer-than-historical margins and elevated leverage profile. Fitch
believes the private equity ownership is likely to prioritize ROE
optimization over accelerated deleveraging, resulting in leverage
remaining elevated.
Within the broader internet security segment, Gen Digital Inc.
(f/k/a NortonLifeLock Inc.; BB+/Negative) is also a leader in its
space. Gen Digital Inc. has larger revenue scale and lower
financial leverage than DCert, but operates in a more competitive
space and does not have the market dominant position DCert has in
its niche space.
A similarly rated software peer, Ivanti Software, Inc. (Ivanti;
B/RWN), operates with a strong but somewhat less robust market
position than DCert, while DCert has typically operated with higher
leverage in recent years. Ivanti's RWN reflects a somewhat weak
liquidity position and potential refinancing risks. Another
enterprise software peer, Redstone Parent LP (RSA; B-/Stable) has
demonstrated similar credit metrics to DCert, albeit with a
somewhat weaker competitive position and weaker margins compared to
DCert.
Key Assumptions
- Revenue growth up high single digits in FY25 due mainly to
partial-year contribution from Vercara; FY26 revenues growing ~16%
due to contribution form Vercara with low-to-mid-single digit
organic growth expected over the rating horizon;
- EBITDA margins projected to be fall slightly below 50% in FY25;
remaining stable thereafter;
- Capex intensity at about 5% of revenue;
- Incremental tuck-in acquisitions totaling $150 million in
aggregate from fiscal years 2026-2028 funded with internal cash;
- SOFR rates forecasted to be 5.0% in FY25, declining gradually to
3.5% by FY28.
Recovery Analysis
Recovery Analysis
- The recovery analysis assumes that DCert would be reorganized as
a going-concern in bankruptcy rather than liquidated;
- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
- In estimating a distressed enterprise value (EV) for DCert, Fitch
assumes elevated customer churn will lead to a high-single-digit
percentage revenue decline in a distressed scenario. This lower
revenue scale will compress EBITDA margins, resulting in a going
concern EBITDA that is approximately 14% lower than the estimated
NTM EBITDA, pro forma for the Vercara acquisition. As DCert's
business model depends on the ability to provide robust IT
security, customer churn could increase in times of distress;
- Fitch applies a 7.0x multiple to arrive at an adjusted EV of $2.0
billion, supported by DCert's strong market position, robust
margins and highly recurring revenues;
- The median reorganization EV/EBITDA multiple for the 71 TMT
bankruptcy cases that had sufficient information for an exit
multiple estimate to be calculated was 5.9x. Of these companies,
five were in the software sector: Allen Systems Group, Inc (8.4x);
Avaya, Inc. (2023: 7.5x, 2017: 8.1x); Aspect Software Parent, Inc.
(5.5x), Sungard Availability Services Capital, Inc. (4.6x), and
Riverbed Technology Software (8.3x);
- Fitch assumes that the $125 million revolver for DCert is fully
drawn, as companies typically utilize credit revolvers when
experiencing financial distress;
- Fitch estimates strong recovery prospects for the first lien
credit facilities and rates them 'B+'/'RR2', or two notches above
DCert's 'B-' IDR. Fitch estimates limited recovery prospects for
the second lien term loan and rates it 'CCC'/'RR6', two notches
below DigiCert's IDR.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Inability to refinance first lien term loan and revolving credit
facility before October 2025, when the first lien debt becomes
current, could lead to a negative rating action;
- EBITDA interest coverage below 1.25x;
- (Cash from Operations-Capex)/Debt sustained below 0%;
- Weakening market position as demonstrated by sustained negative
revenue growth and EBITDA and FCF margin erosion.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 7.5x;
- (CFO-Capex)/Debt sustained above 3.5%.
Liquidity and Debt Structure
The company had $87 million in readily available cash at Oct. 31,
2024. Fitch forecasts DCert to generate EBITDA of around $313
million in FY25, resulting in approximately $85 million in readily
available cash exiting FY25. Additionally, DCert's liquidity is
supported by an undrawn $125 million revolving facility. Liquidity
may potentially be hampered by special dividends to the sponsors or
large acquisitions. DCert's first lien term loan and revolving
credit facility mature in October 2026, while the second lien term
loan matures in October 2029.
Issuer Profile
DCert Parent, LLC is a Certificate Authority (CA) that enables
trusted communications between website servers and terminal devices
such as browsers, smartphones, and IoT devices. The company
verifies and authenticates the validity of websites and their
hosting entities, and facilitates the encryption of data on the
internet.
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
----------- ------ -------- -----
DCert Parent, LLC LT IDR B- Downgrade B
DCert Buyer, Inc. LT IDR B- Downgrade B
senior secured LT B+ Downgrade RR2 BB-
Senior Secured
2nd Lien LT CCC Downgrade RR6 CCC+
DELTA APPAREL: Gets Court OK to Convert Chapter 11 to Chapter 7
---------------------------------------------------------------
Yun Park of Law360 Bankruptcy Authority reports that a Delaware
bankruptcy judge has authorized Delta Apparel Inc., the former
owner of the Salt Life brand, to convert its bankruptcy case from
Chapter 11 to Chapter 7 liquidation after the company was unable to
secure adequate funding for its reorganization.
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.
DOCUDATA SOLUTIONS: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of DocuData
Solutions, LC and its affiliates.
The committee members are:
1. U.S. Bank Trust Company, N.A., as Indenture Trustee
David Diaz, Vice President
1025 Connecticut Ave. N.W., Ste 510
Washington, D.C. 20036
Phone: (771) 233-8824
dave.diaz@usbank.com
Counsel:
Michael B. Fisco
Peter D. Kieselback
Greenberg Traurig, LLP
90 South 7th Street, Ste 3500
Minneapolis, MN 55402
Phone: (612) 259-9700
fiscom@gtlaw.com
kieselbachp@gtlaw.com
2. Alpine Global Management, LLC
Rick Palmon
140 Broadway, 38th Floor
New York, NY 10005-1108
Phone: (646) 403-6235
rick.palmon@alpineglobal.com
3. Phoenix Investment Adviser LLC
Jeffrey L. Peskind
420 Lexington Avenue, Suite 300
New York, NY 10170
Phone: (212) 359-6210
jlpeskind@phoenixinvadv.com
ops@phoenixinvadv.com
4. Rocket Software, Inc.
f/k/a ASG Technologies, Inc.
Elizabeth Fischer, Chief Legal Officer
77 4th Avenue
Waltham, MA 02451
Counsel:
Tom Howley
Howley Law PLLC
700 Louisiana Street, Ste 4545
Houston, TX 77002
Phone: (713) 333-9120
Email: tom@howley-law.com
5. Konica Minolta Business Solutions, USA
Stephen Herbes, SVP and General Counsel
100 Williams Drive
Ramsey, NJ 07446
Phone: (201) 234-4364
Email: sherbes@kmbs.konicaminolta.us
Counsel:
David N. Crapo
Gibbons, P.C.
One Gateway Center
Newark, NJ 070102
Phone: (973) 596-4523
Email: dcrapo@gibbonslaw.com
6. AFLAC
Kedrick N. Eily, Corp. Counsel
1932 Wynnton Road
Columbus, GA 31999
Phone: (470) 618-4845
KEily@aflac.com
7. Opex
John Sims
305 Commerce Drive
Moorestown, NJ 08057
Phone: (856) 727-1100
jsims@opex.com
Counsel:
Winnie Chow, Director of Legal
Opex
Phone: (856) 727-1100
Email: wchow@opex.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 Docudata Solutions
Docudata Solutions, LC, together with their Debtors and non-Debtor
affiliates (the Company), are a global leader in business process
automation. Leveraging their worldwide presence and proprietary
technology, the Company offers high-quality payment processing and
digital transformation solutions across the Americas and Asia,
helping clients enhance efficiency and lower operational costs. The
Company has worked with over 60% of the Fortune 100 companies. They
provide essential services to top global banks, financial
institutions, healthcare payers and providers, and major global
brands. These services include finance and accounting solutions,
payment technologies, healthcare payer and revenue cycle
management, hyper-automation and remote work solutions, enterprise
information management, integrated communications and marketing
automation, as well as digital solutions for large enterprises.
Docudata Solutions and its affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas
Case No. 25-90023) on March 3, 2025. In the petitions signed by
Matt Brown, interim chief financial officer, the Debtors disclosed
$500 million to $1 billion in estimated assets and $1 billion to
$10 billion in estimated liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Hunton Andrews Kurth LLP and Latham & Watkins
LLP, Houlihan Lokey, Financial Advisors, Inc. as investment banker,
AlixPartners, LLP as financial advisor. Omni Agent Solutions, Inc.
is the Debtors' claims, noticing and solicitation agent.
DOUBLE HELIX: To Sell Non-Real Estate Assets to K-LOVE for $4.3MM
-----------------------------------------------------------------
Double Helix Corporation seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Missouri, Eastern Division, to
sell non-real estate assets, free and clear of all liens, claims,
encumbrances and interests.
The Debtor is a nonprofit Missouri corporation currently doing
business as KDHX Community Media. Since 1987, Debtor has operated
KDHX FM radio station as an independent, non-commercial,
educational, listener-supported community radio broadcast station
in St. Louis, Missouri.
The Debtor KDHX's business operations involve the use of
substantial broadcasting and transmitting equipment, a transmitting
tower, other assets located at KDHX's Tower site location and at
the studio building located at 3524 Washington Ave., St. Louis, MO
63103. The Tower Site is subject to an unexpired ground lease.
The Debtor has operated KDHX as a radio broadcast station pursuant
to licenses (FCC license) issued to it by the Federal
Communications Commission (FCC) and is subject to the FCC's
regulatory jurisdiction.
To maintain its current FCC Licenses, KDHX must provide continuous
on air non-commercial educational radio programming. Due to recent
personnel cuts, KDHX has been forced to utilize previously recorded
radio programming.
The Debtor received a pre-petition offer from K-LOVE, Inc., a
Tennessee non-profit 501(c)(3) organization and the sole member of
Educational Media Foundation (EMF), to purchase all or
substantially all of its non-real estate assets.
The Debtor executes a Letter of Intent for the purchase of its
non-real assets and to assign its lease to K-Love.
The Debtor believes that the sale of all or substantially all of
its non-real estate assets to K-LOVE pursuant to section 363 of the
Bankruptcy Code is in the best interest of Debtor, its creditors
and other
parties-in-interest.
The purchase price of the non-real estate Assets will be
$4,350,000.00 as a base price, and is subject to adjustment and
increase by $500,000.00 in the event the closing of the sale occurs
on or before September 24, 2025.
Alternatively, if closing occurs between September 25, 2025 and
March 24, 2026, the Base Purchase Price will increase by
$250,000.00. The Base Purchase Price as may be adjusted includes
the assumption of certain assumed liabilities.
The Debtor believes that the sale is for fair and reasonable
consideration, and in good faith, does not unfairly benefit any
insiders or creditors of Debtor, and will maximize the value of
Debtor's estates.
About Double Helix Corporation
Double Helix Corporation, doing business as KDHX Community Media,
is a nonprofit organization based in St. Louis, Missouri, that
operates an independent, non-commercial radio station at 88.1 FM.
The station offers a wide variety of programming, including music,
as well as public affairs shows and educational content. In
addition to its radio broadcasts, KDHX engages with the local
community through events, educational programs, and support for
independent artists.
Double Helix Corporation sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Miss. Case No. 25-40745) on March 10,
2025. In its petition, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Bonnie L. Clair handles the case.
The Debtor is represented by Robert Eggmann, Esq., at CARMODY
MACDONALD P.C., in Saint Louis, Missouri.
E.W SCRIPPS: Fitch Lowers Rating on LongTerm IDR to 'CCC-'
----------------------------------------------------------
Fitch Ratings has downgraded The E.W. Scripps Company's (Scripps)
Long-Term Issuer Default Rating (IDR) to 'CCC-' from 'CCC'. Fitch
has also downgraded Scripps' senior secured debt to 'CCC+' with a
Recovery Rating of 'RR2' from 'B-'/'RR2' and its senior unsecured
debt to 'C'/'RR6' from 'CC'/'RR6'. Fitch has also placed Scripps'
IDR and senior secured debt on Rating Watch Negative (RWN).
The downgrade and RWN reflect Scripps' recently announced agreement
with certain existing lenders of its Term Loan B-2 and Term Loan
B-3 tranches to extend maturities to avoid default, which could
result in a distressed debt exchange (DDE). An exchange offer
deemed by Fitch as a DDE would lead to a downgrade of the ratings
and the removal of the Rating Watch Negative.
Key Rating Drivers
DDE Initiated to Extend Near-Term Maturities: The proposed DDE
transaction, which Scripps aims to close by April 2025, only buys
additional time and does little to address the broader credit risk
of excessive debt. Fitch expects the company to enter into
additional potential near-term DDE transactions as it likely
negotiates with its 2027 unsecured holders for a favorable solution
to also extend maturities.
Unsustainable Capital Structure; Diminished Expected FCF: Fitch
believes Scripps' two-year average leverage will rise over the next
two years, increasing the pressure on the company to negotiate
favorable terms with multiple tranches of existing bondholders and
the same group of existing lenders that have agreed to extend
maturities to 2028/2029. Fitch does not expect Scripps' core
business to grow rapidly enough during this timeframe to meet the
upcoming maturity obligations.
Highest National Advertising Exposure: The national advertising
market has slowed over the past four years due to high interest
rates post-pandemic, limiting budgets and increasing competition
from digital media. Digital advertising provides better targeting
than traditional linear media, impacting Scripps' performance as
key sectors like automotive, travel, retail, and financial services
have not fully returned to pre-pandemic levels. This has undermined
Scripps' national advertising performance compared to peers with a
more balanced national and local media presence.
Retransmission Revenue Growth Concerns: Fitch believes the
consistent growth of the high-margin retransmission business might
be peaking due to rising cable network costs and continuing erosion
of the subscriber base, as subscribers opt for alternative video
content distributors. This trend will increase Scripps' dependence
on core advertising, reflecting a more volatile operating profile.
Peer Analysis
Scripps' 'CCC-' rating reflects the company's limited liquidity,
accelerating secular challenges, declining profitability, and
sustained elevated leverage. Fitch notes the refinancing risk over
the next 18-24 months as the company faces $1.3 billion in secured
and unsecured debt maturities, increasing refinancing risk during a
non-political year.
The company's profitability and financial flexibility have been
challenged by weaker-than-expected national advertising spending
and increasingly higher TV cable churn rates, partially offset by
resilient local advertising demand and a consistent but
decelerating retransmission business.
Scripps is the fourth-largest TV Broadcaster in the U.S., with
smaller scale and lower margins relative to other peers in the
sector like Gray Media, Inc. (B-/Negative).
Key Assumptions
- Core advertising declines to the high-single digits in 2025, as a
result of a slower demand in both local and national markets during
a non-political year, modestly rising in 2026 by low-single digits,
and then gradually growing at a low- to mid-single-digit rate by YE
2028, capitalizing on the operating resilience of its local
advertising operations and mitigated by the ongoing secular
pressures in the retransmission and network businesses.
- For 2026 and 2028, Fitch anticipates political revenues of around
$270 million per election year.
- Retransmission and carriage revenue generation is expected to
face significant secular challenges, primarily driven by
increasingly higher TV cable churn rates due to increasing
popularity of streaming services, reflecting a declining trend at a
low-single-digit rate over the next four years.
- Scripps Network revenue growing in the low-single digits during
the initial part of the projection with a gradual decline at a low
single-digit rate by the end of the projected period, driven by a
lower renewal rate over the last three years of the rating
horizon.
- EBITDA margins fluctuate, reflecting even-year political
revenues, but improve due to a shift in mix toward higher-margin
retransmission revenue and an improved cost structure that results
in margins between 15% and 20% throughout the rating horizon.
- Annual capex at 3.0% of total revenue.
Recovery Analysis
Key Recovery Rating Assumptions
The recovery analysis assumes that Scripps would be considered a
going-concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim.
EBITDA
Scripps' going-concern EBITDA is based on pro forma LQ8A EBITDA.
Fitch assumes post-bankruptcy operating performance emergence to be
stressed due to significant declines in cable TV subscribers, a
weakened cable network position that hinders effective cost
management of the retransmission segment, which hurts revenue and
operating profitability in a sluggish advertising market
environment. Fitch expects traditional mediums, including
television, to be disproportionately affected by the pullback in
advertising and rising competition from alternative mediums.
Fitch updated Scripps' going-concern LQ8A EBITDA to $400 million
from $525 million to capture accelerated linear market share
declines, driven by weaker demand from national brands and local
advertisers and ongoing declines in the retransmission and network
segments, which Fitch does not expect the company to regain.
Multiple
Fitch employs a 5.5x distressed enterprise value multiple,
reflecting the value of the company's Federal Communications
Commission licenses in small and medium-sized U.S. markets. This
multiple is in line with the median telecom, media and technology
emergence enterprise value/EBITDA multiple of 5.5x.
The analysis also incorporates the following:
- Public trading enterprise value/EBITDA multiples typically of
8.0x-11.0x
- Recent M&A transaction multiples of 7.0x-9.0x, including
synergies (Gray Television acquired Raycom Media for $3.6 billion
in January 2019, including $80 million of anticipated synergies, or
7.8x; Apollo Global Management, LLC acquired Cox Media for $3.1
billion in February 2019 before synergies, or 9.5x; Nexstar Media
Group acquired Tribune Media Company in September 2019 for $7.2
billion, including the assumption of debt and $185 million of
outlined synergies, or 7.5x; Nexstar Media Group then sold 22
stations to three buyers under the terms of the Tribune Media
Company acquisition for a blended 7.5x)
- Scripps announced the acquisition of 15 television stations from
Cordillera Communications in October 2018 for $521 million, or
8.3x, including $8 million in outlined synergies; the acquisition
of eight stations from Nexstar in March 2019 for $580 million at an
8.1x multiple of average two-year EBITDA excluding the New York
City CW affiliate, WPIX.
Fitch estimates an adjusted, distressed enterprise valuation of
roughly $2.2 billion, resulting in a 'CCC+/RR2' senior secured
recovery rating, and a 'C/RR6' unsecured debt recovery rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Fitch will downgrade the IDR once the DDE is agreed upon with
investors and a date for the exchange is set. The IDR will remain
at this level until the DDE is executed, at which point the IDR
will be lowered to 'RD'.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- If Fitch rates the new capital structure and instruments, it will
immediately assign new ratings upon DDE completion in accordance
with Fitch criteria.
Liquidity and Debt Structure
As of Dec. 31, 2024, Scripps had $24 million in cash and cash
equivalents and approximately $578 million available under its
existing RCF, net of $7 million in outstanding letters of credit,
resulting in a total liquidity position of $602 million. The RCF
expires on Jan. 7, 2026, which is the company's next debt
maturity.
The next maturity for the company is the Term Loan B-2 tranche, due
May 1, 2026, with approximately $721 million outstanding, followed
by the 5.875% senior unsecured notes with $426 million outstanding,
maturing on July 15, 2027, and the Term Loan B-3 tranche with $543
million outstanding, maturing on Jan. 7, 2028. Both Term Loan B
tranches, along with the RCF, are governed under the same credit
agreement. The company's required annual term loan amortization
totalled approximately $19 million per year.
The company's RCF has a 5.00x maximum first lien net leverage
covenant through Dec. 31, 2024, which steps down to 4.75x from 1Q25
through Sept. 30, 2025, and then to 4.50x thereafter. The financial
covenant applies quarterly, regardless of revolver utilization. As
of Dec. 31, 2024, Scripps was in compliance with its financial
covenant.
Issuer Profile
Scripps is the fourth-largest TV broadcaster in the U.S. with 60
stations in 40+ markets, serving audiences through a diversified
portfolio of local and national media brands.
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
----------- ------ -------- -----
The E.W. Scripps
Company LT IDR CCC- Downgrade CCC
senior unsecured LT C Downgrade RR6 CC
senior secured LT CCC+ Downgrade RR2 B-
E.W. SCRIPPS: Swings to $146.2 Million Net Income in 2024
---------------------------------------------------------
The E.W. Scripps Company filed its Annual Report on Form 10-K with
the U.S. Securities and Exchange Commission, reporting a net income
of $146.2 million for the fiscal year ended December 31, 2024,
compared to a net loss of $947.8 million during the fiscal year
ended December 31, 2023. As of December 31, 2024, the Company had
an accumulated deficit of $476 million.
As of Dec. 31, 2024, the Company had $5.2 billion in total assets,
$3.9 billion in total liabilities, and $1.3 billion in total
stockholders' equity.
From Scripps President and CEO Adam Symson:
"We are pleased to be announcing a significant round of debt
refinancing. Our highest priority remains reducing our total amount
of debt and improving the company's leverage with a focus that is
already yielding significant results. Our record political
advertising revenue and strategic expense management helped drive
down our leverage significantly, to 4.8x, at year-end 2024. That is
nearly a full turn below year-end 2023 levels.
"We also continue to make strong progress toward improving our
financial performance. Company leaders and I are determined to
continue this work as we move through 2025. We are on track, as we
laid out in November, to increase the Scripps Networks division
margin by at least 400-600 basis points this year. Further,
enterprise-wide, we are executing a transformation plan to improve
operating performance as we best position Scripps to create new
value.
"Industrywide, we anticipate changes to the local broadcast
regulatory environment under the new leadership at the Federal
Communications Commission. We're pleased with the signals that the
commission will revisit outdated ownership rules that have
constrained economic growth and jeopardized broadcasters' ability
to serve their audiences and local communities. We will lean into
any opportunity to improve the operating performance of the
company, deepen our connection to the communities we serve and
unlock shareholder value."
A full-text copy of the Company's Form 10-K is available at:
https://tinyurl.com/m3bm7dd3
About Scripps
The E.W. Scripps Company (NASDAQ: SSP) is a diversified media
company focused on creating a better-informed world. As one of the
nation's largest local TV broadcasters, Scripps serves communities
with quality, objective local journalism and operates a portfolio
of more than 60 stations in 40+ markets. Scripps reaches households
across the U.S. with national news outlets Scripps News and Court
TV and popular entertainment brands ION, ION Plus, ION Mystery,
Bounce, Grit and Laff. Scripps is the nation's largest holder of
broadcast spectrum. Scripps is the longtime steward of the Scripps
National Spelling Bee. Founded in 1878, Scripps' long-time motto
is: "Give light and the people will find their own way."
* * *
S&P Global Ratings lowered its issuer credit rating on The E.W.
Scripps Co. to 'CC' from 'B-' and removed all ratings from
CreditWatch, where S&P placed them with negative implications on
Jan. 8, 2025.
S&P said, "We also lowered our issue-level ratings on Scripps'
senior secured term loan B3 to 'CC' from 'B+'.
"The negative outlook reflects that, upon the completion of the
transaction, we expect to lower our issuer credit rating on the
company to 'SD' (selective default) and our issue-level rating on
its senior secured term loan B3 to 'D'."
ECHOSTAR CORP: Wellington Management Holds 0.1% Equity Stake
------------------------------------------------------------
Wellington Management Group LLP, Wellington Group Holdings LLP, and
Wellington Investment Advisors Holdings LLP disclosed in Amendment
No. 1 of a Schedule 13G filing with the U.S. Securities and
Exchange Commission that as of February 28, 2025, they beneficially
own 230,018 shares of EchoStar Corporation's common stock,
representing 0.1% of the Company's outstanding shares of stock.
About Echostar
Headquartered in Englewood, Colorado, EchoStar Corporation is a
holding company that was organized in October 2007 as a
corporation
under the laws of the State of Nevada. Its subsidiaries operate
four primary business segments: (1) Pay-TV; (2) Retail Wireless;
(3) 5G Network Deployment; and (4) Broadband and Satellite
Services.
As of December 31, 2024, EchoStar had $60.9 billion in total
assets, $40.7 billion in total liabilities, and total
stockholders'
equity of $20.2 billion.
ECHOSTAR CORP: Wellington Trust Holds 0.04% Equity Stake
--------------------------------------------------------
Wellington Trust Company, NA, disclosed in Amendment No. 1 of a
Schedule 13G filing with the U.S. Securities and Exchange
Commission that as of February 28, 2025, it beneficially owns
54,378 shares of EchoStar Corporation's common stock, representing
0.04% of the Company's outstanding shares of stock.
About Echostar
Headquartered in Englewood, Colorado, EchoStar Corporation is a
holding company that was organized in October 2007 as a
corporation
under the laws of the State of Nevada. Its subsidiaries operate
four primary business segments: (1) Pay-TV; (2) Retail Wireless;
(3) 5G Network Deployment; and (4) Broadband and Satellite
Services.
As of December 31, 2024, EchoStar had $60.9 billion in total
assets, $40.7 billion in total liabilities, and total
stockholders'
equity of $20.2 billion.
EISNER BROS: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Eisner Bros. Realty Corp
4403 15th Avenue
#314
Brooklyn NY 11219
Business Description: Eisner Bros. Realty is a single asset real
estate debtor, as defined in 11 U.S.C.
Section 101(51B).
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 25-41389
Debtor's Counsel: Joshua R. Bronstein, Esq.
JOSHUA R. BRONSTEIN & ASSOCIATES, PLLC
114 Soundview Drive
Port Washington NY 11050
Tel: 516-698-0202
E-mail: jbrons5@yahoo.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Israel Eisner as member.
The Debtor did not provide a list of its 20 largest unsecured
creditors in the petition.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/PAARDCA/Eisner_Bros_Realty_Corp__nyebke-25-41389__0001.0.pdf?mcid=tGE4TAMA
EL DORADO: To Sell Fair Oaks Ranch to Dana & Charles Keller
-----------------------------------------------------------
Dawn M. Ragan, the duly appointed Chapter 11 Trustee for the
bankruptcy estate of El Dorado Gas & Oil, Inc., seeks permission
from the U.S. Bankruptcy Court for the Southern District of
Mississippi, to sell Fair Oaks Ranch Property, free and clear of
all liens, claims, encumbrances, and interests.
The Trustee has evaluated the Debtor's assets, including certain
unoccupied single family home located at 29630 Double Eagle Circle,
Boerne, TX 78015, in Bexar County, Texas.
The Trustee has determined that the Real Property is not needed for
Debtor's operations and should be sold. The Trustee submits that
the highest and best value of the Real Property is to sell it to
the Purchasers as a single family home.
The Trustee has obtained an offer and has entered into a purchase
agreement from Dana Keller and Charles Keller.
The Purchasers have agreed to buy the Property for $1,030,000.
The Trustee, as the seller, is to pay a 2% broker fee to the
Purchasers' broker from sale proceeds;
The closing of the Real Property is to occur on April 22, 2025;
The Trustee shall pay any other closing costs and ad valorem taxes
associated with the sale of the Real Property at closing from the
sales proceeds of the Real Property.
The Trustee believes that the offer received from the Purchasers
represents a fair value for the Real Property.
The Trustee further believes that the purchase price is fair and
reasonable and wishes to close as required by the Sale Agreement no
later than April 22, 2025.
About El Dorado Gas & Oil Inc.
Hugoton Operating Company, Inc. filed a voluntary Chapter 11
petition (Bankr. S.D. Miss. Case No. 23-51139) on Aug. 14, 2023. El
Dorado Gas & Oil, Inc., a company in Gulfport, Miss., filed Chapter
11 petition (Bankr. S.D. Miss. Case No. 23-51715) on Dec. 22, 2023,
with $500 million to $1 billion in assets and $50 million to $100
million in liabilities. Thomas L. Swarek, president, signed the
petition.
On Feb. 22, 2024, Bluestone Natural Resources II - South Texas, LLC
and World Aircraft, Inc. filed separate Chapter 11 petitions(Bankr.
S.D. Miss. Case Nos. 24-50223 and 24-50224).
On Jan. 12, 2024, the Court entered an order directing the
appointment of a Chapter 11 trustee for Hugoton. On Jan. 22, 2024,
the Court approved Dawn Ragan as the Chapter 11 trustee for
Hugoton.
On Jan. 31, 2024, the Court ordered the appointment of a Chapter 11
trustee for El Dorado. On Feb. 2, 2024, the Court approved Ms.
Ragan as Chapter 11 trustee for El Dorado.
No official committee of unsecured creditors has been established
in any of the Debtor cases.
Hugoton and El Dorado are both Arkansas corporations engaged in the
exploration, production, and development of crude oil and natural
gas properties. El Dorado is a lease holder and operator of oil and
gas wells covering about 4,000 net acres in South Texas. El Dorado
also owns a substantial amount of oil field equipment and owns real
estate in multiple locations and states. Hugoton also owns oil and
gas interests and operates wells in South Texas.
Hugoton is 100% owned by El Dorado and El Dorado is 100% owned by
Thomas Swarek. Bluestone is 100% owned by Hugoton. Bluestone owns
oil and gas interests operated by the EDGO Debtors. World Aircraft
is 100% owned by EDGO. World Aircraft owns various aircraft and
equipment assets.
Judge Katharine M Samson oversees the cases.
Patrick Sheehan, Esq., at Sheehan & Ramsey, PLLC, is Debtors
Bluestone Natural Resources II-South Texas, LLC and World Aircraft,
Inc.
R. Michael Bolen, Esq., at Hood & Bolen, PLLC; and Nancy Ribaudo,
Esq., Katherine Hopkins, Esq., and Joseph Austin, Esq., at Kelly
Hart & Hallman LLP, serve as counsel to Dawn Ragan, Chapter 11
Trustee for El Dorado Gas & Oil, Inc. and Hugoton Operating
Company, Inc.
ELITA 7 LLC: Gets Extension to Access Cash Collateral
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts issued
an order extending Elita 7, LLC and Victoria Light, LLC's authority
to use cash collateral until June 12.
The court authorized the companies to use the cash collateral of
DMT SPE I, LLC and other secured lenders in the ordinary course of
business in accordance with the companies' budget.
As protection for any diminution in the value of their collateral,
the secured lenders were granted replacement liens on the
companies' assets to the same extend, priority and enforceability
as their pre-bankruptcy liens.
The court approved the payment of $30,000 to DMT SPE I, the primary
secured lender, as additional protection.
The next hearing is scheduled for June 12.
About Elita 7 and Victoria Light
Elita 7, LLC operates a 60-bed Rest Home located at 16 Marble
Street, Worcester, Mass.
Elita 7 and its affiliate, Victoria Light, LLC, filed Chapter 11
petitions (Bankr. D. Mass. Lead Case No. 24-41303) on December 20,
2024. At the time of the filing, the Debtors reported $1 million to
$10 million in both assets and liabilities.
Judge Elizabeth D. Katz oversees the cases.
John O. Desmond, Esq., is the Debtors' legal counsel.
Secured lender DMT SPE I, LLC is represented by:
Douglas K. Clarke, Esq.
Riemer & Braunstein, LLP
100 Cambridge Street, 22nd Floor
Boston, MA 02114-2527
Phone: (617) 880-3485
Fax: (617) 692-3485
Email: dclarke@riemerlaw.com
ENGLOBAL CORP: Seeks Court Approval for $2.5M DIP Financing
-----------------------------------------------------------
As previously disclosed, on March 5, 2025, ENGlobal Corporation and
its direct and indirect domestic subsidiaries filed voluntary
petitions in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division seeking relief under Chapter 11
of Title 11 of the United States Code. The Chapter 11 cases are
being administered under the caption "In re ENGlobal Corporation,
et al.", Case No. 25-90083.
The Debtors continue to operate their businesses and manage their
properties as "debtors-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Bankruptcy Court.
In connection with the Chapter 11 Cases, the Debtors filed motions
seeking Bankruptcy Court approval of debtor-in-possession financing
on the terms set forth in that certain DIP Credit Agreement, dated
as of March 5, 2025 (the "DIP Credit Agreement"; capitalized terms
used but not defined herein have the meanings set forth in the DIP
Credit Agreement), by and among:
(i) the Company,
(ii) ENGlobal U.S., Inc., a Texas corporation,
(iii) ENGlobal Government Services, Inc., a Texas corporation,
and
(iv) ENGlobal Technologies, LLC, a Texas limited liability
company, and Gulf Island Fabrication, Inc., a Louisiana
corporation, as lender.
The DIP Credit Agreement provides for a senior secured super
priority multiple draw term loan facility in the aggregate
principal amount of $2.5 million pursuant to Sections 364(c)(1),
(c)(2), (c)(3) and (d) of the Bankruptcy Code. On March 6, 2024,
the Bankruptcy Court entered an interim order authorizing the
Borrowers to enter into the DIP Credit Agreement, and the Borrowers
entered into the DIP Credit Agreement in accordance with the
interim order.
The proceeds of the DIP Credit Agreement will be used in a manner
consistent with the Budget approved by Lender, including:
(1) for working capital and general corporate purposes of
Borrowers;
(2) to fund the payment of interest, fees, costs, and expenses
related to the Loans;
(3) to pay Bankruptcy Expenses, including the reasonable and
documented fees and expenses of the Lender's professionals; and
(4) for any other purposes specifically set forth in the
Budget approved by the Lender.
The maturity date of the DIP Credit Agreement is the earliest of:
(a) the date that is six months after the Petition Date;
(b) 45 days after the entry of the Interim Order if the Final
Order has not been entered by the Bankruptcy Court prior to the
expiration of such period;
(c) the consummation of a sale of Borrowers, the direct or
indirect owners of Borrowers, or all or substantially all of the
assets of Borrowers;
(d) the substantial consummation of a plan of reorganization
or a plan of liquidation for any Borrower in the Chapter 11 Cases
that is confirmed pursuant to an order entered by the Bankruptcy
Court; and
(e) the acceleration of the Loans and the termination of the
commitment with respect to the Loans in accordance with the Loan
Documents.
The outstanding principal on the Loans under the DIP Credit
Agreement bears interest at a rate of 12.0% per annum.
Subject to certain exceptions, the DIP Credit Agreement is secured
by a first priority perfected priming security interest in all of
the assets of each Borrower. The security interests and liens are
subject only to certain carve-outs and certain permitted liens, as
set forth in the DIP Credit Agreement.
The DIP Credit Agreement is subject to certain customary covenants
and events of default as set forth in the DIP Credit Agreement.
About Englobal Corp.
Englobal Corp. and affiliates provide innovative project solutions
with expertise in engineering, automation, and government services,
supported by a workforce of over 100 employees and contractors in
Houston and Tulsa. Their engineering group offers services such as
engineering, procurement, construction management, and fabricated
products for industries like refineries, petrochemicals, renewable
energy, and transportation. The automation group designs and
integrates modular systems, including control systems and data
monitoring, for both new and existing facilities. Additionally, the
government services group specializes in process control system
design, integration, and maintenance for U.S. government agencies
and commercial clients.
Englobal Corp. and affiliates sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case. No. 25-90083) on
March 5, 2025. In its petition, the Debtor reports estimated assets
and liabilities between $10 million and $50 million each.
Honorable Bankruptcy Judge Alfredo R. Perez handles the case.
The Debtor is represented by:
Christopher Adams, Esq.
Ryan A. O'Connor, Esq.
John Thomas Oldham, Esq.
Madeline Schmidt, Esq.
OKIN ADAMS BARTLETT CURRY LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Email: info@okinadams.com
roconnor@okinadams.com
joldham@okinadams.com
mschmidt@okinadams.com
ESSENTIAL MINERALS: Gets Interim OK to Use Cash Collateral
----------------------------------------------------------
Essential Minerals, LLC received interim approval from the U.S.
Bankruptcy Court for the District of Delaware to use cash
collateral pending the final hearing.
The company has an immediate need to use assets that may constitute
cash collateral of its secured creditors to pay its operating
expenses. These assets include accounts receivable, equipment and
other property believed to be worth more than $5.98 million.
The secured creditors that may assert interest in the cash
collateral are PNC Bank, N.A., Citizens Bank, N.A. and Chase Bank,
N.A.
As protection, the secured creditors will be granted replacement
liens on post-petition assets acquired using the cash collateral.
The final hearing is scheduled for March 31.
About Essential Minerals LLC
Established in 2017, Essential Minerals, LLC specializes in the
production of naturally pure calcium products for the food and
pharmaceutical industries. It is based in New Castle, Del.
Essential Minerals filed Chapter 11 petition (Bankr. D. Del. Case
No. 25-10430) on March 10, 2025, listing total assets of $5,983,878
and total liabilities of $11,962,729.
Judge Thomas M. Horan handles the case.
The Debtor is represented by:
Ronald S. Gellert, Esq.
Gellert Seitz Busenkell & Brown, LLC
1201 N. Orange Street, Suite 300
Wilmington, DE 19801
Tel: (302) 425-5806
Email: rgellert@gsbblaw.com
EYENOVIA INC: Files Registration Statement for 350K Shares
----------------------------------------------------------
Eyenovia, Inc., filed a Form S-8 with the U.S. Securities and
Exchange Commission to register an aggregate of 350,000 additional
shares of common stock, par value $0.0001 per share under the
Eyenovia, Inc. Amended and Restated 2018 Omnibus Stock Incentive
Plan, as amended, representing an increase in the number of shares
of Common Stock reserved for issuance under such plan as a result
of an amendment thereto, which was adopted by the board of
directors of the Company on December 3, 2024 and approved by the
Company's stockholders at the Special Meeting of Stockholders held
on January 21, 2025.
The Company is represented by:
Megan N. Gates, Esq.
Julie M. Plyler, Esq.
Covington & Burling LLP
1 International Place
Boston, MA 02110
Tel: (212) 841-1247
A full-text copy of the Form S-8 is available at
https://tinyurl.com/5475jwhs
About Eyenovia
New York, N.Y.-based Eyenovia, Inc. is an ophthalmic technology
company commercializing Mydcombi (tropicamide and phenylephrine
HCL
ophthalmic spray) for inducing mydriasis for routine diagnostic
procedures and in conditions where short-term pupil dilation is
desired, preparing for the commercialization of clobetasol
propionate ophthalmic suspension 0.05% ("clobetasol propionate"),
for the treatment of post-operative inflammation and pain
following
ocular surgery, and developing the Optejet delivery system both
for
use in combination with its own drug-device therapeutic programs
and for out-licensing for use in combination with therapeutics for
additional indications. The Company's aim is to improve the
delivery of topical ophthalmic medication through the ergonomic
design of the Optejet, which facilitates ease-of-use and delivery
of a more physiologically appropriate medication volume, with the
goal to reduce side effects and improve tolerability and introduce
digital health technology to improve therapy compliance and
ultimately medical outcomes.
In its Quarterly Report for the three months ended September 30,
2024, Eyenovia reported that it had unrestricted cash and cash
equivalents of approximately $7.2 million and an accumulated
deficit of approximately $175.4 million as of September 30, 2024.
For the nine months ended September 30, 2024 and 2023, the Company
used cash in operations of approximately $24.0 million and $17.5
million, respectively. The Company does not have recurring
significant revenue and has not yet achieved profitability. The
Company expects to continue to incur cash outflows from operations
for the near future. The Company expects that it will continue to
incur significant research and development and selling, general
and
administrative expenses and, as a result, it will eventually need
to generate significant product revenues to achieve profitability.
These circumstances raise substantial doubt about the Company's
ability to continue as a going concern for at least one year from
the date that the financial statements were issued.
For the years ended December 31, 2023 and 2022, Eyenovia incurred
net losses of approximately $27.3 million and $28 million,
respectively. As of September 30, 2024, Eyenovia had $22,796,091
in
total assets, $19,076,788 in total liabilities, and $3,719,303 in
total stockholders' equity.
FARDAD LLC: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Fardad, LLC.
About Fardad LLC
Fardad LLC is a Single Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)).
Fardad filed its voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-55802) on June 3,
2024, listing $1 million to $10 million in both assets and
liabilities. The petition was signed by Sepideh Mesri as manager.
Judge Paul W. Bonapfel oversees the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC serves as the
Debtor's legal counsel.
FELTRIM TUSCANY: Seeks Subchapter V Bankruptcy in Florida
---------------------------------------------------------
On March 20, 2025, Feltrim Tuscany Preserve LLC filed Chapter 11
protection in the U.S. Bankruptcy Court for the Middle District of
Florida. According to court filing, the Debtor reports $1 million
snf $10 million in debt owed to 1 and 49 creditors. The petition
states funds will be available to unsecured creditors.
About Feltrim Tuscany Preserve LLC
Feltrim Tuscany Preserve LLC is a limited liability company.
Feltrim Tuscany Preserve LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
25-01693) on March 20, 2025. In its petition, the Debtor reports
estimated assets and liabilities between $1 million and $10 million
each.
Honorable Bankruptcy Judge Catherine Peek Mcewen handles the
case.
The Debtor is represented by Amy Denton Mayer, Esq. at STICHTER,
RIEDEL, BLAIN & POSTLER, P.A.
FF FUND: Court Dismisses Franzone Appeal as Equitably Moot
----------------------------------------------------------
In the appealed case captioned as ANDREW FRANZONE, both
individually and derivatively on behalf of the FF Fund Liquidating
Trust and the F5 Liquidating Trust, Plaintiffs-Appellants, v.
SONEET R. KAPILA, FF Fund Liquidating Trust and F5 Liquidating
Trust, Defendants-Appellees, Case No. 24-cv-21430 (S.D. Fla.),
Judge Darrin P. Gayles of the United States District Court for the
Southern District of Florida granted the Appellees' motion to
dismiss appeal as equitably moot and for statutory mootness.
In this consolidated bankruptcy appeal, Appellant Andrew Franzone
seeks to unwind the Trustee's sale of CoreWeave Inc. shares to
third-party buyers.
This appeal stems from two jointly administered Chapter 11
bankruptcy cases filed by FF Fund I, L.P. and F5 Business
Investment Partners, LLC. On Feb. 1, 2021, the Debtors filed
Amended Plans sponsored by Appellant and FF Fund Management, FF
Fund I's general partner. Article V of the Amended Plans proposed
reorganizations dependent on a guarantee or exit financing from FF
Fund Management. Article VI of the Amended Plans provided for a
"Liquidating Trust Alternative" in the event FF Fund Management
could not provide financial support. In the week before the
confirmation hearing, Appellant was arrested on federal securities
and wire fraud charges and the Securities and Exchange Commission
brought a civil action against Appellant and FF Fund Management for
securities fraud—leaving FF Fund Management unable to provide the
requisite financial support. As a result, the Debtors gave notice
of their intent to proceed under the Liquidating Trust Alternative
and filed the Confirmed Plans. On June 3, 2021, the Bankruptcy
Court entered the Confirmation Order confirming the Confirmed Plans
and implementing the Liquidating Trust Alternative. The
Confirmation Order was not appealed.
On the effective date of the Confirmed Plans, the Liquidating
Trusts held illiquid interests in 47 privately held entities and
unsecured notes from start-up entities and real estate
partnerships. One of these investments was 250,000 preferred shares
in CoreWeave that the Debtors had obtained at $1.00/share.
By mid-2023, the Estate was administratively insolvent. However, in
late-October 2023, the Trustee had the opportunity to sell, as part
of a third-party tender offer, the CoreWeave stock for over
$309/share. As a result, there were proceeds to fully pay creditors
and administrative expenses and distribute funds to beneficiaries
at 2 to 3 times their total investment. Accordingly, on Nov. 14,
2023, the Trustee filed an Expedited Motion for Authority to Accept
Tender Offer for Preferred Shares in CoreWeave, Inc. and Liquidate
Some or All of Such Preferred Shares Pursuant to 11 U.S.C. 363. On
Nov. 17, 2023, the Bankruptcy Court granted the Approval Motion.
The Trustee then sold to third-party buyers 182,245 CoreWeave
preferred shares for $55.24 million.
On Dec. 29, 2023, Appellant filed an Emergency Motion to Reverse
Transactions Related to CoreWeave, Inc., requesting that the
CoreWeave Sale Order "be reversed for bath faith and abuse of
discretion" by the Trustee. On Jan. 16, 2024, with Appellant in
attendance, the Bankruptcy Court held a hearing on the Reversal
Motion. The Bankruptcy Court denied the Reversal Motion. Appellant
did not seek a stay of the Feb. 1 Order.
The Court finds that the doctrine of equitable mootness warrants
granting the Motion and dismissing the instant appeal.
Appellant did not request a stay of the CoreWeave Sale Order, the
Feb. 1 Order, or the Distribution Order. As a result, the Trustee
proceeded with the bankruptcy court authorized sale and
distribution. Therefore, Appellant's failure to timely obtain a
stay of the CoreWeave Sale Order, the Feb. 1 Order, or the
Distribution Order warrants finding this appeal equitably moot, the
Court concludes.
Beyond Appellant's failure to request a stay, the CoreWeave sale
has been completed, distribution is well underway, and the
interests of third parties would be adversely affected if the Court
were to grant the relief Appellant requests. According to the
Court, unwinding the consummated sale and distribution orders would
result in precisely the nightmarish situation that the doctrine of
equitable mootness exists to avoid.
In this case, the CoreWeave Sale Order granted the Trustee's motion
for authorization under 11 U.S.C. Sec. 363(b). Appellant did not
seek a stay of the CoreWeave Sale Order or the Feb. 1 Order. As a
result, Section 363(m) precludes the relief Appellant seeks in this
appeal—namely, the reversal of the CoreWeave Sale Order.
Therefore, this appeal is also statutorily moot and must be
dismissed, the Court holds.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=O6pnEX from PacerMonitor.com.
About FF Fund
FF Fund I, L.P., is a limited partnership that was formed in August
2010. FF Fund's general partner is FF Management. FF Fund's
offering documents identified a broad range of investment
strategies to achieve its stated objectives of "capital
appreciation and current income."
FF Fund has 13 subsidiaries and affiliates that FF Management set
up and routinely evolved over the roughly 10 years since FF Fund's
formation for various accounting, tax, audit, insurance,
regulatory, liquidity, operational, and administrative reasons.
F3 Real Estate Partners, LLC, was established to invest in real
estate primarily from 2011 through 2019. Prior to the CRO's
appointment, F3 purchased and then sold a residential complex
containing 87 condominium units in West Palm Beach, FL, which sale
transaction closed in May 2019.
F5 Business Investment Partners, LLC, held and currently owns the
majority of the current investments made by FF Fund with monies
received from the Limited Partners. The investments made by the F5
consisted mainly of (i) illiquid, non-tradeable privately held
shares in early-stage or start-up companies, (ii) minority
interests in real estate partnerships, or (iii) unsecured
promissory notes.
F6 Standard Securities Partners, LLC, held liquid hedge fund
investments.
The remainder of the subsidiaries had nominal investments.
On Sept. 24, 2019, FF Management retained Soneet R. Kapila to
manage FF Fund. FF Management was and is controlled by Andrew
Franzone.
FF Fund I L.P., an investment company based in Miami, Fla., filed a
voluntary petition for relief under Chapter 11 of Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the
petition signed by CRO Soneet R. Kapila, the Debtor estimated $50
million to $100 million in assets and $1 million to $10 million in
liabilities.
On Jan. 24, 2020, F5 Business Investment Partners, LLC, an
affiliate of FF Fund, filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 20-10996). The case is jointly administered with that of
FF Fund. At the time of the filing, F5 Business estimated assets
of between $10 million and $50 million and liabilities of between
$1 million and $10 million.
Chief Judge Laurel M. Isicoff oversees the cases.
Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., is
serving as the Debtors' legal counsel.
No creditors' committee has been appointed in the case. In
addition, no trustee or examiner has been appointed.
FRISCO BAKING: Gets Final OK to Use Cash Collateral
---------------------------------------------------
Frisco Baking Company, Inc. received final approval from the U.S.
Bankruptcy Court for the Central District of California to use cash
collateral.
The court also approved the budget on a final basis through May 11
and continuing thereafter until disposition of the company's
Chapter 11 case.
Frisco can use the cash collateral on the same terms and conditions
as set forth in the interim order issued by the bankruptcy court in
February.
Leaf Capital Funding, LLC and other lenders may have valid security
interests in the cash collateral.
In January, Leaf Capital Funding advanced $50,000 to the company as
working capital. It is currently owed a total of $271,358.34,
including interest and charges.
About Frisco Baking Company
Established in 1941, Frisco Baking Company, Inc. specializes in San
Francisco-style sourdough bread and a variety of baked goods such
as French and Italian rolls, baguettes, and specialty loaves. The
company offers wholesale services to restaurants and delis across
Los Angeles and Orange counties while maintaining retail operations
at its Los Angeles bakery.
Frisco Baking Company filed Chapter 11 petition (Bankr. C.D. Calif.
Case No. 25-11395) on February 24, 2025, listing between $1 million
and $10 million in assets and between $10 million and $50 million
in liabilities. Damon M. Perata, chief executive officer of Frisco
Baking Company, signed the petition.
Judge Neil W. Bason oversees the case.
Jeffrey S. Shinbrot, Esq., at The Shinbrot Firm is the Debtor's
bankruptcy counsel.
Leaf Capital Funding, LLC, as lender, is represented by:
Jennifer Witherell Crastz, Esq.
Hemar, Rousso & Heald, LLP
15910 Ventura Blvd., 12th Floor
Encino, CA 91436
Telephone: (818) 501-3800
Facsimile: (818) 501-2985
Email: jcrastz@hrhlaw.com
FULCRUM BIOENERY: Court Approves Disclosure Statement
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved the
adequacy of the disclosure statement explaining the amended joint
Chapter 11 plan of liquidation of Fulcrum Bioenergy Inc. and its
debtor-affiliates.
The deadline to vote to accept or reject the Debtors' Amended Joint
Chapter 11 Plan is March 31, 2025, at 4:00 p.m. (ET). For your
vote to be counted, this Ballot must be properly completed, signed,
and returned so that it is actually received by the Debtors' Voting
Agent, Kurtzman Carson Consultants, LLC d/b/a Verita Global, by no
later than March 31, 2025, unless such time is extended in writing
by the Debtors. Please submit a Ballot with your vote in the
envelope provided or by one of the following methods:
If by First Class Mail, Overnight Courier, or Hand Delivery to:
Fulcrum BioEnergy, Inc.
c/o Kurtzman Carson Consultants, LLC dba Verita Global
222 N Pacific Coast Highway, Suite 300
El Segundo, CA 90245
If you would like to coordinate hand delivery of your Ballot,
please email FulcrumInfo@veritaglobal.net and provide the
anticipated date and time of your delivery.
If by Electronic, Online Submission: Visit the Debtors'
restructuring website at: https://www.veritaglobal.net/fulcrum,
click on the "E-Ballot" button below the "Submit Electronic Ballot"
section on the of the landing page, and follow the directions to
submit your Ballot online. If you choose to submit your Ballot via
Verita's E-Ballot system ("E-Ballot Portal"), you should not also
return a hard copy of your Ballot.
Summary of Estimated
Distributions Under The Plan
Estimated Estimated
Class Amount Recovery
----- ---------- ---------
Other Priority $6,496 100%
Fulcrum $112,058,488 9.73%-Unknown
Prepetition
Loan Secured
Holdings $113,955,468 Unknown
Prepetition
Bond Secured
BioFuels $168,029,630 25.98%-Unknown
Prepetition
Bond Secured
Holdings $113,955,468 Unknown
Deficiency
BioFuels $124,379,752 Unknown
Deficiency
Fulcrum $324,867,276 0.07%-Unknown
Undersecured
and General
Unsecured
Holdings N/A Unknown
Undersecured
and General
Unsecured
BioFuels $81,278,385 1.41%-Unknown
Undersecured
and General
Unsecured
Interests N/A 0%
The Debtors said that their Plan constitutes a joint plan of
liquidation for all of the Debtors. The Plan does not seek the
substantive consolidation of the Debtors.
Generally, the Plan provides the following:
* Payment in full of all Allowed Administrative Expense
Claims, Fee Claims, U.S. Trustee Fees, Priority Tax
Claims and Other Priority Claims;
* Funding of a Liquidation Trust to govern the liquidation
of the Debtors' estates and remaining assets following
the Effective Date;
* Holders of General Unsecured Claims shall receive an
interest in the Liquidation Trust;
* Liquidation Trust Assets shall be liquidated to provide
a distribution to Liquidation Trust Beneficiaries; and
* No recovery to the holders of Interests on account of
their Interests.
Under the Plan, Claims in Classes 2A-2C (Secured Claims), Classes
3A-3C (Deficiency Claims), and Classes 4A-4C (Undersecured and
General Unsecured Claims) are impaired and entitled to vote to
accept or reject the Plan. Holders of Interests in Class 5
(Interests) will receive no distribution and, accordingly, the
holders of Interests in such Class are deemed to reject the Plan.
Therefore, their votes are not being solicited.
Accordingly, ballots to accept or reject the Plan are being
provided only to holders of Claims in Classes 2A-2C, Classes 3A-3C,
and Classes 4A-4C, and only such holders who held their Claims on
the Voting Record Date are entitled to vote to accept or reject the
Plan.
