/raid1/www/Hosts/bankrupt/TCR_Public/181218.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, December 18, 2018, Vol. 22, No. 351
Headlines
22 RUNYON: Seeks to Hire Weichert as Realtor
37 CALUMET: U.S. Trustee Objects to Disclosure Statement Approval
AFFINION GROUP: Moody's Lowers CFR to Caa3, Outlook Negative
ALL-STATE FIRE: Amount of Admin Claims Increased to $46K
ARGOS THERAPEUTICS: U.S. Trustee Unable to Appoint Committee
ARP FAMILY: Great Western Bank Does Not Consent Cash Collateral Use
AZUSA PACIFIC: Moody's Confirms Ba1 on 2015B Bonds, Outlook Neg.
BALLENGER CONSTRUCTION: Trustee Selling Trust's Remnant Assets
BEST SALES: U.S. Trustee Unable to Appoint Committee
BK RACING: Front Row Seeks Payment of NASCAR Member Fees
BOYD GAMING: Bank Debt Trades at 2% Off
C.R. OF ATTALLA: Disclosures OK'd; Jan. 9 Plan Confirmation Hearing
CAFE HOLDINGS: Seeks to Hire Donlin as Administrative Advisor
CAFE HOLDINGS: Seeks to Hire Haynes and Boone as Legal Counsel
CAFE HOLDINGS: Seeks to Hire Loughlin Management, Appoint CRO
CAFE HOLDINGS: Seeks to Hire McNair Law Firm as Local Counsel
CARESTREAM HEALTH: Moody's Rates 1st Lien Loans Due 2021 'B1'
CCF HOLDINGS: S&P Assigns CCC+ Issuer Credit Rating, Outlook Neg.
CHECKOUT HOLDING: S&P Lowers ICR to 'D' on Bankruptcy Filing
CHICAGO SURGICAL: Cash Collateral Use Through Jan. 17 Okayed
CM RESORT: Silverthorne Buying Assets for Not Less than $2 Million
CONSOLIDATED ENERGY: Moody's Hikes CFR to Ba3, Outlook Stable
CONVERGENT HEALTHCARE: Bid to Reconsider Heisler Cert. Denial Nixed
CORAL POINTE: U.S. Trustee Unable to Appoint Committee
CORRECT CLAIM: Court Approves Disclosures, Confirms Ch. 11 Plan
CORY SCHULTZ: Ct. Narrows Claims in A. Thomas Suit vs AutoZone
CT TECHNOLOGIES: Moody's Lowers CFR to Caa3, Outlook Stable
CT TECHNOLOGIES: S&P Affirms CCC Issuer Credit Rating, Outlook Dev.
CUKER INTERACTIVE: Case Summary and List of 19 Unsecured Creditors
CUSTOM AIR: U.S. Trustee Unable to Appoint Committee
DAVID'S BRIDAL: Moody's Rates $60MM Bankr. Term Loan 'B2'
EXECUTIVE NON-EMERGENCY: Seeks to Hire Ewald Auctions as Appraiser
F.A.S.S.T LLC: Allowed to Use Cash Collateral Through Feb. 13
FINANCIAL & RISK: Bank Debt Trades at 4% Off
FLEXI-VAN LEASING: S&P Alters Outlook to Negative & Affirms B- ICR
FLOOR & DECOR: S&P Lowers $146MM 1st Lien Loan Rating to 'BB-'
FLORIDA COSMETOGYNECOLOGY: Jan. 24 Disclosure Statement Hearing
FLORIDA MICROELECTRONICS: U.S. Trustee Unable to Appoint Committee
GENON ENERGY: Completes Reorganization, Exits Chapter 11
GEOSTABILIZATION INT'L: S&P Assigns B ICR, Outlook Stable
GETHSEMANE MINISTRIES: Jan. 29 Plan Confirmation Hearing
GOOD SAMARITAN: Moody's Cuts Rating on $114MM Bonds to Ba1
GREAT CANADIAN GAMING: S&P Withdraws 'BB+' Issuer Credit Rating
GREGORY TE VELDE: Trustee Hires A&M to Auction Surplus Cattle
GRIFOLS WORLDWIDE: Bank Debt Trades at 2% Off
HCA HEALTHCARE: Fitch Affirms BB LongTerm IDR, Outlook Stable
HERO INC: Unsecured Creditors to Get 42% Under Chapter 11 Plan
HH & JR: U.S. Trustee Unable to Appoint Committee
HOOK LINE: R. Jurasek Objects to Disclosure Statement
HOOK LINE: Salamatof Objects to Disclosure Statement Approval
HUFFERMEN INC: Seeks Authorization on Cash Collateral Use
