/raid1/www/Hosts/bankrupt/TCR_Public/170811.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, August 11, 2017, Vol. 21, No. 222
Headlines
1776 AMERICAN: Wants Exclusive Plan Filing Extended to Nov. 27
309 BARONNE: Wants Additional 60 Days to Exclusively File Plan
488-486 LEFFERTS: Latest Plan to Pay Unsecured Claims in Full
ABENGOA KANSAS: Aug. 24 Hearing on Drivetrain Plan Outline
ACADANIA MANAGEMENT: Has Interim OK to Use Cash Collateral
ADPT DFW: Plan Outline Okayed; Plan Hearing on Sept. 13
AFFATATO 1 SERVICES: Court Denies Request to Use Cash Collateral
AFFINITY GAMING: S&P Affirms B CCR & Cuts 1st-Lien Debt Rating to B
AIR MEDICAL: Envision Deal No Impact on Moody's 'B3' CFR
ALL-STATE FIRE: Wants to Use Wells Fargo's Cash Collateral
AMAN RESORTS: Case Summary & 6 Unsecured Creditors
AOXING PHARMACEUTICAL: Appoints Guoan Zhang as New CFO
B&B METALS: Sale of 1999 John Deere 624 Loader for $35K Approved
BALTIMORE GRILL: Tarsitano's Notice of Appeal Untimely, Court Rules
BASE ARCHITECTURE: Wants to Use Cash Collateral Until October 2017
BOISE CASCADE: Moody's Hikes CFR to Ba2; Outlook Stable
BOND AND COMPANY: Asks for Court's Nod to Use Cash Collateral
BOSS REAL ESTATE: Bank 34 Seeks Appointment of Examiner
BOSTON HOSPITALITY: U.S. Trustee Forms 3-Member Committee
C SWANK ENTERPRISES: Disclosure Statement Hearing on Sept. 5
C&W SENIOR: Moody's Rates Proposed US$700MM Senior Unsec. Notes B2
CALNSHIRE ESTATES: Bank Wants Conversion or Trustee
CAMBRIDGE REALTY: Case Summary & 19 Largest Unsecured Creditors
CENTRAL GROCERS: Wants Exclusive Plan Filing Extended to Feb. 2018
CLOVER MERGER: Moody's Assigns B2 CFR; Outlook Stable
CORBETT-FRAME INC: Case Summary & 20 Largest Unsecured Creditors
CRS REPROCESSING: Case Summary & 20 Largest Unsecured Creditors
DAVID GOODRICH: McCormick Not Entitled to Interest on Unsec. Claim
DB2017 LLC: Hires Eric A. Liepins as Bankruptcy Counsel
DEAN FOODS: Volume Decline No Impact on Moody's Ratings
E. ALLEN REEVES: To Pay Arch Insurance $450,000 Under Plan
ENVISION HEALTHCARE: Air Medical Deal No Impact on Moody's Ratings
ESOLA CAPITAL: Taps William H. Brownstein as Legal Counsel
ETERNAL ENTERPRISE: Can Use Cash to Defray August 2017 Expenses
FLO'S LLC: Taps Allen Barnes as Legal Counsel
FOOD HUB ORANGE: U.S. Trustee Unable to Appoint Committee
GABEL LEASE: Combined Plan & Disclosures Hearing Set for Sept. 14
GALVESTON BAY: Case Summary & 17 Largest Unsecured Creditors
GARDNER DENVER: S&P Assigns 'B+' Rating on 2024 EUR660MM Term Loan
GENERAL WIRELESS: Wants Up To $2M Financing From Cortland Capital
GIGA-TRONICS INC: Incurs $1.25 Million Net Loss in First Quarter
GREAT FOOD: Has Interim Approval to Use Cash Collateral
GREATER HOPE BAPTIST: Plan Confirmation Hearing Set for Sept. 12
GREATER HOPE: Bank's Unsecured Claims to be Paid $100 A Month
H & M CONCRETE: May Use Austin Bank's Cash Collateral Until Aug. 17
HAMPSHIRE GROUP: Exclusive Plan Filing Deadline Moved to Sept. 20
HARRINGTON & KING: Unsecured Creditors to Get 5% in Latest Plan
HILTZ WASTE: Trustee Hires Murtha Cullina as Counsel
HUNDRED OAKS: Case Summary & 3 Unsecured Creditors
INCA REFINING: Court Rejects Bid for Chapter 11 Trustee
INDUSTRIAL HEAT TREATING: Gets Approval for Liquidating Plan
INTERLEUKIN GENETICS: Cancels Registration of Pref. & Common Stock
INTERLEUKIN GENETICS: Pyxis Has 20.3% Stake as of July 24
ISLAND VIEW: Bank Wants Conversion or Trustee
J.G. NASCON: Sale of Sakai SV70D Vibratory Roller for $7K Approved
JERRY BATTEH: Sale of Jacksonville Property Approved
JJS IN THE DESERT: Wants to Use ARF, et al.'s Cash Collateral
KAPPA DEVELOPMENT: First Banking Seeks to Prohibit Cash Use
KNIGHT ENERGY: Debt-to-Equity Plan Has $1 Million for Unsecureds
LA HABICHUELA: Hearing on Plan Outline Approval Set for Sept. 22
LAWRENCE D. FROMELIUS: Sale of Lisle Property for $240K Approved
LEGACY RESERVES: Posts $92.8 Million Revenues in Second Quarter
LEHMAN BROS: Shinhan Bank Bound to Unsigned Settlement Pact With Co
LIVELY HOPE: Exit Plan to Pay Claims from Sale of Church Building
MARKET QUARE: Wants to Use Olson, SBA Cash Collateral
MARKETS & FUN: Plan Outline Okayed; Plan Hearing on Sept. 5
NET ELEMENT: Issues $200,000 Worth of Common Shares to Cobblestone
NOUVEAU INVESTMENTS: Voluntary Chapter 11 Case Summary
OIL PATCH TRANSPORTATION: Wants to Use Cash Until December 2017
ONE HORIZON: Fails to Comply with Nasdaq's Minimum Bid Price Rule
ONE STATE STREET: Bank Wants Conversion or Trustee
PACIFIC OFFICE: Incurs $4.23 Million Net Loss in Second Quarter
PARKER DEVELOPMENT: President Opposes Approval of Plan Outline
PARTY CITY: Moody's Hikes Corporate Family Rating to Ba3
PROSPECTOR OFFSHORE: May Use Cash Collateral Until Aug. 31
PSH PROPERTIES: Unsecureds to Recoup 100% Over 10 Years at 3%
PUERTO RICO: Aurelius Seeks Dismissal of Title III Case
PUERTO RICO: Aurelius to Question Constitutionality of Board
QUEST SOLUTION: Board Grants 5 Million Options to D&Os
QUEST SOLUTION: Signs Consulting Agreement With Carlos Nissensohn
RENAULT WINERY: Egg Harbor City's Chapter 91 Defense Not Abrogated
REO HOLDINGS: Unsecureds To Be Paid in Full Under Plan
REYNOLDS PROTECTION: Unsecs. To Get $500/Month Over 5 Yrs.
RIO MOBILE: Rudy De La Garza to Recover 100% Under Plan
ROYAL FLUSH: To Make First Payment to Unsecureds on Nov. 15
SAEXPLORATION HOLDINGS: Will Reschedule Release of Q2 Results
SAUL RODRIGUEZ WELDING: Financing, Cash Use Have Court's Final Nod
SKIP BARBER RACING: $830K Sale of Substantially All Assets Okayed
SLIGO PARKWAY: Case Summary & 5 Unsecured Creditors
SMART MODULAR: Moody's Affirms B3 CFR on Weak Brazilian Economy
SOUTH TEXAS MATERIALS: Hires Charmoy & Charmoy as Counsel
SPINLABEL TECHNOLOGIES: Case Summary & 20 Top Unsecured Creditors
STAPLES INC: Fitch Withdraws BB+ Long-Term Issuer Default Rating
STAPLES INC: S&P Affirms 'BB-' Rating on 2024 $2.7BB Term Loan
STAR GOLDEN: Wants to Obtain Up to $250,000 in DIP Financing
STEEPLE RUN: Bank Wants Conversion or Trustee
TERRAVIA HOLDINGS: Has Interim OK to Obtain $5M of DIP Financing
TEXARKANA HOTELS: Plan Outline Okayed; Plan Hearing on Sept. 19
THERON WHITING: Trustee's Sale of Payson Property for $25K Approved
TOISA LIMITED: U.S. Trustee Adds Shanghai Zhenhua to Committee
TOP SHELV: May Use Up To $20K of Cash Collateral
UNITED CHARTER: Seeks Approval on East-West Cash Collateral Deal
VIZIENT INC: S&P Raises Corp Credit Rating to 'B+', Outlook Stable
WEST BANK LAND: Court Declines to Appoint Chapter 11 Trustee
WEST VIRGINIA HIGH: Disclosure Statement Hearing Set for Aug. 24
WESTMORELAND RESOURCE: Incurs $2.35 Million Net Loss in Q2
[*] Moody's Global Speculative-grade Default Rate Drops in July
[^] BOOK REVIEW: The First Junk Bond
*********
1776 AMERICAN: Wants Exclusive Plan Filing Extended to Nov. 27
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1776 American Property IV, LLC, and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of Texas to extend
the exclusive period during which only the Debtors may file a plan
of reorganization for a period of 90 days, from Aug. 27, 2017,
until Nov. 27, 2017. They also ask the Court to move through Jan.
26, 2018, the time in which to confirm a plan.
The current deadline for the Debtors to file their Chapter 11 Plans
and Disclosure Statements is Aug. 27. The Debtors' exclusivity
period to confirm a plan expires Oct. 26.
On July 18, 2017, the Debtors filed their objections to the proofs
of claims filed by Blavesco, Ltd., Michael Stein and Heather
Carlile. The state court litigation related to those claims was
originally scheduled for trial in August 2017. However, on June
30, 2017, the Houston 1st Court of Appeals referred the primary
portion of the lawsuit to mandatory arbitration. The Texas state
court has not reset the case for trial related to the claims that
have were not referred to arbitration. The Disputed Claims are
also subject motion to estimate, which is currently pending before
this Court. The Debtors state that claims alleged by the Disputed
Claimants in the litigation are highly disputed, and allowance of
the same could impact any plan filed by the Debtors. The Debtors
assure the Court that they are working with the Disputed Claimants
towards a potential resolution of the claims.
The Debtors admit that they will not be able to file a meaningful
Chapter 11 plan prior to the expiration of the current exclusivity
period. Thus, the Debtors requests an extension of the exclusive
period in which the Debtors may file a plan until Nov. 27, and
through Jan. 26 to confirm their respective Chapter 11 plans.
On March 18, 2017, the Debtors filed their estimation motion to
determine if any liability is owed to Blavesco and Carlile with
respect to the litigation. The terms of any plan of reorganization
filed by the Debtors will be dependent on resolution of the
estimation motion, the Debtors say.
The Debtors' exclusivity period to file a plan will expire prior to
resolution of the estimation motion, the claim objections or trial
in the Texas state court. The Debtors warn that termination of
exclusivity could result in competing plans, undue expense, and no
corresponding benefit to the unsecured creditors.
The Debtors believe that ample cause exists for granting an
extension of Debtors' exclusivity period to file and confirm a
plan. The Debtors cite these justifications for an extension:
a. this is the Debtors' second request for an extension of
the Exclusivity Period;
b. all things considered, only a short period of time has
elapsed since the commencement of the case;
c. the Debtors are timely pursuing a prompt resolution/trial
of the estimation motion and claim objections;
d. the Debtors continue to pay their post-petition
obligations as they become due and remains in compliance
with their duties as a debtors-in-possession;
e. the Debtors are making monthly adequate protection
payments to their secured lenders;
f. the Debtors have, in good faith, made progress towards
reorganization by generating additional monthly income
since the case was filed;
g. the Debtors cannot confirm a plan absent resolution of the
estimation motion and claim objections. This is an
unresolved contingency. A trial on this motion will not
occur prior to the expiration of the Debtors' Exclusivity
Period to file a plan;
h. the Debtors are not seeking an extension to pressure
creditors into accepting its reorganization demands;
i. the requested extension would not prejudice the interests
of creditors; and
j. the burden on the Debtors' estate of an extension is de
minimis.
About 1776 American Properties IV
1776 American Properties IV LLC and its 12 affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 17-30422) on Jan. 27, 2017. The petitions were
signed by Jeff Fisher, director.
1776 American Properties IV estimated assets of $1 million to $10
million and liabilities of less than $50,000.
The cases are assigned to Judge Karen K. Brown.
Josh T. Judd, Esq., at Andrews Myers PC, serves as the Debtors'
bankruptcy counsel.
No trustee or examiner has been appointed in the bankruptcy cases
and no official committee of unsecured creditors has been
established.
309 BARONNE: Wants Additional 60 Days to Exclusively File Plan
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309 Baronne St., L.L.C., asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana to extend the exclusive period for
the Debtor to file its disclosure statement and Chapter 11 plan for
an additional 60 days.
The Exclusivity Period was slated to expire Aug. 8, 2017, absent an
extension.
The Debtor says it needs an additional 60 days to make further
assessments and inquires in which to adequately prepare a
disclosure statement and plan which may have alternative courses of
action and repayment proposals.
The Debtor asserts that its building has been damaged by the
substantial construction, demolition, and renovation activities
conducted in connection with the construction of the 217 Room NOPSI
Hotel Development at 317-311 Baronne Street, New Orleans,
Louisiana. On July 19, 2017, the Debtor filed an application to
employ Jeffrey P. Green of the Law Firm of Ron Austin & Associates,
L.L.C., to act as special counsel with regard to the Debtor's
claims for damages. The Special Counsel has been approved on an
interim basis as per order of the Court, with final approval set
for hearing on Aug. 30, 2017. The Special Counsel is in the
process of analyzing and preparing a suggested plan of action with
the Debtor's manager and the Debtor's reorganization counsel.
The Debtor assures the Court that despite the damages to the
building at 309 Baronne Street, New Orleans, Louisiana there is
substantial equity in the real property.
The Debtor says that additional time is needed for special counsel,
undersigned counsel and the Debtor's manager to coordinate
regarding the claims of the estate and how to best incorporate its
claims into its plan of reorganization.
About 309 Baronne St., L.L.C.
309 Baronne St., L.L.C., based in New Orleans, LA, filed a Chapter
11 petition (Bankr. E.D. La. Case No. 17-10888) on April 10, 2017.
Markus E. Gerdes, Esq., at Gerdes Law Firm, L.L.C., serves as
bankruptcy counsel. The Debtor hired the Law Firm of Ron Austin &
Associates, L.L.C., as special counsel.
In its petition, the Debtor estimated $1 million to $10 million in
assets and $100,001 to $500,000 in liabilities. The petition was
signed by Harry E. Cantrell, Jr., managing member.
488-486 LEFFERTS: Latest Plan to Pay Unsecured Claims in Full
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Unsecured creditors of 488-486 Lefferts LLC will be paid in full
under the company's latest plan to exit Chapter 11 protection.
The latest restructuring plan proposes to pay the allowed amount of
Class 4 general unsecured claims in full in cash, plus interest,
within 30 days of the effective date of the plan.
Unsecured claims total approximately $21,024.
An earlier version of the plan had estimated the total amount of
general unsecured claims at $537,329.
Class 4 is unimpaired and general unsecured creditors are not
entitled to vote to accept or reject the plan, according to the
company's latest disclosure statement filed on August 1 with the
U.S. Bankruptcy Court for the Eastern District of New York.
A copy of the second amended disclosure statement is available for
free at https://is.gd/eZuUoj
About 488-486 Lefferts LLC
Headquartered in Richmond Hill, New York, 488-486 Lefferts LLC
filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case
No. 15-42716) on June 10, 2015, estimating its assets and
liabilities at between $1 million and $10 million. The petition
was signed by Nir Zeer, managing member.
Edward N Gewirtz, Esq., at Bronstein, Gewirtz & Grossman, LLC,
serves as the Debtor's bankruptcy counsel. Jay Gelbein and Company
is the Debtor's accountant and financial advisor.
On Sept. 9, 2016, the Debtor filed a disclosure statement and
proposed Chapter 11 plan of reorganization.
ABENGOA KANSAS: Aug. 24 Hearing on Drivetrain Plan Outline
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The U.S. Bankruptcy Court for the District of Kansas is set to hold
a hearing on August 24 to consider approval of the disclosure
statement, which explains the liquidating plan proposed by
Drivetrain, LLC, for Abengoa Bioenergy Biomass of Kansas LLC.
Drivetrain is the liquidating trustee appointed pursuant to the
plans of liquidation approved in the Chapter 11 cases of Abengoa's
affiliates in St. Louis, Missouri.
The liquidating trustee's latest disclosure statement further
explains the differences between its own plan and the plan of
liquidation proposed by Abengoa on April 14.
Drivetrain had earlier objected to Abengoa's plan, which proposes
to disallow the intercompany claims totaling $69.5 million filed by
Abengoa Bioenergy Engineering & Construction, Abengoa Bioenergy
Trading US, Abengoa Bioenergy Company, and Abengoa Bioenergy
Outsourcing. The liquidating trustee had argued the plan violates
the Bankruptcy Code.
In its latest disclosure statement, Drivetrain explained that its
own plan allows holders of the intercompany claims to receive a
recovery but voluntarily limits that recovery to an amount that is
less than what such holders would receive if given pro rata
treatment with other general unsecured claims.
Drivetrain expressed belief that implementation of its own plan is
"in the best interests" of Abengoa's estate and creditors because
it provides an estimated recovery of 33% to general unsecured
claims compared with an estimated 19% recovery if the intercompany
claims are allowed in full and receive pro rata treatment, which
the liquidating trustee believes is otherwise legally appropriate.
A copy of the latest disclosure statement is available for free at
https://is.gd/Z9F1EM
About Abengoa Bioenergy Biomass of Kansas
On March 23, 2016, three subcontractors asserting disputed state
law lien claims against Abengoa Bioenergy Biomass of Kansas, LLC
filed an involuntary petition under Chapter 7 of the Bankruptcy
Code. The case was converted to a case under Chapter 11 of the
Bankruptcy Code (Bankr. D. Kan. Case No. 16-10446) on April 8,
2016.
In April 2016, Chief Bankruptcy Judge Robert E. Nugent denied the
request of the Debtor to transfer its case to the Bankruptcy Court
for the District of Delaware where cases involving its indirect
parent companies and other affiliates are pending. Judge Nugent
said the facts and unique circumstances surrounding the Debtor and
its known creditors do not warrant transferring the case.
The Debtor is represented by Armstrong Teasdale LLP, and DLA Piper
LLP (US).
Petitioning creditor Brahma Group, Inc. is represented by Martin
Pringle Oliver Wallace & Bauer. Petitioning creditors CRB Builders
LLC and Summit Fire Protection Co. are represented by Horn Aylward
& Bandy LLC.
The official committee of unsecured creditors is represented in the
Kansas bankruptcy case by Baker & Hostetler LLP and Cosgrove, Webb
& Oman.
On April 14, 2017, the Debtor filed a disclosure statement, which
explains its proposed Chapter 11 plan of liquidation.
On July 19, 2017, Drivetrain LLC filed a disclosure statement
explaining its proposed plan of liquidation for the Debtor.
Drivetrain is the liquidating trustee appointed pursuant to the
plans of liquidation approved in the Chapter 11 cases of the
Debtor's affiliates in St. Louis, Missouri.
ACADANIA MANAGEMENT: Has Interim OK to Use Cash Collateral
----------------------------------------------------------
The Hon. Robert Summerhays of the U.S. Bankruptcy Court for the
Western District of Louisiana has granted Acadiana Management
Group, LLC, and its affiliates interim authorization to use cash
collateral.
A final hearing on the Debtors' motion to use cash collateral use
will be held on Aug. 8, 2017, at 10:00 a.m.
As reported by the Troubled Company Reporter on July 7, 2017, the
Debtors seek permission from the Court to use cash and accounts
receivables which may be cash collateral of BOKF, NA dba Bank of
Oklahoma, Eastman National Bank, NBC Oklahoma and Trustmark
National Bank.
Originating prepetition, the banks are the lenders on two lines of
credit to the Debtors, namely a $14 million line of credit on which
the Debtors are the borrowers and a $1 million line of credit
issued to LTAC Hospital of Greenwood, L.L.C. The Debtors and
Greenwood granted general security interests to the Lenders which
cover, inter alia, the Debtors and Greenwood's cash, bank accounts
and accounts receivables, which will constitute cash collateral of
the Lenders.
The Debtors' authority to use cash collateral will terminate
without any further action by the Court and a termination event
will occur without prior notice upon the occurrence of:
(a) the Debtors' Chapter 11 cases, or any of them, are
dismissed or converted to a case under Chapter 7 of the
U.S. Bankruptcy Code;
(b) the earlier of (i) the date of the entry of an order of
the Court appointing a Chapter 11 trustee or an examiner
with enlarged powers (beyond those set forth in Sections
1104(c) and 1106(a)(3) and (4) of the U.S. Bankruptcy
Code) for any of the Debtors; or (ii) the date any of the
Debtors file a motion, application or other pleading
consenting to or acquiescing in any appointment;
(c) the Court suspends any of the Debtors' Chapter 11 cases
under Section 305 of the Bankruptcy Code;
(d) entry of an order confirming a plan in any of the Chapter
11 cases;
(e) the consummation of the sale of all or substantially all
of the assets of any Debtor or any Debtor's estate;
(f) the interim court order becomes stayed, reversed,
vacated, amended or otherwise modified in any respect
without the prior written consent of respondents;
(g) a court order is entered in any of the Chapter 11 cases
over the objection of respondents approving financing
pursuant to Section 364 that would grant an additional
security interest or a lien on any Collateral or granting
a superpriority administrative claim that is equal or
superior to the superpriority administrative claim
granted to Respondents under the interim court order;
(h) an adversary proceeding or contested matter is commenced
by any Debtor challenging the validity, enforceability,
priority or extent of respondents' liens, or security
interests; or
(i) the Court fails to enter a final court order allowing
the Debtors' motion, on terms acceptable to respondents,
within three business days following the conclusion of
the final hearing.
As adequate protection for any diminution in the value of cash
collateral and other prepetition collateral resulting from the
Debtors' use thereof after the Petition Date, the Lenders will
continue to have a valid, perfected and enforceable continuing
replacement lien and security interest in all assets of the Debtors
existing on or after the Petition Date of the same type as the cash
collateral and other prepetition collateral, together with the
proceeds, rents, products and profits thereof, whether acquired or
arising before or after the Petition Date, to the same extent,
validity, perfection, enforceability and priority of the liens and
security interests of respondents as of the Petition Date. The
rollover lien will be subject only to prior valid and perfected
liens, if any, existing as of the Petition Date with priority over
respondents' liens and security interests. The rollover lien will
be limited to the amount of any diminution.
The Lenders will have a valid, perfected and enforceable continuing
supplemental lien and security interest in all of the assets of the
Debtors of any kind or nature whatsoever within the meaning of
Section 541 of the Bankruptcy Code, whether acquired or arising
prepetition or postpetition, together with all proceeds, rents,
products and profits thereof.
As additional adequate protection for any diminution, the Lenders
will have a super-priority administrative expense claim pursuant to
Section 507(b) of the Bankruptcy Code, with recourse to and payable
from any and all assets of the Debtors' estate and the supplemental
collateral.
A copy of the Order is available at:
http://bankrupt.com/misc/lawb17-50799-117.pdf
About Acadiana Management
Acadiana Management and several affiliates sought Chapter 11
bankruptcy protection (Bankr. W.D. La. Lead Case No. 17-50799) on
June 23, 2017. The petitions were signed by August J. Rantz, IV,
president.
Acadiana Management estimated assets of less than $50,000 and debt
at $50 million and $100 million.
Judge Robert Summerhays presides over the cases.
Bradley L. Drell, Esq., Heather M. Mathews, Esq., and Gene B.
Taylor, III, Esq., at Gold, Weems, Bruser, Sues & Rundell serves as
the Debtors' bankruptcy counsel.
ADPT DFW: Plan Outline Okayed; Plan Hearing on Sept. 13
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas is set
to hold a hearing on Sept. 13, 2017, to consider approval of the
Chapter 11 plan of reorganization for ADPT DFW Holdings LLC and its
affiliates.
The hearing will be held at Courtroom 1, Earle Cabell Federal
Building, 1100 Commerce Street, Dallas, Texas.
ADPT DFW's latest plan proposes to fund the litigation trust
primarily from the net proceeds generated from the sale of
approximately 5.95 acres of land located at the southwest corner of
Orion Place and Gemini Place in Columbus, Ohio.
To satisfy fees and expenses of the litigation trust, ADPT DFW will
get a $1 million loan from Deerfield Management Company LP and a
group of lenders.
The loan will be repaid from the proceeds of the litigation trust,
with interest at the rate of 10% per annum, according to the
company's latest disclosure statement which was approved by the
court on Aug. 1.
The Aug. 1, 2017 order set a Sept. 5, 2017, deadline for creditors
to file their objections and cast their votes accepting or
rejecting the plan.
A copy of the Disclosure Statement for ADPT DFW's Second Amended
Plan is available for free at https://is.gd/GJuPzs
About ADPT DFW Holdings LLC
Adeptus Health LLC -- http://www.adpt.com/-- through its
subsidiaries, owns and operates hospitals and free standing
emergency rooms in partnership with various healthcare providers.
Adeptus Health Inc. is a holding company whose sole material asset
is a controlling equity interest in Adeptus Health LLC.
Lewisville, Texas-based ADPT DFW Holdings LLC and its affiliates,
including Adeptus Health, Inc., and Adeptus Health LLC, each filed
Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Lead Case No.
17-31432) on April 19, 2017, listing $798.7 million in total assets
and $453.48 million in total debt as of Sept. 30, 2016. Andrew
Hinkelman, their chief restructuring officer, signed the
petitions.
Judge Stacey G. Jernigan presides over the cases.
Elizabeth Nicolle Boydston, Esq., Kristian W. Gluck, Esq., John N.
Schwartz, Esq., Timothy S. Springer, Esq., and Louis R. Strubeck,
Jr., Esq., at Norton Rose Fulbright US LLP serve as the Debtors'
bankruptcy counsel. The Debtors tapped DLA Piper LLP (US) as
special counsel; FTI Consulting, Inc., as chief restructuring
officer; Houlihan Lokey, Inc., as investment banker; and Epiq
Systems as claims and noticing agent.
On May 1, 2017, a nine-member official unsecured creditors
committee was formed in the case. The committee tapped Akin Gump
Strauss Hauer & Feld LLP as counsel. The Committee retained
CohnReznick as financial advisors.
On June 19, 2017, the U.S. Trustee appointed an official committee
of equity security holders. The equity committee hired Winstead
P.C. as legal counsel.
Daniel T. McMurray has been named as Patient Care Ombudsman in the
Debtors' cases. The PCO tapped Focus Management Group USA, Inc.,
as medical operations advisor.
AFFATATO 1 SERVICES: Court Denies Request to Use Cash Collateral
----------------------------------------------------------------
The Hon. Karen S. Jennemann of the U.S. Bankruptcy Court for the
Middle District of Florida has denied Affatato 1 Services, LLC's
request to use cash collateral.
A copy of the Order is available at:
http://bankrupt.com/misc/flmb17-01425-114.pdf
As reported by the Troubled Company Reporter on June 5, 2017, the
Court authorized the Debtor to use cash collateral until July 26,
2017, on an interim basis, to pay: (a) amounts expressly authorized
by the Court, including payments to the U.S. Trustee for quarterly
fees; (b) the current and necessary expenses set forth in the
budget, plus an amount not to exceed 10% for each line item; and
(c) such additional amounts as may be expressly approved in writing
by Wells Fargo Bank, N.A.
About Affatato 1 Services
Based in Apopka, Florida, Affatato 1 Services, LLC filed a Chapter
11 petition (Bankr. M.D. Fla. Case No. 17-01425) on March 6, 2017.
Francisco Affatato, chief executive officer, signed the petition.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities.
Aldo G. Bartolone, Jr., Esq., at Bartolone Law, PLLC, serves as
bankruptcy counsel to the Debtor.
The Debtor hired Ruben Toro, CPA as accountant; and Soldnow, LLC,
as an auctioneer in connection with the sale of its inventory and
warehouse located at 2072 Sprint Boulevard, Apopka, Florida.
No trustee, examiner or official committee of unsecured creditors
has been appointed.
AFFINITY GAMING: S&P Affirms B CCR & Cuts 1st-Lien Debt Rating to B
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' corporate credit rating on
Affinity Gaming. The outlook is stable.
Pro forma for the $125 million add-on, the company's first-lien
credit facility consists of a $75 million revolver and an upsized
term loan B with an estimated $444 million outstanding as of June
30, 2017. S&P said, "We lowered our issue-level rating on this
facility to 'B' from 'B+' and revised the recovery rating to '3'
from '2'. The '3' recovery rating reflects our expectation for
meaningful recovery (50%-70%; rounded estimate: 65%) for lenders in
the event of a payment default. We lowered our ratings on this debt
to reflect the impact of the higher amount of first-lien debt that
would be outstanding upon default than under our previous
assumptions.
"In addition, we assigned a 'CCC+' issue-level rating and '6'
recovery rating to Affinity's proposed $100 million second-lien
term loan due 2025. The '6' recovery rating reflects our
expectation for negligible recovery (0%-10%; rounded estimate: 0%)
for lenders in the event of a payment default."
Affinity plans to use the proceeds--along with cash on the balance
sheet and cash flow from operations over the next few months--to
fund an approximately $120 million dividend to its owner, Z
Capital, subject to approval by Affinity's gaming regulators; to
repay its existing $145 million second-lien term due 2025; and to
pay fees, expenses, and debt breakage costs. S&P said, "We plan to
withdraw our issue-level and recovery ratings on the existing
second-lien debt once it is repaid.
"The affirmation of the corporate credit rating reflects our
expectation that anticipated good EBITDA growth as a result of
Affinity's continued cost-rationalization efforts will offset the
higher incremental leverage the company is incurring. We now expect
leverage at the end of 2017 to be about 6.5x, which is about 0.5x
higher than our previous expectation. We forecast leverage will
improve to about 6x by the end of 2018, largely as a result of
EBITDA growth stemming from modest revenue increases and continued
margin improvement. Further, despite the spike in leverage to fund
the dividend, we anticipate that EBITDA coverage of interest will
remain good at about 3x through 2018 and that liquidity will remain
adequate.
"The stable outlook reflects our expectation that Affinity's
interest coverage and liquidity will remain good, despite increased
leverage in 2017 to fund the dividend to Z Capital. We also expect
that Affinity will continue to improve its operations and grow its
EBITDA through rationalizing its cost structure, with
lease-adjusted leverage improving to about 6x by the end of 2018
from approximately 6.5x at the end of 2017.
"We could lower the rating as a result of weaker-than-anticipated
operating performance or increased leverage. This could stem from,
for example, acquisitions or returns to shareholders that result in
lease-adjusted leverage being sustained above 6.5x or EBITDA
coverage of interest deteriorating below 2x. We could also lower
the rating if Affinity's liquidity position deteriorated.
"Higher ratings are unlikely at this time due to the company's
financial sponsor ownership. However, we could consider raising the
rating if we were confident that the company will sustain
lease-adjusted leverage below 5x and FFO to debt above 12% and we
believe the company's financial policy supports these levels."
AIR MEDICAL: Envision Deal No Impact on Moody's 'B3' CFR
--------------------------------------------------------
Air and ground ambulance service provider Air Medical Group
Holdings. Inc. (B3 stable), on August 8, 2017, entered into a
definitive agreement to acquire Envision Healthcare Corporation's
(B1 positive) medical transport subsidiary American Medical
Response for $2.4 billion in cash. This announcement is considered
a credit negative as Moody's expects a meaningful amount of the
purchase price will be funded with incremental debt. There is no
immediate impact on Air Medical's B3 Corporate Family Rating or
stable rating outlook.
Air Medical Group Holdings, Inc. provides emergency air medical
transportation services in the United States. The company
collaborates with leading hospital systems, medical centers and EMS
agencies to offer access to emergency medical care. Air Medical is
owned by Kohlberg Kravis Roberts & Co. L.P. ("KKR"). Pro-forma
revenue exceeds $1.2 billion, prior to the American Medical
Response acquisition.
ALL-STATE FIRE: Wants to Use Wells Fargo's Cash Collateral
----------------------------------------------------------
All-State Fire Protection, Inc., Wells Fargo Bank, N.A., and Wells
Fargo Equipment Finance, Inc., ask the U.S. Bankruptcy Court for
the District of Colorado to authorize All-State Fire's use of cash
collateral.
Prepetition, in or around October of 2014, the Debtor entered into
a Revolving Line of Credit with Wells Fargo in the principal amount
of $1,500,000. The Loan replaced a prior loan with Wells Fargo and
has been extended several times. To secure the Loan, the Debtor
granted Wells Fargo a lien on substantially all of its assets,
including its accounts, accounts receivable and cash, as more
specifically set forth in the financing statement filed with the
Colorado Secretary of State. The Debtor understands that Wells
Fargo therefore asserts a lien on the Debtor's cash and cash
equivalents which the Debtor intends to use to, among other things,
fund its operations, make the post-petition premium payments to its
worker's compensation insurance provider, Pinnacol Assurance, as
well as the cure of the prepetition arrears to Pinnacol Assurance.
Wells Fargo also asserts that it also has a perfected security
interest in the furniture, fixtures, equipment, accounts
receivable, cash, general intangibles, etc., of the Debtor. As of
the Petition Date, according to information provided to the Debtor
by Wells Fargo, the principal balance owed on the Loan was $1.2
million.
On Sept. 22, 2015, the Debtor executed a Single Sided Lease
Agreement -$1 Purchase Option with WFEF for the lease of a New
2015 Nissan PF80YLP Forklift. WFEF asserts that the present
balance owed on the Lease is $30,540.40. Under the terms of the
Lease, the Debtor is required to make monthly payments of $792. At
the end of the Lease, the Debtor may purchase the Equipment for $1.
WFEF recorded a Financing Statement with the Colorado Secretary of
State on Oct. 28, 2015, at Reception No. 20152098816. WFEF
therefore asserts a lien on the equipment.
The Debtor needs immediate use of its cash and accounts receivable
to operate its business and to keep its employees on the jobs. The
Debtor's business depends upon uninterrupted access to funds that
were held in its accounts necessary to operate, meet payroll, and
fund its other operating expenses necessary to maintaining its
ordinary course of business. The Debtor will use cash collateral
to generate new business and accounts receivables during the
bankruptcy case.
The Debtor requires ongoing use of the cash collateral to maintain
its operations and perform work for its customers. the uses
include using its shop equipment to fabricate pipe, using its tools
and site equipment to perform installation and testing, and its
vehicles to provide transportation of employees and materials to
the job site.
The Debtor says that to the extent Wells Fargo and WFEF are
properly perfected secured creditors, they are entitled to adequate
protection of their interests in the pre-petition collateral,
including the operating funds, the bank collateral, and Equipment,
in an amount equal to the aggregate post-petition diminution in
value of the pre-petition collateral, including without limitation,
any diminution resulting from the sale, lease or use by the Debtor
of the pre-petition collateral and the imposition of the automatic
stay. The Adequate Protection Obligations will commence Aug. 1,
2017, and be due on the first of each month thereafter. The
Adequate Protection Obligations are: (i) Wells Fargo: $7,050 per
month; and (ii) WFEF: $792 per month.
As further adequate protection, the Debtor proposes to grant the
Secured Lenders Section 507(b) Claim and replacement lien.
The Debtor's use of cash collateral will terminate on the earlier
of:
a. the Debtor's failure to make any of the Adequate
Protection Obligations or otherwise cure the payments
after seven days written notice;
b. the Court's appointment of a Chapter 11 trustee or
examiner;
c. conversion of the Debtor's Chapter 11 case to a Chapter 7
case;
d. the Debtor's failure to comply with the requirements set
forth in the court order approving this motion;
e. a material adverse change in the Debtor's financial
condition or business operations; or
f. six months from the date of the court approving this
motion.
A copy of the Debtor's request is available at:
http://bankrupt.com/misc/cob17-15844-78.pdf
About All-State Fire Protection
All-State Fire Protection, Inc., based in Wiggins, Colo.,
specializes in the installation of fire sprinkler systems for
residential and commercial clients.
All-State Fire Protection filed a Chapter 11 petition (Bankr. D.
Colo. Case No. 17-15844) on June 23, 2016, estimating $1 million to
$10 million in assets and liabilities. The petition was signed by
Raymond Gibler, president.
The Hon. Thomas B. McNamara presides over the case.
Kenneth J. Buechler, Esq., at Buechler & Garber, serves as
bankruptcy
counsel to the Debtor.
AMAN RESORTS: Case Summary & 6 Unsecured Creditors
--------------------------------------------------
Debtor: Aman Resorts Group Limited
122 E. 42nd Street, Suite 2100
New York, NY 10168
Type of Business: Aman Resorts Group Limited is in the hotel and
tourism industry.
The sole shareholder of the company is Peak
Hotels and Resorts Group, LTD, which sought
Bankruptcy protection under Chapter 7 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 17-
15041) on April 24, 2017.
Peak, acting by Chapter 7 trustee Jacqueline
Calderin passed a resolution on Aug. 4 2017,
to change the name of the Company from "Aman
Resorts Group Limited" to "A.R. Group
Limited" in order to avoid any potential
damage of the goodwill, branding and
intellectual property rights associated with
the brand name "AMAN" in the hotels and
tourism industry.
An involuntary Chapter 11 petition was filed
on March 7, 2016, against ARGL by Carolyn
Turnbull, George Robinson, Fonde Investment
Capital SA, and Adrian Zecha (Bankr.
S.D.N.Y. Case No. 16-10517).
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-20114
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Debtor's Counsel: Robert P. Charbonneau, Esq.
EHRENSTEIN CHARBONNEAU CALDERIN
501 Brickell Key Dr #300
Miami, FL 33131
Tel: (305) 722-2002
Fax: (305) 722-2001
E-mail: rpc@ecccounsel.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Paul Pretlove, co-director through
British Virgin Islands company Madison Director Services Limited.
The Debtor's list of six unsecured creditors is available for free
at http://bankrupt.com/misc/flsb17-20114.pdf
AOXING PHARMACEUTICAL: Appoints Guoan Zhang as New CFO
------------------------------------------------------
Zheng James Chen resigned from his position as Aoxing
Pharmaceutical Company, Inc.'s chief financial officer On Aug. 4,
2017. The Board of Directors appointed Guoan Zhang to serve as the
Company's new chief financial officer.
Mr. Zhang has been the Company's senior vice president of finance
since June 2010 and chief accounting officer since March 2010. Mr.
Zhang also served as the Company's acting chief financial officer
from July 2012 to December 2014 and Nov. 30, 2015, to Jan. 27,
2016.
About Aoxing
Foster City, California-based Aoxing Pharmaceutical Company, Inc.,
has one operating subsidiary, Hebei Aoxing Pharmaceutical Co.,
Inc., which is organized under the laws of the People's Republic of
China. Since 2002, Hebei Aoxing has been engaged in developing
narcotics and pain management products. In 2008 Hebei Aoxing
supplemented its product lines by acquiring Shijiazhuang Lerentang
Pharmaceutical Company, Ltd., a specialty pharmaceutical company
focusing on herbal pain related therapeutics. The Company owns 95%
of the equity in Hebei Aoxing.
Aoxing reported net income of $2.24 million for the year ended June
30, 2016, compared to net income of $5.81 million for the year
ended June 30, 2015. As of March 31, 2017, Aoxing had $62.46
million in total assets, $44.38 million in total liabilities and
$18.08 million in total equity.
BDO China Shu Lun Pan Certified Public Accountants LLP, in
Shanghai, People's Republic of China, issued a "going concern"
qualification on the consolidated financial statements for the year
ended June 30, 2016, citing that the Company accumulated a large
deficit and a working capital deficit that raise substantial doubt
about its ability to continue as a going concern.
B&B METALS: Sale of 1999 John Deere 624 Loader for $35K Approved
----------------------------------------------------------------
Judge Thomas L. Perkins of the U.S. Bankruptcy Court for the
Central District of Illinois authorized B&B Metals, Inc.'s sale of
1999 John Deere 624 loader to Brandon and Michael Beam of B & M
Transportation, Inc. for $35,000.