Class 4A consists of Fulcrum Undersecured and General Unsecured
Claims. Each holder of an Allowed Fulcrum Undersecured and General
Unsecured Claim shall receive in full satisfaction, settlement, and
release of, and in exchange for such Allowed Fulcrum Undersecured
and General Unsecured Claim the Pro Rata Share of the Cash, if any,
to be distributed from the Fulcrum Liquidation Trust Account. The
amount of claim in this Class total $324,867,276. This Class is
impaired.
Class 4B consists of Holdings Undersecured and General Unsecured
Claims. Each holder of an Allowed Holdings Undersecured and General
Unsecured Claim shall receive in full satisfaction, settlement, and
release of, and in exchange for such Allowed Holdings Undersecured
and General Unsecured Claim the Pro Rata Share of the Cash, if any,
to be distributed from the Holdings Liquidation Trust Account. This
Class is impaired.
Class 4C consists of BioFuels Undersecured and General Unsecured
Claims. Each holder of an Allowed BioFuels Undersecured and General
Unsecured Claim shall receive in full satisfaction, settlement, and
release of, and in exchange for such Allowed BioFuels Undersecured
and General Unsecured Claim the Pro Rata Share of the Cash, if any,
to be distributed from the BioFuels Liquidation Trust Account. The
amount of claim in this Class total $81,278,385. This Class is
impaired.
The estimated recovery for General Unsecured Claims is "unknown",
according to the Disclosure Statement.
Interests shall be extinguished, cancelled and released on the
Effective Date. Holders of Interests shall not receive or retain
any distribution under the Plan on account of such Interests.
On or before the Effective Date, the Liquidation Trust Agreement
shall be executed, and all other necessary steps shall be taken to
establish the Liquidation Trust to hold the Liquidation Trust
Assets, which shall be for the benefit of the Liquidation Trust
Beneficiaries. Section 6.3 of the Plan sets forth certain of the
rights, duties, and obligations of the Liquidation Trustee.
The Liquidation Trust shall consist of the Liquidation Trust
Assets. Except as otherwise provided in the Plan or the
Confirmation Order, on the Effective Date, the Debtors shall be
deemed to have transferred all of the Liquidation Trust Assets held
by the Debtors to the Liquidation Trust, and all Liquidation Trust
Assets shall vest in the Liquidation Trust on the Effective Date,
to be administered by the Liquidation Trustee, in accordance with
the Plan and the Liquidation Trust Agreement, free and clear of all
Liens, Claims, encumbrances and other Interest.
Copies of the disclosure statement, the plan and any other document
filed in these cases may be obtained free of charge at Veritas's
website at https://veritaglobal.net/fulcrum/document, or upon
request to Verita in writing to:
Fulcrum Bioenergy Inc.
c/o Kurtzman Carson Consultants LLC
dba Verita Global
222 N. Pacific Coast Highway
Suite 300
El Segundo, CA 90245
Tel: (866) 967-0676 (US/Canada)
(310) 751-2676 (International)
Email: Fulcruminfo@veritaglobal.com
A full-text copy of the Amended Disclosure Statement is available
for free at https://tinyurl.com/32r3avxr
A full-text copy of the Amended Chapter 11 Plan of Liquidation is
available for free at https://tinyurl.com/3cwptzwj
About Fulcrum Bioenergy
Fulcrum Bioenergy Inc. operates as a clean energy company described
as a pioneer in sustainable aviation fuel (SAF) production.
Fulcrum Bioenergy Inc. and its affiliates sought relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
24-12008) on Sept. 9, 2024. In the petition filed by Mark J.
Smith, as chief restructuring officer, the Debtor estimated assets
up to $50,000 and estimated liabilities between $100 million and
$500 million.
The Honorable Bankruptcy Judge Thomas M. Horan handles the case.
The Debtors tapped MORRIS, NICHOLS, ARSHT & TUNNELL LLP as counsel;
and DEVELOPMENT SPECIALISTS, INC., as investment banker. KURTZMAN
CARSON CONSULTANTS, LLC, d/b/a VERITA GLOBAL, is the claims agent.
FULCRUM LOAN: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Fulcrum Loan Holdings, LLC.
About Fulcrum Loan Holdings
Fulcrum Loan Holdings, LLC is engaged in activities related to real
estate.
Fulcrum Loan Holdings and its affiliates filed their voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ga. Lead Case No. 24-56114) on June 11, 2024, listing
$10 million to $50 million in assets and $1 million to $10 million
in liabilities.
Judge Paul W. Bonapfel oversees the case.
The Debtors tapped Benjamin Keck, Esq., at Keck Legal, LLC, as
bankruptcy counsel and F. Beau Howard, Esq., at Fox Rothschild, LLP
as special counsel.
GARUDA HOTELS: Court Extends Cash Collateral Access to April 17
---------------------------------------------------------------
The Chapter 11 trustee for Garuda Hotels, Inc. and Welcome Motels
II, Inc. received another extension from the U.S. Bankruptcy Court
for the Northern District of New York to use cash collateral.
The interim order authorized Jeffrey Dove, the court-appointed
trustee, to use cash collateral until April 17 to pay the
companies' expenses per an approved budget.
RSS Comm 201-LC15 NY GHI, LLC holds a senior security interest in
the companies' assets based on a $7.97M mortgage loan.
As protection for any diminution in value of its collateral, RSS
will be granted replacement liens on the cash collateral and will
receive a monthly payment of interest-only, at the contract
(non-default) rate of interest (per diem of $1,056).
The companies' authority to use cash collateral terminates without
further court order on the earlier of April 17, at 11:59 p.m.
(Eastern Standard Time); entry of an order granting any party
relief from the automatic stay with respect to any property of the
companies in which RSS claims a lien or security interest; entry of
an order dismissing or converting the companies' Chapter 11
proceedings to cases under Chapter 7; and confirmation of a plan of
reorganization.
The next hearing is scheduled for April 17.
About Garuda Hotels Inc.
Garuda Hotels, Inc. and Welcome Motels II, Inc. operate the Country
Inn and Suites Hotel and Econolodge Hotel, respectively. Both
hotels are located in Ithaca, N.Y.
Garuda Hotels and Welcome Motels II filed Chapter 11 petitions
(Bankr. N.D.N.Y. Lead Case No. 22-30296) on May 13, 2022. Both
reported up to $10 million in assets and liabilities at the time of
the filing.
Judge Wendy A. Kinsella oversees the cases.
Erica Aisner, Esq., at Kirby Aisner & Curley, LLP is the Debtors'
legal counsel.
GO LAB: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------
Two affiliates that simultaneously filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
GO Lab, Inc. (Lead Case) 25-10557
1 Main Street
P.O. Box 119
Madison, ME 04950
GO Lab Madison, LLC 25-10558
1 Main Street
P.O. Box 119
Madison, ME 04950
Business Description: The Debtors are a start-up manufacturer
based in Madison, Maine, specializing in
high-performing, dry-process wood fiber
construction insulation. Founded in 2017,
the Debtors produce three commercial
products: TimberBatt, TimberFill, and
TimberBoard, all made from clean softwood
residuals sourced from sawmills and small-
diameter trees. With a state-of-the-art
plant in a former paper mill, the Debtors
are poised to serve the U.S. market with
sustainable, cost-effective wood fiber
insulation solutions, making them the only
manufacturer of such products in the U.S.
and well-positioned to tap into the growing
demand for eco-friendly building materials.
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. Karen B Owens
Debtors'
General
Bankruptcy
Counsel: Mark E. Felger, Esq.
Simon E. Fraser, Esq.
COZEN O'CONNOR
1201 N. Market St., Ste. 1001
Wilmington, DE 19801
Tel: (302) 295-2087
Fax: (302) 295-2013
Email: mfelger@cozen.com
sfraser@cozen.com
Debtors' Special
Counsel for Tax
and Bond Matters: NIXON PEABODY LLP
Debtors'
Special
Counsel for
Corporate
Matters: PIERCE ATWOOD LLP
Debtors'
Investment
Banker: JEFFERIES LLC
Debtors'
Accountants: BERRY DUNN MCNEIL & PARKER, LLC
Debtors'
Claims,
Noticing &
Balloting
Agent: OMNI AGENT SOLUTIONS
GO Lab, Inc.'s
Estimated Assets: $500,000 to $1 million
GO Lab, Inc.'s
Estimated Liabilities: $10 million to $50 million
GO Lab Madison, LLC's
Estimated Assets: $1 million to $10 million
GO Lab Madison, LLC's
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Matthew O'Malia as president and CEO.
Full-text copies of the petitions are available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/OQHZZ3Q/GO_Lab_Inc__debke-25-10557__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PGPIGTI/GO_Lab_Madison_LLC__debke-25-10558__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Small Enterprise Growth Fund $3,824,589
d/b/a Maine Venture Fund
P.O. Box 63
Newport, ME 04953
2. Globe Machine Manufacturing Company $2,926,351
701 East Street
P.O. Box 2274
Tacoma, WA 98401
3. Financial Authority of Maine $1,656,226
5 Community Drive
P.O. Box 949
Augusta, ME 04332-0949
4. Maine Rural Development Authority $1,025,236
c/o Financial Authority of Maine
5 Community Drive / P.O. Box 949
Augusta, ME 04332-0949
5. Dieffenbacher GmBH Maschinen-und $504,461
Anglage
P.O. Box 734475
Dallas, TX 75373
6. Andritz Ltd. $442,673
45 Roy Blvd.
Brantford, Ontario
Canada N3R 7K1
7. Stantec Consulting Ltd. $415,052
P.O. Box 578 / Lockbox 310260
Calgary, Alberta
Canada N3R 7K1
8. Johnson Controls Fire Protection LP $408,036
35 Progress Avenue
Nashua, NJ 03062
9. Town of Madison $400,000
P.O. Box 190
Madison, ME 04950
10. Somerset Economic Development $375,155
Corporation
41 Court Street
Skowhegan, ME 04976
11. OPAL Global, LLC $339,850
137 High Street
Belfast, ME 04915
12. MSK-Covertech, Inc. $287,321
600 Cherokee Parkway
Acworth, GA 30102
13. Kilop USA, Inc. $159,630
4146 Mendenhall Oaks Pkwy
Suite 1013
High Point, NC 27265
14. Kennebec Valley Council of $125,590
Governments
17 Main Street
Fairfield, ME 04937
15. Resourced Solutions, LLC $90,000
3307 21st Avenue N
Arlington, VA 22207
16. Reynold's Engineering and $89,223
Equipment Inc.
1602 Musser Street
Muscatine, IA 52761
17. Rembe, Inc. $81,051
9567 Yarborough Road
Fort Mill, SC 29707
18. Heidrick & Struggles Inc. $75,219
233 S. Wacker Drive, Suite 4900
Chicago, IL 60606
19. NEPW Logistics Inc. $67,990
70 Quarry Road
Portland, ME 04103
20. Keider Consulting $62,093
Lisdorfer Street
11 Saalouis
Sarrland, Germany 66740
GOEASY LTD: S&P Rates New US$400MM Senior Unsecured Notes 'BB-'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' rating to Goeasy Ltd.'s
proposed US$400 million senior unsecured notes due 2030.
The company will use the net proceeds to partially repay secured
debt (about C$160 million outstanding under the revolving credit
and secured facilities as of March 21, 2025). At close, S&P expects
a modest rise in company's leverage.
Proforma basis as of Dec. 31, 2024, the company's leverage--as
measured by debt to adjusted total equity--was 3.6x (3.7x assuming
no debt repayment) which is within S&P's base case expectation of
leverage staying between 3.0x-4.0x on a sustained basis.
For 2024, Goeasy's ratio of unencumbered assets to unsecured debt
was above 1.0x. Pro forma for the transaction, S&P expects the
unencumbered assets-to-unsecured debt ratio to remain at 1.0x-1.1x.
If the company's unsecured debt becomes greater than its
unencumbered assets, it would lower the issue rating by one notch,
to 'B+'.
In January 2025, the Canadian government changed the maximum
allowable interest rate for consumer loans to an annual percentage
rate (APR) of 35%. S&P thinks Goeasy will be able to adjust its
originations in response to the regulation without materially
harming its earnings or credit performance. About 67% of its total
portfolio had an APR of less than 35% as of the end of last year.
The company's net charge-offs to average gross receivables was 9.1%
for 2024, compared with 8.8% in 2023. Goeasy expects net
charge-offs to stay in the 7.75%-9.75% range in 2025 before
declining marginally to 7.5%-9.5% in 2026, as the company continues
to transition its lending book to near-prime consumers and increase
its secured receivables.
S&P said, "The stable outlook on the issuer credit rating reflects
our expectation that, over the next 12 months, Goeasy's leverage
will remain at 3.0x-4.0x. We expect the company to maintain its
existing funding mix and report steady operating performance, with
net charge-offs well below 12%. (Our base-case expectation is
8%-10%.)"
GREENLEAF 2 CPE: Gets Final OK to Use Cash Collateral
-----------------------------------------------------
Greenleaf 2 CPE, LLC and its affiliates received final approval
from the U.S. Bankruptcy Court for the Central District of
California to use cash collateral.
The final order authorized the companies to use cash collateral
solely in the ordinary course of business for the line items
identified in the budget, with a 15% variance.
As protection, the U.S. Small Business Administration and other
secured creditors will be granted replacement liens on assets
generated by the companies after their Chapter 11 filing. These
assets do not include any claims or recoveries under Chapter 5 of
the Bankruptcy Code.
As additional protection, SBA will receive monthly payments of
$2,659 starting this month, with the amount of payments to increase
to $6,000 per month starting in June.
About Greenleaf 2 CPE
Greenleaf 2 CPE, LLC and its affiliates, G7 Venice, LLC and
Greenleaf 4 SOCO, LLC, filed Chapter 11 petitions (Bankr. C.D.
Calif. Lead Case No. 25-11187) on February 18, 2025.
At the time of the filing, Greenleaf 2 CPE reported between
$500,001 and $1 million in assets and between $1 million and $10
million in liabilities.
Judge Deborah J. Saltzman oversees the cases.
The Debtors are represented by:
David B. Golubchik, Esq.
Levene, Neale, Bender, Yoo & Golubchik L.L.P.
2818 La Cienega Ave.
Los Angeles, CA 90034
Tel: 310-229-1234
Email: dbg@lnbyg.com
GUADALUPE REGIONAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Guadalupe Regional Medical Center's, TX
(GRMC) Long-Term Issuer Default Rating (IDR) and the rating on the
following bonds issued by the Board of Managers, Joint Guadalupe
County - city of Seguin, TX on behalf of GRMC at 'BB':
- $97.7 million hospital mortgage revenue, refunding and
improvement bonds series 2015.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Guadalupe Regional
Medical Center (TX) LT IDR BB Affirmed BB
Guadalupe Regional
Medical Center (TX)
/General Revenues/1 LT LT BB Affirmed BB
The 'BB' IDR and revenue bond ratings reflect GRMC's healthy
operating performance despite recent staffing expense pressures,
strengths which are partly offset by a weaker balance sheet and
liquidity position. The ratings also reflect GRMC's strong market
position in a favorable but highly competitive service area with a
growing population.
While the combination of 'bbb' revenue defensibility and an 'a'
operating risk would suggest a higher rating category, Fitch
believes the 'BB' rating accurately reflects risks associated with
GRMC's meaningful dependence on revenues related to its status as
the legal owner of 23 nursing home licenses, as well as presently
weak liquidity metrics including cash-to-adjusted debt, which was
53% in FY24.
The 'BB' rating also reflects GRMC's participation in the Quality
Incentive Payment Program (QIPP), a state of Texas Medicaid
program. Annual QIPP distributions have boosted revenues and cash
flows but leave GRMC exposed to long-term changes to the QIPP
program, including the risk of the program's termination.
About 55% of net patient revenues as presented in GRMC's FY24
audited financials originate from its nursing home business; Fitch
regards these moneys as essentially pass-through since they are not
factored into GRMC's operating income and QIPP moneys are allocated
without reference to cost trends at the nursing homes. Nursing home
operations and QIPP revenues have been relatively stable, but Fitch
believes these funding sources could be more volatile in future
years.
Additionally, GRMC's hospital operations are sensitive to small
changes in utilization due to its small average daily census
(occupancy around 50%) and small revenue base of $143 million in
net patient service revenues, excluding nursing home operations.
GRMC added seven new nursing homes to its portfolio between FY22
and FY24.
The Stable Outlook reflects Fitch's expectation that GRMC's net
leverage metrics will remain stable over the near-term given that
the hospital's capital needs are projected to be modest for the
next five years.
SECURITY
The bonds are secured by a mortgage on hospital property, pledge of
gross revenues and a debt service reserve fund.
KEY RATING DRIVERS
Revenue Defensibility - 'bbb'
Favorable Payor Mix in Growing but Competitive Service Area
Fitch assesses GRMC's revenue defensibility as 'bbb', reflecting a
favorable payor mix, solid market share, and a competitive position
in a growing service area. In FY24, GRMC's gross patient revenues
primarily came from Medicare (53%) and commercial payors (27%),
with minimal exposure to Medicaid (7%) and self-pay (9%), keeping
combined Medicaid and self-pay revenues well below 25%, which Fitch
views favorably. As a non-state, government-owned hospital, GRMC
qualifies for nursing facility supplemental Medicaid support,
benefiting from lease agreements with 23 nursing homes, the
licenses of which it owns.
Total net patient revenues of $363 million in FY24 included GRMC
health system revenues (39.4%), nursing home pass-through revenues
(55%), and other fees and service charges (6%). Revenue growth was
12.8% in FY23 due to additions of two nursing homes and organic
hospital revenue growth, slowing to 6.4% in FY24 due to lower
inpatient volumes and reduced QIPP and supplemental Medicaid
receipts.
In FY24, GRMC earned $6 million from the QIPP and $2.28 million in
supplemental Medicaid revenue for uncompensated care, compared to
$9.8 million and $3.2 million, respectively, in FY23, due in part
to renegotiated QIPP revenue sharing. For FY25, GRMC projects $8
million from QIPP and $2.6 million from Medicaid UC. Fitch would
view any permanent changes or volatility in these payments
negatively, but notes that the risks are presently mitigated by
GRMC's stable payor mix and expanding service area.
GRMC, based in Seguin, TX, a rapidly growing area near San Antonio,
faces intense competition, ranking third in market share (18.2%) in
2024, behind Resolute Health (23.4%) and Christus Health (19.2%).
GRMC is recruiting physicians and expanding outpatient clinics to
strengthen its presence, which Fitch expects will boost patient
volumes and revenues through organic growth and new nursing homes.
Operating Risk - 'a'
Good Cost Management; Moderate Capital Needs
Fitch expects GRMC's operating risk to remain consistent with the
'a' assessment given the hospital's generally stable operating
performance and moderate capital requirements. Excluding nursing
home operations, GRMC produced 9.2% and 5.8% operating EBITDA
margins in FY23 and FY24, respectively, representing a modest
weakening from higher operating EBITDA margins in the 14% to 16%
range during and immediately after the pandemic.
As mentioned, GRMC benefits from supplemental payments related to
its nursing homes, which supports cash flow generation. Management
budgeted for FY25 margins, excluding nursing home operations, to be
in line with stronger FY23 results, but notes that YTD cash flows
are weaker than budgeted given delays to Texas Medicaid QIPP
transfers.
FY24 results were affected by lower QIPP revenues received by GRMC
due to a late renegotiation of how QIPP receipts were split with
some nursing home operators, as well as lower-than-budgeted
supplemental Medicaid revenues. On the expense side, health
insurance costs were over budget by $3.2 million in FY24 and staff
salary costs ended $2 million over budget.
GRMC's FY25 budget was designed to better manage salary costs by
reducing contract labor expense and by realizing drug price
efficiencies in its employee health plan with assistance from
GRMC's group purchasing organization (GPO). Additionally,
management reports that GRMC has been able to recognize $2.4
million of delayed FEMA reimbursements in FY25 stemming from
pandemic-era costs.
Capital spending averaged a solid 125% of depreciation between FY19
and FY23. Projects completed during this time frame included a new
22,000-sf medical office building (MOB) for specialists, the
addition of a six-bed intermediate care unit serving higher acuity
patients, a new urgent care center, renovation of the women's
imaging center and a full lab renovation. GRMC updated one of its
two catheter labs in FY24 and plans to continue investing in
routine capital and strategic growth to accommodate higher volumes.
Current projects include the construction of a 25,000-sf MOB using
an $10 million state grant and $2 million of internal GRMC cash.
GRMC management projects that capex spending will average around
75% of depreciation through FY29 given that the office building now
under construction - GRMC's second MOB project in five years - is
the last major item in its capital plan. Lower capital spending
over the coming five years will provide GRMC with the opportunity
to grow its balance sheet resources.
Financial Profile - 'bb'
Weak Financial Profile
GRMC's absolute liquidity at FYE 2024 was essentially flat compared
FYE19 due to the organization's significant capital spending on
projects from FY21 through FY23. As a result, GRMC's
cash-to-adjusted debt remained weak at only 53% as of FYE 2024,
consisting of $55 million of unrestricted cash and investments and
$7.9 million in debt service reserve funds compared to GRMC's debt
($98 million of long-term debt and $6 million of capital leases)
and adjusted debt, the latter of which includes a portion of GRMC's
net pension liabilities.
Under Fitch's criteria, adjusted debt includes Fitch's calculation
of the hospital's net pension liability, which Fitch estimates at
$11.4 million for FYE 2024 using its standard 6% discount rate
assumption for U.S. public sector pensions. For FY24, GRMC reported
a $574,000 net pension asset for its pension plan. The plan
actuary's calculation uses the plan's official 6.75% discount
rate.
GRMC's net adjusted debt to adjusted EBITDA, which is a measure of
how many years of cash flow is needed to repay outstanding
long-term debt, was 3.3x as of Sept. 30, 2024. Net debt to
operating EBITDA was 4.7x as of the same date. GRMC's average age
of plant is low at only 9.3 years at FYE 2024, reflecting several
years of elevated capital spending prior to FY24.
Fitch's base case scenario reflects a rapid stabilization of
operations after FY24's uncharacteristically weak performance, with
GRMC's operating EBITDA margins (excluding nursing home operations)
remaining around 9%-10% in all years of the scenario (at or above
4% including nursing home operations). No debt issuances are
incorporated into Fitch's analysis at this time given that
management has stated that GRMC has no plans to issue debt through
the five-year scenario horizon.
Fitch's forward-looking stress case assumes a portfolio stress of
-1.1% based on GRMC's highly conservative investment asset
allocation, applying a standard revenue stress in the first two
years of the stress case. Fitch assumes a gradual improvement in
operating EBITDA margins and leverage in the outer years of the
stress scenario. GRMC recovers from the application of stress to
exhibit leverage metrics in line with current levels as indicated
by a fourth-year net adjusted debt to adjusted EBITDA of 2.4x and
cash-to-adjusted debt of 54%.
Asymmetric Additional Risk Considerations
No asymmetric additional risk considerations were applied in this
rating determination.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- If liquidity levels significantly deteriorate such that GRMC's
net leverage position weakens to levels that no longer support the
rating, which in Fitch's view would incorporate a decrease in
cash-to-adjusted debt that brings this measure to below 40%;
- If GRMC's margins and profitability (excluding its nursing home
operations) significantly weaken to levels below a 7% operating
EBITDA margin on a consistent basis, thereby no longer supporting a
'bbb' operating risk profile.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- If GRMC's liquidity position and net leverage position improve
significantly to levels that offset concerns over its small
revenue/volume base and dependency on supplemental funding, with
cash-to-adjusted debt that rises to consistently above 60%.
PROFILE
GRMC is a 153-bed medical center located in Seguin, TX, about 35
miles east of San Antonio. GRMC is a government-owned hospital that
is jointly owned by the city of Seguin and Guadalupe County, TX.
The hospital serves the counties of Guadalupe, Caldwell, Comal,
DeWitt, Gonzales, Hays, Karnes and Wilson, with the city of Seguin
as its primary service area. GRMC estimates the cost of charity
care that is provided under its charity care policy for fiscal 2024
at $8.2 million. It also received $2.3 million of payments in
aggregate from Guadalupe County and city of Seguin in fiscal 2024
to help offset the cost of charity care.
The original GRMC hospital was built in 1965 and underwent
significant renovation and expansion in 2010. GRMC is the sole
member of Guadalupe Regional Medical Group, which has grown to have
employed physicians spanning a variety of specialties. GRMC offers
additional specialty services through affiliations with regional
providers. GRMC generated total operating revenues of approximately
$363 million in FY24 (September 30 YE) including $200 million in
nursing home patient service revenue.
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.
HARVEY CEMENT: Gets Three-Month Extension to Use Cash Collateral
----------------------------------------------------------------
Harvey Cement Products Incorporated received interim approval from
the U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, to use cash collateral until June 21, marking the
third extension since the company's Chapter 11 filing.
The court's previous interim order allowed the company to access
cash collateral for the period from Jan. 17 to March 21.
The third interim order authorized the company to use the cash
collateral of its secured creditors, Old National Bank and the U.S.
Small Business Administration, to pay the expenses set forth in its
budget.
As protection, SBA and Old National Bank were granted replacement
liens on all of the company's property acquired before and after
the bankruptcy filing. In addition, Harvey was ordered to keep the
secured creditors' collateral insured.
The next hearing is scheduled for June 17.
About Harvey Cement Products Incorporated
Founded in 1947, Harvey Cement Products Incorporated has grown over
the years to be one of the leading manufacturers of over 200
varieties and sizes of masonry products and is able to deliver
customer orders to virtually any job site in the contiguous United
States.
Harvey filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-18335) on December 5,
2024, listing between $1 million and $10 million in both assets and
liabilities. Gordon Steck, vice president of Harvey, signed the
petition.
Judge Jacqueline P. Cox handles the case.
The Debtor is represented by Scott R. Clar, Esq., at Crane, Simon,
Clar & Goodman.
HVI CAT: GLR LLC, et al. Suit Remanded to California Superior Court
-------------------------------------------------------------------
Judge Martin R. Barash of the United States Bankruptcy Court for
the Central District of California remanded the civil action
captioned as GLR LLC, a Delaware limited liability company; GRL
LLC, a Delaware limited liability company; and RANDEEP S. GREWAL,
an individual, Plaintiffs, vs. UBS AG, a Swiss Corporation; and
Does 1-10, inclusive, Defendant, Adv. Proc. No.: 9:24-ap-01020-MB
(Bankr. C.D. Cal.) to the Superior Court for the State of
California.
Defendant UBS AG filed its Notice of Removal to Bankruptcy Court,
on June 20, 2024, removing a civil action from the Superior Court
for the State of California and resulting in the opening of this
adversary proceeding.
On Aug. 9, 2024, Plaintiffs GLR LLC, GRL LLC, and Randeep S. Grewal
filed their motion requesting the Court remand the civil action to
the Superior Court.
Pursuant to the complaint in the Civil Action, Plaintiffs initiated
this action to enforce certain contracts between the parties, i.e.,
a certain Waiver, Release and Discharge Agreement dated May 20,
2016, and a certain Release Agreement of the same date. The
disputes allegedly trace their origin to a certain Volumetric
Production Payment Agreement entered into in 2007, to which
Defendant, HVI Cat Canyon, Inc. and a third-party entity, Rincon
Island Limited Partnership, are parties. The Waiver Agreements
allegedly were entered into in connection with a restructuring of
the VPP in 2016.
On Dec. 10, 2020, the Bankruptcy Court entered an order approving a
stipulation between Michael A. McConnell, the Debtor's chapter 7
trustee, UBS AG, London Branch and UBS AG, Stamford Branch which,
among other things, created a litigation fund for prosecuting
litigation claims against insiders. The Litigation Fund was to be
created with proceeds from the sale of certain estate assets and an
additional contribution from these UBS entities.
On July 23, 2021, Mr. McConnell commenced an adversary proceeding
against Grewal, GLR, GRL and various other defendants. The
complaint in the Trustee Litigation asserts a variety of causes of
action, including breach of fiduciary duty, aiding and abetting
breach of fiduciary duty, avoidance and recovery of fraudulent
transfers, aiding and abetting fraudulent transfers, avoidance and
recovery of preferential transfers, negligence, breach of contract,
unjust enrichment, declaratory relief and equitable relief. The
Trustee Litigation remains pending. On May 3, 2022, Mr. McConnell
filed a motion requesting approval of additional litigation
financing of $1.5 million, plus subsequent advances up to $4
million, from UBS AG Stamford Branch. On
June 17, 2022, the Court entered its order approving the Litigation
Financing.
The gravamen of the removed civil action is that Defendant breached
the Waiver Agreements and is liable to Plaintiffs for damages
resulting from the creation of the Litigation Fund, the provision
of the Litigation Financing, and the prosecution of the Trustee
Litigation with those funds. Defendant contends that the Bankruptcy
Court has jurisdiction over the Civil Action based on its
connection to events that occurred (and are occurring) in the
bankruptcy case, and that the civil action is most appropriately
adjudicated by this Court. Plaintiffs argue that the Bankruptcy
Court has no jurisdiction over the Civil Action but that even if it
does, the civil action is most appropriately heard by the Superior
Court.
The Bankruptcy Court is not persuaded that adjudication of the
civil action in another forum threatens the validity of the
financing, deprives any party of the protections accorded them
under the financing, or threatens the fair and efficient
administration of this chapter 7 case.
According to the Bankruptcy Court, Defendant does not identify any
substantive right arising under a provision of the Bankruptcy Code
that is at issue in the civil action. Instead, it argues that the
civil action is "inextricably linked" to this bankruptcy case and
could not have arisen if not for this case. However, Judge Barash
says the argument misconstrues the test for 'arising in'
jurisdiction. The question is not whether the proceeding would not
exist but for a historical or circumstantial connection to a
bankruptcy case. If that were the test, the civil action would
qualify, as the matters complained of as a breach of contract
occurred in and during the pendency of this case. The question,
however, is whether the proceeding by its nature, could arise only
in the context of a bankruptcy case. This standard is clearly not
satisfied. The Plaintiffs allege they have a contract under
applicable state law and that it has been breached. By its nature,
this is a claim that regularly arises outside the context of a
bankruptcy case.
The parties disagree on whether the Bankruptcy Court has "related
to" jurisdiction over the Civil Action. The Bankruptcy Court finds
it unnecessary to resolve this question, however, because it
ultimately determines to remand the case for other equitable
reasons under 28 U.S.C. Sec. 1452(b). Suffice it to say that if the
Bankruptcy Court has jurisdiction, it is not core jurisdiction.
The Bankruptcy Court concludes that it should exercise its
equitable discretion to remand the Civil Action to the Superior
Court pursuant to 28 U.S.C. Sec. 1452(b).
A copy of the Court's decision is available at
https://urlcurt.com/u?l=DoJbyQ from PacerMonitor.com.
About HVI Cat Canyon Inc.
HVI Cat Canyon, Inc., was a privately held oil and gas extraction
company based in New York.
HVI Cat Canyon sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 19-12417) on July 25, 2019. In the
petition signed by Alex G. Dimitrijevic, president and COO, the
Debtor was estimated to have assets of between $100 million and
$500 million and liabilities of the same range.
On Aug. 28, 2019, the New York Court entered an order transferring
the venue to U.S. Bankruptcy Court for the Northern District of
Texas, and assigned Case No. 19-32857.
Weltman & Moskowitz, LLP, ws the Debtor's bankruptcy counsel.
The Office of the U.S. Trustee on Aug. 9, 2019, appointed three
creditors to serve on the official committee of unsecured creditors
in the Debtor's case.
The case was converted to Chapter 7 on Dec. 17, 2020. The
U.S. Trustee appointed Michael A. McConnell as chapter 7 trustee.
I-ON DIGITAL: Series C Voting Rights Up to 20 Per Share
-------------------------------------------------------
I-ON Digital Corp. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that the Company filed a
Certificate of Amendment to its Certificate of Designation of
Series C Convertible Preferred Stock with the Secretary of State of
the State of Delaware, increasing the number of votes per share of
the Series C Convertible Preferred Stock from 1 to 20.
This amendment aligns the voting rights with the conversion rights
of the Series C Convertible Preferred Stock.
About I-On
Chicago, Ill.-based I-ON Digital Corp. was incorporated on July 5,
1999, and is engaged in providing digital-based enterprise
solutions, including the digitization and distribution of precious
metals, primarily gold, and other asset-based digital securities on
the blockchain.
New York, N.Y.-based Kreit & Chiu CPA LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated June 6, 2024. The report noted that the Company had an
accumulated deficit of $3,496,501 and $2,691,363 at December 31,
2023 and 2022, respectively; working capital deficits of $707,969
and $0 at December 31, 2023 and 2022, respectively; net losses of
$805,138 and $27,625 for the years ended December 31, 2023 and
2022, respectively; and net cash used in operating activities of
approximately $498,834 and $792,936 for the years ended December
31, 2023 and 2022, respectively. These matters raise substantial
doubt about the Company's ability to continue as a going concern.
IAMGOLD CORP: Fitch Hikes LongTerm IDR to B+, Outlook Stable
------------------------------------------------------------
Fitch Ratings has upgraded IAMGOLD Corporation's Long-Term Issuer
Default Rating (IDR) to 'B+' from 'B-'. Fitch has also upgraded the
company's secured revolving credit facility and senior secured
second-lien term loan to 'BB-' with a Recovery Rating of 'RR3' from
'B-'/'RR4', and its senior unsecured notes to 'B+' from 'B-' with a
Recovery Rating of 'RR4'. The Rating Outlook is Stable.
The upgrade reflects the improved business profile from the
completion of the Cote Gold project, including the change of
Country Ceiling, and Fitch's expectation that EBITDA leverage will
be sustained below 3.0x.
Key Rating Drivers
Cote Improves Operational Profile: IAMGOLD owns 70% of the Cote
Gold project unincorporated joint venture (JV) (65% net interest in
the project). Cote Gold achieved its first gold pour in 1Q24 and
commercial production in August 2024 and is ramping up to full
production. The mine will have an 18-year life. Fitch expects Cote
Gold to increase IAMGOLD's 2025-2028 attributable average annual
gold production by roughly 300,000 ounces compared with 2024
attributable production of 667,000 ounces, including 124,000 ounces
from Cote Gold.
Cost Position Improves: Fitch views the Essakane mine's high-cost
position as partially offset by solid mine lives and lower cost
positions at Westwood and Cote Gold. According to CRU International
Group's all-in sustaining cost data, IAMGOLD's average cost
position is expected to improve from the fourth quartile to the
third quartile in 2025. Cote Gold's estimated life of mine average
cash costs of $693/oz and all-in sustaining cost of $854/oz,
according to the 2022 technical report, compare with a
first-quartile cost position, according to CRU's 2025 cost data.
According to CRU, the Essakane mine, located in Burkina Faso, has a
fourth-quartile all-in sustaining cost position. The mine, in which
IAMGOLD has a 90% interest, has a four-year mine life and accounted
for 61% of 2024 attributable production. Westwood, located in
Canada, stabilized production to improve its cost position into the
lower half of the cost curve. The mine has a seven-year mine life
and represented 20% of 2024 attributable production.
Deleveraging Capacity: Fitch expects IAMGOLD to generate positive
FCF beginning in 2H25, and to retain cash in advance of debt
maturities or to reduce them opportunistically. EBITDA leverage was
1.5x at Dec. 31, 2024, and Fitch expects it to be sustained below
3.0x.
Improved Country Risk: Operations in Canada (AA+/Stable) generate
sufficient earnings to cover interest payments, thereby reducing
reliance on Essakane in Burkina Faso.
Peer Analysis
IAMGOLD is similar in terms of annual production to gold producer
Eldorado Gold Corporation (B+/Stable). IAMGOLD has higher-cost
mines, higher country risk and a shorter reserve life at its
currently operating mines. IAMGOLD has three mines, compared with
Eldorado Gold 's four operating mines and one near-term project.
IAMGOLD is larger in terms of EBITDA than copper producers Ero
Copper Corp. (B/Stable) and Taseko Mines Limited (B-/Stable), with
a lower cost position than Taseko and a higher cost position than
Ero Copper.
Key Assumptions
- SOFR at 4.10% in 2025 and 3.95% thereafter;
- Consolidated gold production about 850,000 oz per year on
average;
- Gold prices of $2,400/oz in 2025, $2,100/oz in 2026, $2,000/oz in
2027 and $1,800/oz in 2028;
- Annual capex around $300 million, on average;
- Excess cash flow applied to debt repayment.
Recovery Analysis
The recovery analysis assumes IAMGOLD would be reorganized as a
going concern in bankruptcy rather than liquidated. Fitch assumed a
10% administrative claim.
The going concern EBITDA estimate of $295 million reflects Fitch's
view of a sustainable, post-reorganization EBITDA level upon which
Fitch bases the enterprise valuation. The going concern EBITDA
assumption reflects the industry's move from top of the cycle gold
prices to a sustainably lower weak gold price environment, which
would stress the capital structure.
An enterprise value multiple of 4.0x EBITDA is applied to the going
concern EBITDA to calculate a post-reorganization enterprise value.
The choice of this multiple reflects the high-cost position at
IAMGOLD's mines currently in operation and elevated country risk
associated with Burkina Faso as well as improvements in profile
from Cote Gold once complete. The revolver is assumed to be 80%
drawn given the liquidity requirement of $150 million and the total
net debt maximum ratio of 3.5x which would bite into revolver
availability under its GC EBITDA assumption.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' for the first-lien revolver and an
'RR3 'second lien for the second-lien notes. However, per Fitch's
"Country-Specific Treatment of Recovery Ratings Criteria," Fitch
applies a cap of 'RR3' to reflect its view that roughly 50% of
EBITDA will come from Canada (Group A) and 50% will be generated in
Burkina Faso (Group D). Therefore, Fitch caps the instrument's
Recovery Ratings at 'RR3' resulting in 'BB-' rating for the
first-lien secured revolver. The second-lien term loans recover at
an 'RR3', resulting in a 'BB-' rating. The unsecured notes recover
at 'RR4', resulting in a 'B+' rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 3.3x;
- Negative FCF, material deterioration in cost position or
production profile.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Sustained gold production above 800,000 oz with average all-in
sustaining costs trending toward the lower half of the global cost
curve;
- EBITDA leverage sustained below 2.3.
Liquidity and Debt Structure
As of Dec. 31, 2024, IAMGOLD had $348 million in cash on hand and
$419 million available under its $650 million secured revolving
credit facility maturing in 2028. The RCF is subject to early
maturity dates if the term loans or notes are not repaid or
refinanced prior to the stated maturity dates of those instruments.
Fitch expects FCF to be positive beginning in 2H25.
Issuer Profile
IAMGOLD is a mid-tier gold mining company with three operating gold
mines: the Essakane mine in Burkina Faso, the Cote mine in Canada
and the Westwood mine in Canada.
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
----------- ------ -------- -----
IAMGOLD Corporation LT IDR B+ Upgrade B-
senior unsecured LT B+ Upgrade RR4 B-
senior secured LT BB- Upgrade RR3 B-
Senior Secured
2nd Lien LT BB- Upgrade RR3 B-
IMAGINE SCHOOL: Moody's Downgrades Revenue Bond Rating to B1
------------------------------------------------------------
Moody's Ratings has downgraded Imagine School at Land O'Lakes, FL's
revenue bond rating to B1 from Ba2; the outlook is negative. For
fiscal 2024, the school had about $46 million in debt outstanding,
inclusive of parity debt issued for the Imagine School at Trinity
project.
The downgrade to B1 reflects ongoing risk associated with the
Imagine School at Trinity campus construction and ramp up of
operations, which Imagine Land O'Lakes may be required to support
financially, weakening its credit profile. Additionally, Imagine
Trinity has the potential to violate its debt service covenant for
fiscal 2025 and fiscal 2026.
RATINGS RATIONALE
The B1 rating incorporates Imagine Land O'Lakes full enrollment at
911 students and a waitlist equal to 40% of enrollment. Student
demand is driven by a strong academic profile, resulting in its
designation as a high performing charter school. Ongoing demand
will be supported by the school's location in Pasco County, one of
the fastest growing areas in Florida. The school generated a solid
EBIDA margin in fiscal 2024, contributing to a five-year annual
average of 17%, the result of a supportive state and local funding
environment. Fiscal 2024 debt service coverage on the series 2020
bonds grew to 1.44x in fiscal 2024 from 1.24x in fiscal 2023.
Despite these positive operating results, cash position declined to
a very narrow 55 days cash on hand in fiscal 2024, approaching its
minimum requirement of 45 days cash on hand per its bond covenants.
Imagine Land O'Lakes's December 31, 2024 interim financial
statements also indicate a substantial deficit. The school's
leverage is high with a cash to debt ratio equal to 8% when only
including its $16 million in outstanding bonds. When Imagine
Trinity's $30 million in parity debt is included, the cash to debt
ratio declines to a very weak 3%.
Due to Imagine Trinity's delayed construction and opening, it has
utilized nearly all of its capitalized interest fund. As a result,
management will use funds from a working capital loan to meet the
June 2025 debt service payment. Management expects that it will
meet the debt service covenant in fiscal 2025, however the year to
date fiscal 2025 deficit for Imagine Land O'Lakes increases the
risk that the school will violate its coverage and liquidity
covenants in fiscal 2025. In addition, the delayed opening of
Imagine Trinity has shortened the window for the school to meet its
target to enroll 800 students by August 2025 and putting downward
pressure on the school meeting its covenants 2026.
Governance is a key rating driver for this rating action.
Governance considerations reflect Imagine Pasco County LLC's Board
strategy of adding the Imagine Trinity Campus and include
management's ability to meet its enrollment and financial targets
for Imagine Trinity, as well as its success in growing its
liquidity for both schools.
RATING OUTLOOK
The negative outlook reflects the school's exposure to the
construction and ramp up risks of the Imagine Trinity campus
project. The outlook also reflects Imagine Land O'Lakes potential
deficit and further erosion of liquidity in fiscal 2025 and 2026.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Cash levels that result in liquidity consistently greater than
75 days cash on hand
-- Successful completion of the construction and enrollment ramp
up of its new campus
-- Coverage consistently above 1.50x
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Delays in construction or inability to fully ramp up enrollment
at new school
-- Deficit operations or decline in liquidity
-- Coverage levels below 1.15x
-- Increase in leverage
PROFILE
Imagine Pasco County LLC, affiliated with the nationally recognized
nonprofit Imagine Schools, operates Imagine School at Land O'Lakes
and Imagine School at Trinity. The K-8 Imagine Land O'Lakes School
is at slightly over capacity with 911 students and a waitlist equal
to 41% of enrollment, demonstrating adequate demand. Imagine Pasco
County LLC has replicated the model of Imagine Land O'Lakes for its
Imagine school at Trinity, which is expected to open in August
2025, a year later than originally forecast. The charters for
Imagine Land O'Lakes and Imagine Trinity expire on June 30, 2028,
and June 30, 2029, respectively.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in April 2024.
INFINITE GLOW: Gets Interim OK to Use Cash Collateral Until April 8
-------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
San Jose Division, granted Infinite Glow, LLC interim authorization
to use cash collateral.
The interim order approved the use of cash collateral for the
period from Feb. 27 to April 8 pursuant to the company's projected
budget. Infinite Glow is not allowed to use cash collateral to
ready or repair any of its six vacant units for new rentals.
As protection, JPMorgan Chase Bank, N.A., a secured creditor, was
granted a replacement lien on post-petition cash collateral.
A final hearing is set for April 8. Objections are due by April 3.
JPMorgan Chase Bank is represented by:
Mia S. Blackler, Esq.
Lubin Olson & Niewiadomski, LLP
The Transamerica Pyramid
600 Montgomery Street, 14th Floor
San Francisco, CA 94111
Telephone: (415) 981-0550
Facsimile: (415) 981-4343
mblackler@lubinolson.com
About Infinite Glow LLC
Infinite Glow, LLC has an equitable interest in the property
situated at 2912 14th Ave., Oakland, Calif., which is valued at
$4.7 million.
Infinite Glow filed Chapter 11 petition (Bankr. N.D. Calif. Case
No. 25-50253) on February 27, 2025, listing between $1 million and
$10 million in both assets and liabilities.
Judge Stephen L. Johnson handles the case.
The Debtor is represented by:
Steven Robert Fox, Esq.
Law Offices of Steven R. Fox
Tel: 818-774-3545
Email: emails@foxlaw.com
INSPIREMD INC: Reports $32 Million Net Loss in 2024
---------------------------------------------------
InspireMD, Inc. filed its Annual Report on Form 10-K with the U.S.
Securities and Exchange Commission, reporting a net loss of $32
million for the fiscal year ended December 31, 2024, compared to a
net loss of approximately $19.9 million during the fiscal year
ended December 31, 2023.
As of December 31, 2024, the Company had an accumulated deficit of
$254 million.
Tel-Aviv, Israel-based Kesselman & Kesselman, the Company's auditor
since 2010, issued a 'going concern' qualification in its report
dated March 12, 2025, citing that the Company has suffered
recurring losses from operations and cash outflows from operating
activities that raise substantial doubt about its ability to
continue as a going concern.
According to the Company, it has yet to establish any history of
profitable operations. "We expect to incur additional operating
losses for the foreseeable future. There can be no assurance that
we will be able to achieve sufficient revenues throughout the year
or be profitable in the future."
"Because we have had recurring losses and negative cash flows from
operating activities, substantial doubt exists regarding our
ability to remain as a going concern at the same level at which we
are currently performing. The doubts regarding our potential
ability to continue as a going concern may adversely affect our
ability to obtain new financing on reasonable terms or at all.
A full-text copy of the Company's Form 10-K is available at:
https://tinyurl.com/yx9c3w2j
About InspireMD
Headquartered in Tel Aviv, Israel, InspireMD, Inc. --
http://www.inspiremd.com/-- is a medical device company focusing
on the development and commercialization of its proprietary
MicroNet stent platform technology for the treatment of complex
vascular and coronary disease. A stent is an expandable
"scaffold-like" device, usually constructed of a metallic material,
that is inserted into an artery to expand the inside passage and
improve blood flow. Its MicroNet, a micron mesh sleeve, is wrapped
over a stent to provide embolic protection in stenting procedures.
As of Dec. 31, 2024, the Company had $46.8 million in total assets,
$10.7 million in total liabilities, and $36.1 million in total
stockholders' equity.
INSTANT WEB: CION Marks $50.9 Million Loan at 28% Off
-----------------------------------------------------
CION Investment Corp. has marked its $50,951,000 loan extended to
Instant Web LLC to market at $36,557,000 or 72% of the outstanding
amount, according to CION'S Form 10-K for the fiscal year ended
December 31, 2024, filed with the U.S. Securities and Exchange
Commission.
CION is a participant in a Senior Secured First Lien Debt to
Instant Web LLC. The loan accrues interest at a rate of S+700,
1.00% SOFR Floor per annum. The loan matures on February 25, 2027.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
100 Park Avenue, 25th Floor
New York
About Instant Web LLC
Doing business as IWCO Direct, Instant Web provides a range of
direct-mail marketing services, including printing, assembling, and
mailing.
INSULET CORP: Moody's Hikes CFR to 'Ba3', Outlook Remains Positive
------------------------------------------------------------------
Moody's Ratings upgraded Insulet Corporation's ("Insulet")
Corporate Family Rating to Ba3 from B1 and Probability of Default
Rating to Ba3-PD from B1-PD. Concurrently, Moody's affirmed the Ba2
rating on Insulet's senior secured term loan and assigned a Ba2
rating to Insulet's new $500 million senior secured revolving
credit facility due 2030. Moody's also assigned a B2 rating to the
new $450 million senior unsecured notes due 2033. There is no
change to the existing Ba2 rating on the Insulet's senior secured
revolving credit facility, and Moody's anticipates withdrawing this
rating at the conclusion of the refinancing transactions. There is
no change to the Speculative Grade Liquidity Rating of SGL-1.
Following these actions, the outlook remains positive.
The ratings upgrade follows the announced $450 million senior
unsecured notes offering, the proceeds of which, along with cash on
balance sheet, will be used to retire the $800 million of
convertible notes due 2026 (not rated). Beyond deleveraging from
the refinancing transactions, Insulet's progress at deleveraging
also stems from healthy earnings growth in recent quarters. Moody's
anticipates that deleveraging momentum will continue due to strong
earnings growth supported by the successful commercialization of
Omnipod 5(R), cleared by the FDA last year for use by patients with
Type 2 diabetes. Absent any debt-funded acquisitions or shareholder
distributions, Moody's anticipates Insulet's gross debt to EBITDA,
which was 2.7x at December 31, 2024 pro forma the proposed
transactions, trending toward 2.0x over the next 12-to-18 months.
The Ba2 rating on the company's senior secured credit facilities
reflects the loss absorption provided by the new $450 million
unsecured notes, which provide loss absorption capacity, but less
so than the retired $800 million of convertible notes. The B2
rating on the unsecured notes reflects their junior position in the
capital structure relative to the secured term loan and revolving
credit facility.
RATINGS RATIONALE
Insulet's Ba3 rating is supported by its strong competitive
position in the fast-growing insulin management business due to the
success of the Omnipod wearable delivery system. Omnipod represents
a compelling choice for many patients with diabetes due to the
avoidance of multiple daily injections. The company's latest
product Omnipod 5 represents a technological advancement due to its
integration with continuous glucose monitor (CGM) systems, addition
of automated insulin delivery capabilities, and cloud connectivity.
Moody's believes continued roll out into new countries and an
expanded target market will continue to fuel rapid revenue growth.
The rating also reflects Insulet's moderate financial leverage with
debt/EBITDA of 2.7x at December 31, 2024 pro forma the
transactions. The rating is also supported by Insulet's very good
liquidity which provides significant financial flexibility.
These strengths are tempered by a single product-line focus but
growing product diversity, which exposes Insulet to competitive
risks and more general business execution risks. In addition,
continued success over the long term will be dependent on ongoing
R&D and innovation.
The SGL-1 Speculative Grade Liquidity Rating reflects very good
liquidity due to significant cash and short-term investments, which
Moody's expects to be approximately $600 million at December 31,
2024 pro form the transactions. This is more than sufficient to
cover anticipated cash uses including capital expenditures and
working capital needs. Insulet's liquidity will be supplemented by
an upsized $500 million revolving credit facility that expires in
2030, which has a springing leverage covenant set at 6.5x, if
utilization exceeds 35%.
The positive outlook reflects the potential for a higher rating
over the next 12 to 18 months due to ongoing uptake of the Omnipod
5, high earnings growth and a continuation of recent deleveraging
trends.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include improved scale and
reduction in reliance on a single product category, continued
strong earnings growth while maintaining very good liquidity, and
overall conservative financial policy. Quantitatively, the ratings
could be upgraded if the company establishes a track record of
sustaining debt/EBITDA below 2.5x.
Factors that could lead to a downgrade include erosion in
competitive position due to significant innovation advances by
competitors, unforeseen manufacturing or supply chain disruptions,
or weakened liquidity. Quantitatively, the ratings could be
downgraded if debt/EBITDA is sustained above 3.5x.
Headquartered in Acton, Massachusetts, Insulet Corporation is a
leading provider of wearable insulin management systems. Insulet
generated revenue of roughly $2.1 billion in 2024.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2023.
JAMES MARITIME: Files Prospectus for Resale of 3.1MM Shares
-----------------------------------------------------------
James Maritime Holdings, Inc., filed a Form S-1/A with the U.S.
Securities and Exchange Commission relating to the proposed resale
of up to 3,185,000 shares of the Company's common stock, $0.001 par
value per share, or common stock, which amount consists of (i)
2,135,000 shares of common stock outstanding as of March 7, 2025,
and (ii) an aggregate of 1,050,000 shares of common stock issuable
upon exercise of common stock purchase warrants, or the Purchase
Warrants, issued in connection with private placements of the
Company's common stock to certain of its selling security holders.
The Company is represented by:
JPF Securities Law, LLC
1920 McKinny Ave., 7th Floor
Dallas, TX 75201
Tel: (646) 807-9094
A full-text copy of the Form S-1/A is available at
https://tinyurl.com/4675b8h4
About James Maritime Holdings
Sandy, Utah-based James Maritime Holdings, Inc. operates mainly
through its subsidiaries, Gladiator and USS. Gladiator specializes
in the distribution of personal protective products, largely
through mail-in orders and e-commerce channels. On the other hand,
USS offers a combination of professional security personnel
services, enhanced by smartphone-based security applications,
providing a unique blend of traditional and modern security
solutions.
JJJ CONTRACTING: Court Extends Cash Collateral Access to May 1
--------------------------------------------------------------
JJJ Contracting, LLC received another extension from the U.S.
Bankruptcy Court for the Middle District of Tennessee to use cash
collateral.
The interim order authorized the company to use cash collateral to
pay its operating expenses from March 19 until the effective date
of the company's Chapter 11 plan, which is May 1.
As protection, First Horizon Bank and other secured creditors were
granted replacement liens on JJJ's property with the same priority
as their pre-bankruptcy liens.
