/raid1/www/Hosts/bankrupt/TCRLA_Public/190909.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, September 9, 2019, Vol. 20, No. 180
Headlines
B R A Z I L
ODEBRECHT SA: Reaches Settlement Deal w/ IDB Resulting in Sanctions
C H I L E
UBIOME INC: Blames Founders for FBI Probe, Chapter 11
UBIOME INC: Case Summary & 30 Largest Unsecured Creditors
UBIOME INC: Lab-Testing Startup Files for Ch. 11, To Sell Assets
UBIOME INC: New Management Seeks Quick Sale in Chapter 11
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Contribution of Agriculture to Economy Doubles
DOMINICAN REPUBLIC: Poorest Places in the Country Ranked
J A M A I C A
JAMAICA: Sets Better Relationship Bet. Cannabis Dealers, US Banks
P U E R T O R I C O
SEARS HOLDINGS: Sears Cuts 250 Employees at Hoffman Estates HQ
X X X X X X X X
[*] BOND PRICING: For the Week September 2 to September 6, 2019
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B R A Z I L
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ODEBRECHT SA: Reaches Settlement Deal w/ IDB Resulting in Sanctions
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Following an extensive investigation by the Office of Institutional
Integrity (OII, an independent office of the Inter-American
Development Bank), with the cooperation of the Brazilian company
Odebrecht S.A. (Odebrecht), OII disclosed the debarment of CNO S.A.
(CNO), a subsidiary of Odebrecht, for six years in connection with
prohibited practices in two IDB-financed projects. The debarment
makes CNO ineligible to participate in IDB Group-financed
projects.
The OII investigation uncovered bribes paid in two IDB-financed
projects: the Tocoma Hydroelectric Power Plant Program in Venezuela
and the Highway Rehabilitation Program in the State of Sao Paulo in
Brazil.
As part of the Settlement, Odebrecht does not contest the evidence
obtained by OII demonstrating that in both projects CNO committed
corrupt practices when it made payments to public officials in
order to facilitate either the award, contract execution payments
and/or contract amendments.
According to OII's evidence, the illicit payments amounted to
upward of 5-6% of each contract amount, including amendments.
Specific to the Highway Rehabilitation Program, between 2006 and
2008, CNO paid government officials a total amount equivalent to
approximately US$380,000. In the case of the Tocoma Hydroelectric
Power Plant Program, evidence obtained by OII indicates that
between 2007 and 2015, illicit payments and transactions of up to
US$118 million were made utilizing a complex network of agents and
offshore financial payment schemes.
The sanctions are the result of a Negotiated Resolution Agreement
(the Settlement) between the IDB, the Inter-American Investment
Corporation (IDB Invest) and Odebrecht on behalf of its
subsidiaries, CNO and Odebrecht Engenharia e Construçao S.A.
(OEC). The Settlement also includes a conditional non-debarment
applied to OEC for ten years and CNO for four years directly
following CNO's six-year period of debarment. When conditionally
non-debarred, a company remains eligible to participate in IDB
Group-financed projects but only if it fully meets the conditions
of the Settlement. If any of the conditions are not met, the
company will be debarred.
As part of the sanctions, Odebrecht commits to make a total
contribution of US$50 million, starting in 2024, directly to NGOs
and charities managing social projects with the purpose of
improving the quality of life of vulnerable communities in the
IDB's developing member countries.
In addition to the sanctions against CNO and OEC, 19 CNO
subsidiaries will be subject to debarment and a further 41 OEC
subsidiaries will be subject to conditional non-debarment. CNO
branches in Africa are excluded from the sanction. Separately, the
Odebrecht group commits to comply with certain conditions necessary
to demonstrate its reforms.
The Settlement allows for a reduced period of debarment in light of
Odebrecht's continued cooperation, including internal
investigations that are intended to uncover systemic integrity
risks to IDB Group-financed activities. Under the terms of the
Settlement, Odebrecht commits to report on its compliance program
through an independent monitor.
The Settlement was negotiated by OII in accordance with the IDB
Group's Sanctions Procedures. Settlements of this nature are used
by the IDB Group and other multilateral development banks as an
effective means to resolve investigations related to prohibited
practices in exchange for cooperation and disclosures of systemic
integrity risks.
The debarment of CNO and listed subsidiaries qualifies for
cross-debarment by other multilateral development banks (MDBs)
under the Agreement for Mutual Enforcement of Debarment Decisions
that was signed on April 9, 2010.
About Odebrecht SA
Odebrecht S.A. -- www.odebrecht.com -- is a Brazilian conglomerate
consisting of diversified businesses in the fields of engineering,
construction, chemicals and petrochemicals. Odebrecht S.A. is a
holding company for Construtora Norberto Odebrecht S.A., the
biggest engineering and contracting company in Latin America, and
Braskem S.A., the largest petrochemicals producer in Latin America
and one of Brazil's five largest private-sector manufacturing
companies. Odebrecht controls Braskem, which by revenue is the
fourth largest petrochemical company in the Americas.
On June 17, 2019, Odebrecht filed for bankruptcy protection, aiming
to restructure BRL51 billion (US$13 billion) of debt.
The bankruptcy filing comes after years of struggles for Odebrecht,
the biggest of the Brazilian engineering groups caught in a
sweeping political corruption investigation that has rippled across
Latin America, Reuters relayed, as reported by The Troubled Company
Reporter - Latin America.