The Purchasers are the sons of the president of the Debtor.
Once sold, the entire net proceeds of the sale will be paid to
Triumph Community Bank.
About B&B Metals, Inc.
B&B Metals, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Ill. Case No. 17-80859) on June 9,
2017. The Debtor hired Barash & Everett, LLC, as attorney.
BALTIMORE GRILL: Tarsitano's Notice of Appeal Untimely, Court Rules
-------------------------------------------------------------------
The appeals case captioned BALTIMORE GRILL, INC. JACQUELINE
TARSITANO, Appellant, v. CATHERINE E. YOUNGMAN, Appellee, Civil No.
17-220 (RMB) (D.N.J) comes before the Court upon the Notice of
Appeal from Bankruptcy Court by pro se Appellant Jacqueline
Tarsitano and the Motion to Dismiss the Appeal for Lack of Subject
Matter Jurisdiction by Appellee Catherine E. Youngman, the Chapter
11 Trustee for the estate of Debtor Baltimore Grill, Inc.
On Jan. 10, 2017, Appellant filed the Notice of Appeal with the
Clerk of the Bankruptcy Court, appealing the Bankruptcy Court's
Dec. 21, 2016 Order granting the Trustee's Motion to Sell Property
Free and Clear of Liens under Section 363(f) of the Bankruptcy
Code. Subsequently, the Trustee moved to dismiss the instant appeal
for lack of subject matter jurisdiction as untimely.
Judge Renee Marie Bumb of the U.S. District Court for the District
of New Jersey grants the Trustee's motion to dismiss and dismisses
the instant appeal with prejudice.
The Trustee moves to dismiss the instant appeal for lack of subject
matter jurisdiction as Appellant did not timely file the Notice of
Appeal in accordance with Bankruptcy Rule 8002(a). Bankruptcy Rule
8002(a) requires that "a notice of appeal must be filed with the
bankruptcy clerk within 14 days after the entry of the judgment,
order, or decree being appealed." The Bankruptcy Court may extend
the time to file a notice of appeal upon motion by a party that is
filed "within the time prescribed by" Bankruptcy Rule 8002, i.e.
within 14 days of the entry of the appealed order, or "within 21
days after that time, if the party shows excusable neglect."
Bankruptcy Rule 8002 specifically provides, however, that the
Bankruptcy Court "may not extend the time to file a notice of
appeal" if the order appealed from "authorizes the sale or lease of
property or the use of cash collateral under section 363 of the
[Bankruptcy] Code."
Here, Appellant's Notice of Appeal clearly is untimely. Thus, while
the Court recognizes and is sensitive to Appellant's distress over
the loss of her family's business, the Court lacks subject matter
jurisdiction to consider this appeal. The Bankruptcy Court issued
the appealed Order on Dec. 21, 2016. Appellant filed the Notice of
Appeal on Jan. 10, 2017, 20 days later. Under Bankruptcy Rule
8002(a), however, the time to file the Notice of Appeal expired on
Jan. 4, 2017, 14 days after the entry of the appealed Order.
Additionally, Appellant did not request an extension to file the
Notice of Appeal from the Bankruptcy Court at any time, let alone
during the time prescribed by Bankruptcy Rule 8002 or within 21
days after that time, upon a showing of excusable neglect.
For these reasons, Judge Bumb finds that Appellant's Notice of
Appeal is untimely, pursuant to Bankruptcy Rule 8002, depriving
this Court of jurisdiction over the instant appeal. Accordingly,
the Court grants the Trustee's Motion to Dismiss the Appeal for
Lack of Subject Matter Jurisdiction and dismisses Appellant's
appeal. An appropriate Order shall issue on this date.
A full-text copy of Judge Bumb's Opinion dated August 4, 2017, is
available at https://is.gd/Ow41I7 from Leagle.com.
JACQUELINE TARSITANO, Appellant, Pro Se.
CATHERINE E. YOUNGMAN, Appellee, represented by MARTHA B. CHOVANES
-- mchovanes@foxrothschild.com -- FOX ROTHSCHILD LLP.
Boulevard Capital, LLC, Interested Party, represented by SCOTT M.
ZAUBER -- szauber@subranni.com. --SUBRANNI, OSTROVE & ZAUBER.
About Baltimore Grill
Baltimore Grill, Inc., aka Tony's Baltimore Grill, based in
Atlantic City, N.J., filed a Chapter 11 petition (Bankr. D.N.J.
Case No. 16-10816) on Jan. 18, 2016. The Hon. Jerrold N. Poslusny
Jr. presides over the case. Ira Deiches, Esq., at Deiches &
Ferschmann, served as counsel. In its petition, the Debtor total
assets of $1.09 million and total liabilities of $939,063. The
petition was signed by Michael A. Tarsitano, director.
On May 24, 2016, the Court granted the request of the U.S. Trustee
to appoint a Chapter 11 trustee. Subsequently, Catherine E.
Youngman was named as the Chapter 11 Trustee.
The Court denied the request of the Debtor to hire Michael A. Fusco
II, Esq., as Special Counsel/Provisional Director.
BASE ARCHITECTURE: Wants to Use Cash Collateral Until October 2017
------------------------------------------------------------------
Base Architecture Planning & Engr., Inc., seeks authorization from
the U.S. Bankruptcy Court for the Central District of California to
use cash collateral of Citizens National Bank and the Internal
Revenue Service to pay ordinary and necessary operating expenses.
A hearing to consider the Debtor's Motion will be held on Aug. 29,
2017, at 11:00 a.m.
The Debtor owes secured creditor Citizens National Bank $211,000.
It also owes the Internal Revenue Service $500,000. Both secured
creditors appear to have a blanket lien on all assets of the
Debtor, with Citizens Bank being senior to the IRS. Citizens Bank
also has the personal guarantee of the Debtor's primary shareholder
Michael H. Anderson as well as a lien on real properties located at
1002 s. Burnside Avenue Unit 202 Los Angeles, California 90019 and
5383 Stillwater Drive Los Angeles, California 90008. These
properties have more than $400,000 of equity after senior liens.
The Debtor is informed and believes that the cash it has on hand,
the Accounts Receivable and the work-in-process constitutes cash
collateral. The Debtor is not aware of any other entity asserting
an interest in the Property.
The Debtor proposes that it use the cash collateral owned on the
Petition Date to pay the allowed expenses that the Debtor must pay
in August, September and October 2017 in order to maintain its
business operations.
If the Debtor's ability to use cash collateral is interrupted, the
Debtor will be unable to pay its employees and consultants and will
have to shut down soon. The Debtor's business, and the Debtor's
prospects for a successful reorganization, will end.
The Debtor believes Citizens National Bank is adequately protected
by the Property and the real property. The Debtor proposes to pay
Citizens Business Bank $5,000 per month starting September 2017 and
give Citizens Bank a postpetition replacement lien on all of its
postpetition assets up to the value of the cash collateral actually
used postpetition.
The Debtor says that if its access to the cash collateral is
interrupted for even a brief period of time, the consequences would
be disastrous for the unsecured creditors of the estate. The
Debtor would be unable to operate and preserve the business. The
employees would leave and the business would shut down making its
value zero. The Debtor has determined that it would be in the
overwhelming best interests of the estate and its creditors to use
the cash collateral to continue to operate and maintain its
business.
A copy of the Debtor's Motion is available at:
http://bankrupt.com/misc/cacb17-18597-14.pdf
About Base Architecture Planning
Founded in 2003, Los Angeles-based Base Architecture Planning &
Engr, Inc., provides professional architectural services.
Base Architecture sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 17-18597) on July 14,
2017. Michael H. Anderson, president, signed the petition.
At the time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of $1 million to $10 million.
Judge Ernest M. Robles presides over the case.
M. Jonathan Hayes, Esq., at Simon Resnik Hayes LLP, in Sherman
Oaks, California, serves as counsel to the Debtor.
BOISE CASCADE: Moody's Hikes CFR to Ba2; Outlook Stable
-------------------------------------------------------
Moody's Investors Service upgraded Boise Cascade Company's
corporate family rating ("CFR") to Ba2 from Ba3, probability of
default rating ("PDR") to Ba2-PD from Ba3-PD and senior unsecured
bond rating to Ba3 from B1. The speculative grade liquidity rating
remains SGL-1 and the rating outlook is stable.
"The upgrade reflects a sustained improvement in Boise Cascade's
financial and operational performance and Moody's views that
leverage (adjusted Debt to EBITDA) will further decline over the
next 12 to 18 months, despite a slower than expected improvement in
the US housing market", said Ed Sustar, Senior Vice President with
Moody's.
Upgrades:
Issuer: Boise Cascade Company
-- Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
-- Corporate Family Rating, Upgraded to Ba2 from Ba3
-- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3(LGD5)
from B1(LGD5)
Outlook Actions:
Issuer: Boise Cascade Company
-- Outlook, Remains Stable
Affirmations:
Issuer: Boise Cascade Company
-- Speculative Grade Liquidity Rating, Affirmed SGL-1
RATINGS RATIONALE
Boise Cascade's Ba2 corporate family rating primarily reflects the
company's strong liquidity and expectations that the company will
be able to maintain good credit protection metrics with a slow
recovery in the North American wood-based building products market.
The rating also reflects the company's good vertical integration
and strong market position as a building materials distributor and
leading engineered wood products and plywood producer in North
America. Moody's expects the company's leverage to decline over the
next 12-18 months, as earnings increase from the flow through of
improved wood product prices and demand from higher US housing
starts. Credit challenges include the company's concentration in
the volatile wood-based building products market, low operating
margins, and the uncertain pace of the US housing recovery.
Boise Cascade's SGL-1 liquidity rating reflects the company's
strong liquidity position. The company has $105 million of cash
(June 2017), loan availability of $394 million and Moody's
projected cash generation of about $60 million over the next four
quarters, versus no scheduled debt maturities for several years.
The company has $364 million of availability on a $370 million
asset-based revolving credit facility (unrated; matures in April
2020 with $6 million L/C) and $30 million available on a multi-draw
$75 million secured term loan (unrated; matures in March 2026 with
$45 million drawn). Covenant headroom is reasonable, and Moody's
does not expects any breaches in the near term. Two of the
company's engineered wood products facilities secure the term
loan.
The stable outlook reflects Moody's expectations that Boise Cascade
will continue to generate strong operating performance over the
next 12-18 months. Stronger demand from improvements in the US
housing market will increase demand for most of the company's
products. Growth in the company's more stable building material
distribution business (about 55% of EBITDA) will offset some of the
volatility expected from the company's wood product business (45%
of EBITDA) due to the timing of idled or new capacity being started
over the next several years.
Factors that Could Lead to an Upgrade
The company's Ba2 corporate family rating might be upgraded if:
-- Adjusted debt/EBITDA is sustained below 3x (3.3x LTM as of
March 2017) based on Moody's forward views of financial
performance
-- (RCF-capex)/adjusted debt approaches 12% (9% LTM as of March
2017) based on Moody's forward opinion of sustained metrics
-- EBITDA margin approaching 9% (5% LTM as of March 2017) based
on Moody's forward opinion of sustained metrics
-- a reduction in the volatility of the company's financial
performance through diversification away from wood products
(which currently represents about 45% of EBITDA)
Factors that Could Lead to a Downgrade
A downgrade could occur if:
-- Significant deterioration in operating performance
-- Changes in Boise Cascade's financial management policies that
would materially pressure its balance sheet or liquidity
position
-- Adjusted debt/EBITDA exceeds 4x (3.3x LTM as of March 2017)
based on Moody's forward opinion of sustained metrics
-- (RCF-Capex)/adjusted debt approaches 5% (9% LTM as of March
2017) based on Moody's forward opinion of sustained metrics
The principal methodology used in these ratings was Global Paper
and Forest Products Industry published in October 2013.
Boise Cascade is a building products company headquartered in
Boise, Idaho. Boise Cascade manufactures engineered wood products,
plywood, lumber, and particleboard and distributes a broad line of
building materials, including the wood products that it
manufactures.
BOND AND COMPANY: Asks for Court's Nod to Use Cash Collateral
-------------------------------------------------------------
Bond and Company, Jewelers, Inc., seeks permission from the U.S.
Bankruptcy Court for the Middle District of Florida to use cash
collateral to pay operating expenses and the costs of administering
this Chapter 11 case.
The Debtor's primary secured creditor is Synovus Bank, N.A., which
is owed approximately $1,445,000 in connection with advances under
a prepetition loan facility.
The Debtor owes amounts to creditors who supplied jewelry and other
goods on a consignment basis. The value of the consignment goods
on hand is approximately $1.2 million. The Debtor will seek
authorization to pay the Consignment Vendors for post-petition
sales of consigned goods in connection with the relief requested in
the store closing motion.
The Debtor believes that the Lender will assert liens on and
security interests in all the Debtor's assets, including accounts,
deposit accounts, inventory, equipment, and all cash and non-cash
proceeds of the foregoing. Accordingly, the Lender may have an
interest in the Debtor's cash collateral.
The Debtor intends to use cash collateral for:
a. payroll;
b. insurance, including worker's compensation, health
insurance, and general liability insurance;
c. purchase of inventory;
d. payment of utilities;
e. payment of leases;
f. other payments necessary to sustain continued business
operations;
g. payment of expenses authorized under the store closing
motion;
h. care, maintenance, and preservation of the Debtor’s
assets;
i. creation of escrows for tax obligations; and
j. costs of administration in this Chapter 11 case.
As adequate protection, the Debtor proposes to grant the Lender
replacement liens to the same extent, validity, and priority as
existed as of the Petition Date.
A copy of the Debtor's request is available at:
http://bankrupt.com/misc/flmb17-06561-6.pdf
Headquartered in St. Petersburg, Florida, Bond and Company,
Jewelers, Inc. -- dba Bond Jewelers, Bond Diamonds, and Pandora --
sells various kinds of jewelries with store branches in St.
Petersburg, Brandon and Sarasota Florida. bonddiamonds.com, a
dynamic online jewelry commerce site, is the online marketing arm
of Bond Diamonds and Bond Jewelers. Focused entirely on jewelry,
this online enterprise was created through the vision of some of
the World's leading jewelry manufacturers and marketers.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. M.D.
Fla. Case No. 17-06561) on July 27, 2017, estimating its assets and
liabilities at between $1 million and $10 million. The petition
was signed by Marvin K. Shavlan, president.
Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Postler,
P.A., serves as the Debtor's bankruptcy counsel.
BOSS REAL ESTATE: Bank 34 Seeks Appointment of Examiner
-------------------------------------------------------
Secured creditor Bank 34 asks the U.S. Bankruptcy Court for the
District of Arizona to appoint an examiner in Boss Real Estate
Holdings, LLC's Chapter 11 case to investigate the acts, conduct,
assets, liabilities, business operations, and financial condition
of the Debtor.
Bank 34 alleges that the operating reports, which appear to be
prepared by Michael Harris, as Managing Member, raise serious
concerns regarding whether the information contained in such
reports is accurate or complete. Among others, the operating
reports provide that:
(a) The prior month's balance sheets do not tie to the
previous month.
(b) The liabilities listed in the operating reports do not
comport with the liabilities listed in the schedules. For example,
on page 4 of the May 2017 operating report lists pre-petition
unsecured liabilities in the amount of $80,000, while the Debtor's
scheduled pre-petition liabilities exceed $1,000,000.
(c) Bank statements and associated attachments are difficult
to read. However, it appears that the Debtor made a payment to
Florida Intl. University of almost $1,000 on June 13, 2017, which
appears to be a personal expenditure of Mr. Harris.
(d) There are multiple transactions for fast food and casual
dining establishments that appear to be personal expenditures of
Mr. Harris. To name a few: Oregano's Pizza, McDonalds, Fandango,
Fanatics, Chipotle, Filiberto's, and Dominos.
(e) The May 2017 operating report reflects a payment made to
Loancare for $2,183.46 on May 3, 2017, which Bank 34 believes to be
a mortgage payment for Mr. Harris' personal residence located at
1326 W. Cove Dr. Gilbert, AZ 85233.
In addition, Bank 34 also requests that the Court take judicial
notice of the hefty payments made by Mr. Harris to his Chapter 7
Trustee in his personal bankruptcy case.
(a) On July 12, 2017, Judge Ballinger required Harris to pay
his Chapter 7 estate $5,000 to purchase the estate's interest in
the Debtor.
(b) On July 28, 2017, Mr. Harris entered into a stipulation
with his Chapter 7 trustee to pay $7,500 for the estate's interest
in real property located at 33963 Cape Cove, Dana Point, CA.
Bank 34 also believes that the funds used to pay Mr. Harris'
trustee are being generated from the Mesa Car Wash operations which
are not being properly reported.
Bank 34 claims that there is possibility that the Debtor is
directly paying Mr. Harris' personal expenses instead of paying Mr.
Harris a salary. Bank 34 notes that the settlement agreement
between the Debtor and AZ 3-16 Lenders allows Mr. Harris and his
wife to receive a total of $20,000 in compensation for their
management duties, yet the operating report for June 2017 does not
reflect a payment being made to Mr. Harris or his wife).
Bank 34 tells the Court that these transactions reflected in the
operating reports raise serious concerns regarding possible
co-mingling and possible prepetition preferences that should be
scrutinized by an independent examiner. The operating reports
indicate that the Debtor is paying for the personal expenditures of
Mr. Harris. These transactions may constitute preferences or
fraudulent transfers. As such, the Debtor's unorthodox handling of
its finances supports the position that an examiner should be
appointed
Bank 34 believes that it is highly unlikely that the Debtor will
voluntarily initiate litigation to recover any avoidable pre- and
post-petition transfers. Accordingly, Bank 34 asserts that it is
critical that an independent third-party conduct a thorough
investigation of the Debtor's assets, and provide a written report
that would include, among other things, the pursuit of possible
claims -- identify any avoidance claims, both pre- and
post-petition -- against the Debtor and/or any other party that may
have received any avoidable transfer.
Moreover, Bank 34 tells the Court that the appointment of an
examiner is particularly important in this case since a creditors'
committee has not been formed, and the Debtor lacks motivation to
do any type of investigation with respect to maximizing recovery to
creditors or avoiding any pre- and post-petition transfers.
An independent examiner is also required to shed some light on the
true financial condition of the Mesa Car Wash operations. The
Debtor values the underlying Real Property at $2,850,000 and values
the car wash personal property at approximately $12,000 in its
schedules. This is in stark contrast to the purported value of
$7,500,000 represented to Bank 34 by Mr. Harris in November 2016.
If an examiner were appointed, Bank 34 believes that the net
operating profit would be even greater as only legitimate expenses
would be paid and an accurate accounting of income would be
achieved. Bank 34 points out that it is of utmost importance in
this reorganization proceeding to obtain a true value of the car
wash operations. Given the conflicting, self-serving, and
contradictory information provided by Debtor's principal, obtaining
reliable financial information is unlikely to be achieved unless an
examiner is appointed, Bank 34 tells the Court.
Bank 34 is represented by:
Jody A. Corrales, Esq.
DeCONCINI McDONALD YETWIN & LACY, P.C.
2525 East Broadway Blvd., Suite 200
Tucson, AZ 85716-5300
Tel: (520) 322-5000
Fax: (520) 322-5585
E-mail: jcorrales@dmyl.com
About Boss Real Estate Holdings
Boss Real Estate Holdings, LLC, based in Gilbert, AZ, filed a
Chapter 11 petition (Bankr. D. Ariz. Case No. 17-03716) on April
10, 2017. The Hon. Brenda Moody Whinery presides over the case.
Ronald J. Ellett, Esq., at Ellet Law Offices, P.C., serves as
bankruptcy counsel.
The Debtor's primary asset is certain real property located at 2816
South Country Club Drive and 2828 South Country Club Drive, Mesa,
Arizona 85210, where the Debtor operates a car wash, a lube shop,
and a small convenience store -- the Mesa Car Wash.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The petition was signed by Michael
Harris, member/manager.
An official committee of unsecured creditors has not yet been
appointed in the Chapter 11 case of Boss Real Estate Holdings, LLC,
as of May 16, according to a court docket.
BOSTON HOSPITALITY: U.S. Trustee Forms 3-Member Committee
---------------------------------------------------------
Judy A. Robbins, U.S. Trustee for Region 4, on Aug. 8 appointed
three creditors to serve on the official committee of unsecured
creditors in the Chapter 11 cases of Boston Hospitality Group,
Inc., and its three debtor-affiliates.
The committee members are:
(1) Randall L. Williams, Chair Person
United Bank, Inc.
990 Elmer Prince Drive
Morgantown, WV 26505
Tel: (304) 581-6004
Fax: (304) 598-2035
E-mail: randy.williams@bankwithunited.com
(2) Dave Seman
60 Sparrow Lane
Morgantown, WV 26508
Tel: (304) 216-0753
Fax: (304) 594-0081
E-mail: dave@advancedheatingandcooling.info
(3) Steve Jones
413 Mayfield Road
Morgantown, WV 26508
Tel: (304) 282-5563
E-mail: steve183jones@gmail.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About Boston Hospitality Group
Headquartered in Morgantown, West Virginia, Boston Hospitality
Group Inc. is a privately-held company operating under the
restaurants industry. The Boston Beanery concept was patterned
after old Boston pubs from the 1800's, which at that time were
called Beaneries. The company now has five Boston Beanery
locations across West Virginia, Pennsylvania, and Virginia.
Boston Hospitality, Beanery 119 LLC, Boston Restaurants - PA Inc.,
and Beanery Investment Group, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. W.Va. Case Nos. 17-00710 to
17-00713) on July 1, 2017. Patrick J. Padula, president, signed
the petition. The cases are jointly administered.
At the time of the filing, Boston Hospitality disclosed that it had
estimated assets and liabilities of $1 million to $10 million.
The Debtors hired Johnson Law LLC and J. Frederick Wiley, PLLC, as
counsel.
C SWANK ENTERPRISES: Disclosure Statement Hearing on Sept. 5
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
is set to hold a hearing on Sept. 5, 2017, to consider approval of
the disclosure statement, which explains the Chapter 11 plan of
reorganization for C Swank Enterprises, LLC.
The hearing will take place at the U.S. Steel Tower, Courtroom D,
54th Floor, Pittsburgh, Pennsylvania. Objections are due by Aug.
29.
The latest plan classifies general unsecured claims against the
company in Class 16. C Swank believes there are no unsecured
creditors. Nevertheless, it proposes to pay any general unsecured
claim in full, plus interest, on the effective date of the plan.
The company's restructuring plan is dependent on the successful
confirmation of the Chapter 11 plan of reorganization of a related
entity Royal Flush Inc. C Swank cannot fund the plan payments
unless it has the right to lease those vehicles and machinery that
it leases to Royal Flush, according to its latest disclosure
statement filed on August 1.
A copy of the Amended Disclosure Statement is available for free at
https://is.gd/1gxsiZ
About C Swank Enterprises
Headquartered in Apollo, Pennsylvania, C Swank Enterprises, LLC,
leases trucks and equipment used in the oil & gas industry to a
related entity, Royal Flush, Inc.
C Swank filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa.
Case No. 16-23451) on Sept. 15, 2016, estimating assets and
liabilities of $1 million to $10 million. The petition was signed
by Carol A. Swank, managing member.
Judge Carlota M. Bohm presides over the case.
Donald R. Calaiaro, Esq., at Calaiaro Valencik serves as the
Debtor's bankruptcy counsel.
The Debtor has no unsecured creditor, according to its Chapter 11
petition.
C&W SENIOR: Moody's Rates Proposed US$700MM Senior Unsec. Notes B2
------------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the proposed
US$700 million senior unsecured notes to be issued by C&W Senior
Financing Designated Activity Company (SPV Issuer), a trust-owned
special purpose vehicle that Cable & Wireless Communications
Limited (CWC) will consolidate. At the same time, Moody's has
downgraded to B2 from Ba3 the rating on the existing USD750 million
senior unsecured notes at Sable International Finance Limited
(SIFL). The Ba3 corporate family rating (CFR) of CWC, as well as
the ratings of the other debt instruments of the group, remain
unchanged. The rating outlook is stable.
The new SPV Issuer will on-lend the USD700 million proceeds from
the notes issuance to SIFL, through a proceeds loan which will rank
pari passu with SIFL's existing USD750 million senior unsecured
notes. SIFL will use the funds from the proceeds loan to redeem in
full the USD605 million outstanding under the 2021 senior unsecured
notes at Columbus International Inc. (Columbus), to cover related
premiums and for general corporate purposes. Although the notes
will not benefit from a direct guarantee at the SPV level, the
proceeds loan will benefit from the same direct subsidiary
guarantees as SIFL's existing senior unsecured USD750 million
notes.
Issuer: C&W Senior Financing Designated Activity Company
-- US$700M Senior Unsecured Regular Bond/Debenture, Assigned B2
-- Outlook, Stable
Issuer: Sable International Finance Limited
-- $750mm GTD GLOBAL NOTES due 2022, Downgraded to B2 from Ba3
Outlook Actions:
-- Outlook, Remains Stable
RATINGS RATIONALE
The B2 rating of both the new USD700 million notes issued by the
SPV Issuer and of the existing USD750 million SIFL notes reflects
their positioning in the waterfall, ranking behind SIFL's USD1,825
million senior secured term loan and USD625 million senior secured
revolving credit facility (RCF). While the term loan and RCF only
benefit from a share pledge security, which Moody's considers of
limited value, the existence, in case of security enforcement, of a
standstill period on the unsecured notes and the option by secured
creditors to release existing guarantees on the senior unsecured
notes, results in the notes having access to CWC's cash flows after
the term loan creditors, ranking behind in the priority of claims.
The transaction takes place as part of CWC's ongoing efforts to
simplify its capital structure and plans to refinance the debt
outstanding at Columbus. Pro-forma for the transaction, Columbus
will become a guarantor of debt at SIFL, including the proceeds
loan funded by the new senior unsecured notes. In the future, CWC
may undertake additional refinancing transactions. According to the
indenture of the new USD700 million notes, under certain group
refinancing transactions, the notes would be assumed by a new
intermediate holding company and their guarantors would be
released. Following such a refinance, Moody's would have to confirm
the notching of the debt instruments.
The issuance does not have a material effect on CWC's absolute debt
levels and will extend its maturity profile, with the group having
no material debt maturity before 2022 once the Columbus notes are
repaid.
CWC's Ba3 CFR is linked to the credit profile and financial
policies of its parent, Liberty Global plc (Ba3, stable), which
acquired the company in May 2016. The rating also reflects CWC's
effective business model, good profitability and leading market
positions throughout the Caribbean and Panama. The CFR further
incorporates operating challenges and exposure to the emerging
economies where the company operates as well as the competitive
nature of the telecom industry, negative free cash flow and higher
leverage as a result of the Liberty Global acquisition. Despite a
higher debt burden, CWC's integration into the Liberty Global group
also brings some benefits as it forms part of a larger, well-funded
group with a successful M&A track record and experience in Latin
America, and targets synergies estimated at USD150 million by
year-end 2020.
The stable outlook reflects expectations for EBITDA margin
(including Moody's adjustments) remaining above 40%, moderate
revenue growth and the maintenance of an adequate liquidity
position. The outlook also incorporates the return to an adjusted
debt/EBITDA ratio under 4.0x, on a consolidated basis, and to
breakeven free cash flow within the next 12 to 18 months.
A ratings upgrade is unlikely at this time given CWC's linkage to
Liberty Global's credit profile. However, a ratings upgrade could
be considered if more conservative financial policies lead to
deleveraging to under 2.5x (adjusted debt/EBITDA), on a
consolidated basis, while maintaining stable adjusted EBITDA
margins and generating strong positive free cash flow. If Liberty
Global's ratings are upgraded, CWC's ratings could also be
upgraded.
CWC's ratings could be downgraded if adjusted debt/EBITDA increases
to over 4.0x, on a consolidated basis, or if adjusted EBITDA margin
declines toward 35%, both on a sustained basis. If the company's
market shares decline or its liquidity position weakens, the
ratings would also come under pressure. CWC's ratings could also be
downgraded if Liberty Global's ratings are downgraded.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
A subsidiary of Liberty Global, CWC is an integrated
telecommunications provider offering mobile, broadband, video,
fixed-line, business and IT services in Panama, Jamaica, the
Bahamas, Trinidad & Tobago, and Barbados and other markets,
principally in the Caribbean. For the last 12 months to March 2017,
CWC generated revenues of USD2.3 billion.
CALNSHIRE ESTATES: Bank Wants Conversion or Trustee
---------------------------------------------------
Prudential Savings Bank asks the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania to convert the Chapter 11
bankruptcy case of One State Street Associates, LP, Island View
Crossing II, L.P., Calnshire Estates, LLC, and Steeple Run, L.P. to
Chapter 7 liquidation, or in the alternative, appoint a Chapter 11
Trustee.
Prudential Savings Bank points out that:
(a) Prudential Savings Bank entered into a Development
Construction Loan Agreement, pursuant to which Prudential Savings
Bank issued a construction loan to Island View under a promissory
note in the principal amount of $5,541,468.
(b) As security, Island View executed and delivered to
Prudential Savings Bank an Open-End Mortgage and Security Agreement
providing, inter alia, the Island View Property as security for the
loan. As additional security, Island View executed an Assignment of
Rents, Leases and Agreements of Sale on the Island View Property.
(c) Pursuant to the Island View Loan Agreements, the Loan was
intended to provide the Island View Debtor with funds to construct
certain site improvements on the Island View Real Property;
specifically, the Island View Project includes, among other things,
the construction of 73 townhomes with subsequent phases to include
the construction of 96 condominium units.
(d) Island View failed to deposit the security deposits in an
escrow account with Prudential Savings Bank as required by the
Second Island View Loan Agreement and reported to Prudential
Savings Bank receiving only $5,000 in deposit monies from both Ms.
Caione and Mr. Ranganathan, not the $30,990 and the $49,980 in
deposit monies that Ms. Caione and Mr. Ranganathan actually paid to
Island View.
(e) Island View refused to deliver to Prudential Savings Bank
the security deposits for the agreements of sale for Prudential
Savings Bank to hold in escrow, and instead misappropriated the
deposit moneys. At the time that Renato J. Gualtieri and Island
View took in excess of $175,000 in consumer escrow deposits,
neither had the financial wherewithal to build the units or provide
refunds to consumers. Prudential Savings Bank believes that Mr.
Gualtieri diverted the deposits.
(f) Seven civil actions have been filed against Island View by
prospective homebuyers seeking the return the stolen security
deposits. Among the actions are: (1) Monica L. Caione v. Island
View Crossing II LP, Americorp Homes, Island View Crossing II Inc.,
Bucks County, CCP, No. 201602011; (2) Samira Ranganathan v. Island
View Crossing II LP, Bucks County, CCP, No. 2016-05724; (3)
Benjamin A Mastridge, Sr. vs. Island View Crossing II, Bucks
County, CCP, No. 2016-06373; (4) Frank Del Grasso v. Island View
Crossing II LP, et al. Bucks County, CCP, No. 2016-06685; and (5)
Peter Bridge vs. Island View Crossing II, LP, Phila. Municipal
Court, MJ-07102-CV-0000142-2016.
(g) Mr. Gualtieri lied to and misled consumers as to the
ability to return the deposits, long ago depleted by him (which
left an unrecoverable stigma on the project being operated by a
consumer fraud), and Island View's treatment of potential
purchasers is reprehensible and typifies Island View's bad faith
and dishonesty.
(h) Island View failed to maintain and refused reinstate the
required insurance coverage on the collateral secured by the Second
Island View Loan Documents. Island View also failed to timely
notify Prudential Savings Bank of the cancellation of such
insurance, which forced Prudential Savings Bank to obtain
force-placed insurance to protect its collateral.
(i) Island View also failed to maintain certain life insurance
coverage for Mr. Gualtieri as required by the Second Island View
Loan Agreement.
(j) At the status conference, the Debtors have alleged that
the only "viable" project that any of the Debtors have is the
Island View Project, but did not relate to the Court is that the
Island View Project has been dormant for well over a year with no
construction activity where no units are completed. Through their
inactivity, the Debtors have also allowed permits and approvals to
lapse, further diminishing the value of their assets.
(k) The Debtors have taken no steps post-petition to commence
any operations with the sole exception of State Street. Island View
has been left to sit fallow for over a year and during that time,
any assets it has have declined in value while the hard assets
remaining on the property were left to waste and will likely have
to be demolished in order to use the real property in any
meaningful way.
(l) In its Schedules, State Street lists six leases for its
real property, both residential and nonresidential. Prudential
Savings Bank believes that State Street is collecting rent pursuant
to the Leases and is also accruing post-petition obligations, and
as such, using cash collateral in violation of Section 363 of the
Bankruptcy Code -- constituting gross mismanagement of the
Debtors.
(m) The Debtors have failed to pay taxes, including real
estate taxes due on the Properties after the Petition Date. The
Bucks County Tax Claim Bureau filed a secured proof of claim
against Steeple Run in the amount of $14,275 for 2014, 2015 and
2016 unpaid property taxes, which continues to accrue interest
post-petition. In addition, the Debtors have also scheduled unpaid
taxes for which they have no ability to pay (Island View scheduled
priority debt to Bucks County Tax Claim Bureau in the amount of
$118,437 and Borough of Bristol in the amount of $79,917 and
Calnshire scheduled a secured debt to West Caln Township in the
amount of $35,000 and a priority debt to the Chester County Tax
Claim Bureau in the amount of $75,000.00).
(n) Even more troubling, the Debtors' schedules reveal that
Island View under Gualtieri's control (which had no ability to
generate cash except for misappropriating draws from Prudential
Savings Bank and security deposits from potential purchasers)
actually loaned almost $800,000 to insiders. In fact, the vast
majority of the unsecured debts listed in the State Street
Schedules are loans from insiders.
(o) The Debtors have no financing to commence operations and
the combined gross revenues of Island View, Calnshire and Steeple
Run are a telling $0.00. The Debtors are not generating income and
have no other source of cash. Thus, the Debtors have no prospects
for financing with hundreds of thousands of dollars of real estate
taxes and no meaningful cash flows. The Debtors have no reasonable
likelihood of rehabilitation and their prospects have long since
passed with no plausible chance of recovery.
Accordingly, Prudential Savings Bank asserts that the misuse of
funds by Mr. Gualtieri shows that he is not appropriately suited to
run the Debtors and incapable of steering the Debtors efforts
towards reorganization.
Prudential Savings Bank is represented by:
Edmond M. George, Esq.
Michael D. Vagnoni, Esq.
Obermayer Rebmann Maxwell & Hippel LLP
Centre Square West
1500 Market Street, 34th Floor
Philadelphia, PA 19102
Telephone: (215) 665-3000
Facsimile: (215) 665-3165
E-mail:edmond.george@obermayer.com
About One Street Associates and Affiliates
Island View, Calnshire Estates, and Steeple Run, are affiliates of
One Street Associates which filed a voluntary petition on June 21,
2017 (Bankr. E.D. Pa. Case No. 17-14291). The Debtors are managed
by Renato J. Gualtieri, a real estate developer based in Langhorne,
PA.
Island View Crossing II, L.P., Calnshire Estates, LLC, and Steeple
Run, LP filed their respective Chapter 11 petitions (Bankr. E.D.
Pa. Case Nos. 17-14454, 17-14457 and 17-14458, respectively), on
June 30, 2017.
The Debtors' individual cases have not been ordered to be jointly
administered or consolidated and thus, each Debtor has its own
separate bankruptcy estate. The Hon. Eric L. Frank presides over
these cases.
The petitions were signed by Renato J. Gualtieri, president of
corporate general partner.
The Debtors are represented by David B. Smith, Esq. at Smith Kane
Holman, LLC.
At the time of the filing, the Debtors estimated their assets and
debts at $1 million to $10 million, except for Calnshire Estates,
which estimated its assets to be between $10 million to $50
million.
CAMBRIDGE REALTY: Case Summary & 19 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Cambridge Realty Associates, LLC
2150 Highway 35
Sea Girt, NJ 08750
Type of Business: Cambridge Realty owns 100% interest in a
property located at 1973 & 1985 Route
34, Wall, New Jersey valued at $5.50
million. It is a small business Debtor as
defined in 11 U.S.C. Section 101(51D).
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-26154
Court: United States Bankruptcy Court
District of New Jersey (Trenton)
Judge: Hon. Christine M. Gravelle
Debtor's Counsel: Joseph Casello, Esq.
COLLINS, VELLA & CASELLO, LLC
2317 Route 34 South, Suite 1A
Manasquan, NJ 08736
Tel: (732) 751-1766
Fax: (732) 751-1866
E-mail: jcasello@cvclaw.net
Total Assets: $5.53 million
Total Liabilities: $2.99 million
The petition was signed by Loretta Dweck, managing member.
The Debtor's list of 19 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/njb17-26154.pdf
CENTRAL GROCERS: Wants Exclusive Plan Filing Extended to Feb. 2018
------------------------------------------------------------------
Central Grocers, Inc., et al., ask the U.S. Bankruptcy Court for
the Northern District of Illinois to extend the periods during
which the Debtors have the exclusive right to:
-- file a Chapter 11 plan from Sept. 1, 2017, through and
including Feb. 1, 2018, and
-- obtain acceptances of the plan from Oct. 31, 2017, through
and including April 2, 2018.
A hearing on the Debtors' request will be held on Aug. 22, 2017, at
10:00 a.m. (Central Time). Objections must be filed by Aug. 15 at
4:00 p.m. (Central Time).
The Debtors assure the Court that substantial cause exists to
extend the Exclusive Periods in these complex cases. These cases
started with an involuntary Chapter 7 petition against CGI and
evolved into a litigious venue dispute, all while the Debtors and
their professionals were focused on maximizing value by developing
and conducting a robust marketing and sale process for
substantially all of the Debtors' assets. The Debtors say that
they have managed these Chapter 11 cases in a transparent and
inclusive manner, including by collaborating with stakeholders like
their prepetition and postpetition secured lenders, the Official
Committee of Unsecured Creditors, the Office of the U.S. Trustee,
unions, and other parties in interest.
In the first few months of these cases, the Debtors have been
primarily focused on undertaking a marketing and sale process for
their assets involving numerous potential purchasers, conducting
two auctions held over three days, and negotiating complicated
transaction documents related thereto. On Aug. 4, 2017, the
Debtors consummated the going-concern sale of the stalking horse
assets, including 20 of the Debtors' retail stores plus the Strack
headquarters and other related assets, resulting in sale proceeds
of over $85 million plus additional value for the Debtors and their
estates. Thousands of jobs have been preserved through the sale.
In addition, the Debtors have secured approval of a sale of the
distribution center to SUPERVALU Holdings, Inc., for a purchase
price of $61 million, which sale was approved by the Court on July
25, 2017, over the objection of the Creditors' Committee and
various pension funds.
The Debtors tell the Court that substantial issues remain that will
affect any proposed Chapter 11 plan. Over the next few weeks, the
Debtors and their professionals will continue marketing their
remaining unsold real property. The Debtors also intend on
evaluating and pursuing (if appropriate) estate receivables and
claims. Separately, the period for which the Creditors' Committee
has to challenge prepetition liens in accordance with the court
order approving postpetition financing has not yet expired.
The Debtors say that all of the foregoing has been taking place
while they address these aspects that are critical to the
successful administration of these cases, including:
a. securing court-approval of certain first day relief with
respect to postpetition financing, the Debtors' cash
management system, employee compensation and benefit
programs, insurance programs, utility providers, taxes,
among others, and effectively implementing same;
b. evaluating their existing leases and executory contracts
to determine whether to assume or reject the agreements;
c. closing approximately 16 stores at locations where the
Debtors ceased operations but otherwise would have been
obligated to pay rent and other costs, and similarly
winding down the distribution center in an orderly
manner; and
d. collaborating and maintaining an open and transparent
relationship with U.S. Trustee, the lenders, the
Creditors' Committee, and other stakeholders.
According to the Debtors, these efforts have enabled the Debtors to
maximize the value of their assets and minimize the disruptions
often attendant to the commencement of Chapter 11 cases. Under
these circumstances, extensions of the Exclusive Periods are
plainly warranted. The extensions will enable the Debtors to
continue the orderly wind down of their remaining assets in a
rational and value-maximizing manner while addressing numerous
issues necessary to formulate a confirmable Chapter 11 plan.