In addition, First Horizon Bank will receive a monthly payment of
$2,500 from JJJ and another $2,500 from JJ Restoration, LLC, a
non-debtor co-obligor.
In the event the effective date of the plan is extended, a new
hearing will be scheduled to extend JJJ's authority to use cash
collateral.
About JJJ Contracting
JJJ Contracting, LLC is a construction company that offers planning
and design, construction management, building construction,
renovation and repair, landscape and outdoor living, and demolition
services.
JJJ sought relief under Subchapter V of Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 24-03462) on September
9, 2024, with total assets of $451,690 and total liabilities of
$3,248,479. Jeff Juengling, company owner, signed the petition.
Judge Charles M. Walker oversees the case.
Henry E. Hildebrand, Esq., and R. Alex Payne, Esq., at Dunham
Hildebrand Payne Waldron, PLLC are the Debtor's bankruptcy
attorneys.
Secured lender First Horizon Bank is represented by:
David M. Anthony, Esq.
Exo Legal PLLC
P.O. Box 121616
Nashville, TN 37212
Telephone: (615) 869-0634
Facsimile: (615) 656-0133
david@exolegal.com
JP INTERMEDIATE: CION Marks $53.7 Million Loan at 21% Off
---------------------------------------------------------
CION Investment Corp. has marked its $53,716,000 loan extended to
JP Intermediate B, LLC to market at $42,704,000 or 79% of the
outstanding amount, according to CION'S Form 10-K for the fiscal
year ended December 31, 2024, filed with the U.S. Securities and
Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to JP
Intermediate B, LLC. The loan accrues interest at a rate of S+650,
1.00% SOFR Floor per annum. The loan matures on November 20, 2027.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
100 Park Avenue, 25th Floor
New York
About JP Intermediate B, LLC
JP Intermediate B, LLC retails vitamins and nutritional
supplements.
KING STATE: Court OKs Tampa Property Sale to Foxtail Coffee
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, has granted King State Coffee LLC to sell its real
property in a private sale, free and clear of liens, claims,
interests, and encumbrances.
The Court has authorized the Debtor to sell its Property located at
520 E Floribraska Ave, Tampa FL 33603 to Orlando Group Investments,
LLC d/b/a Foxtail Coffee in the purchase price of $950,000.
The Court ordered that the sale shall be free of all liens, claims,
interests and encumbrances and other interests, which shall attach
to the sale proceeds to the same extent, validity, and priority.
The Court further held that Foxtail is entitled to the protections
afforded to good faith purchases.
About King State Coffee LLC
King State Coffee, LLC, a company in Tampa, Fla., filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 24-00576) on February 2, 2024, with $500,000 to $1
million in assets and $1 million to $10 million in liabilities.
Timothy F. McTague, manager, signed the petition.
Judge Catherine Peek Mcewen oversees the case.
David S. Jennis, Esq., at David Jennis, PA, doing business as
Jennis Morse, represents the Debtor as legal counsel.
KLX ENERGY: Completes New $232 Million Senior Secured Notes
-----------------------------------------------------------
KLX Energy Services Holdings, Inc. announced that it has closed on
refinancing its existing 2025 senior secured notes by issuing
approximately $232 million of senior secured notes due March 2030
together with warrants to purchase common stock of the Company. The
Company also announced it has closed on its new ABL credit facility
due March 2028 with a $125 million commitment, a first-in-last-out
facility with a $10 million commitment, and a committed incremental
loan option with a $25 million commitment.
The New Notes are governed by an Indenture, dated as of March 12,
2025, entered into by and among the Company, as the issuer, the
subsidiary guarantors party thereto and U.S. Bank Trust Company,
National Association, as trustee and collateral agent. The New
Notes will mature in March 2030. The Company will pay interest on
the New Notes, at its election, in cash or additional Notes
paid-in-kind on one-, three- or six-month interest periods. The New
Notes bear a floating rate of interest of Term SOFR plus the
Applicable Margin based on the Secured Net Leverage Ratio of the
Company, payable on the last day of the applicable interest period,
which shall include a 100 basis point premium for any period where
interest is paid-in-kind.
The New Notes are senior secured obligations of the Company secured
by a first priority security interest on substantially all of the
Company's assets (other than collateral securing the New ABL
Facility) on a first priority basis) and a second priority security
interest on the collateral which secures the New ABL Facility on a
first priority basis, subject in each case to certain excluded
assets.
The New Notes are initially fully and unconditionally guaranteed by
each of the Company's current subsidiaries. The New Notes will also
be guaranteed by each of the Company's future subsidiaries that
guarantee the Company's indebtedness or indebtedness of guarantors,
including under the New ABL Facility and such subsidiaries that
become guarantors in the future will also pledge their collateral
in support of such guarantees. The guarantees are senior secured
obligations of the guarantors secured by a first priority security
interest on substantially all of the guarantors' assets (other than
collateral securing the New ABL Facility on a first priority basis)
and a second priority security interest on the guarantors' assets
which secure the New ABL Facility on a first priority basis,
subject in each case to certain excluded assets.
The Company will be required to redeem the New Notes in an amount
equal to 2.00% per annum of all New Notes outstanding as of the
prior applicable Interest Payment Date on the last business day of
each of March, June, September and December, commencing on March
31, 2025. Additionally, upon certain changes of control,
consummation of certain asset sales and other events, the Company
will be required to repurchase the New Notes at the applicable
redemption prices.
The Indenture contains certain affirmative and negative covenants,
including covenants requiring the Company to demonstrate compliance
with total net leverage ratio and net capital expenditures and
restricting the Company's ability to incur certain liens and
indebtedness, enter into certain transactions and merge or
consolidate with any other entity or convey, transfer or lease all
or substantially all of the Company's properties and assets to
another person, which, in each case, is subject to certain
limitations and exceptions. The Indenture permits the Company to
incur additional pari passu indebtedness of up to $150,000,000
within 12 months of the Closing (including for the purpose of
consummating permitted acquisitions and investments) subject to the
terms and conditions contained in the Indenture and contains
certain other covenants, events of default and other customary
provisions.
Warrant Agreements
In connection with the Closing and in accordance with the
Securities Purchase Agreement, the Company also entered into
warrant agreements with each of the Investors, pursuant to which
the Company issued the Warrants.
The Warrant Agreements require the Company to file a registration
statement with the Securities and Exchange Commission with respect
to the shares of Common Stock underlying the Warrants. The Warrants
are exercisable immediately, and in lieu of exercising such
Warrant, the holders thereof may convert their Warrants, in whole
or in part, into the number of Warrant Shares pursuant to the terms
of the Warrants prior to the expiration date.
On March 12, 2025, the Company deposited with Wilmington Trust,
National Association, as trustee under the indenture governing the
Existing Notes, $97,103,881.72 in trust and irrevocably instructed
the Existing Notes Trustee to apply such funds to effect the
Redemption. Upon deposit of such redemption amount, the Existing
Notes Indenture was satisfied and discharged in accordance with its
terms. As a result of the satisfaction and discharge of the
Existing Notes Indenture, the Company has been released from its
obligations under the Existing Notes Indenture except with respect
to those provisions of the Existing Notes Indenture that, by their
terms, survive the satisfaction and discharge of the Existing Notes
Indenture.
On August 10, 2018, the Company, each subsidiary guarantor
signatory thereto, JPMorgan Chase Bank, N.A., as administrative
agent, collateral agent, and as an issuing lender, and the lenders
party thereto entered into a revolving credit facility. Borrowings
under the JPM ABL Facility accrued interest at Term SOFR plus an
applicable margin that ranged from 2.50% to 3.00%. The JPM ABL
Facility was secured by, among other things, a first priority lien
on the Company's accounts receivable and inventory.
In connection with entering into the New ABL Facility, the Company
used the net proceeds from borrowings under the New ABL Facility to
voluntarily prepay all outstanding loans and other amounts under
the JPM ABL Facility in the aggregate amount of approximately $50.2
million and in connection therewith terminated the JPM ABL
Facility. In connection with the prepayment and termination of the
JPM ABL Facility, the Company provided Existing Administrative
Agent cash collateral in support of certain existing letters of
credit and existing purchasing card program in an aggregate amount
of approximately $8.1 million. Upon the full payment and
satisfaction of the JPM ABL Facility, the guarantees and security
interests securing obligations under the JPM ABL Facility were
extinguished and terminated.
About KLX Energy
KLX Energy Services Holdings, Inc. -- https://www.klxenergy.com/ --
is a provider of diversified oilfield services to leading onshore
oil and natural gas exploration and production companies operating
in both conventional and unconventional plays in all of the active
major basins throughout the United States. The Company delivers
mission-critical oilfield services focused on drilling, completion,
production, and intervention activities for technically demanding
wells from over 60 service and support facilities located
throughout the United States.
As of September 30, 2024, KLX had $486.8 million in total assets,
$484.3 million in total liabilities, and $2.5 million in total
stockholders' equity.
* * *
As reported by the TCR in November 2024, S&P Global Ratings lowered
its Company credit rating on Houston-based oil and gas oilfield
services company KLX Energy Services Holdings Inc. to 'CCC' from
'CCC+'. S&P also lowered the issue-level rating on KLX's senior
secured notes due November 2025 to 'CCC' from 'CCC+'. The recovery
rating remains '4', reflecting its expectations of average
(30%-50%; rounded estimate: 40%) recovery of principal in the event
of a payment default.
Moreover, Moody's Ratings changed KLX Energy Services Holdings,
Inc.'s (KLXE) outlook to negative from positive. The Caa1 Corporate
Family Rating, Caa1-PD Probability of Default Rating and Caa1
senior secured notes ratings were affirmed. The SGL-2 Speculative
Grade Liquidity Rating (SGL) was changed to SGL-4.
KLX ENERGY: Reports Q4, Full-Year 2024 Results
----------------------------------------------
KLX Energy Services Holdings, Inc. reported financial results for
the fourth quarter ended December 31, 2024.
Full Year 2024 Financial Highlights
* Revenue of $709 million
* Net loss of $(53) million, net loss margin of (7)% and
diluted loss per share of $(3.27)
* Adjusted EBITDA of $90 million
* Adjusted EBITDA margin of 13%
* Subsequent to year end, KLX closed on refinancing its
existing 2025 senior secured notes and closed on a new ABL credit
facility
Fourth Quarter 2024 Financial Highlights
* Revenue of $166 million
* Net loss of $(15) million, net loss margin of (9)% and
diluted loss per share of $(0.90)
* Adjusted EBITDA of $23 million and Adjusted EBITDA margin of
14%
Chris Baker, KLX President and Chief Executive Officer, stated, "We
finished the year strong despite typical seasonal headwinds. 2024
fourth quarter revenue was $166 million, the midpoint of our
guidance, and Adjusted EBITDA margin came in above our prior
guidance. Our companywide focus on cost controls enabled us to
increase our 2024 fourth quarter Adjusted EBITDA marginby 187 basis
points over last year's fourth quarter, despite revenue and rig
count being down 15% and 5%, respectively, over the same period.
"We have seen solid consistency in our market-leading tech
services, rentals and coiled tubing businesses, which have led to
improved and sustainable profitability," added Baker. "We are
closely monitoring potential opportunities for increased
gas-directed activity, driven by LNG export and datacenter/AI
demand. US LNG export capacity is expected to approximately double
by 2030 and, we believe, this increase will drive incremental
natural gas-directed activity within the US onshore market that
will ultimately support and lift OFS pricing and utilization across
all basins.
"Additionally, KLX is extremely pleased to have successfully
completed our refinancing efforts, which will provide increased
financial flexibility as we move forward. Looking forward to full
year 2025, we expect annual revenue to be flat to up slightly and
anticipate our Adjusted EBITDA margin to range between 13% to 15%.
As we navigate the evolving energy landscape, our strategic
positioning, operational excellence, and financial resilience
position us to capitalize on emerging opportunities and deliver
sustainable value to our shareholders in the years ahead,"
concluded Baker.
A full-text copy of the Company's report filed on Form 8-K with the
Securities and Exchange Commission is available at
https://tinyurl.com/4k9sp8m7
About KLX Energy
KLX Energy Services Holdings, Inc. -- https://www.klxenergy.com/ --
is a provider of diversified oilfield services to leading onshore
oil and natural gas exploration and production companies operating
in both conventional and unconventional plays in all of the active
major basins throughout the United States. The Company delivers
mission-critical oilfield services focused on drilling, completion,
production, and intervention activities for technically demanding
wells from over 60 service and support facilities located
throughout the United States.
As of September 30, 2024, KLX had $486.8 million in total assets,
$484.3 million in total liabilities, and $2.5 million in total
stockholders' equity.
* * *
As reported by the TCR in November 2024, S&P Global Ratings lowered
its Company credit rating on Houston-based oil and gas oilfield
services company KLX Energy Services Holdings Inc. to 'CCC' from
'CCC+'. S&P also lowered the issue-level rating on KLX's senior
secured notes due November 2025 to 'CCC' from 'CCC+'. The recovery
rating remains '4', reflecting its expectations of average
(30%-50%; rounded estimate: 40%) recovery of principal in the event
of a payment default.
Moreover, Moody's Ratings changed KLX Energy Services Holdings,
Inc.'s (KLXE) outlook to negative from positive. The Caa1 Corporate
Family Rating, Caa1-PD Probability of Default Rating and Caa1
senior secured notes ratings were affirmed. The SGL-2 Speculative
Grade Liquidity Rating (SGL) was changed to SGL-4.
LEARFIELD COMMUNICATIONS: Moody's Ups CFR to 'B3', Outlook Positive
-------------------------------------------------------------------
Moody's Ratings upgraded Learfield Communications, LLC's
(Learfield) Corporate Family Rating to B3 from Caa1, Probability of
Default Rating to B3-PD from Caa1-PD and the backed senior secured
first lien bank credit facilities ratings to B3 from Caa1. The
outlook remains positive.
The ratings upgrade reflects Learfield's strengthening business
profile, driven by higher sponsorship revenue, renegotiated
multimedia rights agreements with better deal economics, and strong
demand for licensing. Moody's expects that the company will remain
prudent in renegotiating multimedia rights (MMR) contracts that are
up for renewal. Moody's expectation incorporates low single-digit
revenue growth and improving EBITDA margins, driving debt to EBITDA
closer to mid-3x and positive free cash flow generation over the
next 12-18 months. EBITDA margins are expected to expand driven by
top line growth and disciplined cost management. The improving
credit metrics better position the company to operate in the highly
competitive college multimedia rights industry. Governance
considerations were a key driver of the rating action. Following
the restructuring of the capital structure back in 2023, the
company's conservative cost management, evidenced by improving
profitability, has contributed to deleveraging.
RATINGS RATIONALE
Learfield's B3 CFR reflects stiff competition within the college
multimedia rights industry, the potential for higher multimedia
rights fees, moderate financial leverage with the potential for
further de-leveraging, and exposure to cyclical advertising demand.
The collegiate sports landscape continues to evolve, which could
lead colleges to demand higher guaranteed multimedia rights fees
due to the increasing value of multimedia rights and the rising
costs associated with college athletics. There is also the
potential for increased competition in collegiate sports rights
that could negatively impact the ability to renew contracts and
preserve EBITDA margins over time. Moody's adjusted debt to EBITDA
declined to 3.6x in the LTM period ending December 2024 (Q2 FY
2025) from 4.9x in the LTM June 2024 (FY 2024) driven by effective
cost management and profit expansion. The adjusted EBITDA margin
has expanded to low teens percentage in Q2 FY 2025 from high-single
digits in FY 2024. The company has taken measures to improve its
profitability by renegotiating several multimedia rights contracts
with more favorable terms, foregoing deals that were not
profitable, optimizing the pricing of its inventory and reducing
costs. Recent changes in the regulatory environment, including the
approval of selling sponsor advertisements on regular football
season games and name, image, likeness (NIL) provide additional
revenue sources. The company is also operating under a more
sustainable capital structure following the comprehensive debt
restructuring in September 2023.
Learfield benefits from its significant size in the college
multimedia rights industry following the merger with IMG College in
2018. The strong fan base for college sports and the
underpenetrated nature of college media rights compared to
professional sports are positive and will support higher
sponsorship revenue over time. Learfield also operates with long
contract periods with its collegiate multimedia rights partners and
has a substantial amount of pre-sold ad inventory which improves
revenue visibility. While Learfield's multimedia rights business
accounts for a significant portion of operations, the company is
also focused on improving its licensing and collegiate ticketing
business.
Moody's expects Learfield to maintain good liquidity over the next
12-18 months supported by cash holdings of $230 million as of Q2 FY
2025, Moody's expectations for free cash flow of approximately $70
million in the next 12 months, and access to an undrawn $125
million revolving credit facility. Operating cash flow is seasonal
quarter over quarter due to the rights fee payments concentrated in
Q2 (ending in December) and Q4 (ending in June). The company's cash
uses include annual interest expense of approximately $55 million,
the mandatory 1% amortization per annum on the first lien term loan
equivalent to $5.6 million, capital expenditures of $25-$30 million
and working capital needs. As a result of the term loan repricing
in October 2024 and the change in applicable rate due to improved
credit metrics, interest expense is expected to decrease by
approximately $6 million per annum.
The senior secured first lien revolving credit facility and senior
secured first lien term loans are each rated B3, the same as the B3
CFR due to all first lien debt in the capital structure. Moody's
assumes a 50% mean family recovery rate in the event of default
given lack of financial maintenance covenants in the secured credit
facility.
Learfield's ESG Credit Impact Score is CIS-4 mainly driven by the
company's exposure to governance risks. Although the company has a
history of operating with elevated leverage and completed a debt
restructuring back in 2023, the company has shown a track record of
improving operating performance and liquidity. Learfield is owned
largely by former debt holders which are likely to pursue an exit
of their ownership position over time.
The positive outlook reflects Moody's expectations that Learfield
will continue to achieve organic revenue and profit growth,
resulting in sustained leverage in the mid-3x and expanding free
cash flow over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Learfield demonstrates a track
record of continued positive organic revenue growth and expanding
profitability along with an expectation of Moody's adjusted
leverage maintained at mid-3x on a sustained basis and free cash
flow to debt above 10%. A good liquidity position with meaningful
revolver availability and prudent financial policies would also be
required.
The ratings could be downgraded if Moody's adjusted leverage
remains above 5x due to lost multimedia rights contracts or overall
weak operating performance. A deteriorating liquidity position
could also lead to negative ratings pressure.
Learfield Communications, LLC (Learfield) (dba Learfield IMG
College) is an operator in the collegiate sports multimedia rights
and marketing industry with partnerships with approximately 200
premier collegiate athletic organizations. In September 2023, a
debt restructuring was completed with former debt holders. The
company is headquartered in Dallas, Texas with satellite sales
offices located on or near college campuses across the country. The
company reported consolidated revenue of $1.28 billion as of LTM Q2
FY 2025.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
LEE FRANCHISE: Court Extends Cash Collateral Access to April 21
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina issued a second interim order authorizing Lee Franchise
Holdings, Inc. to use cash collateral until April 21.
The second interim order authorized the company to use cash
collateral to pay the expenses set forth in its budget, with a 10%
variance allowed.
Lee Franchise projects total operational expenses of $59,641.35
from March 21 to April 21.
Secured creditors including Dogwood State Bank, Cashable, LLC,
Millstone Funding, Inc., Alpine Advance 5, LLC, and Pipe Advance,
LLC were granted post-petition liens and security interests in
their collateral, with the same priority as their respective
pre-bankruptcy liens and security interests.
Lee Franchise was ordered to pay $2,500 to Dogwood as partial
protection for using the cash collateral.
The company's authority to use cash collateral terminates upon the
occurrence of so-called events of default, including failure to
comply with the terms of the order; use of cash collateral other
than as agreed; dismissal or conversion of its Chapter 11 case to a
proceeding under Chapter 7; and failure to pay post-petition tax
liabilities.
The next hearing is scheduled for April 17.
About Lee Franchise Holdings
Lee Franchise Holdings, Inc. operates a commercial window cleaning
and pressure washing company in Craven County, N.C., with its
principal office at 257 Belltown Road, Havelock, N.C.
Lee Franchise Holdings filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. E.D. N.C. Case No.
25-00617) on February 21, 2025, listing up to $500,000 in assets
and up to $1 million in liabilities. Bradley M. Lee, president of
Lee Franchise Holdings, signed the petition.
Judge Pamela W. McAfee oversees the case.
David J. Haidt, Esq., at Ayers & Haidt, P.A. is the Debtor's legal
counsel.
Secured creditor Dogwood State Bank is represented by:
William Walt Pettit
6230 Fairview Rd, Suite 315
Charlotte, NC 28210
(704) 362-9255
walt.pettit@hutchenslawfirm.com
LESLIE'S POOLMART: Moody's Lowers CFR to Caa1, Outlook Stable
-------------------------------------------------------------
Moody's Ratings downgraded Leslie's Poolmart, Inc.'s ("Leslie's")
corporate family rating to Caa1 from B2 and probability of default
rating to B3-PD from B2-PD. At the same time, Leslie's senior
secured term loan was also downgraded to Caa1 from B2 rating. The
speculative grade liquidity rating ("SGL") remains unchanged at
SGL-3. The outlook was changed to stable from negative.
The CFR and term loan downgrades to Caa1 reflect Moody's
expectations that Leslie's operating performance will remain below
historical levels as the pool industry contends with a very
difficult consumer environment, which weighs on Moody's estimated
recoveries. Although demand trends have shown early signs of
stabilization as Leslie's continues to work to improve its
execution, Moody's expects EBIT/Interest to remain around 1.0x and
funded debt/EBITDA to remain at unsustainable levels, at around 7x,
as Leslie's works adopts initiatives to improve its customer
service and utilization of its assets.
The downgrade of the PDR to B3-PD reflects the company's longer
dated maturity profile with the asset based revolving credit
facilty ("ABL") due to expire in April 2029 (but with a springing
maturity of December 2027 to the extent its term loan due March
2028 remains outstanding). The SGL-3 also reflects Moody's
expectations for adequate liquidity and for the company to be free
cash flow neutral in fiscal 2025 supported by continued improvement
in working capital after significant inventory reductions in its
September 2024 fiscal year end. The company has a $250 million ABL
and cash, which projected to be in excess of $80 million at the end
of September 2025. The company prepaid $25 million in term loan and
its ABL usage was $40 million at the end of the fiscal first
quarter ended December 2024 relative to $38 million for the same
period last year.
RATINGS RATIONALE
Leslie's Caal CFR reflects its high funded leverage as improvements
in operational execution are pursued and as annual pool
installations and discretionary spending remains weak. Funded
debt/EBITDA was 9.2x LTM December 31, 2024. Consumers continue to
curtail purchases with discretionary spending at Leslie's down 3%
in the first fiscal quarter, albeit a relative improvement from the
11% decline last year despite positive growth in its PRO business
and chemicals sales. Leslie's has made significant improvement
reducing its inventory position as inventories declined 25% in
fiscal 2024. The company maintains solid positioning in the pool
and spa maintenance products space which serves residential,
professional and commercial consumers. Funded debt/EBITDA is likely
to remain around 7x at the end of September 2025 as the company
works to stabilize sales and improve efficiencies. Nonetheless,
EBIT/interest is likely to remain around 1.0x given its lower
profitability and the variable interest debt structure. Leslie's
limited absolute scale, narrow product focus and geographic
concentration are also added risks. Nonetheless despite tepid
growth, the need to maintain a pool once built, and any future
acceleration in housing activity should support a return to
top-line growth in coming years.
The stable outlook reflects the expectation that Leslie's revenue
and profitability will stabilize and return to growth which will
support a reduction in leverage and improved cash flow generation
while maintaining a conservative financial policy focused on debt
reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if earnings performance does not
improve or liquidity weakens, including if the company has negative
free cash flow, or estimated recoveries decline. Quantitatively,
the ratings could be downgraded EBIT/interest expense is sustained
below 1.0x.
The ratings could be upgraded if revenue and earnings consistently
improve, if liquidity is at least good, including positive free
cash flow, and financial policies remain conservative.
Quantitatively, the ratings could be upgraded if funded debt/EBITDA
is sustained below 6.0x and EBIT/interest expense is sustained
above 1.5x.
Headquartered in Phoenix, AZ, Leslie's Poolmart, Inc. is a public
specialty pool supplies retailer that operated over 1,000 branded
stores. Sales for the last twelve months ended December 28, 2024
are approximately $1.3 billion.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
LEVEL 3 FINANCING: Fitch Rates New 1st Lien Secured Term Loan 'B+'
------------------------------------------------------------------
Fitch Ratings has assigned Level 3 Financing, Inc.'s new first lien
secured term loan a rating of 'B+' with a Recovery Rating of 'RR1'.
Fitch has also affirmed the Long-Term Issuer Default Ratings (IDRs)
of Lumen Technologies, Inc. and several of its subsidiaries at
'CCC+'. Fitch has affirmed most issue-level ratings but has
downgraded certain issue-level ratings at Lumen, Level 3 and Qwest
Capital due to a more conservative going concern EBITDA assumed in
its recovery analysis, following a weaker 2025-2027 outlook.
Lumen has taken proactive steps in the past year that benefit its
credit profile, including restructuring and reducing debt by nearly
$2 billion via debt exchanges and cash repurchases. It also
announced $8.5 billion of new contracts with customers, including
hyperscalers, that will largely be paid in cash up front in the
next few years. However, Lumen's core business remains unstable,
with revenue and profits continuing to decline at least through
2025.
Fitch has withdrawn the IDRs of Qwest Communications International
Inc. and Qwest Services Corp., as the entities are not expected to
be borrowers in the future and the ratings are no longer considered
to be relevant to the agency's coverage.
Key Rating Drivers
Fundamentals Remain Pressured: Fitch expects Lumen to face organic
EBITDA pressure at least into 2026, with the company guiding EBITDA
to decline 14%-19% in 2025. Management is taking certain cost
saving actions that they project will lead to up to $1 billion of
annualized run-rate savings by YE27, on top of $300 million
announced in 2023.
However, there is meaningful execution risk to achieving this goal.
These savings could improve the company's operating profile but may
be insufficient if revenue pressure continues. Organic revenue
declined by mid- to high-single digit percentage in 2024 while
EBITDA declined in the double digits, per Fitch's calculations.
PCF Deals Help Liquidity: Recent private connectivity fabric (PCF)
contract wins of $8.5 billion significantly bolstered Lumen's
near-term liquidity and indicate the asset value inherent in parts
of its network. The contracts include the provision of dark fiber
and other services to Microsoft Corporation and other hyperscaler,
social media and technology companies. The contracts are long-term,
some for up to 20 years.
Fitch expects most cash from the deals to be realized through 2027
but with a corresponding rise in capex. There is unlikely to be an
immediate revenue or EBITDA boost (EBITDA will be pressured in 2025
as costs ramp ahead of revenue), but FCF will rise from the upfront
cash payments. Fitch projects FCF will be positive in 2025 but that
FCF losses resume in 2026-2027 absent a major improvement in
Lumen's core business or meaningful follow-on PCF-type deals.
Rising Leverage Expectations: Fitch estimates EBITDA leverage will
be in the low-5.0x range in 2025-2026 as Lumen continues to
experience fundamental pressures on its business. This level of
leverage, combined with organic business declines, is manageable
for the current IDR. Interest coverage also remains relatively
challenged and is projected in the high-2.0x range in the next few
years. Management has been actively taking steps to reduce debt and
stabilize EBITDA, which could influence the ratings over time.
Eased Refinancing Pressures: The 2024 transaction support agreement
(TSA) and maturity extensions temporarily eased refinancing risk,
with less than $500 million maturing through YE 2027 as of YE24.
Prior to the TSA transaction, Lumen had $9.5 billion of debt
maturing in 2027 alone. However, it still has a large maturity wall
of more than $7.0 billion in 2029 and more than $6.0 billion in
2030. The pending TL refinancing at Level 3 will help further
stagger maturities. Its available refinancing options could
diminish should its operating profile fail to strengthen in the
next few years.
Divestitures Shrinking Business: Lumen continues to enact
multi-year restructuring efforts. These include major divestitures,
with further sales likely. The company views its mass market
(residential) operations, which comprised roughly 21% of 2024
revenue, as non-core. Divestitures to date have not significantly
improved leverage but have reduced the company's size. Fitch
estimates revenue and EBITDA in 2025 will be nearly $12 billion and
$3.3 billion, respectively, versus $20.7 billion and $8.6 billion
in 2020.
Telecoms Faces Challenges: Lumen faces similar industry-wide
challenges as other wireline operators, as customers migrate to
newer products and services from legacy offerings. The company
seeks to more aggressively address these challenges through
increased investment in its enterprise business and fiber assets.
Execution risk exists in regard to this strategy, but Fitch
believes the investments could eventually support revenue growth
over time as legacy offerings decline in the mix. This is unlikely
in the near term.
Parent-Subsidiary Relationship: Fitch equalizes the ratings of
Lumen and Level 3 Parent, LLC (the guarantor of Level 3 Financing's
debt) as well as Qwest Corporation and Qwest Capital Funding. This
is based on a stronger subsidiary/weaker parent approach amid open
legal ringfencing and open access and control.
Peer Analysis
Lumen has a solid competitive position based on the scale and size
of its wireline operations in the enterprise/business services
market. Its Business segment, which comprised nearly 80% of its
2024 revenue, is smaller than both AT&T Inc. (BBB+/Stable) and
Verizon Communications Inc. (A-/Stable). All three companies have
extensive U.S. footprints. AT&T and Verizon maintain lower
financial leverage, generate materially higher EBITDA and FCF, and
have wireless offerings providing more service diversification
compared with Lumen.
Lumen has not displayed an ability to stabilize its revenue nor
EBITDA and does not yet generate sustainable FCF, unlike its larger
peers. Lumen has a larger enterprise business that differentiates
it from other wireline operators, such as Windstream Services, LLC
(B/Watch Evolving) and Frontier Communications Parent, Inc.
(B+/Watch Positive).
It also has lower exposure to the residential market versus its
telco and cable industry peers, with only 2.5 million broadband
subscribers as of YE 2024. Lumen and other wireline operators are
investing aggressively in fiber in response to declines in their
legacy, copper-based network offerings (e.g., voice, DSL).
Key Assumptions
- Revenue declines in the high-single digit range in 2025,
improving to declines in the low- to mid-single digit range through
2028.
- EBITDA margins to decline in 2025 due to ramp costs associated
with PCF deals and continued high revenue declines, followed by
improvement in the next few years to the low-30% range, helped by
cost saving initiatives and benefits from PCF deals.
- Capex increases materially in 2025-2026 to facilitate the new PCF
deals; capex is projected to remain elevated near $3 billion or
above annually for most of the ratings horizon (higher in 2025 as
PCF deals ramp up).
- Positive FCF in 2025, helped by upfront cash receipts from PCF
deals, then FCF reverting to a loss in 2026-2027.
- Fitch does not assume any incremental M&A nor divestitures,
although the company continues to seek ways to shrink its asset
base, including within its mass markets business.
Recovery Analysis
Fitch undertakes a tailored analysis of recovery upon default for
each issuance for entities rated 'B+' and below, where default is
closer and recovery prospects are more meaningful to investors. The
resulting debt instrument rating includes a Recovery Rating (on a
scale from 'RR1' to 'RR6') and is notched from the IDR accordingly.
This analysis encompasses three steps: (i) estimating the
distressed enterprise value (EV); (ii) estimating creditor claims;
and (iii) distribution of value.
Fitch assumes Lumen would emerge from a default scenario under the
going concern approach versus liquidation. Fitch has run three
separate recoveries for the three primary borrower entities: Level
3 Financing, Qwest Corporation and Lumen Technologies.
In estimating a distressed enterprise value for the three issuers
in Lumen's capital structure, Fitch assumes that continued
sector-wide challenges cause pricing pressure in the company's
enterprise business and there is a slower than anticipated uptake
in growth products. This causes revenue and earnings to decline,
prompting a restructuring.
Key assumptions used in each recovery analysis are as follows:
Level 3 Financing, Inc.
- Going Concern (GC) EBITDA: Fitch assumes a GC EBITDA of $1.2
billion, which is below Fitch's estimated 2025 EBITDA. This assumes
continued revenue pressures and EBITDA margins trend lower toward
the low-20% range versus low- to mid-20% range in 2022-2024.
Reduced EBITDA of this magnitude in a bankruptcy scenario could
imply intense competition and/or pricing pressures.
- EV Multiple: Fitch assumes a 5.5x multiple, which is in-line with
Fitch's recovery assumption for Fitch-rated peer Frontier
Communications. This multiple is further validated based upon
sector trading multiples (current and historic), industry M&A, and
precedent bankruptcy recoveries in the TMT sectors historically.
Qwest Corporation
- GC EBITDA: Fitch assumes a GC EBITDA of roughly $1.73 billion,
which is below Fitch's estimated 2025 EBITDA. This assumes
continued revenue pressures and EBITDA margins trend lower toward
the mid-30% range versus an estimated low- to mid-40% currently
including corporate costs. Reduced EBITDA of this magnitude in a
bankruptcy scenario could imply intense competition and/or pricing
pressures.
- EV Multiple: Fitch assumes a 5.0x multiple, which is lower than
Level 3 (more fiber exposure) and Fitch-rated peer Frontier
Communications (also more fiber) and reflects secular pressures in
the local part of its business. This multiple is further validated
based upon sector trading multiples (current and historic),
industry M&A, and precedent bankruptcy recoveries in the TMT
sectors historically.
Lumen Technologies Inc.
Given a guarantee in place to Lumen Technologies Inc. for its
super-priority debt, Fitch assumed Lumen's super-priority debt put
in place with the 2024 TSA agreement would take priority in a
bankruptcy scenario. Once the super-priority debt is repaid, Fitch
then assumed Qwest Corp's senior unsecured notes would take next
priority, with residual value flowing back up to Lumen.
Fitch calculates all of Lumen's super-priority debt and Qwest
Corp's senior unsecured notes would recover at a RR1 recovery.
Qwest Capital Funding unsecured notes, which Fitch believes are
structurally senior to Lumen's non-superpriority debt, would
realize a modest recovery while Lumen's first lien debt remaining
from pre-TSA and unsecured notes would not recover under Fitch's
latest assumptions.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A weakening of Lumen's operating results, including deteriorating
margins and consistent mid-single digit or greater revenue
erosion.
- Increased liquidity pressure or difficulties refinancing parts of
the capital structure.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Operating fundamentals improve, including sustained revenue and
EBITDA growth or positive FCF.
- Capital structure changes that are positive for the overall
credit profile.
Liquidity and Debt Structure
Lumen had cash and cash equivalents of $1.9 billion at YE 2024,
benefiting from recent asset sales, tax refunds and upfront cash
for long-term hyperscaler contracts. It also had access to roughly
$737 million of capacity on its superpriority senior secured
revolvers. Fitch projects the company could generate positive FCF
in 2025, benefiting from upfront cash receipts from its PCF
contract wins. However, FCF losses will likely resume in 2026-2027
without a significant improvement in its core business or further
debt and cost reductions.
The company has roughly $18 billion of debt pro forma for recent
redemptions, which is before finance leases, unamortized discounts,
debt issuance costs and other adjustments. Its debt includes term
loans as well as secured and unsecured notes across predominantly
three borrower entities. The TSA transaction extended its
maturities but a larger maturity wall remains in 2029-2030.
Lumen's new superpriority debt benefits from secured guarantees by
Qwest Communications International Inc., Qwest Services
Corporation, CenturyTel Holdings, Inc., Wildcat Holdco LLC and
certain other subsidiaries. In addition, Qwest Corporation and
Qwest Capital Funding provide unsecured guarantees on this debt. A
portion of Lumen's revolving facility also benefits from guarantees
from Level 3 subsidiaries, although the guarantees will diminish
once Qwest Corporation moves certain assets into other
subsidiaries. There is also a secured $1.2 billion intercompany
loan that was put in place with the TSA transaction, as cash
proceeds from new money first-lien notes were transferred to Lumen,
and an unsecured $1.825 billion intercompany revolver ($1.5 billion
outstanding at December 2024). The $1.2 billion loan ranks pari
passu with the second-out superpriority revolver, superpriority
term loans, 4.125% and 10% superpriority notes.
Lumen's superpriority secured debt limits total net leverage to no
more than 5.75x and require interest coverage to be no less than
2.0x.
Issuer Profile
Lumen is one of the largest U.S. wireline providers. Much of its
business is focused on the enterprise market, although it also
serves residential customers. It is publicly traded on the NYSE
under the ticker LUMN.
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
----------- ------ -------- -----
Level 3 Parent, LLC LT IDR CCC+ Affirmed CCC+
Level 3 Financing, Inc. LT IDR CCC+ Affirmed CCC+
senior secured LT B+ New Rating RR1
senior unsecured LT CCC- Affirmed RR6 CCC-
senior secured LT B+ Affirmed RR1 B+
Senior Secured
2nd Lien LT CCC- Downgrade RR6 CCC
Qwest Communications
International Inc. LT IDR WD Withdrawn CCC+
Qwest Capital
Funding, Inc.
senior unsecured LT CCC- Downgrade RR6 B+
Lumen Technologies,
Inc. LT IDR CCC+ Affirmed CCC+
senior secured LT CCC- Downgrade RR6 B+
super senior LT B+ Affirmed RR1 B+
senior unsecured LT CCC- Affirmed RR6 CCC-
Qwest Services
Corporation LT IDR WD Withdrawn CCC+
Qwest Corporation LT IDR CCC+ Affirmed CCC+
senior unsecured LT B+ Affirmed RR1 B+
LOTUS OASIS: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
The U.S. Trustee for Region 21 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Lotus Oasis Homewood, LLC.
About Lotus Oasis Homewood LLC
Lotus Oasis Homewood LLC operates in the real estate sector.
Lotus Oasis Homewood sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 25-50962) on January 30,
2025. In its petition, the Debtor reported between $1 million and
$10 million in both assets and liabilities.
The Debtor is represented by John A. Christy, Esq., at Schreeder,
Wheeler & Flint, LLP.
CAFL 2022-RTL1 Issuer, LLC, as lender, is represented by:
Anjali Khosla, Esq.
Rubin Lublin, LLC
3145 Avalon Ridge Place
Suite 100
Peachtree Corners, GA 30071
(877) 813-0992
akhosla@rlselaw.com
MAD ENGINE: Moody's Affirms 'Caa2' CFR & Alters Outlook to Positive
-------------------------------------------------------------------
Moody's Ratings affirmed Mad Engine Global, LLC's (Mad Engine) Caa2
corporate family rating, Caa2-PD probability of default rating and
Caa2 senior secured first lien term loan rating. The rating outlook
has been changed to positive from negative.
The outlook change to positive reflects the company's solid revenue
and EBITDA growth in 2024 driven by strength in the wholesale
business, savings from divesting the loss making brands business,
moving production from California to lower cost locations such as
Kentucky and Mexico, and other operational efficiencies. Moody's
expects the operational benefits to facilitate stable to growing
EBITDA, improved credit metrics and adequate liquidity for the next
12-18 months, notwithstanding an uncertain demand and tariff-driven
cost environment. Moody's projects debt/EBITDA and EBITA/Interest
to improve to 5.7x and 0.9x at year-end 2024 from 8.7x and 0.5x at
year-end 2023.
RATINGS RATIONALE
Mad Engine Global, LLC 's (Caa2 positive) credit profile reflects
its small scale, high leverage, low interest coverage, private
equity ownership and high customer concentration. In particular,
the high debt service is a significant strain on cash flow and its
niche product focus on entertainment apparel makes the company
susceptible to demand swings driven by the licensor's popularity
and purchasing decisions of key customers. The rating is supported
by company's recent momentum in its wholesale business, movement of
some operations to lower cost locations and divestment of its
unprofitable brands business. Mad Engine also has adequate market
positioning through a licensing portfolio which has significantly
grown over the last decade.
The positive outlook reflect Moody's expectations for Mad Engine to
have improving credit metrics with debt/EBITDA and EBITA/Interest
around 5.25x and 1.1x, respectively over the next 12-18 months and
for liquidity to remain at least adequate.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade would require a consistent improvement in
operating performance. An upgrade would also require maintaining at
least adequate liquidity evidenced by sustained positive free cash
flow, conservative financial strategies and refinancing of its
capital structure well ahead of its maturities. Quantitatively, the
ratings could be upgraded if debt/EBITDA is sustained below 6.0x
and EBITA/interest is sustained above 1.0x.
The ratings could be downgraded if the company's overall operating
performance or liquidity profile is worse than expected, including
sustained free cash flow deficits or inability to refinance its
capital structure in a timely fashion. Ratings could also be
downgraded should the probability of default increase for any
reason or recovery expectations are reduced.
Headquartered in Glendale, California, Mad Engine Global, LLC is
engaged in the design, manufacture, and wholesale distribution of
licensed and branded apparel to retailers throughout the US. The
company generates most its revenue from products sold under
licenses with blue chip entertainment companies such as The Walt
Disney Company and Marvel and sells to large blue-chip retailers
such like Walmart Inc. and Target Corporation. The company is
majority owned by Platinum Equity LLC.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
MAYFLOWER RETIREMENT: Fitch Affirms 'BB+' IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Mayflower Retirement Center, Inc.'s
Issuer Default Rating (IDR) at 'BB+'. Fitch has also affirmed the
ratings on the series 2020A and series 2021A revenue bonds issued
by the Florida Development Finance Corporation on behalf of
Mayflower at 'BB+'.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Mayflower Retirement
Center, Inc. (FL) LT IDR BB+ Affirmed BB+
Mayflower Retirement
Center, Inc. (FL)
/General Revenues/1 LT LT BB+ Affirmed BB+
The 'BB+' rating reflects Mayflower's elevated leverage position
and capital related metrics, balanced by a steady market position
as a single-site life plan community (LPC) in the generally
favorable primary market area (PMA) of Winter Park, FL, and weak
but improving independent living (IL) occupancy.
The Stable Outlook reflects reduced credit risk for Mayflower's
rating due to the paydown of $26.4 million in temporary debt linked
to Bristol Landing, a 50-unit independent living (IL) expansion. It
also considers Mayflower's measurable recovery from Hurricanes Ian
and Milton, with all affected units back in service. Additionally,
the affirmations consider the increased revenue from the Bristol
Landing units and limited capex requirements.
Fitch's forward-looking scenario analysis shows Mayflower's
financial profile improving over the next few years as operations
benefit from the additional revenue from the Bristol Landing units
and management focuses on rebuilding occupancy in its main IL
building. No insurance or FEMA funds are factored into the forward
look.
SECURITY
The bonds are secured by a gross revenue pledge of the obligated
group and a mortgage on certain property. A fully funded debt
service reserve fund provides additional bondholder security.
KEY RATING DRIVERS
Revenue Defensibility - 'bbb'
Good Market Position in Competitive PMA
The midrange revenue defensibility reflects Mayflower's market
position as a single-site life plan community (LPC) operating in a
competitive PMA, which includes Winter Park and the greater Orlando
area, with numerous competitors, both from full continuum of care
providers and providers who offer more limited care, such as
standalone AL providers.
The competitive PMA is balanced by steady demand for services at
Mayflower, bolstered by its strong its good reputation in the
community (reputation was a main deciding factor for why Bristol
Landing depositors chose the Mayflower), a demographically strong
market area with good growth and wealth indicators, with pricing
consistent with area housing prices and resident wealth.
Management is focused on rebuilding IL occupancy in the main
building, particularly for the smallest apartments. The Bristol
Landing project is complete and nearly fully occupied. Occupancy
challenges partly stem from a wave of transfers in 2023, coinciding
with the opening of the new memory care (MC) unit and the AL and
skilled nursing (SNF) fully back online after the Bristol Landing
project and Hurricane Ian. Fitch believes IL occupancy will improve
due to the steady demand at Mayflower and revamped marketing
efforts to sell smaller units. As of YE 2024, IL occupancy was 74%.
AL, MC, and SNF occupancies were 90%, 79%, and 94%, respectively.
Operating Risk - 'bbb'
Operating Profile Should Gradually Improve Post-Project
Mayflower's historical operating metrics are consistent with the
'Midrange' assessment, given Mayflower's Type 'A' contract, and
moderating capital related metrics. Over that last five years,
Mayflower's operating ratio averaged 102% and net operating
margin-adjusted (NOMA) averaged 22%.
Unaudited 2024 results show the operating ratio weakening to
106.1%, driven by sector inflationary and staffing challenges.
However, management notes a reduction in agency usage, which should
lead to a moderation in the operating ratio moving forward.
Mayflower had a positive year for net entrance fee receipts at $7.4
million, which resulted in a NOMA of 24.3%.
Fitch expects operations in 2025 to improve as the full revenue
from the stabilized Bristol Landing units positively affect
Mayflower's financial performance, occupancy in its main IL
building rebuilds, and AL and SNF occupancies continue to improve.
Mayflower suffered some damage to its AL project and equipment from
Hurricane Milton in October 2024. Currently, relocation of
electrical components is complete and repairs need to be finished
on two elevators. Mayflower has filed an insurance claim and
applied for FEMA funding, but has yet to receive funds. Mayflower
is seeking about $11 million in reimbursed expenses.
With the major campus repositioning project largely completed,
Mayflower's capital needs are expected to remain manageable and
capex is expected to be below depreciation. Mayflower also
anticipates the opening of the renovated second floor of Building C
around mid-2025, which will replace the existing 31 AL units with
22 AL units. While still relatively elevated, capital metrics have
improved, as the short-term debt has been paid down and the Bristol
Landing units support good revenue growth. Maximum annual debt
service (MADS) as a percent of revenue in 2024 was 18.4%, down
significantly from 28.1% in 2022.
Financial Profile - 'bb'
Financial Profile Resilient Through A Moderate Stress
Given Fitch's 'Midrange' assessments of Mayflower's revenue
defensibility and operating risk, Mayflower's key leverage metrics
are expected to remain consistent with the rating level through a
moderate stress. At FYE 2024 (Dec. 31 year-end), Mayflower had
approximately $32.5 million of unrestricted cash and investments
and 358 days cash on hand (DCOH), as calculated by Fitch. MADS
coverage of $7.3 million, which won't be tested until 2025, is
improved at 1.5x (as calculated by Fitch). Fitch expects gradual
improvement to continue following stabilized occupancy for Bristol
Landing.
Fitch's baseline scenario provides a reasonable forecast of
financial performance over the next five years, considering current
economic expectations. Fitch assumes economic stress (reflecting
financial market volatility) specific to Mayflower's asset
allocation. The forward look shows improvement in Mayflower's
operating ratios through the base case, driven by stabilized
occupancy in the Bristol Landing expansion. Capital spending is
expected to be below depreciation due to limited capital needs
post-Bristol Landing. Key stress case leverage metrics remain
consistent with the 'bb' financial profile, and DCOH stays well
above 200 days, which is neutral to the rating outcome.
Asymmetric Additional Risk Considerations
There are no asymmetric risks associated with the rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Weakening in the financial profile such that cash-to-adjusted
debt is expected to stabilize below 30%;
- Weaker than expected cash flow such that debt service coverage is
consistently below 1.4x.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Longer term, post-project stabilization, an improved financial
profile such that cash-to-adjusted debt stabilizes above 50% and
MADS coverage is consistently above 1.7x.
PROFILE
Mayflower is a type-A LPC located on approximately 30 acres in
Winter Park, FL. The campus currently consists of 294 IL units (28
Bristol villas, the 50 Bristol Landing units, and 216 Bristol
Pointe apartments), 31 AL units (all private), 24 memory support
units (all private), and 60 private skilled nursing beds. Mayflower
generated $39.3 million in total operating revenue in FY 2024
(unaudited).
Sources of Information
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
data from Lumesis.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
MGM RESORTS: Fitch Affirms 'BB-' IDR, Outlook Stable
----------------------------------------------------
Fitch Ratings has affirmed MGM Resorts International (MGM) and its
subsidiaries' (collectively MGM) Issuer Default Ratings (IDR) at
'BB-'. The Rating Outlook is Stable. The subsidiary includes MGM
China Holdings Limited. Fitch has also affirmed MGM's senior
secured debt at 'BB+' with a Recovery Rating of 'RR1' and the
unsecured debt at 'BB-'/'RR4'.
The rating reflects MGM's mid-5x EBITDAR leverage that is
commensurate with the rating, conservative financial policy, and
robust liquidity position. It also considers the company's scale,
strong competitive position and diversification in its Las Vegas
and regional markets. These positive factors are offset by the
company's active development plan, earnings volatility from
high-end play in both Las Vegas and Macau, increasing cost
pressure, and lack of ownership of its properties, which could
affect financial flexibility during weaker economic conditions.
The Stable Outlook reflects Fitch's expectation that MGM's leverage
will remain stable and that liquidity is sufficient to fund future
growth opportunities.
Key Rating Drivers
Strong Scale and Diversification: MGM is one of the largest and
most diversified gaming operators in the U.S. The company maintains
a leading market position in a majority of the markets where it
operates. The company is a dominant operator on the Las Vegas Strip
and continues to increase its market share in Macau, two of the
largest gaming markets in the world. The company also has a rapidly
growing digital business and a strong presence in regional U.S.
gaming markets. Diversification is not just geographic, as MGM
benefits from its strong non-gaming revenues in Las Vegas, and
ability to reach customer segments from the high-end to
value-oriented customers.
Conservative Financial Policy: MGM maintains a financial policy of
net EBITDAR leverage below 4.5x. This differs from Fitch's
calculation as MGM capitalizes only cash lease payments (Fitch uses
total cash and non-cash lease expense) and nets cash against debt.
MGM also has a policy of maintaining $3 billion of liquidity
through a combination of availability under its revolver and cash
(excluding $500 million of cage cash). Any cash in excess of the $3
billion liquidity policy is available for growth projects and
shareholder returns.
Asset-Light Structure: MGM has monetized all of its meaningful
wholly owned assets, resulting in a material increase in
lease-equivalent debt somewhat offset by a reduction in traditional
debt. Fixed charge coverage is relatively low due to the high lease
costs, and the lack of owned real estate could limit financial
flexibility in a stress scenario. MGM's run-rate triple-net leases
(including non-cash lease expense) are expected to annualize to
roughly $2.3 billion in 2025.
Macau Market Stabilizes: Fitch estimates mass market baccarat was
113% of 2019 levels in 4Q24, while the overall market was at 80%.
Due to changes in VIP regulations that have caused a material, and
potentially permanent change in the level of gaming revenues from
that customer segment and the slow return of general mass
customers. MGM focuses primarily on mass market as opposed to VIP,
and its market share has grown to over 15.8% in 2024 from 9.5% in
2019, as it benefits from receiving approximately 200 new tables
under the concession and the continued ramp up of MGM Cotai.
Customer reinvestment rates were elevated in 2024.
Headwinds in Las Vegas: MGM is the largest operator of Las Vegas
Strip properties and has benefited from the strong rebound in
gaming revenue and visitation following the pandemic. Comparisons
to 2024 are expected to be challenging given the absence of the
Super Bowl and receipt of insurance payments in 2024. MGM hopes to
reduce the impact from operating enhancements to reduce costs. In
addition, strong group and convention bookings should have a
favorable impact.
Favorable Asset Mix: MGM has good geographic diversification, which
includes its Las Vegas Strip properties, diverse regional gaming
portfolio, and Macau assets. MGM's portfolio has many high-quality
assets on the Strip, and its regional assets are typically market
leaders. The regional portfolio's diversification partially offsets
the more cyclical nature of Las Vegas Strip properties. MGM's two
properties in Macau provide global diversification benefits and
exposure to a market with favorable long-term growth trends.
Upside in Digital Presence: MGM has exposure to iGaming and sports
betting through its joint venture participation in BetMGM its
wholly-owned iGaming subsidiaries. MGM's sports betting and iGaming
platforms provide diversification benefits and potential upstream
distributions longer-term but are currently not a material credit
driver. Fitch expects the 50% proportional EBITDA of BetMGM to be
an immaterial portion of total MGM property EBITDAR in 2025 as the
company reinvests in customers and its product offering. MGM has
made other investments in its iGaming platform,but is expected to
focus on driving growth and profitability in its existing
operations in the near-term.
Strong PSL Linkage: Fitch views MGM on a consolidated basis because
the linkage between the parent, MGM Resorts International, and
subsidiaries is strong. MGM Resorts International is the primary
debt-issuing entity in the U.S. and is considered a stronger parent
relative to the weaker Macau subsidiaries, given it benefits from
ownership in the operations of all U.S. domestic casinos and its
56% equity interest in MGM China. As a result, Fitch applied the
strong parent/weak subsidiary approach under its Parent and
Subsidiary Linkage Rating Criteria. The linkage is strong because
of perceived high strategic and operational incentive, as the
subsidiaries share brands and customers across the system.
Peer Analysis
MGM is a large, diversified operator of casinos on the Las Vegas
Strip, in regional U.S. gaming markets, and in Macau. The company
has sold and leased-backed all of its U.S. casino operations and
has primarily used the cash to repay debt and expand operations.