On August 28, 2019, the Troubled Company Reporter - Latin America,
citing The Wall Street Journal, reported that Odebrecht and its
affiliates filed for chapter 15 bankruptcy, seeking U.S.
recognition of the largest-ever bankruptcy in Latin America.
Odebrecht SA and several of its affiliates has filed for bankruptcy
protection in the U.S. Bankruptcy Court for the Southern District
of New York on Aug. 26. The case is assigned to Hon. Stuart M.
Bernstein.
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C H I L E
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UBIOME INC: Blames Founders for FBI Probe, Chapter 11
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New management of San Francisco-based microbiome testing company
uBiome, Inc., largely blamed the business' founders for the FBI
investigation into its business practices and the company's
subsequent collapse into Chapter 11 bankruptcy.
Drs. Jessica Richman and Zachary Apte founded uBiome in 2012 to
provide a product which consumers could use to monitor their gut
microbes. The scientific basis for uBiome's analytical process is
the DNA sequencing of the microbe, which are microscopic organisms
that exist throughout nature and are present in many parts of the
human body. Using advanced DNA sequencing and utilizing the
world's largest microbiome database, the Debtor has historically
offered a variety of products to patients and consumers to analyze
the DNA of their microbiomes, including "Explorer," "SmartGut," and
"SmartJane".
uBiome previously operated in two segments: consumer and clinical.
On the consumer side, the Debtor's flagship product is its Explorer
kits, which have been historically sold online for $89.99 each.
The results provided to consumers include suggestions on matters
such as diet, weight control, gut inflammation, sleep disorders,
and non-dietary supplements.
In the clinical diagnostic market, the Debtor's products included
SmartGut, an extension of Explorer, working from a stool sample
using the same wet lab technology and with enhanced bioinformatics
and an expanded array of diagnostics. Unlike Explorer, it was
prescribed by a doctor and billed to the customer's insurance.
Once SmartGut was launched, it was followed by SmartJane (vaginal
swab sample providing diagnoses of STD's, HPV, and other
gynecological disorders) (together with SmartGut, "SmartX"). The
Debtor suspended sales of its clinical products in response to
investigations into certain business practices led by its
founders.
FBI Probe
Curtis G. Solsvig III, who was appointed as acting CEO starting
June 27, 2019, explained the Founders implemented certain business
strategies with respect to the SmartX products that were highly
problematic, contained significant operational (but not scientific)
flaws and, in some instances, were of questionable legality. These
issues included improper insurance provider billing
practices,improper use of a telemedicine physician network (known
as the External Clinical Care Network), overly aggressive and
potentially misleading marketing tactics, manipulation of customer
upgrade testing, and improper use of customer inducements.
Moreover, certain information presented to potential investors
during the three rounds of capital raise my have been incorrect
and/or misleading. Although uBiome believes the science and
technology behind uBiome's business model in this developing area
is sound, these issues -- among others -- have resulted in
significant legal exposure for the Debtor.
As a result of the foregoing and other problematic business
practices, the Federal Bureau of Investigation opened an
investigation on April 26, 2019. The FBI and other federal and
state agencies executed a search warrant on the Debtor's San
Francisco headquarters and obtained various files, business records
and hardware. That same day, the United States Attorney for the
Northern District of California issued a subpoena to the Debtor for
certain records and documents. Since these events, the Debtor, the
Board, and the Debtor's management and advisors have been fully
cooperating with the investigating authorities, including the U.S.
Department of Justice and the Securities and Exchange Commission,
regarding their ongoing investigations. The Debtor intends to
continue its cooperation with these authorities despite the filing
of this Chapter 11 Case.
New Management
At the time the search warrant was executed, the Debtor's board of
directors (the "Board") was composed of the Founders, Kimmy Scotti,
a partner of the venture capital investor 8VC Entrepreneurs Fund I,
L.P. and 8VC Fund I, L.P. (together "8VC"), which was an early and
significant investor in uBiome, Witt Wisebram, an independent
director and one of uBiome's initial creators, and Dr. Joe DeRisi,
M.D., a prominent researcher in the microbiome space.
Within forty-eight hours of the execution of the search warrant,
the three independent Board members -- Ms. Scotti, Dr. DeRisi and
Mr. Wisebram -- created a special committee (the "Special
Committee") to investigate the allegations, and thereafter retained
Milbank LLP ("Milbank") to assist and advise the Special Committee
in carrying out an investigation into these matters (the
"Investigation").
On April 28, 2019, the Special Committee removed the Founders from
their management roles and placed them on paid suspension pending
further action by the Special Committee, and also suspended all
SmartX business operations. In their place, on April 28, 2019, the
Special Committee appointed John Rakow, the Debtor's then-current
General Counsel, as Interim Chief Executive Officer. On or about
April 28, 2019, Dr. DeRisi resigned from the Board and the Special
Committee, and on or about May 9, 2019 and Mr. Wisebram also
resigned from the Board and the Special Committee.
On June 19, 2019, the Founders tendered their resignations from the
Board and executed a Stipulation and Agreement pursuant to which
the Founders waived certain rights as majority shareholders of the
Debtor and granted an 8VC affiliated entity proxy rights with
respect to the Founder's shareholders rights. Mr. Rakow continued
as Interim CEO until his resignation on June 28, 2019.
Under Mr. Rakow and the Special Committee, uBiome focused on fully
cooperating with Milbank and the Investigation, suspended sales of
the SmartX product line and all clinical products, refocused uBiome
around the Explorer product line, and began preparations for a
restructuring of its business.
