/raid1/www/Hosts/bankrupt/TCR_Public/170818.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 18, 2017, Vol. 21, No. 229
Headlines
101 SAW MILL: Case Summary & 5 Unsecured Creditors
8760 SERVICE: Proposes Online Auction of Assets Starting Aug. 28
ACADIANA MANAGEMENT: Selling All Assets of LTAC Hospital for $10K
ACORN PROPERTIES: Selling Thomasville Property for $1.3M to Pay RCH
ADVANCED PRECISION: Hires Crane Heyman as Bankruptcy Counsel
AES CORP: Fitch Assigns BB Rating to $500MM Unsec. Notes Due 2027
ALL PEOPLE: Voluntary Chapter 11 Case Summary
ALLIANCE ONE: Three Directors Elected by Shareholders
ALPHA MEDIA: S&P Lowers CCR to B- on Thin Covenant Cushion
ALPHATEC HOLDINGS: Incurs $2.7 Million Net Loss in 2nd Quarter
ANDEAVOR LOGISTICS: S&P Puts 'BB+' CCR on CreditWatch Positive
ARMSTRONG ENERGY: Incurs $17.2 Million Net Loss in Second Quarter
BADGEROW JACKSON: Hires Christian McLaughlin as Bankruptcy Counsel
BASEBALL PROTECTIVE: Disclosures OK'd; Plan Hearing on Sept. 19
BEAVER-VISITEC INT'L: Moody's Affirms B3 CFR; Outlook Remains Neg.
BEAVER-VISITEC INT'L: S&P Keeps B 1st Lien Loan Rating Amid Upsize
BIOSCRIP INC: Gabelli Funds, et al, Have 9.19% Stake as of June 30
CANNABIS SCIENCE: Incurs $4.02 Million Net Loss in First Quarter
CANNABIS SCIENCE: Reports Restated Net Loss of $10.2M for 2016
CARRINGTON FARMS: Wants to Extend Plan Exclusivity to Aug. 22
CHARLES STREET: Ct. to Set Deadline for Law Firms to File Complaint
CHINA MEDICAL: No Damages Award for Deutsches From Fidelity
CLINE GRAIN: Taps Halderman Real Estate as Auctioneer
CNO FINANCIAL: Fitch Affirms BB+ Ratings on Sr. Unsec. Notes
COMBIMATRIX CORP: Incurs $370,000 Net Loss in Second Quarter
COMMUNITY CHOICE: Reports $18.2 Million Net Loss for 2nd Quarter
CORBETT-FRAME INC: Taps DelCotto Law Group as Legal Counsel
CRITICAL CAR: Disclosures OK'd; Plan Confirmation Hearing on Oct. 4
CYTORI THERAPEUTICS: Incurs $6.04 Million Net Loss in 2nd Quarter
DEREK L. GUSTAFSON: Case Summary & 20 Largest Unsecured Creditors
DIGILITI MONEY: Urban FT Makes Bid to Rescue Business
DOUBLE D. FITNESS: Hires Robert C. Bruner as Attorney
DUFF & PHELPS: Moody's Revises Outlook to Stable & Affirms B2 CFR
ENJUE INC: Taps Joyce W. Lindauer as Legal Counsel
ERIN ENERGY: Oltasho Nigeria Reports 53.8% Stake as of April 3
EVANS & SUTHERLAND: Incurs $171,000 Net Loss in Second Quarter
FIDELITY & GUARANTY: Fitch Revises Ratings Watch to Positive
FLOUR CITY BAGELS: Court Confirms Joint Chapter 11 Plan
FORESIGHT ENERGY: Reports Second Quarter Coal Sales of $204.5-M
FOSSIL GROUP: Moody's Lowers CFR to Ba3; Outlook Remains Negative
FRANK W. KERR: Can Collect Up to $682K from West Grange
GALATIANS ENTERPRISES: Taps Beard & Savory as Legal Counsel
GALATIANS ENTERPRISES: Taps Stokes & Glass as Legal Counsel
GELTECH SOLUTIONS: Reports $1.1M Net Loss for Second Quarter
GREAT FALLS DIOCESE: Taps Douglas Wilson as Accountant
HERBALIFE LTD: China Probe Into MLM Firms No Impact on Moody's CFR
INDUSTRIAL SURFACE: Sale of All Assets to ISA Acquisition Approved
J & J CHEMICAL: Trustee Taps Van Orden as Accountant
JAMES ARRIGAN: Kudair Buying Interest in Katy Property for $162K
JEFFERY P. ALEXANDER: Disclosures OK'd; Plan Hearing on Nov. 1
JOSEPH ANTONAKOS: $400K Sale of Staten Island Property Approved
JSS OF ALBUQUERQUE: State's Police Powers Exempt from Stay
KANAWHA CO, WV: Moody's Cuts Rating on 2013 Housing Bonds to Ba2
KNIGHT ENERGY: El Caballero Appeal Removed from Tex. App. Docket
KUEHG CORP: Moody's Lowers Rating on 1st Lien Secured Loans to B2
LA PALOMA GENERATING: Proposes Sept. 27 Auction for All Assets
LARKIN EXCAVATING: Flat Land Buying All Assets for $2 Million
LEON OSCAR RAMIREZ: Probate Estate Property of Bankruptcy Estate
LPL HOLDINGS: S&P Affirms BB- ICR Amid National Planning Deal
LSC COMMUNICATIONS: Moody's Alters Outlook to Neg., Affirms Ba3 CFR
M&K WALKER: Case Summary & 9 Unsecured Creditors
MALLARD'S LANDING: Taps Kasen & Kasen as Legal Counsel
MED-X TRANS: Plan Confirmation Hearing Rescheduled to Sept. 19
MICRO CONTRACT: Has Court's Final Nod to Use Cash Collateral
MICROSEMI CORP: S&P Hikes CCR to 'BB' on Leverage Reduction
MODERN CONTINENTAL: Sale of PRT Interest for $4.5M Approved
MSAMN CORP: Taps Elliott & Davis as Legal Counsel
NATIONAL TRUCK: Sale of Used Trucks to Upgrade Truck Fleet Approved
NEOPS HOLDINGS: Seeks to Hire Marcum LLP as Accountant
NETWORK SERVICES: Sale of Personal Property for $26K Approved
OHIO COUNTY, KY: Moody's Affirms Ba2 Rating on $83.3MM Rev. Bonds
OYOTOYO INC: Hires KCP Advisory as Financial Advisor
OYOTOYO INC: Names Jeffrey Sternklar as Counsel
PARADOCS PROPERTIES: Taps Nichols and Eberth as Counsel
PARKER PORK: To Sell Real Estate Assets by Feb. 2018 to Pay Debts
PEEKAY ACQUISITIONS: Taps Rust Consulting as Claims Agent
PGB 38 LLC: Names Gregory Messer as Counsel
PHOENIX EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
PLATINUM PARTNERS: Chapter 15 Case Summary
POSTMEDIA NETWORK: Moody's Lowers CFR to Caa2; Outlook Negative
PURADYN FILTER: Reports $383,000 Net Loss for Second Quarter
SALON MEDIA: Incurs $600,000 Net Loss in First Quarter
SCI DIRECT: Wants to Use Cash Collateral, Obtain DIP Financing
SEADRILL LIMITED: Completes Amendments to Credit Facilities
SEARS CANADA: Agrees to C$500,000 Hardship Fund for Employees
SEARS CANADA: Orderly Wind Up of Pension Plan Sought by Retirees
SEARS CANADA: Selling Garden City to WCRE for C$5 Million
SENIOR CARE GROUP: Taps Holliday Fenoglio Fowler as Broker
SHEET METAL AIR: Taps E.P. Bud Kirk as Legal Counsel
SINGH LODGING: Wants to Use Cash to Meet Costs of Operations
SIXTY SIXTY CONDOMINIUM: MRC Contract Not Subject to SG ROFR
SM PROPERTY HOLDINGS: Taps Coan Payton as Legal Counsel
STEFANOVOUNO LLC: Case Summary & 10 Largest Unsecured Creditors
SUNEDISON INC: Former Exec Gaynor Defends $11.2M Claim
SYDELL INC: Advanced Dermal Buying All Assets for $263K
TARRANT COUNTY CULTURAL: Fitch Withdraws BB+ Rev Bonds Ratings
TERRACE MANOR: Disclosures OK'd; Plan Hearing on Sept. 19
TRANSOCEAN INC: S&P Affirms B+ CCR on Songa Offshore Acquisition
TRUE RELIGION: Committee Taps Klehr Harrison as Co-Counsel
TXCC INC: Seeks to Hire C.D. Shamburger as Accountant
US VIRGIN ISLANDS: Fitch Cuts Issuer Default Rating to CCC, Off RWN
US VIRGIN ISLANDS: S&P Lowers GRT Loan Notes Rating to 'CCC'
VANGUARD HEALTHCARE: Wants to Continue Using Cash Collateral
VMWARE INC: Fitch Assigns BB+ Long-Term Issuer Default Rating
VYCOR MEDICAL: Incurs $361,000 Net Loss in Second Quarter
WAGLE LLC: Amended Plan Not Fair and Equitable, Court Rules
WESTERN REFINING: S&P Retains 'B+' CCR on CredtWatch Positive
WHITING PETROLEUM: S&P Affirms 'BB-' CCR on North Dakota Asset Sale
WILLIAM THOMAS, JR: Bell Buying Memphis Property for $705K
YAHOO! INC: S&P Withdraws BB- Unsolicited Corporate Rating
[^] BOOK REVIEW: Competition, Regulation, and Rationing
*********
101 SAW MILL: Case Summary & 5 Unsecured Creditors
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Debtor: 101 Saw Mill River Realty Corp
101 Saw Mill River Road
Hawthiorne, NY 10532
Case No.: 17-23278
Type of Business: 101 Saw Mill River listed its business as a
single asset real estate (as defined in 11
U.S.C. Section 101(51B)). It is an affiliate
of Hudson Valley Hospitality Group, Inc., which
sought bankruptcy protection on Nov. 11, 2016
(Bankr. S.D.N.Y. Case No. 16-23590). The
Company is equally owned by Michael Casarella
and Tom Stratigakis.
Chapter 11 Petition Date: August 17, 2017
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Hon. Robert D. Drain
Debtor's Counsel: Anne J. Penachio, Esq.
PENACHIO MALARA, LLP
235 Main Street, Sixth Floor
White Plains, NY 10601
Tel: (914) 946-2889
Fax: (914) 946-2882
E-mail: apenachio@pmlawllp.com
FMalara@PMLawLLP.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Casarella, managing member.
The Debtor's list of five unsecured creditors is available for free
at http://bankrupt.com/misc/nysb17-23278.pdf
8760 SERVICE: Proposes Online Auction of Assets Starting Aug. 28
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8760 Service Group, LLC, and Pelham Property, LLC, ask the U.S.
Bankruptcy Court for the Western District of Missouri to authorize
bidding procedures in connection with the sale of substantially all
assets in an online auction, commencing on Aug. 28, 2017 and
finishing on Sept. 20, 2017, to be conducted by Mayo Auction and
Realty.
The assets will be transferred to the successful bidders at the
Auction free and clear of all liens, claim, interests and
encumbrances, with such liens, claims, interests and encumbrances
to attach to the proceeds of the sale of the assets.
The Debtors propose these key deadlines:
a. Sale Notice: Within 1 day of the entry of the Auction
Procedures Order
b. Personal Property Reserve Deadline: Sept. 1, 2017
c. Credit Bid Submission Deadline: Sept. 19, 2017 at 4:00 p.m.
(CST)
d. Auction: Aug. 28 - Sept. 20, 2017
e. Sale Objection Deadline: Sept. 21, 2017
f. Sale Hearing: Sept. (TBD), 2017
A copy of the Auction Procedures attached to the Motion is
available for free at:
http://bankrupt.com/misc/8760_Service_81_Sales.pdf
With the exception of the creditors specifically listed, each of
the Debtors' on their schedules as having an undisputed secured
claim or such creditor has filed a proof of claim listing a secured
claim which has not been objected to, may credit bid at the
auction.
Additionally, mechanics' lien holders will not be allowed to credit
bid on the Assets.
However, the Debtors propose that the three creditors holding
blanket liens on the Debtors' personal property: BancorpSouth Bank,
Hudson Insurance, and the United States Internal Revenue Service
will not be permitted to credit bid on personal property. The
status and priority of their blanket secured claims are in material
dispute, making credit bidding on the Debtors' personal property
(and in the case of mechanic's lien holders, real property) by
these creditors impractical. The Debtors are not seeking an order
limiting the ability of BancorpSouth to credit bid on the real
property at 5105 Pelham Drive ("Real Property") and related
fixtures/improvements because such liens are not subject to a
dispute. BancorpSouth and Hudson have agreed not to pursue their
credit bid rights on the condition that the Bidding Procedure Order
is without prejudice to their liens and that their liens attach to
the sale proceeds.
The IRS asserts a lien in substantially all of the 8760 Service
Group's personal property on account of a tax lien filed on March
24, 2017 (less than 90 days prior to the commencement of the
Debtors' cases) regarding tax debts in the amount of $860,664.
Given that this lien is subordinate to the liens of Hudson and
possibly BancorpSouth and given that this lien is likely avoidable
under section 547 of the Bankruptcy Code. Likewise, junior lien
holders and mechanic's lien holders should be prohibited from
credit bidding in light of the additional complications caused by
allowing junior lien holders to credit bid. The Debtors therefor
ask that the Court to "order otherwise" and deny the IRS', junior
lien holders', and mechanic's lien holders' credit bid rights on
any personal property (and with respect to mechanic's lien holders,
on any real property).
The Debtors ask that an initial hearing on the Motion be set on the
week beginning Aug. 21, 2017 to approve the Auction Procedures.
They also ask that a final hearing on the Motion be set no later
than Sept. 22, 2017 to grant the remaining relief requested. The
deadline to objection to the Motion will be Sept. 21, 2017.
The Debtors ask that the Sale Order be effective immediately upon
entry of such order and that the 14-day stay under Bankruptcy Rules
6004(h) be waived.
About 8760 Service Group
Founded in 2010, 8760 Service Group, LLC -- https://www.8760sg.com/
-- provides maintenance, outage, and emergency repair services for
the power, manufacturing and bio-fuel industries.
8760 Service Group, d/b/a 8760 Energy Services, LLC and its
affiliate, Pelham Property, LLC, filed Chapter 11 petitions (Bankr.
W.D. Mo. Case Nos. 17-20454 and 17-20453) on May 1, 2017. The
petitions were signed by Stacey "Buck" Barnes, president.
At the time of filing, Pelham Property estimated less than $50,000
in assets and $1 million to $10 million in liabilities while 8760
Service Group estimated $1 million to $10 million in assets and $10
million to $50 million in liabilities.
The cases are assigned to Judge Dennis R. Dow.
The Debtors are represented by Victor F. Weber, Esq. at Merrick,
Baker & Strauss, P.C.
ACADIANA MANAGEMENT: Selling All Assets of LTAC Hospital for $10K
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Acadiana Management Group, LLC, and affiliates, ask the U.S.
Bankruptcy Court for the Western District of Louisiana to authorize
the sale of substantially all property of LTAC Hospital of
Louisiana-Denham Springs, LLC, to St. Joseph Holdings, LLC or its
designee for $10,000.
LTAC Denham Springs and AMG Realty I, LLC are successors in
interest to CHFG-Denham Springs, LLC. LTAC Denham Springs
currently operates a hospital in Denham Springs, Louisiana, which
is not profitable and is losing money.
BOKF, NA, doing business as Bank of Oklahoma, Eastman National
Bank, NBC Oklahoma and Trustmark National Bank ("Banks") hold a
security interest in all of this Debtor's assets, as well as an
assignment of their management agreement in favor of Acadiana
Management Group. The Banks also hold a mortgage on the building
in which LTAC Denham Springs operates the Hospital, as well as an
assignment of the lease between LTAC Denham Springs and CHFG-Denham
Springs, as predecessor in interest to Debtor AMG Realty.
The management of the Debtors, with the concurrence of Bank of
Oklahoma, individually and as administrative agent for the Banks,
have determined that to continued operations of the Hospital will
result in continuing losses to the estate of LTAC Denham Springs.
Therefore, the Debtors' management has solicited offers to purchase
the Hospital in lieu of closure. In order to preserve the estate
from continued losses associated with operating the Hospital, it is
in the best interest of the estate and its creditors if the sale of
LTAC Denham Springs operations is had on an expedited basis.
LTAC Denham Springs proposes to sell substantially all assets
associated with the Hospital, including, but not limited to, all
business records, billing and patient records, licenses,
certifications, accreditations, Medicare provider numbers and
agreements, submitter identification numbers for Medicare, Medicare
billing passwords, access codes, furniture, fixtures, office
equipment, goodwill, medical supplies, office supplies, and any
other assets physically located at the Hospital. The proposed sale
price for the said assets is $10,000, to be paid at closing, per
the Letter of Intent.
The sale will be without warranty of title or warranty as to the
existence or continuing validity of any licenses or certifications.
The sale will be less and except the following assets owned by
LTAC Denham Springs -- cash, cash equivalents and accounts
receivable collected or accrued prior to the date the sale is
consummated.
St. Joseph further will agree to maintain and hold the estate of
LTAC Denham Springs harmless from any obligation to maintain
patient and billing records as may be required by the United States
of America, the State of Louisiana, and any other applicable legal
or regulatory authority. The terms of the sale are cash or
certified funds at closing, with the closing to occur as soon as
possible after Court approval, with the Court being requested to
relieve the debtor of the appeal delays given the continuing losses
to the estate being incurred.
In conjunction with and as a suspensive condition to the described
sale of assets, St. Joseph or its designee will lease the Hospital
property situated at 8375 Florida Blvd., Denham Springs, Louisiana,
from the bankruptcy estate of AMG Realty, successor in interest to
CHFG-Denham Springs on these following material terms:
a. A triple-net lease where the lessee will be financially
responsible for maintenance of the building generally;
b. $22,000 per month rent for a two-year term, with a lessee
option to extend the lease term for an additional year at a rental
rate of $31,000 per month; and
c. If the option to renew is exercised, St. Joseph or its
designee may elect to rent the property for less than 12 months,
and rent will only be paid pro-rata on the number of months the
property is actually occupied by St. Joseph or its designee.
In order to effectuate the lease to St. Joseph or its designee, the
existing lease of the Hospital property between LTAC Denham Springs
and AMG Realty will be assumed by both estates, will be amended to
include the terms specified, and then will be assigned by LTAC
Denham Springs to St. Joseph or its designee. The parties propose
to close the sale on Aug. 31, 2017.
A copy of the LOI attached to the Motion is available for free at:
http://bankrupt.com/misc/Acadiana_Management_176_Sales.pdf
BOKF, N.A., can be reached at:
BOKF, NA
Rudy J. Cerone and Sarah Edwards
McGlinchey Stafford, PLLC
601 Poydras Street, 12th Floor
New Orleans, LA 70130
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, serve as
the Debtors' bankruptcy counsel.
ACORN PROPERTIES: Selling Thomasville Property for $1.3M to Pay RCH
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Acorn Properties, Inc., asks the U.S. Bankruptcy Court for the
Middle District of Georgia to authorize to authorize the sale of a
parcel of land and improvements thereon described as Lot 85,
Thomasville, Thomas County, Georgia, to Dewar Investments, LLC, for
$1,334,000.
A hearing on the Motion is set for Sept. 20, 2017 at 10:30 a.m.
The Debtor was forced to file the bankruptcy to protect certain
assets which RCH Loan Servicing, LLC held as security for a loan
and had declared a default.
The Debtor has secured a Contract for the sale of the property
which is sufficient to pay off RCH's loan. The property will be
sold free and clear of lien. The Debtor proposes to use the
proceeds to pay off the claim of RCH.
A copy of the Contract attached to the Motion is available for free
at:
http://bankrupt.com/misc/Acorn_Properties_24_Sales.pdf
The Purchaser:
DEWAR INVESTMENTS, LLC
314 N. Patterson Street
Valdosta, GA 31601
Attn: Brandon Dampier
Telephone: (229) 316-2225
E-mail: brandon.dampier@tishcollc.com
jamey@dewarinc.com
About Acorn Properties
Acorn Properties, Inc., based in Thomasville, GA, filed a Chapter
11 petition (Bankr. M.D. Ga. Case No. 17-70661) on June 30, 2017.
The petition was signed by Edward K. Weckwert, Jr., officer. The
Debtor disclosed $1.78 million to $1.36 million in both assets and
liabilities as of the bankruptcy filing. Bruce Warren, Esq., at
Whitehurst Blackburn & Warren, serves as bankruptcy counsel to the
Debtor.
ADVANCED PRECISION: Hires Crane Heyman as Bankruptcy Counsel
------------------------------------------------------------
Advanced Precision Manufacturing, Inc. and A.D.K. Arms, Inc. seek
authorization from the U.S. Bankruptcy Court for the Northern
District of Illinois to employ David K. Welch, Arthur G. Simon,
Jeffrey C. Dan and Brian P. Welch and the law firm Crane, Heyman,
Simon, Welch & Clar as their attorneys, nunc pro tunc to July 20,
2017.
The Debtors require Crane Heyman to:
(a) prepare necessary applications, motions, answers, orders,
adversary proceedings, reports and other legal papers;
(b) provide the Debtor with legal advice with respect to its
rights and duties involving its property as well as its
reorganization efforts herein;
(c) appear in court and to litigate whenever necessary; and
(d) perform any and all other legal services that may be
required from time to time in the ordinary course of the
Debtor's business during the administration of this
bankruptcy case.
Crane Heyman will be reimbursed for reasonable out-of-pocket
expenses incurred.
Prior to the filing of this Chapter 11 case, Crane Heyman was paid
$16,717 as an advance payment retainer for its representation of
the Debtor in this bankruptcy case and matters relating thereto.
David K. Welch, Arthur G. Simon, Jeffrey C. Dan and Brian P. Welch
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estate.
The Court will hold a hearing on the application on August 22,
2017, at 9:30 a.m.
Crane Heyman can be reached at:
David K. Welch, Esq.
Arthur G. Simon, Esq.
Jeffrey C. Dan, Esq.
Brian P. Welch, Esq.
CRANE, HEYMAN, SIMON, WELCH & CLAR
135 South LaSalle Street, Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
Fax: (312) 641-7114
About Advanced Precision Manufacturing, Inc.
Elk Grove Village, Illinois-based Advanced Precision Manufacturing
-- http://www.apmi.us/-- is a family-owned business that produces
and assembles machined components for the aircraft industries, as
well as projects in the automotive industry and commercial
manufacturing market. Founded in 1983, APMI specializes in
precision machining of all standard metals as well as exotic
materials like Inconel, Waspalloy, Titanium, Beryllium Copper,
Hastalloy, and other materials for aviation aerospace, power
generation, medical and oil field drilling applications.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 17-18961) on June 23, 2017, estimating its assets and
liabilities at between $1 million and $10 million. The petition was
signed by Tadeusz Kozlowski, president.
Judge Donald R Cassling presides over the case. Jeffrey C Dan,
Esq., and Arthur G. Simon, Esq., Brian P. Welch, Esq., and David K
Welch, Esq., at Crane, Heyman, Simon, Welch & Clar serves as the
Debtor's bankruptcy counsel.
About A.D.K. Arms, Inc.
Based at 2301 Estes Avenue, Elk Grove Village, Illinois, A.D.K.
Arms, Inc., is a holder of a federal firearms license, operating as
a premium supplier of tactical firearm components.
A.D.K. Arms filed a Chapter 11 petition (Bankr. N.D. Ill. Case No.
17-21679) on July 20, 2017. The case is assigned to Judge Donald
R. Cassling. The Debtor is represented by David K. Welch, Esq. at
Crane, Heyman, Simon, Welch & Clar.
A.D.K. Arms is an affiliated entity of Advanced Precision
Manufacturing, Inc. ("APMI") that filed its own Chapter 11 case
(Bankr. N.D. Ill. Case No. 17-18961) on June 23, 2017. A.D.K. Arms
is the sales agent, seller and distributor for APMI of such
components manufactured by APMI.
The A.D.K. Arms and APMI cases are jointly administered under Case
No. 17-18961.
AES CORP: Fitch Assigns BB Rating to $500MM Unsec. Notes Due 2027
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Fitch Ratings has assigned a 'BB' rating to AES Corporation's
issuance of $500 million senior unsecured notes due in 2027. The
Rating Outlook is Stable. The proceeds will be used to fund the
partial tender offer for the 8.00% senior notes due 2020 and redeem
2019 senior notes.
KEY RATING DRIVERS
Debt Reduction Continues
AES continues to execute its debt reduction plan. In March, 2017,
AES repaid, through a tender offer, $276 million aggregate
principal of its existing 7.375% senior unsecured notes due in 2021
and $24 million of its existing 8.00% senior unsecured notes due in
2020, meeting its debt reduction target for 2017. In 2016, AES
repaid approximately $300 million recourse debt, exceeding its
initial target of $200 million for the year. Since fourth quarter
(Q4) 2011, AES has repaid approximately 32% of total recourse debt.
Over the next three years, Fitch expects AES to make discretionary
debt repayment at a more modest pace of approximately $150 million
per year. Debt repayment and refinancing have and will extend the
next maturity to 2020 when the remaining $228 million (post tender)
8.00% senior notes will be due. Debt reduction, along with project
completion and cost cutting has improved recourse debt/APOCF
(adjusted parent-only cash flow) to mid-4x in Q2 2017 from 5.6x in
2014 which Fitch views favourably.
Diversified Cash Flow
AES invests in a diverse portfolio of regulated electric utilities
and power-generating assets with long-term contracts across four
continents and 17 countries, which Fitch considers its key credit
strength. Investment diversity mitigates macro- and microeconomic
environment adversity that affects local domestic electricity
sectors, and specific project operating risks. The benefit of
diversification has been demonstrated in 2016 when AES was able to
increase distribution from other projects to offset substantial
reduction in distribution from AES Gener.
AES's asset diversification will continue to improve in the next
few years as new projects come online. Approximately 2,976 MW of
new capacity was added in 2016. Currently through 2020, 4,659 MW of
new projects are expected to come online (including the 531 MW Alto
Maipo project which is currently under technical default). From now
to end of 2018, 2.5 GW will come online including the 1.3 GW coal
plant in India OPGC II (AES's share 49%) and IP&L's 671 MW Eagle
Valley (AES's share 70%). Additionally, by 2020, these new projects
will extend the remaining average contract life to 10 years from
six years.
Alto Maipo Continues to Experience Difficulties
After AES Gener completed the legal financial restructuring of its
Alto Maipo project in March 2017, the project continues to
experience construction difficulties including higher costs and low
productivity. During second quarter 2017, Alto Maipo terminated one
of its contractors and is currently seeking a replacement which led
to a technical default of the $631 million project debt and $139
million derivative liability. AES has invested approximately $360
million in the project and will fund an additional $55 million as
part of the March restructuring.
Fitch is concerned that the potential cost increase, further delay
of completion date due to change of contractor, possible recourse
debt financing (full or partial) at AES Gener to fund cost overrun,
and potential political pressure from renegotiation with lenders
and contractors could impair AES Gener's upstream dividend to AES
in the near term. From 2013-2015, AES Gener contributed 14% of
AES's parent only cash flow.
Disciplined Acquisitions
Fitch views favourably AES's acquisition of 50% equity interest in
FTP Power LLC (sPower). It is consistent with its strategy to
expand renewable footprint in the U.S. In July 2017, AES completed
its acquisition of 50% equity interest in sPower for $382 million
in cash with the assumption of sPower's non-recourse debt. The
acquisition is funded primarily by internal cash using the proceeds
from selling AES Sul, a distribution company in Brazil in 2016 for
$440 million. The sPower portfolio includes 1.3 GW of solar and
wind projects in operation in the U.S. with 21-year contracts with
high-investment grade offtakers and potential 10 GW of development
projects. Its 50% partner is Alberta Investment Management
Corporation ("AIMCo"), a Canadian pension fund with $95 billion
asset under management. Fitch notes that AES has demonstrated
discipline and didn't acquire the highly levered and legally
complex renewable yieldco TerraForm at the end of 2016. In April
2017, AES Tiete Energia SA agreed to acquire a 386 MW wind farm
Alto Sertao II in Brazil for $189 million. The transaction will be
funded by non-recourse debt and is expected to close in second half
of 2017. The project has average remaining life of 18 years and
diversifies Tiete's 100% hydro portfolio which has been struggling
in the last few years due to poor hydrology.
Pruning of Portfolio
Since 2011, AES has exited 11 countries, raising $4 billion in
asset sales proceeds including over $500 million in 2016 alone. For
the remainder of 2017, AES plans to sell $500 million additional
assets. In June 2016, AES agreed to sell AES Sul, a distribution
company in Brazil for approximately $440 million, as the company
has suffered from declining demand and poor hydrology conditions
while as higher market purchased power prices cannot be passed
through. Fitch views positively as it reduces exposure to Brazil
and provides liquidity for other cash needs including debt
reduction and growth projects.
AES is in the process of selling 2.4 GW and retiring 1.3GW of
merchant coal-fired generation in Kazahstan and Ohio through its
subsidiary DPL Inc. and DP&L. which will reduce its merchant coal
exposure by 70%. The total sale proceeds will be $74 million. On
April 7, 2017, AES completed the sale of its interest in the
Kazakhstan combined heating and power coal plants (CHP) for $24
million. AES plans to exit Kazahstan completely after its remaining
1GW of hydro PPA expires in Q4, 2017. In April 2017, Dynegy agreed
to buy DP&L's 28.1% stake in the 1,344-MW W.H. Zimmer plant and a
36% interest in units 7 and 8 of the 1,020-MW Miami Fort plant for
$50 million in cash. DP&L will continue to pursue sale of its
peaking units at Conesville plant and it will retire the J.M.
Stuart and Killen Station coal plants by June 2018.
Although Fitch doesn't expect DPL's sale proceeds to be distributed
to AES, exiting Ohio merchant generation business will
substantially reduce operating risks of AES's portfolio and provide
upside in distribution over the long run.
Liquidity Management
Management targets $500 million to $700 million of minimum
liquidity after capital allocation. From 2011 to 2016, the actual
liquidity have been comfortably exceeding the target, ranging from
$900 million $1.2 billion, Liquidity balance takes into account all
committed investments, shareholder buybacks and debt reductions.
Additionally, given management's focus on achieving a stronger
credit profile and emphasis on reinvesting in the business, Fitch
expects AES's share repurchases to moderate. AES purchased $79
million of equity in 2016, compared to an average of $338 million
annually from 2011 to 2015.
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to a positive rating action include:
-- AES's ratings could be upgraded if debt-to-APOCF ratio
sustains below 4.8x and APOCF interest coverage above 3.3x
assuming its risk profile remains the same;
-- If AES continues to reduce its operating risks by exiting
merchant coal generation, increasing long-term contracted
earnings, and increasing its footprint in United States,
positive rating actions are possible.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Ratings and Outlook could be pressured if AES fails to achieve
APOCF interest coverage higher than 2.5x and adjusted
debt/APOCF lower than 5.5x on a sustainable basis;
-- If construction projects experience additional unexpected cost
overrun or delays that require material equity injection or
reduce upstream dividend from its subsidiaries;
-- If AES increases shareholder distributions substantially
without an absolute reduction in debt, rating could also be
pressured;
-- A change in strategy to invest in more speculative, non-
contracted assets or a material decline in cash flow from
contracted power generation assets could also lead to negative
actions.
-- If AES executes merger and acquisition transactions largely
with debt, causing its credit metrics to breach the guideline
ratios above.
ALL PEOPLE: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: All People International Church, Inc.
1993 Edgewood Ave West
Jacksonville, FL 32208
Business Description: The Debtor owns the All People International
Church located in Jacksonville, Florida. It
previously sought bankruptcy protection on
Oct. 31, 2016 (Bankr. M.D. Fla. Case No. 16-
03994).
Web site: http://www.allpeopleint.org
Chapter 11 Petition Date: August 16, 2017
Case No.: 17-bk-03003
Court: United States Bankruptcy Court
Middle District of Florida (Jacksonville)
Judge: Hon. Paul M. Glenn
Debtor's Counsel: Gerald B Stewart, Esq.
LAW OFFICE OF GERALD B. STEWART
24 North Market Street, Suite 402
Jacksonville, FL 32202
Tel: (904) 353-8876
Fax: (904) 356-2776
E-mail: stewartlaw7272@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Arthur T. Jones, bishop/pastor.
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/flmb17-03003.pdf
ALLIANCE ONE: Three Directors Elected by Shareholders
-----------------------------------------------------
Alliance One International, Inc. held its 2017 annual meeting of
shareholders on Aug. 10, 2017, at which the shareholders:
(1) elected each of Richard C. Green, Jr., Nigel G. Howard and
Pieter J. Sikkel as a Class II director for a three-year
term expiring in 2020;
(2) ratified the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending
March 31, 2018;
(3) adopted a resolution approving, on an advisory basis, the
compensation paid to the Company's named executive
officers; and
(4) selected, on an advisory basis, "every one year" as the
frequency of future advisory votes on the compensation of
the Company's named executive officers.
In accordance with the results of this vote, the Company's Board of
Directors determined to hold annual future advisory shareholder
votes on the compensation of the Company's named executive
officers, as required by the Dodd-Frank Act and related SEC
regulations, until the occurrence of the next advisory shareholder
vote on the frequency of future advisory votes on the compensation
of the Company's named executive officers.
The shareholder proposal requesting that the Company prepare a
report on the Company's potential participation in the mediation of
alleged human rights violations described the Company's definitive
proxy statement for the Annual Meeting was not presented by the
shareholder at the Annual Meeting. As a result, that proposal was
not submitted to the shareholders for a vote.
About Alliance One
Morrisville, N.C.-based Alliance One International Inc. is
principally engaged in purchasing, processing, storing, and selling
leaf tobacco. The Company purchases tobacco primarily in the
United States, Africa, Europe, South America and Asia for sale to
customers primarily in the United States, Europe and Asia.
Alliance One reported a net loss attributable to the Company of
$62.92 million on $1.71 billion of sales and other operating
revenues for the year ended March 31, 2017, compared to net income
attributable to the Company of $65.53 million on $1.90 billion of
sales and other operating revenues for the year ended March 31,
2016.
* * *
In September 2016, Moody's Investors Service upgraded Alliance
One's Corporate Family Rating (CFR) to 'Caa1' from 'Caa2' and
Probability of Default Rating to 'Caa1-PD' from 'Caa2-PD'. The
Corporate Family Rating upgrade to Caa1 reflects Moody's somewhat
diminished concerns about Alliance One's liquidity.
In June 2017, S&P Global Ratings affirmed its 'CCC+' corporate
credit rating on Alliance One. The rating outlook is negative.
The rating affirmation reflects S&P's forecast that the Company's
credit metrics will show modest improvement but remain very weak
over the next year, including adjusted debt to EBITDA in the mid-9x
area (compared to over 12x currently) and EBITDA to cash interest
coverage below 1.5x. Despite S&P's forecast for modest
improvement, the company has missed its estimates over the last
several years.
ALPHA MEDIA: S&P Lowers CCR to B- on Thin Covenant Cushion
----------------------------------------------------------
U.S. radio broadcaster Alpha Media LLC's EBITDA cushion of
compliance with its total net leverage covenant has declined to a
very narrow 4.2% as of June 30, 2017, and S&P Global Ratings
expects it to remain thin over the next 12 months. The company may
also need to amend its covenants to avoid a violation during the
next 12-18 months.
Accordingly, S&P lowered its corporate credit rating on Portland,
Ore.-based radio broadcaster Alpha Media LLC to 'B-' from 'B'. The
rating outlook is negative.
S&P said, "At the same time, we lowered our issue-level rating on
the company's $285 million senior secured first-lien credit
facility to 'B' from 'B+'. The '2' recovery rating remains
unchanged and indicates our expectation for substantial recovery
(70%-90%; rounded estimate: 85%) of principal for lenders in the
event of default.
"We don't rate Alpha Media's privately placed $65 million senior
secured second-lien notes and $55 million payment-in-kind (PIK)
holding company notes. However, we include the debt in our debt
leverage estimate.
"The downgrade reflects our view that, barring an amendment, Alpha
Media may not be able to maintain compliance with its financial
covenants under its senior secured first-lien credit facility as a
result of declining EBITDA and quarterly step downs in its total
net leverage covenant. We also expect that the covenant step downs
will begin to limit the company's ability to draw on its revolver,
reducing its total liquidity. Alpha Media has shown an ability to
divest underperforming stations and selling additional assets at
very healthy values may be necessary to reduce its senior secured
leverage and maintain compliance with its covenants over the next
12 months. Additionally, the company may need to amend its credit
agreement in order to provide covenant relief beyond 12 months.
"The negative rating outlook on Alpha Media reflects our
expectation that the company's declining operating performance will
limit its ability to reduce leverage and maintain compliance with
its maintenance covenants over the next 12-18 months, barring
significant deleveraging asset sales or an amendment to its credit
agreement to provide covenant relief.
"We could lower our corporate credit rating on Alpha Media if we
expect the company to violate a covenant during the next 12 months.
This would likely result from continued underperformance combined
with the company's inability to reduce leverage or amend its credit
facility. We could also lower the rating if the company secures an
amendment to provide covenant relief, but its cash interest expense
increases to the point where discretionary cash flow declines below
$15 million, which could cause us to view the company's capital
structure as unsustainable.
"We could revise the outlook to stable if we believe the company
will be able to maintain a margin of compliance above 20% while
generating organic revenue growth, leading to over $25 million in
discretionary cash flow generation. A stable outlook would also
likely require the company to use all of its excess cash flow to
repay debt and maintain an EBITDA cushion of compliance with its
covenants of about 10%."
ALPHATEC HOLDINGS: Incurs $2.7 Million Net Loss in 2nd Quarter
--------------------------------------------------------------
Alphatec Holdings, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.69 million on $24.37 million of revenues for the three months
ended June 30, 2017, compared to a net loss of $5.23 million on
$32.24 million of revenues for the three months ended June 30,
2016.
For the six months ended June 30, 2017, the Company reported a net
loss of $8.21 million on $52.35 million of revenues compared to a
net loss of $11.85 million on $66.44 million of revenues for the
six months ended June 30, 2016.
As of June 30, 2017, Alphatec had $84.19 million in total assets,
$92.14 million in total liabilities, $23.60 million in redeemable
preferred stock, and a total stockholders' deficit of $31.55
million.
General and administrative expenses declined by approximately $0.9
million sequentially.
Cash burn improved to $6.4 million from $11.5 million sequentially;
cash balance of $19.1 million at June 30, 2017.
Operating loss was $0.7 million, sequential improvement from $3.4
million in the first quarter.
Non-GAAP adjusted EBITDA was $1.2 million improved sequentially
from $0.5 million in the first quarter.
Organizational and Product Highlights
* Continued transition of sales organization from non-exclusive
to dedicated, building exceptional momentum with current and
new potential distributors and surgeons. Sales from dedicated
sales agents and distributors increased from less than 15% of
U.S. commercial revenue in the first quarter to more than 18%
in the second quarter
* Enhanced sales, marketing and product development
organizations with the addition of key sales leadership and
engineering talent
* Awarded patent for its innovative and novel uniplanar and
monoaxial screws, currently marketed under the Arsenal
Deformity product line
* Awarded patent that distinguishes and protects proprietary
features of the Alphatec Squadron Lateral Retractor, a key
component of the Company’s Battalion Lateral System, which
will be fully launched in late 2017 and will mark the
Company's entry into the $500M U.S. Lateral market
"We delivered results that were firmly in-line with our
expectations," said Terry Rich, CEO of Alphatec. "Importantly, we
continued to make excellent progress executing on our priorities as
we reposition the Alphatec brand. Despite our deliberate decision
to disrupt short-term revenue by exiting non-strategic
relationships, we continue to see positive traction from new
and existing distributors. This sets us up well for revenue growth
in the second half of 2017. I am extremely confident in the team,
the culture we are building, and the expertise that surrounds me,
and I believe that Alphatec is exceptionally well-positioned to
drive future growth and shareholder value."
U.S. commercial revenues for the second quarter of 2017 were $21.9
million, down $1.6 million, or approximately 7%, compared to $23.4
million in the first quarter of 2017. The sequential revenue
decline was largely driven by deliberate decisions to discontinue
non-strategic relationships.
U.S. gross profit and gross margin for the second quarter of 2017
were $15.5 million and 70.9%, respectively, compared to $16.3
million and 69.4%, respectively, for the first quarter of 2017. The
gross margin improvement was a result of supply chain optimization
and a sequential reduction in inventory kit write-offs related to
distributor turnover.
Total operating expenses for the second quarter of 2017 were $16.5
million, reflecting a decrease of $3.7 million, an approximate 18%
improvement over the first quarter of 2017. On a non-GAAP basis,
excluding restructuring charges and a gain on sale of assets, total
operating expenses in the second quarter of 2017 improved $2.1
million, or approximately 11%, compared to the first quarter of
2017. The improvements reflect the execution of operational
improvement initiatives, including workforce reductions implemented
in October 2016 and February 2017, consolidation of facilities, and
ongoing successful efforts to reduce expenses.
GAAP loss from continuing operations for the second quarter of 2017
was $2.6 million, compared to a loss of $5.4 million for the first
quarter of 2017.
Non-GAAP Adjusted EBITDA in the second quarter of 2017 was $1.2
million, compared to $0.5 million in the first quarter of 2017.
Current and Long-term debt includes $33.6 million in term debt and
$8.9 million outstanding under the Company's revolving credit
facility at June 30, 2017. This compares to $34.2 million in term
debt and $10.4 million outstanding under the Company's revolving
credit facility at March 31, 2017.
Cash and cash equivalents were $19.1 million at June 30, 2017,
compared to $25.5 million reported at March 31, 2017.
Revenue decreased on a year-over-year basis, resulting from the
Company's execution of the transition of its sales organization, in
addition to the impact of lost revenue related to the financial and
operational challenges the Company faced in 2016 prior to the sale
of its international business. The year-over-year improvement in
operating expenses is the result of a comprehensive initiative to
reduce costs and drive operational efficiencies.
For additional information, please refer to the Company's Quarterly
Report on Form 10-Q at https://is.gd/buXPZW
About Alphatec Holdings
Alphatec Holdings, Inc., the parent company of Alphatec Spine, Inc.
-- http://www.alphatecspine.com/-- is a medical technology company
focused on the design, development and promotion of products for
the surgical treatment of spine disorders. The Company has a
comprehensive product portfolio and pipeline that addresses the
cervical, thoracolumbar and intervertebral regions of the spine and
covers a variety of spinal disorders and surgical procedures. Its
principal product offerings are focused on the global market for
fusion-based spinal disorder solutions. The Company believes that
its products and systems are attractive to surgeons and patients
due to enhanced product features and benefits that are designed to
simplify surgical procedures and improve patient outcomes.
Alphatec reported a net loss of $29.92 million on $120.2 million of
revenues for the year ended Dec. 31, 2016, compared to a net loss
of $178.7 million on $134.38 million of revenues for the year ended
Dec. 31, 2015.
ANDEAVOR LOGISTICS: S&P Puts 'BB+' CCR on CreditWatch Positive
--------------------------------------------------------------
S&P Global Ratings said it placed its 'BB+' corporate credit rating
on San Antonio-based Andeavor Logistics L.P. on CreditWatch with
positive implications.
S&P said, "At the same time, we placed our 'BB+' issue-level rating
on the partnership's senior unsecured notes on CreditWatch with
positive implications. We also placed our issue-level ratings on
operating subsidiary Tesoro Logistics Finance Corp. on CreditWatch
with positive implications.
"The rating action reflects our view that the announced transaction
places the partnership on a more sustainable growth path and that
credit measures will be in line with the key drivers we set for an
upgrade. In terms of ANDX's financial risk profile, the transaction
reduces the partnership's cost of capital over the longer-term, and
the 6% distribution growth rate provides a greater cushion in the
distribution coverage ratio and is more supportive of credit, in
our view. We also see a clear path to achieving a debt-to-EBITDA
ratio of about 4x by the end of 2017, and we'd expect the
partnership to continue to finance growth in such a manner as to
maintain the ratio in the 4x area to support the upgrade at close.
"We believe the integration of WNRL somewhat enhances ANDX's
business risk profile, but not enough to change our current
assessment of satisfactory. However, we think the acquisition gives
ANDX a good foothold in the Permian basin and will provide the
partnership with opportunities to expand its asset base in the
region organically at more reasonable EBITDA multiples than
acquiring assets. We also think the acquisition adds to the asset
backlog that can be used to drop down assets to supplement organic
growth.
"We will look to resolve the CreditWatch listing sometime in the
fourth quarter of 2017, when the transaction closes. At that time,
we expect to raise the rating one notch to 'BBB-'."
ARMSTRONG ENERGY: Incurs $17.2 Million Net Loss in Second Quarter
-----------------------------------------------------------------
Armstrong Energy, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q reporting a net loss
of $17.17 million on $60.90 million of revenue for the three months
ended June 30, 2017, compared to a net loss of $15 million on
$60.30 million of revenue for the three months ended June 30,
2016.
For the six months ended June 30, 2017, the Company reported a net
loss of $32.62 million on $120.01 million of revenue compared to a
net loss of $28.44 million on $120.75 million of revenue for the
same period during the prior year.
The increase in net loss of $2.2 million and $4.2 million for the
three and six months ended June 30, 2017, as compared to the same
periods of the prior year is due to a decline in gross margin
period over period, as well as an increase in interest expense and
an increase of costs associated with evaluating strategic
alternatives in 2017, partially offset by the recognition of a gain
on disposal of fixed assets of $0.7 million during the three and
six months ended June 30, 2017, as compared to the same period of
2016.
