/raid1/www/Hosts/bankrupt/TCR_Public/250401.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 1, 2025, Vol. 29, No. 90
Headlines
1103 FRANKLIN: Voluntary Chapter 11 Case Summary
1550 BEDFORD: Unsecured Creditors to Split $100K in Plan
236 WEST E&P: Voluntary Chapter 11 Case Summary
3 BROTHERS PHARMACY: Unsecureds Will Get 50% over 60 Months
346 GRAND LLC: Case Summary & Seven Unsecured Creditors
80 NY AVE: Case Summary & 10 Unsecured Creditors
840 CLAY AVE: Seeks to Hire Jeffrey A. Rockman as Legal Counsel
A-AG US GSI: $100MM Incremental Loan No Impact on Moody's 'B1' CFR
ADVANCED URGENT: Unsecureds Will Get 32% of Claims in Plan
AIBOTICS INC: Inks Software Development Deal with GMF Ventures
ALTRAIN MEDICAL: Case Summary & 20 Largest Unsecured Creditors
ALTRAIN MEDICAL: Sec. 341(a) Meeting of Creditors on April 29
AMERICA-CV STATION: Vasallo Loses Bid to Stay Bankruptcy Ruling
AMERICAN OPEN: Claims Will be Paid from Property Sale/Refinance
ANTIGONE SKOULAS: Gets OK to Use Cash Collateral Until July 1
ASPIRA WOMEN'S: J. Crawford Owns 34,299 Shares
AVEANNA HEALTHCARE: Moody's Alters Outlook on Caa1 CFR to Positive
AZEK GROUP: Moody's Puts 'Ba2' CFR on Review for Upgrade
BAYER & SONZ: Seeks Approval to Hire Compass as Realtor
BLH TOPCO: April 3 Deadline Set for Panel Questionnaires
BRISTOW GROUP: Sikorsky Must Produce Documents for Sanctions Motion
BROOKFIELD PROPERTIES: Moody's Rates New $1.5BB Secured Loans 'B1'
CANYON CREEK: Case Summary & 18 Unsecured Creditors
CHASE CUSTOM: Court Awards $7,552.20 in Fees to Jeffrey Zamboni
CINCH WIRELINE: Simmons Bank Wins Bid to Dismiss Bankruptcy Case
COLLECTIVE SPEAKERS: Gets Final OK to Use Cash Collateral
CORNERSTONE BUILDING: Moody's Cuts CFR to 'B3', Outlook Stable
CREDITO REAL: Moves Forward With Bank Loans, Notes Cancellation
DAWNSTAR CORPORATION: Unsecureds to Split $126K over 36 Months
DEALER SALES: Court Extends Cash Collateral Access to April 22
DENNIS A. PERRY: Creditors' Appeal of Plan Confirmation Dismissed
DICK'S AUTOMOTIVE: Plan Exclusivity Period Extended to July 16
DMCC 26TH AVE: Hearing Today on Bid to Use Cash Collateral
DUN & BRADSTREET: Moody's Puts 'B1' CFR Under Review for Downgrade
EMPLOYBRIDGE HOLDING: Moody's Cuts CFR to 'Caa2', Outlook Stable
ENDO INC: Mallinckrodt Transaction No Impact on Moody's 'B2' CFR
ENTECCO FILTER: Unsecureds to Split $50K in Liquidating Plan
ESPERANZA ELEMENTARY: S&P Rates 2025A/B Revenue Bonds 'BB'
EURASIA LLC: Gets Final OK to Use Cash Collateral Until June 30
FAIR OFFER: Property Sale Proceeds to Fund Plan Payments
FISKER INC: Toccata Automotive Appeal Dismissed with Prejudice
FULCRUM BIOENERGY: $81M Unsecured Claims to Recover 1.41% in Plan
GLOBAL BUSINESS: Moody's Raises CFR to 'B1', Outlook Remains Stable
GOTSTUFF INC: Gets Interim OK to Use Cash Collateral
GROW GREEN: U.S. Trustee Wins Bid to Dismiss Bankruptcy Case
HARE TAYLOR: Seeks to Extend Plan Exclusivity to June 4
HAYDALE CERAMIC: Gets Extension to Access Cash Collateral
HERSCHEND ENTERTAINMENT: Moody's Puts 'Ba3' CFR Under Review
HO WAN KWOK: Default Judgment Against Lamp Entities Affirmed
HYPERSCALE DATA: Inks $4.9MM Exchange Agreement with SJC Lending
iM3NY LLC: Committee Hires Genesis Credit as Financial Advisor
iM3NY LLC: Committee Hires Potter Anderson as Delaware Counsel
iM3NY LLC: Committee Taps Seward & Kissel as Bankruptcy Counsel
INTEGER HOLDINGS: S&P Raises Greatbatch's Debt Rating to 'BB'
INTERNATIONAL IMPULSE: Case Summary & Eight Unsecured Creditors
INTERNATIONAL IMPULSE: Seeks Chapter 11 Bankruptcy in Texas
J. HOWELL: Gets Final OK to Use Cash Collateral
JENCAR TRUCKING: Case Summary & 20 Largest Unsecured Creditors
JNE HOLDINGS: Seeks to Hire Maltz Auctions as Real Estate Broker
JOE'S SPORTS: Gets OK to Use Cash Collateral
JUNK IT PLUS: Court Extends Cash Collateral Access to May 13
LIFT SOCIETY: Court Extends Cash Collateral Access to May 31
LOYALTY VENTURES: Court Tosses Newtyn's Securities Fraud Lawsuit
LTL MANAGEMENT: Loses Bid to Dismiss Soares, et al. Lawsuit
MAGIC CAR: Court Extends Cash Collateral Access to July 31
MANE SOURCE: Gets Interim OK to Use Cash Collateral
MARK A. SCHUSTERMAN: Unsecureds Will Get 41.14% over 5 Years
MAXTIN INC: Case Summary & 20 Largest Unsecured Creditors
MAXTIN INC: Seeks Subchapter V Bankruptcy in Texas
MEADOW CREEK: Seeks to Hire Genova Malin & Trier as Counsel
MENO ENTERPRISES: Unsecureds to Split $228K over 36 Months
MITEL NETWORKS: S&P Withdraws 'D' Issuer Credit Rating
MTL PARTNERS: Court Extends Cash Collateral Access to May 13
NEW FORTRESS: Moody's Cuts CFR to 'Caa1', Outlook Remains Negative
NORTHERN LIBERTIES: Seeks Subchapter V Bankruptcy in Pennsylvania
ONCOCYTE CORP: Posts $60.6MM Net Loss for 2024
ORBCOMM INC: Moody's Assigns 'Caa1' CFR, Outlook Stable
OTB HOLDING: Seeks to Hire King & Spalding as Bankruptcy Counsel
OUR TOWN: Creditors to Get Proceeds From Liquidation
OYA RENEWABLES: Plan Exclusivity Period Extended to June 4
PAPER SOURCE: Court Affirms Dismissal of Sugar Beets Lease Suit
PARADIGM PARENT: Moody's Assigns First Time B2 Corp. Family Rating
PARADOX ENTERPRISES: Gets OK to Use Cash Collateral Until April 30
PARAMOUNT DRUG: Hires Gorski & Knowlton as Bankruptcy Counsel
PARKERVISION INC: Posts $14.4MM Net Loss for 2024
PEER STREET: Stay Enforcement Order in Tarpenning Suit Affirmed
PHILLIPS TOTAL: Case Summary & 20 Largest Unsecured Creditors
POWER BLOCK: Creditors' Committee Fine-Tunes Plan Documents
POWER SOLUTIONS: Posts $69.2MM Net Income for 2024
PRIORITY HOLDINGS: Moody's Ups CFR to B1, Outlook Stable
R. GREGORY INVESTMENTS: Rental Income to Fund Plan Payments
RANGE RESOURCES: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
REGENCY SHOPS: Hires Cordry Appraisal Services as Appraiser
REGENCY SHOPS: Seeks to Tap BridgeBuilders Tax as Accountant
RELENTLESS HOLDINGS: Case Summary & One Unsecured Creditor
RELENTLESS HOLDINGS: Seeks Chapter 11 Bankruptcy in Florida
RITEWAY INSURANCE: Seeks Chapter 11 Bankruptcy in Florida
ROSA LINDA GHAFFARI: UST Wins Bid to Dismiss Bankruptcy Case
RWDY INC: Trustee Loses Bid for Disgorgment of Accountants' Fees
SCRIPSAMERICA INC: Braverman Loses Bid to Dismiss Adversary Cases
SHABAZ YOGURT: Seeks to Hire Mark S. Roher as Legal Counsel
SIDHU TRANSPORTS: Unsecureds to Get Share of Income for 5 Years
SILVER LINING: Gets OK to Use Cash Collateral Until April 29
SILVER STAR: Trust Wins Bid to Dismiss Count I of Amended Complaint
SKYX PLATFORMS: Reports 48% Revenue Growth in 2024
SOLCIUM SOLAR: Court Extends Cash Collateral Access to May 8
SPECIAL EFFECTS: Court OKs Deal to Use SBA's Cash Collateral
SPENCER & ASSOCIATES: Case Summary & 18 Unsecured Creditors
TOP ACES: DBRS Finalizes B(high) Rating, Trend Stable
TRIDENT TPI: Moody's Cuts CFR to 'Caa1', Outlook Remains Negative
TUPPERWARE BRANDS: Files Amendment to Disclosure Statement
UGS PRIVATE: Unsecureds Will Get 5% of Claims over 60 Months
US FOODS: S&P Upgrades ICR to 'BB+', Outlook Stable
WA3 PROPERTIES TALBOT: Seeks Chapter 11 Bankruptcy in New York
WELLPATH HOLDINGS: Court Stays Count I Claims in Hobbs Lawsuit
WELLPATH HOLDINGS: Court Stays Wilson Lawsuit Due to Bankruptcy
WEST TECHNOLOGY: Moody's Affirms Caa1 CFR Following Equiniti Deal
WHITE FOREST: Taps Sonoran Capital Advisors as Investment Banker
XEROX HOLDINGS: Moody's Confirms B2 CFR & Alters Outlook to Stable
YANKE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
YELLOW CANOE: Court Extends Cash Collateral Access to April 23
ZIPS CAR WASH: Hires Gray Reed as Co-Counsel and Conflicts Counsel
ZIPS CAR WASH: Seeks to Hire Evercore Group as Investment Banker
ZIPS CAR WASH: Seeks to Hire Hilco Real Estate LLC as Advisor
ZIPS CAR WASH: Seeks to Hire Kirkland & Ellis LLP as Attorney
ZIPS CAR WASH: Taps Kevin Nystrom of AP Services as CTO
ZIPS CAR WASH: Taps PwC US Tax LLP as Tax Services Provider
*********
1103 FRANKLIN: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: 1103 Franklin Avenue Housing Development Fund Corporation
173 Jacques Avenue
Staten Island, NY 10306
Case No.: 25-41526
Business Description: 1103 Franklin Avenue is a single asset real
estate debtor, as defined in 11 U.S.C.
Section 101(51B).
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Eastern District of New York
Judge: Hon. Elizabeth S Stong
Debtor's Counsel: Julio E. Portilla, Esq.
JULIO E. PORTILLA
380 Lexington Ave. 4th Floor
New York, NY 10168
Tel: (212) 365-0292
Fax: (212) 365-4417
Email: jp@julioportillalaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by George Taishin as president.
The Debtor failed to 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/YFO32BA/1103_Franklin_Avenue_Housing_Development__nyebke-25-41526__0001.0.pdf?mcid=tGE4TAMA
1550 BEDFORD: Unsecured Creditors to Split $100K in Plan
--------------------------------------------------------
1550 Bedford Ave. LLC filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Disclosure Statement describing
Chapter 11 Plan dated March 6, 2025.
The Debtor is the fee simple owner of 1550 Bedford Avenue Brooklyn
(the "Property"). In connection with the acquisition and
development of the Property, the Debtor took on mortgages of
$10,500,000.
These mortgages are currently held by DCP Bedford Graham LLC (the
"Lender"). In 2017 the Debtor began developing the Property into a
luxury hotel designed by a prominent architect. Around the time the
pandemic began in 2020, with just a foundation completed, the
Debtor ran out of funds and was unable to continue with the
development. Many mechanics lien claims were filed against the
Property and several lawsuits were commenced.
At the time of the commencement of this case, five lawsuits were
pending against the Debtor. The Debtor made a few proposals to the
Lender to refinance or restructure its loan but ultimately was not
able to move forward with any of them. The Debtor and the Lender
then jointly agreed to move together for an auction sale of the
property within the contours of a Chapter 11 bankruptcy plan. The
Debtor is not currently conducting any operations.
Class 4 shall consist of all Allowed Unsecured Claims and Junior
Lien Claims. Class 4 is Impaired. Holders of Allowed Class 4 Claims
are entitled to vote to accept or reject the Plan. Class 4 Claims
entitled to vote can elect whether to accept a prioritized
distribution in exchange for becoming a Releasing Party and
granting to the DCP Released Parties the release of all claims.
Specifically:
* Each Holder of an Class 4 Allowed General Unsecured Claim
that votes in favor of the Plan shall receive in full and final
satisfaction, compromise, settlement, release, and discharge of
each such Allowed Claim: (a) its Pro Rata Share of any funds to
which Class 4 is entitled as a result of section 4.02(b) of this
Plan 30 days after the Effective Date.
* Each Holder of Class 4 Allowed General Unsecured Claim that
votes to reject the Plan shall receive in full and final
satisfaction, compromise, settlement, release, and discharge of
each such Allowed Claim: (a) its Pro Rata Share of any funds
remaining for distribution after the DCP Allowed Secured Claim is
paid in full according to the priority in distribution waterfall
provided for in the Bankruptcy Code or applicable state law.
The Debtor estimates that claims in this class approximate $2.4
million. The distribution to this class depends upon the auction
sale results. Initially all creditors who voted in favor of the
plan will receive a pro rata share of $100,000. This would yield
approximately 4.2% of each claim. If the sale price of the
Mortgaged Property allows DCP to receive $14 million then claimants
voting in favor of the plan will receive a pro rata share of 50% of
any excess proceeds.
Class 5 of Interest Holders. On the Effective Date: (1) any
certificate, share, note, bond, indenture, purchase right, or other
instrument or document, directly or indirectly evidencing or
creating any indebtedness or obligation of or ownership interest,
equity, or portfolio interest in the Debtor or any warrants,
options, or other securities exercisable or exchangeable for, or
convertible into, debt, equity, ownership, or profits interests in
the Debtor giving rise to any Claim or Interest shall be canceled
and deemed surrendered as to the Debtor and shall not have any
continuing obligations thereunder; and (2) the obligations of the
Debtor pursuant, relating, or pertaining to any agreements,
indentures, certificates of designation, bylaws, or certificates or
articles of incorporation or similar documents governing shares,
certificates, notes, bonds, indenture, purchase rights, options,
warrants, or other instruments or documents evidencing or creating
any indebtedness or obligation of the Debtor shall be fully
released, settled, and compromised.
The sole means for implementing the Plan is through an auction sale
of the Mortgaged Property. The Plan is grounded in the
determination by the Debtor that maximum recoverable value, and the
creation of the funds required to make the Distributions provided
for under the Plan is best achieved through a prompt and orderly
implementation of a marketing process by which the Mortgaged
Property is sold at auction following exposure to the marketplace.
The Debtor has established a price floor for by entering into the
Stalking Horse Agreement with Stalking Horse Bidder. The Stalking
Horse Agreement provides that in the event no higher and/or better
offer for the Mortgaged Property is identified by the Mortgaged
Property Broker following implementation of the Mortgaged Property
Sale Procedures, the Mortgaged Property will be sold, transferred,
conveyed and assigned to the Stalking Horse Bidder, with such sale,
transfer, conveyance and assignment being subject to the
Prepetition Mortgage but otherwise being free and clear of any and
all other existing Liens, Claims, encumbrances and interests of
whatever kind or nature.
A full-text copy of the Disclosure Statement dated March 6, 2025 is
available at https://urlcurt.com/u?l=WyArOV from PacerMonitor.com
at no charge.
The firm can be reached through:
Isaac Nutovic, Esq.
Law Offices of Isaac Nutovic
261 Madison Avenue, 26th Floor
New York, NY 10016
Telephone: (917) 922-7963
Email: inutovic@nutovic.com
About 1550 Bedford Ave. LLC
1550 Bedford Ave. LLC is a single asset real estate company based
in Brooklyn, New York.
1550 Bedford Ave. LLC sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-45433) on December 31,
2024. In its petition, the Debtor estimated assets and liabilities
between $10 million and $50 million each.
Bankruptcy Judge Elizabeth S. Stong handles the case.
The Law Offices Of Isaac Nutovic is the Debtor's counsel.
236 WEST E&P: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 236 West E&P LLC
235 West 136th Street
New York, New York 11234
Business Description: 236 West E&P LLC is a single-asset real
estate debtor, as defined in 11 U.S.C.
Section 101(51B), and owns a rental
business.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 25-10590
Judge: Hon. John P Mastando III
Debtor's Counsel: Michael L. Previto, Esq.
MICHAEL L. PREVITO
150 Motor Parkway
Hauppauge, NY 11788
Tel: 631-379-0837
Email: mchprev@aol.com
Total Assets: $2,678,090
Total Debts: $2,345,178
The petition was signed by Esley Portesous as owner/president.
The Debtor failed to include 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/BPPL65Y/236_West_E__P_LLC__nysbke-25-10590__0001.0.pdf?mcid=tGE4TAMA
3 BROTHERS PHARMACY: Unsecureds Will Get 50% over 60 Months
-----------------------------------------------------------
3 Brothers Pharmacy, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Mississippi a Disclosure Statement
describing Chapter 11 Plan dated March 4, 2025.
The Debtor is a single-member limited liability company that
operates in Clarksdale, Mississippi. Its primary business activity
is operating a retail pharmacy which is doing business as the
Medicine Shoppe.
Alvin Dixon is the single-owned member of 3 Brothers Pharmacy LLC
and does not receive an annual salary currently. Mr. Dixon would
like this to change in the future subject to cash flow limitations.
Mr. Dixon is also the manager and the sole operator of the
business. Sometimes he brings in a pharmacy tech to help. However,
he currently does not have any employees.
The circumstances that gave rise to the filing of this bankruptcy
matter is due to the lack of a bookkeeper or other accounting
professional to help the Debtor keep its books in order and an
eviction action filed by the landlord of the storefront that the
business operates out of, Aaron E Henry.
The business desires to remain in its current building that is
owned by Aaron E. Henry as the Debtor has made improvements to the
building and has been there since the business first opened.
Alternatively, the business will secure a new location in
Clarksdale, Mississippi and continue business there.
The business made about $353.86 dollars net profit per month, which
will be enough to make payments to secured and unsecured creditors.
Although 3 Brothers Pharmacy, LLC has been open for less than a
decade, the pharmacy has a loyal and growing customer base that is
expected to continue to grow.
Class 4 consists of General Unsecured Claim of Aaron E. Henry.
Aaron E. Henry has not filed a proof of claim and will receive 25%
of claim amount. The claim of Aaron E. Henry is the unsecured claim
that derives from the past due lease payments.
In the eviction action, a judgment in the amount of $52,747.63 was
entered against 3 Brothers Pharmacy, LLC. If Aaron E Henry evicts
the Debtor, the Debtor is proposing to pay Aaron E. Henry 25% of
their judgment, $13,186.90 at $220.00 dollars a month until the
claim is satisfied. The Debtor expects to satisfy this claim within
60 months. Class 4 is not impaired.
Class 5 consists of General Unsecured Claims. Due to only one
unsecured creditor filing a proof of claim and the size of the
claim, the General unsecured creditor filing proof of claim will
receive 50% of claim amount. The claim of AT&T is the only filed
proof of claim unsecured claim. AT&T claimed $378.28. The Debtor is
proposing to pay AT&T back $10.00 per month until the claims are
satisfied. The Debtor expects to satisfy this claim within 60
months. Class 5 is not impaired.
A full-text copy of the Disclosure Statement dated March 4, 2025 is
available at https://urlcurt.com/u?l=rzpI9E from PacerMonitor.com
at no charge.
3 Brothers Pharmacy, LLC is represented by:
D. Dewayne Hopson Jr., Esq.
Derek D. Hopson, Sr., Esq.
HOPSON LAW GROUP
P. O. Box 266
601 Dr. Martin Luther King, Jr., Blvd., Suite A
Clarksdale, MS 38614
Telephone: (662) 624-4100
Fax: (662) 621-9197
About 3 Brothers Pharmacy
3 Brothers Pharmacy, LLC, operates a retail pharmacy which is doing
business as the Medicine Shoppe.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Miss. Case No. 24-12502) on August 21,
2024, with $50,001 to $100,000 in assets and $100,001 to $500,000
in liabilities.
Judge Jason D. Woodard presides over the case.
D. Dewayne Hopson, Jr., Esq. at HOPSON LAW GROUP, is the Debtor's
legal counsel.
346 GRAND LLC: Case Summary & Seven Unsecured Creditors
-------------------------------------------------------
Debtor: 346 Grand LLC
164 Clymer Street
Brooklyn, NY 11211
Business Description: The Debtor is the owner of the fee title for
the property at 346 Grand Street, Brooklyn,
New York 11221, which is presently valued at
$3.23 million.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 25-41515
Judge: Hon. Elizabeth S Stong
Debtor's Counsel: Joel M. Shafferman, Esq.
SHAFFERMAN & FELDMAN LLP
137 Fifth Avenue
9th Floor
New York, NY 10010
Tel: (213) 509-1802
E-mail: shaffermanjoel@gmail.com
Total Assets: $3,225,000
Total Liabilities: $24,865,626
The petition was signed by David Goldwasser as chief restructuring
officer.
A full-text copy of the petition, which includes a list of the
Debtor's seven unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/CIUUACI/346_Grand_LLC__nyebke-25-41515__0001.0.pdf?mcid=tGE4TAMA
80 NY AVE: Case Summary & 10 Unsecured Creditors
------------------------------------------------
Debtor: 80 NY Ave LLC
164 Clymer Street
Brooklyn, NY 11211
Business Description: 80 NY Ave LLC is a debtor with a single
property asset, as outlined in 11 U.S.C.
Section 101(51B). The Debtor owns the full
and outright title to the property located
at 80 New York Avenue, Brooklyn, New York
11216, which is valued at approximately
$2.23 million.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 25-41517
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Joel M. Shafferman, Esq.
SHAFFERMAN & FELDMAN LLP
137 Fifth Avenue
9th Floor
New York, NY 10010
Tel: (212) 509-1802
E-mail: shaffermanjoel@gmail.com
Total Assets: $2,225,000
Total Liabilities: $24,660,939
The petition was signed by David Goldwasser as chief restructuring
officer.
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/GOOB5OQ/80_NY_Ave_LLC__nyebke-25-41517__0001.0.pdf?mcid=tGE4TAMA
840 CLAY AVE: Seeks to Hire Jeffrey A. Rockman as Legal Counsel
---------------------------------------------------------------
840 Clay Ave LLC seeks approval from the U.S. Bankruptcy Court for
the Middle District of Pennsylvania to hire Jeffrey A. Rockman,
Esq., an attorney practicing in Kingston, Pennsylvania, as its
counsel.
The firm will render these services:
a. advise and represent the Debtor with respect to all matters
and proceedings, and prepare necessary applications, motions,
answers, orders, reports, and other legal papers;
b. assist the Debtor in all bankruptcy issues;
c. assist the Debtor with the preparation of and confirmation
of a plan of reorganization;
d. assist the Debtor in the evaluation and prosecution of
claims and litigation, including claims against the sole secured
creditor in this matter; and
e. provide legal services with respect to general corporate,
tax, employee benefit, and other general non-bankruptcy matters to
the extent not duplicative of work to be provided by other
professionals; and
perform all other necessary legal services.
The firm was paid at a discounted rate of $2,500 for its services.
Mr. Rockman assured the court that he is a "disinterested person"
as the term is defined in 11 U.S.C. 101(14).
Mr. Rockman can be reached at:
Jeffrey A. Rockman
515 Gibson Avenue
Kingston, PA 18704
Phone: (570) 479-3113
Email: jeffrocklaw@icloud.com
About 840 Clay Ave LLC
840 Clay Ave LLC sought protection for relief from the U.S.
Bankruptcy Code (Bankr. M.D. Pa. Case No. 24-02897) on November 7,
2024, listing $100,001 to $500,000 in both assets and liabilities.
Judge Mark J Conway presides over the case.
Jeffrey Rockman, Esq. represents the Debtor as counsel.
A-AG US GSI: $100MM Incremental Loan No Impact on Moody's 'B1' CFR
------------------------------------------------------------------
Moody's Ratings said that A-AG US GSI Bidco, Inc.'s (dba Grain &
Protein Technologies (GPT)) announcement to raise $100 million of
incremental first lien term loan does not impact the B1 corporate
family rating or stable outlook. Proceeds of the loan will be used
to help fund the purchase of Munters FoodTech Equipment (MFTE).
GPT's sponsor, American Industrial Partners, will contribute equity
to fund the remaining portion of the acquisition price. The
transaction is anticipated to be completed in the first half of
2025.
The acquisition financing is credit negative as pro forma credit
metrics through 2025 will be weaker than Moody's anticipated at the
time of the initial rating assignment in September 2024. The
increase in debt will push key metrics toward Moody's rating
downgrade thresholds of negative free cash flow, debt-to-EBITDA
over 5x and EBITA-to-interest falling to 2x.
However, benefits from the combination with MFTE and Moody's
expectations for a steady recovery in demand for grain storage and
protein production equipment in 2026 help mitigate anticipated
near-term pressure on metrics. The acquisition boosts total revenue
to nearly $1 billion while significantly improving end market,
product and geographic diversification. MFTE's strong portfolio of
climate control products for protein production results in a pro
forma revenue breakdown of roughly 50% grain storage and 50%
protein production equipment. Demand for these products is expected
to remain robust as protein climate control equipment improves
yield and disease prevention and benefits from increasing global
income per capita and the ongoing shift to higher protein-based
diets. Additionally, MFTE is expected to be margin accretive even
before synergies.
GPT maintains a strong competitive position as a manufacturer of
equipment for grain storage and processing, swine and poultry
housing and feeding and egg production. Exposure to both grain and
protein end markets, as well as a lack of inventory stocking,
limits volatility in operating results tied to agricultural cycles.
A largely variable cost structure and moderate capital investment
needs also support performance through the cycle. Longer-term
demand for the company's products is supported by expectations for
increasing consumption of grain, swine, poultry and eggs to
accommodate global population growth.
Grain & Protein Technologies is a leading designer and manufacturer
of grain storage and processing equipment, as well as feeding,
watering, climate management and control systems for protein
production (swine, poultry and egg production). Products include
grain storage and conditioning bins, feed storage, delivery and
heating/ventilation equipment and aviary systems. Revenue for the
twelve months ended December 31, 2024 was around $800 million.
Grain & Protein Technologies is owned by American Industrial
Partners (AIP) following AIP's leveraged buyout from AGCO
Corporation in July 2024.
Munters FoodTech Equipment manufactures air quality, movement and
temperature control equipment for the poultry, egg and swine
markets. Products include fans, cooling systems, cooling pads,
heaters and other climate solutions.
ADVANCED URGENT: Unsecureds Will Get 32% of Claims in Plan
----------------------------------------------------------
Advanced Urgent Care, LLC, d/b/a Advanced Urgent Care and
Occupational Medicine ("AUC") and The Pegton Building LLC, filed
with the U.S. Bankruptcy Court for the District of Colorado a
Disclosure Statement describing Plan of Reorganization dated March
6, 2025.
The Debtors are Colorado limited liability companies. Dr. Anthony
Euser, is a medical doctor and is the founder and managing member
of both Debtors. Dr. Euser owns 100% of the membership interests in
AUC and Dr. Euser and his wife, Margaret Euser, each own a 50%
membership interest in the The Pegton Building LLC.
AUC operates seven urgent care clinics in Northern Colorado. AUC's
primary operations consist of providing acute non-life-threatening
illnesses and injuries to walk-in patients.
Pegton owns real estate with an address of 2801 – 2901 Purcell
St., Brighton, CO 80601 and 112 S. Denver Ave., Fort Lupton, CO
80621. Pegton is the primary lessee of the following location: 1250
S. Buckley Rd., Ste. N, Aurora, CO 80017 ("Aurora"). Pegton leases
or subleases all of its real estate interests to AUC and has no
employees or other operations.
This bankruptcy was caused by a contract with a billing management
company, Experity, Inc., that led to significant decreases in
per-patient revenue. This challenge persisted for 18 months, from
approximately March of 2022 to September of 2023. AUC replaced the
problem billing management company at the end of 2023 and per
patient revenue has increased and returned to its previous levels.
AUC is currently involved in litigation with Experity in Illinois
(the "Experity Litigation"). Due to the reduced revenue during the
18-month period at issue, AUC got behind on payments to vendors and
landlords.
Class 6 is comprised of creditors with or asserting Unsecured
Claims against the Debtors, including any allowed penalty Claims
held by any taxing authority which are not related to actual
pecuniary loss. Allowed Class 6 Claims shall receive their pro rata
share of the Net Profits Fund until each Claim is paid in full. The
Allowed Class 6 Claims shall not accrue any interest. Distributions
of the amount in the Net Profits Fund to the Allowed Class 10
claimants shall be made annually on the anniversary of the
Effective Date and shall begin in 2026. The allowed unsecured
claims total $6,239,678.13. This Class is impaired.
Class 7 consists of all Interests. All equity interests in the
Reorganized Debtors shall be retained by Anthony Euser and Margaret
Euser.
On the Effective Date, all assets of the Debtor shall be
transferred to the Reorganized Debtor, free and clear of all liens,
claims, and interests of creditors, equity holders, and other
parties in interest, except as otherwise provided herein. The
Reorganized Debtor shall not, except as otherwise provided in this
Plan, be liable to repay any debts which accrued prior to the
Confirmation Date.
The Reorganized Debtors shall fund their Plan obligations with cash
from operations, loans, capital contributions, and Litigation
Proceeds. The Debtors shall have no obligation to obtain Court
approval for future loans or capital contributions. Such funds
shall be sufficient to pay in full all amounts due on the Effective
Date, and, as applicable, priority claimants treated under Article
III herein.
Confirmation of the Plan is in the best interests of the creditors.
Under a liquidation scenario, unsecured creditors will receive 0%
of their claims. However, under the Plan, unsecured creditors are
expected to receive 32% of their pro rata share.
A full-text copy of the Disclosure Statement dated March 6, 2025 is
available at https://urlcurt.com/u?l=O3Lac8 from PacerMonitor.com
at no charge.
Attorneys for the Debtors:
David J. Warner, Esq.
Wadsworth Garber Warner Conrardy, P.C.,
2580 West Main Street, Suite 200
Littleton, Colorado 80120
Telephone: (303) 296-1999
Facsimile: (303) 296-7600
Email: dwarner@wgwc-law.com
About Advanced Urgent Care
Advanced Urgent Care LLC is a locally owned and operated urgent
care services provider. It also offers on-site laboratory
services, x-ray services, and physical exams.
Advanced Urgent Care LLC and The Pegton Building sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead
Case No. 24-14536) on August 7, 2024. In the petition filed by
Anthony G. Euser, as managing member, AUC reports total liabilities
of $7,261,749 and under $50,000 in estimated assets.
The Hon. Joseph G Rosania Jr., presides over the cases.
The Debtors are represented by David J. Warner, Esq., at Wadsworth
Garber Warner Conrardy, PC, as counsel.
AIBOTICS INC: Inks Software Development Deal with GMF Ventures
--------------------------------------------------------------
On January 25, 2025, Aibotics Inc. entered into a software
development agreement with GMF Ventures, LLC, for the development
of iOS and Android based applications for its Philbot massage
robot, the Company disclosed in a Form 8-K filing with the U.S.
Securities and Exchange Commission.
The Company will pay GMF Ventures a total of $165,000 for services
under the contract. The first payment pursuant to the Agreement has
been made via the issuance of 500,000 shares of the Company's
common stock to Steve Fleurimont issued pursuant to the Company's
Equity Incentive Plan as set forth in the Company's registration
statement on Form S-8 filed with the SEC on September 13, 2024.
Aibotics, Inc. engages in technology focused psychedelic therapies.
It provides data driven medical-based solutions for people dealing
with anxiety, depression, bipolar disorders, PTSD, ADHD, autism,
and addictions. The company was founded on January 21, 2000 and is
headquartered in Miami, FL.
ALTRAIN MEDICAL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Altrain Medical and Dental Assisting Academy, LLC
5750 West Thunderbird Rd.
Suite D480
Glendale AZ 85306
Business Description: Altrain Medical is a trade school
specializing in accelerated training
programs in dental assisting, medical
assisting, IT professional training, and
legal assisting/paralegal studies. The
academy provides hands-on learning with
experienced instructors, flexible class
options, and lifetime job placement
assistance, all accredited by the Arizona
State Board of Private Postsecondary
Education.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
District of Arizona
Case No.: 25-02732
Judge: Hon. Eddward P Ballinger Jr
Debtor's Counsel: Patrick Keery, Esq.
KEERY MCCUE, PLLC
6803 E. Main Street Suite 1116
Scottsdale AZ 85251
Tel: (480) 478-0709
E-mail: pfk@keerymccue.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tiffany Lingenfelter as owner/manager.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free on PacerMonitor at:
https://www.pacermonitor.com/view/E35EVWY/ALTRAIN_MEDICAL_AND_DENTAL_ASSISTING__azbke-25-02732__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/DUSM5ZA/ALTRAIN_MEDICAL_AND_DENTAL_ASSISTING__azbke-25-02732__0001.0.pdf?mcid=tGE4TAMA
ALTRAIN MEDICAL: Sec. 341(a) Meeting of Creditors on April 29
-------------------------------------------------------------
On March 28, 2025, Altrain Medical and Dental Assisting Academy
LLC filed Chapter 11 protection in the U.S. Bankruptcy Court for
the District of Arizona. According to court filing, the
Debtor reports between $1 million and $10 million in debt owed
to 1 and 49 creditors. The petition states funds will be available
to unsecured creditors.
A meeting of creditors under Sec. 341(a) to be held on April 29,
2025 at 12:00 PM as a Telephonic Hearing.
About Altrain Medical and Dental Assisting
Academy LLC
Altrain Medical and Dental Assisting Academy LLC is, a training
school for medical and dental assistants based in Glendale,
Arizona.
Altrain Medical and Dental Assisting Academy LLC sought relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case
No. 25-02732) on March 28, 2025. In its petition, the Debtor
reports estimated assets up to $50,000 and estimated liabilities
between $1 million and $10 million.
Honorable Bankruptcy Judge Eddward P Ballinger Jr handles the
case.
The Debtor is represented by Patrick F. Keery at Keery Mccue, PLLC.
AMERICA-CV STATION: Vasallo Loses Bid to Stay Bankruptcy Ruling
---------------------------------------------------------------
In the case captioned as VASALLO TV GROUP, LLC, et al., Plaintiffs,
v. AMERICA-CV STATION GROUP, INC., et al., Defendants, Case No.
24-cv-23011-RKA (S.D. Fla.), Judge Roy K. Altman of the United
States District Court for the Southern District of Florida denied
Carlos Vasallo and Vasallo TV Group's motion to stay the decision
of the United States Bankruptcy Court for the Southern District of
Florida with respect to equitable remedy pending appeal.
Just before the Chapter 11 reorganization plans of Caribevision
Holdings, Inc. and Caribevision TV Network, LLC were set to be
confirmed, the debtors filed an emergency motion to modify the
plans under 11 U.S.C. Sec. 1127(a). The initial plans called for
equity in the reorganized companies to be split between four
shareholders: Ramon Diez-Barroso, Pegaso Television Corp., Emilio
Braun, and Vasallo TV Group. The modification, after being approved
by the bankruptcy court, stripped the first three of their equity
and allocated full ownership to the fourth -- a company controlled
by the debtors' Chief Executive Officer, Carlos Vasallo. The three
ousted shareholders -- the Pegaso Equity Holders -- appealed the
Bankruptcy Court's order confirming the plan modification to the
Eleventh Circuit and won. But, by the time the Pegaso Equity
Holders were vindicated on appeal, two years had elapsed since the
Bankruptcy Court had confirmed the initial, now-remanded plans. So,
when the Eleventh Circuit remanded this case to the Bankruptcy
Court, it noted that it was assuming that effective judicial relief
could be granted and left it to the Bankruptcy Court to fashion an
equitable remedy.
On remand, the Bankruptcy Court directed the parties to devise and
agree on a procedure it could use to determine the appropriate
equitable remedy. The parties did so. Afterwards, the Bankruptcy
Court determined that the equitable remedy was to take back the
equity it had previously allocated to Mr. Vasallo and his Vasallo
TV Group -- the New Equity Interests -- and allocate it to the
Pegaso Equity Holders instead. It also concluded that Mr. Vasallo
and Vasallo TV Group hadn't behaved equitably -- and so, they
weren't entitled to any equitable benefit or protection.
Mr. Vasallo and the Vasallo TV Group appealed the Bankruptcy
Court's decision to this Court. They've also moved to stay the
Bankruptcy Court's decision while this appeal is pending.
A stay pending appeal is an intrusion into the ordinary processes
of administration and judicial review, and accordingly is not a
matter of right, even if irreparable injury might otherwise result
to the appellant. It's an extraordinary remedy that's only granted
upon a showing of four factors:
1) that the movant is likely to prevail on the merits on appeal;
2) that absent a stay the movant will suffer irreparable damage;
3) that the adverse party will suffer no substantial harm from
the issuance of the stay; and
4) that the public interest will be served by issuing the stay.
The Appellants insist that they're likely to prevail on their three
merits arguments: first, that the Bankruptcy Court has no
subject-matter jurisdiction; second, that the Bankruptcy Court
committed "manifest error" in reaching certain factual conclusions
after an evidentiary hearing; third, that the Bankruptcy Court
misapplied the summary-judgment standard.
The Court finds while the Appellants have made at least a
substantial case on the merits on one of their three arguments,
they fail to carry their burden on any other factor. They're
therefore not entitled to a stay, the Court holds.
According to the Court, the Appellants fail to carry their burden
especially on the critical probability that they'll face
irreparable harm if a stay isn't granted. The Appellants claim that
they'll be subject to irreparable harm because the Appellees will
file baseless claims of breaches of fiduciary duty and other causes
in state court. But they don't explain how or why all of that will
happen. Nor do they explain why money damages -- especially
sanctions -- wouldn't compensate them for truly baseless lawsuits.
The Court therefore concludes that the Appellants have failed to
carry their burden of showing that they'll be irreparably harmed.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=imnhhJ from PacerMonitor.com.
About America-CV Station Group
America-CV Station Group, Inc. is a privately held company
primarily in the television station ownership and program
production business. It provides broadcasting services.
America-CV and affiliate Caribevision Holdings, Inc. sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case Nos. 19-16355 and 19-16359) on May 14, 2019. On May 28,
2019, America-CV Network, LLC and Caribevision TV Network, LLC also
filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 19-16976 and
19-16977). The cases are jointly administered under Case No.
19-16355). At the time of the filing, each of the Debtors disclosed
assets of $10 million to $50 million and liabilities of $1 million
to $10 million.
Judge Jay A. Cristol oversees the cases.
The Debtors tapped Genovese Joblove & Battista, P.A., as their
bankruptcy counsel, and Fletcher, Heald & Hildreth, P.L.C., as
Genovese's co-counsel.
AMERICAN OPEN: Claims Will be Paid from Property Sale/Refinance
---------------------------------------------------------------
American Open Space Remedies LLC filed with the U.S. Bankruptcy
Court for the Central District of California a Disclosure Statement
describing Plan of Reorganization dated March 7, 2025.
The Debtor is a California Limited Liability Company formed in
February 2022. Beaumont 1600, LLC is the Manager of the Debtor and
Scott Krentel is its authorized manager.
The Debtor is in the business of acquiring and making real estate
investments. By and through its own efforts and professional
consultants, the Debtor designs, plans and offers for sale, joint
venture or exchange, its projects consisting of industrial and
commercial sites to then sell to public and private builders and
investment firms at a profit.
The Debtor's principal asset of approximately 1,230 acres is a
combination of multiple land parcels of various sizes ("Beaumont
Property") and is the largest portion of land of The Legacy
Highlands Specific Plan ("Legacy Highlands"), which is a unique,
master planned industrial and commercial development set within the
rolling hills of West Beaumont, located in Riverside County,
California. Debtor scheduled the value of the Beaumont Property at
$580,000,000, which is based on the April 23, 2024 "as is value" in
the MAI appraisal of Michael Frauenthal & Associates, Inc.
("Appraisal").
The Plan contemplates that the Debtor will administer its assets
and distribute the proceeds and funds on hand to its Creditors and
Interest Holders in accordance with the priorities set forth in the
Bankruptcy Code.
The Effective Date of the Plan shall be the date fifteen days
following the entry of the Confirmation Order (which Confirmation
Order shall be a Final Order) and the later of date of the close of
escrow on either: (i) the sale of the Beaumont Property; (ii)
refinance of the Beaumont Property; or (iii) joint venture on the
Beaumont Property.
Class 4 consists of All Allowed General Unsecured Claims that are
not Administrative Claims or Priority Claims. Allowed General
Unsecured Claims will be paid in full on their Allowed Claims. This
Class is impaired.
If a Class 4 Claim is a timely filed Proof of Claim which is
subject to an objection to claim that has not yet been resolved by
the Effective Date, then pending resolution of the dispute by a
Final Order, the Debtor will reserve sufficient funds to pay the
Disputed Claim pursuant to the terms of the Plan into the Disputed
Claims Reserve. Once the dispute is resolved by a Final Order, the
Debtor will make a Distribution out of the Disputed Claims Reserve
on account of the Allowed Class 4 Claim in accordance with the
treatment described.
The holders of Allowed Claims in this Class will share pro-rata in
payments of the total Allowed General Unsecured Claim. An initial
distribution of cash will be made in the amount of $151,400.00 out
of the funds available for that purpose from sales, refinancing,
joint venture, DIP loan or capital contribution. In addition, there
will be future cash distributions sufficient from sales,
refinancing, joint venture, DIP loan or capital contribution. This
class shall receive a minimum of $25,000 in quarterly payments for
up to five years with this obligation all due and payable five
years after the Effective Date.
Interest Holders comprise Class 5 of the Plan and are the parties
who hold ownership interests (i.e., equity interests) in the Debtor
which shall be retained and are Unimpaired.
On the Effective Date, all Assets of the Debtor and the Estate will
be vested in the Debtor, including all of the Debtor's and the
Estate's right, title, and interest in and to the Assets. As of the
Effective Date, the Assets of the Debtor shall be free and clear of
all Liens, Claims, and interests of Holders of Claims and
Interests, pursuant to Sections 363(f), 1123, 1141 and 1146(c) of
the Bankruptcy Code, except as otherwise provided in the Plan.
Funding for the Plan shall come from the Debtor's sale, refinance
or the joint venture of the Beaumont Property and from collection
on the Litigation Claims. The Distributions to creditors under the
Plan will be funded primarily from the following sources: (a) the
Debtor's cash on hand on the Effective Date, (b) the net proceeds
from the collection on the Litigation Claims, if any; (3) and the
net proceeds from the sale, refinance or the joint venture of the
Beaumont Property. Debtor reserves its rights to seek new financing
secured by all or part of the Beaumont Property.
A full-text copy of the Disclosure Statement dated March 7, 2025 is
available at https://urlcurt.com/u?l=Ko4rdI from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Robert P. Goe, Esq.
Reem J. Bello, Esq.
Goe Forsythe & Hodges LLP
17701 Cowen, Lobby D, Suite 210
Irvine, CA 92614
Tel: (949) 796-2460
Fax: (949) 955-9437
Email: rgoe@goeforlaw.com
About American Open Space Remedies
American Open Space Remedies, LLC, is a company in Irvine, Calif.,
engaged in activities related to real estate.
American Open Space Remedies filed Chapter 11 petition (Bankr. C.D.
Cal. Case No. 24-12885) on Nov. 8, 2024, listing $100 million to
$500 million in assets and $10 million to $50 million in
liabilities.
Judge Scott C. Clarkson oversees the case.
Goe Forsythe & Hodges, LLP, serves as the Debtor's legal counsel.
ANTIGONE SKOULAS: Gets OK to Use Cash Collateral Until July 1
-------------------------------------------------------------
Antigone Skoulas D.D.S., Inc. received another extension from the
U.S. Bankruptcy Court for the Northern District of California to
use cash collateral.
The court authorized Antigone to use both pre-bankruptcy and
post-petition accounts receivable until July 1 or until further
court order.
As protection, secured creditors, California Bank of Commerce,
Regions Bank (Ascentium), and the U.S. Small Business
Administration were granted replacement liens on post-petition
assets, including accounts receivable, with the same priority as
their pre-bankruptcy liens.
Antigone was ordered to make monthly payments of $2,000 to CBC as
additional protection.
California Bank of Commerce is represented by:
David W. Brody, Esq.
Kenneth R. Shemwell, Esq.
BRODY & SHEMWELL, APC
1350 Columbia Street, Suite 403
San Diego, California 92101
Telephone: (619) 546-9200
Facsimile: (619) 546-9270
dbrody@brody-law.com
About Antigone Skoulas D.D.S. Inc.
Antigone Skoulas D.D.S. Inc. is a dental practice in San Francisco
specializing in cosmetic and restorative dentistry, offering
services like implant restorations, Invisalign, dentures, and TMJ
treatment. With a focus on advanced digital technology and artistic
expertise, the practice provides compassionate care and exceptional
results to help patients achieve their best smiles.
Antigone filed Chapter 11 petition (Bankr. N.D. Calif. Case No.
25-30100) on February 9, 2025, listing total assets of $133,991 and
total liabilities of $1,568,196.
Judge Hannah L. Blumenstiel handles the case.
The Debtor is represented by:
Brent D. Meyer, Esq.
Meyer Law Group, LLP
Tel: 415-765-1588
Email: brent@meyerllp.com
ASPIRA WOMEN'S: J. Crawford Owns 34,299 Shares
----------------------------------------------
James Crawford, Vice President of Finance of Aspira Women's Health
Inc., disclosed in a Form 3 filing with the U.S. Securities and
Exchange Commission that as of Jan. 28, 2025, he directly owns
34,299 shares of the Company's common stock by virtue of the
Company's Employee Stock Option.
About Aspira Women's Health
Formerly known as Vermillion, Inc., Aspira Women's Health Inc. --
http://www.aspirawh.com-- is dedicated to the discovery,
development, and commercialization of noninvasive, AI-powered
tests
to aid in the diagnosis of gynecologic diseases. OvaWatch and
Ova1Plus are offered to clinicians as OvaSuiteSM. Together, they
provide a comprehensive portfolio of blood tests to aid in the
detection of ovarian cancer for the 1.2+ million American women
diagnosed with an adnexal mass each year. OvaWatch provides a
negative predictive value of 99% and is used to assess ovarian
cancer risk for women where initial clinical assessment indicates
the mass is indeterminate or benign, and thus surgery may be
premature or unnecessary. Ova1Plus is a reflex process of two
FDA-cleared tests, Ova1 and Overa, to assess the risk of ovarian
malignancy in women planned for surgery.
Boston, Massachusetts-based BDO USA, P.C., the Company's auditor
since 2012, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has suffered
recurring losses from operations and expects to continue to incur
substantial losses in the future, which raises substantial doubt
about its ability to continue as a going concern.
Aspira Women's Health reported a net loss of $16.69 million for
the
year ended Dec. 31, 2023, compared to a net loss of $29.88 million
for the year ended Dec. 31, 2022. As of June 30, 2024, Aspira
Women's Health had $3.96 million in total assets, $7.67 million in
total liabilities, and $3.7 million in total stockholders' deficit.
AVEANNA HEALTHCARE: Moody's Alters Outlook on Caa1 CFR to Positive
------------------------------------------------------------------
Moody's Ratings affirmed the ratings of Aveanna Healthcare LLC
("Aveanna") including the Caa1 corporate family rating, the Caa1-PD
probability of default rating, the B3 rating on the senior secured
first lien bank credit facilities (consisting of a revolver and a
term loan), and the Caa3 rating on the senior secured second lien
term loan. Concurrently, Moody's changed the outlook to positive
from stable.
The rating affirmation and change of outlook to positive reflect
improving business performance and corresponding deleveraging in
the last 12 months, combined with Moody's expectations of gradual
but continued improvement in the next few quarters. The improvement
in the company's operating metrics will be driven by stabilization
of labor cost, improved execution, and more efficient cash
collection. However, the company's interest rate hedges will roll
off between June 2026 and February 2027, exposing Aveanna to a
higher interest rate, which could adversely affect free cash flow.
For the last twelve-month period ended December 28, 2024, Aveanna's
Moody's adjusted debt-to-EBITDA was approximately 8.4 times.
RATINGS RATIONALE
Aveanna's Caa1 CFR reflects its very high financial leverage,
business concentration in California, Texas, and Pennsylvania and
exposure to reimbursement cuts by government payors. Moody's
expects the company's debt/EBITDA to remain in the mid-7.0 times
range in the next 12 to 18 months. The rating is also constrained
by the company's high reliance on Medicaid reimbursement through
its Private Duty Services (PDS) business which contributes
approximately 81% of the company's revenue.
The rating benefits from Aveanna's leading niche position in the
otherwise fragmented market of pediatric home health services,
where it provides critical services to children and families, as
well as its expanding presence in the home health and hospice
segment. The company's strategy to grow its home health and hospice
businesses will benefit its credit profile through improved service
line and payor diversity.
Moody's views Aveanna's liquidity as adequate (SGL-3). The company
had $84 million in cash at the end of December 2024. Moody's
expects that the company will generate slightly positive free cash
flow (approximately $10-$20 million) over the next 12 months. Free
cash flow incorporates the impact of hedges against higher interest
rates that are in place until early 2027. Liquidity is further
supported by access to a $170.4 million revolving credit facility
that had approximately $138 million available as of December 28,
2024. The revolving credit facility amount will be reduced to
$148.9 million on April 29, 2026, until the final maturity date of
April 15, 2028. The company's also has an securitization facility
with maximum capacity of $175-$225 million subject to borrowing
base requirements ($37.9 million available as of December 28,
2024). The revolving credit facility has a maintenance maximum
leverage covenant if more than 30% is drawn (excluding letters of
credit up to $15 million), requiring that first lien net leverage
does not exceed 7.6 times. Moody's expects the company to maintain
compliance with the financial covenant over the next 12 months. The
company's alternate liquidity options are limited, as the majority
of its assets are encumbered by bank credit facilities.
Aveanna's senior secured first lien credit facility, comprised of a
$170.4 million revolving credit facility and $920 million term
loan, are both rated B3, one notch above the Caa1 CFR. This
reflects the benefit of a layer of loss absorption provided by the
$415 million second lien term loan, which is rated Caa3.
The positive outlook reflects improving business performance and
corresponding deleveraging over the next 12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company continues to delever
and improve its operating performance and financial metrics.
Quantitatively, sustained adjusted debt/EBITDA that is below 7.5
times and interest coverage that is above 1x could support an
upgrade. An improved liquidity position would also support an
upgrade.
The ratings could be downgraded if Aveanna experiences significant
reimbursement reductions and/or further wage pressures. Ratings
could be downgraded if Aveanna pursues more aggressive financial
policies including significant debt-funded acquisitions. Further
weakening of liquidity or sustained negative free cash flow could
also lead to a downgrade.
Headquartered in Atlanta, Georgia, Aveanna Healthcare LLC is a
leading provider of pediatric skilled nursing and therapy services,
home health and hospice services, as well as medical solutions,
such as enteral nutrition, respiratory therapy and medical supply
procurement. Aveanna generated revenue of approximately $2.0
billion for the last twelve month period ended December 28, 2024.
Aveanna Healthcare Holdings Inc. (parent of Aveanna Healthcare LLC)
is listed on the Nasdaq (Ticker: AVAH) but private equity
investors, Bain Capital and J. H. Whitney, retain a significant
ownership interest in the company (70.4% as of Dec 28, 2024).
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
AZEK GROUP: Moody's Puts 'Ba2' CFR on Review for Upgrade
--------------------------------------------------------
Moody's Ratings placed the ratings of The AZEK Group LLC (AZEK) on
review for upgrade, including its Ba2 corporate family rating,
Ba2-PD probability of default rating, and Ba2 ratings on its first
lien senior secured term loan and revolving bank credit
facilities.
This rating action follows the announcement that the company will
be acquired by James Hardie Industries plc (James Hardie). AZEK's
SGL-1 Speculative Grade Liquidity Rating remains unchanged.
Previously, the outlook was stable.
On March 23, 2025, James Hardie announced that it has entered into
a definitive agreement to acquire AZEK for $8.75 billion, including
AZEK's net debt of $386 million. AZEK's shareholders will receive
$26.45 in cash and 1.034 shares of James Hardie for each share of
AZEK stock. The transaction is expected to close during the second
half of calendar 2025, subject to AZEK's shareholders' approval,
regulatory approvals and customary closing conditions.
The business combination of the two companies will increase James
Hardie's revenue scale to about $5.4 billion with strong pro forma
EBITDA margin (on Moody's adjusted basis) of 27%. The combination
of James Hardie and AZEK creates a strong offering of complementary
exterior building products, expands James Hardie's addressable
markets, and further enhances the company's robust cash flow
generation. In addition, both companies share a focus on material
conversion in their business strategies.
The review for upgrade reflects governance considerations related
to the change in AZEK's ownership structure that will result from
this transaction, as well as James Hardie's stronger credit profile
and its larger scale.
The review for upgrade will focus on the completion of the
transaction once all necessary approvals take hold, the combined
entity's future capital structure, and whether AZEK's debt will be
fully repaid at closing in line with the change of control
provision in the credit agreement. Moody's ability to maintain
ratings on AZEK following closing of the transaction will consider
whether its debt remains outstanding, and adequacy of financial and
operational disclosures available.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
AZEK's existing Ba2 CFR is supported by: 1) the company's leading
position in the market for low maintenance building products; 2)
its reliance for the majority of revenue on the residential repair
and remodeling end market, which is more stable than new
construction; 3) the conversion trend from traditional material
such as wood to engineered low maintenance product, which supports
its growth trajectory; 4) the company's conservative financial
strategies, including maintenance of low leverage in line with its
stated net debt to EBITDA target of 2.0x to 2.5x; and 5) solid
operating margins and a very good liquidity, supported by positive
free cash flow generation and meaningful availability under its
revolving credit facility.