The company operates high quality assets and is the largest
operator of assets on the Las Vegas Strip. Regional gaming
operations and the Macau operations are somewhat protected from new
competition due to limited licenses. MGM has a conservative
financial policy and operates with relatively strong liquidity.
Wynn Resorts, Limited (BB-/Stable) is smaller in scale but has
strong relative market share in Las Vegas and Macau. Wynn also has
high-quality assets and operates in attractive regulatory regimes.
Wynn maintains strong liquidity, although its debt will temporarily
increase during periods of large development projects.
Las Vegas Sands Corp. (BBB-/Stable) is the largest operator of
casino resorts in Macau. The company also has a presence as being
only one of the two operators of casino resorts in Singapore.
Leverage is relatively low given the scale of the company's
operations. The company has a strong commitment to a conservative
financial policy and also maintains very strong liquidity.
Key Assumptions
- Total revenues are expected to be flat to negative 1% in 2025
given difficult comparisons on the Las Vegas Strip and uncertain
revenue activity, offset by digital gaming growth. Overall growth
is expected to be in the low single digits throughout the remainder
of the forecast horizon;
- EBITDAR margins are forecasted in the 27% range over the forecast
horizon;
- Total rent of $2.3 billion in 2025 (including non-cash rent),
which is straight-line across the forecast horizon;
- Capex is $1.0 billion-$1.2 billion per year with no major growth
capex assumed. Fitch incorporates $200 million of capex in Macau
annually, in line with the required new concession.
- Assume no dividend policy for the domestic entity;
- Assume $300 million-$500 million of share repurchases over the
forecast horizon, which is based on the company's financial
commitment to its liquidity coverage.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDAR Leverage sustaining above 6.0x, either through a more
prolonged disruption to global gaming demand or adoption of a more
aggressive financial policy;
- A reduction in overall liquidity (low cash and revolver
availability, heightened covenant risk or increased FCF burn) due
to weaker economic conditions or a more aggressive financial
policy.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Increased scale and diversification while meeting stated credit
metric sensitivities;
- EBITDAR Leverage sustaining below 5.0x;
- EBITDAR Fixed Charge Coverage approaching 2.0x.
Liquidity and Debt Structure
As of Dec. 31, 2024, MGM had cash on hand of $2.42 billion,
including $685 million of cash on hand at MGM China. The company
also has an additional $200 million of investments in marketable
debt securities. The company has a stated financial policy of
maintaining $3 billion of liquidity through a combination of
availability under its revolver and cash (excluding $500 million of
cage cash). The US domestic revolver was undrawn with availability
of $2.3 billion (following February 2024 amendment) and there was
$478 million outstanding on the MGM China first revolving credit
facility. The next domestic maturity consists of $400 million in
notes due 2026 and at MGM China, $500 million in notes due in June
2025.
The company repurchased approximately $1.4 billion in stock in
2024. Fitch expects share repurchases will decline in the near
term. MGM is likely to contribute cash in 2025 to its Japan
investment and to its New York operation, if it receives a license
in 2025.This would require a reduction in share repurchases in
order to maintain its financial policy of $3 billion of liquidity
under Fitch projections.
Issuer Profile
MGM operates nine casinos on the Las Vegas Strip and seven in
regional markets, including in Detroit, Mississippi, Maryland, New
Jersey, New York, Massachusetts and Ohio. MGM has a 56% stake in
MGM China, which operates two casinos in Macau SAR. MGM also has a
50% ownership in BetMGM, a large digital gaming operator in the
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
----------- ------ -------- -----
MGM China Holdings
Limited LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
MGM Resorts
International LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
MIDCAP FINANCIAL: S&P Affirms 'BB-' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term issuer credit
ratings on MidCap Financial Issuer Trust and subsidiary MidCap
Financial Holdings Trust. The outlook remains stable. S&P also
affirmed its 'B+' ratings on MidCap's debt.
S&P said, "Our assessment of MidCap's business position balances
its concentration in highly competitive middle-market lending,
against the company's good track record and relationship with
Apollo Global management. MidCap's strengths are the experience of
its management team and its niche lending positions, which have
allowed for relatively high yields of approximately 12% on assets
that have historically demonstrated low losses. MidCap serves as
Apollo's direct origination platform, which also enables MidCap to
bid on larger loan sizes. Apollo Global and Athene own a combined
35% of MidCap, and Apollo Capital, a subsidiary of Apollo Global,
serves as MidCap's investment adviser.
"We expect that MidCap will maintain its health care concentration.
As of Sept. 30, 2024, MidCap's portfolio was about $13.1 billion at
cost versus $13.8 billion in 2023. Approximately 30% of the
portfolio, as of Sept. 30, 2024, was in health care, a meaningful
concentration but lower than in previous years. The company's focus
was on health care finance when it launched in 2008, but it has
broadened its scope since 2015."
While it is focused on middle-market lending, MidCap's loan
portfolio is reasonably diversified by segment. In addition, MidCap
operates separately managed accounts that invest in leveraged loans
for institutional investors, including insurers and pension funds.
MidCap's loan portfolio consists mainly of first-lien loans.
Segments include:
-- Leveraged lending (58%): Senior secured cash-flow-based loans
to middle-market companies with EBITDA typically in the $10
million-$100 million range.
-- Asset-based lending (15%): Revolving lines of credit and
structured term loans made primarily to health care providers and
manufacturing, distribution, retail, and services companies.
-- Lender finance (7%): Senior secured facilities for lenders in
various industries (consumer and commercial).
-- Commercial real estate lending (9%): Secured loans made to
owners or operators of primarily commercial properties, medical
office buildings, and various types of senior housing and skilled
nursing properties.
-- Life sciences and technology lending (5%): Low
loan-to-enterprise-value loans made to borrowers in product
development and growing commercial stage.
-- Franchise finance (5%): Senior secured loans to franchise
owners, primarily in casual dining restaurants.
S&P expects MidCap to manage asset quality challenges, helped by
its good diversification, granular investment portfolio, and
operating track record. As of Sept. 30, 2024, MidCap had 24
borrowers with principal outstanding of $445 million on nonaccrual
(or 3% of the portfolio), compared with $367 million (2.6% of the
portfolio) at year-end 2023. Net charge-offs for the nine months
ended Sept. 30, 2024 were $36 million, down from $56 million the
previous year. The company has provisioned $122 million in reserves
for these loans as of Sept. 30, 2024. That said, MidCap has
historically had low losses as its cumulative net losses since
inception in 2008 through year-end 2024 were 39 basis points. PIK
income also remained low at about 1% of gross investment income for
the nine months ended Sept. 30, 2024.
An anticipated economic slowdown, persistent inflation pressures,
higher-for-longer rates, and the potential impact of tariffs may
lead to stress among highly leveraged middle-market companies. As a
result, Midcap and middle market lenders could see increasing
nonaccruals and payment-in-kind (PIK) income in the next few
quarters as borrowers continue to face liquidity pressures.
S&P Global Ratings believes there is a high degree of
unpredictability around policy implementation by the U.S.
administration and possible responses--specifically with regard to
tariffs--and the potential effect on economies, supply chains, and
credit conditions around the world. As a result, our baseline
forecasts carry a significant amount of uncertainty. As situations
evolve, S&P will gauge the macro and credit materiality of
potential and actual policy shifts and reassess our guidance
accordingly.
As with the loan portfolios of most nonbank lenders, we believe
MidCap's loan portfolio carries somewhat higher risk than that of a
typical bank. But the company manages the risks through prudent
underwriting and by issuing largely senior secured loans.
As of Sept. 30, 2024, MidCap's top investment and top five
investments at cost were about 7% and 25% of adjusted total equity
(ATE), respectively.
S&P said, "We expect MidCap's leverage over the next 12 months to
be 4.0-4.5x. MidCap's debt to ATE was 4.23x as of Sept. 30, 2024,
versus 4.52x as of Dec. 31, 2023. Over the next 12 months, we
expect the company to operate with leverage around 4.0x-4.5x."
On Sept. 30, 2024, profit participating notes were redeemed in
full, and MidCap did not record any expense related to these notes
in the last quarter. S&P said, "As a result, we don't adjust profit
participating notes equity in ATE as of the end of Sept. 30, 2024.
As of September 2024, the firm had $78.6 million in general
reserves, which we add back to tangible equity of $2.6 billion to
compute our ATE."
MidCap had adjusted net income (which excludes profit-participating
note expense) of about $332 million for year to date as of
September 2024, up from $328 million in the same period last year.
Higher net interest income and fee income partially offset
increased interest expense.
S&P said, "We view MidCap's reliance on secured financing as a
rating weakness because it encumbers the balance sheet. We expect
that MidCap will primarily fund its loan growth by accessing the
secured markets." While the company's funding is well matched with
assets, its funding mix is relatively less diversified since it
primarily relies on secured financing, which continues to encumber
its balance sheet. Securitizations and secured bank facilities made
up 85% of MidCap's funding as of Sept. 30, 2024, and they encumber
the majority of its assets.
That said, MidCap has well-diversified and stable funding, in S&P's
view. The company uses long-dated funding that exceeds the average
life of underwritten loans, and it's proactive in extending
facility maturities.
S&P said, "We expect the company to maintain a sufficient liquidity
cushion relative to its unfunded commitments in the next 12 months.
As of Sept. 30, 2024, MidCap had unrestricted cash of $24.2 million
and cash equivalents of $384.6 million available, undrawn on its
credit facilities. In addition, MidCap's subsidiaries had $357.8
million of restricted cash available to finance eligible new loan
originations. Total undrawn commitments were approximately $2.8
billion, compared with $2.23 billion of unfunded commitments to
extend credit, for which there were no prerequisites for future
funding by MidCap.
"Our 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
remains well above 30%, and its unencumbered assets to unsecured
debt ratio was 1.1x-1.2x. We expect MidCap will maintain an
unencumbered assets to unsecured debt ratio of over 1.0x;
otherwise, we could lower our rating on its unsecured debt by
another notch.
"The stable outlook for the next 12 months reflects our expectation
that--despite macroeconomic headwinds--MidCap will operate with
debt to ATE of 4.0x-4.5x and maintain its underwriting record. We
also expect MidCap will maintain adequate liquidity to meet its
operational needs and maintain its existing funding mix."
S&P could lower its ratings on MidCap over the next 12 months if:
-- Debt to ATE remains above 4.5x;
-- Asset quality or earnings materially weaken; or
-- MidCap's available liquidity is strained, in S&P's view.
S&P views an upgrade as unlikely in the next 12 months. In the
longer term, it could raise the ratings if MidCap diversifies its
funding mix such that unsecured debt comprises a larger portion of
total debt.
MIDCAP FINCO: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of MidCap FinCo Intermediate LLC (MidCap) and its
debt-issuing subsidiary, MidCap Financial Issuer Trust at 'BB+'.
Fitch has also affirmed MidCap Financial Issuer Trust's unsecured
debt rating at 'BB' and assigned a 'BB' rating to its $300 million
8.25% unsecured term loan due Jan. 7, 2032.
The Rating Outlook is Stable.
Key Rating Drivers
Strong Middle-Market Franchise: The affirmation of MidCap's ratings
reflects its strong middle market franchise and relationship with
Apollo Global Management, Inc. (Apollo; A/Stable), relatively
lower-risk portfolio with low concentrations, minimal exposure to
equity investments, relatively strong asset quality, and
experienced management.
Higher-Than-Peer Leverage: MidCap's ratings are constrained by the
company's leverage, which is higher than that of commercial lending
peers, below-average core earnings metrics, a largely secured
funding profile and the potential impact of meaningful portfolio
company revolver draws on leverage and liquidity.
Apollo Affiliation Viewed Favorably: Fitch views MidCap's
affiliation with Apollo as a rating strength. The affiliation
provides access to industry knowledge, sponsor and bank
relationships, investment management resources, and deal flow.
Apollo is an alternative investment manager with $751 billion of
assets under management (AUM) as of Dec. 31, 2024, including $616
billion in credit strategies. MidCap has a growing syndication
platform given the opportunities to internally syndicate across
sidecar vehicles with third-party investors and the Apollo
platform.
Credit Performance Stabilizes, Albeit at Elevated Levels: MidCap's
net charge-offs remained elevated relative to historical levels,
reaching 0.64% of average loans in 2024, slightly down from 0.66% a
year ago, and above the previous pandemic high of 0.61% in 2020. As
of Dec. 31, 2024, about 2% of MidCap's loan portfolio was on
non-accrual status, up from a four-year average of 1.7% and flat
YoY. Interest rate cuts have eased debt servicing burdens of
portfolio companies but spread tightening and slowing economic
growth are expected to challenge credit performance. However,
MidCap's focus on first lien investments places it in a relatively
strong position in the event of borrower defaults.
Core Earnings Below Peers: MidCap's core earnings remain below
those of its peers, given its focus on lower-yielding senior debt
investments. In 2024, pretax return on average assets (ROAA) was
2.8%, down from 3.1% in 2023, excluding the interest expense on
profit participating notes. The decline was largely driven by a
reduction in net interest income. Fitch anticipates that earnings
will be pressured in 2025 due to recent interest rate cuts, spread
tightening, and the possibility of more non-accruals. However,
increased M&A activity in 2025 could lead to higher origination
volumes.
Relative to peers, Fitch believes MidCap has a more stable earnings
profile, as business development companies (BDCs) need to mark
their portfolios to fair market value quarterly and generally have
larger equity exposures that contribute to more earnings volatility
over time.
Leverage Within Target: MidCap's leverage target, measured by
consolidated gross debt to tangible equity (including profit
participating notes (PPNs), less goodwill and intangibles), is
3.75x-4.50x. Leverage was 3.9x at YE 2024, down from 4.7x at YE
2023, due to reduced borrowings and new equity from investors.
MidCap's leverage is higher than that of commercial lending peers
and rated BDCs, which Fitch believes is mitigated by MidCap's more
senior and diverse portfolio and its ability to retain capital, as
it is not subject to dividend distribution requirements faced by
BDCs.
As part of a corporate restructuring in September 2024, MidCap's
PPNs were redeemed in full and recharacterized as GAAP equity,
which had a neutral effect on Fitch's leverage metrics, as the
agency previously treated PPNs as equity.
Adequate Liquidity: MidCap's liquidity profile is adequate. At YE
2024, the issuer had $66.2 million of unrestricted cash, $3.1
billion of undrawn capacity on its RCFs, which is more than
sufficient to fund peak draws on revolvers. The credit facilities
have maturities ranging from 2025 to 2036. Fitch expects them to be
renewed and extended, as necessary. MidCap has no term debt
maturities until 2028.
MidCap has historically distributed the majority of its earnings to
shareholders, but the firm offers shareholders the opportunity to
reinvest dividends back into the company, which Fitch views as a
credit positive as it would help fund portfolio growth. MidCap's
payout ratio was 140% in 2024, compared to 93% in 2023.
Distributions in 2024 were slightly elevated, given new equity
capital raised from investors, which was used to repay previous
investors following the company's restructuring.
Largely Secured Funding Profile: MidCap's funding is largely
secured, although well diversified. As of Dec. 31, 2024, the
company had numerous credit facilities with aggregate capacity of
$7.5 billion, 10 securitizations with $4.8 billion of notes
outstanding, and $1.7 billion of unsecured notes across three
issuances. Unsecured debt represented 15.8% of total debt at YE
2024, which is below Fitch's 'bb' category funding, liquidity and
coverage benchmark range of 20%-75% for finance and leasing
companies with an operating environment score in the 'bbb'
category.
Stable Outlook: The Stable Rating Outlook reflects Fitch's
expectation that MidCap will retain underwriting discipline,
demonstrate relatively sound credit performance, maintain leverage
within the targeted range, and maintain sufficient funding
diversity and liquidity to navigate the current credit
environment.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A sustained increase in leverage above 4.5x;
- A sustained reduction in unsecured debt below 10%;
- Material deterioration in asset quality;
- Inability to maintain sufficient liquidity to fund interest
expenses and revolver draws;
- A change in the perceived risk profile of the portfolio;
- Material operational or risk management failures;
- Damage to the firm's franchise that negatively affects its access
to deal flow and industry relationships
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A sustained reduction in leverage to below 3.0x;
- Improved funding flexibility, including unsecured debt
approaching 35% of total debt;
- Strong and differentiated credit performance of recent vintages.
Any ratings upgrade would be contingent on the maintenance of
consistent operating performance, a continued focus on first-lien
investments, and an adequate liquidity profile.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The unsecured debt rating is one notch below the IDR given the high
balance sheet encumbrance and the largely secured funding profile,
which indicates weaker recovery prospects under a stress scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt rating is expected to move in tandem with the
Long-Term IDR. However, a material increase in the proportion of
unsecured funding, assuming no change to the firm's leverage
target, or the creation of a sufficient unencumbered asset pool,
which alters Fitch's view of the recovery prospects for the debt
classes, could result in the unsecured debt rating being equalized
with the IDR.
SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES
MidCap Financial Issuer Trust's Long-Term IDR is expected to move
in tandem with the Long-Term IDR of the parent.
ADJUSTMENTS
The Standalone Credit Profile (SCP) has been assigned in-line with
the implied SCP.
The Capitalization and Leverage score has been assigned below the
implied score due to the following adjustment reason(s): Historical
and future metrics (negative).
The Funding, Liquidity and Coverage score has been assigned below
the implied score due to the following adjustment reason(s):
Funding flexibility (negative) and Historical and future metrics
(negative).
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
MidCap Financial
Issuer Trust LT IDR BB+ Affirmed BB+
senior unsecured LT BB New Rating
senior unsecured LT BB Affirmed BB
MidCap FinCo
Intermediate LLC LT IDR BB+ Affirmed BB+
MIS INTERMEDIATE: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned MIS Intermediate, LLC and MIS
Acquisition, LLC (dba Cardinal) a first-time, Long-Term Issuer
Default Rating (IDR) of 'B'. The Rating Outlook is Stable. Fitch
also assigned first-time, issue-level ratings of 'B+' with a
Recovery Rating of 'RR3' for the $1.1 billion term loan and the
undrawn $180 million RCF.
The 'B' IDR is driven by Cardinal's moderately high leverage and
limited pricing power, which weigh on the rating. Fitch expects the
company's FCF to be positive over the next 18-24 months, offering a
path to deleveraging if the sponsor chooses to reduce debt.
Cardinal will be formed through the Mainline Information Systems,
LLC and Converge Technology Solutions Corp. merger, with H.I.G.
Capital (H.I.G.) as the majority owner. Fitch views the merger
positively because it will diversify product and service offerings.
The combined company will have a stable client base and be
well-positioned to capture more of the growing IT services market.
Key Rating Drivers
Moderately High Leverage: At the transaction close, pro forma
EBITDA leverage will be approximately 5.3x. Leverage would
significantly decrease after implementing identified cost
synergies, though this will take some time. Additionally, the
company intends to use some financing for its payables, reducing
its working capital requirements and improving liquidity. Fitch
considers a portion of such financing arrangements as debt.
Fitch assumes the company will achieve most of its cost savings
plan by YE 2025, increasing EBITDA, although channel financing will
increase debt. Fitch expects leverage to remain above 5.0x for
2025, possibly decreasing by a half turn by YE 2026.
Limited Pricing Power: Data center contracts account for almost
two-thirds of the company's gross profit. This includes purchasing
hardware from original equipment manufacturers (OEMs) and
configuring and servicing it for customers. The company has very
little pricing power in this segment, which is reflected in EBITDA
margins in the 4%-6% range.
Management expects to improve its profitability over the next year
through cost synergies, though this is not a structural shift. The
company faces pressure from powerful OEMs and customers with
alternative service providers. However, it has the potential to
expand higher-value work, such as cybersecurity assignments and
cloud migrations.
Positive FCF: In the first year, the company will incur costs to
achieve synergies. Excluding this use of cash, the combined
company's cash flow should be positive in the first year and grow
thereafter. Capex requirements are low and the company appears to
be managing its working capital requirements well. Stable, positive
FCF supports the rating and will enable the company to pay down
debt if it chooses to do so. Fitch views the FCF potential as a
credit positive that could support a higher rating, depending on
the sponsor's capital allocation.
Growing Market for IT Services: Fitch expects the dynamic IT
services market to grow as companies strive to keep up with
technology developments. Cardinal should capture some of this
growth, though subsectors vary in growth rates and relative values.
Currently, higher growth subsectors constitute a small percentage
of Cardinal's revenue, but the company is well-positioned to
capture some of this work. Capturing more higher-growth and
higher-value work would increase Cardinal's pricing power and
strengthen its operating profile.
Stable and Diversified Client Base: The combined company will have
a stable, diversified base of over 4,500 customers and strong
relationships with OEMs, including IBM, Dell, Cisco and HPE. The
customer base tends to be sticky, which is a credit positive, but
revenue growth potential is limited. Cardinal's customer
relationships provide an opportunity for higher growth if it can
capture more higher-value IT services.
Peer Analysis
IT distributors and value-added resellers (VARs) rated by Fitch
include TD SYNNEX Corporation (BBB-/Stable), Arrow Electronics,
Inc. (BBB-/Stable), CDW Corporation (BBB-/Stable), and Ingram Micro
Inc. (BB/Stable). These companies' business models vary slightly
based on the additional services or 'value add' they provide beyond
distribution.
Cardinal provides more managed services than its peers, but these
services contribute only 21% of gross profit. Thus, Cardinal's core
offerings are similar to those of peers, but are materially
smaller. This lack of scale constrains the rating.
Cardinal is significantly smaller than CDW, its closest Fitch-rated
peer in terms of offerings and geographic reach, at roughly
one-fifth the size. Cardinal also has lower profitability, higher
leverage, and significantly weaker interest coverage.
Other IT service providers offer more managed services, system
integration capabilities, and software development than Cardinal.
Investment-grade examples include DXC Technology Company
(BBB/Negative) and Kyndryl Holdings, Inc. (BBB/Stable). These
companies are much larger by any measure and have much broader
capabilities.
Key Assumptions
- Revenue growth in the 3%-4% range over the next several years;
- EBITDA margin expansion to about 6% in 2026 and then maintained
at this level;
- Capex requirements are minimal;
- Dividends assumed in 2026 and beyond as a use of FCF.
Recovery Analysis
Key Recovery Rating Assumptions:
- Fitch assumes that MIS would be reorganized as a going concern in
bankruptcy rather than liquidated.
- Fitch has assumed a 10% administrative claim.
- The $180 million revolver is fully drawn.
- The $235 million channel financing facility, which is a priority
claim, is partially utilized.
Going-Concern (GC) Approach:
- Fitch projects a Going-Concern (GC) EBITDA of $180 million,
representing a sustainable, post-reorganization EBITDA level upon
which Fitch bases the enterprise valuation. Fitch assumes a
hypothetical scenario whereby prolonged macroeconomic challenges
lead to increased competition and margin compression, ultimately
necessitating a restructuring. Following a period of renewal, Fitch
assumes that revenue stabilizes at approximately $4 billion, with
an EBITDA margin of about 4.5%, culminating in the $180 million GC
EBITDA estimate.
- Fitch applies a GC recovery multiple of 6.0x to the GC EBITDA to
calculate the post-reorganization enterprise value. This multiple
is supported by MIS's growth prospects, scaled market position, and
large and diversified customer base, which are partly offset by
weak profitability and limited competitive advantage. The following
factors further support the multiple:
Historic bankruptcy emergence multiples: the median reorganization
EV/EBITDA multiple for the 77 TMT reorganizations covered in
Fitch's 2024 Telecom, Media and Technology Bankruptcy Enterprise
Values and Creditor Recoveries report was 5.9x, with most multiples
in the 4.0x-7.0x area, and technology at 5.4x. Notable bankruptcy
examples include ConvergeOne Holdings, Inc. (5.5x), Allen Systems
Group, Inc. (8.4x), and QualTek Services Inc. (6.2x).
Peer trading multiples: Converge is being acquired at an 8.1x
multiple, while the recent acquisition multiples for select
transactions in the sector have ranged from 9.0x to 13.4x, with a
median of 10x.
- After deducting administrative claims and priority debt claims,
the EV available for distribution to creditors is $806 million,
resulting in first lien recovery of 'RR3' and 'B+' issue-level
rating, one notch above MIS's IDR.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage sustained above 5.5x;
- Any erosion in the business demonstrated by revenue declines or
EBITDA margin compression;
- Capital allocation that aggressively takes cash out of the
business for equity holders without any debt repayment.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 4.5x;
- Strong operating performance, demonstrated by revenue growth
greater than 4% or EBITDA margin expansion;
- Any debt reduction, including limiting the use of the channel
financing facility
Liquidity and Debt Structure
Cardinal's liquidity should be adequate considering the strong FCF
potential, limited capex requirements, and careful working capital
management. At closing, the company will have a $180 million
undrawn revolver and about $80 million of cash on the balance
sheet. The company should have positive FCF in 2025, bolstering
liquidity.
Debt for the LBO consists of a $1.1 billion term loan. All other
debt will be paid off as part of the transaction.
Issuer Profile
The company distributes IT hardware and software on behalf of OEMs
and then provides related services to the end clients.
Date of Relevant Committee
13 March 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
----------- ------ --------
MIS Acquisition, LLC LT IDR B New Rating
senior secured LT B+ New Rating RR3
MIS Intermediate, LLC LT IDR B New Rating
MODIVCARE INC: AI Catalyst Holds 14.9% Equity Stake
---------------------------------------------------
AI Catalyst Fund, LP, The AI Catalyst Fund GP, LLC, and David
Mounts Gonzales disclosed in Amendment No. 3 of a Schedule 13D
filing with the U.S. Securities and Exchange Commission that as of
March 6, 2025, they beneficially own 2,130,000 shares of ModivCare
Inc.'s common stock, representing 14.9% of the Company's
outstanding shares of stock.
AI Catalyst is represented by:
Kenneth Mantel, Esq.
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY, 10019
Tel: 212-451-2300
About ModivCare
ModivCare Inc. is a technology-enabled healthcare services company
that provides a suite of integrated supportive care solutions for
public and private payors and their members.
* * *
S&P Global Ratings lowered its issuer credit rating on ModivCare
Inc. to 'CCC+' from 'B-'. The outlook is negative.
MODIVCARE INC: Moody's Rates New 2nd Lien PIK Toggle Notes 'Caa2'
-----------------------------------------------------------------
Moody's Ratings assigned a Caa2 rating to ModivCare Inc.'s new
senior secured second lien PIK toggle notes due 2029 following the
close of the company's exchange transaction. ModivCare's existing
ratings, including its Caa1 corporate family rating, Caa1-PD
probability of default rating, B3 senior secured bank credit
facility ratings, Caa3 senior unsecured rating and negative outlook
are unchanged.
ModivCare completed an exchange with some of its lenders to
exchange $251 million of its unsecured notes into the new second
lien secured PIK toggle notes. In addition, the company completed a
purchase and exchange agreement with a shareholder to exchange $20
million of its unsecured notes holdings for the new second lien
secured notes and to purchase an additional $30 million of the new
second lien secured notes.
Net proceeds from the debt purchase exchanges were used to fund
cash to the balance sheet.
RATINGS RATIONALE
ModivCare's Caa1 CFR reflects the company's high leverage, poor
track record of meeting public guidance, and high reliance on
Medicaid funding. ModivCare's operating performance has been
challenged by the Medicaid redetermination process, which has
reduced membership levels and subsequently increased utilization
levels, negatively impacting margins due to the prevalence of
shared risk contracting in the company's revenue mix. Issues
achieving outlined cost savings initiatives in a timely fashion
also constrain the ratings.
The ratings benefit from ModivCare's significant market presence in
non-emergency medical transportation (NEMT) and personal care
services (PCS), as well as considerable scale with $2.8 billion in
annual revenue generation.
Moody's expects ModivCare to have weak liquidity over the next 12
to 18 months. ModivCare's $75 million incremental term loan add-on
is a current obligation maturing in January 2026. Moody's expects
ModivCare to continue generating negative free cash flow in 2025,
ranging from negative $25-50 million, which will hinder its ability
to repay the current maturity while complying with its covenants.
External liquidity is limited—the company's $325 million revolver
has outstanding borrowings totaling $269 million as of December 31,
2024. Moody's expects ModivCare to face challenges in complying
with its maximum net leverage and minimum interest coverage
covenants following the holiday through September 30, 2025. The
company is undergoing a strategic review of its assets and may
divest certain lines of business or monetize investments, providing
some alternate liquidity.
The Caa2 rating on the second lien secured notes reflects the
meaningfully reduced collateral pool that now must be shared with
and prioritized first to the first lien secured debtholders. Given
the less than adequate asset coverage relative to total secured
debt, the rating considers the potential for a low recovery in a
distressed scenario for this debt class.
The negative outlook reflects Moody's expectations that ModivCare's
operating performance and cash flow generation will remain weak
over the next 12-18 months. There is execution risk in the
company's efforts to turnaround operations and grow earnings,
creating uncertainty around the company's ability to address the
near-term maturity of its incremental first lien term loan.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be downgraded if the probability of default
increases, including lack of confidence in repayment of the 2026
term loan maturity or the risk of a transaction Moody's would deem
a distressed exchange increases. The ratings may be downgraded
further if ModivCare's credit metrics continue to weaken, and the
company's performance further deteriorates.
The ratings could be upgraded if the company addresses its
near-term maturity and improves liquidity, with reduction in
reliance on the revolver. The ratings could also be upgraded with
meaningful improvement operating performance, supported by
successful transition of certain shared risk contracts to
fee-for-service arrangements and execution of cost savings
initiatives.
ModivCare is the nation's largest provider of non-emergency medical
transportation programs for state governments and managed care
organizations. Within its personal care segment, the company is a
leading provider of non-clinical home care services to Medicaid
patient populations. Modivcare also provides personal emergency
response systems, vitals monitoring and medication management.
ModivCare generated approximately $2.8 billion in revenue for the
twelve months ending December 31, 2024.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
MOHEGAN TRIBAL: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has assigned Mohegan Tribal Gaming Authority and
Newco Digital Holdings, LLC (collectively, Mohegan) a first-time
'B' Long-Term Issuer Default Rating (IDR). The Rating Outlook is
Stable. Additionally, Mohegan's proposed first lien senior secured
revolver and notes were assigned a 'BB-' ratings with a Recovery
Rating of 'RR2', and the proposed second lien notes assigned
'B'/'RR4' ratings. The existing unsecured notes have been assigned
'CCC+'/'RR6' issue ratings.
The ratings reflect Mohegan's restricted group EBITDA leverage of
5.0x-5.5x, Mohegan Sun's leading market position, growing digital
results, and positive FCF generation. However, challenges include
the accelerated term loan at the Korean subsidiary. Fitch believes
this will not lead to a restricted group default, and may enable
future funding to meet expressed guarantees.
The Stable Outlook reflects moderate industry growth, positive FCF,
and debt capital market access.
Key Rating Drivers
Korea Term Loan Acceleration: On Feb. 18th, 2025, Mohegan announced
the acceleration of the Korea term loan due to covenant breaches.
Bain Capital indicated that lenders are assuming control of the
Inspire casino resort in South Korea. However, Fitch expects
limited impact on the restricted group, as there are no cross
defaults. Mohegan may need to provide up to $100 million to the
Korean subsidiary's senior credit facility holders if principal,
interest and other payments are missed.
Mohegan's 2024 annual financial statements included going concern
language about financing the restricted group's senior secured
credit facility and guaranteed credit facility, due in late 2025,
and refinancing the Korea credit facility, also due in November
2025. The Korean term loan default resulted from unmet facility
covenants. The proposed financing transaction is expected to
resolve the restricted group debt. Mohegan is no longer a part of
the Korea credit facility after the term loan acceleration.
Stable Restricted Group FCF: The restricted group benefits from
Mohegan Sun's scale and market leadership in Connecticut, stable
cash flow its Pennsylvania property, management fees and
distributions from Niagara and Korean operations, and growing
digital business. Risks include new gaming licenses in lower New
York and a potential tribal gaming facility in Massachusetts.
However, development is expected to take several years, and
Mohegan's location offers partial insulation from these risks.
The Connecticut property showed stable EBITDA growth despite new
casinos and expansions in Rhode Island, Boston, and the New York
metro market. Maintenance and growth capex are expected to remain
low and interest payments should decline as the company reduces and
refinances debt at lower interest costs. Although the entity does
makes large distributions to the tribe, like other tribal gaming
entities, restricted FCF remains positive, supporting further debt
reduction.
Growing Digital Business: The financing transaction plans to
combine the Connecticut and Pennsylvania digital businesses into
the restricted group as co-borrowers and co-guarantors, offering
collateral support to lenders. The Connecticut digital business is
growing rapidly and is expected to significantly contribute to FCF
due to its expanding scale and minimal capex needs. Mohegan's
partnership with FanDuel, a leading online sports betting and
iGaming provider, provides support in increasing market share and
providing future growth.
Complex Capital Structure: Mohegan has attempted to diversified
beyond Connecticut into markets like Pennsylvania, South Korea,
Atlantic City, Las Vegas, and digital gaming, leading to a more
complex capital structure. Fitch anticipates a focus more on core
properties, capital structure simplification, and financial
discipline in future developments. Potential rating upgrades depend
on the refinancing second lien notes and reducing guarantees to
unrestricted entities.
Adequate Collateral Coverage: The secured restricted group debt
will be collateralized by the Pennsylvania asset, the new digital
subsidiary, and equity interests in the Niagara facilities. The
addition of the digital subsidiary infers potential additional
material asset coverage, assuming the Connecticut iGaming market
grows relative to other markets, such as New Jersey and Michigan.
Fitch believes the iGaming growth could partially cannibalize
Mohegan Sun casino revenues, but overall revenue is expected to
grow.
Peer Analysis
Mohegan's rating reflects the continued strong and steady
performance at its Connecticut and Pennsylvania properties. Similar
to other tribal gaming entities, the company enjoys a regulatory
restricted market but is vulnerable to casinos opening in adjacent
states. Tribal casinos typically maintain low leverage to ensure
distributions to tribal members but will apply excess cash to fund
non-tribal casinos in order to diversify cash flow.
Mohegan's Connecticut property has withstood expanded gaming in
Rhode Island, Massachusetts, and New York over the last decade,
while applying excess cash to diversify operations.
Other tribal entities, such as Seminole Tribe of Florida
('BBB'/Stable) and The Morongo Band of Mission Indians
(BBB-/Stable) have access to a larger demographic market, similar
regulatory protection, and significantly lower EBITDA leverage.
Seminole has diversified under a separate subsidiary, while Morongo
maintains its one casino outside the greater Los Angeles market.
PCI Gaming Authority (BBB-/Negative) has employed a strategy
similar to Mohegan to use FCF from its regulatory tribal protected
assets and expand in other markets.
The expansion has created additional risks, but leverage is
materially lower than Mohegan, which provides for more credit
support. Bally's Corporation (B/Negative) is a public, non-tribal
entity, and a diversified regional operator with a domestic and UK
iGaming division. Consolidated leverage is high and the company is
currently working through an ownership transaction that will likely
increase leverage.
Key Assumptions
- Restricted group revenues decline 1%-2% in 2025 and 2026 and
increase approximately 4% thereafter primarily reflecting growth in
the U.S. domestic digital segment;
- Restricted group total EBITDA margins of 19%-22% over the
forecast horizon reflecting the expectation of higher costs and
competitive pressures offset by digital growth;
- Capex is steady at $45 million-$55 million over the forecast
horizon, comprised of approximately $27 million of maintenance and
$18 million-$28 million of growth capex;
- Tribal distributions of approximately $75 million-$80 million per
year;
- Base interest rate assumptions reflect the current SOFR curve.
Recovery Analysis
Since creditors cannot force a tribe into bankruptcy or claim
equity in the tribal operations, recovery typically takes form of a
debt-for-debt exchange. The EBITDA multiple in the analysis below
is Fitch's assumption for a sustainable post-restructuring
leverage. Fitch as assumed a 10% administrative claim.
The going-concern EBITDA of $250 million reflects Fitch's
assumption that distress would likely occur from a combination of
weak customer gaming spend, increasing and sustained competitive
pressures, and poor operating performance. A 15% revenue decline
with 50% flow-through to EBITDA is reasonable in the context of a
regional tribal gaming operator, resulting in a going-concern
EBITDA that is roughly 30% below Mohegan's current EBITDA.
Fitch assigns a 5.0x EV/EBITDA multiple for Mohegan. Compared to
corporate gaming credit peers, which typically use a 6.0x-7.0x
multiple, the multiple captures the lack of a formal restructuring
framework and asset diversification.
The analysis assumes the secured debt includes a full draw on the
proposed Mohegan $250 million revolver and proposed secured debt
notes. This results in a 'RR1' recovery; however, Fitch's recovery
criteria caps Native American casinos at a 'RR2' recovery. The
second lien notes would have a 'RR4' recovery and the unsecured
notes would have a 'RR6' recovery.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA Leverage consistently above 6.0x for the restricted
group;
- EBITDAR Fixed Charge Coverage below 1.5x for both the
restricted;
- Reduction in restricted group liquidity due to excess tribal
distributions and/or investments in unrestricted entities.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA Leverage consistently below 5.0x for the restricted
group;
- EBITDAR Fixed Charge Coverage above 2.0 for both the restricted.
Liquidity and Debt Structure
Mohegan held $192.7 million of cash, which includes $74.0 million
at subsidiaries outside the U.S. The company had borrowing capacity
of $158.4 million on the secured credit facility and $34.8 million
on the Niagara credit facility as of Dec. 31, 2024. The secured
credit facility matures in November 2025 and the guaranteed credit
facility matures in October 2025; both facilities are expected to
be refinanced in the announced transaction.
Following the expected refinancing of the 8% senior secured notes
due 2026, the next maturity is not until 2027. Restricted group FCF
is expected to be positive over the forecast horizon.
Issuer Profile
The Mohegan Tribal Gaming Authority is an operator of casino
properties established by the Mohegan Tribe, a federally recognized
Native American tribe. Mohegan has casinos in Connecticut,
Pennsylvania and Ontario, Canada and a rapidly growing digital
gaming business
Date of Relevant Committee
25-Feb-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
----------- ------ --------
Newco Digital
Holdings, LLC LT IDR B New Rating
senior unsecured LT CCC+ New Rating RR6
senior secured LT BB- New Rating RR2
Senior Secured
2nd Lien LT B New Rating RR4
Mohegan Tribal
Gaming Authority LT IDR B New Rating
senior unsecured LT CCC+ New Rating RR6
senior secured LT BB- New Rating RR2
Senior Secured
2nd Lien LT B New Rating RR4
MONTEREY CAPITOLA: Gets Extension to Access Cash Collateral
-----------------------------------------------------------
Monterey Capitola, LLC received another extension from the U.S.
Bankruptcy Court for the Northern District of California to use
cash collateral.
The order signed by Judge M. Elaine Hammond authorized the use of
cash collateral to pay the company's expenses for the period from
March 18 until confirmation of a Chapter 11 plan.
The budget shows total projected expenses of $5,172.
Robert Schonefeld and other creditors were granted a replacement
lien on post-petition cash collateral, to the same extent and with
the same priority as their pre-bankruptcy liens.
About Monterey Capitola LLC
Monterey Capitola, LLC is a California-based company primarily
engaged in renting and leasing real estate properties.
Monterey Capitola sought relief under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Calif. Case No. 24-51916) on
December 17, 2024, with $1 million to $10 million in both assets
and liabilities. Gina Klump, Esq., at the Law Office of Gina R.
Klump, serves as Subchapter V trustee.
Judge M. Elaine Hammond handles the case.
The Debtor is represented by Joan M. Chipser, Esq., at the Law
Offices of Joan M. Chipser.
MURPHY OIL: Moody's Affirms 'Ba2' CFR & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Ratings changed Murphy Oil Corporation's (Murphy) rating
outlook to stable from positive. Moody's also affirmed Murphy's Ba2
Corporate Family Rating, Ba2-PD Probability of Default Rating and
Ba2 senior unsecured notes ratings. Murphy's SGL-1 Speculative
Grade Liquidity (SGL) rating remains unchanged.
"The change in Murphy's outlook to stable from positive is based on
less debt reduction than Moody's previously expected, while
production scale remains subdued," commented Amol Joshi, Moody's
Ratings Vice President - Senior Credit Officer. "At the same time,
Murphy's Ba2 rating is supported by its diversified asset base with
an ability to generate free cash flow while having capital
allocation flexibility."
RATINGS RATIONALE
Murphy's stable outlook reflects the company's solid credit metrics
with an ability to generate meaningful free cash flow at mid-cycle
commodity prices. However, the company's production scale and debt
balances are unlikely to meaningfully change into 2026, driving the
change in outlook to stable from positive.
Murphy's Ba2 CFR reflects its diversified asset base with moderate
debt balances and supportive credit metrics. Murphy benefits from a
diversified portfolio of onshore production from the Eagle Ford
shale and Canada, while its reported offshore production is
predominately in the US Gulf of America (US Gulf). Roughly 55% of
production is liquids. There are higher exploration and regulatory
risks associated with developing deep water US Gulf assets compared
to onshore Eagle Ford shale and Canadian onshore assets. Some of
the company's highest return investments have been in the US Gulf,
which accounted for about 40% of the company's 2024 production
volumes, but a much lower portion of its proved developed reserves
(about one-quarter). The onshore Canadian assets, that account for
over 45% of proved developed reserves at year-end 2024, are
predominately natural gas and those assets would likely generate
lower investment returns compared to the US Gulf assets. Moody's
expects Murphy to utilize a portion of its free cash flow to
modestly repay debt, supporting some improvement in the company's
credit metrics and resiliency to future commodity price
volatility.
Murphy's capital structure is comprised of the senior unsecured
notes, which make up the majority of debt in the liability
structure and an unsecured revolving credit facility. Moody's notes
that the company's revolving credit facility benefits from upstream
guarantees from the operating companies, structurally subordinating
the senior notes to the claims under the credit facility. Moody's
do not expect Murphy to actively maintain material borrowings under
the credit facility. In addition, the company's asset coverage of
debt is strong. Accordingly, Moody's views the assigned Ba2 rating
on the notes as more appropriate than the rating suggested by
Moody's Loss Given Default for Speculative-Grade Companies
methodology. However, if there is meaningful revolver usage leading
to a greater proportion of potential guaranteed facility debt with
a priority claim over the senior unsecured notes, the notes could
potentially be rated below the CFR.
The SGL-1 Speculative Grade Liquidity Rating reflects Murphy's very
good liquidity into 2026. The liquidity position is supported by
funds from operations, cash balances ($424 million at year-end
2024) and an undrawn $1.35 billion unsecured revolving credit
facility. Moody's expects the company to remain well in compliance
with its financial covenants (applicable while Murphy has a
non-investment grade rating) – maximum consolidated leverage
ratio of 3.25x and minimum consolidated interest coverage ratio of
2.5x. The revolver matures in October 2029. Murphy's next notes
maturity is the $79 million of outstanding senior notes maturing in
December 2027.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Murphy's ratings could be upgraded if the company's production
rises above 200,000 barrels of oil equivalent (boe) per day on a
sustained basis and debt is reduced to $1 billion, while
maintaining retained cash flow (RCF) to debt above 40% in a
mid-cycle environment and achieving a leveraged full cycle ratio
(LFCR) of around 2x. The ratings could be downgraded if production
volumes decline meaningfully, RCF to debt falls below 30% or the
LFCR falls below 1.25x.
Murphy Oil Corporation, headquartered in Houston, Texas, is an
independent E&P company with producing and/or exploration
activities in the US and Canada, as well as in other countries
including Brazil, Mexico, Vietnam, Brunei and Côte d'Ivoire.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
MY SIZE: Oren Elmaliah Named CFO; Roy Golan Joins Board
-------------------------------------------------------
As previously disclosed, Or Kles, the Chief Financial Officer of My
Size, Inc. resigned effective March 31, 2025. On March 6, 2025, the
Company appointed Oren Elmaliah as the Company's Chief Financial
Officer, effective April 1, 2025 to replace Mr. Kles. As a then
member of the board of directors of the Company, Mr. Elmaliah
stepped down as a member of the board and all committees of the
board of directors of the Company.
In connection with Mr. Elmaliah's appointment, the Company entered
into an agreement with Accounting Team Ltd., an entity 100% owned
by Mr. Elmaliah pursuant to which it was engaged to provide
bookkeeping, controller and CFO services, effective from March 1,
2025. Under the agreement, the Company agreed to pay Accounting
Team a monthly fee of NIS 40,000 (approx. $11,000) for the
provision of the Services.
Additionally, on March 6, 2025, the Company's board of directors
appointed Roy Golan as a Class I director to replace Mr. Elmaliah,
effective immediately. Mr. Golan's initial term expires at the 2025
annual meeting of stockholders. Mr. Golan was additionally
appointed to the Audit Committee as chair, the Compensation
Committee, and Nominating and Corporate Governance Committee.
Mr. Golan acts as a financial advisor since July 2024 and currently
serves as a director of Neurosense Therapeutics Ltd. (NASDAQ:
NRSN), a Nasdaq listed company developing treatments for severe
neurodegenerative diseases, since July 2024. Mr. Golan previously
served as the Chief Financial Officer of Ayala Pharmaceuticals,
Inc. (OTCQX: ADXS), a clinical-stage oncology company, from its
merger with BioSight Ltd., a private pharmaceutical company
developing innovative therapeutics for hematological malignancies
and disorders, in October 2023 until June 2024. From 2019 to June
2024, Mr. Golan served as Executive VP and Chief Financial Officer
of BioSight Ltd. From 2018 to 2019, Mr. Golan served as President
and Chief Financial Officer of Exalenz Bioscience Ltd. (TASE:
EXEN), a Tel Aviv Stock Exchange listed global, commercial-stage
diagnostics company which developed its BreathID technology
platform to improve patient care by providing breath-based tests in
the fields of gastroenterology and hepatology and was later
acquired by Meridian Bioscience, Inc. (NASDAQ: VIVO). From 2015 to
2018, Mr. Golan served as the Chief Financial Officer of NeuroDerm
(NASDAQ: NDRM), a Nasdaq listed clinical-stage pharmaceutical
company developing next-generation drug-device combinations for
central nervous system disorders, through its initial public
offering until its acquisition by Mitsubishi Tanabe Pharma Group
Company, and prior thereto he served as their VP Finance. Mr. Golan
holds an LLM from Bar Ilan University as well as a BA from The
College of Management in Rishon LeZion and is also a licensed CPA.
There are no arrangements or understandings between Mr. Golan and
any other persons pursuant to which he was appointed as a director.
There are also no family relationships between Mr. Golan and any of
the Company's other directors or executive officers, and he has no
direct or indirect material interest in any transaction required to
be disclosed pursuant to Item 404(a) of Regulation S-K.
Mr. Golan will receive compensation for his board service as a
non-employee director consistent with the Company's other
non-employee directors.
About MySize, Inc.
Airport City, Israel-based My Size, Inc. (NASDAQ: MYSZ) --
http://www.mysizeid.com/-- is an omnichannel e-commerce platform
and provider of AI-driven measurement solutions that drive revenue
growth and reduce costs for online retailers while generating big
data and machine learning analytics.
The Company cautioned in a Form 10-Q Report for the quarterly
period ended March 31, 2024, that substantial doubt exists about
its ability to continue as a going concern. According to the
Company, since inception, it incurred significant losses and
negative cash flows from operations, reporting a net loss of
$1,016,000 and $2,654,000 for three-months ended March 31, 2024 and
2023, respectively, resulting in an accumulated deficit of
$60,897,000. The Company has financed its operations mainly through
fundraising from various investors.
As of September 30, 2024, My Size had $7.03 million in total
assets, $2.57 million in total liabilities, and $4.46 million in
total stockholders' equity.
NETCAPITAL INC: Investors Exercise Warrants, Company Raises $143K
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Netcapital, Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that it entered into inducement
offer letter agreements with certain investors (the "Participating
Holders") that hold certain outstanding warrants to purchase up to
an aggregate of 79,558 shares of the Company's common stock, par
value $0.001 per share, originally issued to the Participating
Holders in December 2023 and May 2024 (the "Existing Warrants").
The Existing Warrants had an exercise price of $8.74 per share.
Pursuant to the Inducement Letters, the Participating Holders
agreed to exercise for cash the Existing Warrants at a reduced
exercise price of $1.80 per share in partial consideration for the
Company’s agreement to issue in a private placement (x) new
Series A-7 Common Stock purchase warrants (the "New Series A-7
Warrants") to purchase up to 79,558 shares of Common Stock (the
"New Series A-7 Warrant Shares") and (y) new Series A-8 Common
Stock Purchase Warrants (the "New Series A-8 Warrants" and,
together with the New Series A-7 Warrants, the "New Warrants") to
purchase up to 79,558 shares of Common Stock (the "New Series A-7
Warrant Shares" and, together with the New Series A-8 Warrant
Shares, the "New Warrant Shares"). The New Warrants are exercisable
beginning on September 5, 2025 (the "Initial Exercise Date") with
such warrants expiring on (i) the five-year anniversary of the
Initial Exercise Date for the Series A-7 Warrants and (ii) the
eighteen-month anniversary of the Initial Exercise Date for the
Series A-8 Warrants.
The closing of the transactions contemplated pursuant to the
Inducement Letters occurred on March 6, 2025. The Company received
aggregate gross proceeds of approximately $143,000 from the
exercise of the Existing Warrants by the Participating Holders,
before deducting nominal miscellaneous expenses payable by the
Company. There were no placement agent fees. The Company intends to
use the net proceeds for general corporate purposes.
The original sale or resale of the shares of Common Stock
underlying the Existing Warrants have been registered pursuant to
an existing registration statement on Form S-1, as amended (File
Nos. 333-282590) declared effective by the Securities and Exchange
Commission on December 20, 2024.
Terms of the New Warrants:
Duration and Exercise Price -- Each New Warrant has an exercise
price equal to $2.03 per share. The New Warrants are not
exercisable until the Initial Exercise Date, and the New Warrants
expire on the (i) 5-year anniversary of the Initial Exercise Date
for the Series A-7 Warrants and (ii) the eighteen month anniversary
of the Initial Exercise Date for the Series A-8 Warrants. The
exercise price and number of New Warrant Shares issuable upon
exercise of the New Warrants are subject to appropriate adjustment
in the event of stock dividends, stock splits, subsequent rights
offerings, pro rata distributions, reorganizations, or similar
events affecting the Common Stock and the exercise price.
Exercisability -- The New Warrants are exercisable, at the option
of each holder, respectively, in whole or in part, by delivering a
duly executed exercise notice accompanied by payment in full for
the number of shares of Common Stock purchased upon such exercise
(except in the case of a cashless exercise discussed below). A
holder may not exercise any portion of their New Warrants to the
extent that the holder would own more than 4.99% of the outstanding
Common Stock immediately after exercise, except that upon prior
notice from the holder to the Company, the holder may increase or
decrease the amount of ownership of outstanding stock after
exercising their New Warrants as applicable, up to 9.99% of the
number of shares of Common Stock outstanding immediately after
giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the New Warrants
provided that any increase will not be effective until 61 days
following notice to the Company.
Cashless Exercise -- If, at the time a holder exercises its New
Warrants, a registration statement registering the resale of the
New Warrant Shares by the holder, under the Securities Act of 1933,
as amended (the "Securities Act"), is not then effective or
available, then in lieu of making the cash payment otherwise
contemplated to be made upon such exercise in payment of the
aggregate exercise price, the holder may elect instead to receive
upon such exercise (either in whole or in part), the net number of
shares of Common Stock determined according to a formula set forth
in the New Warrants.
Rights as a Stockholder -- Except as otherwise provided in the New
Warrant, or by virtue of the holder's ownership of shares of Common
Stock, such holder does not have the rights or privileges of a
holder of Common Stock, including any voting rights, until such
holder exercises such holder's New Warrants. The New Warrants
provide that the holders of the New Warrants have the right to
participate in certain distributions or dividends paid on shares of
Common Stock.
Fundamental Transactions -- If at any time the New Warrants are
outstanding, the Company, either directly or indirectly, in one or
more related transactions, effects a Fundamental Transaction (as
defined in the New Warrants), a holder of New Warrants is entitled
to receive the number of shares of Common stock of the successor or
acquiring corporation, or of the Company if the Company is the
surviving corporation, and any additional consideration receivable
as a result of the Fundamental Transaction by such holder of the
number of shares of Common Stock for which the New Warrants are
exercisable immediately prior to the Fundamental Transaction. As an
alternative, the holder, at their option, in the event of a
Fundamental Transaction, exercisable at any time concurrently with,
or within 30 days after, the consummation of the Fundamental
Transaction (or, if later, the date of the public announcement of
the applicable fundamental transaction), cause the Company to
purchase the unexercised portion of the New Warrants from the
holder by paying to the holder an amount of cash equal to the Black
Scholes Value (as defined in the New Warrants) of the remaining
unexercised portion of the New Warrants on the date of the
consummation of such Fundamental Transaction.