INGEVITY CORP: Fitch Affirms BB LongTerm Issuer Default Rating
INGEVITY CORP: Moody's Alters Outlook on Ba2 CFR to Negative
INNOVATIVE XCESSORIES: Moody's Alters Outlook of B2 CFR to Negative
ISRS REALTY: Hires DelBello Donnellan as Attorney
J CREW: Bank Debt Trades at 19% Off
JAMES SKEFOS: IPS Assets Buying Memphis Properties for $1.5 Million
JBECKS PROPERTIES: Allowed to Continue Using Cash Collateral
JELD-WEN INC: Bank Debt Trades at 2% Off
JORGE A. ALVAREZ: U.S. Trustee Unable to Appoint Committee
JOSEPH'S TRANSPORTATION: Seeks Access to Use Cash Until Jan. 30
JWCCC LLC: Seeks Conditional Approval of Disclosure Statement
K & B DIRECTIONAL: Seeks Authority to Use Cash Collateral
KENDALL FROZEN: Taps Channel Marketing as Financial Advisor
KING'S PEAK ENERGY: Seeks OK on 14th Agreed Cash Collateral Use
KLOECKNER PENTAPLAST: Bank Debt Trades at 11% Off
L.E. DIETRICH: Seeks Authorization on Cash Collateral Use
LANDS' END: Moody's Affirms B3 CFR & Alters Outlook to Stable
LANDS' END: S&P Alters Outlook to Stable & Affirms 'B-' ICR
LBU FRANCHISES: Post-Petition Cash Collateral Use Okayed
MARINER CHIROPRACTIC: U.S. Trustee Unable to Appoint Committee
MBIA INSURANCE: Moody's Affirms 'Caa1' IFS Rating
MCDERMOTT INTERNATIONAL: Bank Debt Trades at 5% Off
MED CARE EMERGENCY: Seeks Authorization to Use Cash Collateral
MISYS PLC: Bank Debt Trades at 6% Off
MOBILE MINI: Moody's Hikes Corp. Family Rating to Ba3
NASROLLAH GASHTILI: Cheng Buying Calabasas Property for $1.4M
NASSAU JOHN: Files for Chapter 11 to Save Purchase Deal
NASSAU JOHN: Voluntary Chapter 11 Case Summary
NATIONAL AUTO: Has Interim Approval to Use Cash Collateral
NATIONAL AUTO: Seeks Authorization to Use Cash Collateral
NATURE'S BOUNTY: Bank Debt Trades at 8% Off
NORTHWEST ACQUISITIONS: S&P Alters Outlook to Neg & Affirms B+ ICR
NSC WHOLESALE: Committee Taps Bederson LLP as Financial Advisor
OHIO VALLEY ELECTRIC: Moody's Alters Outlook to Stable
PARKER DRILLING: Moody's Lowers CFR to Caa3 Amid Bankr. Filing
PAULA ROBERTS WHITE: Cates Buying Jackson Property for $40K
PEAK 10: Bank Debt Trades at 4% Off
PON GROUP: Proposes Sale of Bensenville Property
POPLAR CREEK: Taps TR Mandigo & Company as Valuation Consultant
PROMISE HEALTHCARE: Ombudsman Taps Otterbourg P.C. as Counsel
PROMISE HEALTHCARE: PCO Taps Gibbons P.C. as Delaware Counsel
RACKSPACE HOSTING: $1.995BB Bank Debt Trades at 10% Off
RACKSPACE HOSTING: $800MM Bank Debt Trades at 10% Off
REGDALIN PROPERTIES: Trustee Taps Coldwell & Major as Brokers
REIHNER ENTERPRISES: U.S. Trustee Unable to Appoint Committee
REPUBLIC METALS: Selling Prepaid Products on Wholesale Basis
RESIDENTIAL RESOURCES: Fitch Withdraws BB+ on 2017 Revenue Bonds
ROCK BRIDGE: U.S. Trustee Unable to Appoint Committee
RUTABAGA CAFE: U.S. Trustee Unable to Appoint Committee
SAGE PARK PLACE: Has Authorization on Cash Collateral Use
SARAH ZONE: Seeks Authorization to Use Cash Collateral
SEABROOK DENTAL: Columbia Bank Cash Collateral Stipulation Rejected
SEATTLE PROTON: Taps Bush Kornfeld as Legal Counsel
SEATTLE PROTON: Taps Nixon Peabody as Special Counsel
SEATTLE PROTON: Taps Ogden Murphy as Special Counsel
SENIOR CARE CENTERS: U.S. Trustee Forms 9-Member Committee