Effective July 2, 2019, the Special Committee removed each Founder
as an officer, employee and/or from any other position with the
Debtor and stopped compensating them. By written consents of the
Board dated June 27 and July 11, 2019, I was appointed as Acting
CEO, Ms. Chiu was appointed as Acting CFO and Mr. Bhavaraju was
appointed as Acting COO. Pursuant to a written consent of the
majority of the Debtor's shareholders dated July 11, 2019, Messrs.
Baker and Wells were appointed to the Board as independent
directors. Mr. Baker is a retired corporate restructuring partner
of Latham & Watkins and former head of the bankruptcy and
restructuring group, and Mr. Wells is a partner at DriveTrain, LLC
and an experienced distressed advisor. Both have substantial
experience acting as fiduciaries and advising in distressed
situations.
The new Board and management team has been working diligently to
explore financial and operational alternatives and to prepare
uBiome for a restructuring. This has included, among other things,
hiring professionals, including Young Conaway Stargatt and Taylor,
LLP as counsel and GLC Advisors & Co., LLC and GLCA Securities, LLC
as uBiome's investment banker. uBiome has been working diligently
with Young Conaway to prepare for a restructuring either in or out
of a chapter 11 bankruptcy. GLC, meanwhile, has been diligently
marketing uBiome's assets to potential interested parties in an
effort to secure an investor to finance the Restructuring, either
as an investor outside of chapter 11 or to provide a
debtor-in-possession financing facility and/or to act as a stalking
horse bidder in a court-supervised sale process. With the
cooperation of the Debtor's management team, GLC has prepared and
distributed comprehensive marketing materials, identified possible
investors, and participated in management meetings with interested
investors. The management team has also maintained close
communications with SVB, the Debtor's secured lender.
In addition to preparing for the Chapter 11 restructuring, the
management team has been assessing the Debtor's strategic business
options and preparing a business plan, which is initially focused
on the launch of an upgraded Explorer product and various near- and
medium-term opportunities, including third-party partnerships.
For example, uBiome will begin supplying the Explorer product to
CVS in October of 2019 pursuant to a purchase order agreement. In
short, while the Debtor experienced a serious setback as a result
of the Investigation, the Investigation resulted from the business
practices implemented by the Founders, not bad science or bad lab
practices. The Debtor has established a new Board and a new
Business Plan, and is poised to move forward. This Chapter 11 case
will provide the fresh start necessary to do so.
uBiome, Inc
uBiome, Inc. -- https://ubiome.com/ -- is a microbial genomics
company founded in 2012. uBiome combines its patented proprietary
precision sequencing with machine learning and artificial
intelligence to develop wellness products, clinical tests, and
therapeutic targets. uBiome has filed for over 250 patents on its
technology, which includes sample preparation, computational
analysis, molecular techniques, as well as diagnostic and
therapeutic applications. uBiome and its non-debtor foreign
affiliates currently employ approximately 100 individuals, of which
35 are located in the United States, 37 in Chile, and 28 in
Argentina.
On Sept. 4, 2019, uBiome, Inc., sought Chapter 11 protection
(Bankr. D. Del. Case No. 19-11938).
The Debtor estimated assets of $50 million to $100 million and
liabilities of $10 million to $50 million.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtor tapped YOUNG, CONAWAY, STARGAT & TAYLOR, LLP as counsel;
GOLDIN ASSOCIATES, LLC, as restructuring advisor; GLC ADVISORS &
CO., LLC and GLCA SECURITIES, LLC, as investment banker. Donlin
Recano & Company, Inc., is the claims agent.
UBIOME INC: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: uBiome, Inc.
360 Langton Street
San Francisco, CA 94103
Case No.: 19-11938
Business Description: uBiome, Inc. -- https://ubiome.com -- is a
microbial genomics company founded in 2012.
uBiome combines its patented proprietary
precision sequencing with machine learning
and artificial intelligence to develop
wellness products, clinical tests, and
therapeutic targets. uBiome has filed for
over 250 patents on its technology, which
includes sample preparation, computational
analysis, molecular techniques, as well as
diagnostic and therapeutic applications.
uBiome and its non-debtor foreign affiliates
currently employ approximately 100
individuals, of which 35 are located in the
United States, 37 in Chile, and 28 in
Argentina.
Chapter 11 Petition Date: September 4, 2019
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Judge: Hon. Laurie Selber Silverstein
Debtor's Counsel: Joseph M. Barry, Esq.
YOUNG, CONAWAY, STARGAT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Tel: 302-571-6600
Email: jbarry@ycst.com
- and -
Andrew L. Magaziner, Esq.
YOUNG, CONAWAY, STARGAT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: 302-571-6600
Email: amagaziner@ycst.com
- and -
Michael R. Nestor, Esq.
YOUNG, CONAWAY, STARGAT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: 302-571-6600
Fax: 302-571-1253
Email: mnestor@ycst.com
- and -
Jordan E. Sazant, Esq.