Waivers and Amendments -- The New Warrants may be modified or
amended, or the provisions of the New Warrants waived, with the
Company's and the holder's written consent.
About Netcapital Inc.
Headquartered in Boston, Mass., Netcapital Inc. --
www.netcapital.com -- is a fintech company with a scalable
technology platform that allows private companies to raise capital
online and provides private equity investment opportunities to
investors. The Company's consulting group, Netcapital Advisors,
provides marketing and strategic advice and takes equity positions
in select companies. The Company's funding portal, Netcapital
Funding Portal, Inc. is registered with the U.S. Securities &
Exchange Commission (SEC) and is a member of the Financial Industry
Regulatory Authority (FINRA), a registered national securities
association.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated July 29, 2024, citing that the
Company has negative working capital, net operating losses, and
negative cash flows from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern.
Netcapital reported a net loss of $4.99 million for the year ended
April 30, 2024, compared to net income of $2.95 million for the
year ended April 30, 2023. As of July 31, 2024, Netcapital had
$41.44 million in total assets, $3.93 million in total liabilities,
and $37.51 million in total stockholders' equity.
NEWPORT VENTURES: Jay Zimmerman Appointed as New Committee Member
-----------------------------------------------------------------
The U.S. Trustee for Region 16 appointed Jay Zimmerman as new
member of the official committee of unsecured creditors in the
Chapter 11 case of Newport Ventures, LLC.
The committee is now composed of:
1. SM Delta North LLC
David Miller
2118 Wilshire Blvd, #601
Santa Monica, CA 90403
Phone: (310) 980-3736
Email: millerdca7@gmail.com
2. Scape Sol Landscaping
Phat Gia Phan
431 Wagon Trail Dr.
Denver, CO 80123
Phone: (303) 810-0337
Email: pphan.ssl@hotmail.com
3. Jay Zimmerman
873 Ticonderoga Drive
Sunnyvale, CA 94087
Phone: (650) 743-7844
Email: Zimmerman_Jay@yahoo.com
About Newport Ventures
Newport Ventures, LLC owns and operates a restaurant in Orange,
Calif.
Newport Ventures filed Chapter 11 petition (Bankr. C.D. Calif. Case
No. 24-12738) on October 26, 2024, listing between $10 million and
$50 million in both assets and liabilities. Shahvand Aryana,
principal of Newport Ventures, signed the petition.
Bankruptcy Judge Theodor Albert oversees the case.
The Debtor is represented by Steven M. Kries, Esq.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
NEWSCYCLE SOLUTIONS: CION Marks $12.8 Million Loan at 23% Off
-------------------------------------------------------------
CION Investment Corp. has marked its $12,286,000 loan extended to
NewsCycle Solutions Inc. to market at $9,521,000 or 77% of the
outstanding amount, according to CION'S Form 10-K for the fiscal
year ended December 31, 2024, filed with the U.S. Securities and
Exchange Commission.
CION is a participant in Senior Secured First Lien Debt to
NewsCycle Solutions Inc. The loan accrues interest at a rate of
S+700, 1.00% SOFR Floor per annum. The loan matures on February 27,
2027.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
100 Park Avenue, 25th Floor
New York
About NewsCycle Solutions Inc.
NewsCycle Solutions is a provider of software and services powering
the global media industry, both print and digital. Their content
management, advertising management, subscription management and
mobile solutions help companies drive profitability and accelerate
digital business models. With headquarters in Bloomington, MN and
regional offices throughout the world, Newscycle Solutions is a
trusted partner serving over 10,000 news media, broadcast,
magazine, financial services, and corporate clients.
NINE ENERGY: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative
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Moody's Ratings downgraded Nine Energy Service, Inc.'s (Nine)
Corporate Family Rating to Caa2 from Caa1, Probability of Default
Rating to Caa2-PD from Caa1-PD and senior secured notes ratings to
Caa3 from Caa2. Nine's Speculative Grade Liquidity (SGL) rating was
changed to SGL-4 from SGL-3. The outlook was changed to negative
from stable.
"The downgrade of Nine's ratings with a negative outlook reflect
the company's weakened liquidity in a continuously challenging
industry environment," said Thomas Le Guay, a Moody's Ratings Vice
President.
RATINGS RATIONALE
The downgrade of Nine's CFR to Caa2 reflects the company's weakened
liquidity position, including a constrained availability under the
company's asset-based lending (ABL) facility. The Caa2 CFR also
reflects high risk of a financial restructuring, including a
distressed exchange, given the company's high level of debt
relative to its earnings capacity.
The negative outlook reflects risks of further slowdown in onshore
rig activity in the US, that would further constrain Nine's
liquidity. The company's capital structure could become untenable
in case of a continued weakness in operating conditions.
Nine's CFR reflects the company's relatively small scale and high
leverage in the highly cyclical oilfield services industry. Nine's
operating performance is highly sensitive to new well activity in
the US and has been negatively affected by the continuous decline
in onshore rig activity in the US since early 2023, with the
company's adjusted EBITDA declining by 27% to $53 million in 2024.
The oilfield services industry is highly competitive and subject to
continued capital discipline by upstream operators.
Nine's CFR benefits from diversification across multiple business
lines within the oilfield services industry, exposure to various US
basins, and small but growing exposure to international markets.
The company has no near-term maturities. Its ABL facility matures
in January 2027 and its senior secured notes in February 2028.
Nine's SGL-4 rating reflects Moody's views that the company's
liquidity is weak. As of December 31, 2024, the company's $24
million availability under its ABL facility maturing in January
2027 was constrained by its springing minimum fixed charge coverage
ratio covenant. The ABL revolver's borrowing base also decreased to
$74 million as of December 31, 2024 as a result of lower accounts
receivable and inventory. The company's liquidity is mostly
supported by $28 million of cash and cash equivalents on its
balance sheet as of December 31, 2024. Moody's do not expects the
company to generate any free cash flow in the current industry
environment.
Nine's $300 million of senior secured notes due February 2028 are
rated Caa3, one notch below the Caa2 CFR, reflecting their
subordination to the ABL facility. The notes have a second lien
claim on the assets that secure the revolver with a first lien
claim, including accounts receivable, inventory and equipment (ABL
priority collateral). The senior secured notes have a first lien on
non-ABL priority collateral and a second lien on ABL priority
collateral. The ABL revolver has a second lien on non-ABL priority
collateral.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade include increasing default
risk or a lowering of Moody's views of expected recoveries.
Factors that could lead to an upgrade include a stronger than
expected increase in revenues and profitability, sufficient debt
reduction to achieve a tenable capital structure and improving
liquidity.
Nine Energy Service, Inc. (Nine), headquartered in Houston, Texas,
is a publicly traded provider of oilfield services to oil and gas
exploration and production companies, with a focus on well
completions. Nine reported $554 million of revenue and $53 million
of adjusted EBITDA in 2024.
The principal methodology used in these ratings was Oilfield
Services published in January 2023.
NORTHERN DYNASTY: Kopernik Global Holds 12.7% Equity Stake
----------------------------------------------------------
Kopernik Global Investors, LLC, and David B. Iben disclosed in
Amendment No. 2 of a Schedule 13D filing with the U.S. Securities
and Exchange Commission that as of March 5, 2025, they beneficially
own 73,552,952 shares of Northern Dynasty Minerals Ltd's common
stock, representing 12.7% based on 580,197,249 Common Shares
outstanding.
About Northern Dynasty Minerals Ltd.
Northern Dynasty Minerals Ltd. is a mineral exploration and
development company based in Vancouver, Canada. Northern Dynasty's
principal asset, owned through its wholly owned Alaska-based U.S.
subsidiary, Pebble Limited Partnership, is a 100% interest in a
contiguous block of 1,840 mineral claims in Southwest Alaska,
including the Pebble deposit, located 200 miles from Anchorage and
125 miles from Bristol Bay. The Pebble Partnership is the
proponent
of the Pebble Project.
Vancouver, Canada-based Deloitte LLP, the Company's auditor since
2009, issued a "going concern" qualification in its report dated
April 1, 2024, citing that the Company incurred a consolidated net
loss of $21 million during the year ended December 31, 2023, and
as
of that date, the Company's consolidated deficit was $697 million.
These conditions, along with other matters, raise substantial
doubt
about its ability to continue as a going concern.
Northern Dynasty reported a net loss of C$3.7 million, compared to
a net loss of $C6.2 million for the same period in 2023. As of
June
30, 2024, the Company had C$139.95 million in total assets and
C$21.62 million in total liabilities.
NOVA CHEMICALS: Moody's Affirms 'Ba2' CFR, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Ratings affirmed NOVA Chemicals Corporation's (NOVA) Ba2
corporate family rating, Ba2-PD probability of default rating, Ba3
senior unsecured and Baa3 senior secured notes ratings. The outlook
remains stable.
The ratings affirmation incorporates the credit positive impact of
NOVA's proposed absorption into a sizeable global polyolefin
business controlled by highly rated operators and reflects Moody's
expectations that despite a potentially sizeable litigation payment
to The Dow Chemical Company (Dow, Baa1 negative), NOVA will be well
positioned to reduce debt rapidly even amid persistently weak
industry conditions.
On March 03, 2025, the Abu Dhabi National Oil Company (ADNOC)
announced it had entered into an agreement to purchase 100% of NOVA
from Mubadala Investment Company (MIC, 100% owned by the Government
of Abu Dhabi – Aa2 stable) in a transaction that values NOVA at
$13.4 billion. Simultaneously, NOVA will also be acquired by
Borouge Group International (BGI), a newly formed, large scale
polyolefin joint venture between ADNOC and OMV AG (A3, 31% owned by
the Government of Austria- Aa1 stable), which is expected to close
early 2026. NOVA will operate as a wholly-owned subsidiary under
the BGI conglomerate, but the final capital structure, strategic
direction and status of future debt guarantees are all unknown.
RATINGS RATIONALE
NOVA's CFR is supported by: 1) large scale within the ethylene and
polyethylene markets; 2) competitive manufacturing assets in North
America with access to cost-advantaged ethane; and 3) strong
ownership profile with a history of flexible dividend payments and
track record of liquidity support.
The company is challenged by: 1) high exposure to inherent
cyclicality of prices and input costs leading to volatile margins
and cash flows given limited product and geographic diversity; 2)
lack of forward integration at Geismar which has weighed on
profitability; and 3) recent track record of operational challenges
and tight liquidity management.
NOVA has adequate liquidity. As of Q4-24 sources total close to $2
billion, consisting of around $100 million in cash, Moody's
forecasts for over $500 million of free cash flow during 2025 and
full availability under the $1.5 billion revolving credit facility
(expiring April 2028). Uses over the next twelve months include
$220 million drawn under NOVA's accounts receivable securitization
facilities consisting of a $100 million program expiring December
2025 and $175 in January 2026. Moody's expects that the company
will be subject to an additional sizeable litigation payment to Dow
but will have adequate liquidity after making the payment. Moody's
expects NOVA to remain in compliance with its financial covenants.
The company has some flexibility to raise alternate liquidity
through asset sales.
NOVA's senior unsecured debt is rated Ba3, one notch below the Ba2
CFR, reflecting subordination to the $1.5 billion secured revolving
credit facility (expiring April 2028) and $400 million senior
secured notes due 2028. The senior secured notes are rated two
notches above the CFR at Baa3, reflecting priority ranking ahead of
NOVA's unsecured debt.
The stable outlook reflects Moody's expectations for strong cash
flows reflecting volume growth following the completion of AST2,
with debt/EBITDA declining toward 3.5x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if debt to EBITDA is likely to be
sustained above 5.5x, or if the company generates sustained
negative free cash flow or experiences repeat operational
setbacks.
The ratings could be upgraded if NOVA sustains debt to EBITDA under
3.5x and successfully executes on the full ramp-up of AST2. An
upgrade would also require a more conservative financial policy.
NOVA Chemicals Corporation is a Calgary, Alberta-headquartered
producer of ethylene and polyethylene products.
The principal methodology used in these ratings was Chemicals
published in October 2023.
OMERS RELIEF: Moody's Lowers CFR to Caa1 & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Ratings downgraded OMERS Relief Acquisition, LLC's (dba
Gastro Health) corporate family rating to Caa1 from B3 and
probability of default rating to Caa1-PD from B3-PD. At the same
time, Moody's downgraded the instrument-level ratings on the senior
secured first lien bank credit facilities to B3 from B2 and the
senior secured second lien bank credit facility to Caa3 from Caa2.
Moody's revised the outlook to stable from negative.
The ratings downgrade reflects lack of material improvement in
Gastro Health's leverage and liquidity. Moody's expects Gastro
Health's leverage to remain above 7.5x in Moody's forward view and
for the company to generate breakeven free cash flow with quarterly
volatility.
Governance risk considerations are material to this rating action
reflecting Gastro Health's aggressive financial policy including an
active debt-funded acquisition growth strategy which has
contributed to high financial leverage.
RATINGS RATIONALE
Gastro Health's Caa1 CFR reflects its high financial leverage and
track record of aggressive financial policies, including a bolt-on
acquisition strategy funded with incremental debt. Moderate scale
relative to rated healthcare service providers and high geographic
concentration to Florida, Ohio, Virginia, and Washington also
constrain the rating. Moody's expects financial leverage to remain
above 7.5x in the next 12-18 months.
The rating benefits from increasing demand for routine screening
for colorectal cancer at an earlier age, supporting topline growth
expectations. Good scale relative to other gastroenterology
practice management platforms and a high degree of variable cost
within the company's expense structure further support the rating.
Gastro Health's attractive payor mix also benefits the rating.
Moody's expects Gastro Health to maintain adequate liquidity over
the next 12 to 18 months, supported by $42 million of cash as of
September 30, 2024. Moody's expects the company to generate
breakeven free cash flow in 2025 given the company's significant
interest burden. Liquidity is also supported by a $60 million
revolving credit facility expiring in July 2026, of which $23.5
million was drawn as of September 30, 2024. Subsequent to the close
of the third quarter, the company repaid $10 million of outstanding
borrowings on the revolver. The revolver has a springing maximum
first lien net leverage covenant, which Moody's do not expects the
company to violate if triggered over the next 12 to 18 months.
Alternate liquidity is limited as the majority of assets are
encumbered by bank credit facilities.
The B3 ratings for the company's senior secured credit facilities
are one notch higher than the Caa1 CFR. This reflects the level of
junior capital provided by the second lien term loan in the
company's capital structure. The Caa3 rating on the company's
second lien term loan is two notches below the Caa1 CFR, reflecting
its substantial subordination to the meaningful amount of secured
debt in the company's capital structure.
Gastro Health's CIS-5 (previously CIS-4) indicates that the rating
is lower than it would have been if ESG risk exposures did not
exist and that the negative impact is more pronounced than for
issuers scored CIS-4. Gastro Health has exposure to both social
risks (S-4) and governance considerations (G-5, previously G-4).
The social risk stems from the company's skilled workforce and
exposure to labor shortages and wage inflation as well as changes
to reimbursement rates. Gastro Health's exposure to governance
considerations reflects its aggressive financial policy, including
high financial leverage and history of debt-funded acquisitions
under private equity ownership.
The stable outlook incorporates Moody's expectations that Gastro
Health's leverage will remain elevated and that liquidity will be
adequate.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if operating performance improves and
the company is able to consistently generate positive free cash
flow. An upgrade would also be supported by leverage sustained
below 7.5x.
The ratings could be downgraded if leverage continues to rise or
liquidity deteriorates, including consistently negative free cash
flow. A downgrade could also occur if the capital structure becomes
unsustainable, increasing the probability of default.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Gastro Health is a leading clinical platform comprised of
physicians and advanced practitioners specializing in the treatment
of gastrointestinal disorders, nutrition, and digestive health. The
company's platform spans approximately 200 locations in seven
states and includes more than 350 physicians. LTM revenue as of
September 30, 2024 was around $700 million. Gastro Health is owned
by Canadian public pension fund OMERS.
OMNIQ CORP: Gets $4.4M Order for Rugged Mobile Devices in Logistics
-------------------------------------------------------------------
OMNIQ CORP has received a $4.4 million purchase order from a major
logistics provider for its ruggedized handheld mobile computers.
This order underscores the growing demand for intelligent, durable,
and connected solutions that enhance operational efficiency in
logistics and supply chain management.
These ruggedized mobile computers will empower frontline workers
with real-time data access, workflow automation, and seamless
system integration, ensuring greater accuracy and productivity
across warehouses, distribution centers, and transportation hubs.
Built for the most demanding environments, these devices are
engineered to withstand harsh conditions while providing secure,
high-speed connectivity and superior performance for
mission-critical applications.
"As industries continue to evolve, the need for resilient,
automated, and scalable technology solutions has never been
greater," said Shai Lustgarten, CEO at OMNIQ. "This order reflects
our commitment to delivering cutting-edge solutions that help
logistics leaders optimize operations, reduce downtime, and drive
higher efficiency across their supply chains."
With global supply chains embracing automation, IoT-enabled
mobility, and intelligent data solutions, OMNIQ remains a trusted
technology partner, delivering next-generation innovations that
transform business processes and improve operational resilience.
About Omniq Corp
OmniQ Corporation -- www.omniq.com -- provides computerized and
machine vision image processing solutions that use patented and
proprietary AI technology to deliver real-time object
identification, tracking, surveillance, and monitoring for the
Supply Chain Management, Public Safety, and Traffic Management
applications. The technology and services provided by the Company
help clients move people, objects, and manage big data safely and
securely through airports, warehouses, schools, and national
borders and in many other applications and environments.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 1, 2024, citing that the Company has a deficit in
stockholders' equity and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
As of Sept. 30, 2024, OMNIQ had $37.19 million in total assets,
$77.42 million in total liabilities, and a total stockholders'
deficit of $40.23 million.
ONCOCYTE CORP: Board OKs Executive Salary Raises, Bonuses
---------------------------------------------------------
Oncocyte Corporation disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that the Board of
Directors, at the recommendation of the Compensation Committee of
the Board, approved increases to the annual base salaries of:
(i) Joshua Riggs, the Company's President and Chief Executive
Officer, from $400,000 to $420,000,
(ii) Andrea James, the Company's Chief Financial Officer, from
$325,000 to $341,250, and
(iii) Ekkehard Schüetz, M.D., Ph.D., the Company's Chief
Science Officer, from $378,025 to $396,926.
Each of the salary increases is effective as of March 10, 2025.
In addition, the Board, at the recommendation of the Compensation
Committee, approved a one-time bonus of $25,000 to Andrea James,
the Company's Chief Financial Officer, to be paid in cash or
restricted stock units under the Company's Amended and Restated
2018 Equity Incentive Plan at the discretion of Ms. James in
recognition of her achievements and contributions to the Company
since becoming Chief Financial Officer of the Company in June 2024.
If Ms. James elects to receive such bonus in RSUs, such RSUs
shall:
(i) have a grant date of the second full trading day after the
release of the Company's financial results for the quarter and
fiscal year ended December 31, 2024, and
(ii) vest immediately on the effective date of grant.
On March 9, 2025, the Board, at the recommendation of the
Compensation Committee, approved one-time grants under the Plan
of:
(i) $600,000 in RSUs to Joshua Riggs, the Company's President
and Chief Executive Officer, subject to a maximum of 200,000 RSUs,
(ii) $360,000 in RSUs to Andrea James, the Company's Chief
Financial Officer, subject to a maximum of 120,000 RSUs, and
(iii) $360,000 in RSUs to Ekkehard Schüetz, M.D., Ph.D., the
Company's Chief Science Officer, subject to a maximum of 120,000
RSUs.
Each of the RSUs shall:
(i) have a grant date of the second full trading day after the
release of the Company's financial results for the quarter and
fiscal year ended December 31, 2024, and
(ii) vest as follows: one-fourth of the shares subject to the
grant shall vest on each of the first, second, third and fourth
anniversaries of the effective date of grant, subject to continuous
service through the applicable vesting date.
About Oncocyte Corp.
Oncocyte Corporation, based in Irvine, Calif., is a precision
diagnostics company dedicated to developing and commercializing
proprietary tests in three key areas: VitaGraft -- A blood-based
test for monitoring solid organ transplantation; DetermaIO -- A
gene expression test that evaluates the tumor microenvironment to
predict responses to immunotherapies; and DetermaCNI -- A
blood-based monitoring tool to assess therapeutic efficacy in
cancer patients.
Costa Mesa, CA-based Marcum LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated April
15, 2024. The report emphazies that the Company has incurred
operating losses and negative cash flows since inception and needs
to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
As of September 30, 2024, Oncocyte had $70.2 million in total
assets, $60.5 million in total liabilities, and $9.7 million in
total shareholders' equity.
ONCOCYTE CORP: James Liu Named VP Accounting, Controller
--------------------------------------------------------
Oncocyte Corporation disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that the Company promoted
James Liu to Vice President Accounting, Controller, Treasurer and
Principal Accounting Officer, effective March 10, 2025.
Mr. Liu, age 30, previously served as the Company's Manager of
Securities and Exchange Commission Reporting & Compliance from July
2021 to July 2022, as interim Controller from July 2022 to
September 2022, as Controller & Principal Accounting Officer from
July 2022 to August 2023, as interim Principal Financial Officer
from August 2023 to June 2024, and as Senior Director, Controller
and Principal Accounting Officer since August 2023. Prior to that,
Mr. Liu was the Accounting Manager of Acacia Research Corporation,
an opportunistic capital platform that identifies and acquires
other businesses, from November 2020 to July 2021, and Senior
Accountant at Gatekeeper Systems, Inc., a provider of loss
prevention solutions, from August 2019 to November 2020. Prior to
joining Gatekeeper Systems, Mr. Liu served as Senior Assurance
Associate at BDO USA, LLP, an accounting firm, from October 2016 to
August 2019. Mr. Liu holds a BASc degree from the University of
California, San Diego, and is a Certified Public Accountant.
As Vice President Accounting, Controller, Treasurer and Principal
Accounting Officer, effective March 10, 2025, Mr. Liu will receive
an annual salary of $225,000 and will be eligible to receive
discretionary annual bonuses based on achievement of personal and
corporate performance goals established by the Company, with a
target bonus equal to 35% of his annual base salary.
Mr. Liu also received a one-time grant of $60,000 in RSUs under the
Plan, and a one-time grant of 10,000 options under the Plan. Each
of the RSUs and options shall have a grant date of, and if
applicable, exercise price equal to the closing price on, the
second full trading day after the release of the Company's
financial results for quarter and fiscal year ended December 31,
2024. The RSUs shall vest as follows: one-third of the shares
subject to the grant shall vest on each of the first, second and
third anniversaries of the effective date of grant, subject to
continuous service through the applicable vesting date. The options
shall vest as follows: one-third of the shares subject to the grant
shall vest after one year of continuous service from the effective
date of grant, and the balance will vest in 24 equal monthly
installments commencing one year after the date of grant, subject
to continuous service through the applicable vesting date.
Mr. Liu will continue to be eligible to participate in various
Company employee benefit programs and plans.
There are no family relationships between Mr. Liu and any directors
or executive officers of the Company, or persons nominated or
chosen by the Company to become a director or executive officer of
the Company. Additionally, there are no arrangements or
understandings between Mr. Liu and any other person pursuant to
which he was selected to serve as Vice President Accounting,
Controller, Treasurer and Principal Accounting Officer. Finally,
there are no transactions to which the Company is or was a
participant and in which Mr. Liu has or had a direct or indirect
material interest subject to disclosure as a related party
transaction under Item 404(a) of Regulation S-K.
About Oncocyte Corp.
Oncocyte Corporation, based in Irvine, Calif., is a precision
diagnostics company dedicated to developing and commercializing
proprietary tests in three key areas: VitaGraft -- A blood-based
test for monitoring solid organ transplantation; DetermaIO -- A
gene expression test that evaluates the tumor microenvironment to
predict responses to immunotherapies; and DetermaCNI -- A
blood-based monitoring tool to assess therapeutic efficacy in
cancer patients.
Costa Mesa, CA-based Marcum LLP, the Company's auditor since 2023,
issued a "going concern" qualification in its report dated April
15, 2024. The report emphazies that the Company has incurred
operating losses and negative cash flows since inception and needs
to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
As of September 30, 2024, Oncocyte had $70.2 million in total
assets, $60.5 million in total liabilities, and $9.7 million in
total shareholders' equity.
OWENS & MINOR: Fitch Assigns 'BB+' Rating on Senior Secured Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating with a Recovery Rating of
'RR2' to Owens & Minor, Inc.'s and certain subsidiaries' (OMI)
incremental Term Loan B. Fitch has also assigned a 'BB+'/'RR2'
rating to Owens & Minor, Inc.'s offering of senior secured notes.
Both ratings have been placed on Rating Watch Negative.
In addition, all of OMI's ratings remain on Negative Watch pending
the closing of the acquisition of Rotech Healthcare Holdings, Inc.
and final conclusions of OMI's ability to achieve its deleveraging
plan, including the extent to which the plan will rely on the sale
of its Products & Health Services (P&HS) segment, EBITDA growth or
both. Depending on the nature and extent of deleveraging, Fitch
will determine whether to downgrade the rating by one notch, or
affirm the ratings with a Negative or Stable Rating Outlook.
Key Rating Drivers
Potential Sales of P&HS Segment: OMI announced on Feb 28, 2025 that
it is actively engaged in discussions regarding the potential sale
of its P&HS segment. Fitch views OMI's potential sale of its
Products & Healthcare Services segment as a positive step for its
credit profile. Using sale proceeds to reduce debt could decrease
the risk of a downgrade, all else being equal but does not
eliminate it.
If OMI prioritizes debt reduction over business expansion, it might
deleverage more quickly post-acquisition, especially with increased
EBITDA and cash flow in 2025. The ultimate impact on OMI's leverage
and ratings depends on the successful execution of the P&HS
divestiture and the Rotech acquisition. The completion of the
divestiture and the use of proceeds will influence OMI's position
within the Rating Sensitivities.
Rotech Offers Growth with Leverage: Fitch believes the Rotech
merger will enhance OMI's Patient Direct business by leveraging a
network of 625 locations, improving EBITDA margins and free cash
flow over three years. Synergies from better procurement and
network consolidation could reach $50 million, though offset by
restructuring costs.
OMI's leverage may peak between 4.5x and 5.0x post-merger (and
before sale proceeds from the P&HS segment) with
slower-than-expected debt reduction due to light cash conversion,
keeping leverage and debt ratios outside Fitch's negative rating
sensitivities over the next year.
Strong Position in Medical Products: OMI has a comprehensive
portfolio of proprietary products and services to serve the acute
care hospital and ambulatory markets through its extensive
distribution network. Fitch believes OMI has upside growth
potential in the medium term as it leverages its scale, enhances
efficiency via technology investments and expands its portfolio of
proprietary products. Fitch believes OMI has a sound plan to deal
with pressures that emerged from the pandemic, including excess
product supply, inflation and competitor pricing.
Favorable Outlook for Home Healthcare: Rising demand in the home
healthcare market presents growth opportunities. The 2022
acquisition of Apria, Inc., a leading U.S. home medical equipment
provider, fits well in this market. Fitch believes the aging U.S.
population, rising levels of chronic conditions and increasing
preference for home care will contribute to high single-digit
revenue growth. The home-based care market also offers higher
margins than the core distribution business of medical products and
aligns with the focus of payors and physicians pursuing more
value-based care models.
Modest OMI EBITDA Momentum: Fitch's estimate of OMI's standalone
adjusted EBITDA is higher in 2024 compared to 2023, albeit
modestly, as product demand accelerates. The quality of EBITDA
continues to be constrained by persistent exit and realignment
costs, but Fitch believes such costs will decline following the
sale of the P&HS segment.
Light Cash Conversion: OMI's free cash flow is thin relative to
EBITDA, impacted by unfavorable working capital changes and high
exit and re-alignment costs. The company relies on external
liquidity sources like credit facilities, securitization and
factoring programs, indicating insufficient cash flow from
operations for investments. The Rotech merger adds debt and is
expected to outstrip cash flow from operations in the near term.
Competitive Environment: The U.S. medical-surgical supply
distribution industry is highly competitive, with pricing pressure
and narrow margins. OMI competes on price, product availability,
delivery times, and ease of doing business against national
distributors like Cardinal Health, Medline, regional distributors,
customer self-distribution, and third-party logistics. Emphasizing
customer service, OMI has improved retention and avoided previous
contract losses.
Derivation Summary
OMI's 'BB-' Long-Term Issuer Default Rating (IDR) reflects its
well-positioned home-based care growth platform and solid hospital
distribution foundation. However, concentrated customers, supplier
dependence, and significant debt weigh on its financial profile.
Post-Rotech acquisition, EBITDA leverage is expected to fluctuate
between 4.0x and 5.0x. Compared to peers like Cardinal Health and
McKesson, OMI has higher leverage and smaller scale, contributing
to its lower rating. While Apria enhances OMI's profile in the
higher-margin patient direct market, revenue and profitability
remain below Medline's.
Fitch rates OMI's first-lien senior secured credit facilities with
a recovery rating of 'RR2' pursuant to its "Corporate Recovery
Ratings and Instrument Ratings Criteria" because such first liens
are deemed to be subordinated to obligations created under OMI's
Receivables Financing Agreement.
Fitch assesses OMI's strong parent-subsidiary ties, consolidating
IDRs due to legal, operational, and strategic incentives.
Cross-default provisions across OMI's capital structure further
support this linkage.
Key Assumptions
- All assumptions exclude the potential effects of a sale of the
P&HS segment;
- Revenue (pro forma for the Rotech merger) increasing at 6.5% CAGR
through to 2027;
- Operating EBITDA margin improving to approximately 6%, pro forma
for the Rotech merger;
- CFO, along with external sources of working capital borrowing, to
be sufficient to fund internal growth and capex of approximately
1.8%-2.3% of revenue;
- Incremental acquisition financing resulting in an effective
interest expense rising above 7.5% over the forecast period;
- The change in working capital to dampen CFO, although CFO may
vary depending on growth in inventory and receivables turnover;
- The 2027 Term loan A assumed to be paid;
- EBITDA leverage fluctuating between 4.0x and 5.0x over the next
24 months, depending on the use of receivables factoring, which
offsets reported debt reduction, and the amount and use of FCF;
- No material common dividends or share repurchases through to
2027;
- Proposed acquisition of Rotech Healthcare results in incremental
debt of $1.4 billion and $200 million of EBITDA (pro forma) in
2025. Integration costs are expected to offset cost-reduction
opportunities of ($50 million) for the 24 months after acquisition
closing.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Substantial dependence on external liquidity facilities for
working capital needs;
- Increased level of debt for shareholder returns (dividends or
share repurchases) or highly leveraged acquisitions that Fitch
expects will raise business and financial risks without sufficient
returns;
- Loss of healthcare provider customers or a GPO that causes a
material loss of revenue and EBITDA;
- Gross EBITDA leverage sustained above 4.0x and cash
flow-capex/debt sustained below 5.0%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Reduced dependence on short-term borrowing for working capital
needs;
- Top-line growth sustained at 4% or higher, balanced across
segments and geographies and supported by consistent service levels
and customer persistency;
- Gross EBITDA leverage sustained below 3.0x and cash
flow-capex/debt above 7.5%.
Liquidity and Debt Structure
OMI's liquidity relies on cash flow from operations and a $450
million revolving credit facility, with thin free cash flow due to
negative working capital and realignment costs. The company's
master receivables purchase agreement, capped at $200 million, has
impacted the balance sheet and adjusted cash flow activities.
Fitch expects OMI's cash and free cash flow to cover debt
amortization through 2027, despite potential free cash flow
dampening from Rotech acquisition debt and higher interest rates.
OMI also has access to a $450 million Receivables Sales Program
that provides additional liquidity for general corporate purposes,
though Fitch does not include this facility as a source in its
liquidity calculations.
Issuer Profile
Owens & Minor, Inc., a Fortune 500 company in Richmond, VA,
provides global healthcare solutions through manufacturing,
distribution, and technology services in 80 countries.
Summary of Financial Adjustments
Historical and projected EBITDA are adjusted principally for
non-recurring expenses, including acquisition-related costs. Fitch
has reinstated the balance of accounts receivables that were
treated as sold under OMI's master receivables purchase agreement
on the balance sheet with a related addition to debt; accordingly,
cash flow from operating and financing activities have also been
adjusted.
Date of Relevant Committee
23 July 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
----------- ------ --------
Barista Acquisition I,
LLC
senior secured LT BB+ New Rating RR2
O&M Halyard, Inc.
senior secured LT BB+ New Rating RR2
Owens & Minor, Inc.
senior secured LT BB+ New Rating RR2
Byram Healthcare
Centers, Inc.
senior secured LT BB+ New Rating RR2
Owens & Minor
Medical, Inc.
senior secured LT BB+ New Rating RR2
Barista Acquisition
II, LLC
senior secured LT BB+ New Rating RR2
Owens & Minor
Distribution, Inc.
senior secured LT BB+ New Rating RR2
PAVMED INC: Lucid Diagnostics Closes $14.5-Mil. Stock Offering
--------------------------------------------------------------
PAVmed Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that Lucid Diagnostics Inc., a
subsidiary of the Company, closed on the sale of 13,939,331 shares
of its common stock, pursuant to its previously announced offering
of shares of common stock at a price of $1.10 per share.
The Offering was made pursuant to Lucid Diagnostics' shelf
registration statement on Form S-3 (Registration No. 333-268560)
and a prospectus supplement relating to the Offering dated March 4,
2025.
Lucid Diagnostics estimates that the net proceeds of the Offering,
after deducting the estimated placement agent's fees and other
expenses of the Offering, will be approximately $14.5 million.
Lucid Diagnostics intends to use the net proceeds from the Offering
for working capital and other general corporate purposes. The
Offering, including the related agreements, are described in more
detail in the Current Reports on Form 8-K filed with the SEC by
Lucid Diagnostics on March 4, 2025 and March 5, 2025.
About PAVMed
Headquartered in New York, NY, PAVmed is structured to be a
multi-product life sciences company organized to advance a pipeline
of innovative healthcare technologies. Led by a team of highly
skilled personnel with a track record of bringing innovative
products to market, PAVmed is focused on innovating, developing,
acquiring, and commercializing novel products that target unmet
needs with large addressable market opportunities. Leveraging its
corporate structure -- a parent company that will establish
distinct subsidiaries for each financed asset -- the Company has
the flexibility to raise capital at the PAVmed level to fund
product development, or to structure financing directly into each
subsidiary in a manner tailored to the applicable product, the
latter of which is its current strategy given prevailing market
conditions.
Headquartered in New York, NY, Marcum LLP, the Company's auditor
since 2019, issued a "going concen" qualification in its report
dated March 25, 2024. The report cites 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.
The Company incurred a net loss attributable to PAVmed Inc. common
stockholders of approximately $66.3 million and had net cash flows
sed in operating activities of approximately $52.0 million for the
year ended Dec. 31, 2023. As of Dec. 31, 2023, the Company had
negative working capital of approximately $29.7 million, with such
working capital inclusive of the Senior Secured Convertible Notes
classified as a current liability of an aggregate of approximately
$44.2 million and approximately $19.6 million of cash.
"The Company's ability to continue operations beyond March 2025,
will depend upon generating substantial revenue that is conditioned
upon obtaining positive third-party reimbursement coverage for its
EsoGuard Esophageal DNA Test from both government and private
health insurance providers, increasing revenue through contracting
directly with self-insured employers, and on its ability to raise
additional capital through various potential sources including
equity and/or debt financings or refinancing existing debt
obligations," PAVMed said in its 2023 Annual Report.
POWER CITY: Gets Extension to Access Cash Collateral
----------------------------------------------------
Power City Technologies, LLC received another extension from the
U.S. Bankruptcy Court for the Southern District of Texas, Galveston
Division, to use cash collateral.
The interim order authorized the company to use the cash collateral
of its secured creditors, which consists of revenues generated by
its business operations.
The company's 30-day budget shows total projected expenses of
$45,185.
As protection for the use of their cash collateral, secured
creditors were granted replacement liens equivalent to their
pre-bankruptcy liens. These creditors include Fundthrough USA,
Inc., Capybara Capital, LLC, Five Lakes Financial, Leaf Capital
Funding, CT Corporation Systems, and Maddox Industrial Transformer,
LLC.
As additional protection, Capybara Capital and FundThrough USA will
receive monthly payments of $5,000 and $4,750, respectively.
The interim order will remain effective until the final hearing to
consider the company's request to use cash collateral.
About Power City Technologies
Power City Technologies, LLC is a Texas limited liability company
that focuses on field service industrial machinery repair and
conditional monitoring systems in the Houston and Galveston area.
It works with oil and gas, automotive, food and beverage, and other
manufacturing companies.
Power City Technologies sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 24-80390) on
December 30, 2024, listing up to $50,000 in assets and up to
$500,000 in liabilities. Paul Hopkins, managing member, signed the
petition.
Judge Alfredo R. Perez oversees the case.
The Debtor is represented by Gabe Perez, Esq., at Zendeh Del &
Associates PLLC.
PPS 77 LLC: Case Summary & 10 Unsecured Creditors
-------------------------------------------------
Debtor: PPS 77 LLC
433 East 76th Street
Second Floor
New York, NY 10075
Business Description: PPS 77 LLC operates a parking garage
providing vehicle parking services at 433
East 76th Street, New York, NY.
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 25-10550
Judge: Hon. Martin Glenn
Debtor's Counsel: H Bruce Bronson, Esq.
BRONSON LAW OFFICES PC
480 Mamaroneck Ave
Harrison, NY 10528
Tel: (914) 269-2530
Fax: (888) 908-6906
E-mail: hbbronson@bronsonlaw.net
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Eric Brown as manager.
A full-text copy of the petition, which includes a list of the
Debtor's 10 unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/Y2VADMQ/PPS_77_LLC__nysbke-25-10550__0001.0.pdf?mcid=tGE4TAMA
PREMIER GLOBAL: April 30 Claims Filing Deadline Set
---------------------------------------------------
The District Court of Oklahoma County, Oklahoma, Judge Don Andrews
presiding, entered an order establishing a procedure to notify
claimants to make claims against the receivership for the assets of
Premier Global Corporation fka Premier Construction Services, Inc.,
Premier Factoring, LLC, PF-2 LLC, PF-3 LLC, PF-4 LLC, PF-5 LLC,
PF-6 LLC, PF-7 LLC, Premier Factoring Group LLC, KLC Business
Services LLC, DDL Advisory Group LLC, Steven J. Parish and Richard
Dale Dead ("Receivership Entities"); and ordering the Receiver to
mail a copy of the notice, by regular, to each known creditor and
potential claimant at their last-know address.
If you are receiving this notice by publication, contact Stretto at
(855) 479-4231 or email PremierGlobalInfo@strette.com to obtain a
proof of claim form and instructions.
The deadline for submitting proofs of claim is on April 30, 2025,
at 5:00 p.m. (Central Stand Time)
Each proof of claim must be filed including supporting
documentation, by either (i) electronic submission using the
interface available on the claims website at
https://cases.stretto.com/premierglobal/ or (ii) if submitted
through non-electronic means by U.S. mail or other hand delivery
system, so as to be actually received by the claims agent on or
before 5:00 p.m. (Central Standard Time) on April 30, 2025, at the
following address:
Premier Global Corporation et al.
Claims Processing
c/o Stretto
410 Exchange, Suite 100
Irvine, CA 92602
RE/MAX HOLDINGS: Moody's Cuts CFR to B2 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings downgraded RE/MAX Holdings, Inc.'s (RE/MAX)
corporate family rating to B2 from B1 and probability of default
rating to B2-PD from B1-PD. RE/MAX, LLC's senior secured first lien
bank credit facilities consisting of a term loan B and a revolving
credit facility were downgraded to B2 from B1. The speculative
grade liquidity (SGL) score is SGL-2. The outlooks have been
changed to stable from negative. RE/MAX operates as a franchisor of
real estate brokerage services in the US, Canada, and
internationally and operates as a franchisor of mortgage brokerage
services in the US.
The ratings downgrade reflects Moody's views that borrowing costs
will remain high in 2025, which will keep RE/MAX's elevated
financial leverage sustained above 5x, where it has been since
2023. Moody's expects US existing home sale transaction volumes
will remain essentially flat in 2025 compared to 2024.
Additionally, Moody's expects the company will continue to face
modest declines in US agent counts, which will likely lead to
revenue contraction rates in a low-single-digit range in 2025. The
downgrade also reflects uncertainty around the company's financial
strategies and how it will balance its financial leverage targets,
share repurchase activity, and a potential reintroduction of the
quarterly cash dividend that was halted in 2023.
The change in outlook to stable from negative reflects Moody's
expectations that the company will generate good free cash flow,
around $50 million in 2025, driven by cost reduction efforts over
the last two years and the suspension of the company's quarterly
cash dividend in Q4 2023.
Governance considerations were a key ESG driver of the rating
action, reflecting the company's tolerance for risky financial
strategies that sustain a highly levered capital structure.
RATINGS RATIONALE
RE/MAX's B2 CFR reflects Moody's expectations that financial
leverage will remain in the low-5x range through 2025. The company
has a small revenue scale relative to a broader set of business
service peers, and faces intense industry competition to attract
and retain agents as evidenced by its declining US agent count
since 2018. Moody's expects financial leverage to remain relatively
flat as debt repayments mitigate revenue declines in 2025; however,
financial leverage would modestly weaken in 2025 if the US
residential housing market continues to decline.
Support is provided by the protections offered by its 100%
franchised business model, a history of continued Canada and other
non-US agent count growth, and its highly profitable franchise
business model that lends itself to a flexible cost structure and
limits downside exposure to housing market volumes from its fixed
franchise fee revenue model. The strong RE/MAX brand recognition
and leading market position drive the company's fairly predictable
revenues, robust profit margins and good free cash flow
generation.
As of December 31, 2024, $55 million of RE/MAX's restricted cash
has been funded into an escrow account in connection with the
industry litigation settlement agreement in the Burnett, Moehrl,
and Nosalek cases, which also resolves any similar claims on a
nationwide basis. Moody's views the increased free cash flow that
came from the dividend suspension as a key source of funding for
the settlement charge. Management has not indicated any timing for
the return of the quarterly dividend.
The B2 senior secured credit facility rating, consisting of a $460
million term loan due July 2028 and a $50 million revolver expiring
July 2026, is the same as the B2 CFR as the facility represents the
preponderance of the debt capital structure. The facility is
secured by a first lien pledge of substantially all tangible and
intangible assets of the company's domestic subsidiaries and 65% of
the capital stock of the first-tier foreign subsidiaries.
The SGL-2 speculative grade liquidity score reflects RE/MAX's good
liquidity profile, supported by Moody's expectations for
approximately $50 million of free cash flow generation during the
next 12 months and nearly $97 million of unrestricted cash on hand
at December 31, 2024. The company's $50 million undrawn revolver
expires in July 2026.
The revolver is subject to a total leverage ratio covenant that
cannot exceed 4.5x, which comes into effect when the revolver is
drawn. The company regained access to its revolver when the 2023
litigation settlement charge rolled off in the third quarter of
2024. The leverage ratio was tested at 3.57x at December 31, 3024
and Moody's expects the covenant cushion will be around 20% to 25%
during the next 12 to 18 months.
The stable outlook reflects Moody's expectations that the US
residential home sales volumes will remain relatively flat year
over year such that RE/MAX's revenue will decline in the low-single
digits and financial leverage will remain around 5x in 2025. It
also assumes that liquidity will remain good, supported by free
cash flow of around $50 million over the next 12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if RE/MAX demonstrates sustained
revenue and earnings growth, debt to EBITDA is maintained below 5x,
and free cash flow to debt is sustained in the high single digits.
Commitment to a conservative financial policy, particularly its
strategies towards balancing potential reintroduction of the cash
dividend and share repurchases with a public leverage target would
also be considered for an upgrade.
The ratings could be downgraded if the company's revenue and
earnings decline faster than expected, debt to EBITDA is sustained
above 6x, free cash flow expectations decline, or financial
policies become more aggressive including shareholder
distributions, dividends, and acquisitions.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Denver, Colorado, RE/MAX, LLC is a consolidated
subsidiary of RE/MAX Holdings, Inc. (NYSE: RMAX) and operates as a
franchisor of real estate brokerage services in the US, Canada, and
internationally, as well as a franchisor of mortgage brokerage
services in the US. RE/MAX derives its revenue primarily from
continuing franchise fees, annual dues, broker fees, new franchise
sales and renewals, and other revenue. RE/MAX generated $308
million revenue for the year ended December 31, 2024.
REALPAGE INTERMEDIATE: Fitch Affirms B LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) for RealPage Intermediate Holdings, Inc. and its wholly owned
subsidiary, RealPage, Inc. at 'B'. Fitch has also affirmed the 'B+'
rating with a Recovery Rating of 'RR3' on RealPage Inc.'s
first-lien secured revolver and term loans. The Rating Outlook
remains Stable.
RealPage's ratings are supported by its strong recurring revenue
base, improved profitability, and continued positive cash flow
generation. The company is well established as a leading provider
of software and data analytics to the real estate industry. The
ratings also reflect RealPage's elevated leverage profile and some
concerns about the ongoing antitrust lawsuits regarding its revenue
management products, which may take an extended period to be
resolved.
Key Rating Drivers
Improved Leverage Profile: Fitch estimates Fitch-adjusted gross
leverage to be about 6.7x for fiscal 2024 and to remain above 5.5x
through the rating horizon, with capacity to deleverage supported
by FCF generation. This has improved from 7.6x and 8.8x in 2023 and
2022, respectively. The improvement is due to revenue growth and
EBITDA margin expansion of approximately 200bps in 2024. However,
due to the private equity ownership that is likely to prioritize
growth, Fitch expects capital to be used for acquisitions to
accelerate growth, with financial leverage remaining at moderate
levels.
Approaching Revolver Refinancing: RealPage's debt consists of a
first-lien $3.3 billion term loan (2028 maturity), incremental $1
billion term loan (2028 maturity), and a $250 million first-lien
secured revolver ($120 million drawn) maturing in 2026, in 13
months. Fitch believes that the recurring nature of its business,
improved profitability, and positive FCF will support RealPage's
efforts to refinance its revolver prior to maturity. In its
base-case assumption, Fitch forecasts the company to generate
sufficient FCF to fully repay the outstanding revolver balance in
the current year.
Improving FCF Generation: Fitch expects FCF margins to improve to
high single digits in 2025 and above 10% beyond that, supported by
improved profitability, operational efficiencies, and potentially
lower interest rates. FCF is also expected to improve due to
reduced interest expense from a leverage-neutral transaction in
December 2024, where the company fully refinanced its second-lien
term loan with an incremental first-lien term loan, resulting in
lower overall interest expense due to reduced pricing.
Ongoing Litigation and DOJ Probe: RealPage's revenue management
software is under scrutiny for alleged anticompetitive practices.
Class-action lawsuits have been filed in Tennessee against
RealPage, Thoma Bravo, and over 30 property managers. The
Department of Justice is also pursuing a civil lawsuit against
RealPage and six property management companies in North Carolina
federal court for alleged antitrust violations. These matters are
unlikely to be resolved soon but adverse rulings that materially
impact the company's credit profile could result in negative rating
action.
Acquisition-Aided Growth: Fitch expects RealPage will remain
acquisitive due to the fragmented industry and in an effort to
expand its platform offerings. The company has made a number of
acquisitions in the past, including Knock CRM, G5 Search Marketing,
and HomeWiseDocs, with a combination of cash and debt. Fitch
expects RealPage's organic revenue to grow in the mid-single
digits. Fitch believes M&A remains a central growth strategy to
drive organic revenue through cross-selling opportunities.
Defensible Market Position: RealPage customers manage over 20
million units through North America, Europe and Asia. The company
has grown to its current size by making well over 50 acquisitions.
As the system of record for property managers, akin to an
enterprise resource planning software solution, RealPage's solution
is difficult (and often not economically justified) to replace.
Renewal rates are consistently high, the majority of revenues are
subscription based and contracts are generally multi-year.
Significant Growth Opportunities: Total revenue has grown
organically and through acquisitions. It has also grown through
rent payment inflation, and increased down market penetration.
Secular shifts towards increased electronic payments and digital
leasing and resident management practices will likely drive
RealPage's growth profile going forward.
Peer Analysis
RealPage's leverage profile, high recurring revenues and consistent
positive FCF generation fit well with other 'B' rated issuers.
While not a direct competitor, CoStar Group, Inc. (BBB/Stable)
offers software solutions to manage commercial real estate and it
generates twice as much revenue as RealPage. At the end of 2024,
CoStar's leverage was about 4.0x, whereas Fitch expects RealPage's
leverage to be 6.7x.
RealPage directly competes with numerous software providers in the
real estate sector, including those offering property management
software, cloud services, and software-enabled, value-added
services such as applicant screening, CRM, marketing, internet
listing services, and payment processing. In addition to CoStar,
direct competitors include Yardi, Inc., Entrata, Inc., MRI Software
LLC, and AppFolio.
RealPage's profitability, leverage, and FCF metrics are comparable
to other Fitch-rated software peers in the 'B' rating category,
such as Constant Contact (B/Stable) and Qlik (B/Stable). Both
companies have higher margins in the 40% range but similar leverage
and FCF profiles. Fitch expects RealPage's gross leverage to be
approximately 6.0x in fiscal 2025, driven by revolver repayment and
higher profitability.
Key Assumptions
- Organic revenue growth in the mid-single digits;
- Adjusted EBITDA margins in the mid-30s over the forecast
horizon;
- Approximately $600 million spent on acquisitions, partially
funded by debt and FCF;
- Capex intensity 3.0% of revenue;
- Interest rate forecasted to be 4.50% in fiscal 2025, going down
to 4.00% in fiscal years 2026 and 2027;
- Repayment of first-lien revolver facility, prior to maturity
through FCF generation and cash in hand;
- No assumptions are made for dividends to the sponsor;
- No assumptions are made of the ongoing antitrust matters since
the outcomes are unknown.
Recovery Analysis
Key Recovery Rating Assumptions
Fitch's recovery analysis assumes RealPage would be reorganized as
a going-concern (GC) in bankruptcy rather than liquidated. Fitch
has also assumed a 10% administrative claim.
RealPage has successfully executed on its cost optimization plans,
including offshoring headcount and improved procurement practices
that has translated into structural changes in RealPage's cost
structure with a more normalized EBITDA margin on the basis of
recent quarters' performance leading to a change in GC EBITDA.
Fitch forecasts that RealPage's going-concern EBITDA is $500
million. To arrive at the going-concern EBITDA of $500 million,
Fitch assumes that the company's customer churn increases and that
RealPage loses clients to AppFolio and Yardi, causing revenues to
decline to approximately $1.6 billion and that operating
efficiencies are lost, reducing RealPage's EBITDA margins to 30%.
An enterprise value multiple of 7.0x EBITDA is applied to the
going-concern EBITDA to calculate a post-reorganization enterprise
value. The choice of this multiple considered the following
factors:
- The median reorganization enterprise value/EBITDA multiple for
the 71 TMT bankruptcy cases that had sufficient information for an
exit multiple estimate to be calculated was 5.9x. Of these
companies, five were in the software sector: Allen Systems Group,
Inc - 8.4x; Avaya, Inc. - 2023: 7.5x, 2017: 8.1x; Aspect Software
Parent, Inc. - 5.5x, Sungard Availability Services Capital, Inc. -
4.6x, and Riverbed Technology Software - 8.3x;
- The highly recurring nature of RealPage's revenue and
mission-critical nature of the product support the multiple being
on the high end of the range.
Fitch arrived at an enterprise value of $3.5 billion. After
applying the 10% administrative claim, an adjusted enterprise value
of $3.1 billion is available for claims by creditors. Fitch assumes
a full draw on RealPage's proposed $250 million revolver.
As a result of these considerations, Fitch rates the first lien
term loans and revolver 'B+'/'RR3', or one notch above RealPage's
'B' IDR.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to a
Negative Rating Action/Downgrade
- Adverse rulings for YieldStar and RealPage's antitrust matters,
which have a material impact on the credit profile;
- (CFO-capex)/debt sustained below 3%;
- EBITDA interest coverage sustained below 2.5x;
- Material decline in market share or emergence of significant
competitor or disruptor.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage sustained below 5.5x;
- (CFO-capex)/debt sustained above 7.0%;
- Expectation of sustained growth and/or margin outperformance to
Fitch's expectation.
Liquidity and Debt Structure
Fitch expects RealPage to maintain adequate liquidity. As of Sept.
30, 2024, the company had about $150 million of cash on hand and
had $120 million drawn from its $250 million revolver. The
company's liquidity also benefits from the its FCF generation in
high-single digits, owing to strong cost optimization.