SIMPLY GREEK: U.S. Trustee Unable to Appoint Committee
SKY-SCAN INC: Taps William S. Gannon PLLC as Special Co-Counsel
SMTT INC: Gets Final Authorization on Cash Collateral Use
SOUTHEAST POWERGEN: S&P Alters Outlook to Stable & Affirms 'B' ICR
SOUTHERN CALIFORNIA LOGISTICS: Moody's Hikes 2007/2008A TABs to Ba2
SPRINT INDUSTRIAL: S&P Lowers ICR to 'CCC-', Outlook Negative
STARION ENERGY: U.S. Trustee Unable to Appoint Committee
STOLLINGS TRUCKING: Seeks Court Approval to Employ Bookkeeper
SUMAR INTERNATIONAL: Seeks Authorization on Cash Collateral Use
T CAT ENTERPRISE: Allowed to Use Cash Collateral Through Dec. 31
TIERPOINT LLC: Bank Debt Trades at 5% Off
TOWER AUTOMOTIVE: Moody's Alters Outlook on B1 CFR to Positive
TRINSEO MATERIALS: Bank Debt Trades at 3% Off
TSI TELECOMMUNICATION: Bank Debt Trades at 5% Off
TUXEDO, NY: Moody's Revises Outlook on Ba1 Issuer Rating to Pos.
UNITED MATERIAL: Seeks Authorization to Use Cash Collateral
USG CORP: Moody's Lowers CFR to Ba2, Outlook Negative
VICI PROPERTIES: Bank Debt Trades at 3% Off
VINCE INTERMEDIATE: S&P Withdraws 'CCC+' Issuer Credit Rating
WALL STREET THEATER: Fifth Cash Collateral Stipulation Approved
WEST CORP: $2.557-Bil. Bank Debt Trades at 4% Off
WEST CORP: $700MM Bank Debt Trades at 5% Off
WHITE EAGLE: Case Summary and 7 Unsecured Creditors
WHITE EAGLE: ECI Life Settlement Unit Enters Chapter 11
WIT'S END RANCH: Has $2.1 Million Cash Offer for Bayfield Property
WOODBRIDGE GROUP: Selling Beverly Hills Property for $1.9 Million
WOODBRIDGE GROUP: Selling Beverly Hills Property for $4.2 Million
WOODBRIDGE GROUP: Selling Sachs' Carbondale Property for $180K
WOODBRIDGE GROUP: Selling Sherman Oaks Property for $700K
WOODLAWN COMMUNITY: Committee Taps High Ridge as Accountant
WW CONTRACTORS: Needs Cash Collateral for December 2018 Expenses
WYNN RESORTS: Pomerantz LLC to Lead in Ferris Securities Suit
ZACKY & SONS: Western Milling Appointed as New Committee Member
ZENITH ENERGY: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
*********
22 RUNYON: Seeks to Hire Weichert as Realtor
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22 Runyon St. & 194-196 Johnson Ave Corp. seeks approval from the
U.S. Bankruptcy Court for the District of New Jersey to hire a
realtor.
The Debtor proposes to employ Weichert Realtors New Group in
connection with the sale of its property located at 194-196 Johnson
Avenue, New Jersey.
Weichert will get a commission of 6% of the purchase price.
Edward Gelley, a realtor employed with Weichert, disclosed in a
court filing that he and his firm are "disinterested" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Edward Gelley
Weichert Realtors New Group
237 Adams Street, Newark NJ 07105
Office: 973-741-3000
Cell: 973-666-1113
Fax: 973-741-3030
E-mail: edward@newgrouprealty.com
About 22 Runyon St. & 194-196
Johnson Ave Corp.
22 Runyon St. & 194-196 Johnson Ave Corp. sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 18-33431)
on Nov. 28, 2018. At the time of the filing, the Debtor estimated
assets of less than $50,000 and liabilities of less than $1
million. The Debtor tapped Scura, Wigfield, Heyer, Stevens &
Cammarota LLP as its legal counsel.