YOUNG, CONAWAY, STARGAT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: 302-571-6600
Fax: 302-571-1253
Email: jsazant@ycst.com
Debtor's
Restructuring
Advisor: GOLDIN ASSOCIATES, LLC
Debtor's
Investment
Banker: GLC ADVISORS & CO., LLC AND
GLCA SECURITIES, LLC
Debtor's
Notice,
Claims,
Solicitation &
Balloting Agent: DONLIN RECANO & COMPANY, INC.
https://www.donlinrecano.com/Clients/ub/Index
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Curtis G. Solsvig III, acting chief
executive officer.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/deb19-11938.pdf
List of Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Cigna Refund Claim $2,134,624
900 Cottage Grove
W3SUI
Hartford CT 06152
Lauren Sgro (Thorsell)
Tel: 860-226-1391
Fax: 415-520-6698
Email: lauren.sgro@cigna.com
2. United Health Care Refund Claim $2,084,100
United Payment Integrity, Attn:
Recovery Investigations
4868 Georgia Hwy 85, Suite 206-A
Forest Park GA 30297
Richard O'Connor
Tel: 952-205-0846
3. Horizon Blue Cross Blue Refund Claim $1,435,431
Shield of NJ
P.O. Box 200145
Newark NJ 07102
David Menendez
Tel: 973-466-8318
Email: david_menendez@horizonblue.com
4. BRJ Investments, LLC Convertible $719,118
2885 Sanford Avenue SW Notes
Grandville MI 49418
Jeff
Email: jeff@osf.co
5. Blue Shield of California Refund Claim $424,935
Blue Shield of California Special
Investigations Unit
6300 Canoga Avenue
Woodland Hills CA 91367
Cheri Hahn
Tel: 818-228-6142
Fax: 844-660-6743
Email: cheri.hahn@blueshieldca.com
6. Tricare West Refund Claim $402,253
P.O. Box 202111
Florence SC 92502
Tel: 844-866-9378
7. Bioquimica, Cl S.A. Trade Payable $397,634
Avenida Presidente Battle Y
Ordoliez 3756
Santiago, Chile
Matias Gutierrez
Tel: +56 2 2225-2583
Email: matias.gutierrez@bioquimica.cl
8. Covington & Burling LLP Professional $313,446
850 Tenth Street N.W. Services
Washington DC 20001
Douglas Sprague
Tel: 415-591-6000
Email: dsprague@cov.com
9. Arnold & Porter Professional $311,804
Kaye Scholer LLP Services
P.O. Box 759451
Baltimore MD 21275
Tel: 415-471-3100
Fax: 415-471-3400
Email: invoice@arnoldporter.com
10. Kilpatrick Townsend Professional $296,381
PO Box 39000 Services
San Francisco CA 94139
Hyacinth Campbell
Tel: 866-244-4934
Email: accountsreceivable@kilpatricktownsend.com
11. Ramsey & Ehrlich LLP Professional $274,107
800 Hearst Avenue Services
Albany CA 94710
Lauren Noga
Tel: 510-548-3600
Fax: 510-291-3060
Email: lauren@ramsey-ehrlich.com
12. Tricare Refund Claim $273,029
7700 Arlington Boulevard
Suite 5101
Falls Church VA 22042
Tel: 844-204-9351
13. Kaiser Foundation Health Plan Refund Claim $270,655
Kaiser Permanente, Attn: Regional
Claims Recovery
File 50187
Los Angeles CA 90074
Giang Le
Tel: 858-614-3164
Email: giang.t.le@kp.org
14. Medica Refund Claim $259,637
P.O. Box 9310
Minneapolis MN 55440
Barbara Horn
Tel: 952-992-3134
Email: barbara.horn@medica.com
15. Orrick, Herrington & Professional $233,401
Sutcliffe LLP Services
450 Howard Street
San Francisco CA 94105
John Bautista
Tel: 304-231-2704
Fax: 304-231-2501
Email: accountsreceivable@orrick.com
16. Salesforce.com Inc. Trade Payable $211,654
P.O. Box 203141
Dallas TX 75320
Jason Foster
Tel: 800-667-6389
Email: jason.foster@salesforce.com
17. Premera BCBS Refund Claim $211,213
MS 229
P.O. Box 327
Seattle WA 98111
Tel: 800-364-2991
18. Growth IP Trade Payable $149,460
13480 Chelly Court
San Diego CA 92129
Tel: 323-609-3001
Email: admin@growthip.com
19. Ecare India Private Limited Trade Payable $135,530
B.R Complex, 2nd & 3rd Floor
Woods Road No. 27/28
Chennai, India
Deepak Kumar Sanghi
Tel: 800-518-5013
Email: deepak@ecareindia.com
20. Mayo Clinic Health plan Refund Claim $96,192
4001 41st Street NW
Rochester MN 55901
Tel: 855-384-0001
21. Harvard Pilgrim Refund Claim $83,100
1600 Crown Colony Drive
Quincy MA 02169
Christopher Walsh
Tel: 617-509-1727
Email: christopher_walsh@harvardpilgrim.org
22. Leydig, Voit & Mayer, LTD. Trade Payable $75,426
1981 North Broadway, Suite 310
Walnut Creek CA 94596
Joni Simmons
Tel: 925-482-0100
Fax: 925-482-0110
Email: jsimmons@leydig.com
23. iDesIgnEDU, LLC Trade Payable $75,000
800 Jackson Street, Suite 384
Dallas TX 75202
Saleen Hearon
Tel: 800-581-5418
Email: saleen.hearon@idesignedu.org
24. Aomb Trade Payable $73,809
P.O. Box 645
5600 AP Eindhoven
Eindhoven, Netherlands
Rene Raggers
Tel: +31(0)40-243-3715
Fax: +31(0)40-243-4557
Email: mail@aomb,nl
25. Mintz, Levin, Cohn, Ferris, Professional $66,564
Glovsky, and Popeo, LLP Services
P.O. Box 4539
Boston MA 02212
David Siegal
Tel: 212-935-3000
Fax: 212-935-3115
Email: dmsiegal@mintz.com
26. SendBridge Inc. Trade Payable $60,688
1895 Jackson Street
Apartment 503
San Francisco CA 94109
Email: success@goprimer.com
27. Providence Health Plans Refund Claim $52,314
P.O. Box 6456
Portland OR 97228
Ellen Larsen
Tel: 503-574-7334
Email: ellen.larsen@providence.org
28. S-E, Inc. Trade Payable $47,986
4111 N.E. 112th Avenue
Vancouver WA 98682
Todd Clevette
Email: todd_clevette@sehamerica.com
29. Kekst and Company, Inc. Trade Payable $47,451
P.O. Box 1528
Long Island City NY 11001
Nathan Riggs
Tel: 212-521-4800
Email: nathan.riggs@kekstcnc.com
30. Tricare South Refund Claim $45,419
P.O. Box 7032
Camden SC 29021
UBIOME INC: Lab-Testing Startup Files for Ch. 11, To Sell Assets
----------------------------------------------------------------
Soma Biswas, writing for The Wall Street Journal, reported that
embattled lab-testing startup uBiome Inc. filed for bankruptcy
protection in Delaware, and put its assets up for sale after
suspending testing of its clinical products.