About Central Grocers
Joliet, Illinois-based Central Grocers, Inc. --
http://www.central-grocers.com/-- is a supplier to independent
grocery stores in the Midwestern United States. Formed in 1917,
Central Grocers is organized as a retail cooperative (co-op) owned
by the independent supermarket retailers that it supplies.
Central Grocers is the seventh largest grocery cooperative in the
United States. It supplies over 400 stores in the Chicago area
with groceries, produce, fresh meat, service deli items, frozen
foods, ice cream and exclusively the Centrella Brand distributor.
Sales have grown to $2 billion per year over the past 94 years.
Central Grocers and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 17-10992 to
17-11003) between May 2 and May 4, 2017. Central Grocers estimated
$100 million to $500 million in assets and liabilities. The
petitions were signed by Donald E. Harer, chief restructuring
officer.
Prior to the Chapter 11 filing, certain creditors of CGI filed an
involuntary case against the company under Chapter 7. The case was
filed in the U.S. Bankruptcy Court for the Northern District of
Illinois on May 2, 2017.
On June 13, 2017, the Chapter 11 cases were transferred to the
Illinois court, including CGI's case which was consolidated into
the involuntary Chapter 7 case pending before the Illinois court.
All the Chapter 11 cases are proceeding before the Illinois court,
and are being jointly administered under Case No. 17-13886 for
procedural purposes only. CGI's petition date is May 2, 2017 while
the petition date for the other Debtors is May 4, 2017. Judge
Pamela S. Hollis presides over the cases.
Weil, Gotshal & Manges LLP serves as the Debtors' bankruptcy
counsel. The Debtors also hired Richards, Layton & Finger P.A. as
local counsel; McDonald Hopkins LLC as local counsel and conflicts
counsel; Lavelle Law, Ltd., as general corporate counsel; Conway
Mackenzie Inc. as chief restructuring officer; Peter J. Solomon
Company as investment banker; and Prime Clerk as claims and
noticing agent. Meanwhile, HYPERAMS, LLC and Tiger Capital Group,
LLC were employed as liquidation consultants.
An official committee of unsecured creditors was appointed by the
Office of the U.S trustee on May 15, 2017. The committee hired
Kilpatrick Townsend & Stockton LLP as bankruptcy counsel; Saul
Ewing LLP as Delaware counsel; and FTI Consulting, Inc. as
financial advisor.
CLOVER MERGER: Moody's Assigns B2 CFR; Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned Clover Merger Sub. Inc. a B2
Corporate Family Rating (CFR) and a B2-PD Probability of Default
Rating (PDR). Moody's also assigned a Ba1 rating to Clover's new
5-year asset based lending facility ("ABL"), a B1 rating to the
company's new 7-year first lien term loan, and a Caa1 rating to its
new 8-year second lien term loan. Clover will merge into Alphabet
Holding Company, Inc. (Alphabet), which will be the surviving
entity and borrower upon completion of the proposed $2.905 billion
leveraged buyout (LBO) by private equity firm Kohlberg Kravis
Roberts & Co. (KKR). The rating outlook is stable.
At the same time, Moody's confirmed the B2 CFR and B2-PD PDR on
Nature's Bounty Co. (The) (NB Co.), a wholly owned subsidiary of
Alphabet Holding Company, Inc. Moody's also confirmed NB Co.'s USD
senior secured first lien term loan at B1, its Sterling senior
secured first lien term loan at B1, and its global unsecured notes
due 2021 at Caa1. The rating actions conclude the review for
downgrade initiated on July 25, 2017 following the announcement of
the acquisition by KKR. Moody's expects to withdraw NB Co.'s CFR
and PDR as well as the ratings on NB Co.'s first lien term loans
and notes when they are repaid at the close of the LBO or through
the proceeds from the sale of the company's Holland and Barrett
division. Moody's withdrew the company's SGL-2 Speculative
Liquidity Grade rating. The rating outlook is stable.
Proceeds from the proposed first and second lien term loans, as
well as equity from KKR will be used to acquire a controlling
interest in Alphabet from The Carlyle Group ("Carlyle"). Carlyle
will retain a 30% interest in the company following close of the
transaction. Moody's assumes in the ratings assigned to Clover that
the Holland and Barrett sale will occur prior to the completion of
the LBO.
The following is a summary of Moody's rating actions.
Ratings assigned to Clover Merger Sub. Inc.:
Corporate Family Rating at B2
Probability of Default at B2-PD
$350 million senior secured asset-based revolving credit facility
expiring 2022 at Ba1 (LGD1)
$1.4 billion senior secured first lien term loan maturing 2024 at
B1 (LGD3)
$500 million senior secured second lien term loan maturing 2025 at
Caa1 (LGD5)
Outlook is Stable
Ratings confirmed at Nature's Bounty Co. (The):
Corporate Family Rating at B2
Probability of Default at B2-PD
Senior secured first lien term loan at B1 (LGD3)
Senior secured first lien term loan maturing 2023 at B1 (LGD3)
$1.075 billion global unsecured notes maturing 2021 at Caa1 (LGD5)
Outlook is Stable
Ratings withdrawn at The Nature's Bounty Co.:
Speculative Grade Liquidity Rating, previously SGL-2
RATINGS RATIONALE
Nature's Bounty's B2 CFR reflects the company's high financial
leverage of about 6.1x debt/EBITDA, and moderate scale when
compared to other corporate issuers within the same industry. In
addition, Moody's believes the operating environment of the
vitamin, mineral, and nutritional supplement ("VMNS") industry will
continue to be challenging as competition for market share among
existing providers remains intense and more companies enter the
space and launch new products. Moody's expects competition for
consumers and retail distribution as Nature's Bounty continues to
shift its VMNS product portfolio to branded from private label will
require continual investments in product marketing and promotions
that create downward pressure on margins. The rating is supported
by the company's portfolio of well-known brands and good channel
diversification, as well as the growth potential of the VMNS
industry. This growth is due, in part, to the aging population,
with older adults consuming more VMNS products. Moody's anticipates
growing VMNS volumes as well as Nature's Bounty's initiatives to
streamline its supply chain and cost structure will lead to
relatively flat margins over the next two years despite the
competitive environment. While the company's credit metrics are
weak, Moody's expects improvement over time as the company focuses
on strengthening operating earnings and cash flow generated from
its core branded vitamin and active nutrition products.
The Ba1 rating on the ABL reflects a one-notch override to the Ba2
model-derived outcome based on the loss given default framework.
The override reflects the structural features of the ABL that
Moody's anticipates would enhance recovery prospects in the event
of a default. Moody's confirmed NB Co.'s B2 CFR based on the
decision to assign a B2 CFR to Nature's Bounty following completion
of the LBO. The confirmation of NB Co.'s existing debt ratings
follows from the confirmation of the B2 CFR as well as Moody's
expectation that the debt will be repaid as part of the LBO and
Holland and Barrett divestiture.
Moody's expects in the stable rating outlook that the company will
generate good organic growth and modest free cash flow, leading to
a decline in debt-to-EBITDA to a high 5x range by the end of 2018.
Moody's also anticipates Nature's Bounty will maintain adequate
liquidity over the next 12-15 months supported by modest annual
free cash flow, undrawn capacity under the $350 million ABL, and a
covenant lite debt structure.
The ratings could be downgraded if the company's revenue and EBITDA
deteriorate. Debt funded acquisitions, shareholder distributions,
or a deterioration in liquidity could also contribute to a
downgrade. Debt to EBITDA sustained above 6.0x or EBIT to interest
sustained below 1.5x could also prompt a downgrade.
An upgrade would require that Nature's Bounty's demonstrate an
ability to profitably grow revenue as it shifts the portfolio mix
more toward branded products and by demonstrating consistent solid
operating performance following divestiture of its high margin
Holland and Barrett business segment. The company would also need
to maintain debt to EBITDA below 4.5x before Moody's would consider
an upgrade.
The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.
Nature's Bounty, headquartered in Ronkonkoma, NY, is a manufacturer
and marketer of vitamin, mineral, and nutritional supplements
("VMNS") primarily in the United States. Some of the company's
brands include Nature's Bounty, Sundown and Pure Protein. Nature's
Bounty is a subsidiary of Alphabet Holding Company, Inc. Following
close of the transaction, the company will be majority owned by
private equity firm KKR with a The Carlyle Group owning a 30%
minority interest. The company will generate pro-forma revenues of
about $2.1 billion following close of the Holland and Barrett
divestiture.
CORBETT-FRAME INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Corbett-Frame, Inc.
dba Corbett-Frame Jewelers
369 West Vine St.
Lexington, KY 40507
Type of Business: Corbett-Frame, Inc. owns a jewelry store in
Lexington, Kentucky offering contemporary
designer collections & customized pieces.
The Company is a small business Debtor as
defined in 11 U.S.C. Section 101(51D).
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-51607
Court: United States Bankruptcy Court
Eastern District of Kentucky (Lexington)
Judge: Hon. Gregory R. Schaaf
Debtor's Counsel: Jamie L. Harris, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper Street
Lexington, KY 40507
Tel: (859) 231-5800
E-mail: jharris@dlgfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jennifer Lykins, president.
The Debtor's list of 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/kyeb17-51607.pdf
CRS REPROCESSING: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: CRS Reprocessing, LLC
dba CRS Reprocessing Services
9780 Ormsby Station Road, Suite 2500
Louisville, KY 40223
Type of Business: CRS Reprocessing -- http://www.crs-
reprocessing.com -- is a global partner in
fluid reprocessing management, offering
people, technology and services to
efficiently handle industrial fluids for a
variety of industries. With 30 years of
expertise and operations in the U.S., Europe
and Asia, its custom-built, on-site
reprocessing facilities economically
transform used fluids back to customer-
specified performance levels, allowing high-
yield waste recovery and lower unit costs.
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-32565
Court: United States Bankruptcy Court
Western District of Kentucky (Louisville)
Debtor's Counsel: Lea Pauley Goff, Esq.
STOLL KEENON OGDEN PLLC
2000 PNC Plaza
500 West Jefferson Street
Louisville, KY 40202
Tel: (502) 333-6000
Fax: (502) 333-6099
E-mail: lea.goff@skofirm.com
- and -
Emily Pagorski, Esq.
STOLL KEENON OGDEN PLLC
500 West Jefferson Street, Suite 2000
Louisville, KY 40402
Tel: (502) 333-6000
Fax: 502) 333-6099
E-mail: emily.pagorski@skofirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Scott T. Massie, chief executive
officer.
The Debtor's list of 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/kywb17-32565.pdf
DAVID GOODRICH: McCormick Not Entitled to Interest on Unsec. Claim
------------------------------------------------------------------
David Goodrich Properties, LLC, filed with the U.S. Bankruptcy
Court for the District of Vermont a second amended Disclosure
Statement dated July 31, 2017, referring to the Debtor's plan of
reorganization.
In the event the Court finds the 2006 Promissory Note Valid then,
and the order of cram-down being entered based on the existing
motion, Hubert McCormick's claim will be bifurcated into a secured
claim amount of $600,684 (the value asserted in Mr. McCormick's POC
and thus constitutes an incontrovertible judicial admission) and a
general unsecured claim amount to be determined by the Court in the
adversary proceeding or motion for cram down or the objection to
claim filed by the Debtor.
Mr. McCormick on his secured portion of the claim will receive the
TILL rate of interest on the unpaid principal balance as it is paid
down and will receive a cost-of-living adjustment based on the CPI
Index-Bureau of Labor Statistics (COLA) from the period of July 31,
2017, to the date Mr. McCormick is paid in full so the dollar
amount he ultimately receives when he is paid in full by Oct. 31,
2018 (or before) will be adjusted for inflation.
Mr. McCormick will not be entitled to interest on his general
unsecured claim as this claim would have received nothing in a
theoretical Chapter 7 liquidation as this claim is undersecured as
admitted to his motion for relief from stay. The adequate
protection payments in that they were linked by the Court in its
case management to the mortgage payments owed will be applied to
principal and interest payments as per the terms of the promissory
notes and underlying contracts and the claimants must issue the
Debtor 1099-INT, and the sums paid under the adequate protection
orders will be credited to the Debtor's payments owed to each
claimant.
The Plan will be consummated on or before Oct. 31, 2018.
A copy of the Amended Disclosure Statement is available at:
http://bankrupt.com/misc/vtb16-11465-103.pdf
As reported by the Troubled Company Reporter on May 11, 2017, the
Debtor filed with the Court a disclosure statement referring to the
Debtor's plan of reorganization. The Plan is aimed at marketing
and selling the Debtor's lot based upon a three-prong marketing
approach, or a combination, of the prongs to get the subject lot
sold at an optimal price. This will be a multi-use commercial and
residential district lot, and could yield a sales price of one to
$2 million, if the DeWolf Engineering Map is approved by the Town
of Milton. Ninety residential units are contemplated and 70,000 to
80,000 of commercial square feet space.
About David Goodrich
David Goodrich Properties LLC is a single real estate LLC that owns
and manages real property on 496 Route 7 South in Milton, Vermont.
David Goodrich is the sole member of the LLC. This property
contains 11.5 +/-acres, and two buildings, one of which is
unoccupied; the other contains a body shop that David Goodrich
Properties leases out to Mike Slingerland. David Goodrich
Properties has no employees, as it is essentially just a piece of
real estate in the midst of development and permitting. It does
rent out a piece of the property (the body shop) for $1,250 per
month. It has no other income.
David Goodrich Properties filed for Chapter 11 bankruptcy
protection (Bankr. D. Vt. Case No. 16-11500) on Nov. 28, 2016,
listing $1.4 million in assets and $804,000 in liabilities. Todd
Taylor, Esq., at the Law Offices of Todd Taylor serves as the
Debtor's bankruptcy counsel.
DB2017 LLC: Hires Eric A. Liepins as Bankruptcy Counsel
-------------------------------------------------------
DB2017, LLC seeks approval from the US Bankruptcy Court for the
Western District of Texas, Waco division, to employ counsel.
In order to propose a Plan of Reorganization and effectively move
forward in its bankruptcy proceeding, the Debtor desires to hire
Eric A. Liepins and the law firm Eric A. Liepins, P.C., as counsel
on behalf of the Debtor in this matter.
Eric A. Liepins affirms that his firm does not presently or hold or
represent any interest adverse to the interest of the Debtor or
this Estate and is disinterested within the meaning of 11 U.S.C.
Sec. 101(14).
The Firm has been paid a retainer of $5,000 plus the filing fee.
The compensation to be paid to the Firm shall be based on its
current hourly rates:
Eric A. Liepins $275.00
Paralegals and Legal Assistants $30.00-50.00
The Firm can be reached through:
Eric A. Liepins
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Email: eric@ealpc.com
About DB2017 LLC
DB2017, LLC filed as a Domestic Limited Liability Company (LLC) in
the State of Texas on March 3, 2017 and is approximately five
months old, according to public records filed with Texas Secretary
of State. DB2017, LLC filed a Chapter 11 petition (Bankr. W.D.
Tex. Case No. 17-60592) on July 31, 2017.
Judge Ronald B. King presides over the case. Eric A. Liepins at
Eric A. Liepins, P.C. serves as counsels.
As of date of the bankruptcy filing, the Debtor estimates $100,001
to $500,000 in total assets and $100,001 to $500,000 in total
liabilities.
DEAN FOODS: Volume Decline No Impact on Moody's Ratings
-------------------------------------------------------
Moody's Investors Service commented that Dean Foods Company's (B1
stable) August 8, 2017 announcement that it is experiencing
accelerating volume pressure is credit negative because it will
reduce earnings and cash flow, but that it does not affect its
ratings or outlook.
Dean Foods Company, headquartered in Dallas, Texas, is the largest
processor and distributor of milk and various other dairy products
in the United States. The company had sales of $7.9 billion for the
twelve months ended June 30, 2017.
E. ALLEN REEVES: To Pay Arch Insurance $450,000 Under Plan
----------------------------------------------------------
E. Allen Reeves, Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania a first amended disclosure
statement dated July 31, 2017, referring to the Debtor's first
amended plan of liquidation.
Class 1 Secured Claim of the Arch Insurance Company is impaired.
The Class 1 creditor has a lien on the Bonded Accounts Receivable
in the amount of $5,523,408.
The Class 1 creditor took control of the Bonded Projects. Arch
entered into a settlement and release agreement with the Debtor
detailing the terms by which its claim will be treated going
forward. A motion to approve the Arch Settlement Agreement was
filed on May 19, 2017, and was scheduled for a hearing on June 14,
2017, and approved by order of the Court. Under the terms of the
Arch Settlement Agreement, within three business days after the
court order approving the Arch Settlement Agreement becomes final
and non-appealable, the Debtor will pay $450,000 to Arch in full
and complete satisfaction of the Arch Claims.
As reported by the Troubled Company Reporter on July 5, 2017, the
Debtor filed a motion asking the Court to approve its disclosure
statement describing its proposed plan of liquidation. Class 2
under the proposed liquidation plan consists of the unsecured
claimants. The Class 2 claim holders will share, on a pro rata
basis, the balance of the Debtor's accounts combined with the
proceeds from the sales of the Debtor's assets after payment of
administrative claims, and priority taxes. The treatment and
consideration to be received by holders of Class 2 Allowed Claims
will be in full settlement, satisfaction, release, and discharge of
their respective claims and liens.
The Debtor adds in its First Amended Plan that various creditors
may have lien or other rights against non-bonded projects or the
owners of non-bonded projects. Those rights are not impaired or
expanded by the confirmation of the Debtor's Plan. Class 2
creditor with any rights may proceed, outside of the Debtor's
Chapter 11 bankruptcy, to assert the rights or seek recovery from
any lien fund established by state law except as may otherwise be
determined or adjudicated in the Peddie School Adversary
Proceedings.
Estimated distribution to unsecured creditors is unknown as of the
time of the filing of the Plan.
The Debtor will liquidate all of its property and assets through
the Plan.
A full-textcopy of the Fist Amended Disclosure Statement is
available at:
http://bankrupt.com/misc/paeb17-11354-268.pdf
About E. Allen Reeves
Founded in 1918, E. Allen Reeves, Inc., is a commercial and
residential contractor based in Abington, Pennsylvania.
E. Allen Reeves sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case No. 17-11354) on Feb. 27,
2017. Robert N. Reeves, Jr., president, signed the petition.
At the time of the filing, the Debtor estimated assets and
liabilities at $1 million to $10 million.
The case is assigned to Judge Ashely M. Chan.
The Debtor hired Ciardi Ciardi & Astin, P.C., as legal counsel;
Kreischr Miller as accountant; and Davis Bucco, Esq., as special
counsel.
ENVISION HEALTHCARE: Air Medical Deal No Impact on Moody's Ratings
------------------------------------------------------------------
Moody's Investors Service commented that Envision Healthcare's (B1
positive) agreement to sell its medical transport business ("AMR")
is credit positive, because it removes uncertainty and will provide
the company with a significant inflow of liquidity that can support
future deleveraging. Envision will sell AMR to private equity firm
KKR's Air Medical Group Holdings, Inc. (B3 stable) for $2.4
billion. Management expects the transaction to close during the
fourth quarter of 2017. There is no impact on Envision's existing
ratings or outlook.
Envision Healthcare Corporation is a leading provider of physician
outsourcing services focused on emergency medicine, hospitalists,
anesthesiology, radiology, and neonatology. The company is also a
leading operator of 258 ambulatory surgery centers (ASCs).
Following the divestiture of its medical transport business,
Envision's revenues from continuing operations will approximate $8
billion.
ESOLA CAPITAL: Taps William H. Brownstein as Legal Counsel
----------------------------------------------------------
Esola Capital Investments LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
legal counsel in connection with its Chapter 11 case.
The Debtor proposes to employ William H. Brownstein & Associates,
P.C. to, among other things, give legal advice regarding its duties
under the Bankruptcy Code, assist in the administration of its
assets and liabilities, and assist in the preparation of a plan of
reorganization.
William Brownstein, Esq., the attorney who will be handling the
case, will charge an hourly fee of $495. Law clerks and paralegals
will charge $125 per hour.
The firm received $4,200 from Danny Tepper, managing member of the
Debtor, prior to the petition date.
Mr. Brownstein disclosed in a court filing that he and his firm are
"disinterested persons" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
William H. Brownstein, Esq.
William H. Brownstein & Associates, P.C.
11755 Wilshire Boulevard, Suite 1250
Los Angeles, CA 90025-1540
Tel: (310) 458-0048
Fax: (310) 362-3212
Mobile/Pager: (310) 877-9882
Email: Brownsteinlaw.bill@gmail.com
About Esola Capital Investments
Esola Capital Investments, LLC is in the real estate management,
financial, and collection business. It is an affiliate of Escola
Capital Investment, LLC that sought bankruptcy protection on July
26, 2015 (Bankr. C.D. Cal. Case No. 15-12526).
The Debtor filed a Chapter 11 petition (Bankr. C.D. Calif. Case No.
17-11987) on July 25, 2017. Dan Tepper, managing member, signed
the petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets of less than $50,000 and liabilities of $1 million
to $10 million.
ETERNAL ENTERPRISE: Can Use Cash to Defray August 2017 Expenses
---------------------------------------------------------------
Judge James J. Tancredi of the U.S. Bankruptcy Court for the
District of Connecticut authorized Eternal Enterprise, Inc., to use
cash collateral on an interim basis from Aug. 1, 2017 through Aug.
31, 2017, pursuant to the Budget.
The Debtor may use cash collateral in maintaining its properties
and for payment of the U.S. Trustee's statutory fees. The Budget
reflects total expenses in the aggregate sum of $116,322.
The Debtor concedes that the cash collateral is subject to the
security interests of Hartford Holdings, LLC, as successor to the
interests of Astoria Federal Mortgage Corporation.
In exchange for use of cash collateral by the Debtor said Hartford
Holdings is granted replacement liens in all after-acquired
property of the Debtor from this property, which liens will be of
equal extent and priority to that which the Astoria Federal
Mortgage Corporation enjoyed with regard to the said property at
the time the Debtor filed its Chapter 11 petition.
The Debtor is authorized to use up to $112,322 ($116,322 in the
Budget less the sum of $4,000 for "accounting") of cash collateral
and make a reduced adequate protection payment of $3,678 to
Hartford Holdings. Accordingly, the Debtor is directed pay the sum
of $31,322 make up payments for this period upon receipt of payment
for lost income from the Debtor insurance policy.
The Debtor is also directed to make a direct monthly payment to the
City of Hartford, the sum of $29,219, to be applied to the real
estate tax obligations for the Debtor's several properties located
in the City of Hartford (excluding 360 Laurel Street) on a pro rata
basis.
To the extent that the adequate protection provided turns out to be
inadequate, Hartford Holdings, LLC will be entitled to a
superpriority administrative expense claim pursuant to the
provisions of Code Sec. 507(b).
The further hearing on the continued use of cash collateral will be
held on August 29, 2017 at 10:00 am.
A full-text copy of the Order, dated August 3, 2017, is available
at https://is.gd/LBvPU1
About Eternal Enterprise
Eternal Enterprises Inc. -- http://www.eternalenterprises.net/--
was initially started in 1997 for the purpose of managing and
owning low income apartment buildings in Hartford, Connecticut.
Since its inception, Eternal has been a family business primarily
operated by spouses, Vera Mladen and Dusan Mladen, and their son,
Goran Mladen.
Eternal Enterprises, which owns and manages eight properties
located in Hartford, Connecticut, filed a Chapter 11 bankruptcy
petition (Bankr. D. Conn. Case No. 14-20292) on Feb. 19, 2014. Vera
Mladen, president, signed the petition.
Judge Ann M. Nevins presides over the case.
Irene Costello, Esq., at Shipkevich, PLLC, serves as counsel to the
Debtor, while Greene Law, PC, acts as special counsel. Lakeshore
Realty has been tapped as broker to the Debtor.
The Debtor estimated assets at $50,000 to $100,000 and debt at $1
million to $10 million at the time of the Chapter 11 filing.
* * *
On Feb. 8, 2017, the Debtor filed a disclosure statement, which
explains its Chapter 11 plan of reorganization. The Plan proposes
to pay general unsecured creditors in full in cash.
FLO'S LLC: Taps Allen Barnes as Legal Counsel
---------------------------------------------
Flo's, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Arizona to hire Allen Barnes & Jones, PLC as legal
counsel.
The firm will provide legal services to the company and its
affiliates Flo's Restaurants, Inc. and Flo's Second, LLC in
connection with their Chapter 11 cases.
Allen Barnes will, among other things, advise the Debtors regarding
their duties under the Bankruptcy Code and negotiate with their
creditors.
The attorneys who will be handling the cases and their hourly rates
are:
Thomas Allen Member $395
Hilary Barnes Member $375
Michael Jones Member $335
Philip Giles Associate $285
Khaled Tarazi Associate $255
Legal assistants and law clerks will charge an hourly fee ranging
from $115 to 135.
The firm received a retainer of $36,000 from the Debtors'
principals Dustin Wallace and Florence Chan prior to the petition
date.
Allen Barnes does not represent any interest adverse to the Debtors
or their estates, according to court filings.
The firm can be reached through:
Michael A. Jones, Esq.
Khaled Tarazi, Esq.
Allen Barnes & Jones, PLC
1850 N. Central Ave., Suite 1150
Phoenix, AZ 85004
Office: (602) 256-6000
Fax: (602) 252-4712
Email: mjones@allenbarneslaw.com
Email: ktarazi@allenbarneslaw.com
About Flo's LLC
Flo's LLC, Flo's Second LLC and Flo's Restaurants Inc. sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case Nos. 17-09181, 17-09183 and 17-09186) on August 8, 2017.
Dustin W. Wallace, manager, signed the petitions.
At the time of the filing, the Debtors disclosed that they had
estimated assets of less than $50,000 and liabilities of $1 million
to $10 million.
FOOD HUB ORANGE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on Aug. 8 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Food Hub Orange Park, Inc.
About Food Hub Orange Park, Inc.
Food Hub Orange Park, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 17-02086) on June 7, 2017, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Jason A. Burgess, Esq., at the Law Offices of Jason
A. Burgess, LLC.
GABEL LEASE: Combined Plan & Disclosures Hearing Set for Sept. 14
-----------------------------------------------------------------
The U.S. Bankruptcy Court in Kansas is set to hold a hearing on
Sept. 14, 2017, to consider approval of Gabel Lease Service, Inc.'s
proposed plan to exit Chapter 11 protection.
The Court will also consider at the hearing approval of the
disclosure statement, which explains the company's plan of
reorganization.
In its latest disclosure statement filed on August 1, GLS disclosed
that the company and Larson Engineering Inc. reached a resolution
of their disputes. The resolution resulted in the agreement by the
company to provide Larson with 23 replacement pumping units over
two and a half years.
The company also agreed to include the interest on Larson's allowed
claim in Class 5 to receive distributions as part of the general
unsecured claim.
GLS further disclosed in the document that it will pay all allowed
Class 5 unsecured claims in full over the next five years from
these sources: (i) $30,000 of Brian Gabel, who owns all stock in
the company; (ii) GLS' disposal income; and (iii) any recovery from
Chapter 5 or other avoidance actions brought by the creditors'
committee.
A copy of the Third Amended Disclosure Statement is available for
free at https://is.gd/y0aVNu
About Gabel Lease Service
Gabel Lease Service, Inc., operates as a roustabout company in and
around Ness City, Kansas. GLS also sells pumping units to
customers. Due to the current economic climate, GLS' business
suffered a significant decrease in cash flow. The drop in
oil-and-gas prices has decreased the frequency in which GLS
provides roustabout services to customers and decreased the number
of customers willing to purchase pumping units from the company.
In early 2016, Larson Engineering, Inc., d/b/a Larson Operating
Co., filed suit against GLS in Ness County District Court,
alleging that it purchased 28 Gabel pumping units in 2008 and 2009
from GLS and took delivery of only 5 pumping unit over a 5-year
period.
Eventually, on Dec. 7, 2015, Larson claims it demanded the
Delivery of the remaining units and filed suit when GLS failed to
do so.
Facing the Larson suit and other cash-flow problems, GLS filed a
Chapter 11 petition (Bankr. D. Kan. 16-11948) on Oct. 5, 2016.
The petition was signed by Brian Gabel, president. At the time of
filing, the Debtor estimated assets of less than $500,000 and
liabilities of $1 million to $10 million.
Judge Robert E. Nugent presides over the case.
The Debtor tapped Nicholas R. Grillot, Esq., at Hinkle Law Firm,
LLC, as bankruptcy counsel. The Debtor hired Keenan Law Firm, P.A.
as special counsel; and Adams, Brown, Beran & Ball, Chtd. as its
accountant.
On Nov. 21, 2016, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee retained
Tom R. Barnes II, Esq., at Stumbo Hanson, LLP, as its legal
counsel.
On March 20, 2017, the Debtor filed a Chapter 11 plan of
reorganization and disclosure statement.
GALVESTON BAY: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Galveston Bay Properties LLC
2464 FM 725
New Braunfels, TX 78130
Type of Business: Oil and Gas Extraction
Case No.: 17-51905
Chapter 11 Petition Date: August 9, 2017
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: Kell C. Mercer, Esq.
KELL C. MERCER, PC
1602 E Cesar Chavez St
Austin, TX 78702
Tel: (512) 627-3512
Fax: (512) 597-0767
E-mail: kell.mercer@mercer-law-pc.com
Estimated Assets: $10 million to $50 million
Estimated Debt: $1 million to $10 million
The petition was signed by Dan Polk, manager. A full-text copy of
the petition is available for free at:
http://bankrupt.com/misc/txwb17-51905.pdf
Debtor's List of 17 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Archrock Services, LP $400,792
PO Box 201160
Dallas, TX
75320-1160
Ard Well Service LLC $19,008
Integrity Energy Solutions $22,672
Jim Dial $16,081
Kimray Inc. $18,352
OMI Environmental Solutions $29,634
Peninsula Marine Inc. $33,140
Premium Assignment Corporation $83,502
Quintium Private $875,000
Opportunities Fund LP
9202 S. Northshore
Drive, Suite 301
Knoxville, TN 37922
Reynaldo Trejo Trucking $19,910
Shadow Tree $2,625,000
Income Fund A, LP
Attn: Sam Gradess
7 Renaissance
Square, 5th Floor
White Plains, NY 10528
South Soast Fire & Safety $18,685
Spectral Oil & Gas $30,000
USI Southwest $15,729
Walne Law, LLC $33,096
William Craig Alexander $23,523
Worldwide Power Products $32,061
GARDNER DENVER: S&P Assigns 'B+' Rating on 2024 EUR660MM Term Loan
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Gardner Denver Inc.'s proposed EUR660 million
term loan due 2024. The company plans to utilize the proceeds from
the new term loan to refinance its existing EUR400 million term
loan while using the remaining proceeds to reduce a like amount of
its existing U.S. term loan borrowings. The '3' recovery rating
reflects S&P's expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a default.
S&P said, "At the same time, we affirmed our 'B+' issue-level
rating on the company's existing U.S. dollar-denominated secured
credit facilities, which include an amended and repriced $1.243
billion term loan due 2024 and a $360 million revolving credit
facility due 2020. The '3' recovery rating remains unchanged,
indicating our expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a payment default.
"We plan to withdraw our issue-level and recovery ratings on
Gardner Denver's existing EUR400 million term loan once the
transaction is complete."
Pro forma for the refinancing, Gardner Denver's capital structure
will comprise a $360 million secured first-lien revolving credit
facility due 2020, a $1.243 billion term loan due 2024, a EUR660
million term loan due 2024, and a receivables financing agreement
due 2019 (unrated).
All of S&P's other ratings on Gardner Denver Inc. remain
unchanged.
RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a sharp
deterioration in Gardner Denver's operating performance stemming
from decreased demand for its compressor and vacuum products due to
sustained weak global industrial production and significantly
reduced demand for its high-margin fluid transfer products.
-- S&P assumes that--at default--the company's $360 million
revolving credit facility is 85% drawn and that the unrated
receivables financing agreement is 60% drawn.
-- S&P has valued Gardner Denver on a going-concern basis using a
5.5x multiple and an estimated distressed emergence EBITDA of
$253.1 million. This multiple is in line with those that we use for
Gardner Denver's peers that share a similar business risk profile
assessment.
Simulated default assumptions
-- Simulated year of default: 2021
-- EBITDA at emergence: $253.1 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% admin. costs): $1.170 billion
-- Valuation split (obligors/nonobligors): 45%/55%
-- Value available to first-lien debt claims
(collateral/noncollateral): $916 million/$254.6 million
-- Secured first-lien debt claims: $2.250 billion
--Recovery expectations: 50%-70% (rounded estimate: 50%)
RATINGS LIST
Gardner Denver Inc.
Corporate Credit Rating B+/Stable/--
New Rating
Gardner Denver Inc.
EUR660M Term Loan Due 2024 B+
Recovery Rating 3(50%)
Ratings affirmed; recovery rating unchanged
Gardner Denver Inc.
Senior Secured
$1.243B Term Loan Due 2024 B+
Recovery Rating 3(50%)
$360M Revolver Due 2020 B+
Recovery Rating 3(50%)
GENERAL WIRELESS: Wants Up To $2M Financing From Cortland Capital
-----------------------------------------------------------------
General Wireless Operations Inc., d/b/a Radioshack, et al., seek
permission from the U.S. Bankruptcy Court for the District of
Delaware to obtain up to $2 million in DIP financing financing from
Cortland Capital Market Services LLC, as agent for the DIP
lenders.
The Debtors ask that the Court hold a hearing on Aug. 16, 2017, at
10:00 a.m. to consider the approval of the DIP financing. The
Debtors also ask that objections to their request be filed by Aug.
11, 2017, at 4:00 p.m.
Since the commencement of these cases, the Debtors have financed
their operations solely by utilizing cash collateral, first
pursuant to an interim cash collateral order and then pursuant to a
final cash collateral order entered on April 11, 2017.
The substantial reduction in cash flow from brick and mortar
operations, combined with restructuring expenses and certain
ongoing legacy expenses, including healthcare, have impacted the
Debtors' near term liquidity. Going forward, the Debtors intend to
(i) continue the orderly sale of their inventory; and (ii) propose
and confirm a plan of reorganization, all in an effort to maximize
value for the benefit of their creditors. However, because of the
Debtors' liquidity issues, to do so the Debtors require a prompt
capital infusion.
The Debtors do not wish to disrupt the terms upon which they are
currently authorized to use cash collateral, and hence they do not
seek a modification of the final cash collateral court order.
Rather, the instant motion simply seeks approval of a proposed
debtor-in-possession financing facility by which lenders affiliated
with the Debtors' existing the Junior Lien Creditors, will provide
up to $2 million of financing secured by first priority liens and
superpriority claims which will be junior to the Carve-Out and
Junior Permitted Liens, but senior to the liens and claims of the
Junior Lien Creditors. The proposed postpetition financing will,
among other things, provide capital necessary to allow the Debtors
to continue the orderly sale of inventory and pursue a plan of
reorganization.
Under their prevailing cash collateral budget, the Debtors project
a need for additional liquidity by the week ending Aug. 18, 2017.
The Debtors ask that the Court authorize the Debtors to:
a. grant security interests, liens and superpriority claims
(including a super-priority administrative claim pursuant
to Section 364(c)(1) of the U.S. Bankruptcy Code, liens
pursuant to Sections 364(c)(2) and 364(c)(3) of the
Bankruptcy Code and priming liens pursuant to section
364(d) of the Bankruptcy Code) on the collateral,
provided, however, that the DIP Liens and super-priority
administrative claim will be subordinate, and junior in
all respects to the carveout and Junior Permitted Liens to
the extend set forth in the final cash collateral court
order and the DIP court order; and
b. make non-refundable payments of the principal, interest,
fees, expenses and other amounts payable in accordance
with the terms of the DIP Facility and the DIP court order
approving the DIP facility.
The DIP Facility will have an interest of LIBOR plus 10%. The
Agent Fee is yet to be disclosed. As compensation for the DIP
Facility, an amount equal to 3% of the total commitment will be
deducted from the initial borrowing. In addition, a facility fee
will be payable monthly calculated at a 1-1/2% annualized rate.
In respect of the DIP Financing the DIP Lenders will have Liens on
all on the collateral and superpriority claims that will be (a)
subordinate and junior to (i) Junior Permitted Liens (which are
senior to the liens of the Junior Lien Creditors under the final
cash collateral court order), and (ii) the carve-out, and (b)
senior to the liens and superpriority claims of the Junior Lien
Agent and Junior Lien Creditors under the final cash collateral
court order.
The DIP Facility will mature on the earlier of (x) the date that is
four months after the entry of the DIP court order by the Court or
(y) the effective date of a Chapter 11 plan in the case.
The Junior Lien Creditors and the Junior Lien Agent will retain as
adequate protection the Junior Replacement Liens and superpriority
claims granted to them under the final cash collateral court order,
in accordance with the terms of such order, as supplemented by the
DIP court order.
A copy of the Debtor's request is available at:
http://bankrupt.com/misc/deb17-10506-856.pdf
About General Wireless
Based in Fort Worth, Texas, General Wireless Operations Inc., doing
business as RadioShack -- http://www.RadioShack.com/-- operates a
chain of electronics stores. Its predecessor, RadioShack Corp.,
then with 4,000 locations, sought Chapter 11 protection (Bankr. D.
Del. Case No. 15-10197) in February 2015 and announced plans to
close underperforming stores.
In March 2015, General Wireless, a Standard General affiliate, won
court approval to purchase RadioShack Corp.'s assets, gaining
ownership of around 1,700 RadioShack locations. Two years later,
General Wireless commenced its own bankruptcy case, announcing
plans to close 200 of 1,300 remaining stores.
General Wireless Operations Inc., and its affiliates based in Fort
Worth, Texas, filed a Chapter 11 petition (Bankr. D. Del. Lead Case
No. 17-10506) on March 8, 2017. In its petition, General Wireless
estimated $100 million to $500 million in both assets and
liabilities. Bradford Tobin, SVP and general counsel, signed the
petitions.
The Debtors tapped Pepper Hamilton LLP as legal counsel; Loughlin
Management Partners & Company, Inc., as financial advisor; and
Prime Clerk, LLC, as claims and noticing agent.
On March 17, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee selected
Kelley Drye & Warren LLP as its lead counsel; Klehr Harrison Harvey
Branzburg LLP as local counsel; Bartlit Beck Herman Palenchar &
Scott LLP, as special counsel; and Berkeley Research Group LLC as
financial advisor.
GIGA-TRONICS INC: Incurs $1.25 Million Net Loss in First Quarter
----------------------------------------------------------------
Giga-tronics Incorporated filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.25 million on $1.99 million of net sales for the three months
ended June 24, 2017, compared to a net loss of $102,000 on $3.44
million of net sales for the three months ended June 25, 2016.
These losses have contributed to an accumulated deficit of $26.8
million as of June 24, 2017. The Company used cash flow in
operations totaling $1.1 million and $589,000 in the first quarter
of fiscal 2018 and 2017, respectively.
The Company has experienced delays in the development of features,
receipt of orders, and shipments for the new Advanced Signal
Generator ("ASG"). These delays have contributed, in part to a
decrease in working capital. The new ASG product has shipped to
several customers, but potential delays in the development of
features, longer than anticipated sales cycles, or uncertainty as
to the Company's ability to efficiently manufacture the ASG, could
significantly contribute to additional future losses and decreases
in working capital.
To help fund operations, the Company relies on advances under the
line of credit with Bridge Bank which expires on May 6, 2019. The
agreement includes a subjective acceleration clause, which allows
for amounts due under the facility to become immediately due in the
event of a material adverse change in the Company's business
condition (financial or otherwise), operations, properties or
prospects, or ability to repay the credit based on the lender's
judgement. As of June 24, 2017, the line of credit had a balance
of $582,000.
The Company said these matters raise substantial doubt as to the
Company's ability to continue as a going concern.
As of June 24, 2017, Giga-tronics had $9.06 million in total
assets, $8.39 million in total liabilities and $668,000 in total
shareholders' equity.
As of June 24, 2017, Giga-tronics had $1.1 million in cash and cash
equivalents, compared to $1.4 million as of March 25, 2017. The
Company had negative working capital at June 24, 2017 compared to
$620,000 at March 25, 2017. The current ratio (current assets
divided by current liabilities) at June 24, 2017, was 0.95 compared
to 1.09 at March 25, 2017. The decrease in working capital is
primarily due to declining revenues resulting in net losses in the
recent periods.