As of June 30, 2017, Armstrong Energy had $308.95 million in total
assets, $435.3 million in total liabilities and a total
stockholders' deficit of $126.3 million.
Costs of coal sales of $51.7 million for the three months ended
June 30, 2017, is 2.1% higher than the comparable period of the
prior year, while cost of coal sales of $103.0 million for the six
months ended June 30, 2017, was 0.3% lower than the six months
ended June 30, 2016. On a per ton basis, cost of coal sales for
the three and six months ended June 30, 2017, totaled $34.51 and
$34.69, respectively, which represents a decrease of $1.30 per ton
and $1.71, as compared to the same periods of 2016. This decrease
in per ton amounts is primarily due to the closure of the Company's
Parkway underground mine in October 2016, which was a higher cost
operation, and improved operating efficiency at its underground
mines from increased production due to higher demand for higher
quality coal, partially offset by higher overall costs at our
surface operations from mining in higher ratio reserves.
General and administrative (G&A) expenses were $3.2 million for the
three months ended June 30, 2017, which was 8.8% higher than the
comparable period of 2016. G&A expenses of $6.1 million for the
six months ended June 30, 2017, were 4.7% lower than the six months
ended June 30, 2016. The increase in the three months ended June
30, 2017, as compared to the same period of 2016, is due primarily
to higher expenses for professional services ($0.1 million) and
insurance costs ($0.1 million), while the decrease in the six
months ended June 30, 2017, as compared to the same period of 2016,
is due primarily to lower expenses for labor and benefits of $0.5
million.
During the three months ended June 30, 2017 and 2016, the Company
recognized non-cash impairment charges of $3.4 million and $3.4
million, respectively. The current year charge is related to the
write-off of certain mine development costs associated with the
cancellation of a mineral reserve lease in Union and Webster
Counties, Kentucky, whereas the prior year charge is related to the
write-off of certain previously paid advance royalties that could
no longer be recouped upon the renewal of the aforementioned
mineral reserve lease.
Adjusted EBITDA of $5.0 million and $8.1 million for the three and
six month periods ended June 30, 2017, is 29.2% and 29.5% lower
than the comparable periods of the prior year. The decrease
resulted primarily from the inclusion in Adjusted EBITDA of the
cash portion of production royalties paid to Thoroughbred
Resources, LP (Thoroughbred) of $1.9 million and $3.8 million for
the three and six months ended June 30, 2017, respectively, which
began Jan. 1, 2017, pursuant to existing lease terms and a
settlement agreement the Company reached with Thoroughbred that
became effective March 29, 2017, as well as a decline in gross
margin, partially offset by the recognition of a gain on disposal
of fixed assets during the second quarter of 2017.
The principal indicators of the Company's liquidity are its cash on
hand and, prior to its termination on Nov. 14, 2016, availability
under its revolving credit facility. As of June 30, 2017, its
total available liquidity was $43.3 million, which was comprised
solely of cash on hand.
"We have experienced recurring losses from operations, which has
led to a substantial decline in cash flows from operating
activities. Our current operating plan indicates that we will
continue to incur losses from operations and generate negative cash
flows from operating activities. In addition, we entered into a
settlement agreement with our affiliate, Thoroughbred, effective
March 29, 2017, whereby we agreed, among other things, to begin
paying Thoroughbred all production royalties earned on or after
January 1, 2017 in cash, as permitted by the existing lease terms.
"Furthermore, we are currently in default pursuant to the terms of
the Indenture (the Indenture) governing our 11.75% Senior Secured
Notes due 2019 (the Notes) as a result of failing to make the
$11.75 million interest payment due on the Notes on June 15, 2017.
On July 16, 2017, we entered into a forbearance agreement (the
Forbearance Agreement) with holders who collectively beneficially
own or manage in excess of 75% of the aggregate principal amount of
the Notes (the Holders), whereby the Holders have agreed to forbear
from exercising their rights and remedies under the Indenture or
the related security documents through the earlier of August 14,
2017 or an event of termination, as set forth in the Forbearance
Agreement (the Forbearance Period), with respect to the default as
a result of our failure to make the June 15, 2017 interest
payment.
"We also have other debt obligations entered into to finance the
acquisition of certain equipment and land. Certain of these
financing agreements include cross-default or cross-event of
default provisions. As a result of our default under the
Indenture, the lenders that are party to certain of these
agreements could elect to declare some or all of the amounts
outstanding as immediately due and payable.
"Our continuing operating losses, negative cash flow projections,
Indenture default and other liquidity risks raise substantial doubt
about whether we will meet our obligations as they become due over
the next year. As a result of this, as well as the continued
uncertainty around future coal fundamentals, we have concluded
there exists substantial doubt regarding our ability to continue as
a going concern.
"Due to our current financial outlook, we have undertaken steps to
preserve our liquidity and manage operating costs, including
controlling capital expenditures. Beginning in 2015, we undertook
steps to enhance our financial flexibility and reduce cash outflows
in the near term, including a streamlining of our cost structure
and anticipated reductions in production volumes and capital
expenditures. In addition, we have engaged financial and legal
advisers to assist in restructuring our capital and evaluating
other potential alternatives to address the impending liquidity
constraints. With the assistance of our advisers, we are actively
negotiating the terms of a restructuring with the Holders of the
Notes with the objective of reaching an agreement by the end of the
Forbearance Period. Until any definitive agreements are negotiated
in their entirety and executed, and the transactions contemplated
thereby are consummated, there can be no assurance that any
restructuring transaction will be completed by the end of the
Forbearance Period or at all. Furthermore, it may be difficult to
come to an agreement that is acceptable to all of our creditors,
and there can be no assurance that any restructuring will be
possible at all. Failure to reach an agreement on the terms of a
restructuring with our creditors, including the Holders, would have
a material adverse effect on our liquidity, financial condition and
results of operations. It may be necessary for us to file a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code in order to implement a restructuring, or our
creditors could force us into an involuntary bankruptcy or
liquidation," the Company stated in the filing.
Armstrong currently has approximately 5.3 million tons committed
and priced for 2017. Capital expenditures for 2017 are expected to
be in the range of $12.0 million to $14.0 million. With respect to
any significant development projects, the Company plans to defer
them to time periods beyond 2017 and will continue to evaluate the
timing associated with those projects based on changes in overall
coal supply and demand.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/5JAtRl
About Armstrong
Armstrong Energy, Inc., is a diversified producer of low chlorine,
high sulfur thermal coal from the Illinois Basin, with both surface
and underground mines. The Company markets its coal primarily to
proximate and investment grade electric utility companies as fuel
for their steam-powered generators. Based on 2015 production, the
Company is the fifth largest producer in the Illinois Basin and the
second largest in Western Kentucky.
Armstrong reported a net loss of $58.83 million on $253.9 million
of revenue for the year ended Dec. 31, 2016, compared to a net loss
of $162.1 million on $360.9 million of revenue for the year ended
Dec. 31, 2015.
Ernst & Young LLP, in St. Louis, Missouri, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016, citing that the Company incurred a substantial
loss from operations and has a net capital deficit as of and for
the year ended Dec. 31, 2016. The Company's operating plan
indicates that it will continue to incur losses from operations,
and generate negative cash flows from operating activities during
the year ended Dec. 31, 2017. These projections and certain
liquidity risks raise substantial doubt about the Company's ability
to meet its obligations as they become due within one year after
March 31, 2017, and continue as a going concern.
* * *
In July 2017, S&P Global Ratings lowered its corporate credit and
issue-level ratings on Armstrong Energy to 'D' from 'CC' and
removed the ratings from CreditWatch, where it placed them with
negative implications on June 16, 2017. S&P said, "The downgrade
reflects Armstrong's failure to make an $11.75 million interest
payment on the 11.75% senior secured notes within the 30-day grace
period that expired on July 17, 2017. The interest payment on the
notes was originally due on June 15, 2017, after which the company
exercised its 30-day grace period. We lower the rating to 'D' if
the missed interest payment is not made within 30 calendar days
after the due date, even if a forbearance agreement extends the
time to make such payment."
BADGEROW JACKSON: Hires Christian McLaughlin as Bankruptcy Counsel
------------------------------------------------------------------
Badgerow Jackson, LLC filed an ex-parte application to the U.S.
Bankruptcy Court for the Southern District of California to employ
Christian McLaughlin as bankruptcy counsel.
The Debtor requires Mr. McLaughlin to:
(a) advise and assist the Debtor with respect to compliance
with the U.S. Trustee Chapter 11 Notices, Guides and
revisions;
(b) advise the Debtor regarding matters of bankruptcy law,
including the rights and remedies of the Debtor with regard
to its assets and with respect to the claims of creditors;
(c) represent the Debtor in a proceedings or hearings in the
Bankruptcy Court and, subject to separate agreement, in any
action on any court where the Debtor's rights under the
Bankruptcy Code may be litigated or affected;
(d) conduct examinations of witnesses, claimants, or adverse
parties and to prepare and assist in the preparation of
reports, accounts, and pleadings related to the case;
(e) assist the Debtor in the negotiations, formulation,
confirmation, and implementation of a Chapter 11 plan of
reorganization; and
(f) take other action and perform other services as the Debtor
may require of Mr. McLaughlin with the Chapter 11
proceeding.
Mr. McLaughlin's hourly rate for representation is $400 per hour.
The counsel will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The Debtor arranged for a $10,000 retainer to provide Mr.
McLaughlin with non-bankruptcy estate funds to initiate his
employment.
The Debtor originally employed, and the Court approved the
employment of, Andy Epstein as counsel in the proceeding. On, or
around, August 4, 2017, Mr. Epstein filed a Motion to Withdraw as
Attorney, and on August 8, 2017, the Court granted his motion.
Mr. McLaughlin assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estate.
The counsel can be reached at:
Christian McLaughlin, Esq.
LEGAL OBJECTIVE
701 Palomar Airport Road, Ste. 300
Carlsbad, CA 92011
Tel: (760) 431-2200
Fax: (760) 431-2244
About Mako One Corporation
Mako One Corporation, based in Carlsbad, California, and its
affiliate Badgerow Jackson LLC filed a Chapter 11 petition (Bankr.
S.D. Cal. Lead Case No. 17-03650) on June 20, 2017. The Hon.
Louise DeCarl Adler preside over the case. Christian McLaughlin,
Esq., serves as bankruptcy counsel.
In its petition, the Debtors estimated $10 million to $50 million
in both assets and liabilities. The petition was signed by Bruce
Debolt, CEO.
BASEBALL PROTECTIVE: Disclosures OK'd; Plan Hearing on Sept. 19
---------------------------------------------------------------
The Hon. James P. Smith of the U.S. Bankruptcy Court for the Middle
District of Georgia has approved Baseball Protective, LLC's
disclosure statement dated June 12, 2017, referring to the Debtor's
plan of reorganization.
A hearing for the consideration of confirmation of the Plan and any
objections to confirmation of the Plan will be held on Sept. 19,
2017, at 11:00 a.m.
Any objection to confirmation of the Plan must be filed by Sept.
12, 2017. Ballots must be filed on or before Sept. 12, 2017.
About Baseball Protective LLC
An involuntary Chapter 11 petition (Bankr. M.D. Ga. Case No.
16-31159) was commenced against Baseball Protective LLC, formerly
known as EvoSheild LLC, by petitioners Matt Stover, KB3Interests,
LLC, and Juanita Markwalter on Oct. 31, 2016. The Petitioners
hired McGuireWoods LLP and Crain Caton & James, P.C., as counsel.
Headquartered in Bogart, Georgia, the Debtor manufactures
protective sports gear for professional and college sports team.
The Debtor subsequently filed a consent to the bankruptcy petition.
On Dec. 1, 2016, an order of relief under Chapter 11 of the
Bankruptcy Code was entered in the case. The Debtor is operating
as a debtor-in-possession pursuant to 11 U.S.C. 1107 and 1108.
The Debtor tapped Lamberth, Cifelli, Ellis & Nason, P.A., as
counsel. The Debtor also hired Asbury Law as special tax counsel.
The Debtor was acquired by Wilson Sporting Goods Co. in October
2016. As of Nov. 17, 2016, the Debtor operates as a subsidiary of
Wilson Sporting Goods Co.
On June 12, 2017, the Debtor filed a disclosure statement, which
explains its proposed Chapter 11 plan of reorganization.
BEAVER-VISITEC INT'L: Moody's Affirms B3 CFR; Outlook Remains Neg.
------------------------------------------------------------------
Moody's Investors Service affirmed certain ratings of
Beaver-Visitec International Holdings, Inc. including the B3
Corporate Family Rating and B3-PD Probability of Default Rating. At
the same time, Moody's downgraded the rating on BVI's first lien
senior secured credit facilities to B3 from B2. The rating outlook
remains negative.
These rating actions follow the announcement that BVI is issuing
incremental first-lien debt to repay all of its existing second
lien debt. The refinancing is credit positive because it will
result in interest cost savings of about $3 million annually. The
transaction is leverage-neutral, but the elimination of second-lien
debt in the capital structure results in reduced loss absorption
for first-line debt-holders, resulting in the lower rating. The
Caa2 rating on the senior secured second lien term loan will be
withdrawn upon the close of the transaction.
Ratings affirmed:
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
Ratings downgraded:
Senior secured revolving credit facility to B3 (LGD4) from B2
(LGD3)
Senior secured first lien term loan to B3 (LGD4) from B2 (LGD3)
The rating outlook is negative.
RATINGS RATIONALE
BVI's B3 CFR reflects its small absolute size based on sales and
earnings and high concentration in low tech offerings within a
niche product area. The rating also reflects its high financial
leverage. Key offsets to its small size and lack of diversity are
its long-standing presence in the cataract surgery space and low
dependence on its top customers. BVI's constant currency sales
growth will likely remain in the mid-single digit range over the
coming year. However, challenges include the potential for more
customers to purchase bundled products (at the exclusion of BVI
products) or exert more pricing pressure. In addition, alternative
technology, although still used in a small percent of cases, will
grow.
The negative outlook reflects Moody's concerns that BVI will not
achieve or sustain leverage of about 5.5 times over the next 12 to
18 months.
BVI's ratings could be downgraded if revenues or profitability
weaken, if positive free cash flow is not maintained or if
debt/EBITDA is sustained above 5.5 times. Over time, BVI's ratings
could be upgraded if it materially increases scale and
diversification. If BVI can maintain a solid liquidity profile and
can sustain debt/EBITDA below 4.0 times, it could support an
upgrade.
The B3 rating on the first-lien senior secured credit facilities
mirrors the B3 Corporate Family Rating given that the company's
debt structure after the refinancing will consist solely of
first-lien debt.
Beaver-Visitec International Holdings, Inc. (BVI), headquartered in
Waltham, Massachusetts, is a global manufacturer of largely
disposable products used in eye surgeries, primarily cataract
procedures. BVI was purchased by equity sponsor TPG Capital, from
RoundTable Healthcare Partners, in August 2016.
The principal methodology used in these ratings was Medical Product
and Device Industry published in June 2017.
BEAVER-VISITEC INT'L: S&P Keeps B 1st Lien Loan Rating Amid Upsize
------------------------------------------------------------------
S&P Global Ratings said its issue-level rating on ophthalmic
microsurgical products manufacturer Beaver-Visitec International
Holdings Inc.'s first-lien term loan due 2023 remains 'B' following
the company's proposed $84 million additional offering. The company
will use proceeds primarily to fully repay $80 million outstanding
under the second-lien loan due 2024.
S&P said, "The recovery rating on the first-lien debt remains '3',
which indicates our expectation for meaningful recovery (50%-70%;
rounded estimate: 50%) in the event of a payment default. However,
we revised our estimate of recovery down slightly to about 50% from
about 60% to reflect the increase in the proportion of the capital
structure consisting of first-lien debt.
"Our 'B' corporate credit rating on the company continues to
reflect our assessment of its business risk as weak and financial
risk as highly leveraged.
"Our assessment of the company's business risk profile reflects the
company's small scale (about $150 million of revenues in the last
12 months as of June 30, 2017), a very narrow therapeutic
concentration with about 80% of revenues generated by products used
in cataract procedures, the presence of competitors with
substantially greater size and financial strength, and the reliance
on only a few manufacturing sites. These characteristics are only
partially offset by good product, customer, and geographic
diversity, and a degree of product differentiation and
manufacturing expertise that supports brand loyalty and leads to
some pricing flexibility.
"We expect the abovementioned refinancing to decrease the company's
interest expenses and to enhance its free cash flow by around $3.5
million per year. However, we continue to view the company's
financial profile as highly leveraged, given our expectation for
adjusted debt leverage of 6.3x for 2017, and 5.5x for 2018. We
expect leverage to generally remain above 5x and expect the
company's financial policy to be aggressive, given its ownership by
private equity investors. We expect the company to generate
approximately $15 million to $25 million in annual free cash flow,
given modest capital expenditures needs."
RECOVERY ANALYSIS
Key analytical factors:
-- S&P's recovery analysis reflects the proposed capital structure
consisting of a $30 million revolver and a $300 million term loan,
both secured by a first-lien and pari passu with each other.
-- S&P's default scenario contemplates deterioration stemming from
an operational issue or intensified competition from larger and
financially stronger competitors.
-- S&P's valuation uses an enterprise value approach, because it
believes that creditors would realize greater recoveries through a
reorganization than through a liquidation.
-- S&P also assume that, in a hypothetical bankruptcy scenario,
Beaver-Visitec would have drawn 85% under its $30 million revolver
facility.
-- S&P also assume a 150-basis-point increase in margins on the
revolving credit facility, reflecting the simulated credit
deterioration under its scenario and the triggering of the
springing financial covenant.
Simulated default assumptions:
-- Simulated year of default: 2020
-- EBITDA at emergence: $27 mil.
-- EBITDA multiple: 5.5x
Simplified waterfall:
-- Net enterprise value (after 5% administrative costs): $173
mil.
-- Valuation split in % (obligors/nonobligors): 45/55
-- Collateral value available to first-lien secured creditors:
$140 mil.
-- Secured first-lien debt: $329 mil.
--Recovery expectations: 50%-70%; rounded estimate: 50%
Notes: All debt amounts include six months' prepetition interest.
RATINGS LIST
Beaver-Visitec International Holdings Inc.
Corporate Credit Rating B/Stable/--
Rating Unchanged; Recovery Estimate Revised
To From
Beaver-Visitec International Holdings Inc.
TPG Bedrock Acquisition, Inc.
First-Lien Term Loan Due 2023 B B
Recovery Rating 3 (50%) 3 (60%)
Rating Withdrawn
US$80 mil 2nd lien bank loan due 2024 NR B-
Recovery Rating NR 5 (15%)
BIOSCRIP INC: Gabelli Funds, et al, Have 9.19% Stake as of June 30
------------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Gabelli Funds, et al., reported beneficial ownership of
11,721,893 shares, representing 9.19% of the 127,475,226 shares
outstanding as reported in BioScrip, Inc.'s most recently filed
Form 10-Q for the quarterly period ending June 30, 2017. The
amendment to Schedule 13D was filed to reflect a decrease in the
percent of the outstanding shares beneficially owned by Gabelli
Funds, et al., which is due, in part, to an increase in the shares
outstanding as reported by BioScrip on Aug. 8, 2017. Gabelli
Funds, et al., beneficially own those Securities as follows:
Shares of % of Class of
Name Common Stock Common
---- ------------ -------------
GAMCO Asset Management Inc. 799,851 0.63%
Gabelli Funds, LLC 10,228,742 8.02%
Teton Advisors, Inc. 678,000 0.53%
Gabelli & Co. Investment Advisers 20,350 0.01%
GBL 2,300 0.00%
A full-text copy of the regulatory filing is available at:
https://is.gd/zVpVUy
About Bioscrip
Headquartered in Denver, Colo., BioScrip, Inc., is a national
provider of home infusion services. The company's clinical
management programs and services provide access to prescription
medications for patients with chronic and acute healthcare
conditions, including gastrointestinal abnormalities, infectious
diseases, cancer, pain management, multiple sclerosis, organ
transplants, bleeding disorders, rheumatoid arthritis, immune
deficiencies and heart failure.
BioScrip incurred a net loss attributable to common stockholders of
$50.59 million for the year ended Dec. 31, 2016, compared to a net
loss attributable to common stockholders of $309.51 million for the
year ended Dec. 31, 2015.
As of June 30, 2017, Bioscrip disclosed $613.38 million in total
assets, $600 million in total liabilities, $2.63 million in series
A convertible preferred stock, $74.22 million in series C
convertible preferred stock, and a $63.48 million total
stockholders' deficit.
* * *
In August 2017, Moody's Investors Service affirmed BioScrip, Inc.'s
'Caa2' Corporate Family Rating (CFR). BioScrip's 'Caa2' CFR
reflects the company's very high leverage and weak liquidity.
As reported by the TCR on July 7, 2017, S&P Global Ratings affirmed
its 'CCC' corporate credit rating on home infusion services
provider BioScrip Inc. and removed the rating from CreditWatch,
where it was placed with negative implications on Dec. 16, 2016.
The outlook is positive.
CANNABIS SCIENCE: Incurs $4.02 Million Net Loss in First Quarter
----------------------------------------------------------------
Cannabis Science, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common shareholders of $4.02 million on $3,733 of
revenue for the three months ended March 31 2017, compared to a net
loss attributable to common shareholders of $3.29 million on $2,925
of revenue for the three months ended March 31, 2016.
As of March 31, 2017, Cannabis had $2.33 million in total assets,
$4.76 million in total liabilities and a total stockholders'
deficit of $2.42 million.
The Company has a working capital deficit of $4,050,319 as of March
31, 2017, compared to a working capital deficit of $2,983,206 as of
Dec. 31, 2016. There are insufficient liquid assets to meet
current liabilities or sustain operations through 2016 and beyond
and the Company must raise additional capital to cover the working
capital deficit. Management is working on plans to raise
additional capital through private placements and lending
facilities. The Company currently is relying on existing cash and
loans from stockholders to meet its obligations and sustain
operations.
The Company has promissory note payment commitments of $1,340,156
due to stockholders and currently is in default. The Company is
negotiating with the debtors to extend the notes payable. In
addition, the Company has convertible promissory notes payment
commitment of $670,407 to Raymond C. Dabney, CEO/Director of the
Company and $860,790 to Royalty Management Services Corp.
The Company has additional capital resource requirements for
personnel, supplies, research and development, laboratory,
cultivation equipment, green houses and scientific equipment of
approximately $6,000,000 over the next 12 months. These capital
disbursements are dependent on management's successful raising of
capital through private placements and/or lending facilities.
The Company is not currently in good short-term financial standing.
The Company anticipates that it may only generate limited revenues
in the near future and it will not have enough positive internal
operating cash flow until it can generate substantial revenues,
which may take the next two years to fully realize. There is no
assurance it will achieve profitable operations. The Company has
historically financed its operations primarily by cash flows
generated from the sale of its equity securities and through cash
infusions from officers and outside investors in exchange for debt
and/or common stock.
The Company is working on several business development projects to
generate revenues, including: investing in the cultivation of
leased properties with Members of the Washoe Tribal Allotment,
Winnemucca Tribal Allotment, HRM Farm and Free Spirit Organics, LLC
in Nevada and California that will generate increased license,
royalty revenue, Cannabis/Hemp products sales, and other strategic
acquisitions to support product development, production, and
distribution of newly acquired or manufactured cannabis and hemp
based products. The Company's drug development through its
laboratory services to facilitate new inhalation study for
asthma/COPD and other respiratory conditions. In addition, the
Company signed an agreement with Equi-Pharm for the
commercialization of pet products for distribution in California.
Notwithstanding, the Company said there can be no assurance that
these will be successful in generating revenues in 2017.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/IHdXtr
About Cannabis Science
Cannabis Science, Inc., was incorporated under the laws of the
State of Colorado, on Feb. 29, 1996, as Patriot Holdings, Inc.
Cannabis is at the forefront of medical marijuana research and
development. The Company works with world authorities on
phytocannabinoid science targeting critical illnesses, and adheres
to scientific methodologies to develop, produce, and commercialize
phytocannabinoid-based pharmaceutical products.
Cannabis reported a net loss of $10.19 million on $9,263 of revenue
for the year ended Dec 31, 2016, compared with a net loss of $19.14
million on $44,227 revenue for the year ended Dec. 31, 2015.
Turner, Stone & Company, L.L.P., issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016. The Company has suffered recurring losses
from operations since inception, has a working capital deficiency
and will need to raise additional capital to fund its business
operations and plans. Furthermore, there is no assurance that any
capital raise will be sufficient to complete the Company's business
plans. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
CANNABIS SCIENCE: Reports Restated Net Loss of $10.2M for 2016
--------------------------------------------------------------
Cannabis Science, Inc., filed with the Securities and Exchange
Commission an amendment no. 1 on Form 10-K/A to its annual report
that was originally filed on April 17, 2017, to reflect a
restatement of the Company's financial statements for the year
ended Dec. 31, 2016. The restatement corrects financial statement
errors that arouse from the Company's oversight to account for
payments made by Royalty Management Services Corp. on its behalf.
The errors occurred during the last quarter of 2016 and first four
months of 2017.
The Company previously reported a net loss of $9.99 million for the
year ended Dec. 31, 2016. As restated, the Company reported a net
loss of $10.19 million for the year ended Dec. 31, 2016.
The restatement relates to unrecorded management fees due to RMS
and payments made by RMS on behalf of the Company. The following
is a description of the transactions underlying the restatements:
1. The Company's issued a $710,790 and a $150,000 convertible
promissory note to RMS, on Oct. 1, 2016, and Dec. 31, 2016,
respectively, for unpaid management fees under a contract
with RMS.
2. RMS made payments and incurred obligations on behalf of the
Company which were reimbursable to RMS and represented
obligations of the Company. These payments and
obligations, not previously recognized are as follows:
- Four payments to consultants for services totaling
$30,000 that should have been recognized in operating
expenses
- Three payments for accounts payable totaling $23,476
- Nine payments totaling $185,000 to property owners of
Washoe Tribal Allotments in Douglas County, Nevada,
representing partial payment of Property Farming Rights
totaling $640,000 and covering 16 Acres at a rate of
$40,000 per acre. The balance owing to the Washoe
Tribal members of $455,000 should have been included in
accounts payable
- Three payments totaling $65,000 to the Family Tribal
Allotments of the Winnemucca Tribe of Humbolt County,
Nevada for cultivation working capital related to 320
acres of land that should have been included in accounts
payable
The convertible promissory notes shown in 1 above are convertible
to the common shares of the Company at $0.001 a share within
one-year or other mutually agreed upon price. These notes should
have been recorded based on the maximum capped amount on the
$860,790 face value of the promissory notes as per ASC 470-20-25,
as additional paid-in capital with recognition of a like amount of
prepaid interest discount offset against the note balance.
Recognition of the convertible promissory notes required the
recording the amortization of the related discount of $177,698 for
the three months ended Dec. 31, 2016, as interest expense and
recognition of the property license fees required the recording the
related amortization of $1,052 from the date of the agreements.
The net result is an increase of General and Administrative
expenses of $31,052, an increase of Depreciation and Amortization
of $1,052, an increase of Interest Expense of $177,698 for a total
increase in the Net Loss of $208,750. The total impact on the
balance sheet was a $576,521 in Receivables, a $703,948 net
increase in Property Farming Rights, a $451,605 net increase in
Accounts Payable, a $177,698 net increase in Notes Payable, a
$860,790 increase in Additional Paid-in Capital, a $208,750
increase in Accumulated Deficits, and a $874 increase in Cumulative
exchange translation from the 10-K filed on April 17, 2017.
In addition to the restatement of financial information discussed
above, the Statement of Cash Flows required reclassification of
both years of 2016 and 2015 to present effect of exchange rate
changes on cash on its own section. Furthermore, report No other
changes have been made to the 10-K, and this Amendment has been
updated to reflect events occurring subsequent to the filing of the
10-K.
A full-text copy of the Form 10-K/A is available for free at:
https://is.gd/KPJSrP
About Cannabis Science
Cannabis Science, Inc., was incorporated under the laws of the
State of Colorado, on Feb. 29, 1996, as Patriot Holdings, Inc.
Cannabis is at the forefront of medical marijuana research and
development. The Company works with world authorities on
phytocannabinoid science targeting critical illnesses, and adheres
to scientific methodologies to develop, produce, and commercialize
phytocannabinoid-based pharmaceutical products.
Cannabis reported a net loss of $10.19 million on $9,263 of revenue
for the year ended Dec 31, 2016, compared with a net loss of $19.14
million on $44,227 revenue for the year ended Dec. 31, 2015.
Turner, Stone & Company, L.L.P., issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016. The Company has suffered recurring losses
from operations since inception, has a working capital deficiency
and will need to raise additional capital to fund its business
operations and plans. Furthermore, there is no assurance that any
capital raise will be sufficient to complete the Company's business
plans. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
CARRINGTON FARMS: Wants to Extend Plan Exclusivity to Aug. 22
-------------------------------------------------------------
Carrington Farms Condominium Owners' Association asks the U.S.
Bankruptcy Court for the District of New Hampshire to extend the
exclusive period within which only the Debtor may file a plan from
Aug. 15, 2017, to Aug. 22, and the exclusive period within which
only the Debtor may secure acceptance of a plan from Oct. 15 to
Oct. 23.
The Debtor explains that immediately after finishing the draft
amended plan and the amended plan projections, Granite Bank fka
First Colebrook Bank made an offer with respect to the existing
loan that merits serious consideration.
The Debtor says that given a week, it may be able to deliver a
fully consensual plan and conserve the time, money and resources of
the Court and the parties.
Rue K. Toland on behalf of Granite Bank, Frank P. Spinella, Jr., on
behalf of Belletete's Inc., and Peter N. Tamposi on behalf of
Sequel Development & Management, Inc., have assented to the
Debtor's extension request.
As reported by the Troubled Company Reporter on Aug. 10, 2017, the
Court issued an order setting schedules and deadlines relating to
the Debtor's Disclosure Statement and Plan of Reorganization dated
July 12, 2017. That Order provides these schedules and deadlines:
A. The hearing on the adequacy of the Disclosure Statement is
continued from September 6, 2017 at 2:00 p.m. to October 4, 2017 at
2:00 p.m.
B. The deadline to object to the adequacy of the Disclosure
Statement is extended from August 30, 2017 to September 27, 2017.
C. The Exclusive Filing Period is extended from July 15, 2017
to August 15, 2017.
D. The Exclusive Acceptance Period is extended from September
15, 2017 to October 15, 2017.
About Carrington Farms
Condominium Owners Association
Carrington Farms Condominium Owners' Association, a not for profit,
voluntary association organized under RSA 292, is responsible for
the management and operation of Carrington Farms. It is managed by
NH Core Properties, LLC, acting through Tom Carroll. Although it
was administratively dissolved, Carrington Farms Condominium
Owners' Association has applied for reinstatement.
Carrington Farms Condominium Owners' Association filed a Chapter 11
bankruptcy petition (Bankr. D.N.H. Case No. 17-10137) on Feb. 3,
2017. Gary Woscyna, President, signed the petition. At the time
of filing, the Debtor estimated $100,000 to $500,000 in assets and
$500,000 to $1 million in liabilities.
William S. Gannon, Esq., at William S. Gannon PLLC is serving as
counsel to the Debtor.
CHARLES STREET: Ct. to Set Deadline for Law Firms to File Complaint
-------------------------------------------------------------------
Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District
of Massachusetts will establish a deadline for the law firms Pierce
Atwood LLP and Choate, Hall & Stewart LLP to file complaints to
determine the validity and extent of their asserted liens and
related deadlines.
The firms, as former attorneys for secured creditor OneUnited Bank,
have separately filed notices that they assert attorneys' liens
under MASS. GEN. LAWS ch. 221, section 50 on the Bank's claims in
this case and the proceeds thereof, including certain sale proceeds
being held in escrow, for unpaid fees and expenses incurred in
connection with their representation of the Bank in the case. Now
the chapter 11 debtor and debtor‐in‐possession, the Charles
Street African Methodist Episcopal Church of Boston, has proposed a
plan of reorganization pursuant to which it would distribute the
escrowed proceeds in partial satisfaction of the Bank's secured
claims; and the same plan requires quantification of the extent to
which the Bank's post-petition attorney's fees may, pursuant to 11
U.S.C. section 506(b), be added to one of its secured claims.
The Church has argued that (i) the Bankruptcy Court has exclusive
jurisdiction to determine and enforce the Firms' attorneys' liens,
(ii) that, by virtue of their notices of attorney's liens, the
Firms have commenced proceedings in the bankruptcy court to
determine and enforce the attorneys' liens, and (iii) that, given
the substantial overlap of factual, evidentiary, and legal issues
between the section 506(b) litigation and the attorney's lien
litigation, proceedings to determine and enforce the attorneys
liens should be tried with the section 506(b) litigation. The Firms
support this proposal. The Bank opposes it and argues that the
bankruptcy court lacks both jurisdiction over and authority to
determine the attorneys' liens and, in any event, should exercise
its discretion to abstain.
Upon careful consideration of the arguments, Judge Bailey asserts
that the court has only "related to" jurisdiction over the
attorneys' lien disputes.
Judge Bailey agrees with the Bank that the burden on the Bank, the
Church, this case, and the bankruptcy court, perhaps also the
district court, would be considerably intensified by adjudicating
the lien claims in conjunction with the section 506(b) litigation,
all as part of the plan confirmation process. However, the
overriding consideration here is that this joinder is necessary to
the section 506(b) litigation. The Bank has structured its secured
claim for post-petition fees to include reliance on all fees for
which it has been billed by both Pierce and Choate, a large but
unspecified portion of which it contends, vis‐a‐vis the Firms,
it is not liable for. To be sure, the Bank is entitled to a credit
for amounts already paid, and the Firms are not entitled to liens
for fees already paid, but nothing in the Bank's claim removes any
particular fees or services from its claim.
The Bank is in the admittedly difficult position of arguing against
the Firms that it does not owe fees and, at the same time,
preserving its right to compensation from the Church (and the
guarantor) for reimbursement of the same fees should the Bank
ultimately be determined liable for them. The Bank is free to fight
on both fronts and, in doing so, to take diametrically opposed
positions. Still, in the final analysis, both cannot be true; the
Bank cannot recover from the Church fees for which it is not
obligated to the Firms.
The Bank itself should want to adjudicate the question of its
liability first, as it is difficult to see how it can establish
that it has incurred fees while continuing to deny liability for
the same. Abstention, therefore, is not warranted. If the Bank
demands a jury and does not consent under section 157(e), this may
require that the lien litigation and the section 506(b) litigation
be tried together in the district court and decided separately from
the balance of the plan confirmation process. It may also delay the
confirmation hearing, to allow the lien litigation to ramp up. If
necessary, then so be it. All of this will be worked out later.
A full-text copy of Judge Bailey's Memorandum Decision dated August
16, 2017, is available at:
http://bankrupt.com/misc/mab12-12292-1106.pdf
About Charles Street
Charles Street African Methodist Episcopal Church --
http://www.csrrc.org/-- is located in Roxbury, Massachusetts. Its
mission is to advocate for the needs of community residents and to
strengthen individuals, families, and the community by providing
social, educational, economic, and cultural services.
The Debtor filed for Chapter 11 protection (Bankr. D. Mass. Case
No. 12-12292) on March 20, 2012, to prevent its lender, OneUnited
Bank, from foreclosing on a $1.1 million loan and auctioning off
the church.
The Debtor estimated both assets and debts of between $1 million
and $10 million.
The Debtor is represented by the Boston firm Ropes & Gray LLP,
which is working free of charge. The Debtor tapped AlixPartners,
LLP as restructuring advisor, and Steven G. Elliott as commercial
and residential real estate appraiser for purposes of providing
expert appraisal testimony.
David S. Williams, CEO of Deloitte Financial Advisory Services LLP,
was appointed examiner.
CHINA MEDICAL: No Damages Award for Deutsches From Fidelity
-----------------------------------------------------------
Jon Hill, writing for Bankruptcy Law360, reports that a Financial
Industry Regulatory Authority (FINRA) arbitration panel did not
fully support William and Peter Deutsch's allegations that Fidelity
Brokerage LLC made them lose their chance of taking control of
China Medical Technologies Inc. through stock purchases.
"Whatever Fidelity did or did not do would not have altered the
failure of claimants' investment because the events that doomed the
strategy were either external to Fidelity or internal to [China
Medical]," the panel said, Law360 cites.
Law360 relates that the Deutsches started purchasing China Medical
shares in 2011, grew their stake in the company to nearly 12
million shares by mid-2012, and eventually became interested in
acquiring a controlling interest in China Medical to be able to
make a deal with a strategic buyer and save the company from
liquidation. The Deutsches said Fidelity foiled this effort when
it stopped accepting China Medical stock purchase orders from them
in July in the belief that they were "effectuating a short squeeze
in the stock," Law360 points out.
The panel did not agree with awarding damages to the Deutsches for
Fidelity's alleged misconduct; however it agree with the Deutsches
that Fidelity had botched its responsibilities in that the
brokerage failed to communicate effectively with the Deutsches
before cutting off their stock purchases, Law360 relays.
About China Medical
China Medical Technologies Inc., a maker of diagnostic products,
filed a Chapter 15 bankruptcy petition in New York to locate money
fraudulently transferred by its principals.
The Debtor, which has been taken over by a trustee, is undergoing
corporate winding-up proceedings before the Grand Court of the
Cayman Islands. Kenneth M. Krys, the joint official liquidator,
wants U.S. courts to recognize the Cayman proceeding as the
"foreign main proceeding". The liquidator filed a Chapter 15
petition for China Medical (Bankr. S.D.N.Y. Case No. 12-13736) on
Aug. 31, 2012. Curtis C. Mechling, Esq., at Stroock & Stroock &
Lavan, LLP, in New York, serves as counsel.
China Medical listed as much as $500 million in assets and debt.
Cosimo Borrelli and Yuen Lai Yee (Liz) on Nov. 29, 2012, were
appointed as liquidators of China Medical Technologies Inc.
The liquidators may be reached at:
Cosimo Borrelli
Yuen Lai Yee (Liz)
Level 17, Tower 1
Admiralty Centre
18 Harcourt Road
Hong Kong
CLINE GRAIN: Taps Halderman Real Estate as Auctioneer
-----------------------------------------------------
Cline Grain, Inc. seeks approval from the U.S. Bankruptcy Court for
the Southern District of Indiana to hire an auctioneer.
The Debtor proposes to employ Halderman Real Estate Services, Inc.
to liquidate all or part of its 1,840-acre farmland located in
Boone, Montgomery and Putnam counties in West Central India.
The firm will get a 2.5% commission if more than 800 acres is sold
at auction; 3.25% if less than 800 acres but more than 300 acres is
sold; and 3.9% commission if less than 300 acres is sold.
At the option of the Debtor, 1% of the commission may be structured
as a buyer's premium to further reduce the commission payable by
its estate, according to court filings.
F. Howard Halderman, a president of Halderman, disclosed in a court
filing that the firm is a "disinterested person" as defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
F. Howard Halderman
Halderman Real Estate Services, Inc.
1700 N. Cass Street
P.O. Box 297
Wabash, IN 46992
Phone: (800) 424-2324
About Cline Grain, et al.
Cline Grain, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ind. Case Nos. 17-80004) on Jan. 3,
2017. Chapter 11 petitions were also simultaneously filed by Cline
Transport, Inc. (Case No. 17-80005), New Winchester Properties, LLC
(17-80006), Michael B. Cline and Kimberly A. Cline (Case No.
17-00013) and Allen L Cline and Teresa A. Cline (Case No.
17-00014). Allen Cline, as authorized representative, signed the
petitions.
The cases are assigned to Judge Jeffrey J. Graham. On Jan. 10,
2017, the Court ordered the joint administration of all the
Debtors' cases under Case No. 17-80004.
The Debtors are represented by Jeffrey M. Hester, Esq., at Hester
Baker Krebs LLC.
Cline Grain, Inc. estimated under $50,000 in assets and $1 million
to $10 million in liabilities. Cline Transport, Inc. estimated
between $500,000 to $1 million in assets, while New Winchester
Properties listed $10 million to $50 million in assets. Both
Debtors listed $1 million to $10 million in liabilities.
No official committee of unsecured creditors has been appointed in
the Chapter 11 cases.
CNO FINANCIAL: Fitch Affirms BB+ Ratings on Sr. Unsec. Notes
------------------------------------------------------------
Fitch Ratings has affirmed the 'BBB-' Issuer Default Rating (IDR)
and the Insurer Financial Strength (IFS) ratings for CNO's core
insurance subsidiaries at 'BBB+'. The Rating Outlook is Stable.
KEY RATING DRIVERS
The affirmation of CNO's ratings reflects the company's good
operating performance and business profile, strong investment
profile, strong capitalization and moderate financial leverage.
CNO maintains a profitable niche position selling annuities, life
insurance and supplemental health insurance products in the
middle-income and senior markets. Key competitive strengths include
the company's well-established track record serving these markets
and its controlled distribution system.
A key rating concern is CNO's large proportional exposure to its
underperforming legacy individual long-term care (LTC) insurance
business, which has been impacted negatively by adverse
underwriting results and low interest rates. The company has
received and is actively pursuing premium rate increases on
underperforming legacy in-force business as it deems necessary;
however, such rate increases are subject to regulatory approval.
Fitch notes that the company has taken significant steps to improve
new business pricing and restructure benefit features to enhance
profitability.
Fitch considers CNO's financial performance and earnings to be
good, with relatively low volatility in recent years. The company
reported pretax operating earnings of $410 million in 2016, down
from $423 million in 2015. In first half 2017 (1H17), pretax
operating earnings increased to $214 million from $177 million for
the same period in 2016. Despite strong performance trends in 1H17,
Fitch expects CNO to continue to face earnings pressure driven by
persistently low interest rates.
Fitch considers CNO's overall portfolio credit quality to be good
with slightly less than 6% of bonds below investment grade at
year-end 2016 on a statutory basis. This is generally in line with
the life insurance industry average of 6%. However, nearly half of
the company's investment-grade bond portfolio is 'BBB' level rated
securities (47% of the portfolio at year-end 2016) compared to
roughly a third for the broader industry. The elevated allocation
to the 'BBB' category makes the portfolio potentially more
vulnerable to ratings migration in an adverse economic scenario.
Fitch considers CNO's statutory capitalization to be strong for its
current rating. The company's consolidated risk-based capital (RBC)
ratio under Fitch's consolidation methodology was 436% at year-end
2016, up modestly from 435% at year-end 2015. The company attained
a Prism score of 'Strong' based on Dec. 31, 2016 data. Fitch
expects CNO's RBC ratio to remain above 400% over the intermediate
term. The company's financial leverage ratio of approximately 19%
at June 30, 2017 remains modestly below the average for the
company's publicly traded industry peers.
RATING SENSITIVITIES
Key rating sensitivities that could lead to an upgrade for all
ratings include:
-- Significant reduction in exposure to the company's legacy
individual LTC insurance business;
-- Consistent earnings without significant special charges and
with operating return on equity above 8%;
-- No material deterioration in other credit metrics.
Key rating sensitivities that could lead to a downgrade include:
-- Combined NAIC RBC ratio less than 325% and a Prism score below
'Strong';
-- Deterioration in operating results;
-- Decline in fixed-charge coverage to below 5x;
-- Significant increase in credit-related impairments;
-- Financial leverage above 30%.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings with a Stable Outlook:
CNO Financial Group, Inc.
-- IDR at 'BBB-';
-- 4.50% senior unsecured notes due May 30, 2020 at 'BB+';
-- 5.25% senior unsecured notes due May 30, 2025 at 'BB+'.
Bankers Life and Casualty Company
Bankers Conseco Life Insurance Company
Colonial Penn Life Insurance Company
Washington National Insurance Company
-- IFS at 'BBB+'.
COMBIMATRIX CORP: Incurs $370,000 Net Loss in Second Quarter
------------------------------------------------------------
Combimatrix Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $370,000 on $4.24 million of total revenues for the three months
ended June 30, 2017, compared to a net loss of $1.23 million on
$3.10 million of total revenues for the three months ended June 30,
2016.
For the six months ended June 30, 2017, the Company recognized a
net loss of $888,000 on $8.02 million of total revenues compared to
a net loss of $2.72 million on $6.07 million of total revenues for
the six months ended June 30, 2016.
As of June 30, 2017, Combimatrix had $8.11 million in total assets,
$2.16 million in total liabilities and $5.95 million in total
stockholders' equity.
At June 30, 2017, cash and cash equivalents totaled $3.0 million,
compared to $3.7 million at Dec. 31, 2016. Cash is held primarily
in general checking accounts as well as in money market mutual
funds backed by U.S. government securities. When held, short-term
investments typically are comprised primarily of certificates of
deposits issued by U.S. financial institutions. Working capital
was $5.6 million and $6.1 million at June 30, 2017, and Dec. 31,
2016, respectively. The primary reason for the decrease in working
capital was due to lower overall cash balances at June 30, 2017,
compared to Dec. 31, 2016, driven by operating, investing and
financing activities.