RealPage's debt consists of a first lien $3.3 billion term loan
(2028 maturity), incremental $1 billion term loan (2028 maturity),
and a $250 million first lien secured revolver ($120 million drawn)
maturing in 2026. Fitch forecast recurring nature of the business,
improved profitability, and positive FCF will support RealPage's
efforts to timely refinance its 2026 revolver. In its base case
assumption, Fitch forecasts the company to generate sufficient FCF
to fully repay outstanding revolver balance prior to maturity.
Issuer Profile
RealPage, Inc., founded in 1998 and headquartered in Richardson,
TX, is a leading global provider of software and data analytics to
the real estate industry. Thoma Bravo acquired RealPage on April
22, 2021.
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
----------- ------ -------- -----
RealPage, Inc. LT IDR B Affirmed B
senior secured LT B+ Affirmed RR3 B+
RealPage Intermediate
Holdings, Inc. LT IDR B Affirmed B
ROCHESTER DIOCESE: CNA Loses Bid to Seal Pfau Lift Stay Motion
--------------------------------------------------------------
The Honorable Paul R. Warren of the United States Bankruptcy Court
for the Western District of New York denied, in all respects, the
motion of Continental Insurance Company to seal the Pfau lift stay
motion from public view.
A motion seeking relief from the automatic stay was filed on behalf
of two Abuse Survivors by the Pfau Law Firm. The two Abuse
Survivors seek the Court's permission to proceed with their pending
lawsuits in the New York State Courts, against certain Catholic
parishes and schools—but not against the Diocese of Rochester or
CNA. The merits of the lift stay motion are not yet before the
Court, as the motion was scheduled by Pfau to be heard on March 20,
2025. CNA filed an emergency motion under Sec. 105(a) and 107(b) of
the Code, requesting that the Court seal (from public view) the
lift stay motion and all responses to the motion, asserting that
the motion contained "hostile, violent, and intimidating language."
The United States Trustee opposed CNA's motion, arguing that CNA
had failed to carry the burden necessary, under both Sec. 107(b)
and (c), for a court to seal a pleading from public view. Not
surprisingly, Pfau also filed opposition to CNA's motion.
CNA generally claims:
1) The motion unfairly faults CNA with the fact that this case
has been "delayed" for over five years;
2) The motion unfairly accuses CNA of profiting while the Abuse
Survivors suffer, and in some instances have passed away, as a
result of the "delay" in this case being resolved;
3) The lift stay motion incorrectly characterizes the status of
the Court-ordered mediation.
The Court holds the lift stay motion cannot be sealed from the
public's view under Sec. 107(b)(2) because the contents are neither
scandalous nor defamatory.
The Curt finds CNA has not made any attempt to show by competent
evidence that any identifying information concerning an individual
is contained in Pfau's lift stay motion. Protection of
representatives, employees, and attorneys representing CNA in this
proceeding, based on the actual facts and not those facts or
scenarios imagined by counsel, is unavailable under Sec. 107(c)(1)
of the Code because CNA offers nothing more than speculation and
conclusory statements in support of its motion. The lift stay
motion cannot be sealed under Sec. 107(c)(1), the Court concludes.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=9Jge6m from PacerMonitor.com.
About The Diocese of Rochester
The Diocese of Rochester in upstate New York provides support to 86
Roman catholic parishes across 12 counties in upstate New York. It
also operates a middle school, Siena Catholic Academy. The diocese
has 86 full-time employees and six part-time employees and provides
medical and dental benefits to an additional 68 retired priests and
two former priests.
The diocese generated $21.88 million of gross revenue for the
fiscal year ending June 30, 2019, compared with a gross revenue of
$24.25 million in fiscal year 2018.
The Diocese of Rochester filed for Chapter 11 bankruptcy protection
(Bankr. W.D.N.Y. Case No. 19-20905) on Sept. 12, 2019, amid a wave
of lawsuits over alleged sexual abuse of children. In the petition,
the diocese was estimated to have $50 million to $100 million in
assets and at least $100 million in liabilities.
Bond, Schoenec & King, PLLC and Bonadio & Co. serve as the
diocese's legal counsel and accountant, respectively. Stretto is
the claims and noticing agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the diocese's Chapter 11 case. Pachulski
Stang Ziehl & Jones, LLP and Berkeley Research Group, LLC serve as
the committee's legal counsel and financial advisor, respectively.
ROCK N CONCEPTS: Court Extends Cash Collateral Access to April 8
----------------------------------------------------------------
Rock N Concepts, LLC and Lava Cantina The Colony, LLC received
another extension from the U.S. Bankruptcy Court for the Eastern
District of Texas to use cash collateral to pay their expenses.
The interim order signed by Judge Brenda Rhoades extended the
companies' authority to use cash collateral from March 18 to April
8.
Secured lenders Regions Bank and the U.S. Small Business
Administration were granted replacement security interests in, and
liens on, all post-petition property of the companies.
A final hearing is set for April 8.
About Rock N Concepts LLC
Rock N Concepts, LLC and Lava Cantina The Colony, LLC, a live
entertainment venue and restaurant located in The Colony, Texas,
filed Chapter 11 petitions (Bankr. E.D. Texas Lead Case No.
25-40416) on February 18, 2025.
At the time of the filing, both Debtors reported between $1 million
and $10 million in assets and liabilities.
Sarah M. Cox, Esq., at Spector & Cox, PLLC is the Debtors' legal
counsel.
Secured creditor Regions Bank is represented by:
Jason T. Rodriguez, Esq.
Higier Allen & Lautin, PC
The Tower at Cityplace
2711 N. Haskell Ave., Suite 2400
Dallas, TX 75204
Telephone: (972) 716-1888
Facsimile: (972) 716-1899
jrodriguez@higierallen.com
RUSSEL INVESTMENTS: Moody's Affirms 'B1' CFR, Outlook Negative
--------------------------------------------------------------
Moody's Ratings has affirmed Russell Investments Cayman Midco,
Ltd.'s (Russell) long-term Corporate Family Rating at B1 and its
probability of default rating at B1-PD. Moody's also affirmed B1
ratings on Russell's senior secured first lien bank credit
facilities issued by co-borrowers Russell Investments US
Institutional Holdco, Inc. and Russell Investments US Retail
Holdco, Inc. Moody's also assigned a B1 rating to the $75 million
senior secured first lien revolving credit facility maturing
February 28, 2028 for Russell Investments US Institutional Holdco,
Inc. The outlook remains negative.
RATINGS RATIONALE
The affirmations reflect improvement in Russell's operating
performance and Moody's expectations that the company will be able
to sustain this improved performance in 2025 and beyond. The
turnaround in Russell's operating performance in 2024 was driven by
record sales, redemptions and net flows. It also reflects strong
expense management including a modest impact from expense saving
initiatives. In 2024, the company generated net inflows of $18.6
billion after four consecutive years of net outflows and Moody's
expects the company's net flows to remain positive in 2025.
Importantly, Moody's attributes Russell's results primarily to
improved business processes and improved talent throughout the
organization. Further, Russell is about half way through
implementing its latest cost savings initiatives. While 2024
operating results saw some benefit from these savings initiatives,
Moody's expects more significant benefits in 2025 as more of the
cost savings achieve a full year run rate. As a result of the
company's improved performance, Russell's leverage (Debt/EBITDA
with Moody's Ratings standard adjustments) dropped to 7.1x as of Q3
2024 from 8.1x a year prior.
The continuation of the negative outlook reflects that Russell's
leverage remains elevated for its ratings and above Moody's
downgrade triggers. With the improved operating performance and the
benefit of about $20 million in cost savings achieving a full run
rate in 2025, Moody's expects leverage to be near 6.0x by year-end
2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade is unlikely. The outlook
could return to stable if (1) Debt/EBITDA (including Moody's
standard adjustments) continues to trend toward 6.0x or below and
Moody's concludes the business recovery is sustainable; (2) revenue
growth continues to accelerate; and (3) net flows remain positive,
particularly in the company's core OCIO business.
Conversely, the ratings could be downgraded if (1) Debt/EBITDA
(including Moody's standard adjustments) is sustained above 6.0x
and Moody's concludes that the business recovery and deleverage
momentum has faltered; (2) net flows revert to negative; and (3)
pre-tax margin is sustained below 10%.
Russell Investments, headquartered in Seattle, WA, is a global
asset manager with $219.8 billion in traditional AUM as of
September 30, 2024.
The principal methodology used in these ratings was Asset Managers
published in May 2024.
SAFE & GREEN: Closes $100M ELOC Agreement With Tysadco
------------------------------------------------------
Safe & Green Holdings Corp. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that the Company
closed an ELOC Securities Purchase Agreement with Tysadco Partners
LLC, with an effective date of February 25, 2025, whereby the
Company has the right, but not the obligation, to sell to the
Purchaser, and the Purchaser is obligated to purchase, up to an
aggregate of $100 million of newly issued shares of the Company's
common stock, par value $0.01 per share.
The Company does not have a right to commence any sales of Common
Stock to the Purchaser under the ELOC Purchase Agreement until the
time when all of the conditions to the Company's right to commence
sales of Common Stock to the Purchaser set forth in the ELOC
Purchase Agreement have been satisfied, including that a
registration statement of such shares is declared effective by the
SEC and the final form of prospectus is filed with the SEC. Over
the period ending on the earlier of December 31, 2026, or the date
on which the Purchaser shall have purchased ELOC Shares pursuant to
the ELOC Purchase Agreement for an aggregate purchase price of the
Commitment Amount, the Company will control the timing and amount
of any sales of ELOC Shares to the Purchaser. Actual sales of
shares of Common Stock to the Purchaser under the ELOC Purchaser
Agreement will depend on a variety of factors to be determined by
the Company from time to time, including, among others, market
conditions, the trading price of the Common Stock and
determinations made by the Company as to appropriate sources of
funding.
The purchase price of the shares of ELOC Shares that the Company
elects to sell to the ELOC Purchaser pursuant to the ELOC Purchase
Agreement will be equal to the lowest traded price of Common Stock
during the five business days prior to the applicable closing date
multiplied by 90%.
In no event may the Company issue to the Purchaser under the ELOC
Purchase Agreement more than the 4.99% of the total number of the
Company's shares of Common Stock issued and outstanding immediately
prior to the execution of the ELOC Purchase Agreement, unless the
Company obtains stockholder approval to issue shares of Common
Stock in excess of the Applicable Exchange Cap. In any event, the
ELOC Purchase Agreement provides that the Company may not issue or
sell any shares of Common Stock under the ELOC Purchase Agreement
if such issuance or sale would breach any applicable Nasdaq rules.
The ELOC Purchase Agreement prohibits the Company from directing
the Company to purchase any shares of Common Stock if those shares,
when aggregated with all other shares of Common Stock then
beneficially owned by the Purchaser (as calculated pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as amended),
would result in the ELOC Purchaser beneficially owning more than
4.99% of the outstanding Common Stock.
The ELOC Purchase Agreement provides that the Company shall file a
registration statement registering the resale of the maximum number
of ELOC Shares as shall be permitted by applicable law within five
business days following the date of the ELOC Purchase Agreement.
The Company shall use its best efforts to have the registration
statement declared "effective" within 120 days of the date of the
ELOC Purchase Agreement.
On March 6, 2025, the Company closed and issued a promissory note
in favor of Tysadco Partners LLC, with an effective date of
February 25, 2025, in the aggregate principal amount up to
$1,875,000, and an accompanying Securities Purchase Agreement. All
outstanding Principal and interest shall be due on November 30,
2025. The Note was purchased for up to $1,500,000, representing an
original issue discount of 25%, equal to $375,000 if the Note is
fully funded. The Note shall bear interest at 12% interest per
annum. The Lender has the right to convert all or any portion of
the then-outstanding Principal and interest into fully paid and
non-assessable shares of common stock of the Company, par value
$0.01 per share. The per share conversion price into which the
Principal and interest converts shall be $0.50 per share. Among
others, the following shall be considered events of default under
the Note: if the Company fails to pay the Principal or interest
when due under the Note; if the Company fails to issue Conversion
Shares to the Lender upon exercise by the Lender of the conversion
rights under the Note; or if the Company breaches any covenant,
agreement, or other term or condition of the Note or the
accompanying SPA. Upon the occurrence of an Event of Default, then
the outstanding balance shall immediately increase to 125% of the
outstanding balance immediately prior to the occurrence of the
Event of Default, and a daily penalty of $500 will accrue until the
default is remedied.
If the Company has not obtained approval from the holders of the
Company's Common Stock, as required by applicable rules and
regulation of Nasdaq, the Company shall not issue any number of
shares of Common Stock under the Note that would exceed 4.99% of
the shares of Common Stock outstanding as of the date of the Note.
Additionally, the Company shall not effect any conversion of the
Note, and the Lender shall not have the right to convert any
portion of the Note or receive shares of Common Stock as payment of
interest hereunder to the extent that after giving effect to such
conversion or receipt of such interest payment, the Lender,
together with any affiliates thereof, would beneficially own in
excess of 4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion or receipt of
shares as payment of interest.
In connection with the issuance of the Note and the SPA, the
Company will issue 294,000 shares of Common Stock as additional
consideration for the purchase of the Note.
About Safe & Green
Safe & Green Holdings Corp. is a modular solutions company
headquartered in Miami, Florida. The company specializes in the
development, design, and fabrication of modular structures,
focusing on safe and green solutions across various industries.
The Woodlands, Texas-based M&K CPAS, PLLC, the Company's auditor
since 2024, issued a "going concern" qualification in its report
dated May 7, 2024, citing that the Company experienced net losses
since inception, negative working capital, and negative cash flows
from operations, which raise substantial doubt about the Company's
ability to continue as a going concern.
Safe & Green Holdings reported net losses of $26,757,906 and
$7,089,242 for the fiscal years ended December 31, 2023, and 2022,
respectively. As of June 30, 2024, Safe & Green Holdings had
$20,928,509 in total assets, $25,717,784 in total liabilities, and
$4,789,275 in total stockholders' deficit.
SAFE & GREEN: Issues $360K Promissory Note to GS Capital Partners
-----------------------------------------------------------------
Safe & Green Holdings Corp. disclosed in a Form 8-K Report filed
with the U.S. Securities and Exchange Commission that the Company
executed and issued a Promissory Note in favor of GS Capital
Partners, LLC in the aggregate principal amount of $360,000, and an
accompanying Securities Purchase Agreement and Registration Rights
Agreement.
The Note was purchased by the Lender for a purchase price of
$300,000, representing an original issue discount of $60,000. The
Note shall bear interest at a rate of 15% per annum, with the
understanding that the first twelve months of interest under the
Node (equal to $54,000), shall be guaranteed and earned in full as
of the Issue Date. Any amount of Principal or interest due under
the Note which is not paid when due shall bear interest at 18% per
annum. The Note may not be prepaid in whole or in part except as
explicitly set forth in the Note. The Company shall make monthly
payments on the Note in the amount of $44,000, due and payable on
the 3rd of each month commencing on June 3, 2025, and ending on
February 3, 2025, with a final payment due and payable on March 3,
2026, in the amount equal to any remaining outstanding balance of
the Note.
The Lender will have the right to convert all or any portion of the
then-outstanding Principal and interest including any Default
Interest (as defined in the Note) into fully paid and
non-assessable shares of common stock of the Company, par value
$0.01 per share. Such conversion right is wholly contingent and
subject to the approval of such conversion by a sufficient amount
of holders of the Company's common stock to satisfy the shareholder
approval requirements for such action as provided in Nasdaq Rule
5635(d). The Lender may, on any calendar day, at any time after
Shareholder Approval of such conversion, convert all or any portion
of the then-outstanding Principal and interest (including any
Default Interest) into fully paid and non-assessable share of
common stock, par value $0.01 per share, of the Company. The per
share conversion price into which the Principal, interest
(including any Default Interest) shall be equal to $0.65, subject
to adjustment as provided in the Note. If at any time the
Conversion Price for any conversion would be less than the par
value of the Common Stock, then at the sole discretion of the
Lender, the Conversion Price may equal such par value for such
conversion, and the conversion amount shall be increased to include
Additional Principal (where "Additional Principal" means such
additional amount to be added to the conversion amount to the
extent necessary to cause the number of conversion shares issuable
upon such conversion to equal the same number of conversion shares
as would have been issued if the Conversion Price had not been
adjusted by the Lender to the par value price. The Lender shall be
entitled to deduct $1,750 from the conversion amount in each notice
of conversion to cover Lender's fees associated with each notice of
conversion. The Note may not be converted into shares of the
Company's common stock if the conversion would result in the Lender
and its affiliates owning an aggregate of in excess of 4.99% of the
then-outstanding shares of the Company's common stock.
In connection with the issuance of the Note and the SPA, the
Company will issue to the Lender 275,000 shares of Common Stock as
additional consideration for the purchase of the Note.
Among others, the following shall be considered events of default
under the Note: if the Company fails to pay the Principal Amount or
interest when due on the Note; the Company fails to issue
conversion shares to the Lender upon exercise by the Lender of the
conversion rights under the Note; or the Company breaches any
covenant, agreement, or other term or condition of the Note or the
accompanying Securities Purchase Agreement, Registration Rights
Agreement, Irrevocable Transfer Agent Instructions, or Warrants.
After an Event of Default, in addition to all other rights under
the Note, the Lender shall have the right to convert any portion of
the Note at any time at a price per share equal to the Alternate
Price. The "Alternate Price" shall mean the lesser of (i) the
applicable conversion price under the Note, (ii) the closing price
of the Common Stock on the date of the Event of Default, or (iii)
$0.52.
So long as the Company has any obligation under the Note, the
Company shall not, without the Lender's written consent: pay,
declare, or set apart for such payment, any dividend or other
distribution; redeem, repurchase, or otherwise acquire any shares
of capital stock the Company; repay any indebtedness of the
Company; or sell, lease, or otherwise dispose of any significant
portion of the Company's assets outside the ordinary course of
business.
About Safe & Green
Safe & Green Holdings Corp. is a modular solutions company
headquartered in Miami, Florida. The company specializes in the
development, design, and fabrication of modular structures,
focusing on safe and green solutions across various industries.
The Woodlands, Texas-based M&K CPAS, PLLC, the Company's auditor
since 2024, issued a "going concern" qualification in its report
dated May 7, 2024, citing that the Company experienced net losses
since inception, negative working capital, and negative cash flows
from operations, which raise substantial doubt about the Company's
ability to continue as a going concern.
Safe & Green Holdings reported net losses of $26,757,906 and
$7,089,242 for the fiscal years ended December 31, 2023, and 2022,
respectively. As of June 30, 2024, Safe & Green Holdings had
$20,928,509 in total assets, $25,717,784 in total liabilities, and
$4,789,275 in total stockholders' deficit.
SARIT ABIKZER: Secured Party Sets April 10 Public Auction
---------------------------------------------------------
N.Y.R.F.P LLC ("secured party") will offer for sale at public
auction, pursuant of that certain pledged agreement dated Oct. 24,
2022, made by and among Sarit Abikzer, and individual residing at
435 West 31st Street, PH3, New York, New York 10001 ("pledgor"),
and secured party, all membership and other equity interests in and
to (a) 100% of the limited liability company membership interest in
29 Dolson House LLC; and (b) all related rights and property owned
by the pledgor relating to such limited liability company
interests, which entity, directly or indirectly owns, leases, and
operates the real property located at 29 Dolson Road, Monsey, New
York, and designated on the tax maps of the County of Rockland as
Section 56.06, Block 3, Lot 57.
The public auction will be held in person and virtually via zoom
remote meeting on April 10, 2025, at 9:00 a.m. EDT. Secured party
reserves the right to cancel the sale in its entirety or to adjourn
the sale to a future date.
For questions, inquiries, and information on how to register for
the auction, interested bidders must contact Matthew D. Mannion of
Mannion Auctions, LLC by email at info@jpandr.com or by phone at +1
(212) 267-6698 no later than 3 business days before the
aforementioned auction.
Interested parties who do not comply with the foregoing and any
other requirements of the applicable terms of sale prior to the
deadlines set forth therein will not be permitted to enter a bid.
SAVVYAN TECHNOLOGIES: Reaches Settlement w/ Themesoft; Amends Plan
------------------------------------------------------------------
Savvyan Technologies, LLC, and Kamalakannan Sivanandam, submitted a
First Amended Joint Plan of Reorganization under Subchapter V dated
March 3, 2025.
Under the Plan the Debtors will pay Secured Claims in full and will
pay a return to Allowed Unsecured Claims over 36 months.
On January 30, 2024, Themesoft, Inc. filed a Complaint against
Sivanandam initiating Adversary Proceeding No. 24-04002 herein,
seeking a judgment of non-dischargeability of alleged indebtedness
owed by Sivanandam to Themesoft (the "Adversary Proceeding").
On February 20, 2025, the Court entered an Order approving a
settlement agreement resolving the Adversary Proceeding and all
other claims of Themesoft against the Debtors.
According to Sivanandam's Schedules, he owes total Unsecured Claims
of $3,573,131.20 as of the Petition Date, of which $3,450,000.00 is
the Disputed litigation Claim of Themesoft, Inc.
According to Savvyan's Schedules, it owes total Unsecured Claims of
$3,572,807.20 as of the Petition Date, of which $3,450,000.00 is
the Disputed litigation Claim of Themesoft, Inc
Class 2 consists of the Allowed Secured Claims of State Bank of
India against Sivanandam. This Claim will be paid in full according
to the Debtor's pre-Petition Date loan agreements with this
Claimant.
Class 3 consists of the Allowed Secured Claims of Sundaram Home
Finance against Sivanandam. This Claim will be paid in full
according to the Debtor's pre-Petition Date loan agreements with
this Claimant.
Class 7 consists of the Allowed Claims of Themesoft, Inc. against
Sivanandam. These Claims shall be satisfied according to the
Settlement Agreement (the "Agreement"), the primary terms of which
are:
* The Debtors shall pay to Themesoft the sum of $300,000.00,
payable as follows:
-- Monthly payments of $4,000.00 for 60 consecutive months,
without interest, commencing on the first day of the first month
after the Effective Date of the Plan and continuing on the first
day of each month thereafter, and
-- A single lump-sum payment of $60,000.00 to be made no later
than the last day of the 60th month following the Effective Date of
the Plan.
* These Claims shall be non-dischargeable.
* The Debtors and Themesoft shall have the right to seek
modification of any payments due under the Agreement and otherwise
due under the Plan to the extent there is a material adverse change
in the Debtors' disposable income.
* On the Effective Date of the Plan, the Debtors shall execute
and deliver to Themesoft an agreed, final non-dischargeable
judgment in favor of Themesoft in the amount of $4,000,000.00,
which judgment Themesoft shall release and return to the Debtors
upon completion of the payments due under this Plan.
Like in the prior iteration of the Plan, Class 8 General Unsecured
Claims against Sivanandam shall receive a Pro-Rata share of
$2,000.00 per month in equal monthly payments over 36 months,
commencing on the first day of the first month following the
Effective Date and continuing on the first day of each month
thereafter until the expiration of 36 months.
Class 1 consists of Allowed Claims of Themesoft, Inc. against
Savvyan. These Claims shall be satisfied according to the
Settlement Agreement (the "Agreement"), the primary terms of which
are:
* The Debtors shall pay to Themesoft the sum of $300,000.00,
payable as follows:
-- Monthly payments of $4,000.00 for 60 consecutive months,
without interest, commencing on the first day of the first month
after the Effective Date of the Plan and continuing on the first
day of each month thereafter, and
-- A single lump-sum payment of $60,000.00 to be made no later
than the last day of the 60th month following the Effective Date of
the Plan.
* These Claims shall be non-dischargeable.
* The Debtors and Themesoft shall have the right to seek
modification of any payments due under the Agreement and otherwise
due under the Plan to the extent there is a material adverse change
in the Debtors' disposable income.
* On the Effective Date of the Plan, the Debtors shall execute
and deliver to Themesoft an agreed, final non-dischargeable
judgment in favor of Themesoft in the amount of $4,000,000.00,
which judgment Themesoft shall release and return to the Debtors
upon completion of the payments due under this Plan.
The Debtors intend to make all payments required under the Plan
from available cash and income from the business operations of the
Debtors. Frances Smith and/or her law firm Ross, Smith & Binford
shall serve as the post confirmation disbursing agent (the
"Disbursing Agent") for all payments due to Themesoft and all other
Allowed Claimants under the Plan, pursuant to the Disbursing Agent
Agreement. The Debtors shall make all payments due under this Plan
to the Disbursing Agent, who shall then make the payment due to
Creditors under the Plan.
A full-text copy of the First Amended Plan dated March 3, 2025 is
available at https://urlcurt.com/u?l=ajyA5o from PacerMonitor.com
at no charge.
Attorneys for the Debtors:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 503-4033
Fax: (972) 503-4034
Email: joyce@joycelindauer.com
About Savvyan Technologies
Savvyan Technologies, LLC, is an Independent Product Development,
IT consulting and services firm.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-42043) on October 27,
2023. In the petition signed by Kamalakannan Sivanandam, senior
leader, the Debtor disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, is
the Debtor's legal counsel.
SCILEX HOLDING: Dividend Record Date Moved to April 11
------------------------------------------------------
Scilex Holding Company announced that its Board of Directors has
approved changing the previously announced record date of January
28, 2025 for its previously announced dividend of Scilex preferred
stock to its stockholders and certain other securityholders of
Scilex.
The new record date for the Dividend will be April 11, 2025.
Subject to the Board's right to further change the New Record Date,
the payment date will be determined by subsequent resolutions of
the Board, which will be within 60 days following the New Record
Date.
About Scilex Holding Company
Palo Alto, Calif.-based Scilex Holding Company --
www.scilexholding.com -- is an innovative revenue-generating
company focused on acquiring, developing and commercializing
non-opioid pain management products for the treatment of acute and
chronic pain and, following the formation of its proposed joint
venture with IPMC Company, neurodegenerative and cardiometabolic
disease. Scilex targets indications with high unmet needs and large
market opportunities with non-opioid therapies for the treatment of
patients with acute and chronic pain and is dedicated to advancing
and improving patient outcomes. Scilex's commercial products
include: (i) ZTlido (lidocaine topical system) 1.8%, a prescription
lidocaine topical product approved by the U.S. Food and Drug
Administration for the relief of neuropathic pain associated with
postherpetic neuralgia, which is a form of post-shingles nerve
pain; (ii) ELYXYB, a potential first-line treatment and the only
FDA-approved, ready-to-use oral solution for the acute treatment of
migraine, with or without aura, in adults; and (iii) Gloperba, the
first and only liquid oral version of the anti-gout medicine
colchicine indicated for the prophylaxis of painful gout flares in
adults.
As of Sept. 30, 2024, Scilex had $100.43 million in total assets,
$311.75 million in total liabilities, and a total stockholders'
deficit of $211.32 million.
As of Sept. 30, 2024, Scilex's negative working capital was $241.7
million, including cash and cash equivalents of approximately $0.1
million. During the nine months ended Sept. 30, 2024, the Company
had operating losses of $55.0 million and cash flows received from
operating activities of $16.8 million. The Company had an
accumulated deficit of $556.6 million as of Sept. 30, 2024.
The Company has plans to obtain additional resources to fund its
currently planned operations and expenditures and to service its
debt obligations for at least 12 months from the issuance of its
unaudited condensed consolidated financial statements through a
combination of equity offerings, debt financings, collaborations,
government contracts or other strategic transactions. Although the
Company believes such plans, if executed, should provide the
Company with financing to meet its needs, successful completion of
such plans is dependent on factors outside its control. As a
result, management has concluded that the aforementioned
conditions, among other things, raise substantial doubt about the
Company's ability to continue as a going concern for one year after
the date the unaudited condensed consolidated financial statements
are issued.
SEA WEST: Seeks Subchapter V Bankruptcy in Alaska
-------------------------------------------------
On March 19, 2025, Sea West Inc. filed Chapter 11 protection in
the U.S. Bankruptcy Court for the District of Alaska. According to
court filing, the Debtor reports $829,061 in debt owed to 1 and
49 creditors. The petition states funds will be available to
unsecured creditors.
About Sea West Inc.
Sea West Inc. is a commercial fishing company based in Sand Point,
Alaska, specializing in the use of fishing nets, crab and cod pots,
and other fishing gear for harvesting marine species.
Sea West Inc. sought relief under Subchapter V of Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Alaska Case No. 25-00037) on March
19, 2025. In its petition, the Debtor reports total assets of
$1,235,000 and total liabilities of $829,061
The Debtor is represented byJennifer L. Neeleman, Esq. at NEELEMAN
LAW GROUP, P.C.
SEQUOIA HEALTHCARE: CION Marks $8.5 Million Loan at 51% Off
-----------------------------------------------------------
CION Investment Corp. has marked its $8,252,000 loan extended to
Sequoia Healthcare Management LLC to market $4,135,000 or 49% of
the outstanding amount, according to CION'S Form 10-K for the
fiscal year ended December 31, 2024, filed with the U.S. Securities
and Exchange Commission.
CION is a participant in Senior Secured First Lien Debt to Sequoia
Healthcare Management LLC. The loan accrues interest at a rate of
12.75% per annum. The loan was scheduled to mature on November 4,
2023.
"Investment or a portion thereof was on non-accrual status as of
December 31, 2024," CION says.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
About Sequoia Healthcare Management LLC
Sequoia Healthcare Management LLC is a provider of healthcare and
hospital management services. The company owns and manages three
hospitals in the Northeast.
SERVANT GROUP: Case Summary & 13 Unsecured Creditors
----------------------------------------------------
Debtor: The Servant Group, LLC
16798 W. Jenan Rd.
Surprise AZ 85388
Business Description: The Servant Group, LLC, based in Surprise,
Arizona, specializes in providing nursing-
supported residential homes for adults and
children with developmental disabilities.
The Company offers a variety of home and
community-based services, including adult
day care, adult day health care, home health
aide, personal care, respite care, and
visiting nurse services.
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
District of Arizona
Case No.: 25-02541
Judge: Hon. Brenda K Martin
Debtor's Counsel: Patrick Keery, Esq.
KEERY MCCUE, PLLC
6803 E. Main Street, Suite 1116
Scottsdale AZ 85251
Tel: (480) 478-0709
Email: pfk@keerymccue.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Stephanie Belton Hands as owner or
manager.
A copy of the Debtor's list of 13 unsecured creditors is available
for free on PacerMonitor at:
https://www.pacermonitor.com/view/JF74NGY/THE_SERVANT_GROUP_LLC__azbke-25-02541__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/I3DGVIY/THE_SERVANT_GROUP_LLC__azbke-25-02541__0001.0.pdf?mcid=tGE4TAMA
SHRIJEE LLC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Shrijee LLC
d/b/a Econo Lodge
d/b/a Days Inn by Wyndham Manitowoc
908 Washington Street
Manitowoc, WI 54220
Business Description: Shrijee LLC provides accommodation and food
services, operating under the names Econo
Lodge and Days Inn by Wyndham Manitowoc,
offering lodging and dining experiences to
customers.
Chapter 11 Petition Date: March 24, 2025
Court: United States Bankruptcy Court
Eastern District of Wisconsin
Case No.: 25-21511
Debtor's Counsel: Noe J. Rincon, Esq.
KREKELER LAW, S.C.
26 Schroeder Court, Suite 300
Madison, WI 53711
Tel: (608) 258-8555
Fax: (608) 258-8299
E-mail: nrincon@ks-lawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ankur Patel as member.
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/ATTWFSI/Shrijee_LLC__wiebke-25-21511__0001.0.pdf?mcid=tGE4TAMA
SOLANO HOME: Claims to be Paid From Disposable Income
-----------------------------------------------------
Solano Home Solutions, LLC filed with the U.S. Bankruptcy Court for
the Eastern District of California Plan of Reorganization for Small
Business dated March 3, 2025.
The Debtor is a LLC. Since April 1, 2011, the Debtor has been in
the business of 'Ranch' with rental real property.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $9,000.00 x 60 months, and
resolve Civil Action as to the balance due on Claim. The final Plan
payment is expected to be paid on January 25, 2029.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 1 consists of Priority claims. Class 1 is unimpaired by this
Plan, and each holder of a Class 1 Priority Claim will be paid in
full, in cash, upon the later of the effective date of this Plan,
or the date on which such claim is allowed by a final
non-appealable order.
Class 2 consists of the Secured claim of John Carl Bender and Carol
J. Bender, Trustees of the Bender Family Trust, Percy T. Kilmsch,
Trustee of Trust, San Joaquin County Treasurer (Tax Collector), and
Catherine Fox (unimpaired).
Claims held by Percy T. Kilmsch, Trustee of Trust, San Joaquin
County Treasurer (Tax Collector), and Catherine Fox will be paid in
full, in cash, upon the later of the effective date of this Plan,
or the date on which such claim is allowed by a final non
appealable order. The claim held by John Carl Bender and Carol J.
Bender, Trustees of the Bender Family Trust is disputed through the
resolution of the pending civil action in San Joaquin County, case
number STK-CV-UF-2024-12303.
There are no creditors in Class 3 non-priority unsecured claims.
Class 4 consists of Equity security holders of the Debtor. Class 4
is unimpaired by this Plan, and each holder of a Class 4 Claim will
be paid in full, in cash, upon the later of the effective date of
this Plan, or the date on which such claim is allowed by a final
non-appealable order.
The Debtor will pay regular monthly payments of $9000.00 until the
completion of the pending civil action and/or BDR.
A full-text copy of the Plan of Reorganization dated March 3, 2025
is available at https://urlcurt.com/u?l=MHz9fh from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Peter G. Macaluso, Esq.
Law Offices of Peter G. Macaluso
7230 South Land Park Drive #127
Sacramento, CA 95831
Telephone: (916) 392-6591
Facsimile: (916) 392-6590
About Solano Home Solutions
Solano Home Solutions LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No.
24-25470) on Dec. 3, 2024. In the petition filed by Caroline Marie
Hegarty, managing member, the Debtor disclosed total assets of
$1,011,090 and total liabilities of $1,207,009.
Bankruptcy Judge Christopher D. Jaime handles the case.
The Law Office of Peter G. Macaluso serves as the Debtor's counsel.
SOLID BIOSCIENCES: Files S-3 Statement for Resale of 364K Shares
----------------------------------------------------------------
Solid Biosciences Inc. filed a Form S-3 with the Securities and
Exchange Commission relating to the resale from time to time of up
to 364,990 shares of common stock by Mayo Foundation for Medical
Education and Research. The selling stockholder acquired the
shares of our common stock in a private placement on December 12,
2024.
A full-text copy of the Form S-3 is available at
https://tinyurl.com/4y77ycuh
About Solid Biosciences
Charlestown, Mass.-based Solid Biosciences, Inc. is a life sciences
company focused on advancing a portfolio of current and future gene
therapy candidates, including SGT-003 for the treatment of Duchenne
muscular dystrophy, SGT-501 for the treatment of catecholaminergic
polymorphic ventricular tachycardia, and additional assets for the
treatment of cardiac and other diseases, at different stages of
development with varying levels of investment.
As of September 30, 2024, the Company had $211.8 million in total
assets, $44.8 million in total liabilities, and $167 million in
total stockholders' equity.
The Company has evaluated whether there are conditions and events
that, considered in the aggregate, 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. As of
September 30, 2024, the Company had an accumulated deficit of
$740.9 million. The Company expects to continue to generate
operating losses for the foreseeable future. Based upon its current
operating plan, the Company expects that its cash, cash equivalents
and available-for-sale securities of $171.1 million excluding
restricted cash of $1.9 million, as of September 30, 2024, will be
sufficient to fund its operating expenses and capital expenditure
requirements for at least twelve months from the date of issuance
of these condensed consolidated financial statements. However, the
Company has based this estimate on assumptions that may prove to be
wrong, and its operating plan may change as a result of many
factors currently unknown to it. As a result, the Company could
deplete its capital resources sooner than it currently expects.
The Company expects to finance its future cash needs through a
combination of equity offerings, debt financings, collaborations,
strategic partnerships and alliances, or licensing arrangements.
If the Company is unable to obtain funding, the Company would be
forced to delay, reduce or eliminate some or all of its research
and development programs, preclinical and clinical testing, or
commercialization efforts, which could adversely affect its
business prospects.
SOUTHFIELD VENTURES: Case Summary & Five Unsecured Creditors
------------------------------------------------------------
Debtor: Southfield Ventures, LLC
4627 Arriba Drive
Tarzana CA 91356
Business Description: The Debtor owns the property located at
28100 Franklin Road, Southfield, MI 91356.
Chapter 11 Petition Date: March 26, 2025
Court: United States Bankruptcy Court
Central District of California
Case No.: 25-10474
Judge: Hon. Victoria S Kaufman
Debtor's Counsel: Bruce R. Babcock, Esq.
LAW OFFICE OF BRUCE R. BABCOCK
1835 Sunset Cliffs Blvd. Ste. 101
San Diego CA 92107
Tel: (619) 222-2661
E-mail: brbab@hotmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ernest C. Barreca as manager.
A copy of the Debtor's list of five unsecured creditors is
available for free on PacerMonitor at:
https://www.pacermonitor.com/view/JS326OA/Southfield_Ventures_LLC__cacbke-25-10474__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/JWCEL3A/Southfield_Ventures_LLC__cacbke-25-10474__0001.0.pdf?mcid=tGE4TAMA
SOUTHWEST BAPTIST: S&P Cuts GO Debt Rating to 'BB+', Outlook Neg.
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB+' from
'BBB-' on Missouri Health & Educational Facilities Authority's
bonds, issued for Southwest Baptist University (SBU), Mo. The
outlook is negative.
"The lower rating reflects the weakening in SBU's financial
operations absent one-time funding, which led the university to
violate its debt service coverage covenant in fiscal 2024, as well
as the decline in its financial resources," said S&P Global Ratings
credit analyst Vicky Stavropoulos.
"The negative outlook reflects SBU's declining and weak liquidity
position, which limits its financial flexibility if deficits were
to persist or debt were accelerated," she added.
S&P said, "While we recognize the university expects to benefit
from certain one-time sales of assets and funding, we believe its
liquidity and financial flexibility could be pressured if deficits
persist or if debt were to be accelerated.
"We could further lower the rating if financial resources weaken or
if significant deficits and enrollment declines persist. We could
also lower the rating if the university does not meet its covenant
in fiscal 2025. The issuance of additional debt absent a
commensurate increase in financial resources would also be a
negative factor.
"We could revise the outlook to stable should SBU maintain
compliance with its covenants, improve its operating performance
absent one-time funding, maintain its financial resources while
improving its liquidity position, and continue to stabilize
enrollment."
SPEARMAN AEROSPACE: Gets OK to Use Cash Collateral Until April 30
-----------------------------------------------------------------
Spearman Aerospace, Inc. received second interim approval from the
U.S. Bankruptcy Court for the Central District of California, Los
Angeles Division, to use cash collateral.
The second interim order signed by Judge Deborah Saltzman
authorized the company to use cash collateral until April 30 to pay
the expenses set forth in its budget.
As protection for any diminution in the value of their collateral,
secured creditors were granted replacement liens on post-petition
assets (excluding Chapter 5 claims and the pre-bankruptcy retainer
provided to Echo Park Legal, APC,), with the same validity and
priority as their pre-bankruptcy liens.
The next hearing is scheduled for April 22.
About Spearman Aerospace Inc.
Spearman Aerospace Inc. manufactures high-precision components for
the aerospace industry, specializing in parts for landing gear
assemblies, door pivots, and gearboxes. It utilizes advanced CNC
technology to produce these components for satellite or space
applications and other aerospace needs.
Spearman Aerospace filed Chapter 11 petition (Bankr. C.D. Calif.
Case No. 25-10917) on February 6, 2025, listing between $1 million
and $10 million in both assets and liabilities.
Judge Deborah J. Saltzman handles the case.
The Debtor is represented by:
M. Douglas Flahaut, Esq.
Echo Park Legal, APC
2210 Sunset Blvd. 301
Los Angeles, CA 90026
Tel: 310-709-0658
Email: df@echoparklegal.com
SPINAL USA: CION Marks $17.9 Million 1L Loan at 45% Off
-------------------------------------------------------
CION Investment Corp. has marked its $17,965,000 loan extended to
SPINAL USA Inc./Precision Medical Inc. to market at $9,791,000 or
55% of the outstanding amount, according to CION'S Form 10-K for
the fiscal year ended December 31, 2024, filed with the U.S.
Securities and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to SPINAL
USA Inc./Precision Medical Inc. The loan accrues interest at a rate
of L+950 per annum. The loan matures on May 29, 2025.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
About SPINAL USA Inc.
Precision Spine is a spinal device company offering a full line of
spinal pathology solutions to meet the needs of patients, surgeons
and healthcare providers. With its two wholly owned subsidiaries,
Spinal USA, Inc., and Precision Medical, Inc., the company's
objective is to positively affect patient recovery and overall
surgical outcomes by providing high quality, competitively priced
spinal products that are made in the USA and supported by excellent
customer service.
SPINAL USA: CION Marks $813,000 Loan at 46% Off
-----------------------------------------------
CION Investment Corp. has marked its $813,000 loan extended to
SPINAL USA Inc./Precision Medical Inc. to market at $443,000 or 54%
of the outstanding amount, according to CION'S Form 10-K for the
fiscal year ended December 31, 2024, filed with the U.S. Securities
and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to SPINAL
USA Inc./Precision Medical Inc. The loan accrues interest at a rate
of L+950 per annum. The loan matures on May 29, 2025.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
About SPINAL USA Inc.
Precision Spine is a spinal device company offering a full line of
spinal pathology solutions to meet the needs of patients, surgeons
and healthcare providers. With its two wholly owned subsidiaries,
Spinal USA, Inc., and Precision Medical, Inc., the company's
objective is to positively affect patient recovery and overall
surgical outcomes by providing high quality, competitively priced
spinal products that are made in the USA and supported by excellent
customer service.
SPINAL USA: CION Marks $975,000 Loan at 49% Off
-----------------------------------------------
CION Investment Corp. has marked its $975,000 loan extended to
SPINAL USA Inc./Precision Medical Inc. to market at $502,000 or 51%
of the outstanding amount, according to CION'S Form 10-K for the
fiscal year ended December 31, 2024, filed with the U.S. Securities
and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to SPINAL
USA Inc./Precision Medical Inc. The loan accrues interest at a rate
of L+950 per annum. The loan matures on May 29, 2025.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
About SPINAL USA Inc.
Precision Spine is a spinal device company offering a full line of
spinal pathology solutions to meet the needs of patients, surgeons
and healthcare providers. With its two wholly owned subsidiaries,
Spinal USA, Inc., and Precision Medical, Inc., the company's
objective is to positively affect patient recovery and overall
surgical outcomes by providing high quality, competitively priced
spinal products that are made in the USA and supported by excellent
customer service.
STARWOOD PROPERTY: S&P Rates $400MM Senior Unsecured Bonds 'BB-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue rating to Starwood
Property Trust Inc.'s (BB/Stable/--) offering of $400 million of
senior unsecured sustainability bonds due 2030. The 'BB-' rating is
in line with its ratings on the company's other senior unsecured
bonds.
The issuance will not affect S&P's measure of Starwood's leverage
(debt to adjusted total equity), which was about 3x as of Dec. 31,
2024. The company intends to use net proceeds from this offering to
finance or refinance, in whole or in part, recently completed or
future eligible green or social projects.
S&P said, "We rate the unsecured bonds one notch below our 'BB'
issuer credit rating on Starwood because of their structural
subordination to the secured debt, which exceeds 30% of its
adjusted assets. But we view favorably the use of unsecured debt
because it demonstrates Starwood's access to the capital markets
and helps unencumber assets. The company had $4.9 billion of
unencumbered assets as of Dec. 31, 2024.
"We view favorably Starwood's actions to push out maturities and
strengthen its funding, particularly in current commercial real
estate (CRE) markets and some asset quality weakening on its loans.
We think that the impact of high interest rates has been realized
in CRE lenders' portfolios and that older vintage loans (originated
prior to 2023) will cause further asset quality deterioration. As
of the end of 2024, about 30% of Starwood's commercial portfolio
was originated after the first quarter of 2022 and should help the
portfolio withstand the ongoing challenges in the CRE markets.
"We don't expect systemic pressure on CRE portfolios to the extent
we've seen over the last few years, as seen in loans deemed risky
(rating of '4' and '5') staying relatively unchanged in the fourth
quarter of 2024 that equated to around 37% of its adjusted total
equity as of Dec. 31, 2024, unchanged from the prior quarter, but
up from around 30% as of Dec. 31, 2023. In the fourth quarter of
2024, Starwood foreclosed on three multifamily loans that totaled
about $175 million, net of specific reserve against one property.
As a result, total loans foreclosed was $601 million as of the end
of 2024.
"However, we expect the company's good diversification, expertise
in managing troubled assets, and sizable unencumbered assets to
allow it to navigate challenges without eroding its financial or
business position. Office loans in the U.S. make up 10% of
Starwood's assets, below the proportional exposures of many of its
rated peers.
"The stable rating outlook on Starwood indicates our expectation
for it to navigate the ongoing stress in CRE without a sharp
worsening in its asset quality, liquidity, or performance. We also
expect the company to maintain leverage at 3x-4x and meet its debt
maturities."
STONEYBROOK FAMILY: Gets Final OK to Use Cash Collateral
--------------------------------------------------------
Stoneybrook Family Dentistry, P.A. received final approval from the
U.S. Bankruptcy Court for the Middle District of Florida, Orlando
Division, to use its lenders' cash collateral.
The final order authorized Stoneybrook to use cash collateral to
pay (i) amounts expressly authorized by the court, including
payments to the Subchapter V trustee and payroll obligations
incurred post-petition in the ordinary course of business; (ii) the
current and necessary expenses set forth in the budget, plus an
amount not to exceed 10% for each line item; and (iii) additional
amounts as may be expressly approved in writing by the U.S. Small
Business Administration.
As protection for the use of their cash collateral, SBA and other
secured lenders will have a perfected post-petition lien on cash
collateral to the same extent and with the same validity and
priority as their pre-bankruptcy lien.
Stoneybrook was ordered to make monthly payments of $73.01 to SBA
as additional protection.
The company's authorization to use cash collateral will continue
until the effective date of any confirmed Chapter 11 plan of
reorganization of the company or until further order of the court.
About Stoneybrook Family Dentistry
Stoneybrook Family Dentistry, P.A. specializes in cosmetic
dentistry, Invisalign, dental implants, pediatric dentistry, root
canal therapy, and smile makeovers.
Stoneybrook filed Chapter 11 petition (Bankr. M.D. Fla. Case No.
25-bk-00604) on January 8, 2024, listing up to $500,000 in assets
and up to $10 million in liabilities. Wendi K. Wardlaw, president
of Stoneybrook, signed the petition.
Judge Tiffany P. Geyer oversees the case.
The Debtor is represented by:
Paul N. Mascia, Esq.
Nardella & Nardella, PLLC
Tel: 407-966-2680
Email: pmascia@nardellalaw.com
SULLIVAN MECHANICAL: Court OKs Vehicle Sale
-------------------------------------------
The U.S. Bankruptcy Court for the Western District of Virginia,
Harrisonburg Division, has approved Sullivan Mechanical Contractors
Inc. to sell its vehicles, free and clear of liens, interests, and
encumbrances.
The Court has authorized the Debtor to sell the following
vehicles:
2011 FORD F-150, 1FTEW1CM6BFB00483 $8,400.00
2011 FORD F-150, 1FTEW1CM1BKE21502 $8,800.00
FORD F-150 CREW CAB, 1FTFW1CF9CFC47839 $7,500.00
2003 DODGE TRUCK (RAM 2500), 3D7KA26D23G744538 $6,100.00
2013 FORD F-150 CREW CAB, 1FTFW1CF5DFA99822 $10,400.00
2002 FORD F350 STAKE BODY, 1FDWF36L32EC49504 $5,000.00
2003 FORD E-250 VAN, 1FTNE24W53HC02288 $3,500.00
2007 FORD RANGER 4X4, 1FTYR15E87PA66168 $7,700.00
2008 JEEP GRAND CHEROKEE, 1J8GR48K18C221515 $3,100.00
2000 DODGE DAKOTA QUAD CAB, 1B7GG2AN2YS749995 $2,000.00
2013 FORD EXPEDITION, 1FMJU2A54DEF65922 $8,500.00
2014 FORD F-250, 1FTBF2B62EEB13267 $18,900.00
2016 FORD EXPLORER, 1FM5K8F81GGD23238 $12,800.00
2018 FORD TRANSIT 150, 1FMZK1ZM4JKB50109 $22,000.00
The Court also ordered that the leased vehicle, 2022 Lexus GX460,
Vin JTJGM7BXXN5331620, will also be included as one of the Vehicles
subject to the procedures provided.
The Court ordered the Debtor to sell any and all Vehicles at prices
not less than 80% of the Stated Value or if the Debtor believes
that acceptance of a lesser purchase price is, in the exercise of
its business judgment and discretion, in the best interest of the
estate, the Debtor shall serve a notice of the proposed transaction
by overnight service or electronic mail.
All buyers will take the Vehicles sold by the Debtor pursuant to
the Vehicle Sale Procedures "as is" and "where is," without any
representation or warranties from the Debtor as to the quality or
fitness of such assets for either its intended or any particular
purposes.
About Sullivan Mechanical Contractors Inc.
Sullivan Mechanical Contractors Inc. was first established in
Virginia in 1946 and a family-owned commercial mechanical
contractor, having served Western and Central Virginia for almost
eight decades. It is a well-respected and in demand mechanical
contractor focusing on sheet metal specialties, air conditioning,
plumbing, and heating services. As of late, its services have been
concentrated on the construction of medical and educational
institutions, with numerous at the collegiate level and including
many on the grounds of the University of Virginia.
The Debtor sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D.Va. Case No. 25-50126-RBC).
Paula Steinhilber Beran of Tavenner & Beran, PLC represents the
Debtor as legal counsel.
Sullivan Group, as DIP lender, is represented by David Cox, Esq.,
at Cox Law Group, PLLC.
SUNATION ENERGY: Bigger Capital Fund, 6 Others Hold 9.78% Stake
---------------------------------------------------------------
Bigger Capital Fund, LP, Bigger Capital Fund GP, LLC, District 2
Capital Fund LP, District 2 Capital LP, District 2 GP LLC, District
2 Holdings LLC, and Michael Bigger disclosed in a Schedule 13G
filed with the U.S. Securities and Exchange Commission that as of
February 27, 2025, they beneficially owned 430,000 shares of
SUNation Energy, Inc.'s Common Stock, $0.05 par value, representing
9.78% of the outstanding shares.
The beneficial ownership includes shares issuable upon exercise of
Pre-Funded Warrants, subject to a 9.99% beneficial ownership
limitation, but does not include shares issuable upon the exercise
of Series A and Series B Warrants, which are subject to shareholder
approval and a 4.99% beneficial ownership limitation.
Bigger Capital Fund, LP, Bigger Capital Fund GP, LLC, and Michael
Bigger may be reached through:
Michael Bigger, Managing Member
11700 West Charleston Blvd., #170-659
Las Vegas, NV, 89135
Tel: 631-987-0235
District 2 Capital Fund LP, District 2 Capital LP, District 2 GP
LLC, and District 2 Holdings LLC may be reached at:
175 W. Carver Street
Huntington, NY 11743
A full-text copy of Bigger Capital's SEC Report is available at:
https://tinyurl.com/2ev3jnuy
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.
SUNOCO LP: Fitch Assigns 'BB+' Rating on Senior Unsecured Notes
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating and Recovery Rating of
'RR4' to Sunoco LP's (SUN) proposed issuance of senior unsecured
notes. Proceeds are expected to be used to repay the NuStar
Logistics, L.P. notes due in October 2025 and a portion of the
outstanding borrowings on its revolving credit facility.
SUN's rating reflects its business line and geographic diversity,
resilient cash flows, and strong leverage for its rating category.
This is weighed against volumetric risk on portions of the business
that are not under minimum volume contracts or structurally
exclusive.
The Stable Outlook reflects Fitch's expectation for supportive
fundamentals underlying the business. Fitch anticipates resilient
demand for refined products across North America, continued crude
oil production growth in the Permian Basin, and further increased
demand for renewable fuels and other products supporting the energy
evolution.
Key Rating Drivers
Good Business Mix and Geographic Diversity: SUN has good business
line diversity, with approximately 50% of EBITDA coming from fuel
distribution, 35% from its pipeline systems segment, and 15% from
its terminals segment. While SUN mainly offers services for motor
fuels, crude oil and refined products, it also offers services such
as ammonia transportation and renewable fuel storage.
The company has substantial operations in the Northeast, Gulf
Coast, and Midwest, with some smaller operations on the West coast
and abroad in locations such as Europe and the Caribbean. Having
business line and geographic diversity is a credit positive because
it helps insulate SUN from idiosyncratic risks in certain
businesses or regions.