The Company said it will need additional financing to continue to
fund operations; such financing may not be available on terms
favorable to the Company if at all, which raises substantial doubt
about our ability to continue as a going concern as of the date of
this report.
"If adequate funds are not available, the Company may be required
to delay, reduce the scope of, or eliminate some of its operations.
The Company plans to meet its capital requirements primarily
through issuances of equity securities, future partnerships, debt
financing or possible product line sales. Failure to generate
revenue or raise additional capital would adversely affect our
ability to achieve our intended business objectives. No assurance
can be given that the Company will be able to meet its capital
requirements through these means or otherwise."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/va5XHU
About Giga-tronics
Headquartered in Dublin, California, Giga-tronics Incorporated
(NASDAG:GIGA) produces electronic warfare instruments used in the
defense industry and YIG RADAR filters used in fighter jet
aircraft. It designs, manufactures and markets the new Advanced
Signal Generator (ASG) for the electronic warfare market, and
switching systems that are used in automatic testing systems
primarily in aerospace, defense and telecommunications.
Giga-tronics reported a net loss of $1.54 million on $16.26 million
of net sales for the year ended March 25, 2017, compared to a net
loss of $4.10 million on $14.59 million of net sales for the year
ended March 26, 2016.
GREAT FOOD: Has Interim Approval to Use Cash Collateral
-------------------------------------------------------
The Hon. Carl L. Bucki of the U.S. Bankruptcy Court for the Western
District of New York has granted Great Food Great Fun, LLC, et al.,
authorization to use cash collateral on an interim basis.
A final hearing on the Debtors' motion to use of cash collateral
will be held on Aug. 14, 2017, at 10:00 a.m.
As reported by the Troubled Company Reporter on Aug. 4, 2017, the
secured creditors having claim liens against the Debtors are U.S.
Foods, Inc./U.S. Foodservice, Inc.; Cosina Corporation; the
Internal Revenue Service; the New York State Department of Taxation
and Finance; Snap Advances, LLC; GU Capital; Tango Capital; and
Northwest Savings Bank.
In a court order dated July 28, 2017, each of the Debtors were
authorized and permitted to use cash collateral in the ordinary
course, in the amount of up to $16,000 for Great Food Great Fun and
in the amount of up to $27,000 for Professional Hospitality, on an
emergency basis, until the time of the interim hearing dated Aug.
7, 2017. A copy of that court order is available at:
http://bankrupt.com/misc/nywb17-11557-33.pdf
In a court order dated Aug. 7, 2017, each of the Debtors is
authorized and permitted to use cash collateral in the amount of up
to $35,000 for Great Food Great Fun and in the amount of up to
$58,000 for Professional Hospitality, on an interim basis, in
addition to the up to $16,000 use of cash collateral for Great Food
Great Fun and in the amount of up to $27,000 use of cash collateral
for Professional Hospitality authorized previously on an emergency
basis, until the time of a final hearing on the Debtors' request,
in accordance with (within 5%) those proforma income and expense
projections.
As interim adequate protection to the Secured Creditors, the
Secured Creditors are granted rollover replacement liens in
post-petition assets of the Debtors of the same relative priority
and on the same types and kinds of collateral as they possessed
pre-petition, as the same may ultimately be determined, to the
extent of cash collateral actually used and not paid down by the
Debtors, effective as of the date of the filing of this case,
without the necessity of any further public filing or other
recordation to perfect the liens or security interests.
As additional adequate protection to the Secured Creditors, Debtor
Great Food Great Fun will make these adequate protection payments:
-- as adequate protection to GFGF landlord Cosima, current
rent will be paid at the rate of $1,500 per week.
Additionally, starting on Sept. 1, 2017, GFGF will start
making payments of $1,000.69 per month toward back rental
amounts owed by GFGF;
-- as adequate protection to US. Foods, all current purchases
will be paid COD upon delivery. Additionally, GFGF will
pay $1,000 per week toward arrears owed; and
-- as adequate protection to partially secured claims of the
IRS, GFGF will make adequate protection payments to the
IRS at the rate of $1,000 per week, starting Aug. 10,
2017.
As additional adequate protection to the Secured Creditors, Debtor
Professional Hospitality will make these adequate protection
payments:
-- as adequate protection to U.S. Foods, all current
purchases will be paid COD upon delivery. Additionally,
PH will pay $10,000 per week toward arrears owed until its
Seasonal closure on Sep. 30, 2017; and
-- as adequate protection to the partially secured claims of
NYS Tax, PH will make payments at a rate of $1,000 per
week, starting Aug. 10, 2017, until its seasonal closure
on Sept. 30, 2017.
A copy of the Interim Order dated Aug. 7, 2017, is available at:
http://bankrupt.com/misc/nywb17-11557-50.pdf
About Great Food Great Fun and
Professional Hospitality
Great Food Great Fun, LLC, and Professional Hospitality, LLC, filed
Chapter 11 petitions (Bankr. W.D.N.Y. Case Nos. 17-11557 and
17-11558, respectively). Judge Carl L. Bucki presides over the
Debtors' cases. Daniel F. Brown, Esq., at Andreozzi Bluestein LLP,
serves as counsel to the Debtors.
GREATER HOPE BAPTIST: Plan Confirmation Hearing Set for Sept. 12
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Tennessee is
set to hold a hearing on Sept. 12, 2017, to consider approval of
the Chapter 11 plan of reorganization for Greater Hope Baptist
Church, Inc.
The church's latest plan contains revisions to the provisions
governing the treatment of Class 4 claim of Shelby County Trustee
in the amount of $4,824 and Class 5 claim of the City of Memphis in
the amount of $14,081. Both claims are for unpaid property taxes.
Under the plan, the Class 4 claim of Shelby County Trustee will be
paid, with accruing statutory interest calculated on the base tax
included in such claim at 12% per annum until July 1, 2017, and at
18% per annum beginning July 1, 2017, in monthly payments of at
least $ 122.50 per month. Payments will commence on or before 30
days following the effective date and continuing monthly
thereafter until November 17, 2021.
Meanwhile, the Class 5 claim of the City of Memphis will be paid,
with accruing statutory interest calculated on the base tax
included in such claim at 12% per annum until July 1, 2017, and at
18% per annum beginning July 1, 2017, in monthly payments of at
least $ 357.56 per month.
Payments will start on or before 30 days following the effective
date and continuing monthly thereafter until Nov. 17, 2021,
according to the church's latest disclosure statement which was
approved by the court on Aug. 4.
A copy of the Amended Disclosure Statement is available for free at
https://is.gd/LzE7LI
About Greater Hope Baptist
Greater Hope Baptist Church, Inc. has provided ministerial services
to the Memphis, Tennessee community since February 5, 1960.
Greater Hope Baptist Church sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 16-30641) on Nov.
17, 2016. The petition was signed by Dannie D. Holmes, authorized
representative.
At the time of the filing, the Debtor disclosed $1.06 in assets and
$1.18 million in liabilities.
The case is assigned to Judge David S. Kennedy.
Michael Don Harrell, Esq., serves as the Debtor's bankruptcy
counsel. Dockery Financial Services is the Debtor's tax
consultant.
On June 24, 2017, the Debtor filed its proposed Chapter 11 plan and
disclosure statement.
GREATER HOPE: Bank's Unsecured Claims to be Paid $100 A Month
-------------------------------------------------------------
Greater Hope Baptist Church, Inc., filed with the U.S. Bankruptcy
Court for the Western District of Tennessee a disclosure statement
dated July 31, 2017, referring to the Debtor's plan of
reorganization.
Class 7 will consist of the unsecured claim of Regions Bank in the
amount of $4,465.82 for an unsecured loan. The Class 7 Claim of
Regions Bank will be paid in equal monthly installments, starting
not more than 45 days after the Effective Date of the Plan, in the
amount of $100, which will be paid until such debt is paid in
full.
The plan of Greater Hope to correct its financial problems is to
refinance its mortgage loan in order to pay a smaller monthly
payment. Greater Hope plans to make use of its family life center
to generate funds by having church plays, summer youth camps, and
other activities. Greater Hope also plans to renew their website
and advertising.
Greater Hope will redouble its efforts to increase stewardship.
They will be teaching, preaching, and asking for the congregation
to focus on evangelism and ministry growth. The increase and the
edification of the ministry will purposely be a main concern for
the church's growth and health. Greater Hope intends to greatly
expand its membership.
Greater Hope has, and will continue to identify and make the
necessary cuts in operational costs.
Greater Hope has attached a budget for three years, calendar 2017,
2018 and 2019, respectively. Greater Hope's leadership is
committed to working as diligently as possible to execute the
budgets presented with this document.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/tnwb16-30641-65.pdf
As reported by the Troubled Company Reporter on July 10, 2017, the
Debtor filed with the Court a disclosure statement dated June 24,
2017, referring to the Debtor's plan of reorganization. Under the
Plan, Renasant Bank's Class 6 claim, which consist of the unsecured
claim of Renasant Bank, located at 5240 Poplar Avenue, in Memphis,
Tennessee 38119, in the amount of $50,950.20 for an unsecured loan,
will be paid in equal monthly installments, starting not more than
45 days after the Effective Date of the Plan, in the amount of
$1,000, which will be paid until the debt is paid in full.
About Greater Hope Baptist
Greater Hope Baptist Church, Inc., sought protection under Chapter
11 of the Bankruptcy Code (Bankr. W. D. Tenn. Case No. 16-30641) on
Nov. 17, 2016. The petition was signed by Dannie D. Holmes,
authorized representative.
At the time of the filing, the Debtor disclosed $1.06 in assets and
$1.18 million in liabilities.
The case is assigned to Judge David S. Kennedy. Michael Don
Harrell, Esq., represents the Debtor as bankruptcy counsel. The
Debtor hired Dockery Financial Services as its tax consultant.
On June 24, 2017, the Debtor filed its proposed Chapter 11 plan and
disclosure statement.
H & M CONCRETE: May Use Austin Bank's Cash Collateral Until Aug. 17
-------------------------------------------------------------------
The Hon. Bill Parker of the U.S. Bankruptcy Court for the Eastern
District of Texas has authorized H & M Concrete Services, LLC, to
use cash collateral of Austin Bank, Texas, N.A., for an interim
period from July 21, 2017, to 11:59 p.m. on Aug. 17, 2017.
A final hearing on the Debtor's Motion will be held on Aug. 17,
2017, at 2:00 p.m.
The authorization to use cash collateral will automatically
terminate upon the earlier of (i) relief from stay is obtained with
respect to the collateral, (ii) the case is dismissed, (iii) the
case is converted to one under Chapter 7, (iv) a Chapter 11 trustee
is appointed, or (v) a payment is made which is not authorized by
the court order or otherwise consented to in writing by Austin
Bank.
Austin Bank is granted, as of July 21, 2017, replacement liens,
solely to the extent of the lender's actual interest in cash
collateral and any diminution in its secured position as a result
of the Debtor's use of cash collateral in the interim period, upon:
(i) all assets in which a validly perfected lien existed as of the
Petition Date; (ii) all property acquired by the Debtor in the
interim period that is of the exact nature, kind, or character as
the lender's pre-petition collateral; and (iii) all cash and
receivables attributable to the lender's pre-petition collateral.
The Debtor will provide the Lender with a weekly report reconciling
all postpetition revenues and expenditures with the budget. Each
report will identify the source and amount of revenue received.
As additional component of adequate protection, the Debtor will
provide Austin Bank with a written report of outstanding accounts
receivable invoiced by the Debtor, outstanding accounts payable
invoiced to the Debtor, work performed but not invoiced, and any
jobs or contracts awarded to the Debtor but not performed, as of
the end of business on Aug. 11, 2017.
The Debtor will deposit in its operating account (or DIP account as
soon as access to the DIP account is available) all monies and
revenues generated from the operation of its business and will make
all expenditures from that account.
A copy of the Order is available at:
http://bankrupt.com/misc/txeb17-60532-12.pdf
About H & M Concrete
H & M Concrete Services, LLC, which provides concrete services,
filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case
No. 17-60532) on July 21, 2017.
The Debtor is represented by Eric A. Liepins, Esq., at Eric A.
Liepins, P.C., serves as the Debtor's bankruptcy counsel.
HAMPSHIRE GROUP: Exclusive Plan Filing Deadline Moved to Sept. 20
-----------------------------------------------------------------
The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for
the District of Delaware has extended, at the behest of Hampshire
Group, Limited, et al., the exclusive periods during which only the
Debtors may file a Chapter 11 plan of liquidation and solicit
acceptances thereof, through and including Sept. 20, 2017, and Nov.
20, 2017, respectively.
As reported by the Troubled Company Reporter on July 28, 2017, the
Debtors asked for the extension to preserve the status quo in these
cases through one week after the requested date of the hearing for
confirmation of the Proposed Plan and final approval of the
Proposed Disclosure Statement.
The Debtors related that shortly after entry of the Third Extension
Order, the Debtors and the Official Committee of Unsecured
Creditors jointly filed their Proposed Plan, Proposed Disclosure
Statement, and the Solicitation Motion on July 19, 2017. A hearing
on the Solicitation Motion has been scheduled for Aug. 17 at 10:30
a.m., and the Debtors and the Committee jointly requested that the
Court, among other things, schedule the hearing on confirmation of
the Proposed Plan and final approval of the Proposed Disclosure
Statement for Sept. 13 at 1:00 p.m.
About Hampshire Group, Ltd.
New York-based Hampshire Group, Limited (OTC Markets: HAMP) is a
provider of fashion apparel across a broad range of product
categories, channels of distribution and price points. As a holding
company, the Company operates through its wholly-owned
subsidiaries, Hampshire Brands, Inc. and Hampshire International,
LLC.
Hampshire Group, Limited and two affiliates -- Hampshire Brands and
Hampshire International -- sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 16-12634 to 16-12636) on Nov. 23, 2016,
to facilitate the orderly wind-down of their business operations.
The petitions were signed by Paul Buxbaum, president and chief
executive officer.
Hampshire Group disclosed $25.9 million in assets and $41.8 million
in liabilities. Brands listed under $50 million in both assets and
debts. International listed under $50,000 in assets and under $50
million in liabilities.
Louis M. Rappaport, Esq., at Blank Rome LLP represents the Debtors.
William Drozdowski of GRL Capital Advisors LLC has been tapped as
the Debtors' chief financial officer.
The U.S. Trustee for Region 3 has appointed five creditors to serve
in the official unsecured creditors committee in the case.
Pachulski Stang Ziehl & Jones LLP serves as legal counsel and
Gavin/Solmonese LLC as financial advisor to the Committee.
* * *
The Bankruptcy Court authorized Hampshire Group, Limited, to sell
certain assets to The Fashion Exchange, LLC pursuant to an asset
purchase agreement dated Jan. 13, 2017. The sold assets include
James Campbell assets. The consideration for the Inventory on Hand
will be an amount equal to $10.95 multiplied by the number of items
of Inventory on Hand as of the Closing Date. The consideration for
all other Acquired Assets will be $0.14 million. Klestadt Winters
Jureller Southard & Stevens, LLP, served as legal advisor to the
buyer.
HARRINGTON & KING: Unsecured Creditors to Get 5% in Latest Plan
---------------------------------------------------------------
Unsecured creditors of The Harrington & King Perforating Co., Inc.
and Harrington & King South Inc. may get 25% of their claims in
five years, according to the companies' latest Chapter 11 plan of
reorganization.
Under the latest plan, creditors holding allowed Class 3 general
unsecured claims will receive a total distribution of 5% of their
claims. Payments will be made in five equal annual installments,
according to the companies' latest disclosure statement filed with
the U.S. Bankruptcy Court for the Northern District of Illinois.
The original plan filed on April 11 had proposed to pay general
unsecured creditors 25% of their claims in five years.
A copy of the disclosure statement is available for free at
https://is.gd/GK5FNz
About The Harrington & King Perforating
The Harrington & King Perforating Co., Inc. and Harrington & King
South Inc. are in the business of manufacturing perforating metal
sheets and rolled coils of varying gauges and types to produce hole
patterns of various sizes, shapes, and spacing. Most of the work
is done to customer specifications and consists of high value-added
jobs, not typical of most metal punching. The products are used in
automotive, acoustics, architecture, food and pharmaceutical
straining and filtering, interior design, manufacturing, safety
flooring, pollution control, transportation and mining cleaning and
grading, electronics and other fields.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ill. Case Nos. 16-15650 and 16-15651) on May 7,
2016. The petitions were signed by Greg McCallister, chief
restructuring officer and chief operating officer. The cases are
jointly administered under Case No. 16-15650.
The Debtors each estimated assets and liabilities in the range of
$1 million to $10 million.
The cases are assigned to Judge Deborah L. Thorne.
The Debtors engaged The Law Office of William J. Factor, Ltd. as
bankruptcy counsel. The Debtors tapped Ulmer & Berne LLP as
special counsel; Spiegel & Cahill, P.C. as special workers'
compensation counsel; Beacon Management Advisors LLC as financial
advisor; and Cushman & Wakefield of Illinois, Inc. as real estate
broker.
The official committee of unsecured creditors hired Goldstein &
McClintock LLLP as its legal counsel and Conway MacKenzie, Inc. as
its financial advisor.
On April 11, 2017, the Debtors filed a disclosure statement, which
explains their proposed Chapter 11 plan of reorganization.
HILTZ WASTE: Trustee Hires Murtha Cullina as Counsel
----------------------------------------------------
Mark G. DeGiacomo, the duly-appointed Chapter 11 Trustee for Hiltz
Waste Disposal, Inc, seeks authority from the US Bankruptcy Court
for the District of Massachusetts, Eastern Dvision, to retain the
law firm of Murtha Cullina LLP as his counsel.
The professional services that Murtha Cullina is to render are:
a. prepare all necessary pleadings associated with the
liquidation and recovery of estate assets;
b. represent the Trustee at all Court proceedings;
c. assist the Trustee in the investigation of fraudulent
transfers and insider and non-insider preferences; and
d. perform other legal services as may be required in the
interest of creditors of the Debtor.
Mark G. DeGiacomo, Esq., a partner at Murtha Cullina LLP, attests
that he and each member of the firm is a "disinterested person" as
that term is defined in 11 U.S.C. Sec. 101(14).
The Firm can be reached through:
Mark G. DeGiacomo, Esq.
Murtha Cullina LLP
99 High Street
Boston, MA 02110
Tel: 617-457-4000
Fax: 617-482-3868
Email: mdegiacomo@murthalaw.com
About Hiltz Waste Disposal
Hiltz Waste Disposal, Inc., filed a Chapter 11 petition (Bankr. D.
Mass. Case No. 16-13459) on Sept. 7, 2016. Deborah S. Hiltz,
president, signed the petition. The Debtor estimated assets and
liabilities at $1 million to $10 million.
The case is assigned to Judge Joan N. Feeny.
Aaron S. Todrin, Esq., at Sassoon & Cymrot, LLP, serves as counsel
to the Debtor. Silverman, Avila & Gershaw, CPAs, is the Debtor's
accountants.
The Official Committee of Unsecured Creditors formed in the case
retained Morrissey Wilson & Zafiropoulos, LLP, as counsel to the
Committee, effective as of Oct. 19, 2016.
Mark G. DeGiacomo has been appointed as Chapter 11 Trustee for the
Debtor.
HUNDRED OAKS: Case Summary & 3 Unsecured Creditors
--------------------------------------------------
Debtor: Hundred Oaks Office Park, LLC
131 Dudley Street, #601
Jersey City, NJ 07302
Type of Business: Hundred Oaks is a privately held company in
Jersey City, NJ categorized under office
buildings and parks. It is a single asset real
estate (as defined in 11 U.S.C. Section
101(51B).
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-13186
Court: United States Bankruptcy Court
Western District of Oklahoma (Oklahoma City)
Judge: Hon. Janice D. Loyd
Debtor's Counsel: Charles E. Wetsel, Esq.
TEAGUE & WETSEL, PLLC
1741 West 33rd Street, Suite 120
Edmond, OK 73013
Tel: (405) 285-9200
Fax: (405) 285-9201
E-mail: cwetsel@teaguewetsel.com
Estimated Assets: $10 million to $50 million
Estimated Debt: $1 million to $10 million
The petition was signed by Dale F. Jackson, manager. A full-text
copy of the petition is available for free at:
http://bankrupt.com/misc/okwb17-13186.pdf
Debtor's List of Three Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Oklahoma County Treasurer $20,962
320 Robert S. Kerr, Rm. 307
Oklahoma City, OK 73102
Forrest Freeman
Tel: (405) 713-1300
OK Dept. of Environmental Quality $695
P.O. Box 2036
Oklahoma City, OK 73101
Scott Thompson
Tel: (405) 702-6100
Extreme Erosion Control, LLC $3,750
13310 Hickory Hills Road
Arcadia, OK 73007
Ron Dunlap
Tel: (405) 605-9197
INCA REFINING: Court Rejects Bid for Chapter 11 Trustee
-------------------------------------------------------
The Hon. Jerry A. Brown of the U.S. Bankruptcy Court for the
Eastern District of Louisiana, upon the Motion filed by petitioning
creditors White Oak Opportunity SRV, L.P., White Oak Strategic II
SRV, L.P., White Oak Strategic Master Fund, L.P, issued an order
denying the appointment of a Trustee in the Chapter 11 case of INCA
Refining, LLC.
About INCA Refining
INCA Refining is a single asset real estate (as defined in 11
U.S.C. Section 101(51B)). Its principal assets are located at 9673
La. Highway 18, Lower Elina Plantation, St. James, LA 70086.
An involuntary Chapter 11 petition was filed against INCA Refining,
LLC (Bankr. E.D. La. Case No. 17-11182) on May 9, 2017. The case
is assigned to Judge Jerry A. Brown.
INDUSTRIAL HEAT TREATING: Gets Approval for Liquidating Plan
------------------------------------------------------------
Industrial Heat Treating, Inc. on Aug. 8, 2017, received approval
from the U.S. Bankruptcy Court in Massachusetts for its Chapter 11
plan of liquidation and disclosure statement.
The court approved the liquidating plan and disclosure statement
subject to the filing of a FRBP Rule 9019 motion with respect to
the administrative expense claim of Key Realty Inc.
Key Realty had previously objected to the plan, saying it denies
the firm any compensation for the services it provided to
Industrial Heat as its real estate broker.
The firm also complained that the plan "improperly" sought to
release the company's principal and professionals from any
liability to the firm in connection with the sale of its real
property.
Key Realty is represented by:
Francis C. Morrissey, Esq.
Morrissey, Wilson & Zafiropoulos
35 Braintree Hill Office Park, Suite 404
Braintree, MA 02184
Phone: 781-353-5501
E-mail: fcm@mwzllp.com
About Industrial Heat
Headquartered in North Quincy, Massachusetts, Industrial Heat
Treating, Inc., filed for Chapter 11 bankruptcy protection (Bankr.
D. Mass. Case No. 14-10945) on March 10, 2014, estimating its
assets at up to $50,000 and its liabilities at between $1 million
and $10 million. The petition was signed by Lynne Davis,
president, director, sole stockholder.
Judge Joan N. Feeney presides over the case.
Nina M. Parker, Esq., at Parker & Associates, serves as the
Debtor's bankruptcy counsel.
INTERLEUKIN GENETICS: Cancels Registration of Pref. & Common Stock
------------------------------------------------------------------
Interleukin Genetics, Inc. filed a Form 25 with the Securities and
Exchange Commission notifying the removal from listing or
registration of all of its authorized preferred and common stock
under Section 12(b) of the Securities Exchange Act of 1934.
About Interleukin Genetics
Interleukin Genetics, Inc. (OTCQB: ILIU) --
http://www.ilgenetics.com/-- develops and markets proprietary
genetic tests for chronic inflammatory diseases and health-related
conditions, with significant expertise in metabolism and
inflammation. The Company's tests provide information that is not
otherwise available, to empower individuals and their healthcare
providers to manage their health and wellness through
genetics-based insights and actionable guidance, including
pharmacogenomics information to guide development and use of
therapeutics. Interleukin Genetics' lead products include its
proprietary cardiovascular test to guide treatment of high risk
patients; its proprietary ILUSTRA Inflammation Management Program;
and its Inherent Health line of genetic tests. Interleukin
Genetics is headquartered in suburban Boston and operates an
on-site DNA testing laboratory certified under the Clinical
Laboratory Improvement Amendments (CLIA).
Interleukin Genetics reported a net loss of $7.4 million on $2.5
million total revenue for the year ended Dec. 31, 2016, following a
net loss of $7.89 million on $1.44 million of total revenue in
2015, and a net loss of $6.33 million on $1.81 million of total
revenue in 2014.
As of March 31, 2017, Interleukin had $1.90 million in total
assets, $6.91 million in total liabilities, and a total
stockholders' deficit of $5.01 million.
Grant Thornton LLP issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016.
It said, "The Company has incurred recurring losses and negative
cash flows from operations and as of Dec. 31, 2016 the Company's
current liabilities exceeded its current assets. These conditions,
among others, raise substantial doubt about the Company's ability
to continue as a going concern."
INTERLEUKIN GENETICS: Pyxis Has 20.3% Stake as of July 24
---------------------------------------------------------
Pyxis Innovations Inc. disclosed in a regulatory filing with the
Securities and Exchange Commission that it beneficially owns
47,625,840 shares of Interleukin Genetics, Inc.'s common stock,
which is approximately 20.3% of the sum of (i) the number of the
Issuer's Common Stock that was outstanding as of May 10, 2017 (as
reported in the Issuer's most recent Quarterly Report on Form 10-Q
filed with the SEC) plus (ii) the number of shares that would have
been outstanding upon exercise of all of the Warrants issued to
Pyxis in the Offering and held by Pyxis as of May 10, 2017.
Alticor Inc., Solstice Holdings Inc., and Alticor Global Holdings
Inc. may be deemed to beneficially own the same 47,625,840 shares
of the Issuer's Common Stock.
Pyxis holds the sole power to vote and dispose of the securities of
Issuer that it holds. Alticor Inc., Solstice Holdings Inc., and
Alticor Global Holdings Inc. have the power to direct the voting
and disposition of the securities of the Company held by Pyxis by
virtue of their direct or indirect control of Pyxis.
As previously disclosed, on July 29, 2016, the Company entered into
a Securities Purchase Agreement with various accredited investors,
pursuant to which the Issuer sold securities to the Purchasers in a
private placement transaction. Under the terms of the 2016
Purchase Agreement, following the Offering the number of persons
which was to constitute the entire Board of the Issuer was to
remain at eight, and Pyxis retained the right to designate two of
the eight directors. Under the 2016 Purchase Agreement, Joseph M.
Landstra remained as a Class I director with a term ending at the
2016 annual meeting of stockholders and Roger C. Colman remained as
a Class III director with a term ending at the 2018 annual meeting
of stockholders. Mr. Colman had previuosly resigned as a director,
effective as of Dec. 30, 2016.
On July 24, 2017, Joseph M. Landstra informed Interleukin of his
decision to resign from the Board of Interleukin effective
immediately, including all committees thereof. Prior to that
resignation Mr. Landstra had served as the Pyxis designee as the
Class I director and member of the Audit Committee. Pyxis has not
and does not intend to appoint a successor to Mr. Landstra at this
time, and as a result currently has no representatives on the Board
of the Issuer.
A full-text copy of the regulatory filing is available at:
https://is.gd/GDBGDy
About Interleukin Genetics
Interleukin Genetics, Inc. (OTCQB: ILIU) --
http://www.ilgenetics.com/-- develops and markets proprietary
genetic tests for chronic inflammatory diseases and health-related
conditions, with significant expertise in metabolism and
inflammation. The Company's tests provide information that is not
otherwise available, to empower individuals and their healthcare
providers to manage their health and wellness through
genetics-based insights and actionable guidance, including
pharmacogenomics information to guide development and use of
therapeutics. Interleukin Genetics' lead products include its
proprietary cardiovascular test to guide treatment of high risk
patients; its proprietary ILUSTRA Inflammation Management Program;
and its Inherent Health line of genetic tests. Interleukin
Genetics is headquartered in suburban Boston and operates an
on-site DNA testing laboratory certified under the Clinical
Laboratory Improvement Amendments (CLIA).
Interleukin Genetics reported a net loss of $7.4 million on $2.5
million total revenue for the year ended Dec. 31, 2016, following a
net loss of $7.89 million on $1.44 million of total revenue in
2015, and a net loss of $6.33 million on $1.81 million of total
revenue in 2014.
As of March 31, 2017, Interleukin had $1.90 million in total
assets, $6.91 million in total liabilities, and a total
stockholders' deficit of $5.01 million.
Grant Thornton LLP issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016.
It said, "The Company has incurred recurring losses and negative
cash flows from operations and as of Dec. 31, 2016 the Company's
current liabilities exceeded its current assets. These conditions,
among others, raise substantial doubt about the Company's ability
to continue as a going concern."
ISLAND VIEW: Bank Wants Conversion or Trustee
---------------------------------------------
Prudential Savings Bank asks the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania to convert the Chapter 11
bankruptcy case of One State Street Associates, LP, Island View
Crossing II, L.P., Calnshire Estates, LLC, and Steeple Run, L.P.,
to liquidation under Chapter 7, or in the alternative, appoint a
Chapter 11 Trustee.
Prudential Savings Bank points out that:
(a) Prudential Savings Bank entered into a Development
Construction Loan Agreement, pursuant to which Prudential Savings
Bank issued a construction loan to Island View under a promissory
note in the principal amount of $5,541,468.
(b) As security, Island View executed and delivered to
Prudential Savings Bank an Open-End Mortgage and Security Agreement
providing, inter alia, the Island View Property as security for the
loan. As additional security, Island View executed an Assignment of
Rents, Leases and Agreements of Sale on the Island View Property.
(c) Pursuant to the Island View Loan Agreements, the Loan was
intended to provide the Island View Debtor with funds to construct
certain site improvements on the Island View Real Property;
specifically, the Island View Project includes, among other things,
the construction of 73 townhomes with subsequent phases to include
the construction of 96 condominium units.
(d) Island View failed to deposit the security deposits in an
escrow account with Prudential Savings Bank as required by the
Second Island View Loan Agreement and reported to Prudential
Savings Bank receiving only $5,000 in deposit monies from both Ms.
Caione and Mr. Ranganathan, not the $30,990 and the $49,980 in
deposit monies that Ms. Caione and Mr. Ranganathan actually paid to
Island View.
(e) Island View refused to deliver to Prudential Savings Bank
the security deposits for the agreements of sale for Prudential
Savings Bank to hold in escrow, and instead misappropriated the
deposit moneys. At the time that Renato J. Gualtieri and Island
View took in excess of $175,000 in consumer escrow deposits,
neither had the financial wherewithal to build the units or provide
refunds to consumers. Prudential Savings Bank believes that Mr.
Gualtieri diverted the deposits.
(f) Seven civil actions have been filed against Island View by
prospective homebuyers seeking the return the stolen security
deposits. Among the actions are: (1) Monica L. Caione v. Island
View Crossing II LP, Americorp Homes, Island View Crossing II Inc.,
Bucks County, CCP, No. 201602011; (2) Samira Ranganathan v. Island
View Crossing II LP, Bucks County, CCP, No. 2016-05724; (3)
Benjamin A Mastridge, Sr. vs. Island View Crossing II, Bucks
County, CCP, No. 2016-06373; (4) Frank Del Grasso v. Island View
Crossing II LP, et al. Bucks County, CCP, No. 2016-06685; and (5)
Peter Bridge vs. Island View Crossing II, LP, Phila. Municipal
Court, MJ-07102-CV-0000142-2016.
(g) Mr. Gualtieri lied to and misled consumers as to the
ability to return the deposits, long ago depleted by him (which
left an unrecoverable stigma on the project being operated by a
consumer fraud), and Island View's treatment of potential
purchasers is reprehensible and typifies Island View's bad faith
and dishonesty.
(h) Island View failed to maintain and refused reinstate the
required insurance coverage on the collateral secured by the Second
Island View Loan Documents. Island View also failed to timely
notify Prudential Savings Bank of the cancellation of such
insurance, which forced Prudential Savings Bank to obtain
force-placed insurance to protect its collateral.
(i) Island View also failed to maintain certain life insurance
coverage for Mr. Gualtieri as required by the Second Island View
Loan Agreement.
(j) At the status conference, the Debtors have alleged that
the only "viable" project that any of the Debtors have is the
Island View Project, but did not relate to the Court is that the
Island View Project has been dormant for well over a year with no
construction activity where no units are completed. Through their
inactivity, the Debtors have also allowed permits and approvals to
lapse, further diminishing the value of their assets.
(k) The Debtors have taken no steps post-petition to commence
any operations with the sole exception of State Street. Island View
has been left to sit fallow for over a year and during that time,
any assets it has have declined in value while the hard assets
remaining on the property were left to waste and will likely have
to be demolished in order to use the real property in any
meaningful way.
(l) In its Schedules, State Street lists six leases for its
real property, both residential and nonresidential. Prudential
Savings Bank believes that State Street is collecting rent pursuant
to the Leases and is also accruing post-petition obligations, and
as such, using cash collateral in violation of Section 363 of the
Bankruptcy Code -- constituting gross mismanagement of the
Debtors.
(m) The Debtors have failed to pay taxes, including real
estate taxes due on the Properties after the Petition Date. The
Bucks County Tax Claim Bureau filed a secured proof of claim
against Steeple Run in the amount of $14,275 for 2014, 2015 and
2016 unpaid property taxes, which continues to accrue interest
post-petition. In addition, the Debtors have also scheduled unpaid
taxes for which they have no ability to pay (Island View scheduled
priority debt to Bucks County Tax Claim Bureau in the amount of
$118,437 and Borough of Bristol in the amount of $79,917 and
Calnshire scheduled a secured debt to West Caln Township in the
amount of $35,000 and a priority debt to the Chester County Tax
Claim Bureau in the amount of $75,000.00).
(n) Even more troubling, the Debtors' schedules reveal that
Island View under Gualtieri's control (which had no ability to
generate cash except for misappropriating draws from Prudential
Savings Bank and security deposits from potential purchasers)
actually loaned almost $800,000 to insiders. In fact, the vast
majority of the unsecured debts listed in the State Street
Schedules are loans from insiders.
(o) The Debtors have no financing to commence operations and
the combined gross revenues of Island View, Calnshire and Steeple
Run are a telling $0.00. The Debtors are not generating income and
have no other source of cash. Thus, the Debtors have no prospects
for financing with hundreds of thousands of dollars of real estate
taxes and no meaningful cash flows. The Debtors have no reasonable
likelihood of rehabilitation and their prospects have long since
passed with no plausible chance of recovery.
Accordingly, Prudential Savings Bank asserts that the misuse of
funds by Mr. Gualtieri shows that he is not appropriately suited to
run the Debtors and incapable of steering the Debtors efforts
towards reorganization.
Prudential Savings Bank is represented by:
Edmond M. George, Esq.
Michael D. Vagnoni, Esq.
Obermayer Rebmann Maxwell & Hippel LLP
Centre Square West
1500 Market Street, 34th Floor
Philadelphia, PA 19102
Telephone: (215) 665-3000
Facsimile: (215) 665-3165
E-mail:edmond.george@obermayer.com
About One Street Associates
Island View, Calnshire Estates, and Steeple Run, are affiliates of
One Street Associates which filed a voluntary petition on June 21,
2017 (Bankr. E.D. Pa. Case No. 17-14291). The Debtors are managed
by Renato J. Gualtieri, a real estate developer based in Langhorne,
PA.
Island View Crossing II, L.P., Calnshire Estates, LLC, and Steeple
Run, LP filed their respective Chapter 11 petitions (Bankr. E.D.
Pa. Case Nos. 17-14454, 17-14457 and 17-14458, respectively), on
June 30, 2017.
The Debtors' individual cases have not been ordered to be jointly
administered or consolidated and thus, each Debtor has its own
separate bankruptcy estate. The Hon. Eric L. Frank presides over
these cases.
The petitions were signed by Renato J. Gualtieri, president of
corporate general partner.
The Debtors are represented by David B. Smith, Esq. at Smith Kane
Holman, LLC.
At the time of the filing, the Debtors estimated their assets and
debts at $1 million to $10 million, except for Calnshire Estates,
which estimated its assets to be between $10 million to $50
million.
J.G. NASCON: Sale of Sakai SV70D Vibratory Roller for $7K Approved
------------------------------------------------------------------
Judge Magdeline D. Coleman of the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania authorized J.G. Nascon, Inc.'s
sale of Sakai SV70D Vibratory Roller, Serial No. 150C030493094, to
Keesler Truck & Tractor Sales, Inc. for $7,250.
The Roller will be conveyed to the Buyer as is, where is, without
warranties.
Receipt of the sum of $7,250 by wire or official bank check from
the Buyer will be a condition precedent to the closing of the sale
of the Roller. At the closing of the sale of the Roller, the Buyer
will pay to M&T Bank, by wire to M&T Bank, Account No.
3067502684000, the sum of $5,438 and will pay the balance of the
Purchase Price (i.e., $1,812) to the Debtor.
Notwithstanding anything to the contrary in the Motion or the
Order, the Roller will remain subject to any and all liens and
encumbrances held by M&T Bank unless M&T Bank is paid the Sale
Payment at the closing of the sale of the Roller. The Sale Payment
will be applied by Lender to reduce the outstanding principal
balance due and owing to M&T Bank in connection with the JG Nascon
Loans. Nothing in the Motion or the Order will alter or relieve
Debtor of its obligation to make all adequate protection payments
to M&T Bank when due in accordance with the terms of any cash
collateral order entered by the Court.
If M&T Bank receives payments from the Debtor as set for that
closing, M&T Bank will be deemed to have consented to the sale and
the Roller will be sold to Buyer free and clear of any liens or
encumbrances held by M&T Bank.
The stay provisions set forth in Federal Rule of Bankruptcy
Procedure 6004(h) are waived and closing may occur immediately.
About J.G. Nascon
J.G. Nascon, Inc., is a heavy and highway construction property
located in Eddystone, Pennsylvania, providing full-service site
contracting to the tri-state region. As of Dec. 4, 2015, the
company has approximately 25 employees.
J.G. Nascon, Inc., sought Chapter 11 protection (Bankr. E.D. Pa.
Case No. 15-18704) on Dec. 4, 2015, in Philadelphia. The Debtor
estimated $1 million to $10 million in assets and debt.
The Debtor tapped Albert A. Ciardi, III, Esq., and Jennifer E.
Cranston, Esq., at Ciardi Ciardi & Astin, P.C., as attorneys.
JERRY BATTEH: Sale of Jacksonville Property Approved
----------------------------------------------------
Judge Jerry A. Funk of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Jerry Batteh's sale of real property
located at 2448 Clemson Road, Jacksonville, Florida.
The balance owed $79,561, plus any interest due after June 30, 2017
will be included in the payoff.
The Debtor will obtain an updated payoff prior to the closing of
the sale. The Creditor will not be liable in any way for any of
the closing cost incurred from the sale, but will receive the full
amount of its payoff, as set forth.
The Order will expire, an become void, unless the sale is closed
within 60 calendar days of the entry of the Order, unless the
Debtor files a motion with the Court requesting an extension of
time to complete the sale prior to this expiration period.
The Creditor has waived the unsecured portion of its claim, but
only in the event that it receives the payoff amount, as set
forth.
The Debtor will file a copy of the closing statement evidencing the
sale within 10 days of the date of the sale, and will include all
disbursements at closing on his quarterly operating report for this
period of time.
Jerry Batteh sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 11-05260) on July 18, 2011. The Debtor's Chapter 11 Plan was
confirmed by order dated March 26, 2014.
JJS IN THE DESERT: Wants to Use ARF, et al.'s Cash Collateral
-------------------------------------------------------------
JJs In The Desert One, LLC, seeks permission from the U.S.
Bankruptcy Court for the District of Nevada to use, nunc pro tunc
to the Petition Date, cash collateral in which ARF Financial,
Stearns Bank, N.A., or RAJARATAKA, LLC, may hold an interest.
The Debtor requires the use of cash collateral to pay for: (a) the
costs of operating its business, and (b) the costs of
administration of the Debtor's Chapter 11 case, including the
Debtor's attorneys' fees and U.S. Trustee's fees.