"We have a history of incurring net losses and net operating cash
flow deficits. We are also deploying new services and continue to
develop commercial technologies and services. We believe that our
cash and cash equivalents as of June 30, 2017, which totaled $3.0
million, will be sufficient to meet our expected cash requirements
for current operations through and beyond the fourth quarter of
2017, when we anticipate achieving cash flow break-even status. If
the Merger is terminated, however, and we have to pay termination
fees and transaction expenses, we may not have sufficient funds to
make such payments. In order for us to continue as a going concern
beyond this point and to ultimately achieve profitability, we may
be required to obtain capital from external sources, increase
revenues and reduce operating costs. However, there can be no
assurance that our operations will become profitable or that
external sources of financing, including the issuance of debt
and/or equity securities, will be available at times and on terms
acceptable to us, or at all. The issuance of additional equity or
convertible debt securities will also cause dilution to our
stockholders. Also, in order to issue securities at a price below
the exercise prices of our outstanding warrants issued in
connection with our past preferred stock private placement
financings, we must obtain the affirmative consent of holders of at
least 67% of each series of such outstanding warrants. If we are
unable to obtain the consent of these holders in connection with
future financings, we may be unable to raise additional capital on
acceptable terms, or at all. If external financing sources are not
available or are inadequate to fund our operations, we will be
required to reduce operating costs, including research projects and
personnel, which could compromise our future strategic initiatives
and business plans."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/bMWfTq
About CombiMatrix Corporation
CombiMatrix Corporation -- http://www.CombiMatrix.com/-- provides
best-in-class molecular diagnostic solutions and comprehensive
clinical support to foster the highest quality in patient care.
CombiMatrix specializes in pre-implantation genetic diagnostics and
screening, prenatal diagnosis, miscarriage analysis and pediatric
developmental disorders, offering DNA-based testing for the
detection of genetic abnormalities beyond what can be identified
through traditional methodologies. Its testing focuses on advanced
technologies, including single nucleotide polymorphism chromosomal
microarray analysis, next-generation sequencing, fluorescent in
situ hybridization and high resolution karyotyping.
CombiMatrix reported a net loss attributable to common stockholders
of $5.78 million on $12.86 million of total revenues for the year
ended Dec. 31, 2016, compared to a net loss attributable to common
stockholders of $7.65 million on $10.08 million of total revenues
for the year ended Dec. 31, 2015.
COMMUNITY CHOICE: Reports $18.2 Million Net Loss for 2nd Quarter
----------------------------------------------------------------
Community Choice Financial Inc. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss of $18.21 million on $81.16 million of total revenues for
the three months ended June 30, 2017, compared to a net loss of
$8.94 million on $98.32 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 of $26.57 million on $166.5 million of total revenues compared
to net income of $46.86 million on $205.9 million of total revenues
for the same period a year ago.
As of June 30, 2017, Community Choice had $369.14 million in total
assets, $420.01 million in total liabilities and a total
stockholders' deficit of $50.86 million.
"We have historically funded our liquidity needs through cash flow
from operations and borrowings under our revolving credit
facilities and subsidiary notes. We believe that cash flow from
operations and available cash, together with availability of
existing and future credit facilities, will be adequate to meet our
liquidity needs for the foreseeable future. Beyond the immediate
future, funding capital expenditures, working capital and debt
requirements will depend on our future financial performance, which
is subject to many economic, commercial, regulatory, financial and
other factors that are beyond our control. In addition, these
factors may require us to pursue alternative sources of capital
such as asset-specific financing, incurrence of additional
indebtedness, or asset sales."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/zlsX1s
About Community Choice Financial Inc.
Community Choice Financial Inc. -- http://www.ccfi.com/-- is a
retailer of financial services to unbanked and underbanked
consumers through a network of 501 retail storefronts across 12
states and are licensed to deliver similar financial services over
the internet in 32 states. CCFI focuses on providing consumers
with a wide range of convenient financial products and services to
help them manage their day-to-day financial needs including
consumer loans, check cashing, prepaid debit cards, money
transfers, bill payments, and money orders.
Community Choice reported a net loss of $1.54 million for the year
ended Dec. 31, 2016, following a net loss of $70.01 million for the
year ended Dec. 31, 2015.
* * *
In April 2017, S&P Global Ratings affirmed its issuer credit rating
on Community Choice Financial Inc. (CCFI) at 'CCC'. The outlook
remains negative. S&P said an upgrade is unlikely over the next 12
months. However, S&P could revise the outlook to stable if there
is reduced refinancing risk, the pending CFPB regulations are less
stringent than expected, and the company is able to improve its
operational performance.
As reported by the TCR on Feb. 11, 2016, Moody's Investors Service
affirmed Community Choice Financial's 'Caa1' corporate family
rating. Moody's affirmation of Community Choice's ratings reflects
the company's meaningfully reduced leverage as a result of its
recently announced debt repurchases at a substantial discount.
CORBETT-FRAME INC: Taps DelCotto Law Group as Legal Counsel
-----------------------------------------------------------
Corbett-Frame, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Kentucky to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to employ DelCotto Law Group PLLC to, among
other things, negotiate with creditors and assist in the
preparation of a plan of reorganization.
The hourly rates charged by the firm for the services of its
attorneys range from $200 to $475. Paralegals charge $150 per
hour.
DelCotto received a retainer of $15,000, plus the filing fee of
$1,717. Of this amount, $4,805.10 was used to pay the firm's
pre-bankruptcy services.
Jamie Harris, Esq., disclosed in a court filing that the firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
DelCotto can be reached through:
Jamie L. Harris, Esq.
DelCotto Law Group PLLC
200 North Upper Street
Lexington, KY 40507
Tel: (859) 231-5800
Fax: (859) 281-1179
Email: jharris@dlgfirm.com
About Corbett-Frame Inc.
Corbett-Frame, Inc. owns a jewelry store in Lexington, Kentucky,
offering contemporary designer collections & customized pieces.
The Debtor is a small business Debtor as defined in 11 U.S.C.
Section 101(51D).
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Ky. Case No. 17-51607) on August 9, 2017.
Jennifer Lykins, its president, signed the petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of $1 million to $10 million.
Judge Gregory R. Schaaf presides over the case.
CRITICAL CAR: Disclosures OK'd; Plan Confirmation Hearing on Oct. 4
-------------------------------------------------------------------
The Hon. Sheri Bluebond of the U.S. Bankruptcy Court for the
Central District of California has approved Critical Car Care,
Inc.'s disclosure statement as revised.
A hearing to consider confirmation of the Debtor's second amended
plan (as revised) will be held on Oct. 4, 2017, at 2:00 p.m. Any
objection to the Plan must be filed by Sept. 18, 2017.
The Debtor has made these corrections:
a. Page 21, at lines 12 through 14, does not make sense as
presently drafted and should be revised to read as
follows: the Debtor's lease for space at its 8th Street
West location is through a lease in the name of Mr. Stark.
The Debtor's lease with Mr. Stark is an oral lease that
provides for the use of space in exchange for . . . ."
b. The same correction should be made to the corresponding
language in paragraph 43 on page 48 of Mr. Stark's
declaration.
Service of the solicitation package will be made on or before Aug.
18, 2017. The deadline to cast ballots will be Sept. 18, 2017, at
5:00 p.m. (local time).
The Debtor will file a plan confirmation brief, a ballot summary
with the ballots and a reply to any objection not later than Sept.
25, 2017.
About Critical Car Care
Critical Car Care, Inc., owns and operates two collision repair
centers in Lancaster and Quartz Hills, California. As of the
bankruptcy filing, the Company employed some 15 employees and
generated gross revenues in $1 million to $1.5 million range
annually.
Critical Car Care filed a voluntary Chapter 11 petition (Bankr.
C.D. Cal. Case No. 16-25072) on Nov. 14, 2016. The petition was
signed by David G. Stark, president & C.E.O. The Debtor estimated
assets at $100,001 to $500,000 and liabilities at $500,001 to $1
million at the time of the filing.
The Debtor tapped Steven R. Fox, Esq., at the Law Offices of Steven
R. Fox, as bankruptcy counsel. The Debtor also engaged Howard Fox,
CPA as its accountant.
CYTORI THERAPEUTICS: Incurs $6.04 Million Net Loss in 2nd Quarter
-----------------------------------------------------------------
Cytori Therapeutics, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $6.04 million on $969,000 of product revenues for the three
months ended June 30, 2017, compared to a net loss of $6.40 million
on $1.12 million of product revenues for the three months ended
June 30, 2016.
For the six months ended June 30, 2017, the Company reported a net
loss of $13.59 million on $1.56 million of product revenues
compared to a net loss of $11.74 million on $2.45 million of
product revenues for the six months ended June 30, 2016.
As of June 30, 2017, Cytori had $32.47 million in total assets,
$21.24 million in total liabilities and $11.23 million in total
stockholders' equity.
The Company has an accumulated deficit of $392.7 million as of June
30, 2017. Additionally, the Company has used net cash of $9.9
million and $10.7 million to fund our operating activities for the
six months ended June 30, 2017, and 2016, respectively. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/ygDMZ3
About Cytori
Based in San Diego, California, Cytori Therapeutics (NASDAQ: CYTX)
-- http://www.cytori.com/-- provides patients and physicians
around the world with medical technologies, which harness the
potential of adult regenerative cells from adipose tissue. The
Company's StemSource(R) product line is sold globally for cell
banking and research applications.
Cytori reported a net loss of $22.04 million for the year ended
Dec. 31, 2016, compared to a net loss of $18.74 million for the
year ended Dec. 31, 2015.
BDO USA, LLP, in San Diego, California, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016, stating that the Company has suffered
recurring losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going concern.
DEREK L. GUSTAFSON: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Derek L. Gustafson, D.D.S., P.A.
dba Northland Family Dental
2011 3rd Avenue East
Hibbing, MN 55746
Business Description: Northland Family Dental --
http://www.hibbingdental.com--
is a dental office led by Hibbing, MN family
dentist Derek L. Gustafson, DDS, PA who is
devoted to restoring and enhancing the
natural beauty of a person's smile using
conservative, state-of-the-art dental care
procedures. The clinic's services include
new patient exams, digital x-rays,
general dentistry, teeth whitening,
composite fillings, crowns (caps),
cosmetic dentistry, periodontics,
root canal, fixed bridges, porcelain veneers
and dental implants.
Chapter 11 Petition Date: August 16, 2017
Case No.: 17-50530
Court: United States Bankruptcy Court
District of Minnesota (Duluth)
Judge: Hon. Robert J Kressel
Debtor's Counsel: Steven B Nosek, Esq.
STEVEN NOSEK, P.A.
2855 Anthony Ln S, Ste 201
St Anthony, MN 55418
Tel: 612-335-9171
E-mail: snosek@noseklawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Derek L. Gustafson, chief executive
officer.
The Debtor's list of 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mnb17-50530.pdf
DIGILITI MONEY: Urban FT Makes Bid to Rescue Business
-----------------------------------------------------
Urban FT, Inc., the industry leading SaaS-based digital banking
platform, has made a bid to rescue troubled NASDAQ-listed Digiliti
Money Group, Inc., the mobile app technology firm. On Tuesday,
August 15, The Board of Urban FT contacted the Digiliti Money
chairman with a bona fide, all-cash purchase offer that would
enable the company to continue to serve its customers and stave off
potential bankruptcy proceedings. The acquisition, if accepted,
would be funded, through Morgan Stanley, on behalf of Urban FT's
principal investor.
Urban FT claims to have a strong track record of organic and
acquisitive growth, demonstrating the ability to close acquisitions
in a timely manner and to successfully merge the acquired entities
into the enlarged business. This is evidenced by the acquisitions
of companies including Wipit Inc. in 2015 and, more recently,
iParse LLC, which closed last month within 90 days of first
entering a terms sheet. The company has made known its appetite
for additional acquisitions of transactional banking operators and
providers of mobile, Web or other B2B services that serve community
and regional financial institutions.
"Our goal in approaching Digiliti Money with an attractive and
timely offer is to keep the business operating and viable as we
consolidate the entities to leverage the savings from operational
synergies," says Urban FT COO Glen Fossella. "We believe that our
cash offer -- with the option for certain shareholders, at their
discretion, to convert their Digiliti Money common stock to Urban
FT common stock -- represents the best benefit to all parties
involved, most particularly the consumers who rely on the services
of Digiliti Money's clients.
"We're able to move quickly to rescue Digiliti because of the
support of the Urban FT board of directors and investors, and
because we have a clearly defined acquisition strategy that focuses
on businesses with strong client relationships, recurring revenues
and technologies that deliver an additional competitive advantage
to our core products and services," Mr. Fossella continues.
"Digiliti Money is within our acquisition parameters, and,
ultimately, we believe will deliver an earnings-accretive outcome
to all relevant stakeholders."
According to Mr. Fossella, the acquisition is reasonably
straightforward, with only the usual caveats of conducting
satisfactory due diligence related to the operational, financial
and legal affairs of Digiliti Money; Digiliti Money undergoing a
satisfactory audit; and required legal, shareholder, regulatory and
other third-party approvals.
"We're prepared to move quickly, and we hope Digiliti Money will
match our speed and commitment to completing this transaction," he
adds.
In recent weeks, the trade press has reported on Digiliti Money's
financial difficulties and the appointment of a new interim CEO to
cut costs and seek funding in the face of declining revenue. On
August 14, the company issued an update on its corporate
activities, indicating it is "actively reviewing strategic options
to restructure the company, including the potential sale of the
company or potentially filing for Chapter 11 bankruptcy." The
company also disclosed that its independent accounting firm has
withdrawn its 2016 yearend consolidated audit reports and revoked
its consents to incorporate those reports in any and all
registration statements.
About Urban FT
Urban FT is a SaaS-based digital payments platform that enables any
brand to seamlessly launch a branded Mastercard or Visa card,
lifestyle mobile app and Web solution to complement its core
business. It gives brands a complete platform to enhance every
element of the customer/brand relationship, leveraging what they're
doing today by adding a financial services framework, built on its
unique understanding of driving the customer journey. Its platform
enables brands to uniquely engage their customers, adding value by
deepening and expanding how and when customers interact with the
brand.
DOUBLE D. FITNESS: Hires Robert C. Bruner as Attorney
-----------------------------------------------------
Double D. Fitness Company, seeks authority from the U.S. Bankruptcy
Court for the Northern District of Florida to employ Robert C.
Bruner, Attorney at Law, as attorney to the Debtor.
Double D. Fitness requires Robert C. Bruner to provide legal
representation to the Debtor in the Chapter 11 bankruptcy case.
Robert C. Bruner will be paid at these hourly rates:
Attorney $350
Paralegal $95
Robert C. Bruner will be paid a retainer in the amount of $5,000,
and $1,717 filing fee.
Robert C. Bruner will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Robert C. Bruner, member of Robert C. Bruner, Attorney at Law,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Robert C. Bruner can be reached at:
Robert C. Bruner, Esq.
ROBERT C. BRUNER, ATTORNEY AT LAW
2810 Remington Green Circle
Tallahassee, FL 32308
Tel: (850) 385-0342
About Double D. Fitness Company
Double D. Fitness Company filed a Chapter 11 bankruptcy petition
(Bankr. N.D. Fla. Case No. 17-40242) on July 26, 2017. The Debtor
hired Robert C. Bruner, Esq., at Robert C. Bruner, Attorney at Law.
DUFF & PHELPS: Moody's Revises Outlook to Stable & Affirms B2 CFR
-----------------------------------------------------------------
Moody's Investors Service has affirmed Duff & Phelps Corporation's
B2 corporate family rating (CFR), the B2 rating on its senior
secured first lien bank credit facility and revolving credit
facility as well as the Caa1 rating on the company's second lien
bank credit facility. Concurrently, Moody's has changed the outlook
on Duff & Phelps' ratings to stable from negative.
Issuer: Duff & Phelps Corporation
-- Corporate Family Rating, Affirmed B2
-- 1st Lien Senior Secured Term Loan, Affirmed B2
-- Senior Secured Revolving Credit Facility, Affirmed B2
-- 2nd Lien Senior Secured Term Loan, Affirmed Caa1
Outlook Actions:
-- Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The change in Duff & Phelps' outlook to stable from negative
reflects Moody's expectations that the company will maintain its
recently improved credit metrics. A key credit strength of Duff &
Phelps is its diversified service offerings and high level of
repeat business. These strengths provide the firm with relatively
stable operating margins throughout the economic cycle.
Moody's said Duff & Phelps' credit metrics had deteriorated in 2015
following a number of debt-funded acquisitions and a special
dividend. During 2016 and first half of 2017, Duff & Phelps was
able to successfully integrate its acquisitions and realize
positive operating leverage (growth in revenues bypassing the
growth in expenses). Duff & Phelps benefits from a variable cost
structure that helps the firm in managing its expenses during low
revenue periods, a credit positive said Moody's.
Moody's expects that Duff & Phelps will extend its improving
operating performance and operate at a leverage ratio between 5.5x
and 6x (including Moody's adjustments) into the second half of 2017
and first half of 2018, driven by the firm's diverse businesses:
valuation and tax advisory (2) corporate finance (3) dispute and
legal management consulting services and (4) regulatory and
compliance services provided to financial institutions, private
equity firms and hedge funds.
The B2 rating on the senior secured first lien bank credit facility
and revolver reflect their priority position in the capital
structure under the Loss Given Default methodology and model. The
Caa1 rating assigned to the second lien debt reflects the
relatively small amount of such debt compared to the total debt
obligations of the firm as well as the limited degree of asset
coverage. As such, Moody's expects that severity of loss on the
second lien in the event of default would be extremely high,
resulting in a two notch differential between the CFR and the
rating on the second lien facility.
What Could Change the Rating -- Up
* The demonstration of strong and sustainable organic revenue
growth resulting in positive operating leverage and higher
profitability
* Improved leverage and debt service capacity by way of a
commitment to debt reduction or improvement in EBITDA leading to a
leverage ratio below 5x
What Could Change the Rating -- Down
* A broad slowdown resulting in deterioration in cash flow
generation leading to a Debt/EBITDA ratio above 6x on a sustained
basis
* An increase in borrowings to fund a non-core acquisition or to
pay a special dividend
* Evidence of weakening financial flexibility such as through the
maintenance of limited cash balances and/or ongoing utilization of
the company's revolving credit facility
The principal methodology used in these ratings was Securities
Industry Service Providers published in February 2017.
ENJUE INC: Taps Joyce W. Lindauer as Legal Counsel
--------------------------------------------------
Enjue, Inc. seeks approval from the U.S. Bankruptcy Court for the
Northern District of Texas to hire legal counsel in connection with
its Chapter 11 case.
The Debtor proposes to employ Joyce W. Lindauer Attorney, PLLC to
assist in the preparation of a plan of reorganization and provide
other legal services.
The hourly rates charged by the firm for the services of its
attorneys are:
Joyce Lindauer $395
Sarah Cox $225
Jamie Kirk $195
Jeffery Veteto $185
Paralegals and legal assistants charge an hourly fee ranging from
$65 to $125.
Joyce Lindauer disclosed in a court filing that she and other
members of her firm are "disinterested" as defined in section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Sarah M. Cox, Esq.
Jamie N. Kirk, Esq.
Jeffery M. Veteto, Esq.
Joyce W. Lindauer Attorney, PLLC
12720 Hillcrest Road, Suite 625
Dallas, TX 75230
Tel: (972) 503-4033
Fax: (972) 503-4034
About Enjue Inc.
Enjue, Inc. sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 17-42935) on July 17, 2017. Samuel
S. Kim, vice-president, signed the petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets of less than $100,000 and liabilities of less than
$500,000.
Judge Mark X. Mullin presides over the case.
ERIN ENERGY: Oltasho Nigeria Reports 53.8% Stake as of April 3
--------------------------------------------------------------
Oltasho Nigeria Limited disclosed that it beneficially owns
116,108,833 shares of common stock of Erin Energy Corp.
(representing 53.8%); Latmol Investment Limited reported beneficial
ownership of 1,515,927 (representing 0.7%); and Alhaji Murhi Busari
beneficially owns 117,624,760 common shares (representing 54.5%) as
of April 3, 2017.
Mr. Busari is the chairman of Oltasho and Latmol. By virtue of
this relationship, Mr. Busari is deemed to beneficially own the
securities beneficially owned by Oltasho and Latmol.
The principal business address of each of the reporting persons is
26 T.Y. Danjuma Street, F.C.T., Abuja, Nigeria.
The principal occupation of Oltasho and Latmol is real estate
development and investment. The principal occupation of Busari is
real estate development and investment and media entrepreneur.
On April 3, 2017, an aggregate of 116,108,833 shares of the
Issuer's Common Stock previously held by Allied Energy PLC, were
foreclosed upon by Oltasho, in connection with the failure of
Allied to timely repay $50 million owed to Oltasho, pursuant to the
terms of a loan agreement and certain stock pledges.
On April 13, 2017, an aggregate of 1,515,927 shares of the Issuer's
Common Stock previously held by CAMAC Int'l (Nigeria) Ltd., were
foreclosed upon by Latmol, in connection with the failure of CAMAC
International to timely repay $50 million owed by CAMAC
International to Latmol, pursuant to the terms of a loan agreement
and a stock pledge.
On July 5, 2017, Oltasho and Latmol entered into a voting agreement
with Dr. Kase Lawal. Pursuant to the Voting Agreement, Oltasho and
Latmol provided complete authority to Dr. Lawal to vote the
117,624,760 shares foreclosed upon (and any other securities of the
Issuer obtained by Oltasho and/or Latmol in the future) at any and
all meetings of stockholders of the Issuer and via any written
consents. The Voting Agreement has a term of approximately 10
years, through July 31, 2027, but can be terminated at any time
with the mutual consent of the parties. In connection with their
entry into the Voting Agreement, Oltasho and Latmol each provided
Dr. Lawal an irrevocable voting proxy to vote the shares covered by
the Voting Agreement. Additionally, Oltasho and Latmol agreed not
to transfer the shares covered by the Voting Agreement, during the
term of such agreement, except pursuant to certain limited
exceptions described in the Voting Agreement.
The result of the Voting Agreement was another change in control of
the Issuer, with Dr. Lawal obtaining voting control over
117,624,760 shares of the Issuer's Common Stock, or 54.5% of the
Issuer's Common Stock as of the parties' entry into the Voting
Agreement. Total consideration provided to Oltasho and Latmol for
the Voting Agreement was $10, provided that Oltasho and Latmol have
no desire to control the Issuer and believe that voting control of
the Issuer was best determined by Dr. Lawal, a United States
resident, who has extensive knowledge of United States laws and the
assets and operations of the Issuer, as Dr. Lawal was, until he
recently retired, the chairman and chief executive officer of the
Issuer.
A full-text copy of the regulatory filing is available at:
https://is.gd/b8qIdS
About Erin Energy
Houston, Texas-based Erin Energy Corporation is an independent oil
and gas exploration and production company focused on energy
resources in Africa. The Company's acquires and develops
high-potential exploration and production assets in Africa, and
explores and develops those assets through strategic partnerships
with national oil companies, indigenous local partners and other
independent oil companies. The Company has production and
exploration projects offshore Nigeria, as well as exploration
licenses offshore Ghana, Kenya and Gambia, and onshore Kenya.
Erin Energy reported a net loss attributable to the Company of
$142.40 million on $77.81 million of revenues for the year ended
Dec. 31, 2016, compared to a net loss attributable to the Company
of $430.93 million on $68.42 million of revenues for the year ended
Dec. 31, 2015.
Pannell Kerr Forster of Texas, P.C., in Houston, Texas, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2016, citing that the
Company incurred net losses in each of the years ended Dec. 31,
2016, 2015 and 2014, and as of Dec. 31, 2016, the Company's current
liabilities exceeded its current assets by $264.4 million. These
conditions, along with other matters, raise substantial doubt about
the Company's ability to continue as a going concern.
EVANS & SUTHERLAND: Incurs $171,000 Net Loss in Second Quarter
--------------------------------------------------------------
Evans & Sutherland Computer Corporation filed with the Securities
and Exchange Commission its quarterly report on Form 10-Q reporting
a net loss of $171,000 on $6.74 million of sales for the three
months ended June 30, 2017, compared to a net loss of $969,000 on
$5.26 million of sales for the three months ended July 1, 2016.
For the six months ended June 30, 2017, the Company reported net
income of $14,000 on $14.78 million of sales compared to a net loss
of $733,000 on $13.16 million of sales for the six months ended
July 1, 2016.
As of June 30, 2017, Evans & Sutherland had $26.60 million in total
assets, $24.90 million in total liabilities and $1.69 million in
total stockholders' equity.
"[W]e believe existing liquidity resources and funds generated from
forecasted revenue will be sufficient to meet our current and
long-term obligations," the Company stated in the report. "We
continue to operate in a rapidly evolving and often unpredictable
business environment that may change the timing or amount of
expected future cash receipts and expenditures."
In the first six months of 2017, $915,000 of cash used in operating
activities was attributable to $192,000 of cash provided by the net
income for the period, after the effect of $178,000 of non-cash
items and an unfavorable change to working capital of $1,107,000.
The change to working capital was driven by increases in
receivables and costs and estimated earnings in excess of billings
on uncompleted contracts and customer deposits. These increases
are attributable to the timing of billings and new customer orders.
The change in working capital was also affected by an increase in
prepaid expenses and other assets and a decrease in restricted cash
for a performance guarantee that was released upon completion of
the project.
In the first six months of 2016, the $328,000 of cash used in
operating activities was attributable to $385,000 of cash absorbed
by the net loss for the period, after the effect of $348,000 of
non-cash items and a slightly favorable change to working capital
of $57,000. The more significant working capital changes
contributing to cash consisted of an increase in progress payments
from customer contracts, the amortization of prepaid expenses and
an increase in accrued expenses attributable to payroll schedules,
which were mostly offset by an increase in inventory attributable
to customer deliveries and the reduction of the deferred rent
obligation related to a deferred gain from a prior year sale
leaseback transaction.
Cash used in investing activities was $86,000 for the six months
ended June 30, 2017, compared to $49,000 for the same period of
2016. Investing activities for both periods presented consisted
entirely of property and equipment purchases.
For the six months ended June 30, 2017, financing activities used
$105 of cash compared to $115,000 in 2016 for principal payments on
mortgage notes.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/J4IbBb
About Evans & Sutherland
Salt Lake City, Utah-based Evans & Sutherland Computer Corporation
in conjunction with its wholly owned subsidiary, Spitz Inc.,
creates digital planetarium systems and full-dome show content.
E&S has developed Digistar 5, a digital planetarium with full-dome
video playback, real-time computer graphics, and a complete 3D
digital astronomy package fully integrated into a single theater
system. This technology allows audiences to be immersed in
full-color, 3D computer-generated interactive worlds. E&S also
offers Spitz domes, hybrid planetarium systems integrated with
Digistar and theater systems from audio and lighting to theater
automation. E&S products have been installed in over 1,300
theaters worldwide.
Evans & Sutherland reported net income of $1.74 million for the
year ended Dec. 31, 2016, following a net loss of $1.27 million in
2015.
FIDELITY & GUARANTY: Fitch Revises Ratings Watch to Positive
------------------------------------------------------------
Fitch Ratings has affirmed the 'BBB' Insurer Financial Strength
(IFS) ratings for Fidelity & Guaranty Life Insurance Company and
Fidelity & Guaranty Life Insurance Company of New York
(collectively F&G Life). Fitch has removed the IFS ratings from
Rating Watch Evolving and assigned a Stable Outlook.
Fitch has also revised the Rating Watch to Positive from Evolving
on the 'BB' Issuer Default Rating (IDR) assigned to Fidelity &
Guaranty Life Holdings, Inc., (FGLH) and the 'BB-' senior unsecured
note rating.
KEY RATING DRIVERS
F&G Life's ratings were placed on Rating Watch Evolving in May 2017
following the announcement that it had agreed to be acquired by a
consortium made up primarily of CF Corporation (CF Corp.), a
special purpose acquisition company, funds affiliated with
Blackstone, & Fidelity National Financial in an all-cash
transaction valued at approximately $1.83 billion. The transaction
is expected to close in the fourth quarter of 2017 subject to
regulatory approvals and satisfaction of other customary closing
conditions.
Today's rating actions follow Fitch's review of F&G Life's pro
forma ownership structure, financial profile, and operating
strategy post acquisition. Fitch does not expect the proposed
change in F&G Life's ownership structure to alter the company's
standalone credit profile over the near term since its core product
focus and senior management team will remain in place. Longer term,
F&G Life's credit profile could improve based on the successful
execution of the company's strategies to improve financial
performance and investment results under new ownership. Fitch also
believes the company's financial flexibility and capital raising
ability post acquisition is improved relative to ownership under
F&G Life's current parent, HRG Group Inc.
The revision of the Rating Watch from Evolving to Positive for
FGLH's IDR and senior unsecured note ratings reflects Fitch's
expectation that the ratings will likely be upgraded one notch
following the completion of the acquisition based on the company's
improved financial flexibility under new ownership. Currently,
FGLH's ratings reflect non-standard (i.e., wider) notching from the
IFS rating as a result of the rating and financial profile of its
highly leveraged parent, HRG Group Inc. (HRG; 'B' IDR). Given the
absence of high leverage and more normalized financial flexibility
of the company under new ownership, FGLH's ratings will reflect
standard notching from the IFS ratings once the transaction is
completed.
Fitch's ratings for F&G Life continue to reflect the company's
relatively narrow product focus and liability profile, strong
balance sheet profile, and strong operating performance. The
ratings also consider the competitive and regulatory challenges
tied to the company's strategic focus selling fixed indexed
annuities (FIAs) through independent marketing organizations
(IMOs), and macroeconomic challenges associated with low interest
rates.
Fitch expects the full implementation of the Department of Labor
(DOL) fiduciary rule will have a negative impact on the sale of
FIAs in qualified markets. While Fitch does not see this as an
immediate rating issue, the DOL rules may cause changes in
operating strategies that could impact F&G Life's risk profile and
ratings longer-term.
F&G Life's strong balance sheet profile reflects the company's
strong statutory capitalization, moderate leverage, and good asset
quality. The company's year-end 2016 RBC of 412% was strong for the
rating category. F&G Life's PRISM capital model score is on the
high end of 'Adequate', which is within expectations for its
current rating category.
F&G Life's recent financial performance and balance sheet
fundamentals remain in line with rating expectations. Operating
performance is strong and has shown improvement over the last two
years due to the absence of elevated impairments and wider net
investment spread from a combination of lowering crediting rates
and repositioning to higher yielding assets.
RATING SENSITIVITIES
Fitch could upgrade the IDR and senior unsecured note ratings of
FGLH following the close of the transaction based on the relative
improvement of the company's financial flexibility and financial
profile.
Fitch could affirm the IDR and senior unsecured note ratings of
FGLH at current levels if the transaction doesn't close or if there
has been a material unexpected deterioration in F&G Life's credit
profile.
The following could result in a downgrade of F&G Life's ratings:
-- An unexpected change in the CF Corp. transaction which
negatively impacts F&G Life's credit profile;
-- F&G Life's consolidated RBC ratio falling below 300% with
operating leverage above 20x;
-- Consolidated financial leverage for F&G Life exceeding 35%;
-- Fixed charge coverage falling below 5x;
-- Operating ROE below 5% over four consecutive quarters.
F&G Life's ratings could be upgraded if it maintains operating ROEs
above 10% on a consistent basis and consolidated RBC above 400%,
Prism capital model score remains on the high end of 'Adequate',
fixed charge coverage at 8x and financial leverage below 25%.
Fitch has affirmed the following ratings with a Stable Outlook:
Fidelity & Guaranty Life Insurance Company
Fidelity & Guaranty Life Insurance Company of New York
-- IFS rating at 'BBB'.
Fitch has revised the Rating Watch status to Positive from Evolving
for the following ratings:
Fidelity & Guaranty Life Holdings, Inc.
-- Long-term IDR 'BB';
-- Senior unsecured note due April 2021 'BB-'.
FLOUR CITY BAGELS: Court Confirms Joint Chapter 11 Plan
-------------------------------------------------------
Judge Paul R. Warren of the U.S. Bankruptcy Court for the Western
District of New York approved and confirmed the Second Modified
Second Amended Joint Chapter 11 Plan, dated August 10, 2017, filed
and proposed by United Capital Business Lending, n/k/a Bridge
Funding Group, Inc., Bruegger's Franchise Corporation, Bruegger's
Enterprises, Inc., LDA Management Company, Inc., and Le Duff
America, Inc., Canal Mezzanine Partners II, LP, and Flour City
Bagels, LLC.
Judge Warren finds that the Plan and the various documents set
forth in the Plan Supplement provide adequate and proper means for
the implementation of the Plan, including, without limitation, (i)
the consummation of the Asset Sale, (ii) the cancellation of
certain existing agreements, obligations, instruments and
interests, (iii) the vesting of assets of the Estates in the
Debtor, and (iv) the appointment of the Plan Administrator, thereby
satisfying the requirements of section 1123(a)(5) of the Bankruptcy
Code.
The Court finds that the Plan Proponents have proposed the Plan
(including, without limitation, any other documents necessary to
effectuate the Plan) in good faith and not by any means forbidden
by law, thereby satisfying the requirements of section 1129(a)(3)
of the Bankruptcy Code. In determining that the Plan has been
proposed in good faith, the Court has examined the totality of the
circumstances surrounding the formulation of the Plan. Based on the
evidence presented at the Confirmation Hearing, the Court finds and
concludes that the Plan has been proposed with the legitimate and
honest purpose of maximizing the return available to creditors.
Consistent with the overriding purpose of chapter 11 of the
Bankruptcy Code, the Plan is designed to allow the Debtor to
satisfy its obligations to the greatest extent possible. Moreover,
the sufficiency of disclosure and the arm's-length negotiations
among the Plan Proponents, the Committee, and other parties in
interest leading to the Plan’s formulation, all provide
independent evidence of the Plan Proponents' good faith in
proposing the Plan in compliance with section 1129(a)(3) of the
Bankruptcy Code.
Further, the exculpation and injunction provisions of the Plan are
fair and equitable and have been negotiated in good faith and at
arm's length with, among other persons, representatives of the Plan
Proponents and the Committee, and their respective advisors, and
are consistent with sections 105, 1122, 1123(b)(3)(A), 1123(b)(6),
1129, and 1142 of the Bankruptcy Code, and are each necessary to
the Debtor’s successful emergence from chapter 11.
Based upon all evidence and arguments presented at the Confirmation
Hearing and the pleadings filed with the Court, the Court finds and
concludes that the Plan satisfies the requirements for confirmation
set forth in section 1129 of the Bankruptcy Code. The Plan is
approved and shall be confirmed under section 1129 of the
Bankruptcy Code.
A full-text copy of Judge Warren's Decision and Order dated August
16, 2017, is available at:
http://bankrupt.com/misc/nywb2-16-20213-1088.pdf
About Flour City Bagels
Headquartered in Fairport, New York, Flour City Bagels, LLC,
operates 32 bakeries that serve "New York Style" bagels, coffee,
drinks, soups, salads, sandwiches, fresh fruit, and a variety of
other related items. In 1993, it opened its commissary in
Rochester, at which it produces bagels for sale at all of its 32
bakeries. It employs 425 people.
Flour City Bagels sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 16-20213) on March 2,
2016, estimating both assets and debt in the range of $10 million
to $50 million. Kevin Coyne, the manager, signed the petition.
Judge Paul R. Warren is assigned to the case.
The Debtor is represented by Stephen A. Donato, Esq., and Camille
W. Hill, Esq., at Bond, Schoeneck & King, PLLC, and Harry W.
Greenfield, Esq., Jeffrey Toole, Esq., and Heather E. Heberlein,
Esq., at Buckley King.
The Debtor retained Phoenix Management Services, LLC, as financial
advisor; Phoenix Capital Resources as investment banker; Insero &
Co. CPAs, LLP, as accounting services provider; and Kittel Branagan
& Sargent as tax consultant.
The official committee of unsecured creditors hired Gardere Wynne
Sewell LLP as bankruptcy counsel, Gordorn & Schaal, LLP as local
counsel, and Corporate Recovery Associates, LLC, as business and
financial advisor.
No trustee or examiner has been appointed in the case.
On Dec. 20, 2016, a group of creditors led by United Capital
Business Lending Inc. filed their proposed plan of reorganization
for the Debtor. On the same date, Canal Mezzanine Partners II, LP,
and MRM Real Estate Fund I, LLC, proposed their plan of sale and
subsequent liquidation for the company.
FORESIGHT ENERGY: Reports Second Quarter Coal Sales of $204.5-M
---------------------------------------------------------------
Foresight Energy LP reported financial and operating results for
the second quarter of 2017. Foresight generated quarterly coal
sales revenues of $204.5 million on sales volumes of 4.8 million
tons resulting in Adjusted EBITDA of $84.5 million, cash flows from
operations of $38.5 million and a net loss attributable to limited
partner units of $16.3 million, or $(0.12) per unit. Results for
the second quarter 2017 included $12.8 million of insurance
recoveries related to the combustion event at the Hillsboro
operation, approximately $10.2 million of incremental depreciation,
depletion and amortization, and a non-cash charge of $8.7 million
related to contract amortization. The incremental DD&A and
contract amortization is a function of pushdown accounting adopted
in conjunction with the March 27 refinancing transaction.
As mentioned during the prior quarter, Foresight adopted pushdown
reporting as of March 31, 2017, as a result of Murray Energy
obtaining control of its general partner. As such, operational
results for the quarter ended June 30, 2017, were recorded on the
successor financial statements. As required by pushdown reporting,
the Partnership revalued its balance sheet on the change of control
date and therefore certain financial statement line items are not
comparable to prior periods. However, pushdown reporting did not
materially affect coal sales and cost of coal produced, which are
generally comparable to prior periods.
"Foresight had another solid operating quarter driven by
exceptional production at our operations. We produced
approximately 5.7 million tons during the quarter, an increase of
16% compared to the same period last year. This production level
yielded costs below $22.00 per ton. With all of our scheduled
calendar year 2017 longwall moves now complete, we expect to
improve our industry-leading cost structure over the remainder of
the year," stated Mr. Robert D. Moore, Chairman, president, and
chief executive officer.
Coal sales totaled $204.5 million for the second quarter 2017
compared to $224.1 million for the second quarter 2016,
representing a decline of $19.6 million. The decrease in coal
sales revenues was driven by lower sales volumes and anticipated
reductions in coal sales realizations per ton. Sales volumes were
unfavorably impacted 0.2 million tons due to the continued lack of
performance by one rail service provider and certain customers
deferring shipments during the quarter due to maintenance and
operational issues. The reduction in coal sales realizations of
$2.01 per ton was principally driven by customer mix relative to
the prior year quarter as well as the rolling off of certain legacy
sales contracts with more favorable pricing.
Cost of coal produced was $105.8 million, or $21.88 per ton sold,
for the second quarter 2017 compared to $112.1 million, or $22.16
per ton sold, for the same period of 2016. The decrease during the
current year quarter was driven largely by lower sales volumes and
also included a non-cash charge of $4.6 million related to the
revaluation of coal inventory related to the pushdown accounting
adopted.
Transportation costs decreased $9.3 million, or $1.59 per ton sold,
from the prior year period due to lower sales volumes and lower
charges for minimum contractual rail and export terminal throughput
requirements. The lower contractual minimums are driven by the
expectation of higher export shipments during 2017.
Other operating (income) expense for the second quarter 2017
increased $13.7 million from the second quarter 2016 due to the
receipt of $12.8 million of insurance proceeds related to the
Hillsboro combustion event. Foresight continues to pursue
additional remedies under its insurance policies; however, there
can be no assurances of any future recoveries related to this
incident.
Foresight generated operating cash flows of $38.5 million during
second quarter 2017 and it ended the quarter with $7.2 million in
cash and $158.5 million of available borrowing capacity, net of
outstanding letters of credit, under its revolving credit facility.
During the second quarter 2017, capital expenditures totaled $21.7
million, an increase of $13.5 million compared to the quarter ended
June 30, 2016. Capital spending in the prior year period was lower
as a result of the timing of capital outlays related to the
maintenance of mining operations.
Based on Foresight's contracted position, recent performance, and
its current outlook on pricing and the coal markets in general, the
Partnership is reaffirming, updating or providing the following
guidance for 2017:
Sales Volumes - Based on year-to-date sales volumes, current
committed position and expectations for the remainder of 2017,
Foresight is reaffirming projected sales volumes to be between 20.5
and 22.0 million tons, with over 5.0 million tons expected to go
into the international market. Foresight has current commitments
of approximately 20.0 million tons for 2017.
Adjusted EBITDA - Based on the projected sales volumes and
operating cost structure, Foresight currently expects to generate
Adjusted EBITDA in a range of $285 to $310 million
Capital Expenditures - Total 2017 capital expenditures are
estimated to be between $70 and $77 million.
As noted earlier, during the quarter, Foresight generated cash from
operations of $38.5 million and capital expenditures of $21.7
million. As a result of the provided guidance, liquidity position
and ability to generate cash in the coming quarters, the Board of
Directors of its General Partner approved the restoration of a
quarterly cash distribution of $0.0647 per common unit. The
distribution is payable on Aug. 31, 2017, for common unitholders of
record on Aug. 21, 2017.
"As it relates to deleveraging our balance sheet, we expect debt
reductions to occur by way of required amortization payments under
our various facilities and also the excess cash flow sweep under
our term loan facility. In addition to this, the Partnership plans
to distribute any excess cash to its common unitholders in the form
of ongoing distributions. The distribution declared today will be
the first distribution paid to common unitholders since the third
quarter 2015 and represents the Partnership's commitment to
returning capital to its unitholders. However, future
distributions will be subject to board review and will be based on
a number of factors including our leverage levels, market
conditions, excess cash flow remaining after required excess cash
flow sweeps and our projected future financial and operating
performance," said Mr. Moore.
A full-text copy of the press release is available for free at:
https://is.gd/e6ryjc
About Foresight Energy
Foresight Energy L.P. mines and markets coal from reserves and
operations located exclusively in the Illinois Basin. As of
Dec. 31, 2015, the Company has invested over $2.3 billion to
construct state-of-the-art, low-cost and highly productive mining
operations and related transportation infrastructure. The Company
controls over 3 billion tons of proven and probable coal in the
state of Illinois, which, in addition to making the Company one of
the largest reserve holders in the United States, provides organic
growth opportunities. The Company's reserves consist principally
of three large contiguous blocks of uniform, thick, high heat
content (high Btu) thermal coal which is ideal for highly
productive longwall operations. Thermal coal is used by power
plants and industrial steam boilers to produce electricity or
process steam.
Foresight reported a net loss of $178.6 million in 2016 following a
net loss of $38.68 million in 2015.
* * *
In March 2017, S&P Global Ratings affirmed its 'B-' corporate
credit rating on Foresight Energy L.P. The rating outlook is
revised to stable from negative. "The stable outlook reflects our
expectation that Foresight will operate at an adjusted debt to
EBITDA of just under 5x in the next 12 months and continue to
decline beyond 2017," said S&P Global Ratings credit analyst Vania
Dimova. "We expect the company to improve its EBITDA generation
from export sales."
In March, 2017, Moody's Investors Service upgraded Foresight Energy
L.P.'s Corporate Family Rating (CFR) to 'B3' from 'Caa1', and its
probability of default rating (PD) to 'B3-PD' from 'Caa1-PD'. "The
upgrade reflects the improved industry conditions and the company's
solid contracted position, which drives Moody's expectations that
Debt/ EBITDA, as adjusted, will decline from 5.9x at September 30,
2016 to roughly 4.5x by the end of 2017," says Anna
Zubets-Anderson, the lead analyst for Foresight.
In March 2017, Fitch Ratings assigned a first-time Long-Term Issuer
Default Rating (IDR) of 'B-' to Foresight Energy LP and Foresight
Energy LLC.
FOSSIL GROUP: Moody's Lowers CFR to Ba3; Outlook Remains Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded Fossil Group, Inc.'s ratings,
including its Corporate Family Rating (CFR) to Ba3 from Ba2,
Probability of Default Rating (PDR) to Ba3-PD from Ba2-PD, senior
secured facilities to Ba2 from Ba1 and its unsecured shelf rating
to (P)B2 from (P)B1. The Speculative Grade Liquidity Rating was
affirmed at SGL-3. The ratings outlook remains negative.
The downgrade and negative outlook reflect continued weakening in
Fossil's operating performance and credit metrics and Moody's
expectation that significant challenges will persist over the next
12-18 months, as well as the need to extend its debt maturity
profile well before its debt becomes current in May 2018. Fossil's
second quarter revenue decreased 12 percent year-over-year, with
declines in all product categories and all regions. Traditional
watch sales continued to decline, and while its Connected business
grew three fold, it is not large enough to offset the declines.
Given persistent challenges, the company once again revised its
revenue and earnings guidance down, with revenue now expected to
fall in the range of 4.5 percent to 8.5 percent in 2017, versus its
previous range of down 1.5 percent to 6 percent.
While Fossil is making progress on the development and launch of
wearable technologies, consolidated revenue growth remains
challenged by the ongoing disruption in traditional watches and
slower than expected ramp of new connected product sales,
particularly at consumer electronic stores, which is a relatively
new distribution channel for the company. While benefits from its
New World Fossil restructuring initiatives are being realized, they
are being offset by reduced prices on new connected products in an
effort to drive volume through its supply chain and continued high
promotional activity to drive conversion. Fossil's lease-adjusted
leverage deteriorated to around 3.7x for the twelve months ended
July 1, 2017, and will likely deteriorate further, to around 3.9x,
by the end of the year.
Liquidity remains adequate at this time, as reflected in the SGL-3
Speculative Grade Liquidity Rating. While Fossil extended the
maturity of its credit facility to May 2019, the company will still
need to seek a longer term capital structure well ahead of the
obligations becoming current. The facilities contain maximum
leverage and minimum interest coverage covenants that should have
adequate cushion over the next twelve months; although excess
revolver availability was limited to $79 million due to total
leverage covenant constraints. While balance sheet cash is sizeable
at $319.8 million, $318 million was held by foreign subsidiaries
outside the U.S. However, it is available to manage cash flow needs
and debt reduction over the short term if needed. Despite the
challenging environment, Moody's expects free cash flow to remain
positive with excess used to reduce debt during 2017. However, the
company will likely rely on modest incremental revolver borrowing
to fund seasonal working capital needs.