The existing credit profile is constrained by: 1) the company's
exposure to the cyclicality of its residential new construction and
repair and remodeling as well as commercial end markets; 2) the
competitive dynamics in the low maintenance building products
segment and the discretionary nature of the product; 3) sensitivity
of operating margin, cash flow and liquidity to changes in raw
material costs; 4) risks related to shareholder friendly actions
given the company's share repurchase program; and 5) risks related
to the company's acquisition activity, including leveraging and
potential integration challenges.
Notwithstanding the ratings review, the ratings could be upgraded
if AZEK meaningfully expands its size and scale and maintains
conservative financial strategies with respect to its balance sheet
and growth strategy. Debt to EBITDA sustained below 2.0x and EBITA
to interest coverage above 7.0x, including through periods of
growth through acquisitions, while end markets conditions are
supportive, operating margins remain strong and liquidity robust,
could result in an upgrade.
Given the current review, a ratings downgrade is unlikely. However,
the ratings could be downgraded if the company experiences a
sustained decline in revenue and operating margins, including due
to a weakening in the end markets, or if its financial strategies
grow aggressive with respect to shareholder friendly actions or
acquisitions. An increase in leverage toward 3.0x, a reduction in
interest coverage below 5.0x, or a deterioration in liquidity could
result in a ratings downgrade.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
The AZEK Company Inc. (parent of The AZEK Group LLC), headquartered
in Chicago, Illinois, is a leading manufacturer of premium, low
maintenance building products for residential and commercial
markets in the US and Canada. The company's product offerings
include decking, railing, trim, porch, moulding, pergolas, outdoor
furniture, bathroom and locker systems. AZEK's equity has been
publicly traded since June 2020. In the last twelve months ended
December 31, 2024, the company generated $1.5 billion in revenue.
James Hardie International Finance Designated Activity Company is a
wholly-owned subsidiary of James Hardie Industries plc, an Irish
domiciled global manufacturer of fiber cement, fiber gypsum and
cement-bonded building products and systems for internal and
external construction applications. The company's products are
primarily sold in the United States, Canada, Australia, New
Zealand, the Philippines, and Europe. In the last twelve months
ended December 31, 2024, James Hardie Industries plc generated $3.9
billion in revenue.
BAYER & SONZ: Seeks Approval to Hire Compass as Realtor
-------------------------------------------------------
Bayer & Sonz, LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Wisconsin to employ Nick Harrington of
Compass as realtor.
Mr. Harrington will provide the Debtor with broker price opinions
on its real properties, develop a plan to market its real
properties, and sell the real properties.
The firm will be paid a commission of 3.1 percent of the sales
price.
Mr, Harrington disclosed in the court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Nick Harrington
Compass
7863 Girard Avenue, Suite 208
La Jolla CA 92037
Tel: (414) 335-0823
About Bayer & Sonz, LLC
Bayer & Sonz, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Wis. Case No. 24-25976) on November 6,
2024, with $1 million to $10 million in both assets and
liabilities. Matthew Bayer, managing member, signed the petition.
Judge Rachel M Blise presides over the case.
Emily K. Ott, Esq., at Krekeler Law, S.C. represents the Debtor as
bankruptcy counsel.
BLH TOPCO: April 3 Deadline Set for Panel Questionnaires
--------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy cases of BLH TopCo, LLC, et
al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://tinyurl.com/2j8rtndd and return by email it to
Timothy Fox, Esq. -- Timothy.Fox@usdoj.gov -- at the Office of the
United States Trustee so that it is received no later than
Thursday, April 3, 2025 at 4:00 p.m. Eastern Time.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About BLH Topco
BLH TopCo LLC are operators and franchisors of locally themed,
social gastrobars under the "Bar Louie" brand. Bar Louie is an
upscale neighborhood bar and eatery known for a relaxed atmosphere,
handcrafted cocktails, a well curated selection of local and
regional beers, high quality wines, and a robust menu. Established
in 1991 in Chicago, Illinois, the Company currently operate 31
locations, franchise an additional 17, and employ roughly 1,400
individuals across 19 states. In May 2020, BLH TopCo acquired the
Bar Louie business through a Section 363 sale during a previous
bankruptcy proceeding.
BLH TopCo and four of its affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.,
Lead Case No. 25-10576) on March 26, 2025. In the petitions, the
Lead Debtor reported $1 million to $10 million in estimated assets,
and $50 million to $100 million in estimated liabilities. The
petitions were signed by Leslie Crook as chief administrative
officer.
The Hon. Craig T. Goldblatt presides over the Debtors' cases.
The Debtors tapped Raines Feldman Littrell LLP as bankruptcy
counsel. Bankruptcy Management Solutions, Inc. dba Stretto acts as
claims and noticing agent to the Debtors.
BRISTOW GROUP: Sikorsky Must Produce Documents for Sanctions Motion
-------------------------------------------------------------------
In the case captioned as BRISTOW GROUP INC., Plaintiff, VS.
SIKORSKY AIRCRAFT CORPORATION, Defendant, ADVERSARY NO. 19-3691
(Bankr. S.D. Tex.), Judge Marvin Isgur of the United States
Bankruptcy Court for the Southern District of Texas ordered the
production of certain documents that Bristow Group Inc. seeks in
discovery for its sanctions motion against Sikorsky Aircraft
Corporation.
This adversary proceeding concerns a breach of contract dispute
between Bristow Group Inc. and Sikorsky Aircraft Corporation. The
parties have been engaged in this litigation since 2019. Phase one
of trial commenced in August 2023 before the matter was transferred
to this Judge. Phase two of trial commenced on April 22, 2024. On
that date, Sikorsky's attorney and its principal witness made false
statements to the Court. This adversary proceeding has been abated
for Bristow to pursue its sanctions motion.
Bristow and Sikorsky have done business together for 50 years.
Bristow operates helicopters and other aircraft in twenty
countries. Sikorsky manufactures helicopters. Bristow has purchased
helicopters from Sikorsky for both search and rescue and oil and
gas services.
In 2012, the parties entered a sales agreement for ten helicopters,
with an option for Bristow to purchase an additional sixteen
helicopters.
On July 1, 2014, Bristow notified Sikorsky it would exercise the
sixth option ("Helicopter 16") on July 1, 2014. Helicopter 16's
originally planned final delivery date was April 2015.
Neither final delivery nor a tender of final delivery of Helicopter
16 was made by Sikorsky. Bristow seeks the return of the $11
million deposit.
On April 22, 2024, Gretchen Maton testified as a fact witness at
trial. Maton is a licensed attorney in Connecticut and New York.
Maton worked for Sikorsky from February 2010 to April 2021. She
began in an in-house counsel role and became Director of Contracts
in 2018. She oversaw the drafting of Amendment 21 and the 2018
letters when the alleged breach of the 2012 Agreement occurred.
Bristow seeks an order requiring production of documents claimed by
Sikorsky to be protected by attorney-client and work product
privileges.
Bristow argues that the crime-fraud exception applies to the
privileged documents that it seeks in discovery for its sanctions
motion. Bristow alleges that Sikorsky -- through Maton's trial
testimony -- committed the following wrongdoings: fraud on the
court, perjury, and subornation of perjury. Any of these
wrongdoings, if properly demonstrated, is sufficiently serious to
defeat privilege.
The Court has completed its in camera review of those documents. It
orders production of certain documents reviewed in camera.
Based on set of facts and documents reviewed in camera, the Court
finds that there is sufficient evidence of wrongdoing to pierce the
privileges over certain documents under the crime-fraud exception.
The Court also finds Maton repeatedly proffered contradictory
testimony over material factual issues and then falsely testified
about the timing of her change of heart. Mr. White, Sikorsky's
counsel, made a false representation, which Sikorsky admits five
months after trial, to the Court. Under the circumstances, these
misrepresentations are sufficient evidence of some fraudulent
conduct.
Judge Isgur concludes that Bristow is allowed to pursue its
sanctions claim without discovery roadblocks on the issues it has
identified. Both attorney-client privilege and work product
protection are waived for documents relating to the timing and
circumstances surrounding Maton's change in testimony.
A copy of the Court's decision dated March 25, 2025, is available
at https://urlcurt.com/u?l=bLa8LE from PacerMonitor.com.
About Bristow Group
Bristow Group Inc. (OTC: BRSWQ) -- http://www.bristowgroup.com/--
provides industrial aviation and charter services to offshore
energy companies in Europe, Africa, the Americas, and the Asia
Pacific. It also provides search and rescue services for
governmental agencies and the oil and gas industry. Headquartered
in Houston, Bristow Group employs 3,000 individuals around the
world.
Bristow Group and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 19-32713) on
May 11, 2019. As of Sept. 30, 2018, the Debtors had $2.861 billion
in assets and $1.886 billion in liabilities.
The cases are assigned to Judge David R. Jones.
The Debtors tapped Baker Botts LLP as bankruptcy counsel; Wachtell,
Lipton, Rosen & Katz as co-counsel with Baker Botts; Alvarez &
Marsal and Houlihan Lokey Capital, Inc., as financial advisors; and
Prime Clerk LLC as claims, noticing and solicitation agent.
Henry Hobbs Jr., the acting U.S. trustee for Region 7, appointed
seven creditors to serve on the official committee of unsecured
creditors in the Chapter 11 cases of Bristow Group Inc. and its
affiliates. The Committee selected Kramer Levin Naftalis & Frankel
LLP as its legal counsel. Porter Hedges LLP is the Committee's
local and conflicts counsel. Imperial Capital, LLC, is the
Committee's financial advisor, and Perella Weinberg Partners LP is
the investment banker.
BROOKFIELD PROPERTIES: Moody's Rates New $1.5BB Secured Loans 'B1'
------------------------------------------------------------------
Moody's Ratings assigned B1 ratings to Brookfield Properties Retail
Holding LLC's ("Brookfield Retail" or "the company") proposed new
$700 million senior secured revolving credit facility and $885
million senior secured tranche B term loan facility ("Term B
Loan"). The company's existing ratings, including the Ba3 Corporate
Family Rating and the stable outlook are unaffected by the Term B
Loan.
The company will use the net proceeds from the Term B Loan for
general corporate purposes, which will include the refinancing of
its existing Term B Loan and repayment of the outstanding balance
on the existing revolving credit facility.
RATINGS RATIONALE
Brookfield Retail's Ba3 CFR reflects its large and diversified
portfolio of primarily high-quality enclosed malls, solid operating
track record, and support from its parent companies, Brookfield
Property Partners L.P. (BPY) and Brookfield Corporation (A3
stable). Conversely, the rating is constrained by Brookfield
Retail's weak financial metrics, limited liquidity, and thin buffer
on its fixed charge coverage covenant.
The stable outlook reflects Moody's expectations that Brookfield
Retail will maintain strong operating performance and improve its
fixed charge coverage ratio via ongoing cost savings measures and
modest income growth. Moody's also expects that Brookfield Retail
would receive support from its parent companies if needed to avoid
a covenant breach.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade could be predicated on solid occupancy and
growing same-store cash NOI, as well as reducing net debt/EBITDA
below 11.0x and improving fixed charge coverage above 2.0x
(including its pro rata share of JVs). Maintaining ample liquidity
to meet near- and intermediate-term obligations could also support
a ratings upgrade.
Brookfield Retail's ratings could be downgraded if it were unable
to refinance upcoming recourse debt maturities at reasonable terms
or if capital support from its parents were needed to maintain
covenant compliance. Deterioration in operating performance or
weakening financing conditions could also cause downward rating
pressure. The company's ratings could also be downgraded if net
debt/EBITDA, including its pro-rata share of JVs, remains above
12.5x or if its fixed charge coverage drops below 1.2x.
Brookfield Properties Retail Holding LLC, a Delaware limited
liability company, through its subsidiaries and affiliates, is an
owner and operator of primarily Class A regional malls. As of
September 30, 2024, the company was the owner, either entirely or
with joint venture (JV) partners, of 104 retail properties in the
US.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in February 2024.
CANYON CREEK: Case Summary & 18 Unsecured Creditors
---------------------------------------------------
Debtor: Canyon Creek Villas LLC
541 Jefferson Avenue
Louisville, CO 80027
Business Description: Canyon Creek Villas LLC is a single asset
real estate debtor, as defined in 11 U.S.C.
Section 101(51B).
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
District of Colorado
Case No.: 25-11683
Judge: Hon. Kimberley H Tyson
Debtor's Counsel: Jeffrey A. Weinman, Esq.
ALLEN VELLONE WOLF HELFRICH & FACTOR, P.C.
1600 Stout Street
1900
Denver, CO 80202
Tel: 303-534-4499
Email: jweinman@allen-vellone.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Curtis McDonald as president.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/4JOJ2SA/Canyon_Creek_Villas_LLC__cobke-25-11683__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 18 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Apex Engineers, Inc. Engineering Work $14,625
1625 Locust St
Kansas City, MO 64108
2. Baker Constructors Construction $57,310
5660 Iris Parkway Work
Frederick, CO 80504
3. Blayde Becksted Labor, Services $16,433
Blayde Corporation Equipment
PO Box 121
Wellington, CO 80549
4. Bowman Consulting Consulting $5,843
Group, Ltd.
PO Box 748548
Atlanta, GA 30374
5. Creative West Labor & $44,823
Architects Materials
4400 Osage Drive
Boulder, CO 80303
6. CTL Thompson Engineering $8,370
7306 South Alton Way Consulting
Centennial, CO 80112
7. DAJ Design Architectural $3,183
922A Main Street Work
Louisville, CO 80027
8. Englewood Materials & $9,631
Winsupply Co. Goods Supplier
4701 Colorado Blvd
Ste A
Denver, CO 80216
9. Everest Mechanical Labor, Materials $174,390
1254 Sherman Drive & Services
#5
Longmont, CO 80501
10. Machine LLC Labor and $41,171
1014 Coffman Street Materials
Longmont, CO 80501
11. Mountain Navigation Inc. Materials, $12,819
1920 West Alameda Equipment
Avenue #207 Labor
Lakewood, CO 80226
12. Sierra Pacific Labor and $30,050
Industries, Inc. Materials
dba Sierra Pacific Windows
635 East 52nd
Avenue Suite 100
Denver, CO 80216
13. SteelGen LLC Labor, $17,673
PO Box 232 Services
Wellington, CO Materials
80549
14. Sunbelt Rentals Tools and $9,822
1275 West Mound Street Equipment
Columbus, OH 43223
15. Surround Architecture Architectural $62,916
900 Pearl Street Work
Suite 200
Boulder, CO 80302
16. The Sanitas Group Engineering $6,862
801 Main St Ste 130 Work
Louisville, CO 80027
17. TRH Interior Design Interior $17,740
1908 Pearl Street Design
Boulder, CO 80302 Consulting
18. Worldwide Labor and $11,790
Machinery, LTD Materials
2951 Chambers Road
Aurora, CO 80011
CHASE CUSTOM: Court Awards $7,552.20 in Fees to Jeffrey Zamboni
---------------------------------------------------------------
In the case captioned as JEFFREY P. ZAMBONI, Plaintiff/Defendant,
v. CHASE CUSTOM HOMES & FINANCE, INC., Defendant/Plaintiff, Adv.
Proc. No. 23-2002 (Bankr. D. Maine), Judge Peter G. Cary of the
United States Bankruptcy Court for the District of Maine awarded
$7,552.20 in attorney's fees to Jeffrey P. Zamboni.
Notwithstanding this Court's direction to narrowly tailor his
request for fees and costs to those incurred in connection with his
successful prosecution of his claim under Maine's Unfair Trade
Practices Act and defense of Chase Custom Homes & Finance, Inc.'s
claim under Maine's Prompt Payment Act, Mr. Zamboni seeks to
recover all but $25,075.50 of the $226,182 in fees and $71,191.00
in costs he incurred in connection with this litigation. He also
seeks to recover $4,531.95 in costs identified in the Bill of
Costs. He asserts that Chase's PPA Claim and the non-fee claims all
shared the same common core of facts and, therefore, that all of
the fees and costs are subject to recovery under 10 M.R.S.A.
1118(4).
This matter came before the Court on claims asserted by and between
Chase and Mr. Zamboni arising out of a home construction contract.
While the Court did find that Chase breached the construction
contract, it also found that Mr. Zamboni could reasonably have
avoided some of his home construction issues by being more diligent
in reviewing draft plans and contract terms. The Court also awarded
Chase damages equal to 70% of the contract price on its quantum
meruit claim after Mr. Zamboni refused to pay Chase any portion of
the contract price notwithstanding the substantial work Chase
performed prior to the breach. While he was awarded $231,903 on
his breach of contract and UTPA claims, the Court awarded
$218,152.90 to Chase for work that party had completed and for
which it had not been compensated by Mr. Zamboni.
Mr. Zamboni asserted six counts in his complaint; one of which was
the UTPA violation. Chase asserted four counts, including the PPA
Claim. While neither claim was heavily litigated in this case, Mr.
Zamboni did incur attorney fees in preparing his UTPA Claim and
answer the PPA Claim. After reviewing the fees and costs itemized
in the affidavit, the Court awards Mr. Zamboni $7,552.20 in fees,
representing 20% of the $37,756.00 in fees incurred in connection
with the research and drafting of his: (1) complaint; (2) answer to
Chase's counterclaims and complaint; (3) proposed findings of fact
and conclusions of law; and (4) response to Chase's proposed
findings of fact and conclusions of law. No costs shall be awarded
as the Court finds that those expenses are more appropriately
attributed to the non-fee claims.
A copy of the Court's decision dated March 25, 2025, is available
at https://urlcurt.com/u?l=ZTgLkT
About Chase Custom Homes & Finance
Chase Custom Homes & Finance, Inc. -- https://cchfi.com --
specializes in new home construction, home renovations and
remodeling in Portland, Maine.
Chase Custom Homes & Finance filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No.
23-20032) on Feb. 16, 2023. In the petition filed by Terina Chase
as authorized party, the Debtor reported between $10 million and
$50 million in both assets and liabilities.
Judge Michael A. Fagone oversees the case.
The Debtor tapped Bernstein Shur Sawyer & Nelson as legal counsel;
Purdy, Powers & Company, P.A. as accountant; and Windsor
Associates, LLC as financial advisor.
The U.S. Trustee for Region 1 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Marcus Clegg.
CINCH WIRELINE: Simmons Bank Wins Bid to Dismiss Bankruptcy Case
----------------------------------------------------------------
Chief Judge Craig A. Gargotta of the United States Bankruptcy Court
for the Western District of Texas granted Simmons Bank's motion to
dismiss the Chapter 7 bankruptcy case of Cinch Wireline Services,
LLC for lack of subject matter jurisdiction. Adversary No.
24-05011-cag is also dismissed for lack of subject matter
jurisdiction.
Cinch Wireline Services, LLC filed its chapter 7 petition on Dec.
13, 2023, without its schedules and statement of financial affairs.
John Patrick Lowe was appointed chapter 7 trustee in the case. Tim
Pollard signed the petition as Executive Vice President. Debtor
filed its original Schedules and Statement of Financial Affairs on
Dec. 27, 2023. Pollard signed the original Schedules and SOFA which
indicated no assets and liabilities of $2,700,414.86. Debtor
indicated no income or transfers of property. Question 28 of the
SOFA indicated that Cinch Energy Services, LLC is the parent
company of Debtor and owns 100% of Debtor. Frank Thomas Shumate,
Jr. and Mark W. Lopez are listed as owners of CES without a
description of their percentage
ownership in CES.
The first meeting of creditors was set for Jan. 16, 2024. Pollard
stated that he was authorized to file the bankruptcy case. He
testified that there was a meeting of owners consisting of himself,
Shumate, and Lopez in which all three owners authorized the filing
of Debtor's chapter 7 petition. Pollard testified that Debtor had
no assets and leased assets from other entities, including CES, to
conduct its business. He stated that the primary reason Debtor
filed for chapter 7 relief was to discharge its liabilities from
lawsuits in which it was a defendant.
Trustee alleges, inter alia, that Shumate dissipated assets of
Debtor by fraudulent transfers to other entities that Shumate
controls, including two entities that are in bankruptcy in this
Court WFO, LLC and Superior Ready Mix of Texas, LLC.
Trustee alleges that CES is in possession of Debtor assets and has
been, or is still, operating with the use of Debtor assets.
Briefly, Debtor's business was providing oil and gas services that
included the acquisition of seismic data to discover oil and gas
fields. Debtor's trucks are expensive, roughly $250,000 per
vehicle, and Trustee asserts that Debtor had income in the years
prior to the filing of the chapter 7 petition in the millions of
dollars. Debtor's assets also included a customer base, accounts
receivable, other equipment, and good will. Nonetheless, as stated
herein, Debtor is devoid of any assets and operations.
In late March 2024, Trustee received credible evidence through a
whistleblower that CES, or a holding company for CES -- CES
Holdings, was using Debtor assets. Further, it was alleged that
Debtor had a yard located in Corpus Christi, in which Shumate
through one or several of his entities, was conducting operations
in the name of Cinch Wireline. When Trustee attempted to
investigate these allegations, the whistleblower alleged that the
CPA for Debtor and other Shumate controlled entities, Loretta
Higgins, instructed employees of CWS/CES to destroy the books and
records of Debtor. The whistleblower also alleged that operations
ceased at Corpus Christi yard and were transferred to Midland,
Texas under the pseudonym of CES Holdings. As such Trustee filed an
adversary proceeding (24-05011-cag) against multiple Shumate
controlled entities, Pollard, and Shumate, seeking injunctive
relief, declaratory relief, and recovery of assets under chapter 5
of the Bankruptcy Code.
Defendants in Adv. No. 24-05011 Simmons Bank, Los Cabos Ranch, Mark
Lopez, Tim Pollard, Tim Pollard Construction, 17 Main, LLC, and CES
favor dismissal. Trustee Lowe, Debtor, and interested parties
Michael Mendietta, Justin Sprencel, and Mary Kay McGuffin ask the
Court to retain jurisdiction over the Cinch Wireline, LLC
bankruptcy, or, if the case is dismissed; retain jurisdiction over
Adv. No. 24-05011.
Parties arguing for dismissal maintain that a bankruptcy case must
have the requisite authorization to file the petition on the date
of the filing of the petition. These parties assert that Pollard
did not have the proper authority to execute and file the petition.
As a result, without proper authorization to file the petition, the
Court cannot exercise its subject matter jurisdiction over the
case. Moreover, without the requisite authority at the time of the
filing of the petition, ratification of the act cannot cure this
"fatal defect." Parties favoring dismissal argue that without a
properly authorized bankruptcy petition, the Court's subject matter
jurisdiction was not properly invoked. Therefore, without the
underlying subject matter jurisdiction in the main bankruptcy case,
the Court cannot have subject matter jurisdiction in the adversary
proceeding.
Parties arguing that the Court has subject matter jurisdiction
argue that the TBOC Sec. 101.056 allows ratification of a void or
voidable action, including a chapter 7 filed without the requisite
authority. The parties allege that because the main bankruptcy case
and related adversary proceeding have been pending for months, and
that no one previously objected, all parties have consented to the
chapter 7 petition by implied ratification. They also contend that
should the Court find that it does not have subject matter
jurisdiction over the bankruptcy case, it would be prejudicial to
creditors not to retain jurisdiction over Adv. No. 24-05011.
Simmons and Trustee argue that for the Court to have subject matter
jurisdiction over the Bankruptcy Case, Pollard must have been
properly authorized, pursuant to Texas law, to file the Petition
for Wireline -- at the time of filing.
The Court holds that based upon Supreme Court and Fifth Circuit
precedent, jurisdiction (absent the possibility of ratification) is
established at the time of the filing of the petition and subject
matter jurisdiction cannot be waived. Further, the Court has the
authority to raise it at any time during a case or proceeding.
The TBOC requires a majority of the members (determined per capita
-- i.e., one member, one vote -- not by percentage interest) of the
company to affirmatively vote (at a meeting with a quorum) to
approve an act of the company. The Dec. 13, 2023, Resolution shows
that Shumate, Lopez, and Pollard conducted a meeting to vote on
whether to file a bankruptcy. CES asserted in Adv. No. 24-05012
that CES and McGuffin are the members of Debtor as do the Secretary
of State records. Without McGuffin’s vote to approve the filing
of the chapter 7 petition, CES never constituted a majority of the
members of CWS. Therefore, CES, by itself -- under any of the three
scenarios -- did not have the authority under the TBOC to direct
Pollard to file the petition. As such, there was no actual
authority to file the chapter 7 petition, the Court concludes.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=HLFnKi from PacerMonitor.com.
Cinch Wireline Services, LLC sought relief under Chapter 7 of the
U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-51742) on
December 13, 2023. John Patrick Lowe is the Chapter 7 trustee.
COLLECTIVE SPEAKERS: Gets Final OK to Use Cash Collateral
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado granted
Collective Speakers, LLC final approval to use cash collateral.
The final order authorized the company to cash collateral in
accordance with its budget, with a 15% variance limit unless agreed
upon by secured creditors or ordered by the court.
As protection, secured creditors were granted post-petition liens
on accounts receivable and business income to cover any decrease in
the value of their collateral.
In addition, Collective Speakers was ordered to keep the secured
creditors' collateral insured.
The authorization remains in effect until the budget period ends;
the Chapter 11 case is dismissed or converted; or it is terminated
by the court.
About Collective Speakers LLC
Collective Speakers, LLC is a full-service speakers bureau
specializing in organizing impactful spoken word and lecture
events. In addition to event organization, Collective Speakers
offers coaching services. With over 27 years in the speaking
industry, the bureau provides speech coaching sessions and speech
writing services to help individuals enhance their speaking skills
and craft compelling presentations.
Collective Speakers filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D. Colo. Case No. 25-10783) on
February 14, 2025. In its petition, the Debtor reported total
assets of $25,000 and total liabilities of $1,956,440.
Judge Kimberley H. Tyson handles the case.
The Debtor is represented by:
Keri L. Riley, Esq.
Kutner Brinen Dickey Riley, P.C.
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Tel: 303-832-2400
Email: klr@kutnerlaw.com
CORNERSTONE BUILDING: Moody's Cuts CFR to 'B3', Outlook Stable
--------------------------------------------------------------
Moody's Ratings downgraded Cornerstone Building Brands, Inc.'s
corporate family rating to B3 from B2 and its probability of
default rating to B3-PD from B2-PD. Moody's further downgraded the
company's senior secured credit facility rating to B3 from B2,
senior secured notes rating to B3 from B2 and the senior unsecured
notes rating to Caa2 from Caa1. The rating outlook was changed to
stable from negative.
"The downgrade of the CFR to B3 reflects Moody's expectations of
continued operational underperformance in 2025 amid a challenging
demand environment within the repair and remodel and nonresidential
construction end markets," said Griselda Bisono, VP – Senior
Analyst at Moody's Ratings. Key credit metrics will modestly
improve but remain weak in 2025, including debt-to-EBITDA of about
7.7x and EBITA-to-interest expense coverage of 0.7x.
The stable outlook reflects Moody's expectations that Cornerstone
will maintain a solid liquidity profile, despite weaker operating
metrics, including ample revolver availability, cash on balance
sheet and a lack of near-term debt maturities.
RATINGS RATIONALE
Cornerstone's B3 CFR reflects the company's high debt leverage,
weak interest coverage and low margin profile. Moody's expects the
company's sales volume will continue to be negatively impacted by
weak remodeling demand, due in large part to low existing home sale
activity, as well as weak nonresidential construction activity.
While Moody's expects new residential construction activity to
modestly improve in 2025, it will not sufficiently offset weakness
in the company's other two end markets. This trend is further
exacerbated by the discretionary nature of the company's products
and consumer preference for lower-cost renovations. The effect of
tariffs on Cornerstone's operations, including the ability to pass
on increased costs and the impact that higher costs to consumers
has on demand for remodel activity creates additional downside
risk. Other factors considered in the rating include exposure to
cyclical end markets, particularly new construction, and the highly
competitive landscape in which Cornerstone operates, which can
result in reduced pricing power.
Moody's expects marginal improvement in EBITA margins to about 7%
by the end of 2025, up from about 6% in 2024. This considers the
full year contribution of earnings from acquisitions executed in
2024, as well as the benefit of improved operational efficiency and
reduced costs in manufacturing overhead, SG&A and procurement.
Additionally, Moody's recognizes the company's position as a
leading manufacturer of windows and siding, with a national
presence and an expansive portfolio of products and brands in North
America.
Moody's expects the company to maintain adequate liquidity over the
next 18 months, despite Moody's forecasts for negative free cash
flow 2025 due to weak cash from operations. Moody's assessments of
Cornerstone's liquidity incorporates ample availability on the
company's $1.037 billion ABL and cash flow facilities, no near-term
maturities and weakened but sufficient cushion on financial
covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company sustains improved
credit metrics, including total debt-to-EBITDA below 5.5x, adjusted
EBITA-to-interest expense above 2.0x and free cash flow to debt
above 5.0%. An upgrade would also require maintenance of good
liquidity and a demonstrated commitment to modest leverage.
The ratings could be downgraded if the company experiences a
deterioration in liquidity, including consistent negative free cash
flow and heavy reliance on the revolving credit facilities.
Maintenance of weak credit metrics would also place downward
pressure on the rating, including total debt-to-EBITDA maintained
above 6.5x and adjusted EBITA-to-interest expense below 1.0x.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Headquartered in Cary, North Carolina, Cornerstone Building Brands,
Inc., is the largest manufacturer of exterior building products for
residential and low-rise non-residential buildings in North
America. Following the going private transaction, Cornerstone
became a privately owned business by Clayton, Dubilier and Rice.
CREDITO REAL: Moves Forward With Bank Loans, Notes Cancellation
---------------------------------------------------------------
Valentine Hilaire of Bloomberg Law reports that Credito Real has
completed payments as part of its restructuring plan, the company
stated.
A trust has been established, and the firm is in the final stages
of transferring assets for sale, with proceeds allocated to
unsecured creditors.
The Troubled Company Reporter, citing Angelica Serrano-Roman of
Bloomberg Law, previously reported that a Delaware bankruptcy judge
has agreed to recognize the foreign restructuring of Mexican lender
Creditor Real SAB de CV, despite objections citing last 2024's US
Supreme Court ruling that invalidated nonconsensual liability
releases.
Judge Thomas M. Horan of the US Bankruptcy Court for the District
of Delaware announced during a Tuesday, March 11, 2025, hearing
that he would approve the cross-border plan under Chapter 15 of the
US Bankruptcy Code, which addresses foreign restructurings with US
connections.
The judge granted recognition of the plans, which includes
liability releases for nonbankrupt third parties, despite concerns
raised by two US federal agencies referencing the Supreme Court's
decision.
About Credito Real SAB
Credito Real SAB de CV SOFOM ENR is a Mexico-based company that
provides consumer financing. Credito is Mexico's biggest payroll
lender and second largest non-bank lender after Real Unifin.
Credito Real provides loans, either by providing direct financing
to consumers or by establishing financing programs with consumer
financing dealers that sell to Credito Real the collection rights
from consumer financing products. It also provides financing
directly to individuals that are employed by corporations with
payroll deduction agreements with consumer financing dealers
authorized by Credito Real. Credito Real operates through a number
of subsidiaries, including AFS Acceptance LLC.
Three alleged creditors signed a petition to send Credito Real to
Chapter 11 bankruptcy on June 22, 2022 (Bankr. S.D.N.Y. Case No.
22-10842). Institutional Multiple Investment Fund LLC, of Boston,
Massachusetts; Banco Monex, S.A., of Mexico, and Solitaire Fund, of
Liechtenstein, who claim to own an aggregate $8 million of
unsecured bond debt, signed the involuntary Chapter 11 petition.
David H. Botter, Esq., at Akin Gump Strauss Hauer & Feld LLP is
advising the three bondholders.
Despite efforts by bondholders to force the company to pursue a
Chapter 11 restructuring in the U.S., the Debtor opted to pursue
proceedings in Mexico instead. On June 28, 2022, Angel Francisco
Romanos Berrondo, one of the Debtor's shareholders and the former
CEO of Credito Real, filed a petition, in his capacity as a
shareholder, with the Mexican Court seeking to commence the
Mexican Liquidation Proceeding.
On June 30, 2022, the Mexican Court entered an order commencing the
dissolution and liquidation proceedings for the Company and
appointing Mr. Fernando Alonso-de-Florida Rivero as the Mexican
Liquidator.
The liquidator for Credito Real filed a Chapter 15 bankruptcy
petition (Bankr. D. Del. Case No. 22-10630) on July 14, 2022, to
seek U.S. recognition of the Mexican proceedings. The petition was
signed by Robert Wagstaff, the foreign representative of the
liquidator. Richards, Layton & Finger, P.A., led by John
HenryKnight, is counsel in the U.S. case.
DAWNSTAR CORPORATION: Unsecureds to Split $126K over 36 Months
--------------------------------------------------------------
Dawnstar Corporation filed with the U.S. Bankruptcy Court for the
District of Idaho a Subchapter V Plan of Reorganization dated March
6, 2025.
The Debtor is a trucking company that primarily leases trucking
equipment to other businesses to use in the trucking industry. The
Debtor owns a variety of trucking equipment including trucks,
trailers, and vans. Initially, the Debtor's primary customer was
Brothers Grimm Inc., who the majority of Dawnstar's equipment was
leased to.
Dawnstar experienced cash flow issues when their primary customer,
Brothers Grimm Inc., suddenly lost its insurance coverage and
stopped operating. Dawnstar's equipment was left scattered
throughout the United States and the Debtor was not receiving lease
payments for the equipment.
Due to the lack of lease income and the difficulty locating the
various pieces of equipment the Debtor experience significant cash
flow issues. The Debtor filed for Chapter 11 Bankruptcy relief in
order to preserve the value of the property of the Estate while
locating and releasing the equipment to new customers.
Class 12 consists of all unsecured claims against the Debtor, as
scheduled and asserted in filed and allowed Proofs of Claim,
together with any allowed amounts owed to the creditors in Class
11. This class will split a monthly payment on a pro rata basis
based on the allowed amount of the creditors' claims. During months
1 through 12 of the plan the monthly payment amount will be $500.00
per month. During months 13 through 24 of the plan the monthly
payment amount will be $1,000.00 per month. During months 25
through 36 of the plan the monthly payment amount will be $2,000.00
per month.
In addition, in month 36, the Debtor will make an additional
payment of 50% of the ending cash balance on the last day of month
36 (projected on Exhibit B to be approximately $72,254.99).
(Assuming this remaining cash balance is as projected, the Debtor
anticipates total payments to this group of creditors in the amount
of $126,254.99 over the term of the plan).
The Debtor shall retain all assets and income, except as outlined
in this Plan.
The Debtor intends to fund its plan through regular monthly
payments to creditors. These monthly payments will be made from the
lease income the Debtor receives from the operation of its
business.
The Debtor's financial projections show that the Debtor will have
an aggregate annual average cash flow, after paying operating
expenses and post-confirmation taxes, to pay unsecured creditors a
return of approximately 27% of their claims. The Debtor anticipates
the final payment being made 36 months after the Effective Date of
the Plan.
A full-text copy of the Subchapter V Plan dated March 6, 2025 is
available at https://urlcurt.com/u?l=7Z3VsK from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Matthew T. Christensen, Esq.
Suzanne Jaderholm, Esq.
Johnson May
199 N. Capitol Blvd., Suite 200
Boise, ID 83702
Telephone: (208) 384-8588
Facsimile: (208) 629-2157
Email: mtc@johnsonmaylaw.com
About Dawnstar Corporation
Dawnstar Corporation is engaged in the automotive equipment rental
and leasing business.
Dawnstar Corporation filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No.
24-00825) on Dec. 6, 2024, listing $1,264,438 in total assets and
$1,203,273 in liabilities. The petition was signed by Theodore
Walker Wills as president.
Judge Benjamin P. Hursh presides over the case.
Matthew Christensen, Esq. at JOHNSON MAY, is the Debtor's counsel.
DEALER SALES: Court Extends Cash Collateral Access to April 22
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division extended Dealer Sales Solutions LLC's authority to
use cash collateral from March 11 to April 22.
The interim order authorized the company to use cash collateral to
pay the expenses set forth in its budget, with a 10% variance
allowed, which shows total operating expenses of $69,759 for
April.
The U.S. Small Business Administration, a senior creditor, and
SellersFunding Corp. will have a post-petition lien on the cash
collateral with the same validity, priority, extent, and value as
their respective pre-bankruptcy liens.
As additional protection, SellersFunding will continue to receive
monthly payments of $3,113.75 until the loan is paid in full or
until confirmation of a Chapter 11 plan.
A continued preliminary hearing is scheduled for April 22, 2025.
About Dealer Sales Solutions
Dealer Sales Solutions LLC is primarily engaged in the sale of
motor vehicle supplies, accessories, tools, equipment, and new
motor vehicle parts.
Dealer Sales Solutions sought relief under Subchapter V of Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-06734)
on December 11, 2024, with total assets of $457,160 and total
liabilities of $2,890,604. Daniel A. Rowland, chief executive
officer, signed the petition.
Judge Grace E. Robson oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC is the Debtor's
legal counsel.
Secured creditor SellersFunding Corp. is represented by:
Alan C. Hochheiser, Esq.
Maurice Wutscher, LLP
23611 Chagrin Blvd., Suite 207
Beachwood, OH 44122
Phone: (216) 220-1129
Fax: (216) 472-8510
ahochheiser@mauricewutscher.com
DENNIS A. PERRY: Creditors' Appeal of Plan Confirmation Dismissed
-----------------------------------------------------------------
Chief Judge Nannette Jolivette Brown of the United States District
Court for the Eastern District of Louisiana granted Dennis A.
Perry's motion to dismiss the appeal filed by Dr. William Alden,
Perry Associates, LLC, Crescent City Property Redevelopment
Association, LLC, Crescent City Medical Services, Inc., Private
Connection Auto, LLC, 4330 State Street Drive, LLC, and 1100 South
Jefferson Davis Parkway, LLC from the April 18, 2024 Order of the
United States Bankruptcy Court the Eastern District of Louisiana
approving a plan of reorganization in debtor's bankruptcy case. The
instant appeal is dismissed as moot.
The confirmed plan provides that the creditors shall be entitled to
receive excess proceeds from the sale of certain properties and
that the subchapter V trustee shall remain in place to complete the
sale of the three joint venture properties as previously ordered by
the Bankruptcy Court.
Appellants raise two issues in this appeal regarding the
Confirmation Order. They argue the confirmation of Perry's plan of
reorganization was premature given the pendency of the other
appeals. They also point out that the Bankruptcy Court reduced
their claims from over $900,000 to $18,700.28 Appellants contend
that the Bankruptcy Court disallowed recovery of the payoffs for
delinquent mortgages in the amount of $317,774.54 and disallowed
$350,143.05 in funds spent to maintain and improve the properties.
They argue the Bankruptcy Court erred in disallowing these amounts
because they were not disputed by Perry. They contend the
Confirmation Order includes no such provision and instead allows
Perry to maintain possession of substantial moveable and immovable
assets. According to Appellants, Perry's proposal of a plan that
ignores undisputed debts was not made in good faith as required by
11 USC Sec. 1129(a)(3).
Perry argues the appeal should be dismissed and/or denied as
equitably moot. He points out that Appellants failed to obtain a
stay of the Confirmation Order, and the Plan has been substantially
consummated. He also argues that third parties have relied on the
finality of the plan.
Perry also asserts the Confirmation Order was not premature.
To determine whether this appeal is moot, the District Court must
examine the following three
factors:
(1) whether a stay has been obtained,
(2) whether the plan has been substantially consummated, and
(3) whether the relief requested would affect either the rights
of parties not before the court or the success of the plan.
Judge Brown holds tha the Appellants have not responded to Perry's
argument that this appeal is equitably moot. Appellants failed to
obtain a stay of the Confirmation Order, and the Plan has been
substantially consummated. Reversing the Confirmation Order at this
point would affect the rights of parties not before this Court.
Therefore, all three factors weigh in favor of finding this appeal
moot. Additionally, since the filing of this appeal, the Bankruptcy
Court has ruled on outstanding damages issues, and Appellants have
filed two new notices of appeal related to that ruling. This
development further demonstrates the mootness of the instant
appeal, which relates only to the Confirmation Order. The issues
are more properly addressed in the substantive appeals. If the
Bankruptcy Court's rulings are later reversed, the Plan can be
modified to increase the percentage payout received by Appellants.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=KVm3NQ from PacerMonitor.com.
Dennis A. Perry filed for Chapter 11 bankruptcy protection (Bankr.
E.D. La. Case No. 20-11986) on November 30, 2020, listing under $1
million in both assets and liabilities.
The Debtor is represented by Robin DeLeo, Esq.
DICK'S AUTOMOTIVE: Plan Exclusivity Period Extended to July 16
--------------------------------------------------------------
Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the
Northern District of California extended Dick's Automotive
Transport, Inc.'s exclusive periods to file a plan of
reorganization and obtain acceptance thereof to July 16 and
September 16, 2025, respectively.
As shared by Troubled Company Reporter, the Debtor filed this
Bankruptcy Case to reorganize its financial affairs pursuant to a
plan of reorganization that will allow the business to continue
operations, pay its employees, and pay its general unsecured
claims. The Debtor does business as Dick's Automotive Transport,
which was founded by Richard "Dick" Sgarlato in 1957.
The Debtor is prosecuting this Chapter 11 case. Specifically, the
Debtor has successfully brought and prosecuted its first day
motions, its application to employ professionals, its first and
second monthly operating reports, and obtained orders valuing the
collateral of three different Merchant Cash Advance lenders at
zero. The Debtor is working to improve operating revenue and
expects to cut rent when one of the two properties from which it
operates is sold and it consolidates its business on a single
property.
The Debtor expects to propose an earn-out plan and commit its net
income for 5 years to pay a dividend to unsecured creditors after
payments to administrative, secured and priority claims. The Debtor
anticipates approximately $80,000 in Employee Retention Credits
from the Internal Revenue Service will become available by the time
a plan is filed.
Dick's Automotive Transport, Inc. is represented by:
Robert G. Harris, Esq.
Binder Malter Harris & Rome-Banks LLP
2775 Park Avenue
Santa Clara, CA 95050
Telephone: (408) 295-1700
Email: rob@bindermalter.com
About Dick's Automotive Transport
Dick's Automotive Transport, Inc., sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 24-51752)
on Nov. 18, 2024, with $1 million to $10 million in both assets and
liabilities.
Judge M. Elaine Hammond oversees the case.
The Debtor tapped Robert G. Harris, Esq., at the Law Offices of
Binder and Malter as counsel and Barry Drake at Drake Business
Services Inc. as accountant.
DMCC 26TH AVE: Hearing Today on Bid to Use Cash Collateral
----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida is set
to hold a hearing today to consider another extension of DMCC 26th
Ave, LLC's authority to use cash collateral.
The court's previous order authorized DMCC and its affiliates to
use cash collateral for the period from March 12 to April 1.
The order entered on March 20 granted Wilmington Trust, N.A. and
other secured creditors post-petition liens on cash collateral to
the same extent and with the same validity and priority as their
pre-bankruptcy liens. It also ordered the payment of $53,000 to
Wilmington Trust as protection.
About DMCC 26th Ave LLC
DMCC 26th Ave LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-03657) with $500,001
to $1 million in assets and $500,001 to $1 million in liabilities.
Judge Hon. Jason A Burgess oversees the case.
The Debtor is represented by:
Justin M. Luna, Esq.
Latham, Luna, Eden & Beaudine, LLP
Tel: 407-481-5800
Email: jluna@lathamluna.com
DUN & BRADSTREET: Moody's Puts 'B1' CFR Under Review for Downgrade
------------------------------------------------------------------
Moody's Ratings has placed Dun & Bradstreet Holdings, Inc.'s (DNB)
credit ratings under review for downgrade, including the company's
B1 corporate family rating and B1-PD probability of default rating.
Concurrently, Moody's placed the B1 senior secured first lien bank
credit facility ratings and B3 senior unsecured notes rating, both
issued by The Dun & Bradstreet Corporation (DNB OpCo) operating
subsidiary, under review for downgrade. The outlooks for both DNB
and DNB OpCo are ratings under review and previously were stable
while DNB's speculative grade liquidity ("SGL") SGL-1 rating
remains unchanged. The company is a provider of trade credit as
well as commercial data and analytic products to businesses
worldwide.
The review was prompted by the company's 24 March 2025 announcement
that DNB has entered into a definitive agreement to be acquired by
affiliates of Clearlake Capital Group, L.P. ("Clearlake") [1] in a
transaction valued at $7.7 billion, including outstanding debt,
with an equity value of $4.1 billion. The transaction, which has
been unanimously approved by DNB's Board of Directors, is expected
to close in the third quarter of 2025, subject to shareholder and
regulatory approvals as well as a 30 day "go-shop" period, during
which DNB will actively solicit, evaluate, and potentially enter
into negotiations with other parties that submit alternative
proposals. Details relating to the financing of this purchase have
not yet been fully disclosed, and DNB's future capital structure is
uncertain, but Moody's believe that the company's pro forma
financial strategies, a key ESG consideration, could become more
aggressive.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATING
Excluding the review, DNB's B1 CFR is principally constrained by
the company's high debt-to-EBITDA of approximately 5x (based on
Moody's calculations) as of December 31, 2024. Additionally, DNB's
credit profile is negatively impacted by corporate governance risk
given the company's somewhat concentrated equity ownership, the
limited independence of its board, and potentially aggressive
financial policies including debt financed acquisitions and share
repurchases. Incremental risk incorporated in DNB's credit profile
also stems from the highly competitive market in which the company
operates. Established peers with lower costs and larger scale and
new entrants capitalizing on technological innovation present a
potential threat to DNB's market position. The company's credit
profile is supported by its very long operating history, strong
brand recognition within its target markets, and established
long-term relationships with a large number of diverse customers.
Additionally, the company's credit quality is bolstered by a
largely subscription-oriented sales model that provides a
predictable revenue base while ongoing cost reduction initiatives
drive gradual expansion of DNB's strong margins and improved annual
free cash flow generation approaching 10% of total debt over the
next 12-18 months.
Moody's reviews will focus on DNB's final pro forma capital
structure, financial strategies, liquidity profile, as well as the
company's financial and operating strategies.
Factors that could lead to an upgrade or downgrade of the ratings
will be updated once the review is completed. Prior to the review,
Moody's noted that the ratings could be upgraded if Moody's
anticipates DNB will continue to grow revenues organically, sustain
strong profitability margins, maintain healthy free cash flow and
liquidity, maintain debt-to-EBITDA below 4x and adhere to
conservative financial strategies while reducing equity ownership
concentration. Moody's also noted that the ratings could be
downgraded if DNB experiences a deterioration in operating or
financial performance or adopts more aggressive financial policies,
resulting in debt/EBITDA remaining above 5x.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Founded in 1841 and headquartered in Jacksonville, Florida, DNB is
a provider of trade credit and commercial data and analytic
products. Although a public company, the equity ownership is still
concentrated among affiliates of private equity investors Cannae
Holdings (Cannae) and Thomas H. Lee Partners, L.P. (THL) which hold
over 20% of the company's stock. Moody's expects revenues to
approximate $2.5 billion in 2025.
EMPLOYBRIDGE HOLDING: Moody's Cuts CFR to 'Caa2', Outlook Stable
----------------------------------------------------------------
Moody's Ratings downgraded EmployBridge Holding Company's
("EmployBridge") corporate family rating to Caa2 from Caa1
following a debt exchange (the exchange or transaction).
Concurrently, Moody's downgraded the Probability of Default Rating
to D-PD from Caa1-PD to reflect Moody's views that the transaction
was considered a distressed exchange, which is a default under
Moody's definitions. The PDR will be upgraded to Caa2-PD from D-PD
in a few business days. In addition, Moody's assigned Caa2 ratings
to the company's newly issued $294 million backed senior secured
first lien first out ("FLFO") term loan B due 2030 and $100 million
backed senior secured first out delayed draw term loan ("New DDTL")
due 2030, and a Ca rating to the new approximately $846 million
backed senior secured first lien second out ("FLSO") term loan B
due 2030. The new capital structure also includes a $360 million
asset-based revolver ("ABL Revolver") and a $30 million first in
last out ("New FILO") term loan that are unrated. The outlook
changed to stable from negative.
The new debt issued replaces the company's previous debt
obligations which included an approximately $895 million first-lien
term loan due 2028, a $360 million ABL revolver due 2027 and a $35
million first in last out term loan due 2027. Moody's have
withdrawn the Caa3 rating of the backed senior secured term loan B.
As a result of the transaction, gross debt increased by about $36
million, implying leverage of over 10x based on Moody's expected FY
2024 EBITDA. EmployBridge is a Georgia-based provider of temporary
and contract staffing services, mainly in the light industrial
space.
These rating actions reflect the realization of high governance
risks (as indicated in the company's CIS-5 Credit Impact Score and
G-5 Governance Issuer Profile Score) including EmployBridge's
continued high risk of default and Moody's concerns that the
current capital structure is unsustainable through business cycles.
The company continues to sustain very high debt leverage, which
Moody's anticipates will remain above 10x (Moody's-adjusted).
Moody's also expects continued negative free cash flow over the
next 12-18 months and a weakening liquidity profile. While the
exchange has pushed maturities out to 2029 and 2030 and adds
liquidity in the form of new money, liquidity is just adequate and
Moody's expects business conditions to remain challenged for the
next 12 months. Thus, Moody's believes there remains a high
probability of another default event if conditions do not improve
in in the next several quarters.
RATINGS RATIONALE
EmployBridge's Caa2 CFR reflects the company's high debt to EBITDA
leverage of over 10.0x as of the September 30, 2024, which Moody's
expects will remain elevated over the next 18 months. Moody's
expects revenue to be flat in 2025 as hiring volumes remain subdued
due to economic uncertainty. The rating also considers Moody's
views of EmployBridge's modest profitability, with EBITDA margins
likely to be below 4%, which is low compared to some other
temporary staffing companies. Moody's believes free cash flow to
debt will be negative this year as the company continues to incur
restructuring costs and growth remains muted. Free cash flow will
be sensitive to changes in working capital. The staffing industry
is exposed to macroeconomic conditions that can result in
substantial revenue and earnings swings, increasing uncertainty
around future performance and credit metrics. Given the thin margin
profile of the company and concentration in the light industrial
segment, and geographical concentration in the US, EmployBridge's
credit profile is more sensitive to economic cycles compared to
larger global and more diversified competitors. The staffing
industry is mature and highly competitive with several
significantly larger staffing companies as well as established
niche players. However, Moody's believes that over the long term
secular trends towards greater workforce outsourcing remain
supportive of the company.
All financial metrics cited reflect Moody's standard adjustments.
EmployBridge's credit profile is supported by the company's
competitive size and national branch network, enabling the company
to serve national multi-site clients and to invest in technology
and talent. The company has a diverse customer base but there is
concentration in certain end markets such as distribution and
logistics, food services, autos and retail, which tend to be very
cyclical. However, revenue concentration is with a high-quality
roster of large logistics and light-manufacturing-related
companies. Moreover, EmployBridge is growing its on-site presence
at many of its largest clients' facilities and also increasing its
digital channel to source talent and fill positions, which Moody's
anticipates will increase client retention and establish stronger
competitive barriers over time.
Moody's considers EmployBridge's liquidity profile to be adequate.
Liquidity consists of the new $360 million ABL revolver due 2029
that will have availability of $207 million at the close of the
transaction after deducting capacity used by letters of credit, the
$100 million New DDTL and cash on hand of approximately $50
million. The ABL revolver is subject to a borrowing base that
currently is below the notional amount of $360 million. The company
also has a $160 million letter of credit facility that supports its
workers' compensation insurance program. EmployBridge's cash flow
is seasonal, with working capital typically decreasing in the first
fiscal quarter, thereby driving positive free cash flow, and then
building throughout the course of the rest of the year, driving low
or negative free cash flow. Given thin EBITDA margins and low capex
requirements, working capital is a significant determinant of
overall cash flow. There are no financial covenants applicable to
the new term loans. The ABL is subject to a springing minimum fixed
charge coverage ratio (as defined in the loan documentation) of at
least 1x time when the availability is less than the greater of (i)
12.5% of the lesser of the borrowing base and the line cap and (ii)
$36 million.
The ratings for EmployBridge's debt instruments reflect both the
overall probability of default rating and the loss given default
assessment of the individual debt instruments. The Caa2 ratings on
the new $294 million FLFO term loan due January 2030 and $100
million New DDTL due January 2030 is the same as EmployBridge's
Caa2 CFR, reflecting the facilities' relative size and priority
position in the capital structure ahead of the new approximately
$846 million FLSO term loan but junior to the new $360 million ABL
Revolver due October 2029 and $30 million New FILO term loan. The
FLFO term loan and New DDTL have effectively second priority lien
on all current assets (pledged on a first priority basis to the ABL
and FILO term loan) and first priority lien on all other property.
The instrument ratings of the new FLFO term loan and New DDTL
ratings take into account the asset-lite nature of the business.
The large receivables balance is pledged to the ABL revolver and
FILO term loan, which diminishes Moody's recovery expectations for
the FLFO and DDTL term loans in the event of default. The new FLSO
term loan is rated Ca, reflecting its junior position in the
capital structure. The first-lien term loans (FLFO and New DDTL)
have claim priority relative to the FLSO from the proceeds of any
default or bankruptcy-related liquidation.
The stable outlook reflects Moody's expectations for a challenging
business environment, little to no growth in revenue over the next
12 -18 months, EBITDA margins of less than 4% and debt to EBITDA to
remain elevated and over 10.0x. Free cash flow will be negative
given the large interest burden and ongoing costs related to
operational improvements.
The terms of the new credit facilities include the following:
Incremental pari passu debt capacity up to $50 million (with only
$25 million being incurred as priority first out debt). There is no
inside maturity sublimit.
The credit agreement prohibits the designation of unrestricted
subsidiaries, preventing collateral "leakage" to such subsidiaries.
No loan party may (subject to a $10 million exception): (i)
transfer of material property, including intellectual property, to
any non-loan party or affiliates of the company that are not
subsidiaries; or (ii) be designated as a non-loan party, if it
holds material property.
The credit agreement provides some limitations on up-tiering
transactions, requiring 66.67% lender consent for amendments that
subordinate or have the effect of subordinating the debt or liens,
unless such lenders can ratably participate in such priming debt,
which cannot exceed $100 million.
Amendments authorizing the incurrence of additional debt for the
purpose of influencing voting thresholds require 100% lender
consent.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if EmployBridge establishes a track
record of revenue growth and margin expansion, resulting in a
material contraction in debt-to-EBITDA, sustained positive free
cash flow, and continued improvement in the company's liquidity
profile.