The value of the Debtor's personal property is approximately
$22,838.69. The Debtor's equipment, whose value is included in the
$22,838.69, was appraised on June 14, 2017, by certified appraiser
Daniel C. Watson at $14,000.
The Debtor depends on the revenues from the business, in part, to
purchase products to make its sandwiches, to maintain its lease
obligations, to pay payroll, and to meet other necessary expenses
for the business. The Debtor anticipates that over the next six
months, the revenues generated will be sufficient to maintain and
fund the expenses of the business. The Debtor will be unable to
maintain its business and the income stream generated therefrom,
however, if it is denied the ability to use cash collateral.
Moreover, without the ability to use the cash collateral, the
Debtor will be forced to abandon its business to the detriment of
the Debtor's estate, its creditors and other parties in interest.
The Debtor says that it is essential to the continued operation of
its business that the Debtor obtains authority to use cash
collateral to maintain its business, for payment of lease
obligations, insurance premiums, utilities, payroll and other
maintenance expenses and to fund the cost of administering this
Chapter 11 case.
The Debtor currently projects that ordinary and anticipated cash
flows will be able to cover expenses for the foreseeable future.
Thus, upon receiving authorization to use cash collateral, the
Debtor can continue to run its business successfully. Without
authorization, the detrimental result to the estate will be rapid
and ultimately disastrous given the nature of the Debtor's
business, the Debtor warns.
The Debtor assures the Court that in the present case, Secured
Parties are adequately protected by virtue of the Debtor's
continued operation of its business and the expenditure of cash on
maintaining its business. The value of Debtor's property in which
Secured Creditors have an interest is approximately $29,134.69.
Expenditures of cash collateral to preserve and maintain the
underlying business operations provide additional adequate
protection to a secured creditor.
Without the ability to use cash collateral, the Debtor will be
unable to maintain its business and the income stream generated
therefrom. Moreover, without the use of cash collateral, the
Debtor would be forced to cease its business operations to the
detriment of the Debtor's estate, its creditors and other parties
in interest.
The Debtor anticipates generating positive cash flow from operating
its business. Thus, new cash and cash-generating assets, including
accounts receivable, will become available for replacement liens at
a greater rate than cash is spent. This form of adequate
protection is commonplace, the Debtor says. Therefore, adequate
protection to ARF, Stearns, and Raj can be provided and maintained
through a grant of post-petition replacement liens and security
interests to the extent of any diminution in value of the
prepetition collateral.
A copy of the Debtor's Motion is available at:
http://bankrupt.com/misc/nvb17-13269-13.pdf
About JJS In The Desert One
JJs In The Desert One, LLC, owns and operates one Jimmy Johns
gourmet sandwich restaurant located in Las Vegas, Nevada.
JJs In The Desert One sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case No. 17-13269) on June 16,
2017. Veronica R. Turner, manager, signed the petition.
At the time of the filing, the Debtor estimated assets of less than
$50,000 and liabilities of less than $1 million.
Bryan M. Viellion, Esq., at Kaempfer Crowell, serves as the
Debtor's bankruptcy counsel.
KAPPA DEVELOPMENT: First Banking Seeks to Prohibit Cash Use
-----------------------------------------------------------
The First, A National Banking Association asks the U.S. Bankruptcy
Court for the Southern District of Mississipi to prohibit or
condition Kappa Development & General Contracting, Inc.'s use of
their cash collateral and collateral as necessary to provide
adequate protection to The First.
The First Banking has extended several financial accommodations to
the Debtor, secured by substantially all of the assets of the
Debtor including all proceeds thereof. However, the Debtor has made
no post-petition payments to The First on its loan obligations and,
as of the Petition Date, the Debtor owes The First Banking
approximately $859,138 on the 2010 Note, $196,635 on the 2015 Note,
and $61,943 on the 2016 Note, plus accruing interest, costs and
reasonable attorney's fees.
Accordingly, under the provisions of the Bankruptcy Code, the
proceeds of the accounts receivable and inventory which the Debtor
is collecting on is cash collateral of The First Banking, which the
Debtor is prohibited from using without either authorization from
the Court after Notice and a hearing or consent of The First
Banking -- neither of which has occurred to date.
In addition, the Debtor continues to use the accounts receivable,
and the inventory and equipment, which inventory and equipment
continues to depreciate and otherwise decrease in value, presenting
an unfair risk to the secured lender, The First Banking.
About Kappa Development & General
Contracting, Inc.
Kappa Development & General Contracting, Inc., based in Gulfport,
Miss., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No.
17-51155) on June 12, 2017.
In its petition, the Debtor estimated $1 million to $10 million in
assets and liabilities. The petition was signed by Randy
Blacklidge, president.
The Hon. Katharine M. Samson presides over the case.
Nicholas Van Wiser, Esq. at Byrd & Wiser, serves as bankruptcy
counsel to the Debtor. Russell Gill, Esq., is the special counsel.
KNIGHT ENERGY: Debt-to-Equity Plan Has $1 Million for Unsecureds
----------------------------------------------------------------
Knight Energy Holdings, LLC, is set to file a reorganization plan
that equitizes a substantial portion of its $180 million of
existing secured obligations and gives $1 million to general
unsecured creditors.
Prior to the Petition Date, the Debtors worked diligently with
their debt holders and equity holders on a consensual solution to
adjust the Debtors' current debt structure so that Knight would be
better able to operate their business through a depressed market.
On August 8, 2017, the Debtors entered into a Restructuring Support
Agreement with certain consenting lenders to the senior credit
facility and equity holders.
As of Aug. 7, 2017, the Debtors' combined secured debt obligations
totaled approximately $200 million. The Debtors' significant
funded debt obligations include:
a. Approximately $180.6 million in principal secured debt under
a Credit Agreement dated as of June 26, 2013 as amended, with
Cantor Fitzgerald Securities, as administrative agent, and Cantor
Fitzgerald and Clearlake Capital Partners IV L.P. as lenders.
b. Approximately $8.5 million in principal secured debt pursuant
to three notes payable from KFE to JP Morgan Chase Bank, N.A, and
two notes payable from the HMC Leasing to JP Morgan;
c. Approximately $11.2 million in principal secured debt
pursuant to a note payable from the HMC Leasing to Iberia issued
under a secured mortgage loan dated as of March 28, 2011.
The Debtors also owe real estate and ad valorem taxes in the
principle amount of $3,541,360 and interest and penalties totaling
$778,429. The Debtors estimate that the general unsecured trade
claims is between $10 to $12 million.
The Debtors believe the RSA and the contemplated restructuring are
in the best interests of Knight and its employees. The RSA
provides for a substantial deleveraging transaction pursuant to
which Knight will meaningfully improve its balance sheet by
equitizing a substantial portion of over $180 million of its
existing secured obligations and will substantially bolster its
liquidity position through an exit financing facility.
Terms of RSA
The RSA outlines an expected restructuring through a pre-negotiated
plan of reorganization. The Plan will be accomplished through,
among other transactions:
a. The establishment of the New First Lien Credit Facility
(including the First Lien Takeback Notes and the First Lien
Revolver) and the advance of funds under the First Lien Revolver as
described below.
b. The creation of Reorganized Knight (including the New Board
of Directors), the consolidation of the other Reorganized Debtors
thereunder (including without limitation, Reorganized Enterprises
and Reorganized Leasing), and the issuance of the New Equity
Interests in Reorganized Knight.
c. The distribution of the First Lien Equity Distribution and
the First Lien Takeback Notes Distribution to the Lenders -- First
Lien Distribution.
d. On terms acceptable to the Debtors and the Majority
Consenting Lenders:
(i) the sale of certain non-core assets or property
securing loans held by the Mortgage Holders (the "Sales") either
before or after the Effective Date,
(ii) the repayment in full or in part of the JPM Loans and
the Iberia Loan from the net sale proceeds or conveyance of such
non-core property (the "Repayments"), and
(iii) the restructure or replacement of the JPM Loans in
full or in part with a new loan -- JPM Takeback Loan -- and the
Iberia Loan with a new loan -- Iberia Takeback Loan -- on terms
acceptable to the Debtors and the Majority Consenting Lenders.
e. The establishment of a $1,000,000 fund -- GUC Fund -- to
provide for pro rata payments in full and final satisfaction of all
allowed general unsecured claims, which may include the unsecured
deficiency claim held by the Lenders under the Senior Credit
Facility -- First Lien Deficiency Claim.
f. The full and final satisfaction of all allowed claims arising
from the provision of goods or services which are secured by
perfected and non-avoidable statutory liens on the mineral
interests of customers of the Debtors -- Mineral Contractor Claims
-- in a manner and on terms and conditions acceptable to the
Majority Consenting Lenders.
g. The resolution of all allowed Other Claims on terms and
conditions acceptable to the Majority Consenting Lenders.
h. The distribution of the Comprehensive Settlement Distribution
to the Consenting Holders.
In connection with RSA, the Consenting Lenders agreed to provide
debtor-in-possession financing to accomplish the Restructuring on
the terms and conditions of the DIP Financing Agreement attached to
the DIP Motion.
Drawings under the DIP Financing to fund fees and expenses of legal
counsel and financial advisors to the Debtors and any official
committee shall not exceed $4.625 million without the consent of
the Majority Consenting Lenders.
The Consenting Lenders will consent to and support any motion by
the Debtors seeking the use of cash collateral and/or DIP Financing
in form and substance acceptable to the Majority Consenting Lenders
and the Debtors provided that such motions shall not conflict with
the terms of the RSA or this Term Sheet.
The DIP Financing and the interim and final orders of the
Bankruptcy Court providing for the DIP Financing and the use of
cash collateral shall be in form and substance satisfactory to the
Debtors and the Majority Consenting Lenders. The DIP Financing
Orders will provide adequate protection in the form of customary
carve-outs and payments for the Mortgage Holders acceptable to the
Majority Consenting Lenders.
On the Effective Date, the DIP Financing shall be paid in full from
the proceeds of the First Lien Revolver [or through a
dollar-for-dollar exchange for obligations under the First Lien
Revolver].
The RSA also provides that on the Effective Date, new membership
interests in either (a) a newly established holding company, or (b)
one of the reorganized Debtors shall be issued by Reorganized
Knight. The Debtors' organizational documents will be amended as
necessary to give effect to the Restructuring and the organization
documents of Reorganized Knight and the other Reorganized Debtors
will be executed.
The Board of Directors of Reorganized Knight will initially have 5
members, with appointment as follows: (i) four New Board members
appointed by the Majority Consenting Lenders and (ii) one family
member of the Consenting Holders or such family member's designee
to be agreed upon by the Consenting Holders and the Majority
Consenting Lenders shall serve as a New Board member and as
Chairman Emeritus of Reorganized Knight.
In addition to the New Board members, one family member of the
Consenting Holders or such family member's designee to be agreed
upon by the Consenting Holders and the Majority Consenting Lenders
shall serve as an observer of the New Board.
The 100% of the New Equity Interests will be distributed to the
Lenders under the Senior Credit Facility pro rata in proportion to
the aggregate principal amount of their Loans outstanding under the
Senior Credit Facility (the "First Lien Equity Distribution")
subject to dilution by (i) the Comprehensive Settlement
Distribution, and (ii) the MIP.
In consideration for the entry into the New Leases, the Related
Party Transaction Resolutions, the Releases, and the other
compromises and settlements, the Consenting Holders will receive a
Comprehensive Settlement Distribution of:
(i) 20% of the New Equity Interests in Reorganized Knight on
the Effective Date (the "New Equity Settlement Amount") (subject to
dilution by the MIP);
(ii) two classes of 5-year warrants (or other equity
equivalents) of Reorganized Knight equity interests that entitles
the holders to: (a) 7% of Reorganized Knight equity interests with
an exercise price equivalent to a $120 million equity valuation
("Warrant Tranche 1"), and (b) 6% of Reorganized Knight equity
interests with an exercise price equivalent to a $175.0 million
equity valuation ("Warrant Tranche 2" and together with Warrant
Tranche 1, the "Warrants") (subject to dilution by the MIP). The
Warrants will be exercisable on a cashless basis and as otherwise
provided in the Warrants, including upon an appropriate
change-of-control transaction.
The New Equity Interests and the Warrants will be subject to
dilution by the MIP as well as any future equity interest issuances
by Reorganized Knight. Additional terms and restrictions of the
New Equity Interests and Warrants will be reasonably acceptable to
the Majority Consenting Lenders
Prior to the Effective Date, the Majority Consenting Lenders will
negotiate the terms and conditions of new or amended and restated
employment agreements with the new management of Reorganized Knight
(the "New Management"), the forms of which shall be included in the
Plan Supplement.
Six percent of the New Equity Interests in Reorganized Knight will
be reserved for a management incentive plan (the "MIP"), with the
form, vesting and allocation of the MIP to members of the New
Management to be determined by the New Board of Directors,
following the Effective Date, with consultation rights for the
Chairman Emeritus. New Equity Interests allocated pursuant to the
MIP will be subject to dilution by further allocations under the
MIP as well as any future equity interest issuances by Reorganized
Knight.
The Debtors will market for sale the following non-core real
property securing loans made by the Mortgage Holders:
(i) real property located at 2288 E. County Rd. 30-A, Santa Rosa
Beach, FL (the "Seaside Property") securing JPM Loans;
(ii) real property located at the SE Corner of Interstate Hwy. 40
and N. Cimarron Rd., Oklahoma City, OK (the "Oklahoma City
Property") securing the Iberia Loan; and
(iii) real property located at 507 Park Road, Frierson, LA (the
("Frierson Property") securing the Iberia Loan.
In each case such sales shall be on terms acceptable to the Debtors
and the Majority Consenting Lenders.
The Debtors will discharge any other existing and potential claims
against the Debtors (the "Other Claims"), including, but not
limited to claims (if any) arising out of the winding down or other
disposition of Knight Resources and Knight International in each
case in a manner and on terms and in such amounts acceptable to the
Majority Consenting Lenders and the Debtors.
The Reorganized Knight will continue to have a substantial presence
in Lafayette, Louisiana at its present campus (or at any successor
campus in Lafayette, Louisiana) and continue to use the "Knight"
name in its present and any future business combinations as long as
the Majority Consenting Lenders are majority equity interest
holders in Reorganized Knight.
The Plan will provide for a comprehensive resolution of issues and
disputes with the Consenting Holders (the "Comprehensive
Settlement") that includes:
a. Entry into five-year leases (the "New Leases") on mutually
agreeable terms (including the amount of rent) for certain to be
agreed upon operating locations currently owned or affiliated with
the family members of certain Consenting Holders (excluding
properties owned by Leasing and Enterprises) subject to the
Majority Consenting Lenders' discussion with management about long
term plans and updated diligence on the performance of those
facilities.
b. Resolution on terms acceptable to the Debtors, the Consenting
Holders, and the Majority Consenting Lenders of any other related
party transactions or claims (the "Related Party Transaction
Resolutions").
c. The grant of the Debtor Releases, Third-Party Releases,
Exculpations, and Injunctions under the Plan as outlined in this
Term Sheet, which shall be subject in all respects to the
consummation of the Restructuring on terms satisfactory to
the Restructuring Support Parties.
Milestones
The parties have agreed to implement the restructuring according to
this timeline:
(A) no later than Aug. 8, 2017, the Company will commence the
Chapter 11 cases by filing bankruptcy petitions with the Bankruptcy
Court;
(B) on the Petition Date or within two days thereafter, the
Company will file with the Bankruptcy Court (i) a motion seeking
entry of the Interim Cash Collateral/DIP Financing Order and the
Final Cash Collateral/DIP Financing Order; and (ii) the RSA
Assumption Motion;
(C) on or before Sept. 1, 2017, the Company will file with the
Bankruptcy Court: (i) the Plan; (ii) the Disclosure Statement; and
(iii) a motion (the "Disclosure Statement and Solicitation Motion")
seeking, among other things, (A) approval of the Disclosure
Statement, (B) approval of procedures for soliciting, receiving,
and tabulating votes on the Plan and for filing objections to the
Plan, and (C) to schedule the hearing to consider confirmation of
the Plan (the "Confirmation Hearing");
(D) prior to the Petition Date or within two days thereafter the
Company shall have listed for sale the real property located at
2288 E. County Rd. 30-A, Santa Rosa Beach, FL (the "Seaside
Property"), (ii) the real property located at the SE Corner of
Interstate Hwy. 40 and N. Cimarron Rd., Oklahoma City, OK (the
"Oklahoma City Property"); and (iii) the real property located at
507 Park Road, Frierson, LA (the "Frierson Property" and together
with the Oklahoma City Property, the "Non-Core Iberia Collateral"),
in each case on terms acceptable to the Company and the Majority
Consenting Lenders. The Non-Core Iberia Collateral and the Seaside
Property are together referred to herein as the "Marketed
Properties";
(E) no later than Aug. 14, 2017, the Bankruptcy Court will have
entered the Interim Cash Collateral/DIP Financing Order;
(F) no later than Sept. 1, 2017, the Bankruptcy Court will have
entered the Final Cash Collateral/DIP Financing Order;
(G) no later than Oct. 23, 2017 (i) the Bankruptcy Court will
have entered an order approving the Disclosure Statement and the
relief requested in the Disclosure Statement and Solicitation
Motion; and (ii) no later than five (5) business days after entry
of the order approving the Disclosure Statement and Solicitation
Motion, the Company shall have commenced solicitation on the Plan
by mailing solicitation materials to the creditors and equity
interest holders eligible to vote on the Plan;
(H) no later than Oct. 23, 2017, the Bankruptcy Court will have
entered an order authorizing the assumption of this Agreement (the
"RSA Assumption Order");
(I) no later than Dec. 5, 2017, the Bankruptcy Court shall have
commenced the Confirmation Hearing;
(J) no later than Dec. 8, 2017, the Bankruptcy Court will have
entered the Confirmation Order; and
(K) no later than Dec. 23, 2017, the Effective Date will have
occurred.
RSA Parties and Their Professionals
Consenting Lender:
CLEARLAKE CAPITAL GROUP, L.P.
233 Wilshire Blvd., Suite 800
Santa Monica, CA 90401
Fax: (310) 400-8801
E-mail: jose@clearlake.com
Attn: Jose Feliciano
Counsel to the Majority Consenting Lenders:
VINSON & ELKINS LLP
1001 Fannin Street
Houston, TX 77002
Attention: W. Matthew Strock
E-mail: mstrock@velaw.com
- and -
VINSON & ELKINS LLP
2001 Ross Avenue, Suite 3700
Dallas, TX 75201-2975
Attention: Paul E. Heath
E-mail: pheath@velaw.com
- and -
Brad Foxman
E-mail: bfoxman@velaw.com
The Administrative Agent:
CANTOR FITZGERALD SECURITIES
1801 N. Military Trail, Suite 202
Boca Raton, FL 33431
Attention: Niles Horning
E-mail: nhorning@cantor.com
Counsel to the Administrative Agent:
SHIPMAN & GOODWIN LLP
One Constitution Plaza
Hartford, CT 06103-1919
Attention: Nathan Z. Plotkin
E-mail: nplotkin@goodwin.com
- and -
Kathleen LaManna
E-mail: klamanna@goodwin.com
Counsel to consenting holders Kelly Knight Sobiesk, and Kelly
Knight Sobiesk 2010 Trust 1, Mark E. Knight 2010 Trust 1, MEK 2012
Family Trust No. 1, KKS 2012 Family Trust No. 1:
GORDON ARATA MONTGOMERY BARNETT
McCOLLAM DUPLANTIS & EAGAN, LLC
400 E. Kaliste Saloom Rd., Suite 4200
Lafayette, LA 70508
Fax: (337) 237-3451
Attn: Samuel E. Masur
Armistead M. Long
E-mail: smasur@gamb.law
along@gamb.law
Counsel to consenting holder Bryan R. Knight, Bryan R. Knight 2010
Trust 1, BRK 2012 Family Trust No. 1
GARY J. HAYNES
1013 W University Ave
Lafayette, LA 70506
E-mail: gary.haynes@lusfiber.net
Counsel to consenting holder Ann R. Knight:
BREAUX AND STELLY LAW FIRM LLC
413 Travis St., Suite 100
Lafayette, LA 70503
Fax: (337) 233-4443
Attn: Jean Breaux Jr.
E-mail: jean@breauxstelly.com
First Day Pleadings
The Debtors have filed a number of first day pleadings to minimize
the adverse effects of the commencement of the Chapter 11 cases on
their businesses, and ensure that their restructuring goals can be
implemented with limited disruptions to operations.
The Debtors filed motions to:
-- direct joint administration of the Chapter 11 cases;
-- use cash collateral, and obtain financing;
-- pay all outstanding prepetition wages and benefits;
-- pay insurance premium financing payments and related relief;
-- pay taxes and fees;
-- prohibit utilities from discontinuing service;
-- pay compensation to insiders;
-- maintain their prepetition bank accounts;
-- honor prepetition obligations to critical vendors;
-- pay claims on account of mineral contractor liens;
-- hire Heller, Draper, Patrick, Horn & Dabney, L.L.C. as
counsel;
-- hire Opportune LLP as crisis managers and Gary L. Pittman as
Chief Restructuring Officer and certain additional personnel;
-- appoint Donlin, Recano & Company, Inc., as claims, noticing
and solicitation agent;
-- set procedures for interim compensation and reimbursement of
expenses for professionals; and
-- establish a bar date for filing proofs of claim.
A copy of CFO Mark C. Comeaux's declaration in support of the
Chapter 11 petitions and first-day motions.
http://bankrupt.com/misc/Knight_Energy_1st_Day_Affidavit.pdf
About Knight Energy
Based in Lafayette, Louisiana, Knight Energy Holdings, LLC,
operates as a holding company. Privately-held Knight Energy,
through its subsidiaries, provides manufacturing packages, drilling
jars, inspection, hardbanding, and safety training services to the
oil and gas industry.
Knight Energy's chief operating affiliate is Knight Oil Tools,
which originated as Knight Specialties in Morgan City, Louisiana,
out of the trunk of founder Eddy Knight's car. Since then, Knight
Oil Tools -- http://www.knightoiltools.com/-- has evolved into a
company that provides complete rental, fishing, manufacturing
packages, drilling jars, inspection, hard-banding and safety
training to the oil and gas industry in selected markets throughout
the U.S. Knight Oil Tools' long term vision is to continue to build
upon its strong commitment to provide quality equipment and
outstanding service to customers in each product line it serves.
Knight Energy and certain affiliates sought Chapter 11 protection
(Bankr. W.D. La. Case No. 17-51014) on Aug. 8, 2017.
Knight Energy estimated $50 million to $100 million in assets and
at least $100 million in debt.
Judge Robert Summerhays is the case judge.
Heller, Draper, Patrick, Horn & Dabney, LLC, is serving as counsel
to the Debtor, with the engagement led by William H. Patrick, III.
Opportune, LLP, is the Debtors' crisis managers and is providing
Gary L. Pittman as Chief Restructuring Officer.
Donlin, Recano & Company, Inc., is the claims, noticing and
solicitation agent.
LA HABICHUELA: Hearing on Plan Outline Approval Set for Sept. 22
----------------------------------------------------------------
The Hon. Edward A. Godoy of the U.S. Bankruptcy Court for the
District of Puerto Rico will hold on Sept. 22, 2017, at 9:30 a.m. a
hearing to consider the adequacy of the disclosure statement filed
by La Habichuela, Inc., referring to the Debtor's plan of
reorganization.
Objections to the Disclosure Statement must be filed not less than
14 days prior to the hearing.
As reported by the Troubled Company Reporter on Aug. 4, 2017, the
Debtor filed with the Court an amended disclosure statement
explaining its plan of reorganization, dated July 28, 2017. Class
under the plan consists of the General Unsecured Commercial
Creditors & Unsecured Tax deficiencies of the Puerto Rico Treasury
Department. This class will get a prorated monthly disbursement of
15% of claim for 60 months from the effective date of the plan.
About La Habichuela, Inc.
La Habichuela, Inc, based in Carolina, Puerto Rico, filed a Chapter
11 petition (Bankr. D.P.R. Case No. 15-09171) on Nov. 19, 2015.
Francisco R. Moya Huff, Esq., serves as bankruptcy counsel. In its
petition, the Debtor estimated $164,372 in assets and $1.23 million
in liabilities. The petition was signed by Francisco Cabello
Dominguez, secretary.
LAWRENCE D. FROMELIUS: Sale of Lisle Property for $240K Approved
----------------------------------------------------------------
Judge Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Lawrence D. Fromelius'
sale of real estate located at 1207 Lisle Place, Lisle, Illinois,
to Lilian Riedy for $240,000.
The Sale is free and clear of any interest.
The Closing will be on Sept. 1, 2017.
About Lawrence Fromelius
Lawrence D. Fromelius filed a Chapter 11 petition (Bankr. N.D. Ill.
Case No. 15-22373) on June 29, 2015. The Debtor tapped William J.
Factor, Esq., Ariane Holtschlag, Esq., and Jeffrey K. Paulsen,
Esq., at FactorLaw as counsel.
L. Fromelius Investment Properties LLC filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 15-22943) on July 2, 2015, and Golden
Marina Causeway LLC filed for relief under Chapter 11 (Bankr. N.D.
Ill. Case No. 16-03587) on Feb. 5, 2016.
Mr. Fromelius is the sole member of Investment Properties. He is
also the sale member of East Greenfield Investors LLC, which in
turn is the sole member of Golden Marina Causeway LLC. On Nov.
24, 2015, Lawrence Fromelius filed his initial plan of
reorganization
and on December 1, 2016, Investment Properties filed its initial
plan of reorganization. Both of the plans have been amended to
incorporate changes requested by creditors, including the Ann
Marie Barry Trust, which has filed a claim of approximately $6
million. Currently, the Debtors and the Ann Marie Barry Trust are
negotiating the terms of a disclosure statement to accompany the
plans.
Golden Marina owns two parcels of real estate, located at 302 and
311 East Greenfield Avenue in Milwaukee, Wisconsin. The parcel at
311 E. Greenfield consists of 47 acres and the smaller parcel at
302 E. Greenfield is approximately 1 acre.
LEGACY RESERVES: Posts $92.8 Million Revenues in Second Quarter
---------------------------------------------------------------
Legacy Reserves LP filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to unitholders of $15.82 million on $92.84 million of
total revenues for the three months ended June 30, 2017, compared
to a net loss attributable to unitholders of $57.01 million on
$73.36 million of total revenues for the three months ended
June 30, 2016.
For the six months ended June 30, 2017, the Company reported a net
loss attributable to unitholders of $4.20 million on $192.4 million
of total revenues compared to net income attributable to
unitholders of $44.36 million on $139.2 million of total revenues
for the same period during the prior year.
As of June 30, 2017, Legacy Reserves had $1.31 billion in total
assets, $1.53 billion in in total liabilities and a total partners'
deficit of $214.3 million.
Legacy's primary sources of capital and liquidity have been cash
flow from operations, the issuance of the Senior Notes, the
issuance of additional units and Preferred Units, the Second Lien
Term Loans and bank borrowings, or a combination thereof. To date,
Legacy's primary use of capital has been for the acquisition and
development of oil and natural gas properties, the repayment of
bank borrowings and repurchases of Senior Notes on the open
market.
"Based upon current oil and natural gas price expectations and our
commodity derivatives positions, we anticipate that our cash flow
from operations, commodity hedge realizations and borrowings under
our revolver and Second Lien Term Loans will provide us sufficient
liquidity to fund our operations in 2017 including our revised
capital expenditure budget of $205 million, of which $48.3 million
has been spent. However, should oil and natural gas prices decline
significantly, we could breach certain financial covenants under
our revolving credit facility or our term loan credit agreement,
which would constitute a default under our revolving credit
facility or our term loan credit agreement. Such a default, if not
remedied, would require a waiver from our lenders in order for us
to avoid an event of default and potential subsequent acceleration
of all amounts outstanding under our revolving credit facility or
our term loan credit agreement or foreclosure on our oil and
natural gas properties. Certain payment defaults or acceleration
under our revolving credit facility could cause a cross-default or
cross-acceleration of all of our other indebtedness. If an event
of default occurs, or if other debt agreements cross-default, and
the lenders under the affected debt agreements accelerate the
maturity of any loans or other debt outstanding, we will not have
sufficient liquidity to repay all of our outstanding indebtedness.
Our revolving credit facility and term loan credit agreement
contain covenants that currently prevent us from making
distributions to our limited partners, including holders of our
preferred units, unless we meet certain financial criteria, which,
as of June 30, 2017, we do not meet. Future cash flows are subject
to a number of variables, including the level of oil and natural
gas production and prices. There can be no assurance that
operations and other capital resources will provide cash in
sufficient amounts to operate or to maintain planned levels of
capital expenditures.
"The amounts available for borrowing under our revolving credit
facility are subject to a borrowing base, which is currently set at
$600 million. As of August 1, 2017, we had $129.1 million
available for borrowing under our revolving credit facility. Our
lenders redetermine the borrowing base semi-annually, with the next
redetermination scheduled on or about October 2017, subject to the
parties' rights to have additional redeterminations between
scheduled redeterminations.
"As of August 1, 2017, after consideration of the $145 million draw
discussed below, we had $95 million available for borrowing under
our Second Lien Term Loan Credit Agreement until October 25, 2017.
"Our commodity derivatives position, which we use to mitigate
commodity price volatility and (if positive) support our borrowing
capacity, resulted in $10.8 million of cash receipts in the six
months ended June 30, 2017.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/nCIhRs
About Legacy Reserves
Headquartered in Midland, Texas, Legacy Reserves L.P. is focused on
the acquisition and development of oil and natural gas properties
primarily located in the Permian Basin, East Texas, Rocky Mountain
and Mid-Continent regions of the United States. The Company's
primary business objective has been to generate stable cash flows
to allow it to make cash distributions to its unitholders and to
support and increase quarterly cash distributions per unit over
time through a combination of acquisitions of new properties and
development of its existing oil and natural gas properties.
Legacy Reserves LP reported a net loss attributable to unitholders
of $74.82 million on $314.4 million of total revenues for the year
ended Dec. 31, 2016, compared to a net loss attributable to
unitholders of $720.54 million on $338.77 million of total revenues
for the year ended Dec. 31, 2015.
* * *
As of Sept. 30, 2016, S&P Global Ratings said that it lowered its
corporate credit rating on Legacy Reserves to 'CCC' from 'B-'. The
rating outlook is negative. The downgrade reflects S&P's
expectation that the borrowing base on Legacy's revolving credit
facility could be lowered substantially at its re-determination in
October.
As reported by the TCR on March 24, 2017, Moody's Investors Service
upgraded Legacy Reserves LP's Corporate Family Rating to 'Caa2'
from 'Caa3'. Legacy's 'Caa2' Corporate Family Rating (CFR)
reflects the company's high leverage, weak cash flow coverage (less
than 7% retained cash flow to debt, $27,272 Debt/Average Daily
Production) and recent history of declining production.
LEHMAN BROS: Shinhan Bank Bound to Unsigned Settlement Pact With Co
-------------------------------------------------------------------
Cara Salvatore, writing for Bankruptcy Law360, reports that U.S.
District Judge Denise Cote has affirmed the March 29 decision of
U.S. Bankruptcy Judge Shelley Chapman, legally binding Shinhan Bank
to a clawback settlement with Lehman Brothers that the bank hadn't
yet physically signed before receiving a favorable court ruling.
Law360 recalls that the Bank reached an agreement with Lehman in
April 2016, while motions to dismiss were pending. The Bank,
according to the report, asked for some small changes to Lehman's
standard settlement package and then dragged its heels for weeks on
signing. The report says that the judge eventually ruled on the
pending motions and dismissed Lehman's claims.
According to Law360, Judge Cote agreed with Judge Chapman's ruling
that the parties' intent to be bound was clear. The Bankruptcy
Court committed no error in its finding that the parties intended
to be bound by the settlement regardless of whether the Bank had
signed it yet, the report states, citing Judge Cote.
Law360 shares that the Bank is one of some 250 defendants in a $1
billion clawback adversary proceeding that Lehman's bankruptcy
administrator started in 2010, and this settlement with the Bank
was just one of dozens, if not hundreds. The report says that the
terms of the deal are confidential.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases were assigned to Judge James M.
Peck. Judge Shelley Chapman took over the case after Judge Peck
retired from the bench to join Morrison & Foerster.
A team of Weil, Gotshal & Manges, LLP, lawyers led by the late
Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., served as the
Committee's investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for
the SIPA liquidation of the business of LBI. He is represented by
Hughes Hubbard & Reed LLP.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
* * *
In October 2016, the team winding down LBHI paid $3.8 billion to
creditors, the 11th distribution since Lehman's collapse in 2008.
This brought the total payout to more than $113.6 billion.
Bondholders were projected to receive about 21 cents on the dollar
when Lehman's bankruptcy plan went into effect in early 2012. The
11th distribution raised the bondholders' recovery to more than 40
cents on the dollar and recoveries for general unsecured creditors
of Lehman's commodities to 79 cents on the dollar. Lehman's
aggregate 12th distribution to unsecured creditors pursuant to its
confirmed Chapter 11 plan will total approximately $3.0 billion.
LIVELY HOPE: Exit Plan to Pay Claims from Sale of Church Building
-----------------------------------------------------------------
Lively Hope Church of God in Christ has filed a Chapter 11 plan of
reorganization that proposes to pay creditors from the sale of the
church building.
Under the plan, the church will sell the property located at 214
167th Street, South Spanaway, Washington. The church believes that
the property will attract buyers at its currently listed price of
$1.875 million.
The plan proposes to pay all creditors in full from the proceeds
generated from the sale of the property, which, the church
believes, can be sold within 18 months, according to its disclosure
statement filed with the U.S. Bankruptcy Court for the Western
District of Washington.
A copy of the disclosure statement is available for free at
https://is.gd/ni7erL
About Lively Hope Church of God in Christ
Lively Hope Church is a Christ centered ministry, sowing hope and
reaching souls to become saved, vibrant, and sustainable in this
world through prayer and the Word of God. It listed its busines as
a single asset real estate (as defined in 11 U.S.C. Section
101(51B)). The Church owns a fee simple interest in a property in
Spanaway, WA 98387 valued at $1.9 million.
Lively Hope Church of God in Christ, based in Spanaway, WA, filed a
Chapter 11 petition (Bankr. W.D. Wash. Case No. 17-42381) on June
21, 2017. The Hon. Mary Jo Heston presides over the case. Darrel
B. Carter, Esq., at CBG Law Group, PLLC, serves as bankruptcy
counsel.
In its petition, the Debtor estimated $1.93 million in assets and
$1.33 million in liabilities. The petition was signed by Robert E
Jones, president.
MARKET QUARE: Wants to Use Olson, SBA Cash Collateral
-----------------------------------------------------
Market Square Hospitality, LLC, asks for permission from the U.S.
Bankruptcy Court for the Northern District of Illinois to use cash
collateral of Thomas A. Olson, and U.S. Small Business
Administration on an interim or preliminarily basis to pay for the
necessary expenses related to the operation of the hotel and
maintenance, upkeep, and preservation of the Debtor's property for
purposes of the first interim cash collateral order.
The Debtor asks that the Secured Parties be granted replacement
liens upon the same property on which they had liens prior to the
Petition Date including, rents, profits, income or other proceeds
derived from the operation of the Hotel Business, and the
collection of rents from the Debtor's tenants, to the same extent
and with the same priority as existed on the Petition Date.
Preferred Capital Services Corporation provided construction
financing to the Debtor for the construction of a new hotel on the
Debtor's site. On information and belief, Mr. Olson is an owner or
manager or PCSC. Hotel operations started in June 2011, when
construction of the hotel was substantially completed. In a
transaction that closed in or around August 2012, permanent
financing replaced the construction financing that had been
provided by PCSC.
St. Charles Bank & Trust provided first mortgage financing in an
original principal amount of $6,762,500.00, secured by, among other
things, a first mortgage, assignment of rents and a security
interest in all of the Debtor's personal property. The SBA
provided financing in the amount of $3,197,000 secured by a junior
mortgage on the Debtor's real estate and a junior security interest
in the Debtor's equipment and fixtures.
On June 27, 2017, Mr. Olson purchased the loan documents then held
by St. Charles Bank. The loan is evidenced by a Promissory Note
dated Aug. 1, 2012, in the original principal amount of $6,762,500
that had a maturity date of July 31, 2022. The obligations of the
Debtor under this note are secured by a mortgage, security
agreement, assignment of rents and fixture filing dated Aug. 1,
2012. Mr. Olson claims that the outstanding balance due under the
note and related loan documents is $6,425,174.21 as of June 27,
2017.
The SBA extended a loan to the Debtor evidenced by a Promissory
Note dated Aug. 24, 2012, in the original principal amount of
$3,197,000. The obligations of the Debtor under this note are
secured by a mortgage, assignment of rents, security agreement and
financing statement dated Aug. 24, 2012. The Debtor believes the
outstanding balance due is $2,605,039.55.
The Debtor believes that Mr. Olson claims an interest in cash
collateral derived from the Debtor's operation of the Hotel
Business by virtue of the security agreement dated Aug. 1, 2012,
the UCC filings made with the Colorado Secretary of State.
Additionally, Section 552(b)(2) of the Bankruptcy Code, provides
that a prepetition security interest in rents, fees, charges and
other payments for occupancy of rooms at hotels, extends to such
rents, fees, charges, accounts and other payments acquired by the
estate after the Petition Date.
The Debtor believes the rent that it receives from its tenants at
the hotel premises is cash collateral in which both Mr. Olson and
the SBA have an interest.
The expenses are for payroll for the Debtor's 31 employees,
associated payroll taxes, the purchase of supplies and merchandise
for the Hotel Business and similar necessary expenses. The Debtor
will also request the right to spend up to $450 for emergencies or
contingencies during the period of the first interim court order
without further court order.
The Debtor will be unable to operate the Hotel Business without the
ability to use cash collateral. In that case, it would have to
cease business operations and layoff its employees.
The Debtor has bank balances of $30,000. For the period starting
July 28, 2017, through July 31, 2017, the Debtor projects cash
receipts of $28,163. For the month of August, the Debtor projects
cash receipts of $132,000. These projections were developed by the
Debtor's controller and its manager, based on historical data for
receipts from rooms not occupied by the Cancer Treatment Center of
America and the current level of CTCA room occupancy.
Neither Mr. Olson nor the SBA has formally consented to the uses of
cash collateral as set forth in the proposed budget.
The Debtor intends to seek authority to use cash collateral to make
payments which go on beyond basic operation of the Hotel Business,
including the direct maintenance and preservation of the real
property from which the Hotel Business is operated.
As adequate protection for use of Mr. Olson's and SBA's cash
collateral, the Debtor proposes to grant to Mr. Olson and SBA a
lien upon all property acquired by the Debtor from and after the
Petition Date which in any way relates to or arises from its
ownership of Property, to the same extent Mr. Olson and SBA held a
prepetition valid, perfected, security interests in the same type
of category of property of the Debtor immediately prior to filing
of its bankruptcy petition.
A copy of the Debtor's Motion is available at:
http://bankrupt.com/misc/ilnb17-22394-10.pdf
Market Square Hospitality, LLC, operates a hotel at 2723 Sheridan
Rd, Zion, Illinois 60099, USA, known as "The Inn At Market
Square".
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 17-22394) on July 27, 2017, estimating its assets at
up to $50,000 and its liabilities at between $1 million and $10
million. The petition was signed by David Delach and Richard
Delisle, managers.
Judge Janet S. Baer presides over the case.
Abraham Brustein, Esq., and Julia Jensen Smolka, Esq., at Dimonte &
Lizak, LLC, serve as the Debtor's bankruptcy counsel.
MARKETS & FUN: Plan Outline Okayed; Plan Hearing on Sept. 5
-----------------------------------------------------------
The U.S. Bankruptcy Court in Puerto Rico will consider approval of
the Chapter 11 plan of reorganization for Markets & Fun LLC at a
hearing on Sept. 5, 2017.
The hearing will be held at 10:00 a.m., at the Jose V. Toledo
Federal Building & U.S. Courthouse, Courtroom 2, Second Floor, 300
Del Recinto Sur, Old San Juan, Puerto Rico.
The court will also consider at the hearing final approval of the
company's disclosure statement, which it conditionally approved on
August 4.
Under the proposed plan, Class 2 general unsecured claims in the
total amount of $168,966 will be paid from a carve-out of $5,000,
equivalent to 3%. Payments will be made in
60 monthly installments in the amount of $83 for each claim.