37 CALUMET: U.S. Trustee Objects to Disclosure Statement Approval
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William K. Harrington, the United States Trustee for Region 1,
objects to the adequacy of the disclosure statement explaining 37
Calumet Street, LLC's Chapter 11 plan of reorganization.
The Trustee complains that the Debtor's monthly Plan payments under
a hypothetical balance sheet restructuring exceed its reported
monthly NCF by at least $6,132, exclusive of tax and insurance
escrows.
According to the Trustee that the plan is not confirmable, because
it is likely to be followed by liquidation or the need for further
reorganization, even if the Plan were feasible, the Disclosure
Statement contains inadequate information.
The Trustee asserts that the Plan is not feasible, because the
Debtor has made no efforts either to obtain refinancing or to sell
the property, such as by identifying a lender or moving to employ a
real estate broker.
The Trustee points out that the Disclosure Statement is deficient,
because it fails to explain how administrative and general
unsecured claims are going to get paid if Endeavor were to take the
37 Calumet Street property on or after April 1, 2019 for less than
its current fair value.
About 37 Calumet Street
37 Calumet Street LLC listed its business as a single asset real
estate, as defined in 11 U.S.C. Section 101(51B)).
37 Calumet Street sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mass. Case No. 18-11412) on April 19,
2018. In the petition signed by Patricia Hounsell, manager, the
Debtor estimated assets of $1 million to $10 million and
liabilities of $1 million to $10 million. Judge Frank J. Bailey
presides over the case. Michael Van Dam, Esq., of Van Dam Law LLP,
serves as the Debtor's counsel.
AFFINION GROUP: Moody's Lowers CFR to Caa3, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Affinion Group, Inc.'s
Corporate Family Rating to Caa3 from Caa1 and its Probability of
Default Rating to Caa3-PD from Caa1-PD. Concurrently, Moody's
downgraded the company's first lien credit facility rating
(revolver and term loan) to Caa1 from B2 and its senior unsecured
PIK toggle notes due 2022 to Ca from Caa3. Additionally, the
Speculative Grade Liquidity rating was lowered to SGL-4 from SGL-3.
The ratings outlook is negative.
The downgrade of the CFR to Caa3 reflects a credit profile that is
expected to be meaningfully weakened following Affinion's reported
loss of a top 5 customer in the Global Loyalty segment. The loss of
a key partner has elevated Moody's concerns about the
sustainability of Affinion's capital structure given expectation
for meaningful deterioration of profitability and liquidity.
Affinion's Global Loyalty is a faster-growing and more profitable
segment, which accounted for more than one-third of the company's
consolidated revenue and nearly 50% of management's adjusted EBITDA
(before corporate overhead) as of twelve months ended September 30,
2018. This segment represented a material part of the company's
EBITDA growth in 2018.
Moody's expects that Affinion's EBITDA and liquidity will gradually
erode in Q4 2018 and through most of 2019, creating uncertainty
around the company's ability to meet its debt service requirements
and covenant compliance. Revenues in the company's other segments
remain sluggish and Affinion will need to win new business to
offset this major customer loss as well as continue to expand
existing relationships.
Moody's took the following ratings actions on Affinion Group,
Inc.:
--- Corporate Family Rating, downgraded to Caa3 from Caa1
--- Probability of Default Rating, downgraded to Caa3-PD from
Caa1-PD
--- $110 million first lien senior secured revolving credit
facility due 2022, downgraded to Caa1 (LGD2) from B2 (LGD3)
--- $1.34 billion ($853.3 million outstanding as of September 30,
2018) first lien senior secured term loan due 2022, downgraded to
Caa1 (LGD2) from B2 (LGD3)
--- $532.6 million ($637 million outstanding as of September 30,
2018) senior cash 12.5%/PIK step-up to 15.5% unsecured notes due
2022, downgraded to Ca (LGD5) from Caa3 (LGD5)
--- Speculative Grade Liquidity Rating, downgraded to SGL-4 from
SGL-3
--- Outlook, changed to negative from stable
RATINGS RATIONALE
Affinion's Caa3 CFR reflects ongoing challenges to sustain revenue
and earnings growth, particularly in light of a recent top 5
customer loss in the Global Loyalty segment, driving an
exceptionally high level of debt and leverage. Moreover, Moody's
expects liquidity sources will be weak over the next 12 months.