EmployBridge's ratings could be downgraded if operating performance
trends are weaker than expected, debt-to-EBITDA increases, or
EmployBridge incurs sustained free cash flow deficits that result
in expectations of weakening liquidity. A downgrade would also be
possible if default risk rises, or Moody's perceives that the
recovery prospects in the event of default could deteriorate
further.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
EmployBridge, based in Atlanta, GA, is a provider of temporary and
contract staffing services through company owned and franchised
locations throughout the US The company offers temporary staffing,
temp-to-hire, and direct placement services and derives most of its
revenues from the placement of light industrial, transportation and
clerical staff. The company is controlled by affiliates of Apollo
Global Management, Inc. Moody's expects revenue of around $3.0
billion in FY 2024.
ENDO INC: Mallinckrodt Transaction No Impact on Moody's 'B2' CFR
----------------------------------------------------------------
Moody's Ratings said that the planned merger of Endo Inc., (parent
of Endo Finance Holdings, Inc. or "Endo" and Mallinckrodt plc
("Mallinckrodt"; unrated) will result in an increase in scale and
reduction of financial leverage relative to Endo's existing
profile. There is no change at this time to Endo's ratings
including the B2 Corporate Family Rating, B2-PD Probability of
Default Rating, Ba3 rating of senior secured super-priority
revolving credit facility, and B2 rating of the senior secured term
loan and backed senior secured notes. The outlook remains stable.
On March 13, Endo announced that it will be combining with
Mallinckrodt in a stock and cash merger. Under the terms of the
agreement, Mallinckrodt will continue as the holding company for
the combined business, and Endo will become a wholly-owned
subsidiary of Mallinckrodt. Endo's shareholders will own 49.9% of
the combined company, while Mallinckrodt shareholders will own
50.1%, for an implied pro forma enterprise value of $6.7 billion.
Endo's current debt is expected to remain outstanding, while
Mallinckrodt's existing senior secured term loans and senior
secured notes are expected to be refinanced. The transaction is
subject to shareholder and regulatory approvals and is expected to
close in the second half of 2025.
Over the next several months, as additional information becomes
available, Moody's will determine if the merger results in any
impact to Endo's existing credit ratings or outlook. For example,
more specific financing plans will become clearer. In addition,
Moody's anticipates greater details around plans to carve-out both
companies' generic pharmaceuticals businesses and Endo's sterile
injectables business into a separate business.
Moody's anticipates that positive aspects of the credit profile
will include increase in scale and diversification of combined
company's branded pharmaceuticals portfolio, and modest pro-forma
financial leverage at the close of the merger (with expected net
leverage of approximately 2.3x, on management's basis).
Furthermore, Moody's anticipates that earnings growth will be
supported by potential operational synergies with management
targeting $75 million of pre-tax operating synergies in 12 months
post close, growing to at least $150 million of annual pre-tax
synergies by the third year, driven by business function
integration and R&D savings.
However, factors likely to continue to constrain the ratings
include a reliance on a small number of products to drive growth
and a modest growth outlook overall. These factors may result in
ongoing appetite for acquisitions to supplement organic growth,
which could result in material increase in financial leverage
beyond the initial capital structure at time of the merger.
Endo is a specialty healthcare company offering branded and generic
pharmaceuticals. Endo's reported revenue for the fiscal year ended
December 31, 2024, was approximately $1.76 billion.
ENTECCO FILTER: Unsecureds to Split $50K in Liquidating Plan
------------------------------------------------------------
Entecco Filter Technology, Inc., submitted a First Amended
Disclosure Statement describing First Amended Chapter 11 Plan of
Liquidation dated March 4, 2025.
The Debtor operates as part of a global group of organizations
focused on clean air and filtration technologies. These
organizations operate in multiple countries, including Germany,
Austria, Poland, Romania, India, and the United States.
The Debtor, based in the United States since 2016, is one of the
group's key international subsidiaries. Because the Debtor believes
that its business is more valuable as a part of this global group
of organizations than it is on its own, the Debtor intends to
maximize the value of its assets by selling its business as a going
concern to its majority Equity Security Holder or an affiliate of
its majority Equity Security Holder. In particular, the Debtor's
majority Equity Security Holder is ENTECCOgroup GmbH & Co. KG
("ENTECCOgroup").
The Debtor anticipates that a new investor in ENTECCOgroup will
enable ENTECCOgroup or one of its affiliates to be able to purchase
the Debtor's business as a going concern on or before June 30, 2025
(the "Sale Deadline"), for a purchase price of at least
$400,000.00. The Sale of the Debtor's business as a going concern
shall be subject to approval of the Court. If the Sale of the
Debtor's business as a going concern does not close within ninety
days of the Sale Deadline for a purchase price of at least
$400,000.00, then the Debtor shall convert its case to a case under
Chapter 7 of the Bankruptcy Code.
The Debtor intends to fund the Plan with (i) the Available Cash
from a Court-approved Sale of its business as a going concern; and
(ii) any other assets of the Debtor that are not sold as part of
the Sale, including but not limited to Chapter 5 Actions, cash on
hand, and accounts receivable unrelated to projects assigned to the
buyer (collectively, the "Distribution Assets"). The Debtor
employed Iron Horse Auction Co., Inc. to value the Debtor's
physical assets.
The appraisal report lists the fair market value of the Debtor's
physical assets to be $285,000.00, the orderly liquidation value to
be $200,000.00, and the forced liquidation value to be $140,000.00.
With respect to intangible assets, the Debtor possesses a trademark
registration for EFLEKTOR and has filed a domestic as well as an
international patent application for an air deflector.
Class 4 is comprised of Allowed General Unsecured Claims and
deficiency Claims scheduled or as otherwise approved by the Court.
This Class also includes all Claims that are not otherwise
specifically classified by this Plan. These Claims shall include,
but not be limited to, Creditors whose Claims may arise out of the
rejection of executory contracts and Secured Creditors to the
extent that the Court or the terms of this Plan deems them to be
unsecured in whole or in part or to the extent that such Claim may
not be specifically dealt with in the treatment of a particular
Class or any of these.
In determining whether a Claim, which is otherwise allowable,
should be treated in this Class as opposed to any other Class in
this Plan, this Class is an inclusive one rather than exclusive.
Creditors have filed Proofs of Claim for General Unsecured Claims
in the amount of $13,766,476.37. The Debtor scheduled another
$2,916,642.94 in General Unsecured Claims, for a total General
Unsecured Claims pool of $16,683,119.31. However, the Debtor is
currently undergoing an analysis of these Claims and intends to
object to many of them.
Each Holder of a Class 4 Claim shall be paid, in full and final
satisfaction of such Claim, a Pro Rata share of the Remaining
Available Cash and any other assets of the Debtor that are not sold
as part of the Sale, including but not limited to Chapter 5
Actions, cash on hand, and accounts receivable unrelated to
projects assigned to the buyer. No Class 4 Claim shall be entitled
to any interest. At this time, the Debtor estimates that the Sale
will generate at least $50,000.00 to be shared by the Holders of
Class 4 Claims. Class 4 Claims are impaired under the Plan.
The Debtor shall fund the Plan with (i) the Available Cash from the
Court-approved Sale of its business as a going concern; and (ii)
any other assets of the Debtor that are not sold as part of the
Sale, including but not limited to Chapter 5 Actions, cash on hand,
and accounts receivable unrelated to projects assigned to the buyer
(collectively, the "Distribution Assets").
In the event that the Distribution Assets are not fully liquidated
as of the Effective Date of the Plan, the Liquidating Debtor (or
the Committee in the case of Chapter 5 Actions and other causes of
action) shall liquidate such assets as soon as reasonably
practicable after the Effective Date of the Plan.
A full-text copy of the First Amended Disclosure Statement dated
March 4, 2025 is available at https://urlcurt.com/u?l=rBmKGg from
PacerMonitor.com at no charge.
Bankruptcy Counsel for the Debtor:
Jennifer B. Lyday, Esq.
James Lanik, Esq.
Kylie Hamilton, Esq.
WALDREP WALL BABCOCK & BAILEY PLLC
3600 Glenwood, Suite 210
Raleigh, NC 27612
Telephone: (919) 589-7985
Email: notice@waldrepwall.com
About Entecco Filter Technology
Entecco Filter Technology, Inc., is a Delaware-based environmental
technology company, specializing in air purification systems and
filter products used in various industries.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D.N.C. Case No. 24-50707) with $1 million
to $10 million in both assets and liabilities. James David
Edgerton, president and chief executive officer, signed the
petition.
James C. Lanik, Esq., at Waldrep Wall Babcock & Bailey, PLLC,
serves as the Debtor's legal counsel.
ESPERANZA ELEMENTARY: S&P Rates 2025A/B Revenue Bonds 'BB'
----------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term rating to the Utah
Charter School Finance Authority's $10.9 million series 2025A and
$150,000 series 2025B charter school revenue bonds, issued for
Esperanza Elementary. The outlook is stable.
"The rating reflects our view of the school's small operating base
and limited potential for revenue growth, as operations are
currently at capacity and despite upcoming expansion plans,
management is targeting to grow enrollment close to the expanded
capacity within a year of completing the project," said S&P Global
Ratings credit analyst Sadie Mazzola.
S&P said, "The rating further reflects our view of the school's
somewhat elevated pro forma debt burden, as measured by its pro
forma debt-to-capitalization ratio of 88.5% and debt per student of
$20,500 based on fiscal 2024 audited results, as well as the risk,
as with all charter schools, that it could be closed for
nonperformance of its charter or for financial distress before
final maturity of the bonds, although the evergreen charter status
with the Utah State Board of Education partly mitigates this risk.
"The stable outlook reflects our expectation that Esperanza will
sustain current enrollment and demand metrics, positive operating
performance, and sufficient lease-adjusted maximum annual debt
service (MADS) coverage following the upcoming issuance.
"We could consider a negative rating action if the upcoming
expansion project costs more than currently anticipated or if
demand metrics weaken materially below current levels. Following
the planned series 2025 issuance, we would view negatively any
additional debt without a commensurate growth in resources or
material declines in liquidity.
"We could consider a positive rating action if the school
strengthens its liquidity position in line with higher-rated peers
while sustaining positive operating performance, sound
lease-adjusted MADS coverage, and stable demand metrics."
EURASIA LLC: Gets Final OK to Use Cash Collateral Until June 30
---------------------------------------------------------------
Eurasia, LLC received final approval from the U.S. Bankruptcy Court
for the District of Arizona to use cash collateral until June 30.
The order authorized the use of funds for ordinary business
expenses and insider compensation to Michael and Clarissa
Cottabarren as detailed in the court-approved monthly budgets.
Eurasia projects average monthly expenses of $24,697.50.
As protection, Expansion Capital Group, a secured creditor, was
granted a replacement lien on post-petition revenues to the same
extent and with the same priority and validity as its
pre-bankruptcy lien.
About Eurasia LLC
Eurasia, LLC is a furniture and home furnishings business in
Prescott, Ariz.
Eurasia filed Chapter 11 petition (Bankr. D. Ariz. Case No.
25-01515) on February 25, 2025, listing up to $50,000 in assets and
between $100,000 and $500,000 in liabilities. Jody Corrales, Esq.,
at Deconcini McDonald Yetwin & Lacy P.C. serves as Subchapter V
trustee.
Judge Paul Sala handles the case.
The Debtor is represented by:
Allan D. NewDelman, Esq.
Allan D. Newdelman, P.C.
80 East Columbus Avenue
Phoenix, AZ 85012
Tel: (602) 264-4550
Email: anewdelman@adnlaw.net
FAIR OFFER: Property Sale Proceeds to Fund Plan Payments
--------------------------------------------------------
Justin Cutler, Hiam Family Trust, and Connecting Capital
Investments, LLC (the "Plan Proponents"), each of whom is a secured
creditor, submitted a Disclosure Statement describing Plan of
Liquidation for Fair Offer Cash Now, Inc. dated March 4, 2025.
The Debtor is in the business of purchasing real property,
rehabilitating that property, and either selling or renting the
rehabilitated property.
According to the Debtor's Scheduled filed in this case, as of the
Petition Date the Debtor owned twenty-four parcels of property. The
rehabilitation of some of these properties were complete, and the
properties were being marketed for sale; other properties were in
the midst of being rehabilitated; still other properties were in an
unhabitable state as of the Petition Date.
In the months prior to filing this bankruptcy, the Debtor became
embroiled in disputes with most of its secured creditors. The
Debtor ceased making payments to most of its secured creditors
during the Summer of 2024. In response to the creditors' demands
for payment, the Debtor, through legal counsel, alleged that
creditors Justin Cutler, The Hiam Family Trust, and Connecting
Capital Investments, LLC had collected, and were continuing to
collect, interest from the Debtor at a usurious interest rate under
Tennessee law.
The Debtor's usury claims are disputed. The Debtor and those
secured creditors were unable to resolve these disputes, which led
to some of the creditors initiating foreclosure sales on the
Debtor's real estate. The bankruptcy was filed days before those
foreclosure sales in an apparent attempt to avoid the sale of the
Debtor's real estate.
According to the valuation provided in the Debtor's Schedules, the
total value of this estate’s assets available for distribution is
approximately $4,457,500.00. If the Litigation Claims have any
value, the Liquidating Trustee will recover that additional value
and distribute such assets pursuant to the terms of the Plan. The
total amount of all claims against this estate, including
administrative, priority, secured, and unsecured claims, is
approximately $4,260,217.04 plus fees, interest, and cost of
administration as they continue to accrue. Since the Plan is a plan
of liquidation, under either the Plan or a Chapter 7 liquidation,
all claims should receive the same distribution.
This Plan provides for four classes of secured claims; one class of
priority unsecured claims; one class of general unsecured claims;
and one class of the equity interests of the Debtor's principal.
Unsecured creditors holding allowed general unsecured claims will
receive pro rata distributions from the sale of Property and
liquidation of Litigation Claims. This Plan also provides for the
payment of administrative and priority claims.
Class 5 shall consist of all Allowed Priority Unsecured Claims.
These Allowed Claims will be paid in full upon the sale of the
Property. No interest will accrue on these Allowed Claims.
Class 6 shall consist of all Allowed General Unsecured Claims that
are not otherwise included in another Class herein, which shall be
Allowed Claims in the amounts set forth in the Trustee's Disclosure
Statement, unless reduced by Court order. These allowed Claims
shall be paid pro rata with other Allowed Claims in this Class upon
the sale of the Property and/or upon resolution by the Liquidating
Trustee of the Litigation Claims.
The distributions on account of Class 6 Claims is dependent upon
the net proceeds produced by the sale of Property, the resolution
of the Litigation Claims, and the amount of administrative expenses
incurred by the estate through the Effective Date. No interest will
accrue on these Allowed Claims. This Class is impaired.
The Debtor's principal, believed to be Casey Smotherman, will
retain ownership interests in the Debtor upon the Effective Date,
subject to the terms of this Plan and to the continuing authority
of the Trustee until this case is closed.
The Plan will be funded by the following:
* The Liquidating Trustee will continue funding the Plan
through the Debtor's rent collections and the Debtor's accrued cash
until sufficient capital has been raised to pay all claims in
full;
* The Liquidating Trustee will market and sell Property in a
commercially reasonable time and manner, by means to be determined
by the Liquidating Trustee. The Liquidating Trustee will determine
the order and timing of sale of the Property and/or whether it is
more beneficial to the estate to grant stay relief to a secured
creditor or execute a deed in lieu of foreclosure with a creditor.
If and when sufficient funds to satisfy all Allowed Claims have
been generated by the sale of Property, the Liquidating Trustee
will cease selling unliquidated Property. The Liquidating Trustee
shall return the balance of all other Property (including
unliquidated personal property and real property) to the Debtor's
principal, Casey Smotherman, as the holder of the only Class 7
Claim; and
* The Liquidating Trustee shall evaluate the Litigation Claims
and pursue recovery of same in accordance with his business
judgment. The Liquidating Trustee may consensually resolve any
Litigation Claim with Court approval and compliance with Rule 9019
of the Federal Rules of Bankruptcy Procedure. To pursue the
Litigation Claims, the Liquidating Trustee, with Court approval,
may engage counsel and/or experts.
A full-text copy of the Disclosure Statement dated March 4, 2025 is
available at https://urlcurt.com/u?l=aFw5D9 from PacerMonitor.com
at no charge.
Counsel for Justin Cutler:
Phillip G. Young, Jr., Esq.
Thompson Burton, PLLC
6100 Tower Circle, Suite 200
Franklin, Tennessee 37067
Tel: 615-465-6008
Email: phillip@thompsonburton.com
Counsel for Hiam Family Trust:
Joshua D. Hankins, Esq.
Hankins Law
117 Saundersville Road, Suite 205
Hendersonville, Tennessee 37075
Tel: 615-246-2544
Email: josh@hankinslaw.com
Counsel for Connecting Capital Investments, LLC:
Michael G. Abelow, Esq.
Sherrard Roe Voigt & Harbison, PLC
1600 West End Avenue, Suite 1750
Nashville, Tennessee 37203
Tel: 615-742-4200
Email: mabelow@srvhlaw.com
About Fair Offer Cash Now, Inc.
The Debtor owns 27 properties all located in Alabama, Kentucky,
Missouri, Tennessee, Georgia and Mississippi having a total current
value of $4.94 million.
Fair Offer Cash Now, Inc. in Murfreesboro, TN, sought relief under
Chapter 11 of the Bankruptcy Code filed its voluntary petition for
Chapter 11 protection (Bankr. M.D. Tenn. Case No. 24-03495) on
Sept. 11, 2024, listing $4,942,400 in assets and $4,783,400 in
liabilities. Bradley Smotherman as president, signed the petition.
Judge Charles M Walker oversees the case.
LEFKOVITZ & LEFKOVITZ serves as the Debtor's legal counsel.
FISKER INC: Toccata Automotive Appeal Dismissed with Prejudice
--------------------------------------------------------------
In the case captioned as TOCCATA AUTOMOTIVE GROUP, INC., et al.,
Appellants, v. FISKER, INC., et al., Appellees, Case No.
24-cv-01158-JLH (D. Del.), The Honorable Jennifer L. Hall of the
United States District Court for the District of Delaware granted
the motion of Matthew Dundon, solely in his capacity as the
Liquidating Trustee of the Fisker Liquidating Trust, to dismiss the
appeal with with prejudice as to Toccata.
On Dec. 9, 2024, Akerman LLP, counsel for Appellants filed a motion
seeking leave to withdraw as counsel to Appellants.
On Jan. 14, 2025, the Court entered an Order:
(1) granting the Motion to Withdraw,
(2) directing Toccata to obtain new counsel and file a notice of
appearance within 30 days, and
(3) indicating that if no notice of appearance is filed within
30 days, the appeal (at least as to Toccata) may be dismissed.
The 30-day period expired on Feb. 13, 2025, and the docket reflects
that no notice of appearance by new counsel has been filed on
behalf of Toccata.
The Liquidating Trustee filed a motion to dismiss the appeal based
on Toccata's failure to comply with the Court's Jan. 14, 2025
Order.
Appellant Phil Harrison may proceed pro se should he so choose.
On Feb. 26, 2025, Magistrate Judge Christopher J. Burke issued a
recommendation that this case be withdrawn from the mandatory
referral for mediation and proceed through the appellate process of
this Court.
The Recommendation is accepted and briefing on this appeal shall
proceed in accordance with the following schedule:
* Appellant Phil Harrison's opening brief in support of the
appeal is due on or before April 18, 2025.
* Appellees' brief in opposition to the appeal is due on or
before May 19, 2025.
* Appellant's reply brief is due on or before May 27, 2025.
Harrison's failure to file an opening brief by April 18, 2025 shall
result in the dismissal of the appeal.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=j8vONL from PacerMonitor.com.
About Fisker Inc.
California-based Fisker Inc. is revolutionizing the automotive
industry by designing and developing individual mobility in
alignment with nature. Passionately driven by a vision of a clean
future for all, the company is on a mission to create the world's
most sustainable and emotional electric vehicles.
Fisker Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del.) on June 17, 2024. In its petition, the Debtor
reports between $500 million and $1 billion of assets, and between
$100 million and $500 million of liabilities.
Fisker is represented by Davis Polk & Wardwell LLP and Morris,
Nichols, Arsht & Tunnell LLP as legal advisors and Huron Consulting
Group as restructuring advisor.
FULCRUM BIOENERGY: $81M Unsecured Claims to Recover 1.41% in Plan
-----------------------------------------------------------------
Fulcrum Bioenergy Inc. and affiliates submitted an Amended
Disclosure Statement for Joint Chapter 11 Plan of Liquidation dated
March 6, 2025.
The overall purpose of the Plan is to provide for the liquidation
of the Debtors in a manner designed to maximize recovery to
stakeholders.
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.
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 will
receive a distribution of 0.07% of their allowed claims.
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 will
receive a distribution of 1.41% of their allowed claims.
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. In the
event of any conflict between the terms of Section 6.3 of the Plan
and the terms of the Liquidation Trust Agreement, unless otherwise
specified in the Plan, the terms of the Liquidation Trust Agreement
shall govern.
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.
A full-text copy of the Amended Disclosure Statement dated March 6,
2025 is available at https://urlcurt.com/u?l=ZTEiVh from KURTZMAN
CARSON CONSULTANTS, LLC, d/b/a VERITA GLOBAL, is the claims agent.
Counsel to the Debtors:
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
Robert J. Dehney, Sr., Esq.
Curtis S. Miller, Esq.
Clint M. Carlisle, Esq.
Avery Jue Meng, Esq.
1201 N. Market Street, 16th Floor
Wilmington, Delaware 19801
Telephone: (302) 658-9200
Email: rdehney@morrisnichols.com
cmiller@morrisnichols.com
ccarlisle@morrisnichols.com
ameng@morrisnichols.com
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 reports 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.
GLOBAL BUSINESS: Moody's Raises CFR to 'B1', Outlook Remains Stable
-------------------------------------------------------------------
Moody's Ratings upgraded Global Business Travel Group, Inc.'s (dba
"Amex GBT") corporate family rating to B1 from B2 and its
probability of default rating to B1-PD from B2-PD. Concurrently,
Moody's upgraded the company's backed senior secured bank credit
facilities ratings (revolving credit facility and term loan B1),
issued at GBT US III LLC to B1 from B2. GBT US III LLC is the US
borrower under the bank credit facilities and an indirect
subsidiary of Amex GBT. Amex GBT's speculative grade liquidity
rating (SGL) was upgraded to SGL-1 from SGL-2. The outlook for both
issuers is maintained at stable. Amex GBT is a New York-based
global business travel management company ("TMC").
The upgrade of Amex GBT's CFR to B1 from B2 reflects the company's
strong business momentum and substantial deleveraging since Moody's
initial ratings assignment in 2024. "Moody's expects the company to
continue its strong double-digit EBITDA growth and margin expansion
by focusing on productivity and leveraging automation tools while
investing in long-term growth initiatives," said Oleg Markin,
Moody's Ratings analyst. The upgrade also reflects Amex GBT's
strong balance sheet and free cash flow generation, as well as
Moody's expectations that the company will uphold its public
long-term net leverage target of 1.5x-2.5x (management's
calculations). Moody's expects the company will maintain a very
good liquidity profile within the context of its acquisition growth
strategy and share repurchases. Governance is a key driver of the
rating action, as Amex GBT has been focused upon reducing financial
risk through deleveraging.
The company's debt-to-EBITDA has improved to around 4.8 times as of
the twelve months ended December 31, 2024, from about 6.6 times in
2023. In 2024, Amex GBT expanded its adjusted EBITDA by about 26%
while growing revenue organically at around 6%, and its free cash
flow more than tripled, compared to the prior year. Moody's
projects the company's debt-to-EBITDA leverage trending towards 4.0
times by 2026. Moody's believes the company's focus on cost
reductions and accelerating cash flow generation will result in
free cash flow to debt sustaining around 10% through 2026. This
will enable the company to concentrate on both on organic and
inorganic investment strategies, while also returning cash to
shareholders.
All financial metrics cited reflect Moody's standard adjustments.
Amex GBT is awaiting regulatory approval for its acquisition of CWT
Holdings LLC ("Carlson Wagonlit Travel" or "CWT"). While the UK
Competition and Markets Authority (CMA) approved the deal, the US
Department of Justice's (DOJ) lawsuit challenging the merger is
scheduled for trial in September 2025. Assuming the acquisition
proceeds as planned, the debt-free purchase of CWT is unlikely to
negatively affect Amex GBT's credit profile. With Amex GBT's strong
balance sheet and expected synergies from the acquisition, the
company is well-positioned to absorb CWT. However, challenges
during future integration could pose risks.
RATINGS RATIONALE
Amex GBT's B1 CFR is supported by the company's significant global
scale and position as a leading provider of B2B corporate travel
and expense software and services to large-to-medium-sized
companies, the breadth of its technology-enabled solutions, its
strong supplier relationships, as well as a long-standing client
base with client retention rate of around 97% in 2024. Global
corporate travel volume may level off in 2025 due to economic
uncertainty, but new customer wins should keep Amex GBT growing
above the industry average. Moody's anticipates that Amex GBT will
maintain organic revenue growth of 3%-5% over the next 12-18
months, with EBITDA expanding by a minimum of 10%. With over $30
billion in total transaction volume ("TTV") in 2024, the company
has the ability to drive significant volume in cost-efficient way
for suppliers, and provide comprehensive content and competitive
rates to its corporate customers. The rating also favorably
considers the company's improved free cash flow generation and a
proven track record of managing costs, as well as extracting cost
synergies from past acquisitions. Moody's expects the company to
maintain a strong balance sheet and a very good liquidity profile
over the next 12-15 months.
Amex GBT's rating considers the company's high but quickly
moderating debt-to-EBITDA leverage and revenue base that is exposed
to the cyclical and discretionary nature of corporate travel
services that can lead to variability of Amex GBT's revenue and
earnings. The rating also considers the highly competitive and
fragmented global travel industry within which the company
operates, the largely transactional-nature of its revenues and its
acquisitive growth strategy. Amex GBT's history of cash flow
generation is limited, particularly in light of large cash flow
deficits experienced during the pandemic period. Moody's expects
the company will continue to incur restructuring and integration
expenses for at least the next 1-2 years as it streamlines
operations. The company's rating also considers the negative credit
impact from the potential for more aggressive financial strategies,
including acquisitions and share repurchases. The company recently
completed an 8 million share repurchase in a private transaction,
followed by the announcement of a $300 million share buyback
authorization.
The SGL-1 speculative grade liquidity rating reflects Moody's
expectations that Amex GBT will maintain very good liquidity over
the next 12-15 months. Sources of liquidity consist of cash
balances of $536 million as of December 31, 2024, expectation for
annual free cash flow generation of at least $150 million, and full
access to a new $360 million revolving credit facility due 2029.
Moody's do not anticipate any revolver usage over the next 12-15
months. Moody's also believes that all available liquidity sources
to the company provide good coverage relative to the annual
mandatory term loan amortization of $14 million, paid quarterly
starting on March 31, 2025. Amex GBT has no financial covenant
requirements under the existing term loan. However, the revolving
credit facility is subject to a springing maximum first lien net
leverage ratio covenant of 3.5x, tested quarterly, when more than
35% ($126 million) of the revolver is utilized. Moody's do not
expect a covenant test to apply over the next 12-15 months.
The B1 rating on the senior secured bank credit facilities
(revolver and term loan) is in line with the company's B1 CFR.
Because there is a single family of debt, the individual
instrument's risk reflects directly the overall corporate risk,
captured in the B1 CFR, as such the senior secured bank credit
facilities are also rated B1.
The stable outlook reflects Moody's views that the company will
maintain organic revenue growth of 3%-5% and expand its EBITDA
margin (based on Moody's adjustments) above 10% over the next 12-18
months. Moody's also projects the company's debt-to-EBITDA (based
on Moody's adjustments) will decrease to around 4.0 times by 2026,
while the company maintains very good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Amex GBT will
maintain organic revenue growth, improving EBITDA margins,
debt-to-EBITDA (based on Moody's adjustments) is sustained below
4.0 times, free cash flow-to-debt (based on Moody's adjustments)
above 10%, while maintaining good liquidity. The ratings upgrade
would also require the company to establish and maintain balanced
financial policies.
The ratings could be downgraded if industry challenges, competitive
pressures or, external shocks lead to lower than expected EBITDA
growth, financial policies become aggressive or liquidity
deteriorates. Quantitatively, the ratings could be downgraded if
Moody's expects debt-to-EBITDA (based on Moody's adjustments) will
be sustained above 5.0 times or free cash flow will decline toward
5%.
Formed in 2014, following the spin-off from American Express
Company, Amex GBT provides travel and events management services
and solutions in more than 140 countries. In May 2022, GBT
completed a reverse recapitalization via a special purpose
acquisition company and is currently listed on the NYSE (ticker:
GBTG). Moody's projects Amex GBT will generate annual revenue of
around $2.5 billion in 2025.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
GOTSTUFF INC: Gets Interim OK to Use Cash Collateral
----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
entered a second interim order authorizing Gotstuff, Inc. to use
cash collateral.
Gotstuff was authorized to use cash collateral to pay expenses set
forth in the one-month budget, plus 15% per line item and 15%
overall.
The company projects monthly total operational expenses of
$43,454.77.
Secured lenders including the U.S. Small Business Administration,
Mound City Bank, Oakwood Bank, and Rapid Finance were granted
valid, binding, enforceable, and perfected liens co-extensive with
their pre-bankruptcy liens in all currently owned or hereafter
acquired property and assets of the company.
Gotstuff was ordered to keep its secured lenders' collateral
secured.
About Gotstuff Inc.
Gotstuff, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 25-30448) on February
4, 2025, listing between $100,001 and $500,000 in both assets and
liabilities.
Judge Scott W. Everett presides over the case.
The Debtor is represented by:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
Tel: 972-503-4033
Email: joyce@joycelindauer.com
GROW GREEN: U.S. Trustee Wins Bid to Dismiss Bankruptcy Case
------------------------------------------------------------
Judge Joel D. Applebaum of the United States Bankruptcy Court for
the Eastern District of Michigan granted the United States
Trustee's motion to dismiss the bankruptcy case of Grow Green MI,
Inc.
The U.S. Trustee seeks dismissal on the grounds that:
(i) Grow Green conducted business in violation of federal law
because Grow Green was engaged in the intentional manufacture,
distribution, or possession of any controlled substance or of any
material which may be used to manufacture a controlled substance in
violation of 21 U.S.C. Sec. 841(a) and Sec. 843(a)(7);
(ii) Debtor's behavior in violating a federal criminal statute
equates to gross mismanagement of the estate by risking the
forfeiture of all of its assets; and
(iii) Grow Green's use of proceeds derived from the cannabis
industry to fund a plan of reorganization constitutes bad faith.
The United States Trustee filed a detailed affidavit with an
exhaustive set of exhibits clearly establishing to this Court's
satisfaction Debtor's pre-petition entanglements with the marijuana
industry.
Grow Green argues that dismissal is no longer appropriate because,
at least as of the petition date, it is no longer servicing the
cannabis industry. In its response to the motion, Grow Green
attached the detailed affidavit of its president, Anthony Portelli,
wherein he avowed that Grow Green had adjusted its business model
to exclusively serve general agriculture and horticulture markets
with a clear policy against engaging with the cannabis sector.
Violations of federal law, such as violations of the Controlled
Substances Act (21 U.S.C. Sec. 801 et. seq.), constitute cause for
denying bankruptcy protection under 11 U.S.C. Sec. 1112(b).
Specifically, the CSA prohibits aiding in the manufacture,
distribution or possession of any controlled substance or of any
material or supplies used to manufacture or distribute a controlled
substance.
The U.S. Trustee's Reply Exhibits 7-12, as augmented by two of the
three documents presented at oral argument, evidence that Debtor is
still servicing the marijuana industry and that Mr. Portelli's
affidavit to the contrary is not credible.
Deliberately suppressing purchaser information by:
(i) using obviously fictious names such as AdamAnonymous,
(ii) using multiple individuals' names to obfuscate the end
purchaser,
(iii) using individual names instead of business purchasers, and
(iv) modifying Debtor's invoicing system to deliberately omit
corporate purchasers' names thereby making sales recipients
difficult if not impossible to track, among other actions, leads
the Court to conclude that Debtor is intentionally disguising the
identity of its customers and their involvement with the marijuana
industry.
Because Debtor is servicing marijuana growers in violation of
federal law, it remains ineligible for bankruptcy protection, the
Court holds.
A copy of the Court's decision dated March 20, 2025, is available
at https://urlcurt.com/u?l=PSo5r5 from PacerMonitor.com.
About Grow Green MI Inc.
Grow Green MI Inc. is a family-owned garden supply store in
Whitmore Lake, Mich., serving customers since 2009. The company
offers lighting, nutrients, fertilizers, and pest control
solutions.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 24-31158) on June 20,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Anthony Portelli, president, signed the petition.
Judge Joel D. Applebaum presides over the case.
Scott M. Kwiatkowski, Esq., at Goldstein Bershad & Fried, PC, is
the Debtor's legal counsel.
HARE TAYLOR: Seeks to Extend Plan Exclusivity to June 4
-------------------------------------------------------
Hare Taylor, LLC asked the U.S. Bankruptcy Court for the Northern
District of Florida to extend its exclusivity periods to file a
plan of reorganization and obtain acceptance thereof to June 4 and
August 1, 2025, respectively.
The Debtor requests the extension of the exclusive period to
provide it with additional time to negotiate a resolution of
certain issues relating to the sale of the Debtor's assets.
The Debtor claims that it needs additional time to determine
whether a sale of certain of the Debtor's assets with H&R Block is
prospective and to further negotiate with other creditors. The sale
of the certain tax offices will effect the terms of a potential
plan.
Hare Taylor, LLC is represented by:
Brian G. Rich, Esq.
Berger Singerman LLP
313 North Monroe Street, Suite 301
Tallahassee, FL 32301
Telephone: (850) 561-3010
Facsimile: (850) 561-3013
Email: brich@bergersingerman.com
About Hare Taylor
Hare Taylor, LLC, is a full-service accounting firm with offices in
Panama City and Chipley, Fla. It offers a broad range of services
for business owners, executives, and independent professionals.
Hare Taylor filed Chapter 11 petition (Bankr. N.D. Fla. Case No.
24-50181) on Dec. 6, 2024, with up to $10 million in both assets
and liabilities. Gerald W. Taylor, manager of Hare Taylor, signed
the petition.
Judge Karen K. Specie oversees the case.
Brian G. Rich, Esq., at Berger Singerman, LLP, serves as the
Debtor's legal counsel.
HAYDALE CERAMIC: Gets Extension to Access Cash Collateral
---------------------------------------------------------
Haydale Ceramic Technologies, LLC received second interim approval
from the U.S. Bankruptcy Court for the Northern District of
Georgia, Gainesville Division, to use cash collateral.
The second interim order signed by Judge James Sacca authorized the
company to access funds to maintain operations in accordance with
the budget while protecting potential secured creditors, Silar
Ceramic Technologies, LLC, and the U.S. Small Business
Administration.
Haydale projects total operational expenses of $22,250 for the week
ending April 6; $79,509 for the week ending April 13; $23,274 for
the week ending April 20; $153,682 for the week ending April 27;
and $35,750 for the week ending May 4.
Silar and the SBA were granted replacement liens on post-petition
property (excluding proceeds from avoidance actions) as protection
for their interests.
The second interim order will remain valid until a further hearing
is held and a ruling is entered.
A final hearing is scheduled for April 16.
About Haydale Ceramic Technologies
Haydale Ceramic Technologies, LLC is a manufacturer of Silicon
Carbide (SiC) ceramic materials, boasting the largest installed
production capacity across the Americas, Europe, and the APAC
regions. Manufactured in Greer, South Carolina, the Company's
cutting tools are crafted using the highest quality SiC materials,
including particulates, fibers, and microfibers.
Haydale Ceramic Technologies filed Chapter 11 petition (Bankr. N.D.
Ga. Case No. 25-20159) on February 7, 2025, listing between $1
million and $10 million in assets and between $10 million and $50
million in liabilities.
Judge James R. Sacca handles the case.
The Debtor is represented by:
William Rountree, Esq.
Rountree, Leitman, Klein & Geer, LLC
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Tel: 404-584-1238
Email: wrountree@rlkglaw.com
HERSCHEND ENTERTAINMENT: Moody's Puts 'Ba3' CFR Under Review
------------------------------------------------------------
Moody's Ratings placed Herschend Entertainment Company, LLC's
(Herschend) credit ratings, including its Ba3 corporate family
rating, Ba3-PD probability of default rating and the Ba3 senior
secured term loan B rating on review for downgrade following the
company's announced acquisition of all of Palace Entertainment's US
operations from Parque Reunidos for $700 million. Previously, the
outlook was stable.
The acquisition, which is expected to close during the second
quarter of calendar 2025, is expected to be funded with a $650
million term loan and cash on hand. The transaction is subject to
customary closing conditions.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The acquisition of Palace Entertainment's US operations will
include a diverse portfolio of over 20 entertainment venues
including amusement parks, water parks, family entertainment
centers, campgrounds, and hotels across 10 US states. The
acquisition will increase the company's scale, bringing annual
attendance across all parks to over 20 million and expand
Herschend's regional footprint into the Northeast and upper
Midwest. However, given the mostly debt financed funding, the
transaction (purchase price of approximate 10x EBITDA valuation on
the assets being acquired) may cause leverage to rise to
approximately 4.0x at close before the impact of any potential
synergies or any potential asset sales, and will more than double
Herschend's debt quantum. As such, given that Moody's believes
there is a potential for leverage to be elevated beyond
management's financial policy leverage targets and Moody's
expectations for the Ba3 CFR for some time, governance
considerations are a key driver of the rating action.
The Ba3 CFR reflects Moody's views that revenue and EBITDA will
continue to improve driven by consumer demand, investments in new
attractions and the expansion of resort properties. Herschend has a
history of making opportunistic & strategic acquisitions of
location-based entertainment assets. It also has a successful track
record of purchasing aquariums previously operated as non-profits.
Herschend purchased Kentucky Kingdom and the Vancouver Aquarium in
2021 and Callaway Gardens in 2022 which has supported revenue and
EBITDA growth. In 2023 the company sold a significant portion of
its ownership stake in World Choice Investments, LLC (wholly owned
subsidiary Showtime Acquisition, LLC B2 CFR) which bolstered its
liquidity profile and helped to fund its most recent investment
opportunity, a new hotel in Nashville.
The review will focus on the quality, growth potential and
profitability of the assets being acquired, the expectation and
targets for capex and investment, potential for dispositions, and
potential synergy opportunities with Herschend's current
properties. It will also consider the impact of the mostly
debt-financed acquisition on the company's financial position and
flexibility, increased interest costs and management's leverage
reduction targets and potential changes in financial policy.
Herschend benefits from its amusement parks including Dollywood,
Silver Dollar City, and Wild Adventures, in addition to water
parks, aquariums, adventure tours, dinner shows, lodging, and the
Harlem Globetrotters. Herschend's attractions are largely located
in warmer climates or indoors which slightly reduces seasonality
and offers a longer operating season. The ownership of significant
amounts of land provide Herschend the opportunity for future
expansion or sources of liquidity if needed.
Herschend has concentrated exposure to Tennessee, Missouri, and
Georgia, which elevates risks to performance, although the Harlem
Globetrotters, Pink Jeep, and the aquarium businesses offer a
degree of diversification. Herschend competes for discretionary
consumer spending from an increasingly wide variety of other
leisure and entertainment activities as well as cyclical
discretionary consumer spending. The parks are seasonal and
sensitive to weather conditions, terrorism, public health issues as
well as other disruptions outside of the company's control.
Herschend Entertainment Company, LLC (the lead borrower), and
co-borrowers Herschend Adventure Holdings, LLC and Harlem
Globetrotters International, Inc. operate a portfolio of consumer
entertainment attraction including four amusement parks, four
waterparks, three aquariums, adventure tours (including Pink Jeep),
dinner shows, lodging, and the Harlem Globetrotters International,
Inc. Herschend is a privately owned company by members of the
Herschend family. Herschend's revenue was approximately $902
million as of LTM Q3 2024.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
HO WAN KWOK: Default Judgment Against Lamp Entities Affirmed
------------------------------------------------------------
In the case captioned as LAMP CAPITAL LLC, INFINITY TREASURY
MANAGEMENT INC., Appellants, v. LUC A. DESPINS, Ch. 11
Trustee-Appellee, Case No. 3:24-cv-00217-KAD (D. Conn.), Judge Kari
A. Dooley of the United States District Court for the District of
Connecticut affirmed the order of the United States Bankruptcy
Court for the District of Connecticut granting the Trustee's motion
for default judgment and denying Lamp Capital LLC and Infinity
Treasury Management Inc.'s cross-motion to set aside default.
On the motion for default judgment, the Bankruptcy Court entered
judgment in the Trustee's favor on the first and second claims of
his complaint against the Lamp Entities in the underlying adversary
proceeding.
Lamp Capital is a Delaware limited liability company formed in
2020. ITM -- of which the Debtor's son, Qiang Guo, is the lone
shareholder -- is the sole member and nominal owner of
Lamp Capital. Lamp Capital was managed by the Debtor's agents and
funded exclusively by entities controlled by the Debtor. The Debtor
utilized Lamp Capital to pay his expenses, including, inter alia, a
$1 million retainer to Brown Rudnick LLP, the Debtor's initial
bankruptcy counsel. Lamp Capital was included in the Debtor's List
of 20 Largest Unsecured Creditors and thus, has been on the service
list in the Debtor's Chapter 11 Bankruptcy proceeding, In re Kwok,
No. 22-bk-50073, from the date it was filed.
On Oct. 26, 2023, the Trustee filed the underlying adversary
proceeding against, inter alia, Lamp Capital, principally alleging
that Lamp Capital is the Debtor's alter ego and seeking turnover of
Lamp Capital and its assets to the Debtor's Estate.
On Oct. 31, 2023, the Clerk of Court issued a summons which
directed the Trustee to serve the summons and complaint on the Lamp
Entities. Pursuant to Rule 7012 of the Federal Rules of Bankruptcy
Procedure, the Lamp Entities' deadline to answer or otherwise
respond to the complaint was Nov. 30, 2023. The Lamp Entities did
not do so.
On appeal, the Lamp Entities challenge the Bankruptcy Court's
findings that:
(1) their default was willful;
(2) they failed to present a meritorious defense to the
Trustee's alter ego claims; and
(3) the Trustee would be prejudiced if the entry of default were
set aside.
The Trustee argues that the Bankruptcy Court was well within its
discretion in declining to set aside the default entry.
The District Court agrees with the Bankruptcy Court that the Lamp
Entities' failure to timely respond to the complaint is
better-viewed as a continuation of Lamp Capital's contemptuous
disregard for the broader bankruptcy proceedings, which itself is
evidence of the Lamp Entities' willful and deliberate default.
According to the District Court, the Bankruptcy Court's finding
that the Lamp Entities received timely notice of the adversary
proceeding was not clearly erroneous, and the conclusion that their
failure to respond was willful accords with applicable law.
In this case, the Lamp Entities argue that they have raised serious
questions regarding the Trustee's ability to establish his alter
ago claim against Lamp Capital, and have therefore
demonstrated a meritorious defense. However, the District Court
finds the Lamp Entities do not raise serious, or any, factual
questions regarding the Trustee's ability to establish his claim.
The Lamp Entities challenge the legal sufficiency of the
allegations. As such, the issue on appeal is whether the complaint
adequately stated an alter ego claim against Lamp Capital, and in
particular, whether the Bankruptcy Court properly considered both
elements of the reverse veil piercing test under Delaware law.
The District Court observes that the Lamp Entities had an
opportunity to assert a fact-based defense, or otherwise attempt to
dispute the Trustee's allegations regarding, e.g.,
undercapitalization, corporate formalities, solvency, and the like.
Instead, the Lamp Entities challenged only the sufficiency of the
Trustee's allegations, which the Bankruptcy Court considered and
rejected in accordance with applicable law.
The Bankruptcy Court concluded that the Complaint plausibly alleged
that Lamp Capital's corporate form served to shield the Debtor's
assets from his creditors, given that:
(a) Lamp Capital had no business purpose or existence other than
pooling the Debtor's liquid assets, which were siphoned to pay his
expenses without consideration; and
(b) its indirect, record owner was the Debtor's son (as the sole
shareholder of ITM).
The Lamp Entities argue that these allegations do not support an
inference of fraud or injustice caused by Lamp Capital's corporate
structure. But the District Court agrees with the Trustee that
these allegations plausibly support the belief that Lamp Capital's
corporate form was utilized by the Debtor to perpetrate a fraud and
injustice.
The Lamp Entities also argue that the Bankruptcy Court erred in
concluding that the Trustee would be prejudiced if the default were
set aside, and emphasize that delay alone does not constitute
prejudice. The Trustee contends that, under the circumstances, the
District Court need not undertake the prejudice inquiry at all, and
that even if it did, the Bankruptcy Court's finding of prejudice
was not an abuse of discretion. The District Court agrees with the
Trustee.
The District Court concludes the Bankruptcy Court's factual
findings were not clearly erroneous; the Bankruptcy Court applied
correct legal principles and ultimately acted well within its
discretion in denying the Lamp Entities' motion to set aside
default.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=hVAbPX from PacerMonitor.com.
About Ho Wan Kwok
Ho Wan Kwok sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Conn. Case No. 22-50073) on Feb. 15, 2022. Judge
Julie A. Manning oversees the case. Dylan Kletter, Esq., is the
Debtor's legal counsel.
Ho Wan Kwok aka Guo Wengui is an exiled Chinese businessman.
According to Reuters, Guo was a former real estate magnate who fled
China for the U.S. in 2014 ahead of corruption charges. Guo filed
for bankruptcy after a New York court ordered him to pay lender
Pacific Alliance Asia Opportunity Fund $254 million stemming from a
contract dispute. PAX had initially loaned two of Guo's companies
$100 million in 2008 for a construction project in Beijing and sued
Guo when he failed to pay off the loan.
An Official Committee of Unsecured Creditors has been appointed in
the case and is represented by Pullman & Comley, LLC.
Luc A. Despins was appointed Chapter 11 Trustee in the case.
HYPERSCALE DATA: Inks $4.9MM Exchange Agreement with SJC Lending
----------------------------------------------------------------
Hyperscale Data, Inc. disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that on March 21, 2025, the
Company entered into an Exchange Agreement with SJC Lending, LLC, a
Delaware limited liability company, pursuant to which the Company
issued to the Investor a convertible promissory note in the
principal face amount of $4,909,410.96 in exchange for the
cancellation of the following notes issued by the Company to Steve
J. Caspi, the sole member of the Investor, who transferred such
notes to the Investor, (i) a term note issued on January 14, 2025
in the principal face amount of $2,500,000, (ii) a promissory note
issued on March 7, 2025 in the principal face amount of $500,000,
(iii) a promissory note issued on March 12, 2025 in the principal
face amount of $1,5500,000 and (iv) a promissory note issued on
March 13, 2025 in the principal face amount of $300,000, which Note
1, Note 2, Note 3 and Note 4, as of the Closing, had outstanding
principal and accrued but unpaid interest of $2,600,000,
$502,876.71, $1,505,547.95 and $300,986.30, respectively.
Description of the Note
The Note has a principal face amount of $4,909,410.96. The Note
accrues interest at the rate of 15% per annum, unless an event of
default occurs, at which time the Note would accrue interest at 18%
per annum. The Note will mature on December 31, 2025. The Note is
convertible into shares of the Company's class A common stock, par
value $0.001 per share at any time after NYSE American approval of
the Supplemental Listing Application at a conversion price equal to
the greater of (i) $0.40 per share, which Floor Price shall not be
adjusted for stock dividends, stock splits, stock combinations and
other similar transactions and (ii) the lesser of 75% of the VWAP
of the Common Stock during the five (5) trading days immediately
prior to (A) the Closing Date or (B) the date of conversion into
shares of Common Stock, but not greater than $10.00 per share,
which Maximum Price shall be adjusted for stock dividends, stock
splits, stock combinations and other similar transactions. The
Conversion Price is only subject to adjustment in the event that
the Company does a stock split or similar transaction of the Common
Stock.
The Company may not issue Conversion Shares to the extent such
issuances would result in an aggregate number of shares of Common
Stock exceeding 19.99% of the total shares of Common Stock issued
and outstanding as of the Closing Date, in accordance with the
rules and regulations of the NYSE unless the Company first obtains
stockholder approval.
Pursuant to the Agreement, the Company agreed to file a proxy or
information statement to obtain the Stockholder Approval.
The Note contains standard and customary events of default
including, but not limited to, failure to pay amounts due under the
Note when required, failure to deliver Conversion Shares when
required, default in covenants and bankruptcy events.
The Agreement contains customary representations, warranties and
agreements by the Company, obligations of the parties, termination
provisions and closing conditions. The representations, warranties
and covenants contained in the Agreement were made only for
purposes of such agreement and as of specific dates, were solely
for the benefit of the parties to such Agreement, and may be
subject to limitations agreed upon by the contracting parties.
About Hyperscale Data
Headquartered in Las Vegas, NV, Hyperscale Data, Inc., formerly
known as Ault Alliance, Inc., is transitioning from a diversified
holding company pursuing growth by acquiring undervalued
businesses
and disruptive technologies with a global impact to becoming
solely
an owner and operator of data centers to support high performance
computing services. Through its wholly and majority-owned
subsidiaries and strategic investments, Hyperscale Data owns and
operates a data center at which it mines digital assets and offers
colocation and hosting services for the emerging artificial
intelligence ecosystems and other industries. It also provides,
through its wholly owned subsidiary, Ault Capital Group, Inc.,
mission-critical products that support a diverse range of
industries, including an artificial intelligence software
platform,
social gaming platform, equipment rental services,
defense/aerospace, industrial, automotive, medical/biopharma and
hotel operations. In addition, Hyperscale Data is actively engaged
in private credit and structured finance through a licensed
lending
subsidiary.
New York, New York-based Marcum LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 16, 2024, citing that the Company has a working capital
deficiency, has incurred net losses, and needs to raise additional
funds to meet its obligations and sustain its operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
iM3NY LLC: Committee Hires Genesis Credit as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of iM3NY, LLC and
Imperium3 New York, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Genesis Credit
Partners LLC as financial advisor.
The firm will render these services:
a. reviewing and analyzing financial and other related
disclosures;
b. assessing and monitoring the Debtors' short-term cash flow
and liquidity;
c. reviewing and benchmarking any proposed key employee
retention, other employee benefit programs or other similar
proposals by the Debtors;
e. assessing the Debtors' marketing process, monitoring the
sale process and advising the Committee thereto;
f. evaluating the Debtors' cost / benefit analysis with
respect to the assumption or rejection of various executory
contracts and leases;
g. analyzing any claims reconciliation and estimation
processes;
h. reviewing financial information prepared by the Debtors,
including, but not limited to, cash flow projections and budgets,
business plans, cash receipts and disbursement analysis, asset and
liability analyses across the Debtors' entities and affiliates and
the economic analysis of proposed transactions for which Court
approval is sought;
i. reviewing historical financial provided by the Debtors or
other third parties in coordination with counsel;
j. attending meetings and assisting in discussions with the
Debtors, potential investors, secured lenders, the Committee and/or
any other official committees appointed in the Chapter 11 Cases,
the U.S. Trustee, other parties in interest and professionals hired
by the same, as requested;
k. reviewing and/or preparing information and analysis
necessary for the confirmation of a plan and related disclosure
statement in the Chapter 11 Cases;
l. investigating, evaluating and analyzing causes of action,
avoidance actions and/or preferential transfers;
m. assisting with the prosecution of Committee responses /
objections to the Debtors' motions, including by attending
depositions and providing expert reports/testimony on case issues;
n. rendering such other general business consulting or
providing such other assistance as the Committee or its counsel may
deem necessary that are consistent with the role of a financial
advisor and not duplicative of services provided by other
professionals in these proceedings; and
o. coordinating with counsel on the above workstreams,
strategy and work product.
The firm will be paid at these rates:
Partners $775 to $1,000
Directors / MDs $625 to $725
Associates / VPs $475 to $575
Analysts $325 to $425
Edward Kim (Partner) $1,000
Jorge Gonzalez (Partner) $1,000
Andre Artidiello (Director) $725
Eric Mendez (Director) $725
Ivan Radi (VP) $575
Vinai Sewaliah (Sr Analyst) $425
Pedro Leme (Analyst) $325
As disclosed in the court filings, Genesis is "disinterested" as
that term is defined in section 101(14) of the Bankruptcy Code and
does not hold or represent an interest adverse to the Debtors'
estates with respect to the matters for which Genesis is to be
employed.
The firm can be reached through:
Edward Kim
Genesis Credit Partners LLC
701 Brickell Avenue, Suite 1480
Miami, FL 33131
Phone: (646) 509-3490
Email: ekim@gencp.com
About iM3NY LLC
IM3NY LLC -- https://im3ny.com/ -- is an independent lithium-ion
cell manufacturer that is commercializing cell chemistry developed
in the USA.
iM3NY LLC and Imperium3 New York, Inc. sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
25-10131) on January 27, 2025. In the petition, the Debtors
reported estimated assets between $50 million and $100 million and
estimated liabilities between $100 million and $500 million.
The Honorable Bankruptcy Brendan Linehan Shannon handles the
cases.
The Debtors tapped William E. Chipman, Jr., Esq., at Chipman Brown
Cicero & Cole, LLP as counsel; Novo Advisors as financial advisor;
and Hilco Corporate Finance, LLC as investment banker. Stretto,
Inc. is the Debtors' noticing claims management and reconciliation
consultant.
iM3NY LLC: Committee Hires Potter Anderson as Delaware Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of iM3NY, LLC and
Imperium3 New York, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Potter Anderson &
Corroon LLP as its.
The firm's services include:
a. providing legal advice regarding local rules, practices,
and procedures and providing substantive and strategic advice on
how to accomplish Committee goals, bearing in mind that the
Delaware Bankruptcy Court relies on Delaware counsel such as Potter
Anderson to be involved in all aspects of each bankruptcy
proceeding;
b. drafting, reviewing, and commenting on drafts of documents
to ensure compliance with the Local Rules, local practices, and
local procedures;
c. drafting, filing, and service of documents, as requested by
S&K and/or the Committee;
d. preparing certificates of no objection, certifications of
counsel, and notices of fee applications;
e. printing of documents and pleadings for hearings, and
preparing binders of documents and pleadings for hearings;
f. appearing in Court and at any meetings of creditors on
behalf of the Committee in its capacity as Delaware counsel with
S&K;
g. monitoring the dockets in these Chapter 11 Cases for
filings and coordinating with S&K on pending matters that may need
responses;
h. participating in calls with the Committee;
i. providing additional administrative support to S&K, as
requested; and
j. taking on any additional tasks or projects the Committee
may assign.