Payments under the plan will be funded by the company's on-going
operations, according to its disclosure statement filed on
August 1.
A copy of the disclosure statement is available for free at
https://is.gd/X48qmy
About Markets & Fun LLC
Based in Humacao, Puerto Rico, Markets & Fun LLC is a company
organized and authorized to do business under the laws of the
Commonwealth of Puerto Rico since 2010. The Debtor executed a
franchisee agreement to operate a David's Cookies bakery located at
Hotel Four Points Sheraton in Palmas del Mar, Humacao.
The Debtor filed a Chapter 11 petition (Bankr. D.P.R. Case No.
16-08010) on Oct. 5, 2016. Abdiel Rosado, president and sole
shareholder, signed the petition. At the time of the filing, the
Debtor disclosed that it had estimated assets of less than $50,000
and liabilities of less than $500,000.
Judge Enrique S. Lamoutte Inclan presides over the case.
MRO Attorneys at Law, LLC, serves as counsel to the Debtor. The
Debtor hired Aida Escribano-Ramallo from the firm BDO Puerto Rico,
PSC, as financial consultant.
NET ELEMENT: Issues $200,000 Worth of Common Shares to Cobblestone
------------------------------------------------------------------
Net Element, Inc., issued to Cobblestone Capital Partners LLC
456,761 shares of the Company common stock based on the price of
$0.4379 per share on Aug. 3, 2017.
As previously reported on the Current Report on Form 8-K filed by
Net Element, Inc. on July 7, 2017, in consideration for entering
into the Common Stock Purchase Agreement dated as of July 5, 2017,
between the Company and Cobblestone Capital, the Company was
obligated, upon the earlier of (i) on or one business day after the
Commission declares effective the registration statement referred
to the Purchase Agreement or (ii) six months after the date of the
Purchase Agreement, to issue to Cobblestone Capital such number of
shares of Common Stock that would have a value equivalent to
$200,000 calculated using the average of volume weighted average
price for the Common Stock during the 3 trading days period
immediately preceding the date of issuance of such shares. Under
the Purchase Agreement, the Commitment Shares are deemed to have
been vested and earned as of the date the Purchase Agreement was
executed.
Those shares of common stock of the Company were issued to
Cobblestone Capital under an exemption from the registration
requirements of the Securities Act of 1933, as amended, in reliance
upon Section 4(a)(2) of the Securities Act.
About Net Element
Miami, Fla.-based Net Element International, Inc., formerly Net
Element, Inc., is a global financial technology and value-added
solutions group that supports companies in accepting electronic
payments in an omni-channel environment that spans across
point-of-sale (POS), e-commerce and mobile devices.
Net Element reported a net loss of $13.61 million on $54.28 million
of total revenues for the 12 months ended Dec. 31, 2016, compared
to a net loss of $13.32 million on $40.23 million of total revenues
for the 12 months ended Dec. 31, 2015.
As of March 31, 2017, Net Element had $22.98 million in total
assets, $19.53 million in total liabilities, and $3.45 million in
total stockholders' equity.
Daszkal Bolton LLP's report on the Company's consolidated financial
statements for the year ended Dec. 31, 2016, contains an
explanatory paragraph expressing substantial doubt as to the
Company's ability to continue as a going concern. The independent
auditors stated that the Company's recurring losses from operations
and working capital and accumulated deficits raise substantial
doubt about its ability to continue as a going concern.
NOUVEAU INVESTMENTS: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Nouveau Investments, LLC
14444 Southwest Freeway
Sugar Land, TX 77478
Type of Business: Nouveau Investments operates as a financial
services company providing securities
brokerage and dealing, investment
management, and financial advisory services.
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-34876
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Judge: Hon. Karen K. Brown
Debtor's Counsel: Karen R Emmott, Esq.
KAREN R. EMMOTT, ATTORNEY AT LAW
4615 Southwest Freeway, Suite 500
Houston, TX 77027
Tel: 713-739-0008
Fax: 713-481-6262
E-mail: karen.emmott@sbcglobal.net
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Edward Ly, member.
The Debtor did not file a list of its 20 largest unsecured
creditors on the Petition Date.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/txsb17-34876.pdf
OIL PATCH TRANSPORTATION: Wants to Use Cash Until December 2017
---------------------------------------------------------------
Oil Patch Transportation, Inc., seeks authorization from the U.S.
Bankruptcy Court for the Southern District of Texas to use cash
collateral to continue operating its business in pursuant to its
proposed Budget for August 2017 through December 2017.
The Debtor requires use of cash collateral especially since its
business has improved. The Debtor tells the Court that it has
obtained contracts for significant additional business for August
of 2017. The proposed budget for August 2017 through December 2017
projects total monthly income of $238,000 and total projected
monthly expenses of approximately $208,929. It also reflects a
projected cash profit of $14,351, which represents substantial
improvement from the date of filing in which total income for the
last half of May was $58,706, income for June was approximately
$124,413, and total income for July was approximately $173,000.
Further, the Debtor proposes to use cash collateral to make
adequate protection payments in the aggregate amount of $14,720.
The Debtor claims that agreements for adequate protection payments
have been reached with Wells Fargo, Sun Trust and IPFS, while
conferences with Classic Bank, Stearns Bank and First Financial are
continuing.
Accordingly, the Debtor also proposes to grant each lender or
factor with an interest in the cash collateral with post-petition
lien or interest in post-petition receiveables in the same priority
as existed as the filing of the petition. The post-petition liens
and interests are to protect each holder of a prepetition lien or
interest to the extent of any diminution on the value of its
collateral.
A full-text copy of the Debtor's Motion, dated August 3, 2017, is
available at https://is.gd/te5xkg
A copy of the Debtor's Budget is available at https://is.gd/4zLXxj
About Oil Patch Transportation
Oil Patch Transportation filed a Chapter 11 petition (Bankr. S.D.
Tex. Case No. 17-80152) on May 16, 2017. The Company says it is a
small business debtor as defined in 11 U.S.C. Section 101(51D). It
was founded in 2006 and is engaged in the business of arranging
transportation of freight and cargo. The Debtor serves the oil and
gas industry in Brazoria County, Texas and the surrounding
counties. The Debtor operates on a fiscal year of July through
June. Gross income for fiscal year 2015 was $9,609,160, and for
2016, it was $4,998,418.
Robert Smith, president, signed the petition. At the time of
filing, the Debtor disclosed $2.87 million in total assets and
$2.48 million in total liabilities.
The case is assigned to Judge Marvin Isgur.
The Gerger Law Firm, PLLC, serves as counsel to the Debtor.
ONE HORIZON: Fails to Comply with Nasdaq's Minimum Bid Price Rule
-----------------------------------------------------------------
One Horizon Group, Inc. received a written alert from Nasdaq
Listing Qualifications on July 31, 2017, that the Company's closing
bid price for the last 30 consecutive businesses was less than $1
per share. As a result, the Company is below the continued listing
requirement to maintain a minimum bid price of $1 per share as set
forth in Nasdaq Listing Rule 5550(a)(2). However, Nasdaq Listing
Rule 581(c)(3)(A) provides the Company a compliance period of 180
calendar days to regain compliance. If at any time during this 180
days period the closing bid price of its common stock is at least
$1 for a minimum of ten consecutive business days, the Company will
regain compliance.
About One Horizon
Ireland-based One Horizon Group, Inc., is the inventor of the
patented SmartPacketTM Voice over Internet Protocol ("VoIP")
platform. The software is designed to capitalize on numerous
industry trends, including the rapid adoption of smartphones, the
adoption of cloud based Internet services, the migration towards
all IP voice networks and the expansion of enterprise
bring-your-own- device to work programs. The Company designs,
develops and sells white label SmartPacketTM VoIP software and
services to large Tier-1 telecommunications operators.
One Horizon reported a net loss of $5.54 million on $1.61 million
of revenue for the year ended Dec. 31, 2016, compared to a net loss
of $6.30 million on $1.53 million of revenue for the year ended in
2015.
As of March 31, 2017, One Horizon had $9.66 million in total
assets, $6.81 million in total liabilities and $2.84 million in
total stockholders' equity.
The Company's independent accountants Cherry Bekaert LLP, in Tampa,
Fla., stated in its report on the Company's consolidated financial
statements for the year ended Dec. 31, 2016, that the Company has
recurring losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going concern.
ONE STATE STREET: Bank Wants Conversion or Trustee
--------------------------------------------------
Prudential Savings Bank asks the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania to convert the Chapter 11
bankruptcy cases of One State Street Associates, LP, Island View
Crossing II, L.P., Calnshire Estates, LLC, and Steeple Run, L.P.,
to Chapter 7 liquidation or in the alternative, appoint a Chapter
11 Trustee.
Prudential Savings Bank points out that:
(a) Prudential Savings Bank entered into a Development
Construction Loan Agreement, pursuant to which Prudential Savings
Bank issued a construction loan to Island View under a promissory
note in the principal amount of $5,541,468.
(b) As security, Island View executed and delivered to
Prudential Savings Bank an Open-End Mortgage and Security Agreement
providing, inter alia, the Island View Property as security for the
loan. As additional security, Island View executed an Assignment of
Rents, Leases and Agreements of Sale on the Island View Property.
(c) Pursuant to the Island View Loan Agreements, the Loan was
intended to provide the Island View Debtor with funds to construct
certain site improvements on the Island View Real Property;
specifically, the Island View Project includes, among other things,
the construction of 73 townhomes with subsequent phases to include
the construction of 96 condominium units.
(d) Island View failed to deposit the security deposits in an
escrow account with Prudential Savings Bank as required by the
Second Island View Loan Agreement and reported to Prudential
Savings Bank receiving only $5,000 in deposit monies from both Ms.
Caione and Mr. Ranganathan, not the $30,990 and the $49,980 in
deposit monies that Ms. Caione and Mr. Ranganathan actually paid to
Island View.
(e) Island View refused to deliver to Prudential Savings Bank
the security deposits for the agreements of sale for Prudential
Savings Bank to hold in escrow, and instead misappropriated the
deposit moneys. At the time that Renato J. Gualtieri and Island
View took in excess of $175,000 in consumer escrow deposits,
neither had the financial wherewithal to build the units or provide
refunds to consumers. Prudential Savings Bank believes that Mr.
Gualtieri diverted the deposits.
(f) Seven civil actions have been filed against Island View by
prospective homebuyers seeking the return the stolen security
deposits. Among the actions are: (1) Monica L. Caione v. Island
View Crossing II LP, Americorp Homes, Island View Crossing II Inc.,
Bucks County, CCP, No. 201602011; (2) Samira Ranganathan v. Island
View Crossing II LP, Bucks County, CCP, No. 2016-05724; (3)
Benjamin A Mastridge, Sr. vs. Island View Crossing II, Bucks
County, CCP, No. 2016-06373; (4) Frank Del Grasso v. Island View
Crossing II LP, et al. Bucks County, CCP, No. 2016-06685; and (5)
Peter Bridge vs. Island View Crossing II, LP, Phila. Municipal
Court, MJ-07102-CV-0000142-2016.
(g) Mr. Gualtieri lied to and misled consumers as to the
ability to return the deposits, long ago depleted by him (which
left an unrecoverable stigma on the project being operated by a
consumer fraud), and Island View's treatment of potential
purchasers is reprehensible and typifies Island View's bad faith
and dishonesty.
(h) Island View failed to maintain and refused reinstate the
required insurance coverage on the collateral secured by the Second
Island View Loan Documents. Island View also failed to timely
notify Prudential Savings Bank of the cancellation of such
insurance, which forced Prudential Savings Bank to obtain
force-placed insurance to protect its collateral.
(i) Island View also failed to maintain certain life insurance
coverage for Mr. Gualtieri as required by the Second Island View
Loan Agreement.
(j) At the status conference, the Debtors have alleged that
the only "viable" project that any of the Debtors have is the
Island View Project, but did not relate to the Court is that the
Island View Project has been dormant for well over a year with no
construction activity where no units are completed. Through their
inactivity, the Debtors have also allowed permits and approvals to
lapse, further diminishing the value of their assets.
(k) The Debtors have taken no steps post-petition to commence
any operations with the sole exception of State Street. Island View
has been left to sit fallow for over a year and during that time,
any assets it has have declined in value while the hard assets
remaining on the property were left to waste and will likely have
to be demolished in order to use the real property in any
meaningful way.
(l) In its Schedules, State Street lists six leases for its
real property, both residential and nonresidential. Prudential
Savings Bank believes that State Street is collecting rent pursuant
to the Leases and is also accruing post-petition obligations, and
as such, using cash collateral in violation of Section 363 of the
Bankruptcy Code -- constituting gross mismanagement of the
Debtors.
(m) The Debtors have failed to pay taxes, including real
estate taxes due on the Properties after the Petition Date. The
Bucks County Tax Claim Bureau filed a secured proof of claim
against Steeple Run in the amount of $14,275 for 2014, 2015 and
2016 unpaid property taxes, which continues to accrue interest
post-petition. In addition, the Debtors have also scheduled unpaid
taxes for which they have no ability to pay (Island View scheduled
priority debt to Bucks County Tax Claim Bureau in the amount of
$118,437 and Borough of Bristol in the amount of $79,917 and
Calnshire scheduled a secured debt to West Caln Township in the
amount of $35,000 and a priority debt to the Chester County Tax
Claim Bureau in the amount of $75,000.00).
(n) Even more troubling, the Debtors' schedules reveal that
Island View under Gualtieri's control (which had no ability to
generate cash except for misappropriating draws from Prudential
Savings Bank and security deposits from potential purchasers)
actually loaned almost $800,000 to insiders. In fact, the vast
majority of the unsecured debts listed in the State Street
Schedules are loans from insiders.
(o) The Debtors have no financing to commence operations and
the combined gross revenues of Island View, Calnshire and Steeple
Run are a telling $0.00. The Debtors are not generating income and
have no other source of cash. Thus, the Debtors have no prospects
for financing with hundreds of thousands of dollars of real estate
taxes and no meaningful cash flows. The Debtors have no reasonable
likelihood of rehabilitation and their prospects have long since
passed with no plausible chance of recovery.
Accordingly, Prudential Savings Bank asserts that the misuse of
funds by Mr. Gualtieri shows that he is not appropriately suited to
run the Debtors and incapable of steering the Debtors efforts
towards reorganization.
Prudential Savings Bank is represented by:
Edmond M. George, Esq.
Michael D. Vagnoni, Esq.
Obermayer Rebmann Maxwell & Hippel LLP
Centre Square West
1500 Market Street, 34th Floor
Philadelphia, PA 19102
Telephone: (215) 665-3000
Facsimile: (215) 665-3165
E-mail:edmond.george@obermayer.com
About One Street Associates
Island View, Calnshire Estates, and Steeple Run, are affiliates of
One Street Associates which filed a voluntary petition on June 21,
2017 (Bankr. E.D. Pa. Case No. 17-14291). The Debtors are managed
by Renato J. Gualtieri, a real estate developer based in Langhorne,
PA.
Island View Crossing II, L.P., Calnshire Estates, LLC, and Steeple
Run, LP filed their respective Chapter 11 petitions (Bankr. E.D.
Pa. Case Nos. 17-14454, 17-14457 and 17-14458, respectively), on
June 30, 2017.
The Debtors' individual cases have not been ordered to be jointly
administered or consolidated and thus, each Debtor has its own
separate bankruptcy estate. The Hon. Eric L. Frank presides over
these cases.
The petitions were signed by Renato J. Gualtieri, president of
corporate general partner.
The Debtors are represented by David B. Smith, Esq. at Smith Kane
Holman, LLC.
At the time of the filing, the Debtors estimated their assets and
debts at $1 million to $10 million, except for Calnshire Estates,
which estimated its assets to be between $10 million to $50
million.
PACIFIC OFFICE: Incurs $4.23 Million Net Loss in Second Quarter
---------------------------------------------------------------
Pacific Office Properties Trust, Inc., filed with the Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $4.23 million on $11.15 million of total
revenue for the three months ended June 30, 2017, compared to a net
loss of $2.99 million on $11.29 million of total revenue for the
three months ended June 30, 2016.
For the six months ended June 30, 2017, the Company reported a net
loss of $6.04 million on $22.57 million of total revenue compared
to a net loss of $5.99 million on $22.74 million of total revenue
for the six months ended June 30, 2016.
As of June 30, 2017, Pacific Office had $251.14 million in total
assets, $404.37 million in total liabilities and a total deficit of
$150.23 million.
"Our business is capital intensive and our ability to maintain our
operations depends on our cash flow from operations and our ability
to raise additional capital on acceptable terms. Our primary focus
is to preserve and generate cash.
"We expect that our funds from operations, including existing cash
on hand, will be insufficient to meet working capital requirements,
to repay debt at maturity and to fund required capital expenditures
and leasing costs through August 2018. Accordingly, in addition to
working with the lender of our credit facility and the holders of
our promissory notes on amending their terms in order to extend the
maturity dates, we expect that we may need to contribute existing
properties to joint ventures with third parties or raise additional
capital, either from debt or equity. We also intend to mitigate
any capital project overages and continue to request the maximum
amount of reimbursements of our reserves on a timely basis. We may
also consider strategic alternatives, including a sale, merger,
other business combination or recapitalization, of the Company.
"The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business. We incurred net losses of $6.0 million and $14.0 million
for the six months ended June 30, 2017 and for the year ended
December 31, 2016, respectively, and have incurred cumulative net
losses since inception of $249.0 million. At June 30, 2017, we
expect that our funds from operations, including existing cash on
hand, will be insufficient to meet working capital requirements, to
repay debt at maturity and to fund required capital expenditures
and leasing costs through August 2018. This condition raises
substantial doubt about our ability to continue as a going
concern."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/kXCOm0
About Pacific Office
Pacific Office Properties Trust, Inc., is a real estate investment
trust (REIT). The Company owns and operates primarily office
properties in Hawaii. The Company owns approximately four office
properties, consisting of approximately 1.2 million rentable square
feet and is partner with third-parties in approximately three joint
ventures, holding approximately three office properties, consisting
of approximately seven buildings and approximately one million
rentable square feet (the Property Portfolio). One of its joint
ventures also owns a sports club associated with its City Square
property in Phoenix, Arizona. The Company's Property Portfolio
includes office buildings in Honolulu and Phoenix. The Company is
the sole general partner of its Operating Partnership, Pacific
Office Properties, L.P. The Company holds a long-term ground
leasehold interest in its Waterfront Plaza property.
Pacific Office incurred a net loss of $13.96 million in 2016
following a net loss of $14.26 million in 2015.
Ernst & Young LLP, in Honolulu, Hawaii, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016, citing that the Company expects that funds
from operations, including existing cash on hand, will be
insufficient to meet its working capital requirements and capital
and tenant improvements obligations which raise substantial doubt
about its ability to continue as a going concern.
PARKER DEVELOPMENT: President Opposes Approval of Plan Outline
--------------------------------------------------------------
Parker Development President George Parker asked a U.S. bankruptcy
court to deny approval of the disclosure statement, which explains
the liquidating plan proposed by SummitBridge National Investments
III for his company.
In a filing with the U.S. Bankruptcy Court for the Eastern District
of Virginia, Mr. Parker argued the secured creditor did not
disclose important information about the proposed sale of Parker
Development's Norfolk properties such as supporting data related to
the valuation and the timeline for the sale.
Mr. Parker also argued that the plan could not be confirmed even if
the court finds that the disclosure statement contains adequate
information.
"The plan contemplates a sale pursuant to [section] 363, including
the ability to credit bid by the proponent, SummitBridge, although
such [Bankruptcy] Code provision applies to only pre-confirmation
sales," Mr. Parker argued.
Mr. Parker is represented by:
Kelly M. Barnhart, Esq.
Roussos, Glanzer & Barnhart, PLC
580 E. Main St., Suite 300
Norfolk, VA 23510
Phone: (757) 622-9005
Fax: (757) 624-9257
About Parker Development
Parker Development, LLC, also known as Parker Development I, LLC,
is a Virginia limited liability company that owns and operates
certain commercial real estate in the City of Norfolk, Virginia.
Parker Development filed a Chapter 11 petition (Bankr. E.D. Va.
Case No. 16-73359) on Sept. 28, 2016. The petition was signed by
George G. Parker, president. At the time of filing, the Debtor
estimated assets and liabilities at $1 million to $10 million.
Judge Stephen C. St. John presides over the case. Greer W.
McCreedy, II, Esq., at The McCreedy Law Group, PLLC, serves as
bankruptcy counsel.
On June 16, 2017, SummitBridge National Investments III LLC, a
secured creditor, filed a disclosure statement, which explains its
proposed Chapter 11 plan of liquidation for the Debtor.
PARTY CITY: Moody's Hikes Corporate Family Rating to Ba3
--------------------------------------------------------
Moody's Investors Service upgraded Party City Holdings Inc.'s debt
ratings, including its Corporate Family Rating to Ba3 from B1 and
Probability of Default Rating to Ba3-PD from B1-PD. The ratings
outlook was changed to stable from positive.
"The upgrade reflects its solid operating performance and strong
retail and wholesale presence in the relatively stable market of
party goods and accessories," said Moody's Vice President,
Christina Boni. "Credit metrics have continued to improve through
growth in operating income and debt reduction as the company
continues to enhance its vertically integrated model", Boni further
added."
The following ratings were upgraded:
Upgrades:
Issuer: Party City Holdings Inc.
-- Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
-- Corporate Family Rating, Upgraded to Ba3 from B1
-- Senior Secured Bank Credit Facility, Upgraded to Ba3(LGD3)
from B1(LGD3)
-- Senior Unsecured Regular Bond/Debenture, Upgraded to B2(LGD5)
from B3(LGD5)
Outlook Actions:
Issuer: Party City Holdings Inc.
-- Outlook, Changed To Stable From Positive
Affirmations:
Issuer: Party City Holdings Inc.
-- Speculative Grade Liquidity Rating, Affirmed SGL-2
RATINGS RATIONALE
Party City's Ba3 Corporate Family Rating reflects the company's
solid business performance in the narrow but stable category of
party goods and accessories. Debt/EBITDA continues to improve at
4.8x at June 30, 2017. The rating also reflects that Party City
remains a 'controlled company' as defined by the SEC with
affiliates of Thomas H. Lee Partners, L.P. ("THL") and Advent
International Corporation ('Advent"), who have a history of funding
sizable debt financed dividends, still holding over 70% of the
outstanding shares in the company. The rating is supported by Party
City's strong market presence in both retail and wholesale, growing
geographic diversification, and relative demand stability of party
goods and accessories. The company also has a strong track record
of integrating acquisitions and achieving cost savings, which
should also enable continued future steady growth and metric
improvement. Liquidity is good, as cash flow and revolver
availability are expected to be more than sufficient to cover cash
flow needs over the next 12-18 months.
The stable outlook reflects Moody's expectation that demand for the
party goods and accessories category will continue to be resilient,
and for the company to continue to integrate successfully any
future bolt-on acquisitions.
Ratings could be upgraded through sustained growth in revenue and
profitability leading to improved credit metrics. Clarity around
future financial policies and reduced private equity ownership
could also support a ratings upgrade. Specific metrics include
lease-adjusted debt to EBITDA sustained below 4.25x and EBIT
/interest expense sustained above 3.0x.
Ratings could be downgraded if the company's operating performance
were to substantially weaken due to declines in consumer
discretionary spending, heightened competition or integration
issues, more aggressive financial policies or a material erosion in
liquidity. Metrics include debt/EBITDA sustained above 5.0x or if
EBIT/interest remains below 2.25x.
Party City Holdings Inc. is a designer, manufacturer, distributor
and retailer of party goods and related accessories. The company's
retail brands principally include Party City and Halloween City.
Total revenue exceeded $2.3 billion for the twelve month period
ended June 30, 2017. Following its IPO in April 2015, the company
remains majority owned by Thomas H. Lee Partners, L.P. ("THL").
The principal methodology used in these ratings was Retail Industry
published in October 2015.
PROSPECTOR OFFSHORE: May Use Cash Collateral Until Aug. 31
----------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware entered an interim order authorizing
Prospector Offshore Drilling S.a r.l., et al.'s limited use of cash
collateral.
A final hearing on the Debtors' request will be held on Aug. 23,
2017, at 10:00 a.m. (Eastern Time).
As reported by the Troubled Company Reporter on July 28, 2017, the
Prospector Parent and its debtor affiliates sought authority from
the Court to use cash collateral. The New Debtors intend to use
cash collateral to make monthly lease payments under the Lease
Agreements, and for working capital and other general purposes in
the ordinary course of their businesses, and for costs and expenses
incurred in the Chapter 11 cases. Paragon Parent completed an
acquisition of Prospector Parent and its subsidiaries by acquiring
all of the issued and outstanding shares in Prospector Parent,
which expanded Paragon Parent's drilling fleet by adding two
additional high specification jackup rigs in the U.K. North Sea,
Prospector 1 and Prospector 5.
As adequate protection, the Security Agent is granted perfected
postpetition priming liens and security interests in all of the
Prospector New Debtors' rights and superpriority administrative
expense claims.
Collateral use will terminate without further notice or court
proceeding on the earliest to occur of (i) Aug. 31, 2017, and (ii)
the occurrence of any of these events:
i. the Prospector New Debtors shall fail to make any payment
to the Sale-Leaseback Parties under the interim court
order or the Operative Documents within three (3) business
days after payment becomes due;
ii. the Prospector New Debtors will fail to: (a) comply with
any material provision of the interim court order; or (b)
comply with any other covenant or agreement specified in
the interim court order in any material respect, and such
failure to comply with any other covenant or agreement
will continue unremedied for five business days following
notice by the Security Agent of failure;
iii. the Prospector New Debtors will create, incur or suffer to
exist any post-petition liens or security interests other
than: (a) those granted pursuant to the interim court
order; (b) carriers', maritime, mechanics', operator's,
warehousemen's, repairmen's or other similar liens arising
in the ordinary course of business; (c) pledges or
deposits in connection with workers' compensation,
unemployment insurance and other social security
legislation; (d) deposits to secure the payment of any
post-petition statutory obligations, performance bonds and
other obligations of a like nature incurred in the
ordinary course of business; and (e) any other junior
liens or security interests that the Prospector New
Debtors are permitted to incur under the Operative
Documents;
iv. the Prospector New Debtors shall create, incur or suffer
any other claim which is pari passu with or senior to the
Adequate Protection Claim;
v. any party in interest seeks the entry of an order
reversing, amending, supplementing, staying, vacating or
otherwise modifying this Interim Order without the consent
of the Sale-Leaseback Parties;
vi. a court order will be entered dismissing any of the
Chapter 11 cases;
vii. a court order will be entered converting any of the
Chapter 11 cases to a case under Chapter 7 of the U.S.
Bankruptcy Code;
viii. a court order will be entered appointing a Chapter 11
trustee, responsible officer, or any examiner with
enlarged powers relating to the operation of the
businesses in the Chapter 11 cases, unless consented to in
writing by the Sale-Leaseback Parties; or
ix. the filing by any New Debtor of any motion, pleading,
application or adversary proceeding challenging the
validity, enforceability, perfection or priority of the
liens securing the Secured Obligations or asserting any
other cause of action against and with respect to the
Secured Obligations or the Prepetition Collateral securing
obligations (or if the New Debtors support any motion,
pleading, application or adversary proceeding commenced by
any third party).
A copy of the Order is available at:
http://bankrupt.com/misc/deb17-11572-34.pdf
About Paragon Offshore
Paragon Offshore -- http://www.paragonoffshore.com/-- is a
provider of standard specification offshore drilling units serving
the oil and gas industry. The Company's fleet consists of 32
jackups and six floaters (four drillships and two
semisubmersibles). In addition, Paragon is the majority
shareholder of Prospector Offshore Drilling S.A., a publicly traded
offshore drilling company on the Oslo Axess stock exchange that
owns and operates two high specification jackups. Paragon also
performs drilling operations on the Hibernia Platform offshore
Eastern Canada. The Company operates in significant
hydrocarbon-producing geographies throughout the world, including
Mexico, Brazil, the North Sea, West Africa, the Middle East, India
and Southeast Asia. Paragon's shares are traded on the New York
Stock Exchange under the symbol 'PGN.'
On Feb. 14, 2016, Paragon Offshore plc and certain of its
affiliates ("First Filers") each commenced a voluntary case under
Chapter 11 of the Bankruptcy Code.
Prospector Offshore Drilling S.a r.l. aka Prospector Offshore
Drilling S.A.; Prospector Rig 1 Contracting Company S.a r.l.;
Prospector Rig 5 Contracting Company S.a r.l.; and Paragon Offshore
plc (in administration) filed separate Chapter 11 petitions (Bankr.
D. Del. Case Nos. 17-11572, 17-11573, 17-11574 and 17-11575,
respectively) on July 20, 2017. Judge Christopher S. Sontchi is
assigned to the cases.
The petitions were signed by Lee M. Ahlstrom as senior vice
president and chief financial officer. At the time of filing, the
Debtors reported estimated assets and liabilities ranging between
$1 billion to $10 billion.
The Debtors engaged Gary T. Holtzer, Esq., and Stephen A. Youngman,
Esq., at Weil, Gotshal & Manges LLP as counsel; and Mark D.
Collins, Esq., Amanda R. Steele, Esq., and Joseph C. Barsalona II,
Esq., at Richards, Layton & Finger, P.A. as co-counsel.
The Debtors tapped Lazard Freres & Co. LLC as financial advisor;
Alixpartners, LLP, as restructuring advisor; and Kurtzman Carson
Consultants as claims and noticing agent.
PSH PROPERTIES: Unsecureds to Recoup 100% Over 10 Years at 3%
-------------------------------------------------------------
PSH Properties, LLC, filed with the U.S. Bankruptcy Court for the
Northern District of Texas a combined disclosure statement and plan
of reorganization dated July 31, 2017.
Class 5 Unsecured Claims total $109,731.92. The claimants will
receive 100.0% of their respective claims over a 10-year term
(accruing interest from the petition date), to be paid on a monthly
basis, starting Oct. 10, 2017, at 3.0% interest. Subsequent
payments will be made on the 10th of each month thereafter.
Claimants will receive their pro-rata share of each payment.
The Plan calls for 115 monthly payments each of $1,113.11.
The Debtor reserves the right to prepay a claim at the balance
amount of the claim at the time of the payment. The Debtor also
reserves the right to settle a claim with a claimant at an amount
agreeable to both the Debtor and the affected claimant.
No claimant of this class will have or retain any lien against the
Debtor upon confirmation of the Plan.
The Plan will be funded by the Debtor's continued operations.
The Plan contemplates the continued operations by the Debtor and
payment in full to all its Creditors within a ten year period. It
is anticipated that the Plan will be fully consummated ten years
from the Effective Date. The Debtor expressly reserves the right to
pay creditors earlier than the ten year time period if cash flow
permits.
A copy of the Combined Disclosure Statement and Plan is available
at:
http://bankrupt.com/misc/txnb17-50102-40.pdf
About PSH Properties
PSH Properties, LLC, is a small nonresidential building operator
located in Lubbock, Texas. PSH sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 17-50102) on
April 10, 2017. The petition was signed by David Hodges, managing
member. The case is assigned to Judge Robert L. Jones. At the
time of the filing, the Debtor estimated its assets and liabilities
at $1 million to $10 million.
PUERTO RICO: Aurelius Seeks Dismissal of Title III Case
-------------------------------------------------------
Aurelius Investment, LLC, Aurelius Opportunities Fund, LLC, and Lex
Claims, LLC ask the U.S. District Court for the District of Puerto
Rico to dismiss the Commonwealth of Puerto Rico's Title III
petition, and grant them relief from the automatic stay.
Aurelius et al. question the constitutionality of the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA"), Pub.
L. No. 114-187, 130 Stat. 549 (2016), on the grounds that the
appointment of the Board members of the Fiscal Management and
Oversight Board for Puerto Rico violates the Appointments Clause of
the U.S. Constitution and the separation of powers.
The Financial Oversight and Management Board for Puerto Rico
derives its existence and authority entirely from PROMESA, and it
controls almost every aspect of the Commonwealth's finances
pursuant to that federal law.
Aurelius asserts that the actions the Board has purported to take
since its inception -- including its authorization of this Title
III proceeding -- are therefore void because of the appointment of
the members violates the Appointments Clause of the United States
Constitution and principles of separation of powers.
Aurelius notes that:
-- The Oversight Board is composed of seven voting members who
have no superior officer save the President, yet were never subject
to Senate confirmation.
-- Six of the members of the Oversight Board were effectively
hand-picked by individual members of Congress pursuant to an
intricate system of Balkanized lists designed to severely constrain
the President's appointment powers.
"[S]ince 1789, every civilian official appointed by the federal
government to oversee the operation of a territorial government has
been recognized as a principal federal officer, with
advice-and-consent Senate appointment. This includes all governors
of Puerto Rico until Congress granted Puerto Rico's citizens the
right to select their governors," Theodore B. Olson, Esq., at
Gibson, Dunn & Crutcher LLP, explains in court filings.
"Even if the Board members were inferior officers, PROMESA would
still violate the Appointments Clause because the Act does not vest
the appointment power "in the President alone." PROMESA
effectively required the President to "choose" six of the seven
Board members from seat-specific lists compiled by the Speaker of
the House, the Majority Leader of the Senate, the Minority Leader
of the Senate, and the Minority Leader of the House. 48 U.S.C. Sec.
2121(e)(2). This novel procedure was intended to "ensure[ ] that a
majority of [the Board's] members are effectively chosen by
Republican congressional leaders." And that is exactly what
happened: Congressional leaders dictated lists of potential Board
members, and the President "selected" the Board from those lists."
According to Aurelius, the Board's actions are invalid; it cannot
act until it is properly constituted. Aurelius thus seeks the
dismissal of the Board's petition for the Commonwealth's debt
restructuring under Title III of PROMESA.
"Because the Commonwealth is not eligible to be a debtor under
Title III and the Board lacks lawful authority to operate as
presently constituted, the Board cannot act as the Commonwealth's
representative, and this Title III petition should be dismissed and
this proceeding thereby terminated," Mr. Olson tells the Court.
Funds managed by Aurelius hold substantial amounts of outstanding
bonds that were issued by the Commonwealth of Puerto Rico and
backed by a pledge of Puerto Rico's full faith, credit, and taxing
power.
Aurelius is represented by:
Luis A. Oliver-Fraticelli
Katarina Stipec-Rubio
ADSUAR MUNIZ GOYCO SEDA & PEREZ-OCHOA PSC
208 Ponce de Leon Ave., Suite 1600
San Juan, P.R. 00918
Tel: (787) 756-9000
Fax: (787) 756-9010
E-mail: loliver@amgprlaw.com
kstipec@amgprlaw.com
- and -
Theodore B. Olson
Matthew D. McGill
Helgi C. Walker
Michael R. Huston
Lochlan F. Shelfer
Jeremy M. Christiansen
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Phone: (202) 955-8500
Fax: (202) 467-0539
E-mail: tolson@gibsondunn.com
mmcgill@gibsondunn.com
hwalker@gibsondunn.com
mhuston@gibsondunn.com
lshelfer@gibsondunn.com
jchristiansen@gibsondunn.com
A copy of the Motion is available at:
http://bankrupt.com/misc/PR_913_Aurelius_M_Dismissal.pdf
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of 2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21. On July 2, 2017, a Title III case was commenced for the
Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are onboard as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds, which collectively hold over $3.5 billion in COFINA Bonds
and over $2.9 billion in other bonds issued by Puerto Rico and
other instrumentalities, including over $1.8 billion of Puerto
Rico general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
PUERTO RICO: Aurelius to Question Constitutionality of Board
------------------------------------------------------------
Aurelius Investment, LLC, Aurelius Opportunities Fund, LLC, and Lex
Claims, LLC filed with the U.S. District Court for the District of
Puerto Rico a motion seeking: (1) a clarification that the
automatic stay under 11 U.S.C. Sec. 362 and 922 does not apply; or,
alternatively, (2) relief from the stay so that Aurelius may pursue
an independent action for declaratory and injunctive relief outside
the Title III case against the Financial Management and Oversight
Board for Puerto Rico and its members on the grounds that they were
appointed in violation of the Appointments Clause of the United
States Constitution and that the Board violates the separation of
powers.
Aurelius notes that Oversight Board derives its existence and
authority entirely from PROMESA, and it controls almost every
aspect of the Commonwealth's finances pursuant to that federal law.
Aurelius claims that the appointment of members of the Board
without senate confirmation violates the Appointments Clause of the
United States Constitution and principles of separation of powers.
"Consequently, the actions that the Board has purported to take
since its inception -- including, but not limited to, its
certification of a fiscal plan for Puerto Rico, approval of faulty
budgets, and the authorization of this Title III proceeding -- are
void. All of these actions have already inflicted serious harm on
Aurelius, and the continued operation of the Board threatens to
perpetrate yet more harm on Aurelius. The structural
constitutional defects inherent in the Board raises these harms to
an irreparable level. Another consequence of the Board's
unconstitutionality is that it lacks authority to take any further
official action unless and until it is lawfully constituted. For
many of the same reasons that this Title III proceeding must be
dismissed, Aurelius is also entitled to broader declaratory and
injunctive relief on these constitutional questions," Theodore B.
Olson, Esq., at Gibson, Dunn & Crutcher LLP, explains in court
filings.
Aurelius submits that the automatic stay under 11 U.S.C. Sec. 362
and 922 is inapplicable to its constitutional claims against the
Oversight Board.
"Aurelius's claims are not against the Debtor (the Commonwealth),
nor do they seek to enforce Aurelius's claims as beneficial owners
of bonds against the Debtor. Nevertheless, out of an abundance of
caution, Aurelius requests a comfort order declaring that the stay
does not apply to the contemplated suit, which would be filed
outside the Title III proceeding but in the U.S. District Court of
the District of Puerto Rico," Mr. Olson tells the Court.
"Alternatively, there is good cause to lift the stay given the
severe constitutional harms imposed on Aurelius through the Board's
various past unlawful acts and continuing operation. Complete
relief on these claims cannot be afforded Aurelius within the
confines of this Title III proceeding because Aurelius plans to
seek declaratory and injunctive relief as to the status of the
Board under Title I and its actions under Title II, which goes well
beyond the instant case and controversy over the Commonwealth's
debt restructuring. The many types of harm created by the
unconstitutional status of the Board -- and the remedies necessary
to address them -- are outside the scope of this case."
Funds managed by Aurelius hold substantial amounts of outstanding
bonds that were issued by the Commonwealth of Puerto Rico and
backed by a pledge of Puerto Rico's full faith, credit, and taxing
power.
A copy of the Motion is available at:
http://bankrupt.com/misc/PR_914_Aurelius_M_Lift_Stay.pdf
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70
billion, a 68% debt-to-GDP ratio and negative economic growth in
nine of the last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III
of 2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ("PROMESA").
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21. On July 2, 2017, a Title III case was commenced for the
Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that
may be referred to her by Judge Swain, including discovery
disputes, and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are onboard as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets
Inc. is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Toro, Colon, Mullet, Rivera & Sifre, P.S.C. and Kramer Levin
Naftalis & Frankel LLP serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc.,
Franklin Advisers, Inc., and the First Puerto Rico Family of
Funds,
which collectively hold over $3.5 billion in COFINA Bonds and over
$2.9 billion in other bonds issued by Puerto Rico and other
instrumentalities, including over $1.8 billion of Puerto Rico
general obligation bonds ("GO Bonds").
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP,
Autonomy Capital (Jersey) LP, FCO Advisors LP, Franklin Mutual
Advisers LLC, Monarch Alternative Capital LP, Senator Investment
Group LP, and Stone Lion Capital Partners L.P.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ
Management II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed a nine-member Official Committee of
Retirees and a seven-member Official Committee of Unsecured
Creditors of the Commonwealth. The Retiree Committee tapped
Jenner & Block LLP and Bennazar, Garcia & Milian, C.S.P., as its
attorneys. The Creditors Committee tapped Paul Hastings LLP and
O'Neill & Gilmore LLC as counsel.