According to the report, the San Francisco-based company has lined
up an $8 million bankruptcy loan from 8VC and Silicon Valley Bank
to keep its business open while it looks for a buyer.
Curtis G. Solsvig III, uBiome's Acting Chief Executive Officer,
related that the company is under federal investigation for its
billing practices. The Company laid off around half of its global
workforce in July and co-founders Jessica Richman and Zac Apte, who
were earlier suspended from their positions as co-chief executives,
resigned from the company's board, the Journal related.
Mr. Sosvig said that as of the Petition Date, the Debtor estimates
that (other than the Contingent Liabilities) its unsecured trade
and other operational debt is approximately $3.5 million, mainly
comprised of legal fees and claims held by vendors that were used
for the clinical business.
In addition, there are a number of contingent liabilities,
including:
* Inadvertent billings to Tricare, Medicare and Medicaid for
certain tests, which may total approximately $4 million;
* Potential obligations to private pay insurers for which the
Debtor has received over $10 million of refund requests related to
the Debtor's prior clinical practice; and
* Potential fines for civil and criminal penalties resulting
from the Investigation. The amounts of these fines are currently
unknown.
Kimmy Scotti, who is an 8VC partner and uBiome board member, said:
"We have taken significant action to put the company on stronger
footing and believe in the strength and potential of uBiome's
scientific achievements and [intellectual property]. We remain
committed to supporting the company as it pursues an orderly sale
of its assets for the benefit of all stakeholders."
GLC Advisors & Co. is serving as its financial adviser.
uBiome's proposed counsel:
Michael R. Nestor, Esq.
Joseph M. Barry, Esq.
Andrew L. Magaziner, Esq.
Joseph M. Mulvihill, Esq.
Jordan E Sazant, Esq.
Young Conaway Stargatt & Taylor, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Donlin Recano maintains a free site at
https://www.donlinrecano.com/Clients/ub/
UBIOME INC: New Management Seeks Quick Sale in Chapter 11
---------------------------------------------------------
San Francisco-based microbiome testing company uBiome, Inc., sought
Chapter 11 protection to provide its business with a fresh start
under new management, and to preserve approximately 100 jobs
through a court-supervised sale process that is intended to
maximize the value of the Debtor's assets for the benefit of all
stakeholders.
Curtis G. Solsvig III, who was appointed as acting CEO starting
June 27, 2019, explained in court filings that certain business
practices formulated and implemented by the Debtor's original
founders have resulted in cessation of certain aspects of the
Debtor's business, investigations by certain federal and state
investigatory bodies, loss of revenue and significant potential
contingent liabilities.
In recent weeks, the Debtor has: (1) taken aggressive corrective
action at the Board and management levels; (2) implemented various
corporate governance controls; (3) relaunched certain of its
business operations; (4) committed to cooperate with the
Investigations, (5) mitigated the impact of the Investigations, and
(6) reduced the cost structure of the Company while preserving the
value for the sale process.
The Debtor has also recently installed two new independent
directors -- D.J. (Jan) Baker and Spencer Wells -- who are both
highly qualified and esteemed fiduciaries in the restructuring
community. In addition to the installation of Messrs. Baker and
Wells to the Debtor's 3-person Board of Directors, the Debtor
replaced former management with Curtis G. Solsvig III as acting
CEO, Robin Chiu (a Managing Director at Goldin) as acting CFO; and
Karthik Bhavaraju (a Senior Director at Goldin) as acting COO.
Mr.
Solsvig, Ms. Chiu, and Mr. Bhavaraju were appointed to oversee and
manage the Debtor's day-to-day business operations, and to assist
the Debtor with formulating strategic financial and operational
alternatives with the ultimate goals of optimizing the Debtor's
business outlook and maximizing the Debtor's value for the benefit
of all stakeholders.
Through the Chapter 11 case and under the close supervision and
direction of the new Board of Directors and acting management, the
Debtor intends to undertake a restructuring and sale process to
sell a streamlined, refocused, and healthy business to a bidder
that will result in the maximum return possible to the Debtor's
stakeholders.