Resilient Cash Flows: In its fuel distribution segment, SUN's
contract with 7-Eleven, Inc. has eight years remaining and ensures
a fixed price for a set number of gallons annually. This base
gallonage is 20% to 25% of the partnership's total run rate. The
fuel distribution segment's value chain stretches from retail
stores (where SUN is a lessor and occasionally a retailer) to its
core wholesale operations, making for resilient margins. The
product is a daily necessity for many Americans, and the value
chain adjusts selling prices when volumes fall, as seen during the
pandemic, to maintain gross margin dollar value.
In the pipeline systems and terminals segments, EBITDA is made up
of the following: take-or-pay contracts with largely high
creditworthy or large private/international counterparties,
fixed-fee contracts for the only pipelines into and out of location
advantaged and highly utilized Valero Energy Corporation
(BBB/Stable) refineries, and fixed-fee volume exposed contracts
that are almost entirely exposed to Permian Basin crude oil
dynamics. In volume exposed contracts, exposure to the Permian is
somewhat mitigated because it is the U.S. basin with the lowest
breakevens.
Leverage Forecast: SUN was able to return to its long-term leverage
target of 4.0x within approximately six months of the NuStar
acquisition closing, which was quicker than its publicly targeted
12-18-month timeline. Over the forecast period, Fitch expects SUN's
leverage to remain close to 4.0x, which positions the company
strongly in its rating category. Fitch believes SUN's 4.0x long
term-leverage target policy is important to its rating. SUN
calculates its leverage using a net leverage, which generally leads
to a lower leverage number than Fitch's figure.
Fragmented Motor Fuel Distribution Sector: SUN is the largest
independent distributor of motor fuels in the U.S, within a highly
fragmented sector that includes both independents and
non-independents. SUN's operations in the sector span a broad
spectrum, from being the bridge between credit card banks and SUN
credit card customers to wholesaling to other wholesalers at its
terminals. Fitch believes the sector will present new acquisition
opportunities, and SUN has successfully integrated new acquisitions
before. Fitch will monitor acquisition multiples and financing
plans for any new deals that SUN pursues.
Parent-Subsidiary Linkage: SUN's ratings reflect its Standalone
Credit Profile with no express linkage to its parent company. Fitch
believes Energy Transfer LP (ET; BBB/Stable), the general partner
and owner of a meaningful minority stake in the limited partnership
units, has the stronger credit profile of the two based on its
size, scale, and geographic, operational and cash flow diversity.
SUN's ratings do not receive uplift from the linkage due to weak
strategic, operational and legal (e.g., cross-defaults) incentives
to provide support.
Rating Equalization: Following Fitch's "Parent-Subsidiary Linkage
Criteria," the rating of NuStar Logistics, L.P.'s senior unsecured
debt is equalized with that of SUN, given Fitch's determination of
SUN as a strong parent with high legal incentives and medium
strategic and operational incentives. SUN's debt assumption
agreement on Logistics' unsecured notes is of high importance in
Fitch's assessment.
Peer Analysis
SUN's closest peer is Plains All American Pipeline, L.P. (Plains;
BBB/Stable). Within Fitch's coverage, SUN's combination of
wholesale motor fuel distribution, pipeline systems and terminals
segments makes it unique in Fitch's North American midstream energy
coverage.
Like SUN, Plains operates across many regions, covering all major
production basins and most of the critical demand centers in the
U.S. and Canada. Both SUN and Plains have similar scale, with
annual EBITDA ranging from about $2 billion-$3 billion. About 20%
of Plains' EBITDA comes from NGLs, while the remainder comes from a
crude oil segment with a large Permian presence and an asset base
spanning the entire crude oil midstream value chain. SUN's EBITDA
largely comes from wholesale motor fuel distribution and crude oil
and refined products terminals and pipelines.
Both companies have fairly predictable cash flows. Plains has
substantial operations in the strongest U.S. basin, while SUN sells
a highly demanded product, gasoline, and also has some MVCs and
structural exclusivity in its portfolio.
Fitch expects Plains will have a 2025 leverage of approximately
3.2x, which close to its 3.25x-3.75x net leverage target. Over the
forecast period, Fitch expects SUN to remain around its 4.0x
leverage target. Due to higher business risk and higher leverage,
SUN is rated two notches below Plains.
Key Assumptions
- Fitch's oil price deck, which bears, over the long term, a
relationship to the price of motor fuels and production of crude
and refined products;
- Maintenance capex and growth capex generally in line with
management's guidance;
- Some small acquisitions in the wholesale motor fuel distribution
segment;
- Increasing distributions to unitholders;
- Base interest rates in line with Fitch's Global Economic
Outlook.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage expected to be at or above 4.8x on a sustained
basis;
- Sustained deterioration in motor fuel margins;
- An acquisition or pursuit of organic growth strategy that
significantly increases business risk.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA leverage expected to be at or below 3.8x on a sustained
basis;
- A meaningful increase in the percentage of EBITDA coming from
take-or-pay type contracts.
Liquidity and Debt Structure
SUN has a $1.5 billion unsecured revolving credit agreement that
matures in May 2029. Pro-forma for the debt issuance and NuStar
notes repayment, the nearest bond maturity is in June 2026. Fitch
expects SUN's maturity schedule to be manageable over the forecast
period. As of Dec. 31, 2024, SUN had $94 million in cash and around
$1.25 billion in revolver availability.
SUN does not meaningfully use its revolver in the normal course of
business.
The revolving credit agreement requires the partnership to maintain
a net leverage ratio below 5.5x and an interest coverage ratio
above 2.25x. As of Dec. 31, 2024, SUN was in compliance with its
covenants, and Fitch believes SUN will remain in compliance through
its forecast period.
Issuer Profile
SUN is a wholesale motor fuels distributor, provides pipeline
transportation and storage of crude oil and refined products, and
transports anhydrous ammonia. The company's assets are mainly
located in the U.S., with some operations in Europe and the
Caribbean.
Summary of Financial Adjustments
For unconsolidated investees, Fitch incorporates in EBITDA
distributions from such entities, not equity-method income, nor
pro-rata EBITDA.
Date of Relevant Committee
16 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
----------- ------ --------
Sunoco LP
senior unsecured LT BB+ New Rating RR4
SUNOCO LP: Moody's Rates New $750MM Unsec. Notes Due 2033 'Ba1'
---------------------------------------------------------------
Moody's Ratings assigned a Ba1 rating to Sunoco LP's (SUN) proposed
$750 million senior unsecured notes due 2033. The Ba1 Corporate
Family Rating, existing Ba1 ratings on its senior unsecured notes,
and stable outlook for SUN remain unchanged.
Net proceeds from this debt offering will be used to repay a $600
million notes issue maturing in October 2025 and to pay down
borrowings under SUN's revolving credit facility.
RATINGS RATIONALE
The Ba1 rating on the proposed notes, which will rank pari passu
with SUN's existing notes, is the same as its CFR and reflects the
unsecured nature of its capital structure.
SUN's Ba1 CFR reflects its investment grade scale, a large
operating footprint, and a strong measure of contracted pipeline
and storage earnings that bring important diversification to its
legacy wholesale fuel distribution business. Rapid integration and
realization of synergies from the $7.3 billion NuStar Energy L.P.
(NuStar) acquisition has allowed SUN to quickly return its
financial leverage to pre-acquisition levels. Achieving additional
synergies targeted for 2026 should lead to free cash flow growth
and gradual deleveraging.
SUN is one of the largest distributors of motor fuels in the US and
benefits from the strength of its Sunoco retail brand and the
geographic reach and revenue stability of this business. The
addition of NuStar's diversified pipeline and storage businesses
and the long-term fee-based contracts associated with them adds
greater consistency to SUN's margins. The acquisition is a
continuation on a much larger scale of SUN's credit enhancing
efforts to solidify margins in recent years by growing its presence
in more predictable midstream businesses, such as terminals and
storage tanks.
Moody's regard SUN as having good liquidity as indicated by its
SGL-2 Speculative Grade Liquidity rating, principally a function of
the approximately $1.3 billion of availability under its $1.5
billion unsecured revolving credit facility at December 31, 2024.
The facility is primarily used to fund acquisitions and SUN
periodically issues notes to term out borrowings. Moody's don't
expect SUN to rely on its revolver in any material way to fund
operations (other than temporary working capital swings) or its
capital program as Moody's forecasst SUN to generate positive free
cash flow. The credit facility requires SUN to maintain a net
leverage ratio of not more than 5.5x and interest coverage of not
less than 2.25x, both of which Moody's expects the company to
comfortably comply. SUN's next upcoming debt maturities following
the October maturity being repaid are its $500 million notes issue
in June 2026 and two issues in 2027 totaling $1.15 billion, all of
which Moody's expects SUN to address in the normal course. The
revolver expires in 2029.
SUN's stable outlook reflects Moody's expectations of continued
gradual volume growth and adjusted leverage between 4.0x and 4.5x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade could be considered if SUN's growth and
acquisition activity remains biased toward more stable midstream
activities, with adjusted debt/EBITDA below 3.75x while maintaining
strong distribution coverage. Ratings could be downgraded if
leverage is consistently maintained above 4.75x or distribution
coverage falls below 1.2x.
Dallas, Texas-based SUN is a diversified midstream master limited
partnership with a large motor fuel distribution network and crude
oil, refined products, renewable fuels, and ammonia pipeline,
storage and terminalling operations. SUN's general partner is owned
by Energy Transfer LP (Baa2 stable), which also owns 21% of SUN's
common units.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
SUSHI GARAGE: Creditors to Get Proceeds From Liquidation
--------------------------------------------------------
Sushi Garage, LLC, submitted an Amended Chapter 11 Plan dated March
3, 2025.
The debtor owns and operated (through a management agreement with
Juvia Management, LLC ("Juvia Management") Sushi Garage, and a
100-seat Japanese Restaurant located in Miami Beach’s Sunset
Harbour neighborhood (the "Restaurant").
The Debtor filed the Subchapter V Case due to financial hardship
stemming from the Restaurant experiencing a material decrease in
sales. The Debtor attempted to reach a bridge solution with its
landlord as the sales were insufficient to pay the Debtor's lease
obligations.
Ultimately, the Debtor was compelled to reject the Restaurant
lease. While efforts were underway to investigate an alternative
business location, additional challenges of generating revenue to
continue running the business arose. As a result of these
conditions, the Debtor is now forced to submit a liquidation plan
and go out of business.
The Plan Projection shows that the Debtor as of the Effective Date
(the "Liquidated Debtor") will have sufficient projected disposable
income to make all payments under the Plan. The final Plan payment
is expected to be paid upon receipt of the Debtor's employee
retention credit, which the Debtor believes may occur on or before
the expiration of 12 months from the Effective Date.
Class 1 consists of Allowed Priority Claims. Claims Allowed as
Priority under Section 507 et seq. of the Bankruptcy Code will not
be paid in full on the Effective Date as there are insufficient
funds available. Notwithstanding the foregoing, the Internal
Revenue Service may be entitled to set off its Allowed Priority
Claim from the proceeds of Employee Retention Credit.
Class 3 consists of Allowed General Unsecured Claims. There are
insufficient funds to make a distribution to Class 3. There. Class
3 is Impaired and entitled to vote.
Class 4 consists of Equity Interests of Sushi Garage Holdings in
Sushi Garage. On the Effective Date, the Equity Interests will be
retained in the same amounts and character as they were held prior
to the Petition. Class 4 is deemed to accept and not entitled to
vote.
On the Effective Date, all property of the Debtor not otherwise
disposed of under the Plan, shall vest with the Liquidated Debtor.
The Plan proposes to pay Allowed Claims to be paid under the Plan
from the liquidation of its assets as set forth in the Plan
Projection.
A full-text copy of the Amended Plan dated March 3, 2025 is
available at https://urlcurt.com/u?l=Zi8YnY from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Jacqueline Calderin, Esq.
Agentis PLLC
45 Almeria Avenue
Coral Gables, FL 33134
Telephone: (305) 722-2002
Email: jc@agentislaw.com
About Sushi Garage
Sushi Garage, LLC, doing business as Sushi Garage Miami Beach, is a
Japanese restaurant in Miami Beach, Fla.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-12354) on March 12,
2024, with $1 million to $10 million in both assets and
liabilities. Jonas Millan, managing member, signed the petition.
Judge Laurel M. Isicoff presides over the case.
Jacqueline Calderin, Esq., at Agentis, PLLC, is the Debtor's legal
counsel.
SWC INDUSTRIES: Deborah Jans Out as Committee Member
----------------------------------------------------
The U.S. Trustee for Region 17 disclosed in a notice that these
creditors are the remaining members of the official committee of
unsecured creditors in the Chapter 11 cases of SWC Industries, LLC
and its affiliates:
1. Noel Harwood, Administrator for the
Estate of James Harwood
200 Laurel Lake Drive, Apt. W-100
Hudson, OH 44236
Phone: (216) 210-2472
2. George W. Snell, Jr., c/o Marlene Snell
749 East 29th Street, Apt. 233
Fremont, NE 68025
Phone: (402) 720-1091
Email: marlenesnell42@gmail.com
3. Mary C. Krawczak, Administrator
of the Estate of Patrick Cleary
55 Old Clairton Rd., Ste 204,
Pittsburgh, PA 15236
Phone: (412) 655-2919
4. Service Metal Frabricating, Inc.
10 Stickle Ave.,
Rockway, NJ 07866
Phone: (973) 625-8882
Email: jim@servicemetal.com
Deborah Jans, Special Administrator of the Estate of Machael Jans,
was previously identified as member of the creditors committee.
Her name no longer appears in the new notice.
About SWC Industries LLC
With principal operations in California and Massachusetts, SWC
Industries LLC manufactures a range of innovative sealing and
logistics equipment -- and offers related services -- that create
efficiencies and reduce costs across multiple industries. In
addition, the Company's San Diego-based business designs and
develops a full suite of software designed to improve warehouse
operations.
SWC Industries LLC and 12 affiliates sought Chapter 11 protection
(Bankr. N.D. Cal. Lead Case No. 24-51721) on Nov. 13, 2024.
SWC listed assets and debt of $50 million to $100 million as of the
bankruptcy filing.
The Debtors tapped Allen Overy Shearman Sterling US LLP as lead
restructuring counsel; Binder Malter Harris & Rome-Banks LLP as
restructuring co-counsel and local counsel; Getzler Henrich &
Associates LLC as financial advisor; and Gordian Group, LLC, as
investment banker. Stretto, Inc., is the claims agent.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
TENET HEALTHCARE: Fitch Hikes IDR to 'BB-', Outlook Stable
----------------------------------------------------------
Fitch Ratings has upgraded Tenet Healthcare Corp.'s (Tenet) Issuer
Default Rating (IDR) from 'B+' to 'BB-'. Fitch has also affirmed
the first lien notes at 'BB', and the second lien notes and senior
unsecured notes at 'BB-', after one-notch Recovery Rating
reductions to 'RR3' and 'RR4', respectively (reduced per Fitch's
Corporates Recovery Ratings and Instrument Ratings Criteria to
reflect significant non-guarantor collateral). Fitch has also
affirmed the revolver's rating at 'BB+'/'RR1. The Rating Outlook is
Stable.
The 'BB-' IDR and Stable Outlook reflect an improving competitive
position, with Tenet's Ambulatory Care segment durably delivering
robust EBITDA growth, and divestitures funding significant debt
reduction ($2.1 billion in 2024) and enhancing liquidity (YE 2024
cash on hand totaled $3.0 billion). The upgrade of Tenet's IDR to
'BB-' further credits significant reductions in EBITDA leverage to
3.9x at YE 2024 (well below Fitch's 4.5x positive rating
sensitivity for the previous B+ IDR), and likely further
deleveraging in 2025 and beyond.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Tenet Healthcare
Corporation LT IDR BB- Upgrade B+
senior secured LT BB+ Affirmed RR1 BB+
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB Affirmed RR3 BB
Senior Secured
2nd Lien LT BB- Affirmed RR4 BB-
Key Rating Drivers
EBITDA Leverage Trending Lower: Fitch-defined EBITDA leverage
declined considerably from 5.5x at YE 2022 and 5.1x at YE 2023, to
3.9x at YE 2024 (a half turn from hospital divestitures funding
$2.1 billion of debt reduction). While debt reduction is less
likely than EBITDA growth to drive deleveraging from here, Fitch
sees EBITDA leverage trending toward 3.5x in 2025-2026, supporting
the upgraded 'BB-' IDR.
Fitch expects Tenet will allocate capital prudently, balancing the
objectives of expanding via M&A and de novo development and
returning capital to shareholders, with balance sheet management
sustaining EBITDA leverage under 4.5x (the negative rating
sensitivity for its new BB- IDR). However, Fitch notes that while
Tenet publicly speaks to its leverage improvements, it has not
articulated a specific target for leverage or ratings and thus
there is some risk that leverage could increase unexpectedly
through a highly significant acquisition or divestiture.
Impressive FCF: Excluding taxes paid on divestitures, Tenet
generated an impressive $1.2 billion in FCF in 2024 (6% of
revenue), up from $1.0 billion (5% of revenue) in 2023. Fitch now
expects Tenet to sustain FCF at about 7% of revenue over its rating
horizon, thus increasing within the range of $1.4 billion to $1.7
billion annually, and marking continuing progress with cash
conversion. These levels, and CFO-Capex/Debt Fitch forecasts at low
double-digit levels, are consistent with the upgraded 'BB-' IDR.
After divestiture-driven debt reduction in 2024, Fitch assumes
future FCF is likely to be allocated to Ambulatory segment M&A
(assumed at $0.5 billion annually, double Tenet's $250 million
"baseline" for annual ASC investments) and share repurchases
(assumed at $500 million in 2025 and $750 million in 2026, up from
$200 million-$250 million annually in 2022-2023, but in line with
$672 million in 2024).
Ambulatory Segment Driving EBITDA Growth: Tenet is one of the
largest for-profit operators of acute care hospitals and ambulatory
surgery centers (ASCs), and Fitch sees sustainable, secular ASC
tailwinds and continuing ASC investments driving at least
mid-single-digit consolidated EBITDA growth. With Ambulatory Care
generating higher margins (nearly double) and higher revenue growth
(system-wide, same-facility revenues up 8% in 2024 and up 9% in
2023, reflecting rising acuity) than Hospital Operations, Fitch is
further constructive on the outlook for improving consolidated
EBITDA margin.
EBITDA Margin Likely Improving: Fitch expects EBITDA margin to
improve further in 2025 with its Hospital Operations segment
benefitting from further volume growth, expanded Medicaid funding
and heavily-subsidized ACA exchange coverage (expires YE 2025).
With further benefits from Tenet's high-margin ASCs expanding via
organic growth, capital investment and M&A, Fitch sees consolidated
EBITDA margin improving within the 19%-20% range over its forecast,
consistent with the upgraded 'BB-' IDR.
Peer Analysis
Tenet's Long-Term IDR of 'BB-' reflects higher EBITDA leverage
relative to hospital industry peers HCA Healthcare, Inc. (HCA) and
Universal Health Services, Inc. (UHS; BB+/Stable). While Tenet's
operating and FCF margins still lag those of industry-leader HCA,
Tenet has closed the gap by cutting costs, selling lower-margin
hospitals, and investing to emphasize higher-acuity services and
expand its high-margin ASC business. Tenet's cash flow and
operating margins and are also now in league with those of UHS.
Tenet also has a much stronger operating profile than lower-rated
hospital industry peer Community Health Systems, Inc. (CYH; CCC+).
In contrast to CYH, but similar to HCA and UHS, Tenet's operations
are primarily located in urban or large suburban markets with
favorable organic growth prospects.
Key Assumptions
- Revenues of $21.1 billion in 2025 (+2% YoY, with Hospital
Operations segment reflecting negative skew from divestitures in
2024 but also organic growth of 4% (primarily driven by
pricing/mix), and Ambulatory Care segment reflecting revenue per
case growth of 2% and volume growth of 8%, including acquisitions),
then $22.2 billion in 2026 (+5% YoY), $23.2 billion in 2027 (+4%
YoY) and $24.2 billion in 2028 (+4% YoY), with Hospital Operations
growth of 2%-3% (split evenly between volume and acuity-adjusted
pricing) and Ambulatory Care growth in the 7%-9% range (driven
primarily by volume growth);
- Fitch-defined EBITDA growth of 5%-8% annually (benefitting from
about $500 million of acquisitions annually, primarily adding
interests in ASCs), including EBITDA margin improvement from 18.1%
in 2024 to 18.6% in 2025 (+50 bps YoY), 19.0% in 2026 (+40 bps
YoY), 19.6% in 2027 (+60 bps YoY) and 19.9% in 2028 (+30 bps YoY),
with the higher-margin ASC business commanding a rising share of
EBITDA mix;
- Capex rising within the range of 3.7%-4.1% of revenue, totaling
$775 million in 2025, $850 million in 2026, $925 million in 2027
and $1.0 billion in 2028, as well as $0.5 billion of acquisitions
annually, with M&A and development spending focused on expanding
the ASC business and offering higher-acuity services in both
segments;
- Interest payments of about $730 million in 2025-2026, rising
within the range of about $750 million-$760 million in 2027-2028,
including repayment of $600 million of debt in 2028 and assuming
bonds due in 2027 and 2028 are refinanced at an average cost of
7.0%);
- FCF rising within the range of 6.5%-7.5% of revenue, totaling
$1.4 billion in 2025, $1.5 billion in 2026 and $1.7 billion in each
of 2027 and 2028, funding increasing share repurchases totaling
$500 million in 2025, $750 million in 2026 and 2027, and $1.0
billion in 2028.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Fitch's expectation of EBITDA Leverage sustained above 4.5x (net
of NCI distributions); and
- Fitch's expectation of FCF sustained below 5.0% of revenue.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch's expectation of EBITDA Leverage sustained below 3.5x (net
of NCI distributions); and
- Fitch's expectation of FCF sustained above 7.5% of revenue.
Liquidity and Debt Structure
Liquidity totaled $4.3 billion at YE 2024, including $3.0 billion
of unrestricted cash on hand and $1.3 billion available under
Tenet's $1.5 billion asset-backed revolver (nothing drawn;
immaterial LCs; reflects decline in eligible collateral due to
divestitures). Fitch also expects Tenet to generate an average of
$1.6 billion of annual FCF over its forecast ($1.4 billion in 2025,
rising to $1.7 billion in 2027-2028).
Tenet's nearest debt maturities include $1.5 billion of senior
secured second-lien notes due February 2027 and $1.5 billion of
senior secured first-lien notes due November 2027. Tenet's revolver
also matures in March 2027, but is currently undrawn. Fitch expects
Tenet can refinance both bonds by issuing new senior secured
first-lien notes, and expects Tenet is likely to maintain access to
such capital.
While liquidity also benefits from fixed-rate bonds comprising all
funded debt, its forecast reflects interest on new senior secured
first-lien notes at 7.0%, above recent yields on comparable Tenet
bonds. Tenet's only financial maintenance covenant is a 1.5x
fixed-charge coverage requirement that applies solely if revolver
availability declines below $150 million.
Issuer Profile
Tenet, a leading for-profit health system, operating 49 acute care
and specialty hospitals and 135 outpatient centers (imaging, urgent
care, emergency care) across eight states, 518 ASCs and 25 surgical
hospitals across 37 states, and the Conifer Health Solutions RCM
business.
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
Tenet Healthcare Corporation has an ESG Relevance Score of '4' for
Exposure to Social Impacts reflecting pressure to contain health
care spending growth, a highly sensitive political environment and
social pressure to contain costs or restrict pricing, which has a
negative impact on the credit profile and is relevant to the
ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
TINY FROG: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Tiny Frog, Inc.
275 Cottle Lake Dr.
Coats, NC 27521
Business Description: The Debtor operates multiple franchise
locations of Hwy 55 Burger Shakes & Fries, a
fast-casual dining chain specializing in
burgers, shakes, and fries, under franchise
agreements with The Little Mint, Inc.
Chapter 11 Petition Date: March 25, 2025
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 25-01081
Judge: Hon. Joseph N. Callaway
Debtor's Counsel: David F. Mills, Esq.
NARRON WENZEL, P.A.
P.O. Box 1567
102 S. Third St.
Smithfield, NC 27577
Tel: 919-934-0049
Fax: 919-938-1058
E-mail: dmills@narronwenzel.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alexis Ramos as 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/U22WDRY/Tiny_Frog_Inc__ncebke-25-01081__0001.0.pdf?mcid=tGE4TAMA
TRADEMARK GLOBAL: CION Marks $18.1 Million Loan at 18% Off
----------------------------------------------------------
CION Investment Corp. has marked its $18,139,000 loan extended to
Trademark Global LLC to market $14,831,000 or 81% of the
outstanding amount, according to CION'S Form 10-K for the fiscal
year ended December 31, 2024, filed with the U.S. Securities and
Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to
Trademark Global LLC. The loan accrues interest at a rate of S+850,
1.00% SOFR Floor per annum. The loan matures on June 30, 2027.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
The Company can be reached through:
CĪON Investment Corporation
100 Park Avenue, 25th Floor
New York, NY
About Trademark Global LLC
Trademark Global, LLC provides brand development, manufacturing,
and instant drop shipping services. The Company distributes branded
and licensed products to mass-market online retailers, as well as
supplies retail housewares, artwork, cutlery, tools, toys, and
sporting goods. Trademark Global serves customers worldwide.
TUPPERWARE BRANDS: U.S. Trustee Appoints Retiree Committee
----------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent retirees in the Chapter 11 cases of Tupperware Brands
Corporation and its affiliates.
The committee members are:
1. Thomas James Gray
Email: jimg513@live.com
2. Eugene Zawislak
Email: genezawis@gmail.com
3. Keith Haggerty
Email: kwhneweng@aol.com
4. Pablo Perez de Alejo
Email: cpaheat1@aol.com
5. Peter M. Card
Email: draftace55@yahoo.com
6. James Davenport
Email: jadavenport1956@gmail.com
7. James McClung
Email: james.b.mclung@gmail.com
About Tupperware Brands
Tupperware Brands Corporation (NYSE: TUP) --
https://www.tupperwarebrands.com/ -- is a global consumer products
company that designs innovative, functional, and environmentally
responsible products. Founded in 1946, Tupperware's signature
container created the modern food storage category that
revolutionized the way the world stores, serves, and prepares food.
Today, this iconic brand has more than 8,500 functional design and
utility patents for solution-oriented kitchen and home products.
The company distributes its products into nearly 70 countries,
primarily through independent representatives around the world.
Tupperware Brands sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 24-12166) on Sept. 17,
2024. In the bankruptcy petition, Tupperware reported more than
$1.2 billion in total debts and $679.5 million in total assets.
Judge Brendan Linehan Shannon oversees the case.
Kirkland & Ellis LLP is serving as legal advisor to Tupperware,
Moelis & Company LLC is serving as the Company's investment banker,
and Alvarez & Marsal is serving as the Company's financial and
restructuring advisor. Epiq is the claims agent and has put up the
page https://dm.epiq11.com/Tupperware
UNISYS CORP: Moody's Lowers CFR to 'B2' & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings downgraded Unisys Corporation's (Unisys) corporate
family rating to B2 from B1 and probability of default rating to
B2-PD from B1-PD. Concurrently, Moody's downgraded Unisys' $485
million senior secured global notes due 2027 to B2 from B1. The
speculative grade liquidity rating remains unchanged at SGL-2. The
outlook was changed to stable from negative. Unisys provides
information technology (IT) services and software globally.
The downgrade of the CFR to B2 from B1 reflects Moody's
anticipations for little or no revenue growth and moderately high
debt to EBITDA around 4.5 times over the next 12-18 months. Moody's
anticipations for governance risk from financial strategies
featuring elevated financial leverage were a key ESG consideration
for the downgrade. Support to the B2 CFR and stable outlook is
provided by Moody's anticipations for gross margin expansion in
Unisys' non license and support business lines over the next two to
three years and Moody's overall assessment of its liquidity profile
as good, featuring $377 million of cash and $117 million available
under the unrated $125 million secured credit facility expiring
2027 as of December 31, 2024.
Unisys has removed over $2 billion of pension liabilities since
2020. The company faces future cash contributions to its US pension
plan, assuming no changes in actuarial assumptions, pension asset
performance, or regulatory changes that could alter future cash
contribution requirements. Moody's expects the company may pursue
liability reduction actions, using its cash to make required
contributions, thereby reducing its underfunded status. Moody's
considers the $776 million underfunded amount of Unisys' pensions
as of December 31, 2024 as debt. Therefore, whether through
liability management initiatives or cash contributions, Moody's
considers reductions in the amount of underfunding as equivalent to
debt repayment.
RATINGS RATIONALE
The B2 CFR reflects Unisys' moderately high debt to EBITDA of 4.8
times as of December 31, 2024, small scale relative to larger
competitors, and the challenges of operating within the highly
competitive IT services industry. Over 75% of revenue comes from
recurring sources, comprised of software license renewals,
maintenance and digital workplace services and outsourcing
contracts. Although certain contracts may depress profitability in
the initial implementation phase, these contracts provide a base of
recurring revenues once the company begins to recognize revenues.
These relationships also provide a customer base into which Unisys
can sell additional services. Although Moody's anticipates EBITDA
margin will remain about 14% in 2025 and 2026, the decline of
EBITDA margins from about 19% in 2021 pressures the credit
profile.
All financial metrics cited reflect Moody's standard adjustments.
Evolving technologies and customer requirements require continued
investment in solutions that can materially influence the
profitability of a contract over time. Unisys competes against
much larger organizations, such as Accenture plc (Aa3 stable), DXC
Technology Company (Baa2 negative) and Kyndryl Holdings, Inc. (Baa2
stable), and non-US and low-cost providers, like Infosys Limited
(Baa1 stable) and Tata Consultancy Services Limited (Baa1 stable).
Unisys has high exposure to governance risks related to financial
strategy and risk management due to the company's tolerance for
operating with moderately high financial leverage, including its
large underfunded pension liability.
Unisys' credit profile benefits from the diverse end markets that
it serves, including commercial, financial institutions, and public
sector, which contributes to revenue stability given the differing
demand drivers of each of these separate end markets. The stream of
high margin, although highly episodic, but generally predictable,
software license revenues from its Enterprise Computing Solutions
segment significantly improves Unisys' profit margin and cash flow
during periods of increased scheduled software license renewals,
somewhat explaining the multi-year declining profitability rate
trend.
The SGL-2 liquidity rating reflects Moody's anticipations for at
least $50 million of free cash flow (before required pension
payments) in 2025. Unisys' liquidity is also underpinned by its
high cash balance and the revolver, which is secured by a priority
claim in eligible accounts receivable. Moody's expects that Unisys
will remain in compliance with the financial covenant on the
revolver over the next 12 to 15 months. The company expects to make
approaching $100 million of pension payments in 2025, and more than
$100 million in 2026, which are covered by these sources.
The $485.0 million 6.875% senior secured notes due 2027 are rated
B2, in line with the B2 CFR. The 2027 Notes benefit from upstream
guarantees from certain domestic subsidiaries and the cushion of
unsecured liabilities. However, the 2027 Notes are effectively
subordinated to the revolver. The 2027 Notes' indenture permits the
issuance of first lien debt with priority ahead of the 2027 Notes
in the collateral waterfall. The current B2 debt instrument rating
could be downgraded should Unisys issue a new tranche of senior
secured first lien debt.
The stable outlook reflects Moody's expectations for little to no
revenue growth, some improvement in non license and support
business line gross margins and good liquidity over the next 12 to
18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Unisys achieves organic revenue
growth in a low-to-mid single-digit percentage range, sustains debt
to EBITDA below 4.0 times and free cash flow (before required
pension payments) to debt around 8%, takes steps required to bring
the US and international pension plans to fully-funded status and
maintains a conservative financial policy.
The ratings could be downgraded if Unisys revenue declines or if
profitability or cash flow generation weakens such that Moody's
expects debt to EBITDA will be sustained above 5.5 times or free
cash flow (before required pension payments) to debt will remain
below 5% on a more than temporary basis. A diminished liquidity
profile or more aggressive financial strategies, featuring large,
debt-funded acquisitions or shareholder returns could also lead to
lower ratings.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Unisys Corporation, based in Blue Bell, Pennsylvania, provides
information technology services and enterprise server hardware
worldwide. Moody's expects 2025 revenue of about $2 billion.
UNIVISION COMMUNICATIONS: S&P Affirms 'B+' Issuer Credit Rating
---------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based
Spanish-language multimedia company TelevisaUnivision Inc.'s
indirect subsidiary Univision Communications Inc. to negative from
stable. At the same time, S&P affirmed its 'B+' issuer credit
rating on Univision.
The negative outlook reflects uncertainty regarding the company's
ability to reduce leverage below 6.5x over the next year. To reduce
leverage, the company will likely need streaming revenue growth to
outpace linear TV revenue declines.
S&P said, "We believe leverage could remain above our 6.5x
downgrade threshold over the next 12 months. We estimate
TelevisaUnivision ended 2024 with S&P Global Ratings-adjusted net
leverage of about 7.5x (or about 6.7x excluding the impairment of
program rights) and currently forecast leverage will decline to
about 6.5x in 2025. We expect EBITDA to be relatively flat in 2025
versus 2024 (excluding the impairment of program rights), despite a
full year of streaming profitability and $400 million of cost
actions taken at the end of 2024, given significant expected
revenue headwinds from the company's linear TV business. As a
result, we believe it will modestly deleverage in 2025 from lower
expected restructuring expenses (which we do not add back to
EBITDA), mandatory debt repayment, and a modest increase in cash
(which we net against debt). To reduce leverage, the company will
likely need streaming revenue growth to outpace linear TV revenue
declines. However, both economic and secular challenges present
risk to our base-case forecast. Leverage will likely decline below
6.5x in 2026 due to significant cash flow associated with the U.S.
midterm elections and FIFA World Cup (hosted by the U.S., Mexico,
and Canada), although it will then partially increase in 2027 as
the nonrecurring revenue from these events drops off.
"TelevisaUnivision's U.S. political and nonpolitical advertising
revenue underperformed our expectations in 2024, with nonpolitical
advertising revenue (including linear TV and streaming, which it
does not break out) down in the low-single-digit percent area. U.S.
political revenue will meaningfully decline in 2025 in a
nonelection year, and we expect U.S. nonpolitical advertising
revenue will modestly decline. While the decline will partially be
due to fewer expected major sporting events, we expect ad spending,
particularly on legacy platforms, will be hurt by weakening
economic conditions and forecast linear TV advertising will decline
as consumers continue migrating to digital alternatives. We expect
U.S. linear TV subscription revenue will continue to decline given
ongoing subscriber churn (to which the company is more exposed
since it does not have carriage on Hulu Live). The company also
increased the price of its ad-free premium streaming tier at the
end of 2024, which could potentially slow subscriber growth for
that tier as consumers may instead opt for the company's
ad-supported premium tier or free ad-supported tier.
"We expect the implementation of U.S. tariffs will have a larger
negative impact on Mexico than the U.S. and forecast negative GDP
growth for Mexico in 2025. We expect this will hurt ad spending in
Mexico, although the Mexican upfront (conducted on a calendar
basis, and which 90% of the private sector's business is conducted
through) should help limit the impact. As cord cutting increases in
Mexico with increasing adoption of streaming services, we also
expect declines in linear TV subscription revenue."
TelevisaUnivision has a differentiated strategy, which benefits
profitability. Like its English-language network peers,
TelevisaUnivision is not immune to the secular pressures facing
linear TV. However, it has brought new advertisers to its platform
and increased pricing for new clients. S&P believes this is, in
large part, because its streaming service is meant to complement
its linear TV offering rather than replace it. This contrasts with
many of its English-language network peers that are prioritizing
putting content on their streaming platforms and, as a result,
cannibalizing their existing linear TV business. The company's TV
networks also have more than a 60% share of the Spanish-language
market in the U.S. and in Mexico.
The company reached streaming profitability in the third quarter of
2024, just over two years from the full launch of its streaming
service. S&P believes the company benefits from offering different
content across its ad-supported and subscription-based services
(other streaming services typically offer the same content across
tiers). About two thirds of its premium subscribers come from its
ad-supported service, which reduces subscriber acquisition costs.
At the same time, the company benefits from its vast content
library with over 300,000 hours of programming (more than other
Spanish- and English-language content libraries) and the lower cost
of content production in Mexico, with first-party content driving
most of the total streaming hours on its streaming service.
The negative outlook reflects uncertainty regarding the company's
ability to reduce leverage below 6.5x over the next year. To reduce
leverage, the company will likely need streaming revenue growth to
outpace linear TV revenue declines.
S&P could lower the rating if the company's leverage remains above
6.5x over the next year. This could occur if:
-- Weakening economic conditions cause greater-than-expected
declines in advertising revenue;
-- Growth in streaming revenue and profitability is slower than
expected; or
-- Restructuring charges remain elevated as the company further
integrates its legacy businesses.
Alternatively, S&P could tighten its 6.5x leverage threshold for
the rating, or even lower the rating, if the company's business
trends weaken significantly and its ability to monetize content in
a changing media ecosystem has materially declined.
S&P could revise the outlook to stable if leverage declines below
6.5x and S&P expects it to remain at that level. S&P believes this
could occur if:
-- Operating performance improves due to stronger-than-expected
growth from streaming coupled with relatively stable linear TV
revenue; or
-- The company undertakes asset sales or other balance sheet
measures that accelerate leverage reduction (on an S&P Global
Ratings-adjusted basis) coupled with improved operating
performance.
UPSCALE DEVELOPMENT: Creditors to Get Proceeds From Liquidation
---------------------------------------------------------------
Upscale Development, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Georgia a Plan of Liquidation under
Subchapter V dated March 3, 2025.
The Debtor is a Georgia corporation, incorporated on October 24,
2017. The Debtor is a real estate company. Specifically, the Debtor
owns five single family houses in Atlanta, Georgia for rent and/or
sale.
One of the properties is undergoing renovations before it can be
put on the market. Renovations are almost complete. The Debtor fell
behind on mortgage payments prepetition and filed its Subchapter V
Chapter 11 bankruptcy petition on December 2, 2024 ("Petition
Date") in order to prevent foreclosure of its real estate and to
reorganize its debts.
Nelson H. Carey is the Debtor's Manager and sole member and
officer. No change in the ownership and management of the Debtor is
anticipated post-confirmation.
The Debtor asserts that a controlled liquidation of the Debtor's
assets pursuant to the Plan will maximize recovery for its
creditors.
This Plan deals with all property of the Debtor and provides for
treatment of all Claims against the Debtor and its properties.
Class 7 consists of General Unsecured Claims not otherwise treated
herein. The Debtor believes but does not warrant that all known
General Unsecured Claims in the aggregate amount of approximately
$74,648.58. The Allowed Claims of the Class 7 Creditors are
Impaired.
* If the Plan is confirmed under section 1191(a) of the
Bankruptcy Code, the Debtor shall pay to the Class 7 General
Unsecured Creditors holding Allowed Claims, in full satisfaction of
their respective Allowed Unsecured Claims, a pro rata share of the
net proceeds realized from the sale of its assets on or before 180
days from the Effective Date. If payment has not been received on
or before 180 days from the Effective Date, then the Class 7
Creditors are entitled to enforce their state law rights and
remedies against the Debtor. Class 7 is Impaired by the Plan and is
entitled to cast Ballots.
* If the Plan is confirmed under section 1191(b) of the
Bankruptcy Code, Class 7 shall be treated the same as if the Plan
was confirmed under section 1191(a) of the Bankruptcy Code.
Class 8 consists of the Interests of the Debtor's Equity Holder
Nelson H. Carey. The Equity Holder will retain his Interest in the
Reorganized Debtor as such Interest existed as of the Petition
Date. This class is not impaired and is not eligible to vote on the
Plan.
The source of funds for the payments pursuant to the Plan is the
future income of the Debtor from the orderly liquidation of the
Debtor's assets by the Debtor.
A full-text copy of the Liquidating Plan dated March 3, 2025 is
available at https://urlcurt.com/u?l=hI0Bph from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Paul Reece Marr, Esq.
Paul Reece Marr, PC
6075 Barfield Road; Suite 213
Sandy Springs, GA 30328
Tel: (770) 984-2255
Email: paul.marr@marrlegal.com
About Upscale Development LLC
Upscale Development, LLC is a real estate company.
The Debtor sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ga. Case No. 24-62687) on December 2, 2024, with
$1 million to $10 million in both assets and liabilities. Nelson H.
Carey, manager, signed the petition.
Judge Sage M. Sigler handles the case.
The Debtor is represented by Paul Reece Marr, Esq. at Paul Reece
Marr, P.C.
URBAN CHESTNUT: Court Extends Cash Collateral Access Until April 11
-------------------------------------------------------------------
Urban Chestnut Brewing Company, Inc. received another extension
from the U.S. Bankruptcy Court for the Eastern District of
Missouri, Eastern Division to use the cash collateral of Midland
States Bank and the U.S. Small Business Administration.
The eighth interim order authorized the company to use $354,958 in
cash collateral through April 11 in accordance with its budget.
As protection, the order granted Midland States Bank and SBA a
post-petition replacement lien on the company's post-petition
assets, with the same validity, extent, and priority as their
pre-bankruptcy lien.
In addition, the court approved the payment of $1,030 to the SBA as
protection for Urban Chestnut's pre-bankruptcy indebtedness.
The next hearing is scheduled for April 9.
About Urban Chestnut Brewing Company
Urban Chestnut Brewing Co. is a brewer of craft beer in Saint
Louis, Mo., which specializes in German beer and lagers with a
variety of beer styles from IPAs to weissbiers.
Urban Chestnut Brewing Co. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Mo. Case No. 24-43233} on Sept.
6, 2024, with $1 million to $10 million in both assets and
liabilities. David M. Wolfe, president, signed the petition.
Judge Brian C. Walsh oversees the case.
The Debtor is represented by:
Spencer P. Desai, Esq.
The Desai Law Firm, LLC
Tel: 314-666-9781
spd@desailawfirmllc.com
V1 TECH: Unsecured Creditors to Split $120K over 5 Years
--------------------------------------------------------
V1 Tech, LLC filed with the U.S. Bankruptcy Court for the Northern
District of Texas a Plan of Reorganization dated March 3, 2025.
The Debtor was formed on July 7, 2014, as a Texas Texas limited
liability company. It presently operates from Allen, Texas.
The Debtor's primary source of revenue is derived from creating and
selling licensed art premised upon anime characters. Debtor's
marketing channels include both the internet and weekend Comicon
related shows around the country.
The Debtor, prior to the commencement of this bankruptcy case,
found itself overextended. The Debtor began to fall behind on its
obligations to the Texas Comptroller and borrowed money from
certain credit card and merchant lenders. In an effort to stem the
tide of increasing debt, the Debtor took steps to reduce its rent
and its payroll obligations. Those efforts proved unsuccessful, and
the Debtor filed this chapter 11 bankruptcy case.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of five
years from the Debtor's continued business operations.
Class 3 consists of Non-priority unsecured Claims. Each holder of
an Allowed Unsecured Claim in Class 3 shall be paid by Reorganized
Debtor from an unsecured creditor pool, which pool shall be funded
at the rate of $2,000.00 per month ($120,000.00 over the life of
the plan). Payments from the unsecured creditor pool shall be paid
quarterly, for a period not to exceed five years (20 quarterly
payments) and the first quarterly payment will be due on the
twentieth day of the first full calendar month following the last
day of the first quarter.
The Debtor estimates the aggregate of all Allowed Class 3 Claims is
approximately $1,100,000.00 based upon Debtor's review of the
Court's claim register, Debtor's bankruptcy schedules, and
anticipated Claim objections. This Class is impaired.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
The Debtor proposes to implement and consummate this Plan through
the means contemplated by Sections 1123 and 1145(a) of the
Bankruptcy Code.
A full-text copy of the Plan of Reorganization dated March 3, 2025
is available at https://urlcurt.com/u?l=Ex4bri from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Robert T. DeMarco, Esq.
DeMarco-Mitchell, PLLC
12770 Coit Road, Suite 850
Dallas, TX 75251
Telephone: (972) 991-5591
Facsimile: (972) 346-6791
Email: mike@demarcomitchell.com
About V1 Tech LLC
V1 Tech LLC offers RGB frame, wall art, mouse pads, GPU backplates,
GPU support brackets, RGB fans, and phone cases.
V1 Tech LLC sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Tex. Case No.: 24-44509) on Dec. 3, 2024. In the
petition filed by Hassan Alaw, as owner, the Debtor reports
estimated assets between $100,000 and $500,000 and estimated
liabilities between $1 million and $10 million.
The Debtor is represented by Robert T. DeMarco, Esq. at DEMARCO
MITCHELL, PLLC.
VILLAGE ROADSHOW: In Chapter 11, Eyes May 21 Auction for Films
--------------------------------------------------------------
Village Roadshow Entertainment Group USA Inc. sought Chapter 11
protection with plans to auction off its film library by the third
week of May 2025.
The Company is an independent producer and financier of major
Hollywood motion pictures, having produced and released over 100
films since its inception in 1997, many of which had renowned
success with an international audience.
Since its establishment in 1997, VREG has accumulated a library of
108 feature films, including numerous critically acclaimed and
commercially successful films such as Joker, Sully, San Andreas,
Mad Max: Fury Road, American Sniper, The Lego Movie, The Great
Gatsby, the Sherlock Holmes franchise, Gran Torino, the Ocean's
series, Happy Feet, Mystic River, and The Matrix trilogy. The
Debtors' interests in the Film Library are the Debtors' most
valuable assets, which include the Debtors' undivided interest in
its relevant percentage of the intellectual property, distribution
rights, cash flows, and other property related to the Film Library.
The library assets generate revenue of approximately $50 million
per year.
Goldman Sachs Group, Inc., began marketing the Debtors' assets in
the first half of 2024. In February 2025, the Debtors were in
talks for a potential deal for the library assets with two
purchasers. Ultimately, the Company decided that a sale (or sales)
pursuant to Section 363 of the Bankruptcy Code would maximize the
value of the Debtors' assets.
Following extensive good-faith negotiations with the potential
purchasers, the Debtors determined, in the exercise of their
business judgment, to execute a Stalking Horse Purchase Agreement
with the CP Ventura LLC on March 14, 2025, which provides for a
base purchase price in the amount of $365 million for the library
assets.
The Stalking Horse APA contemplates a public sale process whereby
interested parties may submit higher or better bids for the library
assets, or alternatively, the Debtors' full suite of assets, one or
more of the business segments, or other portions of the assets.
At a hearing on April 11, 2025, at 1:30 p.m. (ET), the Debtors will
seek court approval to enter into the Stalking Horse APA and set
bid procedures for the sale of the Debtors' assets. Under the
proposed bid procedures, the deadline for initial bids by other
parties will be on May 16, 2025, and an auction, if necessary, will
be conducted on May 21, 2025.
Road to Bankruptcy
Keith Maib, a Senior Managing Director in the Turnaround &
Restructuring practice at Accordion Partners, LLC, and presently
the CRO of the Debtors, explains that over the past few years, a
confluence of macro-economic factors have weighed heavily on the
Company's balance sheet, including: the COVID pandemic disrupting
the entertainment industry at large; the 2023 writers' and actors'
strikes delaying production and increasing cost; and "streaming
wars" and alternate viewing methods challenging business models
across the board. The bulk of the Company's liquidity crisis,
however, has stemmed from two significant circumstances that can
befall any company: the souring of a significant business
relationship, and the flatlining of a new venture before it had the
time and necessary resources to become profitable.
The Company previously enjoyed a lucrative and well-known
co-production and co-financing relationship with Warner Bros.
Entertainment Inc. and its affiliates ("WB") that culminated in
numerous and continual successful endeavors. On Feb. 7, 2022, the
Company filed a complaint with respect to WB's release of The
Matrix Resurrections day-and-date on HBO Max and WB's dispute
regarding the Company's right to co-finance derivative works based
on the Film Library assets co-owned with WB predominantly with
regard to the derivative rights agreements. The Company accused WB
of shutting it out of its legal and contractual rights to co-own
and co-finance the sequels, prequels, spinoffs, and other
derivative works of the 89 films that the Company funded and
co-owns and with respect to which derivative rights are applicable.
The Company and WB have remained in protracted arbitration
proceedings, and the Company has already incurred $18 million in
legal fees. The Company believes that the dispute has irreparably
decimated the working relationship between WB and the Company,
which has been the most lucrative nexus for the Company's historic
success in the entertainment industry.
In addition, between 2018 and 2020, the Company's management
focused the majority of its working capital on the development of a
studio business, with the goals of creating independently developed
and owned films, scripted television series and unscripted
television programs. The Company spent approximately $47.5 million
on development expenses for projects that either were developed and
never producer or if produced, never became profitable.
While the Company did achieve certain creative success and
independently produced some media content, including six
full-length movies, five unscripted television programs (including
two seasons of a game show), and two scripted television series, no
production from the studio business was able to realize monetary
gain in the requisite time needed to make the venture sustainable.
About Village Roadshow
Village Roadshow Entertainment Group USA Inc. and its affiliates
are a prominent independent producer and financier of major
Hollywood films, having produced over 100 successful movies since
1997. Their portfolio includes globally recognized blockbusters
such as "Joker," "The Great Gatsby," and the "Matrix" trilogy.
On March 17, 2025, Village Roadshow Entertainment Group USA Inc.
and 33 affiliates filed voluntary petitions for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
25-10475) before the Honorable Thomas M. Horan.
Village Roadshow listed $100 million to $500 million in assets
against $500 million to $1 billion in liabilities as of the
bankruptcy filing.
The Debtors tapped Sheppard, Mullin, Richter & Hampton LLP as
general bankruptcy counsel, and Young Conaway Stargatt & Taylor,
LLP as local bankruptcy counsel. Accordion Partners, LLC, is the
restructuring advisor, and Solic Capital Advisors, LLC, is the
investment banker. Kirkland & Ellis LLP is the special litigation
counsel. Kurtzman Carson Consultants, LLC, is the claims agent.
VISION CARE: Court Tosses Remaining Claim in Besse Medical Suit
---------------------------------------------------------------
Judge Peter G. Cary of the United States Bankruptcy Court for the
District of Maine dismissed Count I of the amended complaint in the
adversary proceeding captioned as Vision Care of Maine, Limited
Liability Company and Tanya Sambatakos, Chapter 11 Trustee for the
Estate of Vision Care of Maine, Limited Liability Company
Plaintiffs v. ASD Specialty Healthcare, LLC d/b/a Besse Medical
Defendant, Case No. 24-01009 (Bankr. D. Me.).
Vision Care provides medical services through facilities in Bangor
and Lincoln, Maine. In September 2017, Vision Care contracted with
Besse Medical to enable Vision Care to buy pharmaceutical products
from Besse Medical on credit extended by Besse Medical. In that
original contract, Vision Care granted Besse Medical a security
interest in all Vision Care's personal
property.
When the parties entered into their third contract in September
2022, Vision Care again granted Besse Medical, among others, a
security interest in Vision Care's personal property, including all
its accounts and proceeds of accounts.
Around September 2022 through January 2023, Vision Care bought
pharmaceutical products from Besse Medical on credit. Besse Medical
billed Vision Care for the purchases, but Vision Care did not pay
all the bills. Besse Medical then sued Vision Care (and its
guarantor), asserting claims based on the unpaid debt. As of April
2024, Besse Medical calculated the debt to be over $4 million.
Vision Care filed its bankruptcy petition while Besse Medical's
lawsuit remained pending. At all times relevant in this case,
Vision Care has had a joint bank account with a related entity.
When Vision Care has received payments for services provided, the
funds have been deposited into that joint account. Likewise, when
the related entity has received payments for services provided, the
funds have been deposited into the joint account. Thus, Vision
Care's funds and the related entity's funds have been commingled.
Soon after filing a voluntary petition under chapter 11 of the
Bankruptcy Code, Vision Care began this adversary proceeding
against Besse Medical. Vision Care's amended complaint—the
operative complaint—had two counts when filed. Count II has since
been dismissed with prejudice at Vision Care's request, leaving
only Count I. In it, Vision Care seeks a declaration that Besse
Medical holds no valid, perfected and/or enforceable security
interest in any funds deposited in its bank accounts before or
after its bankruptcy filing. In a motion to dismiss, Besse Medical
argues that Vision Care has not alleged sufficient facts to state a
claim upon which such relief could be granted and seeks dismissal
of Count I accordingly. In its opposition, Vision Care disagrees.
In seeking dismissal, Besse Medical looks to Article 9-a of the
Uniform Commercial Code in Maine. Article 9-a generally applies to,
among other things, transactions that create security interests in
personal property by contract. Besse Medical identifies provisions
of Article 9-a that could be relevant and contends that the Amended
Complaint lacks sufficient facts to state a plausible claim to
relief under those provisions.