Downgrades:
Issuer: Fossil Group, Inc.
-- Probability of Default Rating, Downgraded to Ba3-PD from Ba2-
PD
-- Corporate Family Rating, Downgraded to Ba3 from Ba2
-- Senior Secured Bank Credit Facility, Downgraded to Ba2(LGD3)
from Ba1(LGD3)
-- Senior Unsecured Shelf, Downgraded to (P)B2 from (P)B1
Outlook Actions:
Issuer: Fossil Group, Inc.
-- Outlook, Remains Negative
Affirmations:
Issuer: Fossil Group, Inc.
-- Speculative Grade Liquidity Rating, Affirmed SGL-3
RATINGS RATIONALE
Fossil's Ba3 Corporate Family Rating reflects the company's
position as one of the world's largest manufacturers and
distributors of watches. The company has a broad portfolio of owned
and licensed brands, which provide it with broad distribution
across a wide range of retailers, and broad international reach,
with the majority of its consolidated net sales generated outside
the US. Despite Fossil's high reliance on third party licensing
sales, Moody's believes the company's demonstrated manufacturing,
design and distribution capabilities provide a high likelihood of
continuing relationships with a broad range of sizeable lifestyle
brand owners. The rating also takes into consideration the
company's moderate, but weakening, credit metrics.
Fossil's ratings are constrained by its high reliance on watch
products for the significant majority of sales. While the watch
category has demonstrated long term growth trends, it is a highly
discretionary product category. Technological change, including
smart watches and other wearable technologies, has significantly
disrupted the traditional watch category, negatively impacting the
company's sales and operating margins. Over time, Moody's expects
this to also create some opportunities for Fossil, which will
benefit from its 2015 acquisition of Misfit, a wearable technology
company. The rating is also constrained by its high reliance on the
Michael Kors brand, which accounted for approximately 23% of fiscal
2016 sales.
The negative outlook reflects the continued uncertainty with regard
to the depth and duration of traditional watch sales declines and
concurrent ramp up of wearable technologies, along with the need to
put in place a longer term capital structure well ahead of
obligations becoming current.
Ratings could be downgraded if it appears that the company will be
unable to stabilize revenue and earnings declines over the near
term, or if liquidity were to erode in any way, such as covenant
violations or failure to extend maturing debt well before becoming
current. Quantitatively ratings could be downgraded if debt/EBITDA
approaches 4.5 times or EBITA/Interest is sustained below 1.5
times.
Given the negative outlook, a ratings upgrade is unlikely over the
near term. To stabilize the outlook, Fossil will need to extend its
maturity profile and stabilize revenue and earnings declines.
Ratings could be upgraded over time if the company resumes revenue
growth and profit margin expansion, while maintaining good
liquidity. Quantitatively ratings could be upgraded if debt/EBITDA
was sustained below 3.75 times and EBITA/Interest above 2.75
times.
Headquartered in Richardson, Texas, Fossil Group, Inc. is a global
design, marketing and distribution company that specializes in
consumer lifestyle and fashion accessories. Principal offerings
include an extensive line of men's and women's fashion watches and
jewelry sold under a diverse portfolio of proprietary and licensed
brands, handbags, small leather goods, and accessories. Revenues
approach $2.9 billion.
The principal methodology used in these ratings was Global Apparel
Companies published in May 2013.
FRANK W. KERR: Can Collect Up to $682K from West Grange
-------------------------------------------------------
Judge Avern Cohn of the U.S. District Court for the Eastern
District of Michigan has entered a partial judgment in favor of the
Frank W. Kerr Company in the amount of $682,000 based upon Walnut
Associates, LLC, d/b/a West Grange Pharmacy's admission of
indebtedness and its statement of willingness to pay such amount.
The Debtor has sued West Grange to collect on a debt. The Debtor
said that West Grange owes $1,930,943 in unpaid pharmaceutical
goods delivered to West Grange from June 16, 2015, to June 30,
2016. However, West Grange concedes it owes the Debtor monies,
saying that the amount owing under an agreed upon system of debits
and credits and "frozen" accounts, is $682,000.00 -- an amount West
Grange is willing and ready to pay.
The Debtor, until its bankruptcy, was a distributor of
pharmaceuticals, pharmaceutical supplies, and over the counter
medications which it sold to pharmacies, including West Grange. For
more than 15 years, from 1996 to 2016, West Grange purchased
pharmaceutical goods from the Debtor on credit under the terms of
an Inventory Finance Agreement. On June 30, 2016, the Debtor ceased
operations.
In June of 2016, prior to the bankruptcy proceedings, Conway
MacKenzie prepared a report entitled Meeting with JP Morgan Chase
N.A. and Comerica Bank, Senior Lenders to Frank W. Kerr Company,
which report states, among others, that Conway MacKenzie
recommended a liquidation of the Debtor. Page 12 of the report is
entitled Kerr Wind-Down -- Key Assumptions: Accounts Receivable,
also contains a column for "Frozen Balances," where the listing for
West Grange states the following amounts:
Balance 1,749
Recovery % 39.0%
Recovery 682
Consequently, the Parties vigorously dispute the accounting for
West Grange's indebtedness -- the Debtor offers the affidavit of
Jeffrey Tischler, while West Grange offers the affidavit of Richard
Grossman, identified as a member of West Grange -- who is also
identified as a member of the Board of Directors of the Debtor.
After the status conference, the Court entered an order stating its
intention to appoint an accounting master, and directed: (a) the
Debtor to submit "an itemized list of debits which total the amount
claimed due and owing" and (b) West Grange to submit "an itemized
list of credits to which it believes it is entitled which total the
amount claimed due and owing."
The Court finds that neither list is particularly helpful because
the Debtor's list is a series of invoices, balances, purchases,
payments, credits, etc. which claims an ending balance of
$1,930,943, while West Grange's statement is nothing more than a
list which shows a "total" of $7,558,382 -- nowhere does it contain
an explanation or calculation to the amount it says it owes.
Accordingly, the Court denies the Debtor's motion for partial
summary judgment as to whether West Grange owes the Debtor beyond
$682,000 because the record is unclear. The Court says that the
competing statements of Tischler and Grossman together with the
confusing and conflicting accounting records do not conclusively
establish that Kerr is entitled to additional monies. In addition,
the Court referred the matter to the magistrate judge for further
proceedings -- to determine what, if any, additional monies are
owed to the Debtor.
A full-text copy of the Memorandum dated August 10, 2017, is
available at https://is.gd/qziDBk from Leagle.com.
Walnut Associates 1, L.L.C. d/b/a West Grange Pharmacy, Defendant,
represented by Michael A. Nedelman, Nedelman Legal Group PLLC.
Walnut Associates 1, L.L.C. d/b/a West Grange Pharmacy, Counter
Claimant, represented by Michael A. Nedelman, Nedelman Legal Group
PLLC.
About Frank W. Kerr Company
Frank W. Kerr Company filed a chapter 7 petition on Aug. 23, 2016.
The Debtor consented to and the Court entered an order for relief
under chapter 11, converting the case to a chapter 11 proceeding
(Bankr. E.D. Mich. Case No. 16-51724) on Sept. 19, 2016.
The Debtor was founded in 1913 and was one of the largest
independent pharmaceutical wholesalers in the United States,
operating its business from an owned facility in Novi, Michigan.
The Debtor's customers through the years included many local and
national chains, such as Revco, Cunningham Drug, Apex, Kmart,
Arbor, Meijer, Inc., and Sav-Mor Drugs. It provided retail
customers with brand and generic pharmaceuticals, over-the-counter
drugs, private label goods, sundries and promotional programs.
The Debtor is represented by Stephen M. Gross, Esq. and Jayson B.
Ruff, Esq., at McDonald Hopkins PLC. Epiq Bankruptcy Solutions,
LLC serves as the Debtor's noticing, claims and balloting agent.
The Debtor hired Conway Mackenzie Management Services, LLC as
restructuring consultant and Jeffrey K. Tischler as chief
restructuring officer.
On Sept. 28, 2016, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The Committee has tapped
Lowenstein Sandler LLP as lead counsel; Wolfson Bolton PLLC as
local counsel; and BDO USA, LLP, as financial advisor.
GALATIANS ENTERPRISES: Taps Beard & Savory as Legal Counsel
-----------------------------------------------------------
Galatians Enterprises, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Tennessee to hire Beard & Savory,
PLLC as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
(a) prepare a motion to use cash collateral, bankruptcy plan,
disclosure statement and related applications, answers,
orders, reports and other legal papers; and
(b) assist co-counsel Stokes & Glass in drafting documents
and rendering advice.
Russell Savory, Esq., the attorney who will be handling the case,
will charge an hourly fee of $275.
Mr. Savory disclosed in a court filing that his firm does not
represent any interest adverse or potentially adverse to the Debtor
and its estate.
Beard & Savory can be reached through:
Russell W. Savory, Esq.
Beard & Savory, PLLC
119 South Main Street, Suite 500
Memphis, TN 38103
Email: 901-523-1110
About Galatians Enterprises Inc.
Galatians Enterprises, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 17-26959) on August
9, 2017.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of less than $1 million.
Judge David S. Kennedy presides over the case.
GALATIANS ENTERPRISES: Taps Stokes & Glass as Legal Counsel
-----------------------------------------------------------
Galatians Enterprises, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Tennessee to hire Stokes & Glass
as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
(a) give legal advice regarding its powers and duties in the
continued management of its property, including advising
the Debtor of its rights and remedies with respect to the
estate's assets and claims of creditors; and
(b) prepare applications, answers, orders, reports and other
legal papers.
Brian Glass, Esq., the attorney who will be handling the case, will
charge an hourly fee of $200. Stokes & Glass received a $3,500
retainer, plus the filing fee from the Debtor prior to the petition
date.
The firm does not represent any interest adverse to the Debtor,
according to court filings.
Stokes & Glass can be reached through:
Brian M. Glass, Esq.
Stokes & Glass
5050 Poplar Avenue, Suite 618
Memphis, TN 38157
Phone: (901) 401-1000
About Galatians Enterprises Inc.
Galatians Enterprises, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 17-26959) on August
9, 2017.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of less than $1 million.
Judge David S. Kennedy presides over the case.
GELTECH SOLUTIONS: Reports $1.1M Net Loss for Second Quarter
------------------------------------------------------------
GelTech Solutions, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.10 million on $181,469 of sales for the three months ended
June 30, 2017, compared to a net loss of $887,393 on $484,934 of
sales for the three months ended June 30, 2016.
The Company reported a net loss of $2.07 million on $570,505 of
sales for the six months ended June 30, 2017, compared to a net
loss of $2.47 million on $703,304 of sales for the same period
during the prior year.
As of June 30, 2017, Geltech had $2.31 million in total assets,
$8.74 million in total liabilities and a total stockholders'
deficit of $6.42 million.
Net cash used during the six months ended June 30, 2017, resulted
primarily from the net loss of $2,078,629 and an increase in
inventories of $145,384. These were partially offset by
depreciation of $44,992, amortization of debt discount of $98,166,
stock based compensation of $133,693, increases in accounts payable
and accrued liabilities of $84,279 and $299,323, respectively, and
a decrease in prepaid expenses of $49,375.
Net cash used during the six months ended June 30, 2016, resulted
primarily from the net loss of $2,470,363, a decrease in accounts
payable of $78,502 and increases in accounts receivable and
settlement receivable of $18,547 and $300,000, respectively, which
were partially offset by the losses on extension of warrants and
conversion of interest of $206,620 and $72,765, respectively, stock
based compensation of $298,808 and increases in accrued liabilities
and accrued settlements of, $276,206 and $240,631, respectively.
The major difference in net cash used in investing activities for
the six months ended June 30, 2017, as compared to the six months
ended June 30, 2016, resulted from the purchase of equipment to mix
and store our wildland product on airbases and for an additional
vehicle for the Company's wildland operations in 2016.
During the six months ended June 30, 2017, the Company received
$1,115,000 in exchange for 4,604,706 shares of common stock and two
year warrants to purchase 2,272,354 shares of common stock at an
exercise price of $2.00 per share in connection with private
placements with four accredited investors, including 2,063,069
shares and 1,031,536 warrants in exchange for $500,000 from its
chairman and principal shareholder and received $200,000 from
advances under the convertible line of credit facility from the
Company's chairman and principal shareholder. In addition, the
Company issued two year warrants to purchase 396,926 shares of
common stock at an exercise price of $2.00 per share in connection
with the convertible line of credit advances. The Company also
received $210,555 in exchange for 858,250 shares of common stock in
connection with a stock purchase agreement with Lincoln Park. The
amounts received were used to make payments on insurance premium
finance contracts of $43,539 as well as providing working capital.
During the six months ended June 30, 2016, the Company received
$407,275 in exchange for 1,015,951 shares of common stock in
connection with a stock purchase agreement with Lincoln Park,
received $1,205,000 from advances under the $5 million secured
convertible line of credit facility with our chairman and principal
shareholder, and received $150,000 in exchange for 428,572 shares
of common stock and two year warrants to purchase 214,286 shares of
common stock at an exercise price of $2.00 per share in connection
with private placements with a director and his wife. In addition,
the Company issued two year warrants to purchase 1,491,593 shares
of common stock at an exercise price of $2.00 per share in
connection with the convertible line of credit advances. The
amounts received were used to make payments on insurance premium
finance contracts of $46,598, as well as providing working
capital.
As of Aug. 11, 2017, we had approximately $168,000 in available
cash.
In August 2015, GelTech signed a $10 million Purchase Agreement
with Lincoln Park. The Company also entered into a Registration
Rights Agreement with Lincoln Park whereby the Company agreed to
file a registration statement related to the transaction with the
SEC covering the shares that may be issued to Lincoln Park under
the Purchase Agreement.
Under the terms and subject to the conditions of the Purchase
Agreement, GelTech has the right to sell, and Lincoln Park is
obligated to purchase, up to $10 million in shares of the Company's
common stock, subject to certain limitations, from time to time,
over the 30-month period commencing on Oct. 16, 2015. Failure of
our stock price to increase to, and remain above, $0.25 per share
will impact our ability to meet our working capital needs through
Lincoln Park.
"Until we generate sufficient revenue to sustain the business, our
operations will continue to rely on Mr. Michael Reger's investments
and the Lincoln Park Purchase Agreement. If Mr. Reger were to
cease providing us with working capital, our stock price were to
remain below the floor price in the Purchase Agreement with Lincoln
Park or we are unable to generate substantial cash flows from sales
of its products or complete financings, the Company may not be able
to remain operational. Although we do not anticipate the need to
purchase any additional material capital assets in order to carry
out our business, it may be necessary for us to purchase additional
support vehicles or mixing base equipment in the future, depending
on demand."
A full-text copy of the Form 10-Q is availabl for free at:
https://is.gd/ftINlc
About GelTech
Jupiter, Fla.-based GelTech Solutions. Inc. is a Delaware
corporation organized in 2006. The Company markets four products:
(1) FireIce(R), a water soluble fire retardant used to protect
firefighters, structures and wildlands; (2) Soil2O(R) 'Dust
Control', its new application which is used for dust mitigation in
the aggregate, road construction, mining, as well as, other
industries that deal with daily dust control issues; (3)
Soil2O(R), a product which reduces the use of water and is
primarily marketed to golf courses, commercial landscapers and the
agriculture market; and (4) FireIce(R) Home Defense Unit, a system
for applying FireIce(R) to structures to protect them from
wildfires.
GelTech Solutions reported a net loss of $4.67 million on $1.20
million of sales for the year ended Dec. 31, 2016, compared with a
net loss of $6.02 million on $1.31 million of sales for the year
ended Dec. 31, 2015.
Salberg & Company, P.A., in Boca Raton, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2016, citing that the Company has a net
loss and net cash used in operating activities in of $4,672,043 and
$3,344,593, respectively, for the year ended December 31, 2016 and
has an accumulated deficit and stockholders' deficit of $47,957,926
and $6,363,616, respectively, at Dec. 31, 2016. These matters
raise substantial doubt about the Company's ability to continue as
a going concern.
GREAT FALLS DIOCESE: Taps Douglas Wilson as Accountant
------------------------------------------------------
The Roman Catholic Bishop of Great Falls seeks approval from the
U.S. Bankruptcy Court in Montana to hire an accountant.
The Debtor proposes to employ Douglas Wilson and Company, P.C. to
audit its financial statements as of June 30, 2017.
The hourly rates charged by the firm are:
Jerry Schmitz Shareholder $165
Kate Dowson Senior $120
Matt Schmitz Junior $95
Shannon Brinkman Clerical $90
Jerry Schmitz, a certified public accountant, disclosed in a court
filing that he and his firm are "disinterested" as defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jerry Schmitz
Douglas Wilson and Company, P.C.
1000 1st Avenue South
Great Falls, MT 59401
Phone: (406) 761-4645
Fax: (406) 761-4619
Email: yourcpa@dwcoqf.com
About Roman Catholic Bishop of
Great Falls, Montana
The Roman Catholic Bishop of Falls, Montana, a Montana Religious
Corporate Sole, also known as the Diocese of Great Falls-Billings
-- http://www.dioceseofgfb.org/-- filed a Chapter 11 bankruptcy
petition (Bankr. D. Mont. Case No. 17-60271) on March 31, 2017.
The petition was signed by Bishop Michael W. Warfel.
In its petition, the Debtor disclosed $20.75 million in total
assets and $14.78 million in total liabilities.
The Hon. Benjamin P. Hursh presides over the case.
Bruce Alan Anderson, Esq., at Elsaesser Jarzabek Anderson Elliott &
MacDonald, CHTD.; and Gregory J. Hatley, Esq., at Davis Hatley
Haffeman & Tighe PC, serves as counsel to the Debtor.
NAI Business Properties and Matt Robertson have been employed as
realtor.
Pachulski Stang Ziehl & Jones LLP is the counsel to the official
committee of unsecured creditors formed in the Debtor's case.
HERBALIFE LTD: China Probe Into MLM Firms No Impact on Moody's CFR
------------------------------------------------------------------
Moody's Investors Service commented that China's investigation into
multi-level market (MLM) firms is credit negative for Herbalife.
However, the announcement does not affect Herbalife's ratings
including the Ba3 Corporate Family Rating or stable rating outlook
at this time because of the uncertain possible outcomes, but
adverse effects could lead to downward rating pressure.
Based in Los Angeles, CA, Herbalife LTD. is a leading direct-seller
of weight management products, nutritional supplements, and related
services, as well as personal care products intended to support a
healthy lifestyle. The company operates through a multi-level
marketing system that consists of approximately 4.1 million global
members across 94 countries. Herbalife generates roughly $4.4
billion in annual revenues.
INDUSTRIAL SURFACE: Sale of All Assets to ISA Acquisition Approved
------------------------------------------------------------------
Judge Melvin S. Hoffman of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Industrial Surface
Applications, Inc., to sell substantially all assets to ISA
Acquisition, LLC.
The sale is free and clear of any and all Encumbrances.
Upon receipt of the sales proceeds, the Debtor will and is
authorized to pay those amounts directly to the Internal Revenue
Service as the first lien holder on the Property.
About Industrial Surface Applications
Industrial Surface Applications, Inc., sought Chapter 11 protection
(Bankr. D. Mass. Case No. 16-11836) on May 13, 2016. The petition
was signed by Gilbert B. Guerin, President. The Debtor estimated
assets of up to $50,000 and $100,001 to $500,000 in debt. The
Debtor tapped Peter J. Haley, Esq., at Nelson Mullins Riley &
Scarborough LLP, as counsel.
J & J CHEMICAL: Trustee Taps Van Orden as Accountant
----------------------------------------------------
The Chapter 11 trustee for J & J Chemical Inc. seeks approval from
the U.S. Bankruptcy Court for the District of Idaho to hire an
accountant.
Wayne Klein, the bankruptcy trustee, proposes to employ Van Orden,
Lund & Cannon, PLLC to, among other things, prepare tax returns;
determine the best way to value inventory; and help respond to the
current audit by the Idaho Tax Commission.
The firm does not represent any interest adverse to the Debtor or
its estate, according to court filings.
Van Orden can be reached through:
Chris Cannon
Van Orden, Lund & Cannon, PLLC
1487 Parkway Drive
Blackfoot, ID 83221
Tel: 208-785-7234
About J & J Chemical, Inc.
J & J Chemical Inc of Blackfoot, Idaho, is a commercial laundry
repair and maintenance company.
The Debtor filed for Chapter 11 protection (Bankr. D. Idaho Case
No. 17-40037) on January 19, 2017. At the time of the filing, the
Debtor disclosed that it had estimated assets and liabilities of
less than $500,000.
The case is assigned to Jedge Jim D. Pappas. The Debtor is
represented by Brent T. Robinson of Robinson & Tribe.
Wayne Klein has been appointed as Chapter 11 trustee for the
Debtor. The trustee hired Cosho Humphrey, LLP as his bankruptcy
counsel.
JAMES ARRIGAN: Kudair Buying Interest in Katy Property for $162K
----------------------------------------------------------------
James W. Arrigan asks the U.S. Bankruptcy Court for the Northern
District of Texas to authorize the sale of his interest in his
residential rental property located at 3314 Bent Sprint Court,
Katy, Texas, to Hussain Kudair for $162,000.
The objection deadline is Sept. 4, 2017.
The Debtor wishes to sell his interest to allow him to fund his
Chapter 11 Reorganization. The liens on the property, held by the
lenders and the taxing authority, will be paid in full. This will
allow the Debtor to be free and clear of this asset and allow him
to use the net proceeds to continue paying for his Chapter 11
Bankruptcy.
The Debtor proposes to sell the property to the Buyer "as is."
The Debtor believes pay off on the property is approximately
$123,000. He has requested an official pay off but the mortgage
company will take 10 days to supply the official payoff amount. He
believes he will net approximately $24,860 and these monies will be
used to fund the Chapter 11 Plan.
A copy of the Sale Agreement attached to the Motion is available
for free at:
http://bankrupt.com/misc/James_Arrigan_39_Sales.pdf
James Arrigan sought Chapter 11 protection (Bankr. N.D. Tex. Case
No. 13-43082) on July 1, 2013.
JEFFERY P. ALEXANDER: Disclosures OK'd; Plan Hearing on Nov. 1
--------------------------------------------------------------
The Hon. William J. Lafferty, III, of the U.S. Bankruptcy Court for
the Northern District of California has approved the disclosure
statement dated June 28, 2017, referring to the Chapter 11
Trustee's plan of reorganization for Jeffery P. Alexander, DDS
Inc., dba Youthful Tooth, dated June 28, 2017.
A hearing on the confirmation of the Plan will be held on Nov. 1,
2017, at 10:30 a.m. Objections to the plan confirmation must be
filed by Oct. 25, 2017, which is also the deadline by which
creditors must vote to accept or reject the Plan.
About Jeffrey P. Alexander
Jeffrey P. Alexander, DDS, Inc., dba A Youthful Tooth, in Oakland,
Calif., filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case
No. 14-43851) on Sept. 19, 2014. Judge William J. Lafferty
presides over the case. Chris D. Kuhner, Esq., at Kornfield,
Nyberg, Bendes and Kuhner, P.C., serves as the Debtor's counsel.
In its petition, the Debtor listed total assets of $3.55 million
and total liabilities of $3.95 million. The petition was signed
by Jeffrey P. Alexander, president. A list of the Debtor's 15
largest unsecured creditors is available for free at
http://bankrupt.com/misc/canb14-43851.pdf
JOSEPH ANTONAKOS: $400K Sale of Staten Island Property Approved
---------------------------------------------------------------
Judge Elizabeth S. Stong of the U.S. Bankruptcy Court for the
Eastern District of New York authorized, with the consent of
SunTrust Bank, Joseph Antonakos' private sale of his vacant land
located at 29 Finlay Road, Staten Island, New York, to Carmine and
Daniela Tragni for $400,000.
A hearing on the Motion was held on Aug. 16, 2017.
The sale is free and clear of all liens, claims, encumbrances,
judgments, mortgages and other interests. All liens, claims and
encumbrances, including but not limited to the lien of the SunTrust
Mortgage, attach to the Sale proceeds in the same order of priority
as exist under nonbankruptcy law.
All ad valorem tax liens on the Finlay Property and the Seller's
portion of all normal and customary closing costs and fees will be
paid at closing from the Sale Proceeds. Subject to the Reserved
Amount, all other Sale proceeds will be paid at closing to SunTrust
in partial satisfaction of the SunTrust Mortgage. In the event
that Purchaser defaults under the Contract, any forfeiture of the
security deposit by to the Debtor will be shared equally between
the estate and SunTrust (with SunTrust's share being applied in
partial satisfaction of the SunTrust Mortgage). SunTrust's receipt
of any security deposit and Sale proceeds is free from offset,
clawback and any other defenses.
From the Sale proceeds, $25,000 will be escrowed by the Debtor's
counsel, segregated from all property of the estate, subject to the
liens of SunTrust and distribution upon further court order
("Reserved Amount").
The 14-day stay requirements of Bankruptcy Rule 6004(h) are waived,
and the Order will be immediately effective.
Joseph Antonakos sought Chapter 11 protection (Bankr. E.D.N.Y. Case
No. 16-42935) on June 30, 2016.
JSS OF ALBUQUERQUE: State's Police Powers Exempt from Stay
----------------------------------------------------------
The State of New Mexico, acting through its Attorney General, has
requested the U.S. Bankruptcy Court for the District of New Mexico
to determine whether its enforcement action filed in state court
against JSS of Albuquerque, LLC and its principal, Jesus M. Cano,
falls within the police or regulatory power exception to the
automatic stay.
U.S. Bankruptcy Judge Robert H. Jacobvitz in New Mexico finds that
the State's request for relief falls within the police or
regulatory exception to the automatic stay.
The Debtor is in the business of locating residential properties to
sell to consumers. The Debtor acquires the properties from an
"investor" or "investors" under real estate contracts ("upstream
real estate contracts") and resells the properties to consumers
under wrap-around real estate contracts. A substantial portion of
the payments under the wrap-around real estate contracts is used to
pay the upstream real estate contracts, where the Debtor retains
the difference between the upstream payment and the payment from
the consumer to the Debtor. An escrow company divides the
consumers' payments between payment on the upstream real estate
contract and payment to the Debtor.
Consequently, the State filed an action against the Debtor, Mr.
Cano, and other unknown persons, in the Second Judicial District
Court, County of Bernalillo, State of New Mexico as Case No.
D-202-CV-2016-07636 on December 9, 2016, requesting for the
following relief:
A. The court issue a temporary injunction restraining the
Defendants from engaging in the conduct alleged herein.
B. The court issue an order freezing Defendants' assets
related to the real estate services and home financing business
activities JSS of Albuquerque, LLC until such time as a Receiver or
neutral party can verify whether consumers were or were not victims
of Defendants' enterprise.
C. For the appointment of a Receiver to manage the assets of
JSS of Albuquerque, LLC related to its real estate and home
financing business activities for later disgorgement and refund to
the consumers harmed by Defendants' unlawful activities.
D. The court determine and adjudge that Defendants' real
estate and home financing scheme violated the New Mexico Unfair
Trade Practices Act, the New Mexico Mortgage Loan Originator
Licensing Act and the New Mexico Real Estate Brokers and Salesman
Licensing Laws.
E. The court determine and adjudge Defendants' real estate and
home financing scheme is fraudulent.
F. The court issue a permanent injunction restraining the
Defendants from engaging in conduct which is found to be unlawful
pursuant to the NMRELA [NMREB], the NMMLOLA [NMMLO], and the
NMUPA.
G. The court rescind all of Defendants' real estate services
and home financing contracts and all real estate contracts
associated with the same or similar unlawful business scheme.
H. The court order the Defendants to pay restitution to all
persons for any monies which were acquired through any practice
found to be unlawful pursuant to the NMMLOLA [NMMLO] and the
NMUPA.
I. The court order Defendants to disgorge all moneys collected
pursuant to real estate services and home financing contracts and
pursuant to any real estate contracts associated with the same or
similar unlawful business scheme.
J. The court order the Defendants to pay to the State of New
Mexico a civil penalty of up to $5,000 per willful violation of the
NMRELA [NMREB] and the NMUPA.
K. The court determine and adjudge that Cano is personally
liable, as a corporate owner, officer, or manager having knowledge
and authority to direct the acts of JSS, for any violations of the
NMRELA [NMREB], the NMMLOLA [NMMLO], and the NMUPA by JSS.
L. The court order Defendants to reimburse the New Mexico
Office of the Attorney General for its attorney[s'] fees and costs
incurred in the investigation and prosecution of this matter.
On December 15, 2016, the State obtained an Order Granting
Permanent Injunction in the State Court Action. Among other things,
the Injunction prohibits the Debtor and Mr. Cano from the
following:
(1) Offering to sell any property, enter into a real estate
contract or engage in the sale of any real estate or home related
services to consumers;
(2) Taking any legal action with respect to any property
related to this matter, including, but not limited attempting to
evict any inhabitant of the properties related to this matter; and
(3) Soliciting real estate and home related insurance business
from the public.
The Court explains that the State is carrying out public policy by
enforcing these types of consumer protection statutes through
declaratory relief, and not pursuing its own pecuniary interest in
the Debtor or Debtor's property, and nor does the declaratory
relief requested adjudicate private rights.
The Court also finds that the State's prosecution of the State
Court Action, including the adjudication of its requests for
declaratory and injunctive relief and liquidation of civil penalty
amounts under the NMREB, the NMMLO and the NMUPA, constitutes a
proper exercise of the State's police and regulatory powers to
protect the citizens of the State of New Mexico -- such claims are
excepted under Section 362(b)(4) from the operation of the
automatic stay.
However, the Court rules that the State's requests for restitution,
disgorgement, and rescission primarily adjudicate private rights.
Consistent with New Mexico case law, the Court says that such
claims fail to satisfy the public policy test under Eddleman.
Consequently, the Court maintains that those claims do not fall
within the exception from automatic stay.
The Court says that the State has not met its burden to show that
enforcement of the provision in the Permanent Injunction that
requires the Debtor to obtain further orders from the State Court
to collect wrap around real estate contract payments after February
2017 because it falls within Section 362(b)(4)'s exception.
The Court maintains, however, that the State may file a motion
requesting the Court for relief from the automatic stay to pursue
its claims for restitution, disgorgement, and rescission or to seek
other relief in in the State Court Action. If the State obtains a
money judgment for civil penalties in the State Court Action, the
State must return to the Bankruptcy Court because collection of any
money judgment for civil penalties is stayed under Section 362(a).
A full-text copy of the Memorandum Opinion dated August 10, 2017,
is available at https://is.gd/AdaR9L from Leagle.com.
About JSS of Albuquerque
JSS of Albuquerque, LLC filed a voluntary Chapter 11 Petition
(Bankr. D.N.M. Case No. 17-10092) on January 18, 2017, disclosing
assets and liabilities ranging from $100,000 to $500,000. The
petition was signed by Jesus Cano, managing member. The Debtor is
represented by Michael K. Daniels, Esq.
KANAWHA CO, WV: Moody's Cuts Rating on 2013 Housing Bonds to Ba2
----------------------------------------------------------------
Moody's Investors Service has downgraded the Kanawha County
Commission, West Virginia Student Housing Revenue Bonds (West
Virginia State University Foundation Project) Series 2013
(approximately $25 million bonds outstanding) to Ba2 from Ba1. The
Outlook is revised to Negative from Stable.
The Series 2013 rating downgrade follows the Moody's rating
downgrade of West Virginia State University to B1 on August 10,
2017. The rating for WVSU remains under review for further
downgrade.
As the project manager for the student housing facility, the
university subordinates most operating expenses to debt service
which closely ties the financial position of the Series 2013 bonds
to the university.
Rating Outlook
The outlook is negative based on the project's reliance on
increased rental rates while maintaining full occupancy in order to
meet escalating debt service payments, which may be challenging
given the university's current financial position.
Factors that Could Lead to an Upgrade
A significant improvement in the university's financial position
as reflected in an investment grade rating
A sustained increase in operating revenues at the Project coupled
with solid enrollment growth
Factors that Could Lead to a Downgrade
Declining net revenue stemming from lower than projected
occupancy or rents
Failure of the university to fund occupancy shortfalls or
subordinated expenses
Erosion of debt service coverage ratio due to declining or flat
revenue
Legal Security
The Series 2013 bonds are limited obligations of the issuer, The
County Commission of Kanawha County, payable from the pledged
revenues derived by the student housing project, Judge Damon J.
Keith Hall. The project was built on university-owned land, under a
ground lease with the foundation that runs coterminous with the
financing.
The Series 2013 bonds are non-recourse obligations of the
borrower.
Use of Proceeds
The bond proceeds were used to finance the construction and
furnishing of a 291-bed student housing facility on the campus of
the West Virginia State University that primarily targets freshman
and sophomore students. The units consist of fully furnished
apartments, suites and semi-suites and includes private, common and
outdoor living amenities.
A portion of bond proceeds also funded a debt service reserve equal
to maximum annual debt service (and capitalized interest accounts
as well as cost of bond issuance.
Obligor Profile
The West Virginia State University Foundation is a West Virginia
nonprofit corporation whose primary purpose is to support the West
Virginia State University.
Methodology
The principal methodology used in this rating was Global Housing
Projects published in June 2017.
KNIGHT ENERGY: El Caballero Appeal Removed from Tex. App. Docket
----------------------------------------------------------------
The Court of Appeals of Texas, Fourth District, has issued an Order
abating and removing the appealed case EL CABALLERO RANCH, INC. and
Laredo Marine, L.L.C., Appellant, v. GRACE RIVER RANCH, L.L.C.,
Appellee, No. 04-16-00298-CV, (4th Tex. App.) from the Court's
active docket because Appellant El Caballero Ranch, Inc. has filed
a suggestion of bankruptcy, stating that it has filed a petition in
bankruptcy under Chapter 11 (Bankr. W.D. La. Case No. 17-51014) on
August 8, 2017 with the U.S. Bankruptcy Court for the Western
District of Louisiana, Lafayette Division.
A full-text copy of the Order dated August 10, 2017, is available
at https://is.gd/IMMvi2 from Leagle.com.
Kimberly S. Keller, Shane John Stolarczyk, Annalyn Garrett Smith,
Judy Kay Jetelina, Justin Barbour, for El Caballero Ranch, Inc., et
al., Appellant.
Shannon K. Dunn, Steven Haley, Beth Watkins, John Howard Patterson
Jr., Jose M. Rubio Jr., for Grace River Ranch, L.L.C., Appellee.
About Knight Energy Holdings
Knight Energy Holdings, LLC, supplies rental equipment and services
for drilling, completion and well control activities, serving a
diverse base of oil and gas operators. Knight is a multi-basin
service provider with operations in nine states. Its services are
available to clients in the United States, including the Permian,
Eagle Ford, San Juan, Bakken, Cotton Valley, DJ, Haynesville,
Alaska, and the Gulf Coast. In the past, Knight Energy also
provided services internationally in Norway, the Netherlands, Iraq,
UAE, Australia, and Colombia. There are presently no international
operations. Knight Energy currently employs approximately 330
employees spread throughout the 18 active locations.
Knight Energy Holdings, LLC, formerly Knight Oil Tools, LLC and its
affiliates filed Chapter 11 petitions (Bankr. W.D. La. Lead Case
No. 17-51014) on Aug. 8, 2017. The petitions were signed by Kelley
Knight Sobiesk, member, director.
At the time of filing, Knight Energy Holdings' had $50 million to
$100 million in estimated assets and $100 million to $500 million
in estimated liabilities.
The case is assigned to Judge Robert Summerhays.
Heller, Draper, Patrick, Horn & Dabney, L.L.C., serves as
bankruptcy counsel to the Debtors; and Gary L. Pittman and
Opportune, LLP, serves as the crisis managers. Donlin, Recano &
Company, Inc., is the claims, noticing & solicitation agent and
maintains the site
https://www.donlinrecano.com/Clients/knight/Index
KUEHG CORP: Moody's Lowers Rating on 1st Lien Secured Loans to B2
-----------------------------------------------------------------
Moody's Investors Service downgraded the rating on KUEHG Corp.'s
first lien senior secured credit facilities to B2 from B1 following
a shift in the structure of the company's offering to a higher
amount of first lien debt and less second lien debt. The first lien
credit facilities consist of an amended $990 million ($982 million
outstanding) term loan due 2022 and an $80 million revolving credit
facility due 2020. Moody's also affirmed the company's B3 Corporate
Family Rating (CFR), B3-PD Probability of Default Rating (PDR), and
the Caa2 rating on its proposed $210 million second lien term loan
due 2025. The rating outlook is stable.
The downgrade of the first lien term loan and revolver rating to B2
from B1 reflects the material reduction of the size of second lien
debt (approximately 20%) in the company's capital structure
compared to the original proposed offering and the resulting lower
loss absorption cushion provided by this instrument to the first
lien credit facilities. The offering structure was changed to
upsize the first lien term loan by $100 million instead of $50
million and reduce the size of the new second lien debt offering to
$210 million from $260 million. All ratings are subject to the
execution of the transaction as currently proposed and Moody's
review of final documentation. The instrument ratings are subject
to change if the proposed capital structure is modified.
The following rating actions were taken:
Issuer: KUEHG Corp.
Corporate Family Rating, affirmed at B3
Probability of Default Rating, affirmed at B3-PD
$80 million first lien senior secured revolving credit facility
due 2020, downgraded to B2 (LGD3) from B1 (LGD3)
Amended $990 million ($982 million outstanding including proposed
$100 million add-on) first lien senior secured term loan due 2022,
downgraded to B2 (LGD3) from B1 (LGD3)
Proposed $210 million second lien senior secured term loan due
2025, affirmed at Caa2 (LGD5)
Outlook, remains stable
RATINGS RATIONALE
The B3 CFR reflects KinderCare Education's modest free cash flow
generation given high capex requirements as the company refreshes
its portfolio of existing learning centers and builds new centers,
and high levels of debt following the leveraged buyout by Partners
Group in August 2015 and the proposed dividend recapitalization.
The rating also reflects the cyclical nature of the child-care and
education industry, where demand for the service is sensitive to
macroeconomic factors such as employment and demographic trends,
the highly fragmented and competitive nature of the industry, and
susceptibility to reductions in federal and state funding support.
Furthermore, the company's ratings are negatively affected by
aggressive financial policies, including shareholder distributions
given the private equity ownership. However, the rating is
supported by the company's large scale within the childcare and
education industry, broad geographic diversity within the U.S., and
the value of its brands. Additionally, the ratings favorably
reflect improving general economic conditions and employment
trends, and Moody's projection for low to mid-single digit same
center sales growth and improving occupancy rates. Moody's also
expects the company's ongoing cost structure rationalization and
real estate portfolio optimization initiatives will continue to
drive margin improvements. Also supportive of the rating are
favorable long term demographic fundamentals, including population
growth and increasing percentage of dual income families.
The ratings could be upgraded if the company demonstrates same
center revenue growth and improves operating margins such that
EBITDA less capex to interest coverage exceeds 1.5x, free cash flow
to debt is in the mid-single digit range, and adjusted debt to
EBITDA is sustained below 5.0x. In addition, for a higher rating
consideration, the company would need to demonstrate a substantial
improvement in liquidity including stronger and consistent free
cash flow generation.
The ratings could be downgraded if the company experiences a
deterioration in its operating performance or increase in leverage,
possibly due to declines in same center sales, acquisitions or
shareholder distributions. Adjusted debt to EBITDA sustained above
6.5x or a material weakening in the company's liquidity profile
could also pressure ratings.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
KinderCare Education, based in Portland, Oregon, is a large scale
for-profit provider of child-care and education services in the
U.S. As of July 1, 2017, the company had a licensed capacity to
serve 177,500 children from 6 weeks to 12 years of age in 38 states
and the District of Columbia. The company operates approximately
1,291 community-based centers, 80 employer-partnership centers and
497 school-partnership sites under a number of recognized brands,
including "KinderCare", "KinderCare Education at Work" (formerly
"CCLC"), and "Champions." KinderCare Education was acquired by
Partners Group in August 2015. In the LTM period ending July 1,
2017, the company generated approximately $1.6 billion in revenues.
LA PALOMA GENERATING: Proposes Sept. 27 Auction for All Assets
--------------------------------------------------------------
La Paloma Generating Co., LLC, and its affiliated debtors, ask the
U.S. Bankruptcy Court for the District of Delaware to authorize the
bidding procedures in connection with the sale of substantially all
assets at auction.
A hearing on the Motion is set for Sept. 6, 2017 at 10:00 a.m. The
objection deadline is Aug. 30, 2017 at 4:00 p.m.
The Debtors have filed their Proposed Disclosure Statement and the
Plan, which provides for a sale of their natural gas-tired,
combined cycle electric generating facility located in McKittrick,
California and substantially all of their other operating assets
("Acquired Assets"). In furtherance of the Sale, the Debtors,
through their investment banker, Jefferies, LLC, began soliciting
indications of interest from potential purchasers on July 21, 2017
and are continuing to pursue potential purchasers.
To the extent that the Debtors receive sufficiently attractive
indications of interest from such potential purchasers by Aug. 30,
2017, the Debtors intend to conduct an Auction for the Acquired
Assets in parallel with their plan process and have developed the
proposed Bidding Procedures for that Auction to maximize value for
their estates. If they do not receive sufficiently attractive
indications of interest, the Debtors intend to pursue the Sale as a
private sale to their first-lien lender, LNV Corp., under the Plan
without a further Auction, but will still require approval of the
proposed Bidding Procedures to establish or confirm the amount of
LNV's allowed credit bid for the Acquired Assets. Accordingly, the
proposed Bidding Procedures reflect a desire to emerge from the
chapter 11 cases prior to Nov. 1, 2017.
The salient terms of the Bidding Procedures are:
a. A Stalking Horse APA is executed no later than Sept. 6,
2017. The purchaser under the Stalking Horse APA will serve as the
"Stalking Horse Bidder" at the Auction, if one is held.
b. If the Debtors choose to enter into a Stalking Horse APA,
the Debtors may offer the Stalking Horse Bidder a Break-Up Fee of
up to 3.0% of the Purchase Price plus Expense Reimbursement for the
Stalking Horse Bidder's reasonable and documented out-of-pocket
costs and expenses in an amount up to 1% of the Purchase Price.
c. Bid Deadline: Sept. 22, 2017 at 5:00 p.m.
d. Good Faith Deposit: 10% of the gross consideration payable
at closing
e. Bid is irrevocable until the earlier of Nov. 30, 2017 and
the first Business Day following the closing of the Sale.
f. Baseline Bid: The Debtors will select what they determine to
be the highest or otherwise best Qualified Bid for the Acquired
Assets to serve as the opening bid at the Auction.
g. Auction: The Auction will take place at the offices of
Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York, at
10:00 a.m. (PET) on Sept. 27, 2017 at 10:00 a.m.
h. Minimum Overbid: The Debtors will announce the bidding
increments for bids at the outset of the Auction.
i. "As Is Where Is": Any Sale will be on an "as is, where is"
basis and without representations or warranties of any kind.
j. Objection Deadline for Plan Confirmation and the Sale and
for Adequate Assurance Objections: Oct. 6, 2017 at 4:00 p.m. (PET)
k. Sale and Confirmation Hearing: Oct. 12, 2017 at 10:00 a.m.
l. Effective Date of Plan and Sale Closing: Oct. 26, 2017
A copy of the Bidding Procedures attached to the Motion is
available for free at:
http://bankrupt.com/misc/La_Paloma_562_Sales.pdf
By no later than Aug. 30, 2017, if the Debtors have received
sufficiently attractive indications of interest for the Acquired
Assets, the Debtors will file with the Court a copy of the Proposed
APA that they intend to send to Interested Bidders and will
highlight the relevant provisions required by Local Rule 6004-1.
If LNV participates in the Auction, including as the Stalking Horse
Bidder, it is expected that LNV will seek to credit bid as part of
the consideration being offered for the Acquired Assets in the
Sale. As of the Petition Date, LNV appears to have only have a
perfected lien on substantially all of the Debtors' real property
and fixtures -- and not on any of the Debtors' personal property.
Further, certain parties have disputed what portion of the Acquired
Assets constitute real property and what portion constitute
unencumbered assets, although it is clear that at least some of the
Acquired Assets are not LNV's collateral. Accordingly, LNV will be
required to include a cash component in any offer for the Acquired
Assets on account of such unencumbered assets.
On Aug. 25, 2017, the Debtors will file a supplement to the Motion
describing the categories of Acquired Assets that the Debtors
believe are not encumbered by LNV's liens, or are subject to an
avoidable lien in favor of LNV, and the value that the Debtors
ascribe to such assets for purposes of the Bidding Procedures.
This value will be the Debtors good faith determination of the
amount of cash LNV should be required to include in any bid for the
Acquired Assets. The Debtors will ask that the Court states in the
Bidding Procedures Order the amount of cash that LNV would be
required to include in any bid for the Acquired Assets.
Because the Debtors are seeking approval of the Sale in connection
with confirmation of the Plan, the Debtors will provide the Sale
and Confirmation Hearing Notices upon all Notice Parties.
Additionally, the Debtors, as part of the Sale, may seek to assume
and assign the Assumed and Assigned Agreements to the Successful
Bidder. Objections, if any, must be filed by Sept. 19, 2017 at
4:00 p.m. (PET).
The Debtors believe that the Bidding Procedures are appropriately
tailored to ensure that the bidding process is fair and reasonable
and will yield the maximum value for their estates and creditors.
The proposed Bidding Procedures are designed to maximize the value
received for the Acquired Assets by facilitating a competitive
bidding process in which all potential bidders are encouraged to
participate and submit competing bids. Accordingly, the Debtors
ask the Court to approve the relief sought.
About La Paloma Generating
La Paloma Generating Company, LLC, a D.C.-based merchant power
generator, and its affiliates La Paloma Acquisition Co, LLC, and
CEP La Paloma Operating Company, LLC, filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Case Nos. 16-12700 to 16-12702) on Dec.
6, 2016. The petitions were signed by Niranjan Ravindran, as
authorized person.
La Paloma Generating estimated $100 million to $500 million in
assets and $500 million to $1 billion in liabilities.
The Hon. Christopher S. Sontchi presides over the cases.
The Debtors are represented by John J. Rapisardi, Esq., and George
A. Davis, Esq., at O'Melveny & Myers LLP, as lead bankruptcy
counsel; and Mark D. Collins, Esq., Andrew Dean, Esq., and Jason M.
Madron, Esq., at Richards, Layton & Finger, P.A., as Delaware
counsel. Lawyers at Curtis, Mallet-Prevost, Colt & Mosle LLP serve
as conflicts counsel. Jefferies LLC serves as the Debtors'
financial advisor and investment banker, while their claims and
noticing agent is Epiq Bankruptcy Solutions. Alvarez & Marsal
North America, LLC, is the financial advisor.
Maria Aprile Sawczuk has been appointed fee examiner in the
bankruptcy case.
On Aug. 2, 2017, the Debtors filed a Chapter 11 Plan and Disclosure
Statement.
LARKIN EXCAVATING: Flat Land Buying All Assets for $2 Million
-------------------------------------------------------------
Larkin Excavating, Inc., asks the U.S. Bankruptcy Court for the
District of Kansas to authorize the sale of substantially all
assets to Flat Land Excavating, LLC, for $2,010,000, subject to
overbid.
Larkin's Assets consist primarily of a landfill/quarry, real
property, an office building, warehouse and yard located at 13575
E. Gilman Rd., Lansing, Kansas, equipment used in and necessary for
the operation of Larkin's business, accounts receivable,
intellectual property and intangible, other miscellaneous personal
property and leases (subject to the lessor's rights to approve the
assumption and assignment of the leases).
Larkin has struggled for many years, resulting in, among other
payables, a significant tax debt in excess of $1,000,000 owed to
the Internal Revenue Service and other taxing authorities. By the
Petition Date, Larkin's debts far exceeded its ability to pay or
reorganize. Because of the substantial tax debt and continuing
capital needs of the business, for which it lacks funding sources,
Larkin has determined that it is in its best business judgment and
the best interests of the bankruptcy estate to sell substantially
all of its Assets.
On June 23, 2017, Flat Land presented Larkin with a Letter of
Intent ("LOI") under which Flat Land has offered to purchase
substantially all of the Assets for $2,010,000.
Larkin proposes to sell the Assets to Flat Land, free and clear of
liens and encumbrances. Pursuant to the LOI, the parties have
agreed to a sale of the Assets to Flat Land for a purchase price of
$2,010,000. The terms of the sale will be memorialized in an asset
Purchase Agreement, the form of which Larkin intends to file prior
to the sale date and to present to any prospective bidders who
request it. Flat Land is purchasing the property in an "as is"
condition and agrees to accept said property in its present
condition. If Flat Land is not the winning bidder at the auction
for the sale of the Assets, it will be entitled to receive $37,500
as a break-up fee.
Should parties other than Flat Land desire to submit competing
offers to purchase the Assets, those offers will be subject to
these terms and conditions:
a. Pending approval of the Motion, an Auction will be
conducted on Sept. 14, 2017, at 10:00 a.m., as scheduled by the
Court.
b. Any purchase offer for all of the Assets must be submitted
in an initial amount not less than $2,085,000.
c. Any subsequent bids will be in increments of $75,000, or
such lesser amount as Larkin considers appropriate, which may be
determined at the sale hearing.
d. Any competing bid will be on terms which are no more
burdensome or conditional to Larkin or less burdensome or
conditional to the bidder than are the terms of the Asset Purchase
Agreement.
d. Any competing bid will not be contingent upon either
receipt of financing necessary to its consummation or upon
completion of any due diligence.
e. In order to participate in any bidding process conducted at
the hearing on the Motion, a competing bidder must appear with: (i)
appropriate evidence of its financial ability to consummate a
contract should such party be the successful bidder at the hearing
on the Motion; and (ii) a cashier's check in the amount of $25,000
as and for an earnest money deposit, which deposit will be
refundable should the bidding process not result in a sale to the
competing bidder.
f. Any competing bidder must be able to perform under and
enter into a contract substantially similar to the Asset Purchase
Agreement no later than Oct. 15, 2017. The Closing of the sale may
occur prior to Oct. 2, 2017, but possession of the assets will not
be granted until Larkin has completed the pending job known as the
Y Belton job, which is scheduled to be concluded by Oct. 1, 2017.
g. Any person who desires to submit a competing bid prior to
the hearing on the Motion and who desires to conduct a due
diligence investigation with Larkin's cooperation will be entitled
to conduct such due diligence investigation upon the following
conditions: (i) the competing bidder will deliver a Confidentiality
Agreement and a non-binding letter of intent to Larkin, through its
counsel, indicating its interest in the acquisition of the Assets
and setting forth the terms of its proposed offer; (ii) the
competing bidder will, contemporaneously with submission of its
letter of intent, provide appropriate evidence of its financial
ability to consummate a contract should such party be the
successful bidder at the hearing on the Motion; and (iii) the
competing bid will be accompanied by an earnest money deposit in
the amount of $25,000 which will be refundable should the competing
bid not be the prevailing bid at the hearing on the Motion.
h. The competing bidder will not tender an offer which is
contingent on completion of due diligence.
The Assets are, either in part or in whole, subject to the liens of
Central Bank of the Midwest, the Internal Revenue Service,
Commercial Credit Group, Inc., University National Bank, CNH
Industrial Capital America LLC, and Spectrum Health Foundation,
Inc. ("Secured Parties"), which liens will attach to the proceeds
of this sale in the order of their priority or to the extent of
their interests.
The Debtor has also identified parties who have filed UCC Financing
Statements but who, the Debtor believes, are no longer creditors of
the Debtor. However, as the UCC Financing Statements have not been
terminated, out of an abundance of caution, the Debtor will provide
notice to these additional potential secured parties:
a. Komatsu Financial Ltd. Partnership, 1701 West Golf Road,
Suite 300, Rolling Meadows, Illinois. A UCC was filed on April 2,
2008, continued on March 1, 2013, and lapses on April 2, 2018. A
second UCC was filed on Oc. 29, 2008, continued on Aug. 2, 2013,
and lapses on Oct. 29, 2018. As the Debtor paid this creditor in
full in early 2015, the Debtor contends that Komatsu is not a
creditor of the Debtor.
b. Kubota Leasing, 655 Business Center Drive Suite 250,
Horsham, Pennsylvania. The UCC was filed on Dec. 31, 2012, and
lapses on Dec. 31, 2017. The Debtor contends that Kubota is no
longer a secured creditor as Kubota repossessed and sold its
collateral prior to the filing of the case.
c. Community First Bank, 650 Kansas Ave, Kansas City, Kansas.
The UCC was filed on April 11, 2016, and lapses on April 11, 2021.
The Debtor does not believe Community First Bank is a creditor but
also believes that this is a duplication of the UCC filed by Kubota
Leasing.
d. Corporation Service Co., PO Box 2576, Springfield,
Illinois. The UCC was filed on Sept. 6, 2016, without an
information concerning on whose behalf the UCC was filed. The
Debtor contends that this is an invalid UCC.
A copy of the LOI attached to the Motion is available for free at:
http://bankrupt.com/misc/Larkin_Excavating_107_Sales.pdf
Larkin proposes that all net sale proceeds be paid to the Secured
Parties in the order of their priority or to the extent of their
interests and for application against the indebtedness owed to that
party, as agreed upon between Larkin and the Secured Parties, or as
determined by the Court. In the event the sale proceeds exceed the
aggregate debt due the Secured Parties, Larkin will retain those
proceeds for disbursement upon proper application to the Court.
Larkin asserts that its efforts to date, coupled with the bidding
procedures detailed, will garner the best and highest price for the
Assets. Accordingly, the Debtor asks the Court to approve the
relief requested.
About Larkin Excavating
Larkin Excavating, Inc. -- http://larkinexcavating.com/-- provides
construction services and operates throughout the United States.
It owns a shop and office building located at 13575 Gilman Road,
Lansing, Kansas, valued at $453,500; a vacant land in Eisenhower
Road, Leavenworth, with a value of $300,000; and a track of real
property, identified by Larkin as the rock quarry and landfill, in
Leavenworth County, valued at $400,000.
Larkin Excavating sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Kan. Case No. 17-20890) on May 17, 2017.
John Larkin, president, signed the petition.
At the time of the filing, the Debtor disclosed $3.46 million in
assets and $6.38 million in liabilities.
Judge Dale L. Somers presides over the case.
The Debtor is represented by Joanne B. Stutz, Esq., at Evans &
Mullinix, P.A.
LEON OSCAR RAMIREZ: Probate Estate Property of Bankruptcy Estate
----------------------------------------------------------------
Judge Eduardo V. Rodriguez of the U.S. Bankruptcy Court for the
Southern District of Texas ruled that Debtors Leon Oscar Ramirez
Jr. and Rosalinda Eckhardt's interest in their father's probate
estate constitutes an equitable interest under the Bankruptcy Code
and is, therefore, property of the bankruptcy estate, and, as such,
the Internal Revenue Services' Objection should be overruled as to
Debtors' interests in property of the probate estate being property
of the respective bankruptcy estates but sustained as to Debtors
having personal liability for some portion or all of the estate
taxes.
In reviewing both federal and state statutes, the Court finds that
section 541 of the Bankruptcy Code, as modified by section 1115,
provides an expansive view of property of the estate that
encompasses equitable interests in probate estates held by debtors
at the time of filing for bankruptcy. Thus, the Court looked to
Texas law, chiefly sections 101.001 and 101.051 of the Texas Estate
Code, which provides that beneficiaries are immediately vested in
their share of the probate estate subject to the probate estate
paying valid debts owed by the decedent.
Therefore, Debtors, since the moment of filing their respective
bankruptcies, hold equitable interests in their shares of their
father's probate estate subject to the payment of valid debts.
These equitable interests, including the required payment of debts,
passed into the respective bankruptcy estates along with their
other respective assets. As such, the IRS' Objection should be
overruled as to Debtors' equitable interests in property of the
probate estate not being included in the respective bankruptcy
estates. Moreover, IRS' arguments regarding the personal liability
of Ramirez and, necessarily, Eckhardt as co-executrix, pursuant to
section 3713 and section 6324, for the estate taxes owed by the
decedent's probate estate are consistent with the Debtors' own
schedules. As such, the IRS' Objection should be sustained as to
Debtors being personally liable for the estate taxes as well.
Further, the IRS filed a proof of claim for the estate tax
liability in both bankruptcy cases that are allowed because Debtors
have neither objected nor marked the scheduled debts as disputed,
contingent or unliquidated.
The Court, however, does not reach the matter of whether the Plan
is improperly attempting to use assets of the probate estate,
paying creditors out of order, or whether the Plan is not feasible
as is alleged by the IRS. The Court will entertain arguments on the
remainder of IRS' Objection at the time of Debtors' confirmation
hearing and will issue further orders accordingly.
A full-text copy of Judge Rodriguez's Memorandum Opinion dated
August 16, 2017, is available at:
http://bankrupt.com/misc/txsb15-50164-200.pdf
Leon Oscar Ramirez, Jr. filed a Chapter 11 petition (Bankr. S.D.
Tex. Case No. 15-50164) on October 26, 2015, and is represented
by:
Jesse Blanco, Esq.
7406 Garden Grove
San Antonio, TX 78250
Tel: 713-320-3732
Fax: 210-509-6903
E-mail: lawyerjblanco@gmail.com
LPL HOLDINGS: S&P Affirms BB- ICR Amid National Planning Deal
-------------------------------------------------------------
S&P Global Ratings said it affirmed its 'BB-' issuer credit rating
on LPL Holdings Inc. The outlook remains stable. At the same time,
S&P affirmed its 'BB-' senior secured and 'B+' senior unsecured
debt ratings.
S&P said, "The affirmation follows LPL's announcement that it has
acquired the independent broker-dealer network of National Planning
Holdings Inc. (NPH) for upfront cash of $325 million plus a
potential back-end payment of up to $123 million, to be paid
largely from cash on hand. In our view, the transaction will not
erode LPL's financial position or liquidity.
"The stable outlook reflects our expectation that the firm will
maintain adequate liquidity, including on-balance-sheet cash of at
least $300 million, but that financial management will remain
aggressive. Further, we expect that leverage over the next 12
months, as defined in LPL's credit agreement, will remain below
3.5x. We expect the firm to limit buybacks in the wake of the NPH
acquisition.
"We could lower our issuer credit rating over the next 12-24 months
if the firm's gross stable funding ratio or liquidity coverage
metric were to fall below 100%, or if liquidity otherwise
deteriorated materially. We could also downgrade the company if we
expect leverage (as measured by the company's credit agreements) to
be above 4x.
"Conversely, over the same time horizon, we could raise the ratings
if the company successfully integrates NPH and commits to
maintaining stronger liquidity, including at the holding company."
LSC COMMUNICATIONS: Moody's Alters Outlook to Neg., Affirms Ba3 CFR
-------------------------------------------------------------------
Moody's Investors Service (Moody's) changed LSC Communications,
Inc.'s (LSC) outlook to negative from stable and affirmed the
company's Ba3 corporate family rating (CFR) and Ba3-PD probability
of default rating. As part of the same action, Moody's also
affirmed the Baa3 rating on LSC's $400 million super priority
senior secured revolving credit facility, the Ba3 rating on the
company's $304 million senior secured term loan B (originally
issued at $375 million), and the Ba3 rating on its $450 million
senior secured notes. The company's speculative grade liquidity
rating was downgraded to SGL-2 (good) from SGL-1 (very good).
"We changed LSC's outlook to negative because revenues and cash
flow are declining faster than Moody's expected, and it is not
clear that management will pre-pay debt to drive de-levering" said
Bill Wolfe, a Moody's senior vice president. The accelerating
revenue declines also caused the SGL rating downgrade. Wolfe noted
that a continuation or acceleration of the revenue trend would
signal accelerating business risk deterioration, and mandate lower
financial risk, i.e., lower leverage of debt/EBITDA, in order to
maintain the existing Ba3 rating.
The following summarizes rating action and LSC's ratings:
Issuer: LSC Communications, Inc.
Outlook, Changed to Negative from Stable
Corporate Family Rating, Affirmed at Ba3
Probability of Default Rating, Affirmed at Ba3-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
Senior Secured Bank Revolving Credit Facility, Affirmed at Baa3
(LGD2 from LGD1)
Senior Secured Term Loan B, Affirmed at Ba3 (LGD3)
Senior Secured Notes, Affirmed at Ba3 (LGD3)
RATINGS RATIONALE
LSC's Ba3 CFR is driven by Moody's expectations that management
will repay debt more quickly than the rate at which the company's
cash flow declines, allowing leverage of debt/EBITDA to reach ~3x
by mid/late-2018 (estimated at ~3.6x at 30June17). LSC's
retail-centric print/publishing services business is in secular
decline, the rate of which varies and is uncertain. This credit
negative background mandates very conservative financial policies,
causing management's acquisitiveness and shareholder friendly
orientation to weigh against the rating.
Moody's assesses LSC's liquidity as SGL-2 (good) based on
expectations that the company will generate $100 million to $125
million of annual free cash flow, and have access to a mostly
undrawn, five-year, $400 million revolving credit facility ($369
million available at 30June17). Moody's forecasts financial
covenant cushions of ~25% and, other than ~$45 million of term loan
amortization, the company has no near term debt maturities.
Rating Outlook
The negative outlook stems from the potential that a combination of
EBITDA declines and insufficient debt repayment may not allow
leverage of debt/EBITDA to reach ~3x by mid/late-2018 (estimated at
~3.6x at 30June17).
Factors that Could Lead to an Upgrade
The rating could be upgraded were Moody's to anticipate: i)
leverage of Debt/EBITDA being sustained below 2.5x (estimated at
~3.6x at 30June17), along with ii) maintenance of solid liquidity
arrangements; and iii) solid operating fundamentals with positive
organic growth and no worse than stable margins.
Factors that Could Lead to a Downgrade
The rating could be downgraded were Moody's to anticipate: i)
leverage of Debt/EBITDA being sustained above 3.25x (estimated at
~3.6x at 30June17), or ii) were liquidity arrangements to
deteriorate; or iii) business' fundamentals to deteriorate,
evidenced by, for example, either margin compression or
accelerating revenue declines.
The principal methodology used in these ratings was Media Industry
published in June 2017.
Headquartered in Chicago, Illinois, LSC Communications, Inc. (LSC),
is a retail-centric print/publishing services and office products
company with annual sales of about $3.5 billion.
M&K WALKER: Case Summary & 9 Unsecured Creditors
------------------------------------------------
Debtor: M&K Walker & Sons Trucking, LLC
1128 Arden Drive, SW
Marietta, GA 30008
Business Description: M&K Walker & Sons is a licensed and bonded
freight shipping and trucking company
running freight hauling business from
Marietta, Georgia. It is a small business
debtor as defined in 11 U.S.C. Section
101(51D). The Debtor is an affiliate of
Milton and Kathy Walker, who jointly
sought bankruptcy protection on July 5, 2017
(Bankr. N.D. Ga. Case No. 17-61756).
Chapter 11 Petition Date: August 16, 2017
Case No.: 17-64328
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Judge: Hon. Paul Baisier
Debtor's Counsel: Will B. Geer, Esq.
LAW OFFICE OF WILL B. GEER, LLC
333 Sandy Springs Circle, NE
Suite 225
Atlanta, GA 30328
Tel: (678) 587-8740
Fax: (404) 287-2767
E-mail: willgeer@willgeerlaw.com
Total Assets: $647,000
Total Liabilities: $1.08 million
The petition was signed by Brenton Walker, manager.
The Debtor's list of nine unsecured creditors is available for free
at http://bankrupt.com/misc/ganb17-64328.pdf
MALLARD'S LANDING: Taps Kasen & Kasen as Legal Counsel
------------------------------------------------------
Mallard's Landing Condominium Association seeks approval from the
U.S. Bankruptcy Court for the District of New Jersey to hire legal
counsel.
The Debtor proposes to employ Kasen & Kasen, P.C. to give legal
advice regarding its duties under the Bankruptcy Code and provide
other legal services related to its Chapter 11 case.
The hourly rates charged by the firm are:
David Kasen $500
Francine Kasen $350
Jenny Kasen $350
The firm received a retainer in the amount of $25,000, plus the
$1,717 filing fee.
David Kasen disclosed in a court filing that he and his firm are
"disinterested" as defined in section 101(14) of the Bankruptcy
Code.
Kasen & Kasen can be reached through:
David A. Kasen, Esq.
Kasen & Kasen, P.C.
1874 E. Marlton Pike, Suite 3
Cherry Hill, NJ 08003
Tel: (856) 424-4144
Fax: (856) 424-7565
Email: dkasen@kasenlaw.com
About Mallard's Landing Condominium
Mallard's Landing Condominium Association sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. N.J. Case No.
17-26037) on August 8, 2017.
MED-X TRANS: Plan Confirmation Hearing Rescheduled to Sept. 19
--------------------------------------------------------------
The Hon. Julie A. Manning of the U.S. Bankruptcy Court for the
District of Connecticut has approved the Med-X Trans, Inc.'s first
amended disclosure statement dated June 26, 2017, referring to the
fourth amended plan of reorganization dated June 26, 2017.
A final hearing to consider the confirmation of the Plan will be
held on Sept. 19, 2017, at 10:00 a.m. Objections to the Plan must
be filed by Sept. 14, 2017, which is also the last day for
returning written ballots of acceptance or rejection of the Plan.
As reported by the Troubled Company Reporter on July 21, 2017, the
Court previously scheduled the plan confirmation hearing for Aug.
15, at 10:00 a.m., and gave creditors until Aug. 10 to file their
objections and cast their votes accepting or rejecting the proposed
plan.
About Med-X Trans
Headquartered in Plainfield, Connecticut, Med-X Trans, Inc., dba
Med-X Transportation, Inc., dba Med-X Enterprises, is in the
business of providing transportation to clients for non-emergency
medical appointments.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D.
Conn. Case No. 15-21942) on Nov. 6, 2015, listing $486,750 in total
assets and $1.24 million in total liabilities. The petition was
signed by Hugh Viele, treasurer.
Judge Ann M. Nevins presides over the case.
Anthony S. Novak, Esq., at Novak Law Office, P.C., serves as the
Debtor's bankruptcy counsel.
On Aug. 22, 2016, the court approved the disclosure statement,
which explains the Debtor's proposed Chapter 11 plan of
reorganization.
MICRO CONTRACT: Has Court's Final Nod to Use Cash Collateral
------------------------------------------------------------
The Hon. Robert E. Grossman of the U.S. Bankruptcy Court for the
Eastern District of New York has entered a final order authorizing
Micro Contract Manufacturing, Inc., to collect its receivables and
use cash collateral.
As reported by the Troubled Company Reporter on April 5, 2017, the
Debtor sought court permission for temporary authority to use cash
collateral pending the interim hearing. The Debtor requested the
immediate use of up to $41,000 weekly of the cash collateral of
Tango Capital/Snap Advance and Yellow Stone Capital LLC.
Use of cash collateral will be in the amounts set forth in the
budget with up to 15% in excess thereof inclusive of the monthly
incremental increases provided for therein together with the carve
out of up to $25,000 and only for the purposes set forth in the
application.
As adequate protection for any post-petition diminution in the
value of the Lenders' and the IRS' interests in the pre-petition
collateral, including any diminution in value caused by the
Debtor's use of the pre-petition collateral and cash collateral,
the Lenders and the IRS are granted a post-petition claim against
the Debtor's estate.
In order to secure the adequate protection claim, the Lenders and
the IRS are hereby granted a first-priority security interest in
and a lien in the same order in which their pre-petition liens
attached upon the prepetition collateral and all post-petition
proceeds thereof, whether property and assets were acquired by the
Debtor before or after the Petition Date, including: (i) all
proceeds of the foregoing; (ii) all accessions to, substitutions
and replacements for, and profits and products of the foregoing;
(iii) the pre-petition collateral; and (iv) all property of the
Debtor, subject only to valid, perfected, enforceable and
unavoidable liens and security interests granted by the Debtor to
any person or entity other than the Lenders, and which were
superior in priority to the Lenders' and the IRS' pre-petition
security interests in and liens upon property of the Debtor on the
Petition Date.
The collateral may be used by the Debtor, if sufficient funds are
not otherwise available from the Debtor's estate, to pay (i) the
statutory fees of the clerk of the Court and the U.S. Trustee
pursuant to 28 U.S.C. Section 1930(a) and (ii); any special
litigation counsel and counsel that may be retained by the
creditors committee pursuant to Section 327(e) of the U.S.
Bankruptcy Code, up to a maximum amount of $25,000 including for
committee counsel in the event a committee is appointed and counsel
is retained pursuant to court order in an amount to be determined
by separate order.
A copy of the Final Order is available at:
http://bankrupt.com/misc/nyeb17-71699-50.pdf
About Micro Contract Manufacturing
Micro Contract Manufacturing, Inc., is a domestic corporation
existing under an by virtue of the laws of the State of New York
with its principal place of business located at 27E Industrial
Blvd., Medford, New York. It is from this location that the
company conducts its manufacturing operations.
Micro Contract Manufacturing filed a Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 17-71699) on March 23, 2017. The petition was
signed by Thomas DeGasperi, president. At the time of filing, the
Debtor estimated assets and liabilities to be between $1 million
and $10 million.
The case is assigned to Judge Robert E. Grossman.
The Debtor's attorney is Harold M. Somer, Esq., at Harold M Somer,
P.C.
No trustee, examiner or official committee has been appointed in
the case.
MICROSEMI CORP: S&P Hikes CCR to 'BB' on Leverage Reduction
-----------------------------------------------------------
S&P Global Ratings raised its corporate credit rating on Aliso
Viejo, Calif.-based Microsemi Corp. to 'BB' from 'BB-'. The outlook
is stable.
S&P said, 'At the same time, we raised our ratings on the company's
secured debt to 'BB' from 'BB-', and we raised our ratings on its
unsecured notes to 'BB-' from 'B+'. Both actions result from our
upgrade of the corporate credit rating.
"The upgrade reflects adjusted leverage, which has fallen to 3.3x
from 6x at the time of its acquisition of PMC-Sierra in January
2016, and which we expect to fall to 3x next quarter. Microsemi
delivered this impressive leverage reduction by delivering cost
synergies from the PMC acquisition, aggressively repaying debt, and
from good revenue growth over the past two quarters, which we
expect to continue into the next quarter. We now believe the
company can absorb an operating downturn and achieve its
shareholder return objectives while maintaining leverage below 4x.
The company could rise above this threshold for acquisitions, but
we expect that it would reestablish leverage below this threshold
in a few quarters through cost savings and debt repayment; we view
the likelihood of a large acquisition that would preclude leverage
reduction below 4x within a few quarters as low.
"The stable outlook reflects our expectation that the diversity of
Microsemi's end markets and its cost discipline will allow it to
deliver consistent operating results, and that it has enough
cushion relative to our downside threshold of 4x leverage to absorb
and operating downturn and to achieve its goals for acquisitions
and shareholder returns.
"We could lower the rating if debt-financed acquisitions or a
semiconductor industry downturn result in leverage sustained above
the 4x area. If the company were to increase leverage above 4x for
an acquisition, we would consider maintaining the 'BB' rating if we
believe that it had a credible plan to reestablish leverage below
4x through debt repayment and cost reductions within 12 months.
"While unlikely over the next 12 months, we could raise the rating
if the company adopted a more conservative financial policy to
maintain leverage below 3x through acquisitions. We believe the
company's current acquisition appetite and tolerance for financial
risk precludes a higher rating."
MODERN CONTINENTAL: Sale of PRT Interest for $4.5M Approved
-----------------------------------------------------------
Judge Melvin S. Hoffman of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Modern Continental
Construction Co.'s sale of the Debtor's interest in Paul Revere
Transport, LLC ("PRT Interest") to Altemate Concepts, Inc. ("ACI")
for $4,454,115.
The sale is free and clear of liens and claims held by Afianzadora
Insurgentes, S.A. De C.V. ("AI") and Economy Fire and Casualty Co.
The requirements of Section 5.2 of the Plan, requiring the consent
of AI and Economy to the sale of the PRT Interest to ACI, are
deemed to have been satisfied, and AI and Economy are deemed to
have consented to said transaction.
The proceeds of the sale of the PRT Interest will be distributed in
accordance with the Plan.
The Order is a final order. The Court expressly finds that there
is no reason for delay in the implementation of the Order, and the
stay imposed by Federal Rule of Bankruptcy Procedure 6004(h) is
modified and will not apply to the Order or to the transactions
contemplated by the Sale Motion.
About Modern Continental Construction
Modern Continental Construction Co. --
http://www.moderncontinental.com/-- of Cambridge, Massachusetts
was established in 1967 when its founders, Lelio "Les" Marino and
Kenneth Anderson, earned a small contract for the construction of
a sidewalk in the town of Peabody. Since then, the company has
blossomed into a multi-faceted organization which is highly
respected throughout the construction industry, and is ranked
among the top contractors in the country.
Modern Continental filed for Chapter 11 protection (Bankr. D. Mass.
Case No. 08-14558) on June 23, 2008, estimating assets of $100
million to $500 million, and debt of $500 million to $1 billion.
Harold B. Murphy, Esq., at Hanify & King P.C., is bankruptcy
counsel to the Debtor. UHY Advisors N.E. LLC is the financial
advisor to the Debtor. Attorneys at Jager Smith P.C. serve as
counsel to the official committee of unsecured creditors formed in
the case.
MSAMN CORP: Taps Elliott & Davis as Legal Counsel
-------------------------------------------------
MSAMN Corp. seeks approval from the U.S. Bankruptcy Court for the
Western District of Pennsylvania to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to employ Elliott & Davis, PC to, among other
things, give legal advice regarding its duties under the Bankruptcy
Code; examine proofs for claim; and assist in the preparation of a
bankruptcy plan.
Jeffrey Morris, Esq., the attorney who will be handling the case,
will charge an hourly fee of $200. Paralegals charge $100 per
hour.
The Debtor paid $1,717 for the filing fee. No retainer has been
paid to Elliott & Davis.
Mr. Morris disclosed in a court filing that he does not have any
connection with the Debtor or any of its creditors.
Elliott & Davis can be reached through:
Jeffrey T. Morris, Esq.
Elliott & Davis, PC
425 First Avenue, First Floor
Pittsburgh, PA 15219
Tel: (412) 434.4911, ext. 34
Fax: (412) 774.2168
Email: morris@elliott-davis.com
About MSAMN Corp.
MSAMN Corp. sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Pa. Case No. 17-23126) on August 3, 2017. Prasad
Margabandhu, president, signed the petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of less than $500,000.
Judge Carlota M. Bohm presides over the case.
NATIONAL TRUCK: Sale of Used Trucks to Upgrade Truck Fleet Approved
-------------------------------------------------------------------
Judge Katharine M. Samson of the U.S. Bankruptcy Court for the
Southern District of Mississippi authorized National Truck Funding,
LLC's sale of used trucks at their minimum sale price.
The sale is free and clear of any and all alleged interests in each
of the Vehicles.
These Procedures will control and be applicable with respect to all
sales, transfers, or conveyances of any of the Vehicles:
a. The Debtor is authorized to use its best efforts and
business judgment to agree to a proposed sale or transfer of any of
the Vehicles.
b. The Debtor will (i) provide written notice of the terms of
the proposed sale or transfer of a Vehicle to (a) the Office of the
United States Trustee and (b) the Lienholder claiming a security
interest in the Vehicle and (ii) file a Notice of Intent to Sell
Vehicle with the Court pursuant to the terms of the Order.
c. The Debtor will make the Vehicle subject to the proposed
sale or transfer reasonably available for inspection by the
Lienholder claiming a security interest therein during normal
business hours.
d. If a Notice of Objection to the proposed sale or transfer of
a Vehicle is filed with the Court within five business days after
filing of the Notice of Intent to Sell Vehicle, then (i) such sale
or transfer of that Vehicle is not authorized by the terms of the
Order, (ii) the Notice of Objection will be set for hearing before
this Court no less than 21 days after the filing of the Notice of
Objection, and (iii) such sale or transfer of that Vehicle may only
be authorized pursuant to a further order of the Court.
e. If a Notice of Objection to the proposed sale or transfer is
not filed with the Court within five business days after filing of
the Notice of Intent to Sell Vehicle such sale or transfer of any
Vehicle by the Debtor will be authorized pursuant to the Order.
f. Upon the closing of any sale or transfer of any Vehicle, the
Debtor will remit to the Lienholder the proceeds of same except
that in the event that the claimed security interest of such
Lienholder is or has been paid in full by the proceeds from the
sale or transfer of the Vehicle(s), the Debtor will retain any
excess proceeds above the amount of the claimed security interest
and will deposit those excess proceeds into an authorized DIP
account.
g. Any interests of the Lienholder in a Vehicle sold or
transferred pursuant to the Procedures will attach to the proceeds
of the Sale of that Vehicle in the same rank and priority as such
interest existed prior to the Sale.
The Debtor will provide the written notices of the proposed sale or
transfer of any Vehicle to the Lienholders claiming a security
interest in that Vehicle and/or any counsel for such Lienholder who
has appeared in these proceedings.
Notwithstanding anything and due to the nature of the security
interests of Yolo Capital, Inc. as a single note secured by
multiple Vehicles, Yolo will receive all proceeds of the sale of
any Vehicle in which claims a security interest and will apply
those proceeds against the principal amount of indebtedness of the
Debtor.
The Debtor will periodically file with this Court a summary report
identifying the Vehicles sold or transferred pursuant to the Order,
the proceeds, if any, paid to Lienholders, and the amount of excess
proceeds, if any, retained by the Debtor. The Debtor will file the
first such report by Nov. 15, 2017 regarding the period between the
entry of the Order and Oct. 31, 2017. The Debtor will file
subsequent reports for each three-month period beginning Nov. 1,
2017.
All rights of the Debtor to challenge or object to (i) any claimed
security interest in any Vehicle if it determines that any claimed
security interest are not properly perfected, (ii) the amount of
the indebtedness owed to any Lienholder, (iii) the valuation of any
Lienholder's collateral, or (iv) any allegations or objections
raised by any Lienholder, are reserved and are not waived or
otherwise relinquished by the terms of the Order.
All rights of any Lienholder to challenge or object to (i) the
valuation of any Vehicle, (ii) the amount of its indebtedness,
(iii) the value of its collateral, (iv) any allegations or
objections raised by the Debtor, or (iv) the sale or transfer of
any Vehicle, are reserved and not waived or otherwise relinquished
by the terms of the Order.
The Order will be immediately effective and enforceable upon its
entry, notwithstanding Rules 7062 or 6004(h) of the Federal Rules
of Bankruptcy Procedure or any other Bankruptcy Rule or Local Rule
or Rule 62(a) of the Federal Rules of Civil Procedure.
The Lienholders:
a. PACCAR Financial Corp.:
Olivia Spencer, Esq.
KING & SPENCER, PLLC
P.O. Box 123
Jackson, MS 39205
E-mail: spencer@kingandspencer.net
- and –
Linda Markle
PACCAR FINANCIAL CORP.
P.O. Box 1518
Bellevue, WA 98009-1518
E-mail: linda.markle@paccar.com
b. Yolo Capital, Inc., Hannah Baby L.L.C. and/or
Moonpie, FLP :
Barry H. Grodsky, Esq.
Donald J. Miester, Jr., Esq.
TAGGART MORTON, LLC
1100 Poydras Street, Ste. 2100
New Orleans, LA 70163
E-mail: bgrodsky@taggartmorton.com
dmeister@taggarrmorton.com
- and –
William A. Neilson, Esq.
Kyle A. Spaulding, Esq.
NEILSON SPAULDING, LLC
1100 Poydras Street, Ste. 2100
New Orleans, LA 70163
E-mail: wneilson@nstaxlaw.com
kspaulding@nstaxlaw.com
- and –
William J. Little, Jr., Esq.
LENTZ & LITTLE, PA
The Hewes Building
2505 14th St., Ste. 100
Gulfport, MS 39501
E-mail: bill@lentzlittle.com
c. Trustmark National Bank:
Robert Alan Byrd, Esq.
BYRD & WISER
145 Main Street
P.O. Box 1939
Biloxi, MS 39533
E-mail: rab@byrdwiser.com
d. The Peoples Bank:
Robert T. Schwartz, Esq.
SCHWARTZ, OGLER & JORDAN, PLLC
2355 Pass Road
Biloxi, MS 39531
E-mail: robert@sojlaw.net
About National Truck Funding
Headquartered in Gulfport, Mississippi, National Truck Funding, LLC
-- http://nationaltruckfunding.com/-- retails and rents trucks.
It operates as a subsidiary of American Truck Group, LLC --
http://americantruckgroup.com/
National Truck and American Truck sought Chapter 11 protection
(Bankr. S.D. Miss. Case Nos. 17-51243 and 17-51244) on June 25,
2017. The petitions were signed by Louis J. Normand, Jr.,
manager.
National Truck estimated its assets and liabilities at $10 million
to $50 million. American Truck estimated its assets and
liabilities at $1 million to $10 million.
Judge Katharine M. Samson presides over the cases.
National Truck Funding and American Truck engaged Stewart Peck and
the law firm of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard as
counsel; and Wessler Law Firm as their local counsel.
NEOPS HOLDINGS: Seeks to Hire Marcum LLP as Accountant
------------------------------------------------------
NEOPS Holdings, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Connecticut to hire an accountant.
The Debtor proposes to employ Marcum LLP to, among other things,
prepare tax returns and assist in evaluating any proof of claims
filed by the Internal Revenue Service.
The hourly rates charged by the firm range from $460 to $510 for
partners, $300 to $450 for directors and senior managers, $235 to
$315 for managers, and $140 to $250 for associates.
The personnel expected to provide the accounting services are Barry
Fischman, partner, and Igor Bochenkov, director, who will charge
$485 per hour and $415 per hour, respectively.
Mr. Fischman disclosed in a court filing that the firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Barry A. Fischman
Marcum LLP
555 Long Wharf Drive, 12th Floor
New Haven, CT 06511
Phone: 203-781-9630
Email: barry.fischman@marcumllp.com
About NEOPS Holdings
Headquartered in Branford, Connecticut, New England Orthotic --
http://neops.net/-- is a provider of state-of-the-art orthotic and
prosthetic patient care products and services in the eastern United
States. The partnership was founded by certified orthotists and
prosthetists who were dissatisfied with large impersonal
corporations where the constant pressures of consolidation and cost
containment can hamper effective patient care.
NEOPS Holdings LLC and its affiliates including New England
Orthotic and Prosthetic Systems, LLC, filed for Chapter 11
protection (Bankr. D. Conn. Lead Case No. 17-31017) on July 11,
2017. The petitions were signed by David Mahler, president and
CEO.
NEOPS Holdings estimated its assets at between $1 million and $10
million and its liabilities at between $10 million and $50 million.
New England Orthotic estimated its assets at up to $50,000 and
liabilities at between $1 million and $10 million.
Judge Ann M. Nevins presides over the case.
James Berman, Esq., and Joanna M. Kornafel, Esq., at Zeisler &
Zeisler, P.C., serve as the Debtors' bankruptcy counsel. The
Debtors hired Daniel O'Brien as their restructuring and financial
advisor.
On July 21, 2017, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors.
NETWORK SERVICES: Sale of Personal Property for $26K Approved
-------------------------------------------------------------
Judge Gregg W. Zive of the U.S. Bankruptcy Court for the District
of Nevada authorized Network Services Solutions, LLC's sale of
miscellaneous routers and related electrical equipment to ito
solutions for $25,720.
A hearing on the Motion was held on Aug. 1, 2017 at 2:00 p.m.
Scott Madison is authorized to execute a Bill of Sale transferring
title of the equipment to the buyer.
The full proceeds of sale will be held in a segregated account,
which is subject to the perfected lien of Western Alliance Bank
without need of any further filing, pending further order of the
Court.
The 14-day stay under F.R.Bankr.P. 6004(h) is waived and the sale
may be completed as soon as practicable.
About Network Services Solutions
Network Services Solutions, LLC, is a Reno, Nevada-based reseller
of telecommunications services.
In November 2016, the Federal Communications Commission said it
plans to fine Network Services Solutions and its chief executive,
Scott Madison, $21,691,499 for apparent violations involving the
Universal Service Fund Rural Health Care Program and wire fraud.
The company is charged with violating the program's competitive
bidding rules, using forged and false documents to seek funding
from the program, and violating the federal wire fraud statute.
The
alleged violations at issue occurred throughout the country, but
were concentrated in the southeastern United States, according to
the FCC.
Network Services Solutions sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Nev. Case No. 17-50309) on March 20,
2017. The petition was signed by Scott Madison, managing member.
The Debtor estimated assets of less than $50,000 and liabilities of
$10 million to $50 million.
The case is assigned to Judge Bruce T. Beesley.
Jeffrey L Hartman, Esq., at Hartman & Hartman, serves as the
Debtor's Chapter 11 counsel. Crosspoint Leasing & Financial
Services, Inc., serves as the Debtor's financial advisor; and
Robison, Belaustegui, Sharp & Low, and Lukas, LaFuria, Gutierrez &
Sachs serves as special counsel.
OHIO COUNTY, KY: Moody's Affirms Ba2 Rating on $83.3MM Rev. Bonds
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba2 senior secured rating on
$83.3 million of County of Ohio, Kentucky (the county) Pollution
Control Refunding Revenue Bonds (Big Rivers Electric Corporation
Project; cusip number 677288AG7) and concurrently revised the
rating outlook to positive from stable.
RATINGS RATIONALE
"The rating actions for the bonds previously issued by the county
on behalf of Big Rivers Electric Corporation (BREC) primarily
reflect BREC's track record of managing through the significant
loss of load from two aluminum smelters who were previously being
served by BREC's largest member owner, Kenergy Corp., until they
terminated their respective power purchase contracts in 2013 and
2014" said Kevin Rose, Vice President-Senior Analyst. "There is a
high likelihood that BREC can steadily increase its operating
margins and increase its cash flow during 2017-19 thanks to
successful implementation of load concentration mitigation
strategies, including credit supportive rate increases which are
taking full effect in 2017 and anticipated profitable sales of
excess capacity under signed firm contracts in the Midcontinent
Independent System Operator (MISO) and other markets beginning in
2018 and 2019", Rose added.
BREC's credit quality continues to recognize the cost plus nature
of the cooperative model which generally allows for cost recovery
from its members, albeit tempered in this case because BREC's rates
are regulated by the Kentucky Public Service Commission (KPSC).
Rate regulation by state public utility commissions is atypical for
the G&T coop sector and can sometimes impede full and timely
recovery of costs of service. Still, BREC's credit profile not only
reflects the financial benefits of rate case decisions in 2013 and
2014, but also considers the various steps it took to unwind a
lease and other transactions in 2008 and 2009 where among other
benefits, residual cash was set aside in restricted accounts to
provide a mitigant in the event of lost smelter load. Pursuant to
the terms of the KPSC rate case decision in 2014, cash in the
restricted accounts was used to temporarily mitigate cost pressures
from significant smelter load loss. The restricted accounts were
used in full to provide bill credits during 2014-16, which
temporarily minimized the rate shock until September 2015 for large
industrial/business (non-smelter) customers and August 2016 for
rural (residential) customers. This approach appears to have
tempered any expressed or latent member disenchantment now that
members are feeling the full impact of significant rate increases.
Despite a relatively competitive starting point in 2013 and other
price mitigating strategies, it remains possible that some member
unrest could still surface, especially if further substantial rate
increases become necessary to recover an increasing regulatory
asset balance or if environmental compliance and other operating
cost pressures surface unexpectedly.
BREC's contracts with its former largest customer, Century Aluminum
of Kentucky (a subsidiary of Century Aluminum Company, which owns
the Hawesville and Sebree smelters) historically made up roughly
two-thirds of BREC's annual energy sales and accounted for just
under 60% of its system demand and in excess of 60% of annual
revenues. While initial expectations contemplated the prospect that
both smelters could cease operations upon expiration of their
respective power contracts, regulatory approvals of Century's
definitive agreements with BREC and Kenergy are allowing Century to
continue operating both smelters by purchasing electricity on the
open market. Under the agreements, Kenergy arranges for the energy
purchases at wholesale market prices and Century pays the market
price and additional amounts to cover any incremental costs
incurred by BREC and Kenergy to accommodate Century's desire to
purchase energy on the market for the smelters. When compared with
the alternative scenario of having both smelters permanently shut
down, this outcome is a better alternative from a credit standpoint
owing to ancillary loads remaining intact with BREC and Kenergy
being reimbursed for the incremental costs to purchase power at
wholesale market prices for the smelters.
Credit supportive rate case decisions by the KPSC in October 2013
and April 2014, resulted in approval of a combined wholesale power
rate increase of about $90.4 million. With the expiration of bill
credits in 2016, the full effects of the wholesale power rate
increases are now being fully borne by BREC's members and, in turn,
the members' retail customers. The rate increases are credit
positive for BREC because the incremental amounts are estimated to
result in about 90% of BREC's total gross margins coming from its
members that have all requirements contracts in place through 2043.
Moody's anticipates that the current wholesale power rates will
continue to support strengthened financial performance, ensure a
degree of cushion for compliance with financial covenants and allow
for BREC to further advance load concentration mitigation
strategies.
Even though BREC has substantial excess capacity owing to the large
customer contract terminations, the KPSC made supportive comments
in the rate orders about prudent mitigation steps taken by BREC and
the commission clearly states its intent to ensure rates are
sufficient to maintain BREC's financial integrity. In fact, the
KPSC rates approved in the April 2014 rate order are designed to
enable BREC to achieve a 1.3x Times Interest Earned Ratio (TIER), a
level that is 20 basis points higher than the 1.1x margins for
interest (essentially the equivalent of TIER) required under BREC's
indenture.
Besides obtaining regulatory support for rate increases and
securing long-term contracts for the sale of capacity and energy
from its 417 megawatt (MW) Wilson plant to load serving
municipal-distribution entities in Nebraska and Kentucky, BREC's
other load concentration mitigation strategies include temporarily
idling generation, reducing staff, making short-term off system
sales and participating in the capacity markets. For example, the
443 MW Coleman plant was idled in May 2014 and is being maintained
to permit restart should market conditions become economically
feasible. Longer term opportunities may also arise for sales of
electricity beyond those in place, depending on economic
development activity in BREC's service territory. BREC also owns
and operates the 130 MW Robert A. Reid and 454 MW Robert D. Green
plants and has rights to about 197 MW of coal-fired capacity from
Henderson Municipal Power and Light Station Two and about 178 MW of
contracted hydro capacity from Southeastern Power Administration.
BREC maintains ample liquidity to support its credit quality by
supplementing any existing cash on hand and internally generated
cash flow with a good quality three-year $130 million syndicated
senior-secured credit agreement with five banks, led by National
Rural Utilities Cooperative Finance Corporation (NRUCFC), which
expires in March 2018. Moody's understand that BREC is negotiating
to amend and extend the credit agreement by the end of 2017. As of
March 31, 2017, BREC reported cash and temporary investments of
about $44.3 million and $122.2 million available under the NRUCFC
credit agreement. Usage under the credit agreement is comprised of
$7.8 million of outstanding letters of credit. BREC has manageable
debt maturities over the next eight quarters, which are largely
comprised of scheduled amortizations of long-term debt to be paid
at a rate of roughly $5.5 million per quarter. The NRUCFC credit
agreement has no undue financial covenants, which largely mirror
those in its mortgage indenture and there is no ongoing material
adverse change clause.
Rating Outlook
The positive rating outlook reflects good progress in implementing
load concentration mitigation strategies, the most critical ones
being the credit supportive rate case outcomes at the KPSC and
better than anticipated success in selling excess energy and
capacity off system in the MISO and other markets at good margins.
The outlook also considers that rate relief and anticipated
profitable contracts to sell energy and capacity beginning in
2018-19 will produce increases in operating margins and cash flow.
The positive outlook also incorporates Moody's view that the
smelters will continue to operate, thereby providing support for
the local economy, including employment levels, and that BREC will
continue to pursue additional long-term contracts for sale of its
excess capacity beyond those already in place.
What Could Change the Rating -- Up
A rating upgrade is possible within 12-18 months if the anticipated
improvements in BREC's operating margins and cash flow begin to
materialize, credit supportive regulatory treatment remains intact,
and BREC achieves further successful results through other ongoing
load concentration mitigation strategies. In terms of metrics, FFO
coverage of interest and debt closer to 2.0x and 4%, respectively,
and debt service coverage tracking close to 1.2x would increase the
prospects for an upgrade.
What Could Change the Rating -- Down
A rating downgrade is unlikely during the next 12-18 months owing
to the positive rating outlook. Beyond that horizon, there are a
variety of factors that could cause us to take negative rating
action, including a shift to less credit regulatory support in
future regulatory filings and weakening of external liquidity.
Also, Moody's would views a scenario under which either or both of
the smelters discontinued operations as credit negative given the
potential residual negative effects such action would have on the
local economy. Furthermore, if full and timely recovery of
environmental compliance costs and increasing regulatory assets
does not occur as anticipated under the KPSC approved environmental
cost recovery mechanism and future rate proceedings, that would add
downward rating pressure, especially if such amounts increase
substantially from currently anticipated levels.
Big Rivers Electric Corporation is an electric generation and
transmission cooperative headquartered in Henderson, Kentucky and
owned by its three member system distribution cooperatives- Jackson
Purchase Energy Corporation; Kenergy Corp; and Meade County Rural
Electric Cooperative Corporation. These member system cooperatives
provide retail electric power and energy to approximately 116,000
residential, commercial, and industrial customers in 22 Western
Kentucky counties.
The principal methodology used in this rating was U.S. Electric
Generation & Transmission Cooperatives published in April 2013.
OYOTOYO INC: Hires KCP Advisory as Financial Advisor
----------------------------------------------------
Oyotoyo, Inc. and Oyo Sportstoys, Inc. seek authorization from the
U.S. Bankruptcy Court for the District of Massachusetts to employ
KCP Advisory Group LLC as their financial advisor, nunc pro tunc to
July 30, 2017.
The Debtors require KCP Advisory to:
(a) review, analyze, and report to the Debtor and its counsel
with regard to any financial reports, information or data
concerning the administration of the Debtor's estate, the
formulation and confirmation of any plan of reorganization
or liquidation, the collection of accounts receivable owed
to the Debtor, and any other financial matters in the
Debtor's bankruptcy case;
(b) advise and assist the Debtor in connection with the sale or
other disposition of any assets of the Debtor's bankruptcy
estate, including, without limitation, the investigation,
solicitation and analysis of alternative methods of
monetizing assets or raising new debt or equity financing
with during the course of the Debtor's bankruptcy case and
in connection with any chapter 11 plan of reorganization or
liquidation the Debtor files, and compiling and analyzing
any financial data or other information required in
connection with the marketing and disposition of any such
assets;
(c) provide support and assistance to the Debtor and its
attorneys with regard to the solicitation of votes to
accept and the confirmation of any chapter 11 plan filed by
the Debtor;
(d) provide support and assistance to the Debtor and its
attorneys with regard to any Chapter 11 plan filed by any
person or entity other than the Debtor in this bankruptcy
case;
(e) analyze any and all claims filed in this bankruptcy case,
and assisting the Debtor and its counsel in seeking the
allowance, disallowance, subordination or
recharacterization, as applicable of any and all such
claims;
(f) analyze any and all causes of action that are property of
the Debtor's bankruptcy estate, and advising the Debtor and
its counsel with respect to any and all such causes of
action;
(g) where applicable, provide expert opinion advice and
testimony to the Debtor and its counsel regarding financial
matters;
(h) manage electronic data discovery, as well as the recovery
and preservation of electronic records of the Debtor; and
(i) perform any other services that may be required to assist
the Debtor or its attorneys in the performance of their
duties and exercise of the Debtor's rights and powers under
the Bankruptcy Code, including, without limitation,
providing testimony, assisting with preparation of state
and local tax and regulatory filings, and responding to
requests for documents and information.
KCP Advisory will be paid at these hourly rates:
Jacen A. Dinoff $350
KCP Professionals $275-$350
KCP Advisory will also be reimbursed for reasonable out-of-pocket
expenses incurred.
KCP Advisory received a $37,500 from the Debtors.
Jacen A. Dinoff, as principal and co-founder of KCP Advisory,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
KCP Advisory can be reached at:
Jacen A. Dinoff
KCP ADVISORY GROUP
2400 District Avenue, Suite 215
Burlington, MA 01803
Tel: (781) 313-8123
Fax: (781) 365-0079
About Oyotoyo Inc.
Oyotoyo, Inc. and Oyo Sportstoys, Inc., a retailer based in Hudson,
Massachusetts, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Mass. Case Nos. 17-41261 and 17-41394) on July 11,
2017 and July 30, 2017. Thomas Skripps, its president, signed the
petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of $1 million to $10 million.
Judge Elizabeth D. Katz presides over the case. Jeffrey D.
Sternklar LLC serves as its bankruptcy counsel. KCP Advisory Group
LLC serves as its financial advisor.
OYOTOYO INC: Names Jeffrey Sternklar as Counsel
-----------------------------------------------
Oyotoyo, Inc. and Oyo Sportstoys, Inc. seek authorization from the
U.S. Bankruptcy Court for the District of Massachusetts to employ
Jeffrey D. Sternklar LLC as counsel, nunc pro tunc to July 30,
2017.
The Debtors require the law firm to:
(a) advise OYO Sports with respect to its rights, powers and
duties as debtor-in-possession in the continued operation
and management of its businesses and properties;
(b) advise OYO Sports with respect to any plan of
reorganization and any other matters relevant to the
formulation and negotiation of a plan or plans of
reorganization in these cases;
(c) represent OYO Sports at all hearings and matters pertaining
to its affairs as debtor and debtor-in-possession;
(d) prepare on OYO Sports' behalf, all necessary and
appropriate applications, motions, answers, orders,
reports, and other pleadings and other documents, and
review all financial and other reports filed in this
Chapter 11 case;
(e) advise OYO Sports with respect to, and assisting in the
negotiation and documentation of, financing agreements,
debt and cash collateral orders and related transactions;
(f) review and analyze the nature and validity of any liens
asserted against the OYO Sports' property and advising OYO
Sports concerning the enforceability of such liens;
(g) advise OYO Sports regarding his ability to initiate actions
to collect and recover property for the benefit of their
estates;
(h) advise and assist OYO Sports in connection with the
potential sale of OYO Sports' assets;
(i) advise OYO Sports concerning executory contracts and
unexpired lease assumptions, lease assignments, rejections,
restructurings and recharacterization of contracts and
leases;
(j) review and analyze the claims of OYO Sports' creditors, the
treatment of such claims and the preparation, filing or
prosecution of any objections to claims;
(k) commence and conduct any and all litigation necessary or
appropriate to assert rights held by OYO Sports, protect
assets of OYO Sports' Chapter 11 estate or otherwise
further the goal of completing OYO Sports' successful
reorganization other than with respect to matters to which
OYO Sports retains special counsel;
(l) coordinate with all other persons or entities, including,
without limitation, any official committee of unsecured
creditors appointed in these cases, as necessary,
including, without limitation, with respect to the
preparation, filing and confirmation of any chapter 11
plans of reorganization or plans of liquidation; and
(m) perform all other legal services and provide all other
necessary legal advice to OYO Sports, which may be
necessary, desirable or proper in OYO Sports' bankruptcy
proceeding.
The law firm will be paid at these hourly rates:
Jeffrey D. Sternklar $450
Paralegal $200
The law firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The firm was paid $22,860 plus the $1,717 chapter 11 filing fee
from the cash paid to the firm by the Debtor, and holds the balance
of $3,278 as a retainer in this case.
Jeffrey D. Sternklar assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtors and their estates.
About Oyotoyo Inc.
Oyotoyo, Inc. and Oyo Sportstoys, Inc., a retailer based in Hudson,
Massachusetts, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Mass. Case Nos. 17-41261 and 17-41394) on July 11,
2017 and July 30, 2017. Thomas Skripps, its president, signed the
petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of $1 million to $10 million.
Judge Elizabeth D. Katz presides over the case. Jeffrey D.
Sternklar LLC serves as its bankruptcy counsel. KCP Advisory Group
LLC serves as its financial advisor.
PARADOCS PROPERTIES: Taps Nichols and Eberth as Counsel
-------------------------------------------------------
Paradocs Properties, LLC seeks authorization from the U.S.
Bankruptcy Court for the Eastern District of Michigan to employ
Nichols and Eberth, P.C. as counsel.
The Debtor requires Nichols and Eberth to represent and assist
Debtor in all aspects of this Chapter 11 case.
Brent M. Lamkin, attorney at Nichols and Eberth, will be paid $250
per hour for his services rendered to the Debtor.
Nichols and Eberth will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Mr. Lamkin assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estate.
Nichols and Eberth can be reached at:
Brent M. Lamkin, Esq.
NICHOLS & EBERTH, P.C.
22374 Garrison
Dearborn, MI 48124
Tel: (313) 561-5700
E-mail: lamkinlaw@yahoo.com
About Paradocs Properties, LLC
Paradocs Properties, LLC, based in Dearborn, Mich., filed a Chapter
11 petition (Bankr. E.D. Mich. Case No. 17-17968) on July 12, 2017.
The Hon. Marci B McIvor presides over the case. Brent M. Lamkin,
Esq., at Nichols & Eberth, P.C., serves as bankruptcy counsel.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The petition was signed by Robert F.
Suchyta, its member.
PARKER PORK: To Sell Real Estate Assets by Feb. 2018 to Pay Debts
-----------------------------------------------------------------
Parker Pork Farms LLC and Edwin Elzie Parker filed with the U.S.
Bankruptcy Court for the District of Kansas a joint combined
disclosure statement and plan of liquidation dated Aug. 7, 2017.
The Debtors propose to sell off their real estate assets no later
than Feb. 28, 2018. Up until that guaranteed sale date, the
Debtors are working on three alternative proposals to sell all or a
significant part of their assets. Whatever real estate assets are
not sold by Dec. 31, 2017, will be auctioned off by Feb. 28, 2018.
Based on comparable sales of land in the area, the Debtor's real
estate assets are worth an amount sufficient to pay off all
creditors in full. The Plan proposes that Debtor sell or surrender
the Equipment and Vehicles, as needed, to pay for ongoing expenses
and for payments to unsecured creditors or as satisfaction (whether
partial or full) of the allowed secured claim secured by that piece
of equipment. The Plan also proposes that EP retain any piece of
equipment or any of the Vehicles necessary for EP's continued
operation as a tenant farmer, with provision made for payments to
any holder of an allowed secured claim in that equipment or the
vehicles per written agreement.
The Debtors will sell the real estate comprising the Hog Operation
and the Crop Operation. To meet the Dec. 31, 2017 date, a private
sale by the Debtors means the Debtor must have closed on the sale
transaction and the funds must be delivered by the buyer to either
the Debtor or a third-party escrow agent, like a title company.
The time period between Jan. 1, 2018, and Feb. 28, 2018, will be
used to market the auction. Confirmation of the Plan will give the
Debtors the right to sell the Hog Operation and the Crop Operation
per the terms of the Plan and any order confirming the Plan.
Under the Plan, holders of Class 7 General Unsecured Claims will
receive 100% payment within 120 days of the Auction Date. To the
extent that the proceeds of the sale of the Hog Operation, Crop
Operation, and equipment, whether by private sale or auction, are
not sufficient to pay holders of Class 7 in full, they will receive
a pro rata payment of their claims within 120 days of the auction
date.
The Debtor believes that a planned sale of assets will produce the
best results for creditors. The Debtor has explored other options
including immediate liquidation, surrender to creditors, and
reorganization. Immediate liquidation without sufficient marketing
time is not the best result for creditors because it decreases the
likelihood that all creditors will be paid in full because the
sales price will be depressed. Surrendering property to secured
creditors is a flawed action for the same reason -- secured
creditors have no incentive to maximize value for the payment of
unsecured creditors, unlike the fiduciary duty of the
debtor-in-possession to maximize value for unsecured creditors and
the incentive for the Debtor to create value to flow down to
equity. Finally, the Debtors do not believe reorganization is a
viable route to take. The Debtors have analyzed their ability to
reorganize their property by seeking a lease of the hog operation
and continuing to farm the row crops and do not believe there is
sufficient cash-flow to meet the debt obligations under reasonable
amortizations of the secured debt.
A full-text copy of the Combined Disclosure Statement and Plan is
available at:
http://bankrupt.com/misc/ksb17-20202-110.pdf
About Parker Pork Farms
Parker Pork Farms LLC owns a hog farming operation and a crop
growing operation, consisting of approximately 590 acres of useable
crop ground.
Based in Robinson, Kansas, the Debtor and its owner Edwin Elzie
Parker sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Kan. Lead Case No. 17-20202) on Feb. 13, 2017. The
petition was signed by Mr. Parker.
Carl R. Clark, Esq., at Lentz Clark Deines PA, serves as legal
counsel for the Debtor and its owner.
At the time of the filing, the Debtor estimated assets of less than
$50,000 and liabilities of $1 million to $10 million.
No trustee, examiner or official committee of creditors or equity
interest holders has been appointed.
PEEKAY ACQUISITIONS: Taps Rust Consulting as Claims Agent
---------------------------------------------------------
Peekay Acquisition, LLC seeks approval from the U.S. Bankruptcy
Court in Delaware to hire Rust Consulting/Omni Bankruptcy as claims
and noticing agent.
The firm will oversee the distribution of notices and the
processing and docketing of proofs of claim filed in the Chapter 11
cases of Peekay and its affiliates.
The hourly rates charged by the firm are:
Clerical Support $26.25 - $37.50
Project Specialist $48.75 - $63.75
Project Supervisor $63.75 - $78.75
Consultant $78.75 - $105.00
Technology/Programming $82.50 - $123.75
Senior Consultant $131.25 - $146.25
Equity Services $168.75
Rust Consulting holds a $5,000 retainer received from the Debtors
prior to the petition date.
Paul Deutch, executive managing director of Rust Consulting,
disclosed in a court filing that the firm is a "disinterested
person" as defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Paul H. Deutch
Rust Consulting/Omni Bankruptcy
16501 Ventura Boulevard, Suite 440
Encino, CA 91436
The Debtors can be reached at:
Peekay Boutiques, Inc.
Attn: Lisa Berman, CEO
901 W. Main Street, Suite A
Auburn, WA 98001
Tel: (253) 351-5001 x 118
Email: lisa@peekay.com
About Peekay Acquisition
Headquartered in Auburn, Washington, Peekay --
http://www.loverspackage.com/-- is a specialty retailer of a broad
selection of lingerie, sexual health and wellness products and
accessories. Peekay's mission is to provide a warm and welcoming
retail environment for individuals and couples to explore sexual
wellness. Peekay currently owns and operates 47 retail stores
across six states under the brand names "Christals," "LoVerS,"
"ConReV" and A. "A Touch of Romance."
Peekay Acquisitions, LLC and affiliates, each sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 17-11722) on Aug. 10,
2017. The petitions were signed by Albert Altro, chief
restructuring officer.
Peekay Acquisition estimated its assets at between $10 million and
$50 million and its debts at between $50 million and $100 million.
Judge Brendan Linehan Shannon presides over the cases. Landis Rath
& Cobb LLP serves as the Debtors' bankruptcy counsel. The Debtors
hired SSG Advisors, LLC as investment banker and Traverse, LLC as
financial advisor.
PGB 38 LLC: Names Gregory Messer as Counsel
-------------------------------------------
PGB 38 LLC seeks authorization from the U.S. Bankruptcy Court for
the Southern District of New York to employ the Law Office of
Gregory Messer as its counsel, nunc pro tunc to the August 8, 2017
petition date.
The Debtor requires the law firm to:
(a) give advice to the Debtor with respect to its powers and
duties as a debtor-in-possession in the continued operation
of its business and management of its property;
(b) negotiate with creditors of the Debtor in working out a
plan and to take necessary legal steps in order to confirm
said plan, including, if need be, negotiations in financing
a plan;
(c) prepare, on behalf of the Debtor, as debtor-in-possession,
necessary applications, answers, orders, reports, and other
legal papers;
(d) appear at judicial proceedings to protect the interests of
the debtor-in-possession and to represent the Debtor in all
matters pending in the Chapter 11 proceeding; and
(e) perform all other legal services for the Debtor, as debtor-
in-possession, as may be necessary herein.
Philip Menegis, its managing member of the Debtor, provided a
$20,000 retainer to the firm to secure services for the Debtor.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Gregory Messer assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estate.
The firm can be reached at:
Gregory Messer, Esq.
LAW OFFICES OF GREGORY MESSER
26 Court Street, Suite 2400
Brooklyn, NY 11242
Tel: (718) 858-1474
E-mail: gremesser@aol.com
PGB 38 LLC filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 17-12211) on Aug. 9, 2017, listing under $500,000
in both assets and liabilities. The Hon. Stuart M. Bernstein
presides over the case.
PHOENIX EQUIPMENT: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Phoenix Equipment Brokerage, LLC
P.O. Box 13862
Maumelle, AR 72113
Business Description: Phoenix Equipment Brokerage --
http://www.phoenix-equipment.com/-- buys &
sells used commercial coffee & tea brewers,
chilled/frozen drink dispensers, soda
machines, grinders and other beverage
equipment. The Company deals in the
top name brands in the industry -- Bunn,
Curtis, Fetco, Keurig, Newco,
Grindmaster/Cecilware, Carpigiani, Crathco,
Ugolini, Wilch, GBM, Concordia, Bloomfield
and Cornelius.
Chapter 11 Petition Date: August 16, 2017
Case No.: 17-14437
Court: United States Bankruptcy Court
Eastern District of Arkansas (Little Rock)
Judge: Hon. Ben T. Barry
Debtor's Counsel: Brad J. Moore, Esq.
WETZEL & MOORE, P.A.
200 North State Street, Suite 200
Little Rock, AR 72201
Tel: 501-663-0535
Fax: 501-372-1550
E-mail: jbmoore@wetzelandmoore.com
firm@wetzelandmoore.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Walter E. Anderson, operating manager
and member.
The Debtor's list of 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/areb17-14437.pdf
PLATINUM PARTNERS: Chapter 15 Case Summary
------------------------------------------
Chapter 15 Debtor: Platinum Partners Value Arbitrage
Intermediate Fund Ltd.
(in Official Liquidation)
Borrelli Walsh, G/F Harbour Place
P.O. Box 30847
Grand Cayman KY1-1204
Cayman Islands
Type of Business: Hedge fund
Foreign
Proceeding
in Which
Appointment
of the
Foreign
Representatives
Occurred: Financial Services Division of the
Grand Court of the Cayman Islands
(Cause No. FSD 30 of 2017 (AJJ))
Chapter 15 Case No.: 17-12269
Chapter 15
Petition Date: August 17, 2017
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Shelley C. Chapman
Chapter 15 Petitioner: Margot MacInnis and Cosimo Borrelli
Chapter 15
Petitioners'
Counsel: Joshua Dorchak, Esq.
MORGAN, LEWIS & BOCKIUS LLP
399 Park Avenue
New York, NY 10022
Tel: (212) 705-7000
Fax: (212) 752-5378
E-mail: joshua.dorchak@morganlewis.com
Estimated Assets: Not Indicated
Estimated Debts: Not Indicated
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nysb17-12269.pdf
POSTMEDIA NETWORK: Moody's Lowers CFR to Caa2; Outlook Negative
---------------------------------------------------------------
Moody's Investors Service downgraded Postmedia Network Inc.'s
(Postmedia) corporate family rating (CFR) to Caa2 from Caa1,
probability of default rating to Caa2-PD from Caa1-PD, first lien
notes rating to B3 from B2, and speculative grade liquidity rating
to SGL-4 from SGL-3. Moody's also changed the ratings outlook to
negative from stable.
"The downgrade of Postmedia's CFR and the outlook change to
negative reflect the company's high leverage (adjusted Debt/EBITDA
of 9.6x at LTM Q3/2017), weak liquidity, and continued decline in
its revenue and EBITDA (including cash restructuring costs), which
together leads to an unsustainable capital structure" said Peter
Adu, Moody's AVP.
Ratings Downgraded:
Corporate Family Rating, to Caa2 from Caa1
Probability of Default Rating, to Caa2-PD from Caa1-PD
C$225 million (face value) 8.25% First Lien Notes due July 2021,
to B3 (LGD2) from B2 (LGD2)
Speculative Grade Liquidity, to SGL-4 from SGL-3
Outlook Action:
Changed to Negative from Stable
RATINGS RATIONALE
Postmedia's Caa2 CFR primarily reflects its unsustainable capital
structure, given that leverage (adjusted Debt/EBITDA) is likely to
be maintained around 9x, high business risk from a continuing steep
revenue decline from its traditional print business, negative free
cash flow generation including cash restructuring costs, and
challenging ability to generate replacement revenue from digital
sources, which will limit its potential to compensate for the
continuing decline in print revenue. The rating also considers the
company's leading position in the Canadian newspaper market and its
well-recognized publications.
Postmedia has weak liquidity (SGL-4). The company's sources consist
of cash of C$16 million at Q3/2017 and C$10 million of availability
under its C$15 million ABL facility that matures in January 2019.
Uses of liquidity include Moody's negative free cash flow
expectation of around $6 million for the next four quarters and
minimum debt payments of C$10 million in this timeframe, which
leaves about C$10 million of excess liquidity for a company of this
size that is undergoing a transformation to digital services.
Postmedia has limited alternative liquidity generating potential as
individual asset sale proceeds must be used to repay debt rather
than to enhance liquidity.
The negative outlook considers that Postmedia's liquidity may be
insufficient to support its operations in the next 12 to 18 months
as revenue and EBITDA declines will not stabilize in this
timeframe.
The ratings may be downgraded if the company's revenue and EBITDA
declines accelerate or if Moody's perceives that there is risk of
an impending debt restructuring or default. A ratings upgrade may
be considered if the company improves its liquidity position
substantially, stabilizes revenue and EBITDA , and sustains
adjusted Debt/EBITDA below 7x (currently 9.6x).
The principal methodology used in these ratings was Media Industry
published in June 2017.
Postmedia Network Inc., headquartered in Toronto, is the largest
publisher of daily newspapers in Canada. Revenue for the last
twelve months ended May 31, 2017 was C$788 million.
PURADYN FILTER: Reports $383,000 Net Loss for Second Quarter
------------------------------------------------------------
Puradyn Filter Technologies Incorporated filed with the Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $383,025 on $575,170 of net sales for the
three months ended June 30, 2017, compared to a net loss of
$306,913 on $578,688 of net sales for the three months ended June
30, 2016.
For the six months ended June 30, 2017, the Company reported a net
loss of $558,569 on $1.26 million of net sales compared to a net
loss of $721,970 on $1.01 million of net sales for the same period
a year ago.
As of June 30, 2017, Puradyn had $1.40 million in total assets,
$9.67 million in total liabilities and a total stockholders'
deficit of $8.26 million.
"Our revenues historically have not been sufficient to fund our
operating expenses. We believe the improvement in the general
economic condition positively impacting the oil and gas industry
has had a likewise positive effect on our business. We continue to
address our liquidity and working capital issues through working
capital loans from our Chief Executive Officer and another member
of the board of directors. During the six months ended June 30,
2017 we borrowed an additional $440,000 from him, and at June 30,
2017 we owed our Chairman $7,553,349 which represented
approximately 78% of our total liabilities. Subsequent to June 30,
2017, he has advanced an additional $85,000 in working capital
funding. These amounts are due at December 31, 2017 and we do not
have sufficient funds to repay the obligations. He has recently
advised us he does not expect to continue to provide working
capital advances to us at historic amounts or extend the due date
of the obligation.
"We also owe certain of our employees $1,610,645 in deferred cash
compensation at June 30, 2017, which represents 17% of our current
liabilities on that date. Since 2005, Messrs. Sandler and Kroger,
two of our executive officers, and two other employees, have
elected to defer a portion of the compensation due them to assist
us in managing our cash flow and working capital needs. As there
is no written agreement with these employees which memorializes the
terms of salary deferral, only a voluntary election to do so, it is
possible that the employees could demand payment in full at any
time. We do not have the funds to pay these amounts in entirety,
and any demand by these officers and employees for full payment
would reduce the amount of funds we have available for our
operations. As of June 30, 2017, one employee has withdrawn the
full amount of deferred pay, and one other employee is currently
drawing down a specified amount to offset the total deferred
amount. Neither of these employees are executive officers.
"While we do not have any external sources of liquidity at this
time, the Company is actively in continuing discussion with third
parties for potential investments. In an effort to improve our
ability to raise capital, on November 11, 2016, Mr. Vittoria
converted $6,100,000 of principal and interest due him into
20,333,333 shares of our common stock at a conversion price of
$0.30 per share. We were initially hopeful that his conversion of
approximately 46% owed him into shares of our common stock at a
price which was effectively 10 times the recent market price of our
common stock would have provided new investor interest in our
efforts to raise working capital upon terms acceptable to our
company. To date, such has not been the case although we continue
to discuss financing options with a number of possible sources.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/ojLsut
About Puradyn Filter
Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated
(OTC BB: PFTI) designs, manufactures and markets the puraDYN's Oil
Filtration System.
Puradyn Filter reported a net loss of $1.44 million on $1.94
million of net sales for the year ended Dec. 31, 2016, compared to
a net loss of $1.44 million on $1.97 million of net sales for the
year ended Dec. 31, 2015.
Liggett & Webb, P.A., in Boynton Beach, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2016, citing that the Company has
experienced net losses since inception and negative cash flows from
operations and has relied on loans from related parties to fund its
operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
SALON MEDIA: Incurs $600,000 Net Loss in First Quarter
------------------------------------------------------
Salon Media Group, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q reporting a net loss
attributable to common stockholders of $572,000 on $1.46 million of
revenues for the three months ended June 30, 2017, compared to a
net loss attributable to common stockholders of $849,000 on $1.29
million of revenues for the three months ended June 30, 2016.
The decreased losses resulted from an increase in revenues and a
corresponding decrease in operating expense to $1.7 million,
compared to $2.1 million in the same period last year. The
financials included several non-recurring items, including $0.3
million non-cash interest expense recorded for the beneficial
conversion feature of capital raising transactions during the
quarter ended June 30, 2017, as well as the reversal of $0.2
million accrued bonuses for former employees.
The increase in revenue was a result of a continued significant
industry shift in online advertising to advertising increasingly
being sold through software-based "programmatic" technology.
Salon's advertising sold through networks that access these
programmatic buys accounted for 83% of total advertising revenues
for the quarter ended June 30, 2017. Salon has been making changes
to its advertising footprint to capture the greater programmatic
opportunity for its display and video advertising inventory and as
a result improved its CPMs from programmatic advertising by 19% in
the quarter ended June 30, 2017, as compared to the quarter ended
June 30, 2016. The higher programmatic CPMs were offset, however,
by a decline in traffic from the same period last year, which led
to a smaller inventory of advertisement products to sell, and a
smaller relative increase in revenues.
As of June 30, 2017, Salon Media had $1.41 million in total assets,
$4.63 million in total liabilities, $6.86 million in series A
convertible preferred stock and a total stockholders' deficit of
$10.07 million.
The Company's focus on growing traffic has shifted from volume to
quality, in order to maximize its ability to monetize page views
with higher CPM video and display advertising. According to data
compiled by Google Analytics, average unique visitors to the
Salon.com Website during the quarter ended June 30, 2017, decreased
23% and 9%, as compared to the quarters ended June 30, 2016 and
March 31, 2017, respectively. The decline in traffic was due to
several factors, including changes in the algorithms used by social
media websites to promote news content, which led to lower referral
traffic from Facebook and Twitter, and the implementation of
software to remove non-human traffic. At the same time, the
Company increased video views to 39 million in the quarter ended
June 30, 2017, compared to approximately 15 million video views in
the quarter ended March 31, 2017, as Salon's editorial team placed
greater emphasis on its video products. The Company has been
refining its strategy in producing original video content, to
emphasize video displayed on its Website instead of on social media
platforms that have barriers to monetization. The Company's goal
continues to be to add high-quality, diversified content to
Salon.com, in order to attract premium video advertising.
Social media continues to be a significant focus for the Company.
Salon continues to make regular updates to its Website to optimize
content to be shared on social media with a special focus on its
mobile platforms. In June 2017, Salon had approximately 971,000
Facebook "likes" and 988,000 Twitter followers, an annual increase
of 7% and 49% respectively.
The Company continues to see a significant shift to users accessing
Salon.com from mobile devices, with 67% of users visiting the
Website from mobile devices in June 2017. The Company continues to
have a company-wide focus on its users' mobile needs, especially
quick and easy access to fast-loading content optimized for better
readability on smaller screens. The Company also has increased
focus on monetizing mobile traffic by implementing native and other
mobile-optimized advertising.
Jordan Hoffner, chief executive officer of Salon said, "I am
pleased about our progress on both the quarter-over-quarter and
year-over-year numbers as our plan is beginning to show tangible
results. Our focus on optimizing the programmatic landscape is
beginning to come to fruition."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/KHmraE
About Salon Media
San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB) --
http://www.Salon.com/-- is an online news and social networking
company and an Internet publishing pioneer.
Salon Media reported a net loss attributable to common stockholders
of $10.43 million on $4.57 million of net revenue for the year
ended March 31, 2017, compared to a net loss attributable to common
stockholders of $1.96 million on $6.95 million of net revenue for
the year ended March 31, 2016.
BPM LLP, in San Francisco, California, issued a "going concern"
qualification on the consolidated financial statements for the year
ended March 31, 2017, noting that the Company has suffered
recurring losses and negative cash flows from operations and has an
accumulated deficit of $135.0 million as of March 31, 2017. These
conditions raise substantial doubt about its ability to continue as
a going concern.
SCI DIRECT: Wants to Use Cash Collateral, Obtain DIP Financing
--------------------------------------------------------------
SCI Direct, LLC, et al., seek permission from the U.S. Bankruptcy
Court for Northern District of Ohio to use cash collateral and to
obtain secured postpetition financing.
The DIP Facility will be provided by the prepetition lender Nancy
Suarez, pursuant to the DIP Agreement by and among the Debtors and
the DIP Lender. The DIP Facility provides up to approximately
$250,000 in credit to the Debtors.
The Debtor will use cash collateral to continue their business
operations and to pay their regular daily expenses including
employees' wages, utilities, and their other costs of doing
business. Without cash collateral use, the Debtors will be unable
to pay their payroll and payroll expenses, operating expenses, and
to otherwise operate their business and preserve their assets.
The Lender's interest in cash collateral is adequately protected.
The adequate protection will be provided to the prepetition lender
through the preservation of the Debtors' value as a going concern.
The Debtors also require secured postpetition financing to continue
their business operations and to pay their regular daily expenses,
including employees' wages, utilities, and other costs of doing
business. The DIP Facility will provide the Debtors with
sufficient additional funds to allow the Debtors to continue
operating their business. To operate Debtors' business without
interruption, it is essential that they be permitted to continue to
borrow operating funds under the DIP Facility pending a closing of
the sale of their assets.
To secure advances under the DIP Facility, the DIP Lender will
receive first priority mortgages, security interests, and liens
encumbering the Debtors' property otherwise known as the
collateral.
The Debtors proposes to grant to the DIP Lender, valid, binding,
enforceable, and perfected liens as follows:
a. pursuant to Section 364(c)(2) of the U.S. Bankruptcy Code,
subject to the administrative expense priorities, a
perfected first-priority security interest in and lien and
mortgage against all property of the Debtors' estates, and
any proceeds and products therefrom, that was not
encumbered as of the Petition Date;
b. subject to the Administrative Expense Priorities perfected
first-priority liens on, and security interests in, all
accounts, inventory, instruments, documents, and
intellectual property of the Debtors, in each case as
provided in the DIP Agreement; the outstanding stock or
other equity interests of the Debtors and their debtor and
non-debtor subsidiaries; if any, and all general
intangibles related to the foregoing and all other
properties, rights, and assets of the Debtors or any
guarantor that are or that are intended to be, subject to
the security interests and mortgages created by the DIP
Agreement, including, without limitation, deposit accounts
and short term investments as described in the DIP
Agreement;
c. pursuant to Section 364(c)(3) of the Bankruptcy Code,
subject to the Administrative Expense Priorities, a
perfected junior lien on, and security interest in, all
personal property of the Debtors and any proceeds and
products therefrom, otherwise subject to a valid and
perfected lien or security interest on the Petition Date,
or a valid lien perfected after the Petition Date, to the
extent perfection is expressly permitted under the
Bankruptcy Code; and
d. pursuant to Section 364(d)(1) of the Bankruptcy Code,
subject to the Administrative Expense Priorities, a
perfected, first-priority, senior priming lien on, and
security interest in, assets that as of the Petition
Date may have been subject to liens junior to the liens
that secured the prepetition indebtedness.
The DIP Agreement provides for certain events of default,
including, but not limited to:
(a) the failure by the Debtors to pay when due any amounts due
and owing under the DIP Agreement;
(b) a breach of any term, covenant, condition, or provision
set forth in the DIP Agreement;
(c) the Debtors' ceasing to do business for any reason; and
(d) the unauthorized distribution of cash or other assets
constituting part of the collateral to unsecured creditors
on account of prepetition claims prior to the termination
or resolution of the Debtors' Chapter 11 cases.
The Debtors will continue to use their prepetition collateral to
create postpetition accounts receivable. Cash generated
postpetition will be subject to the DIP Lender's postpetition
security interest.
A copy of the Debtors' request is available at:
http://bankrupt.com/misc/ohnb17-61738-11.pdf
About Suarez Corporation
Suarez Corporation Industries -- http://www.suarez.com/-- is a
direct marketing company currently offering hundreds of diversified
products around the world. From heaters, food services, jewelry,
body and skin care, collectible coins, and health products, SCI
continues to lead the way through product innovation and
multi-channel marketing. The Company offers services through mail,
phone and internet, television, newspaper, and magazines. The
company started in business in 1968 when Benjamin Suarez started a
small business from his home which eventually became Suarez
Corporation Industries.
Suarez Corporation Industries is an operating entity involved in
direct marketing products to consumers, and Retail Partner
Enterprises, LLC, markets the same products on a wholesale basis to
retail stores. SCI Direct, LLC, holds certain patents, trademarks,
and other intellectual property used by Suarez Corporation
Industries, and Retail Partner Enterprises, LLC. The entities are
owned by Suarez Enterprises Holding Company.
Each of SCI Direct LLC, Suarez Corporation Industries, and two
affiliates filed separate voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio
Case Nos. 17-61735 to 17-61738) on Aug. 7, 2017. The cases are
jointly administered before the Honorable Russ Kendig under SCI
Direct's Case No. 17-61735.
Anthony J. DeGirolamo serves as the Debtors' bankruptcy counsel.
The Phillips Organization is the Debtors' accountant. Craig T.
Conley, Esq., is special counsel. Kurtzman Carson Consultants LLC
is the claims and noticing agent.
SEADRILL LIMITED: Completes Amendments to Credit Facilities
-----------------------------------------------------------
Seadrill Limited on Aug. 17, 2017, disclosed that it has completed
amendments to three secured credit facilities that relate to rigs
purchased by Seadrill Partners from the Company that will insulate
Seadrill Partners from events of default related to the Company's
likely use of chapter 11 proceedings to implement its restructuring
plan.
The amendments to the three facilities remove Seadrill Partners and
its consolidated entities as a borrower or guarantor and separate
the facilities such that each resulting Seadrill Limited facility
is secured only by Seadrill Limited's assets without recourse to
Seadrill Partners or its assets.
This transaction is part of the Company's comprehensive
restructuring plan that is intended to preserve the value of its
equity stakes in Seadrill Partners and its consolidated entities.
Discussions continue with certain third party and related party
investors and its secured lenders on the terms of a comprehensive
recapitalization. As previously disclosed, we continue to believe
that implementation of a comprehensive restructuring plan will
likely involve chapter 11 proceedings, and we are preparing
accordingly. It is likely that the comprehensive restructuring
plan will require a substantial impairment or conversion of our
bonds, as well as impairment and losses for other stakeholders,
including shipyards. As a result, the Company currently expects
that shareholders are likely to receive minimal recovery for their
existing shares.
The Company's business operations remain unaffected by these
restructuring efforts and the Company expects to continue to meet
its ongoing customer and business counterparty obligations.
About Seadrill
Seadrill Limited is a deepwater drilling contractor, which provides
drilling services to the oil and gas industry. It is incorporated
in Bermuda and managed from London.
Seadrill reported a net loss of US$155 million on US$3.17 billion
of total operating revenues for the year ended Dec. 31, 2016,
following a net loss of US$635 million on US$4.33 billion of total
operating revenues for the year ended in 2015.
Seadrill had net income of US$57 million on US$569 million of
operating revenue for the three months ended March 31, 2017,
compared with US$149 million of net income on US$891 million of
operating revenue in the same period in 2016.
"[W]e continue to believe that implementation of a comprehensive
restructuring plan will likely involve chapter 11 proceedings, and
we are preparing accordingly. The extension provides additional
time to finalise negotiations and prepare for the necessary
potential implementation filings," Seadrill said in the July 26
statement.
"It is likely that the comprehensive restructuring plan will
require a substantial impairment or conversion of our bonds, as
well as impairment and losses for other stakeholders, including
shipyards. As a result, the Company currently expects that
shareholders are likely to receive minimal recovery for their
existing shares."
The Company's business operations remain unaffected by these
restructuring efforts and the Company expects to continue to meet
its ongoing customer and business counterparty obligations.
"Over the past year the Company has been engaged in discussions
with its banks, potential new investors, existing stakeholders and
bondholders in order to restructure its secured credit facilities
and unsecured bonds, and in order to raise new capital. The
Company expects the implementation of a comprehensive restructuring
plan will likely involve commencing schemes of arrangement in the
United Kingdom or Bermuda or proceedings under Chapter 11 of the
United States Bankruptcy Code," Seadrill said in May 2017 when it
released its first quarter 2017 results.
"Although discussions are well advanced and significant progress
has been made, until such time our restructuring is completed,
uncertainty remains and therefore substantial doubt exists over the
Company's ability to continue as a going concern for twelve months
after the date the financial statements are issued."
Seadrill reported $21.31 billion in assets against $4.732 billion
in current liabilities and $6.473 billion in non-current
liabilities as of March 31, 2017.
SEARS CANADA: Agrees to C$500,000 Hardship Fund for Employees
-------------------------------------------------------------
Ursel Phillips Fellows Hopkinson LLP, in its capacity as Employee
Representative Counsel, will make a motion before the Hon. Justice
Hainey of the Superior Court of Justice (Commercial List) on Aug.
18, 2017, at 10:00 a.m., seeking an order authorizing and directing
Sears Canada Inc. and its affiliates to establish and create an
"Employee Hardship Fund" pursuant to and in accordance with a Term
Sheet dated Aug. 11, 2017.
Pursuant to the Court's endorsement dated June 22, 2017, and the
order issued by the Court dated July 13, 2017 in the CCAA
proceedings, Ursel Phillips was appointed as Employee
Representative Counsel to represent the interests of the
non-unionized active employees and former employees of the Sears
Canada Entities.
The Former Employees of the Sears Canada Entities are among the
most vulnerable stakeholders in the CCAA proceedings. Many have
suffered significant hardships as a result of the Sears Canada
Entities' insolvency. In addition to losing their continued
employment, some of these employees have been deprived of access to
notice, statutory severance and termination pay, and health
benefits, as a result of the stay of proceedings and the financial
position of the Sears Canada Entities. The insolvency of the Sears
Canada Entities has had a material impact on the standard of living
of many Former Employees and has created severe hardships for many
of these individuals.
One of the potential mechanisms to relieve the hardships
experienced by the Former Employees that the Employee
Representatives, with the assistance of Employee Representative
Counsel, have advocated for is the establishment of an "Employee
Hardship Fund".
Employee Representative Counsel has been advocating for and
negotiating the establishment of an Employee Hardship Fund, through
discussions with the Sears Canada Entities and FTI Consulting
Canada Inc., the Court-appointed monitor of the Sears Canada
Entities, since early July, 2017. These discussions continued
throughout July and into early August, 2017.
On Aug. 11, 2017, the Employee Representative Counsel and the Sears
Canada Entities, in consultation with and with the assistance of
the Monitor, were able to reach agreement on the Employee Hardship
Fund Term Sheet dated August 11, 2017.
The Employee Hardship Fund Term Sheet establishes the details of
the Employee Hardship Fund including, inter alia, the quantum of
the fund, eligibility criteria, the application process, payment
parameters, and the application period to the Employee Hardship
Fund.
According to Saneliso Moyo, associate at Ursel Phillips, the
Employee Hardship Fund will be available to Former Employees --
including employees terminated after the date of the term sheet --
of the Sears Canada Entities whose entitlement to receive certain
payments from the Sears Canada Entities has been stayed or
suspended as a result of these CCAA proceedings, provided that the
Former Employee meets prescribed eligibility criteria. The
Employee Hardship Fund will be solely funded by earned but foregone
executive payment entitlements under the Key Employee Retention
Plan (the "KERP") approved by the Court pursuant to the Amended and
Restated Initial Order dated June 22, 2017 (the "Amended and
Restated Initial Order") in the CCAA proceedings and that are
secured by the KERP Priority Charge (as defined in the Amended and
Restated Initial Order). The Employee Hardship Fund shall be in a
maximum amount of no more than $500,000 without further order of
the Court and unless certain specified criteria are met. Because
the Employee Hardship Fund is funded through voluntary
contributions by KERP beneficiaries of amounts otherwise owed to
those KERP beneficiaries on a priority secured basis, no creditors
of the Sears Canada Entities will be prejudiced by the Employee
Hardship Fund. The funds that are to be contributed to the
Employee Hardship Fund would not have been available for
distribution to creditors other than the KERP beneficiaries.
If approved by the Court, certain Former Employees, upon completing
an application and demonstrating hardship and meeting the
prescribed eligibility criteria, could qualify for a distribution
from the Employee Hardship Fund, subject to stipulated maximum
amounts as set out in the Employee Hardship Fund Term Sheet. The
Monitor will assess completed applications within 14 calendar days
and make an initial determination to approve or reject each such
application. If approved, the first payment from the Employee
Hardship Fund will proceed within seven business days following
the date of such approval, subject to the payment parameters set
out in the Employee Hardship Fund Term Sheet.
Any distributions to Former Employees from the Employee Hardship
Fund shall be deducted from any payments on claims that may be
allowed to each such Former Employee in any claims process
conducted by the Sears Canada Entities in these CCAA proceedings.
The Employee Representatives agree with the terms of the Employee
Hardship Fund Term Sheet and support the creation and
implementation of the Employee Hardship Fund.
A full-text copy of the Motion is available at:
http://bankrupt.com/misc/Sears_C_0811_M_Hardship_Fund.pdf
Representative Counsel for Current and Former Employees:
URSEL PHILLIPS FELLOWS HOPKINSON LLP
555 Richmond Street West, Suite 1200
Toronto, Ontario M5V 3B1
Susan Ursel
Tel: +1 416.969.3515
E-mail: sursel@upfhlaw.ca
Ashley Schiuitema
Tel: +1 416.969.3062
E-mail: aschuitema@upfhlaw.ca
Saneliso Moyo
Tel: +1 416.969.3528
Fax: +1 416.968.0325
E-mail: smoyo@upfhlaw.ca
About Sears Canada
Sears Canada Inc. is an independent Canadian online and store
retailer spun off from Sears Holdings Corp. in 2012. Sears Canada
is one of Canada's largest multi-format retailers, employing 17,000
people at 225 stores across Canada and at its head office in
Toronto, Ontario, as of June 22, 2017.
The Company's balance sheet as of April 29, 2017, showed total
assets of C$1.187 billion against total liabilities of C$1.108
billion.
Amid mounting losses and liquidity constraints Sears Canada and
certain of its subsidiaries on June 22, 2017, applied to the
Ontario Superior Court of Justice (Commercial List) for protection
under the Companies' Creditors Arrangement Act ("CCAA"), in order
to continue to restructure its business.
The Company has engaged BMO Capital Markets, as financial advisor,
and Osler, Hoskin & Harcourt LLP, as legal advisor.
FTI Consulting is the Court-appointed monitor. The Monitor tapped
Norton Rose Fulbright Canada LLP as counsel.
Bennett Jones LLP is serving as legal advisor and KSV Advisory Inc.
is financial advisor to the Board of Directors.
McMillan LLP is representing Sears Holdings CEO Edward S. Lampert
and his investment fund ESL Investments, Inc. (holder of 45.3% of
Sears Canada's total outstanding common shares), and Robert
Berkowitz's Fairholme Capital Management, LLC (20% of shares).
Borden Ladner Gervais LLP is representing Sears Holdings (holder of
11.7% shares).
Goodmans LLP is representing Wells Fargo Capital Finance
Corporation Canada, the administrative agent for lenders under the
CAD$300 million DIP ABL facility. Cassels Brock & Blackwell LLP is
representing GACP Finance Co., LLC, the administrative agent for
lenders under the CAD$150 million DIP term loan facility.
Alvarez & Marsal Canada ULC is the advisor to the DIP ABL Lenders
and DIP Term Loan Lenders.
* * *
The Canadian Court granted Sears Canada creditor protection and a
stay of proceedings until Oct. 4, 2017. The Company in June 2017
announced the closing of 20 full-line locations, plus 15 "Sears
Home" Stores, 10 "Sears Outlet" and 14 "Sears Hometown" locations.
The closures will result in a reduction in its workforce of 2,900
positions.
Sears Canada in July 2017 won approval of the commencement of
liquidation sales at 35 of the closing stores to be conducted by a
contractual joint venture comprised of four liquidation firms,
namely Gordon Brothers Canada ULC, Merchant Retail Solutions ULC,
Tiger Capital Group, LLC and GA Retail Canada ULC.
Sears Canada in July 2017 won approval from the Canadian Court of
sale and investor solicitation process (the "SISP") whereby BMO
Nesbitt Burns Inc. on behalf of Sears Canada and under the
supervision of both the Special Committee of the Board of Directors
of Sears Canada and the Monitor will seek bids and proposals for a
broad range of transaction alternatives with respect to Sears
Canada's business, property, assets and/or leases. The SISP is
ongoing.
SEARS CANADA: Orderly Wind Up of Pension Plan Sought by Retirees
----------------------------------------------------------------
Koskie Minsky LLP will make a motion to the Ontario Superior Court
of Justice (Commercial List) on Aug. 18, 2017 at 10:00 a.m., for an
order directing Sears Canada Inc. to:
-- wind up the Sears Canada Inc. Registered Retirement Plan,
either in entirety or with respect to the defined benefit pensions
component, effective as of Oct. 1, and
-- take all necessary steps for the orderly wind-up of the
plan, including the continuation of payment of pension benefits,
without interruption, during the wind up process.
Koskie Minsky is representative counsel to the non-unionized
retirees and non-unionized active and former employees of Sears
Canada with respect to pension and benefit matters.
Andrew J. Hatnay, Esq., at Koskie Minsky, explains that during
their employment years with Sears Canada, employees earned pension
benefits that are to be paid to them each month during their
retirement for their lifetimes. The pension benefits are the
employees' deferred wages for work they performed for the company.
There are approximately 18,000 retirees and beneficiaries who rely
on receiving monthly pension benefits from the Sears Canada Plan
for their livelihoods.
The Sears Canada Plan was commenced in January 1976 for the purpose
of providing defined benefit pensions to employees on their
retirement (the "DB Component"). The DB Component operates by
establishing a formula pursuant to which a monthly pension benefit
is calculated at the time of the retirement of an employee. During
the operation of the plan, an actuary is required to perform
regular valuations and to advise the company on the amount that it
must contribute to the plan so that the plan can pay the monthly
benefits. In addition, employees were also required to regularly
contribute a portion of their pay to the Sears Canada Plan.
In June 2008, Sears Canada amended the Sears Canada Plan to add a
defined contribution component (the "DC Component"). The DC
Component operates akin to a collection of RRSP-type accounts for
the employees, with the company making fixed contributions as a
percentage of employees' pay to a DC account for each employee. The
employees in turn invest their funds in investment vehicles in an
effort to grow a lump sum to be used on retirement. The company's
contributions are fixed and no actuarial valuation reports are
required for the funding of the DC Component.
After June 30, 2008, all Sears Canada employees could only accrue
future benefits under the DC Component. Pension benefit accruals
for employees who had been accruing a benefit under the DB
Component were frozen as of June 30, 2008. These employees
retained their defined benefit pension that they earned up to June
30, 2008, which would be paid to them as a monthly defined benefit
pension when they retired from Sears Canada (in addition to any
amount they earned under the DC Component, if also applicable to
them).
The most recent actuarial valuation report for the Sears Pension
Plan as at Dec. 31, 2015 reports that the plan is underfunded by
$266.8 million on its wind up. This means that Sears Canada is
required to pay that amount into the plan so that the DB Component
can pay the full amount of benefits earned by the pension plan
members. If that amount is not paid on wind up, the retirees'
monthly pension benefits will have to be reduced, and financial
hardship to many, if not all, the Sears Canada retirees will
result.
Koskie Minsky LLP relates that for over the past five years, Sears
Canada's financial situation has steadily and significantly
deteriorated.
Due to the prolonged financial deterioration of Sears Canada, the
association of Sears retirees, the Store and Catalogue Retiree
Group ("SCRG"), comprised of over 6,000 retirees of Sears Canada,
has since November 2014 been requesting both the company and the
Financial Services Commission of Ontario ("FSCO") to wind up the
Sears Pension Plan, in particular the DB component, in order to
disengage the pension plan from the failing company and to protect
the pension income security of the retirees.
The wind up of the plan gives rise to the requirement by the
company to pay the full amount of the wind up deficit to the plan.
The wind up also gives rise to a payment into the plan by the
Ontario Pension Benefits Guarantee Fund ("PBGF") that would help
offset the underfunding in the plan and minimize pension benefit
reductions.
Under section 82(2) of the Pension Benefits Act, R.S.O. 1990, c.
P.8 ("PBA"), the Ontario Superintendent of Financial Services is
responsible for the administration of the PBGF.
Despite the repeated requests by SCRG, neither the company nor the
Superintendent have taken steps to wind up the Sears Pension Plan.
Urgency for Wind Up
Sears Canada's CCAA filing increases the urgency for the pension
plan to be wound up, Koskie Minsky tells the Court.
On June 22, 2017, Sears Canada was insolvent and applied for
protection from its creditors under the Companies' Creditors
Arrangement Act, R.S.C., 1985, c. C-36 ("CCAA"). Mr. Justice
Hainey of the Ontario Superior Court of Justice (Commercial List)
issued the Initial CCAA Order.
While under CCAA protection, Sears Canada has stated that its main
objective is to conduct a sales process called the Sales and
Investment Solicitation Process ("SISP") to sell itself, in whole
or in parts, to potential purchasers. The SISP is ongoing.
Concurrent to the SISP, Sears Canada has identified 59 stores that
it would close after liquidating the inventory in those stores. On
July 18, 2017, Sears Canada brought a motion before the court for
an order to approve the liquidation sales process for 54 of those
stores. Sears Canada immediately commenced the closure process of
those stores and terminated 2,500 employees without paying
severance pay.
Deemed Trust Priority
According to Koskie Minsky LLP, in the circumstances of Sears
Canada CCAA proceedings, it is a virtual certainty that the company
will not continue in its current form, if at all, nor that a
purchaser in the SISP will assume the liabilities of the Sears
Pension Plan. As a result the plan will need to be terminated,
i.e., wound up.
Section 57(4) of the PBA and section 30(7) of the Personal Property
Security Act, R.S.O. 1990, c. P. 10 ("PPSA") create a deemed trust
priority in favour of the pension plan beneficiaries over certain
assets of an employer for the amount owing and not paid by an
employer to the pension plan on its wind up.
According to Koskie Minsky LLP, the PBA/PPSA deemed trust priority
is critically important for the Sears Canada Plan beneficiaries in
the circumstances of Sears Canada's CCAA proceedings and future
competing claims of other creditors.
Koskie Minsky relates that it is critical for the Sears Canada Plan
to be wound up to secure the PBA/PPSA deemed trust priority for the
beneficiaries of the Sears Canada Plan.
Conflict of Interest
Koskie Minsky avers that Sears Canada, the administrator of the
Sears Canada Plan, owes a fiduciary duty under both section 22 of
the PBA and the common law to act in the best interests of the
pension plan members.
The Ontario Superintendent of Financial Services also owes a
fiduciary duty to the pension plan members to act in their best
interests.
The delays by the company and the Superintendent to wind up the
plan and to secure the PBA/PPSA deemed trust priority are
potentially highly prejudicial to the beneficiaries of the Sears
Canada Plan, Koskie Minsky tells the Court.
Representative Counsel to the Retirees of Sears Canada:
KOSKIE MINSKY LLP
20 Queen Street West, Suite 900, Box 52
Toronto, ON M5H 3R3
Andrew J. Hatnay
Tel: 416-595-2083
Fax: 416-204-2872
E-mail: ahatnay@kmlaw.ca
Mark Zigler
Tel: 416-595-2090
Fax: 416-204-2877
E-mail: mzigler@kmlaw.ca
Demetrios Yiokaris
Tel: 416-595-2130
Fax: 416-204-2810
E-mail: dyiokaris@kmlaw.ca
About Sears Canada
Sears Canada Inc. is an independent Canadian online and store
retailer spun off from Sears Holdings Corp. in 2012. Sears Canada
is one of Canada's largest multi-format retailers, employing 17,000
people at 225 stores across Canada and at its head office in
Toronto, Ontario, as of June 22, 2017.
The Company's balance sheet as of April 29, 2017, showed total
assets of C$1.187 billion against total liabilities of C$1.108
billion.
Amid mounting losses and liquidity constraints Sears Canada and
certain of its subsidiaries on June 22, 2017, applied to the
Ontario Superior Court of Justice (Commercial List) for protection
under the Companies' Creditors Arrangement Act ("CCAA"), in order
to continue to restructure its business.
The Company has engaged BMO Capital Markets, as financial advisor,
and Osler, Hoskin & Harcourt LLP, as legal advisor.
FTI Consulting is the Court-appointed monitor. The Monitor tapped
Norton Rose Fulbright Canada LLP as counsel.
Bennett Jones LLP is serving as legal advisor and KSV Advisory Inc.
is financial advisor to the Board of Directors.
McMillan LLP is representing Sears Holdings CEO Edward S. Lampert
and his investment fund ESL Investments, Inc. (holder of 45.3% of
Sears Canada's total outstanding common shares), and Robert
Berkowitz's Fairholme Capital Management, LLC (20% of shares).
Borden Ladner Gervais LLP is representing Sears Holdings (holder of
11.7% shares).
Goodmans LLP is representing Wells Fargo Capital Finance
Corporation Canada, the administrative agent for lenders under the
CAD$300 million DIP ABL facility. Cassels Brock & Blackwell LLP is
representing GACP Finance Co., LLC, the administrative agent for
lenders under the CAD$150 million DIP term loan facility.
Alvarez & Marsal Canada ULC is the advisor to the DIP ABL Lenders
and DIP Term Loan Lenders.
* * *
The Canadian Court granted Sears Canada creditor protection and a
stay of proceedings until Oct. 4, 2017.
The Company in June 2017 announced the closing of 20 full-line
locations, plus 15 "Sears Home" Stores, 10 "Sears Outlet" and 14
"Sears Hometown" locations. The closures will result in a
reduction in its workforce of 2,900 positions.
Sears Canada in July 2017 won approval of the commencement of
liquidation sales at 35 of the closing stores to be conducted by a
contractual joint venture comprised of four liquidation firms,
namely Gordon Brothers Canada ULC, Merchant Retail Solutions ULC,
Tiger Capital Group, LLC and GA Retail Canada ULC.
Sears Canada in July 2017 won approval from the Canadian Court of
sale and investor solicitation process (the "SISP") whereby BMO
Nesbitt Burns Inc. on behalf of Sears Canada and under the
supervision of both the Special Committee of the Board of Directors
of Sears Canada and the Monitor will seek bids and proposals for a
broad range of transaction alternatives with respect to Sears
Canada's business, property, assets and/or leases. The SISP is
ongoing.
SEARS CANADA: Selling Garden City to WCRE for C$5 Million
---------------------------------------------------------
Sears Canada Inc. and its affiliates will make a motion before the
Ontario Superior Court of Justice (Commercial List) on Aug. 18,
2017 at 10:00 a.m., or as soon after that time as the motion can be
heard, at 330 University Avenue, Toronto, Ontario, seeking approval
of an asset purchase agreement entered into as of April 12, 2017
with WCRE Investments Ltd., a company related to Hungerford
Properties Inc.
On April 12, 2017, Sears Canada entered into an asset purchase
agreement with WCRE to purchase Sears Canada's lands and buildings
located at the Garden City Shopping Centre, 2311 McPhillips Street,
Winnipeg, Manitoba for a purchase price of $5,000,000.
Stephen Champion, Executive Vice-President, Real Estate and
Strategic Opportunities of Sears Canada Inc., explains that prior
to the CCAA filing, the Garden City store was operating at a net
loss of more than $1 million per year. As a result of the poor
performance of the Garden City Property and the uncertainty of
Sears Canada's future viability in this location management decided
to seek the sale of the property. Further, the Garden City store
was listed as a store that Sears Canada intends to close.
Over the course of several months, Sears Canada marketed the Garden
City Property by contacting a number of buyers including national
retailers, property developers and the landlord who owns the
remainder of the Garden City Shopping Centre.
Sears Canada received a property value appraisal for the Garden
City Property from a leading property valuation firm dated Dec. 31,
2016. At the request of the Term Loan Lenders, a subsequent
appraisal was prepared for the Garden City Property dated May 31,
2017. No potential purchaser has been identified who is prepared
to purchase the property based on the assumptions contained in the
appraisals.
The APA includes the following terms:
a. A purchase price of $5,000,000;
b. An Initial Deposit of $20,000 that was provided to the
Purchaser's solicitors in trust within two business days of the
execution of the Original APA (this deposit was subsequently
transferred, along with interest accrued thereon, to the Monitor in
trust, within three business days of the execution of the
Amendment);
c. An Additional Deposit of $380,000 that was provided to the
Monitor in trust within two business days after the satisfaction or
waiver of the Purchaser's conditions precedent;
d. The requirement that the transaction be completed on an "as
is, where is" basis;
e. The requirement that the Purchaser's conditions precedent be
waived or satisfied by July 26, 2017. The Purchaser's conditions
precedent include Board approval, completion of due diligence
following a review of the Delivery Materials, an environmental
assessment, geotechnical review and land and building survey, and a
financing commitment from a third party lender. The Amendment
confirmed that the Purchaser had waived all conditions precedent
set out in section 6.1 of the Original APA.
The only condition that remains to be satisfied before Closing is
obtaining the Approval and Vesting Order. The Amendment provides
that it is a condition precedent that the Approval and Vesting
Order be issued and entered by Aug. 25, 2017. Closing of the
transaction will occur five business days after issuance of the
Approval and Vesting Order, or such other date agreed to by the
parties in writing, provided that Sears Canada will have the right
(with the approval of the Monitor) to extend the Completion Date of
the transaction until no later than Oct. 16, 2017.
A full-text copy of the Motion is available at:
http://bankrupt.com/misc/Sears_C_0811_M_GC_Sale.pdf
About Sears Canada
Sears Canada Inc. is an independent Canadian online and store
retailer spun off from Sears Holdings Corp. in 2012. Sears Canada
is one of Canada's largest multi-format retailers, employing 17,000
people at 225 stores across Canada and at its head office in
Toronto, Ontario, as of June 22, 2017.
The Company's balance sheet as of April 29, 2017, showed total
assets of C$1.187 billion against total liabilities of C$1.108
billion.
Amid mounting losses and liquidity constraints Sears Canada and
certain of its subsidiaries on June 22, 2017, applied to the
Ontario Superior Court of Justice (Commercial List) for protection
under the Companies' Creditors Arrangement Act ("CCAA"), in order
to continue to restructure its business.
The Company has engaged BMO Capital Markets, as financial advisor,
and Osler, Hoskin & Harcourt LLP, as legal advisor.
FTI Consulting is the Court-appointed monitor. The Monitor tapped
Norton Rose Fulbright Canada LLP as counsel.
Bennett Jones LLP is serving as legal advisor and KSV Advisory Inc.
is financial advisor to the Board of Directors.
McMillan LLP is representing Sears Holdings CEO Edward S. Lampert
and his investment fund ESL Investments, Inc. (holder of 45.3% of
Sears Canada's total outstanding common shares), and Robert
Berkowitz's Fairholme Capital Management, LLC (20% of shares).
Borden Ladner Gervais LLP is representing Sears Holdings (holder of
11.7% shares).
Goodmans LLP is representing Wells Fargo Capital Finance
Corporation Canada, the administrative agent for lenders under the
CAD$300 million DIP ABL facility. Cassels Brock & Blackwell LLP is
representing GACP Finance Co., LLC, the administrative agent for
lenders under the CAD$150 million DIP term loan facility.
Alvarez & Marsal Canada ULC is the advisor to the DIP ABL Lenders
and DIP Term Loan Lenders.
* * *
The Canadian Court granted Sears Canada creditor protection and a
stay of proceedings until Oct. 4, 2017. The Company in June 2017
announced the closing of 20 full-line locations, plus 15 "Sears
Home" Stores, 10 "Sears Outlet" and 14 "Sears Hometown" locations.
The closures will result in a reduction in its workforce of 2,900
positions.
Sears Canada in July 2017 won approval of the commencement of
liquidation sales at 35 of the closing stores to be conducted by a
contractual joint venture comprised of four liquidation firms,
namely Gordon Brothers Canada ULC, Merchant Retail Solutions ULC,
Tiger Capital Group, LLC and GA Retail Canada ULC.
Sears Canada in July 2017 won approval from the Canadian Court of
sale and investor solicitation process (the "SISP") whereby BMO
Nesbitt Burns Inc. on behalf of Sears Canada and under the
supervision of both the Special Committee of the Board of Directors
of Sears Canada and the Monitor will seek bids and proposals for a
broad range of transaction alternatives with respect to Sears
Canada's business, property, assets and/or leases. The SISP is
ongoing.
SENIOR CARE GROUP: Taps Holliday Fenoglio Fowler as Broker
----------------------------------------------------------
Senior Care Group, Inc., et al. seek approval from the U.S.
Bankruptcy Court for the Middle District of Florida, Tampa
Division, to employ David R. Fasano and Holliday Fenoglio Fowler,
L.P. as broker to sell their skilled nursing assets locate in
Pinellas Park, St. Petersburg, and Clearwater, Florida, as set
forth in an Exclusive Listing Agreement dated August 1, 2017
pursuant to Sections 105 and 327 of the Bankruptcy Code.
Scott A. Stichter, Esq., at Stichter Riedel Blain & Postler, P.A.,
confirmed to the Troubled Company Reporter in an email that the
firm will be paid a Success Fee of 1.50% of the Gross Purchase
Price on the date of the closing of the sale of the Properties.
The parties' Listing Agreement also provides reimbursement to the
firm for reasonable out-of-pocket expenses and disbursements
incurred, including, but not limited to, airfare, hotel expenses,
other miscellaneous travel expenses, meals, entertainment, aerial
photographs, other photographs, the Broker's graphics design fee,
and third party marketing reports not to exceed $5,000.
David R. Fasano, director with Holliday Fenoglio Fowler, LP,
attests that the firm is disinterested as defined in 11 USC Sec.
101(14).
The Firm can be reached through:
David R. Fasano
Holliday Fenoglio Fowler, L.P.
2323 Victory Avenue, Suite 1200
Dallas, TX 75219
Tel: 214-265-9564
Email: dfasano@hfflp.com
About Senior Care Group Inc.
Senior Care Group, Inc. is a non-profit corporation which, through
its wholly-owned subsidiaries, provides residents and patients with
nursing and long-term health care services.
Senior Care Group and its six affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No.
17-06562) on July 27, 2017. David R. Vaughan, chairman of the
Board, signed the petitions. Scott A. Stichter, Esq., at Stichter
Riedel Blain & Postler, P.A., serves as the Debtors' Chapter 11
counsel.
At the time of the filing, Senior Care Group disclosed that it had
estimated assets and liabilities of $1 million to $10 million.
SHEET METAL AIR: Taps E.P. Bud Kirk as Legal Counsel
----------------------------------------------------
Sheet Metal Air Plus Co., LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Texas to hire legal
counsel in connection with its Chapter 11 case.
The Debtor proposes to employ the law firm of E.P. Bud Kirk to,
among other things, give legal advice regarding its duties under
the Bankruptcy Code; review its pre-bankruptcy transactions; and
assist in the preparation of a bankruptcy plan.
E.P. Bud Kirk, Esq., will charge an hourly fee of $300 for his
services while his firm's paralegals will charge $90 per hour.
Kirk received a retainer of $5,000 upon the filing of the Debtor's
case and $1,500 prior to the petition date.
The firm does not hold any interest adverse to the Debtor's estate
or any of its creditors, according to court filings.
The firm can be reached through:
E.P. Bud Kirk, Esq.
600 Sunland Park Drive
Bldg. Four, Suite 400
El Paso, TX 79912
Phone: (915) 584-3773
Fax: (915) 581-3452
Email: budkirk@aol.com
About Sheet Metal Air Plus Co.
Sheet Metal Air Plus Co., LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Texas Case No. 17-31270) on August
10, 2017.
At the time of the filing, the Debtor disclosed that it had
estimated assets of less than $100,000 and liabilities of less than
$1 million.
Judge H. Christopher Mott presides over the case.
SINGH LODGING: Wants to Use Cash to Meet Costs of Operations
------------------------------------------------------------
Singh Lodging, Inc., asks for permission from the U.S. Bankruptcy
Court for the Western District of New York to use cash collateral
in which Zions First National Bank, New York Business Development
Corporation, BBCN Bankcorp, Inc., CAN Capital, Inc., and Elm
Services LLC have or allege to have a lien or security interest.
The Debtor wants to use cash collateral to meet the costs of
overhead, operations and preservation of its secured creditors'
collateral.
The Debtor owns and operates the Knight's Inn in Lancaster, New
York, valued at $2.5 million and is subject to a first mortgage in
favor of Zions, in the approximate amount of $1 million and a
second mortgage in favor of the NYBDC, in the approximate amount of
$715,000. Since the time of the acquisition, substantial capital
improvements have been made to enhance the Knights Inn's operations
and grow its revenues. Zions commenced a mortgage foreclosure
action on March 7, 2017. The state court entered an order on June
30, 2017, appointing M. Neal Eckard as receiver in the mortgage
foreclosure action.
Upon turnover of the property held by the Receiver, the Debtor has
an immediate need to utilize cash and receipts to pay necessary
expenses relating to the Knights Inn business operations in order
to prevent the occurrence of immediate and irreparable harm to
those operations.
The BBCN Bank Corp, Inc., is cross-collateralized against assets of
Singh Hospitality, Inc., which operates a hotel in Minnesota and is
pending sale. Upon the closing of the Minnesota Hotel, and
subsequent disbursement to BBCN, it is anticipated that Secured
Creditors' claims will be fully secured by the assets of the
Debtor.
As adequate protection to the Secured Creditors, the Debtor
proposes to give "rollover" replacement liens on the same types and
kinds of property on which the creditors assert liens pre-petition,
to the extent of cash collateral actually used.
A copy of the Debtor's Motion is available at:
http://bankrupt.com/misc/nywb17-11637-8.pdf
About Singh Lodging
Singh Lodging, Inc., provides accommodation for travelers. It owns
a fee simple interest in a property located at 50 Freeman Drive,
Lancaster, New York, valued at $2.5 million.
Singh Lodging filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No.
17-11637) on Aug. 4, 2017. The petition was signed by Kabal S.
Virk, president. At the time of filing, the Debtor disclosed $2.53
million in assets and $3.63 million in liabilities.
Robert B. Gleichenhaus, Esq., at Gleichenhaus, Marchese, Weishaar,
P.C., is serving as counsel to the Debtor.
SIXTY SIXTY CONDOMINIUM: MRC Contract Not Subject to SG ROFR
------------------------------------------------------------
Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern
District of Florida has issued an interpretation of the right of
first refusal applicable to non-debtor property that is being sold
as part of Sixty Sixty Condominium Association, Inc.'s proposed
bulk sale of all of the Debtor's assets.
The Court said it cannot grant or deny approval of the bulk sale
without first interpreting a right of first refusal applicable to
non-debtor property that is being sold as part of the proposed bulk
sale.
The Debtor is a condominium association, which holds title to real
property within the condominium, but not in the traditional sense
because another entity, Schecher Group, Inc., owns and controls the
common areas within the condominium building. Schecher Group runs a
hotel operation at the condominium from a pool of units whose
non-debtor owners voluntarily placed their units in the hotel
program.
Schecher Group has a right of first refusal applicable to proposed
transfers of units in the condominium, which provides that a
residential unit owner who intends to accept a bona fide offer (the
"Outside Offer") to purchase its residential unit must give
Schecher Group notice of the Outside Offer. Schecher Group's right
of first refusal further provides that the giving of notice of the
Outside Offer constitutes an offer by the residential unit owner to
sell its residential unit to Schecher Group, or its designee.
The Schecher Group's right of first refusal, however, does not
apply to the five units in the condominium owned by the Debtor,
four of which are commercial units and one of which is a
residential unit. Articles 17.1 and 17.5 of the Declaration of
Sixty-Sixty Condominium specifically exclude the sale of the
Debtor's units from the Schecher Group's right of first refusal.
Thus, the Court holds that its interpretation of the Schecher
Group's right of first refusal would be unnecessary if the Outside
Offer included only the Debtor's assets. However, the Outside Offer
is an offer by Marc Realty Capital, LLC to purchase the Debtor's
five units only as part of a sale that includes at least fifty
non-debtor residential units.
The Debtor asserts, and has proven, that it can neither reorganize
nor maximize the value of its assets outside of a bulk sale that
includes non-debtor property. Moreover, the Debtor is seeking
approval of a sale on a parallel track with its request for
confirmation of a plan of reorganization. Thus, the Court posits
that any sale approved by the Court will be part of a formal
chapter 11 plan process, and Schecher Group, like all other
creditors, can evaluate and vote on the plan, and raise objections
to confirmation.
Jason Welt, the Debtor's broker, testified that there is no market
for the Debtor's commercial units. Charles R. Gibbs, the Vice
President of National Acquisitions for Marc Realty Capital,
testified that Marc Realty Capital's agreement to purchase the
Debtor's units for $1 million is incidental to Marc Realty
Capital's purchase of at least fifty non-debtor units. Mr. Gibbs
explained that Marc Realty Capital is interested in purchasing a
sufficient number of non-debtor units, which constitute a "critical
mass" in the Sixty Sixty condominium building. Mr. Gibb's also
testified that Marc Realty Capital intends to acquire multiple
models for its use of the units and is not solely pursuing a
"shadow rental program" that might or might not be prohibited under
applicable law.
The issue here is whether the MRC Contract triggers the Schecher
Group's right of first refusal. The Schecher Group argues that the
MRC Contract was proposed in bad faith and that the MRC Contract is
illusory
The Court rejects both arguments. Instead, the Court finds that the
Schecher Group's challenges to Marc Realty Capital's good faith are
largely unsubstantiated. The Court also finds that Marc Realty
Capital is not intending to violate the law to the extent that Marc
Realty Capital's intended use of the units it seeks to acquire in
the Sixty Sixty Condominium would be at odds with the Declaration
of Condominium, applicable law and regulations, or other applicable
agreements or rules.
The Court makes no findings with regards to the legality of any
proposed "shadow rental program," or with regards to the
enforceability of the hotel-unit-owner's exclusive rights to
operate a hotel under the condominium documents. Rather, the Court
finds that (i) the non-debtor residential unit owners have a
legally defensible right to sell their units in a bulk sale, (ii)
the non-debtor residential unit owners have a legally defensible
right to rent their units independent of the Schecher Group's hotel
operation, and (iii) Marc Realty Capital can propose and has
proposed a good faith offer to purchase the non-debtor residential
units.
The Court determines that the MRC Contract makes clear that the
purchase price for the non-debtor residential units is $120,000 per
unit plus the unit's allocable share of the Schecher Group
liability. The Court maintains that substitution of an assumption
of liability by Marc Realty Capital for a forgiveness of the debt
by the Schecher Group is an immaterial difference in accounting --
the cost is still the same.
The Court also finds that the MRC Contract complies with the
Court's First Partial Ruling on right of first refusal. Under
Florida law, "the holder of a right of first refusal cannot be
compelled to purchase more property than is subject to the right of
first refusal."
The Court holds that the MRC Contract complies with the prohibition
against mandatory inclusion of property not subject to a right of
first refusal by bifurcating the prospective sale. The Court
explains that the Debtor's property, which is the only property in
the MRC Contract: (a) is not subject to the Schecher Group's right
of first refusal, (b) is subject to purchase and sale provisions
that apply only if Marc Realty Capital purchases at least fifty
non-debtor residential units.
The Court points out that the condition precedent to Marc Realty
Capital's purchase of the Debtor's property, is the sale of at
least fifty non-debtor residential units for a purchase price of
$120,000 per unit plus assumption of any liability owing to the
Schecher Group -- which terms and conditions Schecher Group must
match in order to properly exercise the Schecher Group's right of
first refusal. The Court contends, however, that the Schecher Group
is not required to purchase the Debtor's units.
The Court determines from the plain language of the Schecher
Group's right of first refusal provision that the Schecher Group's
right of first refusal has no limitations on the terms and
conditions that must be matched, and it does not exclude from its
matching requirements bulk-sale conditions. More importantly, the
Court maintains that allowing the Schecher Group to exercise the
Schecher Group's right of first refusal on a unit-by-unit basis
would be an unreasonable restraint on alienation of the non-debtor
units.
The Court indicates that in order to exercise the Schecher Group
right of first refusal, the Schecher Group must match all terms and
conditions of the Amended MRC Contract applicable to Marc Realty
Capital's purchase of the non-debtor units, including, in
particular, offering to purchase all of the non-debtor residential
units that Marc Realty Capital is agreeing to purchase under the
Amended MRC Contract when the contract is presented to the Schecher
Group. This means agreeing to purchase the units offered for sale
by all of the unit owners who have executed the Amended MRC
Contract at the time the Amended MRC Contract is presented to the
Schecher Group, even if such number exceeds fifty units.
A full-text copy of the Order dated August 7, 2017, is available at
https://is.gd/2ICKgG from Leagle.com.
About Sixty Sixty Condominium
Sixty Sixty Condominium is a mixed-use hotel/residential building
located at 6060 Indian Creek Drive in Miami Beach, Florida. Sixty
Sixty Condominium Association, Inc., a non-profit corporation, is
responsible for, among other things, the management, operation, and
maintenance of the Condominium's "Common Elements", and other
obligations imposed by state statute.
Sixty Sixty Condominium Association, Inc., filed a Chapter 11
bankruptcy petition (Bankr. S.D. Fla. Case No. 16-26187) on
December 5, 2016, listing $100,000 to $500,000 in total assets, and
$1 million to $10 million in liabilities. The petition was signed
by Maria Velez, president of the Board of Directors.
The Hon. Robert A. Mark presides over the case.
Brett D. Lieberman, Esq., at Messana, P.A., represents the Debtor
as counsel. Juda Eskew & Associates, PA, serves as the Debtor's
accountant.
An official committee of unsecured creditors has not yet been
appointed in the Chapter 11 case.
SM PROPERTY HOLDINGS: Taps Coan Payton as Legal Counsel
-------------------------------------------------------
SM Property Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Colorado to hire legal counsel.
The Debtor proposes to employ Coan, Payton & Payne, LLC to, among
other things, assist in the administration of its Chapter 11 case;
review claims of creditors; and assist in the preparation of a
bankruptcy plan.
The hourly rates charged by the firm are:
G. Brent Coan $375
Robert Lantz $350
Brett Payton $300
Michael Payne $275
Jeremy Rose $250
Amanda Radtke $125
Coan Payton has required a retainer of $6,666.67, which represents
one-third of the retainer held in the trust account of Kutner,
Brinen, PC, the firm previously tapped by the Debtor to be its
bankruptcy counsel.
The firm has requested that the retainer be transferred from
Kutner's account to its own trust account upon court approval of
the retainer.
Robert Lantz, Esq., the primary attorney who will be handling the
case, disclosed in a court filing that his firm has no conflict of
interest with the Debtor or any of its creditors.
Coan Payton can be reached through:
Robert D. Lantz, Esq.
Coan, Payton & Payne, LLC
999 18th Street
South Tower, Suite S1500
Denver, CO 80202
Tel: (303) 861-8888
Email: rlantz@cp2law.com
About SM Property Holdings LLC
SM Property Holdings, LLC, based in Vail, Colorado, filed a Chapter
11 petition (Bankr. D. Colo. Case No. 17-14554) on May 16, 2017.
The petition was signed by Shaon Mou, manager. In its petition,
the Debtor estimated $1 million to $10 million in both assets and
liabilities.
Judge Joseph G. Rosania Jr. presides over the case. Jenny M. Fujii,
at Kutner Brinen, P.C., serves as bankruptcy counsel.
STEFANOVOUNO LLC: Case Summary & 10 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Stefanovouno, LLC
2323 Brown Avenue
Manchester, NH 03109
Type of Business: Restaurant
Chapter 11 Petition Date: August 16, 2017
Case No.: 17-11142
Court: United States Bankruptcy Court
District of New Hampshire (Manchester)
Debtor's Counsel: Eleanor Wm Dahar, Esq.
VICTOR W. DAHAR PROFESSIONAL ASSOCIATION
20 Merrimack Street
Manchester, NH 03101
Tel: (603) 622-6595
E-mail: edahar@att.net
vdaharpa@att.net
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Thomas Katsiantonis, manager.
The Debtor's list of 10 unsecured creditors is available for free
at http://bankrupt.com/misc/nhb17-11142.pdf
SUNEDISON INC: Former Exec Gaynor Defends $11.2M Claim
------------------------------------------------------
Michael Phillis of Bankruptcy Law360 relates that Paul Gaynor,
former executive vice president of SunEdison Inc., has sought a
$11,246,171 claim against SunEdison and NVT LLC "for funds due
Gaynor under the terms of the compensation agreements set forth in
the claim," along with $1 million against the same parties "in
relation to various claims against the companies, including
wrongful termination and violation of federal and state
whistleblower statutes."
In a response to SunEdison's objections to his claims, Mr. Gaynor
asserted to the Bankruptcy Court that contract agreements support
his claims, Law360 reports.
Law360 relates that Mr. Gaynor has alleged that he was pushed out
of SunEdison for objecting to improper behavior and statements
allegedly made by other executives. He insists that he was not
fired for cause, Law30 cites.
Mr. Gaynor is represented by Charles M. Louderback of Louderback
Law Group.
About SunEdison, Inc.
SunEdison, Inc. (OTC PINK: SUNEQ), is a developer and seller of
photovoltaic energy solutions, an owner and operator of clean
power generation assets, and a global leader in the development,
manufacture and sale of silicon wafers to the semiconductor
industry.
On April 21, 2016, SunEdison, Inc., and 25 of its affiliates each
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case Nos.
16-10991 to 16-11017). Martin H. Truong, the senior vice
president, general counsel and secretary, signed the petitions.
The Debtors disclosed total assets of $20.7 billion and total debt
of $16.1 billion as of Sept. 30, 2015.
The Debtors have hired Skadden, Arps, Slate, Meagher & Flom LLP as
counsel, Togut, Segal & Segal LLP as conflicts counsel, Rothschild
Inc. as investment banker and financial advisor, McKinsey Recovery
& Transformation Services U.S., LLC, as restructuring advisors and
Prime Clerk LLC as claims and noticing agent. The Debtors
Employed PricewaterhouseCoopers LLP as financial advisors; and
KPMG LLP as their auditor and tax consultant.
SunEdison also has tapped Eversheds LLP as its special counsel for
Great Britain and the Middle East. Cohen & Gresser LLP has also
been retained as special counsel.
The Debtors tapped Ernst &Young LLP to provide tax-related
services. Keen-Summit Capital Partners LLC has been hired as real
estate advisor. Binswanger of Texas, Inc. also has been retained
as real estate agent.
Sullivan & Cromwell LLP serves as counsel to TerraForm Power,
Inc., and TerraForm Global, Inc.
An official committee of unsecured creditors has been appointed in
the case. The Committee tapped Weil, Gotshal & Manges LLP as its
general bankruptcy counsel and Morrison & Foerster LLP as special
counsel. Togut, Segal & Segal LLP and Kobre & Kim LLP serve as
conflicts counsel. Alvarez & Marsal North America, LLC, serves as
the Committee's financial advisors.
Counsel to the administrative agent under the Debtors' prepetition
first lien credit agreement are Richard Levy, Esq., and Brad
Kotler, Esq., at Latham & Watkins.
Counsel to the administrative agent under the postpetition DIP
financing facility are Scott Greissman, Esq., and Elizabeth Feld,
Esq. at White & Case LLP.
Counsel to the Tranche B Lenders (as defined in the DIP credit
agreement) and the steering committee of the second lien creditors
are Arik Preis, Esq., and Naomi Moss, Esq., at Akin Gump Strauss
Hauer & Field, LLP.
Counsel to the administrative agent under the Debtors' prepetition
second lien credit agreement is Daniel S. Brown, Esq., at
Pillsbury Winthrop Shaw Pittman LLP.
The collateral trustee under the Debtors' prepetition second lien
credit agreement and the indenture trustee under each of the
Debtors' outstanding bond issuances, is represented by Marie C.
Pollio, Esq., at Shipman & Goodwin LLP.
Counsel to the ad hoc group of certain holders of the Debtors'
convertible senior notes is White & Case LLP's Tom Lauria, Esq.
* * *
On March 28, 2017, the Debtors filed their Plan of Reorganization
and related Disclosure Statement.
SYDELL INC: Advanced Dermal Buying All Assets for $263K
-------------------------------------------------------
Sydell, Inc., doing business as Spa Sydell, asks the U.S.
Bankruptcy Court for the Northern District of Georgia to authorize
the sale of substantially all of its assets to Advanced Dermal
Sciences, LLC, for $263,000.
A hearing on the Motion is set for Sept. 7, 2017 at 10:00 a.m.
The Debtor and the Buyer entered into Asset Purchase Agreement for
the sale of Assets. The Agreement is subject to Court approval and
provides for the sale of substantially all of the assets of the
Debtor for a cash purchase price of $263,000, the assumption of
certain employee wage claims accruing 30 days before the closing of
the proposed transaction and the assumption by the Buyer of the
Debtor's gift card obligations. The Agreement is contingent on the
Debtor's assignment of the leases for its spas at the Forum and in
Cumming, with the Buyer being responsible only for performance of
such leases from and after the Closing Date. Moreover, the Debtor
is advised that the proposed Buyer intends to continue to employ
most of its employees and contractors.
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/Sydell_Inc_232_Sales.pdf
The Debtor discloses that the Buyer is currently negotiating with
Reina Bermudez, the Debtor's sole stockholder, CEO and a member of
its board of directors, to consult with the Buyer for a period of
six months following the Closing Date at a rate of $10,000 per
month.
The Debtor has attempted to sell its assets as a going concern both
before filing the case and during the past eleven months that the
case has been pending. The Agreement is the best and only offer
that it has received. If this asset sale is not approved, then the
Debtor will have no alternative but to cease operations and to
liquidate its assets. It believes that the consideration is a fair
and reasonable price for the assets. Accordingly, the Debtor asks
the Court to approve the relief requested.
The Purchaser is represented by:
Henry F. Sewell, Jr., Esq.
LAW OFFICES OF HENRY F. SEWELL, JR., LLC
2964 Peachtree Road, NW, Suite 555
Atlanta, GA 30305
About Sydell, Inc.
Beauty spa operator Sydell, Inc., d/b/a SPA Sydell, first filed for
bankruptcy (Bankr. N.D. Ga. Case No. 09-83407) on Sept. 3, 2009.
The case was assigned to Chief Judge C. Ray Mullins. The Debtor
was represented by David G. Bisbee, Esq., at the Law Office of
David G. Bisbee. The 2009 petition estimated assets and
liabilities at $1 million to $10 million at the time of the filing.
The Company emerged from Chapter 11 on Feb. 17, 2012.
Sydell, Inc., again sought Chapter 11 protection (Bankr. N.D. Ga.
Case No. 16-64647) on Aug. 22, 2016, four years after emerging from
a prior bankruptcy case. The petition was signed by Reina A.
Bermudez, chief executive officer and 100% owner of Sydell. The
Debtor estimated assets and liabilities of $1 million to $10
million as of the bankruptcy filing.
In the new Chapter 11 case, Sydell, Inc., tapped John Michael
Levengood, Esq., at the Law Office of J. Michael Levengood, LLC as
counsel; and GGG Partners, LLC as financial consultants. It also
hired Tanya Adrews Tate as its special bankruptcy counsel, and
Right on the Books Consultants, LLC, as its accountants.
TARRANT COUNTY CULTURAL: Fitch Withdraws BB+ Rev Bonds Ratings
--------------------------------------------------------------
Fitch Ratings has withdrawn its ratings for the following bonds due
to prerefunding activity:
-- Eugene (OR) (Eugene Water & Electric Board) electric utility
system revenue & refunding bonds series 2001A (prerefunded
maturities only - 298191TE7, 298191TF4, 298191TG2, 298191TH0,
298191TJ6, 298191TK3). Previous Rating: 'AA-'/Rating Outlook
Stable;
-- Ocala (FL) utility system improvement & refunding revenue
bonds series 2007B (prerefunded maturities only - 674564EN5,
674564EP0, 674564EQ8, 674564ER6, 674564ES4, 674564ET2,
674564EU9, 674564EV7). Previous Rating: 'AA-'/Rating Outlook
Stable;
-- Tarrant County Cultural Education Facilities Finance
Corporation (TX) (Air Force Village Obligated Group Project)
fixed-rate revenue bonds series 2009 (prerefunded maturities
only - 87638RCT2, 87638RDE4, 87638RCU9, 87638RCV7). Previous
Rating: 'BB+'/Rating Outlook Stable.
TERRACE MANOR: Disclosures OK'd; Plan Hearing on Sept. 19
---------------------------------------------------------
The Hon. S. Martin Teel, Jr., of the U.S. Bankruptcy Court for the
District of Columbia has approved Terrace Manor, LLC's disclosure
statement dated Aug. 1, 2017, referring to the Debtor's second
amended plan of reorganization dated Aug. 1, 2017.
A hearing on the confirmation of the Plan will be held on Sept. 19,
2017, at 10:00 a.m. Objections to the plan confirmation must be
filed by Sept. 6, 2017, which is also the last day on which the
holders of claims and interests may accept or reject the Plan.
About Terrace Manor LLC
Terrace Manor, LLC, owns a 61-unit residential apartment building
located at 3341-3353 23rd Street S.E., 2276 Savanah Street, S.E.,
and 2270-2272 Savanah Street, S.E. Washington, DC. It is a single
asset real estate as defined in 11 U.S.C. Section 101(51B).
Sanford Capital, LLC, is the 100% owner of Debtor.
The Debtor filed a Chapter 11 petition (Bankr. D.D.C. Case No.
17-00175) on March 30, 2017. The petition was signed by Carter A.
Nowell, managing member of Sanford Capital. The case is assigned
to Judge Martin S. Teel, Jr. At the time of filing, the Debtor had
estimated both assets and liabilities between $1 million to $10
million.
Brent C. Strickland, Esq., and Christopher A. Jones, Esq., at
Whiteford, Taylor & Preston L.L.P., are serving as bankruptcy
counsel to the Debtor.
On April 10, 2017, the Debtor filed a disclosure statement, which
explains its proposed Chapter 11 plan of reorganization.
TRANSOCEAN INC: S&P Affirms B+ CCR on Songa Offshore Acquisition
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' corporate credit rating on oil
and gas offshore contract drilling services provider Transocean
Inc. The outlook is negative.
S&P said, "Our issue-level ratings on the company's debt are
unchanged. We expect to review recovery and issue-level ratings
closer to the close of the Songa transaction, expected by the end
of 2017, when we have full information on the post-close assets and
capital structure.
"The affirmation reflects our view that at the current ratings the
benefits of the Songa acquisition are sufficient to offset the
increase in debt used to finance a portion of the purchase price.
Transocean, which already has an industry-leading contract backlog
of $10.2 billion, will add $4.1 billion in future revenue through
the transaction. Songa has four harsh-environment semi-submersible
drilling rigs contracted into 2023 and 2024 with Statoil, which we
view as a strong counterparty. We view the $3.4 billion purchase
price as fully valuing Songa's contracted rigs; we believe the
likelihood of the company's three idle rigs returning to work in
the next several years is low and we attribute little value to them
in our analysis. Transocean plans to fund the acquisition with a
combination of debt, equity, and cash, which we expect will
increase the company's leverage slightly.
"The negative outlook on Transocean's rating reflects our view that
demand for offshore contract drilling services is unlikely to
recover before 2019 due to limited opportunities for economic
investment in offshore oil and gas exploration and development
(E&P) at our commodity price assumptions, and due to a shift in
focus to shorter-cycle projects by E&P companies. Therefore, we
estimate that Transocean's funds from operations (FFO)-to-debt
ratio will weaken over the next year, falling below 12%, and that
debt to EBITDA will rise above 5x in 2018.
"The negative outlook reflects our view that Transocean's credit
measures will weaken in 2017 and 2018 as contract backlog rolls
off, unless the market recovers earlier than we expect or the
company takes steps to reduce total debt.
"We could lower the rating if we expected Transocean's FFO/debt to
remain well below 12% for a sustained period. This would most
likely occur if we no longer anticipate a recovery in demand for
offshore drilling services after 2018. We could also lower the
rating if the company's liquidity deteriorated, which could occur
if it were to reduce the size of its credit facility or was unable
to refinance debt.
"We could revise the outlook to stable if we expected Transocean to
maintain FFO/debt above 12% for a sustained period, which would
most likely occur if the company were able to recontract rigs as
backlog rolls off in conjunction with an industry recovery."
TRUE RELIGION: Committee Taps Klehr Harrison as Co-Counsel
----------------------------------------------------------
The official committee of unsecured creditors of True Religion
Apparel, Inc. seeks approval from the U.S. Bankruptcy Court in
Delaware to hire Klehr Harrison Harvey Branzburg LLP.
The firm will serve as Delaware co-counsel with Cooley LLP, another
firm tapped by the committee to be its bankruptcy counsel. Klehr
Harrison will also act as conflicts counsel to handle matters in
which Cooley may have a conflict in handling.
The hourly rates charged by the firm are:
Partners $350 - $820
Counsel $295 - $475
Associates $260 - $410
Paralegals $170 – 250
The principal attorneys and paralegal at Klehr Harrison designated
to represent the committee are:
Morton Branzburg Partner $675
Michael Yurkewicz Counsel $425
Sally Veghte Associate $325
Michael Yurkewicz, Esq., disclosed in a court filing that his firm
does not hold or represent any interest adverse to the Debtors'
estates.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Yurkewicz disclosed that his firm has not agreed to any variations
from, or alternatives to, its standard or customary billing
arrangements for its employment with the committee.
Mr. Yurkewicz also disclosed that his firm has not represented the
committee in the 12 months prior to the petition date, and that
they are formulating a budget that is consistent with the court's
order that approved the Debtors' bankruptcy loan.
The firm can be reached through:
Michael W. Yurkewicz, Esq.
Sally E. Veghte, Esq.
Klehr Harrison Harvey Branzburg LLP
919 N. Market Street, Suite 1000
Wilmington, DE 19801
Tel: (302) 426-1189
Email: myurkewicz@klehr.com
Email: sveghte@klehr.com
About True Religion Apparel, Inc.
Manhattan Beach, California-based True Religion Apparel Inc.
designs and markets denim, sportswear and accessories for men,
women and children under the "True Religion" brand. Founded by Jeff
Lubell in 2002, the Company sells its products through wholesale
and retail channels on six continents and through their websites at
http://www.truereligon.com/and http://www.last-stitch.com/ As of
July 5, 2017, the True Religion Brand Jeans retailer had 140 True
Religion and Last Stitch brick-and-mortar stores.
The company has been controlled by TowerBrook Capital Partners
since its take-private transaction in July 2013.
True Religion and four affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 17-11460) on July 5, 2017, after
obtaining secured stakeholder support for a restructuring that
would reduce debt by over $350 million.
True Religion had $243.3 million in assets against $534.7 million
of liabilities as of Jan. 28, 2017.
The company's legal advisors include Wachtell Lipton Rosen & Katz
and Pachulski Stang Ziehl & Jones. Its financial advisor is MAEVA
Group, LLC. Prime Clerk LLC is the claims and noticing agent.
The Ad Hoc Group of Unaffiliated Prepetition First and Second Lien
Lenders -- which signed the RSA -- tapped Akin Gump Strauss Hauer &
Feld LLP as counsel and Moelis & Company, LLP, as financial
advisor.
On July 12, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. Cooley LLP represents
the committee as lead counsel.
TXCC INC: Seeks to Hire C.D. Shamburger as Accountant
-----------------------------------------------------
TX. C.C., Inc. seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Texas to hire an accountant.
The Debtor proposes to employ C.D. Shamburger, Jr. to prepare its
monthly operating reports for May, June and July 2017.
Mr. Shamburger will charge an hourly fee of $200. He will receive
a $30,000 retainer from Day Star Capital Management, LLC or other
non-debtor entity.
In a court filing, Mr. Shamburger disclosed that he is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
About TX.C.C., Inc.
TX.C.C., Inc., et al., own and operate two steakhouse dining
concepts, Texas Land & Cattle and Lone Star Steakhouse & Saloon.
The Debtors currently operate a total of 29 locations across the
two brands.
TX.C.C. filed a Chapter 11 bankruptcy petition (Bankr. E.D. Tex.
Case No. 17-40297) on Feb. 13, 2017. The petition was signed by
Timothy Dungan, president. In its petition, the Debtor estimated
$0 to $50,000 in assets and $1 million to $10 million in
liabilities.
These affiliates also filed for Chapter 11 bankruptcy protection:
a. Texas Land & Cattle of Fairview, LLC (Bankr. E.D. Tex.
Case No. 17-40300) and Lone Star Steakhouse & Saloon of
Springfield, Inc. (E.D. Tex. Case No. 17-40303) on Feb. 13;
b. Lone Star Steaks, Inc. (E.D. Tex. Case No. 17-40330) on
Feb. 17, 2017;
c. Texas Land & Cattle Steakhouse of North Carolina, Inc.
(E.D. Tex. Case No. 17-40332) and TXLC of Arlington II,
LLC (E.D. Tex. Case No. 17-40333) on Feb. 18, 2017.
d. Lone Star Steakhouse & Saloon of Southern Missouri
(E.D. Tex. Case No. 17-40334) Lone Star Steakhouse &
Saloon of Florida, Inc. (E.D. Tex. Case No. 17-40335)
and TXLC of Missouri, Inc. (E.D. Tex. Case No. 17-40336)
on Feb. 19, 2017;
e. Lone Star Steakhouse & Saloon of Michigan, Inc. (E.D. Tex.
Case No. 17-40339), Lone Star Steakhouse & Saloon of
Mississippi, Inc. (E.D. Tex. Case No. 17-40340) and Lone
Star Steakhouse & Saloon of Oklahoma, Inc. (E.D. Tex. Case
No. 17-40341) on Feb. 20, 2017;
f. Lone Star Steakhouse & Saloon of Ohio, Inc. (E.D. Tex.
Case No. 17-40342) on Feb. 21, 2017;
g. TX LC Liquor Company (E.D. Tex. Case No. 17-40443) on
March 3, 2017; and
h. LS Management, Inc. (E.D. Tex. Case No. 17-40508) on
March 8, 2017.
The cases are jointly administered.
The Hon. Brenda T. Rhoades presides over the cases. Weycer,
Kaplan, Pulaski & Zuber, P.C., serves as counsel to the Debtors.
The Debtors hired Jeff Merritt of Merritt Advisors as restructuring
advisor.
No trustee, examiner or statutory creditors' committee has been
appointed in the Chapter 11 cases.
US VIRGIN ISLANDS: Fitch Cuts Issuer Default Rating to CCC, Off RWN
-------------------------------------------------------------------
Fitch Ratings has downgraded the following ratings of the United
States Virgin Islands (USVI) and the USVI Public Finance Authority
(VIPFA):
-- Issuer Default Rating (IDR) of the USVI, to 'CCC' from 'B';
-- $697.8 million gross receipts tax (GRT) revenue bonds, to 'B'
from 'BB-';
-- $741.4 million senior lien matching fund revenue bonds, to 'B'
from 'BB-';
-- $147 million subordinate lien matching fund revenue bonds, to
'B' from 'BB-';
-- $232.2 million subordinate lien matching fund revenue bonds
(Diageo project) series 2009A, to 'B' from 'BB-';
-- $34.9 million subordinate lien matching fund revenue bonds
(Cruzan project) series 2009A, to 'B' from 'BB-'.
Fitch has removed the ratings from Rating Watch Negative. The
Outlook on all of the ratings is Negative.
SECURITY
The GRT revenue bonds issued by VIPFA are secured by a pledge of
GRT collections deposited to the trustee in a separate escrow
account for bondholders prior to their use for general purposes.
The bonds also carry a general obligation pledge of the USVI.
The matching fund revenue bonds are special, limited obligations of
VIPFA payable from and secured by a pledge of and lien on the trust
estate of each respective indenture, primarily matching fund
revenues associated with rum production at the Cruzan and Diageo
facilities located on the USVI.
All current and future GRT and matching fund bondholders have been
provided with a statutory lien on the respective, dedicated revenue
streams, following passage of legislation granting this lien in
2016. The rating on the bonds is two notches above the USVI's IDR,
reflecting Fitch's assessment that even though the bonds are
exposed to operating risks of the territory, bondholders benefit
from enhanced recovery prospects due to the statutory lien on the
respective revenue streams for bondholders.
ANALYTICAL CONCLUSION
The downgrade of the USVI's IDR to 'CCC' from 'B' incorporates the
significant financial pressures confronting the USVI that are
compounded by an extremely high liability burden. The inability to
access capital markets for debt issuance has added further stress,
with a strained liquidity position giving rise to a sizable
escalation in accounts payable. While the government has attempted
to address this situation through proactive cash management,
revenue enhancements and some expenditure reductions, Fitch
believes that prospects for stabilization in the USVI's financial
position are limited. Budget imbalance will continue until such
time as expenditures, including those related to retiree benefit
obligations, are aligned with realistic expectations of future
revenue performance, or economic growth well beyond current
expectations bolsters revenue sources. The outstanding payables are
expected to weigh on the USVI, as will a debt burden that has risen
considerably following multiple years of borrowing to fund ongoing
operations and the exponential growth in the net pension liability
(NPL) of the pension system due to significantly inadequate annual
contributions.
The downgrade of the USVI's gross receipts tax and matching fund
bond ratings to 'B' from 'BB-' incorporates the downgrade in the
USVI's IDR and continues to reflect Fitch's analysis of the
territory's dedicated tax bonds following the passage of the Puerto
Rico Oversight, Management, and Economic Stability Act (PROMESA).
While PROMESA does not currently apply to the USVI, Fitch believes
that its passage created an avenue for the federal government to
adopt future legislation allowing for a restructuring of
USVI-backed debt even though the USVI is not eligible to file for
bankruptcy under current federal law. As a result, Fitch treats the
USVI as analogous to a local government in applying dedicated tax
bond criteria.
The Negative Outlook reflects Fitch's assessment that the USVI will
remain challenged in stabilizing its financial operations and its
debt and pension positions.
Economic Resource Base
The USVI is a small and remote unincorporated territory of the U.S.
located in the Caribbean, about 1,075 miles from Miami. The USVI
consists of three separate main islands: St. Croix, St. Thomas, and
St. John, and is about twice the size of the District of Columbia.
The economy of the USVI is limited, with a reliance on
economically-sensitive tourism, particularly from the U.S., and
some industrial development that includes rum production. Fitch
anticipates relatively flat economic performance going forward. The
USVI has benefited from the conversion of a large, vacant former
refinery on St. Croix to an oil storage facility and a current
expansion project at the refinery is expected to modestly benefit
the labor market and the USVI's revenue sources.
KEY RATING DRIVERS
Revenue Framework: 'a'
Revenue growth is expected to be modest assuming steady tourism and
slow growth in rum production, which is an important contributor to
operating revenues. The USVI has extensive legal control over its
operating revenues and the provision of grants and other operating
aid from the U.S. government provides additional sources of
revenue.
Expenditure Framework: 'bb'
Natural spending growth is expected to be well above revenue growth
and Fitch views the USVI's expenditure flexibility as constrained.
The Fitch-calculated carrying cost for debt and retiree benefits
approximates a very high 33% of expenditures, reflecting the USVI's
sizable burden of debt and pension liabilities that have pushed the
actuarially determined contribution (ADC) to a very high level.
Long-Term Liability Burden: bb
The USVI's combined long-term debt and pension liability is very
large relative to resources, at an estimated 223% of personal
income, reflecting outstanding debt obligations issued for both
capital and operating purposes and the government's unfunded
pension liability.
Operating Performance: bb
Fitch believes the government has a long path to right-size its
budget given the extent of the structural challenges. Financial
operations have been strained and structurally imbalanced for many
years, maintained largely by cash flow borrowing and by long-term
debt issuance in support of operations. Budget imbalance is
expected to persist over the next several years despite recently
enacted tax and fee increases. Given the challenges the USVI is
currently confronting even with economic growth, operations are
poorly positioned to absorb even a modest economic downturn.
RATING SENSITIVITIES
IDR: The USVI's IDR is sensitive to developments related to its
financial position. Successful budget re-alignment, action to
improve the sustainability of its pension system, and/or economic
development efforts that materially boost prospects for the USVI's
ongoing financial sustainability could bolster the rating, while
deterioration in the government's ability or willingness to
continue efforts in support of credit improvement could result in a
downgrade.
GRT and Matching Fund Bonds: The ratings on the GRT and matching
fund bonds are sensitive to movement in the USVI's IDR, to which
they are linked. The ratings are also sensitive to trends in
pledged revenue and future leveraging if such events result in
material weakening in coverage, although the current ratings are
well below the level that the revenue streams alone would support.
US VIRGIN ISLANDS: S&P Lowers GRT Loan Notes Rating to 'CCC'
------------------------------------------------------------
S&P Global Ratings lowered its rating two notches to 'CCC' from
'B-' on the Virgin Islands Public Finance Authority's (VIPFA) gross
receipts tax (GRT) loan notes, issued for the U.S. Virgin Islands
(USVI). At the same time, S&P removed the rating from CreditWatch
with negative implications, where it was placed on Feb. 28, 2017.
The outlook is negative.
S&P said, "The 'CCC' rating on the GRT loan notes reflects our view
of USVI's persistent fiscal and liquidity pressures in the face of
a continued inability to access the capital markets, as reflected
in growing payables despite the adoption of its recent five-year
plan," said S&P Global Ratings credit analyst Oladunni Ososami. We
believe ongoing liquidity pressures and the potential inability of
the territory to meet ongoing business operation obligations
indicates near-term liquidity pressures within the next 12 months,
consistent with our "Criteria for Assigning 'CCC+', 'CCC', 'CCC-',
and 'CC' Ratings" (published Oct. 1, 2012, on RatingsDirect).
"Although the territory adopted the five-year economic growth plan
in March, it has continued to deal with liquidity pressures without
access the capital market. Current liquidity levels are about three
days' cash, augmented in part by a significant amount of payables
which continues to grow, and estimates show the territory could be
facing a negative cash balance by the end of August without any
additional cash flow management initiatives, which we believe
leaves USVI vulnerable to a total depletion of cash before the end
of the current fiscal year."
The USVI is an unincorporated territory of the U.S. and includes
the islands of St. Croix, St. Thomas, and St. John in the Caribbean
Sea.
"The negative outlook reflects our view that the territory's
five-year plan to address the current budget pressures is
optimistic and it remains uncertain as to whether the measures are
adequate to address financial pressures without market access,"
added Ms. Ososami. It also reflects the uncertainty as to whether
bond repayments will continue to remain insulated if financial
conditions worsen.
VANGUARD HEALTHCARE: Wants to Continue Using Cash Collateral
------------------------------------------------------------
Vanguard Healthcare, LLC, and its affiliated debtors and
debtors-in-possession seek permission from the U.S. Bankruptcy
Court for the Middle District of Tennessee to continue using
Healthcare Financial Solutions, LLC's cash collateral.
The Debtors' authority to use cash collateral under the terms of
the cash collateral court order is scheduled to terminate after
Aug. 22, 2017.
The Debtors and HFS have agreed on an extension of the Debtors'
authority to use cash collateral under the terms and conditions of
the existing cash collateral Order after Aug. 22, 2017, to, among
other things, allow the Debtors' continued use of cash collateral
through the plan confirmation hearing currently scheduled to
commence on Sept. 25, 2017. The Official Committee of Unsecured
Creditors has not consented to an extension. In an abundance of
caution, the Debtors seek to set a hearing on the Debtors'
continued use of cash collateral under the terms of the cash
collateral court order past the current termination date of Aug.
22, 2017.
A copy of the Debtors' Motion is available at:
http://bankrupt.com/misc/tnmb16-03296-1833.PDF
About Vanguard Healthcare
Vanguard Healthcare, LLC, is a long-term care provider
headquartered in Brentwood, Tennessee, providing rehabilitation and
skilled nursing services at 14 facilities in four states (Florida,
Mississippi, Tennessee and West Virginia).
Vanguard Healthcare and 17 of its subsidiaries each filed a Chapter
11 bankruptcy petition (Bankr. M.D. Tenn. Lead Case No. 16-03296)
on May 6, 2016. The petitions were signed by William D. Orand, the
CEO. Vanguard estimated assets in the range of $100 million to
$500 million and liabilities of up to $100 million.
The cases are assigned to Judge Randal S. Mashburn.
The Debtors hired Bradley Arant Boult Cummings LLP as bankruptcy
counsel; BMC Group as noticing agent; and Stewart & Barnett, Ltd.,
and Maggart & Associates, P.C., as accountants.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors. Bass, Berry & Sims PLC serves as bankruptcy
counsel to the committee. CohnReznick LLP is the committee's
financial advisor.
The U.S. Trustee also appointed Laura E. Brown as patient care
ombudsman for Vanguard Healthcare.
VMWARE INC: Fitch Assigns BB+ Long-Term Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has assigned the following ratings for VMware, Inc.
(VMware):
-- Long-Term Issuer Default Rating (IDR) 'BB+';
-- Senior unsecured notes 'BBB-/RR2';
-- Senior unsecured revolving credit facility (RCF) 'BBB-/RR2'.
The Rating Outlook is Stable.
KEY RATING DRIVERS
The company's 'BB+' rating mainly reflects Fitch's belief that
VMware's linkage with parent, Dell Technologies Inc. (Dell,
currently rated 'BB+' with a Stable Rating Outlook), is moderate
and that governance mechanisms put in place at both VMware's and
Dell's Boards of Directors encumber but are insufficient to prevent
Dell from ultimately accessing VMware's assets in the absence of
restrictions on restricted payments (RP) or inter-company loans.
Fitch's Parent-Subsidiary Linkage Criteria govern the derivation of
VMware's ratings, given Dell's 82% economic and 97% voting
interests in VMware and consolidation of VMware's financial
statements, despite Fitch's belief VMware would be rated 3-5
notches higher than Dell on a standalone basis.
VMware is an unrestricted subsidiary in Dell's credit agreements
and indentures and there are no upstream guarantees, cross-default
provisions or management or treasury team overlap. In addition,
There are Committees on the Boards of Directors at both VMware and
Dell intended to replicate the functions of RP or inter-company
loan restrictions. The Related Party Transaction Committee (RPTC)
on VMware's Board of Directors is comprised of two independent
Directors and needs to approve any transaction with Dell, ranging
from commercial terms to inter-company loans. However, VMware's
Board of Directors can approve dividends on VMware's Class A common
stock (of which Dell owns approximately 30%) without RPTC
approval.
At Dell, the Capital Stock Committee (CSC), comprised of three
independent Directors, represents the interests of the tracking
stockholders and must approve the use of assets related to Dell's
82% economic ownership of VMware (Class V Group). To partially fund
the Dell's acquisition of EMC Corp. (EMC), Dell created a tracking
stock (Class V common stock) to track a portion of Dell's economic
ownership of VMware. 65% of the Class V Group is attributable to
tracking stockholders (Class V common stockholders), while the
remaining 35% interest in the Class V Group is attributable to DHI.
The CSC would need to approve the use of assets of the Class V
Group, including paying out proceeds received from a VMware
dividend. However, Dell is able to substitute, also subject to CSC
approval, assets of equivalent value, including potentially another
class of stock, rather than paying out dividend proceeds.
Fitch acknowledges the existence of RPTC and CSC governance
mechanisms should increase friction costs for Dell should it
aggressively access VMware's cash. However, Fitch believes Dell can
consolidate the tracking stock at any time with approval from
Dell's Board of Directors. At the same time, Fitch notes Dell's
consistent articulation of its financial policies and priorities,
including a march to achieving investment grade ratings. Further,
Fitch believes Dell's ability to sell all or a portion of its
interest in VMware provides meaningful equity cushion for Dell
bondholders, again tempering incentives to lever up VMware.
Fitch has notched the rating for the senior unsecured notes
offering up one to 'BBB-/RR2 'from VMware's IDR of 'BB+', given
VMware's bondholders are structurally senior to Dell's bondholders
with respect to VMware's assets. Fitch believes VMware's
bondholders currently are well protected by the company's
enterprise value, even assuming a distressed trading multiple.
The ratings also reflect:
Favorable Top-Line Drivers: Fitch believes secular demand from
customers migrating to hybrid cloud environments and VMware
cross-selling its full suite of offerings across its large and
diversified installed customer base will drive solid long-term
organic revenue growth. VMware was a pioneer of x86 architecture
virtualization and has held #1 share in virtualized servers
(computing) ever since. The company's expansion into virtualized
networking, software defined storage (SDS) and management via
acquisitions continues to provide customer penetration
opportunities. Its cloud businesses are growing robustly, albeit
from a smaller base, and should drive growth and customer
penetration. Also, VMware's publicly announced $1 billion revenue
synergy opportunity with Dell Technologies will focus on increasing
attach rates from currently low levels and should also bolster the
top line.
Solid FCF Profile: VMware's high recurring maintenance revenue,
strong profitability and low capital intensity should continue
driving solid annual free cash flow (FCF) with margins near 25%.
FCF and margins should increase from revenue growth and profit
margin expansion from operating leverage, despite continued
investments in cloud products and solutions. Combined with capital
intensity of roughly 3% of revenue, Fitch expects $2 billion to
$2.5 billion of annual FCF through the intermediate term with
approximately half generated inside the U.S.
Conservative Financial Policies: Fitch expects VMware's leverage to
remain low for the proposed rating, pro forma for the bond
issuance, given VMware's solid FCF and financial flexibility. Fitch
expects VMware will increase share repurchases over the near term
and retain a portion of net proceeds for tuck-in acquisitions.
Fitch estimates VMware's total leverage (total debt to operating
EBITDA) will remain below Fitch's negative trigger of 2.5x, pro
forma for the bond deal and inter-company loan repayment, with
interest coverage of more than 20x. Even assuming incremental
issuance to support greater shareholder return intensity, Fitch
believes VMware has incremental debt capacity given the rating and
expected profitability growth.
Meaningful Investment Intensity: Fitch expects investment intensity
will remain essentially fixed at roughly 20% of revenue but that
high research and development (R&D) investment supports continued
technology leadership and is reflected by VMware's strong market
leadership positions. Fitch also believes high R&D spending is
required for cloud growth, particularly with in the context of a
shifting competitive landscape. R&D should remain near 17% on a
non-GAAP basis, while capital spending should be 2.5%-3% of
revenue.
Shifting Competitive Landscape: Demand for on-premise IT services
should slow as customers use more public cloud and
software-as-a-service (SaaS) offerings and, therefore, build more
new or modernize existing on-premise workloads in private or public
clouds. Over time, VMware is increasingly competing with
off-premise compute resources, including public cloud providers
such as Amazon's web services (AWS) and Microsoft's Azure, both of
which have considerably greater resources and financial flexibility
than VMware's historical competitors.
DERIVATION SUMMARY
On a standalone basis, VMware's technology leadership, large and
diversified installed customer base and full suite of products and
services that should drive consistent positive long-term organic
revenue growth and strong FCF support a strong investment grade
rating. However, as a majority owned subsidiary of comparatively
weaker Dell Technologies (currently rated 'BB+' with a Stable
Rating Outlook), Fitch derived the rating for VMware within the
context of Fitch's parent-subsidiary linkage criteria and believes
'BB+' is appropriate, given the moderate to strong linkage between
the two entities. Despite the absence of restrictions on restricted
payments and inter-company loans more than offset the lack of
upstream guarantees and cross-default provisions or the existence
of governance structures on the Boards of Directors at both VMware
and Dell Technologies.
KEY ASSUMPTIONS
-- Mid- to high-single digit organic revenue growth through the
forecast period, driven by solid market growth, increased
customer penetration through cross-selling and the company's
initiatives to drive higher attach rates with Dell
Technologies.
-- Modest margin expansion from solid organic revenue growth.
Fitch expects operating EBITDA margins to expand to the mid-
to high-30s over the forecast period from the low-30s
historically and 35% for the latest 12 months ended May 5,
2017.
-- VMware uses net proceeds from the senior notes offering to
repay $1.23 billion of the inter-company loan with Dell
Technologies.
-- VMware will use remaining net proceeds for share repurchases
or tuck-in acquisitions, and could borrows incrementally to
support annual gross share repurchases thereafter.
-- VMware does not pay a special or regular dividend or make
inter-company loans to Dell Technologies.
RATING SENSITIVITIES
The ratings could be upgraded if Fitch expects:
-- Dell is upgraded, given Fitch's Parent-Subsidiary Linkage
criteria; or
-- VMware explicitly ring fences its cash and cash flows by
adding language to its credit agreement and indentures
restricting payments and inter-company loans.
The ratings could be downgraded if Fitch expects:
-- Dell is downgraded, most likely due to slower than expected
deleveraging or erosion in operating results; or
-- VMware's incremental borrowings to fund shareholder returns or
pay a dividend outpace profitability growth, resulting in
expectations for total leverage sustained above 2.5x.
-- Sustained organic revenue growth underperformance, suggesting
diminished competitiveness of VMware's cloud offerings or
heightened competition, including from cloud infrastructure
providers.
LIQUIDITY
As of May 7, 2017, Fitch believes VMware's liquidity is solid and
supported by $8.6 billion of cash, cash equivalents and short-term
investments, $7.7 billion of which was located outside the U.S.
The company's RCF and Fitch's expectations for $2 billion to $2.5
billion of annual FCF also support liquidity. At the same time,
Fitch believes the absence of restrictions on restricted payments
and inter-company loans is a contingent use of cash.
FULL LIST OF RATING ACTIONS
Fitch has assigned the following ratings:
VMware, Inc.
-- Long-term IDR 'BB+';
-- Senior unsecured RCF 'BBB-RR2';
-- Senior unsecured notes 'BBB-/RR2'.
The Rating Outlook is Stable.
VYCOR MEDICAL: Incurs $361,000 Net Loss in Second Quarter
---------------------------------------------------------
Vycor Medical, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $360,717 for the three months ended June 30, 2017, compared to a
net loss of $305,363 for the three months ended June 30, 2016.
Revenue totaled $308,000 in the quarter ended June 30, 2017, as
compared to $379,000 for the prior year, a decrease of 19%. Vycor
Medical's revenue in the period decreased by $81,000 to $252,000.
Most of this decrease was accounted for by reduced international
sales, which tend to be irregular as international distributors
follow a pattern of placing large stocking orders. In addition
Vycor has been in the process, during 2017, of modifying its
existing VBAS product suite to make it easier to integrate with
Imaging Guided Systems. The Company experienced manufacturing
delays in connection with this re-engineering during the first half
of 2017 and as a result has been unable to fulfill shipments of
certain models, particularly for some large international orders.
These delays have now been resolved and product will start to flow
through during the third quarter.
NovaVision recorded revenues of $55,000 for the three months ended
June 30, 2017, an increase of 20% over the same period in 2016.
New patient starts were up 61% compared to the same period in
2016.
Operating expenses in the quarter ended June 30, 2017, totaled
$622,000 as compared to $623,000 in the prior year period, and Cash
Operating Expenses were $416,000 as compared to $463,000, a
reduction of 10%, despite the costs of our investment program.
Operating loss was $354,000, compared to $292,000 for the same
period in 2016, an increase of 21%, and Cash Operating Loss2 was
$148,000, as compared to $132,000.
For the six months ended June 30, 2017, the Company reported a net
loss of $673,509 compared to a net loss of $832,923 for the same
period during the prior year.
Revenue totaled $736,000 in the six months ended June 30, 2017, as
compared to $779,000 for the prior year, a decrease of 6%. Vycor
Medical's revenue in the period decreased by $60,000 to $622,000.
Sales grew by 11% in the US in 2017 compared to 2016, offset by
reduced international sales, which tend to be irregular as
international distributors follow a pattern of placing large
stocking orders. Vycor's revenues were also impacted by the
manufacturing delays in the period referred to above.
NovaVision recorded revenues of $114,000 for the six months ended
June 30, 2017, an increase of 17% over the same period in 2016. New
patient starts were up 55% compared to the same period in 2016.
Operating expenses in the six months ended June 30, 2017, totaled
$1,302,000 as compared to $1,470,000 in the prior year period, and
Cash operating expenses were $883,000 as compared to $993,000, a
reduction of 11%. Operating Loss was $654,000, compared to
$806,000 for the same period in 2016, a decrease of 19%, and Cash
Operating Loss5 was $235,000, as compared to $329,000, a decrease
of 29%.
As of June 30, 2017, Vycor had $1.82 million in total assets,
$969,394 in total liabilities, all current, and $853,983 in total
stockholders' equity.
Highlights
* Vycor sales grew by 11% in the US in the six months to June
30, 2017 compared to 2016, offset by reduced international
sales. International sales tend to be irregular as
international distributors follow a pattern of placing large
stocking orders. In addition, Vycor has been in the process,
during 2017, of modifying its existing VBAS product suite to
make it easier to integrate with Imaging Guided Systems. The
Company experienced manufacturing delays in connection with
this re-engineering during the first half of 2017 and as a
result has been unable to fulfill shipments of certain
models, particularly for some large international orders.
These delays have now been resolved and product will start to
flow through during the third quarter.
* A new clinical study on Vycor’s VBAS was published by
surgeons at the Hofstra Northwell School of Medicine during
the period, demonstrating a novel technique combining VBAS,
neuronavigation and microsurgery. The VBAS was fundamental
to this study, which concluded that the combination improves
safety and patient outcomes and has broad value for the
resection of a variety of deep brain lesions. In addition, a
congress poster presented by surgeons at Weill Cornell was
published in the Journal of Neurosurgery; this demonstrated
using VBAS in effective surgery to anterior artery aneurisms
and lesions of the anterior third ventricles. A total of 18
papers have now been published or presented demonstrating the
clinical benefits of VBAS, 12 in the last two years.
* During the period the US patent office issued/allowed 4
patents, all directed to the integration of neuro-navigation
systems with Vycor's VBAS retractor system. These patents
complement and strengthen Vycor's existing patent portfolio,
particularly in relation to its ongoing focus to more fully
integrate its VBAS product range with neuro-navigation
systems without sacrificing the surgeon's ability to visually
inspect the surrounding tissue as the devices are inserted.
Management believes that providing surgeons with the ability
to both optically and electronically visualize the location
of the VBAS retractor will further drive the product's
adoption. VBAS now has 21 granted/issued and 10 pending
patents for VBAS technologies, while NovaVision has 45
granted/issued and 1 pending patents for its technologies.
* NovaVision sales grew by 17% for the period ending June 30,
2017, compared to 2016 and new patient starts were up 55%.
NovaVision currently has approximately 250 patients
undergoing its therapies in the US and internationally.
Patient compliance is also strong, with over 80% of patients
who have started since the introduction of the Internet model
completing the full 6 months of VRT, and almost 30% extending
for additional therapy beyond 6 months.
Management Commentary
"We are disappointed with the Vycor division revenues in the second
quarter, however this was largely due to delays created by our
investment program in manufacturing and new products, and these
delays have now been resolved," said Peter Zachariou, CEO of Vycor
Medical. "NovaVision's patient volumes have now outstripped the
impact of our lowered pricing to patients, so we are continuing to
see growth in revenues and patient numbers. We continue to
decrease our Cash Operating Loss2 despite our investment in
manufacturing and new products, which reduced to $235,000 for the
six months compared to $329,000 for the same period in 2016."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/gyeENV
About Vycor Medical
Boca Raton, Fla.-based Vycor Medical, Inc. (OTC BB: VYCO) --
http://www.VycorMedical.com/-- is a medical device company
committed to making neurological brain, spinal and other surgical
procedures safer and more effective. The Company's flagship,
Patent Pending ViewSite(TM) Surgical Access Systems represent an
exciting new minimally invasive access and retraction system that
holds the potential for speedier, safer and more economical brain,
spinal and other surgeries and a quicker patient discharge.
Vycor's innovative medical instruments are designed to optimize
neurosurgical site access, reduce patient risk, accelerate
recovery, and add tangible value to the professional medical
community.
Vycor Medical reported a net loss available to common shareholders
of $1.83 million for the year ended Dec. 31, 2016, compared to a
net loss available to common shareholders of $2.25 million for the
year ended Dec. 31, 2015.
The Company has incurred losses since its inception, including a
net loss of $1,652,280 and $2,082,643 for the years ending Dec. 31,
2016, and 2015, respectively. As at Dec. 31, 2016, the Company had
stockholder's deficiency of $26,483 and cash of $56,859. As a
result, these conditions had raised substantial doubt regarding the
Company's ability to continue as a going concern, according to the
Company's annual report for the year ended Dec. 31, 2016.
WAGLE LLC: Amended Plan Not Fair and Equitable, Court Rules
-----------------------------------------------------------
Judge Carlota M. Bohm of the U.S. Bankruptcy Court for the Western
District of Pennsylvania denied without prejudice the confirmation
of the amended chapter 11 plan of reorganization, dated March 20,
2017, filed by Debtor Wagle, LLC, d/b/a Ed & Mark's Locksmith.
Lynn Stone McLaughlin filed an objection to the confirmation of the
Amended Plan on or about April 18, 2017, complaining that the
Amended Plan violates the absolute priority rule under 11 U.S.C.
section 1129(b)(2) and is therefore not confirmable.
In order for a chapter 11 plan of reorganization to be confirmed,
the plan must meet the requirements of 11 U.S.C. section 1129(a).
Since the Amended Plan was not accepted by every impaired class of
claims, it does not satisfy the requirements of section 1129(a)(8),
the Court said. As such, it may only be confirmed pursuant to the
cramdown provisions of section 1129(b), which, in turn, triggers
analysis of the absolute priority rule set forth in 11 U.S.C.
section 1129(b)(2)(B)(ii). The absolute priority rule requires
payment in full of a dissenting class of unsecured creditors before
any junior class is permitted to retain any property, including
ownership in the reorganized debtor.
In assessing the case, Judge Bohm relied on the four-step test for
the new value exception delineated in In re Haskell Dawes, Inc.,
that is, equity holders seeking to use the new value exception to
the absolute priority rule to obtain plan confirmation must provide
a capital contribution that is: (1) in the form of money or
money’s worth; (2) necessary to the reorganization; (3)
reasonably equivalent to the value of the interest being retained;
and (4) up front and substantial.
Upon careful evaluation, Judge Bohm concludes that the Amended Plan
cannot be confirmed based on the factors set forth in In re Haskell
Dawes, Inc.
The Court is not prepared to conclude that reorganization is
impossible for the Debtor. However, the Court will sustain the
McLaughlin Objection insofar as it contends that the Amended Plan
is not fair and equitable because equity is retaining its interests
while unsecured claims are not being paid in full, as required for
confirmation under section 1129(b)(2)(B)(ii). Therefore, the
Amended Plan cannot be confirmed. An order will be entered
contemporaneously with this Memorandum Opinion.
A full-text copy of Judge Bohm's Memorandum Opinion dated August
16, 2017, is available at:
http://bankrupt.com/misc/pawb16-21169-122.pdf
About Wagle LLC
Wagle LLC, a locksmith, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 16-21169) on March 30,
2016. The petition was signed by Patricia D. Wagle, member.
The Debtor estimated both assets and liabilities in the range of $1
million to $10 million.
The case is assigned to Judge Carlota M. Bohm. The Debtor is
represented by Francis E. Corbett, Esq.
No official committee of unsecured creditors has been appointed in
the case.
WESTERN REFINING: S&P Retains 'B+' CCR on CredtWatch Positive
-------------------------------------------------------------
U.S. midstream energy partnership Western Refining Logistics L.P.
will be acquired by Andeavor Logistics L.P. in an all-equity
transaction for about $1.8 billion, including Western Refining
Logistics' outstanding debt.
Accordingly, S&P Global Ratings said that its 'B+' corporate credit
and senior unsecured ratings on El Paso, Texas-based Western
Refining Logistics L.P. remain on CreditWatch, where it placed them
with positive implications on Nov. 18, 2016.
The recovery rating of '4' on the senior unsecured debt is
unchanged and indicates that creditors can expect average (30% to
50%; rounded estimate 40%) recovery in the event of a payment
default.
S&P said, "The rating action reflects our view that Western
Refining Logistics will become a core subsidiary of Andeavor
Logistics upon the close of the transaction, and we will equalize
our ratings on Western Refining with those on Andeavor. We expect
that Western Refining's operations and assets will be integrated
into Andeavor Logistics', which will help enhance the larger
Andeavor enterprise. We think that Western Refining's current debt
will likely be repaid or refinanced at the Andeavor Logistics level
at close, which will give the pro forma partnership unfettered
access to Western Refining's cash flow.
"We expect to resolve the CreditWatch listing on Western Refining
Logistics in the fourth quarter, when the transaction with Andeavor
Logistics closes. At that time, we expect to raise our corporate
credit rating and senior unsecured issue-level rating on the
partnership four notches to 'BBB-', in line with our assessment of
Andeavor Logistics' credit profile."
WHITING PETROLEUM: S&P Affirms 'BB-' CCR on North Dakota Asset Sale
-------------------------------------------------------------------
Denver-based oil and gas exploration and production company Whiting
Petroleum Corp. announced a $500 million sale of its Fort Berthold
Indian Reservation area assets located in North Dakota, and plans
to use proceeds to pay down portions of its credit facility.
S&P Global Ratings affirmed its 'BB-' corporate credit rating on
Denver-based oil and gas exploration and production company Whiting
Petroleum Corp. The outlook is stable.
S&P said, "At the same time, we affirmed the 'BB+' issue-level
rating on the company's senior secured credit facility; the
recovery rating remains '1', indicating our expectation of very
high (90% to 100%; rounded estimate: 95%) recovery in the event of
a payment default. We also affirmed the 'BB-' issue-level rating on
the company's senior unsecured debt and revised the recovery rating
to '4' from '3', indicating our expectation of average (30% to 50%;
rounded estimated: 35%) recovery in the event of a payment
default.
"The rating affirmation reflects our expectation of appropriate
credit measures over the next two years following the company's
midyear results as well as the recent North Dakota asset
divestiture. We expect the company to use the $500 million sales
proceeds to repay borrowings on its credit facility due 2019 ($550
million drawn as of June 30, 2017). We estimate Whiting will
maintain funds from operations (FFO)/debt in the 20% to 25% range
over the next two years, despite outspending free operating cash
flows at our current price deck assumptions.
"The stable outlook reflects our view that management will outspend
cash flows while maintaining FFO to debt in the 20% to 25% range
over the next two years.
"We could lower the rating if FFO/debt fell and remained below 12%
for a sustained period, or if liquidity deteriorated. We believe
this could occur if the company pursued a more aggressive capital
spending program than we currently forecast, production fell short
of our current projections, or oil prices remained below our
current price deck over a sustained period and the company did not
further rein in capital spending or costs.
"We could raise the rating if Whiting broadened its scale, scope,
and diversity or if it brought FFO/debt above 30% for a sustained
period. This would most likely occur if the company were able to
increase production and reserves beyond our current expectations
while keeping capital spending in line with cash flows."
WILLIAM THOMAS, JR: Bell Buying Memphis Property for $705K
----------------------------------------------------------
William H. Thomas, Jr., asks the U.S. Bankruptcy Court for the
District of Tennessee to authorize the sale of his interest in the
real property consisting of approximately 58.74 acres of vacant
land located at or adjacent to 5568 Airways Road, Memphis,
Tennessee, to Samuel Bell or his assigns $704,880.
The Debtor has entered into a Contract with the Purchaser to sell
his interest in the Property free and clear of all liens, claims
and other encumbrances. The Purchaser has now satisfied all
conditions for his purchase. The gross purchase price for the
Property set forth in the Contract has been reduced to $704,880, in
accordance with, and pursuant to the application of, the formula
for determining the final purchase price as set forth in the
Contract. The Property is not critical to the Debtor's plan of
reorganization.
A copy of the Contract attached to the Motion is available for free
at:
http://bankrupt.com/misc/William_Thomas_285_Sales.pdf
The Debtor proposes that the proceeds of any sale will be subject
to and impressed with the duly perfected first priority lien of the
Deed of Trust benefiting Merchant & Planters Bank and the second
priority lien of the Deed of Trust benefiting Community Bank, and
any other liens in the order of their priority and that net
proceeds, after payment of regular and customary closing costs,
real estate commissions, taxes, recording fees to the extent
applicable, customary and reasonable closing attorney's fees and
fees related to obtaining court approval of the Motion and any
amounts required to be paid pursuant to the Contract, will at
closing be paid first to Merchant & Planters Bank to the extent of
its indebtedness, second to Community Bank to the extent of its
indebtedness, with any remaining surplus to be paid to the Debtor.
The Debtor asserts that the proposed sale of the Property pursuant
to the Contract is in the best interests of the Debtor and its
estates and would maximize the value of his assets. Accordingly,
he asks the Court to approve the relief requested.
The Purchaser:
Samuel Bell
5388 Airways Blvd.
Memphis, TN 38116
Telephone: (901) 344-2600
E-mail: belsam@aol.com
mulmat@aatwar.com
The Purchaser is represented by:
Josh Lawhead, Esq.
BURCH, PORTER & JOHNSON, PLLC
130 N. Court Ave.
Memphis, TN 38103
Telephone: (901) 524-5195
E-mail: jlawhead@bpjlaw.com
Counsel for the Debtor:
Michael P. Coury, Esq.
GLANKLER BROWN PLC
6000 Poplar Avenue, Suite 400
Memphis, TN 38119
Telephone: (901) 576-1886
Facsimile: (901) 525-2389
E-mail: mcoury@glankler.com
About William H. Thomas, Jr.
William H. Thomas, Jr., is a resident of Perdido Key, Florida. He
is an attorney licensed to practice in the State of Tennessee and
owns various real estate and business interests, including the
ownership and operation of various advertising billboards and raw
land.
William H. Thomas, Jr., sought Chapter 11 protection (Bankr. D.
Tenn. Case No. 16-27850-DSK) on June 2, 2016.
YAHOO! INC: S&P Withdraws BB- Unsolicited Corporate Rating
----------------------------------------------------------
S&P Global Ratings lowered its unsolicited corporate rating on
U.S.-based Yahoo! Inc. to 'BB-' from 'BB+' and removed all of its
ratings on the company from CreditWatch, where they were placed
with negative implications on July 26, 2016. The rating outlook is
stable.
S&P said, "At the same time, we lowered our unsolicited issue-level
rating on the company's senior unsecured notes due December 2018 to
'BB-' from 'BB+'. The '3' recovery rating is unchanged, indicating
our expectation for meaningful recovery (50%-70; rounded estimate:
65%) of principal for lenders in the event of a default."
S&P subsequently withdrew all of its ratings on Yahoo!
The rating actions follow Yahoo!'s sale of substantially all of its
operating assets and conversion to a publicly traded,
nondiversified, closed-end investment management company on June
16, 2017. The company subsequently changed its name Altaba Inc.
[^] BOOK REVIEW: Competition, Regulation, and Rationing
-------------------------------------------------------
Author: Greenberg, Warren
Publisher: Beard Group
Paperback: 188 pages
List Price: $34.95
Review by: Gail Hoelscher
Order a personal copy today at http://is.gd/3sdhDD
This book is fundamental reading for those involved directly in
health care as well as those interested and concerned about the
past, present and future of the health care industry in the United
States. Originally published in 1990, Warren Greenberg examined
the U.S. health care sector over the period 1960-1988 using
standard industrial organization economic analysis. He looked at
regulation and competition, antitrust elements, technology, and
rationing, as well as pricing behavior and advertising. Although
some experts claimed the health care industry to be unique and
outside the purview of such analysis, Dr. Greenberg demonstrated
that all industries differ in their own ways, but nonetheless can
be analyzed using these techniques.
Dr. Greenberg's first goal in writing this book was to educate the
layperson about the economics of the health care industry.
Economists have pointed out two major potential differences
between health care and other sectors of the economy: uncertainty
of demand and imperfect and imbalanced information on the part of
providers and consumers. Dr. Greenberg agrees with the first and
less so with the second. Obviously, the timing, extent and length
of future illness and the demand for medical services are
impossible to know. A good deal of the consumer's uncertainty is
smoothed over by health insurance. The uncertainty for insurance
companies in the sector is somewhat different than that for other
industries: while consumers commonly seek more health care than
they would if they were not covered, it is rare for someone to
burn down his own home just to collect the insurance. With regard
to the imbalance in information, physicians do indeed know more
about a particular illness and treatment than the average
potential patient, but Dr. Greenberg asks how that differs from
plumbing, law and accounting!
Dr. Greenberg identified and described the industries that make up
the health care sector: medical services, hospitals, insurance,
and long-term care. He explored market failures and imperfections
in each and detailed some of the measures government has taken to
correct these imperfections. For example, he described the efforts
of the federal government to force competition in the medical
services field and how barriers to entry imposed by physicians'
lobbies to limit the number of physicians in practice were lifted,
physicians were permitted to advertise, and restrictions on the
services of nonphysicians were eased. He recounted efforts to
require hospitals to disclose information on mortality rates,
infections, and medical complications.
Dr. Greenberg's second goal in writing the book was to consider
policy options. Although he claims skepticism of regulation (after
working for the federal government), he believes that ongoing
efforts to devise a more efficient and equitable health care
system will require more competition, regulation, and rationing.
He examined the Canadian, British and Dutch systems, so
fascinating and different from ours, and found the Dutch system
the least regulatory and most equitable.
This book is a primer on the health care industry. Dr. Greenberg
explains economic terms in a straightforward and clear way without
condescension and takes the reader way beyond Economics 101.
Although the sector has changed significantly since this book was
published, Dr. Greenberg's analysis of the past offers valuable
insight into why our system evolved the way it did and what
direction it might take in future.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
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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
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2017. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
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The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***