Potter Anderson will be paid at these rates:
Partners $890 to 1075
Associates $495 to 590
Paraprofessionals $360
The following is provided in response to the request for additional
information set forth in Paragraph D.1. of the Revised UST
Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Potter Anderson did not represent the Committee in the
12 months prepetition. Potter Anderson may represent in the future
certain Committee members and/or their affiliates in their
capacities as members of official committees in other chapter 11
cases or individually in matters wholly unrelated to these Chapter
11 Cases.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Potter Anderson expects to develop a budget and
staffing plan to reasonably comply with the U.S. Trustee's request
for information and additional disclosures, as to which Potter
Anderson reserves all rights. The Committee has approved Potter
Anderson's proposed hourly billing rates.
Christopher Samis, Esq., a partner at Potter Anderson & Corroon,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Christopher M. Samis, Esq.
Potter Anderson & Corroon LLP
Hercules Plaza
1313 North Market Street, 6th Floor
P.O. Box 951
Wilmington, DE 19801
Telephone: (302) 984-6000
Facsimile: (302) 658-1192
Email: csamis@potteranderson.com
About iM3NY LLC
IM3NY LLC -- https://im3ny.com/ -- is an independent lithium-ion
cell manufacturer that is commercializing cell chemistry developed
in the USA.
iM3NY LLC and Imperium3 New York, Inc. sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
25-10131) on January 27, 2025. In the petition, the Debtors
reported estimated assets between $50 million and $100 million and
estimated liabilities between $100 million and $500 million.
The Honorable Bankruptcy Brendan Linehan Shannon handles the
cases.
The Debtors tapped William E. Chipman, Jr., Esq., at Chipman Brown
Cicero & Cole, LLP as counsel; Novo Advisors as financial advisor;
and Hilco Corporate Finance, LLC as investment banker. Stretto,
Inc. is the Debtors' noticing claims management and reconciliation
consultant.
iM3NY LLC: Committee Taps Seward & Kissel as Bankruptcy Counsel
---------------------------------------------------------------
The official committee of unsecured creditors of iM3NY, LLC and
Imperium3 New York, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Seward & Kissel LLP as
its counsel.
The firm's services include:
a. advising the Committee with respect to its rights, powers
and duties;
b. advising the Committee in its consultations with the
Debtors relative to the administration of the Chapter 11 Cases;
c. advising the Committee in analyzing the claims of the
Debtors' creditors and in negotiating with such creditors;
d. reviewing financial and operational information furnished
by the Debtors to the Committee;
e. investigating and advising the Committee with respect to
the acts, conduct, assets, liabilities, and financial condition of
the Debtors and/or insiders, the operations of the Debtors'
business, and the desirability of the continuance of such business,
all motions filed, assets of the estates, and any other matters
relevant to the Chapter 11 Cases or to the formulation of a plan
and/or exit strategy;
f. advising the Committee with respect to any contemplated
sale of the Debtors' assets, and assisting with, participating in,
and attending any related auction and sale process;
g. assisting the Committee in its analysis of, and
negotiations with, the Debtors or any third party concerning
matters related to, among other things, cash collateral usage and
financing to be obtained in the Chapter 11 Cases and the terms of
any plan of reorganization or liquidation of the Debtors;
h. conferring with the Debtors' management, counsel, and
financial advisor and any other retained professional;
i. conferring with the principals, counsel and advisors of the
Debtors' lenders and equity holders;
j. assisting and advising the Committee with respect to its
communications with the general creditor body regarding significant
matters in the Chapter 11 Cases;
k. representing the Committee at hearings and other
proceedings;
l. attending the meetings of the Committee;
m. reviewing and analyzing applications, orders, statements of
operations, and schedules filed with the Court and advising the
Committee as to their propriety;
n. taking necessary actions to protect and preserve the
interests of the Committee, including, but not limited to (i)
possible prosecution of actions on its behalf, (ii) if appropriate,
negotiations concerning all litigation in which the Debtors are
involved, and (iii) if appropriate, reviewing and analyzing claims
filed against the Debtors' estates;
o. appearing, as appropriate, before this Court and the
appellate courts, to protect the interests of the Committee before
those courts;
p. assisting the Committee in preparing and filing pleadings,
motions, applications, answers, orders, reports and papers as may
be necessary in furtherance of the Committee's interests and
objections; and
q. performing such other legal services as may be required and
are deemed to be in the interests of the Committee in accordance
with the Committee's powers and duties as set forth in the
Bankruptcy Code.
The current standard hourly rates of the S&K professionals are
Partners $1,400 to $2,500
Counsel $1,225 to $1,500
Associates $675 to $1,225
Paraprofessionals $300 to $610
The following is provided in response to the request for additional
information set forth in Paragraph D.1. of the Revised UST
Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: N/A
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: A preliminary prospective budget and staffing plan for
the Chapter 11 Cases has been approved by the Committee. In
accordance with the Revised UST Guidelines, the budget may be
amended or supplemented, as necessary, to reflect changed or
unanticipated developments.
The firm can be reached through:
Robert J. Gayda, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Phone: (212) 574-1490
Fax: (212) 480-8421
Email: gayda@sewkis.com
About iM3NY LLC
IM3NY LLC -- https://im3ny.com/ -- is an independent lithium-ion
cell manufacturer that is commercializing cell chemistry developed
in the USA.
iM3NY LLC and Imperium3 New York, Inc. sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
25-10131) on January 27, 2025. In the petition, the Debtors
reported estimated assets between $50 million and $100 million and
estimated liabilities between $100 million and $500 million.
The Honorable Bankruptcy Brendan Linehan Shannon handles the
cases.
The Debtors tapped William E. Chipman, Jr., Esq., at Chipman Brown
Cicero & Cole, LLP as counsel; Novo Advisors as financial advisor;
and Hilco Corporate Finance, LLC as investment banker. Stretto,
Inc. is the Debtors' noticing claims management and reconciliation
consultant.
INTEGER HOLDINGS: S&P Raises Greatbatch's Debt Rating to 'BB'
-------------------------------------------------------------
S&P Global Ratings raised its issue-level rating on Integer
Holdings Corp. subsidiary Greatbatch Ltd.'s senior secured debt to
'BB' from 'BB-' and revised the recovery rating to '2' from '3'.
The '2' recovery rating indicates its expectation for substantial
(70%-90%; rounded estimate: 85%) recovery in the event of payment
default.
The rating action follows completion of the company's $1 billion
convertible notes issuance (unrated). It will use proceeds to
exchange a portion of its $500 million convertible notes (unrated),
repay a portion of its term loan A and outstanding borrowings under
its revolving credit facility, and pay related fees and expenses
(including capped call transactions related to the new convertible
notes), in a mostly leverage-neutral transaction.
S&P said, "Because this does not materially affect credit metrics
for Integer, a Plano, Texas-based medical device contract
manufacturer, our 'BB-' issuer credit rating and stable outlook are
unchanged. We view the transaction favorably because it lowers
interest expense and improves liquidity with increased revolver
capacity." The upgrade of the senior secured debt at Greatbatch
reflects reduced secured debt and a higher gross default valuation
of the company by about $200 million.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario considers a default in 2029
from competitive pressures or quality-related reputation issues
that cause it to lose contracts with its largest customers. This
could contribute to lower revenues, profitability, and cash flow.
Declined operating results would lead to a payment default when
liquidity and cash flow become insufficient to cover cash interest
expenses, mandatory debt amortization, and maintenance capital
expenditure requirements.
-- At default, S&P's recovery analysis assumes a capital structure
consisting of an $800 million revolving credit facility maturing in
2028 (85% drawn), $154 million outstanding under its senior secured
term loan A due in 2028, $116 million outstanding of unsecured
convertible notes due in 2028, and $1 billion outstanding of
convertible senior notes due in 2030.
-- S&P said, "We also incorporate the supplier financing program
or receivables factoring of up to $100 million. We assume the
accounts receivable program will be fully drawn; thus, we reduce
the value available to other debtholders."
-- Estimated debt claims also include about six months of accrued
but unpaid interest outstanding at default.
-- S&P assesses recovery prospects based on a distressed gross
recovery value of approximately $1.1 billion, with an emergence
EBITDA of about $181 million and EBITDA multiple of 6x (a premium
to multiples it uses for its peers, given its greater scale and
broader product offerings).
Simulated default and valuation assumptions
-- Simulated year of default: 2029
-- EBITDA at emergence: $181 million
-- Implied enterprise valuation multiple: 6x
-- Gross enterprise value (EV): $1.1 billion
Simplified waterfall
-- Net EV (after 5% administrative costs): $1 billion
-- Valuation split (obligors/nonobligors): 65%/35%
-- Estimated net EV available to senior secured debt: $805
million
-- Estimated senior secured debt claims: $939 million
--Recovery expectation: 70%-90% (rounded estimate: 85%)
INTERNATIONAL IMPULSE: Case Summary & Eight Unsecured Creditors
---------------------------------------------------------------
Debtor: International Impulse, Inc.
7100 Westwind Drive
Suite 130
El Paso, TX 79912
Business Description: International Impulse, Inc. is involved in
storage and warehousing services, focusing
on the handling and delivery of products for
global markets.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 25-30368
Judge: Hon. Christopher G Bradley
Debtor's Counsel: Corey W. Haugland, Esq.
JAMES & HAUGLAND, P.C.
609 Montana Avenue
El Paso TX 79902
Tel: (915) 532-3911
Fax: (915) 541-6443
Email: chaugland@jghpc.com
Total Assets: $7,430,289
Total Liabilities: $4,603,413
The petition was signed by Amalia Trevino as vice president.
A full-text copy of the petition, which includes a list of the
Debtor's eight unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/5D7PEXA/International_Impulse_Inc__txwbke-25-30368__0001.0.pdf?mcid=tGE4TAMA
INTERNATIONAL IMPULSE: Seeks Chapter 11 Bankruptcy in Texas
-----------------------------------------------------------
On March 28, 2025, International Impulse Inc. filed Chapter 11
protection in the U.S. Bankruptcy Court for the Western District
of Texas. According to court filing, the Debtor reports between
$1 million and $10 million in debt owed to 1 and 49 creditors.
The petition states funds will be available to unsecured
creditors.
About International Impulse Inc.
International Impulse Inc. is a warehousing and storage services
provider based in El Paso, Texas.
International Impulse Inc. sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 25-30368) on March
28, 2025. In its petition, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Christopher G. Bradley handles the
case.
The Debtor is represented by Corey Haugland, Esq. at James &
Haugland, P.C.
J. HOWELL: Gets Final OK to Use Cash Collateral
-----------------------------------------------
J. Howell Tiller MD, LLC received final approval from the U.S.
Bankruptcy Court for the Northern District of Florida to use its
secured creditors' cash collateral.
The final order signed by Judge Karen Specie authorized the company
to use cash collateral to pay its expenses.
As protection, secured creditors will have post-petition security
interests in, and liens on, all of the company's personal property,
including accounts receivable, to the same extent as their
pre-bankruptcy security interests and liens.
As additional protection, J. Howell will continue to deliver
monthly payments of $200 to its counsel's trust account until
confirmation of its Chapter 11 plan. The monthly payment started in
February.
About J. Howell Tiller MD LLC
J. Howell Tiller MD, LLC filed Chapter 11 petition (Bankr. N.D.
Fla. Case No. 25-30068) on January 29, 2025, listing up to $50,000
in assets and up to $100,000 in liabilities. Daniel Etlinger of
Underwood Murray, P.A. serves as Subchapter V trustee.
Judge Karen K. Specie oversees the case.
The Debtor is represented by:
Byron Wright, III, Esq.
Bruner Wright, P.A.
Tel: 850-385-0342
Email: twright@brunerwright.com
JENCAR TRUCKING: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Jencar Trucking Corp
54 Quail Run
Randolph, NJ 07869
Business Description: Jencar Trucking Corp is a transportation
company based in Randolph, New Jersey,
operating a fleet of 14 trucks.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 25-13226
Debtor's Counsel: Brian G Hannon, Esq.
NORGAARD OBOYLE HANNON
184 Grand Avenue
Englewood, NJ 07631
Tel: (201) 871-1333
Fax: (201) 871-3161
Email: bhannon@norgaardfirm.com
Total Assets: $1,271,825
Total Liabilities: $1,817,718
The petition was signed by Carlos Echeverri as president/CEO.
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/3GJRCSQ/Jencar_Trucking_Corp__njbke-25-13226__0001.0.pdf?mcid=tGE4TAMA
JNE HOLDINGS: Seeks to Hire Maltz Auctions as Real Estate Broker
----------------------------------------------------------------
JNE Holdings Inc. seeks approval from the U.S. Bankruptcy Court for
the Eastern District of New York to employ Maltz Auctions Inc in
connection with a potential sale of its residential property
located at 130-58 224th Street, Laurelton, New York 11413.
The firm will receive a commission equal to 6 percent of the gross
sale price.
Richard Maltz, chief executive officer at Maltz Auctions, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Richard B. Maltz
Maltz Auctions, Inc.
39 Windsor Place
Central Islip, NY 11722
Telephone: (516) 349-7022
About JNE Holdings Inc.
JNE Holdings Inc., filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 22-42666) on October 26, 2022, disclosing under
$1 million in both assets and liabilities. The Debtor is
represented by FRANCIS E. HEMMINGS PLLC.
JOE'S SPORTS: Gets OK to Use Cash Collateral
--------------------------------------------
Joe's Sports Bar, Inc. got the green light from the U.S. Bankruptcy
Court for the Western District of North Carolina to use cash
collateral until April 8.
The order signed by Judge Ashley Austin Edwards authorized the
company to use cash collateral to pay the expenses set forth in its
budget, with a 10% variance allowed.
As protection, the U.S. Small Business Administration and other
secured creditors were granted replacement liens on post-petition
assets to the same extent and with the same priority as their
pre-bankruptcy liens.
In addition, SBA will receive payment of $1,078.77 during the
interim period.
The next hearing is scheduled for April 8.
About Joe's Sports Bar Inc.
Joe's Sports Bar Inc., also known as Village Corner, is a member of
the Scratch Made Hospitality Group located in Concord, N.C. The
restaurant serves a diverse range of breakfast and lunch dishes,
including options like "Biscuit Bennys," "Scrambles," "Handhelds,"
and "Plates/Bowls," with special dishes such as fried chicken,
pulled pork, and shrimp and grits.
Joe's Sports Bar sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. N.C. Case No. 25-30207) on March 4,
2025. In its petition, the Debtor reported up to $50,000 in assets
and between $1 million and $10 million in liabilities.
Judge George R. Hodges handles the case.
The Debtor is represented by:
John C. Woodman, Esq.
Essex Richards
1701 South Boulevard
Charlotte, NC 28203
Tel: (704) 377-4300
Fax: (704) 372-1357
Email: jwoodman@essexrichards.com
JUNK IT PLUS: Court Extends Cash Collateral Access to May 13
------------------------------------------------------------
Junk It Plus, LLC received fourth interim approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division to use cash collateral until May 13.
The fourth interim order authorized the company to use cash
collateral to pay expenses, including payments of U.S. Trustee
quarterly fees set forth in its projected budget, with a 10%
variance.
The company projects total operational expenses of $77,119 for
April and $76,551 for May.
Secured creditors, including the U.S. Small Business Administration
and JPMorgan Chase Bank, N.A., will be granted a replacement liens
on the collateral.
As additional protection, JPMorgan Chase Bank will continue to
receive a monthly payment of $886.93 until confirmation of a
Chapter 11 plan or until its loan is paid in full. The monthly
payment started in February.
The next hearing is scheduled for May 13.
About Junk It Plus
Junk It Plus, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05466) on October 8,
2024, with $100,001 to $500,000 in assets and $1 million to $10
million in liabilities. Jerrett McConnell, Esq., at McConnell Law
Group, P.A. serves as Subchapter V trustee.
Judge Grace E. Robson presides over the case.
The Debtor is represented by:
Jeffrey Ainsworth, Esq.
Bransonlaw, PLLC
1501 E. Concord Street
Orlando, FL 32803
Tel: 407-894-6834
Email: jeff@bransonlaw.com
LIFT SOCIETY: Court Extends Cash Collateral Access to May 31
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
San Fernando Valley Division extended Lift Society Inc.'s authority
to use cash collateral from March 18 to May 31.
The court order authorized the use of cash collateral in accordance
with Lift Society's budget, with a 15% variance allowed per line
item.
The U.S. Small Business Administration, JPMorgan Chase Bank, N.A.
and other secured creditors were granted a replacement lien on
post-petition revenues to the same extent, priority, and validity
as their pre-bankruptcy liens.
In addition, SBA will receive a monthly payment of $1,000. Lift
Society may not make $777 monthly payments to JPMorgan Chase at
this time.
The next hearing is set for May 20.
About Lift Society Inc.
Established in 2016, Lift Society Inc. is a boutique fitness center
focused on strength and aesthetic training. The gym provides
semi-private lifting sessions, with a capacity of 8 to 12 people
per class, ensuring individualized guidance and expert coaching.
LIFT Society has several locations across Los Angeles, including
Hollywood, Studio City, Culver City, and Santa Monica.
Lift Society sought relief under Subchapter V of Chapter 11 of the
U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 25-10258) on
February 19, 2025. In its petition, the Debtor reported total
assets of $172,083 and total liabilities of $1,235,866.
Judge Martin R. Barash handles the case.
The Debtor is represented by:
Matthew D. Resnik, Esq.
RHM Law, LLP
17609 Ventura Blvd., Ste 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
Email: matt@rhmfirm.com
LOYALTY VENTURES: Court Tosses Newtyn's Securities Fraud Lawsuit
----------------------------------------------------------------
Judge Edmund A. Sargus, Jr. of the United States District Court for
the Southern District of Ohio granted the defendants' motion to
dismiss the case captioned as NEWTYN PARTNERS LP, and NEWTYN TE
PARTNERS, LP, Plaintiffs, v. ALLIANCE DATA SYSTEMS CORPORATION
N/K/A BREAD FINANCIAL HOLDINGS, INC., et al., Defendants, Case No.
2:23-cv-1451 (S.D. Ohio). Plaintiff's claims under Secs. 10(b) and
20(a) of the Exchange Act are dismissed with prejudice.
Plaintiff Newtyn Partners, LP and Newtyn TE Partners, LP brings
this securities fraud action against Alliance Data Systems
Corporation (now known as Bread Financial Holdings, Inc.), ADS CEO
Ralph J. Andretta ("ADS Defendants") and against two individuals
who became the CEO (Charles L. Horn) and CFO (John J. Chestnut) of
Loyalty Ventures, Inc. ("Loyalty Defendants"), a business spun-off
from ADS in November 2021. This matter is before the Court on
Motions to Dismiss filed by Loyalty Defendants and by ADS
Defendants.
Plaintiff filed its Complaint in April 2023, a First Amended
Complaint in January 2024, and a Second Amended Complaint in March
2024. Plaintiff brings this action on behalf of itself and others
similarly situated as part of a prospective class. The prospective
class consists of "all persons and entities that purchased Loyalty
Ventures common stock between November 8, 2021 and June 7, 2022,
inclusive" (the "Class Period"). Excluded from the prospective
class are Defendants, officers and directors of ADS and Loyalty,
their family and representatives, and others as described in the
SAC.
Plaintiff brings two claims against all Defendants. First,
Plaintiff claims violations of Section 10(b) of the Exchange Act,
15 U.S.C. Sec. 78j(b), and Rule 10b-5 promulgated under that
statute, 17 C.F.R. Sec. 240.10b-5. Second, Plaintiff brings
"control person" claims under Section 20(a) of the Exchange Act, 15
U.S.C. Sec. 78t(a).
Plaintiff alleges that Defendants orchestrated the Spinoff as part
of a plan to alleviate ADS's crushing debt load while knowing that
Loyalty faced significant business headwinds as a new, separate
entity. After establishing Loyalty as a separate, publicly traded
company, Loyalty incurred substantial debt financing to fund a $750
million cash payment back to ADS, a massive payout that Plaintiff
alleges came at the expense of Loyalty's new investors. In
Plaintiff's view, Defendants oversold Loyalty's prospects and
fraudulently misled investors about Loyalty's relationships with
critical corporate partners in its AIR MILES customer rewards
program. After months of decline in its stock price after the
Spinoff, Loyalty filed for Chapter 11 bankruptcy in March 2024.
Plaintiff's fraud allegations rely on documents filed in Loyalty's
bankruptcy proceedings, including a sworn declaration from Loyalty
CEO Charles Horn and a February 20, 2024 Adversary Complaint
against ADS filed by the Bankruptcy Trustee of Loyalty's
liquidating trust. These documents, in part, relate to Defendants'
knowledge regarding the Spinoff, including that one of the
business's most important clients, Sobeys, renegotiated its
contract with ADS shortly before the Spinoff. Plaintiff alleges
that Defendants deceived the market by concealing Sobeys's
potential departure and deliberately timing the Spinoff to occur
before that news would become public. ADS filed a motion to dismiss
the Adversary Complaint in the bankruptcy proceeding on May 20,
2024. That motion is pending as of this Opinion and Order.
Loyalty Defendants moved to dismiss all claims against them under
Rule 9(b) and Rule 12(b)(6) of the Federal Rules of Civil Procedure
and the PSLRA. ADS Defendants also moved to dismiss all claims on
similar grounds.
Defendants retort that Plaintiff merely alleges fraud-by-hindsight
and that the allegedly false or misleading statements highlighted
in the SAC represent non-actionable opinions, statements of
historical fact, statements of corporate optimism, i.e., "puffery,"
or statements that Defendants did not have a duty to disclose. They
also emphasize the tentative nature of Sobeys's potential exit from
the program.
Plaintiff allegations in the SAC include no statements that were
materially false or misleading by omission. Accordingly,
Plaintiff's claims against Defendants for securities fraud
under Sec. 10(b) fail on that element, the Court finds.
Ultimately, taken together, Plaintiff's allegations do not raise
the "strong inference" of scienter necessary to state a claim for
securities fraud under Sec. 10(b). Taking all the alleged facts
collectively, an inference of scienter must be more than merely
plausible or reasonable -- it must be cogent and at least as
compelling as any opposing inference of nonfraudulent intent.
According to the Court, any inference of recklessness or intent to
defraud from the facts alleged in the SAC is significantly less
plausible than the opposing inference that Defendants planned to
use the Spinoff to pay off ADS's debt (as publicly disclosed),
expected Loyalty to succeed, and attempted to achieve that success.
Accordingly, the element of scienter is insufficiently pled under
the PSLRA, and Plaintiff's Sec. 10b5 claims also fail on that
independent ground, the Court finds.
In addition to the Sec. 10(b) claim, Plaintiff alleges a Sec. 20(a)
"control person" claim against all Defendants. Because the Court
concludes that no underlying Sec. 10(b) claim is sufficiently pled,
Plaintiff's Sec. 20(a) necessarily fails as well, the Court holds.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=nR5wwl from PacerMonitor.com.
About Loyalty Ventures
Headquartered in Dallas, Texas, Loyalty Ventures Inc. was a
provider of tech-enabled, data-driven consumer loyalty solutions
and reward programs.
Loyalty Ventures and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
23-90111) on March 10, 2023. As of Sept. 30, 2022, Loyalty Ventures
had $1,591,218,000 in total assets against $1,980,850,000 in total
liabilities.
Judge Christopher Lopez oversees the cases.
The Debtors tapped Akin Gump Strauss Hauer & Feld, LLP and Jackson
Walker, LLP as U.S. bankruptcy counsels; PJT Partners, LP as
investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Kroll Restructuring Administration, LLC
as claims, noticing and solicitation agent. Cassels Brock &
Blackwell, LLP serves as Canadian legal counsel to LoyaltyOne while
Alvarez & Marsal Canada ULC serves as LoyaltyOne's Canadian
financial and restructuring advisor.
Bank of America, N.A. is the administrative agent and collateral
agent under a 2021 Credit Agreement that consisted of a $175
million term A loan facility; a $500 million term B loan facility;
and a $150 million revolving credit facility. Bank of America
tapped Haynes and Boone, LLP as legal counsel and FTI Consulting,
Inc. as financial advisor.
The Ad Hoc Group of Term B Loan Lenders retained Gibson Dunn &
Crutcher, LLP as counsel and Piper Sandler & Co as investment
banker.
* * *
In April 2023, Loyalty Ventures Inc. won bankruptcy court approval
of a wind-down plan that proposed the formation of a creditor trust
in the U.S. and contemplated a $160 million sale of the company's
Canadian Air Miles reward program to Bank of Montreal.
LTL MANAGEMENT: Loses Bid to Dismiss Soares, et al. Lawsuit
-----------------------------------------------------------
Judge P.J. Gibney of the Superior Court of Rhode Island denied the
motion filed by Defendants Johnson and Johnson Holdco (NA) Inc.,
Janssen Pharmaceuticals, Inc., Kenvue, Inc., and LTL Management LLC
to dismiss the case captioned as SUSAN SOARES and BRIAN SOARES
Plaintiffs, v. AVON PRODUCTS INC. et al., Defendants, C.A. No.
PC-2024-01631.
Defendants are all Johnson & Johnson subsidiaries.
Plaintiffs allege that Defendants, among others, are liable for
Susan's mesothelioma. Beginning in 1966, Susan used cosmetic
products such as baby powder, eyeshadows, blushes, bronzers,
foundation, and more which included asbestos-containing talc
products. As a result of using these products, Susan inhaled the
asbestos-containing talc for decades, which Plaintiffs allege was
the cause of her malignant pleural mesothelioma diagnosis on Oct.
30, 2023. Pertinent to these Defendants was Susan's use of Johnson
& Johnson's baby powder, which is alleged to have contained
asbestos.
Plaintiffs allege that from the 1890s until December 1978, Johnson
& Johnson designed, manufactured, marketed, distributed, and sold
talc-containing Johnson's Baby Powder in the United States. In
1972, Johnson & Johnson established Johnson & Johnson Baby
Products' operating division and transferred all of the assets and
liabilities associated with its baby products to it, including its
baby powder. However, after a series of asset and liability
transfers from January 1979 until October 2021, Johnson & Johnson
Consumer Inc. ("Old JJCI") designed, manufactured, marketed,
distributed, and sold talc-containing Johnson's Baby Powder,
including in Rhode Island. On Oct. 12, 2021, Johnson & Johnson
initiated "Project Plato," where Old JJCI underwent a divisive
merger resulting in the creation of two new entities. The first new
entity created was LTL, which received all of Old JJCI's talc
liabilities. The second entity was Johnson & Johnson Consumer Inc.
("New JJCI"), a New Jersey corporation with its principal place of
business also in New Jersey.
Two days after it was conceived in Project Plato, on Oct. 14, 2021,
LTL declared Chapter 11 bankruptcy. However, the Third Circuit
dismissed that case on April 4, 2023, finding
that it was filed in bad faith. A few hours after the dismissal of
that case, LTL again filed for bankruptcy, which was also dismissed
on Aug. 11, 2023. Sometime around December 2023, LTL changed its
name to LLT Management, LLC ("LLT").
Plaintiffs allege New JJCI/Holdco continued the same business as
Old JJCI. New JJCI/Holdco included the same employees, the same
management, and continued to operate from the same physical
location as Old JJCI. The manufacturing, marketing, and
distribution assets of Johnson & Johnson's baby powder were
transferred from Old JJCI to New JJCI/Holdco. Thus, they claim that
New JJCI/Holdco is liable as the successor in interest to Old JJCI.
In June 2022, New JJCI/Holdco created a new subsidiary also named
Johnson & Johnson Consumer, Inc. (JJCI 3.0). JJCI 3.0 was initially
a Nevada corporation before converting to a Delaware corporation in
January 2023, but retained its headquarters in New Jersey. It did
business under the name JNTL Consumer Health (NA). Id. New
JJCI/Holdco -- parent company of JJCI 3.0 -- transferred assets,
employees, and other business related to Johnson's Baby Powder to
JJCI 3.0. Thereafter, New JJCI/Holdco transferred JJCI 3.0 to
Janssen. Janssen then transferred JJCI 3.0 to JNTL Holdings 2, Inc,
a Janssen subsidiary, which became the parent of JJCI 3.0. Id. JNTL
Holdings 2, Inc. was subsequently transferred to Johnson & Johnson,
and Johnson & Johnson transferred it to Kenvue -- allowing it to
become the parent of JJCI 3.0.
Plaintiffs allege that Kenvue continued the business of
manufacturing and selling Johnson's Baby Powder. Kenvue received
all of the assets necessary to do so from New JJCI/Holdco via JJCI
3.0. It retained the same employees, the management remained the
same, it received all the intellectual property rights of New
JJCI/Holdco, and operated from the same physical location. Kenvue
also assumed the same business licenses and business contracts with
suppliers, manufacturers, vendors, and retailers to continue the
business uninterrupted. Thus, Plaintiffs again argue that Kenvue
can be held liable for their claims as the successor in interest to
New JJCI/Holdco and Old JJCI.
Defendants brought their motion to dismiss on April 26, 2024. They
claim that successor liability cannot be imposed upon them as a
matter of law. They characterize Plaintiffs' attempt to impose
successor liability as a result of New JJCI/Holdco's transfer of
assets to Janssen, which then transferred the same to Kenvue.
However, as LTL -- not New JJCI/Holdco -- received Old JJCI's
liabilities due to the divisional merger under Texas law, and Texas
law provides that a successor can only be liable for the
obligations explicitly imposed on it in a merger, neither New
JJCI/Holdco, Kenvue, nor Janssen can be held liable as successors
in interest of Old JJCI. Additionally, because LTL no longer exists
-- rather it is now LLT -- it argues that LTL should also be
dismissed.
Plaintiffs seek to hold Defendants liable as successors in interest
to Old JJCI. The general rule of successor liability in Rhode
Island is that a company that purchases the assets of another is
not liable for the debts of the transferor company.
Defendants argue that Texas law should apply, and Texas law only
allows for liabilities to transfer to a successor corporation when
such liabilities were explicitly allocated to it during the
divisional merger, except as otherwise provided by the plan of
merger or by law or contract.
Neither New JJCI/Holdco nor Kenvue are Texas corporations with a
principal place of business there. According to the Court, if there
is any relationship between the parties, such a relationship would
center in Rhode Island as that is the state where Susan allegedly
purchased, consumed, and was injured by Defendants' products.
Further, even if Rhode Island is not the correct center of
relationship between the parties.
There is nothing to persuade the Court that Texas could be properly
considered the center of the relationship between the parties. The
only allegation tying Texas into this matter is the fact that
Defendants unilaterally decided to undergo a divisional merger
there. Thus, the Court concludes Rhode Island is the only state
with an interest in this matter and that Texas has no interest
whatsoever. Accordingly, Rhode Island law applies to the action at
hand. Defendants' unilateral decision to perform a divisive merger
under Texas law --- and then transfer those entities to new
jurisdictions -- is insufficient to provide Texas an overriding
interest in this action, the Court finds.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=peiTcX
About J&J Talc Units
LLT Management, LLC (formerly known as LTL Management LLC) was a
subsidiary of Johnson & Johnson that was formed to manage and
defend thousands of talc-related claims and oversee the operations
of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue
streams, including royalty revenue streams based on third-party
sales of LACTAID, MYLANTA/MYLICON and ROGAINE products.
LTL Management first filed a petition for Chapter 11 protection
(Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time
of the filing, the Debtor was estimated to have $1 billion to $10
billion in both assets and liabilities.
In the 2021 case, LTL Management tapped Jones Day and Rayburn
Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP
and Shook, Hardy & Bacon LLP as special counsel; McCarter &
English, LLP as litigation consultant; Bates White, LLC as
financial consultant; and AlixPartners, LLP as restructuring
advisor. Epiq Corporate Restructuring, LLC, served as the claims
agent.
On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9
reconstituted the talc claimants' committee and appointed two
separate committees: (i) the official committee of talc claimants
I, which represents ovarian cancer claimants, and (ii) the official
committee of talc claimants II, which represents mesothelioma
claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On Jan. 30, 2023, a panel of the Third Circuit issued an opinion
directing this Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an order
denying LTL's stay motion on March 31, 2023, and, on the dame day,
issued its mandate directing the Bankruptcy Court to dismiss the
2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in connection
with LTL's initial bankruptcy filing in October 2021. LTL also has
secured commitments from over 60,000 current claimants to support a
global resolution on these terms.
In August 2023, U.S. Bankruptcy Judge Michael Kaplan in Trenton,
New Jersey, ruled that the second bankruptcy case should be
dismissed.
3rd Try
In May 2024, J&J announced its subsidiary LLT Management LLC is
soliciting support for a consensual prepackaged bankruptcy plan to
resolve its talc-related liabilities. Under the terms of the plan,
a trust would be funded with over $5.4 billion in the first three
years and more than $8 billion over the course of 25 years, which
J&J calculates to have a net present value of $6.475 billion.
Claimants must cast their vote to accept or reject the Plan by 4:00
p.m. (Central Time) on July 26, 2024. A solicitation package may be
requested at www.OfficialTalcClaims.com or by calling
1-888-431-4056. If the Plan is accepted by at least 75% of voters,
a bankruptcy may be filed under the case name In re: Red River Talc
LLC in a bankruptcy court in Texas or in the bankruptcy court of
another jurisdiction. Epiq Corporate Restructuring, LLC is serving
as balloting and solicitation agent for LLT.
On Sept. 20, 2024, Red River Talc LLC filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Tex. Case No. 24-90505).
Porter Hedges LLP and Jones Day serve as counsel in the new Chapter
11 case. Epiq is the claims agent.
Paul Hastings LLP is counsel to the Ad Hoc Committee of Supporting
Counsel. Randi S. Ellis is the proposed prepetition legal
representative of future claimants.
MAGIC CAR: Court Extends Cash Collateral Access to July 31
----------------------------------------------------------
Magic Car Rental, Inc. received another extension from the U.S.
Bankruptcy Court for the Central District of California, Los
Angeles Division to use cash collateral.
The order signed by Judge Victoria Kaufman granted the company's
motion to use cash collateral on a final basis through and
including July 31.
About Magic Car Rental Inc.
Magic Car Rental, Inc. operates a car rental business and owns two
real properties in California, which generate rental income.
Magic Car Rental filed Chapter 11 petition (Bankr. C.D. Calif. Case
No. 25-10123) on January 24, 2025, listing up to $10 million in
both assets and liabilities. Simon Simonyan, chief executive
officer of Magic Car Rental, signed the petition.
Judge Victoria S. Kaufman oversees the case.
The Debtor is represented by Anyama Law Firm and A.O.E. Law &
Associates.
Ready Cap Lending LLC, as lender, is represented by:
Scott B. Lieberman, Esq.
Finlayson Toffer Roosevelt & Lilly, LLP
15615 Alton Parkway, Suite 270
Irvine, CA 92618
Telephone: 949.759.3810
Facsimile: 949.759.3812
Email: slieberman@ftrlfirm.com
MANE SOURCE: Gets Interim OK to Use Cash Collateral
---------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Greenville Division granted Mane Source Counseling,
PLLC's motion to use cash collateral.
The interim order signed by Judge David Warren authorized Mane
Source Counseling to use cash collateral to pay the expenses set
forth in its 30-day budget, which projects total operational
expenses of $3,865.13.
Judge Warren granted the motion despite the absence of consent from
potential secured creditors, including CT Corporation System,
Corporation Service Company, Ace Funding Source, LLC and NRS
Funding.
As protection, secured creditors will be granted a post-petition
lien on Mane Source Counseling's cash and inventory to compensate
for the use of their collateral.
About Mane Source Counseling PLLC
Mane Source Counseling, PLLC provides counseling and wellness
services with the help of five horses used in therapy sessions.
Mane Source Counseling sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. N.C. Case No. 25-00833) on March
7, 2025, listing up to $500,000 in assets and up to $1 million in
liabilities. Cheryl Meola, company owner, signed the petition.
Judge David M. Warren oversees the case.
The Debtor is represented by:
Kathleen O'Malley, Esq.
Stevens Martin Vaughn & Tadych, PLLC
2225 W. Millbrook Road
Raleigh, NC 27612
Phone: 919-582-2300
Fax: (866) 593-7695
Email: komalley@smvt.com
MARK A. SCHUSTERMAN: Unsecureds Will Get 41.14% over 5 Years
------------------------------------------------------------
Mark A. Schusterman, M.D., P.A. filed with the U.S. Bankruptcy
Court for the Southern District of Texas a Plan of Reorganization
dated March 6, 2025.
Mark A. Schusterman, M.D., P.A. started operations in 1997.
Debtor's operation is a plastic surgery business. Debtor elected to
file a chapter 11 reorganization as the best means to resolve the
current liabilities of the company and determine the secured
portions of those creditors.
The Debtor filed this case on December 6, 2024. Debtor proposes to
pay allowed unsecured based on the liquidation analysis and cash
available. Debtor anticipates having enough business and cash
available to fund the plan and pay the creditors pursuant to the
proposed plan. It is anticipated that after confirmation, the
Debtor will continue in business. Based upon the projections, the
Debtor believes it can service the debt to the creditors.
The Debtor's Plan of Reorganization provides for the continued
operations of the Debtor in order to make payments to its creditors
as set forth in this Plan. Debtor seeks to confirm a consensual
plan of reorganization but is prepared to confirm this plan
pursuant to Section 1191(b) of the Bankruptcy Code if necessary.
The Debtor will continue operating its business. The Debtor's Plan
will break the existing claims into five classes of Claimants.
These claimants will receive cash repayments over a period of time
beginning on or after the Effective Date.
Class 5 consists of Allowed Unsecured Claims. All allowed unsecured
creditors shall receive a pro rata distribution at zero percent per
annum over the next five years according to the projections.
Creditors shall receive monthly disbursements based on the
projection distributions of each 12-month period. Debtor will
distribute $806,800.00 to the general allowed unsecured creditor
pool over the 5-year term of the plan, including the under-secured
claim portions. The Debtor's General Allowed Unsecured Claimants
will receive 41.14% of their allowed claims under this plan.
Any potential rejection damage claims from executory contracts that
are rejected in this Plan will be added to the Class 5 unsecured
creditor pool and will be paid on a pro-rata basis. The allowed
unsecured claims total $1,567,231.68.
The Debtor is rejecting the lease with GPI-3355 AL, LP, and will be
filing a motion to reject. The unsecured claim listed amount
provided in Class 5 for GPI-3355 AL, LP is estimated based on
anticipated lease rejection damages. If GPI-3355 AL, LP does not
file an amended claim within the timeframe specified on the order
rejecting the lease, GPI-3355 AL, LP will receive distributions
based on the treatment provided in Class 5.
Class 7 consists of Equity Interest Holders (Current Owners). The
current owners will receive no payments under the Plan; however,
they will be allowed to retain ownership in the Debtor. Class 7
Claimants are not impaired under the Plan.
The Debtor anticipates the continued operations of the business to
fund the Plan.
A full-text copy of the Plan of Reorganization dated March 6, 2025
is available at https://urlcurt.com/u?l=GQquLG from
PacerMonitor.com at no charge.
The Debtor's Counsel:
Robert C Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Fax: (713) 595-8201
E-mail: notifications@lanelaw.com
About Mark A. Schusterman
Mark A. Schusterman, M.D., P.A. is a medical practice specializing
in plastic surgery. The Debtor offers individualized care in all
phases of plastic surgery rejuvenation for the breast, body, and
face as well as non-surgical treatments.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-35756) on December 6,
2024, with $1,777 in assets and $1,484,160 in liabilities. Mark A.
Schusterman, president, signed the petition.
Judge Jeffrey P. Norman presides over the case.
Robert C Lane, Esq. at THE LANE LAW FIRM, is the Debtor's legal
counsel.
MAXTIN INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Maxtin Inc.
d/b/a Morrison Architectural Sign Company
3108 Garden Brook Dr
Dallas TX 75234
Business Description: Maxtin Inc., doing business as Morrison
Architectural Sign Company, specializes in
designing, fabricating, and installing
custom interior and exterior signage,
including wayfinding, branding, and ADA-
compliant solutions. With a focus on
healthcare and corporate sectors, the
Company provide quality, personalized
signage services across the United States
from its Dallas facility.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 25-40871
Debtor's Counsel: Howard Marc Spector, Esq.
SPECTOR & COX, PLLC
12770 Coit Rd
Suite 850
Dallas TX 75251
Tel: (214) 365-5377
Email: hms7@cornell.edu
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by William Leon Kanizar as president and
director.
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/LTSMHMI/Maxtin_Inc__txebke-25-40871__0001.0.pdf?mcid=tGE4TAMA
MAXTIN INC: Seeks Subchapter V Bankruptcy in Texas
--------------------------------------------------
On March 28, 2025, Maxtin Inc. filed Chapter 11 protection in the
U.S. Bankruptcy Court for the Eastern District of Texas. According
to court filing, the Debtor reports between $1 million and $10
million in debt owed to 1 and 49 creditors. The petition states
funds will be available to unsecured creditors.
About Maxtin Inc.
Maxtin Inc., doing business as Morrison Architectural Sign Company,
is a manufacturer of architectural signage based in Dallas, Texas.
The company specializes in producing custom signs using various
fabrication methods including digital printing, laser cutting, and
CNC machining, as evidenced by its financed equipment including
Mutoh XpertJet printers, HP Latex printers, and Boss Laser systems.
The company works with various materials including plastics and
other fabrication supplies from vendors like E&T Plastics and
Gyford Productions.
Maxtin Inc. sought relief under Subchapter V of Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 25-40871) on March
28, 2025. In its petition, the Debtor reports estimated assets up
to $50,000 and estimated assets up to $50,000 and estimated
liabilities between $1 million and $10 million.
The Debtor is represented by Howard Marc Spector at Spector & Cox,
PLLC.
MEADOW CREEK: Seeks to Hire Genova Malin & Trier as Counsel
-----------------------------------------------------------
Meadow Creek Farm of NY Realty, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Genova, Malin & Trier, LLP as counsel.
The firm will render these services:
a. give the Debtor legal advice with respect to its powers and
duties in its financial situation and management of the property of
the Debtor;
b. take necessary action to void liens against the Debtor's
property;
c. attend meetings and negotiate with representatives of
creditors and other parties in interest;
d. prepare and amend, on behalf of the Debtor, necessary
petitions, schedules, orders, pleadings and other legal papers;
and
e. perform all other legal services for the Debtor as Debtor
which may be necessary.
The firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Michelle Trier, Esq., an attorney at Genova, Malin & Trier,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Andrea B. Malin, Esq.
Michelle L. Trier, Esq.
Genova, Malin & Trier LLP
Hampton Business Center
1136 Route 9
Wappingers Falls, New York 12590
Tel: (845) 298-1600
About Meadow Creek Farm of NY Realty, LLC
Meadow Creek Farm of NY Realty, LLC sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
25-35241) on March 7, 2025, listing $500,001 to $1 million in both
assets and liabilities.
Judge Kyu Young Paek presides over the case.
Michelle L Trier, Esq. at Genova, Malin & Trier, LLP represents the
Debtor as counsel.
MENO ENTERPRISES: Unsecureds to Split $228K over 36 Months
----------------------------------------------------------
Meno Enterprises, LLC filed with the U.S. Bankruptcy Court for the
Northern District of Georgia a Disclosure Statement for Plan of
Reorganization dated March 6, 2025.
The 100% owner of the Debtor is Charles D. Smith, who formed the
company in 2005. The Debtor operates a manufacturing center that
provides digital dye sublimation printing on a variety of
materials.
Due to the COVID-19 pandemic and other unforeseen circumstances,
the Debtor entered into agreements with multiple merchant cash
advance lenders (the "MCAs"). The Debtor has been unable to
continue servicing the inflated payments, especially because sales
of the Debtor’s products became depressed due to the recent
recession.
Combined with the recession, the weekly withdrawals by the MCAs
caused disruptions in the Debtor’s cash flow. Accordingly, the
Debtor was forced to file for bankruptcy protection to stabilize
its operations and to reorganize its debts so that it may continue
to serve its community.
Class 14 consists of all general unsecured claims against the
Debtor. Holders of Class 14 claims shall be paid $228,000.00 over
36 months, to be paid a pro rata payment with payment commencing on
the first business day of the first full quarter following the
Effective Date and continuing by the 1st business day of each
subsequent quarter for a total of 12 quarterly payments. The
allowed unsecured claims total $4,690,837.30. Class 14 is
impaired.
Class 15 consists of Equity Security Holders of Debtor. The
Reorganized Debtor shall not make any distributions or pay any
dividends related to any Equity Interests unless and until all
distributions related to all Allowed Claims in Classes 1 through 14
have been made in full as set forth herein. Holders of Equity
Interests in the Debtor will retain those interests.
The source of funds for payments pursuant to the Plan will be the
profits of the Reorganized Debtor's business operations and the
Auction Proceeds.
The Plan provides that Debtor shall act as the Disbursing Agent to
make payments under the Plan unless Debtor appoints some other
entity to do so. Debtor may maintain bank accounts under the
confirmed Plan in the ordinary course of business. Debtor may also
pay ordinary and necessary expenses of administration of the Plan
in due course.
A full-text copy of the Disclosure Statement dated March 6, 2025 is
available at https://urlcurt.com/u?l=624xAF from PacerMonitor.com
at no charge.
Meno Enterprises, LLC is represented by:
Will B. Geer, Esq.
Caitlyn Powers, Esq.
Rountree Leitman Klein & Geer, LLC
Century Plaza I
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Telephone: (404) 584-1238
Facsimile: (404) 704-0246
Email: wgeer@rlkglaw.com
About Meno Enterprises
Meno Enterprises, LLC is a full-service dye sublimation printing
company in Ball Ground, Ga. It offers design consultation, complete
print and manufacturing services, and direct product distribution.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 24-54660) on May 7, 2024.
In the petition signed by Charles D. Smith, president, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Lisa Ritchey Craig oversees the case.
Will Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC, is the
Debtor's legal counsel.
MITEL NETWORKS: S&P Withdraws 'D' Issuer Credit Rating
------------------------------------------------------
S&P Global Ratings withdrew all of its ratings on Mitel Networks
(International) Ltd. at the issuer's request. The withdrawal
follows the company's filing for bankruptcy protection under
Chapter 11 of the U.S. Bankruptcy Code on March 10. At the time of
the withdrawal, S&P's issuer and issue-level ratings on Mitel were
'D' (default).
MTL PARTNERS: Court Extends Cash Collateral Access to May 13
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
granted extended MTL Partners, LLC's authority to use cash
collateral from March 11 to May 13.
The interim order authorized the company to use cash collateral for
essential business expenses as outlined in its budget, plus an
amount not to exceed 10% for each line item.
The budget shows total expenses of $638,710 from March to May.
Secured creditors were granted a perfected post-petition lien on
cash collateral to the same extent and with the same validity and
priority as their pre-bankruptcy liens.
The next hearing is scheduled for May 13.
About MTL Partners LLC
MTL Partners LLC, doing business as Collier's Furniture Expo, is a
furniture store in Sanford, Florida, offering stationary sofas,
reclining sofas, stationary sectionals, and reclining sectionals.
MTL Partners sought relief under Subchapter V of Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-06518) on
November 27, 2024. In the petition filed by Michael Collier, as
managing member, the Debtor reported total assets of $97,459 and
total liabilities of $2,244,020.
Judge Grace E. Robson handles the case.
The Debtor is represented by:
Jeffrey S. Ainsworth, Esq.
BransonLaw, PLLC
1501 E. Concord Street
Orlando, FL 32803
Tel: 407-894-6834
Email: jeff@bransonlaw.com
NEW FORTRESS: Moody's Cuts CFR to 'Caa1', Outlook Remains Negative
------------------------------------------------------------------
Moody's Ratings downgraded the ratings of New Fortress Energy Inc.
(NFE), including its corporate family rating to Caa1 from B2,
probability of default rating to Caa1-PD from B2-PD, its senior
secured term loans B to B3 from B2 and rated $425 million add on
senior secured term loan B B3 and downgraded legacy 2026 and 2029
senior secured notes to Caa2 from B3. Concurrently, Moody's also
downgraded the senior secured notes under NFE Financing LLC to B3
from B2. The Speculative Grade Liquidity rating is downgraded to
SGL-4 from SGL-3. The outlook remains negative.
RATINGS RATIONALE
The downgrade of NFE's CFR reflects Moody's views that financial
risks remain high, signified by high absolute amount of debt,
leverage and interest costs relative to its EBITDA and operating
cash flow. Taking into account NFE's updated EBITDA guidance that
was lowered to about $1 billion in 2025, Moody's do not expect NFE
to generate sufficient operating cash flows to maintain solid debt
service coverage, while the company continues to borrow to fund its
capex and plans to raise funds from divestments to meet its
maturities in 2025-2026 and to reduce debt.
NFE's high governance risks were an important consideration in this
rating action and are reflected in its revised G-5 score and CIS-5
credit impact score. These scores are linked primarily to its
financial policy with additional risks arising from a complex
organizational structure. Debt-funded expansion keep the leverage
consistently above the levels targeted by its stated financial
policy.
After a period of rapid expansion substantially funded by
borrowing, NFE is focusing on optimizing its asset footprint and on
debt reduction. Over the last 6 months, NFE took steps to extend
its maturities and raised cash through borrowing and placement of
equity. In 2025, the company is actively pursuing divestments of
some of its cash producing assets to reduce debt and debt service
costs in order to achieve a sustainable capital structure. While
Moody's counts on successful execution of the divestment strategy,
Moody's also takes into account execution risks associated with
this strategy, as timing and valuations of such transactions are
inherently uncertain.
NFE's CFR is underpinned by its significant energy infrastructure
assets, including its operating FLNG facility in Mexico and natural
gas terminals and several generation facilities, operating and
under construction in Brazil, Puerto Rico, Nicaragua and Jamaica.
The company plans to reduce its capex in 2025 but will continue to
invest to complete its core projects, including the construction of
its second FLNG facility and its projects in Brazil, and will
continue to expand its operations in Puerto Rico.
The negative outlook on the ratings recognizes execution risks
associated with divestment-led deleveraging strategy and reflects
uncertainty about NFE's ability to improve debt service coverage
and achieve a tenable capital structure through divestments.
NFE has weak liquidity and will rely on its significant cash
balances, committed borrowing facilities and expected proceeds from
various claims to support its liquidity amid limited operating cash
flow available after debt service payments in 2025. At the end of
2024, NFE reported $493 million in unrestricted cash. In March
2025, NFE renegotiated terms of one of its supply contracts in
Puerto Rico and will receive further $110 million in cash proceeds
as part of this settlement.
At the end of 2024, the company had no availability under its $1
billion senior secured revolver facility. The maturity of the
revolver facility was extended to October 2027 in the amount of
$900 million, with $100 million maturing in April 2026. NFE also
agreed to reduce the outstanding balance under the revolver by $270
million by September 30, 2025.
In November, 2024 NFE placed PortoCem Debentures due 2040 to fund
the completion of the PortoCem Power plant in Brazil. In Q1 2025,
NFE completed $425 million add-on term loan B facility with
proceeds to be used to fund completion of the second FLNG facility
and for some other corporate needs.
Moody's also notes that NFE may receive additional one-off payments
from insurance and other settlements, as well as through short-term
supplier credit or sales of LNG cargoes. At the end of 2024, NFE
reported $180 million outstanding under its LNG repurchase short
term funding arrangements. NFE continues to pursue a $659 million
compensation claim from FEMA in recognition of its forgone revenue
resulting from the reorganization of the emergency power supply
contracts in Puerto Rico. The timing and amount of the ultimate
settlement on this claim are inherently uncertain.
The company's next maturity is $509 million notes in September
2026, that will follow the aforementioned maturities under the
Revolver facility in 2025 and 2026. NFE's term loan B facilities
mature in 2028. However, the maturity will accelerate to July 2026,
in advance of the 2026 secured notes maturity, if these notes
remain outstanding.
The recently exchanged senior secured 2029 notes are rated B3, one
notch higher than the Caa1 CFR. These debt instruments benefit from
several significant security and guarantees packages that provide
greater collateral coverage and support better recovery
expectations for these instruments, which is why Moody's views the
B3 rating as more appropriate than the lower rating suggested by
Moody's Loss Given Default for Speculative-Grade Companies
Methodology model. The legacy 2026 and 2029 notes are rated Caa2,
reflecting their lower collateral coverage and recovery
expectations.
NFE recently executed the second amendment to its Term Loan
agreement, that comprised the addition of $425 million of add-on
senior secured term loan B commitments, rated B3, which Moody's
views as a more appropriate rating given its collateral coverage.
All undrawn commitments under term loan A were canceled. The
amendment of the term loan B agreement kept the existing terms,
including cross default provisions, annual amortization requirement
and cash sweep provisions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Failure to reduce debt and significantly improve debt service
affordability and coverage, including a delay in execution of
divestment strategy resulting in 2026 notes becoming current, would
result in a downgrade of the CFR. Rising cash requirements in
operations or capital investments resulting in accelerated use of
available cash balances and delay in debt reduction may also lead
to the downgrade of the ratings. Finally, ratings on the
instruments may be downgraded if Moody's views on the availability
and value of pledged collateral change.
An upgrade of the CFR depends on strong execution of the
deleveraging plan and significant reduction in financial risks. The
upgrade of the CFR would require a substantial reduction in debt
and interest costs, and some improvement in recurring operating
earnings, such that interest coverage improves with EBITDA /
Interest sustained at around 1.5x. An upgrade will also require NFE
to build financial flexibility, reduce reliance on debt by
generating some FCF and to maintain an adequate liquidity
position.
New Fortress Energy Inc. is a US-listed, high growth energy
infrastructure company with liquefaction, regasification and
distribution natural gas operations in Puerto Rico, Mexico,
Jamaica, Nicaragua and Brazil.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
NORTHERN LIBERTIES: Seeks Subchapter V Bankruptcy in Pennsylvania
-----------------------------------------------------------------
On March 27, 2025, Northern Liberties Early Childhood LLC filed
Chapter 11 protection in the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania. According to court filing, the
Debtor reports between $50,000 and $100,000 in debt owed to 1
and 49 creditors. The petition states funds will be available to
unsecured creditors.
About Northern Liberties Early Childhood LLC
Northern Liberties Early Childhood LLC, operating as Liberty
Learning Center II, a Philadelphia-based child day care services
provider, has filed for Chapter 11 bankruptcy protection in the
Eastern District of Pennsylvania. The company, which provides early
childhood education services from its location at 512 E. Girard Ave
in Philadelphia.
Northern Liberties Early Childhood LLC sought relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code
(Bankr. E.D. Pa. Case No. 25-11173-djb
) on March 27, 2025. In its petition, the Debtor reports estimated
assets up to $50,000 and estimated liabilities between $50,000 and
$100,000.
Honorable Bankruptcy Judge Derek J. Baker handles the case.
The Debtor is represented by Robert J. Dupass, Esq.