QUEST SOLUTION: Board Grants 5 Million Options to D&Os
------------------------------------------------------
Quest Solution, Inc.'s Board of Directors adopted a Share Purchase
Option Plan, whereby the Board may grant to directors, officers,
employees, or consultants of the Company options to acquire shares
of common stock in order to provide an inducement and serve as a
long term incentive program. Pursuant to the Plan, on Aug. 2,
2017, the Board issued an aggregate of 5,000,000 options to
purchase shares of common stock of the Company to directors,
officers and consultants at an exercise price of $0.11 per share,
which was the closing price of the Company's common stock on
Aug. 1, 2017. The options will vest over 12 months in four
quarterly and equal installments, subject to the option holders'
continuous service to the Company, and will expire on Aug. 2,
2021.
About Quest Solution
Quest Solution, formerly known as Amerigo Energy, Inc., is a
national mobility systems integrator with a focus on design,
delivery, deployment and support of fully integrated mobile
solutions. The Company takes a consultative approach by offering
end to end solutions that include hardware, software,
communications and full lifecycle management services. The highly
tenured team of professionals simplifies the integration process
and delivers proven problem solving solutions backed by numerous
customer references. Motorola, Intermec, Honeywell, Panasonic,
AirWatch, Wavelink, SOTI and Zebra are major suppliers which Quest
Solution uses in its systems.
Quest Solution incurred a net loss attributable to stockholders of
$14.21 million for the year ended Dec. 31, 2016, following a net
loss of $1.71 million for the year ended Dec. 31, 2015.
The Company's balance sheet as of March 31, 2017, showed $27.78
million in total assets, $42.95 million in total liabilities and a
total stockholders' deficit of $15.16 million.
RBSM, LLP, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016.
The auditors said the Company has a working capital deficiency and
significant subordinated debt resulting from acquisitions. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
QUEST SOLUTION: Signs Consulting Agreement With Carlos Nissensohn
-----------------------------------------------------------------
Quest Solution, Inc., entered into a consulting agreement with Mr.
Carlos Jaime Nissensohn. Mr. Nissensohn and/or any entity under
his control, will provide the Company and its controlled entities
with certain business development, managerial, measures to improve
efficiency and cost savings and financial services in accordance
with the terms and conditions of this agreement. In exchange for
its consulting services, the Consultant will receive a monthly fee
of $15,000, a one-time signatory fee of 600,000 restricted shares,
and 1,500,000 options to buy shares of common stock of the Company
at an exercise price of $0.11 per share, which was the closing
price of the Company's common stock on Aug. 1, 2017. Mr.
Nissensohn will devote at least 80% of his working time to
providing services to the company.
About Quest Solution
Quest Solution, formerly known as Amerigo Energy, Inc., is a
national mobility systems integrator with a focus on design,
delivery, deployment and support of fully integrated mobile
solutions. The Company takes a consultative approach by offering
end to end solutions that include hardware, software,
communications and full lifecycle management services. The highly
tenured team of professionals simplifies the integration process
and delivers proven problem solving solutions backed by numerous
customer references. Motorola, Intermec, Honeywell, Panasonic,
AirWatch, Wavelink, SOTI and Zebra are major suppliers which Quest
Solution uses in its systems.
Quest Solution incurred a net loss attributable to stockholders of
$14.21 million for the year ended Dec. 31, 2016, following a net
loss of $1.71 million for the year ended Dec. 31, 2015.
The Company's balance sheet as of March 31, 2017, showed $27.78
million in total assets, $42.95 million in total liabilities and a
total stockholders' deficit of $15.16 million.
RBSM, LLP, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016.
The auditors said the Company has a working capital deficiency and
significant subordinated debt resulting from acquisitions. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
RENAULT WINERY: Egg Harbor City's Chapter 91 Defense Not Abrogated
------------------------------------------------------------------
Plaintiff taxpayer, 975 Holdings, LLC, is the current owner of an
improved parcel in Egg Harbor City. The taxpayer purchased the
property in a bankruptcy asset sale allowed pursuant to 11 U.S.C.
section 363(f). Prior to the sale, Renault Winery, Inc., acting as
a debtor-in-possession failed to respond to a Chapter 91 request.
Taxpayer argues that both the fact that the prior owner was in a
bankruptcy proceeding and that the property was purchased through a
section 363(f) sale somehow excuses noncompliance with Chapter 91.
The Tax Court of New Jersey rejects both of these arguments.
On April 16, 2015, defendant municipality Egg Harbor City mailed by
U.S. Postal Service certified mail, return receipt requested, a
request in accordance with N.J.S.A. 54:4-34, otherwise known as a
Chapter 91 request. The certified mail was signed for by the
debtor-in-possession on April 18, 2015. The debtor-in-possession
did not respond to the request.
On July 13, 2016, 975 Holdings filed a complaint with this Court
challenging the 2016 assessment on the parcel. On Dec. 15, 2016, a
motion was filed by the municipality to dismiss the complaint in
accordance with Chapter 91 for failure to provide a response to the
April 16, 2015 request.
The current owner, taxpayer 975 Holdings, argues that the
provisions of Chapter 91 do not apply to it since the Chapter 91
notice was sent to the debtor-in-possession. In the alternative,
the taxpayer alleges that the sale of the property to taxpayer
pursuant to 11 U.S.C. section 363(f) somehow abrogates the
municipality's Chapter 91 defense.
The taxpayer initially argued that the obligation to file a
response to a Chapter 91 request belongs with whoever is the
trustee. However, there was not a trustee specifically appointed to
the bankruptcy case. Instead, the day-to-day operations of the
debtor and the assets of the bankruptcy estate were handled by the
debtor-in-possession, Renault Winery.
In this case, taxpayer's predecessor, Renault Winery, was a
debtor-in-possession. Notably, the obligation to file a response to
the Chapter 91 request did not fall upon a case trustee. There is
not any dispute the debtor-in-possession received the Chapter 91
notice and did not respond. This failure to respond is not excused
by the taxpayer's predecessor being a debtor-in-possession. "A
subsequent owner is "saddled with that failure to comply with the
statute." Thus, the taxpayer here is saddled with the failure of
Renault Winery, the debtor-in-possession, to file a Chapter 91
response.
In summary, the Court finds that the municipality is not asserting
an "interest" under section 363(f). Rather, the municipality is
affirmatively asserting a defense under Chapter 91. This defense is
not an interest of the municipality, but is a defense waivable by
the municipality through inaction or indifference. But for the tax
appeal of taxpayer, the Chapter 91 defense would have never arisen.
The essence of a defense is something affirmatively raised in
response to a claim. Only interests can be extinguished in a
section 363(f) sale. Since defenses are not interests under section
363(f), a Chapter 91 defense is not abrogated. The municipality's
motion to dismiss the complaint is granted in part subject to a
reasonableness hearing under Ocean Pines, supra.
The case is 975 HOLDINGS, LLC, Plaintiff, v. CITY OF EGG HARBOR,
Defendant, Docket No. 010346-2016 (Tax N.J.).
A full-text copy of the Tax Court's Decision dated August 4, 2017,
is available at https://is.gd/ldpzzv from Leagle.com.
Salvatore Perillo -- sperillo@npdlaw.com -- for plaintiff (Perskie,
Nehmad & Perillo, attorneys).
James J. Carroll, III for defendant.
About Renault Winery
Renault Winery, Inc., and its affiliates own and operate a hotel,
two restaurants, a golf course, and a winery. The hotel is
located
in Egg Harbor City, N.J., and the other businesses are located on
adjacent property in Galloway Township, N.J. Renault Winery has
served South Jersey as a winery and restaurant facility for the
past 150 years. Joseph Milza and his wife, Geraldine, took over
the operations of Renault Winery in 1974.
The companies that operate the businesses are Renault Winery Inc.
(winery, restaurant and gift shop), Renault Golf LLC (golf
course),
and Tuscany House LLC (hotel, restaurant, and banquet facility).
Renault Realty Co., Renault Winery Property LLC, and Renault
Winery
Inc., own the real estate on which the businesses operate, as well
as other real estate in the immediate area.
Renault Winery, Inc., and four affiliates sought Chapter 11
protection (Bankr. D.N.J. Lead Case No. 14-33075) in Camden, New
Jersey, on Nov. 13, 2014. The cases are assigned to Judge Andrew
B. Altenburg Jr.
The Debtors tapped Subranni Zauber LLC as counsel.
Renault Winery disclosed total assets of $11.3 million and total
debt of $8.59 million.
REO HOLDINGS: Unsecureds To Be Paid in Full Under Plan
------------------------------------------------------
Eva M. Lemeh, the Chapter 11 Trustee for Reo Holdings, LLC, filed
with the U.S. Bankruptcy Court for the Middle District of Tennessee
an amended disclosure statement dated July 31, 2017, in support of
the Chapter 11 Trustee's plan of reorganization.
Class 3C Allowed General Unsecured Claims will be paid in full,
without interest by the Distribution Date. The total of all Class
3C Claims to be paid under the Plan is estimated to be $58,433.72.
In administering the Debtor's estate, the Chapter 11 Trustee has
taken a multipronged approach of litigating and resolving
litigation involving the Debtor, recovering the Debtor's property,
and preparing for the sale of the Debtor's property in order to
fund distributions under the Plan.
A copy of the Amended Disclosure Statement is available at:
http://bankrupt.com/misc/tnmb16-03349-324.pdf
About Reo Holdings LLC
REO Holdings, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
W.D. Tenn. Case No. 16-10414) on Feb. 29, 2016. The Debtor is
represented by Thomas Harold Strawn Jr., Esq.
On May 6, 2016, the case was transferred to the U.S. Bankruptcy
Court for the Middle District of Tennessee.
On July 29, 2016, the bankruptcy court ordered the appointment of
Eva M. Lemeh as trustee. The trustee hired Manier & Herod, P.C.,
as special counsel; and Alexander Thompson Arnold PLLC as
accountant.
On Feb. 29, 2016, Charles E. Walker, who owns a 50% interest in the
Debtor, filed a voluntary petition for relief under Chapter 11 with
the U.S. Bankruptcy Court for the Western District of Tennessee
(Case No. 16-10413). On May 6, 2016, the case was transferred to
the U.S. Bankruptcy Court for the Middle District of Tennessee. On
Aug. 1, 2016, John C. McLemore was appointed to serve as the
Chapter 11 trustee for Mr. Walker.
REYNOLDS PROTECTION: Unsecs. To Get $500/Month Over 5 Yrs.
----------------------------------------------------------
Reynolds Protection, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Texas a disclosure statement dated July
31, 2017, referring to the Debtor's plan of reorganization.
Class 5 General Unsecured Claims is estimated to be approximately
$500,000. The Debtor has not filed claims objections and may
object to certain of the unsecured claims.
Each holder of an Allowed General Unsecured Claim will be paid its
pro rata share of $500 a month over 60 months, starting on the 20th
of the month following the Effective Date and continuing on the
20th day of each month thereafter until paid in full pursuant to
the Plan. Class 5 is impaired by the Plan.
The funds necessary for the satisfaction of the creditors' claims
will be generated from the Debtor's continued business operations
called for by the Plan.
A copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/txnb17-30761-53.pdf
About Reynolds Protection
Reynolds Protection LLC filed a voluntary Chapter 11 Bankruptcy
petition in the United States Bankruptcy Court for the Northern
District of Texas, Dallas Division (Bankr. N.D. Tex. Case No.
17-30761) on March 2, 2017. The Debtor is represented by Joyce W.
Lindauer, Esq., of Joyce W. Lindauer Attorney, PLLC.
RIO MOBILE: Rudy De La Garza to Recover 100% Under Plan
-------------------------------------------------------
Rio Mobile Home and R.V. Parks Inc. filed with the U.S. Bankruptcy
Court for the Southern District of Texas their first amended
combined disclosure statement and Chapter 11 plan of liquidation
dated Aug. 6, 2017.
The Class 2 Secured Claim of Rudy De La Garza -- estimated at
$132,812.50 -- are unimpaired by the Plan. The Debtor will
liquidate the following properties as per this Liquidation Plan,
with court approval through a real estate broker to be selected by
Debtor, unless the Court appoints a Liquidating Trustee:
Rudy De La Garza will receive in full satisfaction of an allowed
secured claim on the closing of the sale of the Debtor's properties
that serve as collateral, cash equal to the amount of the claim.
Any allowed deficiency claim of a holder of a secured claim will be
entitled to treatment as an Allowed Class 4 Claim. Estimated
recovery is 100%.
Class 4 General Unsecured Claims -- estimated at $141,367.73 -- are
impaired by the Plan. Each holder of an Allowed Claim in Class 4
will receive a one-time payment in full of their allowed claim,
after payment of administrative claims and all senior claims.
Estimated recovery is 100%.
Class 5 Interests in the Debtor is impaired by the Plan. Upon
payment of all senior claims, on or after the effective date and
subject to court approval, all remaining property interests will
legally revest upon the equity owner(s) of Debtor, Dean Gutierrez.
The contemplated reversion will be in full satisfaction of any
claim or potential claim of holder of interest in the Debtor. With
respect to the proceeds that may distributed to interest owners,
those funds will be deposited into the registry of the Court until
the litigation claims between or involving Eldon L. Zieger, the
Debtor and Dean Gutierrrez will be decided by a final
non-appealable judgment or agreed compromise.
The final judgment after litigation in Adversary Case 17-01002 will
be outcome determinative on how any excess proceeds from the sale
of the property of the Debtor, after payment of all costs of sale,
ad valorem taxes, IRS taxes and 1st liens and senior allowed claims
are paid, are distributed.
Mr. Zieger asserts a security interest in all outstanding stock or
equity interests of a stockholder of the Debtor and asserts that he
is entitled to receive any proceeds of the liquidation which may
become payable on account of any outstanding stock or equity
interest.
A copy of the Amended Combined Disclosure Statement and Plan is
available at:
http://bankrupt.com/misc/txsb16-10150-122.pdf
As reported by the Troubled Company Reporter on July 7, 2017, the
Debtor filed a liquidating plan, which proposed that Class 4
general unsecured creditors recover 100% of their claims allowed by
the Court. Each creditor would receive a one-time payment in full
of its claim after administrative claims are paid.
About Rio Mobile Home and R.V. Parks
Rio Mobile Home and R.V. Parks, Inc., is a Texas limited liability
corporation that owns, develops, and manages a mobile home and R.V.
park in Brownsville, Texas.
Rio Mobile Home and R.V. Parks, Inc., filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Tex. Case No. 16-10150) on May 10, 2016. In
its petition, the Debtor estimated $16,117 in assets and $1.82
million in liabilities. The petition was signed by Dean Gutierrez,
president.
Judge Eduardo V. Rodriguez presides over the case. Law Office of
Antonio Martinez, Jr., P.C., is the Debtor's bankruptcy counsel.
ROYAL FLUSH: To Make First Payment to Unsecureds on Nov. 15
-----------------------------------------------------------
First Commonwealth Bank filed with the U.S. Bankruptcy Court for
the Western District of Pennsylvania an amended disclosure
statement dated July 31, 2017, referring to the Debtor's amended
plan of reorganization dated July 31, 2017.
Class 10, General Unsecured Creditors will be paid in full over
seven years without interest. The first payment to class 10 claims
will be Nov. 15, 2017.
The Plan breaks this class into two subclasses. Small claims less
than $2,500 and other class 10 claims in excess of $886,545.44.
The Small Claims will be paid over 12 months following the plan
effective date. The claims in excess of $2,500 will receive
distributions over seven years. These creditors will be paid over
84 months: in 28 quarterly installments of $30,580.02 or monthly
payments of $10,193.42.
The disbursing agents may, at his discretion, pay small claims of
less than $2,500, prior to paying other claims. The disbursing
agents will disburse all funds to large claim creditors in Class 10
on a pro rata basis. These creditors will be paid over 12 months:
in four quarterly installments of $7,301.67 or monthly payments of
$2,433.89. The first payment to Small Claims will be Nov. 15,
2017.
The disbursing agents will escrow any funds due to a disputed
claimant in Class 10 until their claim has been finally adjudicated
or approved by the Debtor.
The Debtor may prepay class 10 at any time after confirmation
provided that: (i) FNB's Class 2 Secured Claim is paid in full and
(ii) provided the payment is to the entire Class 10. The Debtor
will be entitled to a discount when creditors in class 10 are paid
sooner than is required by the Plan. The Debtor will be entitled
to deduct 0.5% from the remaining dividend for each month that
creditors are paid ahead of schedule.
If the Debtor pays creditors 22 months ahead of schedule, the
Debtor gets an 11% discount of the then remaining amount due under
the Plan.
If the Debtor or C Swank Enterprises, LLC, pays off the obligations
to FNB prior to the full payment of Class 10, then prior to the
beginning of each quarter, the Debtor will prepare a budget to set
forth the necessary reserves to protect against any instability in
its cash flow, a capital reserve for future repairs and maintenance
of its equipment and an appropriate reserve for future capital
acquisitions, income taxes and payment of administrative claims of
professionals which it intends to retain for each quarter. This
budget will be provided to a single member of the Official
Committee of Unsecured Creditors prior to the starting of each
quarter. In the event there are excess funds available at the end
of the subject quarter in excess of the budgeted amounts for the
reserves, the Reorganized Debtor will use all such cash reserves to
pre-pay the Class 10 claims of the General Unsecured Creditors.
The Debtor will reimburse the single member of the Official
Committee of Unsecured Creditors who disseminates this information
to other unsecured creditors for their actual costs of mailing any
of these reports upon submission of their quarterly bill for those
actual costs.
Royal Flush, Inc., will not declare any dividends to its
shareholders during the period of the repayment to Class 10.
Funds available in the full amount for administrative expenses on
the effective date of the plan are: (i) cash on hand $327,923.98 in
the DIP Account as of July 31 20, 2017, and (ii) cash on hand
$410,000 is projected to be the balance as of the date of
confirmation.
This Plan is dependent of the future vitality of the gas industry
in the Marcellus Shale filed in Western Pennsylvania, Ohio and West
Virginia. The Debtor and the industry have experienced increased
demand in this industry since the filing of the bankruptcy. The
Debtor's success is dependent on the successful confirmation of the
Plan of Reorganization of C. Swank Enterprises, LLC. The Debtor
cannot operate and fund the plan payments contemplated by this plan
unless it has the right to lease and employ those vehicles and
machinery that C. Swank Enterprises, LLC, leases to Royal Flush.
These entities are related and their success is dependent on each
other.
A copy of the Debtor's amended Disclosure Statement is available
at:
http://bankrupt.com/misc/pawb16-23458-268.pdf
As reported by the Troubled Company Reporter on April 21, 2017,
under the Debtor's plan filed on April 11, 2017, Class 10 general
unsecured creditors with claims in excess of $2,500 would be paid
in full over seven years without interest. Holders of small claims
of less than $2,500 would be paid over 12 months following the
effective date of the plan.
About Royal Flush
Headquartered in Spring Church, Pennsylvania, Royal Flush, Inc.,
filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case
No. 16-23458) on Sept. 15, 2016, estimating its assets and
liabilities at between $1 million and $10 million each. The
petition was signed by Carol A. Swank, secretary/treasurer.
Judge Jeffery A. Deller presides over the case. Donald R.
Calaiaro, Esq., at Calaiaro Valencik serves as the Debtor's
bankruptcy counsel. The Debtor hired C&H Accounting, LLC as its
accountant.
Andrew R. Vara, Acting U.S. Trustee for Region 3, on Oct. 20, 2016,
appointed five creditors of Royal Flush, Inc., to serve on the
official committee of unsecured creditors. The committee is
represented by Leech Tishman Fuscaldo & Lampl, LLC.
SAEXPLORATION HOLDINGS: Will Reschedule Release of Q2 Results
-------------------------------------------------------------
SAExploration Holdings, Inc., announced plans to reschedule the
release of its unaudited consolidated financial results for the
second quarter and first six months ended June 30, 2017.
Concurrently, SAE will reschedule its conference call previously
scheduled for Thursday, Aug. 3, 2017, at 10:00 a.m. ET to discuss
these results and other related matters. The company now expects
to release its unaudited consolidated financial results for the
second quarter and first six months ended June 30, 2017 on or
before Aug. 21, 2017. SAE will disseminate additional information
regarding the new date and time of the conference call to discuss
these results and other related matters at a later date.
About SAExploration Holdings
Based in Houston, Texas, SAExploration Holdings, Inc. (NASDAQ:
SAEX) is an internationally-focused oilfield services company
offering a full range of vertically-integrated seismic data
acquisition and logistical support services in Alaska, Canada,
South America, and Southeast Asia to its customers in the oil and
natural gas industry. In addition to the acquisition of 2D, 3D,
time-lapse 4D and multi-component seismic data on land, in
transition zones between land and water, and offshore in depths
reaching 3,000 meters, the Company offers a full-suite of
logistical support and in-field data processing services. The
Company operates crews around the world that are supported by over
29,500 owned land and marine channels of seismic data acquisition
equipment and other leased equipment as needed to complete
particular projects.
SAExploration reported a net loss attributable to the Company of
$25.03 million on $205.56 million of revenue from services for the
year ended Dec. 31, 2016, compared to a net loss attributable to
the Company of $9.87 million on $228.13 million of revenue from
services for the year ended Dec. 31, 2015.
As of March 31, 2017, SAExploration had $217.1 million in total
assets, $169.7 million in total liabilities, and $47.45 million in
total stockholders' equity.
* * *
In June 2016, S&P Global Ratings lowered its corporate credit
rating on SAExploration Holdings to 'CC' from 'CCC-'. At the same
time, S&P lowered the issue-level rating on the company's senior
secured notes to 'CC' from 'CCC-'. The outlook remains negative.
The downgrade follows SAExploration's announcement that it plans to
launch an exchange offer to existing holders of its 10% senior
secured notes for shares of common equity and a new issue of
second-lien notes. Following the rating action, S&P withdrew the
corporate credit and issue-level ratings at the company's request.
In September 2016, Moody's Investors Service withdrew
SAExploration's 'Caa2' Corporate Family Rating and other ratings.
SAUL RODRIGUEZ WELDING: Financing, Cash Use Have Court's Final Nod
------------------------------------------------------------------
The Hon. Tony M. Davis of the U.S. Bankruptcy Court for the Western
District of Texas has entered a final order authorizing Saul
Rodriguez Welding & Trucking, LLC, to obtain postpetition account
receivable financing and use cash collateral.
As reported by the Troubled Company Reporter on July 26, 2017, the
Debtor asked the U.S. Court to authorize the postpetition account
receivable financing and use of cash collateral, nunc pro tunc to
the Petition Date.
Diversified Lenders, Inc., has proposed that certain factoring and
security agreement on essentially the same terms as the prepetition
Agreement between the Debtor and TCI Business Capital, Inc.
Pursuant to the DIP Agreement, DLI has agreed to provide accounts
receivable financing up to $1 million whereby DLI will advance 85%
of the gross amount of all invoices purchased from the Debtor.
The Debtor is authorized to sell invoices to Diversified Lenders,
Inc., under the DIP Agreement, and DLI will advance 85% of the
gross amount of all invoices purchased from the Debtor up to
$1,000,000. DLI is further entitled to receive a $500 due
diligence fee.
Upon collection of the accounts receivable purchased by DLI, DLI
will advance the remaining 15% to the Debtor, less its due
diligence fee, its daily discount fee, and its factoring fees and
charges, which range from 1.75% of the invoice amount for the
initial 30 days and 1.75% each 30 days thereafter in accordance
with the DIP Agreement.
The DIP Agreement will remain fully enforceable between the Debtor
and DLI until confirmation of any plan of reorganization,
conversion or dismissal, whichever occurs first.
To assure fulfillment by the Debtor of all obligations under the
DIP Agreement, including but not limited to the Debtor's obligation
to repurchase accounts receivable that have aged more than 90 days,
DLI will have a lien against all of the Debtor's post-petition
accounts receivable that have not been factored under the DIP
Agreement as well as a lien on all of the Debtor's unencumbered
estate property and liens junior to existing liens on property of
the estate.
As further adequate protection, DLI will have a senior
administrative expense claim with priority over all other
administrative claims allowed in these bankruptcy cases, in the
amount of any unpaid obligations under the DIP Agreement, including
but not limited to the repurchase obligations set forth in the DIP
Agreement.
The Court approves the Debtor's use of $55,000 in cash collateral
that TCI voluntarily released to the Debtor to meet its payroll
obligations on July 17, 2017.
The release of $55,000 in TCI's cash collateral does not violate
any lien or other claim alleged by the Internal Revenue Service.
TCI has advised the Debtor that it currently has an outstanding
balance of $92,548.63, and there are sufficient funds held in TCI's
cash and secured reserves to fully secure TCI for all accounts
receivables it purchased from the Debtor prepetition.
As adequate protection of its asserted interests in the Debtor's
cash collateral, TCI is granted replacement liens to the same
extent, validity and priority as existed on the Petition Date, in
cash collateral of the Debtor owned as of or acquired after the
Petition Date from the Debtor's prepetition accounts receivable.
As additional adequate protection, the Debtor will provide TCI with
written reporting as to the status of its operations, collections,
generation of accounts receivable, and disbursements in the same or
similar format as has been historically been provided by the Debtor
pursuant to the TCI loan documents. If requested, the Debtor will
also serve TCI and DLI with copies of any monthly operating reports
provided to the Office of the U.S. Trustee pursuant to the
Bankruptcy Code and Bankruptcy Rules.
A copy of the final court order is available at:
http://bankrupt.com/misc/txwb17-70115-22.pdf
About Saul Rodriguez
Headquartered in Fort Stockton, Texas, Saul Rodriguez Welding &
Trucking, LLC, was formed on Dec. 13, 2013 as a welding and
trucking company located in Fort Stockton, Texas. The Company
provides welding and trucking services to oil and gas companies in
the Midland/Odessa, Texas metropolitan area.
Saul Rodriguez Welding & Trucking filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Tex. Case No. 17-70115) on June 28, 2017,
estimating its assets at between $500,001 and $1 million. Marcus
Jermaine Watson, Esq., at M. J. Watson & Associates, P.C., serves
as the Debtor's bankruptcy counsel.
SKIP BARBER RACING: $830K Sale of Substantially All Assets Okayed
-----------------------------------------------------------------
Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the
Southern District of New York authorized Skip Barber Racing School,
LLC's sale of substantially all assets and related personal
property to Liquid Asset Partners, LLC for $830,000.
The auction of substantially all of the assets was conducted on
July 26, 2017. The Sale Hearing was held on July 28, 2017.
The sale is free and clear of Claims.
The Debtor's assumption of the Assumed Contracts is authorized and
approved. It is authorized and directed to pay to each
counter-party to an Assumed Contract the cure amount set forth on
the Cure Notice within 10 business days after the Closing Date.
The Debtor is authorized and directed to assign the Assumed
Contracts to the Purchaser.
There will be no rent accelerations, assignment fees, increases or
any other fees charged or chargeable to the Purchaser as a result
of the assumption, assignment and sale of the Assumed Contracts.
Any provision in any Assumed Contract that prohibits or conditions
the assignment of such contract or lease, or allows the
counter-party to such contract to terminate, recapture, impose any
penalty, condition renewal or extension, or modify any term or
condition upon the assignment of such contract or lease,
constitutes an unenforceable anti-assignment provision, and is void
and of no force and effect. The validity of the assumption,
assignment and sale of the Assumed Contracts to Purchaser will not
be affected by any existing dispute between the Debtor and any
counter-party to an Assumed Contract.
In the event that the Purchaser fails to consummate the purchase of
the Purchased Assets, or any subset thereof, the Debtor is
authorized to close the sale transaction with the Back-Up Bidder in
accordance with the Bidding Procedures.
The 14-day stays provided for in Bankruptcy Rules 6004(h) and
6006(d) of the Bankruptcy Rules are waived, and will not be in
effect with respect to the Sale and transactions related to the
Sale, and under Bankruptcy Rule 7062 the Sale Order will be
effective immediately upon entry.
The Purchaser is not and will not be liable to any agent, broker,
person or firm acting or purporting to act on behalf of the Debtor
or the Purchaser for any commission, broker's fee, or finder's fee
with respect to the Sale.
The Debtor is authorized and directed to pay the proceeds of the
sale to People's United Bank, N.A. at the closing of the sale to
Purchaser, net of any amounts authorized by Peoples to be held by
the Debtor's counsel for the payment of approved carve-outs for the
Debtor's retained professionals and quarterly fees due the Office
of the United States Trustee.
A copy of the Agreement attached to the Order is available for free
at:
http://bankrupt.com/misc/Skip_Barber_70_Order.pdf
The Purchaser:
LIQUID ASSET PARTNERS, LLC
4060 29th Street
Grand Rapids, MI 49512
Attn: William Melvin III
E-mail: bmelvinjr@aol.com
The Purchaser is represented by:
COHEN TAUBER SPIEVACK & WAGNER P.C.
420 Lexington Avenue, Suite 2400
New York, NY 10170
Attn: Robert A. Boghosian, Esq.
E-mail: rboghosian@ctswlaw.com
About Skip Barber Racing School LLC
Skip Barber Racing School LLC is a Braselton, Georgia-based racing
school. It operates a fully-integrated system of racing schools,
driving schools, racing championships, corporate events and OEM
events across North America, teaching emergency braking, skid and
slide control, proper cornering techniques, an understanding of
vehicle dynamics, and a variety of other car-control skills.
Skip Barber Racing School filed a Chapter 11 bankruptcy petition
(Bankr. S.D.N.Y. Case No. 17-35871) on May 22, 2017. The petition
was signed by Michael Culver, managing member. The Debtor
estimated
$1 million to $10 million in assets and $10 million to $50 million
in debt.
Judge Cecelia G. Morris presides over the case. Skip Barber
Racing
School hired Forchelli, Curto, Deegan, Schwartz, Mineo & Terrana,
LLP as bankruptcy counsel; and Rust Consulting/Omni Bankruptcy as
claims and noticing agent.
No trustee, examiner or committee of creditors has been appointed.
SLIGO PARKWAY: Case Summary & 5 Unsecured Creditors
---------------------------------------------------
Debtor: Sligo Parkway LLC
11245 Lockwood Drive
Silver Spring, MD 20901
Type of Business: Sligo Parkway listed its business as a
single asset real estate (as defined in 11
U.S.C. Section 101(51B)). It owns a fee
simple interest in a property located at
415 Firestone Drive Silver Spring, MD,
20906 valued at $842,204. The Company
previously sought bankruptcy protection
on July 9, 2015 (Bankr. D. Md. Case No. 15-
19754).
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-20745
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Judge: Hon. Thomas J. Catliota
Debtor's Counsel: Richard S. Basile, Esq.
RICHARD BASILE, ESQ.
6305 Ivy Lane, Ste. 416
Greenbelt, MD 20770
Tel: (301) 441-4900
Fax: (301) 441-2404
E-mail: rearsb@gmail.com
Total Assets: $842,229
Total Liabilities: $1.12 million
The petition was signed by Edward Woody, managing member.
A list of the Debtor's five largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/mdb17-20745.pdf
SMART MODULAR: Moody's Affirms B3 CFR on Weak Brazilian Economy
---------------------------------------------------------------
Moody's Investors Service upgraded SMART Modular Technologies
(Global), Inc.'s Speculative Grade Liquidity ("SGL") rating to
SGL-2 from SGL-3 and affirmed SMART's Corporate Family Rating
("CFR") at B3, and Probability of Default Rating ("PDR") at B3-PD.
Moody's assigned a B3 rating to the Senior Secured Term Loan due
August 2022 ("Term Loan") rating and a B1 rating to the Senior
Secured Revolver due February 2022 ("Revolver"). The outlook
remains positive. The ratings of the Senior Secured Term Loan due
August 2019 and Senior Secured Revolver due August 2019 will be
withdrawn.
The upgrade to the SGL rating reflects the refinancing and increase
of the Term Loan to $165 million (a 9% increase) and extension of
the maturity of both the Term Loan and the Revolver to 2022 from
August 2019. The refinancing lowered the interest rate on the Term
Loan from LIBOR plus 8.00 percent to LIBOR plus 6.25 percent. Since
the interest rate on the Term Loan had been scheduled to increase
by 75 basis points on November 5th, the refinancing has removed an
important liquidity risk, improving SMART's liquidity profile.
RATINGS RATIONALE
The B3 CFR reflects the weak, though improving, Brazilian economy,
and the cyclical nature of SMART's end markets, which results in
high volatility of both revenues and free cash flow ("FCF"). The
rating also reflects SMART's modest revenue scale relative to the
large global competitors in the DRAM memory module business and
customer concentration, with the top three customers accounting for
44% of revenues.
Still, Moody's expects debt to EBITDA (Moody's adjusted) to decline
towards the mid two times level over the next six to nine months.
Moody's expects that SMART will generate increasing FCF due to the
reduced interest expense following the reduction of the Term Loan
interest rate. Moody's also expects increasing FCF due to the
strengthening of end market demand for computer equipment in Brazil
driven by the recovering Brazilian economy and increases in
Brazilian local content tax incentives, which should increase
demand for SMART's mobile memory used in smartphones sold in
Brazil.
Moreover, SMART benefits from a leading market position in the
Brazilian memory market, which accounts for about 45% of revenues.
SMART's market position is supported by the Brazilian government's
local-content tax incentives, which encourage local semiconductor
manufacturing and R&D investments. This gives SMART an advantage
over global competitors that lack local DRAM integrated circuit
packaging and memory module manufacturing operations. SMART's
specialty memory business adds stability to the revenue base, as
this business provides products for markets that tend to have
longer product life cycles based on trailing-edge technologies, and
thus provides SMART with a base of low-growth, though consistent,
revenues and FCF.
The positive outlook reflects Moody's expectation that the EBITDA
margin (Moody's adjusted) will improve toward 11%, as SMART
benefits from the increasing local content incentives for the use
of smartphone memory components made in Brazil and continued
recovery in the Brazilian computer market, which should drive
demand for SMART's DRAM modules. Given this increasing EBITDA,
Moody's expects leverage to improve, with debt to EBITDA (Moody's
adjusted) declining toward the low to mid 2x level and FCF steadily
increasing over the next year. The positive outlook also reflects
an expectation that revenues will increase towards $750 million
over the next 18 months.
The rating could be upgraded if:
* the EBITDA margin improves toward 11% (Moody's adjusted),
reflecting the benefit of increasing Brazilian local content
incentives, and
* SMART generates increasing FCF and an improved liquidity profile,
and
* Revenues are sustained above $750 million
The rating could be downgraded if:
* SMART's financial condition deteriorates such that SMART consumes
cash, leading to a material weakening of liquidity
The Revolver and Term Loan are guaranteed by SMART and certain
subsidiaries (excluding SMART's Malaysian subsidiary), including
the subsidiaries in Brazil that are engaged in the memory business.
The Revolver and Term Loan are secured by a first-lien pledge on
the cash, accounts receivable, and property plant and equipment of
SMART and the guarantors and a pledge of the equity interest in
SMART and certain subsidiaries, including SMART's Malaysian
subsidiary.
While the lenders benefit from a first priority security interest
in certain assets of its Brazilian operating subsidiaries,
enforcing guarantees and establishing claims over non-US collateral
could be time consuming and challenging, which could result in the
erosion in value of the realized collateral. To reflect this
anticipated challenge in enforcing claims in Brazil, and the
exclusion of the Malaysian subsidiary from the pool of guarantors,
the ratings of the Revolver and Term Loan reflect a one-notch
downward override from the LGD model implied rating.
Moody's rates the Revolver B1 and the Term Loan B3, since the
credit agreement stipulates that proceeds from the collateral will
be used first to repay the Revolver borrowings before any payments
are made on the Term Loan. This effectively renders the Term Loan
subordinated to the Revolver in the capital structure, although
both the Revolver and the Term Loan are secured by a first-lien
pledge on the same collateral. The company's overseas restricted
subsidiaries provide a negative pledge precluding them from raising
a material amount of debt at the overseas operations.
The SGL-2 Speculative Grade Liquidity rating reflects SMART's good
liquidity. Moody's expects SMART will keep at least $20 million of
cash and will generate free cash flow ("FCF") of at least $5
million over the next 12 months. External liquidity is provided by
the $50 million Senior Secured Revolver due February 2022
("Revolver"), which Moody's expects will remain undrawn.
Historically, the company has maintained about 25% to 30% of its
cash in the U.S. The Revolver was undrawn at the end of Q3 FY
2017.
Upgrades:
Issuer: SMART Modular Technologies (Global), Inc.
-- Speculative Grade Liquidity, upgraded to SGL-2 from SGL-3
Affirmations:
Issuer: SMART Modular Technologies (Global), Inc.
-- Corporate Family Rating, B3
-- Probability of Default Rating, B3-PD
Assignments:
-- Senior Secured Term Loan due August 2022, B3 (LGD3)
-- Senior Secured Revolver due February 2022, B1 (LGD2)
Outlook Actions:
Issuer: SMART Modular Technologies (Global), Inc.
-- Outlook, Positive
SMART Modular Technologies (Global), Inc, a Cayman Islands exempted
company, is a leading independent manufacturer of memory modules,
embedded flash products and solid state drives (SSDs) for Original
Equipment Manufacturers (OEMs). Its products are used in a variety
of applications in the computing, networking, communications,
printers, storage and industrial markets. About 28% of the
company's equity is publicly-traded, with the remaining equity
owned by affiliates of private equity firm Silver Lake Partners and
management.
The principal methodology used in these ratings was the
Semiconductor Industry Methodology published in December 2015.
SOUTH TEXAS MATERIALS: Hires Charmoy & Charmoy as Counsel
---------------------------------------------------------
South Texas Materials LLC seeks approval from the US Bankruptcy
Court for the District of Connecticut to employ Charmoy & Charmoy
as its counsel.
Professional services to be rendered by the Firm are:
a. give the Debtor legal advice with respect to its powers and
duties as debtor-in-possession in the continued operation of its
business;
b. prepare, on behalf of the debtor-in-possession, disclosure
statement, answers, orders, reports, plan and other legal papers;
and
c. perform all other legal services for the
debtor-in-possession which may be necessary, including the
preparation and filing of modifies plans, and to examine, advise
and secure the necessary consent in and relating to any executory
contracts, which may be material and important to the maintenance
of the business.
Scott M. Charmoy attests that the firm has no connection with the
Debtor nor any other party in interest or their respective
attorneys and is a disinterested person within the meaning of 11
U.S.C. Sec. 104(14).
Charmoy & Charmoy's hourly rates are:
Scott Charmoy $375.00
Schiela Charmoy $400.00
Paralegal $110.00
The Firm can be reached through:
Scott M. Charmoy, Esq.
Charmoy & Charmoy
1700 Post Road, Suite C-9
Fairfield, CT 06824
Tel: (203) 255-8100
About South Texas Materials LLC
Based in Stamford, Connecticut, South Texas Materials LLC filed a
Chapter 11 petition (Bankr. D. Conn. Case No. 17-50935) on July 31,
2017, listing under $1 million in both assets and liabilities. The
Debtor is represented by Scott M. Charmoy, Esq. at Charmoy &
Charmoy, as counsel. Chief Julie A. Manning presides over the case.
SPINLABEL TECHNOLOGIES: Case Summary & 20 Top Unsecured Creditors
-----------------------------------------------------------------
Debtor: SpinLabel Technologies, Inc.
dba Spinformation, Inc.
dba Accudial Pharmaceutical, Inc.
dba Accudial, Inc.
PO Box 371459
Miami, FL 33137
Type of Business: SpinLabel Technologies is a Florida-based
company dedicated to building and licensing its
unique labeling technology that builds brand
value by engaging current and prospective
customers in the shopping corridor and at home.
SpinLabel's proprietary, patented label
Technology enables a spinning label (an outer
Label over an inner label) to almost double the
valuable messaging space on a container.
SpinLabel is aligned with top label
manufacturers globally to facilitate easy
integration into most types of existing
consumer product packaging.
Web site: http://www.spinlabels.com/
Chapter 11 Petition Date: August 9, 2017
Case No.: 17-20123
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Debtor's Counsel: Bradley S Shraiberg, Esq.
SHRAIBERG LANDAU & PAGE PA
2385 NW Executive Center Dr. #300
Boca Raton, FL 33431
Tel: (561) 443-0801
Fax: (561) 998-0047
E-mail: bss@slp.law
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alan Shugarman, director.
The Debtor's list of 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/flsb17-20123.pdf
STAPLES INC: Fitch Withdraws BB+ Long-Term Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has withdrawn its ratings on Staples Inc. Staples
does not participate in the rating process, and Fitch does not have
sufficient information to provide ratings on the company's new
capital structure following its acquisition by Sycamore Partners.