$8 Million Financing
To this end, the Debtor has entered into a postpetition financing
agreement with Silicon Valley Bank ("SVB") for a DIP Facility,
funded in part through participations with participant parties. The
DIP financing will provide the Debtor with up to $8 million in new
money borrowings that will be secured by super senior priority and
senior priority liens on substantially all of the Debtor's assets.
SVB is already owed $5.83 million under a prepetition first lien
facility. The Debtor does not have other secured indebtedness. As
to unsecured debt, the Debtor estimates that its unsecured trade
and other operational debt is $3.5 million, mainly comprised of
legal fees and claims held by vendors that were used for the
Debtor's clinical operations.
The Debtor believes that the DIP Facility will provide the
necessary flexibility to allow the Debtor to run a successful sale
process, preserve approximately 100 jobs, and to engage in
discussions with its creditor constituencies.
The Debtor's proposed path is designed to maximize the value of its
business and assets, and to provide the maximum recovery possible
to the Debtor's creditors. With new management refocusing the
Debtor's business model, the Debtor is poised to continue as a
growing business in the hands of the successful bidder following a
competitive auction process.
Sale in 75 Days
To satisfy the case milestones set forth in the Debtor's DIP
Facility, as well as to prevent deterioration in value of the
Debtor's business attendant to a lengthy sale process, the Debtor
seeks to consummate a sale of its business within the first 75 days
of the Petition Date.
uBiome, Inc
uBiome, Inc. -- https://ubiome.com/ -- is a microbial genomics
company founded in 2012. uBiome combines its patented proprietary
precision sequencing with machine learning and artificial
intelligence to develop wellness products, clinical tests, and
therapeutic targets. uBiome has filed for over 250 patents on its
technology, which includes sample preparation, computational
analysis, molecular techniques, as well as diagnostic and
therapeutic applications. uBiome and its non-debtor foreign
affiliates currently employ approximately 100 individuals, of which
35 are located in the United States, 37 in Chile, and 28 in
Argentina.
On Sept. 4, 2019, uBiome, Inc., sought Chapter 11 protection
(Bankr. D. Del. Case No. 19-11938).
The Debtor estimated assets of $50 million to $100 million and
liabilities of $10 million to $50 million.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtor tapped YOUNG, CONAWAY, STARGAT & TAYLOR, LLP as counsel;
GOLDIN ASSOCIATES, LLC, as restructuring advisor; GLC ADVISORS &
CO., LLC and GLCA SECURITIES, LLC, as investment banker. Donlin
Recano & Company, Inc., is the claims agent.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Contribution of Agriculture to Economy Doubles
------------------------------------------------------------------
Dominican Today reports that from 2012 to 2018, the contribution of
the agricultural sector to the national economy increased from
RD$112 billion to more than RD$228 billion, according to
Agriculture Minister Osmar Benitez.
Benitez said at the same time that production went from 115 million
quintals of food to more than 211 million quintals, according to a
statement from the institution, according to Dominican Today.
The minister said, by participating in a television program, that
the demand for rice, bananas, eggs, chicken, cassava and other
foods from the basic basket is 100% supplied with local production,
the report notes.
He added that the bean planting area was increased. In San Juan
alone, 185,000 tracts of the grain were sown, surpassing the
120,000 sown last year, the report relays.
Benitez stressed that all this has been possible thanks to the
Government's strategy for the national productive sector and said
that thanks to the execution of the 10 axes outlined by President
Danilo Medina at the beginning of his administration, the Dominican
Republic has a productive capacity that allows a self-sufficiency
in the main foods of the family basket, the report relays.
He added that the Government rescued the certified seed
reproduction program for bean planting, the report adds.
Standard & Poor's credit rating for Dominican Republic stands at
BB- with stable outlook (2015). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (2017).
Fitch's credit rating for Dominican Republic was last reported at
BB- with stable outlook (2016).
DOMINICAN REPUBLIC: Poorest Places in the Country Ranked
--------------------------------------------------------
Dominican Today reports that in the first quarter of this year, the
Dominican economy grew 5.7% thanks to sectors such as construction,
energy and water, financial intermediation, mining, tourism,
transportation, public administration, and other service
activities, according to the Central Bank.
However, this has not prevented some Dominican provinces from
remaining immersed in poverty when their Human Development Index
(HDI) is taken into account, according to Dominican Today. The HDI
is an indicator of the United Nations Development Program (UNDP)
that measures the level of development of each country through
variables such as life expectancy, health, education or per capita
income, the report notes.
The provinces of the Dominican Republic that have a lower HDI are
those with low scores in the indexes evaluated by UNDP, the report
relays.
This ranking presented by the Economy and Business section of the
Daily Listin with the information of the 2016 Interactive Map of
the UNDP could be a surprise for those who at first glance think
that the two most developed provinces in the country are the
National District and Santiago or the localities that live in
sectors such as tourism, the report notes.
What was taken into account?
To determine the HDI, UNDP used these three indicators in the
country: life expectancy, as a measure of a long and healthy life;
the years of schooling for adults over 25 years of age, and the
expected years of schooling as a measure of the education
dimension; and gross national income per capita as a measure of
opportunities to access assets to have a decent standard of living,
the report notes.
Here is the classification in low, medium-low, medium-high and high
levels according to the living conditions of the residents of the
32 provinces that make up the Dominican Republic, the report says.