Vision Care conceded that Besse Medical had a valid and perfected
security interest in Vision Care's accounts receivable as original
collateral. Proceeds of that original collateral were cash proceeds
deposited into Vision Care's joint bank account -- shared with a
related entity that also deposited its own funds in the account.
Thus, the cash proceeds were commingled with other property.
Commingling alone, however, would not have prevented Besse
Medical's security interest from attaching to, becoming
automatically perfected in, and remaining perfected in the cash
proceeds.
The Court finds with factual allegations that show commingling,
Vision Care has stated a claim that is potentially consistent with
Besse Medical having no security interest in funds in Vision Care's
joint bank account. Consistent means that Vision Care's claim to
relief is conceivable but not necessarily plausible, as required.
According to the Court, the factual allegations that show
commingling are also consistent with Besse Medical having a
security interest in funds in Vision Care's joint bank account --
as Besse Medical could identify the funds as being the cash
proceeds of its original collateral. Judge Cary concludes, "Without
any fact or reasonable inference tending to preclude this outcome,
it is not plausible that Vision Care is entitled to a declaration
that Besse Medical has no security interest in those funds."
Therefore, the Court agrees that dismissal of Count I is warranted.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=OkrxxZ.
About Vision Care of Maine
Limited Liability Company
Vision Care of Maine Limited Liability Company is a medical group
practice located in Bangor, ME that specializes in Ophthalmology
and Optometry offering vision care services including glasses,
contacts, surgeries for cataracts, retina disease and cornea
disease and glaucoma.
Vision Care of Maine sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Me. Case No. 24-10166) on August 5,
2024. In the petition signed by Curt Young, manager, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Peter G. Cary oversees the case.
The Debtor tapped George J. Marcus, Esq., at Marcus, Clegg, Bals &
Rosenthal, PA as counsel and Opus Consulting Partners, LLC as
financial consultant.
VISTA GLOBAL: Fitch Affirms 'B+' LongTerm Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has affirmed Vista Global Holding Limited's (Vista)
Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable
Outlook. Fitch has also affirmed the senior unsecured ratings on
the bonds issued by VistaJet Malta Finance P.L.C. and Vista
Management Holding Inc. at 'BB-' with a Recovery Rating of 'RR3'.
The notes are guaranteed by Vista and key operating companies Vista
(US) Group Holdings Limited and VistaJet Group Holding Limited.
The IDR reflects Vista's global market position in a fragmented
market, diversification and growing share of contracted revenue,
but also niche operations, concentrated ownership with key man risk
and volatility in on-demand services.
Vista recently announced a USD600 million equity-like injection,
pro forma for which Fitch deems the company to be better positioned
for a 'B+' rating, and expect EBITDAR leverage to decline from
about 5.9x in 2024 to around 5x in 2025 (negative sensitivity
5.5x). This supports the Stable Outlook.
Key Rating Drivers
High Leverage to Decrease: Fitch estimates Vista's EBITDAR leverage
at 5.9x in 2024, down from 6.4x in 2023. This is above its negative
rating sensitivity of 5.5x, but the USD600 million equity-like
transaction will support deleveraging in 2025. Considering its
expectations of a moderate operational and profitability growth and
some normalisation of working-capital movements, Fitch forecasts
EBITDAR leverage to decline to 4.9x in 2025.
Equity-like Funding Improves Financial Structure: Vista aims to
prepay close to USD900 million of debt (including about USD300
million of lease liabilities) with the proceeds of the USD600
million equity-like funding and the upcoming new debt issuance. In
addition to reducing leverage, these transactions will improve the
debt maturity profile, benefit liquidity, increase the unencumbered
fleet, as well as increase the EBITDA margin from a reduction in
lease payments, as part of the lease debt will be repaid from
equity proceeds.
Cash Generation Moderately Positive: Fitch estimates the company
remained free cash flow (FCF) negative in 2024, albeit with a much
lower outflow than in 2023. Negative FCF was mostly driven by
higher-than-expected capex as well as a material working-capital
outflow. Fitch expects EBITDAR growth and working capital
normalisation to lead to consistently positive FCFs (before lease
debt repayment above P&L lease expense), supporting leverage
consistent with the rating. Fitch does not forecast material
external growth in its rating case.
Stable Profitability: Fitch estimates Vista's Fitch-defined EBITDAR
at about USD760 million in 2024 (USD704 million in 2023) with a
margin of around 28%, which Fitch forecasts at about 28.5% in
2025-2028. Fitch expects EBITDAR growth in 2024 to derive from a
moderate revenue increase, somewhat offset by a rise in
semi-variable costs, partially due to higher salaries and training
expenses. Fitch forecasts EBITDAR growth of about USD40 million in
2025, driven by higher aircraft utilisation following the disposal
of less profitable aircraft and an increase in 'Program' live
hours.
Increasing Revenue and Profit Visibility: Fitch estimates the share
of contracted 'Program' revenues to gradually rise to around 60% in
2028 from 47% in 2023, consistent with the company's strategy.
Under the 'Program', customers underwrite use-it-or-lose-it
three-year (on average) contracts, providing more visibility of the
company's results. Fitch anticipates gradually increasing EBITDAR
to around USD900 million in 2028 as a result of this strategy.
Solid Competitive Performance: In 2024 Vista outperformed the
market in flight hours growth, with an increase of about 5%,
compared with a 1% decrease for the global market, driven primarily
by the growth in 'Program' live hours. This was partially offset by
lower On Demand hours due to divestment of the inefficient Citation
fleet. Market flight activity in most regions weakened, but Vista's
global coverage provided some resilience relative to its peers and
the company recorded growth in on-fleet flight hours in most
regions of its operations.
Highly Fragmented Sector: The global private aviation market is
highly fragmented and Vista's market share is about 5%, despite
being one of the leading operators. The market structure provides
growth opportunities for the best performers, but there are strong
competitive pressures. Fitch notes that Vista has historically
expanded more quickly than providers proposing fractional or full
ownership aviation services to customers.
Full Spectrum of Asset-light Services: Vista's business profile
benefits from its full spectrum of asset-light services as an
alternative to aircraft ownership for customers. It offers
different size and range of aircraft types, various membership
benefits and a global footprint, especially after the acquisitions
of the last years. Its forecasts do not assume further M&A and
further debt-funded M&A could put pressure on the rating.
Peer Analysis
In Fitch's view, Vista operates a niche product, which
differentiates the company from airlines in its business model and
cost structure. More broadly, Vista's large share of revenue under
fixed contracts, with a customer base that is more resilient than
the general public to economic cycles and a floating fleet
(aircraft not anchored to certain airports) are key differentiating
factors from commercial airlines. This all supports the company's
higher debt capacity than some second-tier commercial airlines at a
given rating.
Within the private aviation sector, compared with providers with
fractional or full asset ownership, Vista offers lower all-in costs
and higher flexibility as well as no asset residual risk to
customers.
Key Assumptions
- Average number of aircraft in service at 210 aircraft in 2025,
increasing to 225 in 2028
- Average fleet yield to slightly increase in 2025-2028
- Aircraft utilisation to grow gradually during 2025-2028
- Share of 'Program' live hours in total live hours to increase
from 50% in 2024 to 61% in 2025-2028
- All cost factors to grow in line with their nature (fixed versus
variable) to 2028
- Average EBITDAR at USD846 million in 2025-2028
- Average capex at USD280 million on annual basis in 2025-2028
- Average interest costs (excluding leases) at USD232 million in
2025-2028
- Total working capital outflow at USD115 million in 2025-2028
- No dividend pay-out during 2025-2028, post the USD600 million
equity-like funding
Recovery Analysis
The recovery analysis assumes that Vista would be recognised as a
going concern in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
Going-concern EBITDA of USD590 million assumes a significant
downturn in the private-aviation industry where Vista's utilisation
by aircraft remains subdued, and is 9% lower than the average of
its 2024 and 2025 EBITDA forecast.
Fitch applies a distressed enterprise value/EBITDA multiple of 5x
to calculate a going-concern enterprise value, reflecting Vista's
leading niche market position, high customer retention rate of
around 90% and a large proportion of contracted revenue, albeit
partially limited by its moderate scale.
The waterfall analysis output percentage for senior unsecured debt
on current metrics and assumptions is commensurate with 'RR3'.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDAR leverage above 5.5x by end-2025
- EBITDAR fixed-charge coverage below 2.0x
- Reduction in contracted revenue to below 30% of total revenue,
resulting in weaker cash flow visibility
- The notes' rating could be downgraded if its expectation for
recovery rates falls below 51%
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDAR leverage lower than 4.5x
- EBITDAR fixed-charge coverage above 2.5x
- Increase in the share of contracted revenue ('Program' revenue)
and maintenance of high member retention rates
Liquidity and Debt Structure
At end-2024, Vista had short-term financial debt obligations of
around 2x its cash balance, excluding lease payments. In 2025,
Fitch expects the company to generate more than USD100 million of
FCF (after lease expense), which together with the initial readily
available cash that Fitch estimates at USD130 million,
USD600million equity-like proceeds and planned debt issuance, would
be sufficient for scheduled debt repayment and leave the USD265
million committed RCF available and undrawn. In addition to debt
maturities, Vista also has about USD65 million of deferred
consideration payable in 2025 for past acquisitions.
Vista had a sizeable working-capital outflow in 9M24, while for the
full year 2024 Fitch estimates another material outflow of about
USD100 million. Fitch has conservatively forecast working-capital
outflows, at a lower level than in 2024, and there could be upside
from prepayments on incremental 'Program' live hours.
Issuer Profile
Vista is a global provider of private aviation services through its
market-leading asset-light and technology-driven platform. As of
end-2024, it operated a fleet of 214 aircraft.
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
Vista Global Holding Limited has an ESG Relevance Score of '4' for
Governance Structure due to concentrated ownership, 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 Prior
----------- ------ -------- -----
VistaJet Malta
Finance P.L.C.
senior unsecured LT BB- Affirmed RR3 BB-
Vista Management
Holding Inc.
senior unsecured LT BB- Affirmed RR3 BB-
Vista Global
Holding Limited LT IDR B+ Affirmed B+
WA3 PROPERTIES TALBOT: Case Summary & 7 Unsecured Creditors
-----------------------------------------------------------
Debtor: WA3 Properties Talbot LLC
20 E Sunrise Hwy
Valley Stream, NY 11581
Business Description: WA3 Properties Talbot holds the ownership of
a 136-bed skilled nursing facility situated
at
4430 Talbot Rd S, Renton, WA 98055, with an
estimated value of $15 million.
Chapter 11 Petition Date: March 24, 2025
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 25-71123
Judge: Hon. Louis A Scarcella
Debtor's Counsel: Avrum J. Rosen, Esq.
LAW OFFICES OF AVRUM J. ROSEN, PLLC
38 New St
Huntington, NY 11743-3327
Tel: 631-423-8527
E-mail: arosen@ajrlawny.com
Total Assets: $16,421,841
Total Liabilities: $8,217,998
The petition was signed by Samuel Goldner as manager.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/H2QVBAQ/WA3_Properties_Talbot_LLC__nyebke-25-71123__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Seven Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Delaware Div. of Revenue Unknown
P.O. Box 8763
Wilmington, DE 19899
2. Dickson Frohlich Attorneys' Fees $0
Phillips
1420 5th Ave
Suite 2000
Seattle, WA 98101
3. Internal Revenue Service Unknown
Centralized Insolvency Op
P.O. Box 7346
Philadelphia, PA 19101
4. Malka Designs LLC Litigation $0
c/o David Fink, Esq.
One North Charles Street
Suite 350
Baltimore, MD 21201
5. NYS Dept of Tax & Finance Unknown
Bankruptcy Section
P.O. Box 5300
Albany, NY 12205
6. Talbot Rd. S 1 Litigation $0
Healthcare
15406 Meridian
Avenue E
Suite 201
Puyallup, WA 98375
7. Washington St. Dep of Rev Unknown
Attn: Bankruptcy Unit
Seattle, WA 98121
WA3 PROPERTIES UNIV: Case Summary & 11 Unsecured Creditors
----------------------------------------------------------
Debtor: WA3 Properties Univ LLC
20 E Sunrise Hwy
Valley Stream, NY 11581
Business Description: The Debtor owns a 120-bed skilled nursing
facility located at 5520 Bridgeport Way,
W University Place, WA 98467, with an
estimated value of $14 million.
Chapter 11 Petition Date: March 24, 2025
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 25-71124
Judge: Hon. Alan S Trust
Debtor's Counsel: Avrum J. Rosen, Esq.
LAW OFFICES OF AVRUM J. ROSEN, PLLC
38 New St
Huntington, NY 11743-3327
Tel: 631-423-8527
Fax: 631-423-4536
Email: arosen@ajrlawny.com
Total Assets: $15,477,265
Total Liabilities: $10,250,000
The petition was signed by Samuel Goldner as manager.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/ECZ3QEI/WA3_Properties_Univ_LLC__nyebke-25-71124__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 11 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Bridgeport Way W Healthca Litigation $0
15406 Meridian
Avenue E
Suite 201
Puyallup, WA 98375
2. Delaware Div. of Revenue Unknown
P.O. Box 8763
Wilmington, DE 19899
3. Dickson Frohlich Phillips Attorneys' Fees $0
1420 5th Ave
Suite 2000
Seattle, WA 98101
4. Internal Revenue Service Unknown
Centralized
Insolvency Op
P.O. Box 7346
Philadelphia, PA 19101
5. Malka Designs LLC Litigation $0
c/o David Fink, Esq.
One North Charles Street
Suite 350
Baltimore, MD 21201
6. NYS Dept of Tax & Finance Unknown
Bankruptcy Section
P.O. Box 5300
Albany, NY 12205
7. Pierce County Unknown
930 Tacoma Avenue S
Tacoma, WA 98402
8. Pierce County Sewer Unknown
9850 64th St. W.
University Place,
WA 98467
9. SeaTac Electric Unknown
1105 Porter Way
Milton, WA 98354
10. SS Landscaping Services Unknown
10219 Portland Ave
E Ste.
Tacoma, WA 98445
11. Washington St. Dep of Rev Unknown
Attn: Bankruptcy Unit
2101 4th Ave, Suite 1400
Seattle, WA 98121
WATCHTOWER FIREARMS: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------------
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Watchtower
Firearms, LLC.
The committee members are:
1. ThinOps Services
9450 Pinecroft Ave. – Unit 9545
The Woodlands, TX 77387
Representative: Tom Moreno
Tom.moreno@thinops.com
2. MJD Solutions
502 Big Indian Loop
Mooresville, NC 28177
Representative: Matthew Johnson
matthew@mjd.solutions
3. Royal Case
419 E. Lamar
Sherman, TX 75090
Representative: Jarrod Anderson
jarrod@royalcase.com
4. Angry Bear Arms
3537 Hwy 32 East
Salem, MO 66560
Representative: David Odom
odommetalworks@gmail.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 Watchtower Firearms
Watchtower Firearms, LLC is a veteran-owned company offering a
diverse range of firearms, including custom rifles, special edition
rifles, and handguns. It serves military, law enforcement, hunting,
and personal use markets. In addition to firearms, the company
provides suppressors, components, and specialized gear tailored to
meet the needs of its customers.
Watchtower Firearms sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 25-40684) on February
27, 2025. In its petition, the Debtor reported between $10 million
and $50 million in both assets and liabilities.
The Debtor is represented by:
Joseph Acosta, Esq.
Condon Tobin
8080 Park Lane Suite 700
Dallas TX 75231
Tel: 214-763-3440
Email: jacosta@condontobin.com
WEISS MULTI-STRATEGY: Founder Personally Liable Under Forbearance A
-------------------------------------------------------------------
Judge Alvin K. Hellerstein of the United States District Court for
the Southern District of New York granted the plaintiffs' motion
for summary judgment in the case captioned as JEFFERIES STRATEGIC
INVESTMENTS, LLC and LEUCADIA ASSET MANAGEMENT HOLDINGS LLC,
Plaintiffs, -against- GEORGE WEISS, Defendant, Case No.
24-cv-04369-AKH (S.D.N.Y.). The defendant's cross-motion is
denied.
Plaintiffs Jefferies Strategic Investments, LLC and Leucadia Asset
Management Holdings LLC move for summary judgment against Defendant
George Weiss, arguing that he is personally liable for a guarantee
contained in a forbearance agreement executed between the parties.
Simultaneously, Defendant moves for summary judgment against
Plaintiffs, contending that this case should be dismissed.
Defendant George Weiss is the founder of a constellation of hedge
funds, known collectively as the Weiss Companies. On May 1, 2018,
Plaintiff Leucadia entered into a Strategic Relationship Agreement
with the Weiss Companies, in which it agreed to provide financing
through promissory notes. In December 2019 and September 2022,
Plaintiff JSI agreed to purchase $53 million in notes issued by the
Weiss Companies under two note purchase agreements (the "NPAs").
The Weiss Companies did not pay their obligations. To postpone the
debt, on Feb. 12, 2024, Defendant signed a forbearance agreement,
in both his personal capacity, and on behalf of the Weiss
Companies.
After signing the Forbearance Agreement, the Weiss Companies failed
to make payment of the monies owed under the SRA, notes, and NPAs.
On April 29, 2024, the Weiss Companies filed for bankruptcy under
Chapter 11 of the Bankruptcy Code. Simultaneously, in relation to
this bankruptcy case, the Weiss Companies filed an adversary
proceeding against Plaintiffs. The Weiss Companies sought to hold
the Forbearance Agreement unenforceable as a preferential transfer,
and contended that Defendant did not commit to guaranteeing any
payment owed by the Weiss Companies to Plaintiffs under the
Forbearance Agreement. The bankruptcy court rejected this argument,
holding that "a strict construction of the 2024 Forbearance
Agreement, even in Weiss's favor, makes clear that Weiss's
performance guarantee was also a guarantee of payment."
On May 6, 2024, Plaintiffs filed suit against Defendant in New York
state court, seeking to enforce the Forbearance Agreement as to
Defendant's guarantee of payment for the SRA, notes, and NPAs.
Defendant removed the action to this Court on June 7, 2024.
The Court finds Defendant's contentions that the Forbearance
Agreement lacked consideration as to his guarantee fail. Nor do his
arguments that the Forbearance Agreement lacked mutual assent pass
muster.
According to the Court, the fact that only Defendant signed the
Forbearance agreement—both on his personal behalf, as well as on
behalf of the various Weiss Companies—and Plaintiffs did not,
does not constitute a lack of mutual assent. Indeed, there is no
language in the Forbearance Agreement that explicitly requires full
execution before the contract takes effect. Moreover, Plaintiffs
performed their obligations under the Forbearance Agreement, there
were no material disputes between the parties as to the terms of
the contract, and Plaintiffs took objective actions to evince their
intent to be bound by filing a financing statement to perfect the
security interest granted under the Forbearance
Agreement.
Judge Hellerstein holds that the Forbearance Agreement included a
personal payment guarantee by Defendant to Plaintiffs of the Weiss
Companies' corporate debt, and that it is valid and enforceable as
to Defendant.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=GDlx8S from PacerMonitor.com.
About Weiss Multi-Strategy Advisers
Weiss Multi-Strategy Advisers LLC, is a New York-based investment
management firm started in 1978. Weiss Multi-Strategy Advisers LLC
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 24-10743) on April 29,
2024. In the petition signed by George Weiss, manager, the Debtor
disclosed $10 million to $50 million in assets and $100 million to
$500 million in liabilities.
Judge Martin Glenn oversees the case.
The Debtor tapped Tracy L. Klestadt, Esq., at Klestadt Winters
Jureller Southard & Stevens, LLP as counsel and Omni Agent
Solutions, Inc. as claims and noticing agent.
WILLIAMS INDUSTRIAL: CION Marks $1.5 Million Loan at 58% Off
------------------------------------------------------------
CION Investment Corp. has marked its $1,536,000 loan extended to
Williams Industrial Services Group, Inc. to market at $641,000 or
42% of the outstanding amount, according to CION'S Form 10-K for
the fiscal year ended December 31, 2024, filed with the U.S.
Securities and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to
Williams Industrial Services Group, Inc. The loan accrues interest
at a rate of S+1100, 1.00% SOFR Floor per annum. The loan matures
on December 16, 2025.
"Investment or a portion thereof was on non-accrual status as of
December 31, 2024," according to CION.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
About Williams Industrial Services Group, Inc.
Williams Industrial Services Group (NYSE American: WLMS) --
http://www.wisgrp.com/-- is a provider of infrastructure related
services to blue-chip customers in energy and industrial end
markets, including a broad range of construction maintenance,
modification, and support services.
WILLIAMS INDUSTRIAL: CION Marks $325,000 Loan at 58% Off
--------------------------------------------------------
CION Investment Corp. has marked its $325,000 loan extended to
Williams Industrial Services Group, Inc. to market at $137,000 or
42% of the outstanding amount, according to CION'S Form 10-K for
the fiscal year ended December 31, 2024, filed with the U.S.
Securities and Exchange Commission.
CION is a participant in a Senior Secured First Lien Debt to
Williams Industrial Services Group, Inc. The loan accrues interest
at a rate of S+1100, 1.00% SOFR Floor per annum. The loan matures
on December 16, 2025.
"Investment or a portion thereof was on non-accrual status as of
December 31, 2024," according to CION.
CION is an externally managed, non-diversified, closed-end
management investment company that has elected to be regulated as a
BDC under the Investment Company Act of 1940. CION elected to be
treated for U.S. federal income tax purposes as a RIC, as defined
under Subchapter M of the Internal Revenue Code of 1986.
CION Investment Management, LLC, is a registered investment adviser
and affiliate of CION. CIM is a controlled and consolidated
subsidiary of CIG and part of the CION Investments group of
companies, or CION Investments.
CION Investments is a manager of alternative investment solutions
that focuses on alternative credit strategies for individual
investors. CION Investments is headquartered in New York, with
offices in Los Angeles.
CION is led by Mark Gatto and Michael A. Reisner as Co-chief
executive officer and director; and Keith S. Franz, chief financial
officer.
About Williams Industrial Services Group, Inc.
Williams Industrial Services Group (NYSE American: WLMS) --
http://www.wisgrp.com/-- is a provider of infrastructure related
services to blue-chip customers in energy and industrial end
markets, including a broad range of construction maintenance,
modification, and support services.
WMG ACQUISITION: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings upgraded WMG Acquisition Corp.'s (WMG) corporate
family rating to Ba1 from Ba2, the probability of default rating to
Ba1-PD from Ba2-PD and the senior secured notes and senior secured
bank credit facility debt ratings to Ba1 from Ba2. The SGL-1
Speculative Grade Liquidity rating remains unchanged. The outlook
was changed to stable from positive.
The upgrade of the CFR reflects Moody's expectations that WMG will
benefit from positive streaming music trends and operating
improvements over time. WMG has reduced costs in slower growth
business lines and reinvested a portion of the savings in higher
growth areas, which will also support profit margin improvement and
lower leverage. Moody's expects leverage to decrease slightly in
2025 with a further decline toward 3x in 2026, driven by EBITDA
growth in the mid to high single digits, although leverage levels
may be impacted by future debt funded acquisition activity.
Governance considerations were a driver of the ratings due to
recent strategic actions and Moody's expectations that WMG will
remain committed to a conservative financial profile.
RATINGS RATIONALE
WMG's Ba1 CFR reflects the company's moderate leverage level (3.6x
LTM Q1 2025 including Moody's adjustments) with a diversified and
resilient business model. The enhanced scale as the world's third
largest music entertainment company also supports the credit
profile. Extensive recorded music and publishing assets will drive
recurring revenue streams and benefit from royalty rights price
increases. The global music industry is aided by the positive
secular growth trends fueled by demand for music content, driven
chiefly by strong consumer adoption of paid subscription streaming
services, social media apps and emerging digital platforms that
will continue, especially in overseas markets. The vast majority of
revenue is generated by proven artists with an established track
record with good geographic diversity. WMG will also continue to
make investments in new artists and talent development to
institutionalize a pipeline of recurring hit songs to help moderate
recorded music volatility.
Weighing on the rating is WMG's historically seasonal recorded
music revenue, albeit increasingly less cyclical in large digital
streaming markets. Challenges that prevent full monetization of
content value to WMG's songwriters and rights holders due to piracy
also has been a headwind but growth in streaming distribution
services, regulatory changes designed to expand royalty payments to
rights holders, as well as other efforts will continue to improve
monetization of WMG's content.
WMG's Credit Impact Score (CIS-3) reflects the company's governance
score (G-3) as WMG is a controlled company and will continue to
pursue an acquisitive growth strategy.
The stable outlook reflects Moody's views that WMG's license
revenue model, driven primarily by streaming revenue growth, and
improved operating profitability will continue to expand over time,
but WMG will need to contend with more challenging advertising
trends within the smaller ad based streaming services in 2025. WMG
will benefit from a good new release calendar in fiscal 2025
(ending September 2025), continuing initiatives to lower costs, and
investments in higher growth opportunities over time. Moody's
expects relatively flat revenue growth in 2025 but an improvement
in 2026 in the mid to high single digits that will help drive a
further decrease in leverage toward the 3x range. Although, WMG
will continue to consider additional acquisitions of music
libraries or additional businesses that have the potential to lead
to a temporary increase in leverage.
WMG's Speculative Grade Liquidity (SGL) rating of SGL-1 reflects
strong liquidity driven by a significant cash balance ($802 million
as of December 31, 2024) and access to an undrawn ($2 million of
L/Cs) revolver due November 2028. The revolver (not rated) was
increased to $350 million from $300 million in 2023. The company
paid $366 million in dividends as of LTM December 31, 2024 and free
cash flow (FCF) as a percentage of debt is expected to remain in
the mid to high single digits in 2025. A portion of the cash
balances may be used to fund small music publishing and catalog
asset purchases or strategic acquisitions over the coming year. WMG
spent $169 million on the acquisition of music publishing rights
and music catalogs LTM December 31, 2024. In February 2025, WMG
purchased a 50.1 % interest in an investment platform for music
rights, Tempo Music Investments, from Providence Equity Partners
for $76 million.
The term loan is covenant lite. There is also an absence of
financial maintenance covenants in the revolver as long as revolver
advances and outstanding letters of credit are less than $140
million at the end of a fiscal quarter. WMG would need to comply
with a 5x Maximum Senior Secured Leverage covenant (net of cash and
cash equivalents, as defined in the revolving bank credit
agreement) if the amount outstanding on the revolver is at or above
$140 million at the end of a fiscal quarter. WMG's senior secured
covenant calculation was 2.11x as of December 31, 2024. Moody's
expects that WMG will remain well within compliance with the
covenant over the next twelve months with no drawings under the
revolver.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if WMG exhibits sustained revenue
growth in the recorded music business, at least stable EBITDA
margins, and a continued decrease in earnings volatility. WMG's
leverage would also need to be sustained below 3x (Moody's
adjusted) with a strong liquidity position, including free cash
flow to debt in the 10% range with conservative financial
policies.
WMG's ratings could be downgraded if competitive or pricing
pressures led to a decline in revenue or higher operating expenses
(e.g., increased artist and repertoire (A&R) investments), EBITDA
margin contracts, or sizable debt-financed acquisitions increased
leverage toward the 4x range (Moody's adjusted). There may also be
downward pressure on ratings if WMG's liquidity were to weaken
including FCF to debt sustained in the mid single digit range
(Moody's adjusted).
Headquartered in New York, NY, WMG Acquisition Corp. is an indirect
wholly-owned subsidiary of Warner Music Group Corp., a publicly
traded company and leading music content provider operating
domestically and overseas in more than 70 countries. The company
has a library of over 1.5 million musical compositions from more
than 180,000 songwriters and composers across a diverse range of
music genres. Revenue totaled $6.3 billion for the twelve months
ended December 31, 2024.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
WORKHORSE GROUP: Secures $3 Million Release From Lockbox Account
----------------------------------------------------------------
As previously disclosed, on March 15, 2024, Workhorse Group Inc.
entered into a securities purchase agreement with an institutional
investor under which the Company agreed to issue and sell, in one
or more registered public offerings by the Company directly to the
Investor:
(i) senior secured convertible notes for up to an aggregate
principal amount of $139,000,000 that will be convertible into
shares of the Company's common stock, par value of $0.001 per share
(the "Common Stock") and
(ii) warrants to purchase shares of Common Stock in multiple
tranches over a period beginning on March 15, 2024.
Pursuant to the Securities Purchase Agreement, on February 12,
2025, the Company issued and sold to the Investor:
(i) a Note in the original principal amount of $35,000,000
and
(ii) a Warrant to purchase up to 55,045,655 shares of Common
Stock.
Pursuant to a letter agreement entered into between the Company and
the Investor in connection with the Tenth Additional Note (the
"Lockbox Letter"), such proceeds, after fees and expenses, were
deposited into a lockbox account under the control of the
collateral agent under the Securities Purchase Agreement.
Funds may be released from the Lockbox Account from time to time:
(i) in an amount corresponding to the principal amount
converted, if the Investor converts any portion of the Tenth
Additional Note;
(ii) in the amount of $2,625,000 each calendar month, if the
Company satisfies the conditions of a Market Release Event (as
defined in the Lockbox Letter), including minimum common stock
price and trading volume conditions; or
(iii) otherwise, with the consent of the Investor.
On March 7, 2025, the Investor notified the Company that it
consented to the release of $3,000,000 from the Lockbox Account.
Subject to the satisfaction of certain conditions in the Lockbox
Letter, the Company expects to receive the released funds, less
fees and expenses, on March 10, 2025.
About Workhorse Group
Workhorse Group Inc. -- http://www.workhorse.com-- is an American
technology company with a vision to pioneer the transition to
zero-emission commercial vehicles. The Company designs, develops,
manufactures and sells fully electric ground and air-based electric
vehicles.
Cincinnati, Ohio-based Grant Thornton LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 12, 2024, citing that the Company incurred a net loss
of $123.9 million and used $123.0 million of cash in operating
activities during the year ended December 31, 2023. As of that
date, the Company had total working capital of $40.5 million,
including $25.8 million of cash and cash equivalents, and an
accumulated deficit of $751.6 million. These conditions, along
with other matters, raise substantial doubt about the Company's
ability to continue as a going concern.
XPLR OPCO: Fitch Rates New Senior Unsecured Notes 'BB+'
-------------------------------------------------------
Fitch Ratings has assigned XPLR Infrastructure Operating Partners,
LP's (XPLR Opco, formerly NextEra Energy Operating Partners, LP)
proposed senior unsecured notes a 'BB+' rating with a Recovery
Rating of 'RR4'. The proposed notes will rank pari passu with XPLR
Opco's existing senior unsecured debt. Net proceeds would be used
to refinance existing obligations and for general corporate
purposes.
XPLR Opco and its parent, XPLR Infrastructure, LP (XPLR, formerly
NextEra Energy Partners, LP) have Long-Term Issuer Default Ratings
(IDRs) of 'BB+'. Both entities have a Stable Rating Outlook. The
two IDRs are equal because of strong legal ties.
Key Rating Drivers
Dividend Cut Provides Financial Flexibility: The increased use of
Convertible Equity Portfolio Financings (CEPF) has added financial
complexity to the organizational structure, making XPLR reliant on
capital market stability and strong unit price to execute timely
and cost-effective buyouts. Cutting unit distribution resolves
CEPFs buyouts, consistent with Fitch's 100% equity treatment of
CEPFs. The equity credit assumes XPLR will complete its remaining
CEPF buyouts after 2025 with FCF and non-recourse debt at the asset
level, without issuing Holdco-level debt.
The indefinite distribution cut announced on Jan. 28, 2025, will
provide sufficient cash flow to support a buyout of $3.7 billion
outstanding under three CEPFs after 2025. This announcement
concludes the strategic review initiated in 2024.
Low Leverage Headroom: Fitch expects the Holdco Debt to Parent Only
FFO ratio to remain at around 4.9x over the forecast period, in
line with the ratings, but higher than in previous years. Fitch
assumes capex will be financed by Holdco and non-recourse project
debt, resulting in limited leverage headroom. Fitch projects modest
growth through repowering of about 1.6 GW of existing, older, and
lower-performing assets in the next couple of years.
To reflect a strategy change to a low-growth model, Fitch's
adjusted its sensitivity calculation to Holdco Debt to Parent-Only
FFO as of year-end, rather than the previous year-end run-rate FFO.
Any material growth beyond the current plan would require equity
funding to preserve current ratings. Management aims to maintain
the Holdco Debt to Parent Only FFO ratio within the 4.0x-5.0x
range.
Upcoming Refinancing: Fitch expects XPLR's cash flows to come under
pressure due to a substantial near-term refinancing of the capital
structure at materially higher interest rates compared to average
fixed interest rates on the current long-term debt. XPLR has $2.2
billion of holding company debt due through 2027 and about $3.6
billion treasury rate locks at 3.92% to hedge against the upcoming
refinancing and new issuances.
Asset Sales Resolve Near-term CEPF Financing: Natural gas pipeline
sales eliminated the need for equity issuances to complete CEPF
buyouts planned through 2025, a credit positive. Net proceeds of
$1.4 billion from 2023 sales funded buyouts of $750 million in
CEPFs for 2023 and 2024. In 2025, the remaining proceeds and
reduced dividends will fund the $945 million buyout under the 2019
NEP Renewables II CEPF. Fitch expects the 2019 NEP Pipelines CEPF
buyout to occur by 2025 via the Meade pipeline sale.
Long-Term Contracted Cash Flows: Fitch views XPLR's portfolio of
wind, solar, and natural gas pipeline assets favorably due to
long-term offtake arrangements with creditworthy counterparties and
minimal exposure to volumetric or commodity risks. The average
counterparty credit rating is 'BBB', per Fitch and others. As of
Dec. 31, 2024, these projects had a 13-year average remaining
contract term. XPLR's distributions from project subsidiaries are
well diversified by fuel type and geography.
Cash Flow Stability: The predominance of wind in XPLR's portfolio
poses a modest concern due to wind resource intermittency. However,
the broad geographic spread of its wind assets helps mitigate this
risk. Renewable project debt is typically structured to achieve a
debt service coverage ratio (DSCR) above 1.2x and earn a low
'BBB-'/'BBB' rating, maturing before long-term contract expiration.
Recent DSCRs from XPLR show most projects exceed thresholds,
enabling cash flow distributions to the Holdco.
Sponsor Not Expected to Financially Support XPLR: XPLR benefits
from its affiliation with NextEra, the largest U.S. renewable
developer. After the name change, Fitch expects operational support
from NextEra to continue but not equity support for CEPF buyouts or
a buy-in, which would significantly increase NextEra's debt. Fitch
deconsolidates XPLR from NextEra's balance sheet, considering only
upstream dividends in credit analysis. Fitch assumes NextEra would
disengage if XPLR faces financial issues.
Peer Analysis
Fitch views XPLR's ratings are positively positioned compared to
Atlantica Sustainable Infrastructure Plc (Atlantica; BB-/Stable)
due to favorable geographic exposure, long-term contractual cash
flows with minimal regulatory risk, and association with a strong
sponsor.
Like peer Terraform Power Operating, LLC (TERPO; BB-/Stable), XPLR
has parental support. Although NextEra supported XPLR through asset
dropdowns and an IDR suspension in 2023, it is not expected to
assist with funding needs or CEPF buyouts. TERPO benefits from its
sponsorship by Brookfield Corporation (A-/Stable).
Atlantica was taken private by Energy Capital Partners (ECP). Its
portfolio mainly comprises less-variable solar assets. XPLR has
more wind, mitigated by its diverse U.S. footprint. TERPO's
portfolio is 43% solar and 57% wind. XPLR's U.S. exposure (100%) is
favorable compared to TERPO's (68%) and Atlantica's (30%). XPLR's
contracted fleet life is 13 years, longer than Atlantica's 12 and
TERPO's 11 years.
XPLR's forecasted credit metrics are stronger than TERPO's and
Atlantica's. Fitch forecasts XPLR's Holdco Debt to Parent Only FFO
ratio will remain around 4.9x over the forecast period, compared
with around mid-5.0x for TERPO and below 6.0x for Atlantica
post-2025.
Fitch rates XPLR, Atlantica and TERPO based on a deconsolidated
approach since their portfolio comprises assets financed using
non-recourse project debt or with tax equity. XPLR's financing
model is more complex as it also involves CEPF. Fitch defines
Parent-Only FFO as project distributions less Holdco general and
administrative (G&A) expenses, fee for management service
agreement, credit fees and Holdco debt service costs.
Key Assumptions
- Buyout of 2019 NEP Renewables II and NEP Pipelines CEPF with
proceeds from STX and Meade pipelines sales;
- Interest expense rate on new and refinanced Holdco debt around
7.5%;
- None of the project debt treated on-credit, which includes
Fitch's assumption of future project debt issuances;
- Net Holdco debt of approximately $800 million issued from 2025
through 2027; all maturing convertible debt repaid;
- Capex of approximately $1.8 billion in 2025-2026 financed with
nonrecourse and Holdco debt;
- 2020 and 2022 CEPF buyouts funded with FCF;
- 2021 Apollo CEPF sold at no gain in 2027;
- 100% unit distribution cut and not distributions over the
forecast period;
- No CEPF or equity issuance over the forecast period.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Reliance on Holdco debt to fund the buyout of investors in
CEPFs;
- Holdco FFO leverage exceeding 5.0x on a sustained basis;
- Material underperformance in underlying assets lending
variability or shortfall to expected cash flow for debt service;
- Growth strategy underpinned by aggressive acquisitions, addition
of assets in the portfolio that bear material volumetric, commodity
or interest rate risks.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The structural subordination of the Holdco debt to the
nonrecourse project debt, tax equity and CEPFs, and management's
4.0x-5.0x target Holdco leverage caps the rating at 'BB+'.
Liquidity and Debt Structure
XPLR has a $2,500 million RCF that matures in February 2029. The
credit facility provides for up to $400 million of LOC borrowing
capacity. XPLR has an accordion in its RCF for up to a total
commitment size of $3,200 million. The facility provides
flexibility for XPLR to finance acquisitions partly through
revolver borrowings. XPLR had $330 million outstanding debt under
its RCF and $50 million of issued LCs as of Dec. 31, 2024.
The Holdco debt at XPLR is subordinated to project debt, tax equity
and CEPF structures. As of Dec. 31, 2024, there was about $2.1
billion of nonrecourse project finance debt at XPLR's owned
projects.
Issuer Profile
XPLR manages and owns a diversified portfolio of contracted clean
energy projects with stable long-term cash flows.
Date of Relevant Committee
27 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
----------- ------ --------
XPLR Infrastructure
Operating Partners, LP
senior unsecured LT BB+ New Rating RR4
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Dillons Power Washing LLC
Bankr. D. Md. Case No. 25-12231
Chapter 11 Petition filed March 17, 2025
See
https://www.pacermonitor.com/view/R64MKGY/Dillons_Power_Washing_LLC__mdbke-25-12231__0001.0.pdf?mcid=tGE4TAMA
represented by: Justin P. Fasano, Esq.
MCNAMEE HOSEA, P.A.
E-mail: jfasano@mhlawyers.com
In re 216 Holbrooko St, MI LLC
Bankr. E.D. Mich. Case No. 25-42623
Chapter 11 Petition filed March 17, 2025
See
https://www.pacermonitor.com/view/WUIZVUI/216_HOLBROOK_ST_MI_LLC__miebke-25-42623__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert McClellan, Esq.
RESURGENT LEGAL SERVICES, PLC
E-mail: bob@robertjmcclellan.com
In re North Jersey Tire, Auto and Truck Repair, LLC
Bankr. D.N.J. Case No. 25-12719
Chapter 11 Petition filed March 17, 2025
See
https://www.pacermonitor.com/view/7IGHMOA/North_Jersey_Tire_Auto_and_Truck__njbke-25-12719__0001.0.pdf?mcid=tGE4TAMA
represented by: Justin M Gillman, Esq.
GILLMAN CAPONE LLC
E-mail: jgillman@gillmancapone.com
In re BAC Realty Inc.
Bankr. E.D.N.Y. Case No. 25-71020
Chapter 11 Petition filed March 17, 2025
See
https://www.pacermonitor.com/view/TAD5RIY/BAC_Realty_Inc__nyebke-25-71020__0001.0.pdf?mcid=tGE4TAMA
represented by: Charles Wertman, Esq.
LAW OFFICES OF CHARLES WERTMAN P.C.
E-mail: charles@cwertmanlaw.com
In re Jehuda Herskovits
Bankr. E.D.N.Y. Case No. 25-41253
Chapter 11 Petition filed March 17, 2025
In re David Kenner
Bankr. E.D.N.Y. Case No. 25-41252
Chapter 11 Petition filed March 17, 2025
In re Roel Cano Fernandez
Bankr. N.D. Cal. Case No. 25-40466
Chapter 11 Petition filed March 18, 2025
represented by: Arasto Farsad, Esq.
In re Property Problem Solvers, LLC
Bankr. N.D. Ga. Case No. 25-10390
Chapter 11 Petition filed March 18, 2025
See
https://www.pacermonitor.com/view/5HLXXUI/Property_Problem_Solvers_LLC__ganbke-25-10390__0001.0.pdf?mcid=tGE4TAMA
represented by: William Rountree, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
E-mail: wrountree@rlkglaw.com
In re Michael Jerome Harvey Trust and Michele Nicole Harvey Trust
Bankr. D. Minn. Case No. 25-40793
Chapter 11 Petition filed March 18, 2025
See
https://www.pacermonitor.com/view/2P6FO3I/Michael_Jerome_Harvey_Trust_and__mnbke-25-40793__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Adventures In Learning Daycare Bayonne LLC
Bankr. D.N.J. Case No. 25-12790
Chapter 11 Petition filed March 18, 2025
See
https://www.pacermonitor.com/view/462LLZA/Adventures_In_Learning_Daycare__njbke-25-12790__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven D Pertuz, Esq.
THE LAW OFFICES OF STEVEN D PERTUZ LLC
E-mail: pertuzlaw@verizon.net
In re All Nu Electrical Construction & Maintenance Corp.
Bankr. E.D.N.Y. Case No. 25-71031
Chapter 11 Petition filed March 18, 2025
See
https://www.pacermonitor.com/view/MBYYMFY/All_Nu_Electrical_Construction__nyebke-25-71031__0001.0.pdf?mcid=tGE4TAMA
represented by: Heath S. Berger, Esq.
BERGER, FISCHOFF, SHUMER, WEXLER &
GOODMAN, LLP
In re Ryan L Enfield
Bankr. W.D. Tenn. Case No. 25-21411
Chapter 11 Petition filed March 18, 2025
represented by: Toni Parker, Esq.
In re Larry Dell Knox and Darlene D Knox
Bankr. W.D. Tenn. Case No. 25-10367
Chapter 11 Petition filed March 18, 2025
represented by: Thomas Strawn, Esq.
In re Williams Speech Therapy Service, Inc.
Bankr. W.D. Tex. Case No. 25-50504
Chapter 11 Petition filed March 18, 2025
See
https://www.pacermonitor.com/view/BIDFZCA/Williams_Speech_Therapy_Service__txwbke-25-50504__0001.0.pdf?mcid=tGE4TAMA
represented by: Natalie F. Wilson, Esq.
LANGLEY & BANACK, INC.
E-mail: nwilson@langleybanack.com
In re Vacation Ownership Consultants, LLC
Bankr. D. Ariz. Case No. 25-02295
Chapter 11 Petition filed March 19, 2025
See
https://www.pacermonitor.com/view/TP377RY/VACATION_OWNERSHIP_CONSULTANTS__azbke-25-02295__0001.0.pdf?mcid=tGE4TAMA
represented by: Allan D. NewDelman, Esq.
ALLAN D. NEWDELMAN, P.C.
E-mail: anewdelman@adnlaw.net
In re All Season Adventures, Inc.
Bankr. D. Colo. Case No. 25-11437
Chapter 11 Petition filed March 19, 2025
See
https://www.pacermonitor.com/view/XNTLSBQ/All_Season_Adventures_Inc__cobke-25-11437__0001.0.pdf?mcid=tGE4TAMA
represented by: Jonathan M. Dickey, Esq.
KUTNER BRINEN DICKEY RILEY PC
E-mail: jmd@kutnerlaw.com
In re John Neil Hamill
Bankr. M.D. Fla. Case No. 25-01641
Chapter 11 Petition filed March 19, 2025
represented by: Richard Cole, Esq.
In re Jewell Edward Williams, III, et vi and Jewell E. Williams,
III, Estate
Bankr. D. Kan. Case No. 25-40143
Chapter 11 Petition filed March 19, 2025
In re Roszina Jones and Jewell E. Williams, III, Estate
Bankr. D. Kan. Case No. 25-40142
Chapter 11 Petition filed March 19, 2025
In re Jefdan Properties, LLC
Bankr. D. Md. Case No. 25-12364
Chapter 11 Petition filed March 19, 2025
See
https://www.pacermonitor.com/view/EFTPTIQ/Jefdan_Properties_LLC__mdbke-25-12364__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert N. Grossbart, Esq.
GROSSBART, PORTNEY & ROSENBERG, P.A.
E-mail: Robert@Grossbartlaw.com
In re VSA Transportation, LLC
Bankr. D. Minn. Case No. 25-30770
Chapter 11 Petition filed March 19, 2025
See
https://www.pacermonitor.com/view/SQGW4TQ/VSA_Transportation_LLC__mnbke-25-30770__0001.0.pdf?mcid=tGE4TAMA
represented by: Joseph Dicker, Esq.
JOSEPH W DICKER PA
E-mail: Joe@joedickerlaw.com
In re PPW Realty 1414 W 3Rd St. LLC
Bankr. D.N.J. Case No. 25-12820
Chapter 11 Petition filed March 19, 2025
See
https://www.pacermonitor.com/view/O3EUO2Q/PPW_Realty_1414_W_3Rd_St_LLC__njbke-25-12820__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert Nisenson, Esq.
ROBERT C. NISENSON
E-mail: r.nisenson@rcn-law.com
In re 185 Euclid Ave Corp.
Bankr. E.D.N.Y. Case No. 25-41287
Chapter 11 Petition filed March 19, 2025
See
https://www.pacermonitor.com/view/EDNK5RY/185_Euclid_Ave_Corp__nyebke-25-41287__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Maria Elena Ochoa Sanchez
Bankr. C.D. Cal. Case No. 25-12289
Chapter 11 Petition filed March 20, 2025
represented by: Onyinye Anyama, Esq.
In re Armen Hassan Jalalian
Bankr. N.D. Cal. Case No. 25-30216
Chapter 11 Petition filed March 20, 2025
In re Three Star Trucking, LLC
Bankr. E.D.N.C. Case No. 25-01027
Chapter 11 Petition filed March 20, 2025
See
https://www.pacermonitor.com/view/UBMFX2I/Three_Star_Trucking_LLC__ncebke-25-01027__0001.0.pdf?mcid=tGE4TAMA
represented by: George Mason Oliver, Esq.
THE LAW OFFICES OF GEORGE OLIVER, PLLC
In re Diane M. Boccanfuso
Bankr. S.D.N.Y. Case No. 25-22218
Chapter 11 Petition filed March 20, 2025
represented by: Anne Penachio, Esq.
In re M.A. West Rockies Corporation
Bankr. E.D. Wash. Case No. 25-00484
Chapter 11 Petition filed March 20, 2025
See
https://www.pacermonitor.com/view/KB2KXRA/MA_West_Rockies_Corporation__waebke-25-00484__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Edmonds Wellness Clinic, Inc.
Bankr. W.D. Wash. Case No. 25-10741
Chapter 11 Petition filed March 20, 2025
See
https://www.pacermonitor.com/view/TIBRNIA/Edmonds_Wellness_Clinic_Inc__wawbke-25-10741__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas D. Neeleman, Esq.
NEELEMAN LAW GROUP, P.C.
E-mail: courtmail@expresslaw.com
In re Carlos Alberto Garcia Manzanares
Bankr. N.D. Cal. Case No. 25-30221
Chapter 11 Petition filed March 21, 2025
In re Lisa Waddell Nash
Bankr. D. D.C. Case No. 25-00097
Chapter 11 Petition filed March 21, 2025
represented by: John Colan, Esq.
In re Upham Seavey Meriwether, 3rd and Amber Howard Meriwether
Bankr. M.D. Fla. Case No. 25-00861
Chapter 11 Petition filed March 21, 2025
represented by: Thomas Adam, Esq.
In re Melodie Jean Mope
Bankr. M.D. Fla. Case No. 25-01571
Chapter 11 Petition filed March 21, 2025
represented by: Jeffrey Ainsworth, Esq.
In re Magnate Corp., LLC
Bankr. M.D. Fla. Case No. 25-01709
Chapter 11 Petition filed March 21, 2025
See
https://www.pacermonitor.com/view/HD63FQQ/Magnate_Corp_LLC__flmbke-25-01709__0001.0.pdf?mcid=tGE4TAMA
represented by: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
E-mail: All@tampaesq.com
In re Mrs. Betty's Fried Chicken Restaurant, LLC
Bankr. M.D. Ga. Case No. 25-40197
Chapter 11 Petition filed March 21, 2025
See
https://www.pacermonitor.com/view/Z4R26OA/Mrs_Bettys_Fried_Chicken_Restaurant__gambke-25-40197__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel L. Wilder, Esq.
EMMETT L GOODMAN JR LLC
E-mail: bkydept@goodmanlaw.org
In re Gregory Khononov
Bankr. E.D.N.Y. Case No. 25-41349
Chapter 11 Petition filed March 21, 2025
represented by: Alla Kachan, Esq.
In re Bittersweet HB LLC
Bankr. E.D.N.Y. Case No. 25-71069
Chapter 11 Petition filed March 21, 2025
See
https://www.pacermonitor.com/view/4L25P3A/Bittersweet_HB_LLC__nyebke-25-71069__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Community Awareness Network For A Drugfree Life and
Environment Inc.
Bankr. S.D.N.Y. Case No. 25-22225
Chapter 11 Petition filed March 21, 2025
See
https://www.pacermonitor.com/view/ZIWHKHI/Community_Awareness_Network_for__nysbke-25-22225__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert Lewis, Esq.
ROBERT S LEWIS PC
E-mail: Robert.lewlaw1@gmail.com
In re D Elite Management, Inc.
Bankr. N.D. Tex. Case No. 25-30983
Chapter 11 Petition filed March 21, 2025
See
https://www.pacermonitor.com/view/RUSHOCI/D_Elite_Management_Inc__txnbke-25-30983__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re James Dale Wilcox, Jr. and Brenda Darlene Wilcox
Bankr. E.D. Ark. Case No. 25-10980
Chapter 11 Petition filed March 24, 2025
represented by: Kyle Havner, Esq.
In re Cedar Shell LLC
Bankr. E.D. Cal. Case No. 25-21322
Chapter 11 Petition filed March 24, 2025
See
https://www.pacermonitor.com/view/I3YHMEQ/Cedar_Shell_LLC__caebke-25-21322__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Rafael Antonio Flores
Bankr. N.D. Cal. Case No. 25-30224
Chapter 11 Petition filed March 24, 2025
In re Slim and Goldie LLC
Bankr. M.D. Fla. Case No. 25-01633
Chapter 11 Petition filed March 24, 2025
See
https://www.pacermonitor.com/view/PF2S7IY/Slim_and_Goldie_LLC__flmbke-25-01633__0001.0.pdf?mcid=tGE4TAMA
represented by: Jeffrey S. Ainsworth, Esq.
BRANSONLAW, PLLC
E-mail: jeff@bransonlaw.com
In re Lindsay Michelle Zarczynski and Aaron Scott Zarczynski
Bankr. N.D. Ga. Case No. 25-53176
Chapter 11 Petition filed March 24, 2025
represented by: Bethany Strain, Esq.
In re Exton Operating Group, Inc.
Bankr. E.D. Penn. Case No. 25-11126
Chapter 11 Petition filed March 24, 2025
See
https://www.pacermonitor.com/view/3WXGZRY/Exton_Operating_Group_Inc__paebke-25-11126__0001.0.pdf?mcid=tGE4TAMA
represented by: Albert A. Ciardi, III, Esq.
CIARDI CIARDI & ASTIN
Email: aciardi@ciardilaw.com
In re National Steel Services LLC
Bankr. N.D. Tex. Case No. 25-41005
Chapter 11 Petition filed March 24, 2025
See
https://www.pacermonitor.com/view/6326DLA/National_Steel_Services_LLC__txnbke-25-41005__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Cowan Fitness North Round Rock LLC
Bankr. W.D. Tex. Case No. 25-10396
Chapter 11 Petition filed March 24, 2025
See
https://www.pacermonitor.com/view/MV44RBA/Cowan_Fitness_North_Round_Rock__txwbke-25-10396__0001.0.pdf?mcid=tGE4TAMA
represented by: Frank B Lyon, Esq.
FRANK B LYON
E-mail: frank@franklyon.com
*********
Monday's edition of the TCR delivers a list of indicative prices
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Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
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