RATING SENSITIVITIES
Rating sensitivities are no longer relevant given rating
withdrawals.
FULL LIST OF RATING ACTIONS
Fitch has withdrawn the following ratings:
Staples, Inc.
-- Long-term Issuer Default Rating (IDR) 'BB+';
-- $1 billion unsecured revolving credit facility 'BB+/RR4';
-- Senior unsecured notes 'BB+/RR4';
-- Short-term IDR 'B';
-- Commercial paper 'B'.
STAPLES INC: S&P Affirms 'BB-' Rating on 2024 $2.7BB Term Loan
--------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issue-level rating on
U.S.-based Staples Inc.'s proposed term loan following the
company's announcement that it plans to increase the term loan by
$300 million to $2.7 billion and reduce the senior unsecured notes
by a like amount. S&P said, "The recovery rating remains '2',
reflecting our expectation for substantial (70% to 90%) recovery in
the event of default. We lowered the rounded estimate to 70% from
80% because of higher secured debt in the capital structure."
S&P said, "Our ratings on the proposed $1.3 billion unsecured notes
(which have not launched yet) remains 'B-' with a '6' recovery
rating (0% recovery estimate in our default scenario). Staples
plans to use the proceeds from these instruments, along with
borrowings under the asset-based revolving credit facility, to fund
the acquisition of the company by Sycamore Partners.
"Our 'B+' corporate credit rating and the stable outlook reflect
the company's elevated leverage pro forma for the acquisition of
the company as well as our view of intense competition in the
office supply distribution business, limited entry barriers, and
low customer switching costs."
RATINGS LIST
Staples Inc.
Corporate Credit Rating B+/Stable/--
RATINGS AFFIRMED
To From
Staples Inc.
Senior Secured
$2.7Bil term loan due 2024 BB-
Recovery rating 2(70%) 2(80%)
Senior Unsecured
$1.3Bil notes due 2025 B-
Recovery rating 6(0%)
STAR GOLDEN: Wants to Obtain Up to $250,000 in DIP Financing
------------------------------------------------------------
Star Golden Enterprises, LLC, asks for permission from the U.S.
Bankruptcy Court for the District of Nevada to obtain up to
$250,000 in postpetition financing from Evan Sofer.
A hearing to consider the Debtor's Motion is set for Sept. 12,
2017, at 1:30 p.m.
The postpetition financing is a loan in the principal amount of no
less than $100,000 and up to $250,000 pursuant to: (i) the Secured
Promissory Note between the Debtor, as borrower, and Evan Sofer, as
lender; (ii) the deed of trust; (iii) the approval order; and (iv)
any other related loan documents.
The DIP Loan will have a non-default rate of 5.00% per year,
compounded annually, and a default rate of 7.00% per year. Except
as otherwise set forth in the DIP Note, all accrued but unpaid
interest will be paid on or before the maturity date. The DIP Loan
will mature on the earlier of: (a) any default by the Debtor; or
(b) the 10-month anniversary of the loan date.
In the event of any litigation arising under the loan documents or
arising from the loan, the prevailing party will be entitled to
recover from the non-prevailing party all reasonable attorneys'
fees and costs incurred in the action. Further, the Debtor will
pay on demand, costs and expenses incurred by or on behalf of the
Lender arising under or related to the DIP Note and other Loan
Documents.
The Debtor will utilize the proceeds of the DIP Loan solely to
fund: (i) the general working capital requirements of the Debtor,
including obligations incurred in the ordinary course of the
Debtor's business, including, without limitation, ad valorem taxes,
homeowners' association fees or dues, insurance expenses, and
maintenance expenses; (ii) payment of allowed fees, costs, and
expenses of estate professionals; (iii) the costs to fund the
investigation and prosecution of the causes of action, including
the avoidance actions; and (iv) payment of obligations due and
payable under the DIP Note.
The initial loan advance, which will not exceed $100,000, will be
used in accordance with the budget that is approved by the Court.
As security for the DIP Note, the Debtor will make, execute, and
deliver to Lender the Deed of Trust, pursuant to which Debtor will
assign, pledge, and grant to Lender a security interest in, and a
Lien against, the real property described in the Deed of Trust,
including all property, assets, and interest therein and all
proceeds thereof. Any liens granted in favor of Lender under the
DIP Note, Loan Documents, and the approval order will be valid and
perfected Liens on the collateral and the liens will constitute
allowed administrative expenses in the bankruptcy case, subject
only to the permitted liens.
The borrowing limits are specifically set forth in Section 2 of the
DIP Note, and provides that Debtor may request an advance on
account of the DIP Loan and Lender will fund each Loan Request,
provided that (a) Debtor is not in breach; (b) Debtor is not in
Default; (c) the first Loan Request will not exceed the sum of
$100,000; (d) absent the consent of Lender, which consent may be
freely withheld in Lender's sole and absolute discretion, the total
aggregate amount of all Loan Requests during any thirty (30) day
period will not exceed $50,000; and (e) the total outstanding
principal amount of all Loan Advances plus the amount of the Loan
Request do not exceed $250,000.
The initial Loan Advance will be used in accordance with the budget
that is approved by the Court.
The conditions to the effectiveness of the DIP Note are
specifically set forth in Section 1 of the DIP Note, which
conditions include Bankruptcy Court approval in a final order, the
granting of Liens and Administrative Priority, the delivery of the
Loan Documents, and compliance with the law.
These are events of default, subject to certain cure periods: (i)
entry of an order for the appointment of a Chapter 11 trustee; (ii)
entry of an order for the appointment of an examiner with enlarged
powers (beyond those set forth in Sections 1106(a)(3) and (4) of
the Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code;
(iii) entry of an order to convert the bankruptcy case to a Chapter
7 case or to dismiss the bankruptcy case; (iv) the Debtor
attempting to invalidate, reduce or otherwise impair the liens of
the Lender or the Lender's claims or rights against the Debtor or
to subject the collateral to assessment under Section 506(c) of the
Bankruptcy Code; (v) any lien or security interest crated by the
DIP Note, Loan Documents, or approval order will, for any reason,
cease to be a valid lien, subject only to the permitted liens; (vi)
any action is commenced by Borrower which contests the validity,
perfection, enforceability, or priority of any of the Liens and
security interests of Lender created by the DIP Note, Loan
Documents, or approval order; or (vii) the indictment of the Debtor
under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against the debtor,
pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture to any governmental
authority of any material portion of the collateral.
A copy of the Debtor's Motion is available at:
http://bankrupt.com/misc/nvb17-10440-126.pdf
About Star Golden Enterprises
Star Golden Enterprises, LLC, was created on March 15, 2013, as a
Nevada series limited liability company in order to acquire
property for lease or sale at a profit. Its members are IMME, LLC,
Evan Sofer and Robert Goldsmith.
Star Golden Enterprises sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case No. 17-10440) on Jan. 31,
2017, estimating its assets and debt at $1 million to $10 million.
The case is assigned to Judge Bruce T. Beesley.
Garman Turner Gordon LLP is counsel to the Debtor, with the
engagement led by Gregory E. Garman, Esq., Gabrielle A. Hamm, Esq.,
and Mark M. Weisenmiller, Esq.
No trustee, examiner or official committee has been appointed in
the case.
STEEPLE RUN: Bank Wants Conversion or Trustee
---------------------------------------------
Prudential Savings Bank asks the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania to convert the Chapter 11
bankruptcy case of One State Street Associates, LP, Island View
Crossing II, L.P., Calnshire Estates, LLC, and Steeple Run, L.P.,
to Chapter 7 liquidation, or in the alternative, appoint a Chapter
11 Trustee.
Prudential Savings Bank points out that:
(a) Prudential Savings Bank entered into a Development
Construction Loan Agreement, pursuant to which Prudential Savings
Bank issued a construction loan to Island View under a promissory
note in the principal amount of $5,541,468.
(b) As security, Island View executed and delivered to
Prudential Savings Bank an Open-End Mortgage and Security Agreement
providing, inter alia, the Island View Property as security for the
loan. As additional security, Island View executed an Assignment of
Rents, Leases and Agreements of Sale on the Island View Property.
(c) Pursuant to the Island View Loan Agreements, the Loan was
intended to provide the Island View Debtor with funds to construct
certain site improvements on the Island View Real Property;
specifically, the Island View Project includes, among other things,
the construction of 73 townhomes with subsequent phases to include
the construction of 96 condominium units.
(d) Island View failed to deposit the security deposits in an
escrow account with Prudential Savings Bank as required by the
Second Island View Loan Agreement and reported to Prudential
Savings Bank receiving only $5,000 in deposit monies from both Ms.
Caione and Mr. Ranganathan, not the $30,990 and the $49,980 in
deposit monies that Ms. Caione and Mr. Ranganathan actually paid to
Island View.
(e) Island View refused to deliver to Prudential Savings Bank
the security deposits for the agreements of sale for Prudential
Savings Bank to hold in escrow, and instead misappropriated the
deposit moneys. At the time that Renato J. Gualtieri and Island
View took in excess of $175,000 in consumer escrow deposits,
neither had the financial wherewithal to build the units or provide
refunds to consumers. Prudential Savings Bank believes that Mr.
Gualtieri diverted the deposits.
(f) Seven civil actions have been filed against Island View by
prospective homebuyers seeking the return the stolen security
deposits. Among the actions are: (1) Monica L. Caione v. Island
View Crossing II LP, Americorp Homes, Island View Crossing II Inc.,
Bucks County, CCP, No. 201602011; (2) Samira Ranganathan v. Island
View Crossing II LP, Bucks County, CCP, No. 2016-05724; (3)
Benjamin A Mastridge, Sr. vs. Island View Crossing II, Bucks
County, CCP, No. 2016-06373; (4) Frank Del Grasso v. Island View
Crossing II LP, et al. Bucks County, CCP, No. 2016-06685; and (5)
Peter Bridge vs. Island View Crossing II, LP, Phila. Municipal
Court, MJ-07102-CV-0000142-2016.
(g) Mr. Gualtieri lied to and misled consumers as to the
ability to return the deposits, long ago depleted by him (which
left an unrecoverable stigma on the project being operated by a
consumer fraud), and Island View's treatment of potential
purchasers is reprehensible and typifies Island View's bad faith
and dishonesty.
(h) Island View failed to maintain and refused reinstate the
required insurance coverage on the collateral secured by the Second
Island View Loan Documents. Island View also failed to timely
notify Prudential Savings Bank of the cancellation of such
insurance, which forced Prudential Savings Bank to obtain
force-placed insurance to protect its collateral.
(i) Island View also failed to maintain certain life insurance
coverage for Mr. Gualtieri as required by the Second Island View
Loan Agreement.
(j) At the status conference, the Debtors have alleged that
the only "viable" project that any of the Debtors have is the
Island View Project, but did not relate to the Court is that the
Island View Project has been dormant for well over a year with no
construction activity where no units are completed. Through their
inactivity, the Debtors have also allowed permits and approvals to
lapse, further diminishing the value of their assets.
(k) The Debtors have taken no steps post-petition to commence
any operations with the sole exception of State Street. Island View
has been left to sit fallow for over a year and during that time,
any assets it has have declined in value while the hard assets
remaining on the property were left to waste and will likely have
to be demolished in order to use the real property in any
meaningful way.
(l) In its Schedules, State Street lists six leases for its
real property, both residential and nonresidential. Prudential
Savings Bank believes that State Street is collecting rent pursuant
to the Leases and is also accruing post-petition obligations, and
as such, using cash collateral in violation of Section 363 of the
Bankruptcy Code -- constituting gross mismanagement of the
Debtors.
(m) The Debtors have failed to pay taxes, including real
estate taxes due on the Properties after the Petition Date. The
Bucks County Tax Claim Bureau filed a secured proof of claim
against Steeple Run in the amount of $14,275 for 2014, 2015 and
2016 unpaid property taxes, which continues to accrue interest
post-petition. In addition, the Debtors have also scheduled unpaid
taxes for which they have no ability to pay (Island View scheduled
priority debt to Bucks County Tax Claim Bureau in the amount of
$118,437 and Borough of Bristol in the amount of $79,917 and
Calnshire scheduled a secured debt to West Caln Township in the
amount of $35,000 and a priority debt to the Chester County Tax
Claim Bureau in the amount of $75,000.00).
(n) Even more troubling, the Debtors' schedules reveal that
Island View under Gualtieri's control (which had no ability to
generate cash except for misappropriating draws from Prudential
Savings Bank and security deposits from potential purchasers)
actually loaned almost $800,000 to insiders. In fact, the vast
majority of the unsecured debts listed in the State Street
Schedules are loans from insiders.
(o) The Debtors have no financing to commence operations and
the combined gross revenues of Island View, Calnshire and Steeple
Run are a telling $0.00. The Debtors are not generating income and
have no other source of cash. Thus, the Debtors have no prospects
for financing with hundreds of thousands of dollars of real estate
taxes and no meaningful cash flows. The Debtors have no reasonable
likelihood of rehabilitation and their prospects have long since
passed with no plausible chance of recovery.
Accordingly, Prudential Savings Bank asserts that the misuse of
funds by Mr. Gualtieri shows that he is not appropriately suited to
run the Debtors and incapable of steering the Debtors efforts
towards reorganization.
Prudential Savings Bank is represented by:
Edmond M. George, Esq.
Michael D. Vagnoni, Esq.
Obermayer Rebmann Maxwell & Hippel LLP
Centre Square West
1500 Market Street, 34th Floor
Philadelphia, PA 19102
Telephone: (215) 665-3000
Facsimile: (215) 665-3165
E-mail:edmond.george@obermayer.com
About One Street Associates and Affiliates
Island View, Calnshire Estates, and Steeple Run, are affiliates of
One Street Associates which filed a voluntary petition on June 21,
2017 (Bankr. E.D. Pa. Case No. 17-14291). The Debtors are managed
by Renato J. Gualtieri, a real estate developer based in Langhorne,
PA.
Island View Crossing II, L.P., Calnshire Estates, LLC, and Steeple
Run, LP filed their respective Chapter 11 petitions (Bankr. E.D.
Pa. Case Nos. 17-14454, 17-14457 and 17-14458, respectively), on
June 30, 2017.
The Debtors' individual cases have not been ordered to be jointly
administered or consolidated and thus, each Debtor has its own
separate bankruptcy estate. The Hon. Eric L. Frank presides over
these cases.
The petitions were signed by Renato J. Gualtieri, president of
corporate general partner.
The Debtors are represented by David B. Smith, Esq. at Smith Kane
Holman, LLC.
At the time of the filing, the Debtors estimated their assets and
debts at $1 million to $10 million, except for Calnshire Estates,
which estimated its assets to be between $10 million to $50
million.
TERRAVIA HOLDINGS: Has Interim OK to Obtain $5M of DIP Financing
----------------------------------------------------------------
Vince Sullivan, writing for Bankruptcy Law360, reports that the
U.S. Bankruptcy Court for the District of Delaware granted TerraVia
Holdings Inc. authorization for interim access to $5 million in
debtor-in-possession financing as well as a rapid timeline to
accept bids for its assets.
As reported by the Troubled Company Reporter on Aug. 3, 2017, the
Debtors filed a motion seeking authority to execute, enter into and
perform under a debtor-in-possession financing on the terms set
forth in that certain Senior Secured Super-Priority Debtor in
Possession Credit and Security Agreement, by and among the Company,
as borrower, each of the other Debtors, as subsidiary guarantors,
each of the DIP Lenders, and Wilmington Savings Fund Society, FSB,
as administrative agent and collateral agent, a form of which DIP
Credit Agreement was filed with the Court on the Petition Date.
The DIP Credit Agreement provides for a senior secured
debtor-in-possession term loan financing facility in an aggregate
amount of up to $10.0 million, which may be funded in not more than
two draws.
The Debtor had undertaken a lengthy marketing and negotiating
process to come to court with consensual post-petition financing
and a stalking horse offer for its assets that will set an auction
floor at $20 million, along with the assumption of numerous
obligations, Law360 relates, citing Damian S. Schaible, Esq., at
Davis Polk & Wardwell LLP, the attorney for the Debtor.
Law360 quoted Mr. Schaible as saying, "Today, with the consent and
material financial support through the DIP of a group of the
debtor's noteholders, we're standing here with an executed and
binding asset purchase agreement that is the result of a rather
long and challenging process."
Steven Z. Szanzer, Esq., at Davis Polk, said that the financing
from the noteholder group was necessary to pursue a sale of its
assets because the Debtor's cash flow was quickly running out and
the loan was the result of a hard-fought negotiation process,
Law360 shares.
Law360 adds that to deal with the short runway created through the
DIP loan, the Debtor is also pursuing a rapid sale timeline that
hopes to close on a deal by mid-September.
According to Law360, the Debtor received an offer from Corbion NV
of $20 million in cash and the assumption of some of the Debtor's
liabilities. The report says that the Court will hear proposed bid
procedures at an Aug. 22 proceeding, with a planned auction on
Sept. 11 and a sale hearing set for Sept. 15.
About TerraVia
Headquartered in South San Francisco, California, TerraVia
Holdings, Inc. (NASDAQ:TVIA) -- http://www.terravia.com-- is a
plant-based food, nutrition and specialty ingredients company that
harnesses the power of algae, the mother of all plants and earth's
original superfood. With a portfolio of breakthrough ingredients
and manufacturing, TerraVia is well positioned to help meet the
growing need of consumer packaged goods and established and
emerging food manufacturers to improve the nutritional profile of
foods without sacrificing taste, and to develop select consumer
brands. TerraVia also manufactures a range of specialty personal
care ingredients for key strategic partners. Headquartered in
South San Francisco, TerraVia's mission is to create products that
are truly better for people and better for the planet.
On Aug. 2, 2017, TerraVia Holdings, Inc., and its wholly owned U.S.
subsidiaries filed voluntary petitions under chapter 11 of title 11
of the United States Code (Bankr. D. Del. Lead Case No. 17-11655).
The Debtors filed a motion with the Court seeking to administer all
of the Chapter 11 cases jointly under Lead Case No. 17-11655).
The subsidiary debtors in the Chapter 11 cases are Solazyme Brazil
LLC and Solazyme Manufacturing 1, LLC.
The Debtors sought bankruptcy protection after reaching a deal to
sell the assets to Corbion N.V. for $20 million in cash plus the
assumption of liabilities.
Davis Polk & Wardwell LLP is acting as restructuring and corporate
counsel to TerraVia. Rothschild Inc. is acting as TerraVia's
financial advisor and investment banker to lead the sales process
Kurtzman Carson Consultants LLC is the claims agent, maintaining
the case Web site http://www.kccllc.net/TerraVia
TEXARKANA HOTELS: Plan Outline Okayed; Plan Hearing on Sept. 19
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas is set
to hold a hearing on Sept. 19, 2017, to consider approval of the
Chapter 11 plan for Texarkana Hotels, LLC.
The plan calls for the liquidation of the company's remaining
assets following the sale of its hotel. Under the plan, allowed
Class 4 claims of unsecured creditors will be paid a pro-rata share
of funds remaining after payment of senior classes, according to
the company's disclosure statement which was approved by the court
on Aug. 1.
The order set a Sept. 12, 2017, deadline for creditors to file
their objections and a Sept. 15 deadline to cast their votes
accepting or rejecting the plan.
About Texarkana Hotels
Texarkana Hotels, LLC, operates a 127-room hotel and convention
center under the name of Holiday Inn and the Arkansas Convention
Center located at 5200 Convention Plaza in Texarkana, Arkansas.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Tex. Case No. 16-50056) on March 31, 2016. The
petition was signed by Hiren Patel, managing member.
At the time of the filing, the Debtor estimated its assets at $1
million to $10 million and debt at $10 million to $50 million.
The Debtor sold its hotel and convention center to New Boston
Investments, LLC for $6.5 million. The sale closed on April 28,
2017.
On June 15, 2017, the Debtor filed a disclosure statement, which
explains its proposed Chapter 11 plan. The plan calls for the
liquidation of the remaining assets of the Debtor.
THERON WHITING: Trustee's Sale of Payson Property for $25K Approved
-------------------------------------------------------------------
Judge William T. Thurman of the U.S. Bankruptcy Court for the
District of Utah authorized Elizabeth R. Loveridge, Chapter 11
Trustee for Theron Daniel and Susie Grace Whiting, to sell the real
property located at 938 West Utah Avenue, Payson, Utah, to Big Dog
Management, LLC, for $25,000.
The sale is free and clear of liens and interests.
The Court approved the Sale Agreement and authorizes the Trustee to
convey to Big Dog the Property upon the terms contained therein
through a Quit Claim Deed.
Pursuant to Rule 6044(h), the sale is stayed until the expiration
of 14 days after entry of the Order.
A copy of the Sale Agreement attached to the Order is available for
free at:
http://bankrupt.com/misc/Theron_Whiting_939_Order.pdf
About the Debtors
Theron Daniel Whiting and Susie Grace Whiting sought Chapter 11
protection (Bankr. D. Utah Case No. 03-27493) on April 29, 2003.
Duane Gillman was appointed Chapter 11 Trustee of the Bankruptcy
Estate. The Bankruptcy Case was closed on April 12, 2006. On
July
31, 2015, the Court granted a motion by Mr. Gillman to reopen the
case. Elizabeth R. Loveridge was appointed as the new Chapter 11
Trustee on Aug. 3, 2015. The Trustee is represented by David R.
Williams, Esq., at Woodbury & Kesler, P.C..
TOISA LIMITED: U.S. Trustee Adds Shanghai Zhenhua to Committee
--------------------------------------------------------------
William K. Harrington, U.S. Trustee for Region 2, on Aug. 8 added
Shanghai Zhenhua Heavy Industries Col, Ltd., as member of the
official committee of unsecured creditors in the Chapter 11 cases
of Toisa Limited and its affiliates.
As reported by the Troubled Company Reporter on June 16, 2017, the
U.S. Trustee on June 12 filed an amended notice of appointment of
the Committee, stating that the Justice Department's bankruptcy
watchdog announced that it appointed China Shipping Industry
(Jiangsu) Co., Ltd., and Hyundai Heavy Industries Co., Ltd., to
serve on the committee.
Shanghai Zhenhua can be reached at:
Shanghai Zhenhua Heavy Industries Col, Ltd.
Attn: Li Ruixiang, General Manager
3470 South PuDong Road
Shanghai, P.R. China
Tel: +86-21-31193232
About Toisa Limited
Toisa Limited owns and operates offshore support vessels for the
oil and gas industry. Toisa Limited and its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No.
17-10184) on Jan. 29, 2017. The petitions were signed by Richard
W. Baldwin, deputy chairman.
The cases are assigned to Judge Shelley C. Chapman. Togut, Segal &
Segal LLP serves as bankruptcy counsel to the Debtors. The Debtors
hired Kurtzman Carson Consultants LLC as administrative agent, and
claims and noticing agent, Scura Paley Securities LLC, as financial
advisor.
In its petition, Toisa Limited estimated $1 billion to $10 billion
in both assets and liabilities.
TOP SHELV: May Use Up To $20K of Cash Collateral
------------------------------------------------
The Hon. Daniel S. Opperman of the U.S. Bankruptcy Court for the
Eastern District of Michigan has granted Top Shelv Worldwide, LLC,
authorization to use up to $20,000 of cash collateral.
A final hearing on the Debtor's cash collateral use will be held on
Aug. 18, 2017, at 1:30 p.m.
The Debtor is authorized to receive, collect, and make use of the
cash collateral in its possession and that it receives in the
ordinary course of its business. The use of the cash collateral
will be as needed for the reasonable and necessary operating
expenses incurred in the ordinary course of the Debtor's business,
including property insurance, necessary repairs and maintenance,
utilities and other ordinary course charges necessary for the
Debtor's operations, and U.S. Trustee quarterly fees.
Four Courts Inc. will be paid $1,200 per month as adequate
protection starting Aug. 1, 2017, and to be paid monthly up through
confirmation of any plan.
TCP Investments Inc. will be paid $100 per month as adequate
protection starting Aug. 1, 2017, and to be paid monthly up through
confirmation of any plan.
A copy of the Order is available at:
http://bankrupt.com/misc/mieb17-21434-38.pdf
About Top Shelv Worldwide
Top Shelv Worldwide, LLC, previously sought bankruptcy protection
(Bankr. E.D. Mich. Case No. 15-21770) on Aug. 31, 2015.
Top Shelv Worldwide sought protection under Chapter 11 of the
Bankruptcy Code for a second time (Bankr. E.D. Mich. Case No.
17-21434) on July 14, 2017. Stanley Dulaney, member, signed the
petition.
At the time of the filing, the Debtor estimated assets of less than
$1 million and liabilities of $1 million to $10 million.
Judge Daniel S. Opperman presides over the case.
Edward J. Gudeman, Esq., at Brian A. Rookard, Esq., at Gudeman and
Associates, P.C., serve as the Debtor's bankruptcy counsel.
No official committee of unsecured creditors has been appointed.
UNITED CHARTER: Seeks Approval on East-West Cash Collateral Deal
----------------------------------------------------------------
United Charter LLC requests the U.S. Bankruptcy Court for the
Eastern District of California for the approval of the Stipulation
between the Debtor and East-West Bank for the use of cash
collateral and the granting of a replacement lien in all
postpetition rents, issues and profits earned from the Debtor's
real property.
East-West Bank claims that it is the successor by merger to Metro
United Bank and holds a Promissory Note in the principal amount of
$4,500,000, secured by a Deed of Trust covering an industrial
complex consisting of 18 contiguous parcels located in Stockton,
California. The Deed of Trust included an absolute assignment of
rents provision granting to Secured Creditor the right to receive
all rents and profits generated by the Properties. The current
Rents total $15,500, which is a reduction in the typical rents due
to a non-paying tenant who has been evicted. The Rents constitute
East-West Bank's cash collateral.
In addition to East-West Bank's Deed of Trust, there is a second
deed of trust covering the Properties in the amount of $580,000 in
favor of Wayne Bier. The Debtor has valued the Properties
approximately $7,855,019, as of Petition Date.
East-West Bank and Wayne Biers, have consented to the use of cash
collateral on the terms and conditions set forth in the
Stipulation.
The Stipulation contains the following key substantive terms and
conditions:
(A) The Debtor will be entitled to use the Cash Collateral and
to pay certain of the Debtor's actual and necessary operating
expenses incurred after the Petition Date as set forth the Budget
attached to the Stipulation.
(B) All cash collateral collected and in the possession or
under the control of the Debtor will be deposited into the
Debtor-in-Possession bank account held at Bank of Stockton. From
the Cash Collateral Account, the Debtor may pay those actual
expenses set forth in the Budget which are incurred in the ordinary
course of the Debtor's business and which are consistent with the
terms of the Stipulation. The Debtor may also pay other expenses
after obtaining prior written approval of East-West Bank. The
remaining net cash collateral will be paid to East-West Bank on a
monthly basis.
(C) East-West Bank claims to have a valid, enforceable and
perfected security interest to secure a debt of at least $4,522,031
and that the Debtor "is not presently aware of any grounds to
challenge the validity, enforceability, or priority of East-West
Bank's pre-petition claims or liens against the Debtor or the
Collateral."
(D) In consideration for East-West Bank's consent to the use
of cash collateral, the Debtor will remit to East-West Bank monthly
adequate protection payments in the amount of the net rents after
payment of the amounts set forth in the Budget -- approximately
$7,785 per month.
(E) The Stipulation provides all types of adequate protection
by: (a) requiring the Debtor to turnover monthly to East-West Bank
all cash collateral not used under the terms of the Stipulation;
(b) granting East-West Bank a valid, duly perfected, enforceable
and non-avoidable replacement lien and security interest of the
same priority in all of the Debtor's post-petition cash collateral
to the extent cash collateral is used; and (c) prohibiting the
Debtor (but not a Trustee appointed in the case or under Chapter 7
after a conversion of this case) from seeking to surcharge
East-West Bank's collateral under 11 U.S.C. Section 506(c).
(F) Upon the entry of an order by the Court approving the
terms of the Stipulation, the Debtor's right to use East-West
Bank's Cash Collateral will become effective as of the Petition
Date and will continue in effect until the sooner of (a) August 31,
2017, (b) an event of default, or (c) further order of the Court.
The term of the Stipulation may be extended by written agreement of
the Debtor and East-West Bank.
A full-text copy of the Debtor's Motion, dated August 2, 2017, is
available at https://is.gd/qlMI2U
About United Charter LLC
United Charter owns certain properties in Stockton, California.
United Charter LLC filed a Chapter 11 petition (Bankr. E.D. Cal.
Case No. 17-22347), on April 7, 2017. The Petition was signed by
Raymond Zhang, managing member. The case is assigned to Judge
Ronald H. Sargis. The Debtor is represented by Jeffrey J. Goodrich,
Esq. at Goodrich & Associates. At the time of filing, the Debtor
had estimated both assets and liabilities ranging from $1 million
to $10 million.
VIZIENT INC: S&P Raises Corp Credit Rating to 'B+', Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its corporate credit rating on Vizient
Inc. to 'B+' from 'B'. The outlook is stable.
S&P said, "At the same time, we raised the issue-level rating on
the company's first-lien debt to 'BB-' from 'B+.' The recovery
rating on this debt remains '2,' indicating expectations for
substantial (70%-90%; rounded estimate: 75%) recovery in a payment
default. In addition, we raised the rating on the unsecured debt to
'B-' from 'CCC+.' The recovery rating on this debt remains '6,'
indicating our expectations for negligible (0%-10%; rounded
estimate: 0%) recovery in a default.
"The rating action reflects Vizient's progress in integrating the
MedAssets businesses, which it acquired in early 2016. The
company's leverage is trending lower than our expectations, and we
now expect acquisition and integration charges will be modest and
the company will start generating moderate discretionary cash flow.
Lastly, we believe the company's appetite for acquisitions has
abated, after it acquired the Spend and Clinical Management (SCM)
segment of competitor MedAssets and believe acquisition activity
will be limited to tuck-in acquisitions. These factors combined
contribute to our expectation that leverage will decline and remain
below 5x.
"The stable rating outlook reflects our expectation that the
company will limit acquisition activity to tuck-in acquisitions,
its restructuring and integration charges will be modest, and it
will begin generating moderate free cash flow, resulting in a
decline in leverage.
"We could lower the rating if cash flow generation were to
materially weaken or leverage were to be sustained materially above
5x due to acquisition activity. This could occur if the company
spent more than $100 million on acquisitions. We could also lower
the rating if growth were to weaken or competitive pressures were
to rise, such that we view the business has fundamentally weakened.
This could occur if revenue were to begin to decline by a
low-single-digit rate and margins were to decline by 200 basis
points or more.
"We could raise the rating if leverage were to decline below the
mid-4x area. This could occur if revenue were to grow at a double
digit rate and margins were to expand 100 basis points or more."
WEST BANK LAND: Court Declines to Appoint Chapter 11 Trustee
------------------------------------------------------------
Judge Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern
District of Louisiana, upon the Motion filed by the Petitioning
Creditors White Oak Opportunity SRV, L.P., White Oak Strategic II
SRV, L.P., White Oak Strategic Master Fund, L.P, issued an order
denying the appointment of a Trustee in the Chapter 11 case of West
Bank Land Company, LLC.
About West Bank Land
An involuntary Chapter 11 petition was filed against West Bank Land
Company, LLC (Bankr. E.D. La. Case No. 17-11183) on May 9, 2017.
The case is assigned to Judge Jerry A. Brown.
WEST VIRGINIA HIGH: Disclosure Statement Hearing Set for Aug. 24
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of West
Virginia is set to hold a hearing on Aug. 24, 2017, to consider
approval of the disclosure statement jointly filed by West Virginia
High Technology Consortium Foundation and HT Foundation Holdings,
Inc.
The deadline for filing objections to the disclosure statement is
Aug. 18.
Under the companies' latest Chapter 11 plan of reorganization,
general unsecured claims are grouped into two classes: Class 6,
which consists of unsecured claims against WVHTC and Class 7, which
consists of unsecured claims against HT.
The plan proposes to pay allowed claims in Classes 6 and 7 in full
over three years in 12 equal quarterly installments, with the first
payment due no later than 60 days after the effective date of the
plan, according to the companies' latest disclosure statement filed
on Aug. 1.
A copy of the Second Amended Disclosure Statement is available for
free at https://is.gd/3GhHkd
About West Virginia High
West Virginia High Technology Consortium Foundation and HT
Foundation Holdings, Inc. filed chapter 11 petitions (Bankr. N.D.
W.Va. Lead Case No. 16-00806) on Aug. 4, 2016. The petitions were
signed by James L. Estep, president and CEO.
In their petitions, the Debtors estimated $10 million to $50
million in both assets and liabilities.
Judge Patrick M. Flatley presides over the cases. David B.
Salzman, Esq., at Campbell & Levine, LLC serves as bankruptcy
counsel. The Debtors employed Rolston & Company as real estate
appraiser; Easter Valley, LLC as real estate broker; and Arnett
Carbis Toothman, LLP as accountants.
On December 2, 2016, the Debtors filed their Chapter 11 plan of
reorganization and disclosure statement.
WESTMORELAND RESOURCE: Incurs $2.35 Million Net Loss in Q2
----------------------------------------------------------
Westmoreland Resource Partners, LP filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $2.35 million on $81.05 million of revenues for the
three months ended June 30, 2017, compared to a net loss of $14.42
million on $80.46 million of revenues for the three months ended
June 30, 2016.
For the six months ended June 30, 2017, Westmoreland Resource
reported a net loss of $11.16 million on $155.9 million of revenues
compared to a net loss of $23.28 million on $172.9 million of
revenues for the six months ended June 30, 2016.
As of June 30, 2017, Westmoreland Resource had $370.9 million in
total assets, $411.8 million in total liabilities, and a total
deficit of $40.85 million.
"We anticipate that our cash from operations, cash on hand and
available borrowing capacity will be sufficient to meet our
investing, financing, and working capital requirements for the
foreseeable future.
"Our business is capital intensive and requires substantial capital
expenditures for, among other things, purchasing, maintaining and
upgrading equipment used in developing and mining our coal, and
acquiring reserves. Our principal liquidity needs are to finance
current operations, replace reserves, fund capital expenditures,
including costs of acquisitions from time to time, service our debt
and pay quarterly cash distributions to our unitholders. Our
primary sources of liquidity to meet these needs have been cash
generated by our operations, borrowings under the 2014 Financing
Agreement, and availability under our Revolver.
"Our ability to satisfy our working capital requirements, meet debt
service obligations and fund planned capital expenditures
substantially depends upon our future operating performance, which
may be affected by prevailing economic conditions in the coal
industry. To the extent our future operating cash flow or access
to financing sources and the costs thereof are materially different
than expected, our future liquidity may be adversely affected."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/oKgtBn
About Westmoreland Resource
Oxford Resource Partners, LP, now known as Westmoreland Resource
Partners, LP -- http://www.westmorelandMLP.com/-- is a producer of
high value steam coal, and is the largest producer of surface mined
coal in Ohio.
Westmoreland Resource reported a net loss of $31.58 million on
$349.3 million of total revenues for the year ended Dec. 31, 2016,
compared to a net loss of $33.68 million on $384.7 million of total
revenues for the year ended Dec. 31, 2015.
[*] Moody's Global Speculative-grade Default Rate Drops in July
---------------------------------------------------------------
Moody's global speculative-grade default rate closed at 3.1% for
the trailing 12-month period ending July 2017, down from 3.2% the
prior month and 4.8% a year ago, the rating agency says in its
latest monthly default report. Moody's expects the default rate to
continue to decline to finish the year at 2.7%, before easing
further to 2.2% in July 2018.
"Lower numbers of defaults in the commodity sectors are driving the
decline in the spec-grade default rate," said Sharon Ou, a Moody's
Vice Present and Senior Credit Officer. "And looking forward,
Moody's benign outlook is supported by narrow high-yield spreads,
favorable economic conditions and sufficient liquidity."
Ou also noted that stabilizing commodity prices are more than
offsetting growing stress in the Retail sector.
Six Moody's-rated corporate debt issuers defaulted in July 2017,
for a count of 57 so far this year, Ou says. July's defaulters
included two companies in the Retail sector, which is struggling
with consumers' changing buying habits. True Religion Apparel Inc.
filed for Chapter 11 reorganization, and Chinos Intermediate
Holdings A Inc. completed a distressed exchange, a type of default
under Moody's definition. Moody's has recorded defaults by seven
retailers so far in 2017, up from six at the same time last year.
Meanwhile, defaults among Oil and Gas firms have declined to a mere
15 from 50.
By industry, Moody's forecasts that in both the US and Europe, the
default rate for the Media: Advertising, Printing & Publishing
sector will be the highest in the coming year, at 6.8% and 3.7%,
respectively. Meanwhile, the default rate for the Retail sector
will reach 4.3%, the second highest in the US, while in Europe it
is expected to clock in at just 1.9%.
Defaults remain concentrated in North America, where 39 companies
have defaulted since January, followed by Europe, with 14 defaults.
The trailing 12-month US speculative-grade default rate finished
July at 3.6%, down from 3.8% in June, while in Europe the
comparable rate rose to 2.8% from 2.7%.
Moody's expects default rates to decline further during the
remainder of 2017 in both the US and Europe, with the former
declining to 3.2% from 3.6%, and the latter to 2.2% from 2.8%.
[^] BOOK REVIEW: The First Junk Bond
------------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
Review by Gail Owens Hoelscher
Order your personal copy today and one for a colleague at
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion. This engrossing book follows the extraordinary journey
of Texas International, Inc (known by its New York Stock
Exchange stock symbol, TEI), through its corporate growth and
decline, debt exchange offers, and corporate renaissance as
Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI
"flourished for a brief luminous moment but then crashed to
earth and was consumed." TEI's story features attention-grabbing
characters, petroleum exploration innovations, financial
innovations, and lots of risk taking.
The First Junk Bond was originally published in 1994 and
received solidly favorable reviews. The then-managing director
of High Yield Securities Research and Economics for Merrill
Lynch said that the book "is a richly detailed case study. Platt
integrates corporate history, industry fundamentals, financial
analysis and bankruptcy law on a scale that has rarely, if ever,
been attempted." A retired U.S. Bankruptcy Court judge noted,
"(i)t should appeal as supplementary reading to students in both
business schools and law schools. Even those who practice.in the
areas of business law, accounting and investments can obtain a
greater understanding and perspective of their professional
expertise."
"TEI's saga is noteworthy because of the company's resilience
and ingenuity in coping with the changing environment of the
1980s, its execution of innovative corporate strategies that
were widely imitated and its extraordinary trading history,"
says the author. TEI issued the first junk bond. In 1986 it
achieved the largest percentage gain on the NYSE, and in 1987
suffered the largest percentage loss. It issued one of the first
bonds secured by a physical commodity and then later issued one
of the first PIK (payment in kind) bonds. It was one of the
first vulture investors, to be targeted by vulture investors
later on. Its president was involved in an insider trading
scandal. It innovated strip financing. It engaged in several
workouts to sell off operations and raise cash to reduce debt.
It completed three exchange offers that converted debt in to
equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever
junk bond. The fresh capital had allowed TEI to acquire a
controlling interest of Phoenix Resources Company, a part of
King Resources Company. TEI purchased creditors' claims against
King that were subsequently converted into stock under the terms
of King's reorganization plan. Only two years later, cash
deficiencies forced Phoenix to sell off its nonenergy
businesses. Vulture investors tried to buy up outstanding TEI
stock. TEI sold off its own nonenergy businesses, and focused on
oil and gas exploration. An enormous oil discovery in Egypt made
the future look grand. The value of TEI stock soared. Somehow,
however, less than two years later, TEI was in bankruptcy. What
a ride!
All told, the book has 63 tables and 32 figures on all aspects
of TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial
structures that were considered. Those interested in the oil and
gas industry will find the book a primer on the subject, with an
appendix devoted to exploration and drilling, and another on oil
and gas accounting.
Harlan Platt is professor of Finance at Northeastern University.
He is president of 911RISK, Inc., which specializes in
developing analytical models to predict corporate distress.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
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Each Tuesday edition of the TCR contains a list of companies with
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than a balance sheet solvency test.
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Chapter 11 cases involving less than $1,000,000 in assets and
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Each Friday's edition of the TCR includes a review about a book of
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The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
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Copyright 2017. All rights reserved. ISSN: 1520-9474.
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The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
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