ONCOCYTE CORP: Posts $60.6MM Net Loss for 2024
----------------------------------------------
Oncocyte Corporation filed a Form 10-K with the U.S. Securities and
Exchange Commission reporting a net loss of $60,663,000 over a net
revenue of $1,881,000 for the year ended December 31, 2024,
compared to a net loss of $27,781,000 over a net revenue of
$1,503,000 for the year ended December 31, 2023.
The Company also reported $35,081,000 in total assets, $47,355,000
in total liabilities, and $12,274,000 in total stockholders'
deficit at December 31, 2024.
On March 24, 2025, the Company published the following letter to
shareholders in conjunction with its fourth quarter results:
Fellow Shareholders,
Our dynamic team is making swift progress toward delivering a
regulated organ transplant rejection monitoring test kit to the
market next year. To be clear, this test kit is the assay that we
expect can generate future material and self-sustaining revenue
within a few years. In 2024, we began to drive commercial awareness
of our tests and capture market share in the estimated $1 billion
total addressable transplant rejection testing market.
We are proud of our ability to stay nimble and move quickly
relative to our industry. In 2025, we expect to announce a series
of catalysts that build upon our momentum. We expect to announce
progress with our multi-center clinical trial of the clinical test
kit, commercial expansion of sales of our GraftAssureTM
research-use-only (RUO) test kit, and favorable data that further
solidify our global credibility in the transplant community. In
addition, we expect to deepen our relationships with our existing
strategic partners and announce new relationships with additional
strategic partners. Meanwhile, our pipeline of commercial contracts
continues to strengthen, with leading transplant centers
progressing through the stages of assay validation.
Since our November 2024 update, our confidence in the transplant
opportunity has grown in line with the enthusiasm we see among
leading transplant centers to participate in our clinical trial as
part of our FDA submission. With the clinical trial agreement
process already underway, we are eager to name these globally
recognized and well-respected institutions in the coming weeks.
We expect that our clinical trial will be conducted at several
leading U.S. transplant centers and a leading transplant research
institution in Europe, reinforcing the global credibility of our
approach. We are sincerely impressed by the demand that we see
among transplant centers to become part of our clinical trial.
Their strong interest has exceeded our expectations, underscoring
the need for localized and reliable testing solutions.
To recap the significance of this trial, in January 2023, when we
first decided to commercialize our transplant intellectual property
(IP) by designing a kitted test, we essentially planted a flag that
said we would put our assay through the approval processes of the
FDA and its EU equivalent. This decision was significant because in
the U.S., we estimate that most complex molecular diagnostics tests
are run without FDA authorization and are instead performed in
siloed, centralized labs. Moreover, these North American lab tests
are not easily accessible to hospitals in the rest of the world.
Regulatory authorization is a key step toward achieving our mission
to democratize access to these important tests. With regulatory
authorization, we anticipate selling test kits to hospital labs,
thereby empowering hospitals to run the tests themselves to
expediently deliver actionable results.
It is our belief that if we do the hard work of designing a lab
test in kitted form, and achieving regulatory authorization, we
will not only democratize access to these tests – thus bringing
care closer to the patient and helping hospitals to operate more
sustainably – but also create a rapidly growing, high-margin,
recurring business model.
On December 5, 2024, we had our first meeting with the FDA. We were
pleased with the collaborative nature of the discussion and our
reviewers’ feedback. As we continue to develop our kitted product
technology alongside our clinical trial, we are targeting
submission to the FDA by the end of this year, followed by FDA
authorization in 2026.
Additionally, our research-use-only version of the transplant
assay, which has been in the field since July, has generated
invaluable feedback from leading transplant center labs, allowing
us to refine the product for an enhanced user experience. These
collaborations continue to build momentum, increasing awareness
within the transplant community and reinforcing the potential for
clinical use of digital PCR technology for transplant rejection
testing.
Executive summary
Oncocyte is at a pivotal stage in commercializing what we expect to
be an industry-transforming organ transplant rejection monitoring
test. We aim to deliver proven, more affordable, faster tests that
can be run at local labs.
Specifically, we are developing a kitted test that quantifies a
molecular biomarker known as donor-derived cell-free DNA
(dd-cfDNA). Our scientists in Germany and the U.S. have played a
critical role over the past decade in developing the science that
helped establish dd-cfDNA as a trusted biomarker1 of transplant
rejection, and we are now commercializing that technology using a
market disruptive approach.
Our goal is to enable transplant centers to use our kits to capture
the potential patient benefit of a rapid response time and the
business benefit of generating laboratory revenue by running the
test. In addition to designing a laboratory test in kitted form,
our assay uses a digital-PCR workflow that we believe offers
distinct advantages over assays run on Next-Generation Sequencing
(NGS) technology.
We expect meaningful revenue in transplant rejection testing after
we have reached the clinical in-vitro diagnostic (IVD2) stage of
our kitted product development. In the meantime, we believe that
customers who are now adopting GraftAssure test kits for research
use are motivated in part by the eventual opportunity to use our
IVD kits to measure this biomarker in their own labs.
We also can run our clinical-use assay, VitaGraftTM, at our
clinical lab in Nashville, Tenn. We received Medicare reimbursement
for the test run at our lab in August 2023.
Looking back: 2024 Highlights
Successfully launched the research version of our kitted transplant
assay in July 2024: Bringing research centers online with our
GraftAssure RUO assay was a key part of our land-and-expand
strategy to drive commercial adoption of our tests. This also was
an important step toward capturing market share in an estimated $1
billion global total addressable market for transplant rejection
testing. In 2H 2024, we signed leading transplant centers in the
U.S. and Germany, as well as the UK, Switzerland, Austria, and
Southeast Asia. Within six months of launch, transplant centers
representing about 9% of German transplant volumes and about 2% of
U.S. transplant volumes had signed on to use GraftAssure RUO in its
early launch phase.
Achieved claims expansion for transplant rejection monitoring: In
January 2025, we announced that Medicare coverage for our assay
expanded following a study showing that monitoring with
Oncocyte’s assay significantly reduces time to rejection
diagnosis in patients with newly developed donor-specific
antibodies (DSA). The Molecular Diagnostics program (MolDX)
confirmed the use of VitaGraft Kidney to monitor patients with
newly developed donor-specific antibodies (dnDSA+) for
antibody-mediated rejection (AMR). This achievement followed the
publication of a groundbreaking study demonstrating VitaGraft
Kidney’s ability to detect AMR in dnDSA+ patients up to 11 months
earlier than the current standard of care. Early detection of
transplant rejection is growing in significance as novel
therapeutic treatments show promising early results in treating
antibody mediated rejection. Indeed, leveraging our clinical assay
in our laboratories to support data generation is a key lever in
our strategy that increases the market potential for our kitted
product.
Attracted a key strategic partner and investor: In April 2024, we
welcomed Bio-Rad Laboratories (NYSE: BIO) as a strategic investor
and partner. Bio-Rad subsequently invested in Oncocyte two
additional times. Bio-Rad now is a top shareholder, holding
approximately 9.66% of Oncocyte’s outstanding shares as of today.
In addition to its equity investments, Bio-Rad has pledged to
provide valuable financial support for the upcoming clinical trial
and further commercialization assistance, underscoring the depth of
its strategic partnership with Oncocyte.
Advanced the science of transplant and oncology, with favorable
data published in:
* The New England Journal of Medicine
* Transplant International
* Clinical Cancer Research
* Nephrology Dialysis Transplantation
* Acta Neuropathologica Communications
Completed a productive first meeting with the FDA: As noted above,
one of our most significant milestones was our pre-submission
meeting with the FDA on December 5, 2024. At that meeting, we
received valuable feedback regarding their expectations for
marketing authorization of our kitted clinical tests. The FDA
clarified that we may proceed using the de novo pathway rather than
a 510(k) submission. We view this as a meaningful accomplishment
— it establishes a new device category for our kitted test and
reinforces the uniqueness and potentially large clinical value of
our technology. We are in continuous dialogue with the FDA with the
next meeting scheduled in the coming months.
Fully funded our clinical assay development and streamlined our
capital structure: From January 2023 until March 2025, we raised
$57 million in equity from new and existing investors. This
includes the $29 million from our February 2025 registered direct
offering and concurring private placement, in which our five
largest shareholders, including Bio-Rad, led the funding round. We
expect the offering proceeds to fully fund the development of our
transplant assay program through FDA authorization. Also in 2024,
we redeemed all remaining shares of our Series A Redeemable
Convertible Preferred Stock – positioning us favorably with a
streamlined capital structure ahead of a growth inflection point.
Strengthened our team: In June 2024, in preparation for the next
several years of sustained, rapid growth, we welcomed Andrea James
as Chief Financial Officer. She has a proven track record of
guiding financial strategy through multiple phases of growth,
raising and stewarding capital, and building relationships with
high quality institutional investors. In January 2025, we appointed
Dr. Paul Billings as Consulting Chief Medical Officer. Dr. Billings
is a recognized pioneer in genomics and precision medicine with
over 40 years of experience spanning academia, government, and the
biotechnology industry, including as Chief Medical Officer at
Natera, Inc., during the commercialization phase of its blood test
for kidney transplant rejection as well as its cancer blood test
that can identify minimal residual disease. He also has been an
advisor or a physician leader with Laboratory Corporation of
America Holdings, Quest Diagnostics, Life Technologies Corp,
Johnson & Johnson, and Thermo Fisher Scientific, contributing to
transformative advances in molecular medicine. Dr. Billings has
substantial experience in commercializing novel assays in precision
medicine. He will provide key regulatory and reimbursement support
and assist with business development efforts and strategic
partnerships.
Looking Ahead
We believe that our market opportunity is promising, and that we
must continue to focus and execute. As the market shifts away from
centralized testing, our easy-to-use technology positions us to
potentially lead the transition to decentralized, in-lab
diagnostics.
Also, with favorable data expected later this year regarding our
transplant assay, we anticipate further validation of our assay’s
performance, which we believe will be instrumental in driving
adoption and securing payer support.
Our three major goals this year:
* Finalizing the clinical assay design: We are locking in
ease-of-use improvements based on feedback from some of the most
scientifically advanced labs in the world, which have been using
GraftAssure kits for research since last year and will be among our
expected initial clinical customers.
* Kicking off, conducting, and concluding our clinical trial: We
are finalizing the necessary protocols with the FDA, and ensuring
that our clinical trial partners are positioned to deliver robust,
high-quality data.
* For further context, we are designing a prospective,
observational, single-arm, multicenter clinical trial to validate
our clinical kitted transplant assay, which we intend to name
GraftAssureDx. Our study will analyze samples from healthy
transplant recipients as well as from those with transplant organ
rejection, ensuring statistically robust validation of dd-cfDNA
thresholds. The study also will allow for repeat testing across
multiple clinical sites. Our key objectives include confirming
predefined dd-cfDNA thresholds for detecting transplant rejection,
evaluating the test’s sensitivity, specificity, positive
predictive value (PPV), and negative predictive value (NPV)
compared to existing methods, and conducting a repeatability study
across a smaller number of sites to ensure test consistency. We
expect to successfully determine non-inferiority to existing
commercial rejection biomarkers, with expected results meeting or
exceeding the sensitivity and specificity benchmarks observed in
previous studies, and then submit this data to the FDA. We are
planning a second FDA pre-submission meeting to confirm the
endpoints with the agency.
* Spring loading 2H 2026 revenue: We remain on track to meet the
commitment that we made to investors in August 2024 to have at
least 20 transplant centers signed up for our assay by the end of
2025. We estimate that transplant centers that become customers of
our kitted clinical assay each represent a potential annual
high-margin revenue stream of several hundred thousand dollars to
$2 million of clinical-use tests, depending on the size of the
center.
Beyond the above immediate regulatory and product development
objectives, we are preparing for a broader industry shift in
transplant care. By 2028, we expect localized, real-time monitoring
to become the standard of care, and we believe that we are
well-positioned to capture an outsized share of this evolving and
growing market.
The enthusiasm we have seen from transplant centers, patient
advocates, and industry partners reinforces our belief that we are
building something transformative. We remain confident that the
next few years will define the future of transplant diagnostics and
solidify our leadership in this space.
-- The Oncocyte Management Team
Q4 2024 Financial Overview
* Relative to our strategic objective of commercializing our
transplant tests, we consider ourselves to be “pre-revenue.”
Our reported revenues of $1.5 million in Q4 2024 and $1.9 million
for the full year were largely derived from pharma services
performed at our clinical laboratory in Nashville. We see this
revenue as a testament to our team’s ability to achieve the
on-time delivery of clear, scientifically sound and accurate data
sets to our clients.
* A gross profit of $595,000 in Q4 2024, representing a 40% gross
margin, reflected the cost of materials to perform services at our
Nashville laboratory, and the relatively fixed costs of operating
that lab, including labor, infrastructure expenses such as the
depreciation of laboratory equipment, allocated rent costs,
leasehold improvements, and allocated information technology costs.
Full year gross profit of $740,000 reflected a 39% gross margin.
* In Q4 2024, operating expenses of $34.2 million included $41.9
million in non-cash impairment losses offset by a $13.7 million
non-cash gain due the change in fair value of our contingent
consideration, as well as $499,000 in non-cash stock-based
compensation expenses and $522,000 in non-cash depreciation and
amortization expenses. Excluding these non-cash items in the
current and prior periods, our Q4 2024 operating expenses decreased
approximately 12% sequentially and increased 21% year over year.
* Research and development expenses of $2.3 million declined
both sequentially and year over year, reflecting a decrease of 20%
and 11%, respectively, largely due to timing regarding laboratory
expenses.
* Sales and marketing expenses of $1.2 million reflected added
costs as we commercialize our research-use-only transplant test
kits.
* General and administrative expenses of $2.6 million were flat
sequentially, reflecting cost discipline as we focus on investing
in research and development on IVD product development, and sales
and marketing of GraftAssure.
* The $41.9 million intangible asset impairment charge we
recorded in Q4 2024 reflects our decision to maintain a low rate of
investment in our oncology assets as we focus on commercializing
transplant. Specifically, we recorded a charge of $35.1 million for
DetermaCNI and $6.8 million for DetermaIO. Offsetting that charge
in the quarter was a gain of $13.7 million recorded relative to the
decline in our contingent consideration liabilities. This liability
is tied to our expected future contingency payments to shareholders
of companies we had acquired in the past. The liability decline was
similarly related to DetermaIO and DetermaCNI, and was partially
offset by our increased contingent consideration liability in
transplant due to our increased revenue expectations for transplant
in the nearer term. The net decrease in our contingent
consideration liability was recorded as a gain to operating income,
partially offsetting the intangible asset impairment relating to
those same assets.
* On a full-year basis, we believe that the underlying trend in
operating expenses highlights our cost discipline. GAAP operating
expenses grew from $25.5 million in 2023 to $61.8 million in 2024,
with most of the change driven by a $37.8 million change in
non-cash impairment losses and contingent consideration fair
values. Excluding those non-cash items, GAAP R&D, Sales and
Marketing and General and Administrative expenses grew just
$716,000 year over year, or 3% — even while accomplishing all the
achievements listed above.
* General and administrative expenses declined about $978,000
year over year, or 9%, mainly due to cost cutting as well as 2023
severance payments that did not repeat.
* Research and development expenses grew from $9.3 million in
2023 to $9.8 million in 2024, a $545,000 increase, or 6%, as we
continued progress on our assay. Incremental expenses included
software development costs of $450,000 related to our clinical
kitted product development.
* Sales and marketing expenses reflect intentional investments
in commercialization, growing from $2.8 million in 2023 to $3.9
million in 2024, an increase of about $1.1 million. This included
growth in salaries and commission as we signed new top-transplant
centers, travel expenses related to signing our European pilot
sites, and equipment leasing expenses related to instruments
installed at research-use-only assay pilot sites.
* Our Q4 2024 loss from continuing operations was $33.5 million, or
$1.93 per share.
* Our Q4 2024 Non-GAAP loss from operations was $4.4 million and
excludes certain non-cash items.
* Our Q4 2024 per share results reflect 17.4 million weighted
average shares outstanding.
* Including the shares issued as part of our February 2025
offering and private placement, we currently have 28.6 million
shares outstanding.
* Oncocyte's cash, cash equivalents, and restricted cash balance at
the end of the fourth quarter was approximately $10.3 million.
* We are pleased that our fourth quarter outgoing cash flow from
operations (net cash used in operating activities) of $5.4 million,
combined with capital expenditures of $0.2 million, came in
favorably to our targeted spend $6 million, which was partially a
result of operational efficiency and partly a result of working
capital management.
* Please note that our ending year cash balance of $10.3 million
excludes the $29.1 million in gross financing cash flow from our
registered direct offering and private placement in February 2025.
A full-text copy of the Form 10-K is available at
https://tinyurl.com/55y3h96r
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.
ORBCOMM INC: Moody's Assigns 'Caa1' CFR, Outlook Stable
-------------------------------------------------------
Moody's Ratings affirmed GI DI ORION PARENT LP's (GI DI Orion) Caa1
corporate family rating and Caa1-PD probability of default rating.
The outlook is stable. At the same time, Moody's assigned a Caa1
CFR and Caa1-PD PDR to GI DI Orion's main operating company,
ORBCOMM Inc. (ORBCOMM) and affirmed the Caa1 ratings on its senior
secured first lien revolving credit facility and senior secured
first lien term loan. The outlook for ORBCOMM is stable. Moody's
will withdraw the CFR, PDR and stable outlook at GI DI Orion as the
financial statements Moody's rely on are filed by ORBCOMM. Hence
the reassignment of the CFR and PDR at ORBCOMM.
"The ratings affirmation recognizes the company's improved EBITDA
and free cash flow in 2024 but a sustained track record of
improvement, reduction in financial leverage and improving
liquidity will be required for upward rating movement", said Peter
Adu, Moody's Ratings analyst.
RATINGS RATIONALE
ORBCOMM's Caa1 CFR is constrained by: (1) weak credit metrics and
in particular debt/EBITDA that has remained above 10x (including
holdco debt) due to the company's limited ability to convert strong
order wins into revenue as well as pressure on EBITDA from higher
costs; (2) small scale (revenue around $310 million estimated for
2024) as a provider of industrial Internet of Things solutions that
allow assets to be tracked, monitored, and controlled remotely; and
(3) increased competitive risks as several peers and new entrants
are adding satellite capacity in order to pursue opportunities in
the company's target markets. The rating benefits from: (1) good
market positions because its offerings are embedded in customers'
processes and are complimented with competitive pricing; (2)
positive long term growth prospects as a large number of remote and
mobile assets have not been penetrated with connectivity; (3) good
customer diversification; and (4) a private owner that has been
supportive with liquidity injections.
ORBCOMM has one class of secured debt - $50 million revolving
credit facility that expires in September 2026 and $360 million
(face value) term loan due September 2028 - both rated Caa1. The
facilities are rated in line with the CFR because they make up the
bulk of the debt in the capital structure.
ORBCOMM has adequate liquidity through March 31, 2026, with sources
approximating $26 million versus uses of about $3.6 million of term
loan amortization in this time frame. Liquidity consists of cash of
$13 million as of September 30, 2024, $8 million of availability
under its $50 million revolving credit facility that expires in
2026, and Moody's free cash flow estimate of about $5 million over
the next 12 months. The revolver, which is subject to a springing
first lien net leverage covenant when utilization hits a certain
threshold, has already sprung and Moody's expects the covenant
cushion to exceed 15% over the next 12 months. ORBCOMM has limited
flexibility to generate liquidity from asset sales.
The stable outlook reflects Moody's views of good demand and a
pipeline of opportunities that will increase EBITDA and allow
debt/EBITDA to be sustained below 7x through the next 12 to 18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company generates consistent
growth in revenue, EBITDA and free cash flow and demonstrates at
least adequate liquidity while sustaining debt/EBITDA below 6.5x
(including holdco debt).
The ratings could be downgraded if the company's liquidity becomes
weak through cash burn or if Moody's expects a debt restructuring
or negotiated extension of its revolver with existing lenders.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ORBCOMM Inc., headquartered in Rochelle Park, New Jersey, is a
global provider of industrial Internet of Things and
Machine-to-Machine communication solutions to transportation, heavy
equipment, maritime, and government customers that allow them to
track, monitor, and control their assets remotely.
OTB HOLDING: Seeks to Hire King & Spalding as Bankruptcy Counsel
----------------------------------------------------------------
OTB Holding LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ
King & Spalding LLP as counsel.
The firm's services include:
(a) advising the Debtors with respect to their rights, powers,
and duties as debtors and debtors-in-possession in the continued
management and operation of their businesses and the management of
their properties;
(b) advising the Debtors with respect to the conduct of the
Chapter 11 Cases, including all of the legal and administrative
requirements imposed by the Bankruptcy Code and Bankruptcy Rules;
(c) taking all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on the
Debtors' behalf, the defense of any actions commenced against the
Debtors, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed against
the Debtors' estates;
(d) preparing on behalf of the Debtors all necessary motions,
applications, answers, orders, reports, and other papers in
connection with the administration of the Debtors' estates;
(e) taking all necessary actions in connection with any
chapter 11 plan and related disclosure statement and all related
documents, and such further actions as may be required in
connection with the administration of the Debtors' estates;
(f) appearing before the Court and any other courts to
represent the interests of the Debtors' estates;
(g) attending meetings and representing the Debtors in
negotiations with representatives of creditors and other
parties-in-interest;
(h) negotiating and preparing documents relating to the
disposition of assets, as requested by the Debtors;
(i) advising the Debtors on finance, finance-related matters
and transactions, and matters relating to any sale of the Debtors'
assets; and
(j) performing such other legal services for the Debtors as
may be necessary and appropriate in the administration of these
Chapter 11 Cases, including: (i) analyzing the Debtors' leases and
contracts and the assumption and assignment or rejection thereof;
(ii) analyzing the validity of liens against the Debtors' assets;
and (iii) advising the Debtors on corporate matters.
The firm's current hourly rates are:
Partners $1,655
Associates $800 to $1,330
Paraprofessionals $300 to $600
The firm received retainer payments in the amount of $425,030.
Jeffrey Dutson, Esq., a partner at King & Spalding LLP, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeffrey R. Dutson, Esq.
King & Spalding LLP
1100 Louisiana Street Suite 4100
Houston, TX 77002
Tel: (713) 751 3200
About OTB Holding LLC
OTB Holding LLC The Debtors are the operators of the well-known
restaurant brand "On The Border Mexican Grill & Cantina," which
focuses on the development, operation, and franchising of casual
dining establishments in the U.S. and South Korea. Founded in 1982
in Dallas, Texas, On The Border is recognized for its sizzling
mesquite-grilled fajitas, award-winning margaritas, house-made
salsa, and endless chips and salsa. Over the past 40 years, the
brand has expanded from a single cantina into one of the most
popular Tex-Mex chains in the country, offering a wide range of
flavorful dishes inspired by Texas and Mexico. With more than 80
locations in the U.S. and internationally, it has become a go-to
spot for fresh Tex-Mex food and lively dining experiences. On The
Border stands out in the casual dining industry by leveraging its
unique and authentic brand. As of the Petition Date, the Debtors
continue to operate 60 restaurant locations across 18 states, all
of which are leased. In addition, the Company has franchise
agreements with third parties who run 20 additional locations in
the U.S. and South Korea.
The Debtor sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ge. Case No. 25-52415 (SMS) on March 4, 2025. In
the petitions signed by Jonathan Tibus as chief restructuring
officer, the Debtor reports an estimated assets of $10 million to
$50 million and liabilities of $10 million to $50 million.
Seven affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
OTB Holding LLC (Lead Case) 25-52415
OTB Acquisition LLC 25-52416
OTB Acquisition of New Jersey LLC 25-52417
OTB Acquisition of Howard County LLC 25-52418
Mt. Laurel Restaurant Operations LLC 25-52419
OTB Acquisition of Kansas LLC 25-52420
OTB Acquisition of Baltimore County, LLC 25-52421
Judge Sage M. Sigler presides over the case.
Jeffrey R. Dutson, Esq., Brooke L. Bean, Esq., and Kyung Won Song,
Esq., at KING & SPALDING LLP, represent the Debtors as legal
counsel.
ALVAREZ & MARSAL NORTH AMERICA, LLC serves as the Debtors' Chief
Restructuring Officer Provider.
KURTZMAN CARSON CONSULTANTS, LLC serves as the Debtors' Claims &
Noticing Agent.
HILCO CORPORATE FINANCE, LLC represents the Debtors as Lead
Investment Banker.
OUR TOWN: Creditors to Get Proceeds From Liquidation
----------------------------------------------------
Our Town Realestate LLC filed with the U.S. Bankruptcy Court for
the Northern District of Georgia a Subchapter V Plan of Liquidation
dated March 3, 2025.
The Debtor is a real estate company. Specifically, the Debtor owns
four single family houses in Atlanta, Georgia for rent and/or sale.
The Debtor fell behind on mortgage payments pre-Petition 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.
Aljermiah Laqunne McKeithan 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 6 consists of General Unsecured Claims not otherwise treated
herein. The Debtor is not aware of any General Unsecured Claims. If
the Plan is confirmed under section 1191(a) of the Bankruptcy Code,
the Debtor shall pay to any Class 6 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 6 Creditors are
entitled to enforce their state law rights and remedies against the
Debtor.
If the Plan is confirmed under section 1191(b) of the Bankruptcy
Code, Class 6 shall be treated the same as if the Plan was
confirmed under section 1191(a) of the Bankruptcy Code. The Allowed
Claims of the Class 6 Creditors are Impaired by the Plan and the
holders of Allowed Class 6 Claims are entitled to vote to accept or
reject the Plan.
Class 7 consists of the Interests of the Debtor's Equity Holder
Aljermiah Laqunne McKeithan. 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=yLElGq 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 Our Town Realestate LLC
Our Town RealEstate, LLC sought relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No.
24-62744) on De. 2, 2024. In the petition filed by Al McKeithan, as
manager, the Debtor reports estimated assets and liabilities
between $1 million and $10 million each.
Bankruptcy Judge Paul W. Bonapfel handles the case.
The Debtor is represented by Paul Reece Marr, Esq. at PAUL REECE
MARR, P.C.
OYA RENEWABLES: Plan Exclusivity Period Extended to June 4
----------------------------------------------------------
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District
of Delaware extended OYA Renewables Development LLC and affiliates'
exclusive periods to extend their exclusivity periods to file a
plan of reorganization and obtain acceptance thereof to June 4 and
August 4, 2025, respectively.
In a court filing, since the Petition Date, the Debtors and their
professionals have focused substantially all of their time, energy,
and resources on smoothly transitioning into chapter 11, addressing
critical case management issues, and conducting a robust
postpetition marketing and sale process, all in an effort to
maximize the value of the Debtors' estates.
The Debtors believe that, in light of the progress that the Debtors
and other professionals have made in the chapter 11 cases over the
past three and a half months and the Debtors' demonstrated efforts
to work cooperatively with their stakeholders, it is reasonable and
appropriate that the Debtors be granted an extension of the
Exclusive Periods. Accordingly, the Debtors submit that this factor
weighs in favor of extending the Exclusive Periods.
The Debtors explain that throughout the chapter 11 process, the
companies have endeavored to establish and maintain cooperative
working relationships with their primary creditor constituencies.
Importantly, the Debtors are not seeking the extension of the
Exclusive Periods to delay administration of the chapter 11 cases
or to exert pressure on their creditors, but rather to continue the
orderly, efficient, and cost-effective chapter 11 process. Thus,
this factor also weighs in favor of the requested extension of the
Exclusive Periods.
The Debtors claim that termination of the Exclusive Periods would
adversely impact the Debtors' efforts to preserve and maximize the
value of the estates and the progress of the chapter 11 cases. In
effect, if the Court were to deny the Debtors' request for an
extension of the Exclusive Periods, any party in interest would be
free to propose an alternative chapter 11 plan for the Debtors.
Terminating the Exclusive Periods would only foster a chaotic
environment and provide opportunistic parties to engage in
counterproductive behavior in pursuit of alternatives that are not
value-maximizing or feasible under the circumstances of the chapter
11 cases.
Counsel for the Debtors:
Edmon L. Morton, Esq.
Robert S. Brady, Esq.
Kenneth J. Enos, Esq.
Rebecca L. Lamb, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Rodney Square
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: emorton@ycst.com
rbrady@ycst.com
kenos@ycst.com
rlamb@ycst.com
Duston K. McFaul, Esq.
Maegan Quejada, Esq.
SIDLEY AUSTIN LLP
1000 Louisiana Street, Suite 5900
Houston, Texas 77002
Tel: (713) 495-4500
Fax: (713) 495-7799
Email: dmcfaul@sidley.com
mquejada@sidley.com
- and -
Nathan C. Elner, Esq.
Chelsea M. McManus, Esq.
2021 McKinney Avenue, Suite 2000
Dallas, Texas 75201
Tel: (214) 981-3300
Fax: (214) 981-3400
Email: nelner@sidley.com
cmcmanus@sidley.com
- and -
Ian C. Ferrell, Esq.
One South Dearborn
Chicago, Illinois 60603
Tel: (312) 853-7000
Fax: (312) 853-7036
Email: iferrell@sidley.com
About OYA Renewables
OYA Renewables Development LLC own a portfolio of operating solar
projects and projects in various stages of development in North
America. OYA also deliver distributed energy and smart long-term
renewable energy solutions to local communities.
OYA Renewables and seven its affiliates filed for bankruptcy
protection (Bankr. D. Del., Lead Case No. 24-12574) on November 6,
2024. In petition signed by John Shepherd as chief restructuring
officer, the Debtors reported $100 million to $500 million in
estimated assets and liabilities.
The Hon. Karen B. Owens presides over the cases.
Young Conway Stargatt & Taylor LLP serves the Debtors' local
bankruptcy counsel and Sisley Austin LLP serves as the general
bankruptcy counsel. Ankara Consulting Group, LLC acts as financial
advisor to the Debtors, while Agenis Capital Advisors and
SenahillAdvisors LLC act as investment bankers to the Debtors.
Kroll Restructuring Administration LLC is the Debtors' notice and
claims agent.
OYA Renewables Development LLC own a portfolio of operating solar
projects and projects in various stages of development in North
America. OYA also deliver distributed energy and smart long-term
renewable energy solutions to local communities.
OYA Renewables and seven its affiliates filed for bankruptcy
protection (Bankr. D. Del., Lead Case No. 24-12574) on November 6,
2024. In petition signed by John Shepherd as chief restructuring
officer, the Debtors reported $100 million to $500 million in
estimated assets and liabilities.
The Hon. Karen B. Owens presides over the cases.
Young Conway Stargatt & Taylor LLP serves the Debtors' local
bankruptcy counsel and Sisley Austin LLP serves as the general
bankruptcy counsel. Ankara Consulting Group, LLC acts as financial
advisor to the Debtors, while Agenis Capital Advisors and Senahill
Advisors LLC act as investment bankers to the Debtors. Kroll
Restructuring Administration LLC is the Debtors' notice and claims
agent.
PAPER SOURCE: Court Affirms Dismissal of Sugar Beets Lease Suit
---------------------------------------------------------------
In the appealed case captioned as PAPER SOURCE LLC, a Delaware
limited liability company, Plaintiff-Appellant, v. SUGAR BEETS,
INC. d/b/a MAMAN, a New York corporation, Defendant-Appellee, No.
1-23-1878 (Ill. App. Ct.), the Appellate Court of Illinois affirmed
the order of the Circuit Court of Cook County dismissing the
plaintiff's fourth amended complaint.
Paper Source Inc., an Illinois corporation ("Paper Source
Illinois") and defendant Sugar Beets, a New York corporation,
entered into a 12-year lease agreement with 114 N Aberdeen
Partners, LLC. The agreement provided that Paper Source Illinois
and Sugar Beets collectively would be the tenant of the property
and would be jointly and severally responsible for all obligations
under the lease. Each party was responsible for the payment of
rent, taxes, and utilities, among other duties. In the event that
Paper Source Illinois and Sugar Beets failed to pay rent within
five days of written notice of the need to pay rent, they would be
in default on the lease.
When Paper Source Illinois entered into the joint lease, it also
entered into a co-tenant agreement with defendant. The joint lease
was incorporated into the co-tenant agreement, which also
memorialized the rights and duties of the two companies to one
another as co-tenants under the lease.
In March 2021, Paper Source Illinois filed for Chapter 11
bankruptcy in the Eastern District of Virginia. Pursuant to the
bankruptcy, Paper Source Illinois entered into an asset purchase
agreement to sell substantially all of its assets to plaintiff
Paper Source, LLC, then known as Papershop Holdco, Inc., on May 10,
2021. The bankruptcy court approved the agreement on May 13, 2021.
As part of the agreement, Paper Source Illinois assigned the joint
lease with defendant to plaintiff. However, the agreement did not
mention the co-tenant agreement, and the schedule to the bankruptcy
court’s order approving the sale did not reference or otherwise
identify the cotenant agreement.
The plaintiff's fourth amended complaint asserted claims for breach
of contract or, alternatively, breach of implied contract.
Plaintiff sought to enforce the rights and remedies under the
co-tenant agreement and joint lease. Particularly, plaintiff
alleged that it was entitled to $3.6 million in accelerated rent.
Defendant moved to dismiss, and the circuit court granted the
motion and dismissed the complaint with prejudice. This timely
appeal followed.
On appeal, plaintiff contends that the circuit court erred in
dismissing its complaint alleging that defendant breached the
co-tenant agreement because:
(1) when the bankruptcy court assigned plaintiff the joint
lease, it also by implication included the co-tenant agreement, and
(2) an implied contract exists between plaintiff and defendant on
terms identical to the co-tenant agreement.
The circuit court dismissed the complaint because it determined
that plaintiff had failed to allege facts showing that plaintiff
was a party to the co-tenant agreement.
The Appellate Court finds Plaintiff was not a party to the
co-tenant agreement, and Paper Source Illinois did not act on
behalf of plaintiff. Both companies are distinct entities that were
at all times acting in their own interests.
The fact that each tenant is jointly and severally liable for all
obligations under the joint lease is additional evidence that the
joint lease is agnostic as to the existence of an agreement between
the parties. The obligations under the joint lease must be
fulfilled regardless, and the parties’ legal rights and duties
under that agreement would not be affected in any way if no
co-tenant agreement were to exist. In short, plaintiff is a
stranger to the co-tenant agreement, and the circuit court
correctly dismissed its breach of contract claim, the Appellate
Court holds.
Plaintiff also argues that the circuit court erred in concluding
that, in order for plaintiff to be entitled to the remedy of the
acceleration clause of the co-tenant agreement, the parties had to
agree separately and specifically, to the remedies provision of the
adopted written agreement.
The Appellate Court finds Plaintiff’s complaint fails to allege
any facts suggesting that the parties agreed to abide by the
acceleration clause in the co-tenant agreement. The complaint
asserts that defendant continued to pay plaintiff rent and other
lease expenses over the course of several months consistent with
defendant’s obligations under the co-tenant agreement. But the
continued payment of rent only implies a contract term requiring
defendant to pay that amount of rent. It does not imply any
additional terms. The complaint also asserts that defendant never
denied the existence of the co-tenant agreement or its application
to the parties in this case. However, defendant never affirmed that
the co-tenant agreement applied in this case either. Therefore,
defendant’s silence does not imply anything in favor of or
against concluding that an implied agreement existed, the Appellate
Court concludes.
A copy of the Court's decision dated March 24, 2025, is available
at https://urlcurt.com/u?l=xzIc94
About Paper Source
Paper Source, Inc., operates as lifestyle brand and retailer of
premium paper products, crafting supplies and related gifts,
including custom invitations, greeting cards and personalized
stationery and stamps. It sells fine and artisanal papers, wedding
paper goods, books and gift wrap through its 158 domestic stores
and e-commerce website. Its administrative headquarter is in
Chicago.
Paper Source and Pine Holdings, Inc., sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 21-30660) on March 2, 2021. At the time
of the filing, Paper Source disclosed assets of between $100
million and $500 million and liabilities of the same range.
Meanwhile, Pine Holdings disclosed assets of up to $50,000 and
liabilities of between $100 million and $500 million.
The Hon. Keith L. Phillips is the case judge.
The Debtors tapped Willkie Farr & Gallagher LLP and Whiteford
Taylor & Preston LLP as bankruptcy counsel, M-III Advisory LP as
restructuring advisor, SSG Capital Advisors LLC as investment
banker, and A&G Real Estate Partners as real estate advisor. Epiq
Corporate Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 4 appointed a committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The committee
tapped Hahn & Hessen LLP as bankruptcy counsel, Hirschler
Fleischer, PC as Virginia local counsel, and Province, LLC as
financial advisor.
PARADIGM PARENT: Moody's Assigns First Time B2 Corp. Family Rating
------------------------------------------------------------------
Moody's Ratings assigned ratings to Paradigm Parent, LLC ("d/b/a
Patterson Companies or Patterson") including a B2 Corporate Family
Rating, and B2-PD Probability of Default Rating. Moody's also
assigned a B2 rating to the backed senior secured first lien term
loan B. The outlook is stable.
Proceeds from the $900 million ABL (unrated), $1.35 billion senior
secured term loan B, additional senior secured debt which will be
marketed separately, along with new common equity contribution from
private equity firm Patient Square Capital will fund the leveraged
buyout of Patterson Companies. The $900 million ABL is expected to
have $300 million drawn at close. Proceeds will also be used to
refinance existing debt, add cash to the balance sheet and pay fees
and expenses.
Governance risk factors are material to the rating action.
Governance risk factors incorporate the company's financial policy
which includes a high level of leverage post LBO.
RATINGS RATIONALE
Patterson's B2 CFR considers the company's solid position as a
leading distributor of products to the dental and animal health
markets. The company sells a wide variety of consumables, equipment
and practice management software to dental practices as the second
largest distributor in the North American market. The company is
also one the leading distributors to the production animal health
market and the companion animal market, servicing a large customer
footprint of producers, production veterinarians and companion
animal veterinarians. The company sells both its own proprietary
brands and third-party products. Moody's expects continued growth
overall for Patterson Companies. The dental market longer term will
grow due to aging demographics, the production animal market is
driven by increasing consumption of protein and the companion
animal market is driven by increased adoption and spending on
pets.
The rating is constrained by the company's moderate scale and high
leverage of 6.3x on a Moody's adjusted basis as of April 27, 2025,
pro forma for the LBO. Moody's expects leverage to decline to the 5
times range over the next 12 to 18 months.
Moody's expects Patterson's liquidity will remain very good over
the next 12 to 18 months. Patterson's liquidity is supported by
Moody's forecasts that the company will continue to generate
positive free cash flow in FY 2026 and FY 2027 (Patterson's fiscal
year-end is in April). The company's cash flow generation benefits
from its steady profit margins and limited capital expenditures.
The company's liquidity profile is further supported by a new $900
million asset-backed revolving credit facility that will have $300
million drawn as of the close of the transaction. The LBO will
eliminate Patterson's off-balance sheet financing vehicles. Moody's
expects the company to have $134 million of cash on its balance
sheet at the close of the LBO. Alternative sources of liquidity
are limited as substantially all assets are pledged.
Patterson's CIS-4 indicates that the rating is lower than it would
have been if ESG risk exposures did not exist. Patterson has
exposure to environmental risks (E-3) as a distributor utilizing a
fossil fuel dependent truck fleet for one of its business segments.
The score also reflects exposure to social risks (S-3), driven by
responsible production, including compliance with various federal,
state and local regulatory requirements for the sale and
distribution of animal-health pharmaceuticals. Governance risks
(G-4) reflect the company's high financial leverage as well as
private equity ownership, which creates the risk of aggressive
financial policies.
The stable outlook reflects Moody's expectations that Patterson's
solid operating performance will continue over the next 12-18
months, driven by continued demand for its products across dental
and animal health segments. Moody's expects the company will
maintain very good liquidity and earnings growth will drive some
deleveraging over the forecast period.
The B2 rating on the new term loan reflects the preponderance of
senior secured debt in the capital structure. The term loan will
rank below the $900 million ABL revolving facility, which has a
first lien on the more liquid assets, including accounts receivable
and inventory. The term loan has a second lien on the revolver
collateral and a first lien on the remainder of the company's
assets.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following: incremental pari passu
debt capacity up to the greater of $487mm and 100% of Consolidated
EBITDA, plus unlimited amounts subject to 5.4x first lien net
leverage. The credit agreement is expected to have customary J.
Crew and Serta protections.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if operating results are weaker
than Moody's expectations, or if liquidity weakens. Additionally,
if the company adopts a more aggressive financially policy
including pursuing acquisitions or dividends that result in
substantial increase in leverage, this could also result in a
downgrade. Quantitatively, debt / EBITDA sustained above 6.5x could
result in a downgrade.
The ratings could be upgraded if there is a substantial increase in
the company's absolute scale. Additionally, an upgrade would
require Patterson to maintain very good liquidity, as evidenced by
consistent positive free cash flow. Quantitatively, if debt/EBITDA
is sustained below 5.5x, the ratings could be upgraded.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in December 2024.
Patterson Companies, Inc. engages in the distribution of dental and
animal health products in the United States and UK. The company
reported $6.5 billion in revenues for the last twelve months ended
January 25, 2025. The company is publicly traded.
PARADOX ENTERPRISES: Gets OK to Use Cash Collateral Until April 30
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee,
Winchester Division issued an agreed order allowing Paradox
Enterprises, LLC to continue using cash collateral through April
30.
Paradox requires the use of cash collateral to pay its operating
expenses and to make payments to Legalist DIP Fund I, LP and
Legalist DIP SPV II, LP, which may assert an interest in the
company's cash collateral.
The company's budget shows total disbursements of $32,650 for
February; $33,000 for March; and $32,170 for April.
Legalist DIP Fund I and Legalist DIP SPV will be granted a
replacement lien to the extent that the use of cash collateral
results in a decrease in the value of their collateral. In
addition, the secured creditors will receive weekly payments of
$4,000 from Paradox as adequate protection.
A final hearing is scheduled for April 30.
Legalist DIP Fund and Legalist DIP SPV are represented by:
Gregory C. Logue, Esq.
Woolf, McClane, Bright, Allen & Carpenter, PLLC
P.O. Box 900
Knoxville, TN 37901
(865)215-1000
(865)215-1001 (fax)
logueg@wmbac.com
About Paradox Enterprises
Paradox Enterprises, LLC owns various properties valued at $6.1
million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tenn. Case No. 24-10826) on April 5,
2024, with $6,174,373 in assets and $13,012,125 in liabilities.
Eric Shelley, managing member, signed the petition.
Judge Nicholas W. Whittenburg oversees the case.
The Debtor is represented by:
Denis Graham Waldron, Esq.
Dunham Hildebrand, PLLC
Tel: 629-777-6519
Email: gray@dhnashville.com
PARAMOUNT DRUG: Hires Gorski & Knowlton as Bankruptcy Counsel
-------------------------------------------------------------
Paramount Drug, LLC seeks approval from the U.S. Bankruptcy Court
for the District of New Jersey to hire Gorski & Knowlton PC to
handle its Chapter 11 proceedings.
The hourly rates charged by the firm's attorneys and paralegals
are:
Carol Knowlton $425 per hour
Allen Gorski $425 per hour
Paralegal $200 per hour
The firm received a retainer in the amount of $15,000, inclusive of
$1,738 filing fee.
Carol Knowlton, Esq., an attorney at Gorski & Knowlton, disclosed
in a court filing that her firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Carol L. Knowlton, Esq.
GORSKI & KNOWLTON PC
311 Whitehorse Ave, Suite A
Hamilton, NJ 08610
Tel: (609) 964-4000
Fax: (609) 528-0721
E-mail: cknowlton@gorskiknowlton.com
About Paramount Drug LLC
Paramount Drug, LLC offers a range of pharmacy services, including
prescription fills and refills, immunizations, and the provision of
durable medical equipment. As a member of Good Neighbor Pharmacy,
it is committed to providing personalized care and customer
satisfaction.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 25-12381) on March 7,
2025. In the petition signed by Sharon Maher, principal, the Debtor
disclosed $269,300 in assets and $1,534,570 in liabilities.
Judge Andrew B. Altenburg, Jr. oversees the case.
Carol L. Knowlton, Esq., at Gorski & Knowlton, P.C., represents the
Debtor as legal counsel.
PARKERVISION INC: Posts $14.4MM Net Loss for 2024
-------------------------------------------------
Parkervision, Inc., filed a Form 10-K with the Securities and
Exchange Commission disclosing a net loss of $14,472,000 for the
year ended December 31, 2024, compared to a net income of
$9,515,000 for the year ended December 31, 2023.
The Company also disclosed $5,879,000 in total assets, $52,291,000
in total liabilities, and $46,412,000 in total shareholders'
deficit at December 31, 2024.
According to the Company, "The accompanying consolidated financial
statements as of and for the year ended December 31, 2024 were
prepared assuming we will continue as a going concern, which
contemplates that we will continue in operation and will be able to
realize our assets and settle our liabilities and commitments in
the normal course of business for a period of at least one year
from the issuance date of these consolidated financial statements.
These consolidated financial statements do not include any
adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classification of liabilities that could result should we be unable
to continue as a going concern.
:With the exception of the year ended December 31, 2023, we have
incurred significant losses from operations and negative cash flows
in every year since inception, largely as a result of our
significant investments in developing advanced technologies and
protecting our intellectual property. We have utilized the
proceeds from sales of debt and equity securities and contingent
funding arrangements with third parties to fund our operations,
including the cost of litigation to enforce our intellectual
property rights. At December 31, 2024, we had cash and cash
equivalents of approximately $4.9 million, working capital of $2.6
million, and an accumulated deficit of approximately $448.2
million.
"For the year ended December 31, 2024, we incurred a net loss of
approximately $14.5 million and used cash from operations of
approximately $3.2 million. For the year ended December 31, 2024,
we made aggregate payments of approximately $0.2 million on
long-term debt. We received aggregate net proceeds in 2024 from
equity-based financings of $5.0 million and proceeds from option
and warrant exercises of approximately $0.8 million. These
proceeds will be used to support our operations.
"A significant amount of future proceeds that we may receive from
our patent enforcement and licensing programs will first be
utilized to repay borrowings, legal fees, and litigation expenses
under our contingent funding arrangements. In addition, we have
approximately $1.6 million in convertible debt that, if not
converted, or extended in accordance with the terms of the debt,
will mature between July 2025 and March 2026. Although all of our
convertible notes have conversion prices that are currently below
the market price of our common stock, conversion is at the option
of the holder and there can be no assurance that the holders will
exercise their conversion option prior to maturity. These
circumstances indicate there is substantial doubt about our ability
to continue to operate as a going concern for a period of one year
following the issue date of these consolidated financial
statements.
"Our business plan is currently focused solely on our patent
enforcement and technology licensing objectives. The timing and
amount of proceeds from our patent enforcement actions are
difficult to predict and there can be no assurance we will receive
any proceeds from these enforcement actions. Refer to Note 12 for
a complete discussion of our patent enforcement proceedings.
"Significant portions of our litigation costs to date have been
funded by contingent payment arrangements with legal counsel. Fee
discounts offered by legal counsel in exchange for contingent
payments upon successful outcome in our litigation are not
recognized in expense until such time that the related proceeds on
which the contingent fees are payable are considered probable.
Contingent fees vary based on each firm’s specific fee agreement.
We currently have contingent fee arrangements in place for all of
our active cases. In addition to our contingent fee agreements
with legal counsel, we have secured and unsecured contingent
payment obligations that have contingent payments due from
patent-related proceeds.
"Our current capital resources are not sufficient to meet our
liquidity needs for the next twelve months and we may be required
to seek additional capital. Our ability to meet our liquidity
needs for the next twelve months is dependent upon (i) our ability
to successfully negotiate licensing agreements and/or settlements
relating to the use of our technologies by others in excess of our
contingent payment obligations, (ii) our ability to control
operating costs, (iii) the exercise behavior of our convertible
note holders, and/or (iv) our ability to obtain additional debt or
equity financing. We expect that proceeds received by us from
patent enforcement actions and technology licenses over the next
twelve months may not alone be sufficient to cover our working
capital requirements.
"We expect to continue to invest in the support of our patent
licensing and enforcement program. The long-term continuation of
our business plan is dependent upon the generation of sufficient
cash flows from our technology licenses to offset expenses and debt
obligations. In the event that we do not generate sufficient cash
flows, we will be required to obtain additional funding through
public or private debt or equity financing or contingent fee
arrangements and/or reduce operating costs. Failure to generate
sufficient cash flows, raise additional capital through debt or
equity financings or contingent fee arrangements, and/or reduce
operating costs could have a material adverse effect on our ability
to meet our short and long-term liquidity needs and achieve our
intended long-term business objectives."
Year End 2024 Summary and Recent Developments
* The U.S Court of Appeals for the Federal Circuit ("CAFC")
overturned the federal district court's 2022 summary judgement
ruling that dismissed the case prior to a jury trial in its patent
infringement action against Qualcomm and ended the case. The
CAFC's decision remanded the case back to be reopened in the
district court in the Middle District of Florida (Orlando division)
for trial.
A trial date has not yet been set by the district court. The court
has indicated it will set a date for trial following its ruling on
remaining outstanding motions, including Qualcomm's motion for a
third claim construction hearing, the Company's motion to
substitute its technical expert due to serious medical issues, and
Daubert motions regarding damages, among others.
* The Company currently has active patent infringement cases in the
Western District of Texas against MediaTek, Realtek, Texas
Instruments, and NXP Semiconductors with at least two trials
expected to commence in the second half of 2025 and one or more
trials expected in the first half of 2026.
* The Company filed a cert petition with the U.S. Supreme Court
challenging the CAFC's use of Rule 36 orders to uphold decisions of
the Patent Trial and Appeal Board ("PTAB") regarding invalidation
of patent claims. The Supreme Court issued its orders list today,
denying the Company's petition.
Jeffrey Parker, Chairman and Chief Executive Officer, commented,
“The most impactful event of 2024 was the Federal Circuit's
agreement with ParkerVision's appeal, reversing the Orlando
district court's 2022 rulings that had ended our prospect for a
jury trial in our patent infringement case against Qualcomm. This
coming May will mark the start of the 12th year since this case was
filed as it has faced numerous delays due to, among other things,
patent validity challenges, two years of a pandemic, and,
ultimately, a trip to the appellate court. We are eager to receive
the district court's rulings on the remaining pending motions,
after which the court has indicated it will hold a pre-trial
conference and establish a trial date."
Mr. Parker continued, “We have also made meaningful progress in
our patent infringement cases in the Western District of Texas in
2024. We are anticipating at least two jury trials in the Waco
court in the second half of this year, with additional trials
scheduled in 2026. We are confident that juries will find our
story compelling as we explain the benefits our innovations brought
to the accused infringing wireless products. In certain cases, we
had prior interactions with the defendants that we believe provide
a basis for claims of willful infringement."
Commenting on the recent Supreme Court decision on the Company's
cert petition, Mr. Parker stated, "We are disappointed with the
Supreme Court's decision today, denying our cert petition that
raised challenges to the CAFC's use of Rule 36 to affirm PTAB
decisions with no written opinion. I am appreciative of the public
support received for this petition, including from two former
federal circuit judges, as well the number of amicus briefs filed
on behalf of this petition by members of the venture capital,
startup, intellectual property and national security
communities.”
Financial Results
* Net loss for 2024 was $14.5 million compared to net income of
$9.5 million for 2023. Basic and diluted loss per common share was
$(0.16) for 2024, compared to basic and diluted income per common
share of $0.11 and $0.08, respectively, in 2023.
The $24 million decrease in earnings from 2023 to 2024 is primarily
the result of a $25 million decrease in licensing revenue and a
$9.5 million non-cash increase in loss from the change in fair
value of contingent payment obligations, offset by a $10.5 million
decrease in operating expenses.
The decrease in revenue and related decrease in operating expenses
from 2023 to 2024 is primarily the result of a $25 million license
and settlement agreement reached in 2023, as a result of the
Company's patent infringement litigation, and corresponding
contingent expenses payable to legal counsel recognized in
operating expenses.
For the years ended December 31, 2024 and 2023, the Company
recognized a loss of $9.6 million and $0.1 million, respectively,
on the net increase in fair value of its contingent payment
obligations. This increase in fair value is the result of changes
in significant estimates and assumptions regarding the amounts and
timing of projected future proceeds that will be used to repay the
contingent obligations. The significant estimates and assumptions
in 2024 were impacted in particular by the CAFC decision received
in September 2024 that remanded the Qualcomm case back to district
court.
"Our long-term liabilities increased by approximately $8.6 million
from year-end 2023 to 2024. This increase is the result of a $9.6
million increase in our contingent payment obligations, based on an
overall increase in the estimated fair value of those obligations,
partially offset by a decrease in outstanding convertible notes as
a result of conversions by the holders into shares of common stock
during 2024."
At December 31, 2024, we had $4.9 million in cash and cash
equivalents following a December 2024 equity financing.
A full-text copy of the Form 10-K is available at
https://tinyurl.com/4nmfafr6
About ParkerVision
Jacksonville, Fla.-based ParkerVision, Inc. invents, develops and
licenses cutting-edge, proprietary radio-frequency (RF)
technologies that enable wireless solution providers to make and
sell advanced wireless communication products. ParkerVision has
invested in research, development and marketing of its patented RF
receiver and transmitter technologies to enable ultra-small
semiconductor chips to deliver high-performance wireless
communications for Smartphones, WiFi products, Bluetooth devices,
satellite communications, and other wireless communication
applications.
MSL, P.A., the Company's auditor since 2019 and based in Fort
Lauderdale, Fla., issued a "going concern" qualification in its
report dated March 21, 2024. The qualification cited the
Company's
insufficient resources to meet its liquidity needs for the next 12
months, its history of recurring losses from operations, and its
net capital deficiency, all of which raise substantial doubt about
its ability to continue as a going concern.
PEER STREET: Stay Enforcement Order in Tarpenning Suit Affirmed
---------------------------------------------------------------
In the case captioned as SEAN KRISTIAN TARPENNING, Appellant, v.
PEER STREET, INC., et al., Appellees, Case No. 24-cv-00121-MN (D.
Del.), Judge Maryellen Noreika of the United States District Court
for the District of Delaware affirmed the United States Bankruptcy
Court for the District of Delaware's January 17, 2024 Stay
Enforcement Order.
Appellant was formerly the principal of US Real Estate Equity
Builder, LLC and its affiliate, US Real Estate Equity Builder
Dayton, LLC. USREEB was the borrower on a mortgage on commercial
property located at 440 East 63rd Street, Kansas City, Missouri
64110, pursuant to which Peer Street's affiliate, PS Funding, Inc.
was the mortgagee. Appellant personally guaranteed the loan, and,
in August 2019, the loan went into default.