Low level (Where there is more poverty and less Human Development
Index)
1. Elias Pina
2. Flint
3. Independence
4. Bahoruco
5. The Seibo
Medium Low Level (Medium Poverty)
6. Santo Domingo
7. Monte Plata
8. Azua
9. Barahona
10. The Altagracia
11. Peravia
12. San Cristobal
13. Monte Cristi
14. Samana
15. Valverde
16. Espaillat
17. Dajabón
18. San Juan de la Maguana
19. Hato Mayor
20. Maria Trinidad Sánchez
21. La Romana
22. Puerto Plata
23. Sanchez Ramirez
24. La Vega
25. Santiago Rodriguez
26. Santiago
27. San Pedro de Macoris
Medium high level (There are opportunities to progress)
28. San Jose de Ocoa
29. Monsignor Nouel
30. Mirabal sisters
31. Duarte
High level ("Most affluent")
32. National District
Standard & Poor's credit rating for Dominican Republic stands at
BB- with stable outlook (2015). Moody's credit rating for
Dominican Republic was last set at Ba3 with stable outlook (2017).
Fitch's credit rating for Dominican Republic was last reported at
BB- with stable outlook (2016).
=============
J A M A I C A
=============
JAMAICA: Sets Better Relationship Bet. Cannabis Dealers, US Banks
-----------------------------------------------------------------
RJR News reports that Minister of Industry and Commerce Audley Shaw
said the Government of Jamaica is working on establishing better
relationships between dealers in the local cannabis industry and
banks in the United States, for growth of the developing sector.
Mr. Shaw says the United States has a US$150 million industry for
cannabis, which Jamaicans can tap into, according to RJR News.
He says he has been aggressively lobbying the United States
Government to put in place a formal correspondent banking system
for legitimate legal cannabis and medicinal cannabis operators, the
report notes.
Mr. Shaw was speaking at the launch of CanEx Jamaica Business
Conference and Expo in New Kingston, the report adds.
As reported in the Troubled Company Reporter-Latin America on June
27, 2019, RJR News said that Steven Gooden, Chief Executive Officer
of NCB Capital Markets, is warning that the increasing liquidity in
the Jamaican economy might result in heightened risk to the
financial market if left unchecked. This, he said, is against the
background of the local administration seeking to reduce the debt
to GDP to 60% by the end of the 2025/26 fiscal year, which will see
Government repaying more than J$600 billion which will get back
into the system, according to RJR News.
=====================
P U E R T O R I C O
=====================
SEARS HOLDINGS: Sears Cuts 250 Employees at Hoffman Estates HQ
--------------------------------------------------------------
Sears is laying off about 250 employees at its Hoffman Estates
headquarters although the facility will remain open.
According to the Chicago Tribune, citing a notice filed by the
retailer with the state, Sears said it is implementing a permanent
workforce reduction over a 14-day period, beginning Oct. 28, 2019.
Sears said in its letter to the Illinois Department of Commerce and
Economic Opportunity that there are "no current plans to close the
entire facility."
The Hartford Courant recounts that Sears had 4,411 employees in
Hoffman Estates and its Loop satellite office as of January 2017,
according to state filings. In June 2017, Sears told the Tribune
it
had fallen short of the 4,250 employees needed to remain eligible
for state tax credits. Since then, Sears has announced the
elimination of more than 1,100 jobs, mostly in Hoffman Estates.
Sears Holdings sought Chapter 11 protection in October 2018 with
less than 700 stores -- down from the 3,500 stores when Sears and
Kmart merged in 2005. In February 2019, Transform Holdco, an
entity controlled by former Sears CEO and its largest shareholder,
Edward Lampert, bought Sears and 425 stores out of bankruptcy in a
court-sanctioned auction. Since Lampert's purchase, Sears has
continued to reduce its retail footprint, announcing plans August
to close 26 large-format Sears and Kmart stores from late October
through mid-November.
About Sears Holdings
Sears Holdings Corporation (OTCMKTS: SHLDQ) --
http://www.searsholdings.com/-- began as a mail ordering catalog
company in 1887 and became the world's largest retailer in the
1960s. At its peak, Sears was present in almost every big mall
across the U.S., and sold everything from toys and auto parts to
mail-order homes. Sears claims to be is a market leader in the
appliance, tool, lawn and garden, fitness equipment, and automotive
repair and maintenance retail sectors.
Sears and Kmart merged to form Sears Holdings in 2005 when they had
3,500 US stores between them. Kmart emerged in 2005 from its own
bankruptcy.
Unable to keep up with online stores and other brick-and-mortar
retailers, a long series of store closings has left it with 687
retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin
Islands as of mid-October 2018. The Company employs 68,000
individuals, of whom 32,000 are full-time employees.
As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total
assets, $11.33 billion in total liabilities and a total deficit of
$4.40 billion.
Unable to cover a $134 million debt payment due Oct. 15, 2018,
Sears Holdings Corporation and 49 subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15,
2018.
The Hon. Robert D. Drain is the case judge.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel;
M-III Partners as restructuring advisor; Lazard Freres & Co. LLC
as
investment banker; DLA Piper LLP as real estate advisor; and Prime
Clerk as claims and noticing agent.
The U.S. Trustee for Region 2 appointed nine creditors, including
the Pension Benefit Guaranty Corp., and landlord Simon Property
Group, L.P., to serve on the official committee of unsecured
creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP
as legal counsel; FTI Consulting as financial advisor; and Houlihan
Lokey Capital, Inc. as investment banker.
