/raid1/www/Hosts/bankrupt/TCR_Public/170824.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, August 24, 2017, Vol. 21, No. 235
Headlines
2260 EAST MAIN: Sachanandani Buying Mesa Property for $2.8M
500 NORTH AVENUE: D&M Purchase Agreement Alters Plan Implementation
ADIENT GLOBAL: Futuris Acquisition No Impact on Moody's Ba2 CFR
ADVANCED INTEGRATION: S&P Alters Outlook to Neg. & Affirms BB- CCR
AF LEWIS: Quarterly Payment of $500 for Unsecureds Over 20 Quarters
AIR MEDICAL: Bank Debt Trades at 2% Off
ALEVO USA: Bankruptcy Administrator to Form Committee
AMC ENTERTAINMENT: S&P Alters Outlook to Negative & Affirms B+ CCR
AMERICAN POWER: May Voluntarily Shutdown Operations
ANDERSON SHUMAKER: Exclusive Plan Filing Period Extended to Oct. 23
APP HOLDINGS: Moody's Withdraws B3 Corporate Family Rating
ARMSTRONG ENERGY: FTI Tapped for Restructuring; FTI's Boyko Is CRO
ARMSTRONG ENERGY: Obtains Forbearance Extension Until Sept. 15
ARTISANAL 2015: Voluntary Chapter 11 Case Summary
AWAS AVIATION: S&P Affirms BB CCR, Off CreditWatch Developing
B&B BACHRACH: Has Final OK to Use Cash Collateral Through Aug. 31
BADLANDS ENERGY: Taps Parkman Whaling as Financial Advisor
BASS PRO: Bank Debt Trades at 3% Off
BERNARD L. MADOFF: No New Exhibits at Merkin Trial, Court Rules
BIOCLINICA HOLDING: Moody's Revises Outlook to Neg & Affirms B3 CFR
BON-TON STORES: Comparable Store Sales Decreased 6.1% in Q2
BRUCE FINDER: Files Amended Liquidation Plan
BRYANTS DRIVETRAIN: U.S. Trustee Unable to Appoint Committee
BUMBLE BEE: S&P Raises Corp Credit Rating to CCC+, Outlook Stable
CACTUS WELLHEAD: Moody's Hikes Corporate Family Rating to B3
CALHOUN SATELLITE: Case Summary & 20 Top Unsecured Creditors
CALIFORNIA PIZZA: Moody's Alters Outlook to Stable & Affirms B3 CFR
CALPINE CORP.: Moody's Revises Outlook to Neg & Affirms Ba3 CFR
CALPINE CORP: Fitch Affirms B+ IDR Amid ECP Transaction
CALPINE CORP: S&P Affirms 'B+' CCR Amid ECP Transaction
CAPITAL REGION YMCA: U.S. Trustee Unable to Appoint Committee
CENTURYLINK INC: Bank Debt Trades at 2% Off
CHARLES BRELAND: Trustee Selling Baldwin Property for $138K
CHARLES BRELAND: Trustee Selling Personal Property for $8.5K
CHOCTAW GENERATION: Fitch Cuts Rating on 2013-1 Notes to B
CIG INVESTMENTS: U.S. Trustee Unable to Appoint Committee
CJ MICHEL: Wants To Use Cash Collateral, Sell Accounts Receivable
CONFIE SEGUROS: S&P Cuts CCR to B- on Tightening Covenant Cushion
CONIFER VETERINARY: Case Summary & 8 Unsecured Creditors
CORNERSTONE APPAREL: Committee Taps Province as Financial Advisor
CRAPP FARMS: Hires CliftonLarsonAllen as Accountants
CROSS-DOCK SOLUTIONS: Voluntary Chapter 11 Case Summary
CRS REPROCESSING: Proposes $4-Mil. Financing From Triangle Capital
DANA INC: S&P Retains 'BB' Unsecured Notes Rating Amid Refinancing
DARDEN-GREEN CO: Disclosures OK'd; Plan Hearing on Oct. 16
DESTINATION MATERNITY: Hires Berkeley Research Group as Adviser
EARTHONE CIRCUIT: Committee Hires Rudd Law as Special Counsel
EAST JEFFERSON GENERAL: Moody's Cuts Rating on $152MM Bonds to B3
ERIE STREET: Adam Berman Seeks Appointment of Equity Committee
FANSTEEL INC: Wants to Use Cash Collateral Until Sept. 22
FARMERS GRAIN: Rabo Asks Court to End Cash Collateral Use
FAUSER OIL: Exclusive Plan Filing Deadline Moved to Oct. 23
FELCOR LODGING: S&P Assigns 'B+' Rating on RLJ Merger Approval
FINJAN HOLDINGS: Sues Bitdefender for Patent Infringement
FIRST CASH: S&P Affirms 'BB' ICR on Merger Integration
FRANK W. KERR: Files Chapter 11 Plan of Liquidation
FREESEAS INC: Narrows Net Loss to $20.5 Million in 2016
FRONTIER COMMUNICATIONS: Bank Debt Trades at 6% Off
FUNCTION(X) INC: Okays Transfer of $3.3M Note to More Than Words
GARBER BROS: Hires Receivables Management as Collections Agent
GARDEN OF EDEN: Wants Plan Exclusivity Period Extended to Oct. 24
GARLOCK SEALING: Safety National Sues for Coverage Exclusion
GOODYEAR TIRE: Fitch Affirms 'BB' IDR; Outlook Stable
GRANDPARENTS.COM INC: Unsecureds to Recoup Up to 79.5% in New Plan
GREAT BASIN: Receives Default Notice from Lender
GREGORIO MARTINEZ RODRIGUEZ: U.S. Trustee Forms 2-Member Committee
GUIDED THERAPEUTICS: Inks Forbearance Agreement with GPB Debt
HAMPSHIRE GROUP: U.S. Trustee Opposes Disclosure Statement
HORNBECK OFFSHORE: S&P Hikes CCR to 'CCC-', Outlook Negative
IMAGE GRAPHICS: Case Summary & 8 Unsecured Creditors
IMPAX LABORATORIES: S&P Lowers CCR to 'B+', Outlook Stable
IREP MONTGOMERY-MRF: Plan Exclusivity Period Extended by 90 Days
J. CREW: Bank Debt Trades at 46% Off
KAPPA DEVELOPMENT: Names Ronald Russell as Accountant
KNIGHT ENERGY: Taps Bayshore Partners as Investment Banker
LANAI HOLDINGS: S&P Lowers CCR to 'B-' on Weak Financial Results
LB VENTURES: Taps Town Hall Realty as Real Estate Broker
LISA LORD: Court Approves Barron and Barron as Counsel
LLOYD M. HUGHES: May Use Cash Collateral Until Sept. 6
MARIMED INC: Posts $547,000 Net Income in Second Quarter
MARKET SQUARE: Taps O'Donnell Haddad as Special Counsel
MARRONE BIO: Promotes James Boyd to President and CFO
MAYACAMAS HOLDINGS: Schwarzmann Tapped as Financial Advisor
MESOBLAST LIMITED: Reports Positive Trial Results of Cell Therapy
MF GLOBAL: Allied World Seeks Dismissal of Adversary Suit
MOBILESMITH INC: Ray Hemmig Appointed to Board of Directors
MOHAMAD TABATABAEE: Selling San Diego Property for $1.1 Million
MOREHEAD MEMORIAL: Taps Donlin Recano as Administrative Agent
NAVEX ACQUISITION: Moody's Cuts Rating on 1st Lien Loans to B3
NAVIENT CORP: S&P Affirms 'BB-' ICR & Retains Negative Outlook
NEUSTAR INC: S&P Affirms 'B+' CCR on Completion of Aerial Merger
NICE CAR: Has Until Nov. 20 to Exclusively File Plan
OAKS OF PRAIRIE: Wants To Use Cash Collateral Though Aug. 31
P3 FOODS: May Use Cash Collateral Through Sept. 8
PACIFIC 9: Wants Exclusive Plan Filing Deadline Moved to Dec. 20
PARKER DEVELOPMENT: SummitBridge Files Amended Liquidation Plan
PASCO COUNTY FAH: Moody's Affirms Ba3 Rating on 1979 Revenue Bonds
PAYLESS INC: S&P Assigns 'B-' CCR After Emergence From Bankruptcy
PEEKAY ACQUISITIONS: Curtis, RLF Representing Term A Lenders
PEEKAY ACQUISITIONS: Has Interim OK to Use Cash; Hearing on Sept. 6
PEEKAY ACQUISITIONS: U.S. Trustee Forms 5-Member Committee
PENINSULA AIRWAYS: May Use FNB Cash Collateral Until Sept. 3
PENINSULA AIRWAYS: Richard Schumacher Represents Jet in Panel
PETCO ANIMAL: Bank Debt Trades at 10% Off
PETSMART INC: Bank Debt Trades at 7% Off
PHILADELPHIA ENERGY: S&P Lowers CCR to CCC, Outlook Negative
RACEWAY MARKET: Disclosures OK'd; Plan Hearing on Sept. 27
RENX GROUP: Case Summary & 20 Largest Unsecured Creditors
RFI MANAGEMENT: May Use Cash Collateral Until Oct. 5
RJRAMDHAN GROUP: U.S. Trustee Unable to Appoint Committee
RSF 17872: Court Declines to Extend Plan Exclusivity Period
S K TRANSPORT: Names Michelle Steele as Bookkeeper
SABRA HEALTH: Moody's Hikes LT Corporate Family Rating to Ba1
SAN JOSE CONTRACTING: Unsecureds to Recoup $30K Paid Semiannually
SANTA CRUZ PLUMBING: Unsecureds to Recoup 9% Under Plan
SERENITY HOMECARE: Case Summary & 20 Largest Unsecured Creditors
STEARNS HOLDINGS: S&P Alters Outlook to Neg. on Covenant Waiver
SUNGARD AVAILABILITY: S&P Alters Outlook to Neg. & Affirms B- CCR
TAEUS CORPORATION: Plan to be Funded from PenOne Proceeds
TERRAVIA HOLDINGS: Taps Kurtzman Carson as Administrative Advisor
TERRAVIA HOLDINGS: Taps Rothschild as Financial Advisor
TRIDENT HOLDING: S&P Lowers CCR to CCC+, On CreditWatch Negative
TRIUMPH GROUP: S&P Hikes Unsec. Notes Due 2021 & 2022 to B-
TRUE RELIGION: Macerich, et al., Try to Block Disclosures Approval
UNITED RENTALS: S&P Alters Outlook to Positive & Affirms BB- CCR
V&L TOOL: Amendment to Stipulation With GE on Cash Use OK'd
VANSCOY CHIROPRACTIC: Court Approves Michelle Steele as Bookkeeper
WAND INTERMEDIATE: S&P Affirms 'B' CCR, Outlook Stable
WINDSTREAM SERVICES: Fitch Alters Outlook to Neg & Affirms BB- IDR
YELLOW CAB: Trustee Reaches $22 Million Settlement With Jacobses
YOGA CENTER: U.S. Trustee Unable to Appoint Committee
[*] Cohen & Grigsby Attorneys Among Best Lawyers in America List
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
2260 EAST MAIN: Sachanandani Buying Mesa Property for $2.8M
-----------------------------------------------------------
2260 East Main Street, LLC, asks the U.S. Bankruptcy Court for the
Central District of California to authorize the sale of real
property located at 2260 East Main Street, Mesa, Arizona, to Hari
Sachanandani or assigns for $2,750,000.
A hearing on the Motion is set for Sept. 11, 2017 at 2:00 p.m.
The Debtor was formed for the purpose of acquiring the Property.
On June 30, 2011, the Debtor purchased the Property for $3,272,500
from a division of Western Alliance Bank. It made a down payment
of $465,200 and financed the remainder of the purchase price with a
loan from Alliance in the principal amount of $2,781,625.
Shortly after purchasing the Property, the Debtor leased the
Property to Mega RV Corp. which operated a RV dealership thereon.
Brett McMahon was the sole shareholder of Mega RV. Mega RV leased
the Property for several years until it started experiencing
financial difficulties due to the economic conditions of the Great
Recession, which hit the RV industry particularly hard.
In December 2013, the Debtor executed and delivered a second
priority deed of trust against the Property in favor of Forest
River, Inc. ("FR"), securing an indebtedness in the amount of
$2,000,000. The loan proceeds from FR were used to inject
liquidity and improve cash flow for Mega RV, which was struggling
financially. Eventually, due to insurmountable economic headwinds
and aggressive collection actions by its flooring lender (GE), Mega
RV had to shut down its dealership on the Property.
Accordingly, in April 2014, the Debtor agreed to lease the Property
to Vertigo Investments, LLC, doing business as Desert Auto Plex
("Tenant") pursuant to the Standard Industrial/Commercial
Single-Tenant Lease - Net. The Lease is a triple-net lease with
the Tenant paying all insurance, property taxes, and utilities
associated with the Property. Initially, the Lease had a two-year
term, beginning May 1, 2014 and ending April 30, 2016. Base rent
under the Lease was $18,000. The Lease included an option for the
Tenant to extend the term of the Lease for an additional five years
after expiration of the original term, i.e. beginning May 1, 2016
and ending April 30, 2021, which the Tenant exercised in January
2016 (at which time the monthly rent amount was decidedly below
market).
On June 29, 2016, the Alliance Loan fully matured. The Debtor was
unable to make the balloon payment and the Alliance Loan went into
default. Notwithstanding the Debtor's good faith efforts to
negotiate a reasonable forbearance agreement, on Oct. 14, 2016,
Alliance recorded a Notice of Trustee's Sale, scheduling a
trustee's sale for Jan. 16, 2017.
After the Debtor's negotiations with Alliance broke down, Alliance
scheduled a foreclosure sale of the Property for Feb. 17, 2017 and
had informed the Debtor that it would not be continuing the sale.
Accordingly, on Feb. 16, 2017, the Debtor filed the chapter 11
bankruptcy case. It continues to operate as a debtor in possession
and has filed a plan of reorganization. The Debtor intends to
reorganize by selling the Property and has negotiated a global
settlement with Alliance and FR.
The Debtor's principal assets are the Property, including the
rental proceeds therefrom, and its interest in the Lease. Soon
after the Petition Date, the Debtor employed COBE Real Estate, Inc.
as its real estate broker to market the Property for sale.
However, COBE was unable to procure an acceptable purchaser and is
not entitled to any commission. The Debtor is negotiating the
Purchase Agreement with the Buyer. The Debtor's principal assets
are the Property, including the rental proceeds therefrom, and its
interest in the Lease. It proposes to sell the Property free and
clear of any lien on such property if the lien holders consent.
Section 365 technically does not apply, as the Debtor is the
landlord, but in any event the Debtor will assign to the Buyer all
rights under the Lease.
Both Alliance and FR have agreed to the Sale and accepting
discounted payoffs in full satisfaction of their liens and claims,
which will allow for the Sale of the Property and provide funds to
the estate. Accordingly, the Debtor asks the Court to approve the
relief requested.
A copy of the Purchase Agreement and the Stipulation attached to
the Motion is available for free at:
http://bankrupt.com/misc/2260_East_80_Sales.pdf
Absent any objection to the Motion, the Debtor asks that the 14-day
stays set forth in Bankruptcy Rules 6004(h) and 6006(d) be waived
as the Buyer has patiently waited for months and desires to quickly
close the Sale.
The Purchaser is represented by:
Daniel J. Vedra, Esq.
VEFRA LAW, LLC
1435 Larimer St., Suite 302
Denver, CO 80202
Telephone: (303) 937-6540
Facsimile: (303) 937-6547
The Escrow Holder:
FIRST AMERICAN TITLE INSURANCE CO.
1125 17th St., Suite 500
Denver, CO 80202
About 2260 East Main Street
On April 14, 2011, 2260 East Main Street, LLC, was incorporated as
an Arizona limited liability company. Its managing member and
majority shareholder (75.5%) is Brett McMahon, who resides in
Irvine, California and operates his companies, including the
Debtor, from an office located in Irvine, California. The
company's minority shareholder (24.5%) is Michael Lankford, who
resides in Riverside, California.
2260 East Main Street, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 17-10571) on Feb.
16, 2017. The petition was signed by Brent McMahon, managing
member. At the time of the filing, the Debtor estimated its assets
and debt at $1 million to $10 million. The case is assigned to
Judge Mark S. Wallace. The Debtor tapped Robert P. Goe, Esq., and
Donald W. Reid, Esq., at Goe & Forsythe, LLP, as counsel.
500 NORTH AVENUE: D&M Purchase Agreement Alters Plan Implementation
-------------------------------------------------------------------
Long Brook Station, LLC, filed with the U.S. Bankruptcy Court for
the District of Connecticut a ninth amended disclosure statement
describing their ninth amended plan of reorganization.
This latest filing provides that the Company obtained Zoning
Approval for the Stratford, Connecticut Property and initiated
marketing of the Property for sale. The purchase price negotiated
for the Property and set forth in the D&M Purchase Agreement
renders the second mortgage partially secured.
After extensive marketing, the Company reached agreed with a
potential purchaser resulting in the Agreement of Purchase and Sale
by and between the Company and Nelson DaSilva and Rafael Marin for
a sale of the Property subject to Court approval. The terms of the
D&M Purchase Agreement provide for a purchase price of $825,000 and
the closing is subject to a six-month extension of the Zoning
Approval, and Proposed Purchaser's sale of a parcel of real
property. There are no other financing contingencies and the sale
is on an "as is" basis. The proposed sale is to be free and clear
of liens, encumbrances, and interests, which shall attach to the
proceeds of the sale.
This development added significant changes to the effectuation of
the plan.
This version of the plan also reclassified unsecured creditors in
Class 13. Unsecured creditors were previously classified in Class
4. Further, the distributions made to Class 13 claimants on a pro
rata basis will now be within 15 days of the Effective Date of the
Plan. The previous version of the plan stated that payment to
unsecured creditors is upon the later of 30 days after the closing
of the sale of the Property.
A full-text copy of the Ninth Amended Disclosure Statement is
available at:
http://bankrupt.com/misc/ctb14-31095-263.pdf
About 500 North Avenue
500 North Avenue, LLC, and Long Brook Station, LLC, filed Chapter
11 petitions (Bankr. D. Conn. Case Nos. 14-31094 and 14-31095) on
June 6, 2014. The petitions were signed by Joseph Regensburger,
member.
At the time of filing, 500 North Avenue estimated $1 million to $10
million in assets and $10 million to $50 million in liabilities;
and Long Brook Station estimated $500,000 to $1 million in assets
and $1 million to $10 million in liabilities.
The cases are assigned to Judge Julie A. Manning.
The Debtors are represented by Douglas S. Skalka, Esq., at Neubert,
Pepe, and Monteith, P.C.
ADIENT GLOBAL: Futuris Acquisition No Impact on Moody's Ba2 CFR
---------------------------------------------------------------
Moody's Investors Service said that Adient Global Holdings Ltd's
(Adient, Ba2 stable) announcement that it has entered into a
definitive agreement to acquire Futuris Automotive Group is credit
positive but does not currently impact Adient's Ba2 Corporate
Family Rating, nor stable rating outlook.
Adient is a global leader in automotive seating with leading market
positions in the Americas, Europe and China, and has longstanding
relationships with the all major global original equipment
manufacturers (OEMs) in the automotive space. Adient's automotive
seating solutions including complete seating systems, frames,
mechanisms, foam, head restraints, armrests, trim covers and
fabrics. Adient also participates in the automotive interiors
market through its joint venture in China, Yanfeng Global
Automotive Interior Systems Co., Ltd. Consolidated revenues for the
LTM period ending June 30, 2017 were approximately $16.2 billion.
ADVANCED INTEGRATION: S&P Alters Outlook to Neg. & Affirms BB- CCR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on Advanced Integration
Technology L.P. to negative from stable and affirmed its 'BB-'
Corporate Credit Rating.
The outlook revision reflects AIT's much weaker than expected
performance in the first half of 2017 due to delays in a key
program and distractions and delays related to the integration of
recent acquisitions. S&P said, "The negative outlook also indicates
our expectation that the company's credit metrics will remain weak
in 2017 because we are concerned about the pace of improvement in
AIT's metrics over the next 12 months. We now expect the company's
debt-to-EBITDA to be above 5.5x in 2017, which compares with our
prior expectation of between 2.5x and 3.0x.
Although we expect AIT's revenue and earnings to increase in the
second half of 2017 and into 2018, we are concerned that it may
take longer than we anticipate for the company to improve its
credit metrics if there are further integration related issues or
program delays. If no further issues arise, we believe that AIT's
debt-to-EBITDA could decline below 4.0x in 2018.
"The negative outlook on AIT reflects our concerns surrounding the
pace and magnitude of the improvement in the company's credit
metrics over the next 12 months. Although we expect the company's
metrics to improve in 2018, as previously delayed programs ramp up
and management progresses on integrating acquired businesses, we
remain concerned that additional challenges could occur or that
existing problems may take longer to fix. We currently expect AIT's
debt-to-EBITDA to be above 5.5x in 2017, up from 3.7x in 2016.
"We could lower our ratings on AIT in the next 12 months if the
pace of the improvement in the company's credit metrics is slower
than we expect, causing its debt-to-EBITDA to remain above 4.0x on
a sustained basis without material prospects for improvement. This
would likely be caused by additional issues with the integration of
the company's recent acquisitions or--less likely--further program
delays.
"We could revise our outlook on AIT to stable in the next 6-12
months if the company materially improves its credit metrics and we
come to believe that its debt-to-EBITDA will decline below 4.0x by
the middle of 2018. This would most likely occur if the company's
revenue and earnings from the delayed defense program increase as
expected and management successfully addresses the recent
integration problems."
AF LEWIS: Quarterly Payment of $500 for Unsecureds Over 20 Quarters
-------------------------------------------------------------------
AF Lewis Enterprises, LLC, filed with the U.S. Bankruptcy Court for
the Southern District of Alabama a disclosure statement
accompanying its plan of reorganization, dated August 18, 2017.
Under the plan, the Debtor will restructure and pay the secured
claims held by Wells Fargo, Mack, North Mill, and Sweet Water. The
Debtor will also pay its pre-petition priority tax claims owed to
the Internal Revenue Service, Alabama Department of Revenue, and
Alabama Department of Labor for payroll tax liabilities over five
years.
Allen F. Lewis will retain his membership interest in the Debtor.
He will manage the Debtor's timber hauling business. His annual
salary will be at least $24,000, which will be utilized for
personal living expenses for himself and his family and to fund a
personal Chapter 11 plan.
The Debtor estimates that the total of general unsecured claims,
including secured creditor deficiency claims, is approximately
$300,000. Each unsecured claimant will receive a quarterly
distribution of its pro-rata share of $500 for a period of 20
quarters in full satisfaction of all unsecured claims, without
interest. The first quarterly distribution will be made within 30
days after the first day of the calendar quarter following the
Effective Date, and each subsequent quarterly distribution shall be
made within 30 days after the first day of each succeeding
quarter.
The Debtor reserves the right to prepay the amounts due to all
unsecured creditors in this class at any time. In the event the
Debtor is unable to perform under several sections of the Plan, the
Debtor shall be entitled to suspend distributions to Class 8
unsecured creditors, and shall be further entitled to liquidate its
assets as it deems reasonable and necessary to perform under the
Plan.
The Debtor will continue to operate its timber hauling business.
All distributions required under the Plan shall be made from future
revenues.
A full-text copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/alsb16-02190-165.pdf
About AF Lewis Enterprises
AF Lewis Enterprises, LLC, filed a petition under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ala. Case No. 16-bk-02190) on July 1,
2016. The Debtor is represented by Silver, Voit & Thompson,
Attorneys at Law, P.C.
AIR MEDICAL: Bank Debt Trades at 2% Off
---------------------------------------
Participations in a syndicated loan under Air Medical Group
Holdings is a borrower traded in the secondary market at 97.54
cents-on-the-dollar during the week ended Friday, August 11, 2017,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.35 percentage points from the
previous week. Air Medical pays 350 basis points above LIBOR to
borrow under the $1.01 billion facility. The bank loan matures on
April 15, 2022 and carries Moody's B3 rating and Standard & Poor's
B rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended August 11.
ALEVO USA: Bankruptcy Administrator to Form Committee
-----------------------------------------------------
William Miller, U. S. bankruptcy administrator, on August 21 filed
with the U.S. Bankruptcy Court for the Middle District of North
Carolina a notice of opportunity to serve on the official committee
of unsecured creditors in the Chapter 11 cases of Alevo USA, Inc.,
and Alevo Manufacturing, Inc.
Unsecured creditors willing to serve on the committee are required
to file a response within 10 days from August 21.
An organizational meeting will be scheduled after the committee is
appointed, according to the filing.
Mr. Miller can be reached through:
Susan O. Gattis
Bankruptcy Analyst
101 S. Edgeworth Street
Greensboro, NC 27412
Fax: 336-291-9913
Email: susan_gattis@ncmba.uscourts.gov
The companies are represented by:
Terri L. Gardner, Esq.
Nelson Mullins Riley & Scarborough, LLP
P.O. Box 30519
Raleigh, NC 27622
Tel: (919) 329-3882
Fax: 919 329-3799
Email: terri.gardner@nelsonmullins.com
About Alevo USA Inc.
Concord-based battery manufacturers Alevo USA, Inc. and Alevo
Manufacturing, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D.N.C. Case Nos. 17-50876 and 17-50877)
on August 18, 2017. Peter Heintzelman, president, signed the
petitions.
At the time of the filing, Alevo USA disclosed that it had
estimated assets of $1 million to $10 million and liabilities of
$10 million to $50 million. Alevo Manufacturing had estimated
assets and liabilities of $10 million to $50 million.
Judge Catharine R. Aron presides over the cases. Nelson Mullins
Riley & Scarborough, LLP represents the Debtors as bankruptcy
counsel.
AMC ENTERTAINMENT: S&P Alters Outlook to Negative & Affirms B+ CCR
------------------------------------------------------------------
S&P Global Ratings revised its rating outlook on Kansas-based
motion picture exhibitor AMC Entertainment Holdings Inc. to
negative from stable. S&P said, "At the same time, we affirmed our
ratings on the company, including the 'B+' corporate credit
rating."
S&P said, "The negative outlook reflects our view that the
execution risk associated with AMC implementing its growth and cost
management strategies at the theaters it acquired from Carmike
Cinemas in 2016 is higher than we previously expected, and the
company's decision to cut capital spending by $100 million and
implement a $100 million share repurchase program will have a
negative impact on its growth and credit metrics. We now expect
that AMC's leverage will moderate to about 5.4x by the end of 2018.
Despite our expectation for a strong 2018 box office, we believe
further underperformance at Carmike or increased
shareholder-rewarding initiatives could cause leverage to remain
above the low-5x area beyond 2018, which would result in a
downgrade.
"The negative outlook reflects our expectation that AMC's adjusted
leverage could remain elevated in the mid-5x area beyond 2018 due
to execution risks of reseating and improving the theaters the
company acquired in the Carmike acquisition. It also reflects the
risk that directing cash away from capital investment and toward
share repurchases could have a negative impact on the company's
growth and market share.
"We could lower the corporate credit rating if AMC doesn't
successfully integrate its recent acquisitions and we expect that
its adjusted leverage will remain above the low-5x area beyond
2018. This scenario could occur if AMC doesn't realize significant
returns on investments in its customer engagement initiatives at
its newly acquired theaters, resulting in its EBITDA margin
deteriorating and discretionary cash flow approaching break-even
levels. We could also lower the rating if the company further
increases its share repurchase program or pursues another
debt-financed acquisition.
"We could revise the outlook to stable if AMC is able to
meaningfully improve the efficiency of its acquired theaters and
successfully integrates all of its acquisitions, causing us to
expect reported EBITDA margins of over 18% and leverage declining
to the low-5x area or lower by 2018. This may also entail the
company committing to a more conservative financial policy and
directing its cash flow to growth investments rather than share
repurchases."
AMERICAN POWER: May Voluntarily Shutdown Operations
---------------------------------------------------
American Power Group Corporation will extend the filing of its June
30, 2017, Quarterly Form 10-Q via SEC Form 12b-25. On June 6,
2017, the company announced a corporate wide realignment of its
strategic direction, reallocation of resources and reduction in
workforce in response to significant operating losses due to the
impact that continuing low oil prices were having on the Company's
dual fuel and flare capture businesses. The realignment resulted
in a reduction in annual operating costs of over $2 million on a go
forward basis.
Chuck Coppa, APG's CEO/CFO stated, "The fundamental conditions
facing our dual fuel business over the last several years have not
changed. With oil prices remaining below $50 per barrel, the price
differential between oil and natural gas remains extremely tight.
The resulting delays in customer orders have negatively impacted
our dual fuel operations and have made them no longer sustainable.
Our efforts since June to secure licensing relationships, master
distributorship relationships and/or joint marketing relationships
with several of the largest domestic natural gas retail/wholesale
gas suppliers have not generated material traction. Despite
favorable economic conditions in the Mexican market, delays in
securing material orders as well as our limited access to working
capital have forced us to discontinue operating as we have been in
that market."
Mr. Coppa added, "Market conditions for our flare capture and
recovery services in the Bakken region of North Dakota continue to
be very soft, again due to low oil prices and reduction in the
number of drill rigs operating in the region. We do not foresee
any material positive changes in flare capture market conditions in
the near term and have therefore elected to discontinue our flare
capture initiative. As a result, we will report an impairment loss
relating to our flare capture operations of approximately $1.5
million during the three months ended June 30, 2017. We are
currently in discussions with several parties regarding the sale of
all flare capture equipment, the proceeds of which would reduce our
existing secured obligations. We cannot, however, be assured of
the success of these efforts.
Mr. Coppa noted, "As a result of the foregoing and our limited
access to additional near term capital, our Board of Directors is
evaluating several alternatives, including the immediate closure of
operations."
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc. -- http://www.americanpowergroupinc.com/--
provides a cost-effective patented Turbocharged Natural Gas
conversion technology for vehicular, stationary and off-road mobile
diesel engines. American Power Group's dual fuel technology is a
unique non-invasive energy enhancement system that converts
existing diesel engines into more efficient and environmentally
friendly engines that have the flexibility to run on: (1) diesel
fuel and liquefied natural gas; (2) diesel fuel and compressed
natural gas; (3) diesel fuel and pipeline or well-head gas; and (4)
diesel fuel and bio-methane, with the flexibility to return to 100
percent diesel fuel operation at any time.
American Power reported a net loss available to common stockholders
of $10.40 million on $1.86 million of net sales for the year ended
Sept. 30, 2016, compared to a net loss available to common
stockholders of $1.04 million on $2.95 million of net sales for the
year ended Sept. 30, 2015. As of March 31, 2017, American Power
had $10.33 million in total assets, $11.31 million in total
liabilities and a total stockholders' deficit of $987,272.
Schechter Dokken Kanter Andrews & Selcer, Ltd., in Minneapolis,
Minnesota, issued a "going concern" qualification on the
consolidated financial statements for the year ended Sept. 30,
2016, citing that the Company has suffered recurring losses from
operations and has a net capital deficiency that raises substantial
doubt about its ability to continue as a going concern.
ANDERSON SHUMAKER: Exclusive Plan Filing Period Extended to Oct. 23
-------------------------------------------------------------------
The Hon. Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois has extended, at the behest of
Anderson Shumaker Company, the exclusive period for the Debtor to
file a plan of reorganization and disclosure statement to Oct. 23,
2017, and the exclusive period for the Debtor to solicit
acceptances of the plan through Dec. 27, 2017.
A status hearing on the Debtor's plan and disclosure statement is
set for Oct. 24, 2017, at 10:00 a.m.
As reported by the Troubled Company Reporter on Aug. 21, 2017, the
Debtor sought the extension, telling the Court that it is still in
the process of compiling financial information in connection with
its plan of reorganization, and is continuing the process of
negotiating with Associated Bank, its primary lender, and the
Official Committee of Unsecured Creditors with a view towards a
consensual plan of reorganization.
About Anderson Shumaker
Based in Chicago, Illinois, Anderson Shumaker Company provides open
die forgings and custom forgings in various shapes and finishes
using stainless steel, aluminum, carbon steel and various grades of
alloy steel.
Anderson Shumaker filed a Chapter 11 petition (Bankr. N.D. Ill.
Case No. 17-05206) on Feb. 23, 2017. The petition was signed by
Richard J. Tribble, its chief executive officer. At the time of
filing, the Debtor had $1 million to $10 million in estimated
assets and $10 million to $50 million in estimated liabilities.
The case is assigned to Judge Donald R Cassling.
Scott R. Clar, Esq. and Brian P. Welch, Esq. at Crane, Heyman,
Simon, Welch & Clar serve as counsel to the Debtor. RSM US LLP is
the Debtor's accountant.
U.S. Trustee Patrick S. Laying on March 9, 2017, appointed five
creditors to serve on an official committee of unsecured creditors.
The committee members are: (1) Electralloy, G.O. Carlson, Inc.;
(2) Carlson Tool & Manufacturing Corp.; (3) Progressive Steel
Treating, Inc.; (4) Haynes International, Inc.; and (5) Ellwood
Group.
Shelly A. DeRousse, Esq., Devon J. Eggert, Esq., Elizabeth L.
Janczak, Esq., and Trinitee G. Green, Esq., at Freeborn & Peters
LLP, serve as counsel to the Committee.
APP HOLDINGS: Moody's Withdraws B3 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service has withdrawn APP Holdings LP's (Plasman)
B3 corporate family rating (CFR), B3-PD probability of default
rating (PDR), and Caa1 second lien secured rating.
Outlook Actions:
Issuer: APP Holdings LP
-- Outlook, Changed To Rating Withdrawn From Stable
Withdrawals:
Issuer: APP Holdings LP
-- Probability of Default Rating, Withdrawn , previously rated
B3-PD
-- Corporate Family Rating, Withdrawn , previously rated B3
-- Senior Secured Bank Credit Facility, Withdrawn , previously
rated Caa1(LGD4)
RATINGS RATIONALE
The proposed $325 million term loan B (TLB) issue launched in May
2017 was not completed.
APP Holdings LP ("Plasman") is a full-service supplier of exterior
plastic trim, fascia and precision components and systems to global
automotive manufacturers. The Company is headquartered in Windsor,
Ontario and has been owned by Insight Equity since 2011.
ARMSTRONG ENERGY: FTI Tapped for Restructuring; FTI's Boyko Is CRO
------------------------------------------------------------------
Mr. Alan Boyko, a senior managing director of FTI Consulting, Inc.,
was appointed to serve as the chief restructuring officer of
Armstrong Energy, Inc. pursuant to an engagement agreement with
FTI.
Under the agreement, Mr. Boyko will review the Company's operating
plan and budgets, work with management and the Company's other
professionals on key stakeholder restructuring and related
negotiations, advise the Company on operating plan, liquidity
management, and restructuring alternatives, and perform all other
duties normally associated with the position of a CRO. The CRO
will report to the Company's president and CEO during the
engagement. The agreement between FTI and the Company may be
terminated upon 30 days' written notice by either party.
Mr. Boyko will continue to be employed by FTI and will not receive
any compensation directly from the Company. The Company will
compensate FTI at a rate of $840 per hour for Mr. Boyko's services.
Mr. Boyko has more than 10 years of experience in corporate
restructuring, providing advisory services primarily on the
company-side and also to creditor constituencies. He has been
involved in matters including complex financial modeling, short-
and long-term liquidity forecasting and cash management components,
development and assessment of business plans, bankruptcy
preparation and contingency planning, and development of cost
savings initiatives plans.
Mr. Boyko has most recently been deeply involved in the
initialization of the Global Mining Advisory Practice at FTI. In
addition to mining, Mr. Boyko's industry experience includes
automotive, real estate, financial services, food and beverage, and
manufacturing. Mr. Boyko has been involved with many large
engagements, including leadership roles in the bankruptcy cases of
Arch Coal, American Gilsonite and AFA Foods. Other representative
clients include Chrysler, Chrysler Financial, Consol Energy,
NewPage Paper (which was acquired by Verso Corporation), 21st
Century Oncology, Residential Capital, a large mortgage servicing
company and numerous small- to mid-cap mining companies.
The Company said Mr. Boyko has no family relationships with any
executive officers or directors of the Company, or persons
nominated or chosen by the Company to become directors or executive
officers.
Services to Be Provided
FTI will provide Alan Boyko to serve as Armstrong Energy's Chief
Restructuring Officer reporting to Armstrong's Chief Executive
Officer. The CRO, as well as any hourly temporary staff, will work
with other senior management of Armstrong, and other professionals,
to provide various services, including assisting Armstrong and its
management with some or all of the following:
CRO Related:
* Reviewing the Company's operating plan and budgets, providing
feedback as appropriate;
* Working with management and the Company's other professionals
on key stakeholder restructuring and related negotiations,
including litigation (if any);
* Advising the Company on operating plan, liquidity management,
and restructuring alternatives;
* Working closely with management and Company counsel to prepare
for and execute on a voluntary Chapter 11 process, if necessary;
and
* Assisting the Company with the preparation and confirmation of
a value optimizing chapter 11 plan, and/or a sale of certain or
substantially all of Armstrong's assets pursuant to section 363 of
the Bankruptcy Code.
Chapter 11 & Post-Petition Analytical and Reporting Support:
* Providing the Company with additional financial modeling
resources to provide restructuring related financial analyses and
support financial modeling efforts, and modifying existing forecast
tools for court reporting purposes;
* Developing communications plans for all key stakeholders;
* Preparing schedules, reports, etc., as required by any chapter
11 filing;
* Analyzing executory contracts;
* Assisting Armstrong with any litigation;
* Analyzing and administering any Chapter 11 claims process;
* Preparing Monthly Operating Reports, Statement(s) of Financial
Affairs, Schedules of Assets and Liabilities, and other similar
documents and reports; and,
* Providing the analytical support (including any valuation
analyses or testimony) required for any restructuring, whether
implemented through a chapter 11 plan or a section 363 sale.
If cases under the Bankruptcy Code are commenced and FTI's
retention is approved, FTI's role will include serving as principal
bankruptcy crisis and turnaround manager and CRO to the debtors and
debtors in possession in those cases under a general retainer (not
to exceed $100,000), subject to court approval. FTI's role also
will encompass all out-of-court planning and negotiations attendant
to these tasks.
For services rendered, including the CRO services of Alan Boyko,
all professionals will be billed at their current hourly rate. FTI
will submit monthly invoices documenting its reasonable fees and
expenses to the Client; provided that FTI’s fees and expenses for
services rendered through September 15, 2017 shall not exceed
$250,000.
The hourly rates are:
* Senior Managing Directors: $840-$1,050
* Directors / Senior Directors / Managing Directors: $630-$835
* Consultants/Senior Consultants: $335-$605
* Administrative / Paraprofessionals: $135-$265
In addition to the fees, FTI will bill for reasonable allocated and
direct expenses which are likely to be incurred on your behalf
during this Engagement
The CRO can be reached at:
FTI CONSULTING INC.
Alan Boyko
Tel: 303-689-8892
Fax: 303-689-8802
E-mail: alan.boyko@fticonsulting.com
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. 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.
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."
ARMSTRONG ENERGY: Obtains Forbearance Extension Until Sept. 15
--------------------------------------------------------------
To facilitate efforts by Armstrong Energy, Inc., to enter into a
potential restructuring or recapitalization transaction, holders of
senior secured notes have agreed to forbear until mid-September
2017 from exercising their rights and remedies with respect to the
Company's failure to make the required $11.75 million interest
payment that was due June 15, 2017.
On July 16, 2017, Armstrong Energy and certain subsidiaries entered
into a forbearance agreement with the holders of approximately $158
million in aggregate principal amount (representing approximately
79% of the outstanding principal amount) of the Company's Senior
Secured Notes due 2019 issued pursuant to the indenture, dated as
of Dec. 21, 2012, by and among the Company, the Guarantors party
thereto and Wells Fargo Bank, National Association, as trustee, and
collateral agent thereunder.
On Aug. 15, 2017, the Company and the Guarantors entered into a
supplemental forbearance agreement with the Supporting Holders.
Pursuant to the Supplemental Forbearance Agreement, the Supporting
Holders have agreed to forbear from exercising their rights and
remedies under the Indenture or the related security documents
until the earlier of (a) 12:01 a.m. New York City time on
Sept. 15, 2017, and (b) an Event of Termination with respect to the
Company's failure to make the June 15, 2017, interest payment on
the Senior Secured Notes.
Pursuant to the Supplemental Forbearance Agreement, the Supporting
Holders have agreed to not deliver any notice or instruction to the
Trustee directing the Trustee to exercise any of the rights and
remedies under the Indenture or the related security documents with
respect to the Company's failure to make the June 15, 2017,
interest payment during the Supplemental Forbearance Period. The
Supporting Holders have also agreed to not transfer any ownership
in the Senior Secured Notes held by any of the Supporting Holders
during the Supplemental Forbearance Period other than to potential
transferees currently party to or who agree in writing to be bound
by the Supplemental Forbearance Agreement.
The current principal amount outstanding of the Notes is
$200,000,000 and interest payments on the Notes are due
semiannually, on June 15 and Dec. 15.
An interest payment on the Notes in the amount of $11,750,000 was
due on June 15, 2017 (the "June 2017 Interest Payment"), and the
Company did not make such payment (the "Specified Default").
On July 17, 2017 (after giving effect to section 14.07 of the
Indenture), the Company's nonpayment on the June 2017 Interest
Payment had continued for a period of thirty (30) days and thus
matured into an Event of Default.
As a result of the Specified Default, the Holders and the Trustee
will at all times have the immediate right to exercise any and all
remedies allowed pursuant to the terms of the Notes Documents,
including, without limitation, (a) charging default rate interest,
(b) the initiation or continuation of any legal action, and any
enforcement action permitted under the Notes Documents, against the
Company or any Guarantor, (c) instructing the Trustee to take any
action permitted under the Notes Documents or applicable law, and
(d) taking any such actions in furtherance of any of the foregoing
(collectively, all such rights and remedies the "Rights and
Remedies").
The Company is exploring a potential restructuring or
recapitalization transaction (a "Potential Transaction");
To facilitate discussions in respect of a Potential Transaction,
the Obligors and the Supporting Holders executed the Forbearance
Agreement, dated as of July 16, 2017, which provided for a
forbearance period until August 14, 2017. To facilitate continued
discussions in respect of a Potential Transaction, the Obligors and
the Supporting Holders agree, pursuant to the Supplemental
Forbearance Agreement, to continue to temporarily forbear in the
exercise of their Rights and Remedies solely to the extent arising
from the occurrence and continuation of the Specified Default,
subject to the terms and conditions of this Agreement.
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. 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.
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."
ARTISANAL 2015: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Artisanal 2015, LLC
387 Park Ave South
New York, NY 10016
Type of Business: A New York corporation founded in February
2015. Artisanal 2015 previously sought
bankruptcy protection on March 9, 2017 (Bankr.
S.D.N.Y. Case No. 17-10570).
Chapter 11 Petition Date: August 21, 2017
Case No.: 17-12319
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Debtor's Counsel: Arnold Mitchell Greene, Esq.
ROBINSON BROG LEINWAND GREENE
GENOVESE & GLUCK, P.C.
875 Third Avenue, 9th Floor
New York, NY 10022
Tel: (212) 603-6300
Fax: (212) 956-2164
E-mail: amg@robinsonbrog.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Sarid Drory, managing member.
The Debtor did not file a list of its 20 largest unsecured
creditors on the Petition Date.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nysb17-12319.pdf
AWAS AVIATION: S&P Affirms BB CCR, Off CreditWatch Developing
-------------------------------------------------------------
S&P Global Ratings affirmed its ratings on AWAS Aviation Capital
Ltd., including the 'BB' corporate credit rating, and removed them
from CreditWatch, where they were placed with developing
implications on April 25, 2017.
S&P said, "We also affirmed our 'BBB-' issue-level rating on AWAS's
secured debt, which will remain outstanding. The recovery rating on
this debt remains '1', indicating our expectation that lenders
would receive very high recovery (90%-100%, rounded estimate of
95%) of their principal in the event of a payment default. The
outlook is positive, reflecting the positive outlook on DAE.
"Our corporate credit rating on the combined entity is based on the
pro forma combination of both entities. The combined entity will
result in a larger, but still mid-tier, aircraft operating lessor.
The combined entity will have 281 owned and 43 managed aircraft,
with a weighted average age of 5.8 years and a weighted average
lease maturity of 5.8 years, both comparable to most other rated
aircraft lessors. The aircraft fleet is comprised of 192 narrowbody
aircraft (single-aisle planes, including Airbus A320 family and
Boeing 737 family), 45 widebody aircraft (twin aisle, including
Airbus A330-200s and -300s and A350s, and Boeing 777s and 787s), 16
widebody freighters, and 28 regional aircraft ATR72s. The
proportion of widebodies and freighters is higher than typical for
aircraft operating lessors of this size. In addition, based on net
book value, the combined entity has a larger than typical exposure
to the Middle East and Africa (16%), with its major customer,
Emirates, at 14% of net book value of aircraft. No other customer
accounts for more than 4% based on net book value. The combined
entity also has 70 aircraft on order, including 29 Airbus A320s, 12
Boeing 737s, and 29 ATR72s.
"The outlook on the combined entity is positive, reflecting our
expectation that, pro forma for the acquisition of AWAS, the
combined entity's revenues and earnings will benefit from continued
strong demand for certain types of leased aircraft. We expect EBIT
interest coverage in the high-1x area and FFO to debt of around 9%
over the next two years. However, we do see some potential risks
related to the integration of the combined entity.
"We could raise the rating over the next year if we see evidence of
a smooth integration of DAE's and AWAS's operations, and credit
ratios continue in line with our expectations.
"We could revise the outlook to stable over the next year if the
aircraft leasing business experiences market weakness or the
integration of both entities does not proceed as smoothly as
expected, resulting in weaker than expected operating performance
and credit metrics below our expectations.
"We consider DAE to be a government-related entity (GRE). In
accordance with our criteria for GREs, our view of the low
likelihood of timely and sufficient extraordinary government
support for DAE in the event of financial distress, if needed, is
based on our assessment of DAE's limited importance role to the
Emirate of Dubai, despite its ownership by entities of the Emirate.
In our view, DAE's activity could easily be undertaken by a private
sector entity if it ceased to exist."
B&B BACHRACH: Has Final OK to Use Cash Collateral Through Aug. 31
-----------------------------------------------------------------
The Hon. Neil W. Bason of the U.S. Bankruptcy Court for the Central
District of California has entered a final order authorizing B&B
Bachrach, LLC, to use cash collateral of Israel Discount Bank of
New York through and including Aug. 31, 2017, to
Stipulation or second interim cash collateral stipulation, the
carve out amount (as defined in the combined plan and disclosure
statement) will not exceed $802,000.
A copy of the Order is available at:
http://bankrupt.com/misc/cacb17-15292-260.pdf
As reported by the Troubled Company Reporter on July 21, 2017, the
Court entered a fifth interim order authorizing the Debtor to use
cash collateral through and including Aug. 8, 2017. As a condition
precedent to IDB's agreement to consent to the Debtor's continued
use of cash collateral through Aug. 8, 2017, pursuant to the terms
of the fifth interim order, Brian Lipman would have executed the
Lipman cash collateral liquidation stipulation by July 10, 2017.
About B&B Bachrach LLC
Founded in 1877, the Bachrach -- http://www.bachrach.com/-- was
founded by Henry Bachrach, who opened a single store in Decatur,
Illinois, called "Cheap Charley" to serve the growing population of
professional gentlemen who were settling in and developing the
Midwest at the time. In 1910, the name of the Company was changed
to Bachrach when the word "cheap" started to take on connotations
beyond merely a bargain.
Over the next century Bachrach evolved as a purveyor of fine men's
clothing, becoming a brand widely recognizable across not only the
Midwest, but throughout the United States. Bachrach promotes its
brand as a menswear experience based upon a European fashion
aesthetic, superior customer service and an emphasis on lasting
customer relationships.
B&B Bachrach, LLC, doing business as the Bachrach, sought Chapter
11 protection (Bankr. C.D. Cal. Case No. 17-15292), on April 28,
2017, estimating assets and liabilities ranging from $10 million to
$50 million. Brian Lipman, managing member, signed the petition.
The case is assigned to Judge Neil W. Bason.
The Debtor is represented by Brian L Davidoff, Esq., at Greenberg
Glusker Fields Claman Machtinger LLP. Solid Asset Solutions LP,
serves as the Debtor's liquidation consultant. Grobstein Teeple,
LLP has been tapped as financial advisor.
On May 18, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee retained
Pachulski Stang Ziehl & Jones LLP as its legal counsel.
BADLANDS ENERGY: Taps Parkman Whaling as Financial Advisor
----------------------------------------------------------
Badlands Energy, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Colorado to hire a financial advisor.
In a court filing, Badlands proposes to employ Parkman Whaling LLC
to assist the company and its affiliates in pursuing a potential
sale, new equity financing, joint venture, merger transactions or
other alternatives to maximize value for their assets.
Parkman will receive $50,000 per month as compensation. In the
event that a transaction is consummated during the engagement
period, the firm will receive an additional transaction fee.
The transaction fees include a base of $250,000 for closing each of
the Debtors' anticipated sales, along with 5% of the amount of any
winning bids that exceeds the initial stalking horse bids for those
assets.
The firm received fees totaling $195,000 prior to the petition
date.
Bruce Campbell disclosed in a court filing that he and other
members of the firm do not represent any interest adverse to the
Debtors' estates or creditors.
Parkman can be reached through:
Bruce Campbell
Parkman Whaling LLC
600 Travis, Suite 600
Houston, TX 77002
Phone: 713-333-8400
Email: info@parkmanwhaling.com
About Badlands Energy
Denver, Colorado-based Badlands Energy, Inc. --
http://badlandsenergy.framezart.com/-- is an E&P company that has
been involved in the Uinta Basin for over a decade. The Company
also operates in California and has been involved in exploration
projects in Wyoming and Nevada.
Initially operating as a public company known as Gasco Energy,
Inc., the Company underwent a restructuring that was completed in
October 2013. This resulted in a recapitalization followed by
taking the company private. The final step in this was a name
change to Badlands Energy, Inc.
Badlands Energy, Inc., Badlands Production Co., Badlands
Energy-Utah, LLC, and Myton Oilfield Rentals, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case Nos.
17-17465, 17-17467, 17-17469 and 17-17471) on Aug. 11, 2017. The
petitions were signed by Richard Langdon, president and CEO.
Badlands Energy estimated assets at $10 million to $50 million and
liabilities at $50 million to $100 million; Badlands Production's
assets at $1 million and $10 million and liabilities at $10 million
to $50 million; Badlands Energy-Utah's assets at $1 million to $50
million; and Myton Oilfield Rentals' assets at $100,000 to $500,000
and liabilities at $10 million to $50 million.
The cases are assigned to Judge Kimberley H. Tyson. The Debtors
tapped Theodore J. Hartl, Esq., at Lindquist & Vennum LLP, in
Denver, as counsel.
BASS PRO: Bank Debt Trades at 3% Off
------------------------------------
Participations in a syndicated loan under Bass Pro Group LLC is a
borrower traded in the secondary market at 96.95
cents-on-the-dollar during the week ended Friday, August 11, 2017,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.23 percentage points from the
previous week. Bass Pro pays 350 basis points above LIBOR to
borrow under the $2.97 billion facility. The bank loan matures on
Nov. 14, 2023 and carries Moody's B1 rating and Standard & Poor's
B+ rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended August 11.
BERNARD L. MADOFF: No New Exhibits at Merkin Trial, Court Rules
---------------------------------------------------------------
Alex Wolf, writing for Bankruptcy Law360, reports that Irving
Picard, the trustee overseeing the liquidation of Bernard L. Madoff
Investment Securities LLC, won in its bid to limit exhibits at the
upcoming Merkin trial over Ponzi scheme proceeds.
U.S. Bankruptcy Judge Stuart M. Bernstein has entered an order
prohibiting J. Ezra Merkin and related entities from introducing
certain exhibits that weren't produced during discovery, Law360
relates. The order precludes Mr. Merkin, Gabriel Capital and other
co-defendants from using some of their defense evidence to battle
claims Merkin failed to adequately follow up on suspicions that
BLMIS could be a Ponzi scheme, Law360 adds.
The case is Picard v. Merkin, et al., case number 1:08-ap-01789,
in the U.S. Bankruptcy Court for the Southern District of New
York.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of New
York granted the application of the Securities Investor Protection
Corporation for a decree adjudicating that the customers of BLMIS
are in need of the protection afforded by the Securities Investor
Protection Act of 1970. The District Court's Protective Order (i)
appointed Irving H. Picard, Esq., as trustee for the liquidation of
BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and
(iii) removed the SIPA Liquidation proceeding to the Bankruptcy
Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport Charitable
Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven
Morganstern -- assert US$64 million in claims against Mr. Madoff
based on the balances contained in the last statements they got
from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of March 31,
2017, the SIPA Trustee has recovered, from pre-litigation and other
settlements, nearly $11.6 billion -- more than 66% of the currently
estimated principal amount lost in the Ponzi scheme by those who
filed claims. Following the eight distribution of $252 million on
Feb. 2, 2017, the Trustee has made total distributions of $9.725
billion, with 1,336 BLMIS accounts fully satisfied. The 1,336
fully satisfied accounts represent nearly 60% of accounts with
allowed claims.
BIOCLINICA HOLDING: Moody's Revises Outlook to Neg & Affirms B3 CFR
-------------------------------------------------------------------
Moody's Investors Service affirmed BioClinica Holding I, LP's B3
Corporate Family Rating (CFR), B3-PD Probability of Default Rating
(PDR), B1 rating on the 1st lien senior secured facilities
(revolver and term loan) and Caa2 rating on the 2nd lien term loan.
At the same time, Moody's revised the rating outlook to negative
from stable.
"BioClinica's operating performance has fallen below Moody's
expectations due to project delays, reduced project scope, and
weaker new business awards," said Moody's analyst, Morris
Borenstein. "Liquidity remains adequate based on projected cash
needs and will be boosted by receipt of delayed payments from two
meaningful projects from 2016."
Ratings affirmed:
BioClinica Holding I, LP
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
Senior secured 1st lien credit facilities at B1 (LGD3)
Senior secured 2nd lien term loan at Caa2 (LGD5)
Outlook action:
Revised to negative from stable
RATING RATIONALE
The B3 rating is constrained by BioClinica's small absolute size
and very high financial leverage. Debt to EBITDA will remain above
7.5 times over the next 12 months unless BioClinica can reverse
earnings weakness in its depressed segments. Moody's estimates
adjusted debt to EBITDA of around 8 times for the twelve months
ended June 30, 2017. BioClinica's segment offering clinical trial
payment and data housing services continues to drag earnings due to
weak new business awards. Moody's believes the backlog will improve
in BioClinica's clinical research segment; however, revenue
realization will continue to be a challenge due to changes in
project scope and delays. The ratings are also constrained by some
concentration by customer and therapeutic area within the backlog.
The ratings are supported by the company's leadership position in
the specialized niche of outsourced imaging services for clinical
trials. Moody's views this as a defensible business that lends
itself well to the outsourced model.
Despite weak cash generation, liquidity will remain adequate over
the next 12-15 months.
The negative rating outlook reflects Moody's view that improvement
in credit metrics will be dependent on the company's ability to
convert signings into revenue and improve profitability. The
ratings could be downgraded if the company sustains adjusted
leverage above 7.5x or if liquidity weakens. The ratings could be
upgraded if the company increases its customer diversity, improves
revenue and EBITDA performance, and sustains adjusted leverage
below 6.0x.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
BioClinica Holding I, LP (dba "BioClinica") is a leading provider
of specialized services to the pharmaceutical industry with a focus
on clinical imaging. The company's end markets include
pharmaceutical and biotechnology companies and contract research
organizations. The company is owned by private equity firm, Cinven.
Reported net service revenue was $316 million for the twelve months
ended June 30, 2017.
BON-TON STORES: Comparable Store Sales Decreased 6.1% in Q2
-----------------------------------------------------------
The Bon-Ton Stores, Inc., reported operating results for its fiscal
second quarter ended July 29, 2017, and reaffirmed its earnings
guidance for the full year fiscal 2017.
Results for the Second Quarter Ended July 29, 2017
* Comparable store sales decreased 6.1% as compared with the
prior year period.
* Selling, general and administrative expense decreased $20.7
million as compared with the second quarter of fiscal 2016.
* Net loss in the current year second quarter was $33.2
million, or $1.64 per share, compared with net loss of $38.7
million, or $1.95 per share, in the second quarter of fiscal
2016.
* Adjusted EBITDA totaled $9.1 million in the second quarter of
fiscal 2017. Adjusted EBITDA in the second quarter of 2016
was $2.5 million.
William Tracy, incoming president and chief executive officer,
commented, "We made progress in several important areas of the
business during the second quarter. We saw strength in key
merchandise categories and brands and were pleased with the
continued double-digit growth in our omnichannel business.
Additionally, we continued to effectively execute our profit
improvement initiatives, substantially reducing our SG&A expense
for the quarter. While our results were consistent with our
expectations and showed an improvement over our performance in the
first quarter, we remain focused on working to better position the
business for the long-term. Looking forward, we will focus on
efforts to further enhance our merchandise assortment with an
emphasis on our targeted growth categories, refine our marketing
strategy to increase traffic and customer engagement, and drive
growth in our omnichannel business. In addition, we expect to
achieve further cost reductions through the continued rollout of
our profit improvement initiative. We believe that these actions
will drive improved performance in the back half of the year."
Second Quarter Review
Comparable store sales in the second quarter of fiscal 2017
decreased 6.1%. Total sales in the period decreased 7.0% to $504.4
million, compared with $542.4 million in the second quarter of
fiscal 2016.
The Company continued its double-digit sales growth in omnichannel,
which reflects sales via the Company's website, mobile site, and
its Let Us Find It customer service program, as the Company
leveraged its West Jefferson facility and store-fulfillment
network.
Other income in the second quarter of fiscal 2017 was $21.0
million, an increase of $4.8 million over the comparable prior year
period. The increase was primarily due to income associated with
gift card breakage and, to a lesser degree, higher revenues
associated with the Company's proprietary credit card operations.
Proprietary credit card sales, as a percentage of total sales,
increased approximately 40 basis points to 57.4% in the second
quarter of fiscal 2017.
The gross margin rate in the second quarter of fiscal 2017
decreased approximately 100 basis points as compared with the
second quarter of fiscal 2016 to 35.5% of net sales, primarily due
to an increase in the markdown rate. Gross profit decreased $18.9
million to $179.2 million in the second quarter of fiscal 2017,
primarily as a result of decreased sales volume.
SG&A expense in the second quarter of fiscal 2017 decreased $20.7
million, or 9.8%, as compared with the second quarter of fiscal
2016, to $191.2 million. This was largely due to savings
associated with prior year closed stores and reductions in
consulting fees, medical insurance, payroll, taxes and rent, as
well as gains associated with various real estate transactions.
The SG&A expense rate in the second quarter of 2017 was 37.9% of
net sales, a decrease of approximately 120 basis points from the
prior year.
Adjusted EBITDA totaled $9.1 million in the second quarter of
fiscal 2017, inclusive of $4.6 million of income associated with
gift card breakage, $7.8 million of gains related to various real
estate transactions and $1.9 million of severance costs. In the
second quarter of fiscal 2016, Adjusted EBITDA was $2.5 million,
inclusive of $2.4 million of consulting fees related to cost
reduction initiatives and $2.2 million of severance costs.
The Company's excess borrowing capacity under its revolving credit
facility was approximately $171 million at the end of the second
quarter of fiscal 2017 and $189 million as of Aug. 14, 2017.
Guidance
For fiscal 2017, the Company continues to expect loss per share to
be in a range of $2.08 to $2.59, inclusive of a $0.05 per share
expense from the 53rd week, and Adjusted EBITDA to be in a range of
$115 million to $125 million. Updated assumptions reflected in the
Company's full-year guidance include the following:
- A comparable sales decrease now ranging from 3.5% to 4.5%,
which excludes sales from the 53rd week;
- A gross margin rate decrease now ranging from 40 to 60 basis
points below the fiscal 2016 rate of 35.5%;
- SG&A expense now ranging from $834 million to $839 million,
including approximately $10 million for the 53rd week,
compared to SG&A expense of $880.6 million in fiscal 2016;
- Capital expenditures not to exceed $30 million, net of
external contributions; and
- An estimated 20.3 million weighted average shares
outstanding.
The Company expects to decrease debt by approximately $15 million
to $20 million by the end of fiscal 2017.
A full-text copy of the press release is available for free at:
https://is.gd/VHmPJm
About The Bon-Ton Stores
With corporate headquarters in York, Pennsylvania and Milwaukee,
Wisconsin, The Bon-Ton Stores, Inc. -- http://www.bonton.com/--
operates 263 stores, which includes nine furniture galleries and
four clearance centers, in 25 states in the Northeast, Midwest and
upper Great Plains under the Bon-Ton, Bergner's, Boston Store,
Carson's, Elder-Beerman, Herberger's and Younkers nameplates. The
stores offer a broad assortment of national and private brand
fashion apparel and accessories for women, men and children, as
well as cosmetics and home furnishings. The Bon-Ton Stores, Inc.
is an active and positive participant in the communities it
serves.
Bon-Ton Stores reported a net loss of $63.41 million on $2.60
billion of net sales for the fiscal year ended Jan. 28, 2017,
compared to a net loss of $57.05 million on $2.71 billion of net
sales for the fiscal year ended Jan. 30, 2016. As of July 29,
2017, Bon-Ton Stores had $1.38 billion in total assets, $1.49
billion in total liabilities and a total shareholders' deficit of
$110.93 million.
* * *
As reported in the TCR on Dec. 4, 2015, Moody's Investors Service
downgraded Bon-Ton Stores' Corporate Family Rating to 'Caa1' from
'B3'. The company's Speculative Grade Liquidity rating was
affirmed at SGL-2. The rating outlook is stable. The downgrade
considers the continuing and persistent negative pressure on
Bon-Ton's revenue and EBITDA margins which has been accelerating
during the course of fiscal 2015.
As reported by the TCR on Aug. 22, 2016, S&P Global Ratings raised
its corporate credit rating on Bon-Ton Stores to 'CCC+' from 'CCC'.
The outlook remains negative. "The upgrade reflects our view of
Bon-Ton's somewhat improved liquidity after refinancing its A-1 ABL
term loan tranche with an extended maturity to March 2021 and
enhanced liquidity from the additional $50 million in borrowing
capacity to address upcoming debt maturity in 2017.
BRUCE FINDER: Files Amended Liquidation Plan
--------------------------------------------
Bruce Finder Sales, Inc., filed with the U.S. Bankruptcy Court for
the Northern District of Illinois an amended disclosure statement
in support of its plan of liquidation, dated August 18, 2017.
This latest filing deleted the discharge of claims sections and
added that the Disbursing agent will retain authority to make post
confirmation decision including but not limited to claims
objections, preference actions and avoidable transfers.
The Troubled Company Reported previously reported that based on the
amount recovered as of July 25, general unsecured creditors will
not receive any distribution. Once all the assets are liquidated,
Bruce Finder will update the amount available to all creditors.
A full-text copy of the Amended Disclosure Statement is available
at:
http://bankrupt.com/misc/ilnb17-02122-74.pdf
About Bruce Finder Sales
Based in Cicero, Illinois, Bruce Finder Sales, Inc., doing business
as BFS Metals, is a metal service center engaging in the sales of
metal-related products used in maintenance and construction
industry for the past 26 years.
The Debtor filed a Chapter 11 petition (Bankr. N.D. Ill. Case No.
17-02122) on Jan. 25, 2017. Bradley Finder, president, signed the
petition. The Debtor disclosed total assets of $1.1 million and
total liabilities of $1.18 million as of Dec. 31, 2016.
The case is assigned to Judge Deborah L. Thorne. The Debtor is
represented by Allan O. Fridman, Esq., at the Law Office of O.
Allan Fridman.
BRYANTS DRIVETRAIN: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The Office of the U.S. Trustee on August 21 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Bryants Drivetrain of Ocala
LLC.
About Bryants Drivetrain
Bryants Drivetrain of Ocala LLC is a limited liability company.
Homer C. Bryant, Jr. is the manager and sole member.
The Debtor owns the property located at 6050 SW 58th Terrace,
Ocala, Marion County, Florida. The property is being used by
Bryant's Drivetrain Specialist, Inc. and Bryant's Transport LLC.
The Debtor filed a Chapter 11 petition (Bankr. M.D. Fla. Case No.
17-02169) on June 13, 2017. Richard A. Perry P.A. represents the
Debtor as bankruptcy counsel.
BUMBLE BEE: S&P Raises Corp Credit Rating to CCC+, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings raised its corporate credit rating on San
Diego-based Bumble Bee Holdings Inc. to 'CCC+' from 'CCC'. The
outlook is stable.
S&P said, "At the same time, we raised our issue-level rating on
the company's $605 million senior secured notes maturing in
December 2017 to 'CCC+' from 'CCC'. The recovery rating remains
'3', indicating our expectations for meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a payment default. We also
raised our issue-level rating on the company's $150 million senior
PIK toggle notes maturing in March 2018 to 'CCC-' from 'CC'. The
recovery rating remains '6', indicating our expectations for
negligible (0%-10%; rounded estimate: 0%) recovery in the event of
a payment default.
"We will withdraw all ratings, including our corporate credit
rating, on Bumble Bee upon repayment of the existing notes, which
we expect by mid-September 2017, after the company's bond holder
notice period."
The upgrade reflects the company's ability to improve its liquidity
by addressing its near-term maturities on its entire capital
structure. The company is refinancing both its senior secured and
PIK toggle notes and extending the maturity of its asset-backed
lending (ABL) facility to 2022 from Sept. 15, 2017. Under the
refinancing, the company received a $650 million senior secured
term loan due in 2023 and a $200 million ABL facility due in 2022.
The new facilities are not rated. Proceeds from the facilities will
be used to repay the company's existing $605 million senior secured
notes maturing in December 2017 and $150 million senior PIK toggle
notes maturing in March 2018.
S&P said, "The stable outlook reflects our view that the company
should maintain sufficient liquidity to meet its obligations during
the next 12 months under its new capital structure. We believe the
company's credit quality could improve if the civil lawsuits are
settled at amounts that the company can manage while still
maintaining positive FOCF. This would also reflect our expectation
of the maintenance of adequate and sufficient cushion under its
financial covenants over the next 12 months. Still, we recognize
that the company still faces the risk of greater litigation
settlement amounts from the ongoing civil litigation and
potentially tight covenant cushion under its proposed new financing
if the company does not improve operating performance or incurs
higher than expected legal costs. We are no longer maintaining
surveillance on the company following the repayment of the
company's bonds."
CACTUS WELLHEAD: Moody's Hikes Corporate Family Rating to B3
------------------------------------------------------------
Moody's Investors Service upgraded Cactus Wellhead, LLC's Corporate
Family Rating (CFR) to B3 from Caa1, the Probability of Default
Rating (PDR) to B3-PD from Caa1-PD, the senior secured revolving
credit facility's rating to B3 from Caa1, and the senior secured
term loan rating to B3 from Caa1. The rating outlook was changed to
stable from negative.
"The rating upgrades reflect Moody's expectations for Cactus'
credit metrics to improve significantly through year-end 2018
supported by the rise in rig count since mid-2016 and the
consequent improvement in demand for the company's wellheads and
related services," said Moody's Analyst Prateek Reddy. "The change
in outlook to stable reflects Moody's expectations for modest rise
in revenue from well equipment rentals and services performed on a
wellhead base that has grown significantly since mid-2016."
Upgrades:
Issuer: Cactus Wellhead, LLC
-- Corporate Family Rating, Upgraded to B3 from Caa1
-- Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
-- Senior Secured Bank Credit Facility, Upgraded to B3 (LGD 3)
from Caa1 (LGD 3)
Outlook Actions:
Issuer: Cactus Wellhead, LLC
-- Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Cactus' B3 CFR reflects the company's small size (less than $250
million in revenue) and its limited product line. The company
competes with significantly larger, well-capitalized and
highly-diversified oilfield equipment and service providers
including Schlumberger Ltd (A1 stable), Baker Hughes, a GE company,
LLC (A3 stable) and TechnipFMC plc (Baa2 negative). The company's
financial performance is inherently exposed to and is highly
correlated with the cyclicality and volatility of upstream
activities. Following a material deterioration during the downturn
between 2014 and 2016, the company's credit metrics have bounced
back because of the rise in rig count and well-completion activity
since mid-2016. Anticipations for an environment with a relatively
stable rig count and modest improvement in completion activity at
least through year-end 2018 will contribute to revenue and earnings
growth as well as leverage improvement. Moody's-adjusted
Debt-to-EBITDA will reduce and likely sustain below 3 times through
year-end 2018 from 6.6 times at year-end 2016. While an increase in
working capital investment and the weakening of free cash flow
generation are highly likely with the demand uptick, the company's
sizable revolver availability will support the maintenance of
adequate liquidity in 2017 and 2018. Additionally, the rating is
supported by Cactus' strong position within the niche wellhead
control equipment space and the company's differentiated customer
service offerings that support market share growth even during
downturns when pricing pressure is elevated.
Cactus' stable rating outlook reflects Moody's expectations for
well services and rental revenue growth to accelerate and offset
any modest pull-back in product revenue growth as rig count and
well-completion activity growth tempers through year-end 2018. The
outlook incorporates the high likelihood of increased investments
to support working capital needs and the consequent utilization of
revolver availability at least through year-end 2017.
Cactus' $50 million senior secured revolving credit facility that
expires in July 2019 ($5 million outstanding as of June 30, 2017)
and the senior secured term loan due July 2020 (about $250 million
outstanding as of June 30, 2017) form the preponderance of the
company's debt capital and are each rated B3. These ratings are in
line with the B3 CFR reflecting the single class of debt and the
facilities' first-priority lien on substantially all the company's
assets. The B3-PD PDR is in-line with the B3 CFR, reflecting
Moody's expectations for an average family recovery in a distress
scenario.
Ratings could be downgraded if negative free cash flow generation
is sustained, leading to a material reduction in revolver
availability and stressed liquidity. Ratings could also be
downgraded if Moody's-adjusted Debt-to-EBITDA rises above 5 times
or Moody's-adjusted EBITDA-to-interest coverage declines below 2
times.
While unlikely given Cactus' small scale and limited product
offerings, ratings could be upgraded if Moody's-adjusted
Debt-to-EBITDA is sustained below 3 times in an environment of
rising rig count. Maintenance of good liquidity with full revolver
availability and free cash flow-to-debt sustained above 5% will
also be required for ratings to be upgraded.
Headquartered in Houston, TX, Cactus is engaged in the design,
manufacture, sale and rental of wellheads and pressure control
equipment used primarily in land drilling and completions in the
US. Cactus maintains an inventory of fracturing trees and ancillary
equipment for short term rental, offers repair and refurbishment
services and provides service crews to assist in the implementation
of pressure control systems at the wellhead. Revenue for the twelve
month period ended June 2017 was $227 million. Cactus is privately
owned by the private equity company Cadent Energy Partners and
management.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
CALHOUN SATELLITE: Case Summary & 20 Top Unsecured Creditors
------------------------------------------------------------
Debtors: Transmission Solutions Group, Inc
1007 Old Route 119
Hunker, PA 15639
- and -
Calhoun Satellite Communications, Inc.
Type of Business: Calhoun operates a satellite transmission
business and continues to operate as a debtor-
in-possession under 11 U.S.C. Sections 1107 and
1108. Transmission was formed solely for the
purpose of holding Calhoun's stock, and all of
Transmission's creditors hold identical claims
against Calhoun.
Chapter 11 Petition Date: August 22, 2017
Debtor affiliates that simultaneously filed Chapter 11 petitions:
Debtor Case No.
------ --------
Transmission Solutions Group, Inc 17-23388
Calhoun Satellite Communications, Inc. 17-23389
Court: United States Bankruptcy Court
Western District of Pennsylvania (Pittsburgh)
Judge: Hon. Thomas P. Agresti (17-23388)
Hon. Jeffery A. Deller (17-23389)
Debtors' Counsel: Dennis J. Spyra, Esq.
DENNIS J. SPYRA & ASSOCIATES
119 First Ave
Pittsburgh, PA 15222
Tel: 412-471-7675
E-mail: attorneyspyra@dennisspyra.com
Estimated assets and liabilities:
Assets Liabilities
---------- -----------
Transmission Solutions $0 to $50,000 $1 million to $10 million
Calhoun Satellite $0 to $50,000 $1 million to $10 million
The petitions were signed by Kevin Husband, president.
Transmission Solutions' list of five unsecured creditors is
available for free at:
http://bankrupt.com/misc/pawb17-23388.pdf
Calhoun Satellite's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/pawb17-23389.pdf
CALIFORNIA PIZZA: Moody's Alters Outlook to Stable & Affirms B3 CFR
-------------------------------------------------------------------
Moody's Investors Service revised California Pizza Kitchen, Inc.'s
rating outlook to stable from positive. Concurrently, Moody's
affirmed the company's B3 Corporate Family Rating, B3-PD
Probability of Default Rating, B2 ratings on the $30 million senior
secured first lien revolver and $290 million senior secured first
lien term loan, and Caa2 rating on the company's $75 million senior
secured second lien term loan.
"Although outperforming the industry, the change in outlook to
stable from positive reflects CPK's weaker than expected comparable
same restaurant sales and operating performance that has resulted
in debt protection metrics below Moody's previous expectations"
stated Adam McLaren, Moody's Analyst. Wage pressure and to a lesser
extent commodity cost inflation will continue to pressure the
company's margins and hinder credit metric improvement.
Ratings affirmed:
Corporate Family Rating at B3;
Probability of Default Rating at B3-PD;
$30 million senior secured first lien revolver due 2021 at B2
(LGD3);
$290 million senior secured first lien term loan due 2022 at B2
(LGD3);
$75 million senior secured second lien term loan due 2023 at Caa2
(LGD5);
Outlook, revised to Stable from Positive
RATINGS RATIONALE
CPK's B3 Corporate Family Rating is constrained by its high
leverage, modest interest coverage, small scale and geographic
concentration relative to comparable casual dining concepts. The
company is further constrained by the challenging operating
environment which includes soft same store sales growth, with weak
traffic trends, and increasing labor and to a lesser extent
commodity costs which continue to pressure profitability margins.
The company benefits from a high level of brand awareness, various
strategic initiatives to enhance the customer experience, success
of its new format stores -- with average unit volumes higher than
its average restaurant -- and its good liquidity profile.
The stable outlook reflects Moody's expectations that CPK will
continue to maintain a good liquidity profile, with modest revenue
growth.
The ratings could be downgraded if debt/EBITDA increased to over
6.5x, EBIT/interest declined to less than 1.0x on a sustained
basis, or if same store sales remain weak. A deterioration in the
company's liquidity profile could also pressure the ratings.
The ratings could be upgraded if the company demonstrates positive
same store sales performance -- including improving traffic trends
-- with debt/EBITDA sustained below 5.5x and EBIT/interest expense
of about 1.5x. An upgrade would also require the company to
maintain its good liquidity profile.
California Pizza Kitchen, Inc. is an owner, operator and franchisor
with 272 casual dining restaurants in 31 states and 13 countries.
The company is majority owned by Golden Gate Capital and reported
revenue of approximately $617 million for the last twelve month
period ended July 2, 2017.
CALPINE CORP.: Moody's Revises Outlook to Neg & Affirms Ba3 CFR
---------------------------------------------------------------
Moody's Investors Service revised the rating outlook for Calpine
Corporation to negative from stable. At the same time, Moody's
affirmed Calpine's ratings, including its Ba3 corporate family
rating, Ba3-PD Probability of Default rating, Ba2 senior secured
rating and B2 senior unsecured rating. Moody's also revised the
rating outlook of subsidiary Calpine Construction Finance Company,
L.P. to negative and affirmed its Ba2 senior secured rating. The
ratings affirmation expresses Moody's views that Calpine's ratings
continue to be appropriately positioned at this time and not under
review for downgrade. Calpine's SGL-1 speculative grade liquidity
rating is unchanged. The rating actions follows the announcement
that Energy Capital Partners (ECP), and its private equity
partners, will acquire Calpine for $5.5 billion.
Outlook Actions:
Issuer: Calpine Construction Finance Company, L.P.
-- Outlook, Changed To Negative From Stable
Issuer: Calpine Corporation
-- Outlook, Changed To Negative From Stable
Affirmations:
Issuer: Calpine Construction Finance Company, L.P.
-- Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD3)
Issuer: Calpine Corporation
-- Probability of Default Rating, Affirmed Ba3-PD
-- Corporate Family Rating, Affirmed Ba3
-- Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD3)
-- Senior Secured Regular Bond/Debenture, Affirmed Ba2 (LGD3)
-- Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5)
RATINGS RATIONALE
"Calpine's negative outlook reflects Moody's views that ECP will
more aggressively look to extract value from Calpine's portfolio of
assets, primarily through asset divestitures," said Toby Shea, Vice
President -- Senior Credit Officer. "This approach will cause
business risk to increase because Calpine will have less scale and
diversity, and a less efficient integration strategy than what
Moody's had previously incorporated into Moody's credits
analysis."
The change in rating outlook to negative from stable reflects the
likelihood that Calpine's business risk will rise under ECP's
ownership. ECP's investment in Calpine will be made through one of
its investment vehicle funds, which means an exit strategy will be
likely over the next 3-5 years. Along these lines, ECP will look to
profit by selling and divesting portions of Calpine to other
investors at higher valuations.
Moreover, the management focus will likely shift to short-term
gains rather than long-term value. In contrast, Calpine's current
business risk profile is enhanced by having a large and diversified
portfolio, an integrated strategy that matches retail load with
physical generation, and a disciplined corporate culture focused on
long-term objectives.
Moody's expects ECP to maintain Calpine's existing financial policy
at the time of the transaction and, as a result, Calpine's
financial leverage will not increase initially but could weaken
over time. Calpine's debt reduction plan and financial policy were
established with an integrated strategy in mind and they will be
less meaningful over time as parts of the company are sold off.
Calpine's existing rating fundamentally reflects the inherent
volatility of the merchant power sector and its considerable debt
leverage. These challenges are partly offset by the company's $2.7
billion debt reduction plan and the cash flow resiliency resulting
from the company's large scale and geographic diversity, which
includes significant exposure to markets in the Northeast, Texas
and California.
Calpine's fleet of generation assets is comprised predominantly of
natural gas-fired facilities, which raises fuel concentration risk,
but in the current low natural gas price environment, having
exposure to gas as a fuel is highly favorable compared to other
fuels. Calpine's generation base also benefits from having high
fuel efficiency and low maintenance and environmental capital
expenditures, which lowers its business risk profile.
Liquidity
Calpine's speculative grade liquidity rating is unchanged at SGL-1.
The company continues to possess strong liquidity, with $294
million of unrestricted cash on hand as of June 30, 2017 and about
$1.3 billion of unused capacity on its corporate revolving credit
facility.
Calpine's upcoming maturities include a $393 million term loan due
in November of 2017 and another $389 million term loan due in
December 2019. Calpine plans to pay these debts off as they
mature.
The company generated about $736 million of adjusted free cash flow
before growth capital expenditures for the year 2016 and is
forecast to generate $710 to $860 million of adjusted free cash
flow in 2017.
Outlook
The negative outlook primarily reflects Moody's views that Calpine
will have a higher business risk should ECP proceed with the
anticipated strategy of breaking up the company and selling it off
in pieces. The outlook also reflects Moody's expectations that
Calpine will produce a ratio of CFO pre-working capital to debt in
the 10% range in 2017 and 2018.
Factors that Could Lead to an Upgrade
Moody's could change the outlook back to stable, possibly within
twelve to eighteen months after the closing of the transaction, if
Moody's observes that Calpine is willing to reduce its the
financial leverage sufficiently to offset the additional business
risk associated with its new strategy, and maintain a ratio of CFO
pre-working capital to debt in the low-teen's range.
Factors that Could Lead to a Downgrade
A downgrade is likely should the company fail to carry out its plan
to reduce debt by $2.7 billion. A downgrade can also occur should
the company materially change its financial policies, fail to
reduce enough debt to offset the loss of any cash flows or
diversity benefits associated with an asset sale.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
CALPINE CORP: Fitch Affirms B+ IDR Amid ECP Transaction
-------------------------------------------------------
Fitch Ratings has affirmed Calpine Corp.'s Long-Term Issuer Default
Rating (IDR) at 'B+' following the company's announcement that it
is being acquired by Energy Capital Partners (ECP), a private
equity group, along with a consortium of investors led by Access
Industries and Canada Pension Plan Investment Board. The Rating
Outlook is Stable. The affirmation and Stable Outlook are
underpinned by the commitment expressed by the new owners for
Calpine's current financial policy, including the $2.7 billion
deleveraging plan over 2017 - 2019.
Fitch has affirmed Calpine's first lien senior secured debt at
'BB+' with a Recovery Rating (RR) of 'RR1' (implying 91% - 100%
recovery). The first lien senior secured debt includes first lien
term loans, first lien senior secured notes and the revolving
credit facility, all of which are pari passu. Fitch has also
affirmed Calpine's senior unsecured debt at 'BB-/RR3'. The 'RR3'
rating implies a 51% - 70% recovery. In addition, Fitch has
affirmed Calpine Construction Finance Company, L.P.'s (CCFC)
Long-Term IDR at 'B+' and senior secured debt rating at 'BB+/RR1'.
There are no financial conditions associated with the transaction.
The buyer consortium has indicated its support for management's
$2.7 billion deleveraging plan, which supports Calpine's ratings
and avoids triggering the change of control put for its first lien
term loans, first lien senior secured notes and senior unsecured
notes. Both a change of control and a ratings downgrade is required
to trigger a put at 101. Under the bank agreement for the revolving
credit facility, a change of control constitutes an event of
default and would require Calpine to seek an amendment from the
lending group prior to the transaction close.
The investor consortium led by ECP will pay $15.25 per share in
cash or $5.6 billion, which represents approximately 51% premium to
the unaffected share price and implies a roughly 9.5x EV/EBITDA
multiple based on Fitch's 2017 estimates. There is a 45 day go-shop
period; however, Fitch considers it unlikely that a superior
proposal will emerge given the sales process was widely known. The
transaction is expected to close in the first quarter of 2018 after
the requisite approvals are obtained, which include shareholders'
approval, expiration or termination of any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act, and
regulatory approvals from the Federal Energy Regulatory Commission
(FERC), New York Public Service Commission, the Public Utility
Commission of Texas (PUCT) and other states, as necessary. ECP owns
a 15% stake in Dynegy Inc., which may require asset sales to
mitigate market power concerns.
KEY RATING DRIVERS
Ownership in Private Hands Appears Logical: The competitive markets
in the U.S. are undergoing a tumultuous structural change brought
on by the onslaught of renewables and the growth in supply of
efficient natural gas-fired plants due to extremely low natural gas
prices. In addition, state intervention to save struggling nuclear
plants via subsidies and any potential federal support to save coal
plants could further skew market price setting mechanisms. The
resulting weakness and volatility in publically traded shares of
independent power producers (IPP) has intensified the pressure on
managements to execute a longer-term strategy, thus, making private
ownership of IPPs a logical move, in Fitch's opinion. Each of the
competitive markets that Calpine operates in -- California, Texas
and the Northeast -- is facing its unique set of issues that has
the potential to dampen the generation margins for Calpine's fleet.
Fitch expects these pressures to intensify and uncertainty to
prevail until market constructs are modified to enable fair price
discovery.
No Change to Leverage Reduction Plan: The rating affirmation and
Stable Outlook reflect the new owners' commitment to reducing debt
by $2.7 billion over 2017 -2019, out of which $850 million will be
paid down in 2017. Fitch believes the debt reduction target is
achievable given the free cash flow (FCF) profile of the company
and the committed asset sale. At this time, it is not clear if
management intends to stick to their prior net Debt/EBITDA target
of 4.5x. Any material deviations from the current stated financial
policy in favour of shareholders could drive future negative rating
actions.
Favorable Portfolio Mix: Fitch views Calpine's portfolio mix as
relatively strong compared with other merchant generators. The
combination of efficient natural-gas fired combined cycle plants
and Geysers (geothermal) assets make Calpine's fleet cleaner than
its peers. Given the continued penetration of intermittent
renewable generation, Calpine's modern and flexible fleet is well
suited to provide grid reliability services. The fleet is well
diversified geographically. Fitch views Calpine's recent
acquisitions of retail electricity service providers as a
constructive development. Counter to the wholesale generation
business, retail business can aid stability to overall cash flows
and at the same time provide for more efficient hedging,
particularly during current times when liquidity in the competitive
markets has dwindled. Any material change in portfolio composition
with a view to maximize short-term gains for the new owners would
adversely affect Calpine's ratings.
Stable EBITDA Generation: Fitch expects Calpine to continue to
generate stable levels of EBITDA over the agency's forecast period
despite the headwinds the company faces in all the competitive
markets where it operates. Fitch expects Calpine to generate 2017
adjusted EBITDA within its stated guidance range of $1.8 billion to
$1.95 billion. Beyond 2017, Fitch expects adjusted EBITDA to
modestly increase reflecting hedges in place, contribution from the
York 2 project currently under construction and Fitch's
expectations of marginal improvement in natural gas prices. Fitch's
EBITDA forecasts incorporate natural gas price assumption of
$2.75/$3.00/$3.00 per Mcf in 2017/2018/2019, respectively. Fitch
views favourably Calpine's forward integration into retail
electricity business since it offers an effective sales channel and
a partial hedge for its wholesale generation. Retail margins in the
commercial and industrial segment have generally remained
range-bound during commodity cycles and residential retail margins
are usually counter-cyclical given the length and stickiness of the
customer contracts. In 2017, retail load is expected to comprise
approximately 70% of Calpine's wholesale generation.
Strong Free Cash Flow Generation: Fitch expects Calpine to generate
approximately $500 million of FCF in 2017; annual FCF could
increase to more than $800 million by 2019. These FCF estimates
incorporate both maintenance and growth capex based on announced
new project. Fitch expects the FCF to be directed toward
management's $2.7 billion debt reduction plan and, as a result,
Fitch has not assumed any further acquisitions or organic growth in
Moody's financial forecast.
Improvement in Credit Metrics: Fitch expects adjusted debt to
operating EBITDAR ratio to be 6.2x in 2017 and improve to 5.2x in
2019, aided by $2.7 billion debt reduction, EBITDA contribution
from the newly acquired retail platforms and York 2 generation
project coming on line. Funds from operations (FFO) adjusted
leverage is expected to improve to 6.3x in 2017 compared to last
year's 6.8x, and continue to improve to 5.3x in 2019. Coverage
ratios have deteriorated somewhat with the increase in debt to
finance retail platform acquisition, but are likely to improve
gradually to 3.0x.
Rating Linkages: There are strong contractual, operational and
management ties between Calpine and CCFC. CCFC sells a majority of
its power plant output under a long-term tolling arrangement with
Calpine's wholly owned marketing subsidiary. CCFC is also a party
to a master operation and maintenance agreement and a master
maintenance services agreement with another wholly owned Calpine
subsidiary. For these reasons, in accordance with its Parent and
Subsidiary Rating Linkage Criteria, Fitch assigns the same IDR to
CCFC as the parent even though its standalone credit profile is
modestly stronger.
RECOVERY ANALYSIS
The individual security ratings at Calpine are notched above or
below the IDR as a result of the relative recovery prospects in a
hypothetical default scenario. Fitch values the power generation
assets that guarantee the parent debt using a net present value
(NPV) analysis. A similar NPV analysis is used to value the
generation assets that reside in non-guarantor subs and the excess
equity value is added to the parent recovery prospects. The
generation asset NPVs vary significantly based on future gas price
assumptions and other variables, such as the discount rate and heat
rate forecasts in California, ERCOT and the Northeast. For the NPV
of generation assets used in Fitch's recovery analysis, Fitch uses
the plant valuation provided by its third-party power market
consultant, Wood Mackenzie as well as Fitch's own gas price deck
and other assumptions. The NPV analysis for Calpine's generation
portfolio yields approximately $915/kw for the geothermal assets
and an average of $475/kw for the natural gas generation assets.
DERIVATION SUMMARY
Calpine is well positioned with respect to TransAlta Corporation
(rated 'BBB-'/Stable Outlook) and FirstEnergy Solutions (FES; rated
'CC'), both of which own a sizeable proportion of coal assets and
are facing retirement decisions as environmental policies and low
market prices have left their coal fleet uneconomic. Calpine's
fleet is well diversified as compared to Exelon Generation Co. LLC
(Exgen; rated 'BBB'/Stable Outlook) and PSEG Power LLC (Power;
rated 'BBB+'/Negative Outlook), both of which have a dominant
exposure to the Midwest and Northeast markets respectively. Despite
these qualitative strengths, Calpine's leverage at 6.3x, as
measured by debt/EBITDAR, is significantly higher as compared to
Exgen (4.0x), PEG Power (3.5x) and Transalta (4.5x), which results
in a lower rating.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for Calpine
include:
-- Natural gas prices of $2.75/$3.00/$3.00/$3.25 per MMBtu for
2017/18/2019/2020, respectively;
-- Expected generation hedged per management estimates of 95%,
63% and 34% for balance of 2017, 2018 and 2019, respectively;
-- Hedged margin of $18/$20/$27 per MWh for balance of 2017, 2018
and 2019, respectively, per management assumptions.;
-- Capex of approximately $650 million in 2017, declining to $400
million - $450 million annually after the York plant
construction is complete;
-- Debt repayment of $2.7 billion during 2017 - 2019;
-- O&M expense escalating approximately 3% per annum;
-- No additional growth projects except those already announced.
RATING SENSITIVITIES
Positive: Positive rating actions for Calpine and CCFC appear
unlikely unless there is material and sustainable improvement in
Calpine's credit metrics compared with Fitch's current
expectations.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Material negative revision to management's prior stated 4.5
net debt/EBITDA target;
-- Sale of core assets with an aim to maximize shareholder
returns without commensurate reduction in debt;
-- Weaker power demand and/or higher-than-expected power supply
depressing wholesale power prices in its core regions;
-- Unfavorable changes in regulatory construct/rules in the
markets that Calpine operates in;
-- An aggressive growth strategy that diverts a significant
proportion of growth capex toward merchant assets and/or an
inability to renew expiring long-term contracts;
-- Inability to bring its FFO adjusted leverage to below 7.0x,
and total adjusted debt/EBITDAR below 6.0x; and
-- Any incremental leverage and/or deterioration in NPV of the
generation portfolio will lead to downward rating pressure on
the unsecured debt.
LIQUIDITY
Calpine's liquidity position is adequate. Calpine amended its
corporate revolving facility in December 2016, increasing the
capacity to $1.79 billion for the full term through June 27, 2020.
As of June 30, 2017, Calpine had approximately $294 million of cash
and cash equivalents (excluding restricted cash) at the corporate
level and approximately $1.3 billion of availability under the
corporate revolver.
FULL LIST OF RATING ACTIONS
Fitch affirms the following ratings with a Stable Outlook:
Calpine Corp.
-- Long-Term IDR at 'B+';
-- First lien term loans at 'BB+/RR1';
-- First lien senior secured notes at 'BB+/RR1';
-- Revolving credit facility at 'BB+/RR1';
-- Senior unsecured notes at 'BB-/RR3'.
Calpine Construction Finance Company, L.P.
-- Long-Term IDR at 'B+';
-- First lien term loans at 'BB+/RR1'.
CALPINE CORP: S&P Affirms 'B+' CCR Amid ECP Transaction
-------------------------------------------------------
S&P Global Ratings affirmed its 'B+' corporate credit rating on
Calpine Corp. on the announcement that it is being acquired by the
consortium of Energy Capital Partners (ECP) and a consortium of
investors in a take-private transaction.
S&P said "At the same time, we affirmed all issue-level ratings on
the company. The recovery ratings remain unchanged. Our affirmation
follows Calpine's announcement that it is being acquired by a fund
owned by Energy Capital Partners in a take-private transaction."
S&P said, "The stable outlook on Calpine reflects our view that the
company's business risk profile will remain fair over the next two
years with continuing growth in retail, concentration on operations
in core markets, and growth through new builds and expansions. In
our view, financial performance, while weak presently, will improve
modestly with downside risk in the next year significantly
contained by the high level of hedging currently in place. We
expect adjusted debt to EBITDA to exceed 6x during the next 12
months but moderate over the next 24 months.
"Factors that could lead to a downgrade are mostly financial since
we don't expect any adverse change in Calpine's business risk
profile. Factors that could lead to lower financial performance
would be a significant reduction in natural gas prices or market
heat rates, which we consider somewhat remote in most markets
except ERCOT, or an unexpected liquidity drain. More specifically,
a downgrade is likely if funds from operations to debt in the
forecast period fall below 4% or adjusted debt to EBITDA remains
above 7x for a prolonged period. We don't expect any material
liquidity drain based on Calpine's track record on liquidity and
sound management of it."
Developments that could support an improvement of Calpine's credit
profile would be a significant reduction in business risk or an
improvement in financial performance that reduces the financial
risk profile by one category. S&P said, "Our view of Calpine's
business risk profile could improve if we believed the potential
for cash flow volatility due to adverse market developments would
be lower than historic levels. Continued expansion into retail
operations that help to dampen EBITDA variation due to wholesale
market volatility is a possible path to a lower business risk
profile, but we don't think Calpine is focused on establishing a
much larger retail footprint at this time. More specifically, for
financial performance, we'd need to see FFO to debt above 12% and
debt to EBIDTA below 5x on a sustained basis. We think an upgrade
for either reason is remote right now."
CAPITAL REGION YMCA: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The Office of the U.S. Trustee on Aug. 22 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Capital Region Young Men's
Christian Association Inc.
About Capital Region YMCA
Capital Region Young Men's Christian Association, Inc., is a
non-profit organization serving communities in the State of
Florida. It offers day camps, aquatics, youth sports, health and
fitness, and community programs.
Based in Tallahassee, Florida, Capital Region Young Men's Christian
Association, Inc. dba Capital Region Family Health and Fitness
filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 17-40248) on
June 9, 2017. The Hon. Karen K. Specie presides over the case.
Thomas B. Woodward, Esq., at Thomas B. Woodward, 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 Aaron
Boyette, chief volunteer officer.
CENTURYLINK INC: Bank Debt Trades at 2% Off
-------------------------------------------
Participations in a syndicated loan under CenturyLink Inc is a
borrower traded in the secondary market at 97.94
cents-on-the-dollar during the week ended Friday, August 11, 2017,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.70 percentage points from the
previous week. CenturyLink Inc pays 275 basis points above LIBOR
to borrow under the $6.0 billion facility. The bank loan matures on
Jan. 18, 2025 and carries Moody's Ba3 rating and Standard & Poor's
BBB- rating. The loan is one of the biggest gainers and losers
among 247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended August 11.
CHARLES BRELAND: Trustee Selling Baldwin Property for $138K
-----------------------------------------------------------
A. Richard Maples, Jr., Chapter 11 Trustee for Charles R. Breland,
Jr., asks the U.S. Bankruptcy Court for the Southern District of
Alabama to authorize the sale of Osprey Kommerzielle, LLC's
interest, title, and interest in and to the real property located
in Section 21, Township 6 South, Range 2 East, Baldwin County,
Alabama, described as Lot 5, Southside Business Park, Baldwin
County, Alabama, to Medical Park Land, LLC for $138,000.
Before May 4, 2017, Breland wholly owned and controlled Osprey
Holdings, LLC, which holds a 100% membership interest in Opsrey K,
which holds record title to the Property.
On March 20, 2017, Osprey K entered into a Purchase Agreement with
the Buyer to sell the Property for $150,000. On April 4, 2017,
Breland filed a motion to approve the sale to the Buyer on the
terms set out in the March 20 purchase agreement. By Order entered
on May 16 2017, the Court approved the sale to the Buyer.
The Property to be sold was one of four lots in a lot tract to be
combined in a single parcel. The other lots were owned by two
other sellers and the Buyer had negotiated purchase agreements with
all. However, in preparing to close that sale, the Buyer
discovered that subterranean conditions of the soil under the
entire tract ware not as anticipated. Further testing then
revealed that the probable cost of remediation would average
$20,000 per lot. After several weeks of reviewing conditions,
obtaining estimates and negotiating a reduction in the sale prices
of all of the lots, the parties have agreed to a $12,000 per lot
reduction in the sale price.
The purchase price under the renegotiated agreement will be
$138,000 instead of $150,000 and the Trustee asks for approval to
consummate the sale at that reduced price with all other terms and
conditions of the Court's previous Order of May 16 2017, to remain
the same.
If approved by the Court, the sale of the Property will be free and
clear of all liens, claims, encumbrances, and interests including,
without limitation, the liens asserted by any lender, lienholder,
taxing authority, or other creditor or claimant.
Trustee asks the Court to waive the 10-day stay provisions of Fed.
R. Bankr. P. 6004(g) with regard to the sale of the Property.
Charles K. Breland, Jr., sought Chapter 11 protection (Bankr. S.D.
Ala. Case No. 16-02272) on July 8, 2016. The Debtor tapped Robert
M. Galloway, Esq., at Galloway Wettermark Everest Rutens, as
counsel. A. Richard Maples was appointed as the Chapter 11 Trustee
for the Debtor.
CHARLES BRELAND: Trustee Selling Personal Property for $8.5K
------------------------------------------------------------
A. Richard Maples, Jr., Chapter 11 Trustee for Charles R. Breland,
Jr., asks the U.S. Bankruptcy Court for the Southern District of
Alabama to authorize the sale of furniture and furnishings to
Southland Gulf, LLC, for $8,500.
On June 12, 2017, the Trustee filed a motion to authorize the sale
of real property located at 6301 Monroe Street in Daphne, Alabama,
which was occupied by the Estate as its general offices. On July
20, 2017, the Court entered a corrected order authorizing the sale
of the Debtor's office building to Southland Gulf.
As a consequence of the sale, the Debtor will be downsizing its
office of operations and will need considerably less furniture than
what was used at the previous location. The Trustee is informed
and believes that the purchase price negotiated for the furniture
is reasonable and the sale is in the best interest of the
bankruptcy estate.
Pending approval of sale, the Trustee has entered into a Bailment
Agreement with the Purchaser which requires the latter to insure
and return of property if the sale is not approved.
The Trustee asks the Court to hold a hearing on the Motion as soon
as practicable in accordance with the Bankruptcy Rules and enter an
order granting the Motion in its entirety.
A copy of the furniture and furnishings to be sold attached to the
Motion is available for free at:
http://bankrupt.com/misc/Charles_Breland_620_Sales.pdf
About Charles Breland
Charles K. Breland, Jr., sought Chapter 11 protection (Bankr. S.D.
Ala. Case No. 16-02272) on July 8, 2016. The Debtor tapped Robert
M. Galloway, Esq., at Galloway Wettermark Everest Rutens, as
counsel. A. Richard Maples was appointed as the Chapter 11 Trustee
for the Debtor.
The Trustee selected his own firm as counsel and can be reached
at:
A. Richard Maples, Jr.
MAPLES & FONTENOT, LLP
P.O. BOX 1281
Mobile, Alabama 36633
Tel: (251) 445-2082
E-mail: armaples@maplesfontenot.com
CHOCTAW GENERATION: Fitch Cuts Rating on 2013-1 Notes to B
----------------------------------------------------------
Fitch Ratings has taken the following rating action on Choctaw
Generation Limited Partnership, LLLP's (CGLP) $291 million of pari
passu lessor notes as follows:
-- $235 million ($212 million outstanding) series 1 lessor notes
due December 2031 affirmed at 'B'/Stable Outlook;
-- $59 million ($79 million outstanding) series 2 lessor notes
due December 2040 downgraded to 'CCC' from 'B-'.
The series 2 ratings were downgraded because of forecasted
substantial build-up of the deferred principal balance. The
project's high sensitivity to performance and/or economic stresses
highlights the difficulty to repay the series 2 debt by maturity.
KEY RATING DRIVERS
Summary: The ratings reflect the project's susceptibility to
underperformance and dependence on an improved operational profile
following recently completed facility modifications. Series 1 lacks
a debt service reserve to support potential shortfalls in operating
cash, which may occur under Fitch rating case conditions. Default
is a real possibility for the series 2 notes as deferred payments
extend beyond the power purchase agreement (PPA) term and into the
merchant period. The project's limited margin of safety is highly
sensitive to any deterioration in operations and/or financial
performance post-PPA, increasing the likelihood of default for the
series 2 notes.
Operations Yet to Achieve Expected Performance - Operation Risk:
Weaker
The owner-lessor, a subsidiary of Southern Company (Southern),
funded substantial modifications to improve plant performance. The
operator, also a Southern subsidiary, is considered strong but the
facility has not yet achieved expected operating performance
following completion of modifications.
Susceptible Mine-mouth Coal Supply - Supply Risk: Weaker
CGLP's mine-mouth location and a reputable fuel supplier reduce
supply risk. However, early termination or expiration of the supply
agreement in 2032 with potentially less favorable pricing could
lead to inadequate fuel cost recovery.
Revenue Contract with Strong Counterparty - Series 1 Revenue Risk:
Midrange
CGLP has a PPA with federally owned Tennessee Valley Authority
(TVA; 'AAA'/Stable Outlook) for the project's full capacity and
energy output through mid-2032. The series 1 notes mature four
months prior to PPA expiration.
Significant Merchant Exposure - Series 2 Revenue Risk: Weaker
Under a variety of sensitivity scenarios, a significant portion of
series 2 debt would remain unpaid prior to PPA expiration. There is
a high level of uncertainty regarding CGLP's ability to operate
economically in a fully merchant environment.
Debt Structure Lacks Typical Support Features - Debt Structure:
Weaker
Both series lack a dedicated debt service reserve, relying instead
on draws from other project accounts to fund series 1 payment
shortfalls. The ability to defer series 2 target interest and
principal payments introduces the risk of a high outstanding
balance to be repaid after the PPA expires resulting in exposure to
refinance risk.
Projected Financial Profile
Under Fitch's rating case operational assumptions, the series 1
debt service coverage ratio (DSCR) will be close to 1.0x for most
years from 2021 through maturity in 2031. In the absence of a debt
service reserve, the project will need to access funds from
subordinate accounts if available, or will require equity support
to avoid payment default. This profile suggests that material
default risk is present and repayment is highly sensitive to
moderate underperformance. The structural subordination on Series 2
notes yields weaker credit metrics with higher repayment risk.
Payment deferrals under rating case conditions cause the
outstanding balance to balloon to $125 million in 2031. Beyond
2031, there is a high degree of uncertainty regarding project
economics under fully merchant conditions and ability to fully
repay the series 2 debt by maturity.
Peer Group
Pennsylvania Economic Development Financing Authority (Colver;
'BB'/Stable Outlook) and CGLP face performance challenges typical
of coal facilities, although Colver has a longer history of
established operating performance with a strong cash balance to
support debt service under various stress scenarios through its
remaining debt term. CGLP's lower ratings are a result of the
project experiencing variability in plant performance, high
sensitivity to underperformance, and lack of liquidity reserves.
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead to
Negative Rating Action:
-- Persistent operating performance below rating-case
projections;
-- Substantial increase in the series 2 outstanding balance with
high risk of non-repayment under the rating case.
Future Developments That May, Individually or Collectively, Lead to
Positive Rating Action:
-- Persistent operations exceeding base case projections
-- Accelerated repayment of the series 2 notes with deferred
balances below base case projections.
CIG INVESTMENTS: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on August 21 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of CIG Investments, LLC.
About CIG Investments
Based in Tacoma, Washington, CIG Investments, LLC, filed a Chapter
11 petition (Bankr. W.D. Wash. Case No. 17-42424) on June 22, 2017,
listing under $1 million in both assets and liabilities. Rotstein
Law Office, P.C. represents the Debtor as bankruptcy counsel.
CJ MICHEL: Wants To Use Cash Collateral, Sell Accounts Receivable
-----------------------------------------------------------------
CJ Michel Industrial Services, LLC, seeks permission from the U.S.
Bankruptcy Court for the Eastern District of Kentucky to continue
the Debtor's sale of accounts receivable to Gulf Coast Bank and
Trust Company pursuant to receivables purchase agreement, and to
use cash collateral.
The Debtor proposes to use cash collateral for the interim period
effective through any final hearing date to meet its post-petition
obligations and to pay its expenses, general and administrative
operating expenses, and other necessary costs and expenses incurred
during the pendency of the bankruptcy case. The budget does
include the insider expense of the owner's draw
As adequate protection for any diminution in the value of the Gulf
Coast's interest in its collateral, pursuant to 11 U.S.C. Sections
361 and 363, the Debtor proposes that Gulf Coast receive a
replacement lien in postpetition collateral of the same type of
Budget generated by the Debtor's postpetition operations to the
extent of Debtor's use of Cash Collateral to the same extent,
validity, and priority as existed as of the Petition Date. The
Debtor is providing adequate protection to Gulf Coast because it is
the first lienholder in the cash collateral.
The other cash collateral creditors may claim an interest in the
cash collateral pursuant to various UCC-1s filed with the Kentucky
Secretary of State. However, no adequate protection is currently
being offered to these creditors because they appear to have no
value to attach to their asserted liens due to a secured senior
creditor or their liens are avoidable by the Debtor. The inclusion
of the other cash collateral creditors is not a stipulation that
these creditors haves valid claims or liens in the Debtor's
assets.
Pre-petition, the Debtor has in the ordinary course of its business
factored its accounts receivable with Gulf Coast pursuant to the
receivables purchase agreement. The Debtor's obligations in that
regard is secured by a security interest in the Debtor's assets,
including its accounts receivable as evidenced by a UCC-1 filing of
record with the Kentucky Secretary of State. Pre-petition, the
agreement worked as follows: the Debtor would sell or factor a
receivable to Gulf Coast and would be paid the net face amount less
the reserve amount relating to that factor or receivable
(capitalized terms are further defined in the agreement). The
Debtor believes the sale or factoring of its receivables is within
the ordinary course of business but files this motion for approval
out of an abundance of caution. The financial arrangements
proposed are the same as those in place prepetition.
The Debtor has maintained a factoring relationship to bridge the
gap in time between the payment to third parties and the receipt of
the income. The Debtor believes that factoring services is crucial
to its business operations and a necessary part of its business.
It is critical that the Debtor maintains (i) its ongoing business
operations without interruption, and (ii) the confidence of its
employees, vendors and customers. It is imperative to the Debtor's
reorganization efforts that it be able to pay for all post-petition
obligations in the ordinary course and pay any outstanding debts to
its employees, suppliers and customers. The inability of the
Debtor to accomplish these goals will cause irreparable harm to the
Debtor's estate.
A copy of the Debtor's request is available at:
http://bankrupt.com/misc/kyeb17-51611-12.pdf
About CJ Michel Industrial
Founded in 2011, CJ Michel Industrial Services, LLC, is a small
organization in the services industry whose principal assets are
located at 305 W. Main Street Danville, Kentucky 40422. It is a
small business debtor as defined in 11 U.S.C. Section 101(51D).
CJ Michel Industrial Services filed for Chapter 11 bankruptcy
protection (Bankr. E.D. Ky. Case No. 17-51611) on Aug. 10, 2017,
estimating its assets at up to $50,000 and liabilities at between
$1 million and $10 million. The petition was signed by Clarence J.
Michel, Jr., member.
Judge Gregory R. Schaaf presides over the case.
Jamie L. Harris, Esq., at Delcotto Law Group PLLC, serves as the
Debtor's bankruptcy counsel.
CONFIE SEGUROS: S&P Cuts CCR to B- on Tightening Covenant Cushion
-----------------------------------------------------------------
S&P Global Ratings said it lowered its long-term corporate credit
rating on Confie Seguros Holding II Co. and its parent Confie
Seguros Holding Co. (together, Confie) to 'B-' from 'B'. The
outlook is stable. S&P said, "At the same time, we lowered our
ratings on the company's $665 million first-lien senior secured
term B loans due December 2021 and $90 million revolving credit
facility due December 2021 to 'B' from 'B+'. The recovery rating on
these facilities is unchanged at '2(80%)', indicating our
expectation for meaningful recovery in the event of a payment
default. We also lowered our rating on the company's $262.5 million
second-lien term loan due June 2019 to 'CCC' from 'CCC+'. The
recovery rating is unchanged at '6(0%)', indicating our expectation
for negligible recovery in the event of payment default."
S&P said, "The downgrade reflects our expectation that the moderate
erosion of Confie's operating performance could cause its total net
leverage ratio covenant cushion to remain under 10% through 2018.
As of June 30, 2017, the cushion on this covenant was at 3%,
leaving Confie with very limited room to absorb any negative
volatility in earnings due to underperformance of the company's
acquired businesses or further accounting issues. Its first-lien
credit agreement covenant headroom also tightened, with
expectations for cushion to be at about 14% in 2017.
"The stable outlook on Confie reflects our expectation that
although covenant cushion levels will remain thin, they will be
modestly positive over the next year. In our view, we forecast
incremental strengthening of its cushion through the remainder of
2017 and into 2018. The outlook also incorporates our view that its
credit protection profile will continue to be weak with debt to
EBITDA of 6.5x-7x and interest coverage of 1.8x-2.1x in 2017-2018.
"We could lower the rating in the next 12 months if we believe
Confie could breach its debt covenant and there is no resolution
with lenders before a potential breach. This could result from any
modest decline in earnings due to strategy missteps, poorly
performing acquisitions, or declining sales due to rising premium
rates in the auto insurance market.
"We could raise our ratings in the next 12 months if earnings are
ahead of our expectations and the company's covenant cushion
strengthens to levels above 15% through 2018."
CONIFER VETERINARY: Case Summary & 8 Unsecured Creditors
--------------------------------------------------------
Debtor: Conifer Veterinary Hospital Inc.
10903 US Highway 285, Suite E105
Conifer, CO 80433
Type of Business: Privately-held Conifer Veterinary owns an animal
hospital at 10903 USHighway 285, Conifer, CO.
Case No.: 17-17810
Chapter 11 Petition Date: August 22, 2017
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Hon. Michael E. Romero
Debtor's Counsel: Kenneth J. Buechler, Esq.
BUECHLER & GARBER, LLC
999 18th St., Suite 1230 S
Denver, CO 80202
Tel: 720-381-0045
Fax: 720-381-0392
E-mail: ken@bandglawoffice.com
Total Assets: $1.41 million
Total Liabilities: $904,805
The petition was signed by David Palmini, president.
The Debtor's list of eight unsecured creditors is available for
free at http://bankrupt.com/misc/cob17-17810.pdf
CORNERSTONE APPAREL: Committee Taps Province as Financial Advisor
-----------------------------------------------------------------
The official committee of unsecured creditors of Cornerstone
Apparel, Inc. seeks approval from the U.S. Bankruptcy Court for the
Central District of California to hire a financial advisor.
The committee proposes to employ Province Inc. to, among other
things, represent it in negotiations with the Debtor; review
financial reports; and analyze the Debtor's cash flow projections
and capital structure.
The standard hourly rates charged by the firm are:
Principal $690 - $745
Managing Director $580 - $630
Senior Director $540 - $570
Director $470 - $530
Senior Associate $400 - $460
Associate $340 - $390
Analyst $270 - $330
Paraprofessional $150
The firm has agreed to cap its hourly rate at $400.
Edward Kim, senior director of Province, disclosed in a court
filing that he and his firm do not have any connection with the
Debtor or its creditors.
The firm can be reached through:
Edward Kim
Province Inc.
17000 Ventura Boulevard, Suite 300
Encino, CA 91316
Phone: 702-685-5555
Email: info@provincefirm.com
About Cornerstone Apparel Inc.
Cornerstone Apparel, Inc., which operates a chain of apparel stores
under the name Papaya Clothing, filed a Chapter 11 bankruptcy
petition (Bankr. C.D. Cal. Case No. 17-17292) on June 15, 2017. The
petition was signed by Tae Y. Yi, president. The Debtor estimated
assets of $1 million to $10 million and debt of $10 million to $50
million.
Papaya Clothing -- http://www.papayaclothing.com/-- caters to
teens, juniors and the "young at heart", and focuses on the 16 to
25 year old age group. Papaya is headquartered in Commerce,
California, and had a workforce of 1,300 employees at the time of
the bankruptcy filing. As of June 15, 2017, Papaya owned and
operated more than 80 retail stores located shopping centers and
malls throughout the United States.
Judge Vincent P. Zurzolo presides over the case. Levene, Neale,
Bender, Yoo & Brill L.L.P. represents the Debtor as bankruptcy
counsel. The Debtor hired the Law Offices of Steven C. Kim &
Associates as its special counsel, and Young-Woo Park as its
accountant.
On July 11, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. Lewis Brisbois Bisgaard
& Smith, LLP is the committee's bankruptcy counsel.
CRAPP FARMS: Hires CliftonLarsonAllen as Accountants
----------------------------------------------------
Crapp Farms Partnership sought and obtained authorization from the
U.S. Bankruptcy Court for the Western District of Wisconsin to
employ Craig W. Olsen and CliftonLarsonAllen LLP (CLA) as
accountants.
The professional services which Craig Olsen and CLA will provide to
the Debtor includes, but are not limited to, assisting the Debtor
in preparation and filing of payroll tax returns and income tax
returns; performing financial tax analysis; and performing other
accounting services for the Debtor as may be necessary in this
proceeding.
The Debtor will be charged on these hourly rates:
Craig W. Olsen CPA, Principal $305
Professionals at CLA $95-$425
CLA will also be reimbursed for reasonable out-of-pocket expenses
incurred.
As of the petition date, CLA was owed $1,975 by the Debtor for
services provided by CLA to the Debtor. According to the Olsen
Affidavit, CLA waives any claim against the Debtor for this
liability.
Craig W. Olsen, principal of CLA, 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.
CLA can be reached at:
Craig W. Olsen,
CLIFTONLARSONALLEN LLP
3402 Oakwood Mall Drive Suite 100
P.O. Box 810
Eau Claire, WI 54701-7672
Tel: (715) 852-1100
Fax: (715) 852-1101
E-mail: craig.olsen@cliftonlarsonallen.com
About Crapp Farms Partnership
Crapp Farms Partnership is a large farming operation that includes
growing and selling crops, raising livestock, and providing farm
trucking and excavating services to third-party customers. The
farming operation is located in Potosi, Wisconsin.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Wis. Case No. 17-11601) on May 3, 2017. The
petition was signed by Darell C. Crap, partner.
At the time of the filing, the Debtor estimated its assets and
debts at $10 million to $50 million.
The case is assigned to Judge Catherine J. Furay. The Debtor hired
Krekeler Strother, S.C. as Chapter 11 counsel.
J. David Krekeler, Esq.
Eliza M. Reyes, Esq.
Jennifer M. Schank, Esq.
Kristin J. Sederholm, Esq.
Krekeler Strother, S.C.
2901 West Beltline Highway, Suite 301
Madison, WI 53713
Tel: (608) 258-8555
Fax: (608) 258-8299
E-mail: jdkrek@ks-lawfirm.com
ereyes@ks-lawfirm.com
jschank@ks-lawfirm.com
ksederho@ks-lawfirm.com
On June 5, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. It is represented by:
Matthew E. McClintock, Esq.
Goldstein & McClintock, LLLP
111 W Washington St., Ste 1221
Chicago, IL 60602
Tel: (312) 337-7700
Fax: (312) 277-2305
E-mail: mattm@goldmclaw.com
CROSS-DOCK SOLUTIONS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Cross-Dock Solutions, LLC
180 Raritan Center
PO Box 558
Edison, NJ 08837
Type of Business: Cross-Dock Solutions is a full service third
party provider with climate controlled
warehousing and multiple compartmented less than
load (LTL) and truckload equipment that can
accommodate chilled and frozen products on the
same refrigerated trailer. The Company also
offers cross-dock capabilities, cold chain
storage and a warehouse management solution(WMS)
that can be customized to its customers'
business needs.
Web site: http://cross-docksolutions.com/
Chapter 11 Petition Date: August 22, 2017
Case No.: 17-26993
Court: United States Bankruptcy Court
District of New Jersey (Trenton)
Judge: Hon. Kathryn C. Ferguson
Debtor's Counsel: Patricia A. Staiano, Esq.
HELLRING, LINDEMAN, GOLDSTEIN & SIEGAL LLP
One Gateway Center, 8th Floor
Newark, NJ 07102
Tel: 973-621-9020
Fax: 973-621-7406
E-mail: pstaiano@hlgslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pedro Cardenas, managing member.
The Debtor did not file a list of its 20 largest unsecured
creditors on the Petition Date.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/njb17-26993.pdf
CRS REPROCESSING: Proposes $4-Mil. Financing From Triangle Capital
------------------------------------------------------------------
CRS Reprocessing, LLC, filed with the U.S. Bankruptcy Court for the
Western District of Kentuck to obtain from Triangle Capital
Corporation A senior secured, debtor-in-possession revolving loan
facility in the principal amount of $4 million on an interim basis
pending entry of a final DIP court order and to use cash
collateral.
Proceeds will be used on the Debtor's operating expenses and
capital expenditures in accordance with the budget to be prepared
by the Debtor and approved by the Lender.
The DIP Facility will mature on Jan. 31, 2018, and will have an
interest of 8% per annum on the principal amount outstanding from
time to time, calculated on an actual/360 basis, payable in arrears
on the last day of each month and on the Maturity Date. While an
event of default exists, the principal will accrue interest at a
rate that is 2% in excess of the above rate.
In any calendar week, the Debtor may borrow under the DIP Facility
an aggregate amount not exceeding the lesser of (i) 115% of the sum
of the amounts, if any, shown on the Budget line entitled
"Cumulative Cash Shortfall excluding DIP Borrowing" with respect to
the calendar week, all prior calendar weeks, and the immediately
following calendar week, or (ii) the aggregate principal amount, if
any, remaining under the DIP Facility; provided that upon written
request the Debtor may borrow additional amounts in the Lender's
sole discretion. Subject to the foregoing, principal amounts may
be borrowed, repaid, and reborrowed at any time prior to the
Maturity Date.
The Debt service, consisting of interest accruing on the DIP
Facility, will be paid when due.
In consideration of the Debtor's use of cash collateral or
conversion of other prepetition collateral into cash collateral,
the Lender, in its capacity as prepetition lender to the Debtor,
will be granted a post-petition replacement lien on the same assets
(now owned or hereafter acquired by the Debtor, whether through the
use of cash collateral or otherwise) to which its liens attached
prepetition, to the same extent and with the same validity and
priority as exists on the petition date, and will be granted the
liens and priority status to further secure the use of the cash
collateral.
Obligations of the Debtor under the DIP Facility shall be secured
at all times by a first priority, perfected priming lien upon all
real, personal, tangible, and intangible property of the Debtor's
bankruptcy estate.
No later than the earlier of (i) the expiration of any interim DIP
financing court order and (ii) 45 days after the entry of the
interim DIP financing court order, a final DIP court order will
have been entered and will be in full force and effect and will not
have been (x) vacated, stayed, or reversed or (y) amended or
modified except as agreed to in writing by the Lender in its sole
discretion. "Final DIP Order" means an order entered by the Court
on at least 14 days' notice as required by Bankruptcy Rule 4001, in
form and substance satisfactory to Lender in its sole discretion
approving the DIP Facility and the DIP Revolving Loan Documents.
The process for a sale of all or substantially all of the Debtor's
assets in accordance with Section 363 of the Bankruptcy Code will
be structured so that the sale is approved by the Court on or
before Oct. 9, 2017. The Lender and the Company agree that the
Lender shall act as a "stalking horse" for the sale, and all
timing, terms and conditions of the 363 sale motion, the sale
process, sale procedures and auction will be acceptable to the
Lender in its sole discretion, as more specifically described in
the Asset Purchase Agreement and other acquisition documents.
Usual and customary events of default for the Lender or DIP
financings, including but not limited to the appointment of a
trustee or examiner or the conversion of the case to Chapter 7, it
being understood that to the Lender's knowledge no Event of Default
under the DIP Facility will exist as of the closing date of the DIP
Facility.
A copy of the Debtor's request is available at:
http://bankrupt.com/misc/kywb17-32565-3.pdf
About CRS Reprocessing
Headquartered in Louisville, Kentucky, CRS Reprocessing, LLC, doing
business as CRS Reprocessing Services --
http://www.crs-reprocessing.com-- is a global partner in fluid
reprocessing management, offering people, technology and services
to efficiently handle industrial fluids for a variety of
industries. With 30 years of expertise and operations in the U.S.,
Europe and Asia, its custom-built, on-site reprocessing facilities
economically transform used fluids back to customer-specified
performance levels, allowing high-yield waste recovery and lower
unit costs.
CRS Reprocessing filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Ky. Case No. 17-32565) on Aug. 9, 2017, estimating its assets
at between $1 million and $10 million and liabilities at between
$50 million and $100 million. The petition was signed by Scott T.
Massie, chief executive officer.
Lea Pauley Goff, Esq., and Emily Pagorski, Esq., at Stoll Keenon
Ogden PLLC, serve as the Debtor's bankruptcy counsel.
DANA INC: S&P Retains 'BB' Unsecured Notes Rating Amid Refinancing
------------------------------------------------------------------
S&P Global Ratings said that its 'BB' issue-level rating and '4'
recovery rating on Dana Inc.'s senior unsecured notes remain
unchanged following the company's $100 million upsizing of its
revolving credit facility and issuance of a $275 million term loan
A due 2022 (both are unrated). S&P said, "The '4' recovery rating
indicates our expectation for average (30%-50%; rounded estimate:
30%) recovery in the event of a default. The company will use the
proceeds from the term loan to refinance its 5.375% senior notes
due 2021 when the call price steps down in September."
S&P said, "We will withdraw our ratings on the 5.375% senior notes
after they have been redeemed. The recovery waterfall below
reflects the presence of the 5.375% senior notes, but even after
the redemption, the rounded estimate on the recovery will stay at
30%. The refinancing will also slightly decrease Dana's debt
leverage.
"Despite the company's unpredictable end markets and growth
investments, we expect Dana to continue to generate solid earnings
and cash flow while maintaining stable credit measures. We believe
that the company can maintain credit metrics that are appropriate
for the current rating because of its neutral financial policy,
fair scope and scale, competitive market position, and operating
efficiency."
RECOVERY ANALYSIS
Key analytical factors
-- S&P has completed a review of the recovery analysis and our
recovery ratings remain unchanged.
-- S&P has valued the company on a going concern basis using a
5.0x multiple of our projected emergence EBITDA.
-- S&P estimates that, for the company to default, its EBITDA
would need to decline significantly, representing a material
deterioration from the current state of its business.
Simulated default assumptions
-- Simulated year of default: 2022
-- EBITDA at emergence: $325 million
-- EBITDA multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $1.367
billion
-- Valuation split (obligors/nonobligors): 30%/70%
-- Collateral value available to secured creditors: $977 million
-- Total value available to unsecured claims: $592 million
-- Senior unsecured debt and pari passu claims: $1.904 billion
--Recovery expectations: 30%-50% (rounded estimate: 30%)
Note: All debt amounts include six months of prepetition interest.
Collateral value equals asset pledge from obligors after priority
claims plus equity pledge from nonobligors after nonobligor debt.
RATINGS LIST
Dana Inc.
Corporate Credit Rating BB/Stable/--
Ratings Affirmed; Rounded Estimate Revised
To From
Dana Inc.
Senior Unsecured Notes BB BB
Recovery Rating 4(30%) 4(35%)
DARDEN-GREEN CO: Disclosures OK'd; Plan Hearing on Oct. 16
----------------------------------------------------------
The Hon. Tamara O. Mitchell of the U.S. Bankruptcy Court for the
Northern District of Alabama has approved Darden-Green Co., Inc.'s
amended disclosure statement filed on July 31, 2017, referring to
the Debtor's plan of reorganization.
A hearing on confirmation of the Plan will be held on Oct. 16,
2017, at 10:30 a.m. Objections to confirmation of the Plan must be
filed by Oct. 10, 2017.
Acceptances or rejections of the Plan of Reorganization must be
5:00 p.m. on Oct. 10, 2017.
As reported by The Troubled Company Reporter on Aug. 7, 2017, the
Debtor filed an amended plan, which proposes that Class 3 Secured
Claim of Hinkle Metal Supply receive a note in the amount of their
claim together with interest payable at the per annum rate of 5%,
in equal monthly installments over a period of 10 years. Their
judgment lien will remain in effect to secure the note issued by
the Debtor to the claimant.
About Darden-Green
Darden-Green Co., Inc., based in Birmingham, Alabama, filed a
Chapter 11 petition (Bankr. N.D. Ala. Case No. 16-01957) on May 12,
2016. The petition was signed by Bobbie Green, general manager.
The Hon. Tamara O Mitchell presides over the case. Thomas E.
Reynolds, Esq., at Reynolds Legal Solutions, LLC, serves as Chapter
11 counsel. In its petition, the Debtor listed total assets of
$2.13 million and total liabilities of $2.31 million.
DESTINATION MATERNITY: Hires Berkeley Research Group as Adviser
---------------------------------------------------------------
Lillian Rizzo, writing for The Wall Street Journal Pro Bankruptcy,
reported that Destination Maternity Corp. has hired consulting and
advisor firm, Berkeley Research Group LLC, to assess its options in
the troubled retail environment, according to people familiar with
the matter.
According to the Journal, Berkeley Research Group is a consulting
and advisory firm known for its work with other retailers. A
Destination Maternity spokesman told the Journal the company has
retained BRG to improve the retailer's efficiency "in particular
providing advice to us on how to optimize our expense structure."
While BRG advises retailers on management, technology and other
strategic initiatives, it has also worked with retailers that have
recently sought bankruptcy protection, including rue21 Inc.,
American Apparel Inc., hhgregg Inc. and Wet Seal LLC, the Journal
said.
"We have not engaged BRG to explore any in-court or out-of-court
restructuring," the spokesman told the Journal.
Publicly traded Destination Maternity's cost-cutting efforts could
include re-evaluating its real estate portfolio, store-cost
structures and remodeling, among other options, the Journal
related, citing one of the people as saying.
Like other mall-based retailers, Destination Maternity is facing
industrywide headwinds thanks to the proliferation of online
shopping, the decrease in mall foot traffic and a surfeit of
stores, the Journal noted.
"Although we have made some progress, we have experienced
challenges in implementing our turnaround given the over all
weakness in the women's specialty apparel retail space, declining
mall-based traffic, and other factors," the company disclosed in a
public filing in early June, the report related. Those challenges
have slowed the progress of the turnaround, which has resulted in a
decline in net sales and under performance with respect to 2017
expectations, the report further related.
EARTHONE CIRCUIT: Committee Hires Rudd Law as Special Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Earthone Circuit
Technologies Corporation seeks authorization from the U.S.
Bankruptcy Court for the Central District of California to retain
The Rudd Law Firm, APC, as special litigation counsel to the
Committee.
The Committee requires Rudd Law to:
-- represent the Committee concerning any litigation claims
held by the estate, including, but not limited to,
potential D&O claims and insurance claims; and
-- assist the Committee's general counsel, Goe & Forsythe,
LLP, in investigating and litigating the validity of
secured claims against the estate.
Rudd Law will be paid at these hourly rates:
Partner $625
Of Counsel $300-$425
Associates $300-$425
Paralegal $150
Rudd Law will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Christopher L. Rudd, a partner of The Rudd Law Firm, APC, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and (a) is not
creditors, equity security holders or insiders of the Debtor; (b)
has not been, within two years before the date of the filing of the
Debtor' chapter 11 petition, directors, officers or employees of
the Debtor; and (c) does not have an interest materially adverse to
the interest of the estate or of any class of creditors or equity
security holders, by reason of any direct or indirect relationship
to, connection with, or interest in, the Debtor, or for any other
reason.
Rudd Law can be reached at:
Christopher L. Rudd, Esq.
THE RUDD LAW FIRM, APC
15233 Ventura Boulevard, Suite 320
Sherman Oaks, CA 91403
Tel: (310) 457-4072
Fax: (310) 359-0258
About Earthone Circuit
Technologies Corporation
Based in Vetura, California, EarthOne Circuit Technologies
Corporation, which does business as eSurface, is the creator and
licensor of the eSurface proprietary patented technology for
applied conductive materials.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Calif. Case No. 17-12521) on June 21, 2017. The
petition was signed by Doug Molyneux, secretary.
At the time of the filing, the Debtor disclosed that it had
estimated assets and liabilities of $1 million to $10 million.
The case is assigned to Judge Catherine E. Bauer. Winthrop Couchot
Golubow Hollander, LLP represents the Debtor as bankruptcy
counsel.
On July 7, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The Committee hired Goe
& Forsythe, LLP, as counsel, and The Rudd Law Firm, APC, as special
litigation counsel.
EAST JEFFERSON GENERAL: Moody's Cuts Rating on $152MM Bonds to B3
-----------------------------------------------------------------
Moody's Investors Service downgrades East Jefferson General
Hospital's (LA) (EJGH) debt rating to B3 from Ba3. The action
affects $152 million of outstanding rated revenue bonds issued by
the Jefferson Parish Hospital Service District No. 2. The rating
outlook remains negative.
The B3 reflects the significant negative variance to budget in FY
2016, which continues at an accelerated rate through the first half
of FY 2017. Absolute and relative liquidity levels continue to
decline with an expectation of further cash burn by year end. EJGH
operates in a consolidated and highly competitive market in metro
New Orleans. The competitive landscape and the after effects of
prior failed merger discussions are evidenced in annual volume
declines. These factors create steep challenges to a financial
turnaround.
Based on Moody's estimate of the current run rate, and without the
benefit of any asset sales, Moody's expects there is a high
likelihood of a covenant violation with EJGH falling below its
required debt service covenant of 1.0 times measured at fiscal year
end (December 31, 2017), which would trigger an event of default. A
lower rating is precluded at this time as EJGH maintains an all
fixed rate debt structure, a very conservative investment
allocation and a fully funded debt service reserve fund.
Rating Outlook
The negative outlook reflects Moody's expected deterioration in
financial performance in the near term, resulting in an elevated
risk of a rate covenant breach which will trigger an event of
default and possible debt acceleration. The inability to stabilize
performance and a continued decline in liquidity, or filing for
creditor relief, will result in downgrade pressure.
Factors that Could Lead to an Upgrade
Material and durable improvement in financial performance
Growth in liquidity
Stabilization of volumes
Factors that Could Lead to a Downgrade
Financial stress that leads to a rate- or liquidity- covenant
violation; continued cash burn
Bankruptcy filing
Legal Security. Bonds are secured by a revenue pledge of the
restricted group.
Use of Proceed. Not applicable.
Obligor Profile
EJGH is a 420-bed acute care hospital located in Metairie in
Jefferson Parish, LA on the east bank in metro New Orleans. The
hospital is a component unit of the Parrish and is reported in the
financials of the Parish. Affiliates of the hospital include: EJ
Physician group, EJ Surgical Center, Associated hospital services,
EJ Radiation Oncology, Gulf South Quality Network, EJ Medical
Alliance, EJGH physician orthopedic and general surgery
co-management companies and a PET scan facility.
Methodology
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in November 2015.
ERIE STREET: Adam Berman Seeks Appointment of Equity Committee
--------------------------------------------------------------
Adam Berman, together with the Berman Family Trust, filed with the
U.S. Bankruptcy Court for the Northern District of Illinois a
motion seeking the appointment of an official committee of equity
holders.
In his motion, Mr. Berman proposed the appointment of a committee
to represent equity holders in the Chapter 11 cases of Erie Street
Investors, LLC, and its affiliates except in George Street
Investors LLC's case.
"The Debtors' members or equity holders are not adequately
represented by the stakeholders already at the table," Mr. Berman
said.
"The Debtors' members have been misled by Arthur Holmer through a
plan solicitation process replete with misinformation,
misrepresentations and a dire lack of adequate disclosure," Mr.
Berman said.
Mr. Berman is represented by:
Nancy A. Peterman, Esq.
Greenberg Traurig, LLP
77 West Wacker Drive, Suite 3100
Chicago, IL 60601
Phone: (312) 456-8400
Fax: (312) 456-8435
Email: petermann@gtlaw.com
About Erie Street Investors, LLC
Erie Street Investors, LLC, and its affiliates filed separate
Chapter 11 bankruptcy petitions (Bankr. N.D. Ill. Lead Case No.
17-10554) on April 3, 2017. The affiliates are LaSalle Investors,
LLC, WSC Parking Fund I, George Street Investors, LLC, and
Sheffield Avenue Investors, LLC. Arthur Holmer, managing member of
Weiland Ventures, LLC, signed the petitions.
Erie Street Investors and LaSalle Investors each disclosed between
$10 million and $50 million in both assets and liabilities. WSC
Parking Fund listed between $1 million and $10 million in both
assets and liabilities.
The cases are assigned to Judge Deborah L. Thorne. The Debtors are
represented by Crane, Heyman, Simon, Welch & Clar.
Frances Gecker was appointed as Chapter 11 trustee for the Debtors
on May 16, 2017. The trustee hired Ascend Property Management LLC
as the Debtors' property manager; and Jones Lang LaSalle Americas
(Illinois), L.P., as real estate broker.
On June 21, 2017, the Debtors filed a Chapter 11 plan of
reorganization and disclosure statement.
FANSTEEL INC: Wants to Use Cash Collateral Until Sept. 22
---------------------------------------------------------
Fansteel, Inc., Wellman Dynamics Corporation, and Wellman Dynamics
Machining & Assembly, Inc., each seek permission from the U.S.
Bankruptcy Court for the Southern District of Iowa to use cash
collateral for the period starting on Aug. 26, 2017, through and
including Sept. 22, 2017.
On July 11, 2017, the Debtors filed a motion for continued use of
cash collateral and the Court entered an order on July 25, 2017,
authorizing the Debtors to continue the use of cash collateral
through Aug. 25, 2017, pursuant to and upon the same terms as those
previously agreed to by TCTM Financial FS and the Committee of
Unsecured Creditors in the stipulation and consent court order at
the Debtors and approved by the Court.
As of Aug. 10, 2017, the Debtors' consolidated cash balance was
approximately $1,267,000. As of Aug. 10, 2017, the Debtors are
overdue on adequate protection payments owed to TCTM, totaling
approximately $359,351, comprising TCTM's June and July 2017 unpaid
interest payments under that certain Loan and Security Agreement,
dated as of July 15, 2005, by and among the Debtors and TCTM (as
successor by assignment to Fifth Third Bank), as well as working
capital collections from the sale of American Sintered
Technologies. In addition, as of Aug. 10, 2017, the Court has
entered orders approving the payment of approximately $4,168,498 of
total professional fees incurred in connection with the Chapter 11
cases through July 31, 2017, of which the Debtors have only paid
$2,411,436, leaving $1,757,062 of outstanding and currently owing
professional fees.
If the Debtors had to pay today all of the deferred and unpaid
adequate protection payments owed to TCTM and the total of all
professional fees approved by the Court, the Debtors would have a
negative cash balance in their consolidated bank accounts, thus
potentially imperiling the Debtors' ability to continue their
current operations. The Debtors will realistically only be able to
satisfy these obligations upon their exit from these chapter 11
proceedings.
Despite the overdue adequate protection and professional fees, TCTM
has nevertheless agreed to consensually continue the Debtors' use
of cash collateral to support the Debtors' reorganization efforts.
The Debtors believe that time is of the essence in pursuing a
resolution of their respective Chapter 11 cases through the
proposed sale process.
The Debtors are required to make adequate protection payments in an
amount equal to the non-default interest rate under the loan
agreement. With the consent of TCTM, the Debtor has deferred
making those payments of $132,425 per month for the months of June,
July and August 2017. The Debtor seeks deferral of the adequate
protection payment for September 2017.
The Debtors are required to pay all court-approved fees and
expenses incurred by TCTM. The Debtor has deferred timely payment
of approximately $1,311,639.17 of court-approved fees incurred by
TCTM. The Debtor seeks to defer payment of the court-approved fees
until Sept. 22, 2017.
A copy of Fansteel's motion, which is identical to the motions of
Wellman Dynamics Corporation and Wellman Dynamics Machining, is
available at http://bankrupt.com/misc/iasb16-01823-1069.pdf
About Fansteel and Affiliates
Headquartered in Creston, Iowa, Fansteel, Inc., manufactures
aluminum and magnesium castings for the aerospace and defense
industries. Fansteel has four locations in the USA and one in
Mexico and has a workforce of more than 600 employees. Fansteel
generated $87.4 million in revenue in 2015 on a consolidated basis.
Wellman Dynamics Corporation contributed 67% of Fansteel's sales.
The rest of the sales are generated from Intercast, a division of
Fansteel, and other non-debtor subsidiaries.
Fansteel, Wellman Dynamics, and Wellman Dynamics Machinery &
Assembly, Inc. filed Chapter 11 petitions (Bankr. S.D. Iowa Case
Nos. 16-01823, 16-01825 and 16-01827) on Sept. 13, 2016. The
petitions were signed by Jim Mahoney, CEO. The cases are assigned
to Judge Anita L. Shodeen. The Debtors disclosed total assets of
$32.9 million and total debt of $41.97 million.
The companies tapped Jeffrey D. Goetz, Esq., and Krystal R.
Mikkilineni, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C.,
as counsel; RSM US LLP as tax advisor; Jeffrey Sands and Dorset
Partners, LLC as business broker; and Mark J. Steger, Esq., at the
Clark Hill Law Firm, as Environmental Counsel.
The companies filed motions to jointly administer the cases
pursuant to Bankruptcy Rule 1015(b), and the court ordered the
joint administration on Oct. 17, 2016. The court subsequently
entered an order on May 24, 2017, vacating its Oct. 17 order and
discontinuing the joint administration of the cases under the lead
case of Fansteel.
On Sept. 23, 2016, the U.S. Trustee for Region 12 appointed an
official committee of unsecured creditors in Fansteel's bankruptcy
case. The committee retained Morris Anderson & Associates, Ltd.,
as financial advisor; and Archer & Greiner, P.C. and Nyemaster
Goode, P.C., as counsel.
In March 2017, the U.S. trustee announced that the unsecured
creditors' committee of Fansteel would no longer serve as the
official committee in its case and that it would be reconstituted
as the official committee of unsecured creditors in the Chapter 11
cases of Wellman Dynamics and Wellman Dynamics Machinery. As of
March 22, 2017, a new creditors' committee has not yet been
appointed in Fansteel's bankruptcy case.
Wellman Dynamics filed a Chapter 11 plan of reorganization and
disclosure statement on January 11, 2017. On May 8, 2017, the
creditors' committee of Wellman Dynamics filed a rival Chapter 11
plan of liquidation for the company.
FARMERS GRAIN: Rabo Asks Court to End Cash Collateral Use
---------------------------------------------------------
Rabo Agrifinance LLC, Farmers Grain, LLC's largest creditor, asks
the U.S. Bankruptcy Court for the District of Idaho to terminate
the Debtor's authority to use cash collateral.
As reported by the Troubled Company Reporter on July 7, 2017, the
Court authorized the Debtor to continue using cash collateral from
June 12, 2017, through and including Oct. 31, 2017.
Rabo has a lien on substantially all of the Debtor's personal
property assets and, in particular, on its cash, its accounts, and
its farm products and grain inventory (and all proceeds thereof),
all of which constitute cash collateral. The Debtor has been
spending and using Rabo's cash collateral in this case pursuant to
the terms of the final cash collateral court order and the two
interim orders entered prior thereto. All of those prior orders
outline the terms and conditions under which the Debtor's authority
to use cash collateral will continue. Moreover, all of those court
orders provide that nothing set forth therein "shall prevent or
prejudice a creditor from requesting the Court, on an emergency
basis or otherwise, to terminate the use of cash collateral . . .
or from seeking any other relief including, without limitation,
stay relief or dismissal or conversion of this case."
Rabo asks the Court to terminate the use of cash collateral that
was authorized by the final cash collateral court order, because
Rabo's interest in cash collateral is not adequately protected, and
the Debtor has failed to comply with various requirements of the
Court's orders regarding use of cash collateral.
The Court has ordered the Debtor to do certain things to try and
provide adequate protection to Rabo in return for its use of cash
collateral. Among other things, the Court has ordered that the
Debtor make monthly payments to Rabo of no less than $100,000 per
month by the first day of each month, and that it also provide Rabo
(and other parties in interest) certain reports and information,
but the Debtor has not done these things, Rabo complains. Rabo
informs the Court that it has not received its $100,000 Adequate
Protection Payment for August 2017, even though the payment was due
no later than Aug. 1, 2017.
Rabo claims that the Debtor has not provided Rabo with any
borrowing base certificates or a number of the reports and
financial disclosures required by paragraphs 7(E) of the First
Interim Order, 6(E) of the second interim court order, and 5(F) of
the final cash collateral court order. The Debtor also has failed
to comply with paragraph 5(f) of the final cash collateral court
order, which requires that all MORs filed by the Debtor must
include "a report showing the previous-month's grain purchases,
indicating whether the previous-month grant purchases were paid-for
during the previous month, or whether the grain producer elected to
receive payment later.
In the case of an election to receive payment later, the Debtor
will indicate whether, and to what extent, that grain producer
waived any lien claim it may have in the unpaid-for grain. In the
event the grain producer did not waive any lien claim, the Debtor
shall indicate the type and quantity of the grain purchased, the
estimated value of the grain, and where and how it is segregated
from the Debtor's paid-for grain." None of the MORs filed by the
Debtor in this case to date provide this information to the Court
or creditors. The Debtor also has failed to use and spend cash
collateral in conformance with the terms of the approved budget.
Paragraph 4 of the final cash collateral court order expressly
provides that "Debtor may exceed the monthly amount for a line item
expense by not more than 10% so long as the total expenditures for
all budgeted line items do not exceed the total budgeted expense
set forth in the Budget."
Rabo's motion is available at:
http://bankrupt.com/misc/idb17-00450-80.pdf
Rabo is represented by:
Ron Kerl, Esq.
COOPER & LARSEN, CHARTERED
151 North Third Avenue, Suite 210
P.O. Box 4229
Pocatello, ID 83205-4229
Tel: (208) 235-1145
Fax: (208) 235-1182
E-mail: ron@cooper-larsen.com
-- and --
Michael R. Johnson, Esq. (Pro Hac Vice)
RAY QUINNEY & NEBEKER P.C.
36 South State Street, Suite 1400
Salt Lake City, Utah 84111
Tel: (801) 532-1500
Fax: (801) 532-7543
E-mail: mjohnson@rqn.com
About Farmers Grain LLC
Based in Nyssa, Oregon, Farmers Grain LLC buys and sells grain,
dry, soya, and inedible beans. Farmers Grain holds a fee simple
interest in a real property located at 110, 114, & 255 King Ave. in
Nyssa, including all structures and other fixtures valued at $4.13
million.
Farmers Grain sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Idaho Case No. 17-00450) on April 18, 2017. The
petition was signed by Galen Jantz, manager. At the time of the
filing, the Debtor disclosed $14.10 million in assets and $15.55
million in liabilities.
The case is assigned to Judge Terry L. Myers.
Angstman Johnson is serving as counsel to the Debtor, with the
engagement led by Matthew T. Christensen.
FAUSER OIL: Exclusive Plan Filing Deadline Moved to Oct. 23
-----------------------------------------------------------
The Hon. Thad J. Collins of the U.S. Bankruptcy Court for the
Northern District of Iowa has extended Fauser Oil Co., Inc. and its
affiliates' exclusivity periods for filing a Chapter 11 plan of
reorganization until Oct. 23, 2017, and for soliciting acceptances
on the plan until Dec. 21, 2017.
Judge Collins also held that if the Debtor files a second motion to
extend the deadlines by Oct. 2, 2017, then the deadlines will
automatically be extended until the Court acts on the second
motion, without the necessity for the entry of a bridge order.
As reported by the Troubled Company Reporter on Aug. 7, 2017, the
Debtors asked the Court to extend by approximately three months to:
(i) Nov. 30, 2017, from Aug. 22, 2017, the deadline to file a
Chapter 11 plan, and (ii) Jan. 29, 2017, from Aug. 22, 2017, the
deadline to solicit acceptances of the plan.
About Fauser Oil Co., Inc.
Elgin, Iowa-based Fauser Energy Resources, Inc. --
http://www.fauserenergy.com/-- supplies and delivers propane and
fuel products to residential and commercial customers throughout
the Midwest region of the U.S.
Fauser Oil Co. Inc., Fauser Energy Resources Inc., Fauser Transport
Inc. and Ron's L.P. Gas Service LLC sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Iowa Lead Case No. 17-00466)
on April 24, 2017. Paul Fauser, president, signed the petition.
At the time of the filing, Fauser Energy estimated its assets and
debts at $1 million to $10 million.
Judge Thad J. Collins presides over the case.
Sweet DeMarb LLC serves as counsel to the Debtors, with the
engagement led by James D. Sweet, Esq., and Rebecca R. DeMarb, Esq.
Yara El-Farhan Halloush, Esq., of Halloush Law Office, P.C., is
the Debtors' local co-counsel. Ravinia Capital LLC is the Debtor's
investment banker and financial advisor
On May 12, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors for Fauser Oil. No
creditors' committee has been appointed for the other Debtors. The
Fauser Oil Committee retained Pepper Hamilton as legal counsel.
The Committee hired Cutler Law Firm, P.C., as associate counsel.
FELCOR LODGING: S&P Assigns 'B+' Rating on RLJ Merger Approval
--------------------------------------------------------------
U.S. lodging real estate investment trust (REIT) RLJ Lodging Trust
Inc. announced on August 15 that its proposed acquisition of FelCor
Lodging Trust Inc. (FelCor Inc.) was approved by both companies'
shareholders.
Accordingly, S&P Global Ratings assigned its 'B+' corporate credit
rating to Irving, Texas-based FelCor Lodging L.P. The outlook is
stable.
S&P said, "At the same time, we raised our issue-level rating on
the company's $525 million senior secured notes due 2023 to 'BB-'
from 'B+'. The recovery rating remains '2', indicating our
expectation for substantial (70%-90%; rounded estimate: 80%)
recovery in a default scenario. We also raised our issue-level
rating on the company's $475 million senior unsecured notes due
2025 to 'B+' from 'B'. The recovery rating remains '3', indicating
our expectation for meaningful (50%-70%; rounded estimate: 65%)
recovery in the event of default. The rating upgrades are based on
the higher corporate credit rating at FelCor Lodging LP.
"The issue-level ratings on the senior secured and senior unsecured
notes will remain on CreditWatch with positive implications until
the transaction closes. We expect to raise our issue-level ratings
and recovery ratings on both sets of notes by one additional notch
upon the close of the transaction, since it is our understanding
that RLJ intends to repay FelCor's line of credit and unencumber
the assets that secure it, which would improve recovery prospects
for noteholders. We would raise the issue-level rating on the
senior secured notes to 'BB', with a '1' recovery rating, and raise
the issue-level rating on the senior unsecured notes to 'BB-', with
a '2' recovery rating.
"The stable outlook reflects our expectation for lease-adjusted
debt to EBITDA at FelCor in the mid-6x area in 2017, and in the
high-5x area in 2018. Our outlook incorporates the expected sale of
the Knickerbocker hotel in 2018.
"We could lower the rating one or more notches if we believe FelCor
would sustain adjusted debt to EBITDA above the mid-7x area, or
EBITDA interest coverage below the mid-1x area, and if we believe
that FelCor is no longer strategically important to RLJ. This would
likely result from a deterioration in operating performance at
FelCor that diverges from that of RLJ, such that we no longer
believe RLJ would support FelCor. Additionally, we could lower the
rating if we lower our assessment of RLJ's group credit profile,
which could happen if our measure of adjusted leverage at RLJ is
sustained above 5x.
"We could raise the rating one notch if we believe FelCor will
sustain our measure of lease-adjusted debt to EBITDA below 5x, and
FFO to debt above 12%, incorporating any future leveraging
acquisitions or other transactions, and EBITDA volatility over the
lodging cycle in FelCor's owned hotel portfolio. We could also
consider raising the rating on FelCor if we were to raise our
assessment of RLJ's group credit profile, which could happen if we
believe RLJ will sustain consolidated preferred stock-adjusted debt
to EBITDA below 4x. It could also happen if strong performance at
RLJ's hotels and the company's successful integration of FelCor
improves our view of the business risk at the group."
FINJAN HOLDINGS: Sues Bitdefender for Patent Infringement
---------------------------------------------------------
Finjan Holdings, Inc., has filed a patent infringement lawsuit
against Bitdefender, Inc., a Florida Company, and Bitdefender
S.R.L., a Romanian corporation, in the U.S. Northern District of
California.
Finjan filed a Complaint (Case No. 5:17-cv-04790), on Aug. 16,
2017, and alleges that Bitdefender's products and services infringe
four U.S. Finjan patents. Specifically, Finjan is asserting
infringement of U.S. Patent Nos. 6,804,780; 7,930,299; 8,141,154;
and 8,677,494. Finjan is seeking, among other things, a jury
trial, past damages not less than a reasonable royalty, injunctive
relief, enhanced damages for willful infringement, and reasonable
attorneys' fees and costs.
Finjan has pending infringement lawsuits and appeals against
FireEye, Inc., Symantec Corp., Palo Alto Networks, Blue Coat
Systems, Inc., ESET and its affiliates, Cisco Systems, Inc., and
SonicWall, Inc. relating to, collectively, more than 20 patents in
the Finjan portfolio. The court dockets for the foregoing cases
are publicly available on the Public Access to Court Electronic
Records (PACER) website, www.pacer.gov, which is operated by the
Administrative Office of the U.S. Courts.
About Finjan
Established 20 years ago, Finjan Holdings, Inc. (NASDAQ: FNJN)
formerly Converted Organics Inc. -- http://www.finjan.com/-- is a
globally recognized leader in cybersecurity. Finjan's inventions
are embedded within a strong portfolio of patents focusing on
software and hardware technologies capable of proactively detecting
previously unknown and emerging threats on a real-time,
behavior-based basis.
Finjan reported a net loss attributable to common stockholders of
$6.43 million for the year ended Dec. 31, 2016, a net loss
attributable to common stockholders of $12.60 million for the year
ended Dec. 31, 2015, and a net loss of $10.47 million for the year
ended Dec. 31, 2014.
As of March 31, 2017, Finjan had $29.85 million in total assets,
$6.54 million in total liabilities, $6.26 million in series A
preferred stock, and $17.04 million in total stockholders' equity.
FIRST CASH: S&P Affirms 'BB' ICR on Merger Integration
------------------------------------------------------
First Cash Financial Services Inc. continues to integrate its
acquisition of Cash America International Inc., which doubled the
size of the company while broadening its geographic footprint.
First Cash Financial Services Inc.'s leverage is 2.0x debt to
adjusted EBITDA as of June 2017.
S&P Global Ratings affirmed its 'BB' issuer credit rating on First
Cash Financial Services Inc. The outlook remains stable. S&P said,
"At the same time, we also affirmed our rating on the company's
debt at 'BB'. The recovery rating on the debt remains '3',
reflecting our expectation of meaningful recovery (55%-60%) in a
simulated default scenario."
The stable outlook reflects S&P Global Ratings' expectation that
over the next 12 months, the company's debt to EBITDA will remain
between 1.5x-2.5x. S&P said, "We expect First Cash to deploy the
majority of its cash flows to fund further expansion opportunities
and share repurchases, as opposed to reducing leverage.
"We could lower the rating if large debt-funded initiatives,
weaker-than-expected market conditions, or adverse regulatory
changes result in deteriorating credit measures. Specifically, we
could lower the rating if we expect debt to EBITDA to remain above
2.5x on a persistent basis due to lower than expected
profitability, or greater than expected impact from foreign
currency fluctuations.
"We may consider raising the rating within the next 12 months if
First Cash is able to reduce its leverage level to below 1.5x. We
could also raise the rating if the company improves operating
efficiency by lowering costs as a result of the merger over the
next 12 months while maintaining a more moderate growth strategy."
FRANK W. KERR: Files Chapter 11 Plan of Liquidation
---------------------------------------------------
Frank W. Kerr Company filed with the U.S. District Court for the
Eastern District of Michigan a combined plan of liquidation and
disclosure statement dated Aug. 14, 2017.
Class 4 consists of all Equity Interests and Equity Claims
including warrants to purchase or acquire Equity Interests. The
holders of the Equity Interests will neither receive any
distributions nor retain any property under the Plan or the
Liquidating Trust Agreements. As of the Effective Date, all
certificates, documents, and other instruments underlying Equity
Interests, including warrants, will be canceled. Class 4 is
impaired, but because no distributions will be made to the holders
of Class 4 Equity Interests, nor will the holders retain any
property, the holders are deemed to have rejected the Plan pursuant
to Section 1126(g) of the U.S. Bankruptcy Code and are not entitled
to vote to accept or reject the Plan.
Class 3 Allowed General Unsecured Claims are impaired by the Plan.
Each holder of an Allowed General Unsecured Claim, including the
Lender Unsecured Claim, will receive a pro rata proportion of the
Class 3 Liquidating Trust Assets remaining after (i) the
administration of or setting aside an estimated amount necessary
for the administration of the Class 3 Liquidating Trust, and (ii)
the payment, in full, of all allowed administrative claims, allowed
priority claims, allowed priority tax claims, and allowed
substantial contribution claims to the extent not paid by the
Debtor on or prior to the Effective Date and therefore still
payable from the Class 3 Liquidating Trust Assets; provided,
however, that (a) the Lenders agree to waive the first $1,000,000
in Class 3 Liquidating Trust Distributions they would otherwise be
entitled to receive from the unencumbered proceeds; (b) for
purposes of determining the pro rata proportion of the distribution
the Lenders would be entitled to receive on account of the Lender
Unsecured Claim, the Lender Unsecured Claim will be capped at
$30,000,000; (c) the Lenders will not receive any Distribution from
the portion of the Class 3 Liquidating Trust Assets attributable to
the Lenders' Contribution; and (d) for purposes of determining the
pro rata proportion of the distribution the holders of Allowed
General Unsecured Claims other than the Lender Unsecured Claim
would be entitled to receive from the portion of the Class 3
Liquidating Trust Assets attributable to the Lenders' Contribution,
the Lender Unsecured Claim will be deemed to be worth $0. For
purposes of voting on the Plan, only, the Allowed Lender Unsecured
Claim will have a value of $30,000,000.
The Plan Administrator will be designated by the Lenders. The
person so designated will become the Plan Administrator on the
Effective Date. Not more than five calendar days after the Debtor
receives the election notice from the Lenders, the Debtor will file
a notice with the Court stating that the Lenders have delivered the
election notice to the Debtor, that the election notice states that
the Lenders have elected the Liquidating Debtor Mechanism, and
identifying the person whom the Lenders have designated as the Plan
Administrator.
The Plan is a liquidating Plan. The Plan provides that on the
Effective Date, the Class 2 Assets will be transferred by the
Debtor for the benefit of the Lenders, through one of the following
Mechanisms elected by the Lenders, in their sole discretion: (i)
Class 2 Liquidating Trust Mechanism; (ii) Liquidating Debtor
Mechanism; or (iii) Surrender Mechanism. The Plan provides that on
the Effective Date, the Class 3 Liquidating Trust Assets will be
transferred by the Debtor to the Class 3 Liquidating Trust.
Since the Closing Date, the Debtor terminated all employees, has
ceased all ongoing business operations, and has been managed by the
CRO. The information contained in this disclosure statement is
based primarily upon the information in the Debtor's books and
records after a reasonable and comprehensive investigation of the
same. While the CRO cannot make a representation as the accuracy
of the information contained in the books and records of the Debtor
prior to his appointment as the Debtor's CRO in June 2016, the
information contained herein is believed to provide a reasonably
accurate, fair and comprehensive overview of the Debtor and its
Estate in order to allow creditors and other parties in interest to
evaluate the proposed terms of the Plan.
A full-text copy of the Combined Plan of Liquidation and Disclosure
Statement is available at:
http://bankrupt.com/misc/mieb16-51724-496.pdf
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, like 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.
FREESEAS INC: Narrows Net Loss to $20.5 Million in 2016
-------------------------------------------------------
Freeseas, Inc. filed with the Securities and Exchange Commission
its annual report on Form 20-F reporting a net loss of US$20.51
million on US$506,000 of operating revenues for the year ended Dec.
31, 2016, compared to a net loss of US$52.94 million on US$2.30
million of operating revenues for the year ended Dec. 31, 2015.
As of Dec. 31, 2016, Freeseas had US$2.93 million in total assets,
US$36.52 million in total liabilities and a total shareholders'
deficit of US$33.59 million.
Fruci & Associates II, PLLC, in Spokane, Washington, issued a
"going concern" opinion on the consolidated financial statements
for the year ended Dec. 31, 2016, noting that the Company has been
unable to obtain ongoing sources of revenue sufficient to cover
cost of operations and scheduled debt repayments. Additionally,
the Company has not made scheduled payments and is in violation of
debt covenants associated with its bank loan, and per the loan
agreement, this violation may result in acceleration of outstanding
indebtedness, which would require the Company to obtain significant
additional financing in order to meet obligations under the loan
agreement. These factors raise substantial doubt about its ability
to continue as a going concern.
A full-text copy of the Form 20-F is available for free at:
https://is.gd/X27BAU
About FreeSeas Inc.
Headquartered in Athens, Greece, FreeSeas Inc., formerly known as
Adventure Holdings S.A. -- http://www.freeseas.gr/-- was
incorporated in the Marshall Islands on April 23, 2004, for the
purpose of being the ultimate holding company of ship-owning
companies. The management of FreeSeas' vessels is performed by
Free Bulkers S.A., a Marshall Islands company that is controlled by
Ion G. Varouxakis, the Company's Chairman, President and CEO, and
one of the Company's principal shareholders.
The Company's fleet consists of six Handysize vessels and one
Handymax vessel that carry a variety of drybulk commodities,
including iron ore, grain and coal, which are referred to as "major
bulks," as well as bauxite, phosphate, fertilizers, steel products,
cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the
aggregate dwt of the Company's operational fleet is approximately
197,200 dwt and the average age of its fleet is 15 years.
FRONTIER COMMUNICATIONS: Bank Debt Trades at 6% Off
---------------------------------------------------
Participations in a syndicated loan under Frontier Communications
is a borrower traded in the secondary market at 94.30
cents-on-the-dollar during the week ended Friday, August 11, 2017,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.88 percentage points from the
previous week. Frontier Communications pays 350 basis points above
LIBOR to borrow under the $1.5 billion facility. The bank loan
matures on June 1, 2024 and carries Moody's B1 rating and Standard
& Poor's BB- rating. The loan is one of the biggest gainers and
losers among 247 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended August 11.
FUNCTION(X) INC: Okays Transfer of $3.3M Note to More Than Words
----------------------------------------------------------------
The holders of an Amended and Restated 12% Secured Convertible
Promissory Note due June 1, 2017, in the Principal Amount of
$3,284,000, under which Function(x) Inc. is the borrower, entered
into a Purchase and Escrow Agreement with More than Words, LLC, an
unaffiliated buyer on Aug. 11, 2017. Under the Agreement, the
Buyer is purchasing the Note and the right to 440 shares of the
Company's Series F Preferred Stock on an installment basis. In
connection with the Agreement, the Company consented to the
transfers. The parties entered into a standstill agreement, which
prevents the Holders from exercising any remedies and commencing an
action against the Company and its officers and directors with
respect to the Seller Securities, so long as payments are made
timely. In addition, the Agreement prevents any of the parties or
the Releasees (defined in the Agreement as the Seller, the Buyer,
the Escrow Agent, each of their officers, directors, agents,
affiliates, partners, managers, shareholders or members, and the
Company and its officers and directors), from commencing any action
against any other Releasee as long as the payments are made timely
(except with respect to the Release and Settlement Agreement with
respect to the Company's Series G Preferred Stock Offering
described in the Company's Current Report on Form 8-K dated July
21, 2017, and with respect to the Buyer exercising its rights under
the Note and for third parties (other than Releasees) claiming
indemnification.
The parties to the Agreement have agreed that in the event that the
Buyer satisfies the obligation to pay the installments and purchase
the Seller Securities, reciprocal releases between the Company,
Holders, Buyer, and Releasees will become effective.
The Buyer has agreed that if it completes the purchase of the
Seller Securities, the principal balance of the Note will be
reduced to $3,000,000 and the rights with respect to the 440 shares
of the Company's Series F Preferred Stock will be deemed
cancelled.
Payment of the purchase price under the Agreement was guaranteed by
Robert F.X. Sillerman, the Company's executive chairman and chief
executive officer.
About Function(x)
Based in New York, FunctionX Inc (NASDAQ:FNCX) is a diversified
media and entertainment company. The Company conducts three lines
of businesses, which are digital publishing through Wetpaint.com,
Inc. (Wetpaint) and Rant, Inc. (Rant); fantasy sports gaming
through DraftDay Gaming Group, Inc. (DDGG), and digital content
distribution through Choose Digital, Inc. (Choose Digital). The
Company's segments include Wetpaint, which is a media channel
reporting original news stories and publishing information content
covering television shows, music, celebrities, entertainment news
and fashion; Choose Digital, which is a business-to-business
platform for delivering digital content; DDGG, which is a
business-to-business operator of daily fantasy sports, and Other.
The Company's digital publishing business also includes Rant, which
is a digital publisher that publishes original content in over 13
verticals, such as in sports, entertainment, pets, cars and food.
Function(x) incurred a net loss of $63.68 million for the year
ended June 30, 2016, compared to a net loss of $78.53 million for
the year ended June 30, 2015. As of Dec. 31, 2016, Function(x) had
$31.80 million in total assets, $27.94 million in total liabilities
and $3.85 million in total stockholders' equity.
BDO USA, LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended June
30, 2016, citing that the Company has suffered recurring losses
from operations and at June 30, 2016, has a deficiency in working
capital that raise substantial doubt about its ability to continue
as a going concern.
GARBER BROS: Hires Receivables Management as Collections Agent
--------------------------------------------------------------
Garber Bros., Inc. sought and obtained authorization from the U.S.
Bankruptcy Court for the District of Massachusetts to employ
Receivables Management Corporation (RMC) as collections agent.
The Debtor requires RMC to:
(a) access to all of the Debtor's account receivable data;
(b) represent the Debtor in the collection of monies with
respect to certain delinquent accounts placed with RMC by
the Debtor;
(c) use every lawful and permissible means to collect
Designated Accounts in full and not to settle any
Designated Account for less than its full stated amount
without express written consent of the Debtor;
(d) provide the Debtor with notice of collections from
Designated Accounts;
(e) remit all collections to the Debtor upon receipt; and
(f) provide monthly reporting to the Debtor as to the status of
collections on all Designated Accounts.
In exchange for above services, RMC will receive the following:
-- Commencing after RMC has downloaded all receivables data
from the Debtor, a monthly fee of $4,000 for reporting and
analytics functions with respect to the Debtor's accounts
receivable data.
-- Contingency Fees for collection of Designated Accounts as
follows:
- with respect to non-responsive Designated Accounts, a
Contingency Fee of 18%;
- with respect to Designated Accounts on a payment plan with
the Debtor, a Contingency Fee of 10% for accounts less
than $5,000 and a Contingency Fee of 6% for accounts
greater than $5,000;
- with respect to Designated Accounts for which legal
collection action is required, a Contingency Fee of 25%
plus additional expenses and court costs reasonably
requested by attorneys, including fees required to
initiate litigation approved by the Debtor. The Debtor
will remit Contingency Fees to RMC from collections of
Designated Accounts within one business day of the
Debtor's receipt of good and available funds from such
collections.
-- RMC agrees that it is not entitled to compensation on
amounts collected from sources other than the Designated
Accounts.
Alan Goldberg, vice president of RMC, 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.
RMC can be reached at:
Alan Goldberg
RECEIVABLES MANAGEMENT CORPORATION
400 West Cummings Park, Suite 4450,
Woburn, MA 01801
Tel: (781) 933-1550
Fax: (781) 933-0770
About Garber Bros.
Alleged creditors signed an involuntary Chapter 7 petition for
Garber Bros., Inc. (Bankr. D. Mass. Case No. 17-11802) on May 15,
2017. The petitioning creditors are BIC USA, Conagra Brands, Inc.,
General Mills, Inc., Mars Financial Services, Mondelez, Nestle USA
The Coca-Cola Company, and The Hershey Company. The petitioning
creditors are represented by:
Janet E. Bostwick
Janet E. Bostwick, PC
295 Devonshire Street
Boston, MA 02110
Tel: (617) 956-2670
Fax: (617) 422-1428
E-mail: jeb@bostwicklaw.com
- and -
Scott E. Blakeley, Esq.
Ronald A. Clifford, Esq.
Blakeley LLP
18500 Von Karman Ave, 5th floor
Irvine, CA 92612
Tel: (949) 260-0612
E-mail: rclifford@blakeleyllp.com
On June 7, 2017, the Court granted the motion of the Debtor to
convert the case to Chapter 11.
The Debtor is represented by:
Christopher M. Condon, Esq.
Harold B. Murphy, Esq.
Murphy & King, Professional Corporation
One Beacon Street, 21st Floor
Boston, MA 02108
Tel: (617) 423-0400
Fax: (617) 423-0498
E-mail: ccondon@murphyking.com
bankruptcy@murphyking.com
GARDEN OF EDEN: Wants Plan Exclusivity Period Extended to Oct. 24
-----------------------------------------------------------------
Garden of Eden Enterprises, Inc., et al., ask the U.S. Bankruptcy
Court for the Southern District of New York to extend by 60 days
the periods during which the Debtors have the exclusive right to
file a plan of reorganization and solicit acceptances of the plan
through and including Oct. 24, 2017, and Dec. 22, 2017,
respectively.
A hearing to consider the requested extension will be held on Sept.
12, 2017, at 11:00 a.m. Objections must be filed by Sept. 5,
2017.
This is the Debtors' fourth request for an extension of the
Exclusive Periods which will expire on Aug. 25, 2017, and Oct. 23,
2017, respectively.
Since the Petition Date, the Debtors have been evaluating their
store sales and the costs to support each store location. The
Debtors have recently filed a motion to assume their respective
leases which is currently scheduled to be heard by the Court on
Sept. 12, 2017. The Debtor has had initial discussions with Noah
Bank, American Express and the Official Committee of Unsecured
Creditors and it requests the opportunity to continue with these
discussions.
Debtors Broadway Specialty Food, Inc., and Garden of Eden Gourmet
Inc. believe that if they are able to finalize rent modifications
and extensions of their respective lease terms and negotiate
payment terms with respect to the prepetition cure amounts due and
owing to their respective landlords, they will be in a position to
negotiate and formulate a plan of reorganization with its secured
creditors, along with the Committee. Broadway and Gourmet need
additional time to negotiate with their respective landlords in
order to enable them to formulate a plan of reorganization. At
this time, the Debtors are not in a position to present a plan and
disclosure statement, however the Debtors believe that cause exists
for an extension of the Exclusive Periods.
About Garden of Eden Enterprises
Garden of Eden Enterprises, Inc., Broadway Specialty Food, Inc.,
Coskun Brothers Specialty, and Garden of Eden Gourmet Inc. filed
Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 16-12488, 16-12490,
16-12491, 16-12492, respectively) on Aug. 29, 2016. The petitions
were signed by Mustafa Coskun, president. The cases are assigned
to Judge James L. Garrity Jr.
Doing business as Garden of Eden, the Debtors operate three upscale
full-service specialty-food retail stores at leased premises in New
York. Garden of Eden Enterprises is the parent operating company
of the Debtors, and maintains its place of business at 720 Anderson
Avenue, Cliffside Park, New Jersey 07010.
Clifford A. Katz, Esq., and Scott K. Levine, Esq., of Platzer,
Swergold, Levine, Goldberg, Katz & Jaslow, LLP, serve as counsel to
the Debtors.
The Debtors disclosed $8.05 million in assets and $8.29 million in
liabilities.
U.S. Trustee William K. Harrington on Sept. 15, 2016, appointed
three creditors to serve on the official committee of unsecured
creditors of Garden of Eden Enterprises, Inc., et al. The
Committee retained Sullivan & Worcester LLP as counsel.
GARLOCK SEALING: Safety National Sues for Coverage Exclusion
------------------------------------------------------------
Rick Archer, writing for Bankruptcy Law360, reports that insurer
Safety National Casualty Corp. refuses to contribute into a $480
million mesothelioma fund established under the Chapter 11 plan of
Garlock Sealing Technologies LLC.
Safety National filed a complaint in a North Carolina district
regarding the matter, which involved a $5 million excess policy the
insurer issued to Garlock in 1983.
Law360 relates that under the complaint, Safety National claims
that Garlock failed to exhaust the underlying coverage or apply the
policy's per-claim deductable and that "other legal and policy
defenses" precluded coverage. The insurer adds that the policy
requires coverage disputes to go to arbitration and asks the court
to compel arbitration, Law360 cites.
The case is Safety National Casualty Corp. v. Garlock Sealing
Technologies LLC et al., case number 3:17-cv-00458, in the U.S.
District Court for the Western District of North Carolina.
About Garlock Sealing
Headquartered in Palmyra, New York, Garlock Sealing Technologies
LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than
a century, Garlock has been helping customers efficiently seal the
toughest process fluids in the most demanding applications.
On June 5, 2010, Garlock filed a voluntary Chapter 11 petition
(Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina,
to establish a trust to resolve all current and future asbestos
claims against Garlock under Section 524(g) of the U.S. Bankruptcy
Code. The Debtor estimated $500 million to $1 billion in assets
and up to $500 million in debts as of the Petition Date.
Affiliates The Anchor Packing Company and Garrison Litigation
Management Group, Ltd. also filed for bankruptcy.
Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., serves as
bankruptcy counsel to the Debtors. Garland S. Cassada, Esq., at
Robinson Bradshaw & Hinson, serves as counsel for asbestos-related
matters.
The Official Committee of Unsecured Creditors is represented by
FisherBroyles LLP.
The Official Committee of Asbestos Personal Injury Claimants in The
Chapter 11 cases is represented by Travis W. Moon, Esq., at
Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC,
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New
York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and
Jeanna Rickards Koski, Esq., in Washington, D.C.
Joseph W. Grier, III, the court-appointed legal representative for
future asbestos claimants, has retained A. Cotten Wright, Esq., at
Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P.
Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his
co-counsel.
Judge George Hodges of the U.S. Bankruptcy Court for the Western
District of North Carolina on Jan. 10, 2014, entered an order
estimating the liability for present and future mesothelioma claims
against Garlock Sealing at $125 million, consistent with the
positions GST put forth at trial.
In January 2015, the Debtors filed their Second Amended Plan of
Reorganization, which is backed by the Future Asbestos Claimants'
Representative (FCR).
On June 12, 2017, the bankruptcy court confirmed the reorganization
plan.
About OldCo, LLC
OldCo, LLC, formerly known as Coltec Industries, Inc., based in
Charlotte, N.C., manufactures and distributes aerospace and
industrial products in the United States, Canada, and Europe. It
filed a Chapter 11 bankruptcy petition (Bankr. W.D.N.C. Case No.
17-30140) on Jan. 30, 2017. The petition was signed by Joseph
Wheatley, president and treasurer. Bankruptcy Judge Craig J.
Whitley is assigned to the case.
The Debtor is represented by Daniel Gray Clodfelter, Esq. and
William L. Esser, IV, Esq., at Parker Poe Adams & Bernstein LLP.
The Debtor also hired David M. Schilli, Esq., and Andrew W.J. Tarr,
Esq., at Robinson, Bradshaw & Hinson, P.A., as special corporate &
litigation counsel; Rust Consulting/Omni Bankruptcy as claims,
notice & ballot agent.
The Debtor estimated $100 million to $500 million in both assets
and liabilities.
By order entered on Feb. 3, 2017, the Court ordered that the Coltec
Bankruptcy Case be jointly administered with the Garlock Bankruptcy
Case.
GOODYEAR TIRE: Fitch Affirms 'BB' IDR; Outlook Stable
-----------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings (IDR) of The
Goodyear Tire & Rubber Company (GT) and its Goodyear Dunlop Tires
Europe B.V. (GDTE) subsidiary at 'BB'. In addition, Fitch has
affirmed the 'BB+/RR1' ratings on GT's secured revolving credit
facility and second-lien term loan, as well as GDTE's secured
revolving credit facility. Fitch has affirmed GT's senior unsecured
notes rating at 'BB/RR4' and GDTE's senior unsecured notes rating
at 'BB/RR2'.
GT's ratings apply to a $2 billion asset-based revolving credit
facility, a $400 million second-lien term loan and $3 billion in
senior unsecured notes. GDTE's ratings apply to a 550 million euros
secured revolving credit facility and 250 million euros in senior
unsecured notes.
The Rating Outlooks for GT and GDTE are Stable.
KEY RATING DRIVERS
GT's ratings reflect the tire manufacturer's relatively strong
margin performance, solid annual FCF generation and moderate
financial leverage, set against a backdrop of heavy industry
competition, highly seasonal cash flow variability and sensitivity
to raw material prices. The ratings also reflect GT's strong brand
recognition as the third-largest global tire manufacturer, its
globally diversified manufacturing footprint, and its strong
competitive position in the higher-margin high value added (HVA)
17-inch and higher tire segment. GT's revenue has declined over the
past five years due to a combination of product rationalizations,
lower commodity prices, the deconsolidation of its Venezuelan
operations, and the dissolution of its alliance with Sumitomo
Rubber Industries, Ltd. (SRI). However, with rising commodity
costs, increasing demand in emerging markets and the opening of its
new plant in Mexico, Fitch expects GT's revenue to begin to rise
over the next several years, which will provide the company with
opportunities for further credit profile improvement.
Fitch's primary rating concerns relate to the heavy competition in
the global tire industry, rising tire industry production capacity
and the industry's sensitivity to commodity prices, particularly
with respect to petroleum products and natural rubber. Fitch
expects global industry capacity to continue rising over the
intermediate term, but the capacity-intensive nature of HVA tire
production mitigates this concern somewhat. Although GT is adding
capacity in its Americas segment with its new plant in Mexico, the
company has been capacity constrained on some of its more popular
HVA tires in North America, especially for light truck and SUV
tires, and its new plant will help the company better meet demand
for those products.
Relatively low commodity prices have contributed to GT's strong
profitability over the past couple of years, as substantially lower
raw material costs have more-than-offset the effect of commodity
cost adjustments on revenue in some of its customer contracts.
However, commodity costs have risen over the past year, and they
will pose a near-term headwind to profitability, as there will be a
lag before tire prices catch up to the higher costs. GT currently
estimates that its raw material costs will be up $700 million, or
about 18%, in 2017. Historically, GT has been successful in
offsetting higher raw material costs with changes in price and mix,
as well as material substitution. GT has increased prices on its
tires, and the aforementioned escalators will also adjust, which
will likely offset the margin effect of the increased costs over
the intermediate term. However, competitive dynamics, particularly
in the 16-inch-and-lower segment, resulted in a decline in GT's
volumes when it raised prices earlier in 2017, which could pressure
the company's ability to fully offset higher material costs with
increased pricing over the next few quarters.
As GT's pension funding obligations have declined and it has begun
producing consistently positive annual FCF, the company has
targeted a substantial portion of its pre-dividend FCF toward
dividends and share repurchases. The company's current 2017 through
2020 capital allocation plan includes between $3.5 billion and $4
billion of cumulative spending on a combination of dividends and
share repurchases over that four-year period. Fitch expects share
repurchases to make up the bulk of the shareholder-friendly
spending, which will provide the company with some flexibility if
FCF over the period turns out to be lower than expected. The
capital allocation plan also earmarks between $800 million and $900
million for debt reduction through that period in order to
strengthen the company's balance sheet.
FCF
Fitch expects GT to produce positive FCF over the intermediate
term, with FCF margins generally running in the low-single digit
range. Fitch expects capital spending as a percentage of revenue to
generally run at about 5.5% to 6.5% over the intermediate term
based on the growth capital spending targets included in the
company's capital allocation plan. Post-dividend FCF in the LTM
ended June 30, 2017 was $119 million, equal to a 0.8% FCF margin.
However, FCF in the LTM period was pressured by working capital,
which, according to Fitch's calculations, used $383 million in
cash, as higher raw material costs led to an increase in cash used
for inventories.
Fitch's FCF calculation is adjusted for the effect of
period-to-period changes in off-balance sheet factored receivables,
which Fitch treats as financing cash flows. GT's FCF still remains
quite seasonal, with most of the company's cash generation
typically occurring in the fourth quarter, but the magnitude of the
intra-year positive and negative seasonal working capital swings
has moderated over the past several years. Nonetheless, negative
working capital at certain points during a typical year will likely
result in temporary increases in leverage as the company borrows
from its various global credit facilities to meet short-term
liquidity needs.
DEBT AND LEVERAGE
Fitch expects GT's gross EBITDA leverage, including off-balance
sheet factoring, to decline to around 2x over the next several
years as the company focuses on its debt reduction target and as
EBITDA grows on slightly higher business levels and solid
profitability. Fitch expects funds from operations (FFO) adjusted
leverage to decline to the low-3x range. As of June 30, 2017, GT's
actual EBITDA leverage, as calculated by Fitch, was 2.7x and FFO
adjusted leverage was 4.1x. These figures were somewhat inflated as
the company temporarily borrowed from several of its global credit
facilities to cover higher working capital usage. Fitch expects
EBITDA leverage to decline closer to the mid-2x range and FFO
adjusted leverage to fall below 4x by year-end 2017.
Consistent with many U.S. industrial companies with global
operations, the majority of GT's debt has been issued in the U.S.,
but about 56% of its revenue was generated outside the U.S. in
2016. Also, Fitch estimates that about 85% of the company's
consolidated cash was located at non-U.S. subsidiaries at June 30,
2017. Of the cash at non-U.S. subsidiaries, $174 million was
located in countries where capital controls can be imposed at
times, such as China and South Africa. In general, Fitch views the
relatively low level of U.S.-based cash compared with U.S.-issued
debt as a risk that could lead to higher leverage in the event the
company had difficulty repatriating its non-U.S. cash.
PENSIONS
The funded status of GT's pension plans has improved significantly
following discretionary contributions that it made to its U.S.
salaried and hourly plans in 2013 and 2014, respectively, which
fully funded those plans. GT also de-risked the U.S. plans by
shifting the plans' assets to nearly all duration matched
fixed-income investments, with only about 6% of the U.S. plan's
assets comprised of equities. Both U.S. plans are also frozen. As a
result of these actions, Fitch no longer views the U.S. pension
plans as a material rating concern. At year-end 2016, GT's U.S.
plans were 94% funded, with an underfunded status of only $313
million. Including the non-U.S. plans, GT's global pensions were
92% funded, with an underfunded status of $669 million. The company
estimates that 2017 global pension contributions will run between
$50 million and $75 million.
RATINGS NOTCHING
The IDRs of GT and GDTE are equalized, given the strong operating
and legal ties between the two entities, including cross-default
provisions to GT's debt in certain of GDTE's debt agreements,
downstream guarantees from GT to GDTE, and certain covenants in
GDTE's debt agreements that are based on GT's consolidated figures.
There are also strong operational ties, as GDTE's operations are
fully integrated with those of GT.
The ratings of 'BB+/RR1' on GT's and GDTE's secured credit
facilities, including the second-lien term loan, reflect their
substantial collateral coverage and outstanding recovery prospects
in a distressed scenario. The one-notch uplift from the IDRs of GT
and GDTE reflects Fitch's notching criteria for issuers with IDRs
in the 'BB' range. On the other hand, the rating of 'BB/RR4' on
GT's senior unsecured notes reflects Fitch's expectation that
recoveries would be average in a distressed scenario, consistent
with most senior unsecured obligations of issuers with an IDR in
the 'BB' range.
GDTE's Eur250 million 3.75% senior unsecured notes due 2023 have a
Recovery Rating of 'RR2', reflecting the notes' structural
seniority to GT's senior unsecured debt. GDTE's notes are
guaranteed on a senior unsecured basis by GT and the subsidiaries
that also guarantee GT's secured revolver and second-lien term
loan. Although GT's senior unsecured notes are also guaranteed by
the same subsidiaries, they are not guaranteed by GDTE. The
recovery prospects of GDTE's notes are further strengthened
relative to those at GT by the lower level of secured debt at GDTE.
However, the rating of 'BB' on GDTE's senior unsecured notes is the
same as the rating on GT's senior unsecured notes, reflecting
Fitch's notching criteria for issuers with an IDR in the 'BB'
range. GDTE's credit facility and its senior unsecured notes are
subject to cross-default provisions relating to GT's material
indebtedness.
DERIVATION SUMMARY
GT has a relatively strong competitive position as the
third-largest global tire manufacturer, with a highly recognized
brand name and a focus on the higher-margin HVA tire category.
However, the shift in focus to HVA tires has led to lower tire unit
volumes and revenue, particularly in the mature North American and
Western European markets, while profit margins have risen
substantially. The company's diversification is increasing as
rising incomes in emerging markets lead to higher demand for HVA
tires, particularly in the Asia Pacific region.
GT's margins are roughly consistent with other large Fitch-rated
rated tire manufacturers, Compagnie Generale des Etablissements
Michelin ('A-'/Outlook Stable) and Continental AG ('BBB+'/Outlook
Stable), but GT's leverage is considerably higher, as the other two
both maintain EBITDA leverage below 1x. GT's leverage is more
consistent with auto suppliers in the 'BB' category, such as
Tenneco Inc. ('BB+'/Outlook Stable) and American Axle &
Manufacturing Holdings, Inc. ('BB-'/Outlook Stable). GT's margins
are relatively strong compared to those other 'BB'-category
issuers, but this is tempered somewhat by heavier seasonal working
capital swings that lead to more variability in FCF over the course
of a year. That said, absolute annual FCF levels and margins have
been a bit strong compared with the 'BB'-rated auto supplier peers.
Although GT's leverage is in-line with its rating category and
similarly rated peers, its focus on debt reduction is likely to
result in declining leverage over the longer term.
KEY ASSUMPTIONS
-- Global tire industry demand grows modestly over the next
several years on OEM production growth and a higher global car
parc.
-- GT's sales decline a bit in 2017 on lower volumes and
competitive dynamics, but beyond 2017 sales rise on global
unit volume growth, improved mix and pricing above the change
in commodities.
-- Capital spending runs at roughly 5.5% to 6.5% of revenue over
the next several years.
-- Dividends rise through the forecast period, reflecting company
plans to return more cash to shareholders.
-- The company reduces debt by nearly $750 million in the 2017
through 2020 time frame, in line with its debt-reduction
initiatives.
-- Cash pension contributions run between $50 million and $75
million per year over the intermediate term.
-- The company generally maintains between $850 million and $1
billion in cash (including not readily available cash) on its
balance sheet, with excess cash used primarily for share
repurchases and some debt reduction.
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Demonstrating continued growth in tire unit volumes, market
share and pricing;
-- Maintaining 12-month FCF margins of 4% or better for an
extended period;
-- Maintaining leverage near 2.0x for an extended period;
-- Maintaining FFO adjusted leverage near 3.0x for an extended
period.
Future Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A significant step-down in demand for the company's tires
without a commensurate decrease in costs;
-- An unexpected increase in costs, particularly related to raw
materials, that cannot be offset with higher pricing;
-- A decline in the company's consolidated cash below $850
million for several quarters;
-- A decline in 12-month FCF margins to below 2% for a prolonged
period;
-- An increase in gross EBITDA leverage to above 3.0x for a
sustained period;
-- An increase in FFO adjusted leverage to above 4.0x for a
sustained period.
LIQUIDITY
Fitch expects GT's liquidity to remain adequate over the
intermediate term. At June 30, 2017, GT had $903 million in cash
and cash equivalents, but most of this was located outside the U.S.
Over the longer term, Fitch expects the company will repatriate
cash from outside the U.S. at a level sufficient to cover most of
its U.S. cash requirements that are not met with cash generated in
the U.S. However, it is likely to continue temporarily borrowing on
its credit facilities during weaker seasonal periods in a typical
year. In addition to its cash, GT had about $2.4 billion in
availability on various global credit facilities at June 30, 2017,
including about $1.6 billion in availability on its primary U.S.
and European revolvers. The company has no significant debt
maturities prior to 2019, although it has various borrowings,
primarily non-U.S., totaling $673 million (excluding off-balance
sheet factoring) coming due in the next 12 months, much of which
Fitch expects will be refinanced.
In April 2016, GT amended its $2 billion asset-based revolving
credit agreement. As part of the amendment, GT revised the
collateral package included in its borrowing base, which has
increased the amount typically available on the facility. This,
combined with the company's improved FCF profile, has led it to
target carrying less cash than it did previously. Fitch expects the
company to maintain a solid consolidated cash position, but is
likely to often carry less than $1 billion in consolidated cash.
Based on its criteria, Fitch treats non-U.S. cash, as well as and
cash needed to cover seasonal changes in working capital and other
obligations, as "not readily available" for purposes of calculating
net metrics. Based on the substantial portion of GT's consolidated
cash that Fitch believes is outside the U.S., along with the
seasonality in its business, Fitch has treated all of GT's
consolidated cash at June 30, 2017 as not readily available.
However, as previously noted, Fitch believes the company has
sufficient financial flexibility to meet its intermediate-term cash
obligations.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings with a Stable Outlook.
The Goodyear Tire & Rubber Company
-- IDR at 'BB';
-- Secured revolving credit facility at 'BB+/RR1';
-- Secured second-lien term loan at 'BB+/RR1';
-- Senior unsecured notes at 'BB/RR4'.
Goodyear Dunlop Tires Europe B.V.
-- IDR at 'BB';
-- Secured revolving credit facility at 'BB+/RR1';
-- Senior unsecured notes at 'BB/RR2'.
GRANDPARENTS.COM INC: Unsecureds to Recoup Up to 79.5% in New Plan
------------------------------------------------------------------
Grandparents.com, Inc., and Grand Card, LLC, filed with the U.S.
Bankruptcy Court for the Southern District of Florida a first
amended joint disclosure statement with respect to their first
amended joint plan of liquidation.
This new liquidating plan estimates that the projected range of
recovery for Class 3 general unsecured claimants may be as little
as 1% and as high as 79.5%.
The Debtors will allocate $50,000 for pro rata distribution to
holders of Class 3 Claims. Additionally, Class 3 Claims will
receive the GUC Priority Claim after payment of the Lender's
Initial Share of Litigation Claims Proceeds, which represents a
partial subordination of the Lender's unsecured deficiency claim.
After the net proceeds of Litigation Claims total $750,000, any net
recoveries from Litigation Claims will be distributed pro rata to
all holders of Allowed general unsecured claims for Class 3 and
Class 4, except that at no time shall the percentage recovery to
the general unsecured creditor pool (Class 3) exceed two times the
percentage recovery to the Lender under Class 4.
Class 3 Claims are estimated to be $3,632,719.91 for Debtor
Grandparents. Com and $443,287.32 for Debtor Grand Card, for an
unsecured claim pool of $4,076,007.23 in the aggregate, based upon
the amounts in the Debtors' Amended Schedules minus the Lender's
deficiency claim and intercompany claims.
The sources of funding for Class 3 claimants' pro rata
distributions may include but are not limited to: the $50,000
contributed by the Lender and earmarked for payment to Class 3
creditors; the GUC Priority Claim totaling $450,000; net recoveries
from Litigation Claims against the Debtors' former officers and
directors (with total insurance coverage of $15 Million); and net
recoveries from other Litigation Claims, including Chapter 5 causes
of action.
As previously reported by the Troubled Company Reporter, under the
initial liquidating plan, the projected range of recovery for
creditors holding Class 3 general unsecured claims may be as little
as 1% and as high as 71%. It also stated that the sources of
funding for payment of Class 3 claims include the $50,000
contributed by the lender; $400,000 of the net proceeds from
litigation claims; net amount recovered from litigation claims
against former officers and directors (with total insurance
coverage of $15 million); and net amount recovered from other
litigation claims.
A full-text copy of the First Amended Disclosure Statement is
available at:
http://bankrupt.com/misc/flsb17-14711-182.pdf
About Grandparents.com Inc.
New York-based Grandparents.com, Inc., together with its
consolidated subsidiaries, is a family-oriented social media
company that through its Web site, http://www.grandparents.com/,
serves the age 50+ demographic market. The website offers
activities, discussion groups, expert advice and newsletters that
enrich the lives of grandparents by providing tools to foster
connections among grandparents, parents, and grandchildren.
Granparents.com, Inc., and Grand Cards LLC filed separate Chapter
11 petitions (Bankr. S.D. Fla. Case Nos. 17-14711 and 17-14704,
respectively) on April 14, 2017. The petitions were signed by
Joshua Rizack, chief restructuring officer, The Rising Group
Consulting, Inc. The Hon. Laurel M. Isicoff presides over the
cases.
The Debtors listed combined assets of $1 million and combined
liabilities of $24.9 million.
The Debtors are represented by Steven R. Wirth, Esq., and Eyal
Berger, Esq., at Akerman LLP. They have also tapped Genovese
Joblove & Battista, P.A. as special litigation counsel and
conflicts counsel, and EisnerAmper LLP as accountants and financial
advisor.
GREAT BASIN: Receives Default Notice from Lender
------------------------------------------------
Great Basin Scientific, Inc., received on Aug. 16, 2017, from
Hudson Bay Master Fund Ltd. an Event of Default Redemption Notice
which was provided pursuant to Section 4(b) of the 2017 Series A
Senior Secured Convertible Notes, dated April 17, 2017, in the
original principal amount of $20.3 million. The Note issued to
Hudson Bay is in the principal amount of $14.5 million.
Hudson Bay has alleged in the Notice that the Company has admitted
that it cannot pay its debts as they become due and that the
alleged admission constitutes an Event of Default as set forth in
Section 4(a)(vi)E of the Note. The Company and Hudson Bay have
begun discussions for a forbearance of the default, however there
can be no assurance the Company and Hudson Bay will be able to
agree on terms of the forbearance. Unless an agreement for
forbearance is reached with Hudson Bay, the Company is required to
pay the full amount due under the Note issued to Hudson Bay,
totaling $18.3 million, which includes principal, interest and the
Event of Default Redemption Premium, within three business days
from the Company's receipt of the Notice.
"The Company does not have the funds to repay the Note, therefore,
if forbearance is not granted, the Company may have to cease
operations and the holders of the Notes may exercise their rights
under that certain Security Agreement dated June 29, 2016," as
stated in a Form 8-K report filed with the Securities and Exchange
Commission.
Aside from Hudson Bay there are five holders of the Notes, all of
whom may exercise their rights to declare an Event of Default. If
the remaining holders of the Notes were to declare an Event of
Default and demand repayment pursuant to Section 4(b) of the Notes,
the Company will owe an additional $7.3 million in principal,
interest and the Event of Default Redemption Premium.
About Great Basin
West Valley City, Utah-based Great Basin Scientific Inc. --
http://www.gbscience.com/-- is a molecular diagnostic testing
company focused on the development and commercialization of its
patented, molecular diagnostic platform designed to test for
infectious disease, especially hospital-acquired infections. The
Company believes that small to medium sized hospital laboratories,
those under 400 beds, are in need of simpler and more affordable
molecular diagnostic testing methods. The Company markets a system
that combines both affordability and ease-of-use, when compared to
other commercially available molecular testing methods.
Great Basin Scientific reported a net loss of $89.14 million on
$3.04 million of revenues for the year ended Dec. 31, 2016,
compared to a net loss of $57.89 million on $2.14 million of
revenues for the year ended Dec. 31, 2015. As of March 31, 2017,
Great Basin had $29.24 million in total assets, $59.10 million in
total liabilities, and a total stockholders' deficit of $29.86
million.
The Company's independent accountants, BDO USA, LLP, in Salt Lake
City, Utah, expressed "substantial doubt" about the Company's
ability to continue as a going concern noting that the Company has
incurred substantial losses from operations, has negative operating
cash flows and has a net capital deficiency.
GREGORIO MARTINEZ RODRIGUEZ: U.S. Trustee Forms 2-Member Committee
------------------------------------------------------------------
Gail Brehm Geiger, acting U.S. trustee for Region 18, on Aug. 22
appointed two creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case of Gregorio Martinez
Rodriguez.
The committee members are:
(1) John Blackhurst
Committee Chairperson
Hornecker Cowling et al.
717 Murphy Road
Medford, OR 97504
Tel: (541) 779-8900
Fax: (541) 773-2635
E-mail: jwb@roguelaw.com
(2) Connie Wright
Director of Credit Services
Sysco Portland, Inc.
26250 SW Parkway Center Drive
Wilsonville, OR 97070
Tel: (503) 682-6586
Fax: (503) 682-4124
E-mail: Wright.c@pdx.sysco.com
The U.S. Trustee amended the Committee to notify the Court of the
removal of Melisa Button effective Aug. 23, 2017, and the
appointment of John Blackhurst as successor Chairperson. The U.S.
Trustee also removed Robert Robertson, Eduardo Lopez, Francisco J.
Flores, and Leobardo Esquivel from the Committee.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
Gregorio Martinez Rodriguez filed for Chapter 11 bankruptcy
protection (Bankr. D. Or. Case No. 15-60956) on March 24, 2015.
GUIDED THERAPEUTICS: Inks Forbearance Agreement with GPB Debt
-------------------------------------------------------------
Guided Therapeutics, Inc., entered into a forbearance agreement
with GPB Debt Holdings II LLC on Aug. 7, 2017, with regard to a
senior secured convertible note in original principal amount of
$1,437,500, issued Feb. 12, 2016. Under the forbearance agreement,
GPB has agreed to forbear from exercising certain of its rights and
remedies (but not waive such rights and remedies), arising as a
result of the Company's failure to pay the monthly interest due and
owing on the note.
In consideration for the forbearance, the Company agreed to waive,
release, and discharge GPB from all claims against GPB based on
facts existing on or before the date of the forbearance agreement
in connection with the note, or the dealings between the Company
and GPB, or the Company's equity holders and GPB, in connection
with the note.
Pursuant to the forbearance agreement, the Company has reaffirmed
its obligations under the note and related documents and executed a
confession of judgment regarding the amount due under the note,
which GPB may file upon any future event of default by the Company.
During the forbearance period, the Company must continue to comply
will all the terms, covenants, and provisions of the note and
related documents.
About Guided Therapeutics
Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) --
http://www.guidedinc.com/-- is developing a rapid and painless
test for the early detection of disease that leads to cervical
cancer. The technology is designed to provide an objective result
at the point of care, thereby improving the management of cervical
disease. Unlike Pap and HPV tests, the device does not require a
painful tissue sample and results are known immediately. GT has
also entered into a partnership with Konica Minolta Opto to develop
a non-invasive test for Barrett's Esophagus using the LightTouch
technology platform.
Guided Therapeutics incurred a net loss attributable to common
stockholders of $4.99 million for the year ended Dec. 31, 2016,
compared to a net loss attributable to common stockholders of $9.50
million for the year ended Dec. 31, 2015. As of June 30, 2017,
Guided Therapeutics had $1.51 million in total assets, $11.85
million in total liabilities and a total stockholders' deficit of
$10.34 million.
UHY LLP, in Sterling Heights, Michigan, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016, citing that the Company's significant
operating losses raise substantial doubt about its ability to
continue as a going concern.
HAMPSHIRE GROUP: U.S. Trustee Opposes Disclosure Statement
----------------------------------------------------------
Jeff Montgomery, writing for Bankruptcy Law360, reports that the
U.S. Trustee in Delaware has objected to the Chapter 11 disclosure
statement filed by Hampshire Group Ltd, citing potential asset
shortfalls, multiple inconsistencies, and terms that could harm
creditors, among other things.
The U.S. Trustee has also asked the Bankruptcy Court to reject a
proposed three-week company confirmation and objection timetable,
noting that the schedule includes the Labor Day holiday, Law360
relates.
About Hampshire Group
New York-based Hampshire Group, Limited (OTC Markets: HAMP), is a
provider of fashion apparel across a broad range of product
categories, channels of distribution and price points. As a
holding company, the Company operates through its wholly-owned
subsidiaries, Hampshire Brands, Inc. and Hampshire International,
LLC.
Hampshire Group, Limited and two affiliates -- Hampshire Brands and
Hampshire International -- sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 16-12634 to 16-12636) on Nov. 23, 2016,
to facilitate the orderly wind-down of their business operations.
The petitions were signed by Paul Buxbaum, president and chief
executive officer.
Hampshire Group disclosed $25.9 million in assets and $41.8 million
in liabilities. Brands listed under $50 million in both assets and
debt. International listed under $50,000 in assets and under $50
million in liabilities.
Louis M. Rappaport, Esq., at Blank Rome LLP represents the Debtors.
William Drozdowski of GRL Capital Advisors LLC has been tapped as
the Debtors' chief financial officer.
The U.S. Trustee for Region 3 has appointed five creditors to serve
in the official unsecured creditors committee in the case.
Pachulski Stang Ziehl & Jones LLP serves as legal counsel and
Gavin/Solmonese LLC as financial advisor to the Committee.
* * *
The Bankruptcy Court authorized Hampshire Group, Limited, to sell
certain assets to The Fashion Exchange, LLC pursuant to an asset
purchase agreement dated Jan. 13, 2017. The sold assets include
James Campbell assets. The consideration for the Inventory on Hand
will be an amount equal to $10.95 multiplied by the number of items
of Inventory on Hand as of the Closing Date. The consideration for
all other Acquired Assets will be $0.14 million. Klestadt Winters
Jureller Southard & Stevens, LLP, served as legal advisor to the
buyer.
HORNBECK OFFSHORE: S&P Hikes CCR to 'CCC-', Outlook Negative
------------------------------------------------------------
S&P Global Ratings raised its corporate credit rating on Covington,
La.-based offshore vessel provider Hornbeck Offshore Services Inc.
to 'CCC-' from 'SD' (selective default). The rating outlook is
negative.
S&P said, "At the same time, we affirmed our 'D' issue-level rating
on the company's convertible notes due 2019 and our 'CCC'
issue-level ratings on the senior notes due 2020 and 2021. The '2'
recovery rating on the notes is unchanged, indicating our
expectation for meaningful (70%-90%; rounded estimate: 85%)
recovery to creditors in the event of a payment default.
"The upgrade reflects our reassessment of our corporate credit
rating on Hornbeck following the company's completion of a debt
exchange, whereby holders of $200 million of its convertible notes
due 2019 and $8.1 million of its senior notes due 2020 exchanged
their debt for $95.3 million of a new senior secured first-lien
term loan credit facility maturing in 2023 and $54.1 million in
cash. We viewed the exchange as distressed, since the value the
lenders received was less than the amount the original securities
promised, and because we believed there was a realistic possibility
of a conventional default prior to the exchange.
"The negative outlook reflects our view that Hornbeck will likely
enter into a distressed exchange or debt restructuring for its 2020
or 2021 debt maturities over the next six months.
"We could raise the rating if we no longer believe the company
would enter into a distressed exchange or restructuring, which
would most likely occur in conjunction with a recovery in the
offshore drilling market."
-- S&P's simulated default scenario contemplates a payment default
in 2018, following an extended period of weak commodity prices that
leads to a major cutback in exploration and production spending and
delays in the start-up of offshore projects.
-- S&P valued the company on a discrete asset valuation basis and
assume that a default during an extended cyclical downturn will
materially lower the value of the vessels.
-- S&P assumes Hornbeck's $300 million delayed draw term loan
credit facility is 60% drawn at the time of default.
-- Although S&P's recovery estimate exceeds 90%, it caps the
recovery rating at '2' for companies rated 'B' and lower.
-- Simulated year of default: 2018
-- Net enterprise value (after 5% in administrative costs): $1.23
billion
-- Secured first-lien debt claims: $188 million
-- Total value available to unsecured claims: $1.04 billion
-- Unsecured claims: $940 million
-- Recovery expectation: 70%-90% (rounded estimate: 85%)
Note: All debt amounts include six months of prepetition interest.
IMAGE GRAPHICS: Case Summary & 8 Unsecured Creditors
----------------------------------------------------
Debtor: Image Graphics 2000, Inc.
2450 W. Sample Road, #20
Pompano Beach, FL 33073
Type of Business: Image Graphics 2000 -- http://igxboatwraps.com/
-- provides graphic design services in Pompano
Beach, FL, and surrounding areas. Its services
include boat wraps, commercial displays, vehicle
wrapping, banners, bulk products, deck graphics
and tournament sponsor wrapping. The Company is
a small business debtor as defined in 11 U.S.C.
Section 101(51D).
Chapter 11 Petition Date: August 22, 2017
Case No.: 17-20585
Court: United States Bankruptcy Court
Southern District of Florida (Fort Lauderdale)
Judge: Hon. John K Olson
Debtor's Counsel: Simona Burshteyn, Esq.
FIRST LEGAL PA
1930 Harrison St., Suite 209
Hollywood, FL 33020
Tel: 9549981488
Fax: 9547036577
E-mail: Sburshteyn@firstlegalpa.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Wade Davis, vice president.
The Debtor's list of eight unsecured creditors is available for
free at http://bankrupt.com/misc/flsb17-20585.pdf
IMPAX LABORATORIES: S&P Lowers CCR to 'B+', Outlook Stable
----------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on IMPAX
Laboratories Inc. to 'B+' from 'BB-'. The outlook is stable.
S&P said, "We also lowered our issue-level ratings on the senior
secured facilities to 'BB' from 'BB+'. The recovery rating on this
debt remains '1', indicating our expectations for meaningful
(90%-100%; rounded estimate: 95%) recovery in the event of a
payment default. In addition, we lowered our rating on the senior
unsecured notes to 'B' from 'B+'. The recovery rating on this debt
remains '5', indicating our expectations for modest (10%-30%;
rounded estimate: 25%) recovery in the event of a payment
default."
The rating action reflects IMPAX's slower-than-expected
deleveraging after its 2016 purchase of a portfolio of generic
drugs from Teva. S&P said, "We previously expected the company to
reduce 2017 leverage to below 5.0x and now forecast that adjusted
leverage will remain above 5.0x through 2017 as a result of
increased competition and continued generic pricing pressures that
offset strong growth in key products such as generic epinephrine
auto-injector and Rytary (a treatment for Parkinson's disease). We
also believe that while IMPAX has a number of promising
opportunities in its pipeline, challenging industry dynamics limit
the upside.
"The stable rating outlook reflects our expectation that pricing
pressure in the company's generic business will continue through
2018 and be partially offset by higher volumes and the launch of
newer generic products. We expect that a majority of the company's
free cash flow will be used to repay debt and expect adjusted
leverage of under 5.0x by the end of 2018.
"While we expect adjusted leverage to remain above 5.0x in 2017, we
could lower the rating if the company is unable to reduce adjusted
leverage below 5.0x through EBITDA growth or debt paydown. This
could occur if heightened generic price erosion causes revenues to
decline in the low-single-digit range and gross margins contract by
100 basis points.
"We could raise the rating if the company generates close to $100
million in free cash flow and reduces leverage to around the 4x
area. We believe this would require high-single-digit revenue
growth and high-teens EBITDA growth in 2018. This would likely
result if the company is able to improve margins, grow volumes, and
launch successful new products, while Rytary and epinephrine
continue their double-digit growth trajectory."
IREP MONTGOMERY-MRF: Plan Exclusivity Period Extended by 90 Days
----------------------------------------------------------------
The Hon. Dwight H. Williams, Jr., of the U.S. Bankruptcy Court for
the Middle District of Alabama has extended, at the behest of IREP
Montgomery-MRF LLC, the exclusive period to file a Chapter 11 plan,
and gain acceptance of a plan by 90 days.
As reported by the Troubled Company Reporter on Aug. 4, 2017, the
Debtor sought the extension, saying that prior to the commencement
of this case, some 20 different companies had expressed an interest
in operating or purchasing its materials recovery facility which,
prior to its closure, was processing the municipal solid waste for
the City of Montgomery and the Municipal Solid Waste Disposal
Authority. The Debtor, prior to filing the case, has negotiated an
asset purchase agreement with the City and the Authority as it
intends to sell its assets under Section 363 utilizing the City and
the Authority as a "stalking horse bidder" under the APA. The
Debtor shared that given the number of parties already interested
in the Facility, the Parties envisioned that the 363 motion would
be filed fairly quickly after the commencement of the case and the
Debtor would be able to assess fairly quickly whether a plan might
be beneficial.
About IREP Montgomery-MRF
Based in Montgomery, Alabama, IREP Montgomery-MRF, LLC, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.
Ala. Case No. 16-32279) on Aug. 20, 2016. The petition was signed
by Kyle Mowitz, manager. The case is assigned to Judge Dwight H.
Williams Jr. At the time of the filing, the Debtor estimated its
assets at $10 million to $50 million and debts at $50 million to
$100 million. The Debtor is represented by Clyde Ellis Brazeal,
III, Esq., at Jones Walker LLP.
J. CREW: Bank Debt Trades at 46% Off
------------------------------------
Participations in a syndicated loan under J. Crew is a borrower
traded in the secondary market at 52.88 cents-on-the-dollar during
the week ended Friday, August 11, 2017, according to data compiled
by LSTA/Thomson Reuters MTM Pricing. This represents a decrease of
0.44 percentage points from the previous week. J. Crew pays 300
basis points above LIBOR to borrow under the $1.56 billion
facility. The bank loan matures on Feb. 27, 2021 and carries
Moody's Caa2 rating and Standard & Poor's CCC rating. The loan is
one of the biggest gainers and losers among 247 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended August 11.
KAPPA DEVELOPMENT: Names Ronald Russell as Accountant
-----------------------------------------------------
Kappa Development and General Contracting Inc. sought and obtained
authorization from the U.S. Bankruptcy Court for the Southern
District of Mississippi to employ Ronald E. Russell as accountant.
The Debtor requires Mr. Russell to perform general accounting
services at the rate of $75.
Ronald Russell will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Ronald E. Russell 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.
Ronald Russell can be reached at:
Ronald E. Russell, CPA
P.O. Box 12905
Jackson, MS 39236-2905
Tel: (601) 981-8079
About Kappa Development & General
Contracting, Inc.
Kappa Development & General Contracting, Inc., based in Gulfport,
Miss., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No.
17-51155) on June 12, 2017. The Hon. Katharine M. Samson presides
over the case. Nicholas Van Wiser, Esq. at Byrd & Wiser, 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 Randy
Blacklidge, president.
KNIGHT ENERGY: Taps Bayshore Partners as Investment Banker
----------------------------------------------------------
Knight Energy Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Louisiana to hire an investment
banker.
In a court filing, Knight Energy proposes to employ Bayshore
Partners, LLC to provide these services to the company and its
affiliates in connection with their Chapter 11 cases:
(a) assist the Debtors in evaluating their strategic options
with respect to a recapitalization or sale of their
business;
(b) assist the Debtors in preparing and disseminating a
Confidential Information Memorandum (CIM) describing
their business, strategy, market position, growth
opportunities, and historical and projected financial
information;
(c) solicit and evaluate proposals from potential parties to
a recapitalization or sale transaction;
(d) coordinate gathering of due diligence materials to be
provided to selected potential parties to a transaction;
(e) assist the Debtors in the negotiation with lenders,
creditors, and advisors involved in any transaction;
(f) assist the Debtors in negotiations related to the
recapitalization activities and a potential transaction;
and
(g) assist the Debtors in the negotiation, documentation and
consummation of a transaction.
Bayshore will be paid a monthly advisory fee of $15,000 (prorated
for any partial month period), with the first payment due upon
entry of an interim court order approving the firm as the Debtors'
investment banker.
The firm will also be paid a nonrefundable cash fee deemed earned
upon the closing of a transaction equal to (i) $500,000 in the
event that the administrative agent and the consenting lenders
consummate the transaction; or (ii) $1 million in the event that
the Debtors consummate a transaction with a party other than the
consenting lenders.
Michael Turner, managing director of Bayshore, disclosed in a court
filing that his firm is a "disinterested person" as defined in
section 101(14) of the Bankruptcy Code.
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 cases are assigned to Judge Robert Summerhays.
Heller, Draper, Patrick, Horn & Dabney, L.L.C., serves as
bankruptcy counsel to the Debtors while Opportune, LLP serves as
their crisis manager. Donlin, Recano & Company, Inc., is the
claims, noticing and solicitation agent.
LANAI HOLDINGS: S&P Lowers CCR to 'B-' on Weak Financial Results
----------------------------------------------------------------
U.S.-based rehabilitation and sports medicine product distributor
Lanai Holdings III Inc. posted second-quarter financial results
that were well below S&P Global Ratings' expectations. S&P has
updated its forecast and now project free operating cash outflows
and leverage in excess of 9x for calendar year 2017.
As a result, S&P Global Ratings lowered its corporate credit rating
on U.S.-based Lanai Holdings III Inc. to 'B-' from 'B'. The outlook
is stable.
S&P said, "At the same time, we lowered our issue-level rating on
the company's $710 million first-lien credit facilities to 'B-'
from 'B'. The '3' recovery rating is unchanged and reflects our
expectation for meaningful recovery (50%-70%; rounded estimate:
60%) in the event of payment default. We also lowered our
issue-level rating on the company's $255 million second-lien credit
facilities to 'CCC' from 'CCC+'. The '6' recovery rating is
unchanged and reflects our expectation for negligible recovery
(0%-10%; rounded estimate: 5%) in the event of payment default.
"The downgrade reflects our revised expectation that Lanai will
have free operating cash outflows this year. Lanai recently
released second-quarter results, which are tracking weaker than we
had anticipated. Due to operating weakness in the distribution
segment and the implementation of a new ERP system, we now project
that the company will have free cash outflows and adjusted leverage
above 9x at the end of 2017. This is well below our previous
expectation for moderate cash flows of $30 million to $50 million
and leverage around 7x.
"Our stable outlook on Lanai reflects our expectation that its
liquidity will remain adequate for the next 12 months. It also
reflects our expectation that organic revenue growth will be flat
this year, but recover in 2018 to the low- to mid-single-digit
percent area, and that elevated operating expenses will begin to
decline in 2018, resulting in minimal but positive free cash flow
generation.
"We could lower our rating on Lanai if the company cannot stabilize
revenue growth or experiences further operational disruptions to
its business, such as the entrance of another major competitor or
additional large, unexpected expenditures that reduce margins by
400 basis points. This would result in sustained free operating
cash outflows and leverage in excess of 10x.
"We could consider an upgrade if Lanai is able to fully resolve the
operational issues on the distribution side, resulting in leverage
below 7x and free operating cash flow generation in excess of $20
million. In addition, we would need to regain confidence that Lanai
can renew and sustain revenue growth and stabilize its operations."
LB VENTURES: Taps Town Hall Realty as Real Estate Broker
--------------------------------------------------------
LB Ventures, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Massachusetts to hire a real estate broker.
The Debtor proposes to employ Town Hall Realty, Inc. in connection
with the sale of its real estate located at 433 Quincy Shore Drive,
Quincy, Massachusetts.
The firm will receive a commission of 3% of the net sales price of
the property pursuant to the terms of its listing agreement with
the Debtor. The agreement authorizes the firm to share up to 1.5%
of the net sales price with non-agent facilitators such as a
buyer's broker.
Andy Nguyen, a real estate broker employed with Town Hall,
disclosed in a court filing that all employees and agents of the
firm are "disinterested persons" as defined in section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Andy Nguyen
Town Hall Realty, Inc.
835 Dorchester Avenue
Boston, MA 02125
About LB Ventures LLC
LB Ventures, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mass. Case No. 17-10084) on January 10,
2017. Luis M. Barros, manager, signed the petition.
At the time of the filing, the Debtor disclosed that it had
estimated assets of $1 million to $10 million and liabilities of
less than $1 million.
Judge Joan N. Feeney presides over the case. Parker & Associates
is the Debtor's bankruptcy counsel.
On July 6, 2017, the Debtor filed its proposed Chapter 11 plan of
reorganization and disclosure statement.
LISA LORD: Court Approves Barron and Barron as Counsel
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas
authorized Lisa Lord, Inc. to employ Barron and Barron LLP as
counsel.
The Debtor requires Barron and Barron to:
(a) take all necessary actions to protect and preserve the
bankruptcy estate, including prosecution of actions on its
behalf, defense of any actions commenced against it,
negotiations concerning all litigation in which it is
involved, and objecting to claims;
(b) prepare on behalf of the Debtor all necessary motions,
applications, answers, orders, reports, and papers in
connection with the administration of the estate;
(c) formulate, negotiate, and propose a plan of reorganization,
if justified; and
(d) perform all other necessary legal services in connection
with these proceedings.
Debtor will be charged on these hourly rates:
Robert E. Barron $325
Robert W. Barron $250
Diane S. Barron $250
Legal Assistants-Level I $75
Legal Assistants-Level II $50
Barron and Barron will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Robert E. Barron, managing partner of Barron and Barron LLP,
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.
Barron and Barron can be reached at:
Robert E. Barron, Esq.
BARRON AND BARRON, LLP
P.O. Box 1347,
Nederland, TX 77627
Tel: (409) 727-0073
Fax: (409) 724-7739
E-mail: ecffiling@rbarronlaw.com
About Lisa Lord Inc
Lisa Lord, Inc., filed a Chapter 11 bankruptcy petition (Bankr.
E.D. Tex. Case No. 17-10339) on June 9, 2017, disclosing under $1
million in both assets and liabilities.
The Debtor is represented by Robert E. Barron, Esq., at Barron and
Barron LLP.
LLOYD M. HUGHES: May Use Cash Collateral Until Sept. 6
------------------------------------------------------
The Hon. A. Benjamin Goldgar of the U.S. Bankruptcy Court for the
Northern District of Illinois has entered an agreed order
authorizing Lloyd M. Hughes Enterprises, Incorporated, on an
interim basis, restricted use of cash collateral until Sept. 6,
2017.
The Court will hold on Sept. 6, 2017, at 10:00 a.m., a hearing to
consider the final authorization of the use of cash collateral.
The Debtor negotiated with Inland Bank and Trust a resolution to
the Bank's request to prohibit cash collateral use.
The Bank has secured claims against the Debtor by virtue of a
certain SBA note dated June 24, 2010, in the original principal
amount of $625,000, which Note is in default. The Bank is the
holder of a valid perfected first lien and security interest in and
to all of the Debtor's assets as collateral security for the Note.
A judgment of foreclosure was entered on April 28, 2017, in the
amount of $842,355.77, with regard to the laundromat property. The
Bank filed on July 25, 2017, a proof of claim.
The Debtor acknowledges and admits (i) the authenticity and
validity of the proof of claim and all the Debtor financing
agreements, (ii) the validity, perfection, priority and
enforceability of all liens, assignments, security interests and
mortgages granted to the Bank pursuant to the proof of claim and
Debtor financing agreements, including without limitation, all
liens related to the equipments; (iii) the aggregate indebtedness
owed to the Bank in the sum of $842,355.77 as of April 28, 2017,
pursuant to the proof of claim and the debtor financing agreements;
and (iv) that it hereby waives all defenses, objections and
challenges to the proof of claim and the debtor financing
agreements, including any defenses to the Bank's lien on the
equipment raised in the Debtor's response to the bank motion to
prohibit use of cash collateral, and releases any claims against
the Bank.
The Debtor is currently collecting cash proceeds from the operation
of the business and use of the equipment, which constitute cash
collateral of the Bank.
The Debtor has immediate need for the use of cash collateral of the
Bank to operate the business and preserve the going concern value
of its business.
The Bank, as security and adequate protection for all cash
collateral utilized by the Debtor and for any diminution of its
collateral, is granted a post-petition replacement lien and
security interest in all of the Debtor's assets.
The Debtor will pay the Bank, as additional adequate protection for
the Debtor's use of cash collateral, in the month of August 2017,
the sum of $2,000 by Aug. 15, 2017, for application to principal on
the indebtedness and $2,700 by Aug. 31, 2017, as a monthly deposit
into a real estate tax escrow at the Bank for accruing real estate
taxes on the Laundromat Property, Residence 1 and Residence 2.
The Debtor will restrict its use of cash collateral to payment of
the monthly expenses.
The Bank is granted an administrative priority as adequate
protection for all cash collateral utilized by the Debtor, but only
to the extent of any diminution of the collateral during these
proceedings.
A copy of the Order is available at:
http://bankrupt.com/misc/ilnb17-16025-56.pdf
As reported by the Troubled Company Reporter on Aug. 14, 2017, the
Debtor sought court permission to use cash collateral through Sept.
6, in order for the Debtor to continue to operate its business, and
effectuate an effective reorganization. The Debtor will use cash
collateral for, among other things, payroll, insurance, utilities,
postage, rent, purchases of supplies and materials, and other
miscellaneous items needed in the ordinary course of business.
About Lloyd M. Hughes Enterprises
Lloyd M. Hughes Enterprises, Incorporated, is an Illinois
corporation that owns and operates a laundry facility consisting of
155 coin operative washers and dryers. The facility is located at
6331 S. Martin Luther King Drive, Chicago, Illinois.
Lloyd M. Hughes Enterprises sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ill. Case No. 17-16025) on May 24,
2017. Lloyd M. Hughes, chairman and president, signed the
petition.
At the time of the filing, the Debtor had less than $50,000 in
estimated assets and $500,001 to $1 million in estimated
liabilities.
Judge A. Benjamin Goldgar presides over the case.
MARIMED INC: Posts $547,000 Net Income in Second Quarter
--------------------------------------------------------
MariMed Inc. filed with the Securities and Exchange Commission its
quarterly report on Form 10-Q reporting net income attributable to
MariMed of $547,000 on $1.62 million of revenues for the three
months ended June 30, 2017, compared to a net loss attributable to
MariMed of $50,986 on $647,440 of revenues for the three months
ended June 30, 2016.
For the six months ended June 30, 2017, MariMed reported net income
attributable to the Company of $514,760 on $2.77 million of
revenues compared to a net loss attributable to the Company of
$146,366 on $1.26 million of revenues for the six months ended June
30, 2016.
As of June 30, 2017, MariMed had $15.35 million in total assets,
$10.08 million in total liabilities and $5.26 million in total
stockholders' equity.
During the six months ended June 30, 2017, the Company raised a
total of $5,800,000, comprised of $5,200,000 from the issuance of
common stock, $200,000 from the issuance of Series A preferred
stock, and $400,000 from the issuance of promissory notes. These
funds will primarily be used to build state-of-the-art medical
marijuana facilities in new markets. The Company expects to
continue to pursue additional sources of capital though it has no
current arrangements with respect to, or sources of, additional
financing at this time, and there can be no assurance that any such
financing will become available.
Revenues for the three months ended June 30, 2017, increased by
150% from the same period a year ago. This significant increase
was primarily due to the Company's medical cannabis clients
generating a robust 74% increase in revenues, a percentage of which
is earned by the Company in the form of a management fee. For the
three months ended June 30, 2017, these clients' revenues increased
to $2.7 million from $1.6 million for the same period in 2016.
Cost of revenues increased 75% from $214,610 for the three months
ended June 30, 2016, to $375,711 for the three months ended June
30, 2017. While an increase was expected given the increase in
revenues, the percentage increase of cost of sales was half of the
percentage increase of revenues, demonstrating the successful
leveraging of our company infrastructure to generate higher
margins. Accordingly, gross profit as a percentage of revenue
increased from 67% for the three months ended June 30, 2016, to 77%
for the three months ended June 30, 2017.
Personnel expense increased 15% to $136,824 for the three months
ended June 30, 2017, from $118,921 for the same period a year ago.
This increase was the result of hiring additional staff to support
the higher level of revenues.
Marketing and promotion costs increased to $45,265 for the three
months ended June 30, 2017, from $1,598 for the same period a year
ago. This increase is due to the Company's additional efforts to
promote its services within the medical cannabis industry.
General and administrative costs increased to $368,557 for the
three months ended June 30, 2017, from $149,861 for the same period
a year ago. This increase is commensurate with the growth of
revenues and the overall business.
Depreciation and amortization increased from $64,247 for the three
months ended June 30, 2016, to $93,583 for the three months ended
June 30, 2017, due to the increase in rental properties.
Non-operating expenses are primarily comprised of interest expense
on our mortgage and notes payable, offset by interest income on our
note receivable. For the three months ended June 30, 2017,
interest expense was $116,742, offset by interest income of
$20,358. For the three months ended June 30, 2016, interest
expense was $75,097, offset by interest income of $21,409.
As a result of the foregoing, the Company realized net income of
$504,805 for the three months ended June 30, 2016, a thirteen-fold
increase over the same period a year ago, when net income was
$39,047.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/E5QTWC
About MariMed
Based in Brookline, Mass., MariMed Inc., formerly known as Worlds
Online Inc., currently operates in two separate segments with one
segment being a 3D entertainment portal which leverages its
proprietary licensed technology to offer visitors a network of
virtual, multi-user environments which the Company calls "worlds"
and the second segment, MariMed Advisors, being a management
company in the medical cannabis industry.
Worlds Online reported net income of $321,165 on $3.564 million of
total revenue for the year ended Dec. 31, 2016, compared with a net
loss of $1.84 million on $1.270 million of total revenue for the
year ended Dec. 31, 2015.
L&L CPAS, PA issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016.
The auditors noted the Company has suffered recurring operating
losses, has an accumulated stockholders' deficit, has negative
working capital, has had minimal revenues from operations, and has
yet to generate an internal cash flow that raises substantial doubt
about its ability to continue as a going concern.
MARKET SQUARE: Taps O'Donnell Haddad as Special Counsel
-------------------------------------------------------
Market Square Hospitality, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to hire
O'Donnell Haddad, LLC as special counsel.
The firm will represent the Debtor in administrative and judicial
proceedings related to matters involving its compliance with liquor
control laws.
The hourly rates charged by the firm are:
Robert O'Donnell $300
Associate $270
Paralegal/Law Clerk $55
Robert O'Donnell, Esq., disclosed in a court filing that the firm
is a "disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
The firm holds an unsecured claim against the Debtor in the amount
of $1,386.50. However, its status as a creditor with a relatively
small unsecured claim does not create any material adversity to the
Debtor or the estate with respect to the proposed representation,
according to the Debtor's bankruptcy counsel, Abraham Brustein
Road, Esq., at DiMonte & Lizak, LLC.
About Market Square Hospitality LLC
Market Square Hospitality, LLC, operates a hotel at 2723 Sheridan
Rd, Zion, Illinois 60099, USA, known as "The Inn At Market Square".
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Ill. Case No. 17-22394) on July 27, 2017, estimating its assets at
up to $50,000 and its liabilities at between $1 million and $10
million. The petition was signed by David Delach and Richard
Delisle, managers.
Judge Janet S. Baer presides over the case.
Abraham Brustein, Esq., and Julia Jensen Smolka, Esq., at Dimonte &
Lizak, LLC, serve as the Debtor's bankruptcy counsel.
MARRONE BIO: Promotes James Boyd to President and CFO
-----------------------------------------------------
Marrone Bio Innovations, Inc., promoted James B. Boyd, the
Company's senior vice president and chief financial officer, to
president and chief financial officer effective Aug. 15, 2017,
according to a Form 8-K report filed with the Securities and
Exchange Commission.
In connection with the promotion, the Company and Mr. Boyd entered
into a letter agreement, also effective Aug. 15, 2017, pursuant to
which Mr. Boyd's base salary will be increased from $250,000 to
$285,000, provided that Mr. Boyd has agreed to defer his salary
increase until the satisfaction of certain contingencies described
in the letter agreement. In addition, Mr. Boyd has been granted
150,000 restricted stock units with respect to the Company's common
stock, which will vest in equal monthly increments over a period of
three years from the grant date. In addition, Mr. Boyd will
continue to be eligible for the Company's bonus plan, under which
Mr. Boyd's bonus can be up to 40% of his salary.
About Marrone Bio
Marrone Bio makes bio-based pest management and plant health
products. Bio-based products are comprised of naturally occurring
microorganisms, such as bacteria and fungi, and plant extracts.
The Company's current products target the major markets that use
conventional chemical pesticides, including certain agricultural
and water markets, where the Company's bio-based products are used
as alternatives for, or mixed with, conventional chemical products.
The Company also targets new markets for which (i) there are no
available conventional chemical pesticides or (ii) the use of
conventional chemical pesticides may not be desirable or
permissible either because of health and environmental concerns
(including for organically certified crops) or because the
development of pest resistance has reduced the efficacy of
conventional chemical pesticides. All of the Company's current
products are approved by the United States Environmental Protection
Agency and registered as "biopesticides."
Marrone Bio reported a net loss of $31 million on $14 million total
revenues for the year ended Dec. 31, 2016, compared with a net loss
of $43.7 million on $9.8 million total revenue for the year ended
Dec. 31, 2015. As of June 30, 2017, Marrone Bio had $47.81 million
in total assets, $83.46 million in total liabilities and a total
stockholders' deficit of $35.65 million.
Ernst & Young LLP issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016,
stating that the Company has incurred losses since inception, has a
net capital deficiency, and has additional capital needs that raise
substantial doubt about its ability to continue as a going concern.
MAYACAMAS HOLDINGS: Schwarzmann Tapped as Financial Advisor
-----------------------------------------------------------
The Chapter 11 trustees for Mayacamas Holdings, LLC and Profit
Recovery Center, LLC seek approval from the U.S. Bankruptcy Court
for the Northern District of California to hire a financial
advisor.
The trustees propose to employ Michael Schwarzmann to provide these
services in connection with the Debtors' Chapter 11 cases:
(a) assisting the trustees with the sale or disposition of
the Debtors' assets;
(b) investigation and reconstruction of the Debtors' uses of
cash pre-bankruptcy;
(c) assisting the trustees in the review and reconciliation
of asserted claims;
(d) reconciliation of pre-bankruptcy intercompany claims;
(e) assisting the trustees in the preparation of materials
as required; and
(f) preparation of materials and reports related to the
Debtors' cases.
Mr. Schwarzmann will charge an hourly fee of $425 for his
services.
Mr. Schwarzmann does not hold any interest adverse to the Debtors'
estates and is a "disinterested person" as defined in section
101(14) of the Bankruptcy Code, according to court filings.
About Mayacamas Holdings LLC
Mayacamas Holdings LLC owns a ranch located on a hilltop ridgeline
above the town of Calistoga in Napa, California, known as Mayacamas
Ranch. Mayacamas Ranch is Northern California's premier
exclusive-use group retreat center for companies, non-profit
groups, weddings, and families.
Mayacamas Holdings LLC and Profit Recovery Center LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Calif. Case Nos. 17-30326 and 17-30327) on April 7, 2017. David H.
Levy, manager, signed the petitions.
At the time of the filing, the Debtors estimated their assets and
debts at $1 million to $10 million.
Judge Dennis Montali presides over the cases. Rimon P.C. serves as
the Debtors' bankruptcy counsel.
On July 21, 2017, the court approved the appointment of Samuel R.
Maizel as bankruptcy trustee for Mayacamas Holdings, and Allan B.
Diamond as bankruptcy trustee for PRC.
MESOBLAST LIMITED: Reports Positive Trial Results of Cell Therapy
-----------------------------------------------------------------
Mesoblast Limited announced that the Phase 2a trial of its
Mesenchymal Precursor Cells (MPCs) for prevention of radiographic
and clinical features of knee osteoarthritis after traumatic injury
has been published in the peer-reviewed journal Arthritis Research
& Therapy. The results showed that a single intra-articular
injection of Mesoblast's product candidate MPC-75-IA reduced
cartilage loss and bone changes by six months, and improved pain
and function for over two years, when compared to controls.
The paper, entitled 'Safety, tolerability, clinical and joint
structural outcomes of a single intra-articular injection of
allogeneic mesenchymal precursor cells in patients post anterior
cruciate ligament reconstruction: a controlled double-blind
randomized trial', concluded that MPCs may modulate the
inflammation-related pathological processes that are associated
with post-traumatic knee osteoarthritis.
The trial's senior author, Professor Flavia Cicuttini, Head
Musculoskeletal Unit, Department of Epidemiology and Preventive
Medicine School of Public Health and Preventive Medicine at Monash
University, Australia, said: "As there are no treatments that slow
progression of osteoarthritis, these results are very exciting for
a population who are at high risk of developing this crippling
condition."
"In this study we found that a single injection of 75 million
mesenchymal precursor cells was well tolerated and appeared to slow
the onset of a number of the early changes at the knee that are
common following knee injury and signify the development of knee
osteoarthritis. Larger studies are warranted to confirm whether
this treatment will slow or even prevent the development of knee
osteoarthritis following early joint injuries," stated Professor
Cicuttini.
Trial design and key findings were:
* A double-blind placebo-controlled trial randomized (2:1) 17
patients aged 18-40 who had undergone ACL reconstruction 4-6
weeks earlier to either a single intra-articular injection of
75 million allogeneic MPCs plus hyaluronic acid (MPC+HA,
n=11) or hyaluronic acid (HA, n=6) alone. Pain, function and
quality of life parameters were measured over 24 months using
the composite of Knee Injury and Osteoarthritis Outcomes
Scores (KOOS) and the Short Form Health Survey (SF-36, a 36-
item, patient-reported survey of patient health). Joint
space width reflecting cartilage thickness was measured by
X-ray, and structural changes in the joint were measured by
magnetic resonance imaging (MRI)
* Intra-articular MPC administration post–ACL reconstruction
was well tolerated
* Patients who were treated with MPC+HA had significantly
greater improvement in KOOS symptoms and pain at 18 months
(both p=0.03) and 24 months (p=0.04 and 0.02, respectively),
compared with HA controls
* MPC+HA treated patients showed greater improvements in KOOS
pain, symptom, activities of daily living, and SF-36 bodily
pain scores at 6,12 and 24 months (p
MF GLOBAL: Allied World Seeks Dismissal of Adversary Suit
---------------------------------------------------------
Natalie Olivo, writing for Bankruptcy Law360, reports that Allied
World Assurance Co. Ltd. has asked a New York bankruptcy court to
dismiss the adversary proceeding commenced by MF Global due to
improper service.
Under the adversary proceeding, MF Global is suing its excess
insurer, Allied World, for refusing to participate in the payment
of a global settlement in connection with the brokerage's collapse,
Law360 relates. MF Global, Law360 adds, has alleged that Allied
World and other Bermuda-based excess insurers owe at least $25
million for policy coverage and damages of up to $40 million after
failing to contribute any money to a $159 million multidistrict
litigation settlement to resolve claims against the company's
former managers and directors, including ex-CEO Jon Corzine, a
former governor and U.S. senator from New Jersey.
The adversary case is MF Global Holdings Ltd. et al. v. Allied
World Assurance Co. Ltd. et al., case number 1:16-ap-01251.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance USA
Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case
Nos. 11-15059 and 11-5058), after a planned sale to Interactive
Brokers Group collapsed. As of Sept. 30, 2011, MF Global had
$41,046,594,000 in total assets and $39,683,915,000 in total
liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S. Trustee
to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy
Court entered an order approving the appointment of Louis J. Freeh,
Esq., of Freeh Group International Solutions, LLC, as Chapter 11
trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions
(Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On
Dec. 27, the Court entered an order installing Mr. Freeh as Chapter
11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case. J.
Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester,
Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as
bankruptcy counsel. The Garden City Group, Inc., serves as claims
and noticing agent. The petition was signed by Bradley I. Abelow,
Executive Vice President and Chief Executive Officer of MF Global
Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP,
as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained Capstone
Advisory Group LLC as financial advisor, while lawyers at Proskauer
Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of Goldman
Sachs Group Inc., stepped down as chairman and chief executive
officer of MF Global just days after the bankruptcy filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told creditors with
$1.134 billion in unsecured claims against the parent holding
company why they could expect a recovery of 13.4% to 39.1% from the
plan. As a consequence of a settlement with JPMorgan, supplemental
materials informed unsecured creditors their recovery was reduced
to the range of 11.4% to 34.4%. Bank lenders will have the same
recovery on their $1.174 billion claim against the holding company.
As a consequence of the settlement, the predicted recovery became
18% to 41.5% for holders of $1.19 billion in unsecured claims
against the finance subsidiary, one of the companies under the
umbrella of the holding company trustee. Previously, the predicted
recovery was 14.7% to 34% on bank lenders' claims against the
finance subsidiary.
MOBILESMITH INC: Ray Hemmig Appointed to Board of Directors
-----------------------------------------------------------
The Board of Directors of MobileSmith, Inc., appointed Ray Hemmig
as director effective Aug. 11, 2017. Mr. Hemmig has not been
appointed to any committee of the Board as of Aug. 17, 2017.
Ray Hemmig has more than 40 years of executive and board experience
in the retail and restaurant industries, including: J. C. Penney
(Store Management/Operations), Hickory Farms of Ohio (Franchise
Operations, Director of Training, Regional VP West Coast, National
Operations), Grandy's (VP Operations, COO; EVP (Saga Corp), Ace
Cash Express (CEO, Executive Chairman, Chairman), Buffet Partners,
LP dba Furr's Fresh Buffet (CEO, Chairman). He founded in October
1995 Retail and Restaurant Growth Capital (RRGC) - a small business
investment company (SBIC) that has been providing growth capital to
retail and restaurant industries for over 20 years. In 2013 Mr.
Hemmig founded Hemmig Investments, LTD - a family investment office
based in Dallas, TX, which is involved in non-controlling
investments in privately held businesses in a variety of
industries.
Mr. Hemmig has served in an active investor and/or management roles
in successful M&A transactions: Grandy's to Saga Corp. in 1983; On
the Border's to Brinker in 1996; the sale of Ace Cash Express in
2006; the sale of Restoration Hardware in 2008; and multiple
private company transactions at RRGC. His current and recent
ventures include: Snappy Salads -- based in Dallas, TX; The PGA
Tour Super Stores and Taco Mac -- both based in Atlanta, GA.
Mr. Hemmig has extensive (40+) corporate Board experience. He has
served on multiple public and privately held company boards:
Communications World; Party City (NYSE:PRTY); On the Border; Ace
Cash Express; Restoration Hardware (NYSE:RH); Full House Resorts
(NASDAQ:FLL), as well as numerous other privately held company
boards in the US and abroad. Mr. Hemmig is also an active member
and board member of the North Texas Chapter of the National
Association of Corporate Directors (NACD), where he holds the
highest "Leadership Fellow" Director status. He was a director of
The University of Texas at Dallas's, Institute for Excellence in
Corporate Governance (the "IECG"), and currently, he is the Chair
of the Jindal School of Management Advisory Board at The University
of Texas at Dallas, where he also serves on the Development Board.
He is a frequent speaker on the subjects of corporate governance
and retail and restaurant trade industries.
Mr. Hemmig has served on various Industry and Non-Profit
affiliations such as: Dallas Restaurant Association (Past
President), Texas and National Restaurant Associations (Director),
International Franchise Association, International Shopping Center
Association, FiSCA (formerly NaCCA), North Texas Food Bank (Board
Member and Past President) and other educational, community service
and charitable entities.
Mr. Hemmig received his business education from the University of
Toledo in Toledo, Ohio.
In consideration for advisory services including providing
strategic advice to the Company, promoting the Company in the
business and investment community and marketing certain of the
Company's products and services, the Company will pay to Mr. Hemmig
a cash fee of $2,500 per month.
In addition, the Company has granted Mr. Hemmig options under the
Company's 2016 Equity Incentive Plan, to purchase 338,146 shares of
the Company's common stock par value $0.001 per share, which
options are scheduled to vest over a three-year period in equal
quarterly installments, at exercise price of $1.40 per share,
subject to accelerated vesting upon the occurrence of certain
specified events.
About MobileSmith, Inc.
Raleigh, North Carolina-based MobileSmith, Inc., was incorporated
as Smart Online, Inc. in 1993 and changed its name to MobileSmith,
Inc. effective July 1, 2013. The company develops and markets
software products and services tailored to users of mobile devices.
Its flagship product, MobileSmith(R) Platform is an app
development platform that enables organizations to rapidly create,
deploy and manage custom, native smartphone and tablet apps
deliverable across iOS and Android mobile platforms.
MobileSmith reported a net loss of $7.50 million on $1.86 million
of total revenue for the year ended Dec. 31, 2016, compared to a
net loss of $7.71 million on $1.82 million of total revenue for the
year ended Dec. 31, 2015. The Company's balance sheet at June 30,
2017, showed $1.64 million in total assets, $51.22 million in total
liabilities and a total stockholders' deficit of $49.58 million.
Cherry Bekaert LLP, in Raleigh, North Carolina, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2016, citing that the Company has suffered
recurring losses from operations and has a working capital
deficiency as of Dec. 31, 2016. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
MOHAMAD TABATABAEE: Selling San Diego Property for $1.1 Million
---------------------------------------------------------------
Mohamad H. Tabatabaee asks the U.S. Bankruptcy Court for the
Southern District of California to authorize the sale of real
property located at 7462 Los Brazos, San Diego, California, to
Amanda and John Joslin for $1,150,000 and, if that sale falls out
of escrow, to Ms. Flossie Wong-Staal for $1,150,000, and, if that
sale also falls out escrow, to Pourfard Family Trust 12/11/13 for
1,100,000 in the form of a credit bid.
A hearing on the Motion is set for Aug. 31, 2017 for 10:00 a.m.
On June 16, 2016, the Debtor obtained an order allowing for the
employment of Realtor Karla G. Poulkka to list the Property. The
Property was then listed for sale on the San Diego County Multi
Listing Service, Zillow.com, Tilia.com and a variety of other
on-line listing sen/ices. Pursuant to the terms of Ms. Poulkka's
employment, the Property was listed for sale at $1,300,000. The
listing price was later reduced to $1,999,000.
On Aug. 7, 2017, the Debtor received an offer from the Joslins to
purchase the Property for $1,100,000. The Debtor submitted a
counter offer with a purchase price of $1,150,000, which was
accepted. An escrow has now been opened with The Heritage Escrow
Co. The sale is contingent upon the Joslins selling their current
residence. However, that residence has now been listed for sale
and the Joslins have been informed that this transaction must close
within 60 days and no later than Oct. 16, 2017.
On Aug. 15, 2017, the Debtor received a "backup" offer from Ms.
Wong-Staal for $1,150,000. Ms. Wong-Staal is represented by
Deborah Chew. The offer was accepted by Debtor.
The Debtor has also received a second backup offer from the Trust
in the amount of $1,100,000. The Trust is the living trust of
Ardeschir Pourfard and Kimberly Pourfard. Ardeschir Pourfard is
the principal of AJA Rugs, lnc, which is the largest judgment
creditor in this case; AJA Rugs is represented by David W. Brody.
The backup offer from the Trust is contingent upon the other two
offers failing out of escrow. The Trust's backup offer is in the
form of a "credit bid" -- whereby the Trust will use the value of
AJA Rug's judgment lien to purchase the Property. The Trust is
represented by real estate agent Kathy Grust of Bennion Deville
Homes.
A copy of the purchase agreements attached to the Motion is
available for free at:
http://bankrupt.com/misc/Mohamad_Tabatabaee_271_Sales.pdf
The Property is encumbered by a single deed of trust in favor of US
Bank, with an outstanding loan balance of approximately $520,000.
On Aug. 10, 2017, the Court issued an order shorting time on a
Motion to Sell Los Brazos, with a hearing date of Oct. 31, 2017 and
any opposition to the Motion due by Aug. 30, 2017 at 12:00 p.m.
Accordingly, in the exercise of his sound business judgment, the
Debtor believes that the sale of the Property at this time is in
the best interest of the Debtor, the bankruptcy estate, and his
creditors. He asks entry of an order authorizing and approving the
sale of the Property to any of the prospective buyers set forth on
the terms and conditions set forth in each buyer's accepted offer,
free and clear of any liens, claims and encumbrances.
About Mohamad Tabatabaee
Mohamad H. Tabatabaee filed a petition for relief under Chdapter 13
of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 16-02772) on May
10, 2016. The matter was converted to a Chapter 11 bankruptcy on
July 27, 2016.
The Debtor's attorney:
David L. Speckman, CSB
SPECKMAN LAW FIRM
1350 Columbia Street, Suite 503
San Diego, California 92101
Tel: (619) 696-5151
Fax: (619) 696-5196
E-mail: speckmanlawfirm@gmail.com
MOREHEAD MEMORIAL: Taps Donlin Recano as Administrative Agent
-------------------------------------------------------------
Morehead Memorial Hospital seeks approval from the U.S. Bankruptcy
Court for the Middle District of North Carolina to hire Donlin,
Recano & Company, Inc. as administrative agent.
The firm will provide these bankruptcy administrative services:
(a) assist in the solicitation, balloting, tabulation and
calculation of votes, and prepare any appropriate report
in furtherance of confirmation of a plan of
reorganization;
(b) generate an official ballot certification and testify,
if necessary, in support of the ballot tabulation
results;
(c) In connection with the balloting services, handle
requests for documents;
(d) gather data in conjunction with and assist in the
preparation, of the Debtor's schedules of assets and
liabilities and statement of financial affairs; and
(e) manage and coordinate any distributions pursuant to a
confirmed plan of reorganization or otherwise; and
Donlin received payment of $20,659.19 on June 22, and $11,240.04 on
July 7 for pre-bankruptcy services.
Roland Tomforde, chief operating officer of Donlin, disclosed in a
court filing that his firm is a "disinterested person" as defined
in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Roland Tomforde
Donlin, Recano & Company, Inc.
6201 15th Avenue,
Brooklyn, NY 11219
About Morehead Memorial Hospital
Founded in 1924, Morehead Memorial Hospital --
http://www.morehead.org/-- is a North Carolina non-profit
corporation that owns and operates a 108-bed general acute care
community hospital on a 22-acre campus located at 117 East Kings
Highway, Eden, North Carolina. Within the Hospital Real Property,
Morehead Memorial also owns and operates a 121-bed skilled nursing
facility. It also owns several other parcels of real property
located in Eden that are contiguous to, or in the general vicinity
of, the Hospital Real Property.
Morehead Memorial Hospital filed for Chapter 11 bankruptcy
protection (Bankr. M.D.N.C. Case No. 17-10775) on July 10, 2017,
estimating its assets and liabilities at between $10 million and
$50 million each. The petition was signed by Dana M. Weston, chief
executive officer.
Judge Benjamin A. Kahn presides over the case.
Thomas W. Waldrep, Jr., Esq., Jennifer B. Lyday, Esq., and
Francisco T. Morales, Esq., at Waldrep LLP serve as the Debtor's
bankruptcy counsel. The Debtor employed Womble Carlyle Sandridge &
Rice, LLP as special counsel; Grant Thornton LLP as financial
advisor; Hanlon Hammond Camp LLC as investment banker and
operational and strategic advisor; and Donlin, Recano & Company,
Inc. as claims and noticing agent.
On July 24, 2017, William Miller, the bankruptcy administrator for
the Middle District of North Carolina, appointed an official
committee of unsecured creditors. The committee hired Sills Cummis
& Gross, P.C. as co-counsel.
NAVEX ACQUISITION: Moody's Cuts Rating on 1st Lien Loans to B3
--------------------------------------------------------------
Moody's Investors Service affirmed Navex Acquisition, LLC B3
corporate family, B3-PD probability of default and Caa2 second lien
term loan ratings. Concurrently, Moody's downgraded the first lien
credit facilities to B3 from B2, following the approximately $83
million increase to its existing first lien term loan to pay in
full its second lien term loan with the proceeds. The rating
outlook is stable.
RATINGS RATIONALE
The B3 corporate family rating ("CFR") reflects Navex's high
financial leverage of about 6.6x (as measured by Moody's adjusted
debt to EBITDA for LTM June 30, 2017), which is expected to decline
to the upper 5x over the next 12 to 18 months. The rating
incorporates the company's modest revenue and EBITDA base and
private equity ownership. Additionally, although Navex has been
expanding its product focus through acquisitions in recent years,
its product set remains narrower than the broader and integrated
offerings of its larger competitors across the governance, risk and
compliance ("GRC") market. The B3 rating derives support from the
recurring stream of subscription revenues, high renewal rates,
EBITDA margins of about 30% and low capital expenditure
requirements that lend stability and predictability to cash flow
generation. Furthermore, Navex will benefit from demand for GRC and
ethics and compliance ("E&C") solutions arising from a stable to
increasingly complex global regulatory environment and enforcement
requirements.
The debt instrument ratings are determined in conjunction with
Moody's Loss Given Default Methodology and reflect an average
recovery across the capital structure. The B3 rating on the first
lien credit facilities is now the same as the corporate family
rating, reflecting their dominance in the capital structure and its
downgrade from B2 due to elimination of the second lien term loan.
Moody's highlights Navex Global, Inc. is the borrower and Navex
Acquisition, LLC is the Holdco guarantor of the bank debt. The bank
debt is guaranteed by the primary borrower's wholly-owned and
restricted domestic subsidiaries, as well as by Navex Acquisition,
LLC and holding company Navex Global Holding Company.
Liquidity profile is good based on a cash balance of almost $60
million and a $20 million undrawn revolver at June 30, 2017 and FCF
expected to be about $30 million for FY ending December 2018.
Moody's anticipates good cushion under the springing financial
covenant applicable to the first lien credit facilities. The first
lien term loan amortizes 1% with a bullet due at maturity.
The stable rating outlook reflects Moody's views that revenue will
grow in the mid to high single digit percentage range, with
modestly improving EBITDA margins, leverage declining to the upper
5x and free cash flow to debt being in the mid single digit
percentages. Moody's expects the company to benefit from increasing
demand for E&C solutions, resulting in core organic revenue growth
from higher penetration within domestic and international markets.
A rating upgrade over the near term is unlikely given Navex's
modest revenue and EBITDA base as well as high financial leverage.
Moody's could consider an upgrade if the company substantially
increases its scale, while improving its profitability such that
debt to EBITDA is sustained below 5x and free cash flow to debt is
at or above a high single digit percentage.
Navex's ratings could be pressured by a decline in revenues or
EBITDA, if Moody's expects the company will not be able to sustain
positive free cash flow or if the company's liquidity situation
deteriorates.
The following ratings were affirmed:
Issuer: Navex Acquisition, LLC
Corporate Family Rating -- B3
Probability of Default Rating -- B3-PD
Second lien term loan credit facility -- Caa2 (LGD6)*
*To be withdrawn upon being paid in full via the above
transaction.
The following ratings were downgraded:
Issuer: Navex Acquisition, LLC
First lien revolving credit facility -- to B3 (LGD4) from B2
(LGD3)
First lien term loan credit facility -- to B3 (LGD4) from B2
(LGD3)
Outlook -- Stable
The principal methodology used in these ratings was Software
Industry published in December 2015.
Navex Acquisition, LLC is a provider of integrated software content
services in the ethics and compliance ("E&C") space, providing
governance, risk and compliance ("GRC") solutions to about 12,500
customers worldwide, including global enterprises and small and
medium businesses ("SMB"). Navex had revenues of about $173
million, as of LTM June 30, 2017, and has been owned by Vista
Equity Partners since November 2014.
NAVIENT CORP: S&P Affirms 'BB-' ICR & Retains Negative Outlook
--------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-/B' long- and short-term issuer
credit ratings on Navient Corp. The outlook remains negative. At
the same time, S&P affirmed its 'B+' senior unsecured debt rating.
The rating affirmation reflects Navient's stable operating cash
flows, maintenance of adequate risk-adjusted capital, ability to
access the unsecured debt markets, and reduction in near-term debt
maturities. Navient's portfolios of Federal Family Education Loan
Program (FFELP) and private education loans provide reliable cash
flows, notwithstanding recent spread compression, and we believe
the company can generate $1.5 billion or more of cash from
operations. Navient's large portfolio of FFELP loans have minimal
credit risk due to government guarantees, and S&P sees its
risk-adjusted capital (RAC) ratio of about 7.2% as adequate.
S&P said, "The negative outlook on Navient reflects the risks we
see stemming from litigation against the company and its
concentration of large unsecured debt maturities in 2018-2020.
Approximately $5.9 billion of unsecured debt will mature in
2018–2020. Excluding any impact of recent litigation, we expect
Navient will generate at least $1.5 billion per year in cash from
operations and will successfully refinance upcoming unsecured debt
maturities. Also, we expect Navient to maintain adequate
risk-adjusted capital, with a RAC ratio of at least 7.0%.
"We could lower the ratings in the next 12 months if Navient does
not reduce unsecured debt due in 2018-2020 or increase liquid
assets to more clearly demonstrate that it is well-positioned to
meet those maturities. If unfavorable market conditions restrict
Navient's ability to continue to enhance its liquidity and manage
upcoming maturities, we could lower the rating. Also, we could
lower the ratings if the company's RAC ratio declines below 7.0% on
a sustained basis, perhaps as a result of share repurchases or
judgments or settlements related to litigation.
"We could revise the outlook to stable if Navient resolves the CFPB
litigation without a significant financial impact. We could also
revise the outlook to stable if Navient further reduces unsecured
debt maturities in 2018-2020 or increases on-balance-sheet
liquidity in the form of unrestricted cash and available-for-sale
securities to fully cover debt maturities through 2018 and
maintains 12-18 months of liquidity needs thereafter, including
unsecured debt maturities. We would look favorably upon actions to
conserve or build cash, such as a reduction in share repurchases or
additional issuances of longer-term debt."
NEUSTAR INC: S&P Affirms 'B+' CCR on Completion of Aerial Merger
----------------------------------------------------------------
Private equity sponsor Golden Gate Capital has completed its
acquisition of U.S. telecommunications and information services
provider Neustar Inc., which has been merged into Aerial Merger Sub
Inc., a subsidiary of Aerial Parent Corp. (Aerial).
As a result, S&P Global Ratings affirmed its 'B+' corporate credit
rating on Sterling, Va.-based Neustar Inc. The outlook is stable.
S&P said, "We also affirmed the 'BB' issue-level rating on the
company's pre-merger senior secured debt. We subsequently withdrew
our rating on this debt.
"At the same time, we lowered our issue-level rating on the senior
unsecured notes to 'B-' from 'B' and revised the recovery rating on
this debt to '6' from '5' due to the higher amount of senior
secured debt post-merger. The '6' recovery rating indicates our
expectation for negligible (0%-10%; rounded estimate: 5%) recovery
of principal and interest for unsecured lenders in the event of
payment default.
"We removed all of our ratings on Neustar from CreditWatch, where
we had placed them with negative implications on June 21, 2016."
The downgrade of the senior unsecured debt follows the completion
of Neustar's acquisition by Golden Gate Capital and its merger into
Aerial Merger Sub Inc. (with Neustar the surviving entity), a
subsidiary of Aerial Parent Corp. S&P said, "The lower recovery
rating for Neustar's senior unsecured debt reflects our assessment
that the increase in secured debt (which has been assumed by
Neustar) to fund the acquisition reduces recovery prospects for the
unsecured debt issues in our hypothetical default scenario. Still,
we expect that Neustar's $300 million of pre-merger 4.50% senior
unsecured notes will be repaid by the Sept. 7, 2017 redemption
date.
"The stable outlook is based on our consolidated view of Aerial's
credit profile, which includes revenue and cash flow visibility
from the NPAC contract over the next year and healthy growth from
other segments such that leverage remains below 4x over the next
year.
"We could lower the rating on Neustar if we downgrade Aerial. This
could occur if business conditions deteriorate in the Information
Services & Analytics (IS&A) segment, resulting from higher churn
and competitive pressures from larger peers. We could also lower
the rating if the company makes a debt-financed dividend to
shareholders or an acquisition that pushes adjusted leverage above
5x on a sustained basis.
"We could raise the rating on Neustar if we upgrade Aerial. This
could occur if the company maintains adjusted leverage below 4x
over a sustained period. However, given the company's private
equity ownership, an upgrade would require greater comfort around
Neustar's longer-term financial policy and a commitment to maintain
leverage below 4x following the expiration of the NPAC contract."
NICE CAR: Has Until Nov. 20 to Exclusively File Plan
----------------------------------------------------
The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the
Southern District of Florida has granted Nice Car, Inc.'s request
to extend the time for the Debtor to have the exclusive right to
(i) file a plan by an additional 90 days or until Nov. 20, 2017,
and (ii) obtain acceptances for the plan by an additional 90 days
or until Feb. 20, 2018.
About Nice Car, Inc.
Founded in 1977, Nice Car -- https://nicecar1977.com/ -- is a
family owned and operated full service used car dealer. The
Debtor's business is located in Hollywood, Broward County, Florida
and serves customers throughout the South Florida area. Steven
Kerzer is the 100% shareholder of the Debtor and the Debtor's
president.
Nice Car, Inc., filed a Chapter 11 petition (Bankr. S.D. Fla. Case
No. 17-15001), on April 24, 2017. The petition was signed by
Steven Kerzer, president. The case is assigned to Judge Raymond B.
Ray. The Debtor is represented by Robert F. Reynolds, Esq., at
Slatkin & Reynolds, P.A. At the time of filing, the Debtor had
estimated assets and liabilities ranging from $10 million to $50
million.
OAKS OF PRAIRIE: Wants To Use Cash Collateral Though Aug. 31
------------------------------------------------------------
The Hon. Thomas M. Lynch of the U.S. Bankruptcy Court for the
Northern District of Illinois has authorized The Oaks of Prairie
Point Condominium Association to use cash collateral during the
period Aug. 1, 2017, through Aug. 31, 2017.
A status hearing on the cash collateral use will be held on Aug.
25, 2017, at 11:00 a.m.
The Debtor will pay Illinois State Bank the sum of $10,728.81 by
Aug. 15, 2017. The payments will be made from the Debtor's reserve
account at Illinois State Bank, to be creditor to the Debtor's
loan.
During the duration of the cash collateral court order, the Debtor
will not make any disbursements from or deposits to the
Debtor-in-Possession account currently located at Rockford Bank and
Trust.
In return for the Debtor's continued interim use of cash
collateral, the Lender is granted valid and perfected, enforceable
security interest in and to the Debtor's post-petition accounts,
assessments and other receivables which are no or hereafter become
property of the estate to the extent and priority of its alleged
prepetition liens, but only to the extent of any diminution in the
value of the assets during the period from the commencement of the
case through Aug. 31, 2017.
A copy of the Order is available at:
http://bankrupt.com/misc/ilnb16-80238-178.pdf
As reported by the Troubled Company Reporter on July 17, 2017, the
Court authorized the Debtor to use cash collateral of Illinois
State Bank on an interim basis, during the period July 1, 2017,
through July 31, 2017.
About The Oaks of Prairie Point
Condominium Association
The Oaks of Prairie Point Condominium Association is an Illinois
corporation that owns and operates condominium buildings located in
Lake in the Hills, Illinois, known as "The Oaks of Prairie Point
Condominium".
The Association sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 16-80238) on Feb. 3,
2016, estimating assets and liabilities at $1 million to $10
million. Donna Smith, property manager, signed the petition.
The case is assigned to Judge Thomas M. Lynch.
The Debtor is represented by Thomas W. Goedert, Esq., at Crane,
Heyman, Simon, Welch & Clar, in Chicago, Illinois.
P3 FOODS: May Use Cash Collateral Through Sept. 8
-------------------------------------------------
The Hon. Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois has entered an eleventh interim order
authorizing PNC Equipment Finance, LLC, to use cash collateral of
PNC Equipment Finance, LLC, through Sept. 8, 2017.
A hearing to consider the continued use of cash collateral will be
held on Sept. 5, 2017, at 10:00 a.m.
PNC asserts a secured claim in the amount of $689,965.62 as of the
Petition Date.
PNC and the Debtor agree that all of the Debtor's cash and
available funds, wherever located, whether as original collateral
or proceeds of other collateral, constitute PNC's cash collateral.
PNC is granted and will have postpetition replacement liens, to the
same extent and with the same priority as held prepetition on the
same type of assets.
The Debtor will make an adequate protection payment, in the amount
of $16,428.14 to PNC.
As reported by the Troubled Company Reporter on July 19, 2017, the
Court authorized the Debtor's use and expenditure of PNC Equipment
Finance, LLC,'s cash collateral through Aug. 12, 2017.
About P3 Foods, LLC
P3 Foods, LLC, which operates nine Burger King franchises in
Minneapolis, Minnesota, filed a chapter 11 petition (Bankr. N.D.
Ill. Case No. 16-32021) on Oct. 6, 2016.
The case is assigned to Judge Donald Cassling.
The Debtor tapped Richard L. Hirsh, Esq., at Richard L. Hirsh,
P.C., as counsel. The Debtor also engaged Aldridge Chasewater LLC
as accountant.
An official committee of unsecured creditors has not been appointed
in the case.
PACIFIC 9: Wants Exclusive Plan Filing Deadline Moved to Dec. 20
----------------------------------------------------------------
Pacific 9 Transportation, Inc., asks the U.S. Bankruptcy Court for
the Central District of California to extend the exclusivity period
during which only Pacific 9 Transportation, Inc., may file a plan
of reorganization to Dec. 20, 2017, from Aug. 22, 2017.
As reported by the Troubled Company Reporter on July 28, 2017, the
Court extended the exclusive period during which only the Debtor
may file a plan of reorganization from the current deadline of
April 24, 2017, to Aug. 22, 2017.
The Debtor says its bankruptcy presents complex issues of
employment law that must be considered when resolving the claims by
the Debtor's drivers and the California Labor Commissioner. In
addition, the Debtor's bankruptcy is complex due to the
pre-petition class action lawsuits and the number of claims filed
against. As of Aug. 22, 2017, 58 proofs of claim have been filed,
42 of which were filed by the Debtor's drivers and the California
Labor Commissioner. Due to the complex nature and number of claims
against the Debtor and the pre-petition class action lawsuits, like
the Castro Class Action, the Debtor proposed a plan that presents
two alternatives. The U.S. Trustee and the Official Committee of
Unsecured Creditors filed objections to the Plan and Disclosure
Statement.
The Debtor says it has been diligently working with the Official
Committee of Unsecured Creditors regarding the terms of a plan and
disclosure statement. As a result, the Debtor filed its second
amended Chapter 11 plan of reorganization dated July 27, 2017, and
its second amended Chapter 11 disclosure statement dated July 27,
2017. A hearing on the approval of the Second Amended Disclosure
Statement is currently set for Sept. 7, 2017.
The Debtor also says it needs time to address any objections the
U.S. Trustee may have to the Second Amended Disclosure Statement.
Further, assuming the Debtor resolves the Committee' objections and
the U.S. Trustee's objections (to the extent it has any) to the
Second Amended Plan and Disclosure Statement, the Debtor will need
time to either file a third amended plan and disclosure statement
or attend the hearing on the adequacy of the Second Amended
Disclosure Statement.
The Debtor assures the Court that it is making good faith progress
toward reorganization. The Debtor is in the process of converting
to its new employment model, which is essential to its
reorganization. Further, the Debtor has provided the Committee
with all of the information it has requested in the 2004 Motion.
The Debtor says it is paying its bills as they become due and tells
the Court that it is not seeking an extension of exclusivity in
order to pressure creditors to submit to the Debtor's
reorganization demands.
About Pacific 9 Transportation
Pacific 9 Transportation, Inc., is a trucking company located in
Los Angeles, California that provides trucking services throughout
California. The Company rents real property located at 21900 S.
Alameda Street, Los Angeles, CA 90810 for the premises used to
store its trucks, trailers, ocean containers, and legally related
equipment. As of Sept. 1, 2016, it began using the premises as its
office and principal place of business.
Pacific 9 sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. C.D. Cal. Case No. 16-15447) on April 26, 2016. The
petition was signed by Le Phan, CFO. The Debtor estimated both
assets and liabilities in the range of $1 million to $10 million.
The case is assigned to Judge Julia W. Brand.
The Debtor hired Haberbush & Associates LLP as its general
bankruptcy counsel; and The Law Firm of Atkinson, Andelson, Loya,
Ruud & Romo as its special counsel.
On June 14, 2016, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee retained
Danning, Gill, Diamond & Kollitz, LLP, as local counsel, and Armory
Consulting Company as financial advisor.
PARKER DEVELOPMENT: SummitBridge Files Amended Liquidation Plan
---------------------------------------------------------------
SummitBridge National Investments III LLC, a secured creditor of
Parker Development, LLC, filed with the U.S. Bankruptcy Court for
the Eastern District of Virginia a first amended disclosure
statement describing its first amended plan of liquidation, dated
August 18, 2017, for the Debtor.
This latest liquidation plan The Plan provides the Court shall
appoint John D. McIntyre, of the law firm of Wilson & McIntyre,
PLLC, in Norfolk, Virginia, as plan administrator. Confirmation of
the Plan will constitute approval of the appointment of the Plan
Administrator. The Plan Administrator shall be compensated on an
hourly basis at the rate of $325/hour. The Plan Administrator also
shall be entitled to reimbursement of all out-of-pocket expenses
incurred by the Plan Administrator in the performance of his duties
under this Plan.
The Plan Administrator shall post a bond equal to 100% of the
estimated fair market value of the Norfolk, Virginia Property,
subject to such lesser amount as may be agreed upon by the Plan
Administrator, the Plan Proponent, and the Debtor, the premiums of
which shall be paid from the Debtor's funds on hand.
The Plan Administrator will engage the services of Fox & Associates
Partners, Inc. t/a Tranzon Fox, based in Virginia Beach and
Richmond, Virginia, through William G. Londrey and Steven I. Fox,
two of its partners, as auctioneer, and shall promptly commence the
process to have the Property advertised and sold in a commercially
reasonable manner at an Auction Sale.
At the closing of the Auction Sale, the closing agent will be
authorized to distribute the proceeds of sale to pay all costs of
sale, including the compensation of the Auctioneer, all unpaid
post-petition real estate taxes, storm water fees and other such ad
valorem municipal charges prorated to the date of closing (to the
extent not paid from funds on hand with the Debtor), the Allowed
Secured Claim of Norfolk (to the extent not otherwise paid on the
Effective Date from funds on hand with the Debtor) and the Allowed
Secured Claim of SummitBridge.
Until the date of closing on the sale of the Property, the Plan
Administrator shall continue making monthly adequate protection
payments to SummitBridge that were being made by the Debtor during
the Chapter 11 Case, that is, the monthly sum of $5,786.44 (or such
higher or lower amount as may be required by the variable interest
rate described in the loan documents that form the basis of
SummitBridge's secured claim), representing interest accruing on
the debt owed to SummitBridge at the non-default rate.
Upon Confirmation, all property of the estate shall be vested in
the Debtor, subject to the liens of the City of Norfolk and
SummitBridge, and shall be subject to the full, sole, and exclusive
authority of the Plan Administrator. The Debtor, through its
designated representative or counsel, may communicate with the Plan
Administrator but shall have no control, authority or influence
over the operation of the Property or any other assets of the
Estate, including any bank accounts maintained by the Debtor.
The initial liquidating plan provided that the Court shall appoint
a plan trustee who shall be selected and identified by the Plan
Proponent upon notice to all interested parties. The Plan Trustee
shall have full, sole, and exclusive authority to operate and sell
the commercial real estate in the City of Norfolk, Virginia. The
authority to operate the Property shall include the authority to
negotiate new leases, lease extensions and lease renewals, and to
pursue enforcement of existing and new leases, including the
collection of unpaid rent. The authority to sell the Property shall
include the authority to convey the Property by special warranty
deed.
A full-text copy of the First Amended Disclosure Statement is
available at:
http://bankrupt.com/misc/vaeb16-73359-95.pdf
About Parker Development
Parker Development, LLC, also known as Parker Development I, LLC,
is a Virginia limited liability company that owns and operates
certain commercial real estate in the City of Norfolk, Virginia.
Parker Development filed a Chapter 11 petition (Bankr. E.D. Va.
Case No. 16-73359) on Sept. 28, 2016. The petition was signed by
George G. Parker, president. Judge Stephen C. St. John presides
over the case. Greer W. McCreedy, II, Esq., at The McCreedy Law
Group, PLLC, serves as bankruptcy counsel. At the time of filing,
the Debtor estimated assets and liabilities at $1 million to $10
million.
PASCO COUNTY FAH: Moody's Affirms Ba3 Rating on 1979 Revenue Bonds
------------------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 rating of Pasco
County (FL) Federal Assistance Housing Inc., Mortgage Revenue Bonds
Series 1979. $450,000 of outstanding debt is affected. The outlook
is revised to stable from negative.
The rating action is based on the project being granted a new
housing assistance payment ("HAP") contract under which rental
rates increased to levels comparable to the local Housing and Urban
Development ("HUD") Fair Market Rent ("FMR") levels. The project
has also entered into a contract with Pasco County to receive
grants for repairs and maintenance although the county is not
legally obligated to cover operating and/or bond debt service gaps.
Rent increases will help stabilize and potentially improve
financial performance and Pasco County grants will help address
deficiencies identified by the HUD REAC Physical Assessment Score.
Rating Outlook
The outlook has been revised to stable from negative given the
continued support of Pasco County and rental rate increases.
Factors that Could Lead to an Upgrade
A significant and sustained improvement in financial performance
above a 1.00x DSC
Factors that Could Lead to a Downgrade
Reliance of debt service reserve to make debt service payments.
Legal Security
The bonds are secured by revenues and trustee-held reserve funds
from Hudson Hills Manor. The pledged revenues also include payments
from a Housing Assistance Payment (HAP) contract with the U.S.
Department of Housing and Urban Development (HUD). The Project
continues receiving discretionary financial support from the
Authority, although the entity is not legally obligated to cover
operating and/or bond debt service gaps.
Use of Proceeds
Not Applicable
Obligor Profile
The Pasco County Housing Authority is a non-profit organization
created by Pasco County in 1973 and released from the County as a
separate entity in 1977. The Authority was established in
accordance with Florida Statutes to develop, manage, and maintain
low income housing and housing assistance programs for low income
families, disabled, elderly, and single citizens of Pasco County.
Methodology
The principal methodology used in this rating was Global Housing
Projects published in June 2017.
PAYLESS INC: S&P Assigns 'B-' CCR After Emergence From Bankruptcy
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' corporate credit rating to
Kansas-based footwear retailer Payless Inc. The outlook is
negative.
S&P said, "At the same time, we assigned a 'B+' issue-level rating
with a '1' recovery rating to the $80 million first-lien tranche
A-1 term loan, and 'B-' issue-level rating with a '4' recovery
rating to the $200 million first-lien tranche A-2 term loan. The
'1' recovery rating on the tranche A-1 term loan facility reflects
our expectation for very high (90%-100%; rounded estimate: 95%)
recovery in the event of a payment default. Our '4' recovery rating
on the tranche A-2 term loan facility reflects our expectation for
average (30%-50%; rounded estimate: 35%) recovery in the event of a
payment default."
On Aug. 10, 2017, the company's plan was declared effective and
Payless emerged from bankruptcy. Balance sheet debt has been
reduced by about 50%, with the capital structure now consisting of
an $80 million first-lien tranche A-1 term loan, a $200 million
first-lien tranche A-2 term loan, and a $260 million asset-based
lending (ABL) facility which we expect to have moderate
availability. Payless has also meaningfully reduced its cost
structure by shrinking its store base by about 20% and lowering its
rent obligations through negotiations with landlords. Still, the
store base remains extensive with around 3,600 locations.
S&P said, "The ratings reflect our view that competition in the
value footwear segment will continue to create a very challenging
operating environment, and competing on price alone will not be
enough to consistently drive profit growth. The discount shoe
category has become increasingly competitive in recent years, and
we believe off-price competitors like TJX and DSW have taken some
market share from Payless over that time period. Also, recent
results from even higher-end footwear retailers have been weak. In
addition, we forecast the company's post-emergence adjusted credit
metrics will remain relatively weak despite reduced debt under the
new capital structure, as the company still faces substantial
operating lease commitments, which we have incorporated into our
calculation of credit metrics. The company is now controlled by
former lenders and we expect that over time, the new owners will
seek to monetize their investment, which could lead to a sale or
releveraging of the company.
"The negative outlook reflects our view that the discount shoe
segment will continue to be very competitive, and as a result
Payless will have difficulty meaningfully improving traffic trends
and same-store sales over the next 12 months. As a result, we
expect fixed-charge coverage to remain in the mid-1.0x area over
that time period.
"We could lower the rating if Payless is unable to demonstrate
improvement in operating trends as planned, such that we would view
the company's restructuring and new business strategy to be
insufficient to support the capital structure. Under this scenario,
intense competition in the discount footwear industry or
merchandising/inventory missteps could lead to persistent traffic
declines, which would reduce sales and margins below post emergence
expectations. Under this scenario, credit metrics would weaken
relative to emergence levels on a sustained basis, and the company
would need to rely more heavily on usage of its revolving credit
facility to fund business operations.
"We could revise the outlook to stable if the company is able to
demonstrate traction in its new operating initiatives, delivering
stronger-than-expected operating performance that exceeds their
stated plans. Under this scenario, sales would grow in the
low-single digits in 2018 (compared with our base-case forecast of
a low-single-digit decline), and gross margin would expand 100 bps
above our current expectations. This would result in fixed-charge
coverage in the mid- to high-1.0x area, with moderately positive
free operating cash flow. We would also need to believe that the
potential for re-leveraging is minimal."
PEEKAY ACQUISITIONS: Curtis, RLF Representing Term A Lenders
------------------------------------------------------------
Curtis, Mallet-Prevost, Colt & Mosle LLP and Richards, Layton &
Finger, P.A., filed with the U.S. Bankruptcy Court for the District
of Delaware a verified statement pursuant to Bankruptcy Rule 2019
of the Federal Rules of Bankruptcy Procedure in connection with
their representation of certain holders and investment advisors
holding secured debt issued under that certain Financing Agreement
dated as of Dec. 31, 2012, in the Chapter 11 cases of Peekay
Acquisitions, LLC and affiliates.
Starting in January 2016, the Term A Lenders retained Curtis to
represent them in connection with a potential restructuring of the
Debtors' obligations under the Financing Agreement. In July 2017,
the Term A Lenders retained RLF to serve as Delaware local counsel
in connection with a potential restructuring of the Debtors'
obligations under the Financing Agreement.
The Term A Lenders hold disclosable economic interests or act as
investment managers or advisors to funds and accounts that hold
disclosable economic interests in relation to the Debtors. In
accordance with Bankruptcy Rule 2019 and based upon information
provided to Counsel by each of the Term A Lenders.
As of the date of this Verified Statement, Counsel represents only
the Term A Lenders in connection with the Financing Agreement and
does not represent or purport to represent any entity or entities
other than the Term A Lenders in connection with the Debtors'
Chapter 11 cases.
The Term A Lenders include:
a. Alpine Associates, A Limited Partnership
574 Sylvan Avenue, Suite 100
Englewood Cliffs, NJ 07632
Nature & Amount of Disclosable Economic
Interests: $3,600,000 Term A Loans
b. Alpine Heritage, L.P.
574 Sylvan Avenue, Suite 100
Englewood Cliffs, NJ 07632
Nature & Amount of Disclosable Economic
Interests: $2,500,000 Term A Loans
c. Alpine Heritage II, L.P.
574 Sylvan Avenue, Suite 100
Englewood Cliffs, NJ 07632
Nature & Amount of Disclosable Economic
Interests: $600,000 Term A Loans
d. Alpine Heritage Offshore Fund Ltd.
574 Sylvan Avenue, Suite 100
Englewood Cliffs, NJ 07632
Nature & Amount of Disclosable Economic
Interests: $300,000 Term A Loans
e. Chatham Capital Management IV, LLC
on behalf of various managed funds and
accounts
1230 Peachtree Street NE
Suite 1750
Atlanta, GA 30309
Nature & Amount of Disclosable Economic
Interests: $5,000,000 Term A Loans
f. The K2 Principal Fund L.P.
2 Bloor Street West
Toronto, ON M4W 3E2
Nature & Amount of Disclosable Economic
Interests: $8,000,000 Term A Loans
$2,000,000 Term B Loans
g. Tor Capital LLC
18 Kittredge Street
Walpole, MA 02081
Nature & Amount of Disclosable Economic
Interests: $2,000,000 Term A Loans
$1,000,000 Term B Loans
h. Twin Haven Special Opportunities Fund IV, LP
11111 Santa Monica Boulevard
Suite 525
Los Angeles, CA 90025
Nature & Amount of Disclosable Economic
Interests: $5,000,000 Term A Loans
$3,000,000 Term B Loans
The Counsel for the Term Lenders can be reached at:
Mark D. Collins, Esq.
Amanda R. Steele, Esq.
Brendan J. Schlauch, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
E-mail: collins@rlf.com
steele@rlf.com
schlauch@rlf.com
-- and --
Steven J. Reisman, Esq.
Shaya Rochester, Esq.
Joshua S. Geller, Esq.
CURTIS, MALLET-PREVOST, COLT & MOSLE LLP
101 Park Avenue
New York, New York 10178-0061
Tel: (212) 696-6000
Fax: (212) 697-1559
E-mail: sreisman@curtis.com
srochester@curtis.com
jgeller@curtis.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 on (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 debt 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.
SSG Advisors, LLC, is the Debtors' investment banker.
Traverse, LLC, is the Debtors' financial advisor.
Rust Consulting/Omni Bankruptcy -- http://omnimgt.com-- is the
Debtors'
claims and noticing agent.
PEEKAY ACQUISITIONS: Has Interim OK to Use Cash; Hearing on Sept. 6
-------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has entered
an interim order authorizing Peekay Acquisitions, LLC, and
affiliates to use cash collateral.
A final hearing on the cash collateral use will be held on Sept. 6,
2017, at 10:00 a.m. (ET). Objections to the cash collateral use
must be filed by Aug. 30, 2017, at 4:00 p.m. (ET).
As reported by the Troubled Company Reporter on Aug. 21, 2017, the
Debtors sought court permission to use cash collateral and all
other prepetition collateral in accordance with the 13-week
cash-flow forecast. The cash-flow forecast spanning the weeks
ending Aug. 12, 2017, through Oct. 27, 2017, provides total general
operating disbursements of approximately $8,631,888, and
non-recurring disbursements in the aggregate sum of $2,165,316.
The Debtors recently entered into a proposed stalking horse
purchase agreement with TLA Acquisition Corp., an affiliate of the
Debtors' senior secured Term A Lenders, which provides for the sale
of substantially all the Debtors' assets.
Pursuant to a certain Prepetition Financing Agreement by and among
the Debtors Christals Acquisition, LLC, Peekay Acquisition, LLC,
and certain subsidiaries, and Cortland Capital Market Services LLC,
as collateral and administrative agent for the Lenders thereto and,
and CB Agency Services, LLC, as origination agent for the Lenders
thereto, (1) the Term A Lenders provided the Debtors with Tranche A
Term Loans and (2) the Term B Lenders provided the Debtors with
Tranche B Term Loans.
The Term A Lenders' consent to the use of cash collateral will
automatically terminate upon the earliest to occur of: (i) 80 days
following the Petition Date; and (ii) the effective date of a
Chapter 11 plan, among others.
The Prepetition Agent, solely on behalf of and for the direct
benefit of the Term A Lenders, is granted continuing valid,
binding, enforceable, fully perfected and non-avoidable liens on
and post-petition security interests in the prepetition collateral,
all of the other property, assets and interests in the property and
assets of the Debtors, and all property of the estate of the
Debtors.
The Debtors will pay, monthly in arrears in cash, all reasonable
and documented fees and expenses of (i) Curtis, Mallet-Prevost,
Colt & Mosle LLP, as counsel to the Term A Lenders and one law firm
acting as local counsel to the Term A Lenders, and (ii) Arnold &
Porter Kaye Scholer, as counsel to the Prepetition Agent and one
firm acting as local counsel to the Prepetition Agent, each in
connection with the Chapter 11 cases.
Only if the Term B Lenders consent to the Debtors' use of
prepetition collateral, the Prepetition Agent, solely on behalf of
and for the benefit of the term B Lenders, is granted continuing
valid, binding, enforceable, fully perfected and non-avoidable
liens on and post-petition security interests in the collateral;
provided, that Term B adequate protection liens will be junior in
priority to (i) the carveout; (ii) the permitted liens, other than
permitted liens securing Term B financing agreement obligations, on
the prepetition collateral; (iii) any valid, perfected, unavoidable
liens or security interests that were in existence as of the
Petition Date and senior to the prepetition financing agreement
liens securing the Term B financing agreement obligations, or that
are perfected subsequent to the Petition Date; (iv) the Term A
adequate protection liens on the collateral; and (v) the
prepetition financing agreement liens securing the Term A financing
agreement obligations.
A copy of the Order is available at:
http://bankrupt.com/misc/deb17-11722-35.pdf
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 on (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.
SSG Advisors, LLC, is the Debtors' investment banker.
Traverse, LLC, is the Debtors' financial advisor.
Rust Consulting/Omni Bankruptcy -- http://omnimgt.com-- is the
Debtors'
claims and noticing agent.
PEEKAY ACQUISITIONS: U.S. Trustee Forms 5-Member Committee
----------------------------------------------------------
Andrew Vara, acting U.S. trustee for Region 3, on August 21
appointed five creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of Peekay Acquisition,
LLC, and its affiliates.
The committee members are:
(1) Kristy E. Butt
2944 232rd Avenue, SE
Black Diamond, WA 98010
Phone: 206-409-8134
(2) Brian E. Barnett
28010 SE 388 Place
Enumclaw, WA 98022
Phone: 253-653-4089
(3) Gary Zebrowski
54 Pilgrim Lane
Drexel Hill, PA 19026
Phone: 610-446-1807
(4) Dreamgirl International
Attn: Christopher Scharff
5548 Linberch Lane
Bell, CA 90201
Phone: 323-268-0220
Fax: 323-268-4913
(5) United Consortium, Inc.
Attn: Joe Walls
24000 Hancock Parkway
Valencia, CA 91355
Phone: 919-723-7519
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About 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 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 between $10 million and $50
million and its debts 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. Rust Consulting/Omni Bankruptcy serves as
claims and noticing agent.
PENINSULA AIRWAYS: May Use FNB Cash Collateral Until Sept. 3
------------------------------------------------------------
The Hon. Gary Spraker of the U.S. Bankruptcy Court for the District
of Alaska has authorized Peninsula Airways, Inc., to use First
National Bank Alaska's cash collateral until Sept. 3, 2017.
A hearing on the continued use of cash collateral will be held on
Sept. 8, 2017, at 1:00 p.m.
As reported by the Troubled Company Reporter on Aug. 16, 2017, the
Debtor sought court permission for the use of cash collateral. The
proposed budget provides total cash outflow in the aggregate sum of
$7,661,430 covering the weeks ending Aug. 13 through Sept. 8, 2017.
First National Bank has indicated its consent to the Debtor's use
of cash collateral, but both parties desire an order of the Court
which specifies the terms of such use, and which deals with the
possibility of other creditors claiming a security interest in cash
collateral.
A $2,500 weekly payment will be made as adequate protection to
First National Bank, and will be credited to the line of credit
obligation owed by Debtor to the bank.
The Debtor is authorized to negotiate Wells Fargo check numbers 685
through 692, on condition that the recipients of those check agree
to sell goods or provide services to the Debtor going forward on
the same basis and terms as those provided to the Debtor prior to
the Petition Date.
A copy of the Order is available at:
http://bankrupt.com/misc/akb17-00282-34.pdf
About Peninsula Airways
Founded in 1955 by Orin Seybert in Pilot Point, Alaska, PenAir is
one of the oldest family owned airlines in the United States. It
is Alaska's second largest commuter airline operating an extensive
scheduled passenger and cargo service, as well as charter and
medevac services, and also operates scheduled passenger service in
several regions of the continental U.S.
PenAir's main base is Ted Stevens Anchorage International Airport,
with other hubs located at Portland International Airport in
Oregon, Boston Logan International Airport in Massachusetts and
Denver International Airport in Colorado. PenAir currently has a
code sharing agreement in place with Alaska Airlines with its
flights operated in the state of Alaska as well as all of its
flights in the lower 48 states appearing in the Alaska Airlines
system timetable.
Peninsula Airways, Inc., doing business as PenAir, filed a Chapter
11 petition
(Bankr. D. Alaska Case No. 17-00282) on Aug. 6, 2017. The petition
was signed by Daniel P. Seybert, president. At the time of filing,
the Debtor estimated assets and liabilities ranging from $10
million to $50 million.
The case is assigned to Judge Gary Spraker.
The Debtor is represented by Cabot C. Christianson, Esq., at the
Law Offices of Cabot Christianson, P.C.
PENINSULA AIRWAYS: Richard Schumacher Represents Jet in Panel
-------------------------------------------------------------
Richard Schumacher, Credit and Collections Manager of Jet Support
Services, Inc., has taken the place of Paul Rahe, the company's
Senior Vice President and General Counsel, as representative of the
company in the official committee of unsecured creditors in the
Chapter 11 case of Peninsula Airways, Inc.
Morgan Whitehead, Vice President of Operations of Aviation
Inventory Resources, Inc., is the chairperson of the Committee.
The committee members now include:
(1) Aviation Inventory Resources, Inc.
Attn: Morgan Whitehead
Vice-President of Operations
12240 E. Highway 917
Alvarado, TX 76009
Phone: (817) 672-0060
(2) SimCom International, Inc.
D.B.A. Simcom Aviation Training
Attn: Debbie DeFord
Director of Finance
6989 Lee Vista Blvd.
Orlando, FL 32822
Phone: (407) 275-1050 ext. 2231
(3) Jet Support Services, Inc.
Attn: Richard Schumacher: Credit and Collections Manager
180 N. Stetson Avenue 29th Floor
Chicago, IL 60601
Tel: (312) 644-7651
(4) Worldwide Aircraft Services, Inc.
Attn: David Vorbeck
Administrative Director
2755 N. General Aviation Avenue
Springfield, MO 65803
Phone: (417) 865-1879
(5) Northern Maine Regional
Attn: Scott Wardwell
Airport Director
650 Airport Drive, Suite 11
Presque Isle, ME 04769
Phone: (207) 764-2550
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
As reported by the Troubled Company Reporter on Aug. 23, 2017, Gail
Brehm Geiger, acting U.S. trustee for Region 18, on Aug. 18
appointed five creditors to serve on the Committee.
About Peninsula Airways
Founded in 1955 by Orin Seybert in Pilot Point, Alaska, PenAir is
one of the oldest family owned airlines in the United States. It
is Alaska's second largest commuter airline operating an extensive
scheduled passenger and cargo service, as well as charter and
medevac services, and also operates scheduled passenger service in
several regions of the continental U.S. Its main base is Ted
Stevens Anchorage International Airport, with other hubs located at
Portland International Airport in Oregon, Boston Logan
International Airport in Massachusetts and Denver International
Airport in Colorado. PenAir currently has a code sharing agreement
in place with Alaska Airlines with its flights operated in the
state of Alaska as well as all of its flights in the lower 48
states appearing in the Alaska Airlines system timetable.
Peninsula Airways, Inc., dba PenAir, filed a Chapter 11 petition
(Bankr. D. Alaska Case No. 17-00282) on Aug. 6, 2017. The petition
was signed by Daniel P. Seybert, president. The case is assigned
to Judge Gary Spraker. The Debtor is represented by Cabot C.
Christianson, Esq., at the Law Offices of Cabot Christianson, P.C.
At the time of filing, the Debtor estimated assets and liabilities
ranging from $10 million to $50 million.
PETCO ANIMAL: Bank Debt Trades at 10% Off
-----------------------------------------
Participations in a syndicated loan under Petco Animal Supplies is
a borrower traded in the secondary market at 89.60
cents-on-the-dollar during the week ended Friday, August 11, 2017,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.73 percentage points from the
previous week. Petco Animal pays 325 basis points above LIBOR to
borrow under the $2.506 billion facility. The bank loan matures on
Jan. 26, 2023 and carries Moody's NR rating and Standard & Poor's B
rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended August 11.
PETSMART INC: Bank Debt Trades at 7% Off
----------------------------------------
Participations in a syndicated loan under Petsmart Inc is a
borrower traded in the secondary market at 93.41
cents-on-the-dollar during the week ended Friday, August 11, 2017,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.81 percentage points from the
previous week. Petsmart Inc pays 300 basis points above LIBOR to
borrow under the $4.246 billion facility. The bank loan matures on
March 10, 2022 and carries Moody's Ba3 rating and Standard & Poor's
B+ rating. The loan is one of the biggest gainers and losers among
247 widely quoted syndicated loans with five or more bids in
secondary trading for the week ended August 11.
PHILADELPHIA ENERGY: S&P Lowers CCR to CCC, Outlook Negative
------------------------------------------------------------
S&P Global Ratings said it lowered its corporate credit rating on
Philadelphia-based Philadelphia Energy Solutions Refining and
Marketing LLC (PESRM) to 'CCC' from 'B'. The outlook is negative.
S&P said, "In addition, we lowered the issue-level rating on
PESRM's senior secured debt to 'CCC' from 'B+'. We have also
revised the recovery rating to '4' from '2', indicating our
expectation for average (30%-50%, rounded estimate: 45%) recovery
if a payment default occurs."
The rating action reflects the likelihood that PESRM will default
over the next 12 months without a satisfactory resolution of its
current negotiations to refinance existing debt, both at PESRM and
a subsidiary of its parent, Philadelphia Energy Solutions LLC,
North Yard Logistics. Failure to reach terms with its lenders will
lead to a near-term liquidity crisis, and PESRM is likely to have
to consider a distressed exchange offer or redemption. It is our
understanding that both PESRM and the term loan B lenders have
hired advisors to assist in coming to some sort of resolution.
The negative outlook reflects the difficult competitive environment
faced by the company due to weak crack margins, high RIN costs, and
a relatively high consumed crude differential. S&P said, "We expect
leverage at the company to continue to be in excess of 6x during
the next 12 months, complicating the company's efforts to agree to
terms with its lenders. Resolving this refinancing is crucial given
the maturity date of the term loan B on April 2018.
"We could lower the ratings to 'CCC-' if the company does not
address its liquidity issues by refinancing its existing credit
facilities by early in the fourth quarter of 2017.
"We could consider a positive rating action if the company is able
to extend or refinance its intermediation facility and its term
loan B and credit facilities without any loss to investors."
RACEWAY MARKET: Disclosures OK'd; Plan Hearing on Sept. 27
----------------------------------------------------------
The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the
Southern District of Indiana has approved Raceway Market Land,
LLC's second amended disclosure statement dated June 21, 2017,
referring to the Debtor's second amended plan dated June 21, 2017.
A hearing to consider confirmation of the Plan and any objection or
modification to the Plan will be held on Sept. 27, 2017, at 10:00
a.m. EDT.
Any objection to the confirmation of the Plan must be filed by
Sept. 13, 2017.
Any ballot accepting or rejecting the Plan must be filed by Sept.
13, 2017.
A creditor or equity security holder whose claim or interest is not
scheduled or scheduled as disputed, contingent or unliquidated must
file a proof of claim or interest in order to be treated as a
creditor for the purposes of voting on the Plan or distribution
under the Plan. Any proof of claim or interest must be filed on or
before Sept. 13, 2017.
As reported by the Troubled Company Reporter on July 3, 2017, the
Debtor filed with the Court a disclosure statement dated June 21,
2017, for the Debtor's second amended Chapter 11 plan, which
envisions resolution of this case by the Debtor either refinancing
the Beal Bank and First Financial Obligations or selling the
mortgaged property no later than Dec. 31, 2017.
About Raceway Market
Headquartered in Indianapolis, Indiana, Raceway Market Land, LLC,
filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case
No. 16-09541) on Dec. 20, 2016, listing $4.25 million in total
assets and $5.74 million in total liabilities. The petition was
signed by Craig W. Johnson, president.
Judge Robyn L. Moberly presides over the case.
Andrew T. Kight, Esq., at Taft Stettinius & Hollister LLP serves as
the Debtor's bankruptcy counsel.
RENX GROUP: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: RenX Group II, LLC
1701 SE Oak Shore LN
Portland, OR 97267
Type of Business: Founded in 2013, Renx Group is a home business
in Portland, OR.
Chapter 11 Petition Date: August 22, 2017
Case No.: 17-33139
Court: United States Bankruptcy Court
District of Oregon
Judge: Hon. Trish M Brown
Debtor's Counsel: Theodore J Piteo, Esq.
MICHAEL D. O'BRIEN & ASSOCIATES, P.C.
12909 SW 68th Pkwy, Suite 160
Portland, OR 97223
Tel: (503) 786-3800
E-mail: ted@pdxlegal.com
enc@pdxlegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tracey Baron, manager.
The Debtor's list of 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/orb17-33139.pdf
RFI MANAGEMENT: May Use Cash Collateral Until Oct. 5
----------------------------------------------------
The Hon. Benjamin A. Kahn of the U.S. Bankruptcy Court for the
Middle District of North Carolina has entered a third interim
consent order authorizing RFI Management, Inc., to use cash
collateral until Oct. 5, 2017.
A further hearing on the cash collateral use will be held at 11:00
a.m. on Oct. 5, 2017.
Swift Financial Corporation will have a continuing postpetition
lien and security interest in all property and categories of
property of the Debtor in which and of the same priority as it held
a similar, unavoidable security interest as of the Petition Date,
and the proceeds thereof, whether acquired prepetition or
postpetition, equivalent to a lien granted under Sections 364(c)(2)
and (3) of the U.S. Bankruptcy Code, but only to the extent of cash
collateral used for purposes other than adequate protection
payments to Swift Capital.
Swift Financial contends that it is the owner of the Debtor's
future receivables. It also contends that it has a security
interest in the Debtor's present and future accounts, receivables,
chattel paper, deposit accounts, personal property, assets and
fixtures, general intangibles, instruments, equipment and
inventory, which constitutes cash collateral.
The validity, enforceability, and perfection of the post-petition
liens on the post-petition collateral will not depend upon filing,
recordation, or any other act required under applicable state or
federal law, rule, or regulation.
The Debtor will not use cash collateral except to pay its ordinary,
necessary and reasonable post-petition operating expense and
administrative expenses necessary for the administration of this
estate, including the Debtor's reasonable attorneys' fees as
approved by the Court and quarterly fees.
The Debtor will maintain debtor-in-possession bank accounts into
which it will deposit all income. The Debtor will open and
maintain a separate DIP Account for each project on which it is
serving as a subcontractor, and all income and expenses for that
project must be paid from the project's respective DIP Account.
Transfers may only be made between DIP Accounts if those transfers
are necessary to pay expenses set out in the budget or if they are
approved in writing by Swift Capital.
The Debtor may request in writing that Swift Capital approve an
amended budget should it become apparent that there are valid
expenses what were not foreseen at this time. To the extent Swift
Capital declines any request by the Debtor to amend the budget, the
Debtor reserves the right to file an additional motion to use cash
collateral and seek an expedited hearing of it so long as all
creditors in this proceeding receive at least five business days
notice.
The Debtor will pay as adequate protection to Swift Capital the sum
of $6,800 to be paid on Aug. 17, 2017, and Sept. 17, 2017.
This court order will be effective nunc pro tunc from July 20,
2017, and will remain in full force and effect and the Debtor will
be authorized to use cash collateral until the earlier of (i) entry
of a court order modifying the terms of the use of cash collateral
or the adequate protection provided to Swift Capital; (ii) entry of
a court order terminating this Order for cause, including but not
limited to breach of its terms and conditions; (iii) upon filing of
a notice of default as provided in this court order; or (iv) Oct.
5, 2017.
A copy of the Order is available at:
http://bankrupt.com/misc/ncmb17-80247-119.pdf
About RFI Management
RFI Management, Inc., works as a subcontractor installing flooring
products and wall materials, principally in hotel properties across
the United States and in Puerto Rico.
RFI Management filed a Chapter 11 bankruptcy petition (Bankr.
M.D.N.C. Case No. 17-80247) on March 29, 2017. Edward Rosa,
President, signed the petition. At the time of filing, the Debtor
estimated assets and liabilities between $100,000 and $500,000.
James C. White, Esq. and Michelle M. Walker, Esq., at Parry Tyndall
White, serve as counsel to the Debtor. Padgett Business Services
of NC is the Debtor's accountant.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
RJRAMDHAN GROUP: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on August 21 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of RJRamdhan Group, LLC.
About RJRamdhan Group
RJRamdhan Group, LLC filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 17-02241) on June 19, 2017. The Debtor is represented by
Robert D. Wilcox, Esq., at Wilcox Law Firm.
RSF 17872: Court Declines to Extend Plan Exclusivity Period
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
has denied RSF 17872 Via Fortuna LLC's request for an extension of
its exclusivity periods.
As reported by the Troubled Company Reporter on July 26, 2017, the
Debtor asked the Court for the third time to extend the exclusive
periods during which the Debtor may file and obtain acceptance to
its plan by 120 days, or through Nov. 15, 2017, and Jan. 16, 2018,
respectively. The Debtor said it needs more time to continue the
efforts of its related entities to liquidate their substantial
assets to provide funding for the Debtor, and for the Debtor to
formulate, propose, and confirm a plan.
About RSF 17872 Via De Fortuna LLC
RSF 17872 Via De Fortuna LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Calif. Case No. 16-04436) on July
22, 2016. The petition was signed by Black Rock Thoroughbreds,
LLLP, the Debtor's manager. The Debtor is represented by Todd
Ringstad, Esq., at Ringstad & Sanders LLP. At the time of the
filing, the Debtor estimated its assets at $10 million to $50
million and debts at $1 million to $10 million.
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case.
S K TRANSPORT: Names Michelle Steele as Bookkeeper
--------------------------------------------------
S K Transport Inc. seeks authorization from the U.S. Bankruptcy
Court for the Southern District of West Virginia to employ Michelle
Steele as bookkeeper.
Ms. Steele will be compensated as follows:
(a) a retainer in the amount of $750 for the initial setup of
financials and accounting records, financial review of
accounting records, onsite visits, meetings and beginning
of the first Monthly Operating Report;
(b) a $600 cap per month to prepare the Monthly Operating
Report. This includes preparation of payroll, the monthly
financials and other financial reporting related to the
Monthly Operating Report;
(c) a fee of $35 per hour for preparation of projections,
disclosure plan, assistance with tax returns and necessary
accounting for preparation of debtor's confirmation,
dismissal or conversion of bankruptcy case. A fee
application will be required for hourly services.
Ms. Steele will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Ms. Steele 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.
Ms. Steele can be reached at:
Michelle Steele
MICHELLE STEELE ACCOUNTING SOLUTIONS INC
3818 Maccorkle Avenue Se
Charleston, WV 25304
Tel: (304) 925-8462
About S K Transport Inc
S K Transport is a small business debtor as defined in 11 U.S.C.
Section 101(51D) that is engaged in the trucking business. The
Debtor sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. W.Va. Case No. 17-20298) on May 30, 2017. Charles
Shannon, its owner, signed the petition. At the time of the
filing, the Debtor estimated its assets and debts at $1 million to
$10 million.
Judge Frank W. Volk presides over the case. The Debtor hired
Caldwell & Riffee as counsel.
An official committee of unsecured creditors has not been appointed
in the Chapter 11 case of S K Transport Inc.
SABRA HEALTH: Moody's Hikes LT Corporate Family Rating to Ba1
-------------------------------------------------------------
Moody's Investors Service upgraded all ratings of Sabra Health Care
REIT, Inc. and downgraded the senior unsecured debt rating of Care
Capital Properties, LP following the announcement on August 17,
2017 by Sabra and Care Capital that the merger of the two REITs was
complete. These rating actions conclude Moody's review that began
on May 8, 2017 after the announcement that the REITs had reached a
definitive agreement to merge, with Sabra as the surviving entity.
The ratings outlook is stable and reflects Moody's expectations
that Sabra will continue to operate and grow with a conservative
capital strategy.
The following ratings were upgraded:
Issuer: Sabra Health Care REIT, Inc.
Long term corporate family rating to Ba1 from Ba3
Preferred stock rating to Ba2 from B2
Issuer: Sabra Health Care Limited Partnership
Senior Unsecured rating to Ba1 from Ba3
The following rating was downgraded:
Issuer: Care Capital Properties, LP
Senior unsecured rating to Ba1 from Baa3
The following rating was withdrawn:
Issuer: Care Capital Properties, LP
Long term issuer rating at Baa3
RATINGS RATIONALE
The upgrade of Sabra's senior unsecured rating to Ba1 reflects the
strategic benefits obtained from the acquisition of Care Capital.
The transaction significantly expanded Sabra's size and scale in
the skilled nursing facility (SNF) and senior housing sectors,
which should lead to an improved cost of capital as it seeks to
grow. In addition, Sabra will reduce its concentration with Genesis
Healthcare, Inc. ("Genesis"), its largest tenant, to 11% of total
cash NOI from 33% at 2Q17, which includes the previously announced
sale of over 30 Genesis assets by the end of 2017.
The downgrade of Care Capital's senior unsecured rating to Ba1
reflects a modest deterioration of credit metrics and the
expectation of Net Debt/EBITDA maintained above 5.0x. While SNF
EBITDAR/rent coverage is expected to improve to 1.31x for the
combined entity compared with Care Capital's 1.20x coverage,
Moody's still views asset quality as weak, and when combined with
higher leverage, more indicative of a non-investment grade rating.
Moody's note that the stated coverages exclude tenants with
meaningful credit enhancements through corporate guarantees. Sabra
is expected to reposition the CCP portfolio through a combination
of rent adjustments, dispositions and retenanting which should
improve the performance of the portfolio over time.
Other areas of concern include the increased exposure to SNFs for
the combined entity to 73% of annualized proforma revenue compared
to 57% at 2Q17 for Sabra. The private pay mix for the combined
entity will be 36% of annualized proforma revenue compared to 49%
at 2Q17 for Sabra.
Moody's stated that an upgrade of Sabra's ratings would be
predicated on continued profitable growth while reducing tenant
concentration such that the top three operators represent closer to
20% of total cash NOI. In addition, an upgrade would reflect
maintenance of Net Debt/EBITDA below 5.0x and fixed charge coverage
approaching 4.0x, as well as an improvement in tenant operating
performance closer to 1.40x EBITDAR coverage.
A rating downgrade would likely reflect a shift in capital
structure resulting in Net Debt/EBITDA above 6.0x and fixed charge
coverage falling below 2.5x on a consistent basis. Sustained
deterioration in property level coverage ratios, particularly from
major tenants would also result in a ratings downgrade.
Sabra Health Care REIT, Inc. [Nasdaq: SBRA] owns and invests in
triple-net leased senior housing facilities throughout the US and
Canada. As of YE16 Sabra's portfolio included 97 skilled
nursing/transitional-care facilities, 85 senior housing facilities,
and one acute care hospital. The company's gross asset value as of
YE16 was $2.5 billion.
The principal methodology used in these ratings was Global Rating
Methodology for REITs and Other Commercial Property Firms published
in July 2010.
SAN JOSE CONTRACTING: Unsecureds to Recoup $30K Paid Semiannually
-----------------------------------------------------------------
San Jose Contracting, Inc., filed with the U.S. Bankruptcy Court
for the District of Arizona a disclosure statement explaining its
plan of reorganization, which is intended to resolve, compromise
and settle all claims, disputes, and causes of action between and
among all participants.
Under the proposed plan, Class 9 general unsecured claimants will
receive a total of $30,000, to be paid on a pro-rata basis.
Payments will be made semiannually in the amount of not less than
$2,500, pro rata. The remainder of their claims will be
discharged.
The Debtor's Plan will be funded by its cash on hand, and its
regular cash flow. The Debtor's owner and manager, Lowell Gulley,
shall act as the Disbursing Agent under the Plan. Once all required
distributions called for in the Plan are made, the case will
terminate.
A full-text copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/azb217-00433-51.pdf
About San Jose Contracting
San Jose Contracting, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 17-00433) on Jan. 17,
2017. The petition was signed by Lowell J. Gulley, president.
The case is assigned to Judge Brenda K. Martin.
At the time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of $1 million to $10 million.
Harold E. Campbell, Esq., at Vincent R. Mayr, Esq., at Campbell &
Coombs, P.C., serve as the Debtors' legal counsel.
SANTA CRUZ PLUMBING: Unsecureds to Recoup 9% Under Plan
-------------------------------------------------------
Santa Cruz Plumbing, Inc., filed with the U.S. Bankruptcy Court for
the Northern District of California a disclosure statement dated
Aug. 14, 2017, referring to the Debtor's plan of reorganization
dated Aug. 14, 2017.
A hearing on the approval of the Disclosure Statement will be held
on Sept. 7, 2017, at 1:30 p.m.
Class 4 General Unsecured Claims -- totaling $1,704,162 -- are
impaired by the Plan. The holders will receive monthly payments of
2,552.24, with interest rate of 0%, starting in Month 53 after the
Effective Date. Holders are expected to recover 9%.
Payments and distributions under the Plan will be funded by the
Debtor's operating profits.
A full-text copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/canb17-50324-65.pdf
About Santa Cruz Plumbing
Santa Cruz Plumbing, Inc., filed a Chapter 11 petition (Bankr. N.D.
Cal. Case No. 17-50324) on Feb. 10, 2017. The petition was signed
by Jason Stewart Allison, president. The Debtor disclosed total
assets of $772,930 and total liabilities of $3.72 million at the
time of the filing. The Hon. Stephen L. Johnson is the case judge.
Lars T. Fuller, Esq., at The Fuller Law Firm, PC, is serving as
counsel to the Debtor.
SERENITY HOMECARE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor affiliates that simultaneously filed Chapter 11 bankruptcy
petitions:
Debtor Case No.
------ --------
Serenity Homecare, LLC 17-80881
1601 Jackson Street
Alexandria, LA 71301
Antigua Investments, LLC 17-80882
1535 Jackson Street
Alexandria, LA 71301
Central Louisiana Home Healthcare, LLC 17-80883
1601 Jackson Street
Alexandria, LA 71301
Cupples Holdings, LLC 17-80884
1535 Jackson Street
Alexandria, LA 71301
Hospice Care of Avoyelles Parish, LLC 17-80885
1601 Jackson Street
Alexandria, LA 71301
Quality Home Health I, LLC 17-80886
1601 Jackson Street
Alexandria, LA 71301
Quality Home Health, Inc. 17-80887
1601 Jackson Street
Alexandria, LA 71301
Type of Business: Home health care service provider in Alexandria,
Louisiana
Chapter 11 Petition Date: August 22, 2017
Court: United States Bankruptcy Court
Western District of Louisiana (Alexandria)
Judge: Hon. John W. Kolwe
Debtors' Counsel: Bradley L. Drell, Esq.
GOLD, WEEMS, BRUSER, SUES & RUNDELL
POB 6118
Alexandria, LA 71307-6118
Tel: (318) 445-6471
Email: bdrell@goldweems.com
Estimated Estimated
Assets Liabilities
--------- -----------
Serenity Homecare $0-$50,000 $500,000- $1,000,000
Antigua Investments $0-$50,000 $1,000,000-$10,000,000
Central Louisiana Home $0-$50,000 $100,000- $500,000
Cupples Holdings $0-$50,000 $500,000- $1,000,000
Hospice Care of Avoyelles $0-$50,000 $100,000- $500,000
Quality Home Health I $0-$50,000 $100,000- $500,000
Quality Home Health $0-$50,000 $50,000- $100,000
The petitions were signed by Thomas E. Cupples, II,
member/manager.
Serenity Homecare's list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/lawb17-80881.pdf
Antigua Investments' list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/lawb17-80882.pdf
Central Louisiana Home Healthcare's list of 20 largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/lawb17-80883.pdf
Cupples Holdings' list of four unsecured creditors is available for
free at:
http://bankrupt.com/misc/lawb17-80884.pdf
Hospice Care of Avoyelles' list of 20 largest unsecured creditors
is available for free at:
http://bankrupt.com/misc/lawb17-80885.pdf
Quality Home Health I's list of 20 largest unsecured creditors --
which has a single entry -- is available for free at:
http://bankrupt.com/misc/lawb17-80886.pdf
Quality Home Health's list of 20 largest unsecured creditor is
available for free at:
http://bankrupt.com/misc/lawb17-80887.pdf
STEARNS HOLDINGS: S&P Alters Outlook to Neg. on Covenant Waiver
---------------------------------------------------------------
S&P Global Ratings said it revised its outlook on Stearns Holdings
LLC to negative from stable and affirmed the 'B' issuer credit
rating. S&P said, "We also affirmed our issue rating on Stearns'
senior secured notes at 'B'."
The negative outlook on Stearns reflects the company's
weaker-than-expected earnings, rising leverage, and funding risk
due to recent covenant violations that required waivers. S&P said,
"We believe the company could face profitability challenges in the
remainder of 2017, but we expect debt to adjusted tangible equity
to remain below 2.0x."
S&P said, "We could lower our rating over the next 12 months if the
company loses access to one or more of its funding facilities, or
if additional covenant waivers occur and cause us to believe the
funding structure of the company is in jeopardy. Separately, we
could lower the rating if debt to adjusted tangible equity rises
above 2.0x, or if the company sells significantly more mortgage
servicing rights (MSRs) than it retains to generate operational
liquidity.
"An upgrade is unlikely over the next one to two years. We could
revise the outlook to stable if we believe earnings have
sustainably improved such that future covenant failures were less
likely. We could also raise the rating over time if the company
reduces its leverage and decreases its earnings volatility without
altering the long-term prospects of its fundamental business
model."
SUNGARD AVAILABILITY: S&P Alters Outlook to Neg. & Affirms B- CCR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Wayne, Pa.-based Sungard
Availability Services Capital Inc. (Sungard AS) to negative from
stable. S&P said, "At the same time, we affirmed our 'B-' corporate
credit rating on the company."
S&P said, "At the same time, we affirmed our 'B' issue-level
rating, with a recovery rating of '2', on the company's $204
million senior secured revolving credit facility expiring March
2018 and $425 million outstanding senior secured term loan due
March 2019.
"In addition, we are assigning our 'B' issue-level rating and '2'
recovery rating to the company's extended $46 million revolver
expiring September 2020 and $471 million senior secured term loan
due September 2021. The '2' recovery rating indicates our
expectations for substantial (70%-90%; rounded estimate: 80%)
recovery in the event of payment default.
"We also affirmed our 'CCC' issue-level rating, with a recovery
rating of '6', on the company's senior unsecured notes due 2022.
The '6' recovery rating indicates our expectation for negligible
(0%-10%; rounded estimate: 5%) recovery in the event of payment
default."
The outlook revision reflects the company's slow transition to
integrated cloud-based recovery solutions, continued pressure from
declining traditional recovery services, competition in co-location
offerings, and prospects for higher interest expenses related to
refinanced debt and weak free cash flow. These factors are
partially offset by the company's established client scale and
diversity as well as its presence in mission-critical enterprise
disaster recovery services markets.
The negative outlook reflects the company's slow transition to
integrated cloud-based recovery solutions, persistent revenue
declines, and steady erosion in higher-margin traditional recovery
services. The outlook also reflects the company's looming term loan
debt maturity in March 2019, which it has only partially refinanced
recently, and prospects for higher interest expense related to
refinanced debt and weak free cash flow generation.
S&P said, "We could lower the rating if we believe the company's
prospects for operating stability remain limited, with new business
growth only partially offsetting secular traditional business
revenue declines. We could also lower the rating if the company
does not refinance its 2019 term loan maturity on terms that
alleviate pressures on its liquidity, leading us to believe its
capital structure is unsustainable.
"We could revise the outlook back to stable if we believe the
company will achieve sustained operating growth, including positive
free cash flow in 2017 and 2018, and relieve liquidity and
refinancing pressures in 2017."
TAEUS CORPORATION: Plan to be Funded from PenOne Proceeds
---------------------------------------------------------
TAEUS Corporation filed with the U.S. Bankruptcy Court for the
District of Colorado a disclosure statement in support of its
chapter 11 plan of reorganization, dated August 18, 2017.
The Debtor invested significant resources on a contingency basis
towards the monetization of PenOne patents. The Debtor performed
work on the analysis of the Patent portfolio belonging to Pen-One
which included certain phone technology used by both Apple and
Samsung. The Debtor attempted to negotiate licenses for the use of
this technology to no avail and agreed to take a percentage of the
compensation which PenOne was to receive upon the resolution of the
dilemma created by the continued use of the PenOne technology by
Samsung and Apple. To resolve the unauthorized use of the patents,
patent litigation against both Apple and Samsung was filed in the
U.S. District Court for The Southern District of Alabama on April
25, 2017.
The Debtor will receive 12.5% of any litigation settlement amount
from these two defendants and all other efforts to derive money
from the Pen One portfolio. The Debtors share of the estimated
settlement amounts far exceed any money owed to the creditors, and
along with revenues generated from the normal operations of the
Debtor form the basis of the ability of the Debtor to repay debtors
in full.
The Debtor's plan proposes to pay Class 5 general unsecured
creditors in full from the proceeds of the commission generated
from PenOne, and will receive quarterly payments equal to 1/20th of
their claims till the PenOne proceeds arrive.
The Debtor will fund the Plan using funds generated from operations
which will fund the quarterly payments owed under the Plan and the
remainder of amounts owed to creditors will come from the proceeds
generated from the commission to be realized from the PenOne
litigation.
A full-text copy of the Disclosure Statement is available at:
http://bankrupt.com/misc/cob15-23313-123.pdf
Headquartered in Colorado Springs, Colorado, TAEUS Corporation
filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case
No. 15-23313) on Dec. 2, 2015, with estimated assets of $0 to
$50,000 and estimated liabilities at $1 million to $10 million. The
petition was signed by Art Nutter, president.
TERRAVIA HOLDINGS: Taps Kurtzman Carson as Administrative Advisor
-----------------------------------------------------------------
TerraVia Holdings, Inc. seeks approval from the U.S. Bankruptcy
Court in Delaware to hire Kurtzman Carson Consultants LLC as its
administrative advisor.
The firm will provide these bankruptcy administrative services to
TerraVia and its affiliates:
(a) assist in the preparation of the Debtors' schedules and
statements of financial affairs;
(b) assist in the solicitation, balloting, tabulation and
calculation of votes, and prepare any appropriate
report required in furtherance of confirmation of any
Chapter 11 plan;
(c) generate an official ballot certification and testify,
if necessary, in support of the ballot tabulation
results for any bankruptcy plan; and
(d) assist in connection with claims objections, claims
reconciliation and related matters.
The hourly rates charged by the firm are:
Analyst $25 - $45
Technology/Programming Consultant $35 - $70
Consultant/Sr. Consultant $65 - $145
Director/Sr. Managing Consultant $160 - $185
Executive Vice-President Waived
Securities Director/Solicitation Consultant $180
Securities Sr. Director/Solicitation Lead $200
Evan Gershbein, senior vice-president of Kurtzman's corporate
restructuring services, 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:
Evan Gershbein
Kurtzman Carson Consultants LLC
2335 Alaska Avenue
El Segundo, CA 90245
Tel: 310-751-1803 / 866-381-9100
Email: egershbein@kccllc.com
Email: info@kccllc.com
About TerraVia
Headquartered in South San Francisco, California, TerraVia
Holdings, Inc. (NASDAQ:TVIA) -- http://www.terravia.com/-- is a
plant-based food, nutrition and specialty ingredients company that
harnesses the power of algae, the mother of all plants and earth's
original superfood. TerraVia also manufactures a range of
specialty personal care ingredients for key strategic partners.
On Aug. 2, 2017, TerraVia Holdings, Inc., and its wholly owned U.S.
subsidiaries filed voluntary petitions under chapter 11 of title 11
of the United States Code (Bankr. D. Del. Lead Case No. 17-11655).
The subsidiary debtors in the Chapter 11 cases are Solazyme Brazil
LLC and Solazyme Manufacturing 1, LLC.
The Debtors sought bankruptcy protection after reaching a deal to
sell the assets to Corbion N.V. for $20 million in cash plus the
assumption of liabilities.
The Debtors hired Davis Polk & Wardwell LLP as their lead counsel
and Richards, Layton & Finger, P.A. as co-counsel. Kurtzman Carson
Consultants LLC is their claims agent.
TERRAVIA HOLDINGS: Taps Rothschild as Financial Advisor
-------------------------------------------------------
TerraVia Holdings, Inc. seeks approval from the U.S. Bankruptcy
Court in Delaware to hire a financial advisor and investment
banker.
In a court filing, TerraVia proposes to employ Rothschild Inc. to
provide these services to the company and its affiliates in
connection with their Chapter 11 cases:
(a) identifying or initiating potential transactions;
(b) reviewing and analyzing the Debtors' assets and their
operating and financial strategies;
(c) reviewing and analyzing the Debtors' business plans and
financial projections;
(d) evaluating the Debtors' debt capacity in light of their
projected cash flows and assisting in the determination
of an appropriate capital structure for the Debtors;
(e) assisting the Debtors and their other professionals in
reviewing the terms of any proposed transaction, in
responding thereto and, if directed, in evaluating
alternative proposals for a transaction;
(f) determining a range of values for the Debtors and any
securities that they offer or propose to offer in
connection with a transaction;
(g) advising the Debtors on the risks and benefits of
considering a transaction with respect to their
intermediate and long-term business prospects and
strategic alternatives to maximize their business
enterprise value;
(h) assisting the Debtors in arranging any proposed debtor-
in-possession financing;
(i) reviewing and analyzing any proposals the Debtors
receive from third parties in connection with a
transaction;
(j) assisting or participating in negotiations in connection
with a transaction;
(k) assisting the Debtors in connection with one or more
potential "M&A transactions;"
(l) attending meetings of the Debtors' Board of Directors,
creditor groups, official constituencies and other
interested parties, as necessary;
(m) assisting the Debtors in connection with a potential
"new capital raise" and
(n) participating in hearings before the court and providing
testimony if requested by the Debtors.
Rothschild will be compensated according to this fee arrangement:
(a) an advisory fee of $125,000 per month payable in
advance on the first day of each month;
(b) a fee equal to 2% of the aggregate principal amount of
indebtedness of the Debtors restructured, amended,
refinanced, equitized, tendered, exchanged, repurchased,
repaid, extinguished or assumed in a transaction,
payable upon the closing of such transaction;
(c) a fee equal to the greater of (i) 2% of the aggregate
consideration involved in an M&A transaction, and
(ii) $750,000 (provided that the consideration received
by the Debtors in the transaction is at least
$5 million), payable at the closing of an M&A
transaction; and
(d) a new capital fee equal to (i) 3% of the face amount
of any new debt raised, and (ii) 5% of any equity
capital raised, excluding any equity underlying any
contingent equity such as warrants, purchase rights
or similar contingent equity securities.
Within one year prior to the petition date, the Debtors paid
Rothschild $875,000 in fees and $83,636.99 in expense
reimbursements for services rendered in connection with the firm's
engagement.
Tero Janne, managing director at Rothschild, 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:
Tero Janne
Rothschild Inc.
1251 Avenue of the Americas, 33rd Floor
New York, NY 10020
Tel: (212) 403-3500
Fax: (212) 403-5454
About TerraVia
Headquartered in South San Francisco, California, TerraVia
Holdings, Inc. (NASDAQ:TVIA) -- http://www.terravia.com/-- is a
plant-based food, nutrition and specialty ingredients company that
harnesses the power of algae, the mother of all plants and earth's
original superfood. TerraVia also manufactures a range of
specialty personal care ingredients for key strategic partners.
On Aug. 2, 2017, TerraVia Holdings, Inc., and its wholly owned U.S.
subsidiaries filed voluntary petitions under chapter 11 of title 11
of the United States Code (Bankr. D. Del. Lead Case No. 17-11655).
The subsidiary debtors in the Chapter 11 cases are Solazyme Brazil
LLC and Solazyme Manufacturing 1, LLC.
The Debtors sought bankruptcy protection after reaching a deal to
sell the assets to Corbion N.V. for $20 million in cash plus the
assumption of liabilities.
The Debtors hired Davis Polk & Wardwell LLP as their lead counsel
and Richards, Layton & Finger, P.A. as co-counsel. Kurtzman Carson
Consultants LLC is their claims agent.
TRIDENT HOLDING: S&P Lowers CCR to CCC+, On CreditWatch Negative
----------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on Trident
Holding Co. LLC (Trident) to 'CCC+' from 'B-'. S&P said, "At the
same time, we placed the rating on CreditWatch with negative
implications.
S&P said, "At the same time, we lowered our rating on the
first-lien debt issued by New Trident Holdcorp Inc. to 'CCC+' from
'B-' and placed the rating on CreditWatch negative.
"The recovery rating on this debt remains '3', indicating our
expectation for meaningful (50%-70%; rounded estimate: 65%)
recovery of principal in the event of a payment default.
"We also lowered our rating on New Trident Holdcorp Inc.'s
second-lien term loan to 'CCC-' from 'CCC' and placed the rating on
CreditWatch negative. The recovery rating on this debt remains '6',
indicating our expectation for negligible (0%-10%; rounded
estimate: 0%) recovery in the event of default.
"Trident has underperformed our expectations since its merger with
another provider of bedside diagnostic services, Schryver Medical
LLC (Schryver). We had expected EBITDA margins to be in 14%-15%
range, on the back of cost synergies and a shift in product mix,
resulting in adjusted debt to EBITDA of 7.1x and funds from
operations (FFO) to debt of 6% in 2017.
"The CreditWatch negative placement reflects our view that the
company may face execution challenges in its efforts to recover
from the recent downturn.
"We aim to resolve the CreditWatch placement in the next 90 days,
based on the company's results in the third quarter of 2017 or
earlier, if there is a material change in the company's conditions
(i.e., an amendment to the credit agreement, capital injection, or
other).
"We could lower the ratings if there is no or negligible
improvement in earnings and cash flow, such that we conclude that a
liquidity crisis could occur over the next 12 months, or we
question the company's ability to amend its covenants.
"We could affirm the ratings if we believe the risk of a liquidity
crisis and covenant breach has been significantly reduced. This
includes, inter alia, the company addressing the covenant step-down
to 6.5x from the current 7.5x in the first quarter of 2018.
However, given the current industry dynamics, we would view
leverage of above 9x as unsustainable over the long time."
TRIUMPH GROUP: S&P Hikes Unsec. Notes Due 2021 & 2022 to B-
-----------------------------------------------------------
S&P Global Ratings raised its issue-level rating on Triumph Group
Inc.'s $300 million 5.25% senior unsecured notes due 2022 and $375
million 4.875% senior unsecured notes due 2021 to 'B-' from 'CCC+'
and removed the ratings from CreditWatch, where it placed them with
positive implications on Aug. 2, 2017. S&P said, "We also revised
our recovery rating on both series of notes to '5' from '6'. The
'5' recovery rating indicates our expectation for modest (10%-30%;
rounded estimate: 20%) recovery in a default scenario."
All of S&P's other ratings on Triumph Group Inc. remain unchanged.
As expected, Triumph recently issued $500 million of unsecured
notes and used the proceeds to repay the $302.4 million of
outstanding debt remaining on its first-lien term loan and $149
million of outstanding revolver borrowings. The company also
amended its credit facility to reduce the revolver's commitment to
$800 million from $850 million. The reduction in the company's
amount of secured debt following the transactions will provide
improved recovery
prospects for the unsecured notes.
RATINGS LIST
Triumph Group Inc.
Corporate Credit Rating B/Stable/--
Issue Ratings Raised; Off CreditWatch; Recovery Ratings Revised
To From
Triumph Group Inc.
Senior Unsecured
$300M 5.25% Notes Due 2022 B- CCC+/Watch Pos
Recovery Rating 5(20%) 6(0%)
$375M 4.875% Notes Due 2021 B- CCC+/Watch Pos
Recovery Rating 5(20%) 6(0%)
TRUE RELIGION: Macerich, et al., Try to Block Disclosures Approval
------------------------------------------------------------------
The Macerich Company, The Forbes Company, and The Related Companies
filed with the U.S. Bankruptcy Court for the District of Delaware
an objection to True Religion Apparel and its debtor-affiliates'
disclosure statement for the Debtors' joint Chapter 11 plan of
reorganization.
The Debtors lease retail space from the The Macerich Company, The
Forbes Company, and The Related Companies pursuant to 17 unexpired
leases of nonresidential real property at the shopping center
locations.
The Landlords do not object to the Debtors' efforts to confirm a
plan of reorganization, but complain that, as drafted, the
Disclosure Statement, Plan and Proposed Order fail to provide
adequate information for the Landlords or other creditors to make
an informed decision with respect to the Plan and the treatment of
the Leases under the Plan, as well as the Plan itself improperly
seeks to modify the Landlords' rights under their Leases and the
Bankruptcy Code.
The Landlords claim that, among other things:
a. the Disclosure Statement provides insufficient information
for counterparties to unexpired leases like the Landlords
in connection with the treatment of their Leases under the
Plan. The Disclosure Statement and Plan also rely, in
part, on a Plan Supplement, including a list of any
executory contracts and unexpired leases to be rejected
under the Plan that need not be filed until five days
prior to the plan confirmation hearing. The delayed
filing of the Plan Supplement not only fails to provide
Landlords with sufficient time for a meaningful review and
an opportunity to object in advance of any deadline to
object to the Plan, but it also effectively
disenfranchises the Landlords by permitting the Debtors to
reject leases after the voting deadline;
b. the Disclosure Statement and Plan provide only that the
Debtors may serve notices on counterparties to the
contracts and leases that the Debtors intend to assume,
and that " [i]f a counter party to any Executory Contract
or Unexpired Lease, that the Debtors or Reorganized
Debtors, as applicable, intend to assume, does not receive
such notice, the proposed cure for the Executory Contract
or Unexpired Lease shall be deemed to be zero dollars
($0)." The Debtors must be required to serve an
assumption notice upon all counterparties to their
executory contracts and leases, and their proposed cure
amounts, on no less than 14 days notice in advance of any
objection deadline to provide the Landlords with
sufficient time for meaningful review and an opportunity
to object;
d. the Plan provides for the assumption, assumption and
assignment or rejection of executory contracts and leases
beyond the entry of the order confirming the Plan. If a
counterparty objects to the assumption, assumption and
assignment, or cure, the "Reorganized Debtors reserve the
right to reject any Executory Contract or Unexpired Lease
at any time in lieu of assuming or assuming and assigning
it." This is contrary to the Bankruptcy Code and makes it
impossible for creditors to make an informed decision on
the Plan. "If, on the face of the plan, the plan could
not be confirmed, then the Court [should] not subject the
estate to the expense of soliciting votes and seeking
confirmation. Not only would allowing an unconfirmable
plan to accompany a disclosure statement, and be
summarized therein, constitute inadequate information, it
would be misleading and it would be a needless expense to
the estate." As a result, the Court should require the
Debtors to amend the Disclosure Statement and Plan to
provide creditors with adequate information (which cannot
be modified post-confirmation) before allowing the Debtors
to proceed to plan confirmation;
e. the Plan and Disclosure Statement seek to improperly
extend the time to assume or reject leases. The
Disclosure Statement and Plan provide that the Debtors may
reject leases after confirmation by reserving the right to
reject leases at any time where the counterparty objects
to the assumption, assumption and assignment, or cure.
This violates Section 365(d)(4), and as a result, the Plan
is not confirmable under Section 1129(a)(1). The Debtors
cannot pick and choose which Bankruptcy Code provisions to
follow and which to ignore. Section 365(d)(4) requires
the assumption or rejection of leases no later than the
entry of the order confirmation a plan of reorganization,
and the Debtors must abide by this provision to confirm
their Plan;
f. the Debtors fail to demonstrate adequate assurance of
future performance under the Plan for leases they propose
to assume under the Plan. More specifically, the
Disclosure Statement fails to provide any historical
financial information that would allow creditors,
including the Landlords, to evaluate the Debtors' go-
forward financial projections; and does not adequately
explain their post-emergence business strategy and the
associated risks; and
g. through the injunction provisions, the Debtors improperly
seek to deprive Landlords of their rights to setoff and
recoupment. To the extent any claim objections or
preference actions are prosecuted against the Landlords
following Plan confirmation, the Landlords should not be
deprived of their rights to assert setoffs or exercise
recoupment, or be limited in their ability to enforce
these rights. The Debtors fail to provide any authority
for seeking to void Landlords' ability to exercise their
setoff and recoupment rights, and Debtors should not be
permitted to deprive Landlords of these rights.
A full-text copy of the Objection is available at:
http://bankrupt.com/misc/deb17-11460-331.pdf
The Landlords are represented by:
Leslie C. Heilman, Esq.
BALLARD SPAHR LLP
919 N. Market Street, 11th Floor
Wilmington, DE 19801
Tel: (302) 252-4465
Fax: (302) 252-4466
E-mail: heilmanl@ballardspahr.com
-- and --
Dustin P. Branch, Esq.
BALLARD SPAHR LLP
2029 Century Park East, Suite 800
Los Angeles, CA 90067-3012
Tel: (424) 204-4354
Fax: (424) 204-4350
E-mail: branchd@ballardspahr.com
As reported by the Troubled Company Reporter on July 6, 2017, the
Debtors filed a Joint Chapter 11 Plan of Reorganization that
provides that general unsecured creditors owed $104.7 million will
receive a $2.5 million in first lien term loans and 5.5% of the
stock in the reorganized debtors, and, if the class votes in favor
of the Plan, they will receive $1 million in cash and an additional
$2 million in reorganized first lien term loans.
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. The Committee hired
Cooley LLP, as counsel, Province, Inc., as financial advisor.
UNITED RENTALS: S&P Alters Outlook to Positive & Affirms BB- CCR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on United Rentals Inc. (URI)
and operating subsidiary United Rentals (North America) Inc. to
positive from stable and affirmed its 'BB-' corporate credit rating
on both companies. All of S&P's other ratings remain unchanged.
S&P said, "It is our preliminary expectation that the new debt
United Rentals will issue to fund the acquisition will be largely
unsecured. However, we will monitor the company's funding strategy
over the near term and review the structure of the transaction as
more information becomes available to assess any potential impact
on our current issue-level and recovery ratings.
"The outlook revision reflects our expectation that United Rentals
will likely maintain debt-to-EBITDA of 3x or less and a
FOCF-to-debt ratio of 10% or more over the next 12 months, which
should provide it with a sufficient cushion to absorb the
volatility in its demand over the economic cycle. United Rentals
has entered into a definitive merger agreement to acquire Neff
Corp. for approximately $1.3 billion, which we believe it will fund
with a mix of cash, borrowings from its asset-based lending (ABL)
facility, and new debt. At the close of the transaction (which the
company expects to occur in the fourth quarter of 2017), we
forecast that United Rentals' leverage will be slightly above 3x.
In 2018, we expect the combined company to generate strong free
operating cash flow in excess of $900 million, which should enable
United Rentals to modestly reduce its leverage to the high-2x area
by the end of the year. In addition, we expect that the dynamics of
the equipment rental industry, primarily a continued improvement in
rental pricing and a more balanced supply and demand for rental
equipment, will support United Rentals' ability to maintain or
improve its credit measures. This forecast also incorporates our
belief that United Rentals will successfully manage the integration
of Neff alongside its integration of NES Rentals (acquisition
closed April 2017) while making progress toward realizing the
expected cost synergies.
"The positive outlook on URI reflects our expectation that the
company may reduce its debt-to-EBITDA below 3x and increase its
FOCF-to-debt above 10% over the next 12 months due to continued
strong cash flow generation and contributions from its
acquisitions.
"We could raise our ratings on URI over the next 12 months if its
rental pricing and equipment utilization continue to improve and
management makes progress toward successfully integrating NES and
Neff, enabling the company to realize its anticipated cost and
revenue synergies. Under this scenario, we expect the company to
maintain adjusted debt-to-EBITDA of 3x or below and a
FOCF-to-adjusted debt ratio of 10% or more. We believe that these
leverage levels should provide the company with a cushion of about
1x to absorb the potential volatility in its EBITDA over the
economic cycle and the high degree of capital intensity in its
industry. To raise our ratings, we would also expect the company to
continue to make financial policy decisions--particularly those
related to share repurchases and future acquisitions--that enable
it to sustain this level of leverage over the next 12 months.
"We could revise our outlook on URI to stable if we no longer
believe that the company will be able to sustain leverage at or
below 3x because of a significantly weaker operating performance,
integration missteps, or more aggressive financial policies related
to shareholder returns and acquisitions."
V&L TOOL: Amendment to Stipulation With GE on Cash Use OK'd
-----------------------------------------------------------
The Hon. Susan V. Kelley of the U.S. Bankruptcy Court for the
Eastern District of Wisconsin has entered an order approving the
fifth amendment to stipulation between V&L Tool, LLC, and GE
Healthcare, a division of General Electric Company.
The Debtor is authorized and directed to act in accordance with the
terms and conditions of Stipulation, as amended by the Fifth
Amendment.
A copy of the Stipulated Order is available at:
http://bankrupt.com/misc/wieb16-24208-237.pdf
As reported by the Troubled Company Reporter on July 31, 2017, the
Debtor filed with the Court a stipulated motion for order approving
fifth amendment to its stipulation with GEHC, regarding its interim
use of cash collateral through Sept. 30, 2017. Under the Fifth
Amendment, the Debtor and GEHC agree to further amend the
Stipulation as follows: (a) the Debtor and GEHC agree to further
extend the term of the Stipulation until Sept. 30, 2017, as
provided in the Fifth Amendment; and (b) the Stipulation is amended
to provide that, for each payment by GEHC to the Debtor under the
GEHC Supply Agreement that is made by GEHC after June 30, 2017, and
on or before Sept. 30, 2017, GEHC will withhold 20% of the payment
amount as a setoff/recoupment to be applied against the Subject
Obligations until it has received, through the 20% setoffs, an
additional $43,696.80 during this period.
About V&L Tool, LLC
Founded by Vyron Schaefer in 1968, V&L Tool, LLC, is in the
business of designing, machining and assembly of metals to close
tolerance specifications.
V&L Tool, LLC, formerly doing business as VLT Acquisition LLC,
filed a Chapter 11 petition (Bankr. E.D. Wis. Case No. 16-24208) on
April 27, 2016. Greg Ahsmann, manager, signed the petition.
At the time of filing, the Debtor disclosed $5.46 million in total
assets and $5.16 million in total liabilities.
The Debtor is represented by Jonathan D. Golding, Esq., and Richard
N. Golding, Esq., at the Golding Law Offices, P.C., in Chicago,
Illinois.
VANSCOY CHIROPRACTIC: Court Approves Michelle Steele as Bookkeeper
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of West
Virginia authorized Vanscoy Chiropractic Corporation Holistic
Health Center to employ Michelle Steele as bookkeeper.
Michelle Steele will be paid for her professional services as
follows:
(a) a retainer in the amount of $750 for the initial setup of
financials and accounting records, financial review of
accounting records, onsite visits, meetings and beginning
of the first Monthly Operating Report;
(b) a $600 cap per month to prepare the Monthly Operating
Report. This includes preparation of payroll, the monthly
financials and other financial reporting related to the
Monthly Operating Report;
(c) a fee of $35 per hour for preparation of projections,
disclosure plan, assistance with tax returns and necessary
accounting for preparation of debtor's confirmation,
dismissal or conversion of bankruptcy case. A fee
application will be required for hourly services.
Michelle Steele will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Michelle Steele 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.
Ms. Steele can be reached at:
Michelle Steele
MICHELLE STEELE ACCOUNTING SOLUTIONS INC
3818 Maccorkle Avenue Se
Charleston, WV 25304
Tel: (304) 925-8462
About VanScoy Chiropractic Corporation
Holistic Health Center
VanScoy Chiropractic Corporation Holistic Health Center sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
W.Va. Case No. 17-30271) on June 12, 2017, disclosing under $1
million in both assets and liabilities. Judge Frank W. Volk,
presides over the case. Joseph W. Caldwell, Esq., at Caldwell &
Riffee serves as the Debtor's legal counsel. The United States
Trustee has been unable to appoint a committee of unsecured
creditors pursuant to 11 U.S.C. Section 1102(a).
WAND INTERMEDIATE: S&P Affirms 'B' CCR, Outlook Stable
------------------------------------------------------
S&P Global Ratings affirmed its 'B' corporate credit rating on Wand
Intermediate I LP. The outlook remains stable.
S&P said, "At the same time, we affirmed our 'B' issue-level and
'3' recovery ratings on the company's first-lien debt and revolver
as well as our 'CCC+' issue-level and '6' recovery ratings on its
second-lien term loan."
Wand operates light vehicle collision repair shops in the U.S. The
company has an economically resilient business model that is
mitigated by its aggressive expansion strategy, narrow scope of
operations, limited scale, and lack of diversity (the company
conducts business only in certain U.S. locales and does only
collision repair).
S&P said, "The stable outlook reflects our view that Wand will
continue to operate with a gross margin that's at least as good as
recent levels, allowing the company to generate a small amount of
positive FOCF and maintain sufficient liquidity despite its
acquisitive business strategy.
"We could lower the rating within the next 12 months if the company
is not able to generate positive free cash flow consistently for
multiple quarters, adversely affecting liquidity. This could occur
if the company's operating prospects reverse and margins decline
200 basis points, potentially due to integration risks associated
with its acquisitions or technical labor wage pressure due to
heightened competition. We could also consider a downgrade if its
debt leverage increases above 8x on account of many debt funded
acquisitions.
"We consider an upgrade unlikely during the next 12 months because
we believe Wand's financial policies will remain aggressive under
its financial sponsor based on its large debt burden relative to
its size and our general view of the financial sponsors' tolerance
for financial risk. However, we could upgrade the company if debt
leverage moved below 5x and if we believe that the risk of
re-leveraging above 5.0x was low despite the sponsor's aggressive
financial policy."
WINDSTREAM SERVICES: Fitch Alters Outlook to Neg & Affirms BB- IDR
------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' Long-Term Issuer Default
Ratings (IDRs) of Windstream Services, LLC and its subsidiary
Windstream Holdings of the Midwest, Inc. The Rating Outlook is
revised to Negative from Stable.
Windstream had approximately $5.6 billion of debt outstanding as of
June 30, 2017.
The Negative Outlook reflects slower-than-anticipated revenue and
EBITDA stabilization for Windstream versus previous expectations.
Fitch had expected Windstream to return to revenue growth in 2019,
excluding the EarthLink merger and Broadview acquisition (the
transactions). While Fitch expects cost synergies from the
transactions to drive EBITDA stabilization by the end of the
forecast, Moody's does not expects revenue to return to growth over
the forecast horizon. The slower path to revenue growth is mainly
attributable to headwinds in the legacy businesses, including those
acquired from EarthLink and Broadview.
Fitch has revised its negative rating sensitivity for adjusted
leverage to 5.5x from 5.7x-5.8x to reflect the challenging
competitive and business environment, which, in turn, has led to
continued delays in the return to revenue and EBITDA stability.
Fitch expects total adjusted debt/EBITDAR will decline to the
mid-5x range by the end of 2018 as cost synergies are realized from
both transactions and will remain relatively flat over the
remainder of the forecast horizon. Moody's believes the enhanced
financial flexibility provided by the elimination of Windstream's
dividend (net of cash used towards the $90 million share repurchase
program) serves as an additional avenue for modest deleveraging.
KEY RATING DRIVERS
Near-Term Pressures
The company has experienced some pressure in the wholesale and CLEC
segments as a result of competition and declining legacy services.
Excluding the transactions, Windstream experienced a decline of
3.4% in service revenue in 2016. Sequential revenues have been
relatively stable in the ILEC consumer and small/medium business
segment, and the enterprise segment. Including the transactions,
Fitch's base case assumes organic revenues continue to decline over
the forecast horizon, albeit at a slowing pace.
Revenue Mix Changes
Windstream derives approximately two-thirds of its revenue from
enterprise services, consumer high-speed internet services and its
carrier customers (core and wholesale), which all have growing or
stable prospects in the long term. Certain legacy revenues remain
pressured, but Windstream's revenues should stabilize gradually as
legacy revenues dwindle in the mix.
Leverage Metrics
Fitch estimates total adjusted debt/EBITDAR will be 5.8x in 2017,
including both transactions. Fitch expects total adjusted
debt/EBITDAR will decline to the mid-5x range by the end of 2018 as
cost synergies are realized from both transactions and will remain
relatively flat over the remainder of the forecast horizon. The
enhanced financial flexibility provided by the elimination of
Windstream's dividend (net of cash used for share repurchases)
serves as an additional avenue for modest deleveraging. In
calculating total adjusted debt, Fitch applies an 8x multiple to
the sum of the annual rental payment to Uniti Group Inc. plus other
rental expenses.
Cost Synergies Support EBITDA Stabilization
Windstream anticipates realizing more than $180 million of annual
run-rate synergies three years after the close of the EarthLink
merger and Broadview Networks acquisition (the transactions): $155
million in operating cost savings and $25 million in capital
spending savings. Windstream expects to realize $115 million in
operating cost synergies after two years following the
transactions, with roughly $40 million-$50 million to be realized
by the end of year three. In its base case assumptions for
Windstream, Fitch has assumed moderately lower cost savings in each
of the three years following the transactions.
Integration Key to Success
Fitch believes there are potential execution risks to achieving the
operating cost and capital expenditure synergies following the
close of the transactions. Initial savings are expected to be
realized from reduced selling, general and administrative savings
as corporate overheads and other public company cost savings arise.
Over time, the company is expected to realize the benefits of lower
network access costs as on-network opportunities lower third-party
network access costs. Finally, benefits are gradually expected to
be realized by IT and billing system cost savings.
DERIVATION SUMMARY
Windstream mainly targets small and mid-sized business (SMB)
customers, and competes in a highly fragmented space with smaller
and larger peers. Cable operators are increasingly focused on
medium-sized businesses and compete against Windstream in the SMB
segment. Cable operators can also target other larger regional
customers, including governments and universities. Larger wireline
operators typically focus on enterprise customers, slightly
reducing the level of competition in the SMB market for
Windstream.
Windstream has a weaker competitive position in the higher-margin
enterprise market based on the scale and size of its operations.
Larger companies, including AT&T Inc. ('A-'/RWN), Verizon
Communications Inc. ('A-'/Stable), and CenturyLink, Inc.
('BB+'/RWN), have an advantage with national or multinational
companies given their extensive footprints in the U.S. and abroad.
Fitch notes that CenturyLink will become the second largest
enterprise service provider after it acquires Level 3
Communications, Inc. (LVLT; 'BB'/Stable), which is expected to
close at the end of 3Q17.
In comparison to Windstream, AT&T and Verizon maintain lower
financial leverage, generate higher EBITDA margins and FCF, and
have wireless offerings that provide more service diversification.
Fitch also believes Windstream will have a weaker FCF profile than
CenturyLink following the LVLT acquisition, as CenturyLink's FCF
will benefit from enhanced scale and LVLT's net operating loss
carryforwards.
Windstream has less exposure to the more pressured residential
market compared to its rural local exchange carrier (RLEC) peer,
Frontier Communications Corp. ('B+'/Stable). Within the residential
market, RLECs face wireless substitution and competition from cable
operators with facilities-based triple-play offerings, including
Comcast Corp. ('A-'/Stable) and Charter Communications Inc. (Fitch
rates Charter's indirect subsidiary, CCO Holdings, LLC,
'BB+'/Stable). Cheaper alternative offerings such as Voice over
Internet Protocol (VoIP) and over-the-top (OTT) video services
provide additional challenges. RLECs have had modest success with
bundling broadband and satellite video service offerings in
response to these threats. As of year-end 2016, roughly 60% of
Windstream's footprint overlapped with a national cable operator.
No country-ceiling, parent/subsidiary or operating environment
aspects impact the rating.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for Windstream:
-- Revenue and EBITDA include the EarthLink merger as of Feb. 27,
2017 and the acquisition of Broadview on July 28, 2017.
-- Revenues total $5.9 billion and $6 billion in 2017 and 2018,
respectively. Fitch expects organic revenue to continue to
decline over the forecast horizon, albeit at a slowing pace.
-- 2017 EBITDA margins are in the range of 22% to 23%, including
the annual rental payment as an operating expense. Fitch
expects EBITDA margins to expand by roughly 100 bps in 2018 as
Windstream cost synergies are realized.
-- Fitch assumes Windstream will benefit from synergies post-
acquisition, and has moderately reduced the amount of
operating cost synergies from the $155 million anticipated by
Windstream over the next three years.
-- Fitch expects total adjusted debt/EBITDAR will decline from
5.8x at year-end 2017 to the mid-5x range by the end of 2018
as cost synergies are realized from both transactions.
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead to
Stabilization of the Rating
- The company sustains total adjusted debt/EBITDAR under 5.5x.
Fitch has revised the negative adjusted leverage threshold to
5.5x from 5.7x-5.8x owing to the challenging competitive and
business environment.
- Revenues and EBITDA would need to stabilize on a sustained
basis.
- Fitch would also need to see progress by Windstream in
executing the integration of its recent transactions prior to
stabilizing the rating.
Future Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A negative rating action could occur if total adjusted
debt/EBITDAR is 5.5x or higher for a sustained period.
- The company no longer makes progress toward revenue and EBITDA
stability due to competitive and business conditions.
LIQUIDITY
The rating is supported by the liquidity provided by Windstream's
$1.25 billion revolving credit facility (RCF). At June 30, 2017,
approximately $475 million was available. Revolver availability was
supplemented with $25 million in cash at the end of 2Q17.
The $1.25 billion senior secured RCF is in place until April 2020.
Principal financial covenants in Windstream's secured credit
facilities require a minimum interest coverage ratio of 2.75x and a
maximum leverage ratio of 4.5x. The dividend is limited to the sum
of excess FCF and net cash equity issuance proceeds subject to pro
forma leverage of 4.5x or less.
Outside of annual term-loan amortization payments, Windstream does
not have any material maturities until 2020. Maturities in 2020
total $1.5 billion, including $750 million outstanding on the
revolver at June 30, 2017.
Fitch believes that Windstream's announcement in August 2017 to
eliminate its dividend provides enhanced financial flexibility.
Moody's estimate post-dividend FCF in 2017 will range from $0 to
negative $50 million, including integration capex and $50 million
of spending related to the completion of Project Excel. Fitch
expects capital spending to return to normal levels in the 13%-15%
range after 2017 and for the company to return to positive FCF in
2018, with FCF margins in the low single digits over the forecast.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
Windstream Services, LLC
-- IDR at 'BB-';
-- $1.25 billion senior secured revolving credit facility due
2020 at 'BB+/RR1';
-- Senior secured term loans at 'BB+/RR1';
-- Senior unsecured notes at 'BB-/RR4'.
Windstream Holdings of the Midwest, Inc.
-- IDR at 'BB-';
-- $100 million secured notes due 2028 at 'BB-/RR4'.
The Rating Outlook is revised to Negative from Stable.
YELLOW CAB: Trustee Reaches $22 Million Settlement With Jacobses
----------------------------------------------------------------
John Kennedy, writing for Bankruptcy Law360, reports that the
Chapter 7 trustee of Yellow Cab Affiliation Inc., Michael Desmond,
has negotiated a $22.1 million settlement between the company and
lawyer Marc Jacobs and his wife, Deborah.
Mr. Jacobs, a former partner at Barack Ferrazzano Kirschbaum &
Nagelberg LLP, sustained severe injuries when a Yellow Cab unit he
hailed crashed into a concrete highway barrier in August 2005. A
March 2015 jury verdict in the Jacobs' case caused Yellow Cab to
file for bankruptcy.
The settlement would involve the Jacobses reducing their individual
claims to 85 percent of the original judgment -- from $22 million
to $18.7 million for Jacobs and from $4 million to $3.4 million for
his wife, trustee Michael K. Desmond said, according to Law360.
About Yellow Cab Affiliation
Chicago, Illinois-based Yellow Cab Affiliation, Inc., filed for
Chapter 11 protection (Bankr. N.D. Ill. Case No. 15-09539) on March
18, 2015. The petition was signed by Michael Levine, president.
Bankruptcy Judge Hon. Carol A. Doyle presides over the case.
Matthew T. Gensburg, Esq., and Martin S Kedziora, Esq., at
Greenberg Traurig, LLP, and Bruce Zirinksky represent the Debtor in
its restructuring effort.
The Debtor estimated assets at $1 million to $10 million and debt
of $10 million to $50 million.
On November 2016, the Debtor's case was converted into a Chapter 7
proceeding. Michael Desmond of Figliulo & Silverman PC was
appointed as Chapter 7 trustee.
YOGA CENTER: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
The Office of the U.S. Trustee on Aug. 22 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of The Yoga Center, LLC.
About The Yoga Center LLC
The Yoga Center, LLC -- http://yogacentermpls.com-- is a small
business Debtor as defined in 11 U.S.C. Section 101(51D). The
Company provides Yoga classes offering a wide selection of drop-in
classes, specialty class series, workshops and events, as well as
teacher training programs, specialty teacher trainings and
continuing education for the lifelong learner.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Minn. Case No. 17-42115) on July 13, 2017. Neil
Riemer, president, signed the petition.
Michael J. Sheridan, Esq., serves as the Debtor's bankruptcy
counsel.
At the time of the filing, the Debtor disclosed that it had
estimated assets of less than $1 million and liabilities of $1
million to $10 million.
Judge Katherine A. Constantine presides over the case.
[*] Cohen & Grigsby Attorneys Among Best Lawyers in America List
----------------------------------------------------------------
Business law firm Cohen & Grigsby on Aug. 17, 2017, disclosed that
32 lawyers from its Pittsburgh office have been selected by their
peers for inclusion in the 2018 edition of Best Lawyers in
America.
Attorneys in the following practice areas have earned a spot in the
2018 listing:
* Administrative/Regulatory Law: Anthony Cillo
* Banking and Finance Law: James D. Chiafullo
* Bankruptcy and Creditor Debtor Rights/Insolvency and
Reorganization Law: William E. Kelleher Jr.
* Commercial Litigation: Larry K. Elliott, Robert M. Linn,
Richard R. Nelson II, Jeffrey P. Ward
* Corporate Compliance Law: Charles C. Cohen
* Corporate Law: Christopher B. Carson, James D. Chiafullo,
Charles C. Cohen,
Jack W. Elliott, David J. Kalson
* Employment Law – Management: Ronald J. Andrykovitch, Robert
B. Cottington, Valerie S. Faeth, James R. Haggerty, Robert F.
Prorok
* Immigration Law: John S. Brendel, Lawrence M. Lebowitz,
Matthew T. Phillips
* International Trade and Finance Law: V. Susanne Cook
* Labor Law – Management: Ronald J. Andrykovitch, Robert B.
Cottington,
James R. Haggerty, Robert F. Prorok
* Litigation – Bankruptcy: William E. Kelleher Jr.
* Litigation – Intellectual Property: Robert M. Linn
* Litigation – Labor and Employment: Robert B. Cottington,
James R. Haggerty,
Robert M. Linn
* Litigation – Land Use and Zoning: Clifford B. Levine
* Litigation – Securities: Larry K. Elliott, Richard R. Nelson
II
* Litigation – Trusts and Estates: R. Michael Daniel,
Christopher F. Farrell,
Mario Santilli Jr., Jeffrey P. Ward
* Mediation: James B. Brown
* Mergers and Acquisitions Law: Jack W. Elliott
* Non-Profit/Charities Law: Christopher F. Farrell
* Patent Law: Noland J. Cheung
* Public Finance Law: Charles R. Brodbeck
* Real Estate Law: Charles R. Brodbeck, James D. Chiafullo,
Blaine A. Lamperski, William R. Taxay
* Tax Law: Christopher F. Farrell, David J. Kalson
* Technology Law: David J. Kalson
* Trusts and Estates: R. Michael Daniel, Christopher F. Farrell,
Samuel J. Goncz, C. Eric Pfeil, Mario Santilli Jr., Jonathan M.
Schmerling
* Venture Capital Law: David J. Kalson
Best Lawyers has become universally regarded as the definitive
guide to legal excellence and is the oldest peer-review publication
in the legal profession. Inclusion is based entirely on exhaustive
peer review and lawyers are not permitted to pay any fee to
participate in or be included on Best Lawyers lists. Over three
decades, Best Lawyers lists have earned the respect of the
profession, the media and the public as a reliable, unbiased source
of legal referrals.
About Cohen & Grigsby
Since 1981, Cohen & Grigsby, P.C. -- http://www.cohenlaw.com/--
and its attorneys have provided sound legal advice and solutions to
clients that seek to maximize their potential in a constantly
changing global marketplace. Comprised of more than 140 lawyers,
Cohen & Grigsby maintains offices in Pittsburgh, PA and Naples,
Fla. The firm's practice areas include Business Services, Labor &
Employment, Immigration/International Business, Intellectual
Property, Real Estate & Public Finance, Litigation, Employee
Benefits & Executive Compensation, Estates & Trusts, Bankruptcy &
Creditors Rights, and Public Affairs. Cohen & Grigsby represents
private and publicly held businesses, nonprofits, multinational
corporations, individuals and emerging businesses across a full
spectrum of industries. Its lawyers maintain an unwavering
commitment to customer service that ensures a productive
partnership.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Jeffrey Allen Silverman
Bankr. D. Ariz. Case No. 17-09512
Chapter 11 Petition filed August 15, 2017
represented by: Patrick F. Keery, Esq.
KEERY MCCUE, PLLC
E-mail: pfk@keerymccue.com
In re Carl Erickson
Bankr. S.D. Fla. Case No. 17-20293
Chapter 11 Petition filed August 15, 2017
Filed Pro Se
In re NEBFYNEDYNE 15, INC.
Bankr. D. Neb. Case No. 17-81147
Chapter 11 Petition filed August 15, 2017
See http://bankrupt.com/misc/neb17-81147.pdf
represented by: Bruce C. Barnhart, Esq.
BARNHART LAW OFFICE
E-mail: bruce@barnhart-law.com
In re Greer Appliance Warehouse & Service, LLC
Bankr. D.S.C. Case No. 17-04069
Chapter 11 Petition filed August 15, 2017
See http://bankrupt.com/misc/scb17-04069.pdf
represented by: Robert H. Cooper, Esq.
THE COOPER LAW FIRM
E-mail: thecooperlawfirm@thecooperlawfirm.com
In re Ryan S. O'Hara
Bankr. C.D. Cal. Case No. 17-20050
Chapter 11 Petition filed August 16, 2017
represented by: Mark T. Young, Esq.
DONAHOE & YOUNG LLP
E-mail: myoung@donahoeyoung.com
In re Frosty Fox, Inc.
Bankr. N.D. Ill. Case No. 17-81923
Chapter 11 Petition filed August 16, 2017
See http://bankrupt.com/misc/ilnb17-81923.pdf
represented by: James A. Young, Esq.
JAMES A. YOUNG LAW
E-mail: jyoung@jamesyounglaw.com
In re Pro-Tech Auto & Marine, Inc.
Bankr. W.D. Ky. Case No. 17-32628
Chapter 11 Petition filed August 16, 2017
See http://bankrupt.com/misc/kywb17-32628.pdf
represented by: Sandra D. Freeburger, Esq.
DEITZ SHIELDS & FREEBURGER, LLP
E-mail: sfreeburger@dsf-atty.com
In re Derek L. Gustafson
Bankr. D. Minn. Case No. 17-50531
Chapter 11 Petition filed August 16, 2017
represented by: Steven B. Nosek, Esq.
E-mail: snosek@noseklawfirm.com
In re Symonous Greta Harris
Bankr. E.D.N.Y. Case No. 17-44247
Chapter 11 Petition filed August 16, 2017
See http://bankrupt.com/misc/nyeb17-44247.pdf
represented by: Audrey Thomas, Esq.
THE LAW OFFICE OF AUDREY THOMAS PLLC
E-mail: audreythomasesq@gmail.com
In re 203 Lena Inc.
Bankr. S.D.N.Y. Case No. 17-23274
Chapter 11 Petition filed August 16, 2017
See http://bankrupt.com/misc/nysb17-23274.pdf
represented by: Lawrence Morrison, Esq.
MORRISON TENENBAUM PLLC
E-mail: lmorrison@m-t-law.com
In re Great Electric
Bankr. S.D. Tex. Case No. 17-34958
Chapter 11 Petition filed August 16, 2017
See http://bankrupt.com/misc/txsb17-34958.pdf
represented by: Rhonda Lynn Allen, Esq.
E-mail: rallen1204@gmail.com
In re Paul Andrew Day
Bankr. D. Utah Case No. 17-27117
Chapter 11 Petition filed August 16, 2017
represented by: Brian D. Johnson, Esq.
E-mail: courtmail@bdjexpresslaw.com
In re Jacksonville Beauty Institute Inc.
Bankr. M.D. Fla. Case No. 17-03022
Chapter 11 Petition filed August 17, 2017
See http://bankrupt.com/misc/flmb17-03022.pdf
represented by: Kevin B Paysinger, Esq.
LANSING ROY, PA
E-mail: court@lansingroy.com
In re Jami R. Agins
Bankr. S.D. Fla. Case No. 17-20432
Chapter 11 Petition filed August 17, 2017
represented by: Stan L. Riskin, Esq.
E-mail: stan.riskin@gmail.com
In re Boris Mordukhaev
Bankr. E.D.N.Y. Case No. 17-44255
Chapter 11 Petition filed August 17, 2017
represented by: Alla Kachan, Esq.
E-mail: alla@kachanlaw.com
In re Greene Ave Prop. Mgmt 2017 Corp
Bankr. E.D.N.Y. Case No. 17-44262
Chapter 11 Petition filed August 17, 2017
See http://bankrupt.com/misc/nyeb17-44262.pdf
Filed Pro Se
In re Ninety Fifth Street Square Inc.
Bankr. S.D.N.Y. Case No. 17-12270
Chapter 11 Petition filed August 17, 2017
See http://bankrupt.com/misc/nysb17-12270.pdf
represented by: Joshua Bronstein, Esq.
E-mail: jbronsteinlaw@gmail.com
In re Nandini, Inc.
Bankr. M.D. Pa. Case No. 17-03409
Chapter 11 Petition filed August 17, 2017
See http://bankrupt.com/misc/pamb17-03409.pdf
represented by: Lisa A. Rynard, Esq.
PURCELL KRUG AND HALLER
E-mail: lrynard@pkh.com
In re Tina Marie Jones
Bankr. M.D. Tenn. Case No. 17-05623
Chapter 11 Petition filed August 17, 2017
represented by: PAUL E. JENNINGS, Esq.
PAUL E. JENNINGS LAW OFFICES, P.C.
E-mail: paulejennings@bellsouth.net
In re John D. Neal and Itzel C. Neal
Bankr. M.D. Tenn. Case No. 17-05624
Chapter 11 Petition filed August 17, 2017
represented by: PAUL E. JENNINGS, Esq.
PAUL E. JENNINGS LAW OFFICES, P.C.
E-mail: paulejennings@bellsouth.net
In re St. Albans Cleaners and Launderers, Inc.
Bankr. S.D.W. Va. Case No. 17-20432
Chapter 11 Petition filed August 17, 2017
See http://bankrupt.com/misc/wvsb17-20432.pdf
represented by: William W. Pepper, Esq.
PEPPER AND NASON
E-mail: tinas@peppernason.com
In re P.D.L., INC.
Bankr. S.D. Fla. Case No. 17-20457
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/flsb17-20457.pdf
represented by: Ariel Sagre, Esq.
SAGRE LAW FIRM, P.A.
E-mail: law@sagrelawfirm.com
In re Marisa's Ristorante, LLC
Bankr. D. Conn. Case No. 17-51021
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/ctb17-51021.pdf
represented by: Mark M. Kratter, Esq.
LAW OFFICES OF MARK M. KRATTER, LLC
E-mail: laws4ct@aol.com
In re CareFocus Corporation
Bankr. D. Minn. Case No. 17-32654
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/mnb17-32654.pdf
represented by: Steven B. Nosek, Esq.
STEVEN B. NOSEK, P.A.
E-mail: snosek@noseklawfirm.com
In re 2722 Charamico Realty Corp.
Bankr. S.D.N.Y. Case No. 17-12283
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/nysb17-12283.pdf
Filed Pro Se
In re Pinnacle Land Group, LLC
Bankr. W.D. Pa. Case No. 17-23339
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/pawb17-23339.pdf
represented by: Donald R. Calaiaro, Esq.
CALAIARO VALENCIK
E-mail: dcalaiaro@c-vlaw.com
In re John R. Bowles
Bankr. N.D. Ala. Case No. 17-71473
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/alnb17-71473.pdf
represented by: Herbert M. Newell, III, Esq.
NEWELL & HOLDEN, LLC
E-mail: hnewell@newell-law.com
In re Robert Brian Karnes and Jennifer Dawn Karnes
Bankr. E.D. Ark. Case No. 17-14522
Chapter 11 Petition filed August 18, 2017
represented by: Joel G. Hargis, Esq.
HARGIS LAW OFFICE
E-mail: joel@hargislawoffice.com
In re Nancy Lee Hoy-Nielsen
Bankr. E.D. Va. Case No. 17-12829
Chapter 11 Petition filed August 18, 2017
Filed Pro Se
In re Joel Lazaro and Rosemarie Lazaro
Bankr. C.D. Cal. Case No. 17-20226
Chapter 11 Petition filed August 20, 2017
represented by: Javier H Castillo, Esq.
CASTILLO LAW FIRM
E-mail: jhcecf@gmail.com
In re Little Saigon Supermarket, LLC
Bankr. C.D. Cal. Case No. 17-20227
Chapter 11 Petition filed August 20, 2017
See http://bankrupt.com/misc/cacb17-20227.pdf
represented by: Elaine Nguyen, Esq.
WEINTRAUB & SELTH APC
E-mail: elaine@wsrlaw.net
In re Salad & Co., Inc.
Bankr. S.D. Fla. Case No. 17-20528
Chapter 11 Petition filed August 20, 2017
See http://bankrupt.com/misc/flsb17-20528.pdf
represented by: David C. Rubin, Esq.
David C. Rubin P.A.
E-mail: david3051@aol.com
In re J. R. Bowles Logging, LLC
Bankr. N.D. Ala. Case No. 17-71473
Chapter 11 Petition filed August 18, 2017
See http://bankrupt.com/misc/alnb17-71473.pdf
represented by: Herbert M. Newell, III, Esq.
NEWELL & HOLDEN, LLC
E-mail: hnewell@newell-law.com
In re Ivan Neal Tracy, Jr.
Bankr. D. Ariz. Case No. 17-09763
Chapter 11 Petition filed August 21, 2017
represented by: William R. Richardson, Esq.
RICHARDSON & RICHARDSON, P.C.
E-mail: wrichlaw@aol.com
In re Yegiya Kutyan and Haykush Helen Kutyan
Bankr. C.D. Cal. Case No. 17-12214
Chapter 11 Petition filed August 21, 2017
represented by: Sanaz S. Bereliani, Esq.
BERELIANI LAW FIRM
E-mail: berelianilaw@gmail.com
In re Kenneth Lee Underwood
Bankr. M.D. Fla. Case No. 17-03060
Chapter 11 Petition filed August 21, 2017
represented by: Robert A Heekin, Jr., Esq.
THAMES MARKEY AND HEEKIN, P.A.
E-mail: rah@tmhlaw.net
In re Dale M. Williams, Inc.
Bankr. M.D. Fla. Case No. 17-05561
Chapter 11 Petition filed August 21, 2017
See http://bankrupt.com/misc/flmb17-05561.pdf
represented by: Peter N Hill, Esq.
HERRON HILL LAW GROUP, PLLC
E-mail: peter@herronhilllaw.com
In re All Sod Nursery, Inc.
Bankr. M.D. Fla. Case No. 17-07361
Chapter 11 Petition filed August 21, 2017
See http://bankrupt.com/misc/flmb17-07361.pdf
represented by: Michael R. Dal Lago, Esq.
DAL LAGO LAW
E-mail: mike@dallagolaw.com
In re Cavalier Real Estate, LLC
Bankr. E.D. Va. Case No. 17-72997
Chapter 11 Petition filed August 21, 2017
See http://bankrupt.com/misc/vaeb17-72997.pdf
represented by: Karen M. Crowley, Esq.
CROWLEY, LIBERATORE, RYAN & BROGAN, P.C.
E-mail: kcrowley@clrbfirm.com
In re Jeffery Layne Wyatt
Bankr. N.D. Cal. Case No. 17-52022
Chapter 11 Petition filed August 22, 2017
represented by: David S. Henshaw, Esq.
HENSHAW LAW OFFICE
E-mail: david@henshawlaw.com
In re David Lorne Palmini
Bankr. D. Colo. Case No. 17-17815
Chapter 11 Petition filed August 22, 2017
represented by: Jane M. Roberson, Esq.
E-mail: Roberson@JustAskJane.info
In re Eric Philip Mains
Bankr. S.D. Ind. Case No. 17-91272
Chapter 11 Petition filed August 22, 2017
Filed Pro Se
In re Landmark Medical Group, LLC
Bankr. D. Md. Case No. 17-21294
Chapter 11 Petition filed August 22, 2017
See http://bankrupt.com/misc/mdb17-21294.pdf
represented by: Morgan William Fisher, Esq.
LAW OFFICES OF MORGAN FISHER LLC
E-mail: mwf@morganfisherlaw.com
In re Archer NY Company LLC
Bankr. E.D.N.Y. Case No. 17-75101
Chapter 11 Petition filed August 22, 2017
See http://bankrupt.com/misc/nyeb17-75101.pdf
Filed Pro Se
In re L&A Automotive Center, Inc.
Bankr. N.D.N.Y. Case No. 17-11559
Chapter 11 Petition filed August 22, 2017
See http://bankrupt.com/misc/nynb17-11559.pdf
represented by: Richard H. Weiskopf, Esq.
THE DELORENZO LAW FIRM
E-mail: Rweiskopf@delolaw.com
In re 74 Fifth Ave Market Corp.
Bankr. S.D.N.Y. Case No. 17-12321
Chapter 11 Petition filed August 22, 2017
See http://bankrupt.com/misc/nysb17-12321.pdf
represented by: Douglas J. Pick, Esq.
PICK & ZABICKI LLP
E-mail: dpick@picklaw.net
In re Chris Lee Gilbert
Bankr. N.D. Tex. Case No. 17-43406
Chapter 11 Petition filed August 22, 2017
represented by: Howard Marc Spector, Esq.
SPECTOR & JOHNSON, PLLC
E-mail: hspector@spectorjohnson.com
*********
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
of the TCR.
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
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***