On November 19, 2019, Appellant, individually and as a member of
various affiliated entities, including the USREEB Debtors, filed a
Verified Petition in the Circuit Court of Jackson County, Missouri
at Kansas City, against PSFI, among others. The Verified Petition
asserted claims arising out of lending transactions among the
parties, including transactions in connection with the Property.
On October 2, 2020, Appellant put the USREEB Debtors into chapter
11 bankruptcy in the United States Bankruptcy Court for the
District of Kansas. At the time, the Property was owned by USREEB
(whose principal was Appellant) and became the property of USREEB's
bankruptcy estates. Appellant was quickly removed as the principal
of the USREEB Debtors for "cause" and replaced with a chapter 11
trustee, who is responsible for overseeing the USREEB Bankruptcy.
On July 27, 2022, the Kansas Bankruptcy Court entered the Sale
Order, over Appellant's objection, authorizing the sale of the
Property to PSFI free and clear of all liens, claims and
encumbrances. In other words, the Sale Order authorized PSFI to
acquire the Property free and clear of the claims asserted in the
Verified Petition.
On August 31, 2022, the Chapter 11 Trustee transferred the Property
to PSFI's designee, PSF TX 1, LLC, as evidenced by a recorded
Trustee's Deed.
On June 26, 2023 Peer Street filed its chapter 11 proceedings in
the Bankruptcy Court. In accordance with Peer Street's ordinary
course business practices, on July 6, 2023, PSF TX 1, LLC signed an
agreement to sell the Property.
On July 24, 2023, Appellant filed a lis pendens against the
Property citing his claims in the Verified Petition in violation
and disregard of both section 362 of the Bankruptcy Code and the
Sale Order. At the time Appellant filed the Lis Pendens, he was
aware of Peer Street's pending chapter 11 cases as he had actively
participated in them. The Lis Pendens has prevented Peer Street's
ability to close on the pending sale of the Property.
On September 15, 2023, Peer Street filed the Debtors' Motion for
Entry of an Order (I) Enforcing the Protections of 11 U.S.C. Sec.
362; (II) Deeming Lis Pendens Void Ab Initio; and (III) Granting
Related Relief, pursuant to which Peer Street sought entry of the
Stay Enforcement Order.
On January 16, 2024, the Bankruptcy Court held a hearing on the
Stay Enforcement Motion. At the Hearing, the Bankruptcy Court
concluded that:
(1) it is undisputed that the Lis Pendens was filed after the
Petition Date;
(2) it is undisputed that PSF TX 1, LLC -- a debtor in Peer
Street's bankruptcy cases -- owns the Property;
(3) the sale of the Property to Peer Street was free and clear
of any claims that were asserted or that could be asserted by
Appellant, including those that were asserted in the Verified
Petition;
(4) any interest Appellant may have had in the lawsuit
commenced by the Verified Petition is no longer owned by Appellant,
but is instead owned by the chapter 7 bankruptcy estate created
when Appellant filed the Ohio Bankruptcy and is controlled by the
chapter 7 trustee in that proceeding; and
(5) the Lis Pendens is a clear violation of the automatic stay
as an attempt to exercise control over property of
Peer Street's estates.
With respect to Appellant's assertion during oral argument that
Peer Street made unsubstantiated misrepresentations to the
Bankruptcy Court regarding the Property, the Bankruptcy Court
concluded that there's been no misrepresentation.
The parties agree that the sole issue on appeal is whether the
filing of the Lis Pendens against property of Peer Street's
bankruptcy estates after the commencement of their chapter 11
cases violated section 362(a) of the Bankruptcy Code.
Judge Noreika holds that the Appellant's filing of the Lis Pendens
is a violation of the automatic stay and is void ab initio. The Lis
Pendens is predicated on the claims asserted in the Verified
Petition and its filing is the continuation of a judicial action
that was commenced prior to the Petition Date in violation of
section 362(a)(1) of the Bankruptcy Code. Moreover, the Lis Pendens
frustrated and delayed Peer Street's sale of the Property and is,
therefore, an act taken to exercise control over property of the
estate.
A copy of the Court's decision dated March 24, 2025, is available
at https://urlcurt.com/u?l=OlsyX1 from PacerMonitor.com.
About Peer Street, Inc.
Peer Street, Inc. is a technology platform that democratizes access
to real estate debt investments. The company's unique
technology-driven marketplace enables investors to diversify their
capital in a fixed-income asset class that had previously been
difficult for individuals to access.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10815) on June 26,
2023. In the petition signed by Brewster Johnson, president, the
Debtor disclosed up to $100 million in both assets and
liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped Joseph Barry, Esq., at Young Conaway Stargatt
and Taylor, LLP represents the Debtor as legal counsel, Kramer
Levin Naftalis and Frankel LLP as co-bankruptcy counsel, Stretto,
Inc. as claims and noticing agent, and Piper Sandler is broker.
PHILLIPS TOTAL: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Phillips Total Care Pharmacy, Inc.
121 E. State Street
Mauston, WI 53948
Business Description: Phillips Total Care Pharmacy is an
independent provider of long-term care
pharmacy services located in Mauston,
Wisconsin. With more than 32 years of
expertise, it serves over 80 healthcare
establishments across the state, including
long-term care, assisted living, and secure
facilities. The Company specializes in
short-cycle drug distribution, packaging, IV
and enteral therapies, and pharmacist
consultation. Phillips Total operates
around the clock, supported by a committed
team and a fleet of delivery drivers.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Western District of Wisconsin
Case No.: 25-10699
Debtor's Counsel: Claire Ann Richman, Esq.
RICHMAN & RICHMAN LLC
122 W. Washington Avenue, Suite 850
Madison, WI 53703-2732
Tel: 608-630-8990
Fax: 608-630-8991
Email: crichman@randr.law
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Wayne MacArdy 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/JVDYORQ/Phillips_Total_Care_Pharmacy_Inc__wiwbke-25-10699__0001.0.pdf?mcid=tGE4TAMA
POWER BLOCK: Creditors' Committee Fine-Tunes Plan Documents
-----------------------------------------------------------
The Official Committee of Unsecured Creditors submitted a First
Amended Combined Chapter 11 Plan and Disclosure Statement for Power
Block Coin, L.L.C., d/b/a SmartFi dated March 7, 2025.
During the Committee's investigations, it has uncovered many issues
that raise concerns about the Debtor's management of this case and
the Debtor's ability to finance and successfully reorganize under
its proposed Amended Plan.
In order to facilitate an orderly and equitable resolution for all
creditors, the Debtor's assets and operations would be placed into
a Liquidating Trust. A disinterested, qualified trustee will be
engaged, selected in accordance with the Plan, and will serve in a
fiduciary capacity to protect the interests of all creditors while
maximizing recoveries.
The Liquidating Trust will include an initial board which shall be
comprised of 3-7 members appointed in accordance with the terms of
this Plan. The Liquidating Trustee shall be required to consult
with and obtain the approval of this Liquidating Trust Advisory
Board for all major decisions, including any litigation,
settlements, asset sales, and any other actions outside the
ordinary course of business. Terms of the Liquidating Trust
(including governance protocols and decision-making authority) will
be determined, in consultation with the trustee, to ensure
appropriate oversight by the Liquidating Trust Advisory Board.
The Liquidating Trustee will have the right to operate the Debtor's
business and to pursue all causes of action held by the Debtor,
including all claims available under Ch. 5 of the Bankruptcy Code,
all analogous state law claims, avoidance claims, claims against
insiders and claims for substantive consolidation. Additionally,
the Liquidating Trustee may settle any and all claims held by the
Debtor against third parties, including Insiders. While the
Committee does not yet have the documents necessary to enable it to
propose any such settlements, the Liquidating Trustee will be
authorized to investigate and pursue such settlements, to the
extent that they are in the best interests of creditors.
All Administrative Expense Claims and Priority Claims will be Paid
In Full. All Holders of General Unsecured Claims and Subordinated
Claims will receive their pro rata distributions from the
Liquidating Trust when such proceeds become available, after all
costs of administration of the Liquidating Trust, including
Liquidating Trust Expenses, are paid until no further proceeds are
available. The existing Equity Interests of the Debtor shall be
cancelled.
The Liquidating Trustee will be vested with all Retained Assets and
have full authority to liquidate or operate the business of the
Debtor, thus succeeding to all rights, claims, and interests of the
Debtor. The Liquidating Trustee shall have no obligation to pay any
expenses of the Debtor incurred after the Effective Date and no
such expenses shall be paid by the Retained Assets, including
post-Effective Date expenses of the Debtor's counsel and
professionals.
The initial funding of the Liquidating Trust will be determined
after further investigation into the Debtor's financial situation.
However, one source of funding is that the remaining amount on the
Blue Castle Note will be turned over to the Liquidating Trust.
Based on the Debtor's December 2024 monthly operating report, there
is approximately $1.11 million remaining in the Blue Castle Note.
There are also outstanding notes receivable due from some of the
Debtor's lending customers, but these notes may be subject to
objections or other legal encumbrances that may make them difficult
to collect.
Additionally, Committee counsel will defer the payment of their
fees if necessary to enable confirmation of the Plan and to ensure
that the Liquidating Trust is appropriately funded. If such
deferment is necessary, Committee counsel will be paid from the
assets of the Liquidating Trust, including without limitation,
recoveries obtained by the Liquidating Trustee after plan
confirmation.
A full-text copy of the First Amended Combined Chapter 11 Plan and
Disclosure Statement dated March 7, 2025 is available at
https://urlcurt.com/u?l=sQlGBJ from PacerMonitor.com at no charge.
Counsel for the Official Committee of Unsecured Creditors:
Annette W. Jarvis, Esq.
Michael F. Thomson, Esq.
Carson Heninger, Esq.
Abigail J. Stone, Esq.
GREENBERG TRAURIG, LLP
222 South Main Street, Suite 1730
Salt Lake City, UT 84101
Telephone: (801) 478-6900
Email: jarvisa@gtlaw.com
thomsonm@gtlaw.com
carson.heninger@gtlaw.com
abigail.stone@gtlaw.com
About Power Block Coin, L.L.C.
Power Block Coin, LLC, a company in Orem, Utah, conducts business
as SmartFi. SmartFi is a unique monetary system, which combines
monetary policy with the freedoms of cryptocurrency to create a
self-sustaining open-lending platform, providing the holders of
SmartFi Token the opportunity to manage the system and become the
beneficiaries of the wealth creation that would otherwise accrue to
traditional banks.
Power Block Coin filed its voluntary petition for Chapter 11
protection (Bankr. D. Utah Case No. 24-23041) on June 20, 2024,
listing $10 million to $50 million in assets and $1 million to $10
million in liabilities. Aaron Tilton, officer, signed the
petition.
Judge Joel T Marker oversees the case.
The Debtor tapped Parsons Behle & Latimer as legal counsel and CFO
Solutions L.L.C., a Utah limited liability company, as accountant
and financial advisor.
POWER SOLUTIONS: Posts $69.2MM Net Income for 2024
--------------------------------------------------
Power Solutions International, Inc. filed with the U.S. Securities
and Exchange Commission its Annual Report on Form 10-K reporting a
net income of $69,279,000 over net sales of $475,967,000 for the
year ended December 31, 2024, compared to a net income of
$26,306,000 over net sales of $458,973,000 for the year ended
December 31, 2023.
The Company also disclosed $328,182,000 in total assets,
$262,932,000 in total liabilities, and $65,250,000 in stockholders'
equity at December 31, 2024.
For the year ended December 31, 2024, the Company reported net
income of $69.3 million and generated $62.4 million in cash flow
from operating activities. In August 2024, the Company refinanced
its debt through a new Revolving Credit Agreement with three banks.
Additionally, the Company entered into a new Shareholder's Loan
Agreement with Weichai to replace all existing Shareholder Loan
Agreements. The new Revolving Credit Agreement and the SLA mature
on August 30, 2025 and August 31, 2025, respectively, and have
borrowing capacity of $120.0 million and $105.0 million,
respectively.
As of December 31, 2024, the Company held $55.3 million in cash and
cash equivalents and its short-term debt obligations under the new
Revolving Credit Agreement and SLA totaled $95.0 million and $25.0
million, respectively. While the Company has achieved profitability
and generated positive cash flows from operating activities in
2024, uncertainties exist about the Company's ability to refinance,
amend or extend its outstanding indebtedness.
Due to these uncertainties, the Company's management has concluded
that, substantial doubt exists as to its ability to continue as a
going concern within one year after the date that these financial
statements are issued. The Company's plans to alleviate the
substantial doubt about its ability to continue as a going concern
may not be successful, and it may be forced to limit its business
activities or be unable to continue as a going concern, which would
have a material adverse effect on its results of operations and
financial condition.
The consolidated financial statements have been prepared assuming
that the Company will continue as a going concern and contemplating
the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. The Company's ability
to continue as a going concern is dependent on extending and
amending, refinancing or repaying the indebtedness outstanding
under the Company's existing debt arrangements. Without additional
financing, the Company anticipates that it will not have sufficient
cash and cash equivalents to repay amounts owed under its existing
debt arrangements as they become due. In order to provide the
Company with a more permanent source of liquidity, management plans
to seek an extension and amendment and/or replacement of its
existing debt agreements or seek additional liquidity from its
current or other lenders before the maturity dates in 2025. There
can be no assurance that the Company's management will be able to
successfully complete an extension and amendment of its existing
debt agreements or obtain new financing on acceptable terms, when
required or if at all. These consolidated financial statements do
not include any adjustments that might result from the outcome of
the Company's efforts to address these issues.
Fourth Quarter 2024 Results
The Company reported record profit for the three months ended
December 31, 2024, with net income of $23.3 million and diluted
earnings per share of $1.01, compared to net income of $8.4 million
and diluted earnings per share of $0.36 for the fourth quarter of
2023.
Dino Xykis, Chief Executive Officer, commented, "Our sales and net
income increased significantly for the quarter, driven by higher
demand from our power systems business, including contributions
from the expanding data center sector, along with operational
efficiencies, and strategic initiatives that continue to yield
positive results. For the year, we achieved record profits,
reflecting a disciplined and consistent financial approach, market
expansion, and commitment to delivering value to our shareholders.
As we move forward, we remain focused on innovation, and
operational excellence, while continuing to reduce PSI’s debt,
improving our balance sheet and delivering long-term growth.”
Kenneth Li, Chief Financial Officer, commented, “In December
2024, we successfully uplisted to the Nasdaq Stock Market, marking
a key milestone in our growth journey. This achievement reflects
our strong financial position, record profitability, and commitment
to delivering shareholder value. We remain focused on executing our
strategy, maintaining financial discipline, and leveraging our
Nasdaq listing to drive shareholder value creation."
Sales for the fourth quarter of 2024 were $144.3 million, an
increase of $39.5 million, or 38%, compared to the fourth quarter
of 2023, primarily as a result of sales increases of $41.0 million
in the power systems end market. This shift in markets reflects the
conscious strategic prioritization towards higher growth markets
such as data centers as well as oil and gas products and away from
more mature markets such as trucks and school buses. As part of the
Company's prioritization of the rapidly expanding data center
sector, the Company is focused on improving and increasing our
manufacturing capacity and capabilities to meet our customers’
evolving demand for our products. Lower industrial end market sales
are primarily due to decreases in demand for products used within
the material handling and arbor care markets, as well as the
effects of enforcement of the Uyghur Forced Labor Prevention Act.
Gross profit increased by $15.7 million, or 57%, during the fourth
quarter of 2024 as compared to the same period in the prior year.
Gross margin in the fourth quarter of 2024 was 29.9%, an increase
of 3.6% compared to 26.3% in the same period last year, primarily
due to improved mix, pricing actions, higher operating
efficiencies, and lower warranty costs attributable to the
Company's strategic sales shift away from some of our
transportation customers. For the fourth quarter of 2024, warranty
costs were $0.7 million, as compared to $1.0 million for the fourth
quarter of 2023.
Selling, general and administrative expenses of $12.4 million
increased during the fourth quarter of 2024 by $3.0 million, or
32%, compared to the same period in the prior year, due to higher
executive compensation and legal expenses.
Interest expense was $2.4 million in the fourth quarter of 2024 as
compared to $3.6 million in the same period in the prior year,
largely due to reduced outstanding debt and lower overall effective
interest rates.
Net income was $23.3 million, or earnings per share of $1.01, in
the fourth quarter of 2024, compared to net income of $8.4 million,
or earnings per share of $0.36 for the fourth quarter of 2023.
Balance Sheet Update
The Company's cash and cash equivalents were approximately $55.3
million, while total debt was approximately $120.2 million at
December 31, 2024. This compares to total debt of approximately
$145.2 million and cash and cash equivalents of approximately $22.8
million at December 31, 2023. Included in the Company’s total
debt at December 31, 2024, were borrowings of $95.0 million under
the Revolving Credit Agreement, and borrowings of $25.0 million
under the Shareholder's Loan Agreement. We remain committed to
strengthening our business and generating cash flow to reduce debt.
Recently, we amended our loan agreement, providing us with the
flexibility to pay off our shareholder loan. In the first quarter
of 2025, we successfully paid down an additional $10.0 million,
bringing our total debt to $110.0 million. With our strong
financial position and recent Nasdaq uplisting, we will explore
opportunities for long-term debt financing to support our growth
strategy and optimize our capital structure. We remain focused on
financial discipline and enhancing shareholder value.
Outlook for 2025
The Company anticipates an increase in sales for 2025 compared to
2024, driven by expected growth in the power systems end market
including products supporting data centers, while sales in the
industrial and transportation end markets are projected to remain
about flat. However, due to ongoing geopolitical and macroeconomic
uncertainties, especially with the latest tariff announcements and
the possible impact on trade between the USA and the rest of the
world, PSI will not provide specific sales growth guidance for
2025.
A full-text copy of the Form 10-K is available at
https://tinyurl.com/2cv5uj7p
About Power Solutions
Wood Dale, Ill.-based Power Solutions International, Inc.,
incorporated under the laws of the state of Delaware in 2011,
designs, engineers, manufactures, markets and sells a broad range
of advanced, emission-certified engines and power systems that are
powered by a wide variety of clean, alternative fuels, including
natural gas, propane, and biofuels, as well as gasoline and diesel
options, within the power systems, industrial and transportation
end markets. The Company manages the business as a single
reportable segment.
Chicago, Ill.-based BDO USA P.C., the Company's auditor since
2018,
issued a "going concern" qualification in its report dated March
14, 2024, citing that there are significant uncertainties that
exist about the Company's ability to refinance, extend, or repay
its outstanding indebtedness, maintain sufficient liquidity to
fund
its business activities and maintain compliance with the covenants
and other requirements under the Company's debt arrangements.
These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
As of September 30, 2024, Power Solutions International had $339.1
million in total assets, $297 million in total liabilities, and
$42.1 million in total shareholders' equity.
PRIORITY HOLDINGS: Moody's Ups CFR to B1, Outlook Stable
--------------------------------------------------------
Moody's Ratings upgraded the credit ratings of Priority Holdings,
LLC (Priority), including its Corporate Family Rating to B1 from
B2, its Probability of Default Rating to B1-PD from B2-PD, and its
Senior Secured First Lien Bank Credit Facilities ratings (Term Loan
B and Revolving Credit Facility) to B1 from B2. The outlook remains
stable and the Speculative Grade Liquidity Rating (SGL) remains
unchanged at SGL-1.
The upgrade reflects the company's continued solid revenue growth,
simplified and lower cost capital structure with improved cash flow
generation capabilities after the 2024 redemption of the preferred
equity, and the expectation of ongoing deleveraging with earnings
growth and debt paydown.
The stable outlook reflects Moody's expectations of healthy revenue
growth in 2025 along with modest margin expansion and expanded free
cash flow generation.
RATINGS RATIONALE
The B1 CFR reflects healthy revenue growth in all three segments
–SMB merchant acquiring, B2B payments, and Enterprise— with
particularly strong growth in the Enterprise business, which
largely consists of payment processing services for customers of
debt resolution platforms. The credit profile is also supported by
good cash flow generation relative to debt levels, with free flow
to debt expected to approximate 8% in FY 2025, despite relatively
high interest costs. The company's goal to continue to deleverage
through both earnings growth and debt paydown also supports its
credit position.
At the same time, the company continues to maintain elevated
financial leverage of about 4.8x at December 31, 2024, which
Moody's expects to decline to about 4.2x at FY 2025. Also, Priority
is exposed to the very competitive merchant acquiring and payment
processing space, where price competition and technology innovation
can impact company results. Also, the strategy includes M&A, which
is often seen as crucial to advance in the industry, but which
could present integration costs and potentially slow down the
deleveraging trajectory.
Governance considerations include relatively high debt leverage, a
concentrated ownership structure with a majority owned by the
founder and his family, and the potential for debt-funded
acquisitions.
Priority's very good liquidity is supported by an unrestricted cash
balance of $59 million as of December 31, 2024. Liquidity is also
supported by projected free cash flow of about $65 million in 2025
and an undrawn $70 million revolving credit facility expiring in
2029. The revolving credit facility is subject to a total net
leverage covenant of 6.9x applicable when utilization exceeds 35%,
stepping down to 6.4x by the end of 2025. Priority is in compliance
with the covenant with a meaningful cushion. The maturity for the
$950 million term loan is 2031.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with consistent revenue and EBITDA
growth such that the company achieves greater scale, debt-to-EBITDA
(Moody's adjusted) sustained below 4x, free-cash-flow-to-debt at or
above 10%, and a balanced financial policy.
The ratings could be downgraded with revenue or margin declines,
debt-to-EBITDA (Moody's-adjusted) sustained above 5x, a
deterioration of liquidity and/or cash flow generation, and/or
expectation of a more aggressive financial policy.
Priority Holdings, LLC is a merchant acquirer and payment solutions
provider serving approximately 177,000 small and medium-sized
business (SMB) merchants. The company is the 6th largest non-bank
merchant acquirer in the United States. The company also provides
B2B payment solutions that accelerate the funding of vendors and
improve working capital for buyers, more recently through its
acquisition of the buyer-funded platform Plastiq, which enables
businesses to pay any vendor by credit card, regardless of whether
that vendor accepts credit cards. The Enterprise segment, currently
the most profitable with more than 50% of segment EBITDA, provides
payment processing and embedded finance solutions to vertically
focused customers, including debt-resolution platforms. Revenues
for the fiscal year ended December 31, 2024, were $880 million.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
R. GREGORY INVESTMENTS: Rental Income to Fund Plan Payments
-----------------------------------------------------------
R. Gregory Investments, LLC and DS Texas Capital LLC filed with the
U.S. Bankruptcy Court for the Southern District of Texas an Amended
Combined Disclosure Statement and Chapter 11 Plan dated March 6,
2025.
RGI is a Texas limited company that was formed on September 20,
2013 and is a real estate holding company whose primary asset is an
improved 2.5-acre lot in Brazoria County, Texas that operates an
onsite storage center of 197 units (the "CR 58 Facility") through a
non-debtor affiliate Diamond Storage, LLC.
On July 30, 2021, RGI financed the construction of large
self-storage facility through Stellar Bank with three promissory
notes: Loan #8001045574 original principal amount of $2,194,000.00,
Loan #8001045578, original principal amount of $1,755,220.00 Loan
#8001045578, and Loan #8001026042 original principal amount of
$100,000.00 (collectively the "Stellar Loans").
The proceeds of the Stellar Loan were used as a construction loan
to build a 50,000 sq. ft self-storage building with climate
controlled and non-climate controlled units on approximately 2
acres of the 9.4-acre lot (the "Cemetery Rd Facility"). Due to
construction delays and additional loans, RGI was unable to service
its obligations to Stellar Bank under the Stellar Loan. The filing
of these Chapter 11 Cases was prompted by the acceleration and
notice of intent to foreclose on the Cemetery Rd Facility by
Stellar Bank.
Class 3 is comprised of General Unsecured Claims and Deficiency
Claims asserted by Denver Commercial Builders, Inc. d/b/a Reconn
Construction Services ($163,291.28), ISC Acquisition Corp. d/b/a
ISC Building Materials ($22,968.38), Relentless Fire Protection
($102,561.00), The Reliable Automatic Sprinkler Co., Inc.
($25,771.96), Progressive Interest, Inc. d/b/a Progressive
Electrical Contractors ($110,914.59), H&E Equipment Services, Inc.
($17,755.44), Custom Stucco and Stone Company ($10,000.00), City
Electric Supply Company ($9,118.39), Stellar Bank ($427,206.38),
and Trinity Excavators, LLC ($12,977.21).
Holders of Claims in Class 3 shall receive Pro Rata payments of
recoveries under any Chapter 5 causes of action. Holders of Claims
in Class 3 shall be entitled to exercise their rights and remedies
pursuant to applicable non-bankruptcy law upon default. Class 3 is
impaired under the Plan and entitled to vote to accept or reject
the Plan.
The payments contemplated in this Plan shall be funded from
continued operations from RGI and recoveries from Chapter 5 causes
of action. RGI believes it will generate sufficient rental income
to fund payments under the Plan.
A full-text copy of the Amended Combined Disclosure Statement and
Plan dated March 6, 2025 is available at
https://urlcurt.com/u?l=Al6IQi from PacerMonitor.com at no charge.
Counsel to the Debtors:
Susan Tran Adams, Esq.
Tran Singh LLP
Brendon Singh
2502 La Branch Street
Houston TX77004
Tel: (832) 975-7300
Fax: (832) 975-7301
Email: stran@ts-llp.com
About R. Gregory Investments
R. Gregory Investments, LLC in _ Manvel, TX, sought relief under
Chapter 11 of the Bankruptcy Code filed its voluntary petition for
Chapter 11 protection (Bankr. S.D. Tex. Case No. 24-34097) on Sept.
1, 2024, listing $2,503,600 in assets and $1,739,000 in
liabilities. Ryan Gregory as managing member, signed the petition.
Judge Eduardo V Rodriguez oversees the case.
TRAN SINGH, LLP serve as the Debtor's legal counsel.
RANGE RESOURCES: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings upgraded Range Resources Corporation's Corporate
Family Rating to Ba1 from Ba2, Probability of Default Rating to
Ba1-PD from Ba2-PD and senior unsecured ratings to Ba2 from Ba3.
The SGL-1 Speculative Grade Liquidity rating was unchanged. The
rating outlook was changed to stable from positive.
"The upgrade reflects Range's solid operational execution, proven
ability to generate free cash flow in a low gas price environment
as evidenced during 2023-24, improving leverage, and commitment to
conservative financial policies," said Sajjad Alam, a Moody's
Ratings Vice President. "The company's fundamentally low cost
structure, significant liquids production, firm-transportation
contracts, disciplined hedging strategy, and reduced debt level
should afford significant financial flexibility through 2026 even
if gas prices moderate and average in the $2.75-$3.00/MMBtu
range."
RATINGS RATIONALE
The Ba1 CFR is supported by Range's large natural gas resource base
in Appalachia, significant proportion of NGLs in the production mix
that enhances per unit margins, lower base decline rate and
reinvestment requirements given its long drilling history in the
Marcellus Shale, and well-established track record of low cost and
capital efficient operations. The CFR also reflects Moody's
expectations that management will prudently allocate capital in
achieving its growth, debt reduction, and shareholder return
objectives after preserving Range's strong balance sheet. Range's
ratings are constrained by its high correlation to volatile natural
gas and NGLs prices, with natural gas representing about 68% of
production, high geographic concentration, and exposure to
Appalachian basin negative price differentials given a portion of
its gas is currently priced locally.
Range has improved capital efficiency in recent years leading to
more consistent free cash flow generation. Capital expenditures
have been significantly reduced from pre-pandemic years and are
projected to range between $650 million to $700 million per year
over the next three years. Given its prolific and contiguous
Marcellus acreage and diversified access to higher-value markets,
management should be able to increase daily production to the
targeted level of 2.6 Bcfe/d by 2027. In 2025, Range plans to
operate two drilling rigs and one frac crew, with liquids
accounting for over 30% of total production.
Moody's expects management to reduce total debt near the lower end
of its $1.0-$1.5 billion net debt target. The company intends to
utilize a combination of cash and revolver borrowings to repay the
$609 million 4.875% notes maturing on May 15, 2025. Moody's
anticipates a significant portion of Range's free cash flow will be
directed towards reducing any remaining revolver borrowings through
2026 as management concurrently tries to boost capital returns to
shareholders. Range's reduced debt level and low cost structure
enhances its resilience to withstand negative credit impacts from
carbon transition risks. While the financial performance of the
company will continue to be influenced by industry cycles, compared
to historical experience, Moody's expects future profitability and
cash flow in this sector to be more volatile because global
initiatives to limit adverse impacts of climate change will
constrain the use of hydrocarbons and accelerate the shift to less
environmentally damaging energy sources. The company's focus on
natural gas and NGLs does provide it with better positioning than
its oil focused peers with respect to carbon transition risk.
Range should have very good liquidity through 2026 supported by
free cash flow, which is reflected in the SGL-1 rating. As of
December 31, 2024, Range had $304 million in cash and no borrowings
under its $1.5 billion committed revolving credit facility
(expiring April 14, 2027). The facility has a $3 billion borrowing
base and had $1.335 billion available after accounting for $165
million in letters of credit at year-end 2024. The revolver
agreement contains two financial maintenance covenants, including a
minimum current ratio of 1x and maximum net leverage of 3.75x
(4.25x if rated investment grade by both Moody's and Standard &
Poor's (S&P)). Range is expected to comfortably meet these
covenants through 2026. Approximately 40% of Range's 2025 gas
production volume and 25% of 2026 volumes had hedges at the end of
2024 with a floor price of $3.86/ MMBtu and $4.03/MMBtu,
respectively, which will partially protect revenues in the event of
a sharp price drop.
The senior unsecured notes are rated Ba2, which is one notch below
Range's Ba1 CFR, due to their subordinated position in the capital
structure behind the company's sizeable senior secured revolving
credit facility that has a first-lien claim over most of Range's
assets. The revolver credit agreement has provisions allowing Range
to request the release of collateral securing the facility upon
achieving an investment-grade rating from either Moody's or S&P.
The stable outlook reflects Moody's expectations that Range will
maintain conservative financial policies and very good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade may be considered if Range can significantly grow its
production scale at competitive returns or achieve greater
geographic diversification; maintain debt near the lower end of
management's stated target; and produce consistent free cash flow.
For an upgrade, Range will also need to maintain its retained cash
flow (RCF) to debt above 50% and leveraged full-cycle ratio (LFCR)
above 2x at mid-cycle natural gas and NGL prices.
The ratings could be downgraded if the company substantially debt
funds a large acquisition or funds shareholder distributions with
debt. A downgrade could also occur if the retained cash
flow-to-debt (RCF/Debt) ratio falls below 30%.
Range Resources Corporation is a Fort Worth, Texas based publicly
traded independent exploration and production company with primary
operations in the Marcellus Shale in Pennsylvania.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
REGENCY SHOPS: Hires Cordry Appraisal Services as Appraiser
-----------------------------------------------------------
Regency Shops, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Kansas to hire Cordry Appraisal Services, Inc.
as its appraiser.
The Debtor requires the services of an appraiser to assist in the
valuation of its real property, a shopping complex located at 9296
Metcalf Avenue, Overland Park, Kansas.
As disclosed in the court filings, the members of Cordry Appraisal
Services, Inc. are disinterested parties as defined in 11 U.S.C.
Sec. 101(14), representing no interest adverse to the Debtor or the
Debtor’s estate on the matters upon which they are to be
engaged.
The firm can be reached through:
Kevin P. O' Bryan
Cordry Appraisal Services, Inc.
10990 Quivira Road, Suite 130
Overland Park, KS 66210-2016
Telephone: (913) 451-0895
Facsimile: (913) 451-1047
About South Regency Shops LLC
South Regency Shops, LLC owns a shopping center situated at 9296
Metcalf Avenue in Overland Park, Kan., with an estimated current
value of $810,000.
South Regency Shops filed Chapter 11 petition (Bankr. D. Kan. Case
No. 25-20140) on February 10, 2025, listing total assets of
$817,347 and total liabilities of $2,578,359.
Judge Dale L. Somers handles the case.
The Debtor is represented by Colin Gotham, Esq. at Evans &
Mullinix, P.A.
REGENCY SHOPS: Seeks to Tap BridgeBuilders Tax as Accountant
------------------------------------------------------------
Regency Shops, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Kansas to hire BridgeBuilders Tax + Legal
Services as accountant.
The Debtor requires the services of BridgeBuilders to prepare its
federal and state corporate income tax returns, prepare and compile
financial statements, and provide accounting, bookkeeping, and
consulting services as requested.
The firm will be paid at these rates:
Attorney Partners $475 per hour
Attorney Associates $250 to $375 per hour
CPAs $240 to $375 per hour
Staff Accountants $170 to $250 per hour
Paralegal / Assistants $100 to $120 per hour
As disclosed in a court filing, BridgeBuilders is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The accountant can be reached through:
Kevan D. Acord, CPA
BridgeBuilders Tax + Legal Services
9325 Pflumm Rd
Lenexa, KS 66215
Phone: (913) 492-6008
Fax: (913) 492-7953
About South Regency Shops LLC
South Regency Shops, LLC owns a shopping center situated at 9296
Metcalf Avenue in Overland Park, Kan., with an estimated current
value of $810,000.
South Regency Shops filed Chapter 11 petition (Bankr. D. Kan. Case
No. 25-20140) on February 10, 2025, listing total assets of
$817,347 and total liabilities of $2,578,359.
Judge Dale L. Somers handles the case.
The Debtor is represented by Colin Gotham, Esq. at Evans &
Mullinix, P.A.
RELENTLESS HOLDINGS: Case Summary & One Unsecured Creditor
----------------------------------------------------------
Debtor: Relentless Holdings Corporation, a Florida corporation
7063 Siena Ct
Boca Raton, FL 33433
Business Description: Relentless Holdings is a real estate debtor
with a single asset, as outlined in 11
U.S.C. Section 101(51B). The Debtor
possesses a single-family residence at 1011
Rhodes Villa Ave., Delray Beach, FL 33483,
which is presently appraised at $7.8
million.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 25-13399
Judge: Hon. Mindy A Mora
Debtor's Counsel: Sherri B. Simpson, Esq.
SIMPSON LAW GROUP
400 NW 25 Street
Wilton Manors, FL 33311
Tel: (954) 524-4141
Email: sbs@simpsonlawfl.com
Total Assets: $7,800,000
Total Liabilities: $6,168,502
The petition was signed by Ramon Millan Pineda as president.
The Debtor has recognized the Internal Revenue Service Centralized
Insolvency Operations, situated at P.O. Box 7346, Philadelphia, PA
19101, as its only unsecured creditor for possible unpaid income
tax returns.
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/7U6XAEA/Relentless_Holdings_Corporation__flsbke-25-13399__0001.0.pdf?mcid=tGE4TAMA
RELENTLESS HOLDINGS: Seeks Chapter 11 Bankruptcy in Florida
-----------------------------------------------------------
On March 28, 2025, Relentless Holdings Corporation 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 be available
to unsecured creditors.
About Relentless Holdings Corporation
Relentless Holdings Corporation is a Florida-based single asset
real estate company. The company owns and manages real property
located at 1011 Rhodes Villa Ave, Delray Beach, FL, while
maintaining its principal place of business in Boca Raton.
Relentless Holdings Corporation sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 25-13399) on
March 28, 2025. In its petition, the Debtor reports estimated
assets and liabilities between $1 million and $10 million each.
Honorable Bankruptcy Judge Mindy A. Mora handles the case.
The Debtor is represented by Sherri B. Simpson, Esq.
RITEWAY INSURANCE: Seeks Chapter 11 Bankruptcy in Florida
---------------------------------------------------------
On March 28, 2025, Riteway Insurance Repair Service Inc. filed
Chapter 11 protection in the U.S. Bankruptcy Court for
the Southern District of Florida. According to court filing, the
Debtor reports between $500,000 and $1 million in debt owed to
1 and 49 creditors. The petition states funds will be available to
unsecured creditors.
About Riteway Insurance Repair Service Inc.
Riteway Insurance Repair Service Inc. is a Miami-based company
specializing in insurance-related repair services.
Riteway Insurance Repair Service Inc. sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla.Case No. 25-13401)
on March 28, 2025. In its petition, the Debtor reports estimated
assets between $100,000 and $500,000 and estimated liabilities
between $500,000 and $1 million.
Honorable Bankruptcy Judge Laurel M. Isicoff handles the case.
The Debtor is represented byBradley S. Shraiberg at Shraiberg Page
PA.
ROSA LINDA GHAFFARI: UST Wins Bid to Dismiss Bankruptcy Case
------------------------------------------------------------
Judge Robert H. Jacobvitz of the United States Bankruptcy Court for
the District of New Mexico will grant the United States Trustee's
motion to dismiss the chapter 11 bankruptcy case of Rosa Linda
Guzman Ghaffari.
Pro se Debtor filed two objections to the motion.
The UST argues that cause exists because Debtor did not comply with
the Court's Scheduling Order requiring her to mail complete plan
packages to all creditors and parties in interest by Jan. 3, 2025.
The UST also argues that Debtor does not have a confirmable plan on
file and has demonstrated an inability to effectuate a plan.
Debtor filed this chapter 11 bankruptcy case on May 3, 2024, and
converted the case to subchapter V on Aug. 23, 2024. Since that
time, she has demonstrated an inability to comply with the
requirements of the Bankruptcy Code and has been unable,
despite repeated efforts, to file a plan that is not facially
defective. Cause for dismissal exists where a debtor's failure to
file an acceptable plan after a reasonable time indicates its
inability to do so. In this case, Debtor's inability to file a plan
that is not defective on its face for nearly a year after the
Petition Date and more than five months since converting to
subchapter V, constitutes cause to dismiss or convert under Sec.
1112(b), the Court finds.
The Court concludes that dismissal, rather than conversion of this
case to chapter 7, is in the best interests of creditors and the
estate.
According to the Court, there is no equity in the Debtor's
properties that a chapter 7 trustee could realize for the benefit
of creditors. Even though the UST's Motion asks for either
dismissal or conversion, at the final hearing on the Motion the UST
only requested dismissal. Judge Jacobvitz holds, "Dismissal will
not cause undue harm to creditors or the estate. There is no
indication that a trustee is needed to oversee the administration
of a chapter 7 estate. Dismissal is in the best interest of
creditors as a whole, particularly those whose claims are current
and whose claims Debtor intends to keep current. Upon dismissal,
creditors whose claim are in default may exercise remedies without
the impediment of an automatic stay."
A copy of the Court's decision is available at
https://urlcurt.com/u?l=dOPWR8
Rosa Linda Guzman Ghaffari filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D.N.M. Case No.
24-10453-j11) on Aug. 23, 2024.
The case was dismissed on March 19, 2025.
RWDY INC: Trustee Loses Bid for Disgorgment of Accountants' Fees
----------------------------------------------------------------
Judge John S. Hodge of the United States Bankruptcy Court for the
Western District of Louisiana denied the request of RWDY, Inc.'s
Chapter 11 trustee for disgorgement of fees paid to accountants in
the bankruptcy case.
A few months after the plan of reorganization was confirmed,
Debtor's then-president, Brian T. Owen implemented a scheme to
defraud the reorganized debtor and avoid paying a portion of his
compensation to the distribution trust.
Owen diverted millions of dollars into an off-ledger account and
then siphoned the funds into his personal account for his sole
benefit. He was later convicted of laundering over $3.8 million in
the off-ledger account, but his money laundering and theft likely
far exceeded that amount.
After Owen's theft was discovered, he resigned as an officer of
Debtor and forfeited his ownership interest in the company. Shortly
thereafter, Debtor filed its second (current) bankruptcy case.
In the second case, like the first, the Court authorized Debtor to
employ as accountants Trent Millican and the accounting firm where
he was employed.
After learning of Millican's role in establishing the off-ledger
account and Owen's use of it to commit crimes, Debtor's management
concluded that the accountants breached their standard of care owed
to Debtor. The accountants denied any wrongdoing. They also denied
knowledge of Owen's unlawful activities. Millican testified that he
was unaware that any money had been deposited into the off-ledger
account. He thought it was an inactive or closed account.
In this case, the motion alleges that Millican's active role in
Owen's misdeeds and his actions in concert with Owen created an
interest materially adverse to the estate. According to the motion,
at the time Millican signed his declaration, he:
1) had actual knowledge that he had been instrumental in Owen's
misappropriation of millions of dollars from RDWY;
2) knew or should have known that Owen had executed agreements
with the merchant cash advance companies; and
3) knew or should have known that Owen had misappropriated funds
and used them to gamble at casinos.
Contrary to the trustee's allegations, the documentary evidence and
testimony presented to the Court did not establish that Millican
acted in concert with Owen or was a co-conspirator with him or
knowingly played an active role in Owen's misdeeds. The Court finds
the evidence also did not establish that Millican had actual
knowledge of various transactions with the MCA companies. Nor did
it establish that Millican knew that Owen used Debtor's funds to
pay gambling debts. While the evidence established that Millican
knowingly helped Owen open the off-ledger account, it did not
establish that he had actual knowledge that Owen used, or intended
to use, that account for illicit purposes. Moreover, no evidence
was presented to suggest that Millican financially benefitted from
Owen's theft, the Court adds.
While there may be solid evidence to support the estate's causes of
action based on negligence, the evidence does not support a finding
that Millican knowingly, intentionally or recklessly made
misrepresentations to the Court about his firm's disinterestedness
and lack of adversity.
A copy of the Court's decision dated March 24, 2025, is available
at https://urlcurt.com/u?l=oEjH5d from PacerMonitor.com.
About RWDY Inc.
RWDY Inc. -- https://www.rwdyinc.com/ -- is an oil and energy
company based out of 1302 Dekort St, Copperas Cove, Texas.
RWDY filed a petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. La. Case No. 22-11308) on Dec. 21, 2022, with $10
million to $50 million in both assets and liabilities. Mark Allen,
manager, signed the petition.
Judge John S. Hodge oversees the case.
The Debtor tapped Robert W. Raley, Esq., at Ayres, Shelton,
Williams, Benson & Paine, LLC as legal counsel; Leland G. Horton,
Esq., at Bradley Murchison Kelly & Shea LLC as special counsel; and
Postlethwaite & Netterville, APAC as accountant.
SCRIPSAMERICA INC: Braverman Loses Bid to Dismiss Adversary Cases
-----------------------------------------------------------------
Judge John T. Dorsey of the United States Bankruptcy Court for the
District of Delaware denied Defendant Braverman Brothers, LLC's
motions to dismiss the amended complaints in the cases captioned as
Stanziale v. Medi Biotech LLC, Adv. Proc. Nos. 18-50400 and
18-504011 (Bankr. D. Del.).
Charles A. Stanziale, Jr. is the Chapter 7 Trustee of the
bankruptcy estates of Main Avenue Pharmacy, Inc. and ScripsAmerica,
Inc. Braverman is a Florida Limited Liability Company that marketed
the Debtors' compounded prescription products in 2014 and 2015. The
Debtors made certain payments to Braverman based on a percentage of
the amount the Debtors received from pharmaceutical benefits
managers, such as Optum, Caremark, and Express Scripts.
On April 17, 2018, the Trustee filed the adversary complaints
against Braverman among others. The Trustee amended his complaints
on June 26, 2018. The Amended Complaints seek to avoid and recover
several allegedly fraudulent transfers from the Debtors to
Braverman pursuant to the Bankruptcy Code, the Delaware Uniform
Fraudulent Transfer Act, and the New Jersey Uniform Fraudulent
Transfer Act. Additionally, the Amended Complaints include a claim
for unjust enrichment against Braverman.
Braverman moved to dismiss all claims against it for failure to
state a claim. The Trustee filed his objections to the Motions on
Oct. 29, 2018.
Braverman makes three arguments as to why the Complaints should be
dismissed:
(1) they fail to state a claim for fraudulent conveyance under
the Bankruptcy Code;
(2) they fail to state a claim for fraudulent conveyance under
applicable state law; and
(3) they fail to state a claim for unjust enrichment.
Braverman argues that the complaints do not allege a claim under
sections 544(b) and 548 of the Bankruptcy Code. Specifically, it
argues that the Amended Complaints do not address the value of the
services it provided to the Debtors and that they do not allege
that the commissions were disproportionate to like commissions paid
for similar services in the marketplace. Instead, Braverman argues,
the Complaints contain only general statements that the payments
were excessive. Additionally, it argues that the Trustee's
assertion that because the contract was illegal there can be no
reasonably equivalent value for services is contrary to law.
Judge Dorsey says, "Other courts have held that illegal contracts
can never have reasonably equivalent value. I agree with these
courts. If a contract is illegal, a defendant cannot show
reasonably equivalent value."
The Trustee also argues that Braverman's Motions failed to address
the allegations in paragraph 30 of the Amended Complaints, which
allege that the commissions earned were well
above the commissions earned in the marketplace.
According to the Court, the question of whether a transaction was
for reasonably equivalent value is one of fact not amenable for
determination on a motion to dismiss.
The Court finds the Trustee met his burden of pleading sufficient
facts which, accepted as true, plausibly give rise to relief. In
the Amended Complaints, the Trustee identifies specific commission
payments, alleges that the commission rates for Braverman were
between 60-70%, and alleges that such percentages were far in
excess of normal or market commission percentages. At this stage,
this is all that is required, the Court says.
The Amended Complaints allege fraudulent conveyance under Delaware
and New Jersey law. Braverman argues that neither DUFTA nor NJUFTA
provides for extraterritorial application. Since Braverman is a
Florida entity, it argues there can be no claim against it for UFTA
violations under either state's law.
The Trustee responds that the transfers at issue emanated from
either Delaware or New Jersey, so Delaware or New Jersey law should
apply even if the transfers were received in
Florida.
The Court finds there is no real conflict between the respective
fraudulent transfer statutes of Florida, Delaware, and New Jersey.
All three states have enacted the Uniform Fraudulent Transfer Act
and there is no real conflict. The elements of claims for both
actual and constructive fraudulent conveyance are essentially the
same in each state. Accordingly, the laws of Delaware as the forum
state control, the Court concludes.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=jDXsRt from PacerMonitor.com.
About ScripsAmerica
ScripsAmerica, Inc., filed a Chapter 11 petition (Bankr. D. Del.
Case No. 16-11991) on Sept. 7, 2016. The petition was signed by
Jeffrey J. Andrews, chief financial officer. At the time of
filing, the Debtor had $600,000 in total assets and $4.65 million
in total debt.
Ciardi Ciardi & Astin has been tapped as bankruptcy counsel, Equity
Partners HG LLC as investment banker, and Bederson LLP as
accountant.
In November 2016, the U.S. Trustee appointed a two-member official
unsecured creditors committee in the case. The Committee tapped
Bayard P.A. was tapped as counsel and EisnerAmper LLP as financial
advisor. However, on January 13, 2017, the U.S. Trustee disbanded
the Committee on the Debtor's request.
On January 16, 2017, the Debtor filed a plan of liquidation, a copy
of which is available at:
http://bankrupt.com/misc/deb16-11991-156.pdfv
The case was converted to a Chapter 7 on February 7, 2017. On July
21, 2017, Main Avenue Pharmacy, Inc. filed a voluntary petition for
relief under Chapter 7 of the Bankruptcy Code. An order for joint
administration of the Debtors' cases was entered on September 15,
2017. Charles A. Stanziale, Jr. is the Chapter 7 Trustee.
SHABAZ YOGURT: Seeks to Hire Mark S. Roher as Legal Counsel
-----------------------------------------------------------
Shabaz Yogurt Land Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to hire The Law Office
of Mark S. Roher, P.A. as counsel.
The firm will render these services:
(a) give advice to the Debtor with respect to its powers and
duties as Debtor in possession and the continued management of its
finances;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee’s Operating Guidelines and
Reporting Requirements and with the rules of the Court;
(c) prepare motions, pleadings, orders, applications,
adversary proceedings, and other legal documents necessary in the
administration of the case;
(d) protect the interest of the Debtor in all matters pending
before the Court; and
(e) represent the Debtor in negotiation with his creditors in
the preparation of a plan.
The firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Mark Roher, Esq., disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Mark S. Roher, Esq.
Law Office of Mark S. Roher, PA
1806 N. Flamingo Road, Suite 300
Pembroke Pines, FL 33028
Tel: (954) 353-2200
Email: mroher@markroherlaw.com
About Shabaz Yogurt Land Inc.
Shabaz Yogurt Land Inc. sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 25-12523) on
Mar 9, 2025, listing up to $50,000 in both assets and liabilities.
Judge Scott M Grossman presides over the case.
Mark S. Roher, Esq. at Law Office Of Mark S. Roher, P.A. represents
the Debtor as counsel.
SIDHU TRANSPORTS: Unsecureds to Get Share of Income for 5 Years
---------------------------------------------------------------
Sidhu Transports LLC filed with the U.S. Bankruptcy Court for the
Southern District of Indiana a Subchapter V Plan of Reorganization
dated March 6, 2025.
The Debtor was established in May 2019 in Indianapolis, Indiana.
The Debtor is solely owned by Sukhdev Singh ("Singh"). The Debtor
operates a trucking business that hauls general freight and
refrigerated goods nationwide.
Recently, the logistic industry was hard hit, causing a significant
drop in freight rates. This created difficulties for the Debtor's
ongoing operations. To make matters more difficult, Debtor was
unable to hire drivers for at least a few of their trucks and
therefore the trucks were not able to generate income.
The Debtor's goal is to reorganize payments for its operational
equipment. With a reduction in payments, and going into the optimal
spring and summer transit season, the Debtor plans to stably
operate, pay its creditors, and return to profitability.
All Claims arising from the past or present debt of the Debtor
shall be bound by the provisions of this Plan. This Plan combines
the classification, allowance, and treatment of Claims.
Class 10: Unsecured Claims. The Claimants holding Unsecured Claims
shall receive a pro-rata share from the Debtor's Disposable Income
over the five-year term of this Plan, an annual payment of
beginning on the first day of the twelfth month following the
Effective Date and annually thereafter, at which time the remaining
amount of their Claim shall be discharged. The allowed unsecured
claims total $403,217.77. Class 10 Claims are impaired.
The source of funds used in this Plan for payments to Creditors
shall be the net monthly income of Debtor for five years resulting
from continued, normal business operations of Debtor. Debtor shall
contribute all net Disposable Income toward Plan payments; however,
Debtor shall reserve a portion of the net Disposable Income to fund
a reserve.
A full-text copy of the Subchapter V Plan dated March 6, 2025 is
available at https://urlcurt.com/u?l=aZwEiW from PacerMonitor.com
at no charge.
Sidhu Transports, LLC is represented by:
Harley K. Means, Esq.
Kroger Gardis & Regas, LLP
111 Monument Circle, Suite 900
Indianapolis, IN 46204
Tel: (317) 777-7434
Email: hmeans@kgrlaw.com
About Sidhu Transports
Sidhu Transports, LLC, filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No.
24-06022) on Nov. 6, 2024, listing up to $50,000 in assets and up
to $10 million in liabilities. The petition was signed by Sukhdev
Singh as owner.
Judge Jeffrey J Graham presides over the case.
Harley K. Means, Esq., at Kroger, Gardis & Regas, L.L.P., is the
Debtor's legal counsel.
SILVER LINING: Gets OK to Use Cash Collateral Until April 29
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada granted Silver
Lining Advertising, LLC interim approval to use cash collateral
until April 29.
The interim order authorized the company to use cash collateral to
pay the expenses set forth in its budget, with a 15% variance
allowed.
As protection, City National Bank and the U.S. Small Business
Administration will be granted superpriority claims and replacement
liens on post-petition assets fo the company to the extent of any
post-petition decrease in value of their security interests
resulting from the use of cash collateral,
In addition, CNB and SBA will receive $500 per month and $10,160
per month, respectively.
A final hearing is set for April 29.
About Silver Lining Advertising
Silver Lining Advertising LLC is an advertising agency located in
Las Vegas, specializing in innovative mobile and digital marketing
strategies. The Company provides services such as mobile billboards
(both static and digital), street teams, walking billboards, and
the Vegas Vibe magazine, a local publication used for promotional
purposes. Additionally, Silver Lining runs a Concierge Program and
collaborates with notable clients like AREA15, Blue Man Group, and
Imagine Exhibitions.
Silver Lining Advertising sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 25-11398) on March
14, 2025. In its petition, the Debtor reported between $1 million
and $10 million in both assets and liabilities.
The Debtor is represented by:
Matthew C. Zirzow, Esq.
LARSON & ZIRZOW, LLC
850 E. Bonneville Ave.
Las Vegas, NV 89101
Tel: 702-382-1170
Email: mzirzow@lzlawnv.com
SILVER STAR: Trust Wins Bid to Dismiss Count I of Amended Complaint
-------------------------------------------------------------------
Judge Sarah A. Hall of the United States Bankruptcy Court for the
Western District of Oklahoma granted the motion filed by Michael L.
Sparkman Revocable Trust u/a/d December 20, 2019 to dismiss the
amended complaint in the adversary case captioned as DAVID R.
PAYNE, CHAPTER 11 TRUSTEE, Plaintiff, vs. MICHAEL L. SPARKMAN
REVOCABLE TRUST U/A/D DECEMBER 20, 2019, Defendant, Adv. No.
25-01005-SAH (Bankr. W.D. Okla.).
Prior to bankruptcy, Silver Star was engaged in the oil and gas
development and production business.
Michael E. Deeba, the financial advisor employed by Trustee, has
analyzed and traced transactions through Silver Star's books,
general ledgers, journal entries, and data embedded from/in
accounting software and agreed/reconciled amounts from Silver Star
income tax returns, depreciation schedules, and county property
records for Charles V. Long, Jr. Deeba discovered that Silver Star
funds/property were utilized to pay for improvements on the
property, which Trust, in the lawsuit styled The Michael L.
Sparkman Revocable Trust u/a/d December 20, 2019 v. Rosewood Energy
II, LLC Charles V. Long, Jr., Case No. CJ-2024-114, District Court
of Logan County, State of Oklahoma, asserts is subject to its
lien.
Prior to the bankruptcy petition, Silver Star procured and paid for
certain land and property improvements and buildings in Section
Thirty (30), Township Sixteen (16) North, Range Four (4) West of
Logan County, Oklahoma. Specifically, the land improvements were
recorded in Silver Star's Property and Equipment asset accounts.
Silver Star paid for $1,713,448 of the property assets.
During March, April, and May 2020, Silver Star was
undercapitalized, unable to pay its obligations in the ordinary
course, and was insolvent. Silver Star had pledged all of its
assets to a senior secured lender prior to March 2020.
Silver Star did not borrow, nor did it receive any funds, from the
Trust.
Silver Star paid the Trust $37,500 and did not receive any value in
exchange for such payments. Silver Star was not a maker, obligor or
guarantor of any claim to Defendant. A summary of the cash
transfers asserted to be fraudulent transfers are as follows:
a. March 16, 2020 – $12,500
b. April 15, 2020 – $12,500
c. May 14, 2020 – $12,500
The motion attacks only the first claim for relief in which the
Trustee seeks judgment determining that all of the property assets
continued to be property of the estate, and that all monies paid by
Silver Star to the Trust constituted property of the estate.
The Trust argues the complaint fails to contain sufficient facts to
allow it to respond to the claim under Section 541. And, while this
Court agrees, it also views the Trustee's claim under Section 541
as fundamentally improper. Count I will, therefore, be dismissed.
Judge Hall holds that while the Court fully appreciates the
definition of the property assets may change as discovery proceeds
in this adversary proceeding and Deeba is able to continue his
forensic investigation, this fact does not eliminate the need to
sufficiently identify the relief the Trustee seeks and the factual
basis therefor to establish the plausibility of the claim. If the
Trustee wants a declaration the property assets are, in fact,
property of the Silver Star bankruptcy estate, at a minimum, the
complaint should identify what comprises the property assets as
currently known. The discussion of Deeba's tracing and
investigation activities and identification of amounts does nothing
to identify what the property assets are and when the transactions
giving rise to Trustee's claim to the property assets took place --
especially to the Trust, a non-insider defendant. For these
reasons, the first claim for relief in the complaint fails to state
a claim to declare the property assets as assets of the Silver Star
bankruptcy estate.
The Trustee is authorized to seek leave to file an amended
complaint in accordance with this Order.
A copy of the Court's decision dated March 24, 2025, is available
at https://urlcurt.com/u?l=slz7Ho from PacerMonitor.com.
About Silver Star of Nevada
Silver Star of Nevada, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
23-10315) on Feb. 14, 2023, with $1 million to $10 million in both
assets and liabilities. Charles V. Long, Jr., president of Silver
Star of Nevada, signed the petition.
Judge Sarah A. Hall oversees the case.
Stephen J. Moriarty, Esq., at Fellers, Snider, Blankenship, Bailey
& Tippens, P.C. and Hall Estill, a professional corporation, serve
as the Debtor's bankruptcy counsel and special counsel,
respectively.
On March 29, 2024, David R. Payne was appointed as trustee in this
Chapter 11 case. He tapped D. R. Payne & Associates, Inc. as his
accounting support staff and Michael E. Deeba, PLLC as financial
advisor.
SKYX PLATFORMS: Reports 48% Revenue Growth in 2024
--------------------------------------------------
SKYX Platforms Corp. (NASDAQ: SKYX) (d/b/a SKYX Technologies), an
award winning highly disruptive advanced and smart home platform
technology company with over 97 U.S. and Global pending and issued
patents and a portfolio of over 60 lighting and home decor
websites, with a mission to make homes and buildings become
advanced-safe-smart instantly as the new standard, on March 24,
2025 reported its financial and operational results for the Fourth
Quarter and Fiscal Year ended December 31, 2024.
Fourth Quarter 2024 and Subsequent Highlights
* SKYX Reports 48% Growth in 2024 Revenues From $58.8 million in
2023 to $86.3 million in 2024
* Generated a record $23.7 million in revenue in Q-4 2024 compared
to $22.2M in Q-4 2023.
* Reported $15.5 million in cash, cash equivalents, and restricted
cash, as of December 31, 2024, compared to $13.0 million as of
September 30, 2024.
* In March 2025, the Company secured additional $1.45 million
funding including from a strategic investor through its $2.00
Series A-1 Preferred Offering.
* As common with companies such as ours when sales are converted
into cash rapidly, often referred to as the "Dell Working Capital
Model" the Company continues to leverage its trades payable to
finance its operations, to enhance its cash position and to lower
its cost of capital.
* Management anticipates significant orders and to become cash flow
positive during the second half of 2025.
* Reported a reduction in General and Administrative expenses by
$5.7 million to $31.4 million as of December 31, 2024 from $37.0
million as of December 31, 2023.
* SKYX reported a $3.3 million decrease in total liabilities and a
reduction of $3.9 million in net loss.
* Net loss per share decreased by $0.09 to ($0.36) per share in
2024 compared to ($0.45) in 2023. Adjusted EBITDA loss per share, a
non-GAAP measure, amounted to $(0.13) per share in 2024, as
compared to $(0.17) per share, in 2023.
* In 2024, Company Secured $11 million equity preferred stock
investment led by the Shaner Group, a leading Marriott hotel owner
with over 70 hotels, including significant insider investing by
SKYX's President Steve Schmidt, who invested $500,000, Co-CEO Lenny
Sokolow and Co-CEO John Campi, who each invested $250,000.
Preferred investment representing $2.00 per share of common stock
with NO warrants.
Market Acceptance and Recent Events:
* Company expects to continue increasing units and grow its revenue
to pro, builders, and retail segment. Company continues to grow its
market penetration of its advanced and smart plug & play products,
expecting its products to be in 20,000 U.S. and Canadian
units/homes by the end of Q-1 2025.
* Company expects its products to be in tens of thousands
additional homes, incrementally in 2025.
* SKYX's technologies provide opportunities for recurring revenues
through interchangeability, upgrades, monitoring, and
subscriptions.
* Company is focused on the "Razor & Blades" model and its product
range includes its advanced ceiling electrical outlet (Razor) and
its advance and smart home plug & play products (Blades) including
lighting, Chandeliers/Pendants, ceiling fans, recessed lights, down
lights, exit signs, emergency lights, holiday/kids/themes lights,
indoor/outdoor wall lights among others smart products.
* Company continues to utilize its e-commerce platform of over 60
websites for lighting and home décor to educate and enhance its
market penetration to both retail and professional segments.
* SKYX collaborates with Home Depot for its Advanced and Smart Plug
& Play Products for both retail and professional segments. SKYX’s
product offering will include a variety of its Advanced and Smart
Plug & Play Products including Retrofit Kits, Smart Light Fixtures,
Smart Ceiling Fans, Ceiling Outlet Receptacles, Recessed Lights and
more.
* Company collaborates with Wayfair for Its Advanced and Smart Plug
& Play Products for both retail and professional segments. SKYX’s
product offering will include a variety of its advanced and Smart
Plug & Play products including Retrofit Kits, Smart Light Fixtures,
Smart Ceiling Fans, Ceiling Outlet Receptacles, Recessed Lights and
more.
* SKYX collaborates with U.S. and world leading lighting companies
including Kichler Quoizel, European leading company, EGLO, and
worlding lighting manufacturer Ruee.
* Collaborated with Cavco Homes, a leading U.S. prefabricated home
manufacturer, for integrating our advanced and smart plug & play
technologies into Cavco’s high-end premium homes shown at the
builder show. Cavco is a public company that has sold nearly one
million homes and continues to deliver close to 20,000 annually.
* Three luxury developments by Forte Developments, including an
80-story high-rise in Miami's Brickell District and projects in
Clearwater Beach and Jupiter, Florida, will feature SKYX’s
technology. More than 12,000 smart plug & play products, including
ceiling outlets, lighting, fans, and emergency fixtures, will be
supplied across 400+ units.
* A 1,000-unit mixed-use development by Jeremiah Baron Companies
will incorporate smart plug & play technologies, with 140 units
receiving initial product supply. This product rollout will include
ceiling outlets, lighting, fans, and emergency fixtures, with
deliveries continuing throughout construction.
* A strategic partnership with JIT Electrical Supply, a leading
builder supplier, will expand SKYX’s footprint in electrical,
lighting, and ceiling fan markets. JIT, which has supplied over
100,000 U.S. homes, will distribute SKYX's lighting solutions,
ceiling fans, recessed lights, emergency lights, exit signs, and
indoor/outdoor wall lights beginning early 2025.
* Huey Long, former Amazon E-Commerce Director and executive at
Walmart and Ashley Furniture, has joined as head of SKYX's
e-commerce platform. He will collaborate with the existing team to
expand market penetration across 60 lighting and home décor
websites and other key e-commerce channels in the U.S. and Canada.
* Greg St. John, former Home Depot lighting head and CEO of Eglo
and Cordelia Lighting, has been appointed President of Lighting,
Fans, and Smart Home Products. With 30+ years of industry
experience, he will lead expansion efforts in retail, homebuilder,
and commercial markets, overseeing partnerships with Home Depot,
Wayfair, and other major retailers.
Safety Standardization Mandatory Code / Insurance Specification and
Recommendation
* SKYX's code team, led by industry veterans Mark Earley, former
head of the National Electrical Code (NEC), and Eric Jacobson,
former President and CEO of the American Lighting Association
(ALA). Company’s safety Code Standardization team believes it
will achieve assistance from additional safety organizations with
its code mandatory safety standardization efforts based on the
product’s significant safety aspects. Mr. Earley and Mr. Jacobson
were instrumental in numerous code and safety changes in both the
electrical and lighting industries. Both strongly believe that, in
light of the Company’s standardization progress including its
product specification approval voting for by ANSI / NEMA (American
National Standardization Institute / National Electrical
Manufacturers Association) and being voted into 10 segments in the
NEC Code Book, it has met the necessary safety conditions for
becoming a ceiling safety standardization requirement for homes and
buildings.
* Insurance Companies. Company strongly believes its products can
save insurance companies many billions of dollars annually by
reducing fires, ladder falls, and electrocutions among other
things. Management expects that once it completes an entire range
and variations of its safe advanced plug & play products it will
start being recommended by insurance companies.
2024 Financial Results:
Revenue in 2024 increased to a record $86.3 million including
record sales of $23.7 million which were realized in the fourth
quarter including e-commerce sales, smart home products and
advanced plug & play products. Gross profit in 2024 increased to
$24.6 million, or 28% of revenue. Gross profit was positively
impacted by the gross profit from the acquisition of the Belami
e-commerce platform, which contained over 60 websites for lighting
and home décor. Cash, cash equivalents and restricted cash,
amounted to $15.5 million as of December 31, 2024, as compared to
13.0 million as of September 30, 2024. Cash used in operating
activities for 2024 amounted to $18.3 million, as compared to $13.0
million in 2023. Adjusted EBITDA loss per share, a non-GAAP
measure, amounted to $(0.13) per share in 2024, as compared to
$(0.17) per share, in 2023.
The Company's annual report on Form 10-K will be filed with the SEC
and will be made available on the Company's investor relations
website: https://ir.skyplug.com/sec-filings/.
Management Commentary
Our year ended December 31, 2024 was highlighted by our four
quarters of consecutive growth including sales and rollout of our
advanced ceiling smart and standard plug & play platform products
on many leading U.S. and Canadian websites. We believe we have
accelerated our cadence of sales with a robust gross margin
profile, notably managing the cash burn of SKYX. Our e-commerce
platform with over 60 websites is expected to continue providing
additional cash flow to the Company. Management anticipates that
the Company will become cash flow positive during the second half
of 2025.
About SKYX Platforms Corp.
As electricity is a standard in every home and building, our
mission is to make homes and buildings become safe-advanced and
smart as the new standard. SKYX has a series of highly disruptive
advanced-safe-smart platform technologies, with over 97 U.S. and
global patents and patent pending applications. Additionally, the
Company owns over 60 lighting and home decor websites for both
retail and commercial segments. Our technologies place an emphasis
on high quality and ease of use, while significantly enhancing both
safety and lifestyle in homes and buildings. We believe that our
products are a necessity in every room in both homes and other
buildings in the U.S. and globally. For more information, please
visit our website at https://skyplug.com/ or follow us on
LinkedIn.
About Skyx Technologies
Headquartered in Pompano Beach, Florida, Sky Technologies develops
advanced platform technologies focused on enhancing safety,
quality, and ease of use in homes and buildings. With nearly 100
patents and pending applications, the Company's products are
designed to improve safety and lifestyle in residential and
commercial spaces. In 2023, Sky expanded by acquiring an online
retailer specializing in home lighting, ceiling fans, and
furnishings. The Company's technologies enable quick and safe
installation of light fixtures and ceiling fans without the need
to
handle hazardous wires.
In its report dated March 24, 2025, the Company's auditor, M&K
CPAS, PLLC, issued a "going concern" qualification, citing the
Company's accumulated deficit, negative cash flows from
operations,
and recurring net losses, which raise substantial doubt about its
ability to continue as a going concern.
SKYX reported a net loss of $35.77 million for the year ending
Dec.
31, 2024, compared to a net loss of $39.73 million in 2023. As of
Dec. 31, 2024, SKYX reported total assets of $65.89 million, total
liabilities of $56.83 million, temporary equity of $5 million, and
total equity of $4.05 million. Additionally, as of Dec. 31, 2024,
SKYX had an accumulated deficit of $181.8 million.
SOLCIUM SOLAR: Court Extends Cash Collateral Access to May 8
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, extended Solcium Solar, LLC's authority to use
cash collateral from March 11 to May 8.
The interim order authorized the company to use cash collateral to
pay the expenses set forth in its budget. The company may deviate
up to 10% from the line items in the budget without violating the
interim order.
As protection, secured creditors will have a perfected
post-petition lien on the cash collateral to the same extent and
with the same validity and priority as their pre-bankruptcy liens.
In addition, Solcium Solar was ordered to maintain insurance
coverage for its property in accordance with its obligations under
its loan agreements with secured creditors.
The next hearing is scheduled for May 8.
About Solcium Solar
Solcium Solar, LLC is a privately owned and operated solar energy
company specializing in residential solar solutions, commercial
solar solutions, EV solar solutions, and battery storage
solutions.
Solcium Solar sought relief under Subchapter V of Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-05611) on
October 18, 2024, with $100,000 to $500,000 in assets and $1
million to $10 million in liabilities. Aaron R. Cohen serves as
Subchapter V trustee.
Judge Grace E. Robson oversees the case.
The Debtor is represented by:
Scott W. Spradley, Esq.
Law Offices of Scott W. Spradley, P.A.
Tel: 386-693-4935
Email: scott@flaglerbeachlaw.com
SPECIAL EFFECTS: Court OKs Deal to Use SBA's Cash Collateral
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
approved a stipulation between Special Effects Unlimited, Inc. and
the U.S. Small Business Administration, allowing the company to use
the agency's cash collateral.
The stipulation authorizes the company to use SBA's cash collateral
until April 30 to pay its expenses.
As protection, SBA will receive a replacement lien on all
post-petition revenues of the company to the same extent and with
the same priority and validity as its pre-bankruptcy lien. The
agency will also receive monthly payment of $731, with the first
payment to be paid on or before March 6.
SBA will be entitled to a super-priority claim over the life of the
company's bankruptcy case, which claim will be limited to any
diminution in the value of its collateral.
About Special Effects Unlimited
Special Effects Unlimited, Inc. operates as a specialized rental
provider of film and entertainment industry effects equipment,
including weather effects, wind machines, fog systems, and physical
effects equipment. The company maintains operations at 8942
Lankershim Blvd., Sun Valley, Calif., and serves the greater Los
Angeles entertainment market.
Special Effects Unlimited filed Chapter 11 petition (Bankr. C.D.
Calif. Case No. 25-10015) on January 5, 2025, listing between $1
million and $10 million in assets and between $500,000 and $1
million in liabilities.
Judge Victoria S. Kaufman handles the case.
The Debtor is represented by:
Marc A. Goldbach, Esq.
Goldbach Law Group
Tel: 562-696-0582
Email: marc.goldbach@goldbachlaw.com
SPENCER & ASSOCIATES: Case Summary & 18 Unsecured Creditors
-----------------------------------------------------------
Debtor: Spencer & Associates Therapeutic Alliance, PLLC
12340 Jones Rd
Houston, TX 77070-3129
Business Description: Spencer & Associates is an outpatient mental
health clinic offering a comprehensive range
of therapy services to address conditions
such as PTSD, depression, anxiety, mood
disorders, and issues related to family
conflicts and school problems. The clinic
specializes in both traditional and
alternative therapeutic approaches,
including strength-based strategies, reality
therapy, art therapy, and neurofeedback. To
better accommodate clients' needs, Spencer &
Associates offers convenient online
telehealth appointments as well as early
morning office hours.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 25-31668
Judge: Hon. Eduardo V Rodriguez
Debtor's Counsel: Robert C Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Email: notifications@lanelaw.com
Total Assets: $106,447
Total Debts: $1,127,503
The petition was signed by Regina Spencer as owner.
A full-text copy of the petition, which includes a list of the
Debtor's 18 unsecured creditors, is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/GHQ54OI/Spencer__Associates_Therapeutic__txsbke-25-31668__0001.0.pdf?mcid=tGE4TAMA
TOP ACES: DBRS Finalizes B(high) Rating, Trend Stable
-----------------------------------------------------
DBRS Limited finalized the provisional credit rating of B (high)
with a Stable trend on Top Aces Inc's (Top Aces or the Company,
rated BB (low) with a Stable trend) Senior Unsecured Notes (the
Notes), which closed on March 13, 2025. The Recovery Rating on the
Notes is RR5.
The credit rating on the Notes is applicable to the following
series: CAD 200 million, 9.00% Senior Unsecured Notes due March 13,
2030. The net proceeds of the Notes, together with draws under the
Company's new revolving credit facility, are intended to be used to
repay existing indebtedness. The Notes will be unsecured
obligations ranking equal with all existing and future unsecured
indebtedness of Top Aces but will effectively be subordinated to
any secured indebtedness of the Company, including the Company's
revolving credit facility.
CREDIT RATING DRIVERS
Morningstar DBRS could take a positive credit rating action should
Top Aces materially strengthen its business risk profile, primarily
through increasing its size and customer diversification, without
necessarily requiring an improvement in key credit metrics to do
so. Conversely, should key credit metrics materially deteriorate in
aggregate for a sustained period (i.e., debt-to-EBITDA increase
toward 4.5 times (x)) because of weaker-than-expected operating
performance and/or more aggressive financial management), the
credit ratings could be pressured. That said, weaker-than-expected
operating performance for a sustained period, resulting in a more
permanent shift in the Company's business risk profile, could also
result in the requirement to maintain stronger credit metrics to
support the same credit rating.
CREDIT RATING RATIONALE
Comprehensive Business Risk Assessment (CBRA): Top Ace's CBRA of BH
reflects the Company's solid market position in its niche markets,
contracted revenues streams, strong safety record, technological
capabilities, and favorable industry tailwinds. The CBRA also
reflects the considerable spending requirements related to fleet
maintenance and contract growth, risks associated with customer
concentration, as well as uncertainties around existing contract
renewals and future contract growth.
Comprehensive Financial Risk Assessment (CFRA): Top Aces' CFRA of
BBBL reflects the Company's relatively conservative financial
management practices (i.e., debt-to-EBTIDA of approximately 3.25x
in 2025).
Intrinsic Assessment (IA): The IA of BBL is within the Intrinsic
Assessment Range and is based on the CBRA and CFRA, also taking
into consideration peer comparisons, among other factors.
Additional Considerations: The credit ratings include no further
negative or positive adjustments resulting from additional
considerations.
Recovery Rating: The Recovery Rating of RR5 on the Senior Unsecured
Notes assumes a fully drawn secured revolver and reflects the
secured revolver's first-lien position.
Notes: All figures are in Canadian dollars unless otherwise noted.
TRIDENT TPI: Moody's Cuts CFR to 'Caa1', Outlook Remains Negative
-----------------------------------------------------------------
Moody's Ratings downgraded Trident TPI Holdings, Inc. (dba
TekniPlex)'s corporate family rating to Caa1 from B3, the
probability of default rating to Caa1-PD from B3-PD, the senior
secured first lien term loan B7 due 2028 to B3 from B2, and the
senior unsecured notes due 2028 to Caa3 from Caa2. The outlook
remains negative.
The rating action reflects Trident's weak liquidity and Moody's
expectations that Trident's operating performance and financial
metrics will remain challenged in 2025. Although volume trends have
shown early signs of improvements, Moody's expects EBITDA/interest
expense to remain below 1.5x and adjusted debt/EBITDA well above
7.0x through the next 12 to 18 months.
Benefits from new business wins and the integration of acquisitions
have not materialized sufficiently to solidify credit metrics. Cash
flow has been challenged after accounting for elevated capital
expenditures, high interest costs, foreign exchange losses, and
working capital needs.
The downgrade to Caa1 also reflects governance considerations,
including an aggressive financial policy and limited prospects for
material debt reduction in future.
RATINGS RATIONALE
Trident's Caa1 CFR reflects the company's high leverage (Moody's
adjusted) at just over 9.0x debt/EBITDA in fiscal year-end June
2025 and weak interest coverage.
A lackluster volume recovery and high debt load will limit future
improvements in Trident's credit metrics. Moody's expects leverage
to improve only to 8.5x debt/EBITDA at fiscal year-end 2026 based
on more favorable volume trends and EBITDA growth. Interest
coverage will remain weak at around 1.1x EBITDA/interest in fiscal
2025, before slightly improving to 1.3x in fiscal 2026. While
Moody's expects funds from operations to increase to about $40
million in fiscal 2025 and to $80 million in fiscal 2026, from
around $27 million for the last twelve months ended December 2024,
free cash flow will remain negative due to elevated capital
expenditures, foreign exchange losses, and working capital needs.
Moody's do capture the impact of more favorable volumes in
Trident's EBITDA margin with an increase to close to 18% in fiscal
2026, or around 150 basis points over fiscal 2025.
Trident's product offerings in the consumer product and healthcare
end markets showcase the company's material science capabilities.
Over the past several years, Trident has made a strong push to grow
through acquisition and streamline operations within its consumer
product and healthcare end markets to expand its specialized
product portfolio and win new business. The ability to meet
stringent product certification hurdles creates stickiness with
customers and barriers to entry for the company.
Trident's liquidity is weak with $115 million outstanding under its
$200 million ABL revolver (borrowing base of $170 million) and $50
million cash on balance sheet as of December 2024. The company has
executed another $13 million in sale and leaseback transactions in
the recent December quarter that followed about $100 million in
sale and leaseback transactions during fiscal June 2024. Capital
expenditures will remain elevated at $100 million through fiscal
2026 to fund future growth investments before declining to more
normalized levels of about $70 million.
Moody's expects free cash flow to be negative in fiscal year 2025
and 2026 in the amount of around $100 million and $20 million,
respectively.
The B3 rating assigned to the first lien senior secured term loan
is one notch above the Caa1 corporate family rating and reflects
its priority position in the capital structure. However, the rating
is constrained by the structural subordination to the $200 million
asset-based revolver and lack of guarantees and asset pledges from
a meaningful portion of the operating subsidiaries. The first lien
senior secured term loan is guaranteed by all existing and future
domestic subsidiaries. The guarantors account for around 65% of
EBITDA and 70% of book assets. The term loan is issued by Trident
TPI Holdings, Inc. and is secured by the first priority lien on all
domestic assets other than the assets securing the ABL revolver,
and a second lien on the ABL collateral.
The Caa3 rating on the senior unsecured second notes is two notches
below the corporate family rating and reflects the instrument's
structural subordination to both the asset-based revolver and the
first lien term loans, as well as the expectation of a considerable
loss in a default scenario. The senior unsecured second notes are
issued by Trident TPI Holdings, Inc. and is guaranteed by all
existing and future domestic subsidiaries.
The negative outlook reflects Trident's weak liquidity and
expectation of continued negative free cash flow generation if the
company does not scale back capital expenditures.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
Moody's changed Trident's governance risk score to G-5 from G-4 and
its credit impact score to CIS-5 from CIS-4. The change in the
governance risk and credit impact scores reflect the company's
aggressive financial policies, which have resulted in a large
amount of debt on its balance sheet. As a result, credit metrics
are weak, while execution risk is high to realize the cash flow
benefits from acquisition integration and cost savings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if liquidity deteriorates or the
company fails to improve credit metrics. Specifically, Moody's
could downgrade the rating if EBITDA-to-interest is sustained below
1.0x. A downgrade could also occur in the case of increased risk of
a restructuring of the debt or a default.
An upgrade, although unlikely over the near term, would require a
sustainable improvement in credit metrics, liquidity and a less
aggressive financial policy. Specifically, if interest coverage
improves sustainably above 1.5x, debt to EBITDA declines to 7.0x
and the company has positive free cash flow-to-debt.
Headquartered in Wayne, Pennsylvania, Trident TPI Holdings, Inc.
(dba Tekni-Plex) is a manufacturer of plastic packaging and
provider of material science and sustainable solutions to the food,
healthcare, and consumer good end markets. Trident generated last
twelve months ended December 2024 revenue of $1.9 billion and is a
portfolio company of Genstar Capital.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
TUPPERWARE BRANDS: Files Amendment to Disclosure Statement
----------------------------------------------------------
Tupperware Brands Corporation and affiliates submitted an Amended
Disclosure Statement relating to the Joint Chapter 11 Plan of
Liquidation dated March 6, 2025.
The primary objective of the Plan is to maximize value for all
Holders of Allowed Claims and Allowed Interests and generally to
distribute all property of the Estates that is or becomes available
for distribution generally in accordance with the priorities
established by the Bankruptcy Code. The Debtors believe that the
Plan accomplishes this objective and is in the best interest of the
Estates.
Generally speaking, the Plan:
* provides the vesting of certain assets on the Effective Date
in the Liquidating Trust for the purpose of distribution to the
Liquidating Trust Beneficiaries;
* designates a Liquidating Trustee to administer the
Liquidating Trust and to wind-down, liquidate, or otherwise
dissolve the post-Effective Date Debtors;
* contemplates recoveries to Holders of Administrative Claims
and Other Priority Claims as is necessary to satisfy section 1129
of the Bankruptcy Code.
The Plan contemplates: (a) the Debtors paying Allowed
Administrative Claims, Allowed Priority Claims, Allowed Other
Secured Claims in full, or otherwise render such Claims Unimpaired;
(b) appointing a Liquidating Trustee pursuant to the mechanics set
forth in the Plan; (c) establishing a Liquidating Trust to
distribute the remaining Cash of the Debtors and the proceeds of
the Liquidating Trust Assets; and (iv) the orderly dissolution of
the Debtors and the Debtors' Estates.
Like in the prior iteration of the Plan, each Holder of an Allowed
General Unsecured Claim Holder shall receive its Pro Rata share of
the right to recovery from the Liquidating Trust in accordance with
the Liquidation Proceeds Allocation.
The Sale Transaction includes the sale of Acquired Assets to, and
assumption of Assumed Liabilities by, the Credit Agreement Lenders'
designee, NewCo, and the agreement for the acquisition via credit
bid of the collateral constituting 100% of the equity interests in
Premiere Brands International Holdings BV from Dart Industries Inc.
and Tupperware Home Parties, LLC.
Distributions under the Plan shall be funded by (i) Cash on hand as
of the Effective Date and (ii) all other Liquidating Trust Assets;
provided, however, that Allowed Professional Fee Claims shall be
paid from the Professional Fee Reserve in the first instance.
The Debtors' releases, third-party releases, and exculpation
provisions included in the Plan are an integral part of the
Debtors' overall chapter 11 efforts and were an essential element
of the negotiations between the Debtors and their key
constituencies in obtaining their support for the Plan.
The Releasing Parties are each of, and in each case in its capacity
as such: (a) the Debtors; (b) each Holder of Credit Agreement
Claims and each Holder of Bridge Credit Agreement Claims; (c) the
Prepetition Agents; (d) the Purchaser; (e) the Committee and
members of the Committee in their capacity as members of the
Committee; (f) the Liquidating Trustee; (g) each Holder of Claims
who opt in to granting the releases set forth in the Plan; (h) each
Holder of Interests who opt in to granting the releases set forth
in the Plan; (i) each current and former Affiliate of each Entity
in the foregoing clause (a) through the following clause (j); and
(i) each Related Party of each Entity in the foregoing clause (a)
through this clause (j), only to the extent such Holder of Claims
or Interests in the foregoing clause (g) and (i) is legally
entitled to bind such Affiliate or Related Party.
On the Effective Date, the Liquidating Trust will be established
pursuant to the Liquidating Trust Agreement. Upon establishment of
the Liquidating Trust, title to the Liquidating Trust Assets shall
be deemed transferred to the Liquidating Trust without any further
action of the Debtors or any managers, employees, officers,
directors, members, partners, shareholders, agents, advisors, or
representatives of the Debtors.
The Liquidating Trust shall be established for, among other
purposes, the purpose of (a) receiving and holding the Liquidating
Trust Assets; (b) administering, disputing, objecting to,
compromising, or otherwise resolving all Claims and Interests; (c)
making distributions in accordance with the Plan and the
Liquidating Trust Agreement; (d) maximizing recoveries for the
benefit of the Liquidating Trust Beneficiaries; (e) performing all
actions reasonably requested by the Purchaser to complete all of
the Debtors' outstanding obligations under the Purchase Agreement
as successor to the Debtors; and (f) commencing and pursuing the
Retained Causes of Action and managing and administering any
proceeds thereof, with no objective to continue or engage in the
conduct of a trade or business.
A full-text copy of the Amended Disclosure Statement dated March 6,
2025 is available at https://urlcurt.com/u?l=MZhaIY from Epiq,
claims agent.
Co-Counsel for the Debtors:
Anup Sathy, P.C.
Spencer A. Winters, P.C.
Jeffrey T. Michalik, Esq.
Gabriela Z. Hensley, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
333 West Wolf Point Plaza
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
E-mail: anup.sathy@kirkland.com
spencer.winters@kirkland.com
jeff.michalik@kirkland.com
gabriela.hensley@kirkland.com
-and-
Patrick J. Reilley, Esq.
Stacy L. Newman, Esq.
Michael E. Fitzpatrick, Esq.
Jack M. Dougherty, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, Delaware 19801
Tel: (302) 652-3131
Fax: (302) 652-3117
E-mail: preilley@coleschotz.com
snewman@coleschotz.com
mfitzpatrick@coleschotz.com
jdougherty@coleschotz.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.
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.
UGS PRIVATE: Unsecureds Will Get 5% of Claims over 60 Months
------------------------------------------------------------
UGS Private Security, Inc. filed with the U.S. Bankruptcy Court for
the Central District of California a First Amended Disclosure
Statement describing First Amended Plan of Reorganization dated
March 4, 2025.
The Debtor is a California Corporation established sometime in
2017. The management of the debtor both pre- and post-bankruptcy
have been by its managing member, Parfait Voundi. Mr. Voundi is an
insider, and a notice of insider compensation was sent to all
parties in this case.
The business ran into issues with the Insurance and has a recent
monetary judgment. There are some pending Lawsuits. The business
has approximately 16 employees. Debtor's liabilities include
Lawsuits for Workers Compensation cases, potential Labor Code
violations, Insurance claims, collection and credit card debts.
The debtor has two monetary Judgements against it by two Insurance
Companies which caused the debtor to seek protection under the
bankruptcy laws in order to reorganize its debts and continue its
business operations effectively.
The instant Case was filed on March 1, 2024, as a chapter 11
petition including the Schedules of Assets and Liabilities,
Statement of Financial Affairs, Other Schedules, and a List of
Creditors Holding 20 Largest Unsecured Claims. The Debtor's
Schedules listed assets of $31,420.03 and liabilities of
$339,087.14.
The Debtor anticipates generating sufficient income to fund the
proposed Plan.
Class 4 consists of General Unsecured Claims. The Debtor will pay a
total of $22,048.75 (5% of all general unsecured claims) to in the
holder of Class 4 claims, in monthly installments of $367.48 over
60 months commencing on the Effective Date of the Plan. Holders of
allowed general unsecured claims shall receive their pro-rata share
of $367.48 monthly from the Debtor's disposable income derived from
the financials. The allowed unsecured claims total $440,974.96.
Class 4 Claims are impaired.
Class 6 consists of Interest Holders. Mr. Parfait Voundi is the
100% equity security holder. Mr. Voundi will retain his share
ownership interest in the property but will not receive any
distributions, dividends, or payments with respect to his share
ownership interest. Pursuant to the current approved insider
compensation, Mr. Parfait Voundi will continue to receive
$10,153.84 for his services.
The Plan will be funded by the Debtor's post-petition earnings from
its business activities. Based on the debtor's monthly operating
reports for the last seven months, the debtor has received an
average of $142,507.00 a month for its business income.
A full-text copy of the First Amended Disclosure Statement dated
March 4, 2025 is available at https://urlcurt.com/u?l=lOkLL0 from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Onyinye Anyama, Esq.
ANYAMA LAW FIRM | A Professional Law Corporation
18000 Studebaker Road, Suite 325
Cerritos, California 90703
Tel. (562) 645-4500; Fax. (562) 318-3669
Email: info@anyamalaw.com
About UGS Private Security
UGS Private Security, Inc., is a California Corporation established
sometime in 2017.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-11631) on March 1,
2024, with $0 to $50,000 in assets and $100,001 to $500,000 in
liabilities.
Judge Julia W. Brand presides over the case.
Onyinye N. Anyama, Esq., at Anyama Law Firm, A Professional Corp.,
represents the Debtor as legal counsel.
US FOODS: S&P Upgrades ICR to 'BB+', Outlook Stable
---------------------------------------------------
S&P Global Ratings raised its issuer credit rating on foodservice
distributor US Foods Inc. to 'BB+' from 'BB'. At the same time, S&P
affirmed its 'BBB-' issue-level rating on the senior secured debt.
The '1' recovery rating remains unchanged.
S&P said, "We also raised our issue-level rating on the senior
unsecured debt to 'BB+' from 'BB'. The '4' recovery rating remains
unchanged.
"The stable outlook reflects our expectations that continued good
execution will lead to revenue and EBITDA growth that will enable
US Foods to maintain S&P Global Ratings-adjusted debt to EBITDA
below 3.5x.
The upgrade reflects US Foods' solid execution that has led to
consistent case volume growth and EBITDA expansion. The company's
revenue grew 6.4% in 2024, led by case volume growth of 4.2% as US
Foods expanded its market share through both organic growth and
acquisitions. The company's customer wins in the independent
restaurant segment, which contributes about one third of its
overall revenue and is its most profitable customer base, have
outpaced the industry. S&P expects US Foods will continue to expand
its market share as it benefits from its investments in its sales
force, technology, and operations. In addition to top-line growth,
the company has strengthened profitability by growing its
private-label penetration, improving delivery efficiency, and
working with vendors to reduce its cost of goods sold (COGS). Its
S&P Global Ratings-adjusted EBITDA grew 9% in 2024 to $1.67
billion, resulting in EBITDA margin expanding approximately 10
basis points (bps) to 4.4%. The company has consistently expanded
profit margins over the past few years, and S&P expects ongoing
improvement over the next two years. Based on the company's
consistent performance and ability to maintain adjusted leverage
below 3.5x, it revised its comparable ratings modifier to neutral
(previously negative).
US Foods' increasing market share and efficiency initiatives will
drive continued EBITDA growth. S&P said, "We believe the company
will continue to expand its market share in 2025, though anticipate
softer volume growth this year due to weakening consumer spending.
Our base case projects annual revenue growth of 5%-6% over the next
two years, supported by higher case volumes, modest inflation, and
contributions from tuck-in acquisitions. We anticipate further
share gains in the independent restaurant business and new customer
additions in health care and hospitality will lead to low- to
mid-single-digit percent case volume over the next two years. We
forecast S&P Global Ratings-adjusted EBITDA margin will improve
approximately 20 bps to 4.6% in 2025 as the company continues to
manage costs through vendor negotiations, increase private-label
penetration, and improve its supply chain through route
efficiencies. The company realized $230 million in COGS savings
from 2022-2024, supporting gross margin expanding more than 100
bps. Management is targeting $260 million in additional savings
between 2025-2027. We believe this is achievable and expect the
company to leverage its scale with suppliers to optimize its
assortment and pricing. The company achieved productivity gains in
terms of cases per mile in 2024 after implementing new routing
technology in some of its markets. We expect further productivity
benefits from its routing technology and warehouse efficiency
efforts."
S&P said, "We believe US Foods' scale and customer diversification
positions it well to manage macroeconomic disruptions. The food
service distribution industry remains highly competitive and
fragmented, and US Foods is one of the few operators with a large
national footprint. The company's scale provides it with bargaining
power, and its ability to assist its customers in menu optimization
and streamlining purchases with its e-commerce platform has enabled
continued market share gains over the past two years. Restaurants
account for approximately 55% of US Foods' customer mix (by
revenue), but it also serves health care, hospitality, education,
and other segments, offering some customer diversification. We
expect its health care and education segments will remain resilient
if consumer spending declines. Furthermore, we believe the company
can manage operating expenses effectively to support profitability
in the event that demand weakens. That said, we expect the
long-term trend of consumers increasing their food-away-from-home
spending will continue.
"We expect US Foods will deploy its cash flow toward tuck-in
acquisitions and share buybacks. The company's financial policy
remains unchanged and, as part of its three-year plan, it aims to
generate $4 billion in operating cash flow from 2025-2027, with 50%
of that cash flow allocated to shareholder returns, 20% to
opportunistically pursue accretive tuck-in mergers and
acquisitions, and 30% for capital expenditure (capex). We expect
operating cash flow will expand over the next two years; however,
increased capex will keep FOCF at $750 million-$850 million. Our
base-case forecast projects annual capex of $400 million-$425
million in 2025 and 2026. We believe consolidation in the industry
will continue and the company will continue to pursue tuck-in
acquisitions to enhance its presence and add additional capacity in
its existing markets. US Foods' reported net leverage was 2.8x as
of Dec. 28, 2024 (3.4x on an S&P Global Ratings-adjusted basis),
unchanged from the prior year, and within the company's target
range of 2x-3x. Under our base-case scenario, we forecast S&P
Global Ratings-adjusted leverage will be maintained in the low-3x
area over the next 12 months and do not expect any material debt
paydown in the near term.
"The stable outlook reflects our view that the company will
continue to grow its revenue and EBITDA base and maintain S&P
Global Ratings-adjusted leverage below 3.5x."
S&P could lower its rating on US Foods if its operating performance
weakens, leading to lower EBITDA generation than it expects,
causing it to sustain S&P Global Ratings-adjusted leverage above
4x. This could occur if:
-- Economic challenges, increased competition, or execution issues
pressure growth prospects and operating margins relative to our
expectations; or
-- The company pursues a more aggressive financial policy,
including debt funded share repurchases or acquisitions that cause
credit metrics to weaken.
S&P could raise its ratings on US Foods if:
-- The company demonstrates sustained operating performance gains,
meaningfully expands its operating scale, and expands its S&P
Global Ratings-adjusted EBITDA margin to above 5% through
successful execution of its operational improvement initiatives
while maintaining a consistent financial policy; or
-- Adopts a financial policy that supports S&P Global
Ratings-adjusted leverage being sustained below 3x while continuing
to expand its EBITDA base.
WA3 PROPERTIES TALBOT: Seeks Chapter 11 Bankruptcy in New York
--------------------------------------------------------------
On March 24, 2025, WA3 Properties Talbot LLC filed Chapter 11
protection in the U.S. Bankruptcy Court for the Eastern District
of New York. According to court filing, the
Debtor reports $8,217,998 in debt owed to 1 and 49 creditors.
The petition states funds will be available to unsecured
creditors.
About WA3 Properties Talbot LLC
WA3 Properties Talbot LLC 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.
WA3 Properties Talbot LLC sought relief under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 25-71123) on March
24, 2025. In its petition, the Debtor reports total assets of
$16,421,841 and total liabilities of $8,217,998
Honorable Bankruptcy Judge Louis A. Scarcella handles the case.
The Debtor is represented by Avrum J. Rosen, Esq. at LAW OFFICES OF
AVRUM J. ROSEN, PLLC.
WELLPATH HOLDINGS: Court Stays Count I Claims in Hobbs Lawsuit
--------------------------------------------------------------
In the case captioned as CHRISTOPHER HOBBS, Plaintiff, v. JOHN DOE
DEPUTIES, KERRY J. FORESTAL, MARION COUNTY SHERIFF'S OFFICE,
WELLPATH LLC F/K/A CORRECT CARE SOLUTIONS, LLC, CHRISTOPHER
CLAYTON, CORECIVIC, INC., Defendants, Case No.
1:23-cv-01088-TWP-TAB (S.D. Ind.), Chief Judge Tanya Walton Pratt
of the United States District Court for the Southern District of
Indiana granted the motion of Defendants Christopher Clayton and
the Marion County Sheriff's Office to extend bankruptcy stay to the
MSCO and its employees.
Mr. Hobbs initiated this civil rights lawsuit in state court, and
it was removed to this Court on June 22, 2023. Since childhood,
Mr. Hobbs has suffered from epilepsy, and this condition causes him
to suffer seizures.
Mr. Hobbs brings two claims in his Amended Complaint. In Count I --
Mr. Hobbs claims he was denied the correct epilepsy medication and
a bottom bunk even though he suffers from seizures. The claim in
Count I is against the John Doe Deputies, Marion County Sheriff
Kerry J. Forestal, MCSO, Wellpath, and CoreCivic. In Count II, Mr.
Hobbs claims Deputy Clayton started a fight with Mr. Hobbs and
assaulted him. The claim in Count II is brought against Wellpath,
the company that provides medical care to inmates at the Jail,
Marion County Sherriff Kerry Forestal, the Marion County Sheriff's
Office, CoreCivic, Inc., and Deputy Clayton, as well as
unidentified John Doe deputies.
The MSCO Defendants seek to stay this case based on the bankruptcy
court's order extending the stay to claims against Wellpath's
clients or customers.
Also pending is Defendant Wellpath LLC f/k/a/ Correct Care
Solutions, Inc.'s, Motion for Summary Judgment, Defendant
CoreCivic, Inc.’s Motion for Summary Judgment and Designation of
Evidence, MCSO's Motion for Partial Summary Judgment; and Defendant
CoreCivic, Inc.'s Motion for Summary Judgment Regarding ADA and
Rehabilitation Act.
In this case, the Court agrees that Wellpath and the MSCO
Defendants have an "identity of interest" regarding Mr. Hobbs's
claims about the treatment he received for his epilepsy. However,
Mr. Hobbs's claim that Deputy Clayton later assaulted him does not
implicate any Wellpath employee. This Court has the option to sever
unrelated claims, at which point the Bankruptcy Court's stay order
would not apply because WellPath would not be a party to the new
severed case.
Judge Pratt holds that all claims against Wellpath remain stayed.
The motion to stay is granted as to all claims in Count I. The
claims against Kerry Forestal, the MSCO, Christopher Clayton, and
CoreCivic, Inc. in Count II are severed. Because the claims in
Count II are discrete and separate, in the interest of judicial
economy and to avoid prejudice to Mr. Hobbs, Count II will be
severed from this lawsuit, and a new case will be opened. In
addition, the remaining pending motions are dismissed without
prejudice to refile once the stay is lifted.
A copy of the Court's decision dated March 24, 2025, is available
at https://urlcurt.com/u?l=jk09wt from PacerMonitor.com.
About Wellpath Holdings
Wellpath Holdings, Inc., formerly known as CCS-CMGC Holdings, Inc.,
is a provider of medical and mental healthcare in jails, prisons,
and inpatient and residential treatment facilities.
Wellpath Holdings and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 24-90533) on Nov. 11, 2024. Timothy Dragelin, chief
restructuring officer and chief financial officer, signed the
petitions.
At the time of the filing, the Debtors reported $1 billion to $10
billion in assets and liabilities.
Judge Alfredo R. Perez oversees the cases.
The Debtors tapped Marcus A. Helt, Esq. at McDermott Will & Emery,
LLP as bankruptcy counsel; FTI Consulting, Inc., as financial
advisor; and Lazard Freres & Co., LLC and MTS Partners, LP as
investment banker.
WELLPATH HOLDINGS: Court Stays Wilson Lawsuit Due to Bankruptcy
---------------------------------------------------------------
Magistrate Judge Sheila K. Oberto of the United States District
Court for the Eastern District of California will stay proceedings
in the case captioned as CHRISTOPHER JOHN WILSON, Plaintiff, v.
TUOLOMNE COUNTY, et al., Defendants, Case No. 1:21-cv-00196-KES-SKO
(E.D. Cal.) pending the outcome of Wellpath, LLC's bankruptcy
proceedings in the United States Bankruptcy Court for the Southern
District of Texas.
The bankruptcy proceedings require an automatic stay of the case
given Defendant Son's employment with a Wellpath entity.
Plaintiff Christopher John Wilson, a state prisoner and previous
county detainee, is proceeding pro se and in forma pauperis in this
civil rights action. This case proceeds on Plaintiff's Eighth
Amendment deliberate indifference to serious medical needs and
failure to protect claims against Defendant Son and Eighth
Amendment excessive force claim against Defendant Teague.
The Wellpath bankruptcy proceedings impact these proceedings and
two of Plaintiff's three claims in particular. And while the Court
cannot predict the length any stay, a stay in this action will not
be indefinite and result in undue delay. The bankruptcy proceedings
are active and ongoing. Additionally, Defendant Son will be
directed to keep the Court updated every 60 days concerning the
status of those proceedings.
A copy of the Court's decision is available at
https://urlcurt.com/u?l=Jm5wZo from PacerMonitor.com.
About Wellpath Holdings
Wellpath Holdings, Inc., formerly known as CCS-CMGC Holdings, Inc.,
is a provider of medical and mental healthcare in jails, prisons,
and inpatient and residential treatment facilities.
Wellpath Holdings and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 24-90533) on Nov. 11, 2024. Timothy Dragelin, chief
restructuring officer and chief financial officer, signed the
petitions.
At the time of the filing, the Debtors reported $1 billion to $10
billion in assets and liabilities.
Judge Alfredo R. Perez oversees the cases.
The Debtors tapped Marcus A. Helt, Esq. at McDermott Will & Emery,
LLP as bankruptcy counsel; FTI Consulting, Inc., as financial
advisor; and Lazard Freres & Co., LLC and MTS Partners, LP as
investment banker.
WEST TECHNOLOGY: Moody's Affirms Caa1 CFR Following Equiniti Deal
-----------------------------------------------------------------
Moody's Ratings affirmed West Technology Group, LLC's (West
Technology) Caa1 corporate family rating and Caa1-PD probability of
default rating following the March 17, 2025 announcement that it
entered into a definitive agreement to sell its Notified business
to Equiniti. Concurrently, Moody's affirmed the B2 ratings of West
Technology's senior secured first lien bank credit facilities,
comprising the senior secured first lien revolving credit facility
expiring August 2026 and senior secured first lien term loan B3 due
April 2027 and upgraded the rating of its senior secured second
lien notes due April 2027 to Caa2 from Caa3. The upgrade of the
senior secured second lien notes reflect Moody's expectations that
the majority of proceeds from the Notified business sale will repay
senior secured first lien debt. The outlook remains negative. West
Technology is a provider of technology-enabled communications
services.
The Notified business is being sold to Equiniti for $534.5 million,
which consists of $454.5 million of cash and up to $80 million in
earnout payments. The transaction is expected to close in the
second quarter of 2025, subject to regulatory approvals and other
customary closing conditions. The company's credit agreement
requires that 75% of asset sale proceeds repays senior secured term
loan debt. The ratings affirmation reflects the company's very high
financial leverage, Moody's expectations of continued revenue and
EBITDA declines for at least the next 12 months, ongoing negative
free cash flow generation and challenges in achieving sustainable
and profitable growth. The Notified business represented 42% of
company-calculated adjusted EBITDA (excluding the legacy
collaboration / corporate segment), and Moody's projected Notified
to have mid-single-digit percentage revenue growth in 2025. Moody's
anticipates the combined TeleVox and Mosaicx business revenue will
decline in the double-digit percentages over the same period. Since
2023, the company has sold several of its businesses and used the
sale proceeds to repay debt and add cash to the balance sheet.
Moody's expects further asset sales over time with sale proceeds to
be used in a similar manner. However, asset sales involve uncertain
timing and event risk. The negative outlook reflects Moody's
uncertainty of West Technology growing revenue and generating free
cash flow beyond 2025, which could weaken its liquidity.
RATINGS RATIONALE
West Technology's Caa1 CFR is constrained by the company's highly
leveraged debt capital structure, declining revenue trends in its
remaining two business segments, and Moody's expectations for
continued negative free cash flow over the next 12 months. Moody's
expects revenue declines to persist in the TeleVox segment due to
recasts and reprices of its enterprise clients from a volume-based
pricing model to a Software as a Service (SaaS) approach, though
the SaaS transition will provide better revenue visibility with
longer-term client contracts. In addition, there is uncertainty
about the timing of further divestitures and the value of proceeds,
which can materially impact the credit profile and debt service
capacity of the remaining businesses.
The CFR is supported by the company's leading position as a
provider of notification services and good operating scale. The
company is combining the TeleVox and Mosaicx businesses, and when
completed, Moody's expects cost savings will contribute to improved
profitability. Risks are also mitigated by the company's good
liquidity supported by high cash balances and a fully available
$152.7 million revolver which Moody's expects are sufficient to
fund expected cash flow deficits over the next 12 months.
All financial metrics cited reflect Moody's standard adjustments.
West Technology's first lien credit facilities comprising the
senior secured first lien revolver expiring August 2026 and term
loan due April 2027 are rated B2. The rating reflects their first
priority position in the capital structure and a meaningful cushion
from the senior secured second lien notes due April 2027 rated
Caa2. The rating for the senior secured second lien notes reflects
their subordination by a meaningful amount of secured debt in the
capital structure and their weak recovery prospects in the event of
a default.
Moody's views West Technology's liquidity as good supported by its
currently high cash balances ($187 million cash as of September 30,
2024) and undrawn $152.7 million revolver expiring August 2026
which is more than sufficient to fund Moody's expectations of
negative free cash flow over the next 12 months. During the fourth
quarter, the company sold its Utilities business included in its
Mosaicx segment, and a majority of proceeds were used to repay
debt. Upon the expected transaction close of the Notified business
sale, Moody's expects cash balances will increase by at least $100
million. Cash needs over the next 12 months include one-time costs
associated with cost takeout initiatives and capital spending
around 8% of revenue. Moody's expects West Technology's revolver
will likely remain undrawn. The revolver contains a springing
maximum first lien net leverage ratio of 5.9x (with no step downs)
when utilization is greater than 35% ($53.6 million). The
definition of EBITDA in the credit agreement permits various
addbacks, including non-recurring expenses and pro forma cost
savings. Moody's estimates West Technology will have modest
operation cushion under the leverage ratio test if the ratio were
to become applicable.
The negative outlook reflects Moody's views that West Technology's
revenue will decline and free cash flow will remain negative over
the next 12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade is unlikely in the near
term. However, upward rating pressure would arise if West
Technology delivers solid operating performance with sustainable
revenue and EBITDA growth and generates positive free cash flow.
Downward rating pressure could occur if liquidity deteriorates, the
risk of default rises, or Moody's assessments of recovery in a
default scenario deteriorates to levels below the expectation for a
Caa1 rating.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
West Technology Group, LLC (f/k/a Intrado Corporation) is a
provider of technology-enabled communications services. It was
acquired by affiliates of Apollo Global Management, Inc. in October
2017.
WHITE FOREST: Taps Sonoran Capital Advisors as Investment Banker
----------------------------------------------------------------
White Forest Resources, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Sonoran Capital Advisors, LLC as their investment banker.
The firm will render these services:
(a) Complete the Raven Crest Auction. To complete the Raven
Crest Auction, Sonoran shall:
i. Contact potential buyers and negotiate non-disclosure
agreements to the extent the buyer has not already provided one;
ii. Provide access to the data room;
iii. Arrange for and attend potential buyers' meetings with
Companies' management or site visits;
iv. Assist with any other diligence required by potential
buyers in order to provide a qualified bid;
v. Provide a weekly update on the process to the
Companies' Chief Restructuring Officer ("CRO");
vi. Assist the CRO and counsel for the Companies'
("Counsel") in determining a qualified bid;
vii. To the extent there is more than one qualified bidder,
assist Counsel with the auction; and
viii. Provide testimony to the Bankruptcy Court regarding the
auction process and the results.
(b) Go to market and determine whether third parties are
willing to invest in the Companies or purchase the South Fork
Assets. To complete this process, Sonoran shall:
i. Contact potential buyers/investors and negotiate
non-disclosure agreements to the extent the buyer has not already
provided one;
ii. Provide access to the data room;
iii. Arrange for and attend potential buyers/investors'
meetings with Companies' management or site visits;
iv. Assist with any other diligence required by potential
buyers/investors in order to provide an offer to invest in the
Companies or purchase the South Fork Assets;
v. Provide a weekly update on the process to the
Companies' CRO;
vi. Assist the CRO and Counsel in determining the best
offer for the Companies or the South Fork Assets;
vii. To the extent there is a bidder to purchase the South
Fork Assets under § 363 of the bankruptcy code, assist Counsel
with the auction process;
viii. To the extent there is an investor willing to sponsor a
plan of reorganization, assist Counsel and the CRO with structuring
that plan; and
ix. Provide testimony as may be required in connection with
any of the foregoing or may otherwise be required in a chapter 11
case.
The firm will receive compensation at these fees:
(a) Monthly Fees. The Monthly Fees shall be paid at the
beginning of every calendar month. Sonoran shall be paid a monthly
fee of $50,000, beginning in March 2025. Sonoran shall cap the
total amount of monthly fees at $200,000.
(b) Success Fees.
i. Raven Crest Success Fee
A. To the extent there is a qualified bidder and the
Raven Crest Auction is held, Sonoran shall be paid a success fee
equal to the amounts outlined below based on the final cash
purchase price from the auction:
Cash Purchase Price Success Fee
$12,450,000 to $12,499,999 $50,000
$12,500,000 to $12,999,999 $100,000
$13,000,000 to $13,999,999 $200,000
$14,000,000 or greater $300,000
B. Sonoran shall not be paid a Raven Crest Success Fee
if there are no overbids and no auction is necessary.
ii. South Fork Success Fee
A. To the extent a buyer acquires all of the South Fork
Assets, Sonoran shall be paid a success fee of 3% of the purchase
price of those assets; or
B. To the extent a new investor infuses capital into
the Companies to fund a plan of reorganization or otherwise
capitalize the Companies, Sonoran shall be paid a success fee of 5%
of the amount of that investment.
(c) In addition, Sonoran shall be reimbursed for its
reasonable, out-of-pocket expenses incurred in connection with this
assignment, such as travel, lodging, messenger and telephone
charges. All fees and expenses shall be billed on a monthly basis
and payable upon application to and approval by the Bankruptcy
Court.
Matthew Foster, Esq., a partner at Sonoran Capital Advisors,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Matthew Foster, Esq.
Sonoran Capital Advisors, LLC
1733 N. Greenfield Rd.
Mesa, AZ 85205
Telephone: (480) 825-6650
Email: mfoster@sonorancap.com
About White Forest Resources, Inc.
White Forest Resources Inc. and affiliates are privately-held
producers of premium metallurgical and thermal coal in the Central
Appalachian coal basin. The Debtors operate two mining operations
in West Virginia. The main buyers of the Debtors' premium
metallurgical coal, which is used in a process to produce coke for
steel manufacturing, include steel manufacturers, commodity
brokers, and industrial clients. Electric utilities and industrial
companies are the principal customers for the Debtors'
thermalcoal.
White Forest Resources Inc. and affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 25-10195) on February 7, 2025. In its petition, the Debtor
reports estimated assets up to $50,000 and estimated liabilities
between $10 million and $50 million.
Honorable Bankruptcy Judge Thomas M. Horan handles the case.
The Debtor is represented by Alan M. Root, Esq., William E.
Chipman, Jr., Esq., and Alison R. Maser, Esq., at Chipman Brown
Cicero & Cole LLP in Wilmington, Delaware. The Debtors' CRO
Provider is RK Consultants LLC. The Debtors' special counsel is
Jones & Associates. The Debtors' noticing and claims agent is
Stretto.
XEROX HOLDINGS: Moody's Confirms B2 CFR & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings confirmed the B2 corporate family rating and B2-PD
probability of default rating of Xerox Holdings Corporation (Xerox)
as well as Xerox's B3 backed senior unsecured notes rating. Moody's
also confirmed the Ba2 rating of Xerox Corporation's backed senior
secured debt facility (upsized to $780 million at closing of the
Lexmark acquisition) and the Caa1 rating of its senior unsecured,
unguaranteed notes. The outlooks were revised to stable from
ratings under review. Previously, the ratings were on review for
upgrade. Finally, as part of the debt financing for the Lexmark
acquisition, Moody's assigned a Ba2 rating to proposed backed
senior secured 1st lien notes and Ba3 rating to proposed backed
senior secured 2nd lien notes of Xerox Corporation, a subsidiary of
Xerox. Initially, these 2nd lien notes will be issued by Xerox
Issuer Corporation, an unrestricted sub of Xerox Corp, and placed
into escrow until closing. Moody's also assigned a Caa1 rating to
the proposed senior unsecured PIK/Toggle notes of Xerox. The
Speculative Grade Liquidity (SGL) rating of SGL-3 under Xerox
remains unchanged.
Closing of the Lexmark acquisition is subject to customary
regulatory and shareholder approvals and expected to close in the
second half of 2025. These actions conclude the review for upgrade,
which was initiated on December 24, 2024. The assigned ratings
assume successful closing of the Lexmark acquisition and no
material change in the size, terms and conditions of the
transaction.
RATINGS RATIONALE
Following the acquisition of Lexmark, the B2 CFR of Xerox will be
supported by its good market position in the core mid-range print
and document outsourcing markets, increased scale, enhanced product
diversification, and expanded global reach. During periods of weak
demand for office equipment and supplies, the company will benefit
from recurring revenues tied to its management contracts regardless
of print volumes. The majority of Xerox's combined revenues with
Lexmark will still come from bundling recurring post-sale contracts
that include managed print services (MPS), supplies (toner and
paper), and finance income. In addition, the November 2024 ITsavvy
acquisition better positioned Xerox on a path to achieving its
target of 20% revenue contribution from higher growth IT and
Digital services. Nevertheless, Xerox will remain behind its large
cap peers, including Canon, FUJIFILM, and HP, which have already
established good revenue diversification. The B2 CFR also reflects
Xerox's commitment to prioritize debt repayment with a goal of
reducing reported gross leverage to less than 3x. The company will
have a two-year runway to make progress towards this goal given the
need to refinance $750 million of notes maturing in August 2028.
The combination of Lexmark's businesses with those of Xerox is
credit positive given increased scale and a more balanced print
portfolio, despite greater exposure to mature demand for printers
and copiers. Lexmark's strengths with the smaller A4 printer models
and mid-market clients complements Xerox's leading position with
the larger A3 models and enterprise clients. The addition of
Lexmark secures certain manufacturing capabilities for Xerox,
enhances market coverage particularly in the APAC region, and
expands A3 model supply options. The company aims to partially
offset the impact of secular challenges by gaining market share,
particularly as weak providers exit. Although not immune to the
impact of global tariffs, Moody's believes the company will be able
to navigate through the uncertainties of recent tariffs based on
the geographic diversification of its manufacturing footprint and
supply chain partners.
The Lexmark acquisition will improve debt to EBITDA to less than
5.5x from 5.9x as of December 2024 (Moody's adjusted, or roughly
8.1x at December 2024 excluding equipment financing adjustments),
assuming no benefit from planned cost synergies. Moody's expects
the company will be able to realize most of its targeted cost
savings for the Lexmark acquisition, which will increase combined
operating profits as well as improve leverage and free cash flow.
Xerox's stand-alone operating results have been hurt by declining
revenues, and the combination with Lexmark's businesses is expected
to lead to more stable revenues. Nevertheless, Moody's believes it
will be challenging for Xerox to achieve organic revenue growth
given secular challenges. Therefore, improvement in credit metrics,
including leverage and coverage ratios, will come initially from
increasing profit margins. In Moody's base case projections,
Moody's expects ongoing low to mid-single digit percentage declines
in core printer and copier revenues will be partially offset by
revenue gains in certain growth segments such as IT and Digital
services and A4 color offerings.
Generating meaningful levels of recurring free cash flow will
require good execution of the company's operating strategy as well
as achieving the majority of targeted cost synergies. In addition
to prioritizing debt repayment to achieve its stated target of less
than 3x gross leverage, Xerox reduced its quarterly dividend payout
by 50% effective 1Q2025, which preserves roughly $62.5 million of
cash annually and reflects good governance. Nevertheless, Moody's
believes that excluding cash inflows from the reduction in Xerox's
equipment financing portfolio, free cash flow will remain negative
in 2025 despite the dividend cut. Moody's believes Xerox will
achieve most of its targeted synergies given these cost cuts are
largely based on consolidation and the elimination of redundant
functions. Moody's also expects adjusted free cash flow, excluding
inflows from equipment financing reductions, will turn positive by
the end of 2026 supported by the first full year of cash flow
contributions from Lexmark.
Liquidity is adequate with roughly $500 million of balance sheet
cash at each year end for the next two years and good cash
generation from the transition to external equipment financing for
roughly 40% of the remaining $1.7 billion of financing receivables
as of December 2024. To enhance cash balances, temporary advances
under the $425 million ABL revolver may be needed, primarily in the
first quarter of the calendar year when working capital
requirements peak. After January 2026, there are no sizable
scheduled debt maturities until August 2028, which provides a
two-year window for Xerox to improve margins and build liquidity.
Xerox's governance risk remains elevated reflecting aggressive
financial policies, including the company's decision to direct a
portion of cash from the ongoing reduction in equipment finance
receivables to partially fund acquisitions (ITsavvy and Lexmark),
instead of to debt repayment. Nevertheless, governance has improved
following the September 2023 exit of activist Carl Icahn who
controlled 22% of outstanding shares and the departure of board
members who were selected by Carl Icahn. More recently the company
reduced its dividend payout by 50% thereby increasing annual free
cash flow by roughly $62.5 million. Social risks remain elevated as
the demand for office printers and copiers continue to face secular
decline reflecting substitution of traditional physical copies with
digital documents and the trend to go paperless.
The Ba2 rating on the proposed senior secured 1st lien notes is
three notches above the CFR reflecting their 1st lien position,
along with the other 1st lien secured debt, ahead of unsecured debt
instruments. First lien debt benefits from security on
substantially all assets of the borrower and domestic subsidiaries,
including certain unencumbered finance receivables, and a second
lien on the ABL borrowing base collateral. Senior secured 1st lien
debt ranks below the ABL revolver (unrated) which benefits from a
priority lien on eligible working capital assets. The Ba3 rating on
the proposed senior secured 2nd lien notes is two notches above the
CFR reflecting their secured position behind the 1st lien debt.
Moody's rates the guaranteed senior notes B3, one notch below the
B2 CFR, reflecting their unsecured position behind all secured debt
instruments. The Caa1 ratings on the proposed senior unsecured
PIK/Toggle notes of Xerox and unguaranteed senior notes due 2035
and 2039 of the operating subsidiary Xerox Corporation are two
notches below the CFR reflecting their lack of guarantees in
certain operating subsidiaries as compared to the backed senior
notes that have these subsidiary guarantees. The $220 million of
subordinated secured seller notes (unrated) rank ahead of the
unsecured notes, but Moody's expects that they will be repaid
entirely by their January 2026 maturity.
The stable outlook incorporates Moody's expectations that revenue
declines, adjusting for acquisitions, will improve to the low
single-digit percentage range reflecting ongoing secular challenges
in the overall printer/copier segment, partially offset by revenue
gains in higher growth segments such as IT and Digital services and
A4 color printing. Over the two years post closing of the
acquisition, Moody's expects Xerox will achieve most of its
targeted cost synergies for the Lexmark acquisition. Moody's also
expects adjusted Debt to EBITDA will approach the mid-4x range by
the end of 2025 given the Lexmark acquisition is deleveraging and
expectations for improving overall profit margins. The outlook
incorporates Moody's expectations that there will be no resumption
of share repurchases until liquidity and adjusted debt to EBITDA
meaningfully improves.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Moody's expects consistent annual
revenue growth, improving profitability and cash flow, and
conservative financial discipline. These results would be evidenced
by sustained adjusted operating margins in the low double-digit
percentage range with adjusted total debt to EBITDA comfortably
below 4.5x (or less than 5.5x without equipment financing
adjustments) as well as increased cash balances and revolver
availability.
Ratings could be downgraded if Xerox remains unable to generate
organic revenue growth or if operating margins weaken, despite
investments to realize cost synergies. Downward rating actions
could also occur if Moody's expects adjusted debt to EBITDA will
not be sustained below 5.25x or if liquidity deteriorates
demonstrated by lower cash balances, reduced revolver availability,
or adjusted free cash flow to debt remaining in the low single
digit percentage range. Ratings could also be downgraded if the
company funds share buybacks prior to meaningfully improving key
credit metrics, including financial leverage and liquidity
demonstrated, by growing cash balances.
Xerox Holdings Corporation, based in Norwalk, CT, is a leader in
document processing systems and related supplies for enterprises
including SMBs, governmental entities, and Fortune 100 companies.
Pro forma for the proposed acquisition of Lexmark, combined
revenues will exceed $8 billion.
The principal methodology used in these ratings was Diversified
Technology published in February 2022.
YANKE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Yanke Construction, Inc.
f/d/b/a Yanke's Design & Construction, Inc.
16208 Golden Avenue
Walled Lake, MI 48390
Business Description: Founded in 1989, Yanke Construction is a
Michigan-based company specializing in
retaining wall solutions for both
residential and commercial projects. The
Company offers a range of services,
including the installation of segmental,
Redi Rock, and reinforced soil walls, as
well as concrete fences and drainage
solutions.
Chapter 11 Petition Date: March 28, 2025
Court: United States Bankruptcy Court
Eastern District of Michigan
Case No.: 25-43176
Judge: Hon. Mark A. Randon
Debtor's Counsel: John J. Stockdale, Jr., Esq.
SCHAFER AND WEINER, PLLC
40950 Woodward Ave., Suite 100
Bloomfield Hills, MI 48304
Tel: (248) 540-3340
Email: jstockdale@schaferandweiner.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Darren Yanke as president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free on PacerMonitor at:
https://www.pacermonitor.com/view/Q2RID7Q/Yanke_Construction_Inc__miebke-25-43176__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free on
PacerMonitor at:
https://www.pacermonitor.com/view/QSVWVZQ/Yanke_Construction_Inc__miebke-25-43176__0001.0.pdf?mcid=tGE4TAMA
YELLOW CANOE: Court Extends Cash Collateral Access to April 23
--------------------------------------------------------------
Yellow Canoe, LLC received second interim approval from the U.S.
Bankruptcy Court for the Eastern District of North Carolina,
Raleigh Division, to use cash collateral.
The second interim order authorized the company to use cash
collateral for the operating expenses set forth in its budget, with
a 10% variance allowed.
Yellow Canoe projects total operational expenses of $114,572 for
the period from March 22 to April 30.
The company's operations generate cash proceeds that may be
considered cash collateral for the U.S. Small Business
Administration, CT Corporation System, and North Mill Credit Trust,
which assert liens on the company's assets, including inventory and
accounts receivable.
The secured creditors' liens on the collateral securing their
indebtedness extend to Yellow Canoe's post-petition assets to the
extent and amount that they are secured as of the petition date,
according to the second interim order.
The second interim order remains in full force and effect until the
earlier of April 23; termination of the second interim order; or
upon filing of a notice of default. Events of default include
Yellow Canoe's failure to comply with the second interim order and
failure to file a Chapter 11 plan in accordance with orders of the
bankruptcy court.
The next hearing is scheduled for April 23.
About Yellow Canoe
Yellow Canoe, LLC operates multiple fast-casual restaurant chain
franchises. It operates two Schlotzsky's franchise stores and one
Cinnabon franchise store. Yellow Canoe's restaurants are located in
Apex, N.C. and Fayetteville, N.C.
Yellow Canoe filed Chapter 11 petition (Bankr. E.D. N.C. Case No.
25-00618) on February 21, 2025, listing up to $100,000 in assets
and up to $10 million in liabilities. Paul Sabattus, managing
member of Yellow Canoe, signed the petition.
Judge David M. Warren oversees the case.
Lydia C. Stoney, Esq., at Hendren, Redwine & Malone, PLLC,
represents the Debtor as legal counsel.
ZIPS CAR WASH: Hires Gray Reed as Co-Counsel and Conflicts Counsel
------------------------------------------------------------------
Zips Car Wash, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ Gray Reed as
co-counsel and conflicts counsel.
The firm will render these services:
a) provide legal advice and services regarding local rules,
practices, and procedures, including Fifth Circuit law;
b) provide certain services in connection with the
administration of the chapter 11 cases, including preparing
agendas, hearing notices, witness and exhibit lists, and hearing
binders of documents and pleadings;
c) review and comment on proposed drafts of pleadings to be
filed with the Court;
d) at the request of the Debtors, appear in Court, at any
meeting with the United States Trustee for the Northern District of
Texas, and any meeting of creditors at any given time on behalf of
the Debtors as their local co-counsel;
e) perform all other services assigned by the Debtors to Gray
Reed as co-counsel and conflicts counsel;
f) provide independent counsel to the Debtors; and
g) provide legal advice and services on any matter on which
Kirkland and Ellis may have a conflict or as needed based on
specialization.
The firm's standard hourly rates are:
Jason S. Brookner, Partner $990
Aaron M. Kaufman, Partner $850
Amber M. Carson, Partner $750
Blake M. Bryan, Associate $425
Veronica Salazar, Paralegal $385
Gray Reed received a retainer in the aggregate amount of $100,000.
The following is provided in response to the request for additional
information set forth in paragraph D.1 of the Guidelines for
Reviewing Applications for Compensation and Reimbursement of
Expenses Filed Under 11 U.S.C. Sec. 330 by Attorneys in Larger
Chapter 11 Cases:
Question: Did the Firm agree to any variations from, or
alternatives to, the Firm's standard or customary billing
arrangements for this engagement?
Answer: No.
Question: Do any of the Firm professionals included in this
engagement vary their rate based on the geographical location of
the Debtors' chapter 11 cases?
Answer: No. The hourly rates used by Gray Reed in representing
the Debtors are consistent with the rates that Gray Reed charges
other comparable chapter 11 clients, regardless of the location of
the chapter 11 case.
Question: If the Firm has represented the Debtors in the 12
months prepetition, disclose the Firm's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If your billing rates
and material financial terms have changed post-petition, explain
the difference and the reasons for the difference.
Answer: Gray Reed represented the Debtors during the weeks
immediately prior to the Petition Date, using the same hourly
rates, and such rates have not changed post-petition.
Question: Have the Debtors approved the Firm's prospective
budget and staffing plan, and if so, for what budget period?
Answer: Gray Reed has provided a good faith estimate of its
expected fees and expenses during the course of these chapter 11
cases, along with the staffing plan outlined in the Application.
The Debtors incorporated such good faith estimates into an approved
budget filed in relation to their post-petition financing motion.
Jason Brookner, Esq., a partner at Gray Reed, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jason S. Brookner, Esq.
Aaron M. Kaufman, Esq.
Amber M. Carson, Esq.
GRAY REED
1601 Elm Street, Suite 4600
Dallas, TX 75201
Telephone: (214) 954-4135
Facsimile: (214) 953-1332
Email: jbrookner@grayreed.com
akaufman@grayreed.com
acarson@grayreed.com
About Zips Car Wash, LLC
Zips Car Wash LLC and affiliates are among the largest privately
owned express car wash operators in the U.S., offering advanced car
wash services using cutting-edge chemistry like Ultra HD Glaze and
Graphene-Ceramic Fusion X to deliver superior results, including
glossy tires, streak-free windows, and a well-protected paint job.
Founded in 2004 with just two locations in rural Arkansas, the
Debtors have expanded significantly through strategic acquisitions,
now operating over 260 locations across 23 states. Headquartered in
Plano, Texas, the Debtors run their businesses under the Zips, Jet
Brite, and Rocket Express brands and serve their customers through
two core revenue channels: a traditional pay-per-wash format and
Zips Unlimited, their flagship monthly subscription program with
over 600,000 members.
Zips Car Wash LLC and affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80069)
on February 5, 2025. In its petition, the Debtor reports estimated
assets between $500 million and $1 billion and estimated
liabilities between $1 billion and $10 billion.
Honorable Bankruptcy Judge Michelle V. Larson handles the case.
The Debtors' local bankruptcy counsel is Jason S. Brookner, Esq.,
Aaron M. Kaufman, Esq., and Amber M. Carson, Esq., at Gray Reed,
Dallas, Texas.
The Debtors' general bankruptcy counsel is Joshua A. Sussberg,
Esq., and Ross J. Fiedler, Esq., at Kirkland & Ellis LLP, in New
York, and Lindsey Blumenthal, Esq., at Kirkland & Ellis LLP,
Chicago, Illinois.
The Debtors' investment banker is Evercore Group LLC. The Debtors'
financial advisor is Alixpartners LLP. The Debtors' Noticing &
Claims Agent is Kroll Restructuring Administration LLC. The
Debtors' Real Estate Consultant & Advisor is Hilco Real Estate LLC.
The Debtors' tax advisor is PWC US TAX LLP.
ZIPS CAR WASH: Seeks to Hire Evercore Group as Investment Banker
----------------------------------------------------------------
Zips Car Wash, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ Evercore Group L.L.C.
as investment banker.
The firm's services include:
i. reviewing and analyzing the Debtors' business, operations,
and financial projections;
ii. advising and assisting the Debtors in a Restructuring,
Sale, and/or Capital Raise transaction;
iii. providing financial advice in developing and implementing a
Restructuring, including:
a. assisting the Debtors in developing the Plan;
b. advising the Debtors on tactics and strategies for
negotiating with various stakeholders regarding the Plan;
c. providing testimony, as necessary, with respect to
matters on which Evercore has been engaged to advise the Debtors in
any proceedings under the Bankruptcy Code that are pending before a
court exercising jurisdiction over the Debtors; and
d. providing the Debtors with other financial restructuring
advice as Evercore and the Debtors may deem appropriate;
iv. If the Debtors pursue a Capital Raise, assisting in:
a. drafting, preparation and distribution of offering
materials and other related documentation describing the Debtors,
the Securities, and the terms of the Capital Raise;
b. assisting the Debtors in formulating a marketing
strategy for the Securities and assisting the Debtors in developing
procedures and a timetable therefor;
c. identifying and contacting prospective purchasers of the
Securities;
d. advising the Debtors as to the strategy and tactics of
negotiations with such prospective purchasers and participate in
such negotiations;
e. advising the Debtors as to the timing, structure and
pricing of the Capital Raise;
f. providing such other investment banking services as are
customary for similar transactions and as may from time to time be
agreed upon by Evercore and the Debtors;
g. upon request thereof, providing the Debtors' existing
senior lenders with certain available written documentation or
access related to the Capital Raise;
h. participating in a conference call (not more frequently
than once per month) with the Debtors' existing senior lenders to
discuss progress and developments made in connection with the
Capital Raise; and
i. working in good faith with the Debtors to try to achieve
certain refinancing milestones as required by its existing senior
secured lenders.
v. If the Debtors pursue a Sale, assisting in:
a. structuring and effecting a Sale;
b. identifying interested parties and/or potential
acquirors and, at the Debtors' request, contacting such interested
parties and/or potential acquirors; and
c. advising the Debtors in connection with negotiations
with potential interest parties and/or acquirors and aiding in the
consummation of a Sale transaction.
The firm will receive compensation as follows:
i. Monthly Fee. A monthly fee of $150,000 (a "Monthly Fee"),
payable effective as of October 1, 2024, and on the first day of
each month thereafter until the earlier of the consummation of the
Restructuring transaction or the termination of Evercore's
engagement. So long as Monthly Fees have actually been earned and
paid, 100 percent of Monthly Fees actually paid shall be credited
(without duplication) against any Restructuring Fee that is payable
pursuant to the Engagement Letter (the "Monthly Fee Credit"). Any
such Monthly Fee Credit shall only apply to the extent that all
such Monthly Fees and the Restructuring Fee are approved in their
entirety by the Court pursuant to a final order not subject to
appeal and which order is acceptable to Evercore (and, to the
extent only a portion of such Monthly Fees are approved, such
Monthly Fee Credit shall be adjusted commensurately on a pro rata
basis).
ii. A one-time fee of $3.5 million (a "Restructuring Fee"),
payable upon the earlier of (i) confirmation of a Plan or (ii)
consummation of any Restructuring.
iii. A fee (a "Capital Raise Fee"), payable upon closing of any
Capital Raise that is approved by the Debtors' independent
directors and incremental to any Restructuring Fee or Sale Fee
equal to the sum of (i) 3.0 percent of the aggregate gross amount
of financing irrevocably committed at or in connection with such
closing with respect to Junior Securities and Other Securities
(excluding, for the avoidance of doubt, the preferred equity of the
Debtors existing on the date hereof), in each case whether or not
drawn down, and (ii) 1.5 percent of the aggregate gross amount of
financing irrevocably committed at or in connection with such
closing with respect to Debt Securities (excluding Debt Securities
provided by HPS Investment Partners and/or its affiliates
(collectively, "HPS") not to exceed $187.5 million of commitments
held by HPS under the Debtors' existing senior secured credit
facility on the date hereof), whether or not drawn down; provided,
that in no event shall Evercore receive more than $13,500,000 of
Capital Raise Fees in the aggregate (the "Maximum Fee") for the
Capital Raise. Notwithstanding anything in this paragraph to the
contrary, Evercore shall not be entitled to any Capital Raise Fee
on account of any financing committed or provided by any of the
Debtors' existing lenders (or their affiliates) under the Credit
Agreement.
iv. A fee (a "Sale Fee"), subject to the Court's approval,
payable upon consummation of any Sale that is approved by the
Debtors' independent directors (and for which Sale, Evercore was
specifically and separately herefrom engaged by the Debtors in
writing) and from the proceeds of any such Sale, in an amount to be
mutually agreed upon pursuant to good faith negotiations between
the Debtors and Evercore, consistent with the compensation
customarily paid to Evercore and other investment banks of similar
standing acting in similar situations. Notwithstanding anything in
this paragraph to the contrary, Evercore shall not receive a Sale
Fee on account of any Sale (i) that results from the exercise of
remedies (or an agreement with the Debtors or any of their direct
or indirect parent entities or equity-holders in lieu of an
exercise of remedies) by any of the Debtors' existing lenders under
the Credit Agreement (including, without limitation, any
foreclosure, debt-for-equity exchange, credit bid or other similar
transaction) or (ii) for which a third-party broker other than
Evercore is engaged, including, without limitation, the St. Louis
Sale and the Orlando Sale (each as defined in the Credit
Agreement).
v. In addition to any fees that may be payable to Evercore
and, regardless of whether any transaction occurs, the Debtors, on
a monthly basis, shall promptly reimburse to Evercore (a) all
reasonable and documented out of pocket expenses (including travel
and lodging, data processing and communications charges, courier
services and other appropriate expenditures) and (b) other
reasonable and documented out of pocket fees and expenses,
including expenses of counsel, if any ("Engagement Expenses");
provided that the Engagement Expenses (excluding the expenses of
counsel, if any) shall not exceed $100,000 in the aggregate without
the prior written consent of the Debtors.
vi. If Evercore provides services to the Debtors for which a
fee is not provided, subject to the Court's approval, such services
shall, except insofar as they are the subject of a separate
agreement, be treated as falling within the scope of the Engagement
Letter, and the Debtors and Evercore will agree upon a fee for such
services based upon good faith negotiations.
Dan Aronson, a senior managing director of Evercore, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Dan M. Aronson, CFA
EVERCORE GROUP LLC
55 East 52nd Street
New York, NY 10055
Tel: (212) 857-3100
About Zips Car Wash, LLC
Zips Car Wash LLC and affiliates are among the largest privately
owned express car wash operators in the U.S., offering advanced car
wash services using cutting-edge chemistry like Ultra HD Glaze and
Graphene-Ceramic Fusion X to deliver superior results, including
glossy tires, streak-free windows, and a well-protected paint job.
Founded in 2004 with just two locations in rural Arkansas, the
Debtors have expanded significantly through strategic acquisitions,
now operating over 260 locations across 23 states. Headquartered in
Plano, Texas, the Debtors run their businesses under the Zips, Jet
Brite, and Rocket Express brands and serve their customers through
two core revenue channels: a traditional pay-per-wash format and
Zips Unlimited, their flagship monthly subscription program with
over 600,000 members.
Zips Car Wash LLC and affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80069)
on February 5, 2025. In its petition, the Debtor reports estimated
assets between $500 million and $1 billion and estimated
liabilities between $1 billion and $10 billion.
Honorable Bankruptcy Judge Michelle V. Larson handles the case.
The Debtors' local bankruptcy counsel is Jason S. Brookner, Esq.,
Aaron M. Kaufman, Esq., and Amber M. Carson, Esq., at Gray Reed,
Dallas, Texas.
The Debtors' general bankruptcy counsel is Joshua A. Sussberg,
Esq., and Ross J. Fiedler, Esq., at Kirkland & Ellis LLP, in New
York, and Lindsey Blumenthal, Esq., at Kirkland & Ellis LLP,
Chicago, Illinois.
The Debtors' investment banker is Evercore Group LLC. The Debtors'
financial advisor is Alixpartners LLP. The Debtors' Noticing &
Claims Agent is Kroll Restructuring Administration LLC. The
Debtors' Real Estate Consultant & Advisor is Hilco Real Estate LLC.
The Debtors' tax advisor is PWC US TAX LLP.
ZIPS CAR WASH: Seeks to Hire Hilco Real Estate LLC as Advisor
-------------------------------------------------------------
Zips Car Wash, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ Hilco Real Estate, LLC
as real estate advisor.
The firm's services include:
a. meeting with the Debtors and the special committee of the
board of Zips Car Wash, LLC to ascertain the Debtors' goals,
objectives, and financial parameters;
b. mutually agreeing with the Debtors and the Special
Committee with respect to a strategic plan for restructuring,
shortening, or terminating the Debtors' Leases and, if necessary,
the sale of the Properties;
c. on the Debtors' behalf, negotiating the terms of
restructuring, term shortening, and termination agreements with the
landlords under the Leases and, if necessary, purchase and sale
agreements for the Properties, in accordance with the Strategy;
d. providing the Debtors with weekly Lease status reports,
which shall include updates on the Services;
e. providing written reports to, and meeting periodically
with, the Debtors and the Special Committee regarding the status of
such negotiations;
f. assisting the Debtors in closing the pertinent Lease
restructuring, term shortening and termination agreements and
Property purchase and sale agreements; and
g. providing general real estate consulting and advisory
services with respect to the Leases and the implementation of the
Strategy.
Hilco will be compensated at these rates:
a. For each Lease that becomes a Restructured Lease, Hilco
Real Estate shall earn a fee equal to the Restructured Lease
Savings Fee equal to a base fee of $500 plus the aggregated
Restructured Lease Savings5 multiplied by 4.5 percent; provided,
however that for purposes of calculating Restructuring Lease
Savings only those Restructuring Lease Savings to be achieved
during the seven year period from and after the effective date of
the Restructured Lease shall be included in such calculation. The
amounts payable on account of a Restructured Lease shall be paid in
a lump sum upon closing of the transaction having the effect of
restructuring the Lease, which may include a transaction subject to
entry of an order by the Bankruptcy Court approving an assignment
to any acquiror of applicable Leases (or any portion thereof),
including through a purchase of the Company's or a portion of the
Company's assets to such acquiror (whether through a credit bid,
plan of reorganization, 363 sale or otherwise), directly or through
designation rights (collectively, a "Bankruptcy Sale Process").
b. For each Lease that becomes a Terminated/Term Shortened
Lease, Hilco Real Estate shall earn a fee equal to one and one-half
months of gross rent under such Terminated/Term Shortened Lease.
The amounts payable on account of a Terminated/Term Shortened Lease
shall be paid in a lump sum upon closing of the transaction that
provides the Company with an early termination right or has the
effect of terminating or otherwise shortening the term of such
Lease, which may include a transaction subject to entry of an order
by the Bankruptcy Court approving an assignment to any acquiror of
applicable Leases (or any portion thereof), including through a
purchase of the Company's or a portion of the Company's assets to
such acquiror, whether through a Bankruptcy Sale Process or
otherwise.
c. Solely to the extent that Hilco Real Estate is engaged as
the broker to sell a Property, in the event a Property is sold
(including through a Bankruptcy Sale Process), Hilco Real Estate
shall earn a fee equal to four and one-half percent of the Gross
Sale Proceeds. Each such fee shall be payable at the time of
closing on a sale of the Property. Except as set forth in the
Services Agreement, Hilco Real Estate shall not be responsible for
any other fees or commissions in connection with the disposition of
the Property, including, but not limited to, any fees or
commissions that may be owed to the Company's previous real estate
brokers.
As disclosed in court filings, Hilco Real Estate does not have a
material interest adverse to the Debtor regarding the specific
matters for which it is to be retained.
The firm can be reached through:
Eric W. Kaup
Hilco Real Estate, LLC
5 Revere Drive, Suite 206
Northbrook, IL 60062
Tel: (847) 504-2463
Email: ekaup@hilcoglobal.com
About Zips Car Wash, LLC
Zips Car Wash LLC and affiliates are among the largest privately
owned express car wash operators in the U.S., offering advanced car
wash services using cutting-edge chemistry like Ultra HD Glaze and
Graphene-Ceramic Fusion X to deliver superior results, including
glossy tires, streak-free windows, and a well-protected paint job.
Founded in 2004 with just two locations in rural Arkansas, the
Debtors have expanded significantly through strategic acquisitions,
now operating over 260 locations across 23 states. Headquartered in
Plano, Texas, the Debtors run their businesses under the Zips, Jet
Brite, and Rocket Express brands and serve their customers through
two core revenue channels: a traditional pay-per-wash format and
Zips Unlimited, their flagship monthly subscription program with
over 600,000 members.
Zips Car Wash LLC and affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80069)
on February 5, 2025. In its petition, the Debtor reports estimated
assets between $500 million and $1 billion and estimated
liabilities between $1 billion and $10 billion.
Honorable Bankruptcy Judge Michelle V. Larson handles the case.
The Debtors' local bankruptcy counsel is Jason S. Brookner, Esq.,
Aaron M. Kaufman, Esq., and Amber M. Carson, Esq., at Gray Reed,
Dallas, Texas.
The Debtors' general bankruptcy counsel is Joshua A. Sussberg,
Esq., and Ross J. Fiedler, Esq., at Kirkland & Ellis LLP, in New
York, and Lindsey Blumenthal, Esq., at Kirkland & Ellis LLP,
Chicago, Illinois.
The Debtors' investment banker is Evercore Group LLC. The Debtors'
financial advisor is Alixpartners LLP. The Debtors' Noticing &
Claims Agent is Kroll Restructuring Administration LLC. The
Debtors' Real Estate Consultant & Advisor is Hilco Real Estate LLC.
The Debtors' tax advisor is PWC US TAX LLP.
ZIPS CAR WASH: Seeks to Hire Kirkland & Ellis LLP as Attorney
-------------------------------------------------------------
Zips Car Wash, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ Kirkland & Ellis LLP
and Kirkland & Ellis International LLP as attorneys.
The firm's services include:
a. advising the Debtors with respect to their powers and
duties as debtors in possession in the continued management and
operation of their businesses and properties;
b. advising and consulting on the conduct of these chapter 11
cases, including all of the legal and administrative requirements
of operating in chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties in interest;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which the Debtors are involved, including objections to claims
filed against the Debtors' estates;
e. preparing pleadings in connection with these chapter 11
cases, including motions, applications, answers, orders, reports,
and papers necessary or otherwise beneficial to the administration
of the Debtors' estates;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post petition
financing;
g. advising the Debtors in connection with any potential sale
of assets;
h. appearing before the Court and any appellate courts to
represent the interests of the Debtors' estates;
i. advising the Debtors regarding tax matters;
j. taking any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a chapter 11 plan and all documents related
thereto; and
k. performing all other necessary legal services for the
Debtors in connection with the prosecution of these chapter 11
cases, including: (i) analyzing the Debtors' leases and contracts
and the assumption and assignment or rejection thereof; (ii)
analyzing the validity of liens against the Debtors' assets; and
(iii) advising the Debtors on corporate and litigation matters.
Kirkland's current hourly rates are:
Partners $1,295 to $2,675
Of Counsel $875 to $2,245
Associates $785 to $1,625
Paraprofessionals $355 to $705
The following is provided in response to the request for additional
information set forth in Paragraph D.1. of the Revised UST
Guidelines:
a. Question: Did Kirkland agree to any variations from, or
alternatives to, Kirkland's standard billing arrangements for this
engagement?
Answer: No. Kirkland and the Debtors have not agreed to any
variations from, or alternatives to, Kirkland's standard billing
arrangements for this engagement. The rate structure provided by
Kirkland is appropriate and is not significantly different from (a)
the rates that Kirkland charges for other non-bankruptcy
representations or (b) the rates of other comparably skilled
professionals.
b. Question: Do any of the Kirkland professionals in this
engagement vary their rate based on the geographic location of the
Debtors' chapter 11 cases?
Answer: No. The hourly rates used by Kirkland in representing
the Debtors are consistent with the rates that Kirkland charges
other comparable chapter 11 clients, regardless of the location of
the chapter 11 case.
c. Question: If Kirkland has represented the Debtors in the 12
months prepetition, disclose Kirkland's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If Kirkland's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: Kirkland's current hourly rates for services rendered
on behalf of the Debtors range as follows:
Partners $1,295 to $2,675
Of Counsel $875 to $2,245
Associates $785 to $1,625
Paraprofessionals $355 to $705
Kirkland represented the Debtors from August 1, 2024 to Dec 31,
2024 before the Petition Date, using the hourly rates listed below:
Partners $1,195 to $2,465
Of Counsel $820 to $2,245
Associates $745 to $1,495
Paraprofessionals $325 to $625
d. Question: Have the Debtors approved Kirkland's budget and
staffing plan, and, if so, for what budget period?
Answer: Yes. More specifically, pursuant to the Interim DIP
Order, professionals proposed to be retained by the Debtors are
required to provide weekly estimates of fees and expenses incurred
in these chapter 11 cases.
Joshua Sussberg, a partner at Kirkland & Ellis LLP and Kirkland &
Ellis International, LLP, disclosed in a court filing that the
firms are "disinterested persons" within the meaning of Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Joshua A. Sussberg, Esq.
Ross J. Fiedler, Esq.
Joshua A. Sussberg, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: joshua.sussberg@kirkland.com
ross.fiedler@kirkland.com
About Zips Car Wash, LLC
Zips Car Wash LLC and affiliates are among the largest privately
owned express car wash operators in the U.S., offering advanced car
wash services using cutting-edge chemistry like Ultra HD Glaze and
Graphene-Ceramic Fusion X to deliver superior results, including
glossy tires, streak-free windows, and a well-protected paint job.
Founded in 2004 with just two locations in rural Arkansas, the
Debtors have expanded significantly through strategic acquisitions,
now operating over 260 locations across 23 states. Headquartered in
Plano, Texas, the Debtors run their businesses under the Zips, Jet
Brite, and Rocket Express brands and serve their customers through
two core revenue channels: a traditional pay-per-wash format and
Zips Unlimited, their flagship monthly subscription program with
over 600,000 members.
Zips Car Wash LLC and affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80069)
on February 5, 2025. In its petition, the Debtor reports estimated
assets between $500 million and $1 billion and estimated
liabilities between $1 billion and $10 billion.
Honorable Bankruptcy Judge Michelle V. Larson handles the case.
The Debtors' local bankruptcy counsel is Jason S. Brookner, Esq.,
Aaron M. Kaufman, Esq., and Amber M. Carson, Esq., at Gray Reed,
Dallas, Texas.
The Debtors' general bankruptcy counsel is Joshua A. Sussberg,
Esq., and Ross J. Fiedler, Esq., at Kirkland & Ellis LLP, in New
York, and Lindsey Blumenthal, Esq., at Kirkland & Ellis LLP,
Chicago, Illinois.
The Debtors' investment banker is Evercore Group LLC. The Debtors'
financial advisor is Alixpartners LLP. The Debtors' Noticing &
Claims Agent is Kroll Restructuring Administration LLC. The
Debtors' Real Estate Consultant & Advisor is Hilco Real Estate LLC.
The Debtors' tax advisor is PWC US TAX LLP.
ZIPS CAR WASH: Taps Kevin Nystrom of AP Services as CTO
-------------------------------------------------------
Zips Car Wash, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ AP Services, LLC and
designate Kevin Nystrom as chief transformation officer.
The firm's services include:
a. providing executive leadership and reviewing the management
processes of the Debtors;
b. managing and forecasting liquidity;
c. assessing opportunities to drive improvement in top line
results through pricing, customer acquisition & retention, as well
as improving the customer experience;
e. evaluating cost reduction opportunities;
f. developing a turnaround business plan, including a lease
rationalization strategy;
g. reviewing current footprint and evaluating and implementing
opportunities to improve current real estate costs;
h. assisting the Debtors' investment bank as needed in the
financing process (assisting with diligence, supporting financial
information requests, management presentations, and other related
tasks);
i. engaging with capital structure constituencies as
requested;
j. understanding current pricing performance with a focus on
customer/product profitability and retail traffic;
k. preparing for contingencies, including those that may be
necessary to affect any of the tasks;
l. reviewing and consulting on potential transactions and
strategic alternatives as requested;
m. providing such other services as are customary of a CTO in
similarly situated companies; and
n. assisting the Debtors with such other matters as may be
requested that fall within APS's expertise and are mutually
agreeable.
The firm will be paid at these rates:
Kevin Nystrom, CTO $1,430
Partner/ Partner &
Managing Director $1,225 to $1,540
Senior Vice President/
Director $850 to$1,150
Vice President $650 to $835
Analyst/ Consultant $250 to $640
As disclosed in court filings, AP Services is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kevin Nystrom
AlixPartners, LLP
909 3rd Ave
New York, NY 10022
Tel: (212) 490-2500
Email: knystrom@alixpartners.com
About Zips Car Wash, LLC
Zips Car Wash LLC and affiliates are among the largest privately
owned express car wash operators in the U.S., offering advanced car
wash services using cutting-edge chemistry like Ultra HD Glaze and
Graphene-Ceramic Fusion X to deliver superior results, including
glossy tires, streak-free windows, and a well-protected paint job.
Founded in 2004 with just two locations in rural Arkansas, the
Debtors have expanded significantly through strategic acquisitions,
now operating over 260 locations across 23 states. Headquartered in
Plano, Texas, the Debtors run their businesses under the Zips, Jet
Brite, and Rocket Express brands and serve their customers through
two core revenue channels: a traditional pay-per-wash format and
Zips Unlimited, their flagship monthly subscription program with
over 600,000 members.
Zips Car Wash LLC and affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80069)
on February 5, 2025. In its petition, the Debtor reports estimated
assets between $500 million and $1 billion and estimated
liabilities between $1 billion and $10 billion.
Honorable Bankruptcy Judge Michelle V. Larson handles the case.
The Debtors' local bankruptcy counsel is Jason S. Brookner, Esq.,
Aaron M. Kaufman, Esq., and Amber M. Carson, Esq., at Gray Reed,
Dallas, Texas.
The Debtors' general bankruptcy counsel is Joshua A. Sussberg,
Esq., and Ross J. Fiedler, Esq., at Kirkland & Ellis LLP, in New
York, and Lindsey Blumenthal, Esq., at Kirkland & Ellis LLP,
Chicago, Illinois.
The Debtors' investment banker is Evercore Group LLC. The Debtors'
financial advisor is Alixpartners LLP. The Debtors' Noticing &
Claims Agent is Kroll Restructuring Administration LLC. The
Debtors' Real Estate Consultant & Advisor is Hilco Real Estate LLC.
The Debtors' tax advisor is PWC US TAX LLP.
ZIPS CAR WASH: Taps PwC US Tax LLP as Tax Services Provider
-----------------------------------------------------------
Zips Car Wash, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ PwC US Tax LLP as
restructuring tax services provider.
The firm's services include:
a. Debt Restructuring Letter: The services will include tax
assistance and tax advice in connection with the contemplated debt
and/or legal entity restructuring of Zips and/or its affiliates
(the "Restructuring Plan"). As requested, the services with respect
to the Restructuring Plan may include, but are not limited to, the
following, which will be based on inputs and assumptions provided
by Zips:
i. In-Scope Tax Analysis --
1. High-Level Federal Income Tax Analysis (excludes state
and other tax analysis) Based on inputs and assumptions provided by
Zips:
(a) Calculate estimates of taxable gain or loss in a
scenario where limited liability company ("LLC") membership
interests of Zips are transferred to the creditor(s) for no
consideration other than extinguishment of debt that is nonrecourse
for federal income tax purposes. PwC US Tax will use various
high-level inputs/assumptions, including regarding tax basis in
assets and the portion of such gain /loss treated as ordinary vs.
capital gain/loss, based on information/assumptions provided by
Zips, including, notably, assumptions regarding valuation of the
assets conveyed (or deemed conveyed). For the avoidance of doubt,
PwC US Tax will not perform any valuations with respect to any
In-Scope Tax Analysis workstream.
(b) Calculate estimates of cancellation of debt income
("CODI") for a scenario in which the Restructuring Plan results in
CODI rather than taxable gain on account of an issuance of equity
of Express Car Wash Holdings, LLC ("Express Car Wash") in
satisfaction of the debt. This scenario will use inputs /
assumptions as provided by Zips, including valuation inputs.
(c) Estimate allocations of CODI / gain to the various
partners of Express Car Wash in the two above scenarios based on
various high-level assumptions provided by Zips. For the avoidance
of doubt, we will not independently calculate items such as 704(c),
partnership minimum gain, etc., and may make a number of
simplifying assumptions regarding allocations.
(d) Prepare a high-level calculation of outside basis
in partnership interests in Express Car Wash and estimate potential
taxable gain/loss on the actual (or deemed) disposition of Express
Car Wash, partnership interests, if any, as a result of the
Restructuring Plan, using various high-level inputs and
assumptions, based on information provided by Zips.
(e) Estimate federal income tax leakage at ASC -- Zips
Holdings, Inc. (the "Blocker") as a result of the Restructuring
Plan for the two above scenarios, using the above
inputs/assumptions and other high-level inputs/assumptions (e.g.,
assume insolvency to the extent of CODI, assume tax attributes and
limitations thereon as calculated by Zips, etc.).
(f) Estimate withholding tax from the Restructuring
Plan with respect to non-U.S. partners of Express Car Wash,
assuming full withholding tax (i.e., no exemptions or rate
reductions), based on U.S. / foreign designations for each partner
as provided by Zips.
2. Detailed Tax Analysis (Federal and State) Based on
inputs and assumptions provided by Zips:
(a) Calculate estimates of state income tax
consequences of the two restructuring alternatives discussed
above.
(b) Perform detailed calculations of Express Car Wash's
partnership taxable income / loss allocations for the two
alternatives discussed above based upon agreed upon refined inputs
and assumptions.
(c) Perform detailed calculations of Express Car Wash's
partnership outside basis and estimate potential taxable gain/loss
on the actual (or deemed) disposition of Express Car Wash,
partnership interests, if any, as a result of the Restructuring
Plan.
(d) High-level estimate of transfer taxes, assuming a
transfer of LLC interests in the taxable gain alternative of the
Restructuring Plan.
(e) Refine certain limited other inputs / assumptions
utilized in the high-level federal income tax analysis, based on
areas identified in the high-level analysis, as mutually agreed
upon by PwC US Tax and Zips.
ii. Additional Tax Analysis - Upon request and PwC US Tax
written agreement (inclusive of email), PwC US Tax will assist with
other tax analysis of the Restructuring Plan, based on inputs and
assumptions provided by Zips, including but not limited to:
1. Analyze alternative transaction structures in addition
to the ones discussed above, as requested.
2. Analyze potential tax consequences with respect to
minority investors, as requested.
3. Prepare additional iterations of tax analysis models,
as requested.
4. Prepare ownership change analysis under Internal
Revenue Code ("IRC") Section 382, Section 382 limitation
calculations, and net unrealized built-in gain or loss analysis, as
requested.
5. Assist in the preparation of a slide deck that
overviews the significant tax consequences of the Restructuring
Plan, as requested.
(a) The draft tax step plans transaction summary slide
deck and any tax structure steps will be at a level that provides
direction on tax issues but will not be specific enough for Zips to
implement their proposed transaction without the appropriate
knowledge, expertise, and additional steps that will be provided
and decided upon by management, along with other advisors as
needed. Zips is ultimately responsible for deciding which plan and
transaction steps to implement. PwC US Tax will not execute any
implementation plans or make any management decisions.
6. Prepare or comment on tax basis calculations, as
requested.
7. Prepare technical memoranda regarding mutually agreed
tax issues of the Restructuring Plan, as requested.
8. Comment on transaction cost analysis for transaction
fees related to the Restructuring Plan, as requested.
9. Participate in meetings as Zips' tax advisor (e.g.,
conference calls and/or in person meetings), as requested.
10. Gain an understanding of Zips' intercompany debt and
consider the income tax implications of maintaining or eliminating
such debt, as requested.
11. Read and comment on the tax matters with respect to the
Restructuring Plan legal agreements, as requested.
(a) Zips' legal counsel will draft all legal
documentation and agreements associated with the project. Zips and
its counsel are responsible for ensuring Zips' intended tax
structure is appropriately reflected in any agreements. Note that
PwC US Tax will not develop any legal draft of the purchase
agreement or individual sections therein and will not negotiate any
of the terms. For the avoidance of doubt, PwC US Tax will not
provide any legal advice, interpretations or opinions. Any such
matters should be referred to the Zips' legal counsel.
12. Other U.S. federal, state and local, and non-U.S. tax
consulting, advice, research, planning, and analysis as may be
necessary, desirable, or requested from time to time by the Zips,
as requested.
b. Restructuring Addendum:
i. Review and comment on potential amendments to Express Car
Wash's federal income tax returns for 2022 and 2023, including
supporting calculations, to be prepared by Zips and/or Zips tax
return preparer. This may include the following:
1. Review and comment on the recalculation of section
704(b) income / loss and taxable income / loss items among the
partners of Express Car Wash to reflect required allocation
methodologies.
2. Review and comment on calculations of Section 743(b)
basis adjustment(s) and allocations to partnership assets pursuant
to Section 755 in connection with certain historical acquisition(s)
of interests in Express Car Wash (e.g., the section 743(b) basis
adjustment relating to the Blocker's acquisition of Express Car
Wash interests in 2022).
3. Review and comment on adjustments, if any, to taxable
income / loss items relating the Company's tax treatment of certain
sale-leaseback transactions. See discussion below for further
information.
4. Review and comment on Administrative Adjustment
Requests ("AAR") related to the items noted above to be filed in
connection with the amended 2022 and 2023 U.S. federal income tax
returns filed by Express Car Wash.
For the avoidance of doubt, PwC US Tax will not prepare any tax
returns or tax return workpapers with respect to the 2022 and 2023
amended U.S. federal tax returns.
ii. Review and comment on Blocker's 2023 federal income tax
returns to be prepared by Zips and/or Zips tax return preparer.
This may include review and comment on the following:
1. Calculation of the section 743(b) deductions relating
to Blocker's 2022 acquisition of Express Car Wash that were not
previously reported.
2. A copy of a statement under Treas. Reg. Section
1.743-1(k) relating to the above section 743(b) adjustment.
3. Form 8082 noting inconsistent treatment with the Form
K-1 provided to Blocker by Express Car Wash in connection with the
originally filed 2023 Express Car Wash federal income tax return.
4. Adjustments to Blocker's net operating losses ("NOLs"),
including for 2022, on account of modified section 743(b)
adjustment(s).
For the avoidance of doubt, PwC US Tax will not prepare any tax
returns or tax return workpapers with respect to Blocker or Express
Car Wash.
iii. Review and comment on Express Car Wash's and/or Blocker's
2024 federal income tax return and 2025 federal income tax return
for the period beginning January 1, 2025, including supporting
workpapers, prepared by Zips and/or Zips tax return preparer. This
may include the following:
1. Review the reporting of the Restructuring Plan in
Express Car Wash's and Blocker's federal income tax returns for the
tax year beginning January 1, 2025.
2. Review workpaper calculations relating to the federal
income tax consequences to Blocker and Express Car Wash of the
Restructuring Plan for the tax year beginning January 1, 2025,
including calculations of the allocation of section 704(b) and tax
income / loss items among the partners of Express Car Wash.
iv. Review and comment on the tax treatment of sale-leaseback
transactions entered into by Express Car Wash, and its subsidiaries
from 2022 through the short-year 2025. This may include the
following:
1. With respect to sale-leaseback transactions treated by
Zips as failed-sale leasebacks for GAAP purposes (as determined by
Zips), review the lease agreements and related GAAP economic
analyses provided by Zips for purposes of analyzing the U.S.
federal income tax characterization of such transactions (e.g.,
whether each transaction is treated as a true sale-leaseback or a
financing transaction for U.S. federal income tax purposes).
For the avoidance of doubt, PwC US Tax will not perform any
economic analyses of the leased property (e.g., analysis of useful
property lives, residual values at end of lease term, etc.) and
will not perform any GAAP/accounting analysis.
2. Assist Zips in determining the appropriate U.S. federal
income tax consequences of the sale-leaseback transactions based on
the above characterization (e.g., deduction of rental payments if a
true lease, deductions for depreciation and/or interest if a
financing transaction, etc.).
3. Determine if an accounting method change would be
required for U.S. federal income tax purposes with respect to the
sale-leaseback transactions that were treated as failed
sale-leaseback transactions for GAAP purposes from 2022 through the
short year 2025, based on the analysis above.
4. Assist Zips in determining the appropriate treatment of
the sale leaseback transactions for purposes of Zips' U.S. federal
income tax basis balance sheet (e.g., whether the lease gives rise
to an asset or liability on the tax basis balance sheet or not).
(a) Zips agrees PwC US Tax's tax basis calculations, if any,
relating to any asset (or liability) will not be used to determine
the carrying value of the asset or liability for financial
reporting purposes.
5. Review sale-leaseback transactions to determine whether
any sales tax would have been due in connection with such
transactions.
For the avoidance of doubt, this is not expected to include
analysis of real property transfer taxes, which we understand has
already been performed by counsel.
6. Review Zips' and/or Zips' tax return preparer's
schedules / calculations of the historical federal income tax
treatment of the sale-leaseback transactions for U.S. federal and
state income tax purposes for tax years from 2022 through the
short-year 2025, for purposes of comparing to the tax consequences
of the treatment determined via the analysis above.
The Restructuring Addendum is not in any way intended to limit the
other services described in the Debt Restructuring Letter.
Accordingly, for example, PwC US Tax may also (i) review state
income tax calculations / tax returns relating to the above, (ii)
prepare estimated calculations relating to the above workstreams,
and/or (iii) perform analysis relating to sale/leasebacks other
than those treated as failed sale-leasebacks for GAAP purposes.
The firm will be compensated as follows:
a. The Debt Restructuring Letter and the Restructuring
Addendum are each hourly fee arrangements subject to the agreed
upon hourly rate ranges, exclusive of expenses:
Partner/Principal $987 to $1,473
Managing Director $835 to $1,208
Director $751 to $1,195
Senior Manager $719 to $1,141
Manager $641 to $1,107
Senior Associate $546 to $952
Associate and other staff $431 to $743
b. Prepetition, the Debtors remitted retainer payments
totaling $1,250,000 for Professional Services. As of the Petition
Date, $191,548 of the retainer remains on hand to be applied to
Court-approved post petition Professional Services.
As disclosed in a court filing, PwC US Tax LLP is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Adam Furst
PwC US Tax LLP
655 New York Ave NW
Washington, DC 20001
Tel: (301) 801-3952
About Zips Car Wash, LLC
Zips Car Wash LLC and affiliates are among the largest privately
owned express car wash operators in the U.S., offering advanced car
wash services using cutting-edge chemistry like Ultra HD Glaze and
Graphene-Ceramic Fusion X to deliver superior results, including
glossy tires, streak-free windows, and a well-protected paint job.
Founded in 2004 with just two locations in rural Arkansas, the
Debtors have expanded significantly through strategic acquisitions,
now operating over 260 locations across 23 states. Headquartered in
Plano, Texas, the Debtors run their businesses under the Zips, Jet
Brite, and Rocket Express brands and serve their customers through
two core revenue channels: a traditional pay-per-wash format and
Zips Unlimited, their flagship monthly subscription program with
over 600,000 members.
Zips Car Wash LLC and affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 25-80069)
on February 5, 2025. In its petition, the Debtor reports estimated
assets between $500 million and $1 billion and estimated
liabilities between $1 billion and $10 billion.
Honorable Bankruptcy Judge Michelle V. Larson handles the case.
The Debtors' local bankruptcy counsel is Jason S. Brookner, Esq.,
Aaron M. Kaufman, Esq., and Amber M. Carson, Esq., at Gray Reed,
Dallas, Texas.
The Debtors' general bankruptcy counsel is Joshua A. Sussberg,
Esq., and Ross J. Fiedler, Esq., at Kirkland & Ellis LLP, in New
York, and Lindsey Blumenthal, Esq., at Kirkland & Ellis LLP,
Chicago, Illinois.
The Debtors' investment banker is Evercore Group LLC. The Debtors'
financial advisor is Alixpartners LLP. The Debtors' Noticing &
Claims Agent is Kroll Restructuring Administration LLC. The
Debtors' Real Estate Consultant & Advisor is Hilco Real Estate LLC.
The Debtors' tax advisor is PWC US TAX LLP.
*********
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