The U.S. Trustee for Region 2 on July 9, 2019, appointed five
retirees to serve on the committee representing retirees with life
insurance benefits in the Chapter 11 cases.
* * *
In February 2019, Bankruptcy Judge Robert Drain has granted Sears
Holdings approval to sell the business to majority shareholder and
CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL
Investments, Inc., has won an auction to acquire substantially all
of Sears' assets, including the "Go Forward Stores" on a
going-concern basis. The proposal will allow 425 stores to remain
open and provide ongoing employment to 45,000 employees.
===============
X X X X X X X X
===============
[*] BOND PRICING: For the Week September 2 to September 6, 2019
---------------------------------------------------------------
Issuer Name Cpn Price Maturity Country Curr
----------- --- ----- -------- ------- ---
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Cia Latinoamericana de 9.5 73.9 7/20/2023 AR USD
Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Provincia del Chubut A 4.5 2208 3/30/2021 AR USD
MIE Holdings Corp 7.5 56.2 4/25/2019 HK USD
China Huiyuan Juice Gr 6.5 46.6 8/16/2020 CN USD
KrisEnergy Ltd 4.0 40.4 6/9/2022 SG SGD
Noble Holding Internat 5.3 60.5 3/15/2042 KY USD
Noble Holding Internat 6.2 62.2 8/1/2040 KY USD
YPF SA 16.5 67.3 5/9/2022 AR ARS
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Odebrecht Finance Ltd 7.0 17.0 4/21/2020 KY USD
Yida China Holdings Lt 7.0 74.3 4/19/2020 CN USD
Noble Holding Internat 6.1 62.0 3/1/2041 KY USD
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
Avadel Finance Cayman 4.5 55.0 2/1/2023 US USD
Argentine Republic Gov 6.9 75.2 1/11/2048 AR USD
Polarcus Ltd 5.6 71.8 7/1/2022 AE USD
Argentine Republic Gov 8.3 74.5 12/31/2033 AR USD
Argentine Republic Gov 4.3 70.0 12/31/2033 AR JPY
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
Cia Latinoamericana de 9.5 74.3 7/20/2023 AR USD
Enel Americas SA 5.8 32.7 6/15/2022 CL CLP
MIE Holdings Corp 7.5 56.4 4/25/2019 HK USD
Banco Macro SA 17.5 65.2 5/8/2022 AR ARS
Provincia de Rio Negro 7.8 70.3 12/7/2025 AR USD
Odebrecht Finance Ltd 6.0 16.4 4/5/2023 KY USD
Province of Santa Fe 6.9 75.2 11/1/2027 AR USD
Odebrecht Finance Ltd 7.0 16.5 4/21/2020 KY USD
Province of Santa Fe 6.9 74.7 11/1/2027 AR USD
Embotelladora Andina S 3.5 37.9 8/16/2020 CL CLP
USJ Acucar e Alcool SA 9.9 74.0 11/9/2019 BR USD
Argentine Republic Gov 8.3 72.9 12/31/2033 AR USD
Empresa Provincial de 12.5 0.0 1/29/2020 AR USD
Cia Energetica de Pern 6.2 1.1 1/15/2022 BR BRL
Provincia de Buenos Ai 7.9 75.3 6/15/2027 AR USD
AES Tiete Energia SA 6.8 1.2 4/15/2024 BR BRL
Provincia de Rio Negro 7.8 70.4 12/7/2025 AR USD
Argentine Republic Gov 0.5 27.6 12/31/2038 AR JPY
Plaza SA 3.5 38.3 8/15/2020 CL CLP
Banco Security SA 3.0 5.6 7/1/2019 CL CLP
Argentina Bonar Bonds 5.8 75.2 4/18/2025 AR USD
Corp Universidad de Co 5.9 64.2 11/10/2021 CL CLP
City of Cordoba Argent 7.9 73.1 9/29/2024 AR USD
Automotores Gildemeist 8.3 54.2 5/24/2021 CL USD
Provincia de Cordoba 7.1 72.7 8/1/2027 AR USD
Argentine Republic Gov 6.3 74.1 11/9/2047 AR EUR
Provincia del Chaco Ar 4.0 0.0 12/4/2026 AR USD
Fospar S/A 6.5 1.2 5/15/2026 BR BRL
Empresa de Transporte 4.3 30.9 7/15/2020 CL CLP
Argentina Bonar Bonds 7.6 74.4 4/18/2037 AR USD
Automotores Gildemeist 6.8 54.9 1/15/2023 CL USD
SACI Falabella 2.3 50.6 7/15/2020 CL CLP
Sylph Ltd 2.4 65.1 9/25/2036 KY USD
Banco Security SA 3.0 27.4 6/1/2021 CL CLP
Empresa Electrica de l 2.5 63.8 5/15/2021 CL CLP
Sociedad Austral de El 3.0 17.0 9/20/2019 CL CLP
Provincia del Chaco Ar 9.4 74.8 8/18/2024 AR USD
Argentine Republic Gov 7.1 75.7 6/28/2117 AR USD
Provincia de Cordoba 7.1 74.7 8/1/2027 AR USD
Metrogas SA/Chile 6.0 41.6 8/1/2024 CL CLP
Esval SA 3.5 49.9 2/15/2026 CL CLP
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2019. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *