/raid1/www/Hosts/bankrupt/TCR_Public/180302.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, March 2, 2018, Vol. 22, No. 60
Headlines
4411 ENGLE RIDGE: Seeks Monthly Access to $2,955 Cash Collateral
A'GACI LLC: Has Green Light to Auction Assets on April 3
ACHAOGEN INC: May Issue 2.02M Additional Shares Under Equity Plans
ACHAOGEN INC: Widens Net Loss to $125.6 Million in 2017
ADAMIS PHARMACEUTICALS: Board Approves 2018 Bonus Plan
ADVANCED MICRO: Moody's Hikes CFR to B2; Outlook Positive
ADVANTAGE SALES: Bank Debt Trades at 5.06% Off
AERIAL PARENT: S&P Alters Outlook to Neg. on Pending NPAC Transfer
ALLEN COUNTY, OH: S&P Lowers Rating on 2007 Revenue Bonds to 'B'
ALTA MESA: Reports Year-End Proved Reserves & Operational Update
ANDERSON SHUMAKER: Cash Use Until March 15 Approved
ARROWHEAD SELF: Hearing on Plan and Disclosures Set for March 28
AYTU BIOSCIENCE: Amends Prospectus on 5.8M Class A Units Sale
BILL BARRETT: Incurs $138.2 Million Net Loss in 2017
BLINK CHARGING: Wolverine Flagship Has 9.9% Stake as of Dec. 29
BON-TON STORES: City View, Willow Investment Oppose Asset Sale
BRAZIL MINERALS: GW Holdings Group Has 9.2% Stake as of Feb. 26
BREDA LLC: Maine Inns Facing Foreclosure, to Seek Chapter 11
BULOVA TECHNOLOGIES: To File Its Form 10-Q Within Grace Period
C & M RUSSEL: M. Evans Claims vs Law Firm Barred by Res Judicata
CALUMET SPECIALTY: S&P Alters Outlook to Stable & Affirms 'B-' CCR
CAROLINE WYLY: Woody Creek Home Sold for $13.4 Million
CARTHAGE SPECIALTY: Case Summary & 20 Largest Unsecured Creditors
CARTHAGE SPECIALTY: To Seek Chapter 11 After Failed Sale Bid
CENGAGE: Bank Debt Trades at 7.64% Off
COATES INTERNATIONAL: Obtains $44K From Convertible Note Financing
CONCORDIA HEALTHCARE: Bank Debt Trades at 9.33% Off
CONTURA ENERGY: S&P Affirms 'B-' CCR & Alters Outlook to Stable
CORNBREAD VENTURES: Has Until May 28 to Exclusively File Plan
CORONADO GROUP: S&P Raises CCR to 'B' on Asset Acquisition Plan
DAVID'S BRIDAL: Bank Debt Trades at 11.91% Off
DELEK US: Moody's Assigns Ba3 CFR; Outlook Stable
DEXTERA SUGICAL: Terminates Officers to Conserve Cash
DEXTERA SURGICAL: Common Stock Delisted From Nasdaq
DPW HOLDINGS: Will Sell $50 Million Worth of Common Stock
DULUTH PUBLIC SCHOOL: S&P Alters Debt Rating Outlook to Stable
ERIN ENERGY: Olasho Converts $61.4M Notes Into 22.3M Shares
EZRA HOLDINGS: Files Chapter 11 Plan, Singapore Scheme
FSA INC: Seeks Permission to Use Village Bank Cash Collateral
FYNDERS INC: Plan Okayed, Cash Collateral Use Moot
GASTAR EXPLORATION: Russell Porter Quits as Pres., CEO & Director
GATEWAY CASINOS: Moody's Affirms B2 CFR & Rates 1st Lien Loans Ba3
GATEWAY CASINOS: S&P Affirms 'B' CCR on New Financing Transactions
GEM ACQUISITIONS: Moody's Assigns B3 CFR; Outlook Stable
GENERAL NUTRITION: Bank Debt Trades at 2.62% Off
GENON ENERGY: Kestrel Buying Hunterstown Facility for $520-Mil.
GLOBAL KNOWLEDGE: Bank Debt Trades at 12.67% Off
GREENTECH AUTOMOTIVE: Proposes Key Employee Incentive Plan
H MELTON: CEO Seeks Permission to Use Cash Collateral
HARD ROCK EXPLORATION: HNB Suit Transferred to S.D. W.Va.
HATHAWAY HOMES: Chapter 11 Trustee Seeks Chapter 7 Conversion
HHGREGG INC: Parties Resolve Issues on Chipman Brown Retention
IHEARTMEDIA INC: Board Okays $17.5 Million in Bonuses to 3 Execs
IHEARTMEDIA INC: May File for BankruptcyThis Weekend
IHEARTMEDIA INC: Skips $138 Million in Interest Payments
INFOBLOX INC: Fitch Lowers Long-Term IDR to B-; Outlook Stable
LANCASTER COUNTY HOSPITAL: Fitch Affirms BB+ on 2015/2017 Bonds
LAND'S END: Bank Debt Trades at 10.42% Off
LAREDO HOUSING: S&P Cuts Rating on 1994 Revenue Bonds to CCC+
LINN ENERGY: SCE Did Not Waive Right to Terminate Contract
LOS ANGELES INTERNET: Case Summary & 8 Unsecured Creditors
MARQUIS DIAGNOSTIC: Seeks Authorization to Use Cash Collateral
MURRAY ENERGY: Bank Debt Trades at 10.83% Off
NEIMAN MARCUS: Bank Debt Trades at 15.58% Off
NISOURCE INC: Moody's Affirms (P)Ba1 Preferred Shelf Rating
ONEMAIN HOLDINGS: S&P Alters Outlook to Positive & Affirms 'B' ICR
PATRIOT NATIONAL: Court OKs Bid to Compel Mediation on D&O Claims
PETSMART INC: Bank Debt Trades at 17.50% Off
PRECIPIO INC: Leviston Resources Has 4.93% Stake as of Feb. 14
QUIDDITCH ACQUISITION: S&P Assigns 'B-' CCR, Outlook Stable
RAND LOGISTICS: Common Stock Delisted From Nasdaq
RAND LOGISTICS: Court Approves Disclosures & Confirms Plan
RAND LOGISTICS: Court OKs $100K Supplemental Pay to CFO Hiltwein
RAND LOGISTICS: Exits Bankruptcy, AIP Acquisition Closes
REAL INDUSTRY: CMC, N T Ruddock Resign as Committee Members
REAL INDUSTRY: Court Disapproves Appointment of Equity Committee
RESOLUTE ENERGY: Provides Operations Update and 2018 Guidance
ROSETTA GENOMICS: Will Seek Approval of Genoptix Merger on April 6
SCHOOL OF EXCELLENCE: S&P Lowers 2004A Revenue Bond Rating to 'BB-'
SEADRILL LTD: April 17 Plan Confirmation Hearing Set
SEADRILL LTD: Bank Debt Trades at 12.70% Off
SEADRILL LTD: Statement on Global Settlement
SKILLSOFT CORP: Bank Debt Trades at 10.90% Off
SOLBRIGHT GROUP: Registers $10.5M Common Shares for Resale
ST. CLOUD DIOCESE: To File for Chapter 11 Bankruptcy
TALEN ENERGY: Moody's Alters Outlook to Neg. & Affirms B1 CFR
TEVA PHARMACEUTICAL: S&P Rates New Senior Unsecured Notes 'BB'
TOYS R US: Proposes Bid Procedures for Real Property & Leases
TOYS R US: US Trustee Objects to Chilmark Partners Retention
UNITI GROUP: Moody's Lowers CFR to B3; Keeps Outlook Negative
VERESEN MIDSTREAM: S&P Alters Outlook to Pos. & Affirms 'BB-' CCR
WALDRON DEVELOPMENT: May Use Cash Collateral Through March 23
WEEKLEY HOMES: S&P Affirms 'B+' CCR, Off CreditWatch Negative
WEIGHT WATCHERS: Moody's Affirms B1 CFR & Alters Outlook to Pos.
WEINSTEIN CO: Confirms New Deal to Sell Assets to Contreras-Sweet
WINDSTREAM CORP: Bank Debt Trades at 11.75% Off
WINDSTREAM SERVICES: Moody's Cuts CFR to B3; Outlook Remains Neg.
WMG ACQUISITION: Moody's Rates Proposed $325MM Sr. Unsec. Notes B3
WMG ACQUISITION: S&P Rates New $325MM Unsecured Notes Due 2026 'B'
WORLD VIEW: Wants Access to Old National Bank Cash Collateral
[*] Suzanne L'Hernault Joins Rimon's Finance Services Group
[^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS
*********
4411 ENGLE RIDGE: Seeks Monthly Access to $2,955 Cash Collateral
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4411 Engle Ridge Drive, LLC, requests the U.S. Bankruptcy Court for
the Eastern District of Michigan Southern Division allowing Debtor
to use cash collateral in the monthly amount of $2,955.
The Debtor's expenses related to the property are:
(a) $600 for property management;
(b) $780 monthly in property taxes (annual tax of
$9,358.55);
(c) interest payments to Old National Bank; and
(d) ordinary maintenance of an average of $300.
Old National Bank has perfected secured interests in the Debtor's
cash collateral. Furthermore, Old National Bank is the mortgagee
to a mortgage, which references a loan in the amount of $165,200
and additional mortgage, which references a line of credit in the
amount of $75,000. As of the Petition Date, the principal amount
owed to Old National Bank by the Debtor, exclusive of accrued but
unpaid interest, costs, fees, and expenses, was approximately
$170,000.
Pursuant to various Security Agreements by and between Old National
Bank and Debtor, and the other applicable prepetition credit
documents to include three forbearance agreements, the Debtor
granted to Old National Bank a continuing lien and security
interest to secure the indebtedness. The Second Amended Forbearance
Agreement with Old National Bank has interest rate of 9%.
Cash payments generated by the Debtor are primarily from rents of
4411 Engle Ridge Drive in the amount of $3,600 monthly. According
to the Allen County 2017 assessment, 4411 Engle Ridge Drive has a
minimum value of $198,500. Old National Bank's equity cushion in
4411 Engle Ridge Drive is a minimum of $28,500. As such, said
creditor has adequate protection in the equity cushion alone.
Additionally, the Debtor proposes by way of further adequate
protection interest payments at the rate set forth in the Second
Amended Forbearance Agreement of 9% on the principle balance of
$170,000, resulting in monthly payments of $1,275 to Old National
Bank during the pendency of the case. The Debtor also proposes to
use cash collateral in the amount up to $2,955, including monthly
interest payments of $1,275 to Old National Bank.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/mieb18-41983-7.pdf
About 4411 Engle Ridge Drive
4411 Engle Ridge Drive, LLC is a single asset real estate case,
with its only asset being the real property and improvements
commonly known as 4411 Engle Ridge Drive, Fort Wayne, Indiana. The
Company is a Michigan corporation formed on August 20, 2013.
4411 Engle Ridge Drive filed a Chapter 11 voluntary petition
(Bankr. E.D. Mich. Case No. 18-41983) on Feb. 16, 2018. The Hon.
Phillip J. Shefferly is assigned to the case. Don Darnell, Esq.,
in Dexter, Michigan, serves as counsel to the Debtor.
A'GACI LLC: Has Green Light to Auction Assets on April 3
--------------------------------------------------------
Patrick Danner, writing for San Antonio Express-News, reports that
Senior U.S. Bankruptcy Judge Ronald King of the U.S. Bankruptcy
Court for the Western District of Texas authorized the auction and
sale of the assets of women's apparel and accessories retailer
A'Gaci.
The Court approved an April 3 auction and an April 9 hearing to
review the sale. The sale is scheduled to close no later than
April 27.
A'Gaci has retained investment bank SSG Capital Advisors to assist
with a sale, refinancing or restructuring of the retailer's assets.
According to the report, A'Gaci counsel Ian Peck has informed the
Court that SSG has contacted more than 100 potential buyers and
investors, several of whom have signed nondisclosure agreements.
He said A'Gaci has not yet lined up a "stalking-horse bidder".
Mark Butterbach, A'Gaci's chief financial officer, said after a
court hearing Feb. 28 that management is "open to all options at
this time, whether it be an equity investment, whether it be a
sale."
About A'GACI, L.L.C.
Founded in San Antonio, Texas, A'GACI, L.L.C. --
http://www.agacistore.com/-- is a fast-fashion retailer of women's
apparel and accessories. A'GACI attracts young, fashion-driven
consumers through its value-pricing and frequent introductions of
new and trendy merchandise. It operates specialty apparel and
footwear stores under the A'GACI banner as well as a
direct-to-consumer business comprised of its e-commerce Web site
http://www.agacistore.com/ Stores feature an assortment of tops,
dresses, bottoms, jewelry, and accessories sold primarily under the
Company's exclusive A'GACI label. In addition, the Company sells
shoes under its sister brand labels of O'Shoes and Boutique Five.
A'GACI, L.L.C., filed a Chapter 11 petition (Bankr. W.D. Tex. Case
No. 18-50049) on Jan. 9, 2018. In the petition signed by
manager/CMO David Won, the Debtor disclosed $82 million in total
assets and $62 million in total liabilities as of Nov. 25, 2017.
The case is assigned to Judge Ronald B. King.
Haynes and Boone, LLP, serves as the Debtor's bankruptcy counsel;
Berkeley Research Group is the financial advisor; and SSG Advisors,
LLC, is the investment banker. Kurtzman Carson Consultants LLC,is
the claims, noticing & balloting agent.
No trustee, examiner or official committee of unsecured creditors
has been appointed in the case.
In its schedules, A'Gaci listed total assets of $37.3 million,
including $16.3 million in inventory and about $8.9 million in
cash, and about $54.7 million in total liabilities.
ACHAOGEN INC: May Issue 2.02M Additional Shares Under Equity Plans
------------------------------------------------------------------
Achaogen, Inc. filed a Form S-8 registration statement with the
Securities and Exchange Commission to register an additional
2,019,462 shares of common stock issuable under the Company's 2014
Equity Incentive Award Plan and 2014 Employee Stock Purchase Plan.
Achaogen is registering an additional 1,700,600 shares of Common
Stock issuable under the 2014 Plan and 318,862 shares of Common
Stock issuable under the ESPP, none of which have been issued as of
Feb. 27, 2018. A full-text copy of the prospectus is available at
https://is.gd/opqiys
About Achaogen, Inc.
South San Francisco, California-based Achaogen, Inc. --
http://www.achaogen.com/-- is a clinical-stage biopharmaceutical
company committed to the discovery, development, and
commercialization of novel antibacterials to treat multi-drug
resistant gram-negative infections. The Company is developing
plazomicin, its lead product candidate, for the treatment of
serious bacterial infections due to MDR Enterobacteriaceae,
including carbapenem-resistant Enterobacteriaceae. In 2013, the
Centers for Disease Control and Prevention identified CRE as a
"nightmare bacteria" and an immediate public health threat that
requires "urgent and aggressive action."
Achaogen reported a net loss of $125.6 million on $11.17 million of
contract revenue for the year ended Dec. 31, 2017, compared to a
net loss of $71.22 million on $41.77 million of contract revenue
for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Achaogen
had $197.07 million in total assets, $65.10 million in total
liabilities, $10 million in contingently redeemable common stock
and $121.96 million in total stockholders' equity.
ACHAOGEN INC: Widens Net Loss to $125.6 Million in 2017
-------------------------------------------------------
Achaogen, Inc., filed with the Securities and Exchange Commission
its annual report on Form 10-K reporting a net loss of $125.6
million on $11.17 million of contract revenue for the year ended
Dec. 31, 2017, compared to a net loss of $71.22 million on $41.77
million of contract revenue for the year ended Dec. 31, 2016.
Achaogen reported a net loss of $36.4 million for the fourth
quarter of 2017, compared to a net loss of $29.7 million for the
same period in 2016. Diluted net loss was $0.98 per share for the
fourth quarter of 2017, compared to diluted net loss of $1.04 per
share for the same period of 2016.
As of Dec. 31, 2017, Achaogen had $197.07 million in total assets,
$65.10 million in total liabilities, $10 million in contingently
redeemable common stock and $121.96 million in total stockholders'
equity. As of Dec. 31, 2017, there were approximately 42.5 million
shares of common stock outstanding.
At Dec. 31, 2017, Achaogen had $164.8 million in unrestricted cash,
cash equivalents and short-term investments compared to $145.9
million at Dec. 31, 2016. Subsequent to Dec. 31, 2017, Achaogen
refinanced a $25.0 million secured debt line it had with Solar
Capital with a new $50.0 million secured debt line with Silicon
Valley Bank. The Company also issued 2,144,454 shares of common
stock under its at-the-market equity facility for net proceeds of
$24.0 million.
Contract revenue totaled $1.9 million for the fourth quarter of
2017 compared to $10.7 million for the same period of 2016.
Contract revenue for the year ended Dec. 31, 2017 was $11.2 million
compared to $41.8 million for the year ended Dec. 31, 2016. The
decrease in contract revenue during the fourth quarter and 2017 was
primarily due to lower Biomedical Advanced Research and Development
Authority (BARDA) contract revenues. As of
Dec. 31, 2017, $11.0 million remains on Option 1 of the BARDA
C-Scape contract. Achaogen derived all of its revenue from funding
provided under Gates Foundation and U.S. government contracts in
connection with the research and development of product
candidates.
Research and Development expenses in the fourth quarter of 2017
were $29.5 million, compared to $17.9 million reported for the same
period in 2016. The increase in R&D expenses during the quarter
was attributable to increased personnel and facility-related costs
as net headcount increased, external expenses related to plazomicin
product supply and pre-launch activities, C-Scape and early
research programs. For the full year 2017, research and
development expenses were $95.6 million, compared to $74.0 million
for the full year 2016. The increase in 2017 R&D expenses was
primarily attributable to increased personnel and facility related
costs, increased expenses related to C-Scape and early research
programs, offset by decreases related to the plazomicin program.
General and Administrative expenses in the fourth quarter of 2017
were $14.5 million, compared to $4.9 million for the same period in
2016. For the full year 2017, G&A expenses were $41.9 million,
compared to $17.1 million for the full year 2016. The increase in
G&A expenses for the quarter and the year 2017 was primarily
attributable to an increase in personnel and facility-related
costs, and in costs related to preparation for the
commercialization of plazomicin.
Change in warrant and derivative liabilities for the fourth quarter
of 2017 was a $5.9 million gain compared to a $17.0 million loss
for the same period in 2016. The increase was primarily related to
non-cash gain for the revaluation of warrants issued in the private
placement of common stock and warrants to purchase common stock in
June 2016.
"We gained considerable momentum in 2017 that culminated with FDA
acceptance of our plazomicin NDA submission and positive results
from our first clinical trial of C-Scape, our second antibacterial
product candidate," said Blake Wise, Achaogen's chief executive
officer. "There remains a significant unmet need for the treatment
of serious bacterial infections due to MDR Enterobacteriaceae,
including carbapenem-resistant Enterobacteriaceae (CRE), and we
look forward to the potential approval of plazomicin this year and
the opportunity to make plazomicin available to hospitals and
patients in need."
Recent Highlights and Upcoming Milestones
* Plazomicin Approval Application (United States): The FDA
accepted for review the Company's New Drug Application (NDA)
for plazomicin for the treatment of complicated urinary tract
infections (cUTI), including pyelonephritis, and bloodstream
infections (BSI) due to certain Enterobacteriaceae in
patients who have limited or no alternative treatment
options. Plazomicin previously received FDA Breakthrough
Therapy Designation for the treatment of bloodstream
infections (BSI) caused by certain Enterobacteriaceae in
patients who have limited or no alternative treatment
options.
* Plazomicin PDUFA Date: The plazomicin NDA has Priority Review
and the Prescription Drug User Fee Act (PDUFA) target action
date is June 25, 2018. Should plazomicin receive approval by
the target action date, the Company expects to launch
plazomicin soon thereafter. The FDA recently upgraded the
status of the plazomicin fill manufacturer, the Pfizer
CentreOne McPherson facility, to Voluntary Action Indicated
(VAI), clearing a regulatory path for approval of plazomicin
out of this facility. The FDA is currently planning to hold
an advisory committee meeting to discuss the application.
* Plazomicin Approval Application(European Union): Achaogen
currently plans to submit a Marketing Authorization
Application to the European Medicines Agency in the second
half of 2018.
* C-Scape Phase 1 Clinical Trial: Positive top-line results
from a Phase 1 clinical trial of C-Scape demonstrated that
the drug was well tolerated across all doses studied in the
clinical trial, with no drug-drug interaction between
ceftibuten and clavulanate when dosed in combination.
* C-Scape Components: C-Scape is an oral combination of
ceftibuten, an approved third generation cephalosporin, and
clavulanate, an approved beta-lactamase inhibitor. C-Scape
was awarded Qualified Infectious Disease Product (QIDP)
status by the FDA for the treatment of cUTI.
* C-Scape Phase 3 Program: Achaogen plans to meet with
regulatory agencies in the first half of 2018 to seek
agreement on the details of the C-Scape development plan that
would include initiating, in 2018, a pivotal trial in
patients with cUTI.
Other Corporate Milestones
* Refinanced an existing $25.0 million debt line with Solar
Capital with a new $50.0 million secured debt line with
Silicon Valley Bank, which has an interest-only period until
at least February 2020.
* Thermo Fisher Scientific received an Acceptance Review
Notification for its 510(k) submission for its assay enabling
therapeutic drug management (TDM) of plazomicin. The
notification from the FDA confirms that the submission
contains all of the necessary information needed to proceed
with the substantive review.
A full-text copy of the Form 10-K is available for free at:
https://is.gd/bwSH21
About Achaogen, Inc.
South San Francisco, California-based Achaogen, Inc. --
http://www.achaogen.com/-- is a clinical-stage biopharmaceutical
company committed to the discovery, development, and
commercialization of novel antibacterials to treat multi-drug
resistant gram-negative infections. The Company is developing
plazomicin, its lead product candidate, for the treatment of
serious bacterial infections due to MDR Enterobacteriaceae,
including carbapenem-resistant Enterobacteriaceae. In 2013, the
Centers for Disease Control and Prevention identified CRE as a
"nightmare bacteria" and an immediate public health threat that
requires "urgent and aggressive action."
ADAMIS PHARMACEUTICALS: Board Approves 2018 Bonus Plan
------------------------------------------------------
The Compensation Committee of the Board of Directors of Adamis
Pharmaceuticals Corporation approved the Company's 2018 Bonus Plan
on Feb. 21, 2018. The terms of the Plan establish for each level
of Company employee, including the Company's executive officers but
excluding the Company's field sales employees, a target cash bonus
amount, expressed as a percentage of base salary. Bonus payments
will be based on an evaluation by the Committee of the Company's
achievement of corporate performance goals for the relevant year,
and, where applicable, individual goals. The corporate performance
goals for 2018 will be determined by the Committee and may include
the achievement of performance targets and business goals relating
to matters such as, without limitation, the Company's financial
results, revenues, net income, EBITDA, return on equity, stock
price, capital raising activities, pre-clinical or clinical trial
activities (including without limitation initiation or completion
of trials), regulatory filings relating to product candidates,
other regulatory activities or approvals, product development,
product commercialization activities, strategic activities and
strategic commercial agreements or arrangements, or other corporate
goals. The Committee and the Board also confirmed the Committee's
arrangements and authority to approve and make discretionary cash
compensation payments, including, without limitation, changes in
salaries, bonus payments or other cash compensation, and payments
permitted by any applicable employment agreement.
About Adamis
San Diego, Calif.-based Adamis Pharmaceuticals Corporation
(OTCQB:ADMP) -- http://www.adamispharmaceuticals.com/-- is a
biopharmaceutical company engaged in the development and
commercialization of specialty pharmaceutical and biotechnology
products in the therapeutic areas of respiratory disease, allergy,
oncology and immunology.
Adamis reported a net loss applicable to common stock of $20.81
million for the year ended Dec. 31, 2016, compared to a net loss
applicable to common stock of $13.57 million for the year ended
Dec. 31, 2015. As of Sept. 30, 2017, Adamis had $56.30 million in
total assets, $10.27 million in total liabilities and $46.03
million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Diego, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2016, citing that the
Company has incurred recurring losses from operations, and is
dependent on additional financing to fund operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
ADVANCED MICRO: Moody's Hikes CFR to B2; Outlook Positive
---------------------------------------------------------
Moody's Investors Service upgraded Advanced Micro Devices, Inc.'s
("AMD") corporate family rating to B2, senior unsecured rating to
B3, and affirmed the speculative grade liquidity rating of SGL-1.
The outlook is positive.
RATINGS RATIONALE
The upgrade of the corporate family rating to B2 reflects AMD's
improved performance outlook, driven by design wins, modest market
share gains, and an expanded set of product offerings. As a result,
Moody's expects double digit revenue growth, slightly higher gross
margins, as well as operating profitability and positive free cash
flow over the next year. AMD's "Polaris" graphics family for the
mid-range high volume segment should help it compete in the growing
PC gaming market against Nvidia and AMD's "Vega" family and "EPYC"
processors should strengthen its position in the high-end graphics
and server markets.
Driven by new products with higher average selling prices, AMD's
PC-related business - microprocessors and graphics chips - reported
the highest level of segment operating profit in several years
($147 million), with most of that generated in the second half of
2017. With an improved product positioning in the desktop,
notebook, and a richer mix of graphics products, Moody's project a
material increase in segment profitability in 2018. The growing
enterprise, embedded, and semi-custom business is supported by very
strong positions in game consoles (including Xbox and PlayStation),
although Moody's projects slightly lower revenue and operating
profit in 2018 as the segment benefited from console upgrades in
2017.
AMD's SGL-1 rating reflects the company's improved liquidity
profile. AMD reported $1.19billion of cash and cash equivalents as
of December 30, 2017. AMD also maintains a $500 million asset based
revolving credit facility (ABL) under which AMD had an outstanding
loan balance of $70 million as of December 30, 2017. With cash
balances, access to the ABL, and no debt maturities until $153
million is due in March 2019, AMD has very good liquidity.
Ratings upgraded:
Corporate family rating to B2 from B3
Probability of default rating at B2-PD from B3-PD
$153 million (outstanding) senior unsecured notes due 2019 at B3
(LGD4) from Caa1 (LGD4)
$347 million (outstanding) senior unsecured notes due 2022 at B3
(LGD4) from Caa1 (LGD4)
$311 million (outstanding) senior unsecured notes due 2024 at B3
(LGD4) from Caa1 (LGD4)
Ratings affirmed
Speculative grade liquidity rating at SGL-1
Outlook Actions:
Outlook changed to positive from stable
The positive outlook reflects AMD's much improved balance sheet and
broadened product positioning and prospects for improved operating
performance and cash generation over the next year. The ability to
consistently execute product and technology transitions, as well as
competition from strong competitors such as Intel and Nvidia remain
key challenges.
The rating could be upgraded if AMD is able to sustain revenue
growth with improving operating profitability while achieving
positive free cash flow and maintaining cash and liquid investments
of approximately $1 billion.
The rating could be downgraded if AMD's cash and liquid investments
are likely to drop below $600 million (without raising additional
debt) or if the company experiences declining operating margins and
negative free cash flow.
The principal methodology used in these ratings was Semiconductor
Industry Methodology published in December 2015.
Advanced Micro Devices, Inc. (AMD) is a fabless semiconductor
company that specializes in microprocessors, graphics processing
units and semi-custom and embedded processors. AMD reported revenue
of $5.33 billion in 2017.
ADVANTAGE SALES: Bank Debt Trades at 5.06% Off
----------------------------------------------
Participations in a syndicated loan under which Advantage Sales &
Marketing is a borrower traded in the secondary market at 94.94
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents an increase of 1.21 percentage points from
the previous week. Advantage Sales pays 650 basis points above
LIBOR to borrow under the $760 million facility. The bank loan
matures on July 25, 2022. Moody's rates the loan 'Caa1' and
Standard & Poor's gave a 'CCC+' rating to the loan. 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 Friday, February 23.
AERIAL PARENT: S&P Alters Outlook to Neg. on Pending NPAC Transfer
------------------------------------------------------------------
Aerial Parent Corp.'s wholly-owned subsidiary and
telecommunications and information services provider Neustar Inc.
is expected to transition its Number Portability Administration
(NPAC) activities to iconectiv by the end of the third quarter of
2018.
S&P Global Ratings revised the outlook on Aerial Parent Corp.
(parent of Sterling, Va.-based Neustar Inc.) to negative from
stable. At the same time, S&P affirmed the 'B+' corporate credit
rating.
S&P said, "We also affirmed the 'BB' issue-level rating on Neustar
Inc.'s first-lien debt. The recovery rating on the debt remains
'1', which indicates our expectation of very high (90%-100%;
rounded estimate: 90%) recovery of principal and interest in the
event of payment default.
"In addition, we affirmed the 'B-' issue-level rating on Neustar's
second-lien debt. The recovery rating remains '6', which indicates
our expectation of negligible (0%-10%; rounded estimate: 5%)
recovery of principal and interest in the event of payment
default.
"The outlook revision reflects our expectation for declining
earnings contribution from the NPAC contract over the next year,
which coupled with continued weaker-than-expected operating
performance in the company's IS&A segment could result in adjusted
leverage rising above our 5x downgrade threshold in 2019. However,
while we assume that the NPAC contract will transition from Neustar
to iconectiv (formerly Telcordia Technologies Inc. and subsidiary
of Ericsson) by the end of the third quarter of 2018, we also
recognize that the transition's completion as scheduled is not a
certainty given the complexity and potential for further delays.
"The negative outlook reflects our belief that adjusted leverage
could rise above our 5x downgrade threshold in 2019 if Neustar's
NPAC contract is transitioned to iconnectiv by the end of the third
quarter of 2018 as expected and operating performance in the
company's IS&A segment does not improve.
"We could lower the rating once the operations associated with the
NPAC contract are fully transitioned to iconectiv and we no longer
expect Neustar to derive meaningful revenue and cash flow from the
contract, absent material improvement in the company's non-NPAC
businesses. 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 over the next year.
"We could revise the outlook to stable if there are further delays
in the NPAC transition and we believe there is sufficient revenue
and cash flow visibility from the contract coupled with improved
operating performance in the IS&A segment, such that leverage
remains comfortably 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."
ALLEN COUNTY, OH: S&P Lowers Rating on 2007 Revenue Bonds to 'B'
----------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'B' from 'B+' on
Allen County, Ohio's health care facilities revenue bonds, series
2007 (Ginnie Mae Collateralized - Lockhaven Apartments Project).
The outlook is stable.
"The rating action reflects our view of a projected decline in debt
service coverage to below 1.0x within six years, based on updated
financial information," said S&P Global Ratings credit analyst Jose
Cruz.
S&P said, "Having analyzed trustee balances for the issue with a
basis date of Dec. 21, 2017, in light of our stressed reinvestment
assumptions--which are applicable due to the issue's reliance on
investment earnings to meet debt service payments--we believe the
issue's assets and revenues are insufficient to pay full and timely
debt service through maturity. Under our criteria, this places the
issue in a coverage band commensurate with a 'B' rating.
"In the event of prepayment, it is our opinion that there are still
sufficient assets to cover reinvestment risk based on the 30-day
minimum notice period required for special redemptions.
"The stable outlook reflects S&P Global Ratings' opinion that the
issues are susceptible to short-term, market-rate investment income
but that the issues should perform within the 'B' range. However,
in the event market conditions were to improve, and investment
revenue were to increase, we could raise the rating. Conversely, if
market conditions were to deteriorate, we could lower the rating."
ALTA MESA: Reports Year-End Proved Reserves & Operational Update
----------------------------------------------------------------
Alta Mesa Resources, Inc. announced a summary of year-end 2017
proved reserves and provided an upstream operational update,
including associated production and drilling activity.
Year-End 2017 Reserves
Alta Mesa's oil, natural gas and natural gas liquids reserves as of
Dec. 31, 2017, were 176.2 million barrels of oil equivalent net to
the Company, an increase of 46.6 MMBOE compared to 129.6 MMBOE at
year-end 2016. Ryder Scott Company, LP, an independent reserve
engineering firm, audited Alta Mesa's year-end proved reserves
estimates as of Dec. 31, 2017. Proved reserves consisted of 71.9
million barrels of oil, 36.1 million barrels of natural gas
liquids, and 409 billion cubic feet of natural gas. Approximately
52 MMBOE of proved reserves at year-end 2017 were classified as
proved developed producing (PDP) reserves, and approximately 124
MMBOE were classified as proved undeveloped (PUD) reserves.
Through year-end 2017, the Company's reserves have grown in volume
at a five-year compound annual growth rate of over 80%.
Operational Update
Full-year 2017 production net to the Company was approximately
21,000 BOE per day, a greater than 50% increase over 2016 net
production of approximately 13,000 BOE per day. Total production
mix for full-year 2017 was 52% oil, 17% natural gas liquids and 31%
natural gas. Fourth quarter 2017 production was approximately
22,000 BOE per day, a greater than 45% increase over approximately
15,000 BOE per day in the fourth quarter 2016. Total production
mix for the fourth quarter 2017 was 55% oil, 18% natural gas
liquids and 27% natural gas. Through year-end 2017, the Company's
net production has grown at a five-year compound annual growth rate
of over 80%.
Alta Mesa deployed from four to six drilling rigs during 2017,
drilled 108 gross wells (approximately 60 net wells), and completed
101 gross wells (approximately 56 net). The Company has had six
drilling rigs and four fracture stimulation crews operating in
early 2018, and has contracted for two additional drilling rigs to
begin operating in March and April of 2018.
"The drilling and completion activity Alta Mesa has executed in the
oil window of the STACK during 2017, coupled with leasehold
acquisitions, has set the stage for a deliberate program of
multi-well pattern development," stated Alta Mesa's Chief Executive
Officer, Hal Chappelle. "Our capital and operating cost structure
and production mix have continued to foster economic returns on
capital for our investors. With the planned increased level of
activity in our 2018 program, we expect to capitalize upon the
efficiency gains and execution success we had last year, resulting
in what we believe will be continued long-term corporate-level
returns and value creation."
Fourth Quarter and Full Year 2017
Earnings Conference Call
Alta Mesa will report fourth quarter and full year 2017 financial
results, and provide an operational update and 2018 guidance on
Thursday, March 29th, 2018. The Company invites you to listen to
its conference call to discuss these results on that date at 11:00
a.m. Eastern Time. If you wish to participate in this conference
call, dial 888-347-8149 (toll free in US/Canada) or 412-902-4228. A
webcast of the call and any related materials will be available on
the Company's website at www.altamesa.net. Additionally, a replay
of the conference call will be available for one week following the
live broadcast by dialing 844-512-2921 (toll free in US/Canada) or
412-317-6671 (International calls), and referencing Conference ID #
10117607.
About Alta Mesa
Headquartered in Houston, Texas, Alta Mesa Holdings, LP --
http://www.altamesa.net/-- is a privately-held, independent
exploration and production company primarily engaged in the
acquisition, exploration, development and production of oil,
natural gas and natural gas liquids within the United States. The
Company has transitioned its focus from its diversified asset base
composed of a portfolio of conventional assets to an oil and
liquids-rich resource play in the eastern portion of the Anadarko
Basin in Oklahoma (the "STACK") with an extensive inventory of
drilling opportunities.
Alta Mesa reported a net loss of $167.9 million for the year ended
Dec. 31, 2016, and a net loss of $131.8 million for the year ended
Dec. 31, 2015. The Company's balance sheet at Sept. 30, 2017,
showed $1.08 billion in total assets, $866.39 million in total
liabilities and $217.5 million in partners' capital.
ANDERSON SHUMAKER: Cash Use Until March 15 Approved
---------------------------------------------------
The Hon. Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois has entered an 11th interim order
authorizing Anderson Shumaker Company to use the cash collateral of
Associated Bank, N.A., on an interim basis solely for the period
from the Petition Date through March 15, 2018.
The authorized cash collateral will be maintained only in accounts
with Associated Bank. The Debtor is authorized to maintain no more
than $10,000 in its account with Forest Park National Bank & Trust
Co. and will immediately transfer any funds above that amount to
the Debtor's operating account maintained with Associated Bank.
The Debtor will continue to make monthly adequate protection
payments of $38,000 to the Lender in immediately available funds.
The next monthly adequate protection payment is due on February 24,
2017, and each successive monthly adequate protection payment is
due on the 24th day of each month thereafter unless or until the
monthly adequate payment is modified by court order or written
agreement of the lender and the Debtor.
Associated Bank will receive (i) a replacement lien in the
prepetition collateral and in the post-petition property of the
Debtor of the same nature and to the same extent and in the same
priority it had in the prepetition collateral, and to the extent
the liens and security interests extend to property pursuant to
Section 552(b) of the U.S. Bankruptcy Code, and (ii) an additional
continuing valid, binding, enforceable, non-avoidable, and
automatically perfected post-petition security interest in and lien
on all cash or cash equivalents.
Associated Bank will be deemed to have an allowed superpriority
adequate protection claim to the extent the adequate protection
lien is not adequate to protect Associated Bank against the
diminution in value of the prepetition collateral.
The final hearing will be held on March 13, 2018 at 10:00 a.m. to
consider entry of a final order on Debtor's use of cash collateral
A full-text copy of the Eleventh Interim Order is available at:
http://bankrupt.com/misc/ilnb17-05206-188.pdf
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 estimated $1 million to $10 million in assets
and $10 million to $50 million in 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 and
CFO Advise LLC serve as the Debtor's accountant and financial
advisor, respectively. The Debtor hired Fort Dearborn Partners
Inc. as its financial advisor.
On March 9, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. Freeborn & Peters LLP
is the Committee's legal counsel.
ARROWHEAD SELF: Hearing on Plan and Disclosures Set for March 28
----------------------------------------------------------------
Judge Dennis R. Dow of the U.S. Bankruptcy Court for the Western
District of Missouri issued an order conditionally approving
Arrowhead Self Storage, LLC's disclosure statement in connection
with its proposed chapter 11 plan filed on Feb. 8, 2018.
March 28, 2018 at 1:30 p.m. is fixed for the hearing on final
approval of the disclosure statement and for the hearing on
confirmation of the plan.
March 21, 2018 is the deadline for:
A. Filing with the Court objections to the disclosure statement
or plan confirmation; and
B. Submitting ballots accepting or rejecting the plan.
About Arrowhead Self Storage
Arrowhead Self Storage, LLC, operates a self-storage facility in
Kansas City, Missouri. The company offers for rent storage space
on a short-term basis to tenants.
Arrowhead Self Storage sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mo. Case No. 17-43057) on Nov. 10,
2017. Susan I. Rose, its member, signed the petition. At the time
of the filing, the Debtor estimated assets and liabilities of $1
million to $10 million. Judge Dennis R. Dow presides over the
case. Erlene W. Krigel, Esq., at Krigel & Krigel, P.C., serves as
the Debtor's counsel.
AYTU BIOSCIENCE: Amends Prospectus on 5.8M Class A Units Sale
-------------------------------------------------------------
Aytu Bioscience, Inc., filed with the Securities and Exchange
Commission an amended Form S-1 registration statement relating to
the offering 5,813,954 Class A Units consisting of one share of its
common stock and one warrant to purchase one share of the Company's
common stock, at an exercise price equal to 120% of the public
offering price of the Class A Units per share of common stock,
which warrants will be exercisable upon issuance and will expire
five years from date of issuance. The shares of common stock and
warrants that are part of a Class A Unit are immediately separable
and will be issued separately in this offering.
Aytu Bioscience is also offering to those purchasers, if any, whose
purchase of Class A Units in this offering would otherwise result
in the purchaser, together with its affiliates and certain related
parties, beneficially owning more than 4.99% of the Company's
outstanding common stock immediately following the consummation of
this offering, the opportunity, in lieu of purchasing Class A
Units, to purchase Class B Units. Each Class B Unit will consist
of one share of the Company's newly designated Series B Convertible
Preferred Stock, or the Series B Preferred, with a stated value of
$1,000 and convertible into shares of its common stock at the
public offering price of the Class A Units, together with the
equivalent number of warrants as would have been issued to such
purchaser of Class B Units if they had purchased Class A Units.
The shares of Series B Preferred and warrants that are part of a
Class B Unit are immediately separable and will be issued
separately in this offering. The Company is also offering the
shares of common stock issuable upon exercise of the warrants and
conversion of the Series B Preferred.
The number of shares of the Company's common stock outstanding
after this offering will fluctuate depending on how many Class B
Units are sold in this offering and whether and to what extent
holders of Series B Preferred shares convert their shares to common
stock.
Aytu Bioscience's common stock is listed on the NASDAQ Capital
Market under the symbol "AYTU." On Feb. 23, 2018, the last
reported sale price of its common stock on the NASDAQ Capital
Market was $0.86.
Assuming an offering price of $0.86 per Class A Unit, the Series B
Preferred included in the Class B Units will be convertible into an
aggregate total of 5,813,954 shares of Common Stock and the
warrants included in the Class B Units will be exercisable for an
aggregate total of 5,813,954 shares of Common Stock.
There is no established trading market for the warrants or the
Series B Preferred, and the COmpany does not expect an active
trading market to develop. Aytu Bioscience does not intend to list
the warrants or the Series B Preferred on any securities exchange
or other trading market. Without an active trading market, the
liquidity of the warrants and the Series B Preferred will be
limited.
A full-text copy of the amended prospectus is available at:
https://is.gd/V0q0ig
About Aytu BioScience
Englewood, Colorado-based Aytu BioScience, Inc. (OTCMKTS:AYTU) --
http://www.aytubio.com/-- is a commercial-stage specialty
healthcare company concentrating on developing and commercializing
products with an initial focus on urological diseases and
conditions. Aytu is currently focused on addressing significant
medical needs in the areas of urological cancers, hypogonadism,
urinary tract infections, male infertility, and sexual
dysfunction.
Aytu BioScience reported a net loss of $22.50 million for the year
ended June 30, 2017, a net loss of $28.18 million for the year
ended June 30, 2016, and a net loss of $7.72 million for the year
ended June 30, 2015. Aytu BioScience reported a net loss of $4.24
million for the three months ended Sept. 30, 2017.
As of Dec. 31, 2017, the Company had $18.85 million in total
assets, $15.82 million in total liabilities and $3.03 million in
total stockholders' equity.
"[T]he Company had approximately $4.0 million in cash including
approximately $76,000 in restricted cash (that is expected to be
released in fiscal year 2018). In addition, for the quarter ended
December 31, 2017, and for the most recent four quarters ended
December 31, 2017, we used an average of $3.2 million of cash per
quarter for operating activities. Looking forward, we expect cash
used in operating activities to be in the range of historical usage
rates, therefore, indicating substantial doubt about the Company's
ability to continue as a going concern. We expect to require a
cash infusion during the fourth quarter of fiscal year 2018 to
sustain operations," the Company stated in its quarterly report for
the period ended Dec. 31, 2017.
BILL BARRETT: Incurs $138.2 Million Net Loss in 2017
----------------------------------------------------
Bill Barrett Corporation filed with the Securities and Exchange
Commission its annual report on Form 10-K reporting a net loss of
$138.2 million on $252.8 million of total operating revenues for
the year ended Dec. 31, 2017, compared to a net loss of $170.37
million on $178.81 million of total operating revenues for the year
ended Dec. 31, 2016.
For the three months ended Dec. 31, 2017, Bill Barrett reported a
net loss of $77.82 million on $83.37 million of total operating
revenues compared to a net loss of $49.27 million on $51.62 million
of total operating revenues for the same period in 2016.
As of Dec. 31, 2017, Bill Barrett had $1.39 billion in total
assets, $792.2 million in total liabilities and $598.6 million in
total stockholders' equity.
Chief Executive Officer and President Scot Woodall commented,
"Reflecting on the past year, I'm proud of our accomplishments as
we delivered excellent operating and financial results, and
executed on strategic goals as well. Our strong execution was
highlighted by 2017 production growth of 20%, further improvement
in per unit operating costs and lower oil price differentials that
translated into industry leading operating margins relative to our
DJ Basin peers. Our operations team did an excellent job of
executing an efficient capital program that resulted in strong
reserve and production growth from our legacy DJ Basin asset. We
are also seeing positive results from our enhanced completion
program. During the fourth quarter, we completed the sale of our
remaining Uinta Basin assets, a transaction that further
streamlines our operations and cost structure, while strengthening
our balance sheet. We have generated significant operating
momentum and entered 2018 with $314 million of cash and an undrawn
credit facility of $300 million, providing strong liquidity to
support anticipated 2018 activity levels."
Mr. Woodall continued, "In December, we announced a strategic
combination with Fifth Creek Energy that creates a premier DJ Basin
company. This transaction significantly expands our footprint by
providing a large, derisked acreage position with a significant
inventory of drilling locations, while materially improving our
leverage metrics. We continue to integrate the two organizations
and expect to provide a combined 2018 operating plan and guidance
following the anticipated March closing."
Strategic Combination with Fifth Creek Energy
On Dec. 5, 2017, the Company announced a strategic combination with
Fifth Creek Energy that materially expands its DJ Basin footprint
and, coupled with other strategic steps taken in the fourth quarter
of 2017, significantly strengthens the Company's balance sheet.
The Company has established a record date of
Feb. 13, 2018, and a date of March 16, 2018, for a special meeting
of its shareholders to vote on, among other items, the strategic
business combination with Fifth Creek Energy pursuant to the
Agreement and Plan of Merger. The combination is expected to close
in March 2018.
2017 Production and Financial Results
Oil, natural gas and natural gas liquids production totaled 7.0
MMBoe for 2017, at the mid-point of the Company's guidance range of
6.9-7.1 MMBoe. DJ Basin production sales volumes totaled 6.2 MMBoe
for 2017 or an increase of 21% compared to 2016. Production sales
volumes for 2017 were weighted 60% oil, 21% natural gas and 19%
natural gas liquids.
Production sales volumes for the fourth quarter of 2017 totaled
2.12 MMBoe, above the mid-point of the Company's guidance range of
2.0-2.2 MMBoe, representing a 37% increase from the fourth quarter
of 2016. DJ Basin production sales volumes totaled 1.94 MMBoe, an
increase of 42% compared to the fourth quarter of 2016. DJ Basin
oil volumes totaled 1.1 MMBbls, an increase of 38% compared to the
fourth quarter of 2016. Production sales volumes for the fourth
quarter of 2017 were weighted 60% oil, 23% natural gas and 17%
NGLs.
For 2017, West Texas Intermediate ("WTI") oil prices averaged
$50.95 per barrel, NWPL natural gas prices averaged $2.71 per MMBtu
and NYMEX natural gas prices averaged $3.11 per MMBtu. Commodity
price differentials to benchmark pricing for 2017 were oil less
$2.75 per barrel versus WTI; and natural gas less $0.27 per Mcf
compared to NWPL. The DJ Basin oil price differential averaged
$2.40 per barrel. The NGL price averaged approximately 39% of the
WTI price per barrel.
For the fourth quarter of 2017, WTI oil prices averaged $55.40 per
barrel, NWPL natural gas prices averaged $2.60 per MMBtu and NYMEX
natural gas prices averaged $2.93 per MMBtu. Fourth quarter of
2017 commodity price differentials to benchmark pricing were oil
less $2.44 per barrel versus WTI; and natural gas less $0.28 per
Mcf compared to NWPL. The DJ Basin oil price differential averaged
$2.51 per barrel. The NGL price averaged approximately 44% of the
WTI price per barrel.
For the fourth quarter of 2017, the Company had derivative
commodity swaps in place for 8,125 barrels of oil per day tied to
WTI pricing at $57.69 per barrel, 10,000 MMBtu of natural gas per
day tied to NWPL regional pricing at $2.96 per MMBtu and no hedges
in place for NGLs.
Cash operating costs (LOE, gathering, transportation and processing
costs, and production tax expense) averaged $5.90 per Boe in 2017
compared to $6.72 per Boe in 2016, a 12% improvement. Cash
operating costs totaled $6.24 per Boe in the fourth quarter of 2017
compared to $6.37 per Boe in the fourth quarter of 2016.
LOE was $3.27 per Boe in the fourth quarter of 2017 compared to
$3.73 per Boe in the fourth quarter of 2016. The year-over-year
improvement was primarily a result of increased operational
efficiencies and lease operating cost reductions.
DJ Basin LOE improved to $2.64 per Boe in the fourth quarter of
2017 compared to $2.96 per Boe in the fourth quarter of 2016, and
was $2.87 per Boe in 2017 compared to $3.41 per Boe in 2016.
At Dec. 31, 2017, the Company’s $300 million revolving credit
facility had zero drawn and $274.0 million in available capacity,
after taking into account a $26.0 million letter of credit. The
principal balance of long-term debt was $627.3 million and cash and
cash equivalents were $314.5 million, resulting in net debt
(principal balance of debt outstanding less the cash and cash
equivalents balance) of $312.8 million. Cash and cash equivalents
includes approximately $110.8 million of net proceeds from the
common stock offering completed in December 2017 and $102.3 million
of net proceeds from the sale of Uinta Basin properties that closed
in December 2017.
On Dec. 5, 2017, the Company announced a privately negotiated
exchange with a holder of its 7.0% Senior Notes due 2022. As a
result of this transaction, the principal amount of the Notes was
reduced by $50 million or 13%, which will result in annual interest
savings of approximately $3.5 million.
Capital Expenditures
Capital expenditures of $260.7 million for 2017 were at the
mid-point of the Company's guidance range of $250-$270 million.
Capital projects included spudding 69 gross operated XRL wells in
the DJ Basin and placing 54 gross operated XRL wells on initial
flowback. Completion activity was greater during the second half
of the year as the Company entered 2017 operating one drilling rig
and added a second drilling rig in June. Capital expenditures
included $226.9 million for drilling and completion operations,
$20.4 million for leaseholds to expand development programs, and
$13.4 million for infrastructure and corporate purposes.
Capital expenditures for the fourth quarter of 2017 totaled $86.2
million, which was at the mid-point of the Company's guidance range
of $80-$90 million. Capital expenditures included spudding 22
gross operated XRL wells in the DJ Basin and placing 16 gross
operated XRL wells on initial flowback. Capital expenditures
included $76.8 million for drilling and completion operations, $0.2
million for leaseholds, and $9.2 million for infrastructure and
corporate assets.
OPERATIONAL HIGHLIGHTS
DJ Basin
During 2017, production sales volumes from the DJ Basin totaled 6.2
MMBoe, which represents a 23% increase over 2016. In the fourth
quarter of 2017, DJ Basin production sales volumes totaled 1.94
MMBoe, which represents a 42% increase from the fourth quarter of
2016. DJ Basin oil volumes totaled 1.11 MMBbls, which represents a
38% increase from the fourth quarter of 2016.
During 2017, the DJ Basin program focused on optimizing completions
to include enhanced completions and narrower frac stage spacing of
approximately 120 feet. Early data from the enhanced completion
program is encouraging with well performance from recent DSUs on
average meeting or exceeding the base XRL type-curve of 600 MBoe.
Completion activity was recently highlighted by DSU 5-63-32 and DSU
5-63-30, which are located within the western area of NE Wattenberg
and include 5 XRL and 6 XRL wells, respectively. Initial flowback
began in the third quarter of 2017 and production is tracking above
the base type-curve. DSU 5-61-20 is located within the central
area of NE Wattenberg and includes 8 XRL wells. Initial flowback
began in the fourth quarter of 2017 and the wells are performing
consistent with the base type-curve.
Two drilling rigs are currently operating in the NE Wattenberg
field with drilling activity focused on the southern portion of the
acreage position within DSU 4-62-28, which includes 10 XRL wells,
and within DSU 4-62-33, which includes 10 XRL wells. In addition,
completion operations continue at DSU 3-62-4, which includes 10 XRL
wells and is expected to be placed on initial flowback in the first
quarter 2018.
The drilling program continues to exceed expectations as XRL well
drilling days to rig release averaged approximately 6.9 days per
well in 2017, including a best-in-class XRL well that was drilled
in approximately 5.6 days. This represents a 15% improvement from
the average of 2016.
Drilling and completion efficiencies continue to be achieved within
the XRL well program that have resulted in an approximate 30%
average year-over-year improvement in 2017 cycle times leading to
an increased number of stages being completed and in the amount of
sand that is pumped on a daily basis.
Drilling and completion costs for XRL wells averaged approximately
$4.65 million in 2017 and the Company continues to seek
efficiencies that will offset expected inflationary pressures in
2018.
Uinta Oil Program
Production sales volumes averaged 1,965 Boe/d (91% oil) during the
fourth quarter of 2017.
The Company completed the sale of its Uinta Basin assets for net
proceeds of $102 million in December 2017.
FIRST QUARTER 2018 OUTLOOK
The Company is providing its outlook for the first quarter of 2018
for its legacy properties and anticipates issuing full year 2018
guidance following the closing of the Fifth Creek Energy
transaction in March 2018.
* Capital expenditures are expected to total approximately $80-
$90 million
- Assumes two drilling rigs operating in NE Wattenberg
* Production of 1.8-2.0 MMBoe
- Includes only DJ Basin production volumes on the legacy NE
Wattenberg acreage and does not include any volumes
associated with the Uinta Basin that was sold in the
fourth quarter of 2017 or from the Fifth Creek Energy
business combination
- Represents flat sequential production from the fourth
quarter of 2017 as operations are being modestly impacted
by high line pressures associated with third-party natural
gas processing constraints and third-party line freezes
- Production is estimated to be approximately 60% oil
COMMODITY HEDGES UPDATE
Generally, it is the Company's strategy to hedge 50%-70% of
production on a forward 12-month to 18-month basis to reduce the
risks associated with unpredictable future commodity prices, to
provide certainty for a portion of its cash flow and to support its
capital expenditure program.
For 2018, 10,067 barrels per day of oil is hedged at an average WTI
price of $53.55 per barrel and 5,000 MMBtu/d of natural gas is
hedged at an average NWPL price of $2.68 per MMBtu.
For 2019, 5,246 barrels per day of oil is hedged at an average WTI
price of $54.17 per barrel. No natural gas hedges are in place.
A full-text copy of the Form 10-K is available for free at:
https://is.gd/JoHPjW
About Bill Barrett
Bill Barrett Corporation (NYSE: BBG), headquartered in Denver,
Colorado -- http://www.billbarrettcorp.com/-- is an independent
energy company that develops, acquires and explores for oil and
natural gas resources. All of its assets and operations are
located in the Rocky Mountain region of the United States.
* * *
In April 2017, Moody's Investors Service upgraded Bill Barrett's
Corporate Family Rating (CFR) to 'Caa1' from 'Caa2' and its
existing senior unsecured notes' ratings to 'Caa2' from 'Caa3'.
"The upgrade of Bill Barrett's ratings is driven by the reduction
of default risk supported by the company's large cash balance and
improved debt maturity profile," said Prateek Reddy, Moody's lead
analyst. "The company's credit metrics are likely to soften in
2017 because of the roll off of higher priced hedges, but the
metrics should strengthen along with production growth in 2018."
BLINK CHARGING: Wolverine Flagship Has 9.9% Stake as of Dec. 29
---------------------------------------------------------------
Wolverine Flagship Fund Trading Limited beneficially owns 112,656
shares of the common stock of Blink Charging Co., and 1,087,714
shares of common stock of the Company receivable upon conversion of
the Series C Preferred Stock. The Preferred Stock may not be
exercised to the extent that the holder and its affiliates would
own more than 9.99% of the outstanding common stock of the Issuer
after such conversion.
Wolverine Asset Management, LLC, is the investment manager of the
Fund and has voting and dispositive power over the securities. The
sole member and manager of WAM is Wolverine Holdings, L.P. Robert
R. Bellick and Christopher L. Gust may be deemed to control
Wolverine Trading Partners, Inc., the general partner of Wolverine
Holdings. Each of Mr. Bellick, Mr. Gust, WTP, Wolverine Holdings
and WAM disclaims beneficial ownership of the securities covered by
the Schedule 13G.
Each of WAM, Wolverine Holdings, WTP, Mr. Bellick, and Mr. Gust
have shared power to dispose or to direct the disposition of (i)
112,656 shares of the common stock of the Issuer and (ii) 1,087,714
shares of the common stock of the Issuer upon conversion of the
Preferred Stock.
A full-text copy of the regulatory filing is available at:
https://is.gd/uQ7eTe
About Blink Charging
Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID),
formerly known as Car Charging Group, Inc. --
http://www.CarCharging.com/,http://www.BlinkNetwork.com/and
http://www.BlinkHQ.com/-- is a national manufacturer of public
electric vehicle (EV) charging equipment, enabling EV drivers to
easily charge at locations throughout the United States.
Headquartered in Florida with offices in Arizona and California,
Blink Charging's business is designed to accelerate EV adoption.
Blink Charging offers EV charging equipment and connectivity to the
Blink Network, a cloud-based software that operates, manages, and
tracks the Blink EV charging stations and all the associated data.
Blink Charging also has strategic property partners across multiple
business sectors including multifamily residential and commercial
properties, airports, colleges, municipalities, parking garages,
shopping malls, retail parking, schools, and workplaces.
The Company's name change to Blink Charging from Car Charging
Group, Inc., integrates the Company's largest operating entity,
Blink Network, and represents the thousands of Blink EV charging
stations that the Company owns and/or operates, and the Blink
network, the software that manages, monitors, and tracks the Blink
EV stations and all its charging data.
Car Charging reported a net loss attributable to common
shareholders of $9.16 million for the year ended Dec. 31, 2016,
compared with a net loss attributable to common shareholders of
$9.58 million for the year ended Dec. 31, 2015. As of Sept. 30,
2017, Blink Charging had $1.90 million in total assets, $67.79
million in total liabilities, $825,000 in series B convertible
preferred stock, and a $66.71 million total stockholders'
deficiency.
Marcum LLP, in New York, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2016, citing that the Company has incurred net losses since
inception and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
BON-TON STORES: City View, Willow Investment Oppose Asset Sale
--------------------------------------------------------------
BankruptcyData.com reported that City View Capital and Willow
Investment filed with the U.S. Bankruptcy Court an objection to
Bon-Ton Stores' motion for the sale of all or substantially all of
the Debtors' assets and procedures related thereto. The objection
asserts, "At a minimum, the current sale schedule must provide the
protections that Landlords are entitled under their Leases and the
Bankruptcy Code. Specifically, the schedule set forth in the Sale
Motion and Bidding Procedures, does not provide, among other
things, Landlords with sufficient time to assess and object (if
necessary) to any proposed assumption and assignment of the Leases.
More importantly, Landlords object to the proposed sale schedule
to the extent there is a bid that includes the assumption and
assignment of Leases. Landlord's designated representative should
be permitted to attend and participate in the sale. Further,
Landlord should be permitted to credit bid and provide a deposit as
they have a vested interest in their Leases, and those associated
with their properties. The Debtors should be required to
disseminate the Adequate Assurance Information to Landlords upon
their receipt of such information from any Qualifying Bidder, and
in no event later than twenty-four hours of the Bid Deadline,
including for any Stalking Horse Bidder. Finally, the Debtors
should be required to pay all undisputed cure amounts upon the
entry of a sale order, regardless of whether there is a pending
cure objection."
About The Bon-Ton Stores
The Bon-Ton Stores, Inc. (OTCQX: BONT) -- http://www.bonton.com/--
with corporate headquarters in York, Pennsylvania and Milwaukee,
Wisconsin, operates 256 stores, which includes nine furniture
galleries and four clearance centers, in 23 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., sought Chapter 11 protection (Bankr. D.
Del. Case No. 18-10248) on Feb. 4, 2018. In the petitions signed
by Executive Vice President and CFO Michael Culhane, the Debtor
disclosed total assets at $1.58 billion and total debt at $1.74
billion.
The Bon-Ton Stores tapped Paul, Weiss, Rifkind, Wharton & Garrison
LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel;
Joseph A. Malfitano, PLLC, as special counsel; PJT Partners LP as
investment banker; AP Services, LLC as financial advisor; and A&G
Realty Partners LLC, as real estate advisor; and Prime Clerk LLC,
as administrative advisor.
Andrew R. Vara, Acting U.S. Trustee for Region 3, on Feb. 15, 2018,
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case.
BRAZIL MINERALS: GW Holdings Group Has 9.2% Stake as of Feb. 26
---------------------------------------------------------------
GW Holdings Group LLC disclosed in a Schedule 13G filed with the
Securities and Exchange Commission that as of Feb. 26, 2018, it
beneficially owns 12,778,646 shares of common stock of Brazil
Minerals Inc., constituting 9.2% based on the total of outstanding
shares of Common Stock. A full-text copy of the regulatory filing
is available for free at https://is.gd/B6dEOi
About Brazil Minerals
Based in Pasadena, California, Brazil Minerals, Inc. --
http://www.brazil-minerals.com/-- mines and sells diamonds, gold,
sand and mortar in Brazil. The Company, through subsidiaries,
outright or jointly owns 11 mining concessions and 20 other mineral
rights in Brazil, almost all for diamonds and gold. The Company,
through subsidiaries, owns a large alluvial diamond and gold
processing and recovery plant, a sand processing and mortar plant,
and several pieces of earth-moving capital equipment used for
mining as well as machines for sand processing and preparation of
mortar.
Brazil Minerals reported a net loss of $1.73 million on $13,323 of
revenue for the year ended Dec. 31, 2016, compared to a net loss of
$1.87 million on $63,610 of revenue for the year ended Dec. 31,
2015. As of Sept. 30, 2017, Brazil Minerals had $1.32 million in
total assets, $1.63 million in total liabilities and a total
stockholders' deficit of $314,149.
B F Borgers CPA PC, in Lakewood, CO, 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 significant accumulated deficit.
In addition, the Company continues to experience negative cash
flows from operations. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
BREDA LLC: Maine Inns Facing Foreclosure, to Seek Chapter 11
------------------------------------------------------------
The Camden Harbour Inn and the Portland-based Danforth Inn will be
placed in bankruptcy to stave off foreclosure, a co-owner for the
inns said, according to Lauren Abbate, writing for Bangor Daily
News.
The Camden Harbour Inn, and its restaurant Natalie's, and the
Portland-based Danforth Inn, and its restaurant Tempo Dulu, are up
for foreclosure auction on March 29.
The report relates Raymond Brunyanszki, co-owner of the inns, said
the inns' owners are working on filing for protection under Chapter
11 bankruptcy for both businesses to halt the foreclosure auctions
and allow for continuing negotiations with the bank lender.
According to the report, Mr. Brunyanszki said he and his business
partner, Oscar Verest, never received a notice from Bar Harbor Bank
and Trust -- which holds the mortgages for both inns -- that the
two properties were slated for auction.
But an attorney representing Bar Harbor Bank and Trust said the
bank's law firm notified the owners' attorney that the bank would
be publishing foreclosure auction notices in local publications.
Charles Remmel, said they gave the first notice well before the
mandated 21 days of notice, the report continues.
According to the report, Mr. Brunyanszki said the current situation
is the result of an "ongoing disagreement" between the LLCs that
operate the inns and Bar Harbor Bank and Trust. He could not
elaborate on the nature of the disagreement, but he alleges that
Bar Harbor Bank and Trust made commitments that it has not
fulfilled, costing the businesses about $1 million in added
expenses during the past year.
The report says the bank denies failing to abide by the agreement
and said that financial trouble for the two LLCs dates to December
2016, according to Mr. Remmel. He said the bank has "tried to work
with them" but that the businesses eventually failed to comply.
"The defaults go back quite a long ways," he said.
Mr. Brunyanszki said the businesses are in fine financial standing
and hope they are able to negotiate a contract that is favorable
for both parties. Otherwise, he said the inns' owners are prepared
to let a judge decide what is fair.
Breda LLC operates the Camden Harbour Inn and Natalie's. Tempo Dulu
LLC operates the Danforth Inn and Tempo Dulu restaurant.
BULOVA TECHNOLOGIES: To File Its Form 10-Q Within Grace Period
--------------------------------------------------------------
Bulova Technologies Group, Inc. notified the Securities and
Exchange Commission via Form 12b-25 regarding the delay in the
filing of its quarterly report on Form 10-Q for the period ended
Dec. 31, 2017.
The Company said that, "The compilation, dissemination and review
of the information required to be presented in the Form 10-Q for
the quarter ending December 31, 2017 could not be completed and
filed by February 14, 2018, without undue hardship and expense to
the registrant. The registrant anticipates that it will file its
Form 10-Q for the quarter ended December 31, 2017 within the
"grace" period provided by Securities Exchange Act Rule 12b-25."
About Bulova
Bulova Technologies Group, Inc., was originally incorporated in
Wyoming in 1979 as "Tyrex Oil Company". During 2007, the Company
divested itself of all assets and previous operations. During
2008, the Company filed for domestication to the State of Florida,
and changed its name to Bulova Technologies Group, Inc., and
changed its fiscal year from June 30 to Sept. 30. From Jan. 1,
2009, Bulova Technologies Group, Inc. operated in multiple business
segments. Government Contracting was focused on the production and
procurement of military articles for the US Government and other
Allied Governments throughout the world, and was accounted for
through two of the Company's wholly owned subsidiaries, Bulova
Technologies Ordnance Systems LLC, and Bulova Technologies (Europe)
LLC. In October 2012, this segment was discontinued through the
sale of substantially all of the assets of Bulova Technologies
Ordnance Systems LLC, with any remaining assets and liabilities
associated with that operation being segregated and reported as a
discontinued operation. Contract Manufacturing included the
production of cable assemblies and circuit boards accounted for
through BT Manufacturing Company LLC, a wholly owned subsidiary
that was discontinued and disposed of in March 2011. In July of
2013, the Company began the sale of high precision industrial
machine tools through a distributor network accounted for through
Bulova Technologies Machinery LLC, a newly formed subsidiary.
Bulova Technologies is headquartered in Clearwater, Florida.
Bulova reported a net loss of $500,296 for the year ended Sept. 30,
2017, following a net loss of $7.81 million for the year ended
Sept. 30, 2016.
As of Sept. 30, 2017, Bulova had $20.29 million in total assets,
$46.31 million in total liabilities and a total shareholders'
deficit of $26.02 million.
The Company has sustained substantial losses, and has minimal
assets. These factors, the Company said, raise substantial doubt
regarding its ability to continue as a going concern. The
Company's existence is dependent upon management's ability to
develop profitable operations and resolve its liquidity problems.
C & M RUSSEL: M. Evans Claims vs Law Firm Barred by Res Judicata
----------------------------------------------------------------
The adversary proceeding captioned MATTIE BELINDA EVANS, an
individual Chief Executive Manager as Real Party in Interest for C
& M RUSSELL, LLC, and Trustee of Mattie B. Evans Family Trust,
Plaintiff, v. ALAN G. TIPPIE, an individual, attorney for
SULMEYERKUPETZ, a professional corporation, and DOES 1 through 100,
inclusive, Defendants, Adv. No. 2:16-ap-01577-RK (Bankr. C.D. Cal.)
came on for hearing on Jan. 10, 2018 on the Motion of Defendants'
Alan G. Tippie and SulmeyerKupetz, a professional corporation for
Summary Judgment on Complaint for Damages for Legal Malpractice;
Intentional and Negligent Misrepresentation; Breach Of The Implied
Covenant Of Good Faith and Fair Dealings; Breach Of Fiduciary Duty;
Civil Conspiracy; Racism; Fraud & Fraudulent Inducement and;
Intentional and Negligent Infliction of Emotional Distress filed on
Nov. 29, 2017.
After consideration of all pleadings and papers filed in support of
and in opposition to the Motion, and the arguments of the parties
at the hearing, Bankruptcy Judge Robert Kwan determines that the
Defendants' motion for summary judgment should be granted on each
claim in Plaintiff's complaint.
The claims asserted by Plaintiff in the Complaint are barred by the
principle of res judicata. "The doctrine of res judicata bars a
party from bringing a claim if a court of competent jurisdiction
has rendered final judgment on the merits of the claim in a
previous action involving the same parties or their privies."
Plaintiff's claims for relief are all admittedly based upon the
services that were provided by Defendants to C & M that preceded
the entry of the order approving the fees and services of
Defendants. Plaintiff had signed and submitted her personal
declaration in support of the Defendants' application for
compensation as attorneys for C & M in this bankruptcy case,
therefore any issue as to the services rendered are merged in the
order approving the fees for such services. Because the undisputed
facts show that if C & M had any objection to Defendants' fees
before they were approved, it had sufficient opportunity to object
to them, and because the court's order approving Defendants' final
fee application was a final adjudication of the fees owed to
Defendants, the court agrees that res judicata is properly applied
to bar any claims of C & M and anyone like Plaintiff asserting
claims through it for legal malpractice and breach of fiduciary
duty.
A full-text copy of Judge Kwan's Decision dated Feb. 16, 2018 is
available at https://is.gd/MYFNjo from Leagle.com.
Mattie Belinda Evans, Plaintiff, pro se.
Alan G. Tippie, Defendant, represented by David J. Richardson --
drichardson@sulmeyerlaw.com -- Sulmeyer Kupetz & Steven Werth,
SulmeyerKupetz.
SulmeyerKupetz, a Professional Corporation and Alan G. Tippie,
Defendant, represented by David J. Richardson, Sulmeyer Kupetz.
About C&M Russell
Los Angeles, California-based C & M Russell LLC owns five
multifamily apartment buildings all located in either Redondo Beach
or El Segundo, California. The Company first made a pro se Chapter
11 bankruptcy filing (Bankr. C.D. Calif. Case No. 11-49889) on
Sept. 21, 2011. C & M Russell filed for another Chapter 11
petition (Bankr. C.D. Case No. 11-53845) on Oct. 20, 2011. Judge
Sandra R. Klein presides over the case. Alan G. Tippie, Esq., and
Avi E. Muhtar, Esq., at SulmeyerKupetz, serve as the Debtor's
counsel. In the second petition, the Debtor scheduled assets of
$17.5 million and debts of $9.30 million. The petition was signed
by Mattie B. Evans, chief executive member. Kenneth Blake, CPA,
acts as accountant.
CALUMET SPECIALTY: S&P Alters Outlook to Stable & Affirms 'B-' CCR
------------------------------------------------------------------
The credit metrics for U.S.-based Calumet Specialty Products
Partners L.P. have improved due to targeted asset sales leading to
near-term debt reduction and improved market conditions in its
specialty chemicals and crude oil refining businesses.
S&P Global Ratings said it revised its rating outlook on
Indianapolis-based Calumet Specialty Products Partners L.P. to
stable from negative and affirmed its 'B-' corporate credit rating
on the company.
S&P said, "In addition, we have placed the 'CCC+' issue-level
rating on Calumet's unsecured notes on CreditWatch with positive
implications. This is in anticipation of repayment of all of the
company's secured notes, the impact of which would be that we would
revise the recovery rating on the unsecured notes to '4' (30%-50%,
rounded estimate: 40%) from '5' (10%-30%, rounded estimate: 25%).
"We have also affirmed the 'B+' issue-level ratings on the
company's secured notes. The recovery rating is '1', which reflects
our expectation of very high (90%-100%, rounded estimate: 95%)
recovery in the event of default. We anticipate that this debt will
be fully repaid in April 2018.
"The outlook revision to stable from negative is based on our
expectation that Calumet's credit metrics will improve following
repayment of the $400 million 2021 11.50% secured notes in April.
Specifically, we expect adjusted debt to EBITDA to go below 6x and
remain below that level over the next year with funds from
operations (FFO) to debt being about 7%-11% over the next year as
well. While these levels have markedly improved over recent years,
we still consider the company to be highly leveraged.
"The stable outlook reflects our expectation that debt to EBITDA
will not return to previous elevated levels following the paydown
of the secured debt in April 2018 with the proceeds from the sale
of the Superior refinery, which are currently escrowed. The sale
also means that, going forward, about 60% of the company's EBITDA
will be derived from the specialty chemical product sector, which
is less volatile than the refining business. We expect the
company's specialty products segment to continue to produce
relatively stable cash flow, and the fuel products segment to
continue to have weaker profitability due to relatively low Gulf
Coast 2/1/1 crack margins and RIN costs. We expect the company's
liquidity to remain adequate over the next 12 months and leverage
to stay below 6x.
"We could lower the rating if Calumet's credit metrics weakened
such that adjusted debt to EBITDA went above 6x on a sustained
basis, possibly due to an inability to pass through higher crude
prices, which negatively affects specialty chemicals margins, and
weaker crack spreads than our current expectation, which negatively
affects refining margins.
"We could raise the rating if we believed that the company would
sustain debt to EBITDA below 5x while maintaining adequate
liquidity. In addition to this quantitative measure, the fact that
the company's EBITDA is now primarily driven by the specialty
chemicals business, which we view has less volatile than refining,
could also contribute to a rating change. Other factors that could
result in an upgrade include further improvement in crack margins
and success in reducing costs and streamlining operations while
maintaining strong margins in the specialty chemicals business."
CAROLINE WYLY: Woody Creek Home Sold for $13.4 Million
------------------------------------------------------
Rick Carroll, writing for The Aspen Times, reports that Caroline
Wyly, the widow of Dallas billionaire Charles Wyly, has sold the
couple's Woody Creek ranch home for $13.4 million in bankruptcy.
The report also says Ms. Wyly sold an undeveloped lot in the Fox
Ranch subdivision for $1.8 million in a separate but related
transaction.
The buyer of both properties is a Fort Worth, Texas-based limited
liability company called 0955 Woody Creek LLC.
The report notes Caroline "Dee" Wyly originally had listed the
13,853-square-foot home for $33.5 million in March 2015, after she
declared Chapter 11 bankruptcy reorganization in October 2014. The
advertised price gradually declined to $14.9 million in November.
According to the report, most proceeds from the sale -- $13 million
plus $90,000 in attorney's fees and expenses -- were paid to
Compass Bank, a creditor in the bankruptcy that also had a lien on
the estate.
"It is the trustee's understanding and belief that the buyers are
unrelated to the debtor," case trustee Robert Yaquinto said in a
Nov. 22 court filing, adding that the buyers asked that their
identities not be publicly disclosed, the Aspen Times notes.
The report also says Carbondale broker Leo Carmichael, who
represented the buyers, said they "had no relationship whatsoever"
to the Wylys.
About Caroline Wyly,
and Sam WylY
Caroline Wyly is the widow of business tycoon Charles Wyly. She
and her brother-in-law Sam Wyly sought Chapter 11 bankruptcy
protection as leverage to settle a looming tax bill and a $329
million claim from the Securities and Exchange Commission. Her
bankruptcy is In re Caroline D. Wyly, 14-35074, in U.S. Bankruptcy
Court, Northern District Texas (Dallas).
Sam Wyly is a lifelong entrepreneur and author. His first book,
1,000 Dollars & An Idea, is a biography that tells his story of
creating and building companies, including University Computing,
Michaels Arts & Crafts, Sterling Software, and Bonanza Steakhouse.
His second book, Texas Got It Right!, co-authored with his son,
Andrew, was gifted to roughly 450,000 students and teachers,
thought leaders, and readers, and continues to be a best-seller in
its Amazon category.
Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge
ordered him to pay several hundred million dollars in a civil fraud
case. In September 2014, a federal judge ordered Mr. Wyly and the
estate of his deceased brother to pay more than $300 million in
sanctions after they were found guilty of committing civil fraud to
hide stock sales and nab millions of dollars in profits.
The Wylys' cases were consolidated until the court separated them
in November 2016. U.S. Chief Bankruptcy Judge Barbara Houser then
converted Caroline "Dee" Wyly's case from a bankruptcy
reorganization to a liquidation.
CARTHAGE SPECIALTY: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Carthage Specialty Paperboard, Inc.
30 Champion Street
Carthage, NY 13619
Type of Business: Carthage Specialty Paperboard, Inc. is a
paperboard manufacturer in Carthage, New York,
serving a diverse range of markets from pulp-
substitute specialty paperboard to industrial
grade chipboards. It offers graphic arts board,
cap closure board, and chip board. Over 96% of
its paperboards are made from 100% recycled
fiber saving valuable natural resources and
landfill space while also utilizing clean energy
alternatives like hydro-electrical generation
and cogeneration technologies.
http://www.carthagespbd.com/
Chapter 11 Petition Date: February 28, 2018
Affiliates that simultaneously filed Chapter 11 petitions:
Debtor Case No.
------ --------
Carthage Specialty Paperboard, Inc. 18-30226
Carthage Acquisition, LLC 18-30227
Court: United States Bankruptcy Court
Northern District of New York (Syracuse)
Debtors' Counsel: Stephen A. Donato, Esq.
BOND, SCHOENECK & KING, PLLC
One Lincoln Center
Syracuse, NY 13202-1355
Tel: (315) 218-8000
Fax: (315) 218-8100
E-mail: sdonato@bsk.com
Assets and Liabilities:
Estimated Estimated
Assets Liabilities
---------- -----------
Carthage Specialty $10 mil.-$50 million $10 mil.-$50 million
Carthage Acquisition $1 mil.-$10 million $10 mil.-$50 million
The petitions were signed by Donald Schnackel, vice president of
finance.
Full-text copies of the petitions are available for free at:
http://bankrupt.com/misc/nynb18-30226.pdf
http://bankrupt.com/misc/nynb18-30227.pdf
A. List of Carthage Specialty's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Beaver River Distribution Trade Debt $129,800
Cascade Recovery Inc. Trade Debt $105,545
Constellation New General Supplies $78,500
Energy Inc.
Continental Paper Grading Trade Debt $89,166
D K Trading Corp. Trade Debt $329,399
P.O. Box E
Clarks Summit, PA
18411-0240
Direct Energy Utility Services $102,900
Ekman & Co., Inc. Trade Debt $109,169
Excellus Health Plan - Group Insurance Premiums $77,464
Great Lakes Transport Services Provided $71,445
Integrity Express Logistics Services Provided $118,740
Nalco Chemical Co. Chemical Supplies $203,080
National Fiber Supply Trade Debt $184,739
Company
National Grid Utility Services $171,727
Occupational Safety Penalties & Fines $175,000
& Health Admin.
Oneida Warehousing LLC Services Provided $129,985
River Valley Paper Trade Debt $325,529
P.O. Box 1911
Akron, OH
44309-1911
Rockwell Automation Maintenance $101,720
Veritiv Operating Company Judgment $124,928
Village of West Carthage Utility Services- $199,982
Water
Voith Fabrics Trade Debt $91,952
B. Carthage Acquisition's Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Development Unlimited Guaranty $1,029,783
Authority of North of debt of Carthage
Country Specialty Paperboard
111 Clinton Street Inc.
Watertown, NY 13601
CARTHAGE SPECIALTY: To Seek Chapter 11 After Failed Sale Bid
------------------------------------------------------------
wwnytv.com reports that Carthage Specialty Paperboard has decided
to file for Chapter 11 bankruptcy, citing "an acute cash flow
shortage."
According to the report, officials with the West Carthage mill
summoned workers to a meeting Feb. 28 in the afternoon. The
company said the meeting was called to inform employees that a deal
to sell the business unexpectedly fell apart, that it decided to
file for bankruptcy and file a WARN Notice to alert workers to
pending layoffs or a plant closure.
The company said Chapter 11 bankruptcy will give it "some breathing
space to continue to pursue a sale." Officials said the company is
continuing discussions with potential buyers and is also pursuing a
proposal for a management buy-out, the report relates.
"It is the Company's expectation that a deal with management or
another buyer will be reached and the Company can reconfigure and
continue operations," the company said in a prepared statement,
according to the report.
The report recounts that on Feb. 23, union officials told 7 News
the mill planned to lay off workers for a week because of a lack of
available fiber, which is the raw material the mill needs to make
its product. On Feb. 28, company officials said they're hopeful
those employees will be back on the job on March 11.
Carthage Specialty Paperboard -- http://www.carthagespbd.com/-- is
owned by DeltaPoint Capital Management, a Rochester-based private
equity investment firm.
CENGAGE: Bank Debt Trades at 7.64% Off
--------------------------------------
Participations in a syndicated loan under which Cengage (fka
Thomson Learning) is a borrower traded in the secondary market at
92.36 cents-on-the-dollar during the week ended Friday, February
23, 2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.86 percentage points from
the previous week. Cengage pays 425 basis points above LIBOR to
borrow under the $1.71 billion facility. The bank loan matures on
June 7, 2023. Moody's rates the loan 'B2' and Standard & Poor's
gave a 'B' rating to the loan. 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 Friday,
February 23.
COATES INTERNATIONAL: Obtains $44K From Convertible Note Financing
------------------------------------------------------------------
Coates International, Ltd., received the net proceeds of a
securities purchase agreement and a related convertible promissory
note, dated Feb. 15, 2018 in the face amount of $44,000 issued to
GS Capital Partners, LLC. The Company also issued a back-end
collateralized, convertible promissory note, in the face amount of
$44,000 issued to GS Capital Partners, LLC, which is not expected
to be funded prior to the six month anniversary of the funding of
the first convertible note. The back end note may be cancelled by
the Company prior to being funded. The Promissory Notes mature in
February 2019 and provides for interest at the rate of eight
percent per annum. The Notes may be converted into unregistered
shares of the Company's common stock, par value $0.0001 per share,
at the Conversion Price, as defined, in whole, or in part, at any
time beginning 180 days after the date of the Notes, at the option
of the Holder. All outstanding principal and unpaid accrued
interest is due at maturity, if not converted prior thereto. The
Registrant is responsible for expenses amounting to $4,000 in
connection with each of the two notes.
The Conversion Price will be equal to 65% multiplied by the Market
Price, as defined. The Market Price will be equal to the average
of the three lowest trading prices of the Company's common stock on
the OTC Pink Sheets during the 12 trading-day period ending one
trading day prior to the date of conversion by the Holder. The
number of shares of common stock to be issued upon conversion will
be equal to the aggregate amount of principal, interest and
penalties, if any divided by the Conversion Price. The Holder
anticipates that upon any conversion, the shares of stock it
receives from the Company will be tradable by relying on an
exemption under Rule 144 of the U.S. Securities and Exchange
Commission.
These note may be prepaid with a prepayment penalty equal to 15%
during the first 60 days, 20% during the next 90 days and 30%
during the next 30 days the note is outstanding. The Company has
reserved 14,636,000 shares of its unissued common stock for
potential conversion of the convertible notes.
The convertible promissory note was privately offered and sold to
the Holder in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws
which the Registrant believes are available to cover this
transaction based on representations, warranties, agreements,
acknowledgements and understandings provided to the Registrant by
the Holder.
About Coates
Based in Wall Township, N.J., Coates International, Ltd. (OTC BB:
COTE) -- http://www.coatesengine.com/-- was incorporated on Aug.
31, 1988, for the purpose of researching, patenting and
manufacturing technology associated with a spherical rotary valve
system for internal combustion engines. This technology was
developed over a period of 15 years by Mr. George J. Coates, who is
the President and Chairman of the Board of the Company. The Coates
Spherical Rotary Valve System (CSRV) represents a revolutionary
departure from the conventional poppet valve. It changes the means
of delivering the air and fuel mixture to the firing chamber of an
internal combustion engine and of expelling the exhaust produced
when the mixture ignites.
MSPC, in Cranford, New Jersey, Coates' independent registered
public accountants, have stated in their Auditor's Report dated
April 14, 2017, with respect to the Company's financial statements
as of and for the year ended Dec. 31, 2016, that the Company
continues to have negative cash flows from operations, recurring
losses from operations, and a stockholders' deficiency. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
Coates reported a net loss of $8.35 million on $29,200 of total
revenues for the year ended Dec. 31, 2016, compared to a net loss
of $10.20 million on $94,200 of total revenues for the year ended
Dec. 31, 2015. As of Sept. 30, 2017, Coates had $2.27 million in
total assets, $8.18 million in total liabilities and a total
stockholders' deficiency of $5.90 million.
CONCORDIA HEALTHCARE: Bank Debt Trades at 9.33% Off
---------------------------------------------------
Participations in a syndicated loan under which Concordia
Healthcare Corp is a borrower traded in the secondary market at
90.67 cents-on-the-dollar during the week ended Friday, February
23, 2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents an increase of 1.02 percentage points from
the previous week. Concordia Healthcare pays 500 basis points above
LIBOR to borrow under the $500 million facility. The bank loan
matures on October 20, 2021. Moody's rates the loan 'Caa2' and
Standard & Poor's gave a 'CCC-' rating to the loan. 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 Friday, February 23.
CONTURA ENERGY: S&P Affirms 'B-' CCR & Alters Outlook to Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' corporate credit rating on
Bristol, Tenn.-based thermal and met coal producer Contura Energy
Inc. The outlook is revised to stable from positive.
S&P said, "We also affirmed our 'B' issue-level rating on the
company's $400 million first-lien term loan due in 2024 with a '2'
recovery rating, indicating substantial recovery (70%-90%; rounded
estimate: 70%) in the event of a default."
Contura's key risks reflect the inherent challenges of coal mining,
including operating in a cyclical industry, price volatility,
weather-related disruptions, capital-intensive operations,
labor-related challenges, and increasingly stringent environmental
and safety regulations. In divesting the PRB assets, Contura
narrows its product and operating diversity to predominantly met
coal in the Appalachian basins, reduces the priced component of
revenues that largely consisted of PRB coal, and increases its
sensitivity to volatile met coal prices. S&P said, "However, while
met coal prices are elevated, we expect the company to exhibit a
material improvement in margins, with a smaller, more focused
footprint. There is also more potential for growth as the expanding
international demand for met coal becomes a stronger business
driver, and natural gas displacing thermal coal becomes a weaker
one. Furthermore, while seaborne markets are strong, we consider
the combination of the trading and logistics segment along with the
ownership of the Dominion Terminal Associates coal export terminal
as a competitive advantage. This is somewhat offset by the trading
and logistics segment's dependence on third-party met coal
suppliers, given that we expect the segment to contribute in excess
of 30% of total revenues."
S&P said, "The stable outlook reflects our expectation that Contura
will continue to benefit from elevated met coal prices, which
contribute to rising profitability. However, we anticipate a
decline in met prices, which would have more of an impact on the
smaller, less-diversified business. Nevertheless, we anticipate
that leverage metrics will settle into the lower end of the 2x-3x
range over the next year.
"We could raise the rating if the company maintains leverage below
2x, particularly if we expect EBITDA margins to be sustained above
25% through most reasonable market conditions. In this scenario, we
expect the company would generate cash flow after capital spending
above $150 million and preserve adequate liquidity.
"It is equally likely that we could lower the rating if we consider
the capital structure to be unsustainable, or we view the company
to be dependent on favorable economic and commodity price
conditions to meet its obligations. This would be the case if we
considered liquidity to be weak or if EBITDA interest coverage
approached 1x."
CORNBREAD VENTURES: Has Until May 28 to Exclusively File Plan
-------------------------------------------------------------
The Hon. Brenda K. Martin of the U.S. Bankruptcy Court for the
District of Arizona has extended, at the behest of Cornbread
Ventures, LP, the exclusive periods during which only the Debtor
can file a plan of reorganization and solicit acceptance of the
plan through and including May 28, 2018, and July 27, 2018,
respectively.
As reported by the Troubled Company Reporter on Feb. 9, 2018, the
Debtor has been actively discussing parameters for a viable plan
with JP Morgan Chase and Red Fox Lending. Those discussions have
been productive and remain ongoing. If given further time to
develop, there is more than a reasonable prospect that the Debtor
will be able to successfully negotiate the bases for a consensual
plan with its creditor constituencies. Additional time will give
the Debtor, JPMC, and Red Fox Lending the time necessary to prepare
and analyze the requisite financial data and other information
needed to evaluate potential plan scenarios.
A copy of the court order is available at:
http://bankrupt.com/misc/azb17-12877-145.pdf
About Cornbread Ventures
Cornbread Ventures, LP, is the owner and operator of Z'Tejas
Southwestern Grill. The company was founded in 2015 and is based
in Austin, Texas.
Cornbread Ventures filed a Chapter 11 petition (Bankr. D. Ariz.
Case No. 17-12877) on Oct. 30, 2017. In the petition signed by
Michael Stone, its president and general partner, the Debtor
estimated $1 million to $10 million in both assets and
liabilities.
Judge Brenda K. Martin presides over the case.
Serving as the Debtor's counsel is Jordan A Kroop, Esq., at Perkins
Coie LLP, as counsel. Horne LLP serves as its accountant.
The U.S. Trustee on Jan. 9, 2018, notified the U.S. Bankruptcy
Court for the District of Arizona that no official committee of
unsecured creditors was appointed in the Chapter 11 case.
CORONADO GROUP: S&P Raises CCR to 'B' on Asset Acquisition Plan
---------------------------------------------------------------
Coronado Group LLC, a U.S.-based producer of high-quality
metallurgical (met) coal, will fund the $475 million acquisition of
the Curragh mine with a portion of the new $550 million senior
secured term loan B, a $150 million term loan C and $180 million
cash equity contribution from the financial sponsor.
S&P Global Ratings raised its corporate credit rating on Beckley,
W.V.-based Coronado Group LLC to 'B' from 'B-' and removed it from
CreditWatch, where the ratings agency placed it with developing
implications on Feb. 6, 2018. The outlook is stable.
S&P said, "At the same time, we assigned a 'B+' issue-level ratings
to the company's proposed $550 million senior secured term loan B
and the $150 million term loan C. The recovery rating on the debt
is '2', indicating our expectation of substantial (70%-90%; rounded
estimate: 85%) recovery for lenders in the event of a payment
default.
"The upgrade reflects Coronado's reduced business risk as we expect
the Curragh mine will add significant scale and improve
profitability of existing operations. We anticipate the Curragh
mine will more than double Coronado's current production to about
23.6 million short tons in 2018, while also adding 14 million short
tons of capacity. The Curragh acquisition will also diversify
Coronado's current product portfolio. On consolidated basis, we
expect Coronado to offer a broader range of met coal products
including, hard coking (HCC), semi hard coking, semi soft coking
and PCI coals, of which high quality low volatility (low-vol) HCC
coal will make up about 30% of total production. Although Curragh
low-vol HCC has inferior qualities to the Buchanan low-vol HCC,
including significantly lower reflectance, higher volatile matter,
and slightly higher ash content, it offers some of the lowest
sulfur content of the HCC portfolio, which makes it an attractive
product to the Asian market. Curragh benefits Coronado's operations
by lowering the consolidated cash costs of production as Curragh's
cash costs are in the second quartile of the global cost curve. We
expect Coronado to achieve EBITDA margins of about 43% in 2018, as
a result of the cash costs advantages, increased production, and
strong international coal prices in 2018. On consolidated basis, we
expect Coronado will not only decrease its customer concentration
but also improve the credit quality of its customers. Prior to the
acquisition, Coronado generated almost half of its revenue from
X-Coal Energy and Resources, a global met coal marketer. Pro forma
for the transaction, we expect Coronado's top two customers will
make up about 33% of total revenues, and no other customer will
make up more than 6% of sales. Additionally, Curragh mine
geographic position in Australia is closer to the high growth Asian
market than the U.S. mines, which adds transportation advantages
and access to more investment grade global steel makers in Japan
and South Korea.
"The stable outlook reflects our expectation that Coronado will be
able to execute its acquisition plan and successfully integrate
Curragh operations in the next 12 months. We expect the company
will increase the annual production to about 23 million short tons,
including approximately 14 million short tons coming from the
Curragh mine in Australia. We also expect Coronado will gradually
reduce mining costs, improve operations, and optimize the product
mix that we anticipate will result in EBITDA margins greater than
35%. Under this scenario, we expect the company to operate at
adjusted debt leverage between 1x and 1.5x in 2018.
"We could lower the rating if we expect Coronado will not be able
to execute its acquisition plan in the next 12 months due to
operational challenges, including difficult mining conditions,
weather related interruptions or union labor agreement delays or
potential disruptions stemming from the long- term supply agreement
with Stanwell. We expect to lower Coronado's ratings if these
factors cause margins to contract to 25% or less. We would also
lower ratings if interest coverage approaches 1.5x and the
company's free operating cash flow approaches break even.
"Although less likely, we could raise the rating if Coronado
successfully integrates Curragh to its operations, meets certain
profitability and leverage hurdles, and makes changes to its
ownership structure or financial policies. Specifically, under this
scenario, we would expect the company to maintain EBITDA margins
above 35% under most reasonable market conditions. We would also
expect the financial sponsor to demonstrate a track record of
financial discipline or relinquishes control of the company, while
the company's adjusted debt leverage is below 3x."
DAVID'S BRIDAL: Bank Debt Trades at 11.91% Off
----------------------------------------------
Participations in a syndicated loan under which David's Bridal Inc.
is a borrower traded in the secondary market at 88.09
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents an increase of 2.14 percentage points from
the previous week. David's Bridal pays 375 basis points above LIBOR
to borrow under the $520 million facility. The bank loan matures on
October 11, 2019. Moody's rates the loan 'Caa2' and Standard &
Poor's gave a 'CCC' rating to the loan. 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
Friday, February 23.
DELEK US: Moody's Assigns Ba3 CFR; Outlook Stable
-------------------------------------------------
Moody's Investors Service assigned first time ratings to Delek US
Holdings, Inc. (DK), including a Ba3 Corporate Family Rating (CFR),
a Ba3-PD Probability of Default Rating (PDR), and a B1 rating on
the senior secured term loan B. The outlook is stable.
The net proceeds from the term loan will be used to refinance
existing debt. The ratings on Alon USA Partners, LP and its rated
debt will be withdrawn after the debt is repaid.
"The refinancing of existing debt simplifies Delek's debt structure
following the acquisitions of Alon USA Energy and Alon USA
Partners," stated James Wilkins, Moody's Vice President Senior
Analyst. "The financing will not increase leverage and Moody's
expects Delek to maintain conservative financial policies as it
grows its business."
Assignments:
Issuer: Delek US Holdings, Inc.
-- Corporate Family Rating, Assigned Ba3
-- Probability of Default Rating, Assigned Ba3-PD
-- Senior Secured Term Loan, Assigned B1 (LGD4)
-- Speculative Grade Liquidity Rating, Assigned SGL-1
Outlook Actions:
Issuer: Delek US Holdings, Inc.
-- Outlook, Assigned Stable
RATINGS RATIONALE
DK's Ba3 CFR reflects low leverage and an elevated cash balance
reflective of its conservative financial policies and very good
liquidity that can support it through periods of volatile refining
industry profit margins and potentially high RINs expenses. Delek's
debt to EBITDA was 3.0x as of December 31, 2017, pro forma for the
Alon acquisition and Moody's expect it to improve towards 2.5 x in
2018. Delek's refining and marketing operations include four
refineries of modest scale that are geographically focused and have
a combined throughput capacity of 302 thousand barrels per day
(mbpd) (all four refineries can be operated at less than 75 mbpd
allowing them to apply for waivers of RIN's requirements). The
refineries are positioned in Texas, Louisiana and Arkansas where
they can benefit from both growing Permian crude oil production and
other locally-sourced crudes that are purchased at a discount to
WTI Cushing prices. The company also benefits from more stable
earnings generated by retail gas station and midstream operations,
through its ownership interests in Delek Logistics Partners, LP (B1
stable).
The secured term loan is rated B1, one notch below the Ba3 CFR,
reflecting the priority claim of the $1 billion revolving credit
facility, which shares the same collateral as the term loan, but
has a first lien on working capital and a second lien on fixed
assets, whereas the term loan has a first lien priority claim on
fixed assets and a second lien on working capital. Moody's views
the B1 rating assigned as more appropriate than the Ba3 rating
indicated by Moody's Loss Given Default Methodology given the
inherent volatility of the company's trade payables and lack of
material other debt outstanding that is subordinated to the term
loan.
Delek's SGL-1 Speculative Grade Liquidity rating reflects very good
liquidity supported by elevated cash balances, about $850 million
of unused borrowing capacity under its $1 billion ABL revolving
credit facility due 2023 and positive free cash flow. The company
has kept elevated cash balances ($932 million as of December 31,
2017) and has stated it expects it will continue to do so. The
company had roughly $150 million drawn on its ABL revolving credit
facility as of year-end 2017, pro forma for the refinancing, which
leaves ample borrowing capacity to fund potential growth capital
expenditures. The revolver has a minimum fixed charge coverage
ratio of 1.0x, which is only tested if excess availability is less
than the greater of 12.5% of the revolver commitment ($1 billion)
and $125 million. Moody's does not expect the covenant to be tested
through 2019. The only near-term large debt maturity is the $150
million of Alon convertible senior notes due on September 15, 2018,
which will be repaid at maturity with existing cash balances. The
company's liquidity benefits from a supply and offtake agreement
covering three refineries with J. Aron that matures on April 30,
2020, and is cancellable. Should Delek or J. Aron elect to
terminate the agreement, Delek would have to invest a substantial
amount in working capital. (The obligation under the supply and
offtake agreement totaled $436 million as of December 31, 2017.)
The stable outlook reflects Moody's expectation that refining
margins will remain stable or improve in 2018-2019. The ratings
could be upgraded if there is an increase in scale by adding
refineries to its portfolio or expanding existing operations such
that it benefits from larger scale operations (throughput capacity
greater than 100mbpd) or improvement in refining margins such that
all refineries produce free cash flow in trough market conditions
and the company maintains retained cash flow to debt above 25%. The
ratings could be downgraded if there is a decline in profitability
of refining operations or retained cash flow to debt falls below
15%.
The principal methodology used in these ratings was Refining and
Marketing Industry published in November 2016.
Delek US Holdings, Inc. (NYSE: DK), headquartered in Brentwood,
Tennessee, is an independent refining and wholesale marketing
company with 302 mbpd of total throughput capacity at four
refineries. Its retail segment is the largest licensee of 7-Eleven
in the United States and operates approximately 300 convenience
stores. Additionally, DK holds a 63.5% stake in midstream logistics
company, Delek Logistics LP (DKL, B1 stable).
DEXTERA SUGICAL: Terminates Officers to Conserve Cash
-----------------------------------------------------
The Board of Directors of Dextera Surgical Inc. took actions to
conserve cash to pay the Company's creditors and for the benefit of
the Dextera Surgical stockholders.
On Dec. 11, 2017, Dextera Surgical filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Delaware, and on Feb. 20,
2018, Dextera Surgical sold substantially all of its assets to
AesDex, LLC. As a result, Dextera Surgical has now ceased to
operate as an operating company and is in the process of winding
down the company.
As a result of the current status of Dextera Surgical, on Feb. 23,
2018:
1. The Board of Directors terminated the employment and executive
officer status of each of the following executive officers of
Dextera Surgical, effective March 1, 2018:
a. Julian Nikolchev, chief executive officer and president;
b. Thomas Palermo, chief operating officer;
c. Liam J. Burns, vice president, worldwide sales and
marketing; and
d. Gregory P. Watson, vice president, operations;
2. The Board of Directors designated Robert Y. Newell, Dextera
Surgical's vice president, finance and chief financial officer,
as Dextera Surgical's principal executive officer -- Mr. Newell
will be the sole remaining executive officer of Dextera
Surgical;
3. Each of the directors Thomas A. Afzal, Gregory D. Casciaro, R.
Michael Kleine and Samuel E. Navarro resigned as directors of
Dextera Surgical, effective at the close of business on
Feb. 23, 2018 -- Michael Bates and Julian Nikolchev will remain
as the sole members of the Board of Directors to oversee the
wind down of the company;
4. The Board of Directors reduced the size of the Board to two
directors, effective at the effective time of the resignations
of the four directors; and
5. The Board of Directors reduced the compensation of the
remaining directors of the company to a quarterly retainer of
$7,500 per quarter.
About Dextera Surgical
Headquartered in Redwood City, California, Dextera Surgical Inc.
(DXTR:US OTC US) -- https://www.dexterasurgical.com/ -- is a
medical device company that designs and manufactures proprietary
stapling devices that enable the advancement of minimally invasive
surgical procedures. Founded in 1997 as Vascular Innovations,
Inc., the Company changed its name in November 2001 to Cardica,
Inc., and in June 2016 to Dextera Surgical Inc.
Dextera Surgical sought Chapter 11 protection (Bankr. D. Del. Case
No. 17-12913) on Dec. 11, 2017. Dextera Surgical also entered into
an asset purchase agreement with Aesculap, Inc, an affiliate of B.
Braun Group, for $17.3 million.
The Company disclosed $6.53 million in total assets and $14.82
million in total debt as of Sept. 30, 2017.
The Debtor tapped Saul Ewing Arnstein & Lehr LLP as counsel; Cooley
LLP as special corporate counsel; JMP Securities, LLC, as financial
advisor and investment banker; and Rust Consulting/Omni Bankruptcy
as claims and noticing agent.
DEXTERA SURGICAL: Common Stock Delisted From Nasdaq
---------------------------------------------------
The Nasdaq Stock Market LLC filed a Form 25-NSE with the Securities
and Exchange Commission notifying the removal from listing or
registration of Dextera Surgical Inc.'s common stock on the
Exchange under Section 12(b) of the Securities Exchange Act of
1934.
About Dextera Surgical
Headquartered in Redwood City, California, Dextera Surgical Inc.
(DXTR:US OTC US) -- https://www.dexterasurgical.com/ -- is a
medical device company that designs and manufactures proprietary
stapling devices that enable the advancement of minimally invasive
surgical procedures. Founded in 1997 as Vascular Innovations,
Inc., the Company changed its name in November 2001 to Cardica,
Inc., and in June 2016 to Dextera Surgical Inc.
Dextera Surgical sought Chapter 11 protection (Bankr. D. Del. Case
No. 17-12913) on Dec. 11, 2017. Dextera Surgical also entered into
an asset purchase agreement with Aesculap, Inc, an affiliate of B.
Braun Group, for $17.3 million.
The Company disclosed $6.53 million in total assets and $14.82
million in total debt as of Sept. 30, 2017.
The Debtor tapped Saul Ewing Arnstein & Lehr LLP as counsel; Cooley
LLP as special corporate counsel; JMP Securities, LLC, as financial
advisor and investment banker; and Rust Consulting/Omni Bankruptcy
as claims and noticing agent.
DPW HOLDINGS: Will Sell $50 Million Worth of Common Stock
---------------------------------------------------------
DPW Holdings Inc. entered into a sales agreement with H.C.
Wainwright & Co., LLC on Feb. 27, 2018, to sell shares of its
common stock, par value $0.001, having an aggregate offering price
of up to $50,000,000 from time to time, through an "at the market
offering" program under which HCW will act as sales agent.
The offer and sale of the Shares will be made pursuant to the
Company's effective "shelf" registration statement on Form S-3 and
an accompanying base prospectus contained therein (Registration
Statement No. 333-222132) filed with the Securities and Exchange
Commission on Dec. 18, 2017, amended on Jan. 8, 2018, and declared
effective by the SEC on Jan. 11, 2018, and a prospectus supplement
related to the ATM Offering, dated Feb. 27, 2018.
Subject to the terms and conditions of the Sales Agreement, HCW
will use its commercially reasonable efforts to sell the Shares,
based upon the Company's instructions, consistent with its normal
trading and sales practices and applicable state and federal laws,
rules and regulations and rules of the NYSE American. The Company
will set the parameters for sales of the Shares, including the
number of Shares to be sold, the time period during which sales are
requested to be made, any limitation on the number of Shares that
may be sold in one trading day, and any minimum price below which
sales may not be made. Under the Sales Agreement, HCW may sell the
Shares by any method permitted by law deemed to be an "at the
market offering," as defined in Rule 415 of the Securities Act of
1933, as amended. The Company or the Agent may, upon written
notice to the other party in accordance with the terms of the Sales
Agreement, suspend offers and sales of the Shares. The Company and
HCW each have the right, in its sole discretion, to terminate the
Sales Agreement at any time upon prior written notice pursuant to
the terms and subject to the conditions set forth in the Sales
Agreement.
The Company will pay to HCW a commission in an amount equal to 5.0%
of the gross sales price per Share sold through it as sales agent
under the Sales Agreement. In addition, the Company has agreed to
reimburse HCW for certain expenses it incurs in the performance of
its obligations under the Sales Agreement up to a maximum of
$60,000 and $5,000 each calendar quarter. The Company has also
agreed pursuant to the Sales Agreement to indemnify and provide
contribution to HCW against certain liabilities, including
liabilities under the Securities Act.
About DPW Holdings
Headquartered in Fremont, California, DPW Holdings, Inc., formerly
known as Digital Power Corp. -- http://www.DPWHoldings.com-- is a
diversified holding company that, through its wholly owned
subsidiary, Coolisys Technologies, Inc., is dedicated to providing
technology-based solutions where innovation is the main driver for
mission-critical applications and lifesaving services. Coolisys'
growth strategy targets core markets that are characterized by
"high barriers to entry" and include specialized products and
services not likely to be commoditized. Coolisys through its
portfolio companies develops and manufactures cutting-edge resonant
switching power topologies, specialized complex high-frequency
radio frequency (RF) and microwave detector-log video amplifiers,
very high-frequency filters and naval power conversion and
distribution equipment. Coolisys services the defense, aerospace,
medical and industrial sectors and manages four entities including
Digital Power Corporation, www.DigiPwr.com, a leading manufacturer
based in Northern California, 1-877-634-0982; Digital Power Limited
dba Gresham Power Ltd., www.GreshamPower.com, a manufacturer based
in Salisbury, UK.; Microphase Corporation, www.MicroPhase.com with
its headquarters in Shelton, CT 1- 203-866-8000; and Power-Plus
Technical Distributors, www.Power-Plus.com, a wholesale distributor
based in Sonora, CA 1-800-963-0066. Coolisys operates the branded
division, Super Crypto Power, www.SuperCryptoPower.com.
Digital Power reported a net loss of $1.12 million for the year
ended Dec. 31, 2016, and a net loss of $1.09 million for the year
ended Dec. 31, 2015. As of Sept. 30, 2017, Digital Power had
$18.26 million in total assets, $10.79 million in total liabilities
and $7.46 million in total equity.
"The Company expects to continue to incur losses for the
foreseeable future and needs to raise additional capital to
continue its business development initiatives and to support its
working capital requirements. In March 2017, the Company was
awarded a 3-year, $50 million purchase order by MTIX Ltd. ("MTIX")
to manufacture, install and service the Multiplex Laser Surface
Enhancement ("MLSE") plasma-laser system. Management believes that
the MLSE purchase order will be a source of revenue and generate
significant cash flows for the Company. Management believes that
the Company has access to capital resources through potential
public or private issuance of debt or equity securities. However,
if the Company is unable to raise additional capital, it may be
required to curtail operations and take additional measures to
reduce costs, including reducing its workforce, eliminating outside
consultants and reducing legal fees to conserve its cash in amounts
sufficient to sustain operations and meet its obligations. These
matters raise substantial doubt about the Company's ability to
continue as a going concern," said the Company in its quarterly
report for the period ended Sept. 30, 2017.
DULUTH PUBLIC SCHOOL: S&P Alters Debt Rating Outlook to Stable
--------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB+' long-term rating on the Duluth Housing &
Redevelopment Authority, Minn.'s series 2010A and 2010B
lease-revenue bonds issued for the Duluth Public School Academy
(operating as Duluth Edison Charter School [DECS]), through its
affiliate, the Tischer Creek Duluth Building Co.
"The outlook revision reflects our view of DECS' improved financial
performance for 2017 and the expectation of continued performance
for 2018 that would demonstrate a trend of operations consistent
with peers at the current rating," said S&P Global Ratings credit
analyst Melissa Brown. While cash remains low for the rating, the
school improved its cash position to 37 days' cash on hand after an
unexpected drawdown on cash to 26 days in fiscal year 2016.
Management attributed cash levels to the use of reserves to reduce
the school's liability to EdisonLearning Inc., its prior
back-office service provider. S&P said, "We view the separation
from EdisonLearning positively, being that it allows the school's
internal leadership to demonstrate its ability to successfully
manage operations. However, we will continue to monitor DECS'
ability to manage expenses and balance operations as the school
continues to strengthen its operations. Additionally, the school
has postponed its potential expansion plans for a new high school
indefinitely, which further supports our view of the stability of
the rating over the next year."
S&P said, "We assessed DECS' enterprise profile as adequate,
characterized by a decent and stable enrollment base supported by
healthy student retention, good academics, a healthy charter
standing, and a stable management team. We assessed DECS' financial
profile as vulnerable, with a good lease-adjusted maximum annual
debt service (MADS) coverage for the rating, a manageable debt
burden, and improving liquidity metrics, albeit below rating
category medians."
DECS is a grade K-8 public charter school in western Duluth. It has
two campuses, North Star Academy (K-8) and Raleigh Academy (K-5).
The series 2010 bonds are secured by a pledge of lease payments
made to the building company by the academy from state lease aid.
The bonds are further secured by the school's net revenue pledge.
State lease aid, the lower of $1,341 per pupil or 90% of the
school's annual lease payment, is used to pay debt service. The
bonds are further secured by a fully funded debt service reserve.
S&P said, "The stable outlook reflects our expectation that during
the next year, the charter school will maintain a steady financial
profile by continuing to generate positive revenue over expenses,
maintain its MADS, and continue adding to its cash position. We
anticipate that the school's demand profile will continue to
reflect good academics and meet its enrollment projections, which
include a gradual decline in the number of students over the next
several years."
ERIN ENERGY: Olasho Converts $61.4M Notes Into 22.3M Shares
-----------------------------------------------------------
Erin Energy Corp. entered into a Convertible Subordinated Note
Amendment and Debt Conversion Agreement on Feb. 26, 2018, with
Oltasho Nigeria Limited, its largest stockholder. Oltasho was the
holder of that certain Convertible Subordinated Note Due Jan. 15,
2019 in the principal amount of $50,000,000.
Pursuant to the Debt Conversion, the Company and Oltasho agreed:
(a) to reduce the conversion price of the Convertible Note from
$10.46 per share to $2.75 per share, the closing price of the
Company's common stock on the NYSE American on Dec. 29, 2017; and
(b) that Oltasho would immediately convert the Convertible Note
into shares of common stock of the Company at the reduced
conversion price.
In connection with, and pursuant to, the Debt Conversion, which was
effective Dec. 31, 2017, Oltasho converted the amount then owed
under the Convertible Note ($61,400,148, when including principal
and accrued entered) into 22,327,327 shares of the Company's common
stock and the Convertible Note is deemed satisfied and paid in
full.
About Erin Energy
Erin Energy Corporation -- http://www.erinenergy.com/-- is an
independent oil and gas exploration and production company focused
on energy resources in sub-Saharan Africa. Its asset portfolio
consists of 5 licenses across 3 countries covering an area of 6,100
square kilometers (~1.5 million acres), including current
production and other exploration projects offshore Nigeria, as well
as exploration licenses offshore Ghana and The Gambia. Erin Energy
is headquartered in Houston, Texas, and is listed on the New York
and Johannesburg Stock Exchanges under the ticker symbol ERN.
Erin Energy reported a net loss attributable to the Company of
$142.4 million in 2016, a net loss attributable to the Company of
$430.9 million in 2015, and a net loss attributable to the Company
of $96.06 million in 2014. As of Sept. 30, 2017, Erin Energy had
$229.5 million in total assets, $588.8 million in total liabilities
and a total capital deficiency of $359.3 million.
Pannell Kerr Forster of Texas, P.C., in Houston, Texas, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2016, citing that the
Company incurred net losses in each of the years ended Dec. 31,
2016, 2015 and 2014, and as of Dec. 31, 2016, the Company's current
liabilities exceeded its current assets by $264.4 million. These
conditions, along with other matters, raise substantial doubt about
the Company's ability to continue as a going concern.
EZRA HOLDINGS: Files Chapter 11 Plan, Singapore Scheme
------------------------------------------------------
BankruptcyData.com reported that Ezra Holdings filed with the U.S.
Bankruptcy Court a Chapter 11 Plan and Ezra Holdings Limited's
Singapore Scheme of Arrangement and related Disclosure Statement.
BankruptcyData relates that according to the Disclosure Statement,
"The Plan and Ezra Scheme contain plans for each of the Debtors and
do not provide for the Debtors' substantive consolidation. With
respect to debtor Ezra Holdings, the Plan and Ezra Scheme provide
for the (i) liquidation of assets through a creditor trust, (ii)
consummation of the New Ezra Transaction and (iii) consummation of
the Holding Company Transaction, which will result in the emergence
of a capitalized New Ezra, all of which provide value to both
creditors and shareholders beyond what could be obtained through a
liquidation alone."
The objectives of the Plan and Ezra Scheme are as follows: "To
prevent a scramble for the assets of the Debtors by the Creditors
and ensure an orderly distribution of monies to the Creditors
either prior to emergence or subsequently by the Creditor Trust;
and to allow the Debtors to recover their debts.
BankruptcyData relays that in conjunction with the solicitation and
confirmation of the Plan before the Bankruptcy Court, Ezra Holdings
will commence a restructuring process before the Singapore Court,
requesting sanction of the Ezra Scheme, as approved by the
requisite majority of the Creditors of Ezra Holdings, under Section
210 of the Companies Act. After its initial filing to seek leave of
the Singapore Court to convene the Scheme Meeting, Ezra Holdings
will request that the Singapore Court hold a hearing, to set a
timeline for the Scheme Meeting and other relief.
According to the report, the value of unencumbered assets will be
distributed ratably to the unsecured creditors of the relevant
Debtor. In addition, upon the occurrence of the Distribution
Enhancement Trigger, respectively, Holders of Unsecured Claims
against Ezra Holdings will receive, (i) shares equal to 4% of the
enlarged share capital of the reorganized New Ezra and (ii) shares
equal to 4% of the share capital of the Holding Company as at
completion of the Holding Company Transaction.
About Ezra Holdings
Founded in 1992, Ezra Holdings Limited --
http://www.ezraholdings.com/-- is an offshore contractor and
provider of integrated offshore solutions to the global oil and gas
industry. Ezra is incorporated in Singapore with its registered
office at 15 Hoe Chiang Road #28-01 Tower Fifteen Singapore 089316.
Its shares were listed on the SGX Sesdaq on Aug. 8, 2003, and moved
to the Mainboard of the Singapore Exchange since Dec. 8, 2005. It
also issued certain notes (S$150,000,000 4.875% Notes due 2018
comprised in Series 003) which have been listed on the Singapore
Exchange since 2013.
Ezra established and maintains an office in the United States
located at 75 South Broadway, Fourth Floor, Office Number 489,
White Plains, New York 10601. Ezra also has a wholly owned New
York subsidiary, Ezra Holdings (NY) Inc., which was incorporated in
the United States of America with 200 shares at a nominal issue
price per share.
EMITS, a wholly owned subsidiary of Ezra, provides supporting
information technology services to each of the Ezra Group's
business divisions. Ezra Marine, another wholly owned subsidiary
of Ezra, has a leasehold interest in the marine base in Singapore
located at 51 Shipyard Road, Singapore 628139 and leases out the
base's facilities and provides various support services in
connection with the marine base to the Ezra Group's operating
entities.
Ezra Holdings and two affiliates -- Ezra Marine Services Pte. Ltd.
and EMAS IT Solutions Pte Ltd -- filed voluntary Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 17-22405) on
March 18, 2017, before the Honorable Robert D. Drain. In the
petition signed by Tan Cher Liang, director, Ezra Holdings
estimated $500 million to $1 billion in assets and $100 million to
$500 million in liabilities. The Debtors' Chapter 11 Cases are
being jointly administered for procedural purposes only.
Lawyers at Saul Ewing, led by Sharon L. Levine, Esq., serve as the
Debtors' Chapter 11 counsel. The Debtors tapped as general
Singapore counsel Drew & Napier LLC; and claims and noticing agent,
Prime Clerk LLC. Foxwood LLC also serves as special counsel.
The Ezra Group's joint venture, EMAS CHIYODA Subsea Limited, and
certain of its affiliate companies filed voluntary Chapter 11
petitions (Bankr. S.D. Tex. Lead Case No. 17-31146) on Feb. 27,
2017. ECS' wholly-owned subsidiary, EMAS-AMC AS, has also been
placed under members' voluntary liquidation in Norway.
Ezra guaranteed substantial charter hire liabilities of the ECS
Group, as well as certain loans owed by the ECS Group to financial
institutions, Ezra faces potentially significant contingent
liability if the creditors call on the guarantees.
Ezra received statutory demands from Svenska Handelsbanken AB
(Publ), Singapore Branch and Forland Subsea AS on Jan. 24, 2017,
and Feb. 6, 2017, respectively. These statutory demands have since
expired under Singapore law and these two creditors may commence
winding up applications against Ezra. Ezra also received a
statutory demand from VT Halter Marine, Inc. on March 9, 2017.
FSA INC: Seeks Permission to Use Village Bank Cash Collateral
-------------------------------------------------------------
FSA, Inc., seeks permission from the U.S. Bankruptcy Court for the
District of Minnesota to use the cash collateral of Village Bank
N.A.
The court will hold a final hearing on the cash collateral motion
on March 22, 2018 at 1:30 p.m.
The Debtor requires the use of cash collateral in order to carry on
its business activities, to pay for its current operations,
including purchases, insurance, utilities, payroll, and payroll
taxes and rent. With the use of cash collateral, the Debtor will
be able to operate, on a cash basis, and believes that it will be
able to obtain a confirmed plan and reorganization in accordance
with existing rules and statutes.
Village Bank N.A. purports to have a prepetition lien in cash
collateral. Village Bank made two loans to Debtor: (a) a loan in
the original principal amount of $150,000 on August 12, 2016; and
(b) a second loan in the original principal amount of $25,000 on
January 5, 2017.
As of the Filing Date, the Debtor had cash collateral assets with a
value of approximately $19,000 (consisting of cash on hand and in
the bank account). The Debtor projects that the value of cash
collateral, as of February 22, 2018 will be approximately $20,000,
and as of March 22, 2018 will be $28,000.
Based upon the projected values and the cash flow projection, the
position of Village Bank (the only creditor who holds a lien in
cash collateral including cash, accounts receivable and inventory)
will remain stable and even increases in value.
The Debtor proposes that it be authorized to grant to Village Bank
(and any other creditors having a lien in cash collateral), a
replacement lien or a security interest in any new assets,
materials and accounts receivable, generated from the use of cash
collateral, with the same priority, dignity, and validity of
prepetition liens or security interests. Specifically, the Debtor
proposes granting a replacement lien to Village Bank to the extent
that it protects them against diminution of the value of their
collateral as it existed at the time of the commencement of this
proceeding.
The Debtor further proposes that it be permitted as adequate
protection to pay Village Bank $1,000 per month, to offset the
interest that would otherwise be accruing on its loans. In
addition, the Debtor proposes (1) to maintain insurance on all of
the property in which the Cash Collateral Creditor (and all other
secured creditors) claim a security interest; (2) to pay all
post-petition federal and state taxes, including timely deposit of
payroll taxes; (3) provide the Cash Collateral Creditor (and all
other secured creditors, upon reasonable notice), access during
normal business hours for inspection of their collateral and the
Debtor’s business records; and (4) all cash proceeds and income
of the Debtor will be deposited into a Debtor in Possession
Account.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/mnb18-30465-5.pdf
FSA, Inc., doing business as The Unofficial Dive Bar & Grill, filed
a Chapter 11 petition (Bankr. D. Minn. Case No. 18-30465) on Feb.
20, 2018.
The Debtor is represented by:
John D. Lamey III, Esq.
LAMEY LAW FIRM, P.A.
980 Inwood Avenue North
Oakdale, MN 55128
Telephone: 651-209-3550
Facsimile: 651-789-2179
-- and --
Kesha L. Tanabe, Esq.
TANABE LAW
4304 34TH Ave. S.
Minneapolis, MN 55406
Telephone: (612) 735-0188
E-mail: kesha@tanabelaw.com
FYNDERS INC: Plan Okayed, Cash Collateral Use Moot
--------------------------------------------------
Judge Christopher J. Panos of the U.S. Bankruptcy Court for the
District of Massachusetts cancelled the hearing scheduled for Feb.
22, 2018 regarding the continued use of cash collateral as being
moot because a plan has been confirmed in this matter and the
jointly administered case of Keepers, Inc. (Bankr. Case No.
17-40401).
About Fynders Inc.
Fynders, Inc., runs restaurant located in West Boylston,
Massachusetts operating under the name Finders Pub. Finders is
located next door to its affiliated restaurant, Keepers, Inc.,
which does business as Keepers Pub.
On June 23, 2010, Fynders and Keepers filed jointly administered
petitions under Chapter 11 of the Bankruptcy Code, In re Fynders,
Inc., 10-43170 and In re Keepers, Inc., 10-43171. The Court
confirmed the Debtors' Combined Plan of Reorganization and
Disclosure Statement on Dec. 21, 2010.
Due to additional financial difficulties, Fynders, Inc., and
Keepers again sought Chapter 11 protection (Bankr. D. Mass. Case
No. 17-40400) on March 7, 2017. The petitions were signed by
Kathleen McCormick, president.
At the time of filing, Fynders disclosed $139,750 in total assets
and $2.21 million in total liabilities.
The cases are assigned to Judge Christopher J. Panos.
David B. Madoff, Esq., at Madoff & Khoury LLP, is serving as
counsel to the Debtors. Patrick J. Crowley of Hershman Fallatrom &
Crowley, Inc., is the Debtors' accountant.
An official creditors' committee has not been appointed in the
cases.
GASTAR EXPLORATION: Russell Porter Quits as Pres., CEO & Director
-----------------------------------------------------------------
Gastar Exploration Inc. announced that J. Russell Porter, president
and CEO, will be leaving the Company. The Board of Directors has
appointed Jerry Schuyler, Gastar's Chairman of the Board of
Directors, as interim CEO, effective immediately. Gastar has
initiated a search to fill the permanent position of president and
CEO. Mr. Porter will remain with Gastar during a transitional
period in which he will assist Mr. Schuyler as well as remain
available to the Company on a consulting basis.
Mr. Schuyler commented, "Russ has been an exemplary leader of
Gastar for almost 14 years and was instrumental in successfully
building Gastar's assets in numerous basins as well as assembling a
very capable management team and staff. He navigated Gastar
through several financial and industry downturns that a significant
number of other companies did not survive. The entire Board of
Directors thanks him for his service and wishes him well in his
future endeavors.
"With the re-financing of Gastar's capital structure last year, the
pending sale of the WEHLU asset to enhance liquidity and the much
improved operations results recently realized, the Board has a high
degree of confidence in Gastar's future and its ability to continue
unlocking the value of its very attractive STACK Play assets."
In addition to his role as Chairman of Gastar's Board, Mr. Schuyler
currently serves as an independent director for Penn Virginia
Corporation, an exploration and production company with operations
focused in the Eagle Ford Play, a position held since November
2016. Mr. Schuyler also previously served as an independent
director for various exploration and production companies including
privately-funded Yates Petroleum Corporation and Gulf Coast Energy
Resources Company and publicly traded Rosetta Resources Inc. Mr.
Schuyler formerly served as a director for Laredo Petroleum, Inc.
and had joined Laredo in June 2007 as executive vice president and
chief operating officer, before being promoted to president and
chief operating officer in July 2008 and retiring in July 2013.
Mr. Schuyler has a Bachelor of Science degree in Petroleum
Engineering from Montana College of Mineral Science and
Technology.
Mr. Porter will receive $3,483,430 as a severance payment, which
represents amounts he was entitled to receive pursuant to his
employment agreement with the Company (including payment for
accrued and unused vacation), plus a supplemental amount as
consideration for his willingness to make himself available in a
consulting capacity for a period of time following his separation.
About Gastar Exploration
Houston, Texas-based Gastar Exploration Inc. --
http://www.gastar.com/-- is a pure play Mid-Continent independent
energy company engaged in the exploration, development and
production of oil, condensate, natural gas and natural gas liquids.
Gastar's principal business activities include the identification,
acquisition and subsequent exploration and development of oil and
natural gas properties with an emphasis on unconventional reserves,
such as shale resource plays. Gastar holds a concentrated acreage
position in what is believed to be the core of the STACK Play, an
area of central Oklahoma which is home to multiple oil and natural
gas-rich reservoirs including the Meramec, Oswego, Osage, Woodford
and Hunton formations.
Gastar reported a net loss attributable to common stockholders of
$103.5 million on $58.25 million of total revenues for the year
ended Dec. 31, 2016, compared to a net loss attributable to common
stockholders of $474.0 million on $107.3 million of total revenues
for the year ended Dec. 31, 2015. As of Sept. 30, 2017, Gastar had
$370.8 million in total assets, $391.6 million in total
liabilities, and a total stockholders' deficit of $20.77 million.
* * *
In March 2017, S&P Global Ratings affirmed its 'CCC-' corporate
credit rating, with a negative outlook, on Gastar Exploration.
Subsequently, S&P withdrew all its ratings on Gastar at the
issuer's request.
In April 2017, Moody's Investors Service withdrew all assigned
ratings for Gastar Exploration, including the 'Caa3' Corporate
Family Rating, following the elimination of all of its rated debt.
GATEWAY CASINOS: Moody's Affirms B2 CFR & Rates 1st Lien Loans Ba3
------------------------------------------------------------------
Moody's Investors Service affirmed Gateway Casinos & Entertainment
Limited's B2 corporate family rating (CFR), B2-PD probability of
default rating, Ba3 ratings on existing first lien credit
facilities and Caa1 second lien notes rating, and assigned Ba3
ratings to the company's proposed first lien credit facilities. The
ratings on the existing first lien debt and will be withdrawn when
the refinance transaction closes. The ratings outlook remains
stable.
Proceeds from Gateway's new US$305 million term loan together with
sale leaseback net proceeds related to three of its casinos
properties in Greater Vancouver (C$483 million), will be used to
repay existing debt (C$629 million), pay a dividend to shareholders
(C$125 million), pay fees and expenses (C$12 million) and the
remainder (about C$100 million) will be retained on the balance
sheet to be invested in growth projects in Ontario and British
Columbia.
"The CFR was affirmed as the transaction maintains leverage below
6x, and operations are performing well" said Peter Adu, Moody's
AVP.
Ratings Affirmed:
Corporate Family Rating, B2
Probability of Default Rating, B2-PD
US$255M second lien notes due 2024, Caa1 (LGD5)
C$125 million secured revolving credit facility
due 2022, Ba3 (LGD3); to be withdrawn at close
US$405 million first lien term loan B1 due 2023,
Ba3 (LGD3); to be withdrawn at close
C$80 million first lien term loan B2 due 2023, Ba3
(LGD3); to be withdrawn at close
Ratings Assigned:
New C$150 million secured revolving credit facility
due 2023, Ba3 (LGD2)
New US$305 million first lien term loan B due 2023,
Ba3 (LGD2)
Outlook:
Remains Stable
RATINGS RATIONALE
Gateway's B2 CFR is constrained by 1) small relative size (around
C$600 million pro forma), 2) re-leveraging risk by its long-tenor
private equity majority owner (pro forma leverage is 5.5x), 3)
negative free cash flow as it rebuilds and improves on the North
and Southwest casino bundles in Ontario purchased in May 2017
(negative $110 million expected in 2018), and 4) execution risk of
operating those nine Ontario casinos, which are new premises for
the company. Gateway's rating benefits from 1) its good market
position and favorable gaming regulatory environment in Canada,
which create substantial entry barriers, 2) good geographic
diversity within Canada, 3) good operational performance at its
British Columbia and Alberta casinos, including its ability to
improve performance at individual casinos by upgrading food and
entertainment, and 4) the company's eligibility for capital
spending reimbursement programs in British Columbia, which allows
it to maintain attractive properties.
Gateway has adequate liquidity. The company's sources of liquidity
total about C$310 million while it has mandatory debt repayments of
close to C$4 million and about C$110 million of expected negative
free cash flow in 2018. The negative free cash flow in 2018 is
driven by capital spending on the Ontario properties, a casino
renovation and rebranding in Alberta, and expansion and relocation
of British Columbia properties. Moody's also expects about C$100
million of negative free cash flow in 2019 due to additional
capital spending, mainly on the Ontario properties. Gateway's
liquidity is supported by pro forma cash of about C$214 million
when the refinancing and sale leaseback transactions close, and
about C$94 million of availability (after letters of credit) under
its new C$150 million revolving credit facility due in 2023. The
company's revolver will be subject to a total net leverage covenant
with step downs and Moody's expects cushion to exceed 40%
throughout 2018. Gateway has limited ability to generate liquidity
from asset sales as its assets are encumbered.
The stable outlook reflects Moody's expectation that Gateway will
reduce leverage below 5x and lessen concentration risk further in
the next 12 to 18 months as it grows earnings from the Ontario
gaming properties acquired in May 2017.
To consider an upgrade, Moody's will need to gain confidence that
there is no future re-leveraging risk given the company's ownership
profile. As well, the company will have to demonstrate a track
record of successful operation of the Ontario properties while
sustaining adjusted Debt/EBITDA below 5x (pro forma 5.5x) and
EBIT/Interest above 2x (pro forma 0.8x). Gateway's rating could be
downgraded if adjusted Debt/EBITDA is sustained above 6.5x (pro
forma 5.5x) and EBIT/Interest below 1x (pro forma 0.8x).
Additionally, the company's rating could be lowered if liquidity
deteriorates, likely due to substantial negative free cash flow
generation.
The principal methodology used in these ratings was Gaming Industry
published in December 2017.
Gateway Casinos & Entertainment Limited operates 26 gaming
properties located in British Columbia, Alberta and Ontario. The
company's revenue, pro forma for the full year contribution from
its Ontario properties, is around C$600 million. The company is
majority-owned by The Catalyst Capital Group Inc. and is
headquartered in Burnaby, British Columbia.
GATEWAY CASINOS: S&P Affirms 'B' CCR on New Financing Transactions
------------------------------------------------------------------
S&P Global Ratings said it affirmed its 'B' long-term corporate
credit rating on Burnaby, B.C.-based casino operator Gateway
Casinos & Entertainment Ltd. The outlook is stable.
S&P said, "At the same time, S&P Global Ratings assigned its 'BB-'
issue-level rating and '1' recovery rating to Gateway's proposed
US$305 million senior secured term loan B and C$150 million
committed revolving credit facility. The '1' recovery rating
indicates our expectation of very high (90%-100%; rounded estimate
95%) recovery in the event of default. In addition, S&P Global
Ratings affirmed its 'CCC+' issue-level rating, with a '6' recovery
rating, on the company's US$255 million second-lien senior secured
notes. A '6' recovery rating indicates our expectation of
negligible (0%-10%; rounded estimate 0%) recovery in default. We
expect to withdraw the ratings on the existing first-lien debt post
the closing of these transactions.
"The affirmation reflects our view that Gateway's adjusted
debt-to-EBITDA will be 7.0x-7.5x through 2018, along with adjusted
EBITDA interest cover of 2.0x-2.5x, from the proposed sale and
leaseback transaction, debt repayment, and cash distribution to
shareholders. Although we expect the adjusted debt-to-EBITDA to
increase by 0.5x due to the transactions, the company's growth from
the recently acquired Ontario gaming assets could lead to improved
cash flow and credit measures over the next 12 months."
Gateway plans to sell its three properties (Grand Villa--Burnaby,
Starlight--New Westminster, and Cascades--Langley) in the Greater
Vancouver Area (GVA) for net proceeds of about C$483 million. After
the sale and leaseback transaction, the company proposes to raise
US$305 million senior secured first-lien term loan B. The proceeds
from these transactions will be used to pay down the existing term
loan facility of C$584 million, repay the drawings on the revolving
credit facility of C$45 million, for cash distribution to
shareholders of C$125 million, to pay transaction fees of C$12
million, and the rest to fund the company's growth initiatives for
capital investments in B.C. and Ontario. At the same time, the
company is also proposing to increase its committed revolving
credit facility to C$150 million from C$125 million. As a result of
these transactions, the company is repaying a moderate amount of
balance-sheet debt of about C$250 million; however, adjusted
debt-to-EBITDA increases by 0.5x largely from the sale and
leaseback transaction (as S&P capitalizea operating leases as debt
in its adjusted debt calculations).
S&P said, "The stable outlook on Gateway reflects our view that the
company's adjusted debt-to-EBITDA will remain at 7.0x-7.5x, along
with adjusted EBITDA interest coverage of 2.0x-2.5x over the next
12 months, driven by the company's expected EBITDA accretion from
the Ontario assets, coupled with a leverage increase from Gateway's
proposed sale and leaseback transaction and cash distribution to
shareholders. We expect the acquired Ontario gaming assets to be
EBITDA accretive leading to improved cash flow and credit measures;
however, we expect the heavy capital outlay for the Ontario assets
could weigh on the company's free operating cash flow.
"We could lower the rating if the company's adjusted EBITDA
interest coverage falls below 2x and adjusted debt-to-EBITDA
increases above 8x over the next 12 months without any prospects
for improvement. This could result from a more competitive
landscape, increased marketing spending, and slower ramp-up of the
Ontario gaming assets that lead to declining profitability levels
and liquidity issues. We could also lower the rating if the company
performs a large debt-funded shareholder remuneration leading to a
deterioration in leverage metrics, with adjusted debt-to-EBITDA
remaining above 8x.
"Although, unlikely over the next 12 months, we could raise the
rating if Gateway maintains adjusted debt-to-EBITDA below 6x. We
would expect a scenario whereby the company maintains its margins
and cash flow while investing in the acquired Ontario gaming assets
and managing increased competition in a mature market."
GEM ACQUISITIONS: Moody's Assigns B3 CFR; Outlook Stable
--------------------------------------------------------
Moody's Investors Service has assigned a B3 corporate family rating
and B3-PD probability of default rating to Gem Acquisitions, Inc.,
indirect parent of Genex Holdings, Inc. (together with their
subsidiaries, Genex). Moody's has also assigned ratings to new
credit facilities that Gem is issuing in connection with a pending
buyout of the company sponsored by private equity firm Stone Point
Capital. The financing arrangement includes first-lien credit
facilities rated B2 and a second-lien credit facility rated Caa2.
Proceeds from these borrowings plus new and rollover equity will be
used to buy out existing shareholders, repay existing debt, and pay
related fees and expenses. The parties expect to complete the
transaction by mid-March. The rating outlook for the issuer is
stable.
RATINGS RATIONALE
Genex's ratings reflect its strong market position in workers'
compensation case management and related medical cost containment
services, its national network of nurses and case managers, and its
record of stable revenues. The managed care business provides Genex
with recurring fee income from multi-year contracts with clients.
These strengths are offset by the company's aggressive financial
leverage and limited fixed charge coverage, exposure to cyclicality
in the workers' compensation insurance market, and integration and
contingent risks associated with acquisitions.
Upon closing the transaction, Genex will have a pro forma
debt-to-EBITDA ratio above 7.5x and (EBITDA - capex) interest
coverage of 1.5x-1.6x, based on Moody's estimates. These estimates
include the rating agency's standard adjustments for operating
leases along with pro forma adjustments for recent acquisitions and
certain non-recurring costs. Such leverage is high for Genex's
rating category, but Moody's expects the company to reduce leverage
over the next 12-18 months through a combination of organic growth
and expense savings.
Factors that could lead to an upgrade of Genex's ratings include:
(i) debt-to-EBITDA ratio below 6x, (ii) (EBITDA - capex) coverage
of interest exceeding 2x, and (iii) free-cash-flow-to-debt ratio
exceeding 5%.
Factors that could lead to a rating downgrade include: (i)
debt-to-EBITDA ratio remaining above 7.5x, (ii) (EBITDA - capex)
coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt
ratio below 2%.
Moody's has assigned the following ratings (and loss given default
(LGD) assessments) to Gem:
Corporate family rating B3;
Probability of default rating B3-PD;
$50 million five-year first-lien senior secured revolving credit
facility rated B2 (LGD3);
$365 million seven-year first-lien senior secured term loan rated
B2 (LGD3);
$120 million eight-year second-lien senior secured term loan rated
Caa2 (LGD5).
The rating outlook for the company is stable.
When the transaction closes, Moody's will withdraw Genex's existing
ratings, as the existing credit facilities will be
repaid/terminated.
The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in September 2017.
Based in Wayne, Pennsylvania, Genex is a leading provider of
managed care services related to workers' compensation insurance.
Genex serves many Fortune 500 companies as well as major US
workers' compensation and disability carriers and third-party
administrators.
GENERAL NUTRITION: Bank Debt Trades at 2.62% Off
------------------------------------------------
Participations in a syndicated loan under which General Nutrition
Centers is a borrower traded in the secondary market at 97.38
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.57 percentage points from
the previous week. General Nutrition pays 250 basis points above
LIBOR to borrow under the $1.375 billion facility. The bank loan
matures on March 4, 2019. Moody's rates the loan 'B3' and Standard
& Poor's gave a 'B-' rating to the loan. 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
Friday, February 23.
GENON ENERGY: Kestrel Buying Hunterstown Facility for $520-Mil.
---------------------------------------------------------------
NRG Wholesale Generation LP and RRI Energy Services, LLC, each a
wholly owned indirect subsidiary of GenOn Energy, Inc., on Feb. 22,
2018, entered into an Asset Purchase Agreement with Kestrel
Acquisition, LLC.
Pursuant to the Purchase Agreement, (i) Kestrel as Buyer agreed to
buy all assets owned, used or held for use primarily in the
operation by NRGWG and its affiliates of the Hunterstown CCGT
facility, an electric power generation facility with a summer
capacity rating of approximately 810 megawatts; and (ii) RRI will
assign certain third party gas interconnection contracts to Buyer.
The closing purchase price is $498,000,000, which amount is subject
to upward adjustment for the net working capital of the business
calculated as of the closing date.
GenOn currently expects the purchase price, after adjustments, to
be approximately $520,000,000.
In connection with the transaction, GenOn, NRG Energy, Inc. as
Provider and Kestrel entered into a Transition Services Agreement
on February 22, 2018, pursuant to which Provider has agreed to
provide or cause its affiliates to provide certain administrative,
tax, accounting, information technology and other operational
services with respect to operating the Hunterstown Facility on a
transitional basis following the closing of the transactions
contemplated by the Purchase Agreement.
The Bankruptcy Court has entered the Order Confirming the Third
Amended Joint Chapter 11 Plan of Reorganization of GenOn Energy,
Inc. and its Debtor Affiliates.
The closing of the transactions contemplated by the Purchase
Agreement is subject to the Bankruptcy Court entering a final order
approving modification of the Plan and confirming that the Purchase
Agreement constitutes a third party sale transaction for purposes
of, and entitled to the benefits and protections of, the Plan and
Confirmation Order.
The GenOn Noteholders holding over 50% of the GenOn Notes are
supportive of, and have consented to, the transactions contemplated
by the Purchase Agreement as a third party sale transaction under
the Plan.
The Purchase Agreement also includes an exclusivity provision
whereby Sellers have agreed that they and their Affiliates and
their and their Affiliates' respective representatives will not,
directly or indirectly, encourage, solicit, initiate or engage in
discussions or negotiations with, or provide any information to,
any person concerning the sale of the Hunterstown Facility, or
enter into any agreement with respect thereto.
Additionally, the closing of the transactions contemplated by the
Purchase Agreement is subject to other customary closing
conditions, including the expiration of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the
approvals of the Federal Energy Regulatory Commission and the
Pennsylvania Department of Environmental Protection.
Subject to the satisfaction of closing conditions described in the
Purchase Agreement, the transaction is expected to close in the
second quarter of 2018.
The Purchase Agreement contains certain customary termination
rights, including by mutual consent of Buyer and the Sellers, by
either Buyer or Sellers if the closing of the transaction has not
occurred by July 30, 2018 (subject to extension by Buyer in its
sole discretion), by either Buyer or Sellers if a court has entered
a final order prohibiting the transaction, by either Buyer or
Sellers in the event of an uncured breach by the other party that
would cause a failure of a closing condition at a time when the
terminating party is not in breach of the Purchase Agreement and by
Sellers if all conditions to closing have occurred and Buyer fails
to close after Sellers irrevocably confirm that they are ready,
willing and able to, and will, consummate the transactions
contemplated by the Purchase Agreement. Upon termination of the
Purchase Agreement by Sellers for an uncured breach by Buyer that
would cause a failure of a closing condition at a time when Sellers
are not in breach of the Purchase Agreement or if all conditions to
closing have occurred and Buyer fails to close after Sellers
irrevocably confirm that they are ready, willing and able to, and
will, consummate the transactions contemplated by the Purchase
Agreement, Buyer will be required to pay Sellers a termination fee
of $24,900,000 (the "Termination Fee")
Platinum Equity Capital Partners, IV, L.P., the parent of the
Buyer, provided (i) an equity commitment letter in favor of the
Buyer (and enforceable by Sellers) for the full purchase price, and
(ii) a limited parent guarantee with respect to the Termination Fee
and an additional $500,000 with respect to any losses suffered by
Sellers as a result of any debt financing transaction by Buyer.
While the Buyer has the ability to obtain debt financing at its
election, the transaction is not subject to a financing condition
and the Buyer has provided an equity commitment for the full
purchase price which is specifically enforceable by Sellers. Other
than in respect of the Purchase Agreement, the Transition Services
Agreement and the respective agreements, documents and certificates
contemplated thereby, there are no material relationships between
the Sellers and its affiliates and the Buyer and its affiliates.
Credit Suisse Securities (USA) LLC is acting as exclusive financial
advisor to GenOn related to the sale.
A copy of the Asset Purchase Agreement by and between Kestrel
Acquisitions, LLC, as Purchaser, and NRG Wholesale Generation LP
and RRI Energy Services, LLC, as Sellers, dated as of February 22,
2018, is available at https://is.gd/6nUVfF
The Purchaser may be reached at:
Kestrel Acquisition, LLC
c/o Platinum Equity Advisors, LLC
1 Greenwich Office Park
North Building, Floor 2
Greenwich, CT 06831
Attn: Louis Samson
Facsimile: (203) 542-9291
Email: LSamson@platinumequity.com
- and -
c/o Platinum Equity Advisors, LLC
360 North Crescent Drive, South Building
Beverly Hills, CA 90210
Attn: Eva Kalawski
Facsimile: (310) 712-1863
Email: EKalawski@platinumequity.com
And is represented by:
David I. Brown, Esq.
David A. Kurzweil, Esq.
Latham & Watkins LLP
555 11th Street, N.W., Suite 1000
Washington, DC 20004
Facsimile: (202) 637-2201
Email: David.Brown@lw.com
David.Kurzweil@lw.com
About GenOn Energy
GenOn Energy, Inc., is a wholesale power generation corporation
with 15,394 megawatts in generating capacity, operating operate 32
power plants in eight states. GenOn is subsidiary of NRG Energy
Inc., which is a competitive power company that produces, sells and
delivers energy and energy services, primarily in major competitive
power markets in the U.S.
GenOn is the product of two mergers since 2010. First, on Dec. 3,
2010, two wholesale power generation companies -- RRI Energy, a
company formerly known as Reliant Energy, and Mirant Corporation --
completed an all-stock, tax-free merger with Mirant becoming RRI's
wholly-owned subsidiary. Following the merger, RRI took its
current name: GenOn.
NRG, through a wholly-owned subsidiary, and GenOn completed a
stock-for-stock merger in a $6 billion deal, with GenOn continuing
as the surviving company on December 14, 2012. NRG, as
consideration for acquiring GenOn's entire equity, issued 0.1216
shares of NRG common stock for each outstanding share of GenOn. In
structuring the merger, NRG "ring-fenced" GenOn's debt, leaving
GenOn's creditors without recourse against NRG's assets in the
event of GenOn's default.
As of March 31, 2017, GenOn Energy had $4.81 billion in total
assets, $4.51 billion in total liabilities and $304 million in
total stockholders' equity.
GenOn Energy, Inc. ("GenOn"), GenOn Americas Generation, LLC
("GAG") and 60 of their directly and indirectly-owned subsidiaries
commenced the Chapter 11 cases in Houston, Texas (Bankr. S.D. Tex.
Lead Case No. 17-33695) on June 14, 2017, to implement a
restructuring plan negotiated with stakeholders prepetition. The
Debtors' cases have been assigned to Judge David R. Jones.
Kirkland & Ellis LLP is the Debtors' bankruptcy counsel. Zack A.
Clement, PLLC, is the local counsel. Rothschild Inc. is the
financial advisor and investment banker. McKinsey Recovery &
Transformation Services U.S. is the restructuring advisor. Epiq
Systems, Inc., is the claims and noticing agent.
Credit Suisse Securities (USA) LLC serves as GenOn Energy's
financial advisor and investment banker.
Special Counsel to the GAG Steering Committee is Quinn Emanuel
Urquhart & Sullivan, LLP. The Steering Committee of GAG
Noteholders is comprised of Benefit Street Partners LLC, Brigade
Capital Management, LP, Franklin Mutual Advisers, LLC, and Solus
Alternative Asset Management LP, each on behalf of itself or
certain affiliates, and/or accounts managed and/or advised by it or
its affiliates.
Counsel to the GenOn Steering Committee and the GAG Steering
Committee are Keith H. Wofford, Esq., Stephen Moeller-Sally, Esq.,
and Marc B. Roitman, Esq., at Ropes & Gray LLP.
Counsel for NRG Energy, Inc., are C. Luckey McDowell, Esq., and Ian
E. Roberts, Esq., at Baker Botts L.L.P.
GLOBAL KNOWLEDGE: Bank Debt Trades at 12.67% Off
------------------------------------------------
Participations in a syndicated loan under which Global Knowledge
Training LLC is a borrower traded in the secondary market at 87.33
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents an increase of 0.38 percentage points from
the previous week. Global Knowledge pays 550 basis points above
LIBOR to borrow under the $175 million facility. The bank loan
matures on January 30, 2021. Moody's rates the loan 'B2' and
Standard & Poor's gave a 'CCC+' rating to the loan. 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 Friday, February 23.
GREENTECH AUTOMOTIVE: Proposes Key Employee Incentive Plan
----------------------------------------------------------
GreenTech Automotive, Inc., an electric car company, and five
affiliates ask the U.S. Bankruptcy Court for the Eastern District
of Virginia to approve a Key Employee Incentive Program.
Norman D. Chirite, internal legal counsel to GreenTech, tells the
Court that two critical employees -- himself, as internal counsel
and business advisor, and Peter Huddleston, as Chief Financial
Officer -- will agree to continue to be employed by GreenTech at
the current compensation through the earlier of the date of a
confirmed plan of reorganization or liquidation or conversion of
the Chapter 11 cases to Chapter 7.
Under the KEIP, provided that GreenTech successfully consummates
either (a) a Section 363 sale of GreenTech's interest in
China-based Jiangsu Saleen Automotive Technologies,, Co., Ltd, or
(b) a confirmed plan of reorganization or a plan of liquidation
providing for the sale of the JSAT Interest, then (i) upon the
reorganization of GreenTech, each Key Employee will be offered
employment by GreenTech with a 25% salary increase, and (ii) if
GreenTech does not offer employment, including in the case of a
liquidation of GreenTech, each Key Employee will be paid a
separation payment equal to 100% of base salary.
If a Key Employee voluntarily terminates that person's employment
with GreenTech prior to the Performance Condition being satisfied,
that person shall no longer be eligible to receive any payment. If
GreenTech terminates the employment of a Key Employee or fails to
pay salary or benefits to the person in whole or in part, either
before or after reorganization, then that person shall be entitled
to receive a payment of 100% of current base salary provided the
Performance Condition is satisfied either prior to or after such
termination.
According to Mr. Chirite, the Board of GreenTech has extensively
debated the elements of the KEIP and, in its business judgment,
believes that the benefits provide under the KEIP Motion are in the
best interests of the GreenTech estate and relatively de minimis in
relation to the Company's assets and liabilities.
"I also believe that the relief requested in the KEIP Motion is in
the best interests of GreenTech's estate, its creditors and all
other parties in interest and constitutes a critical element in
achieving a successful and smooth transition to chapter 11 and
successful transactions in these Chapter 11 cases," Mr. Chirite
said.
Events Leading to Bankruptcy Filing
GreenTech Automotive and five affiliates sought Chapter 11
bankruptcy protection (Bankr. E.D. Va. Lead Case No. 18-10651) on
Feb. 26, 2018.
According to Mr. Chirite, the Debtors' businesses have reached the
point of unsustainability absent utilization of the tools presented
by chapter 11.
"GreenTech has experienced significant adverse developments that
have hindered the successful operations of its automobile business,
impaired its access to capital, and resulted in difficulties in the
advancement of its investors' permanent residency petitions before
the United States government," Mr. Chirite said.
For the period from 2009 until 2013, GreenTech received investments
aggregating $141.5 million from a total of approximately 283
individuals in four distinct investment transactions:
-- In the A-1 tranche, 57 investors invested an aggregate
of $28.5 million in GreenTech's Series A-1 Preferred
Stock.
-- In the A-2 tranche, 35 investors invested an aggregate
of $17.5 million in additional shares of GreenTech's
Series A-1 Preferred Stock.
-- In the A-3 tranche, 89 investors invested an aggregate
of $44.5 million in limited partnership interests in
GreenTech Automotive Capital A-3, L.P., which funds
were, in turn, loaned to GreenTech.
-- In the A-4 tranche, 102 investors invested an aggregate
of $51 million in GreenTech's Series A-2 Preferred Stock.
The A-1 through A-4 tranches were intended to qualify for the
Employment-Based Immigration Preference program, known as "EB-5",
which offered immigrant investors the opportunity to qualify for
permanent U.S. residency by investing specified amounts in certain
U.S. job creating initiatives in economically challenged localities
in the United States. Each of the investors in the A-1 through A-4
tranches were participants in the EB-5 program.
Prior to making an investment, every potential investor was
provided with a solicitation package. The offering materials for
the A-1 through A-4 investment tranches disclosed that the
investments were "at risk" within the new enterprise, as was
required under applicable EB-5 regulations, and that there was no
assurance that the investments would be successful or that the
investors would ultimately receive permanent residency in the U.S.
In 2013, the conservative-oriented online news organization
Franklin Center for Government and Public Integrity, through its
watchdog.org web site, published a series of 76 negative articles
containing certain false and defamatory statements targeting
GreenTech, which was previously affiliated with Terrence McAuliffe
(who at that time was running for Governor of
the Commonwealth of Virginia).
GreenTech pursued defamation claims against the Franklin Center in
Mississippi and Virginia courts that were ultimately resolved.
However, the adverse publicity occasioned by the watchdog.org
articles and extensive follow-on coverage in major media had
extremely negative impacts on the governmental, investor and public
perception of GreenTech and its business.
The Company's 2013 $85 million lawsuit against Watchdog.org was
dismissed, wreg.com reports.
The Securities Exchange Commission commenced an investigation of
GreenTech stemming from the adverse publicity. While the SEC
ultimately declined to pursue any further action against GreenTech,
the investigation itself and the burden of the required responses
to the SEC's inquiries further damaged GreenTech and its business
prospects.
In addition, the Office of the Inspector General of the Department
of Homeland Security conducted an investigation of GreenTech and
the involvement of Mr. McAuliffe in communications with the DHS's
Citizenship and Immigration Services. The resulting report of the
Inspector General in 2015, and the involvement of Republican
legislators such as Senator Chuck Grassley in the matter, further
impaired GreenTech's reputation and its fundraising capability and,
importantly, the orientation of USCIS toward the investor petitions
for permanent residency under the EB-5 program.
GreenTech was dealt another severe blow when it was sued in early
2015 by Plastech Holdings Company, a Michigan firm that falsely
accused GreenTech of tortious interference with PHC's contractual
relationship with a Chinese automotive manufacturer, Anhui
Jianghuai Automobile Co., Ltd., with whom GreenTech had established
a cooperative vehicle development and marketing arrangement.
After protracted litigation and discovery, GreenTech secured the
dismissal of that case when it was established conclusively that
PHC had forged the Chinese company's signature on a fictitious
agreement that was the foundation of its claims against GreenTech.
As a result of the PHC litigation, GreenTech incurred significant
legal and other expenses and was forced to abruptly terminate its
business relationship with the Chinese company, forfeiting a
substantial deposit, stranding substantial start-up expenses and
resulting in other damages totaling in tens of millions of dollars,
which effectively destroyed GreenTech as a viable enterprise.
GreenTech is now pursuing civil claims against PHC and its counsel,
Susman Godfrey, in a federal action in Detroit, Michigan before the
same court that dismissed the fraudulent claims against GreenTech,
for the damages resulting from PHC's and Susman's pursuit of claims
which they knew were fraudulent.
Those circumstances, as well as personnel issues and manufacturing
and other difficulties experienced in pursuing the establishment of
GreenTech's ambitious business plan, ultimately resulted in severe
economic hardship for GreenTech and its failure to meet operating
plans, according to Mr. Chirite.
"GreenTech exhausted its financial resources battling the USCIS,
PHC/Susman and negative perceptions arising due to the public
events," he said. "GreenTech was forced to substantially limit
operations in Mississippi, even though it had been successful in
establishing the business opportunity with the Chinese firm JAC and
had in fact commenced limited production of its MyCar vehicle in
Mississippi."
According to wreg.com, the bankruptcy filing cites $7.5 million won
by 12 investors and pending lawsuits. Mississippi officials also
are seeking legal action against GreenTech after the company failed
to pay back $6.3 million in incentives granted by the state.
Wreg.com notes former Virginia Gov. Terry McAuliffe resigned from
GreenTech in 2012, but featured the company prominently in his 2013
race.
In 2016, GreenTech entered into a relationship with a newly
organized automotive enterprise in China, Jiangsu Saleen Automotive
Technologies,, Co., Ltd., under which GreenTech had appraised and
then conveyed rights in its MyCar intellectual property and certain
engineering assistance to JSAT in exchange for a minority interest
in JSAT held on behalf of GreenTech by a subsidiary of WMIC. The
minority interest in JSAT remains the principal asset of GreenTech
apart from its manufacturing facility.
Over the past approximately two years, GreenTech has continued to
survive only through advances from its principal stockholder and
fees for engineering services from JSAT, while claims of its
investors and the State of Mississippi and ensuing litigation have
continued to mount and consume dwindling resources. The State of
Mississippi and Tunica County, Mississippi have commenced
litigation to recover amounts advanced to and for the benefit of
GreenTech, and various groups of EB-5 investors have pursued civil
litigation against the Debtors in a number of state and federal
courts proceedings.
The Debtors explored outside financing and possible sale options
for the past two years, according to Mr. Chirite. Although the
Debtors did have some promising leads, these efforts did not reach
the desired results.
In 2017 GreenTech sought to arrange for the purchase of the JSAT
Interest by a Chinese investment fund and obtained support for the
transaction from a significant portion of its investors. However,
the condition to that transaction -- that there be no major
litigation involving GreenTech -- has not been fulfilled due to the
pendency of litigation against GreenTech and the other Debtors,
including claims by a group of investors who sought to force
payment to them of more than their original investments as a
condition to not frustrating the consummation of that transaction.
The Debtors have determined, in the prudent exercise of their
business judgment, that the commencement of these chapter 11 cases
at this time is the best alternative in order to stabilize their
businesses, provide access potentially to DIP financing and ensure
that maximum value can be preserved and realized for the benefit of
their estates.
"While the Debtors are cognizant of the costs associated with
chapter 11, the Debtors believe that, by using the tools available
to them under the Bankruptcy Code, they can effectuate a
value-maximizing transaction through a plan of reorganization or
sales. The Debtors have been and continue to be focused on
developing a restructuring solution that maximizes value for all
stakeholders," Mr. Chirite said.
H MELTON: CEO Seeks Permission to Use Cash Collateral
-----------------------------------------------------
Henry J. Melton, individually, requests the U.S. Bankruptcy Court
for the Northern District of Texas permission to use cash
collateral
Mr. Melton is the 90% owner, President and Chief Executive Officer
of Henry Melton Ventures, LLC. Each of the cases is substantially
related in that Mr. Melton owns 90% of Henry Melton Ventures which
in turn owns H. Melton Ventures RD, LLC and other operating
non-debtor affiliates.
Andrew R. Korn obtained, by default, a state court receivership as
to all of Mr. Melton's non-exempt assets with respect to a judgment
in excess of two hundred thousand and no/100 dollars. Mr. Melton's
holding company, Ventures, was drawn into the receivership by a
default judgment, notwithstanding this business had nothing to do
with the liability of Mr. Melton to the Receiver's client.
On November 8, 2017, Andrew R. Korn, the court-appointed receiver,
filed his motion and brief to prohibit use of cash collateral and
for an accounting and alternative for adequate protection. In
relation to the Motion of Receiver seeking to prohibit use of cash
collateral, the Court, on February 2, 2018, entered an Agreed
Adequate Protection Order.
Under the terms of the Adequate Protection Order several matters
relevant to the motion for use of cash collateral were ordered:
(a) On or before February 17, 2018 Melton is to deliver an
accounting of all funds that were in his possession, custody, or
control from the Petition Date, October 14, 2017 until date of
appointment of his Chapter11 Trustee;
(b) The decision as to whether the Receiver is a secured
creditor with an interest to be protected in cash collateral is
deferred to another day;
(c) Funds in possession, custody and control of the Chapter 11
Trustee for Mr. Melton will not be disbursed absent a court order
authorizing the disbursement. To the extent Mr. Melton utilized
funds without prior Court or written authorization from the
Trustee, the estate and Trustee were provided with replacement
liens against properties claimed as exempt by Mr. Melton, which
included the substantial NFL retirement benefits.
Under the Code, as reinforced by the Adequate Protection Order,
cash collateral can and may be used by Mr. Melton if he proposes
adequate protection and same is authorized by the Court.
In this regard, assuming the Receiver prevails on his position that
current wages actually received become then cash collateral, Mr.
Melton proposes use of a replacement lien on current wages from his
Lyft employment of $1,500 - $2,000 per month from date of filing to
the present that has been used with consent of the Trustee under
the Cash Collateral Order if replacement liens were provided and
assuming a budget of less than $2,000 per month to meet ordinary
and necessary household and living expenses.
In addition, Mr. Melton proposes approved use of cash collateral
that came into his possession from pre-petition assets prior to the
appointment of the Trustee and Cash Collateral Order other than
from Lyft employment.
The Debtor also proposes use of some of the $25,000 that came into
his possession after the appointment of the Trustee and entry of
the Adequate Protection Order arising from pre-petition assets
which was duly turned over to the Trustee during the course of the
case from note payments owed to him on the Express Working Capital,
LLC note ($10,000) and payments on a damage claim from Progressive
insurance ($15,000).
Pursuant to the budget, the use of cash collateral would be limited
to meet child support obligations, automobile payments, insurance
payment, for an aggregate amount of $3,350.
In addition, Mr. Melton has received notice that he will receive an
additional $6,000 for a rental deposit in an apartment he formerly
owned in Tampa Bay, Florida from his former landlord, Future Home
Realty, Inc., Tampa Bay, Florida. Mr. Melton requests permission to
use $3,000 of this rental deposit for securing new housing and
initial month's rent for April after his current lease terminates
on March 31, 2017.
Mr. Melton intends to exit bankruptcy through a confirmed plan by
May 1, 2018 but if he does not complete by that date, he requests
an additional use of cash collateral for $1,500 per month for his
daughter.
A full-text copy of the Mr. Melton's Motion is available at
http://bankrupt.com/misc/txnb17-43922-166.pdf
About H Melton Ventures
H Melton Ventures LLC, based in Arlington, Texas, filed a Chapter
11 petition (Bankr. N.D. Tex. Case No. 17-43922) on Sept. 28, 2017,
estimating $1 million to $10 million in both assets and
liabilities, with the petitions signed by Michael Warden, its
manager. Chapter 11 cases were also commenced by Michael G. Warden
(Case No. 17-33888) and Henry J. Melton, II (Case No. 17-44206).
Each debtor, other than H. Melton Ventures RD, LLC, joined in a
motion for joint administration. On Nov. 15, 2017, the Court
ordered procedural consolidation of all cases.
The Hon. Russell F. Nelms presides over the cases.
David D. Ritter, Esq., at Ritter Spencer PLLC, serves as bankruptcy
counsel to the Holding Company, H Melton Ventures, LLC. The
Debtors, Henry J. Melton II and H. Melton Ventures RD, LLC, hired
Wiley Law Group, PLLC, as counsel.
HARD ROCK EXPLORATION: HNB Suit Transferred to S.D. W.Va.
---------------------------------------------------------
In the civil action captioned THE HUNTINGTON NATIONAL BANK,
Plaintiff, v. HARD ROCK EXPLORATION, INC., CARALINE ENERGY COMPANY,
BLUE JACKET GATHERING, LLC, BLUE JACKET PARTNERSHIP, BROTHERS
REALTY, LLC, DUANE YOST, JAMES L. STEPHENS, JR., GREGORY LAUGHLIN
and MONICA R. FRANCISCO, Defendants, Civil Action No. 1:16CV48
(N.D.W.Va.), District Judge Frederick P. Stamp entered an order
granting Defendant Yost's motion to transfer, denying as moot the
individual Defendant's motion for abstention, denying as moot
Huntington's motion to strike notice to chapter 11 trustee, and
granting motions for joinder.
In his motion to transfer, defendant Yost represents that
Huntington filed its proof of claims against the Hard Rock Entities
on Oct. 3, 2017, and that the proof of claims "track, mirror, and
encompass the claims presented in the instant action." Thus,
defendant Yost argues that the claims are "duplicative and
unnecessary and allow for two active federal actions within the
Court's jurisdiction to persist, all to the burden, expense, and
detriment" of the non-debtor, individual defendants. Further,
defendant Yost contends that no proposed plan of reorganization or
pending motion to convert to a Chapter 7 case can be fully
considered unless the Bankruptcy Court has the instant action
within its docket. Defendant Yost also represents that Huntington
will not be prejudiced by transfer because it will still be able to
fully litigate both actions in the Bankruptcy Court.
Huntington argues that the motion to transfer should be denied
because the proof of claims filed by Huntington in the bankruptcy
proceedings do not track the claims presented in the instant
action. Specifically, Huntington contends that defendant Yost
ignores that the proof of claims are asserted against the Hard Rock
Entities, not the individual defendants. Thus, Huntington concludes
that the motion to transfer should be denied because Huntington's
claims against the individual defendants are not pending in any
forum other than this Court.
Under the interests of justice prong of section 1412, the Dunlap
court noted that "[t]he factors applied by bankruptcy courts when
deciding whether to transfer venue in matters . . . relating to a
case under title 11 are often the same factors applied when
deciding whether to transfer a bankruptcy case." The Dunlap court
describes those factors as follows:
1. The proximity of creditors of every kind to the court[;] 2. The
proximity of the debtor to the court[;] 3. The proximity of the
witnesses necessary to the administration of the estate[;] 4. The
location of the assets[;] and 5. The economical and efficient
administration of the estate.
The most important of these factors is the fifth factor, the
economic and efficient administration of the estate. This factor is
an amalgamation of the four preceding factors.
Other factors that have been applied are: 1. The presumption in
favor of the home court; 2. The ability to receive a fair trial; 3.
The state's interest in having local controversies decided within
its borders, by those familiar with its law; 4. Enforceability of
any judgment to be rendered; 5. Plaintiff's original choice of
forum.
The two factors the Dunlap court found to be most important both
weigh heavily in favor of transfer. First, the home court of the
underlying bankruptcy action is in the Southern District of West
Virginia, and, thus, that court is "presumptively suitable."
Second, because both the related removed state court civil action
and the bankruptcy action underlying this civil action are pending
before Judge Volk in the Southern District of West Virginia,
transfer of this civil action to the Southern District of West
Virginia will be more economical and efficient than continuing to
litigate only this civil action in this Court.
Additionally, the parties in the instant case have represented that
they already have to travel to Charleston because both the related
removed state court civil action and the bankruptcy action
underlying this civil action are pending before Judge Volk. Thus,
the convenience prong of section 1412 also weighs in favor of
granting the motion to transfer.
Because the Court grants defendant Yost's motion to transfer, the
individual defendants' motions for abstention must be denied as
moot. Additionally, even if the motions for abstention were not
mooted by the transfer, they would still be mooted by the fact that
the state court action has also been transferred to the United
States Bankruptcy Court for the Southern District of West
Virginia.
Lastly, transfer is appropriate because this civil action is stayed
as to the Hard Rock Entities (the debtors) but not as to the
individual defendants (the non-debtors and guarantors). At this
time, there has been no motion in the bankruptcy court to lift the
automatic stay as to the debtors.
Because the Court grants defendant Yost's motion to transfer, the
individual defendants' motions for abstention must be denied as
moot. Additionally, even if the motions for abstention were not
mooted by the transfer, they would still be mooted by the fact that
the state court action has also been transferred to the United
States Bankruptcy Court for the Southern District of West
Virginia.
A full-text copy of Judge Stamp's Memorandum Opinion and Order
dated Feb. 16, 2018 is available at https://is.gd/Fx6qJQ from
Leagle.com.
The Huntington National Bank, Plaintiff, represented by Kathleen J.
Goldman -- kathleen.goldman@bipc.com -- Buchanan Ingersoll & Rooney
PC & Christopher P. Schueller --christopher.schueller@bipc.com --
Buchanan Ingersoll & Rooney, LLP.
Hard Rock Exploration, Inc., Caraline Energy Company, Blue Jacket
Gathering, LLC, Blue Jacket Partnership & Brothers Realty, LLC,
Defendants, represented by Danielle H. Brown --
dbrown@gettylawgroup.com. -- The Getty Law Group PLLC, pro hac
vice, Kristopher D. Collman – kcollman@gettylawgroup.com -- The
Getty Law Group PLLC, pro hac vice, Richard A. Getty, The Getty Law
Group PLLC, pro hac vice & Michael D. Simms.
Duane Yost, Defendant, represented by J. Michael Benninger,
Benninger Law & Michael D. Simms.
James L. Stephens, Jr. & Monica R. Francisco, Defendants,
represented by Danielle H. Brown , The Getty Law Group PLLC, pro
hac vice, Kristopher D. Collman , The Getty Law Group PLLC, pro hac
vice, Richard A. Getty , The Getty Law Group PLLC, pro hac vice,
Marc R. Weintraub -- mweintraub@baileyglasser.com -- Bailey &
Glasser & Michael D. Simms .
Gregory Laughlin, Defendant, represented by Jennie Ovrom Ferretti,
George & Lorensen, PLLC, Shawn P. George, George & Lorensen, PLLC &
Michael D. Simms.
Robert W. Leasure, Jr., Trustee, represented by Elizabeth A.
Amandus -- eamandus@jacksonkelly.com -- Jackson Kelly PLLC &
William F. Dobbs, Jr. -- wfdobbs@jacksonkelly.com -- Jackson &
Kelly.
Blue Jacket Partnership, Hard Rock Exploration, Inc., Brothers
Realty, LLC, Caraline Energy Company & Blue Jacket Gathering, LLC,
Counter Claimants, represented by Danielle H. Brown , The Getty Law
Group PLLC, Kristopher D. Collman , The Getty Law Group PLLC,
Richard A. Getty , The Getty Law Group PLLC & Michael D. Simms .
Monica R. Francisco & James L. Stephens, Jr., Counter Claimants,
represented by Danielle H. Brown, The Getty Law Group PLLC,
Kristopher D. Collman, The Getty Law Group PLLC, Richard A. Getty,
The Getty Law Group PLLC, Marc R. Weintraub, Bailey & Glasser &
Michael D. Simms.
Duane Yost, Counter Claimant, represented by Michael D. Simms.
Gregory Laughlin, Counter Claimant, represented by Shawn P. George,
George & Lorensen, PLLC & Michael D. Simms.
About Hard Rock Exploration
Founded in 2003, Hard Rock Exploration, Inc., and its affiliates
provide oil and gas exploration and production services in Virginia
and West Virginia. Hard Rock focuses on drilling horizontal wells.
Hard Rock Exploration, Inc., and its affiliates sought Chapter 11
protection (Bankr. S.D. W.Va. Lead Case No. 17-20459) on Sept. 5,
2017. The affiliates are Caraline Energy Company (Bankr. S.D.
W.Va. 17-20461); Brothers Realty, LLC (Bankr. S.D. W.Va. 17-20462);
Blue Jacket Gathering, LLC (Bankr. S.D. W.Va. 17-20463) and Blue
Jacket Partnership (Bankr. S.D. W.Va. 17-20464).
The petitions were signed by James L. Stephens, the Debtors'
president.
At the time of filing, Hard Rock estimated $10 million to $50
million in assets and liabilities. Caraline Energy estimated $10
million to $50 million in assets and liabilities.
The Hon. Frank W. Volk presides over the cases.
The Debtors are represented by Christopher S. Smith, Esq., at
Hoyer, Hoyer & Smith, PLLC and Taft A. McKinstry, Esq., at Fowler
Bell PLLC.
The Office of the U.S. Trustee appointed three creditors to serve
on the official committee of unsecured creditors in the Chapter 11
case of Hard Rock Exploration, Inc. The committee members are: (1)
Richard L. Wilson; (2) John M. Dosker; and (3) Jim Schwab Pi Star
Communications.
On Jan. 3, 2018, the Bankruptcy Court of the Southern District of
West Virginia appointed Robert W. Leasure, Jr., as the Chapter 11
Trustee of Hard Rock Exploration, Inc. The Trustee hired Jackson
Kelly PLLC, as counsel.
HATHAWAY HOMES: Chapter 11 Trustee Seeks Chapter 7 Conversion
-------------------------------------------------------------
Bryan Clark, writing for the Idaho Post Register, reports that the
Chapter 11 Trustee for Hathaway Homes Group, has asked the
Bankruptcy Court to convert the Chapter 11 proceedings to a
liquidation in Chapter 7.
According to the Post Register, TAG Lending, the largest lender to
Hathaway Homes Group, has joined the motion to convert to Chapter
7.
The Post Register relates that a probe conducted by Gary Rainsdon,
the Chapter 11 Trustee, revealed that:
1. The Company's books don't match the bank statements.
2. The Company's records are in "shambles."
3. Contracts are missing or unsigned. Mr. Rainsdon reported
that he was unable to determine the state of accounts
receivable and that owner Paul Hathaway claims not to
know.
4. Money that court filings claimed was in the bank isn't
there. While a filing indicates more than $142,000 in
one company bank account, Mr. Rainsdon found there was in
fact $65 in it on the day Hathaway filed bankruptcy.
5. During the period between when Hathaway Homes Group
lost a $3.8 million lawsuit to a lender it defrauded
and when it filed for bankruptcy, its owners, Paul and
Mikki Hathaway, took $30,000 of their customers' money
and gambled it away at the Planet Hollywood Resort and
Casino in Las Vegas.
6. Paul Hathaway regularly told customers that delays were
due to circumstances beyond his control, when in fact he
simply cashed their checks and ordered no home for them.
7. Warranty work was often not performed or done in a
substandard way.
8. Homes sold under promissory notes have no records of what
has been paid so far.
9. More than 50 former customers have filed official
complaints with the Consumer Protection Division of the
Idaho Attorney General's Office. The total losses these
and other customers incurred remains unknown, and may
never be known in full.
10. Some transfers can be tracked, but many of them appear to
have occurred through checks and cash withdrawals from
ATMs and bank branches.
The Post Register notes that Hathaway Homes Group is facing:
-- a consumer protection suit from the Attorney General's
Office,
-- lawsuits from former customers who allege they were
ripped off,
-- a $3.8 million judgment for a Utah lender which was
defrauded, and
-- a criminal investigation by the Fremont County Sheriff's
Office.
The Post Register says TAG Lending, according to a Utah lawsuit,
extended Paul Hathaway and his company $3.8 million in credit
secured by property in North Dakota. But Hathaway instead
transferred the collateral to a third party and then defaulted on
his loans.
According to the Post Register, the total amount of customers'
money that the Hathaways diverted for personal spending and casino
gambling remains unknown. Rainsdon's investigation found that
Hathaway Homes Group's finances were so intimately commingled with
those of Paul and Mikki Hathaway that they can't be separated. The
couple have reported about $10 million in gambling over the last
three years, the only years during which reporting occurred. Their
net losses are unknown.
About Hathaway Homes Group
Hathaway Homes Group, LLC, is a dealer of recreational vehicle and
manufactured homes in South East Idaho. It offers a selection of
new modular homes, mobile homes, toy haulers, and pre-owned RVs and
trailer homes.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Idaho Case No. 17-40992) on Nov. 10, 2017. Paul J.
Hathaway, its owner, signed the petition.
At the time of the filing, the Debtor estimated assets and
liabilities of $1 million to $10 million.
Judge Jim D. Pappas presides over the case.
HHGREGG INC: Parties Resolve Issues on Chipman Brown Retention
--------------------------------------------------------------
BankruptcyData.com reported that the U.S. Trustee assigned to the
hhgregg Inc. case, the official committee of unsecured creditors of
Gregg and creditors Haier US Appliance Solutions filed with the
U.S. Bankruptcy Court an agreed entry resolving issues related to
the committee's proposed retention of Chipman Brown Cicero & Cole
(CBCC) as counsel to pursue certain claims against the Debtors'
directors and officers. The resolution notes, "The Engagement
Letter is hereby amended with respect to reimbursement of CBCC's
out-of-pocket expenses, such that: CBCC shall be paid a $25,000
retainer for partial reimbursement of its out-of-pocket expenses,
which retainer will be held by CBCC for application towards
reimbursement of its final expenses, subject to its final fee
application; CBCC may request interim reimbursement of its
out-of-pocket expenses pursuant to B-2014-1(b)(4) by the following
procedure: CBCC may file a Notice of Request for Reimbursement of
Out-of-Pocket Expenses (each, a 'Request'). Such Request shall be
served on the Debtors, the Office of the United States Trustee, the
DIP Agent, the FILO Agent, counsel for the Committee, and all
interveners of record setting forth the amount of the Request and
containing, as an attachment, a descriptive itemization and amount
of each expense included in such Request; Parties shall have 14
days after the date of filing of the Request to review and object
to such Request. At the expiration of that period, 100% of the
expenses identified in any Request, except specific expenses for
which an objection has been interposed by any party as provided
below, shall be promptly paid by the Debtors. The hearing scheduled
for March 7, 2018 at 1:30 PM EST on the CBCC Application and the
GEA Objection is rendered moot by this Order and upon the Court's
approval of this Agreed Entry shall be vacated."
The Court subsequently issued an order approving the resolution,
according to the report.
About hhgregg Inc.
Indianapolis, Indiana-based hhgregg, Inc., is an appliance,
electronics and furniture retailer. Founded in 1955, hhgregg is a
multi-regional retailer currently with 220 stores in 19 states that
also offers market-leading global and local brands at value prices
nationwide via http://www.hhgregg.com/
hhgregg Inc., Gregg Appliances Inc. and HHG Distributing LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Ind. Lead Case No. 17-01302) on March 6, 2017. The petitions were
signed by Kevin J. Kovacs, chief financial officer.
At the time of the filing, hhgregg and HHG Distributing estimated
assets and liabilities of less than $50,000. Gregg Appliances
estimated assets and liabilities at $100 million to $500 million.
The Debtors engaged Morgan, Lewis & Bockius LLP and Ice Miller LLP
as counsel; Berkeley Research Group, LLC as financial advisor;
Stifel and Miller Buckfire & Co. as investment banker; Hilco IP
Services as intellectual property advisor; Altus Group US, Inc., as
tax advisor; and Donlin, Recano & Company, Inc., as claims and
noticing agent.
The U.S. Trustee has appointed creditors to serve on the official
committee of unsecured creditors in the case of Gregg Appliances,
Inc., Case No. 17-01303-RLM-11. No official committee has been
appointed in the cases of hhgregg, Inc., No. 17-01302-RLM-11 or HHG
Distributing, LLC, No. 17-01304-RLM-11.
The Committee hired Cooley LLP and Bingham Greenebaum Doll LLP as
counsel, and ASK LLP as avoidance claims counsel. The Committee
retained Province Inc. as financial advisor. The Committee tapped
Chipman Brown Cicero & Cole, LLP as its special counsel.
Counsel to the Agent for the Debtors' prepetition secured lenders
and the lenders providing DIP financing are Sean M. Monahan, Esq.,
at Choate, Hall & Stewart LLP; and Jay Jaffe, Esq., at Faegre Baker
Daniels, LLP.
Counsel to the FILO Agent is Stuart Brown, Esq., at DLA Piper LLP.
* * *
When hhgregg filed for Chapter 11 bankruptcy, it had signed a term
sheet with an anonymous party to purchase the Company assets. The
Company said at that time it expected a quick and smooth process
through Chapter 11 with emergence in approximately 60 days. Ten
days later, hhgregg said it has terminated the nonbinding term
sheet with the anonymous party because the Company was unable to
reach a definitive agreement on terms, and said it continues to
work with interested third parties to purchase assets of the
business. hhgregg added it had received strong interest from third
parties interested in buying some or all of the Company's assets.
Subsequently, hhgregg executed a consulting agreement with a
contractual joint venture comprised of Tiger Capital Group, LLC,
and Great American Group, LLC, to conduct a sale of the merchandise
and furniture, fixtures and equipment located at the Company's
retail stores and distribution centers.
In an April order, the Bankruptcy Court approved, at the Company's
request, a plan for the Company to close 132 retail stores and the
Company's distribution centers.
According to a disclosure with the Securities and Exchange
Commission in March, debtors Gregg Appliances, Inc., and HHG
Distributing, LLC, entered into a Consulting Agreement with a
contractual joint venture between Tiger Capital Group and Great
American Group to conduct the sale of the merchandise and
furniture, fixtures and equipment located at the Company's 132
retail stores and the distribution centers.
As of June 8, 2017, the Debtors have completed store closing sales
in all its stories.
The Company has said it does not anticipate any value will remain
from the bankruptcy estate for the holders of the Company's common
stock, although this will be determined in the continuing
bankruptcy proceedings.
IHEARTMEDIA INC: Board Okays $17.5 Million in Bonuses to 3 Execs
----------------------------------------------------------------
The Compensation Committee of the Board of Directors of
iHeartMedia, Inc. approved on Feb. 23, 2018 bonus payments for
three executive officers.
iHeartMedia announced the bonuses in a regulatory filing on Feb.
28.
iHeartMedia will hand out $15,500,000 in total annual bonuses to
these officers:
$9,300,000 Robert W. Pittman, Chairman & CEO
$5,300,000 Richard J. Bressler, President, COO & CFO
$900,000 Robert H. Walls, Jr., VP, General Counsel
& Secretary
iHeartMedia will also pay another $1 million in earned but
previously unpaid bonuses each to Messrs. Pittman and Bressler.
(1) Robert W. Pittman
The Compensation Committee approved a bonus opportunity for Robert
W. Pittman, the Company's Chairman and Chief Executive Officer,
under a new 2018 Key Incentive Bonus Plan, pursuant to which Mr.
Pittman will be eligible to earn a target bonus for each calendar
quarter of 2018 of $2,325,000.
The Compensation Committee approved payment of Mr. Pittman's
Quarterly Bonus for the period ending March 31, 2018; provided that
Mr. Pittman is required to repay the after-tax value of the
Quarterly Bonus if he were to be terminated for "cause" or
voluntarily resign without "good reason" before March 31, 2019.
In addition, the Compensation Committee accelerated the payments of
bonuses Mr. Pittman previously earned during 2016 ($500,000) and
2017 ($500,000) under the iHeartMedia, Inc. 2015 Supplemental
Incentive Plan. Mr. Pittman is required to repay the after-tax
value of the relevant portion of these SIP payments upon any
termination of his employment if he would have forfeited such
portion if payment of these SIP payments had not been accelerated.
(2) Richard J. Bressler
The Compensation Committee approved a bonus opportunity for Richard
J. Bressler, the Company's President, Chief Operating Officer and
Chief Financial Officer, under the 2018 KEIP, pursuant to which Mr.
Bressler will be eligible to earn a Quarterly Bonus for each
calendar quarter of 2018 of $1,325,000.
The Compensation Committee approved payment of Mr. Bressler's
Quarterly Bonus for the period ending March 31, 2018; provided that
Mr. Bressler is required to repay the after-tax value of the
Quarterly Bonus if he were to be terminated for "cause" or
voluntarily resign without "good reason" before March 31, 2019.
In addition, the Compensation Committee accelerated the payments of
bonuses Mr. Bressler previously earned during 2016 ($500,000) and
2017 ($500,000) under the SIP. Mr. Bressler is required to repay
the after-tax value of the relevant portion of these SIP payments
upon any termination of his employment if he would have forfeited
such portion if payment of these SIP payments had not been
accelerated.
(3) Robert H. Walls, Jr.
The Compensation Committee approved a bonus opportunity for Robert
H. Walls, Jr., the Company's Executive Vice President, General
Counsel and Secretary, under the 2018 KEIP, pursuant to which Mr.
Walls will be eligible to earn a Quarterly Bonus for each calendar
quarter of 2018 of $225,000. The Compensation Committee approved
payment of Mr. Walls' Quarterly Bonus for the period ending March
31, 2018; provided that Mr. Walls is required to repay the
after-tax value of the Quarterly Bonus if he were to be terminated
for "cause" or voluntarily resign without "good reason" before
March 31, 2019.
All of the payments are in addition to the bonuses the named
executive officers will earn for 2017 performance under the plans
in effect for 2017, and any SIP payments earned during 2015, all of
which were paid in accordance with the terms of the agreements.
About iHeartMedia, Inc. and
iHeartCommunications, Inc.
iHeartMedia, Inc. (PINK:IHRT), the parent company of
iHeartCommunications, Inc., is a global media and entertainment
company. Based in San Antonio, Texas, iHeartCommunications
specializes in radio, digital, outdoor, mobile, social, live
events, on-demand entertainment and information services for local
communities, and uses its unparalleled national reach to target
both nationally and locally on behalf of its advertising partners.
The Company's outdoor business reaches over 34 countries across
five continents.
iHeartCommunications reported a net loss attributable to the
Company of $296.31 million in 2016, a net loss attributable to the
Company of $754.6 million in 2015, and a net loss attributable to
the Company of $793.8 million in 2014.
As of Sept. 30, 2017, iHeartCommunications had $12.25 billion in
total assets, $23.93 billion in total liabilities and a total
stockholders' deficit of $11.67 billion.
* * *
As reported by the TCR on Feb. 12, 2018, Fitch Ratings has affirmed
iHeartCommunications, Inc.'s Long-Term Issuer Default Rating (IDR)
at 'C'. iHeart's 'C' IDR reflects the likelihood for a near-term
default and potential restructuring event, which increased
following the company's strategic decision to not pay the $106
million cash interest payment on a more junior piece of debt that
was due on Feb. 1, 2018.
Also in February 2018, S&P Global Ratings lowered its corporate
credit ratings on Texas-based iHeartMedia Inc. and its iHeart
subsidiary to 'SD' (selective default) from 'CC'. The downgrade
follows iHeart's recent announcement that it did not make a $106
million net cash interest payment on its 12%/14% senior notes due
2021. The payment was due on Feb. 1.
HeartCommunications' carries a 'Caa2' Corporate Family Rating from
Moody's Investors Service.
IHEARTMEDIA INC: May File for BankruptcyThis Weekend
----------------------------------------------------
Emma Orr, writing for Bloomberg News, reports that advisers to some
of iHeartMedia Inc.'s senior creditors have been shown bankruptcy
papers that would be used on the first day of court proceedings,
according to people with knowledge of the matter. Bloomberg says
the Company's bankruptcy filing could come as soon as this
weekend.
One source told Bloomberg that a formal support agreement still
isn't in place with the most-senior lenders, and the creditors
aren't in restricted talks with the company. The source asked not
to be identified as the discussions are private.
According to Bloomberg's Ms. Orr, if the company files without a
pre-negotiated restructuring plan in place, the bankruptcy could
turn into a free-fall, with some of the biggest and most
contentious specialists in distressed companies potentially
tussling for years over about $20 billion of debt.
The report also notes negotiators have narrowed many of their
differences, with the two sides swapping increasingly similar plans
for a bankruptcy. But a deal has been held up by the insistence of
iHeart's private equity sponsors on retaining a stake in the
reorganized company.
The report also notes that iHeart and creditors are positioning
themselves for what could come after the bankruptcy filing, with
the company disclosing a bonus plan for Chief Executive Officer Bob
Pittman and junior bondholders controlling more than $200 million
of unsecured debt suing in a New York state court. The junior
bondholders are accusing iHeart of secretly using assets for years
to secure other borrowing. The suing bondholders include funds run
by Angelo Gordon & Co., a distressed-debt investor that had been
accumulating shares of iHeart's billboard advertising company,
Clear Channel Outdoor Holdings Inc.
As widely reported, Billionaire John Malone's Liberty Media stepped
in with a last-minute offer to senior creditors that would help
salvage iHeart by injecting cash and financing a trip through
bankruptcy, but, according to Bloomberg, analysts have said the bid
isn't high enough to win over creditors. Still, talks remain fluid
and ongoing between the secured creditor group and Liberty Media,
sources told Bloomberg.
Bloomberg News also reports that Liberty has already bought a
substantial position in iHeart debt and sees potential synergies
between iHeart and SiriusXM radio, according to its Chief Executive
Officer Greg Maffei on Thursday during a call with investors.
iHeart runs the biggest land-based radio network with about 850
stations and Sirius has the largest satellite radio network.
iHeart is controlled by Bain Capital and Thomas H. Lee Partners,
which staged a leveraged buyout in 2008.
According to Bloomberg, the senior creditor group is advised by
investment bank PJT Partners and law firm Jones Day.
As reported by the Troubled Company Reporter, Liberty has engaged
Millstein & Co., KPMG, Baker Botts LLP, and Weil, Gotshal & Manges
LLP, as advisors in connection with the Restructuring.
The TCR reported on Feb. 28 that certain lenders and noteholders of
iHeartCommunications disclosed on Monday that, in connection with
the discussions concerning iHeartCommunications's restructuring,
the lender and noteholders received a term sheet for a
restructuring of the Company from Liberty Media.
The term sheet, dated Feb. 23, sets forth the principal terms of
the restructuring of iHeartMedia, Inc. and 35 affiliated entities,
including a plan of reorganization to be filed and implemented in
cases to be commenced by the Company under chapter 11 of the
Bankruptcy Code.
Liberty Media proposes to extend $1.159 billion in new Cash
investment in iHeartCommunications, Inc., under a reorganization
plan. In exchange, Liberty and its affiliate, Sirius XM,
collectively, will receive 40% of the Common Shares in the
Reorganized Company -- 20% of the New Common Shares shall be held
by Sirius and 20% of the New Common Shares shall be held by
Liberty.
The Liberty Media proposal also requires that Clear Channel Outdoor
Holdings, Inc. be spun off in a taxable transaction.
Under the proposal, iHeart and Liberty will enter into an
investment and restructuring support agreement memorializing the
terms of Liberty's new Cash investment in iHeartCommunications.
The Investment Agreement will provide for, among other things:
-- an equity commitment fee of 2.0%,
-- a breakup fee of 3.0%,
-- a no-shop obligation of the Debtors (subject to a
fiduciary out), and
-- provisions for the full and prompt payment of the
reasonable and documented fees and out-of-pocket
expenses of Liberty's restructuring advisors.
The Investment Agreement will be expressly incorporated into and
made part of the Plan. The Debtors will file a motion to assume
the Investment Agreement and thereafter use reasonable best
efforts
to obtain the Bankruptcy Court's approval of the motion as
promptly
as possible.
Liberty is willing to finance working capital needs in chapter 11
through a DIP facility.
Liberty's Term Sheet contemplates that the Chapter 11 Debtors will
enter into a new secured exit financing, with gross proceeds of
$5.250 billion. Terms of the Exit Financing are to be determined,
but Liberty assumes ~5.2x pro forma net leverage with ~$500
million
of excess cash generated by the Debtors' Radio businesses by end
of
2018 to be distributed to holders of Senior Communications Claims
under the Plan.
Liberty wants the Company to file for Chapter 11 bankruptcy in
March 2018; and consummate the Reorganization Plan no later than
December 21, 2018 and other interim milestones to be negotiated.
Liberty's Term Sheet proposes to restructure iHeartCommunications
obligations, including:
ABL Facility Claims
-------------------
$[365],000,000 ABL Facility
Senior Communications Claims
----------------------------
$5,000,000,000 Term Loan D due 2019
$1,300,000,000 Term Loan E due 2019
$2,000,000,000 9.0% Priority Guarantee Notes due 2019
$1,750,000,000 9.0% Priority Guarantee Notes due 2021
$871,000,000 11.25% Priority Guarantee Notes due 2021
$1,000,000,000 9.0% Priority Guarantee Notes due 2022
$950,000,000 10.625% Priority Guarantee Notes due 2023
Unsecured Notes Claims
----------------------
$1,764,000,000 14.0% Senior Notes due 2021
$175,000,000 6.875% Senior Notes due 2018
$300,000,000 7.25% Senior Notes due 2027
General Unsecured Claims
------------------------
$[6],000,000 General Unsecured Claims
Unsecured Subsidiary Claims
---------------------------
$[26],000,000 unsecured long-term obligations of
Debtors other than iHeartCommunications
A copy of the Term Sheet is available at https://is.gd/UhQ2f5
About iHeartMedia, Inc. and
iHeartCommunications, Inc.
iHeartMedia, Inc. (PINK:IHRT), the parent company of
iHeartCommunications, Inc., is a global media and entertainment
company. Based in San Antonio, Texas, iHeartCommunications
specializes in radio, digital, outdoor, mobile, social, live
events, on-demand entertainment and information services for local
communities, and uses its unparalleled national reach to target
both nationally and locally on behalf of its advertising partners.
The Company's outdoor business reaches over 34 countries across
five continents.
iHeartCommunications reported a net loss attributable to the
Company of $296.31 million in 2016, a net loss attributable to the
Company of $754.6 million in 2015, and a net loss attributable to
the Company of $793.8 million in 2014.
As of Sept. 30, 2017, iHeartCommunications had $12.25 billion in
total assets, $23.93 billion in total liabilities and a total
stockholders' deficit of $11.67 billion.
* * *
As reported by the TCR on Feb. 12, 2018, Fitch Ratings has affirmed
iHeartCommunications, Inc.'s Long-Term Issuer Default Rating (IDR)
at 'C'. iHeart's 'C' IDR reflects the likelihood for a near-term
default and potential restructuring event, which increased
following the company's strategic decision to not pay the $106
million cash interest payment on a more junior piece of debt that
was due on Feb. 1, 2018.
Also in February 2018, S&P Global Ratings lowered its corporate
credit ratings on Texas-based iHeartMedia Inc. and its iHeart
subsidiary to 'SD' (selective default) from 'CC'. The downgrade
follows iHeart's recent announcement that it did not make a $106
million net cash interest payment on its 12%/14% senior notes due
2021. The payment was due on Feb. 1.
HeartCommunications' carries a 'Caa2' Corporate Family Rating from
Moody's Investors Service.
IHEARTMEDIA INC: Skips $138 Million in Interest Payments
--------------------------------------------------------
iHeartCommunications, Inc., an indirect subsidiary of iHeartMedia,
Inc., said its Board of Directors has elected not to make the
interest payments due March 1, 2018, of approximately:
$59,100,000 with respect to its outstanding 11.25% Priority
Guarantee Notes due 2021 and
$78,800,000 with respect to its outstanding 9.0% Priority
Guarantee Notes due 2021.
The Board of Directors of iHeartCommunications elected not to make
the payments as active discussions continue among its lenders,
noteholders, and financial sponsors regarding a comprehensive debt
restructuring.
Under the indentures governing the Notes, iHeartCommunications has
a 30-day grace period to make the interest payments before such
default triggers an event of default.
As reported by the Troubled Company Reporter last month, the
Company elected not to make a cash interest payment of $106
million, due Feb. 1, 2018, to holders of its 14% senior unsecured
notes due 2021 as active discussions continue among its lenders,
noteholders, and financial sponsors regarding a comprehensive debt
restructuring. That decision, the Company said, won't trigger an
event of default under the indenture as the Company will utilize a
30-day grace period under the indenture during which it retains the
right to make the interest payment to the holders of the Notes and
remain in compliance with the indenture governing the Notes.
About iHeartMedia, Inc. and
iHeartCommunications, Inc.
iHeartMedia, Inc. (PINK:IHRT), the parent company of
iHeartCommunications, Inc., is a global media and entertainment
company. Based in San Antonio, Texas, iHeartCommunications
specializes in radio, digital, outdoor, mobile, social, live
events, on-demand entertainment and information services for local
communities, and uses its unparalleled national reach to target
both nationally and locally on behalf of its advertising partners.
The Company's outdoor business reaches over 34 countries across
five continents.
iHeartCommunications reported a net loss attributable to the
Company of $296.31 million in 2016, a net loss attributable to the
Company of $754.6 million in 2015, and a net loss attributable to
the Company of $793.8 million in 2014.
As of Sept. 30, 2017, iHeartCommunications had $12.25 billion in
total assets, $23.93 billion in total liabilities and a total
stockholders' deficit of $11.67 billion.
* * *
As reported by the TCR on Feb. 12, 2018, Fitch Ratings has affirmed
iHeartCommunications, Inc.'s Long-Term Issuer Default Rating (IDR)
at 'C'. iHeart's 'C' IDR reflects the likelihood for a near-term
default and potential restructuring event, which increased
following the company's strategic decision to not pay the $106
million cash interest payment on a more junior piece of debt that
was due on Feb. 1, 2018.
Also in February 2018, S&P Global Ratings lowered its corporate
credit ratings on Texas-based iHeartMedia Inc. and its iHeart
subsidiary to 'SD' (selective default) from 'CC'. The downgrade
follows iHeart's recent announcement that it did not make a $106
million net cash interest payment on its 12%/14% senior notes due
2021. The payment was due on Feb. 1.
HeartCommunications' carries a 'Caa2' Corporate Family Rating from
Moody's Investors Service.
INFOBLOX INC: Fitch Lowers Long-Term IDR to B-; Outlook Stable
--------------------------------------------------------------
Fitch Ratings has downgraded the ratings for Infoblox Inc.:
-- Long-term Issuer Default Rating (IDR) to 'B-' from 'B';
-- 1st-lien revolving credit facility (RCF) to 'B+'/'RR2' from
'BB-'/'RR2';
-- 1st-lien term loan B to 'B+'/'RR2' from 'BB'-/'RR2';
-- 2nd-lien term loan B to 'CCC'/'RR6' from 'CCC+'/'RR6'.
The Rating Outlook is Stable. Fitch's actions affect $800 million
of total debt, including the undrawn $50 million revolving credit
facility (RCF). A full list of ratings follows at the end of this
release.
The ratings and Outlook reflect lower than previously expected
revenue growth and pressured FCF through at least the near-term,
limiting the potential for voluntary debt reduction and potentially
reducing flexibility for investments. Fitch expects Infoblox's
revamped go-to-market (GTM) strategy and new subscription product
introductions will drive revenue growth at least in-line with the
broader DDI market and that profit margins should remain near
current, stronger levels as the company achieves the benefits from
restructuring and reorganization.
KEY RATING DRIVERS
Market Leadership: Fitch expects Infoblox Inc.'s market leadership
in DDI, which includes domain name services (DNS), dynamic host
configuration protocol (DHCP) and internet protocol address
management (IPAM), to support improving operating performance
through the rating horizon. Infoblox's roughly 50% leading share of
worldwide DDI software and appliance markets, excluding DNS
security and large installed base result in meaningful intellectual
property and should drive revenue growth at least in-line with that
of the broader market (low- to mid-single digits) and meaningful
recurring revenue.
Improving FCF Profile: Fitch expects recurring FCF to strengthen
from maintenance and support contracts, which have high attach and
renewal rates and are typically one to three years in duration,
resulting in substantial deferred revenue. Maintenance and support
revenue should grow by high single digits through the intermediate
term due to high switching costs, product sales growth and
increasing complexity. Fitch believes the stickiness of maintenance
and support services reduces risk associated with growing deferred
revenue. As a result, annual FCF should strengthen to $25 million
to $50 million beyond fiscal 2018.
High Intermediate-Term Leverage: Fitch expects Infoblox will remain
highly levered over the intermediate term, given positive but
modest FCF available for debt reduction. In the absence of using
FCF for voluntary debt reduction, Fitch expects high FFO-adjusted
leverage for the rating through the rating horizon.
Significant Product Cyclicality: Fitch expects three- to five-year
product cycles will drive uneven revenue growth for the product
segment, representing a lower but still significant portion of the
overall sales mix. Product sales should continue to decline after
strong growth in fiscal 2015 and 2016 but expanding relationships
with existing customers and customers shifting to subscription
should augment growth from solid maintenance and support revenue.
Threat of Larger Entrants: Fitch believes the potential for larger
players to enter the growing and fragmented DDI market via
acquisition is a meaningful risk. The DDI market is a relatively
small but has attractive demand characteristics for technology
providers with more focused DNS product portfolios, a focus on
unique standards or industry or customer sets. Fitch believes
bundling DNS services with a broad set of service offerings and
leveraging a global sales footprint could affect industry pricing
and profitability.
DERIVATION SUMMARY
Fitch believes lower FCF and higher leverage, which when combined
may constrain Infoblox's ability to de-lever over the rating
horizon, support a one-notch lower rating than free Barracuda
Networks, Inc. (Barracuda) and Gigamon, Inc. (Gigamon). Both
Barracuda and Gigamon are similar in size but generate positive
FCF, although interest expense related to their respective buyout
could consume a portion of Barracuda's and Gigamon's cash flow.
Nonetheless, both companies' are being bought at pro forma gross
leverage near 7x versus a Fitch estimated 9.2x for Infoblox for the
latest 12 months ended Oct. 31, 2017.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Fitch Rating Case for the Issuer
-- Low- to mid-single digit revenue growth through the rating
horizon, driven by strong subscription and maintenance and
subscription growth mostly offset by ongoing product declines.
-- Adjusted operating EBITDA margin in the low- to mid-20s, due
to restructuring, greater GTM efficiency, higher mix of
maintenance and support sales and increasing aaS scale.
-- Deferred revenue grows in line with recurring revenue.
-- Break even to modest FCF in fiscal 2018, increasing to $25
million to $50 million annually through the rating horizon.
Fitch's recovery assumptions contemplate decline in product revenue
more than offsetting positive growth for subscription revenue,
likely exacerbated by pricing pressures. This would result in
Infoblox underperforming the broader DDI market and sustained
negative FCF. Nonetheless, Fitch believes Infoblox would be
reorganized and focus on aaS and maintenance and support offerings,
resulting in a going concern EBITDA of $75 million. Fitch assumes a
7x going concern multiple resulting in a $473 million going concern
enterprise value after 10% administrative costs. The $548 million
of 1st-lien RCF and term loan B would recover roughly 86%,
resulting in ratings of 'B+'/'RR2', while the $250 million 2nd-lien
term loan B would recover nothing, resulting a 'CCC'/'RR6' rating.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
-- Expectations for annual FCF margins sustained above 5%.
-- Above market revenue growth with operating EBITDA margins
above 20%, supporting Infoblox's product strength and GTM
strategy.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
-- Expectations for negative FCF from below market revenue
growth.
-- Operating EBITDA margin compression to mid- to high-teens from
pricing pressures to drive product adoption.
LIQUIDITY
Adequate liquidity: Fitch believes Infoblox's package of liquidity
is adequate and consisted of: $44.5 million of unrestricted cash
and cash equivalents an undrawn $50 million 1st-lien RCF expiring
Nov. 7, 2023. Fitch's expectation for modest annual FCF revenue
growth from increasing deferred revenue also supports liquidity and
more than supports $1.25 million of quarterly mandatory term loan
amortization. Total debt at Oct. 31, 2017 was $748 million and
consisted of $498 million of 1st-lien term loans maturing Nov. 7,
2023 and $250 million of 2nd-lien term loans maturing Nov. 7,
2024.
Fitch has downgraded the following ratings:
Infoblox Inc.
-- Long-Term IDR to 'B-' from 'B';
-- 1st-lien Senior Secured Revolving Credit Facility to
'B+'/'RR2' from 'BB-'/'RR2';
-- 1st-lien Senior Secured Term Loan B to 'B+'/'RR2' from 'BB-
'/'RR2';
-- 2nd-lien Senior Secured Term Loan B to 'CCC'/'RR6' from
'CCC+'/'RR6'.
The Rating Outlook is Stable.
LANCASTER COUNTY HOSPITAL: Fitch Affirms BB+ on 2015/2017 Bonds
---------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on the following bonds
issued by Lancaster County Hospital Authority (PA) on behalf of
Brethren Village (BV):
-- $98.4 million revenue bonds, series 2017;
-- $9.6 million revenue bonds, series 2015.
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a mortgage on BV's main campus, a security
interest in pledged assets (including gross receipts), and debt
service reserve funds.
KEY RATING DRIVERS
ROBUST DEMAND: BV's favorable service area, long operating history,
and expansive service offerings have translated in strong demand
across all service lines. Over the last three fiscal years, BV has
averaged a robust 96% occupancy in its independent living units
(ILUs), assisted living units (ALUs), and skilled nursing facility
(SNF). Furthermore, BV maintains a robust waitlist of 650 people
and has filled or presold 70 of its new 72 ILUs, with presold units
requiring an upfront deposit of 10% of its initial entrance fee.
CAPITAL PROJECT ON-TIME AND ON-BUDGET: BV is currently underway on
its $28 million 72-unit IL expansion project, which is currently
on-time and on-budget. The 'BB+' rating incorporates the full size
and scope of the project, which Fitch expects to be accretive to
BV's overall financial profile upon completion. Construction and
fill-up for the new ILUs will occur in phases, with 32 units
already complete and 29 already occupied. The project is expected
to generate approximately $18 million in initial entrance fees
($7.4 million received through Dec. 31, 2017), which are expected
to be used to fund a portion of the costs of the project and pay
down $5 million in temporary debt.
HIGH DEBT BURDEN: BV's debt burden remains elevated. Maximum annual
debt service (MADS) of $8.6 million equates to a high 20.2% of
total fiscal 2017 revenues which is unfavorable to Fitch's 'below
investment grade' ('BIG') category median of 17.1%. However, BV
maintained sufficient coverage levels in recent years, as evidenced
by its average 1.4x MADS coverage and 0.9x revenue-only coverage
over the last three fiscal years which primarily excludes the
additional revenues from its new ILUs. Fitch expects coverage
levels to improve following completion of its expansion project.
ADEQUATE PROFITABILITY LEVELS: BV's strong demand across all
service lines and enhanced pricing flexibility has supported
sufficient profitability levels for its rating level in recent
years. Over the last three fiscal years, BV has averaged a 100.5%
operating ratio, 14.8% net operating margin (NOM), and 24.3%
NOM-adjusted which all compare favorably to Fitch's 'BIG' medians
of 101.5%, 9.5% and 19.8% respectively.
MODEST LIQUIDITY POSITION: As of the six-month interim period
(ending Dec. 31, 2017), BV had $29.7 million in unrestricted cash
and investments, which translates into 278 days cash on hand, 23.4%
cash to debt, and 3.4x cushion ratio. All three metrics remain
below Fitch's 'BIG' medians. However, Fitch expects BV's overall
liquidity position to improve following completion of its upcoming
ILU expansion project. Furthermore, BV benefits financially from
its $12 million of restricted funds that are used to support
operations.
RATING SENSITIVITIES
MAINTENANCE OF OPERATING PROFILE: The 'BB+' rating assumes that
Brethren Village's current operating profile, characterized by high
occupancy across all levels of care, strong operating margins and
modest liquidity, remains stable. Should any of these weaken during
the construction and fill-up period of the new ILUs or if debt
service coverage declines, there could be negative rating
pressure.
EXPANSION PLAN PROJECT MANAGEMENT: The 'BB+' rating incorporates
the appropriate management of the construction project and fill-up
of the new ILUs according to forecasts. Significant cost overruns
or fill-up delays that hamper financial performance or position
could result in negative rating action.
LAND'S END: Bank Debt Trades at 10.42% Off
------------------------------------------
Participations in a syndicated loan under which Lands' End is a
borrower traded in the secondary market at 89.58
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.39 percentage points from
the previous week. Lands' End pays 325 basis points above LIBOR to
borrow under the $515 million facility. The bank loan matures on
April 4, 2021. Moody's rates the loan 'B3' and Standard & Poor's
gave a 'B-' rating to the loan. 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 Friday,
February 23.
LAREDO HOUSING: S&P Cuts Rating on 1994 Revenue Bonds to CCC+
-------------------------------------------------------------
S&P Global Ratings lowered its rating to 'CCC+' from 'B' on Laredo
Housing Finance Corp., Texas' series 1994 single-family mortgage
revenue bonds. Ginnie Mae mortgage-backed securities and Fannie Mae
pass-through certificates secure the bonds. The outlook is
negative.
"The downgrade is due to corporation's vulnerable finances,
including its asset-to-liability parity of 86.18% as of Oct. 1,
2017, and insufficient funds to cover reinvestment risk in the
event of prepayment," said S&P Global Ratings credit analyst Joanie
Monaghan.
S&P said, "The negative outlook reflects our view that, during the
two-year outlook period, the corporation may not be able to pay
full and timely debt service on the bonds to prevent a credit
default. Although debt service continues to be paid in full and on
time, we expect that the assets held in trust will be insufficient
to pay full and timely debt service on the bonds prior to
maturity."
LINN ENERGY: SCE Did Not Waive Right to Terminate Contract
----------------------------------------------------------
In the case captioned In re SOUTHERN CALIFORNIA EDISON COMPANY,
Civil Action No. 16-CV-57 (S.D. Tex.), Southern California Edison
appeals from the Order of the Bankruptcy Court that denied its
Motion for Entry of an Order Authorizing Termination of Forward
Contracts Pursuant to 11 U.S.C. section 556. District Judge Hayden
Head reverses the judgment of the bankruptcy court that Southern
California Edison waived its right to terminate the contract and
denies appellee Berry Petroleum Company, LLC's Motion to Dismiss
Appeal.
Linn Energy, LLC and Berry Petroleum Company, LLC (Berry) filed
Chapter 11 bankruptcy on May 11, 2016. Previously, Berry entered
into two electricity supply and capacity agreements with Southern
California Edison in July 2012 and April 2014. The Agreements
provided that Berry would supply SCE with electricity and capacity
from its cogeneration plants in California for a term of 84 months
each.
Both Agreements provided Termination Rights of the parties for an
event of default that included either party becoming bankrupt and
provided a process of early termination. Both contracts also
recited that the "Agreement and transactions contemplated by this
Agreement constitute a 'forward contract' within the meaning of the
United States Bankruptcy Code and that Buyer and Seller are each
'forward contract merchants' within the meaning of the United
States Bankruptcy Code."
Berry provided notice of its bankruptcy filing to SCE on May 27,
2016. SCE filed its motion for authorization to terminate the
Agreements on July 22, 2016, 56 days after service. Berry filed its
objections to SCE's motions on August 12, 2016. The Official
Committee of Unsecured Debtors joined in Berry's objections. On
August 15, 2016, SCE filed its reply to the objections.
The bankruptcy court held an evidentiary hearing and found that SCE
waived its right to terminate and declined to decide whether the
contracts were forward contracts.
The bankruptcy court in this case relied on a single factor,
promptness, to determine waiver. However, the Bankruptcy Code
prohibits a court from engrafting barriers to the use of an ipso
facto clause in certain kinds of contracts. Moreover, the Supreme
Court also prohibits courts from engrafting requirements onto the
Code.
The Court finds that the statutory language does not mention the
timing of termination of a contract subject to section 556. There
is also no Fifth Circuit or United States Supreme Court ruling that
reads a promptness requirement into the statute. As a result, SCE
could not have known that it was required to move "quick[ly]" after
its counterparty filed bankruptcy to avoid waiver. The Court finds
that the bankruptcy court's reading of the statute erected a court
imposed barrier to the plain language of section 556. Accordingly,
the Court reverses the bankruptcy court's finding of waiver based
on the court's erroneous inclusion of an extra-statutory promptness
requirement in section 556.
A full-text copy of Judge Head's Memorandum Opinion and Order dated
Feb. 16, 2018 is available at https://is.gd/sc3HkG from
Leagle.com.
Linn Energy, LLC, Linnco, LLC, Linn Acquisition Company, LLC, Linn
Energy Finance Corp., Linn Energy Holdings, LLC, Linn Exploration &
Production Michigan LLC, Linn Exploration Midcontinent, LLC, Linn
Midstream, LLC, Linn Midwest Energy LLC, Linn Operating, Inc.,
Mid-Continent I, LLC, Mid-Continent II, LLC, Mid-Continent Holdings
I, LLC & Mid-Continent Holdings II, LLC, In Res, represented by
Alexandra Frank Schwarzman -- alexandra.schwarzman@kirkland --
Kirkland & Ellis, LLP, Jennifer Francine Wertz -- jwertz@jw.com --
Jackson Walker LLP, Matthew Dudley Cavenaugh -- mcavenaugh@jw.com
-- Jackson Walker, Patricia Baron Tomasco -- ptomasco@jw.com --
Jackson Walker LLP & Seth Goldman -- Seth.Goldman@mto.com -- Munger
Tolles Olson LLP.
Berry Petroleum Company, LLC, Debtor, represented by William R.
Greendyke -- william.greendyke@nortonrosefulbright.com -- Norton
Rose Fulbright US LLP, Alexandra Frank Schwarzman , Kirkland &
Ellis, LLP, Jason Lee Boland --
jason.boland@nortonrosefulbright.com -- Fulbright Jaworski, LLP,
Jennifer Francine Wertz , Jackson Walker LLP, Matthew Dudley
Cavenaugh , Jackson Walker, Patricia Baron Tomasco , Jackson Walker
LLP & Seth Goldman , Munger Tolles Olson LLP.
Southern California Edison Company, Appellant, represented by Bruce
Davidson Oakley, Hogan Lovells US LLP & Michael Shane Johnson --
shane.johnson@hoganlovells.com -- Hogan Lovells US LLP.
Linn Energy, LLC, et al, Appellee, represented by Patricia Baron
Tomasco, Jackson Walker LLP.
About Linn Energy, LLC
Headquartered in Houston, Texas, Linn Energy, LLC, and its
affiliates are independent oil and natural gas companies. Each of
Linn Energy, LLC, and 14 of its subsidiaries filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Lead Case No. 16-60040) on May 11, 2016. The petitions were signed
by Arden L. Walker, Jr., chief operating officer of LINN Energy.
The Debtors have hired Paul M. Basta, Esq., Stephen E. Hessler,
Esq., Brian S. Lennon, Esq., James H.M. Sprayregen, Esq., and
Joseph M. Graham, Esq., at Kirkland & Ellis LLP and Kirkland &
Ellis International LLP as general bankruptcy counsel, Jackson
Walker L.L.P. as co-counsel, Lazard Freres & Co. LLC as financial
advisor, AlixPartners as restructuring advisor and Prime Clerk LLC
as claims, notice and balloting agent.
Judge David R. Jones presides over the cases.
The Office of the U.S. Trustee has appointed five creditors of Linn
Energy LLC to serve on the official committee of unsecured
creditors. The Committee tapped Mark I. Bane, Esq., and Keith H.
Wofford, Esq., at Ropes & Gray LLP; and Moelis & Company LLC as
investment banker. It also retained as Texas Oil & Gas Counsel,
John P. Melko, Esq., David S. Elder, Esq., and Michael K. Riordan,
Esq., at Gardere Wynne Sewell LLP.
On January 27, 2017, the Bankruptcy Court entered the Order
Confirming (I) Amended Joint Chapter 11 Plan of Reorganization of
Linn Energy, LLC and Its Debtor Affiliates Other Than Linn
Acquisition Company, LLC and Berry Petroleum Company, LLC and (II)
Amended Joint Chapter 11 Plan of Reorganization of Linn Acquisition
Company, LLC and Berry Petroleum Company, LLC. On February 28,
2017, the Plan became effective and the LINN Debtors emerged from
their Chapter 11 cases.
Through the restructuring, LINN has reduced debt by more than $5
billion to total debt of $1.012 billion and pro forma net debt of
$962 million, resulting in $730 million of liquidity. The new
structure significantly enhances financial flexibility and
positions the Company for long-term success.
LOS ANGELES INTERNET: Case Summary & 8 Unsecured Creditors
----------------------------------------------------------
Debtor: Los Angeles Internet Exchange
9539 East Kennerly St.
Temple City, CA 91780
Business Description: Los Angeles Internet Exchange is an Internet
service provider based in Temple City,
California, offering data processing,
hosting, and related services. Its mission
is to connect networks across Asia, North
America and Europe.
http://www.la-ix.com/
Chapter 11 Petition Date: February 28, 2018
Case No.: 18-bk-12220
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Judge: Hon. Barry Russell
Debtor's Counsel: Jasmin Yang, Esq.
LEWIS BRISBOIS BISGAARD & SMITH LLP
633 West Fifth Street, Suite 4000
Los Angeles, CA 90071
Tel: 213.250.1800
Fax: 213.250.7900
E-mail: Jasmin.Yang@lewisbrisbois.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $100,000 to $500,000
The petition was signed by Medwin Piatos, chief operating officer.
A copy of the Debtor's list of eight unsecured creditors is
available for free at:
http://bankrupt.com/misc/cacb18-12220_creditors.pdf
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/cacb18-12220.pdf
MARQUIS DIAGNOSTIC: Seeks Authorization to Use Cash Collateral
--------------------------------------------------------------
Marquis Diagnostic Imaging, LLC, and its debtor-affiliates seek
authorization from the United States Bankruptcy Court for the
Northern District of Georgia to use cash collateral on an interim
basis in accordance with the Budget which is necessary to avoid
immediate and irreparable harm to the estates pending a final
hearing.
The Debtors claim that the use of cash collateral is essential to:
(a) the continued operation of the businesses of the Debtors; (b)
maintain the value of the Property; and (c) an effective
reorganization of the Debtors.
The Debtors believe that Great Western Bank is the only creditor
holding or asserting a perfected lien against the accounts
receivable and proceeds of accounts receivable of any of the
Debtors.
In addition to the Great Western claims, several other parties
assert liens to certain, specified equipment of certain Debtors,
although none of these liens extend to accounts or proceeds thereof
of any of the Debtors, to wit:
(a) Toshiba Medical Systems, Inc. asserts a claim that is
purportedly secured by certain equipment and leasehold interests of
Debtor Marquis Diagnostic Imaging of Arizona;
(b) NFS Leasing asserts liens on certain specific IT of DVR
Acquisition and Marquis Diagnostic Imaging;
(c) Hewlett-Packard and McKesson also assert liens against
certain assets of Marquis Diagnostic Imaging of Arizona, but not
accounts or proceeds thereof; and
(d) Bank of America and Key Equipment assert liens on certain
equipment of Desert Valley Radiology, however, the Debtors are
informed and advised that these liens should have been released as
part of the DVRP transaction in 2015.
The Debtors propose to provide adequate protection of the use of
cash collateral in the form of:
(a) a replacement lien in the Debtors' post-petition property
and the proceeds thereof to the same extent of any pre-petition
liens that are valid, properly perfected and enforceable, and in
the same relative priority and continuation of valid and properly
perfected liens and security interests held by such party in its
pre-petition collateral; and
(b) allowing the Debtors to use cash collateral only in
accordance with the budgets to be approved by the Court and
provision of the Debtors' monthly operating reports required by the
U. S. Trustee and filed with the Court.
A full-text copy of the Debtors' Motion is available at:
http://bankrupt.com/misc/ganb18-52365-14.pdf
About Marquis Diagnostic Imaging
Marquis Diagnostic Imaging, LLC, is an outpatient diagnostic
imaging center that provides a comprehensive exam for patients
experiencing serious heart conditions, stroke and other life-
threatening diseases. Marquis offers MRI (Magnetic Resonance
Imaging), CT (Computed Tomography), Ultrasound, and X-ray services.
The Company maintains its facilities in Gilbert and Phoenix,
Arizona.
Marquis Diagnostic Imaging, LLC and its affiliates Marquis
Diagnostic Imaging of North Carolina, LLC and Marquis Diagnostic
Imaging of Arizona, LLC, sought Chapter 11 protection (Bankr. N.D.
Ga. Case Nos. 18-52365, 18-52367 and 18-52380, respectively) on
Feb. 9, 2018.
In the petitions signed by Venesky, authorized representative, MD
Imaging, LLC, estimated $1 million to $10 million in assets and up
to $50,000 in debt; MD Imaging of NC estimated up to $50,000 in
assets and $1 million to $10 million in liabilities; and MD Imaging
of Arizona estimated $1 million to $10 million in assets and debt.
Henry F. Sewell, Jr., Esq., of the Law Offices of Henry F. Sewell,
Jr., serves as counsel to the Debtors.
No request has been made for the appointment of a trustee or
examiner and no official committee of unsecured creditors has been
appointed in any of these cases.
MURRAY ENERGY: Bank Debt Trades at 10.83% Off
---------------------------------------------
Participations in a syndicated loan under which Murray Energy is a
borrower traded in the secondary market at 89.17
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.65 percentage points from
the previous week. Murray Energy pays 650 basis points above LIBOR
to borrow under the $1.7 billion facility. The bank loan matures on
April 10, 2020. Moody's rates the loan 'B2' and Standard & Poor's
gave a 'B-' rating to the loan. 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 Friday,
February 23.
NEIMAN MARCUS: Bank Debt Trades at 15.58% Off
---------------------------------------------
Participations in a syndicated loan under which Neiman Marcus Group
Inc. is a borrower traded in the secondary market at 84.42
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.81 percentage points from
the previous week. Neiman Marcus pays 325 basis points above LIBOR
to borrow under the $2.942 billion facility. The bank loan matures
on October 25, 2020. Moody's rates the loan 'Caa1' and Standard &
Poor's gave a 'CCC' rating to the loan. 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
Friday, February 23.
NISOURCE INC: Moody's Affirms (P)Ba1 Preferred Shelf Rating
-----------------------------------------------------------
Moody's Investors Service affirmed the ratings of NiSource Inc.
(NI), including its Baa2 Issuer Rating and Prime-2 short term
rating for commercial paper, the ratings of all of its guaranteed
subsidiaries, as well as the Baa1 Issuer Rating and senior
unsecured rating of its utility operating company Northern Indiana
Public Service Company. The outlook for all companies is stable.
RATINGS RATIONALE
"The affirmation of NiSource's ratings reflects Moody's view that
the company will generate improved debt coverage ratios in 2018
despite the negative cash flow impact from federal tax reform and a
significant capital expenditure plan", said Lesley Ritter,
AVP-Analyst. "Moody's expect that NiSource will raise sufficient
equity and hybrid securities this year to produce cash flow from
operations pre-working capital to debt of at least 13% in order to
meet its stated commitment to maintaining its existing credit
rating". The affirmation comes after extensive dialogue with
NiSource management on their planned response to both tax reform
and to their recently deteriorating financial condition and Moody's
view that these measures should be sufficient to stabilize and
ultimately improve financial performance.
NiSource's Baa2 rating reflects the low business risk of its
operating utilities, with natural gas local distribution companies
(LDC) accounting for 70% of consolidated rate base. The rating also
considers the company's record of credit supportive outcomes across
its seven jurisdictions, including access to recovery mechanisms
that allow 75% of its annual investment to be recovered within a
year or less. Largely offsetting these credit positive attributes
are the company's weak financial ratios and highly levered balance
sheet. At Baa2, NiSource is amongst the lowest rated US-based LDC
utilities in the Moody's rated universe, and juxtaposes the
company's strong regulatory environment against its levered
financial position.
Straining the company's already weak financial ratios are the
passage of federal tax reform legislation, which lowers collections
from customers, as well as the extensive ongoing capital investment
projects under way at each of its utilities. Across the company,
investments are expected to total $1.6-1.8 billion per year through
2020; materially exceeding the company's operating cash flow
generation (2017 adjusted CFO was about $1 billion). When combined
with NiSource's target to grow its dividend by 5-7% CAGR through
2020 (2017 dividend was $229 million), Moody's expect the company
will generate a sizeable, annual negative free cash flow balance
nearing $900 million in 2018 that will be financed through external
capital raises.
To that effect, NiSource has supplemented its existing $55-65
million DRIP equity program with an ATM program to raise $200-300
million in equity each year through 2020. Although material, the
ATM program is not sufficient to fully offset the cash shortfall
and additional incremental external capital raises will be needed.
Given the company's stated commitment to maintaining its existing
credit ratings, Moody's expect that NiSource will use a credit
supportive approach, including a mix of incremental common equity
and hybrids, to fund a material portion of the remainder of its
cash needs. This should allow NiSource to achieve a cash flow
pre-WC to debt ratio that remains above Moody's previously stated
downgrade threshold of 12% and reach a sustained level of 13-14%
near term.
NiSource's stable outlook reflects Moody's view that the recent
decline in NiSource's financial profile following its 2015
corporate separation will be reversed. Moody's expects the company
will exhibit a debt to capitalization ratio of approximately 55% as
well as cash flow to debt of 13-14% in 2018 and going forward. The
stable outlook also reflects Moody's view that NiSource's regulated
utility capital expenditure plans will be financed in a credit
supportive manner.
What Could Change the Rating -- Up
An upgrade at NiSource could be considered if there was further
improvement in the utility's regulatory environment or if the cash
flow to debt ratio rises to the high teens and debt to
capitalization fell below 50%, on a sustained basis.
An upgrade at NIPSCO could result from a material improvement in
the credit supportiveness of the regulatory environment, providing
greater predictability, timeliness and/or sufficiency of rates;
sustained strong financial ratios, such that CFO pre-WC to debt
remains above 22% considering its elevated capital expenditure
program. An upgrade at NiSource could also place upward rating
pressure on NIPSCO.
What Could Change the Rating - Down
The rating of NiSource could be downgraded if the anticipated
improvement in financial profile does not materialize over the near
term; including cash flow to debt returning to the 13-14% range and
debt to capitalization reaching 55% or below. The rating could also
be downgraded if the company fails to issue sufficient common
equity and/or hybrid securities to finance its negative free cash
flow balance; or there is a decline in credit supportiveness of
NiSource's regulatory environments, an adverse change in the
company's business mix such that its business risk profile
deteriorates, or if cash flow to debt falls to 12% or below and/or
debt to capitalization remains above 55%.
NIPSCO's rating could be downgraded if it experienced a
deterioration in the credit supportiveness of the Indiana
regulatory environment; or it produced weaker financial ratios such
that CFO pre-WC to debt fell to the mid-teens, on a sustained
basis. NIPSCO would also experience downward rating action if
NiSource adopted a more aggressive corporate strategy where it
would place additional reliance on dividends from its regulated
subsidiaries to service parent debt. A downgrade at NiSource could
also place downward rating pressure on NIPSCO.
Outlook Actions:
Issuer: Bay State Gas Company
-- Outlook, Remains Stable
Issuer: NiSource Capital Markets, Inc.
-- Outlook, Remains Stable
Issuer: NiSource Finance Corporation
-- Outlook, Remains Stable
Issuer: NiSource Inc.
-- Outlook, Remains Stable
Issuer: Northern Indiana Public Service Company
-- Outlook, Remains Stable
Affirmations:
Issuer: Bay State Gas Company
-- Senior Unsecured Medium-Term Note Program, Affirmed (P)Baa2
-- Senior Unsecured Regular Bond/Debenture, Affirmed Baa2
Issuer: Jasper (County of) IN
-- Senior Unsecured Revenue Bonds, Affirmed Baa1
-- Underlying Senior Unsecured Revenue Bonds, Affirmed Baa1
Issuer: NiSource Capital Markets, Inc.
-- Senior Unsecured Regular Bond/Debenture, Affirmed Baa2
Issuer: NiSource Finance Corporation
-- Issuer Rating, Affirmed Baa2
-- Senior Unsecured Shelf, Affirmed (P)Baa2
-- Senior Unsecured Bank Credit Facility, Affirmed Baa2
-- Senior Unsecured Regular Bond/Debenture, Affirmed Baa2
Issuer: NiSource Inc.
-- Issuer Rating, Affirmed Baa2
-- Preferred Shelf, Affirmed (P)Ba1
-- Preferred Shelf-Non Cumulativce, Affirmed (P)Ba1
-- Senior Unsecured Commercial Paper, Affirmed P-2
Issuer: Northern Indiana Public Service Company
-- Issuer Rating, Affirmed Baa1
-- Senior Unsecured Medium-Term Note Program, Affirmed (P)Baa1
-- Senior Unsecured Regular Bond/Debenture, Affirmed Baa1
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
ONEMAIN HOLDINGS: S&P Alters Outlook to Positive & Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings said it revised its outlook on OneMain Holdings
Inc. and its rated subsidiaries to positive from stable. At the
same time, S&P affirmed its 'B' issuer credit ratings on OneMain
Holdings, Inc., OneMain Financial Holdings, LLC, and Springleaf
Finance Corp.
S&P said, "We also affirmed our 'B' issue ratings on OneMain
Financial Holdings and Springleaf Finance Corp.'s senior unsecured
debt, as well as our 'CCC' issue rating on Springleaf's junior
subordinated debt."
The positive outlook reflects the firm's shift toward more secured
lending, declining leverage, moderate growth in receivables, and
diversified funding mix. For fiscal-year 2017, leverage, measured
as debt to adjusted total equity (ATE) decreased to 7.1x from 7.4x
in 2016. S&P said, "We now include a greater proportion of the
company's general reserves in ATE, which improves comparability
with OneMain's peers. Previously we had considered the majority of
reserves to be specific in nature. Excluding general reserves, debt
to ATE was 9.5x at year-end 2017. For year-end 2017, OneMain had
$535 million in portfolio-level reserves, compared with $572
million in 2016. We expect OneMain's leverage to continue to
decline as earnings bolster equity. The management team is
targeting leverage (using a different metric than our debt-to-ATE
measure, debt to tangible equity) of 7.0x by the second half of
2018."
S&P said, "The positive outlook reflects our expectations that,
over the next 12 months, OneMain will maintain its competitive
position in nonprime consumer lending and continue to gradually
reduce its leverage to about 7.0x. We expect net charge-offs to
remain below 8% on a consistent basis and the firm to maintain its
existing funding mix.
"We could raise the rating over the next six to 12 months if
OneMain maintains leverage around 7.0x and net charge-offs of about
7%, while maintaining its existing secured and unsecured mix.
"We could revise our outlook to stable over the next six to 12
months if debt to ATE rises above 7.5x or if net charge-offs rise
toward 8% on a sustained basis. We could lower the rating if net
charge-offs rise above 9% on a sustained basis. We could also lower
the ratings if we see competitive pressures increase in the
subprime installment lending industry, such that risk-adjusted
yields decline, and negatively affects earnings."
PATRIOT NATIONAL: Court OKs Bid to Compel Mediation on D&O Claims
-----------------------------------------------------------------
BankruptcyData.com reported that the U.S. Bankruptcy Court approved
Patriot National's motion to (i) compel mediation of claims against
the Debtors' directors and officers (D&O) and (ii) temporarily stay
related litigation pending the outcome of mediation. As previously
reported, "The relief sought in this motion addresses the Debtors'
concern that continued prosecution of the Claims would quickly
deplete the available proceeds of the D&O Policies through payment
of defense costs and expose the estates to potential
indemnification or estoppel risks. Such a result would not be in
the best interests of the Debtors' creditors or the investor
litigants vying to recover from the same finite pool of insurance
coverage, as the Non-Debtor Parties may not have sufficient
resources to satisfy any judgment. By this Motion, the Debtors
seek a Court-ordered mediation to seek to resolve all Claims
covered by the D&O Policies at once in the best interest of all
stakeholders and the estates. The Debtors have been informed that
the Insurers and the Prepetition Agent support mediation of the
Claims. The Debtors have approximately $60 million and $70 million
of D&O insurance coverage for 2016 and 2017, respectively, and the
proceeds of those policies may provide meaningful recoveries to the
Debtors' creditors and other stakeholders. On information and
belief, in excess of $20 million of the proceeds of the Debtors'
prepetition D&O Policies, has already been advanced in the less
than two years since the first Action was filed. There is a
significant risk that the remaining proceeds will be largely, if
not completely, exhausted by defense costs if an early settlement
of the Claims is not reached. A successful mediation could resolve
these disputes in a manner that would save the parties - and the
courts - time, money and resources, while preserving the bulk of
the D&O Policies' proceeds for the benefit of the creditors in the
chapter 11 cases and the plaintiffs in the Actions."
About Patriot National
Fort Lauderdale, Florida-based Patriot National, Inc., also known
as Old Guard Risk Services, Inc., through its subsidiaries,
provides agency, underwriting and policyholder services to its
insurance carrier clients, primarily in the workers' compensation
sector. Patriot National -- http://www.patnat.com/provides
general agency services, technology outsourcing, software
solutions, specialty underwriting and policyholder services, claims
administration services and self-funded health plans to its
insurance carrier clients, employers and other clients. Patriot was
incorporated in Delaware in November 2013.
The Company completed its initial public offering in January 2015
and its common stock is listed on the New York Stock Exchange under
the symbol "PN."
Patriot National, Inc., and affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 18-10189) on Jan. 30, 2018. In the
petitions signed by CRO James S. Feltman, the Debtors disclosed
$159.4 million in total assets and $242.2 million in total debt as
of Dec. 31, 2017.
The Debtors have tapped Laura Davis Jones, Esq., James E. O'Neill,
Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones
LLP and Kathryn A. Coleman, Esq., Christopher Gartman, Esq., and
Jacob Gartman, Esq., at Hughes Hubbard & Reed LLP as bankruptcy
Counsel; Pachulski Stang Ziehl & Jones LLP as co-counsel and
conflicts counsel; Duff & Phelps, LLC, as financial advisor; and
Conway Mackenzie Management Services, LLC, as provider of EVP of
Finance and related advisory services. Prime Clerk LLC --
https://cases.primeclerk.com/patnat -- is the Debtors' claims,
noticing and balloting agent.
James S. Feltman of Duff & Phelps, LLC, has been tapped as chief
restructuring officer to the Debtors.
The Office of the U.S. Trustee has named two creditors -- Jessica
Barad and MCMC LLC -- to serve on the official committee of
unsecured creditors in the Debtors' cases.
PETSMART INC: Bank Debt Trades at 17.50% Off
--------------------------------------------
Participations in a syndicated loan under which Petsmart Inc. is a
borrower traded in the secondary market at 82.5 cents-on-the-dollar
during the week ended Friday, February 23, 2018, according to data
compiled by LSTA/Thomson Reuters MTM Pricing. This represents an
increase of 0.61 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. Moody's
rates the loan 'B1' and Standard & Poor's gave a 'CCC' rating to
the loan. 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 Friday, February 23.
PRECIPIO INC: Leviston Resources Has 4.93% Stake as of Feb. 14
--------------------------------------------------------------
Leviston Resources LLC disclosed in a Schedule 13G/A filed with the
Securities and Exchange Commission that as of Feb. 14, 2018, it
beneficially owns 549,764 shares of common stock of Precipio, Inc.,
constituting 4.93 percent of the shares outstanding. The
percentage is based on 11,148,484 shares of Common Stock
outstanding as of Feb. 14, 2018. A full-text copy of the
regulatory filing is available for free at https://is.gd/Zpv8BC
About Precipio
Omaha, Nebraska-based Precipio, formerly known as Transgenomic,
Inc. -- http://www.precipiodx.com/-- has built a platform designed
to eradicate the problem of misdiagnosis by harnessing the
intellect, expertise and technology developed within academic
institutions and delivering quality diagnostic information to
physicians and their patients worldwide. Through its
collaborations with world-class academic institutions specializing
in cancer research, diagnostics and treatment, initially the Yale
School of Medicine, Precipio offers a new standard of diagnostic
accuracy enabling the highest level of patient care.
Transgenomic reported a net loss available to common stockholders
of $8 million on $1.55 million of net sales for the year ended Dec.
31, 2016, compared with a net loss available to common stockholders
of $34.27 million on $1.92 million of net sales for the year ended
Dec. 31, 2015. As of Sept. 30, 2017, Precipio had $34.97 million
in total assets, $14.57 million in total liabilities and $20.40
million in total stockholders' equity.
Marcum LLP, in Hartford, CT, issued a "going concern" qualification
on the consolidated financial statements for the year ended Dec.
31, 2016, stating that the Company has incurred operating losses
and used cash for operating activities for the past several years.
This raises substantial doubt about the Company's ability to
continue as a going concern.
QUIDDITCH ACQUISITION: S&P Assigns 'B-' CCR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings assigned its 'B-' corporate credit rating to
California-based Quidditch Acquisition Inc., the parent company of
Mexican fast-casual chain Qdoba Restaurant Corp. The outlook is
stable.
S&P said, "At the same time, we assigned our 'B-' issue-level
rating and '3' recovery rating to Quidditch's proposed senior
secured debt, consisting of a $35 million cash flow revolver
facility due 2023 and a $203 million term loan due 2025. The '3'
recovery rating indicates our expectation for meaningful (50%-70%,
rounded estimate: 60%) recovery in the event of a payment
default."
The ratings on Quidditch reflect its position as a relatively small
player in the intensely competitive fast-casual segment of the
restaurant industry, single brand focus with limited menu
diversity, and exposure to fluctuations in commodity prices. S&P
said, "We also believe there are some execution risks associated
with the company's planned strategic initiatives to improve
operating performance under the new ownership structure. These
factors are somewhat offset by the company's participation in the
rapidly growing Mexican fast-casual sub-segment, our view that the
company's future growth prospects could be better following its
spinoff from Jack in The Box and recurring cash flow from franchise
royalties.
"The stable outlook reflects our expectation for relatively stable
credit metrics over the next 12 months, with adjusted debt to
EBITDA to remain in the low-5.0x area and fixed-charge coverage
ratio in the mid-1.0x area. We base this forecast on modest EBITDA
base expansion on lower stand-alone general & administrative
expenses and net unit growth, and adequate sources of liquidity.
"We could lower the rating if the fixed-charge coverage ratio
declines to 1.0x because of ineffective execution of planned
strategic initiatives. Under this scenario, operating performance
would be meaningfully below our expectations, driven by same-store
sales declining in the mid- to high-single-digit area or margin
contraction because of elevated commodity prices or labor costs.
Liquidity could become constrained, ultimately pressuring the
company's ability to service its debt obligations and leading us to
believe the company's capital structure is unsustainable.
"We could raise the rating if the company demonstrates meaningful
traction in its operating performance through decent execution on
its planned strategic initiatives, resulting in same-store sales
stabilizing in the low-single-digit area and fixed-charge coverage
ratio improving to 2.2x or better. Under this scenario, we could
view the business more favorably. We would also have to believe
that the company is unlikely to incur a large debt-funded
dividend."
RAND LOGISTICS: Common Stock Delisted From Nasdaq
-------------------------------------------------
The Nasdaq Stock Market LLC filed a Form 25 with the Securities and
Exchange Commission notifying the removal from listing or
registration of Rand Logistics, Inc.'s common stock on the Exchange
under Section 12(b) of the Securities Exchange Act of 1934.
About Rand Logistics
Rand Logistics, Inc. -- http://www.randlogisticsinc.com/--
provides bulk freight shipping services in the Great Lakes region.
Through its subsidiaries, the Company operates a fleet of ten
self-unloading bulk carriers, including eight River Class vessels
and one River Class integrated tug/barge unit, and three
conventional bulk carriers, of which one is operated under a
contract of affreightment. The Company's vessels operate under the
U.S. Jones Act -- which dictates that only ships that are built,
crewed and owned by U.S. citizens can operate between U.S. ports --
and the Canada Marine Act -- which requires Canadian commissioned
ships to operate between Canadian ports. Headquartered in Jersey
City, New Jersey, Rand Logistics was formed in 2006 through the
acquisition of the outstanding shares of capital stock of Lower
Lakes Towing Ltd. Common shares of Rand Logistics trade on the
NASDAQ Capital Market under the symbol RLOG.
On Jan. 29, 2018, Rand Logistics, Inc., and seven of its
subsidiaries filed voluntary petitions seeking relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 18-10175).
In the petitions signed by CFO Mark S. Hiltwein, the Debtors listed
total consolidated assets of $268,948,855 and total consolidated
debt of $258,535,349 as of Nov. 30, 2017.
The Debtors engaged Pepper Hamilton LLP as Delaware bankruptcy
counsel; Akin Gump Strauss Hauer & Feld LLP as general bankruptcy
counsel; Conway Mackenzie, Inc., as turnaround manager; Miller
Buckfire & Co. LLC as financial advisor; and Kurtzman Carson
Consultants as noticing, balloting & claims agent.
RAND LOGISTICS: Court Approves Disclosures & Confirms Plan
----------------------------------------------------------
BankruptcyData.com reported that the U.S. Bankruptcy Court approved
Rand Logistics' Disclosure Statement and concurrently confirmed the
Company's Joint Prepackaged Chapter 11 Plan of Reorganization. As
previously reported, "The Plan has been negotiated with and has the
support of the agent and sole lender under the Second Lien Credit
Agreement, Lightship Capital LLC ('Lightship'). This Disclosure
Statement, the Plan and the accompanying documents have been
extensively negotiated with the legal and financial advisors to
Lightship. [T]he Plan embodies a settlement among the Debtors and
their key stakeholders on a consensual deleveraging transaction
which provides for the implementation of a restructuring through an
expedited chapter 11 process. [T]he key terms of the Plan include,
without limitation, the following: payment in full, in the ordinary
course of business, or reinstatement of Allowed General Unsecured
Claims, including those held by trade vendors, suppliers and
customers; payment in full, in Cash, of all Allowed Administrative
Claims, Allowed Professional Fee Claims, Allowed Priority Tax
Claims, Allowed Statutory Fee Claims, Allowed DIP Claims, Allowed
Other Priority Claims and Allowed Other Secured Claims; payment in
full, in Cash, of all Allowed First Lien Claims; conversion of
Allowed Second Lien Claims into 100% of the New Common Stock,
subject to dilution on account of the Equity Incentive Program,
resulting in the elimination of approximately $92 million of debt;
cancellation of the Existing Preferred Shares and the Existing
Common Shares; entry into the Exit Facility Credit Agreement to
ensure adequate liquidity at exit; and prompt emergence from the
Chapter 11 Cases."
About Rand Logistics
Rand Logistics, Inc. -- http://www.randlogisticsinc.com/--
provides bulk freight shipping services in the Great Lakes region.
Through its subsidiaries, the Company operates a fleet of ten
self-unloading bulk carriers, including eight River Class vessels
and one River Class integrated tug/barge unit, and three
conventional bulk carriers, of which one is operated under a
contract of affreightment. The Company's vessels operate under the
U.S. Jones Act -- which dictates that only ships that are built,
crewed and owned by U.S. citizens can operate between U.S. ports --
and the Canada Marine Act -- which requires Canadian commissioned
ships to operate between Canadian ports. Headquartered in Jersey
City, New Jersey, Rand Logistics was formed in 2006 through the
acquisition of the outstanding shares of capital stock of Lower
Lakes Towing Ltd. Common shares of Rand Logistics trade on the
NASDAQ Capital Market under the symbol RLOG.
On Jan. 29, 2018, Rand Logistics, Inc., and seven of its
subsidiaries filed voluntary petitions seeking relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 18-10175).
In the petitions signed by CFO Mark S. Hiltwein, the Debtors listed
total consolidated assets of $268.9 million and total consolidated
debt of $258.5 million as of Nov. 30, 2017.
The Debtors engaged Pepper Hamilton LLP as Delaware bankruptcy
counsel; Akin Gump Strauss Hauer & Feld LLP as general bankruptcy
counsel; Conway Mackenzie, Inc., as turnaround manager, Miller
Buckfire & Co. LLC as financial advisor; and Kurtzman Carson
Consultants as noticing, balloting & claims agent.
RAND LOGISTICS: Court OKs $100K Supplemental Pay to CFO Hiltwein
----------------------------------------------------------------
BankruptcyData.com reported that the U.S. Bankruptcy Court approved
Rand Logistics' motion to pay supplemental compensation to its
chief financial officer, Mark S. Hiltwein. As previously reported,
"By this Motion, the Debtors request authority to pay supplemental
compensation of $100,000 (the Supplemental Compensation') to the
Debtors' Chief Financial Officer, Mark S. Hiltwein. The
Supplemental Compensation, which has been consented to by
Lightship, will be payable to Hiltwein only if the Plan is
confirmed and substantially consummated - i.e., upon the Effective
Date. The Debtors, in consultation with their advisors, exercised
their reasonable business judgment in approving the payment of the
Supplemental Compensation. In light of Hiltwein's critical role
prior to the commencement of and during the Chapter 11 Cases, the
Debtors believe that the loss of his focus and efforts would be
detrimental to the successful implementation of the Plan. As such,
given that confirmation and consummation of the Plan (and the
related requirements thereto) are the last significant milestones
in the Chapter 11 Cases, the Supplemental Compensation is payable
only upon the Effective Date. The only impaired creditor under the
Plan has consented to the Supplemental Compensation, and, as such,
the Debtors believe that the authorization to pay the Supplemental
Compensation is in the best interests of their estates and all
parties in interest in achieving the value-maximizing results of
the Plan."
About Rand Logistics
Rand Logistics, Inc. -- http://www.randlogisticsinc.com/--
provides bulk freight shipping services in the Great Lakes region.
Through its subsidiaries, the Company operates a fleet of ten
self-unloading bulk carriers, including eight River Class vessels
and one River Class integrated tug/barge unit, and three
conventional bulk carriers, of which one is operated under a
contract of affreightment. The Company's vessels operate under the
U.S. Jones Act -- which dictates that only ships that are built,
crewed and owned by U.S. citizens can operate between U.S. ports --
and the Canada Marine Act -- which requires Canadian commissioned
ships to operate between Canadian ports. Headquartered in Jersey
City, New Jersey, Rand Logistics was formed in 2006 through the
acquisition of the outstanding shares of capital stock of Lower
Lakes Towing Ltd. Common shares of Rand Logistics trade on the
NASDAQ Capital Market under the symbol RLOG.
On Jan. 29, 2018, Rand Logistics, Inc., and seven of its
subsidiaries filed voluntary petitions seeking relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 18-10175).
In the petitions signed by CFO Mark S. Hiltwein, the Debtors listed
total consolidated assets of $268,948,855 and total consolidated
debt of $258,535,349 as of Nov. 30, 2017.
The Debtors engaged Pepper Hamilton LLP as Delaware bankruptcy
counsel; Akin Gump Strauss Hauer & Feld LLP as general bankruptcy
counsel; Conway Mackenzie, Inc., as turnaround manager, Miller
Buckfire & Co. LLC as financial advisor; and Kurtzman Carson
Consultants as noticing, balloting & claims agent.
RAND LOGISTICS: Exits Bankruptcy, AIP Acquisition Closes
--------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware on
Feb. 28, 2018, entered an order confirming Rand Logistics, Inc. and
its debtor-affiliates' Joint Prepackaged Chapter 11 Plan of
Reorganization.
All applicable conditions to consummation of the Plan were
satisfied or waived and the effective date of the Plan occurred on
March 1, 2018.
The Company filed a notice of the Effective Date of the Plan with
the Bankruptcy Court on March 1, 2018.
As contemplated by the Plan, on the Effective Date, Lightship
Capital LLC, an affiliate of American Industrial Partners, the
holder of 100% of the Debtors' second lien debt, converted all of
the second lien debt into 100% of the new common stock of the
reorganized Company (subject to dilution by shares to be issued
under an equity incentive plan for management and directors).
Prior to the filing of the Chapter 11 Cases, Lightship, the only
creditor impaired under the Plan and entitled to vote or accept or
reject the Plan, submitted its ballot voting in favor of the Plan.
The transactions contemplated by the Plan materially de-levered the
Company's balance sheet, eliminating approximately $92 million in
outstanding debt and resulted in Lightship becoming the owner of
substantially all of the Company's new common stock upon its
emergence from Chapter 11.
Pursuant to the Plan, all holders of claims against the Debtors
(except for the second lien debt held by Lightship) are unimpaired;
the Debtors' trade creditors and vendors are expected to be paid in
full in the ordinary course of business. Additionally, pursuant to
the Plan, all outstanding shares of the Company's Preferred Stock,
par value $0.0001 per share, and Common Stock, par value $0.0001
per share, consisting of 295,480 shares of preferred stock and
18,633,149 shares of Common Stock, have been cancelled and
extinguished as of the Effective Date with no recovery under the
Plan.
All of the shares of Common Stock and Preferred Stock outstanding
immediately prior to the effective time of the Plan have been
cancelled and extinguished.
Additionally, on the Effective Date, the Debtors and the Company's
non-debtor subsidiaries entered into a new credit agreement with
Ally Bank for exit financing replacing the Debtors' existing
revolving credit facility with a new revolving credit facility and
term loan facility and providing adequate liquidity for the
Company's continuing operations.
The Plan provides that the terms of all directors of all the
Debtors shall be deemed to have expired on the Effective Date, and,
as of the Effective Date, all directors have resigned from the
Company's board of directors.
AIP is a New York-based private equity firm with over $4.0 billion
of assets under management that has focused on buying, improving
and growing industrial businesses in the U.S. and Canada for over
20 years.
"We are pleased to have completed the transaction and to be
partners with a leading private equity firm that shares our vision
for Rand's future," commented Edward Levy, President and Chief
Executive Officer of Rand. Mr. Levy added, "The transaction has
recast our balance sheet and positions the Company for continued
customer service and growth."
"We are thrilled to partner with Rand and its leadership team to
welcome a new beginning for a clear market leader in shipping and
logistics on the Great Lakes," said Jason Perri, a Partner of AIP.
"Rand's track record of reliability, safety and service in moving
critical raw materials among world class customers between ports on
the Great Lakes speaks for itself. We are pleased to help Rand
reduce its debt burden and restore its financial health for the
benefit of all stakeholders, especially customers and employees,
and look forward to working with Rand to continue to improve its
operations and broaden its capabilities as a new platform for
growth under our ownership."
* * *
Vince Sullivan, writing for Bankruptcy Law360, reports that after a
night to mull over the objections presented by the federal
government, the bankruptcy judge confirmed the Chapter 11 plan once
language was added to satisfy the concerns of the United States.
The Confirmation Order provides that no governmental unit (as
defined in section 101(27) of the Bankruptcy Code) shall be subject
to the Third-Party Releases described in Article 6.4(b) of the
Plan. Notwithstanding any language to the contrary contained in
the Disclosure Statement, the Plan, and/or this Confirmation Order,
no provision thereof shall release any non-Debtor, including any
current and/or former officer and/or director of the Debtors and/or
any non-Debtor Person or Entity, from liability to the United
States Securities and Exchange Commission, in connection with any
legal action or claim brought by the SEC against such Person and/or
Entity.
A copy of the Court's Order confirming the Plan is available at
https://is.gd/ZXSu2i
A copy of the Debtors' Joint Prepack Plan is available at
https://is.gd/YCLpl0
Nasdaq Delisting
The Nasdaq Stock Market, LLC, February 27, 2018, Rand Logistics,
Inc.
The Nasdaq Stock Market, Inc. said on Feb. 27, that it has
determined to remove from listing the common stock of Rand
Logistics, Inc., effective at the opening of the trading session on
March 9, 2018. Based on review of information provided by the
Company, Nasdaq Staff determined that the Company no longer
qualified for listing on the Exchange pursuant to Listing Rule
5550(a)(2).
The Company was notified of the Staffs determination on September
20, 2017. The Company appealed the determination to a Hearing
Panel. Upon review of the information provided by the Company, the
Panel issued a decision dated December 4, 2017, granting the
Company continued listing pursuant to an exception that included
several milestones that the Company was required to meet, towards
the goal of regaining compliance with Listing Rule 5550(a)(2).
However, the Company was unable to meet the exception milestones as
required.
On January 3, 2018, the Panel issued a final delisting
determination and notified the Company that trading in the Companys
securities would be suspended on January 5, 2018.
The Company did not request a review of the Panels decision by the
Nasdaq Listing and Hearing Review Council. The Listing Council did
not call the matter for review.
The Panels Determination to delist the Company became final on
February 20, 2018.
Rand Logistics said on March 1, it intends to file Form 15 filings
with the Securities and Exchange Commission for the purpose of
terminating the registration of the Common Stock under the
Securities Exchange Act of 1934, as amended. Upon filing the Form
15 for the Common Stock, the Company will immediately cease filing
any further periodic or current reports under the Exchange Act.
About Rand Logistics
Rand Logistics, Inc. -- http://www.randlogisticsinc.com/--
provides bulk freight shipping services in the Great Lakes region.
Through its subsidiaries, the Company operates a fleet of ten
self-unloading bulk carriers, including eight River Class vessels
and one River Class integrated tug/barge unit, and three
conventional bulk carriers, of which one is operated under a
contract of affreightment. The Company's vessels operate under the
U.S. Jones Act -- which dictates that only ships that are built,
crewed and owned by U.S. citizens can operate between U.S. ports --
and the Canada Marine Act -- which requires Canadian commissioned
ships to operate between Canadian ports. Headquartered in Jersey
City, New Jersey, Rand Logistics was formed in 2006 through the
acquisition of the outstanding shares of capital stock of Lower
Lakes Towing Ltd. Common shares of Rand Logistics trade on the
NASDAQ Capital Market under the symbol RLOG.
On Jan. 29, 2018, Rand Logistics, Inc., and seven of its
subsidiaries filed voluntary petitions seeking relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 18-10175).
In the petitions signed by CFO Mark S. Hiltwein, the Debtors listed
total consolidated assets of $268,948,855 and total consolidated
debt of $258,535,349 as of Nov. 30, 2017.
The Debtors engaged Pepper Hamilton LLP as Delaware bankruptcy
counsel; Akin Gump Strauss Hauer & Feld LLP as general bankruptcy
counsel; Conway Mackenzie, Inc., as turnaround manager, Miller
Buckfire & Co. LLC as financial advisor; and Kurtzman Carson
Consultants as noticing, balloting & claims agent.
Lightship's professionals and advisors are (i) White & Case LLP,
(ii) Houlihan Lokey Capital Inc., (iii) Stikeman Elliot LLP, (iv)
Seward & Kissel LLP, (v) Kieselstein Law Firm, PLLC, (vi) RSM US
LLP, and (vii) Fox Rothschild LLP.
REAL INDUSTRY: CMC, N T Ruddock Resign as Committee Members
-----------------------------------------------------------
The Office of the U.S. Trustee for Region 3 on Feb. 28 disclosed in
a court filing that Commercial Metals Co. and N T Ruddock Co.
resigned as members of the official committee of unsecured
creditors in the Chapter 11 cases of Real Industry, Inc. and its
affiliates.
The remaining committee members are Huron Valley Steel Corp.,
Nathan H. Kelman Inc., and Page Transportation Inc.
About Real Industry
Based in Beachwood, Ohio, Real Industry, Inc. (NASDAQ:RELY) is the
holding company for Real Alloy, the largest third-party aluminum
recycler in both North America and Europe. Real Alloy offers
products to wrought alloy processors, automotive original equipment
manufacturers, foundries, and casters. Real Alloy delivers
recycled metal in liquid or solid form according to customer
specifications and serves the automotive, consumer packaging,
aerospace, building and construction, steel, and durable goods
industries.
Real Industry has no funded debt. The funded debt obligations of
the Real Alloy debtors total $400 million, comprised of (i) $96
million outstanding under a $110 senior secured revolving
asset-based credit facility with Bank of America, and (ii) $305
million in principal outstanding under 10.00% senior secured notes
due 2019.
Real Industry, Inc., and Real Alloy Intermediate Holding, LLC, Real
Alloy Holding, Inc., and their U.S. subsidiaries filed voluntary
petitions seeking relief under Chapter 11 of the Bankruptcy Code in
Delaware on Nov. 17, 2017.
The Honorable Kevin J. Carey is the case judge.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as local
bankruptcy counsel; Jefferies LLC as the debtors' investment
banker; Berkeley Research Group, LLC as financial advisor; Ernst &
Young LLP as auditor and tax advisor; and Prime Clerk as the claims
and noticing agent and administrative advisor.
The Ad Hoc Noteholder Group tapped Latham & Watkins LLP as counsel;
Young Conway Stargatt & Taylor LLP as Delaware counsel; and Alvarez
& Marsal Securities, LLC, as financial advisor.
DDJ Capital Management, LLC, Osterweis Capital Management, HPS
Investment Partners, LLC, Hotchkis & Wiley Capital Management, and
Southpaw Credit Opportunity Master Fund L.P. comprise the Ad Hoc
Noteholder Group.
The Official Committee of Unsecured Creditors tapped Brown Rudnick
LLP as counsel; Duane Morris LLP as Delaware counsel; Miller
Buckfire & Co, LLC, as investment banker; and Goldin Associates,
LLC, as financial advisor.
The Ad Hoc Committee of Equity Holders of Real Industry tapped the
firms of Dentons US LLP and Bayard, P.A., as counsel.
* * *
Real Alloy entered into an agreement with its existing asset-based
facility lender and certain of its bondholders for continued use of
its $110 million asset-based lending facility and up to $85 million
of additional liquidity through debtor-in-possession financing to
fund ongoing business operations.
As Real Industry has no access to the Real Alloy debtors'
postpetition financing, Real Industry accepted an unsolicited
proposal from 210 Capital, LLC and the Private Credit Group of
Goldman Sachs Asset Management L.P. for (i) up to $5.5 million in
postpetition financing, (ii) an equity commitment of $17 million
for up to 49% of the common stock, and (iii) a commitment to
provide a $500 million acquisition financing facility on terms to
be negotiated.
REAL INDUSTRY: Court Disapproves Appointment of Equity Committee
----------------------------------------------------------------
BankruptcyData.com reported that the U.S. Bankruptcy Court denied
Real Industry's ad hoc committee of equity holders' motion for an
order directing the U.S. Trustee assigned to the case to appoint an
official committee of equity holders. The order states, "The Motion
is DENIED for the reasons set forth on the record at the Hearing."
The ad hoc committee previously argued, "Although typically there
are a number of factors that should be considered, the tendency is
to treat the likelihood of recovery to shareholders as the
preeminent factor in the determination to appoint an equity
committee. Moreover, Real Industry has no pre-petition debt and
only two classes of equity and it has substantial net operating
losses ('NOLs'). Real Industry's emergence from chapter 11 with
its NOLs intact depends on the continuity of ownership of greater
than 50 percent of the shares by the existing equity as required by
the United States Tax Code. The value of common shareholders'
recovery depends on a number of factors, including the value and
treatment of Preferred Stock. As a result of these factors, the
usual inquiries about whether the value of operating assets, proven
either by the market or in projections, are sufficient to provide a
recovery to shareholders over creditor claims in accordance with
the absolute priority rule are inapplicable at this junction here.
In sum, the shareholders of Real Industry have no meaningful
representation in the case with a fiduciary duty to the entire
class."
About Real Industry
Based in Beachwood, Ohio, Real Industry, Inc. (NASDAQ:RELY) is the
holding company for Real Alloy, the largest third-party aluminum
recycler in both North America and Europe. Real Alloy offers
products to wrought alloy processors, automotive original equipment
manufacturers, foundries, and casters. Real Alloy delivers
recycled metal in liquid or solid form according to customer
specifications and serves the automotive, consumer packaging,
aerospace, building and construction, steel, and durable goods
industries.
Real Industry has no funded debt. The funded debt obligations of
the Real Alloy debtors total $400 million, comprised of (i) $96
million outstanding under a $110 senior secured revolving
asset-based credit facility with Bank of America, and (ii) $305
million in principal outstanding under 10.00% senior secured notes
due 2019.
Real Industry, Inc., and Real Alloy Intermediate Holding, LLC, Real
Alloy Holding, Inc., and their U.S. subsidiaries filed voluntary
petitions seeking relief under Chapter 11 of the Bankruptcy Code in
Delaware on Nov. 17, 2017.
The Honorable Kevin J. Carey is the case judge.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as local
bankruptcy counsel; Jefferies LLC as the debtors' investment
banker; Berkeley Research Group, LLC as financial advisor; Ernst &
Young LLP as auditor and tax advisor; and Prime Clerk as the claims
and noticing agent and administrative advisor.
The Ad Hoc Noteholder Group tapped Latham & Watkins LLP as counsel;
Young Conway Stargatt & Taylor LLP as Delaware counsel; and Alvarez
& Marsal Securities, LLC, as financial advisor.
DDJ Capital Management, LLC, Osterweis Capital Management, HPS
Investment Partners, LLC, Hotchkis & Wiley Capital Management, and
Southpaw Credit Opportunity Master Fund L.P. comprise the Ad Hoc
Noteholder Group.
The Official Committee of Unsecured Creditors tapped Brown Rudnick
LLP as counsel; Duane Morris LLP as Delaware counsel; Miller
Buckfire & Co, LLC, as investment banker; and Goldin Associates,
LLC, as financial advisor.
The Ad Hoc Committee of Equity Holders of Real Industry tapped the
firms of Dentons US LLP and Bayard, P.A., as counsel.
* * *
Real Alloy entered into an agreement with its existing asset-based
facility lender and certain of its bondholders for continued use of
its $110 million asset-based lending facility and up to $85 million
of additional liquidity through debtor-in-possession financing to
fund ongoing business operations.
As Real Industry has no access to the Real Alloy debtors'
postpetition financing, Real Industry accepted an unsolicited
proposal from 210 Capital, LLC, and the Private Credit Group of
Goldman Sachs Asset Management L.P. for (i) up to $5.5 million in
postpetition financing, (ii) an equity commitment of $17 million
for up to 49% of the common stock, and (iii) a commitment to
provide a $500 million acquisition financing facility on terms to
be negotiated.
RESOLUTE ENERGY: Provides Operations Update and 2018 Guidance
-------------------------------------------------------------
Resolute Energy Corporation provided a business update, including a
review of the Company's 2017 production and operational
performance, year-end 2017 reserves and full year 2018 guidance.
Rick Betz, Resolute's chief executive officer, said, "2017 was a
year of significant accomplishments at Resolute. We successfully
divested non-core assets in Utah and New Mexico to further
strengthen our balance sheet and complete our transformation to a
Delaware Basin pure play. At the same time, we completed a
significant acquisition within the Delaware Basin that expanded our
core acreage position by nearly 30 percent. During the year we
spud 28 new horizontal wells and brought 27 wells on line. The new
wells drove year-over-year Permian Basin production growth of 151
percent while delivering some of the strongest returns on capital
employed in the basin. As we look at 2018, we have a well-formed
plan which we expect will increase Permian Basin production by more
than 50 percent while further strengthening our returns and
unlocking the full potential of the Company's assets to create
compelling value for all stockholders."
2017 Production and Operational Performance
Fourth quarter 2017 Company production increased 41 percent
year-over-year to 27,595 barrels of oil equivalent ("Boe") per day
and full year production grew by 77 percent to 25,086 Boe per day.
Fourth quarter 2017 production included a contribution of
approximately 2,100 Boe per day from the Company's recently
divested Aneth Field properties. Fourth quarter production
exceeded the high end of the Company's updated guidance, as
announced on Nov. 6, 2017, by 595 Boe per day and full year
production was approximately at the midpoint.
Fourth quarter Permian Basin production increased 89 percent
year-over-year to 25,481 Boe per day and full year production grew
by 151 percent to 20,112 Boe per day.
For the fourth quarter, Company production consisted of 52 percent
oil, 75 percent liquids and 25 percent gas, and Permian Basin
production consisted of 49 percent oil, 74 percent liquids and 26
percent gas.
The Company expects to report cash-based lease operating expense
("LOE") per Boe for the full year 2017 of $8.64, or approximately
$79 million, a reduction of 29 percent from the prior year. Full
year LOE is below the midpoint of Resolute's November 2017 updated
guidance. Permian Basin LOE for the full year 2017 is expected to
be approximately $40 million, or $5.46 per Boe.
Net capital spending for 2017 is expected to be approximately $277
million, after earnout payments of $26 million received from
Caprock Midstream.
Resolute's 2017 plan for its Mustang and Appaloosa assets
contemplated drilling 22 wells, completing and bringing on line 21
wells, including two wells that were drilled but uncompleted
("DUC") at year-end 2016, and exiting the year with two DUCs. As a
result of increased drilling and completion efficiency, Resolute
was able to complete drilling operations on 25 wells and had three
wells drilling over year-end, while still completing and bringing
on line 21 wells in these areas. Excluding the three wells that
were drilling over year-end, Resolute carried six DUCs into 2018.
During 2017, the Company set spud-to-TD records of 14 days drilling
mid-length laterals in Mustang and 17 days drilling long laterals
in Appaloosa.
In May 2017 Resolute completed the acquisition of the Bronco
acreage, which expanded the Company's Reeves County holdings by 28
percent. As part of the transaction Resolute acquired two
producing wells and six DUCs. All six DUCs were completed and on
production by September 2017, bringing the total number of wells
brought on line in 2017 to 27.
Wells placed on production in 2017 included fourteen mid-length
laterals, nine long length laterals, and four standard length
laterals acquired as part of the Bronco acquisition. The Wolfcamp
A and Upper Wolfcamp B horizontal wells in Reeves County had
average peak 24-hour rates between 2,400 and 2,800 Boe per day.
In addition to Resolute's successful Wolfcamp A and Upper B
drilling programs, during 2017 the Company also tested the lower
Wolfcamp B and the Wolfcamp C in Appaloosa and Mustang. To date,
Resolute has drilled two lower Wolfcamp B wells and four Wolfcamp C
wells, three of which are producing. The remaining three wells are
expected to be on production in the coming weeks.
The Uinta C101H, a Wolfcamp C well, had a recent 24-hour rate of
approximately 2,900 Boe per day, of which 29 percent was oil and 65
percent was liquids. This is an early-time rate and the final peak
rate may be higher. The South Elephant C207SL, also a Wolfcamp C
well, had a peak 24-hour rate of 2,294 Boe per day, of which
approximately 31 percent was oil and 68 percent was liquids. The
South Elephant B307SL, a lower Wolfcamp B well, had a peak 24-hour
rate of 2,254 Boe per day of which approximately 41 percent was oil
and 73 percent was liquids. While these results are encouraging,
Resolute intends to complete additional testing and observe
production over a longer period of time before pursuing full scale
development of these deeper zones.
Resolute currently has approximately 21,000 net acres in the
Delaware Basin. In the heart of the Company's operating areas,
Mustang, Appaloosa and Bronco, 89 percent of the acreage is held by
production. Resolute has approximately 430 gross (375 net)
drillable locations in the Wolfcamp A and Upper B zones in these
areas, representing a ten year inventory assuming a three rig
drilling program. Using moderate density assumptions in the lower
Wolfcamp B and the Wolfcamp C, and assuming only one zone in the
Wolfcamp C, successful results from our deeper tests could add more
than 160 gross locations representing an incremental four years of
development inventory.
Year-End 2017 Proved Reserves
At Dec. 31, 2017, Resolute's estimated proved reserves were 53.4
MMBoe, compared to year-end 2016 proved reserves of 60.3 MMBoe,
after reducing proved reserves by 23.0 MMBoe for dispositions in
Aneth and New Mexico and 9.1 MMBoe for production during 2017.
Permian Basin reserves grew from 35.4 MMBoe to 53.4 MMBoe as a
direct result of Resolute's successful Delaware Basin drilling
program. Approximately 47 percent of the Company's 2017 year-end
proved reserves were oil and 70 percent were liquids. Proved
undeveloped reserves comprise 51 percent of total proved reserves.
This category includes less than 10 percent of the Company's total
inventory of 430 Wolfcamp A and upper Wolfcamp B locations.
The present value of the Company's estimated future net revenues
from proved reserves was approximately $433 million after-tax as of
Dec. 31, 2017, using SEC pricing guidelines for year-end 2017,
discounted at ten percent. Benchmark pricing used in calculating
the year-end 2017 present value of the Company's reserves was
$51.34 per barrel of oil and $2.98 per MMBtu of gas. All prices
were adjusted for differentials and NGL content, and the analysis
excluded the impact of hedges.
2018 Drilling and Completion Plan to Optimize
Development and Drive Value Creation
Mr. Betz continued, "After carefully evaluating the results of our
2017 drilling activity we have formulated a 2018 operating plan
which places Resolute at the forefront of those Delaware Basin
operators in full field development. Our 2018 plan is built around
the twin pillars of pad drilling and batch completions. By using
two and three rigs drilling three-well pads in close proximity and
then completing all of these wells together, we expect to deliver
even stronger well performance at lower costs than the previous
operational approach we employed through most of 2017. We are
confident in our ability to execute on this plan and believe the
resulting production growth will position us to generate positive
free cash flow in the fourth quarter of 2018 and for full year
2019."
Resolute's 2018 plan includes net capital spending of $365 million
to $395 million, including $350 million to $375 million in drilling
and completion capital to support two rigs throughout the year, and
a third rig which commenced work in late February and is expected
to be released in mid-September. Additionally, the Company expects
to spend an incremental $42 million to $49 million on field
facilities and other corporate capital, and to receive estimated
earnout payments of $27 million to $29 million from Caprock
Midstream. Overall, Resolute expects to drill 42 wells during the
year and bring 38 wells on production, carry six DUCs and have two
wells drilling over year-end 2018.
Each of the three rigs will be primarily pad drilling three-well
stacks with all the rigs in the same spacing unit at the same time.
Operations will focus in the Sandlot unit in Mustang and the
Mitre/Ranger units in Appaloosa, with Wolfcamp Upper A, Lower A,
and Upper B as the primary target zones. This approach to pad
drilling will provide Resolute with the opportunity to batch
complete groups of up to nine wells simultaneously. In addition to
the production and reservoir benefits of pad drilling and batch
completions, the opportunity to be more efficient with rig time,
frac crew utilization and supply management will allow the Company
to be more effective in managing costs throughout the year.
The Company estimates that full-year Delaware Basin production will
increase more than 50 percent year-over-year, to an average of
30,000 to 33,000 Boe per day, and will grow more than 90 percent
from the first quarter of 2018 to the fourth quarter, with a
projected fourth quarter 2018 production rate of 42,000 to 44,000
Boe per day.
Beginning in late 2017 the Company shifted focus to building an
inventory of drilled wells to batch complete. As a result, two
completions are expected in first quarter 2018, and in mid-March
Resolute will begin completing its first nine-well group.
Consequently, the Company expects first quarter 2018 production to
be 22,000 to 23,000 Boe per day. With the first nine-well group
coming on line in May and another nine-well group coming on line in
July Resolute expects production to ramp significantly in the
middle part of the year. Further groups of completed wells will
come on line throughout the remainder of the year driving rapid
production growth.
This development plan was put in place based on the Company's
experience with the impact of infill drilling on well performance.
In estimating its 2018 total production, Resolute has fully
incorporated the anticipated effects of frac interference on older
wells and the expected modestly reduced production from newly
drilled infill wells. In addition the Company has taken into
consideration potential operational events that could reduce
production further such as power outages, weather, well shut-ins
and downstream gas constraints.
2018 Guidance and Capital Budget
Production: For 2018, Resolute expects production to be 10,950 to
12,045 MBoe, or an average of 30,000 to 33,000 Boe per day. The
Company expects average quarterly production to ramp from 22,000 to
23,000 Boe per day in the first quarter to an estimated fourth
quarter rate of 42,000 to 44,000 Boe per day.
Mix: Oil is expected to make up approximately 52 percent of
production, while total liquids are expected to make up
approximately 75 percent of production.
Lease Operating Expense: Resolute projects annual cash LOE for 2018
to be between $60 million and $68 million, or $5.57 per Boe at the
mid-point of the range. This represents approximately 36 percent
decrease in LOE per Boe compared to expected 2017 expenditures.
General & Administrative Expense: Resolute anticipates that annual
cash general and administrative expense for 2018 will be between
$30 million and $34 million, net of COPAS reimbursements and
capitalization and before one-time costs associated with the
previously announced Aneth sale, or $2.78 per Boe at the mid-point
of the range, down approximately 15 percent from the expected $3.27
per Boe in 2017. The Company's estimate of 2018 cash general and
administrative expense does not include potentially material costs
related to stockholder activism.
Capital Expenditures: Resolute expects capital expenditures of
between $365 million and $395 million in 2018, net of estimated
earnout payments of $27 to $29 million receivable from Caprock
Midstream.
Liquidity: At Dec. 31, 2017 the Company had $30 million outstanding
under its revolving credit facility. This facility currently has a
$210 million borrowing base. In addition to availability under the
Company's revolving credit facility, Resolute believes its balance
sheet provides financial flexibility and optionality to fund the
2018 development plan. Resolute expects to exit the year with a
debt-to-EBITDA ratio of between 2.80x and 2.95x with further
declines over a five-year outlook when using free cash flow to pay
down debt.
These expectations do not include the anticipated positive impact
from up to $10 million of contingency payments from the Aneth
purchaser, payable in the fourth quarter of 2017, all of which has
been or would be earned at today's strip, nor do they include any
potential proceeds from a midstream transaction involving the
Bronco properties, which is currently being explored.
Investor Presentation
The Company also filed an investor presentation with additional
information, which can be found on Resolute's website at
www.resoluteenergy.com.
About Resolute Energy
Based in Denver, Colorado, Resolute Energy Corp. (NYSE:REN) --
http://www.resoluteenergy.com/-- is an independent oil and gas
company focused on the acquisition and development of
unconventional oil and gas properties in the Delaware Basin portion
of the Permian Basin of west Texas.
Resolute reported a net loss of $161.7 million in 2016, a net loss
of $742.3 million in 2015, and a net loss of $21.85 million in
2014. The Company had $792.3 million in total assets, $866.1
million in total liabilities, and a total stockholders' deficit of
$73.76 million as of Sept. 30, 2017.
ROSETTA GENOMICS: Will Seek Approval of Genoptix Merger on April 6
------------------------------------------------------------------
Rosetta Genomics Ltd. gives notice that an extraordinary general
meeting of the shareholders of the Company will be held at 25901
Commercentre Dr., Lake Forest, CA 92630, on April 6, 2018 at 10:00
am (PT).
At the Extraordinary Meeting, shareholders will be asked to
consider and vote on the following:
1. The adoption and approval, pursuant to Section 320 of the
Companies Law 5759-1999 of the State of Israel, of the
merger of Stone Marger Sub Ltd. ("Merger Sub"), a company
incorporated under the laws of the State of Israel and a
wholly owned subsidiary of Genoptix, Inc., a Delaware
corporation, with and into the Company, including the
adoption and approval of: (i) the Agreement and Plan of
Merger, dated as of Feb. 27, 2018, by and among Genoptix,
Merger Sub, and the Company; (ii) the merger of Merger Sub
with and into the Company on the terms and subject to the
conditions set forth in the Merger Agreement and in
accordance with Sections 314 through 327 of the Companies
Law, following which the separate corporate existence of
Merger Sub shall cease and the Company will become a
private wholly-owned direct subsidiary of Genoptix; (iii)
the consideration to be received by the shareholders of
the Company in the Merger, preliminarily estimated to be
$0.40 to $0.45 in cash, without interest and less any
applicable withholding taxes, for each ordinary share of
the Company, nominal (par) value NIS 7.2 per share, held
immediately prior to the effective time of the Merger,
with the exact price per ordinary share dependent on the
final amounts of deductions and adjustments detailed in
the Merger Agreement that have not yet been fixed, and the
extent to which outstanding warrants are exercised and
convertible debentures are converted prior to the
effective time of the Merger; and (iv) all other
transactions and arrangements contemplated by the Merger
Agreement, including, without limitation, the purchase by
the Company of a prepaid "tail" directors' and officers'
liability insurance policy for a period of seven years
following the effective time of the Merger.
The approval of Item 1 requires the affirmative vote of the holders
of at least a majority of the voting power of the Company, in
person or by proxy, such majority not to include votes by
shareholders that are Merger Sub, Genoptix or any person or entity
holding at least 25% of the means of control of either Merger Sub
or Genoptix, or any person or entity acting on their behalf,
including any family member of, or entity controlled by, any of the
foregoing.
Only shareholders of record at the close of trading on March 9,
2018, will be entitled to notice of, and to vote at, the
Extraordinary Meeting. All shareholders are cordially invited to
attend the Extraordinary Meeting in person. Discussion at the
Extraordinary Meeting will be commenced if a quorum is present. Two
or more shareholders present, in person or by proxy and holding
shares conferring in the aggregate more than 25% of the voting
power of the Company shall constitute a quorum for the
Extraordinary Meeting. If within half an hour from the time
appointed for the Extraordinary Meeting a quorum is not present,
the Extraordinary Meeting will be adjourned to April 13, 2018 at
the same time and place or to such day and at such time as the
Chairman may determine. At any such adjourned meeting, any two
shareholders present in person or by proxy will constitute a
quorum.
A full-text copy of the Notice is available for free at:
https://is.gd/7i2TKb
About Rosetta Genomics
Based in Rehovot, Israel, Rosetta Genomics Ltd. --
http://www.rosettagx.com/-- is seeking to develop and
commercialize new diagnostic tests based on a recently discovered
group of genes known as microRNAs. MicroRNAs are naturally
expressed, or produced, using instructions encoded in DNA and are
believed to play an important role in normal function and in
various pathologies. The Company has established a CLIA-certified
laboratory in Philadelphia, which enables the Company to develop,
validate and commercialize its own diagnostic tests applying its
microRNA technology.
Rosetta Genomics reported a net loss of US$16.23 million on US$9.23
million of total revenues for the year ended Dec. 31, 2016,
compared to a net loss of US$17.34 million on US$8.26 million of
total revenues for the year ended Dec. 31, 2015.
As of June 30, 2017, Rosetta had US$6.20 million in total assets,
US$5.11 million in total liabilities and US$1.09 million in total
shareholders' equity.
Kost Forer Gabby & Kasierer, a member of Ernst & Young Global, in
Tel-Aviv, Israel, issued a "going concern" qualification on the
consolidated financial statements for the year ended Dec. 31, 2016,
citing that the Company has recurring losses from operations and
has limited liquidity resources that raise substantial doubt about
its ability to continue as a going concern.
SCHOOL OF EXCELLENCE: S&P Lowers 2004A Revenue Bond Rating to 'BB-'
-------------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB-' from 'BB'
on the Texas Public Finance Authority Charter School Finance
Corp.'s revenue bonds, series 2004A issued for the School of
Excellence in Education (SEE). S&P also withdrew its ratings on
SEE's series 2016A refunding bonds, which were never issued. The
outlook is stable.
"The lowered rating reflects our view of SEE's five-year trend of
material enrollment declines, which has led to operating deficits
that we expect will continue unless a sufficient plan is put into
place to address them," said S&P Global Ratings credit analyst
Kaiti Wang.
SEE, which primarily serves economically disadvantaged students, is
an open-enrollment public charter school in north-central San
Antonio. Population is transient as families in the primary service
area move frequently. The school has historically served a
low-socioeconomic community. All of its students are enrolled in
the free and reduced lunch program, and 7.5% are classified as
special needs.
SEADRILL LTD: April 17 Plan Confirmation Hearing Set
----------------------------------------------------
Judge David R. Jones of the U.S. Bankruptcy Court for the Southern
District of Texas, Victoria Division, has approved the disclosure
statement explaining Seadrill Limited, et al.'s Second Amended
Joint Chapter 11 Plan of Reorganization and established the
following dates with respect to the solicitation of votes to
accept, and voting on, the Plan and confirming the Plan:
Solicitation Deadline March 5, 2018
Publication Deadline March 5, 2018
Voting Deadline April 5, 2018
Plan Objection Deadline April 5, 2018
Deadline to File Confirmation Brief April 12, 2018
Deadline to File Voting Report April 12, 2018
Confirmation Hearing April 17, 2018
The Debtors' estimate of aggregate Allowed General Unsecured Claims
against Debtors Seadrill Limited, NADL, and Sevan, and the
estimated recovery percentage of these claims under the Plan, is as
follows:
Projected Projected
Debtor/Class Claims Recovery
------------ --------- ---------
Seadrill Ltd. Class B3 $3,280 Million 32%-47%
NADL - Class D3 $673 Million 23%-33%
Sevan - Class F3 $0 N/A
The Plan is supported by holders of approximately 99% of the claims
arising under the bank facilities and holders of approximately 70%
(up from the 40% disclosed in the previous disclosure statement) of
the unsecured bonds.
According to Peg Brickley, writing for The Wall Street Journal Pro
Bankruptcy, Seadrill Ltd. quelled opposition to its bankruptcy exit
plan by making room for more creditors to invest in getting the
company back on its feet.
The Journal pointed out that weeks of talks headed off a threatened
open-court battle over Seadrill's attempt to reshuffle its debts
and bring in new money. The Journal said creditors left on the
sidelines, including Barclays Capital and a cadre of unsecured
bondholders, protested, complaining that Centerbridge and Mr.
Fredriksen had unfairly put together a sweetheart deal for
themselves and a few supporters.
The official committee representing all unsecured creditors agreed,
and started getting ready to sue, the Journal noted.
Seadrill, during the disclosure statement hearing, unveiled
settlements that will stop the legal threats and bring support for
the chapter 11 turnaround plan to at least 70% of unsecured
bondholders, up from the 40% level of support the original plan
enjoyed, the Journal related.
Barclays and the unsecured bondholder groups are dropping threats
to put together rival restructuring deals, after being invited into
the investment opportunity on favorable terms, the report further
related. The official committee of unsecured creditors is now
urging a "yes" vote on the revised plan because of the improved
treatment, the report said.
Thomas Moers Mayer, lawyer for the committee, said told the Journal
that Seadrill's banks agreed to stretch out the maturity on their
loans, as long as the company raised at least $1 billion in fresh
cash to shore up its finances to weather tough industry conditions.
The question for Seadrill was "who got the opportunity" to
participate in the bailout, Mr. Mayer further told the Journal.
Under pressure from Barclays and the bondholder group, Seadrill
made room in the deal for more participants in the investment, and
found some cash for junior creditors that aren’t positioned to
make the investment, the Journal noted.
The Journal, however, noted that some things didn't change in the
revised turnaround plan. As in the original plan, top-ranking banks
will stretch out the maturity on their loans, giving Seadrill a
longer period of time to recover from the energy-market turmoil,
the news agency pointed out. Seadrill shareholders that fought a
losing battle for better treatment will get a 2% stake in the
reorganized company, less than half of what Mr. Fredriksen's
investment company, Hemen Holding, will collect as a "fee" for
going along with the restructuring, the report noted.
A redlined version of the Second Amended Disclosure Statement is
available at:
http://bankrupt.com/misc/txsb17-60079-1003.pdf
About Seadrill Ltd
Seadrill Limited is a deepwater drilling contractor providing
drilling services to the oil and gas industry. It is incorporated
in Bermuda and managed from London. Seadrill and its affiliates
own or lease 51 drilling rigs, which represents more than 6% of the
world fleet.
As of Sept. 12, 2017, Seadrill employed 3,760 highly-skilled
individuals across 22 countries and five continents to operate
their drilling rigs and perform various other corporate functions.
As of June 30, 2017, Seadrill had $20.71 billion in total assets,
$10.77 billion in total liabilities and $9.94 billion in total
equity.
Seadrill reported a net loss of US$155 million on US$3.17 billion
of total operating revenues for the year ended Dec. 31, 2016,
following a net loss of US$635 million on US$4.33 billion of total
operating revenues for the year ended in 2015.
After reaching terms of a reorganization plan that would
restructure $8 billion of funded debt, Seadrill Limited and 85
affiliated debtors each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex.
Lead Case No. 17-60079) on Sept. 12, 2017.
Together with the chapter 11 proceedings, Seadrill, North Atlantic
Drilling Limited ("NADL") and Sevan Drilling Limited ("Sevan")
commenced liquidation proceedings in Bermuda to appoint joint
provisional liquidators and facilitate recognition and
implementation of the transactions contemplated by the RSA and
Investment Agreement, and Simon Edel, Alan Bloom and Roy Bailey of
Ernst & Young are to act as the joint and several provisional
liquidators.
In the Chapter 11 cases, the Company has engaged Kirkland & Ellis
LLP as legal counsel, Houlihan Lokey, Inc. as financial advisor,
and Alvarez & Marsal as restructuring advisor. Slaughter and May
has been engaged as corporate counsel, and Morgan Stanley served as
co-financial advisor during the negotiation of the restructuring
agreement. Advokatfirmaet Thommessen AS is serving as Norwegian
counsel. Conyers Dill & Pearman is serving as Bermuda counsel.
Prime Clerk serves as claims agent.
The United States Trustee for Region 7 formed an official committee
of unsecured creditors with seven members: (i) Computershare Trust
Company, N.A.; (ii) Daewoo Shipbuilding & Marine Engineering Co.,
Ltd.; (iii) Deutsche Bank Trust Company Americas; (iv) Louisiana
Machinery Co., LLC; (v) Nordic Trustee AS; (vi) Pentagon Freight
Services, Inc.; and (vii) Samsung Heavy Industries Co., Ltd.
Kramer Levin Naftalis & Frankel LLP is serving as lead counsel to
the Committee. Cole Schotz P.C. is local and conflicts counsel to
the Committee. Zuill & Co (in exclusive association with Harney
Westwood & Riegels) is serving as Bermuda counsel. London-based
Quinn Emanuel Urquhart & Sullivan, UK LLP, is serving as English
counsel. Parella Weinberg Partners LLP is the investment banker to
the Committee. FTI Consulting Inc. is the financial advisor.
SEADRILL LTD: Bank Debt Trades at 12.70% Off
--------------------------------------------
Participations in a syndicated loan under which Seadrill Ltd is a
borrower traded in the secondary market at 87.3 cents-on-the-dollar
during the week ended Friday, February 23, 2018, according to data
compiled by LSTA/Thomson Reuters MTM Pricing. This represents a
decrease of 0.51 percentage points from the previous week. Seadrill
Ltd pays 300 basis points above LIBOR to borrow under the $1.1
billion facility. The bank loan matures on February 21, 2021.
Moody's rates the loan 'Caa2' and Standard & Poor's gave a 'CCC+'
rating to the loan. 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 Friday, February 23.
SEADRILL LTD: Statement on Global Settlement
--------------------------------------------
Hamilton, Bermuda-based Seadrill Limited on February 26, 2018,
succeeded in reaching a global settlement with an ad hoc group of
bondholders, the official committee of unsecured creditors, and
other major creditors in its chapter 11 cases.
As a result of the settlement, approximately 70% of the Company's
bondholders by principal amount have now signed an agreement to
support the Company's restructuring. Approximately 99% of the
Company's bank lenders by principal amount had previously signed
and remain party to the agreement.
Anton Dibowitz, CEO and President of Seadrill Management Ltd.,
said:
"The settlement is a pivotal moment in our efforts to implement a
broadly-consensual comprehensive restructuring plan. We now have
virtually all of our bank lenders, a supermajority of our bonds,
the official creditors' committee, newbuild contract
counterparties, and our largest shareholder supporting our
restructuring. We look forward to the successful implementation of
the transaction in the near future."
The settlement adds additional bondholders as commitment parties to
the Company's approximately $1 billion new capital raise and also
significantly increases proposed distributions to general unsecured
creditors under the plan.
The settlement also includes an agreement regarding the amount and
treatment of the claims of Samsung Heavy Industries Co., Ltd. and
Daewoo Shipbuilding & Marine Engineering Co., Ltd., two shipyards
that are party to newbuild contracts with the Company.
To effectuate the settlement, the Company executed amendments to
its restructuring support agreement and investment agreement. After
executing the amendments, the Company filed a revised plan of
reorganization and disclosure statement with the court overseeing
its chapter 11 cases in the Southern District of Texas.
According to the amendment to the investment agreement, on February
6, 2018, (a) Fintech Investments Ltd. Transferred its Debt
Commitment and Equity Commitment to Pequod S.a.r.l. pursuant to
Section 2.6(a) of the Investment Agreement without relieving the
transferor of ultimate liability with respect to the Debt
Commitment and Equity Commitment and (b) Pequod S.a.r.l. joined the
Investment Agreement pursuant to a joinder agreement.
The Company and the Commitment Parties have agreed to amend the
Investment Agreement to, among other things, increase the Aggregate
Debt Commitment Amount to $880,000,000, increase the Debt Rights
Offering to $119,350,000 and increase the Creditor Equity Rights
Offering to $48,076,476.41.
A copy of the Amendment, Stipulation and Joinder Agreement, dated
as of February 26, 2018, in respect of the Restructuring Support
and Lock-Up Agreement, dated as of September 12, 2017 -- Original
RSA -- by and among Seadrill Limited (on behalf of all Company
Parties), the commitment parties to the Original RSA, the
Distressed Trading Desk of Barclays Bank PLC, certain holders of,
or advisors or managers of accounts holding, certain unsecured
bonds, Samsung Heavy Industries Co., Ltd., Daewoo Shipbuilding &
Marine Engineering Co., Ltd. and the official committee of
unsecured creditors in the chapter 11 cases -- as well as a copy of
the Debtors' SECOND AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION
-- is available at https://is.gd/mUub6h
A copy of the Amendment, Assignment and Joinder Agreement, dated as
of February 26, 2018, in respect of the Investment Agreement, dated
as of September 12, 2017 -- Original Investment Agreement -- by and
among the commitment parties to the Original Investment Agreement,
the Distressed Trading Desk of Barclays Bank PLC, certain holders
of, or advisors or managers of accounts holding, certain unsecured
bonds and Seadrill Limited, is available at https://is.gd/WdIAxd
The Investors are:
-- Hemen Investments Limited, a Cyprus holding company;
-- Centerbridge Credit Partners L.P., and certain of its
affiliates;
-- Certain funds and/or accounts that are managed, advised or
sub-advised by each of Aristeia Capital L.L.C., GLG Partners LP,
Saba Capital Management LP and Whitebox Advisors, LLC or such
Person's Affiliate(s), in each case, that are signatories to the
Investment Agreement;
-- The Distressed Trading Desk of Barclays Bank PLC; and
-- Certain beneficial owners (or investment advisors or
managers for beneficial owners) of unsecured notes issued by
Seadrill Limited and/or its subsidiary North Atlantic Drilling
Limited, and/or one or more of their respective affiliates, related
funds, managed accounts and/or designees, in each case that are
represented by Stroock & Stroock & Lavan LLP and are signatories to
the Investment Agreement.
About Seadrill Ltd
Seadrill Limited is a deepwater drilling contractor providing
drilling services to the oil and gas industry. It is incorporated
in Bermuda and managed from London. Seadrill and its affiliates
own or lease 51 drilling rigs, which represents more than 6% of the
world fleet.
As of Sept. 12, 2017, Seadrill employed 3,760 highly-skilled
individuals across 22 countries and five continents to operate
their drilling rigs and perform various other corporate functions.
As of June 30, 2017, Seadrill had $20.71 billion in total assets,
$10.77 billion in total liabilities and $9.94 billion in total
equity.
Seadrill reported a net loss of US$155 million on US$3.17 billion
of total operating revenues for the year ended Dec. 31, 2016,
following a net loss of US$635 million on US$4.33 billion of total
operating revenues for the year ended in 2015.
After reaching terms of a reorganization plan that would
restructure $8 billion of funded debt, Seadrill Limited and 85
affiliated debtors each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex.
Lead Case No. 17-60079) on Sept. 12, 2017.
Together with the chapter 11 proceedings, Seadrill, North Atlantic
Drilling Limited ("NADL") and Sevan Drilling Limited ("Sevan")
commenced liquidation proceedings in Bermuda to appoint joint
provisional liquidators and facilitate recognition and
implementation of the transactions contemplated by the RSA and
Investment Agreement, and Simon Edel, Alan Bloom and Roy Bailey of
Ernst & Young are to act as the joint and several provisional
liquidators.
In the Chapter 11 cases, the Company has engaged Kirkland & Ellis
LLP as legal counsel, Houlihan Lokey, Inc. as financial advisor,
and Alvarez & Marsal as restructuring advisor. Slaughter and May
has been engaged as corporate counsel, and Morgan Stanley served as
co-financial advisor during the negotiation of the restructuring
agreement. Advokatfirmaet Thommessen AS is serving as Norwegian
counsel. Conyers Dill & Pearman is serving as Bermuda counsel.
Prime Clerk serves as claims agent.
The United States Trustee for Region 7 formed an official committee
of unsecured creditors with seven members: (i) Computershare Trust
Company, N.A.; (ii) Daewoo Shipbuilding & Marine Engineering Co.,
Ltd.; (iii) Deutsche Bank Trust Company Americas; (iv) Louisiana
Machinery Co., LLC; (v) Nordic Trustee AS; (vi) Pentagon Freight
Services, Inc.; and (vii) Samsung Heavy Industries Co., Ltd.
Kramer Levin Naftalis & Frankel LLP is serving as lead counsel to
the Committee. Cole Schotz P.C. is local and conflicts counsel to
the Committee. Zuill & Co (in exclusive association with Harney
Westwood & Riegels) is serving as Bermuda counsel. London-based
Quinn Emanuel Urquhart & Sullivan, UK LLP, is serving as English
counsel. Parella Weinberg Partners LLP is the investment banker to
the Committee. FTI Consulting Inc. is the financial advisor.
SKILLSOFT CORP: Bank Debt Trades at 10.90% Off
----------------------------------------------
Participations in a syndicated loan under which Skillsoft Corp is a
borrower traded in the secondary market at 89.1 cents-on-the-dollar
during the week ended Friday, February 23, 2018, according to data
compiled by LSTA/Thomson Reuters MTM Pricing. This represents an
increase of 0.96 percentage points from the previous week.
Skillsoft Corp pays 825 basis points above LIBOR to borrow under
the $185 million facility. The bank loan matures on April 28, 2022.
Moody's rates the loan 'Caa3' and Standard & Poor's gave a 'CCC'
rating to the loan. 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 Friday, February 23.
SOLBRIGHT GROUP: Registers $10.5M Common Shares for Resale
----------------------------------------------------------
Solbright Group, Inc. filed with the Securities and Exchange
Commission a Form S-1 registration statement relating solely to the
offer and sale from time to time by AIP Global Marco Fund, LP, AIP
Global Macro Class, AIP Canadian Enhanced Income Class, Lenox
Capital Partners, LP, et al., of up to an aggregate of 10,489,777
shares of its common stock consisting of (i) up to 5,061,556 shares
of common stock held by the selling stockholders, (ii) up to
4,166,667 shares of its common stock that are issuable upon the
conversion of its 10% convertible promissory notes issued in
connection with a private placement offering of convertible notes
that the Company closed on May 1, 2017, and (iii) up to 1,261,554
shares of its common stock that are issuable upon the exercise of
warrants issued in connection with a private placement offering of
shares and warrants that was closed in April 2017.
The Company is not offering any shares of common stock for sale
under this prospectus, and it will not receive any of the proceeds
from the sale or other disposition of the shares of common stock
offered hereby. However, the Company will receive proceeds from
the exercise of the warrants if the warrants are exercised for
cash. The Company intends to use those proceeds, if any, for
general corporate purposes.
Solbright Group's common stock is quoted for trading on the OTC
Markets Group Inc. OTCPink tier under the symbol "SBRT". On
Feb. 23, 2018, the last reported sale price of the Company's common
stock on OTCPink was $0.68.
A full-text copy of the Form S-1 prospectus is available at:
https://is.gd/3raC6f
About Solbright Group, Inc.
Solbright Group, Inc., formerly Arkados Group, Inc., conducts its
business activities through two subsidiaries, Arkados, Inc.
(Arkados) and SolBright Energy Solutions, LLC (SES). The Company
delivers technology solutions for building and machine automation
and energy conservation and provide energy conservation services
such as LED lighting retrofits, HVAC system retrofits and solar
engineering, procurement and construction services.
At Nov. 30, 2017, the Company had total assets of $18.23 million,
total liabilities of $9.85 million, and a $8.39 million in total
stockholders' equity.
The Company has incurred net losses of $53 million since inception,
including a net loss of approximately $7 million for the six months
ended Nov. 30, 2017. Additionally, the Company still had both
working capital and stockholders' deficiencies at Nov. 30, 2017 and
negative cash flow from operations since inception. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern. Management expects to incur additional
losses in the foreseeable future and recognizes the need to raise
capital to remain viable.
ST. CLOUD DIOCESE: To File for Chapter 11 Bankruptcy
----------------------------------------------------
Jean Hopfensperger, writing for the Minnesota Star Tribune, reports
that the Catholic Diocese of St. Cloud said it will seek bankruptcy
protection to address clergy sex abuse claims.
The St. Cloud Diocese is facing 74 claims of clergy sex abuse, the
report notes.
"This approach is the best way to ensure that available resources
will be distributed equitably to all the victims and survivors,
while allowing the diocese to continue its vital ministries that
benefit the people of our 16 counties," Bishop Donald Kettler said
in a statement released by the diocese, according to the report.
Bishop Kettler said he is committed to openness and transparency
about how they are working to resolve the lawsuits. "We will keep
pastors and parishes informed about the process as it moves
forward," he said in the statement.
Bishop Kettler made the announcement at a meeting in Albany with
clergy and staff from all parishes. He did not mention a date for
the Chapter 11 filing, according to the report.
In the past, the dioceses in New Ulm and Duluth, as well as the
Archdiocese of St. Paul and Minneapolis, have sought Chapter 11
protection amid clergy sex abuse claims.
TALEN ENERGY: Moody's Alters Outlook to Neg. & Affirms B1 CFR
-------------------------------------------------------------
Moody's Investors Service revised the outlook for Talen Energy
Supply, LLC to negative from stable, and affirmed its existing
ratings. Ratings affirmed include Talen's Corporate Family Rating
(CFR) at B1, its probability of default (PD) at B1-PD, its senior
secured debt at Ba1, its senior unsecured guaranteed debt at B1,
its senior unsecured, nonguaranteed debt at B3 and its speculative
grade liquidity rating (SGL) at SGL-2. The action follows the
company's February 25, 2018 announcement that on December 27, 2017,
it paid a special cash dividend of $500 million to its
stockholders.
RATINGS RATIONALE
The revision of Talen's outlook to negative reflects the company's
reduced financial flexibility following the payment of a $500
million special cash dividend to its stockholders. Moody's view the
distribution as indicative of a financial policy that favors
shareholders with only a modest cushion for creditors. Although the
dividend was funded primarily with free cash flow from operations
and through the sale of non-core assets, the cash outflow comes on
the heels of the company's recent refinancing (rather than
repayment) of upcoming debt maturities. Moody's previous stable
outlook assumed that Talen would utilize the additional liquidity
created by incremental operating cash flow and non-core asset sales
to make operational enhancements, or to opportunistically reduce
debt. Payment of the dividend without materially lowering debt
levels leaves the company in a highly leveraged position, with
limited financial cushion to weather continuing weak market
conditions or to invest in operations enhancing projects.
The affirmation of Talen's ratings considers credit positive
actions taken by management to improve financial performance by
focusing on cost reductions and operational improvements. As a
result, Moody's expect full year 2017 and 2018 cash flow, and cash
flow based credit metrics, will remain strong. For example, Moody's
expect Talen's ratio of cash flow from operations excluding changes
in working capital (CFO pre-WC) to debt will be near 10%. However,
based on current power market conditions, absent additional
operational enhancements, Moody's expect credit metrics beyond 2018
will move lower, and that the company may be challenged to remain
free cash flow positive. If these trends continue, the ratings
could be downgraded.
While Talen's independent power company peers, including Calpine
Corporation (Ba3, negative) and NRG Energy, Inc. (Ba3, positive)
have been focused on reducing leverage and increasing financial
flexibility in the face of these adverse market conditions, Talen
is poised to see its leverage burden increase. By 2020, Moody's
estimate Talen's ratio of CFO pre-WC to debt could fall below 7%
(approximately 150-200 basis points lower when including nuclear
fuel as a cash operating expense) and that its ratio of total
adjusted debt to earnings before interests, taxes, depreciation and
amortization (EBITDA) could be close to 9x.
Liquidity
Talen has an adequate liquidity position, although not as robust
following the $500 million cash outflow. As of February 23, 2018,
the company reports it had an unrestricted cash balance of about
$128 million and no borrowings under its $1.242 billion credit
facility. Moody's expect the company will remain free cash flow
positive over the next 12-18 months, and may turn break-even or
negative thereafter based on the current forward curve and without
further management intervention. Talen's nearest long-term debt
maturities include $87 million of notes due May 2018 and $17
million of notes due July 2019 which the company expects to repay
with cash on hand.
Rating Outlook
The rating outlook for Talen is negative.
Factors that Could Lead to an Upgrade
Given the negative outlook, it is not likely the CFR would move
upward over the next 12-18 months. The outlook could be revised to
stable if there were to be additional operational enhancements,
reductions in leverage, or an improvement in market conditions such
that Moody's could expect the ratio of CFO pre-WC to remain near
10% beyond 2018 and that the company would remain free cash flow
positive. Longer term, if the ratio of CFO pre-W/C to debt were to
be maintained in the mid-teens, there could be upward pressure on
the rating.
Factors that Could Lead to a Downgrade
If there were to be an increase in leverage, additional dividends
to shareholders, operational challenges, or continued weak
commodity prices such that Moody's would expect the ratio of CFO
pre-W/C to debt to fall below 7%, or the company to be free cash
flow negative, there could be downward pressure on Talen's CFR. If
there were to be additional refinancings that replace unsecured
debt with additional secured or guaranteed debt, or there is other
erosion of the unsecured liability base, there could be pressure on
the ratings of the secured or guaranteed notes.
Outlook Actions:
Issuer: Talen Energy Supply, LLC
-- Outlook, Changed To Negative From Stable
Affirmations:
Issuer: Talen Energy Supply, LLC
-- Probability of Default Rating, Affirmed B1-PD
-- Speculative Grade Liquidity Rating, Affirmed SGL-2
-- Corporate Family Rating, Affirmed B1
-- Senior Secured Bank Credit Facility, Affirmed Ba1(LGD2)
-- Guaranteed Senior Unsecured Regular Bond/Debenture, Affirmed
B1(LGD4)
-- Senior Unsecured Regular Bond/Debenture, Affirmed B3(LGD5)
Issuer: Pennsylvania Economic Dev. Fin. Auth.
-- Senior Unsecured Revenue Bonds, Affirmed B1(LGD4)
Talen Energy Supply, LLC is an independent power producer with
about 16 GW of generating capacity. Talen Energy Corporation,
headquartered in Allentown, PA, is a privately owned holding
company that owns 100% of Talen and conducts all its business
activities through Talen.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
TEVA PHARMACEUTICAL: S&P Rates New Senior Unsecured Notes 'BB'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '3'
recovery rating to euro-denominated and U.S.-dollar-denominated
senior unsecured notes offered by finance subsidiaries Teva
Pharmaceutical Finance Netherlands II B.V. and Teva Pharmaceutical
Finance Netherlands III B.V., respectively. The notes carry an
unconditional guarantee by parent company Teva Pharmaceutical
Industries Ltd. (Teva), the same as other outstanding senior
unsecured debt.
Teva intends to offer EUR1 billion aggregate principle amount of
euro-denominated notes in one or more series and $2.25 billion
aggregate principle amount of U.S.-dollar-denominated notes in one
or more series. The '3' recovery rating reflects our expectation
for meaningful (50%-70%; rounded estimate: 50%) recovery in the
event of a payment default.
Teva intends to use the proceeds and cash on hand to repay $2.3
billion of U.S.-dollar-denominated and Japanese-yen-denominated
term loans and US$1.5 billion of 1.4% senior notes due 2018 and for
general corporate purposes. S&P views the transaction as
essentially neutral to net leverage, but it does increase the
company's financial flexibility and liquidity.
The 'BB' long-term corporate credit rating on parent Teva is
unchanged. The outlook is stable.
S&P said, "Our ratings on Teva reflect its leading position in
generic drug development and its specialty drug business that has a
number of products with over $100 million of revenue. The rating
also reflects the loss of exclusivity of Copaxone, Teva's most
successful product, and the related decline in sales from over $4
billion in 2016 to expected sales of about $1.2 billion in 2019.
Furthermore, Teva's core generic business is challenged both from
pricing pressures and internal development issues. In addition, the
rating reflects significant progress in restructuring that we
expect will net $3 billion in savings and a 25% reduction in global
workforce. We expect free cash flow of about $2.6 billion in 2018
and funds from operations to debt in the 12%-13% range from
2017-2019."
RATINGS LIST
Teva Pharmaceutical Industries Ltd.
Corporate Credit Rating BB/Stable/--
New Ratings
Teva Pharmaceutical Finance Netherlands III B.V.
Teva Pharmaceutical Finance Netherlands II B.V.
Senior Unsecured Notes BB
Recovery Rating 3 (50%)
TOYS R US: Proposes Bid Procedures for Real Property & Leases
-------------------------------------------------------------
BankruptcyData.com reported that Toys "R" Us filed with the U.S.
Bankruptcy Court a motion for entry of an order establishing
bidding procedures and approving the sale of certain real property
and leases. The motion explains, "As the Debtors will no longer be
operating stores at the Initial Closing Stores, the Debtors now
seek entry of an order approving the Bidding Procedures to
capitalize on those assets. In conjunction with the store
performance analysis and Initial Store Closings, the Debtors and
their affiliates also engaged Cushman & Wakefield and A&G to
perform appraisals (the 'Appraisals') of their owned real property
and unexpired real property leases (collectively, the 'Real Estate
Assets'). Following the Appraisals, and in consultation with A&G,
A&M, and Lazard, the Debtors determined that obtaining Court
approval of a sale of the Real Estate Assets in connection with the
Store Closings is the most value-maximizing option with respect to
such Real Estate Assets."
BankruptcyData related that "The Bidding Procedures contemplate
that the Debtors, in consultation with the Consultation Parties,
would be authorized, but not obligated, in an exercise of their
business judgment, to agree to reimburse the reasonable and
documented out-of-pocket fees and expenses of one or more Qualified
Bidder (each, an 'Expense Reimbursement'), and/or agree to pay one
or more Qualified Bidders a 'work fee' or other similar cash fee
(each, a 'Work Fee') if the Debtors reasonably determine in their
business judgment that any such Expense Reimbursement or Work Fee
will encourage one or more parties to submit a Qualified Bid or
result in a competitive bidding and Auction process. The aggregate
amount of all Expense Reimbursements and Work Fees may not exceed
$50,000 per Qualified Bidder or $1,000,000 in the aggregate, and
the Debtors shall consult with the Consultation Parties prior to
agreeing to any specific Expense Reimbursement or Work Fee. The
Debtors may choose a Stalking Horse Bidder by March 15, 2018, and
will inform the court if a Stalking Horse Bidder has been selected
and any terms thereto at the hearing to approve the Bidding
Procedures. The Debtors submit that the opportunity to enter into a
Stalking Horse Agreement that provides these bid protections will
encourage bidders to submit bids and participate at the Auction,
thereby maximizing value for the Debtors estates."
According to the report, the motion proposes the following general
timeline: March 26, 2018 deadline to submit qualified competing
bids; an auction, if necessary, would be conducted on March 29,
2018, followed by an April 12, 2018 sale hearing.
The Court scheduled a March 20, 2018 hearing to consider the
procedures motion.
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey, in
the New York City metropolitan area. Merchandise is sold in 880
Toys "R" Us and Babies "R" Us stores in the United States, Puerto
Rico and Guam, and in more than 780 international stores and more
than 245 licensed stores in 37 countries and jurisdictions.
Merchandise is also sold at e-commerce sites including Toysrus.com
and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate entities,
are not part of the Chapter 11 filing and CCAA proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. A&G Realty Partners, LLC, serves as its
real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
TOYS R US: US Trustee Objects to Chilmark Partners Retention
------------------------------------------------------------
BankruptcyData.com reported that the U.S. Trustee (UST) assigned to
the Toys "R" Us case filed with the U.S. Bankruptcy Court an
objection to Debtors Geoffrey and Geoffrey Holdings' motion to
retain Chilmark Partners as financial advisor. The objection
asserts, "The UST objects to the Chilmark Application and proposed
order approving same because Chilmark is not disinterested and may
have an adverse interest to the Geoffrey Debtors. In fact, David
Schulte, the Disinterested Manager of the Geoffrey Debtors, is a
member of Chilmark. According to Chilmark's website, David Schulte
has been Chilmark's managing general partner and the head of
Chilmark's restructuring advisory services and principal investing
activities since 1984. Mr. Schulte is also the managing general
partner of Chilmark Fund II and was one of two individuals who
acted as the general partner of the Zell/Chilmark Fund when it was
formed in 1990. As such, Chilmark does not pass muster under the
requirements of 11 U.S.C. section 327(a) as it is not
disinterested."
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey, in
the New York City metropolitan area. Merchandise is sold in 880
Toys "R" Us and Babies "R" Us stores in the United States, Puerto
Rico and Guam, and in more than 780 international stores and more
than 245 licensed stores in 37 countries and jurisdictions.
Merchandise is also sold at e-commerce sites including Toysrus.com
and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate entities,
are not part of the Chapter 11 filing and CCAA proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. A&G Realty Partners, LLC, serves as its
real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
UNITI GROUP: Moody's Lowers CFR to B3; Keeps Outlook Negative
-------------------------------------------------------------
Moody's Investors Service has downgraded Uniti Group Inc.'s
corporate family rating to B3 from B2 following the downgrade of
Windstream Services, LLC. As Uniti's largest tenant and main source
of revenue, Windstream's credit profile significantly influences
the ratings and outlook of Uniti. The downgrade of Windstream
reflects its sustained weak operating trends, highlighted by weak
EBITDA and cash flow metrics. With only marginal revenue diversity,
the business and credit risk at Windstream will weigh heavily on
Uniti. Moody's has also downgraded Uniti's probability of default
rating to B3-PD from B2-PD, its unsecured debt rating to Caa2
(LGD5) from Caa1 (LGD5), and its senior secured debt rating to B2
(LGD3) from B1 (LGD3). Uniti's speculative grade liquidity (SGL)
rating has been downgraded to SGL-3 from SGL-2 due to the company's
growing cash flow deficits.
Downgrades:
Issuer: Uniti Group Inc.
-- Probability of Default Rating, Downgraded to B3-PD from B2-PD
-- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
-- Corporate Family Rating, Downgraded to B3 from B2
-- Senior Secured Bank Credit Facility, Downgraded to B2 (LGD3)
from B1 (LGD3)
-- Senior Secured Regular Bond/Debenture, Downgraded to B2 (LGD3)
from B1 (LGD3)
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2
(LGD5) from Caa1 (LGD5)
Outlook Actions:
Issuer: Uniti Group Inc.
-- Outlook, Remains Negative
RATINGS RATIONALE
Uniti's B3 corporate family rating (CFR) primarily reflects its
reliance upon Windstream (B3, negative) for approximately 70% of
pro forma revenues. Uniti's rating will remain linked with
Windstream unless or until it can diversify its revenue stream such
that Windstream represents meaningfully less than half of Uniti's
total revenues. The rating also contemplates Uniti's high leverage
of around 6x (Moody's adjusted, pro forma for acquisitions) and its
negative free cash flow as a result of its high dividend payout and
the growing capital intensity of acquired businesses. Offsetting
these limiting factors are Uniti's stable and predictable revenues,
its high margins and the strong contract terms within the master
lease agreement between it and Windstream. Uniti's fiber and tower
acquisitions represent a growing degree of revenue diversification
which may help to eventually create some ratings separation between
Uniti and Windstream. But Uniti's financial policy, specifically
its potential use of debt to fund M&A, its high dividend and high
leverage constrain its rating.
The negative outlook reflects Uniti's tightly-linked credit profile
to that of Windstream, which continues to face negative pressure.
Despite certain scenarios such as a distressed exchange (DE) or
Windstream's acceptance of the master lease within a bankruptcy
restructuring not resulting in a default by Uniti, Moody's believes
that continued negative results for Windstream will directly impact
Uniti's credit profile.
While unlikely given the dependency on Windstream's credit profile,
Moody's could raise Uniti's ratings if leverage were to be
sustained below 4x (Moody's adjusted). Should Uniti diversify its
revenue base such that the master lease agreement comprises less
than 50% of its revenue, the company's ratings would evolve to
reflect the weighted average credit profile of Windstream and the
credit profile of Uniti's non-Windstream subsidiaries until such
time that enough revenue diversity is achieved that a stand-alone
assessment of Uniti's creditworthiness is warranted. Moody's
believes that such a stand-alone assessment could be warranted when
Uniti diversifies its base such that no single tenant represents
more than 20% of total revenues.
Moody's could lower the ratings if leverage were sustained above
6.5x or if there is any negative change in the credit profile of
Windstream. Windstream's rating outlook is negative and its B3
rating could be downgraded if its fundamentals remain weak.
The ratings for the debt instruments reflect both the probability
of default of Uniti, to which Moody's assigns a PDR of B3-PD, and
individual loss given default assessments. Moody's rates Uniti's
senior secured credit facilities and senior secured notes at B2
(LGD3) reflecting their enhanced collateral and priority claim on
assets. Uniti's senior unsecured notes are rated Caa2 (LGD5),
reflecting their junior position in the capital structure.
The principal methodology used in these ratings was Communications
Infrastructure Industry published in September 2017.
Uniti Group, formerly Communications Sales & Leasing, Inc is a
publicly traded, real estate investment trust (REIT) that was spun
off from Windstream Holdings, Inc. in April of 2015. The majority
of Uniti's assets are comprised of a physical distribution network
of copper, fiber optic cables, utility poles and real estate which
are under long term, exclusive master lease to Windstream. Over
time, Uniti has acquired additional fiber assets that it operates
as a stand-alone carrier, serving enterprise and communications
customers.
VERESEN MIDSTREAM: S&P Alters Outlook to Pos. & Affirms 'BB-' CCR
-----------------------------------------------------------------
S&P Global Ratings said it revised its outlook to positive from
stable on Veresen Midstream L.P. At the same time, S&P Global
Ratings affirmed its 'BB-' long-term corporate credit and senior
unsecured debt ratings on Veresen Midstream. The '4' recovery
rating on the secured debt is unchanged, and reflects S&P's
expectation of average (30%-50%; rounded estimate 40%) recovery in
a default scenario.
The outlook revision reflects the company's completion of three
processing plants and associated gathering infrastructure ahead of
schedule and below budget in the Dawson region located in Montney
shale play, resulting in savings of approximately $220 million, or
9% of capital costs. These plants are supported by strong contracts
and will likely result in EBITDA more than doubling in the next
12-24 months, with leverage improving significantly.
Three plants, Sunrise, Tower, and Saturn phase 2, came on-stream at
the end of 2017 and beginning of 2018. Since then, these plants
have achieved significant capacity utilization and are likely to
contribute EBITDA of C$220 million-C$275 million a year once they
are fully ramped up.
S&P said, "We assess Veresen Midstream's business risk profile as
satisfactory. We believe that the company has a strong competitive
advantage because of its location in the growing region of Montney
and good contractual structure. Offsetting these benefits is our
belief that Veresen Midstream is limited in its shippers and asset
base, which is in both one geographic region and commodity."
Veresen Midstream is one of the largest independent natural gas
gathering and processing businesses in the region. It is
46%-54%-owned limited partnership between parent Pembina Pipeline
Corp. and KKR & Co. L.P., and was formed in 2014 to build, own, and
operate up to C$5 billion of natural gas processing infrastructure
in Montney for Encana Corp. and Cutbank Ridge Partnership (CRP), a
joint venture (JV) between Encana and Mitsubishi Corp. Its main
infrastructure is in two locations: Dawson and Hythe-Steeprock.
The positive outlook reflects S&P Global Ratings' view that Veresen
Midstream's cash flows will improve significantly within the next
24 months following the recently completed three processing plants
that strong counterparties contractually support and leverage will
consequently improve. S&P expects debt-to-EBITDA will fall to about
5x in the next two years.
S&P said, "We could revise the outlook to stable if we believe that
debt to EBITDA will not improve to about 5x and FFO-to-debt above
10% by 2019, which would likely be due to the lower-than-expected
volumes from the recently constructed plants. In addition, if we
believe that the partnership's strategic importance to Pembina
declines, we could remove the support under our group rating
methodology and lower the rating.
"We could raise the rating if we believe debt-to-EBITDA will stay
below 5x and FFO-to-debt above 12% or if there is more substantial
asset, commodity, geographic, and shipper diversity."
WALDRON DEVELOPMENT: May Use Cash Collateral Through March 23
-------------------------------------------------------------
Judge Jacqueline P. Cox of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Waldron Development
Company use of cash collateral of Wilmington Trust on an interim
basis to pay the following amounts for the period through March 23,
2017:
Jose Carrillo (Maintenance) $100
Bank Direct (Insurance) $162
Elizabeth Mach (Cleaning) $60
Therese Waldron (Management fee) $375
Snow Plowing $300
Fay Servicing $2,340
Comed/Nicor $100
Law Office of William J. Factor (retainer) $10,000
U.S. Trustee Fee $325
The Debtor's use of cash collateral is set for status on March 20,
2018 at 10:00 a.m.
A full-text copy of the Order is available at
http://bankrupt.com/misc/ilnb17-37011-26.pdf
About Waldron Development Company
Waldron Development Company owns a three-flat apartment building at
3838 North Kenmore, Chicago, Illinois.
Waldron Development sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 17-37011) on Dec. 14,
2017. The Debtor intends to use Chapter 11 to effectuate a sale of
the building under Section 363(b) of the Bankruptcy Code, or to
restructure the debt on the building.
At the time of the filing, the Debtor estimated assets of less than
$50,000 and liabilities of less than $1 million.
Judge Jacqueline P. Cox presides over the case.
The Debtor hired The Law Office of William J. Factor, Ltd., as its
legal counsel.
WEEKLEY HOMES: S&P Affirms 'B+' CCR, Off CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' corporate credit rating on
Weekley Homes, LLC. At the same time, S&P affirmed the 'B+' ratings
on the company's $200 million senior unsecured notes due in 2023
and $250 million senior unsecured notes due in 2025. The outlook is
stable.
S&P said, "At the same time, we removed all ratings from
CreditWatch, where we placed them with negative implications on
Sept. 7, 2017, following Hurricane Harvey in the Houston area.
"The affirmation of the 'B+' corporate credit rating and stable
outlook are a result of Weekley Homes' strong home sales and
closings over the last few quarters, which we expect to continue.
It is now evident that the damage from Hurricane Harvey had no
material impact on the company's operations or performance in the
Houston market, which accounts for about 20% of Weekley's total
inventory. While the storms in Texas and Florida caused
construction delays, they did not result in meaningful home
cancellations but shifted deliveries into 2018, adding to the
company's backlog.
"Our stable outlook reflects our expectation of continued home
closings in the company's markets and stabilizing gross margins,
resulting adjusted leverage to improve to below 5x by fiscal
year-end 2018.
"We could lower our corporate credit rating on the company over the
next 12 months if its sales and profitability deteriorate such that
debt to EBITDA is above 5x at year-end 2018. We believe this could
occur if Weekley's housing market slows, leading to unfavorable
home closing volumes or cancellations and price decreases.
Additionally, the company's profitability could drop from
competitive cost increases for lots, materials, and labor.
"Based on our view of the stable homebuilding markets in Houston
and Florida, and of Weekley's small regional footprint, we view an
upgrade as unlikely over the next 12 months. However, one could
occur if the company improves its operating efficiency and EBITDA
margins are sustained around 10%, bringing leverage to below 4x on
a sustained basis, or if the company acquires sizable assets that
increase geographic diversity."
WEIGHT WATCHERS: Moody's Affirms B1 CFR & Alters Outlook to Pos.
----------------------------------------------------------------
Moody's Investors Service affirmed Weight Watchers International,
Inc.'s Corporate Family rating ("CFR") at B1, Probability of
Default rating ("PDR") at B1-PD, senior secured credit facilities
at Ba3, senior unsecured notes at B3 and Speculative Grade
Liquidity rating ("SGL") at SGL-1. The rating outlook was revised
to positive from stable.
RATINGS RATIONALE
"Moody's expects solid subscriber, revenue and free cash flow
growth in 2018, following an impressive performance in 2017," said
Edmond DeForest, Moody's Senior Credit Officer.
The B1 CFR reflects Moody's expectation for low double digit growth
rates in digital and meeting subscribers and revenue, , debt to
EBITDA around 5 times, EBITA to interest expense approaching 3
times and over $150 million of free cash flow in 2018. The leverage
decline from over 6.5 times for the LTM period ended September 30,
2017 will come from EBITDA expansion and modest debt repayment. The
accelerating subscriber and revenue growth across products and
geographies during 2017 hint at what could be a high and
sustainable growth trajectory in 2018 and beyond.
Profitability as measured by EBITA margin should remain solidly
above 20%. Weight Watchers has a recent history of subscriber
volatility. The weight management services industry is competitive
and Moody's anticipates consumer preferences will continue to
evolve. The high degree of operating leverage in the business makes
profitability very sensitive to subscriber declines. That said,
rates of profitability may expand more slowly than revenues and
subscribers in 2018 despite the high degree of operating leverage
as Weight Watchers invests in its products, services and promotions
to maintain high subscriber growth rates. Moody's remains concerned
that competition for weight loss service customers, especially for
so-called "trial" members who are most likely to follow the newest
trends or promotions, could make operating and financial
improvements difficult to sustain.
All financial metrics cited reflect Moody's standard adjustments.
In addition, Moody's expenses Weight Watchers capitalized software
costs.
The Ba3 senior secured credit facility ratings reflects the B1-PD
PDR and a Loss Given Default ("LGD") assessment of LGD3, reflecting
their priority position in the debt capital structure ahead of the
unsecured claims. The facility is secured by a first lien on (1)
100% of the capital stock of all direct and indirect domestic
subsidiaries; (2) 65% of the capital stock of direct material
foreign subsidiaries; and (3) all material property and assets of
Weight Watchers and each direct and indirect U.S. subsidiary. The
facility is guaranteed by all direct and indirect domestic
subsidiaries of the company.
The B3 senior unsecured rating reflects the probability of default
of the company, as reflected in the B1-PD PDR, and the expected
loss given default of the debt instrument, as reflected in the LGD5
assessment. The rating reflects the subordination of the senior
unsecured notes to the secured claims.
The SGL-1 rating reflects Weight Watchers' very good liquidity
profile. Weight Watchers had cash balances of over $170 million at
September 30, 2017. Moody's expects at least $150 million of free
cash flow. The company will have about $77 million of required
annual term loan amortization in 2018. The fully available $150
million senior secured revolver is subject to a financial covenant
requiring first lien leverage (as defined in the facility
agreement) of no more than 5 times, but only if $50 million is
outstanding on the quarter end test date. Moody's do not expect the
covenant to be measured, but expect ample cushion were it to be
measured.
The positive ratings outlook reflects Moody's anticipation that
ongoing and high rates of subscriber, revenue and free cash flow
growth will lead to lower financial leverage and improved operating
flexibility.
The ratings could be upgraded if Moody's expects: 1) debt to EBITDA
to remain below 4 times; 2) free cash flow to debt will be
sustained around 10%; and 3) a commitment to debt reduction and
balanced financial policies.
A ratings downgrade is possible if Moody's expects: 1) slowing
growth in subscribers or revenues; 2) debt to EBITDA sustained
above 5 times; 3) free cash flow to debt below 6%; 4) diminished
liquidity; or 5) sizable debt-financed acquisitions or shareholder
returns.
Issuer: Weight Watchers International, Inc.
Affirmations:
-- Corporate Family Rating, at B1
-- Probability of Default Rating, at B1-PD
-- Senior Secured Bank Credit Facility, at Ba3 (LGD3)
-- Senior Unsecured Notes, at B3 (LGD5)
-- Speculative Grade Liquidity Rating, at SGL-1
Outlook:
-- Outlook, revised to Positive from Stable
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Weight Watchers is a provider of weight management services.
Moody's expects revenue for 2018 to around $1.5 billion.
WEINSTEIN CO: Confirms New Deal to Sell Assets to Contreras-Sweet
-----------------------------------------------------------------
Dawn C. Chmielewski, writing for Deadline.com, reports that the
Board of Directors of The Weinstein Company has confirmed a deal to
sell the company's assets to the investor group led by Maria
Contreras-Sweet and Ron Burkle.
Natalie Robehmed, writing for Forbes.com, reports that
Contreras-Sweet's group is reportedly spending $500 million,
including $225 million to assume Weinstein Co.'s debt and
committing $275 million to form a new company.
According to Deadline.com, it is unclear whether the investor group
agreed to provide a $7 million bridge fund to keep Weinstein Co.
afloat through the 40-day process to close the deal. The matter
was resolved "amicably," according to one source.
The board consists of Tarak Ben Ammar, Lance Maerov and Bob
Weinstein.
"We are pleased to announce that we have entered into an agreement
to sell the assets of The Weinstein Company to an investor group
led by Maria Contreras-Sweet and Ron Burkle," said the Board,
according to the Deadline.com report. "The deal provides a clear
path for compensation for victims and protects the jobs of our
employees. We greatly appreciate the efforts of Attorney General
Schneiderman and his staff, Maria Contreras-Sweet, Ron Burkle and
his team at Yucaipa for bringing about this agreement. We consider
this to be a positive outcome under what have been incredibly
difficult circumstances."
As widely reported, Weinstein Co. said Monday it may file for
bankruptcy after prior sale talks with the Contreras-Sweet group
fell through.
On Thursday, Ms. Contreras-Sweet announced that she and the
Weinstein Co.'s board of directors reached an agreement for the
purchase of assets to launch a new, female-led movie studio whose
board of directors will be made up of a majority of women. The
deal would save about 150 jobs, protect the small businesses owed
money by The Weinstein Co. and create a fund to compensate victims
of sexual harassment and abuse, according to Deadline.com.
Deadline.com provided a full-text copy of Ms. Contreras-Sweet:
"Our team is pleased to announce that we have taken an
important step and have reached an agreement to purchase assets
from The Weinstein Company in order to launch a new company, with a
new board and a new vision that embodies the principles that we
have stood by since we began this process last fall. Those
principles have never wavered and have always been to build a movie
studio led by a board of directors made up of a majority of
independent women, save about 150 jobs, protect the small
businesses who are owed money and create a victims' compensation
fund that would supplement existing insurance coverage for those
who have been harmed. The cornerstone of our plan has been to
launch a new company that represents the best practices in
corporate governance and transparency.
"This next step represents the best possible pathway to
support victims and protect employees.
"We are grateful to the New York State Attorney General's
office for their efforts in helping us reach an agreement and we
are grateful to our investors who have believed in this process and
in the compelling value of a female-led company. We also want to
thank all the parties who returned to the negotiating table to help
us reach this development.
"I have had a long-standing commitment to fostering women
ownership in business. This potential deal is an important step to
that end."
WINDSTREAM CORP: Bank Debt Trades at 11.75% Off
-----------------------------------------------
Participations in a syndicated loan under which Windstream Corp is
a borrower traded in the secondary market at 88.25
cents-on-the-dollar during the week ended Friday, February 23,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents an increase of 1.47 percentage points from
the previous week. Windstream Corp pays 325 basis points above
LIBOR to borrow under the $580 million facility. The bank loan
matures on February 17, 2024. Moody's rates the loan 'B2' and
Standard & Poor's gave a 'BB-' rating to the loan. 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 Friday, February 23.
WINDSTREAM SERVICES: Moody's Cuts CFR to B3; Outlook Remains Neg.
-----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating (CFR) of Windstream Services, LLC to B3 from B2 based on the
company's sustained weak operating trends and a challenging debt
maturity profile. Moody's has also downgraded Windstream's
probability of default rating (PDR) to B3-PD from B2-PD, its
secured rating to B3 from B2 and its unsecured rating to Caa1 from
B3. Windstream's speculative grade liquidity rating (SGL) remains
at SGL-2, reflecting good liquidity. The outlook remains negative
due to Moody's expectation of continued pressure on EBITDA,
negative free cash flow including persistent restructuring costs,
and low asset coverage relative to debt.
Windstream faces large debt maturities of over $1 billion each in
2020 and 2021 and strong negative market sentiment that poses very
high refinancing risk. Windstream's revenues and EBITDA declined
5.5% (pro forma) in 2017 versus 2016. Moody's expects this trend to
continue in 2018 and pressure cash flow and liquidity. Management
expects an improvement in EBITDA trend in 2018 and a return to
growth in 2019. Absent a change in EBITDA trajectory, the company's
credit profile will remain stressed.
Downgrades:
Issuer: Windstream Services, LLC
-- Probability of Default Rating, Downgraded to B3-PD from B2-PD
-- Corporate Family Rating, Downgraded to B3 from B2
-- Senior Secured Bank Credit Facility, Downgraded to B3 (LGD3)
from B2 (LGD3)
-- Senior Secured Regular Bond/Debenture, Downgraded to B3(LGD3)
from B2 (LGD3)
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1
(LGD4) from B3 (LGD4)
Outlook Actions:
Issuer: Windstream Services, LLC
-- Outlook, Remains Negative
RATINGS RATIONALE
Windstream's B3 corporate family rating reflects its scale as a
national wireline operator with a large base of recurring revenues,
offset by high leverage, a declining top line and margin pressure.
Moody's believes that Windstream faces a continued erosion of
EBITDA and cash flows as a result of prolonged prior
underinvestment. Moody's expects Windstream's pro forma EBITDA to
decline in the low single digit percentage range for the next
several years, although some of this impact could be offset by cost
cutting and greater investment into the consumer segment. Moody's
views Windstream as having limited leverage tolerance due to its
low asset coverage following the 2015 sale and leaseback
transaction of its outside plant and real estate assets to Uniti
Group.
Moody's believes Windstream will maintain good liquidity over the
next twelve months with $44 million of cash on hand at 12/31/17 and
Moody's estimate of approximately $300 million available on its
$1.25 billion revolver. Windstream has been proactive in redeeming
and refinancing near-term maturities and has no material maturities
before 2020. Further, completion of the company's recent exchange
offer improves liquidity by modestly pushing out maturities on
portions of outstanding 2021 and 2022 unsecured notes. Despite
having no debt maturities over the next twelve months, Moody's
believes Windstream could face a challenge with its 2020
maturities, including the revolving credit facility.
The ratings for the debt instruments comprise both the overall
probability of default of Windstream, to which Moody's maintain a
PDR of B3-PD, the average family loss given default assessment and
the composition of the debt instruments in the capital structure.
Moody's rate the senior secured debt including the $1.25 billion
revolver and approximately $1.8 billion of term loans at B3, LGD3.
Windstream's secured debt benefits from a collateral package that
includes a pledge of assets and upstream guarantees from
subsidiaries representing approximately 20% of total company cash
flow. Also, the secured debt benefits from a pledge of the equity
interest in certain non-guarantor subsidiaries. The ratings on the
secured debt reflect the reduced collateral value following the
contribution of Windstream's outside plant assets to the REIT
entity. For this reason, there is no ratings gap between the
secured debt and the CFR. Windstream's senior unsecured notes are
rated Caa1, LGD4, reflecting their junior position in the capital
structure.
Moody's could downgrade Windstream's ratings further if Moody's
believes that the company is unable to transition to approximately
stable EBITDA over the next 12 to 18 months, its liquidity
deteriorates or its subscriber trends worsen. In addition, Moody's
could downgrade Windstream's ratings if it does not address its
2020 maturities prior to year end 2018. Moody's could stabilize
Windstream's outlook if it is on track to achieve stable EBITDA,
while maintaining leverage around 5x and good liquidity. Given the
company's weak fundamentals ratings upgrade is unlikely at this
point.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
Windstream Services, LLC. (formerly known as Windstream
Corporation) is a pure-play wireline operator headquartered in
Little Rock, AR that provides telecommunications services in 48
states. For the last twelve months ended December 31, 2017
Windstream generated $6.25 billion in pro forma revenues.
WMG ACQUISITION: Moody's Rates Proposed $325MM Sr. Unsec. Notes B3
------------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to WMG
Acquisition Corp.'s proposed $325 million senior unsecured notes.
In connection with this issuance, WMG Acquisition Corp. plans to
raise a $320 million add-on to the existing $1.006 billion senior
secured term loan due 2023. Proceeds from the combined debt raise
will be used to prepay the $635 million outstanding 6.75% senior
notes due April 2022 via the call feature. The rating outlook is
stable.
Issuer: WMG Acquisition Corp.
Rating Assigned:
$325 Million Senior Unsecured Notes due 2026 -- B3 (LGD6)
Rating Unchanged:
$1.326 Billion ($1.006 Billion currently outstanding) Senior
Secured Term Loan due 2023 -- Ba3 (LGD3)
WMG Acquisition Corp. is a wholly-owned subsidiary of WMG Holdings
Corp., which in turn is a wholly-owned subsidiary of Warner Music
Group Corp. ("WMG" or the "company"). The term loan add-on will be
executed via an amendment under the existing credit agreement. The
assigned rating is subject to review of final documentation and no
material change in the size, terms and conditions of the
transaction as advised to Moody's. Upon repayment of the 6.75%
notes, Moody's will withdraw the rating.
RATINGS RATIONALE
Moody's views the transaction favorably due to the improvement in
WMG's weighted average interest expense and extension of its debt
maturity structure. The B3 rating on the unsecured notes is two
notches below WMG Holdings Corp.'s B1 Corporate Family Rating (CFR)
reflecting the lack of security and higher loss assumption that
this class of debt will sustain in a distressed scenario under
Moody's Loss Given Default (LGD) Methodology.
The B1 Corporate Family Rating (CFR) reflects Moody's expectation
that WMG Holdings Corp.'s parent, Warner Music Group Corp., will
operate with financial leverage as measured by total debt to EBITDA
in the 4.75x-5.75x area (including Moody's standard and
non-standard adjustments) over the rating horizon. Moody's believe
WMG will experience deleveraging driven by EBITDA growth from
online music subscription and advertising-supported streaming,
which is now WMG's largest and fastest growing revenue source,
underpenetrated markets worldwide for paid streaming consumption
and rising listener demand for WMG's music content. Ratings reflect
the music industry's history of revenue losses from 1999 to 2014
offset by signs of a multi-year upturn following the third
consecutive year of growth in 2017 as listeners globally
increasingly adopt on-demand streaming services. The recorded music
industry continues to transition from physical to digital music
platforms, download to streaming services and PC to mobile
devices.
The B1 CFR is supported by WMG's position as the world's third
largest recorded music industry player with an extensive music
library and publishing assets, which drive recurring revenue
streams. Only a small percentage of WMG's annual revenue depends on
recording artists and songwriters without an established track
record, while the bulk of its revenue is generated by proven
artists or from its catalog (defined as albums older than 18
months) and thus isolated from the revenue volatility associated
with new releases from new artists. Ratings also recognize the
opportunities to grow digital revenue through the proliferation of
new streaming services, and anticipate the higher margin
faster-growth digital revenue will lead to market share gains in
the recorded music segment.
At the same time, the B1 CFR reflects the challenges and
opportunities related to new strategies that major industry players
are pursuing to adapt to the shift in demand for music content
delivery to various digital platforms and capture faster growth
revenue associated with the transition from downloads to streaming.
The rating also embeds the increasing disparity between the strong
growth of ad-supported music streaming consumption relative to
slower growth revenue derived from the same ad-supported streams,
which means WMG's artists, songwriters and rights holders are not
fully maximizing value from this sub-segment and not receiving
equitable remuneration. The B1 rating incorporates the seasonal and
cyclical nature of recorded music revenue (nearly 85% of WMG's
revenue) and low visibility into the ultimate results of upcoming
release schedules. Moody's believe WMG will pursue external growth
through small tuck-in acquisitions funded with excess cash flow and
the potential sale of non-core assets. Moody's expect the company
to maintain a good liquidity profile over the next 12-15 months.
Rating Outlook
The stable rating outlook reflects Moody's expectation for
continued improvement in recorded music industry fundamentals
combined with WMG's position as the world's third largest music
content provider with global diversification and an enhanced
recorded music repertoire. Moody's expect EBITDA growth to be
driven by improved margins as a result of robust streaming revenue
growth, the value of its music content, realized synergies, solid
returns on artist investments, marketing and branding, as well as
enhancement of the company's analytics.
What Could Change the Rating -- Up
Ratings could be upgraded if there is evidence of sustained growth
in the recorded music industry and WMG exhibits EBITDA margin
expansion as well as realization of lower earnings volatility and
higher returns on investments. Assurances that management will
maintain disciplined operating strategies for long-term growth,
exhibit prudent financial policies and target credit metrics
consistent with a higher rating resulting in total debt to EBITDA
leverage sustained comfortably below 4.5x (Moody's adjusted) and
free cash flow to adjusted debt in the mid-to-high single digit
range could also lead to an upgrade. Finally, for an upgrade to be
considered, Moody's would need clarity from the equity sponsor with
respect to the financial policy track record for each of its
portfolio company holdings as well as the long-term investment
philosophy and exit strategy for WMG.
What Could Change the Rating -- Down
Ratings could be downgraded if debt-financed acquisitions,
competitive pressures or increased artist and repertoire (A&R)
investments negatively impact revenue or EBITDA resulting in total
debt to EBITDA leverage sustained above 6x (Moody's adjusted), or
if heightened capital spending or financial sponsor related actions
result in negative free cash flow.
The principal methodology used in this rating was Business and
Consumer Service Industry published in October 2016.
With headquarters in New York, NY, WMG Holdings Corp. is a
wholly-owned subsidiary of Warner Music Group Corp., a leading
music content provider operating domestically and overseas. Revenue
totaled approximately $3.7 billion for the twelve months ended 31
December 2017.
WMG ACQUISITION: S&P Rates New $325MM Unsecured Notes Due 2026 'B'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '5'
recovery rating to WMG Acquisition Corp.'s proposed $325 million
senior unsecured notes due 2026. The '5' recovery rating indicates
S&P's expectation of modest (10% - 30%; weighted average: 15%)
recovery of principal in the event of a payment default. At the
same time, the company plans to issue an additional $320 million
fungible add-on to its existing term-loan facility.
The 'B+' issue-level rating and '3' recovery rating are unaffected
by this add-on. The '3' recovery rating indicates S&P's expectation
of meaningful (50% - 70%; weighted average: 60%) recovery of
principal in the event of a payment default. WMG Acquisition plans
to use the net proceeds from the issuances to fully redeem its
outstanding $635 million senior unsecured notes. WMG Acquisition is
a subsidiary of Warner Music Group Corp. (WMG).
S&P said, "Our 'B+' corporate credit rating reflects WMG's position
as the third-largest global record company; its strong geographic
diversity, with operations in more than 50 countries; its large and
well-diversified portfolio of recordings and compositions across
multiple genres, offset by its smaller market share compared to
significantly larger peers. Global music streaming growth now
outpaces declines in physical sales and digital downloads and we
expect this trend to continue in 2018 and beyond.
"We forecast adjusted leverage to decline to the high-4x area in
fiscal 2018. WMG's adjusted leverage as of Dec. 31, 2017, was 5.5x
on a rolling-12-month basis. We expect WMG to continue to
prioritize using free cash flow generation to invest in the
business, through acquisitions and/or internal artist development.
We also expect the company to continue to make dividend
distributions over our outlook horizon, using cash on the balance
sheet. Given the lack of visibility regarding the pace of voluntary
debt reduction, we expect leverage reduction to come primarily from
continued EBITDA growth."
RATINGS LIST
Warner Music Group Corp.
Corporate credit rating B+/Stable/--
New Rating
WMG Acquisition Corp.
Senior Unsecured
$325 mil sr unsecd nts due 2026 B
Recovery rating 5(15%)
WORLD VIEW: Wants Access to Old National Bank Cash Collateral
-------------------------------------------------------------
World View International Trade LLC seeks authority from the U.S.
Bankruptcy Court for the Eastern District of Michigan to allow use
of up to $209,508 cash collateral per month.
The Debtor is in immediate need to use postpetition revenues to pay
wages, inventory, taxes, and other expenses incurred in the
ordinary course of business. The Debtor anticipates that it may
need as much $209,508 per month to operate its business, plus cost
of sales. All cash collateral will be used in accordance with the
Debtor's First and Second Quarterly 2018 monthly budget.
Because Debtor uses cash generated by sales to pay for replacement
inventory, rents, utilities, wages, insurance, and supplies, and
Debtor does not otherwise have adequate funds to pay for such
expenses, Debtor will be immediately and irreparably harmed if it
is not able to use cash collateral.
There is one party that has an interest in cash collateral - Old
National Bank. As of the Petition Date, the principal amount
alleged owed to Old National Bank was approximately $1,139,480. No
creditor other than Old National Bank holds a recorded or perfected
security interest or lien in cash collateral.
Cash generated by the Debtor consist almost exclusively as a result
of the export sale of inventory as a supplier, and that cash is the
proceeds, product, offspring, or profits of the inventory which the
Old National Bank holds a security interest prepetition.
The Debtor believes that the fair market value of the Debtor's
trucks, computers, telephones, copier, office furniture, supplies,
and inventory is $165,128. Therefore, Old National Bank's liens are
collaterized in the amount of $165,128. The adequate protection to
Old National Bank lies in the value of the Debtor's equipment,
inventory, and receivables.
Accordingly, Debtor proposes to provide adequate protection by a
continued lien in the vehicles, equipment, inventory, and supplies
of Debtor, preserving the value of the collateral subject to lien
without further depreciation, or the cash equivalent on account,
and thereby maintaining a cash value of personal property,
inventory, supplies, and cash of $165,128.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/mieb18-41982-8.pdf
About World View International
World View International Trade LLC -- http://worldviewexport.com/
-- is a limited liability company headquartered in Ann Arbor,
Michigan. World View was launched in 2011 with the goal of
providing beef hides to Asian markets for further refinement into
semi-finished and finished goods. Initially focused on bulk
container shipments, World View now directly services individual
meat processors, butchers and locker plants around the country with
daily pickup service, while still maintaining its commitment to
bulk shipment suppliers. Direct Export Management now provides over
100 local meat processors from all over the country with the most
direct route to Asian tanneries.
World View International Trade filed a Chapter 11 petition (Bankr.
E.D. Mich. Case No. 18-41982) on Feb. 16, 2018. In the petition
signed by Jeffrey Wilkerson, manager, the Debtor estimated at least
$50,000 in assets and $1 million to $10 million in liabilities.
The case is assigned to Judge Phillip J. Shefferly. The Debtor is
represented by Donald C. Darnell, Esq., Don Darnell.
[*] Suzanne L'Hernault Joins Rimon's Finance Services Group
-----------------------------------------------------------
Rimon on Feb. 12, 2018, disclosed that Suzanne L'Hernault, a
finance and restructuring attorney, has joined the firm as a
Partner in its Finance Services group. Ms. L'Hernault will be
located in the firm's New York City and New Jersey offices.
Prior to joining Rimon, Ms. L'Hernault was at Greenberg Traurig
LLP, where she served as a shareholder in its Banking & Finance
practices.
Suzanne L'Hernault represents lenders and borrowers in a wide range
of secured and unsecured financing transactions. Focusing her
practice in leveraged buyout financing, asset-based lending,
working capital financing, project funding, and workouts, Suzanne
has extensive experience drafting and negotiating credit
agreements, letters of credit, inter-creditor agreements,
subordination agreements, and security documents.
Ms. L'Hernault also has extensive experience in dealing with
liquidity facilities, working capital lines of credit, term loans,
and debt restructuring agreements. Suzanne also advises
administrative agents in syndicated credit facilities.
At Rimon, Ms. L'Hernault is joining a firm with a strong and
growing financial services practice. Over the last four months,
the 17-office firm has added a number of high profile Partners
practicing in the financial services sector, including former
Sedgwick Restructuring Practice Chair Lillian Stenfeldt in San
Francisco and Palo Alto; Chicago Partner Thomas Fawell from Katten;
Commercial Litigator Zheng Liu in Palo Alto from Orrick
Herrington; International Tax Partner Ajay Whittemore in San
Francisco; Trusts & Estates Partner Roy Kozupsky in Boston and New
York from Moses & Singer; and Financial Services and Leveraged
Finance Partner Fred Chang in Seattle, who was a General Counsel
for Deutsche Bank in Asia.
“Our clients have been very interested in having a deep bench of
diverse financial services sector partners who can handle every
type of transaction or litigation that comes their way. As a
result, our financial services group has witnessed very strong
growth over the last year, as we have added top shelf partners from
across the globe. We're very happy to add Suzanne, who has forged
a name for herself as a go-to attorney for financing transactions.
Her work and her experience speak for themselves, and we are glad
that we have increasingly seen partners of her caliber show a
desire to join Rimon," said Rimon CEO Michael Moradzadeh.
Ms. L'Hernault received her J.D. from Fordham University School of
Law and a B.A. from State University of New York at Stony Brook.
Rimon has 17 offices across three continents. The firm is widely
known as being at the vanguard of legal innovation. The firm has
been repeatedly recognized by the Financial Times as one of North
America's most innovative law firms. The firm's managing partners
were both named 'Legal Rebels' by the American Bar Association's
ABA Journal and have spoken on innovations in the practice of law
at Harvard and Stanford Law Schools. Rimon and its lawyers have
also received numerous awards for excellence, including from Best
Lawyers and Chambers.
[^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS
------------------------------------------
Authors: Teresa A. Sullivan, Elizabeth Warren,
& Jay Westbrook
Publisher: Beard Books
Softcover: 370 Pages
List Price: $34.95
Review by: Susan Pannell
Order your personal copy today at
http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.html
So you think you know the profile of the average consumer debtor:
either deadbeat slouched on a sagging sofa with a three day growth
on his chin or a crafty lower-middle class type opting for
bankruptcy to avoid both poverty and responsible debt repayment.
Except that it might be a single or divorced female who's the one
most likely to file for personal bankruptcy protection, and her
petition might be the last stage of a continuum of crises that
began with her job loss or divorce. Moreover, the dilemma might be
attributable in part to consumer credit industry that has increased
its profitability by relaxing its standards and extending credit to
almost anyone who can scribble his or her name on an application.
Such are among the unexpected findings in this painstaking study of
2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors use
data contained in the actual petitions. In so doing, they offer a
unique window into debtors' lives.
The authors conclude that people who file for bankruptcy are, as a
rule, neither impoverished families nor wily manipulators of the
system. Instead, debtors are a cross-section of America. If one
demographic segment can be isolated as particularly debtprone, it
would be women householders, whom the authors found often live on
the edge of financial disaster. Very few debtors (3.7 percent in
the study) were repeat filers who might be viewed as abusing the
system, and most (70 percent in the study) of Chapter 13 cases fail
and become Chapter 7s. Accordingly, the authors conclude that the
economic model of behavior -- which assumes a petitioner is a
"calculating maximizer" in his in his decision to seek bankruptcy
protection and his selection of chapter to file under, a profile
routinely used to justify changes in the law -- is at variance with
the actual debtor profile derived from this study.
A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors are
simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer debts
are off the charts. Petitioners seem particularly susceptible to
the siren song of credit card companies. In the study sample,
creditors were found to have made between 27 percent and 36 percent
of their loans to debtors with incomes below $12,500 (although the
loans might have been made before the debtors' income dropped so
low). Of course, the vigor with which consumer credit lenders
pursue their goal of maximizing profits has a corresponding impact
on the number of bankruptcy filings.
The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.
*********
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
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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
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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
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Monthly Operating Reports are summarized in every Saturday edition
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The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2018. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
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The TCR subscription rate is $975 for 6 months delivered via
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