Moody's estimates that total debt-to-EBITDA (Moody's adjusted) was
around 10.0 times at September 30, 2018 and Affinion's revenue and
earnings will continue to fall over the next 12 months. Affinion's
debt-to-EBITDA (Moody's adjusted) is likely to materially exceed
10.0 times by 2019 as management works to mitigate the impact of
volume losses in the Global Loyalty segment by onboarding new
customers and expanding relationships with existing partners. Given
an expectation for significant earnings and liquidity erosion in
2019, Moody's is concerned that the current capital structure is
unsustainable. Moody's believes that the elevated risk of a debt
restructuring will increase further if the company is unable to
meaningfully grow earnings and reduce leverage in the next few
years. Moody's expects Affinion will generate negative free cash
flow despite the benefit of significant PIK interest that will lead
to increasing debt levels. The rating also factors in the highly
competitive industry in which Affinion operates, exposure to
cyclical client and consumer spending, and the high degree of
regulatory oversight around marketing of its products and
services.
Favorable consideration is given to the company's good global
market presence, supported by its large membership base, its direct
marketing expertise and strong margins in its Global Loyalty
segment. Affinion's debt does not mature until 2022 and provides
some flexibility to stabilize earnings and free cash flow, and
maintain adequate capacity under the revolver to fund operations.
Affinion's SGL-4 Speculative Grade Liquidity rating reflects
expectation for weak liquidity over the next 12 months,
characterized by negative free cash flow generation, modest cash
balances, significant revolver borrowings and uncertainty regarding
covenant compliance. Given negative operating trends, Moody's
expects the company to generate negative free cash flow and rely
heavily on its current cash balance of approximately $50 million as
of September 30, 2018. On November 14, 2018, Affinion entered into
the fourth amendment to its credit facility, which permitted the
company to release $45 million of the $50 million from its
restricted cash following the July 2018 sale of the Insurance
business. Approximately $32 million will be available for working
capital needs and/or investments and the remaining $13 million was
used to prepay term debt. In addition, the company had
approximately $65 million availability under its $110 million
revolving credit facility due 2022, incorporating a $40 million
draw and $5 million in letters of credit outstanding as of
September 30, 2018. While Moody's expects the company could meet
all of its cash obligations over the next twelve months, its
liquidity will remain weak.
The potential for a covenant violation also overhangs the company's
liquidity position. Affinion's bank credit agreement (revolver and
term loan) includes two financial maintenance covenants that
require covenant compliance tests every quarter. While the company
had adequate cushion under its total secured leverage ratio and
consolidated fixed charge coverage ratio covenants at September 30,
2018, the loss of the top 5 loyalty customer creates significant
uncertainty with respect to covenant compliance over the next 12
months.
The negative rating outlook reflects Moody's expectation that
Affinion will experience declines in revenue and EBITDA and its
debt-to-EBITDA (Moody's adjusted) to remain well above 10.0 times
range over the next 12-18 months. The outlook also incorporates
Moody's view that the company's liquidity will remain weak in the
near-term and the risk of a default event is elevated.
The ratings could be downgraded if Affinion's operating performance
deteriorates further and does not begin to stabilize within the
next 12-18 months, liquidity deteriorates further, or if the
likelihood of a distressed exchange or other form of default
further increases.
Potential for an upgrade is limited in view of the operating
challenges, very high financial leverage and weak liquidity.
However, an upgrade could occur if a material improvement in
operating performance and liquidity diminishes the risk of a debt
restructuring.
Affinion is a leading provider of loyalty and customer engagement
solutions. Affinion's products include subscription-based lifestyle
services, personal solutions that strengthen and extend customer
relationships for its 5,500 marketing partners worldwide, including
companies in financial services, retail, travel, and Internet
commerce. The company is estimated to generate approximately $700
million of net revenues for the twelve months ended December 31,
2018. Affinion's equity is owned by former debt holders following
the company's debt exchange transaction in 2015.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
ALL-STATE FIRE: Amount of Admin Claims Increased to $46K
--------------------------------------------------------
All-State Fire Protection, Inc., and Raymond S. Gibler filed a
corrected second amended joint plan of reorganization and a
supporting corrected disclosure statement.
The total amount of administrative claims under the Debtor
increased to $46,273 in the corrected second amended plan, from
$45,000, with the addition of $515 for taxes due to the IRS for
12-31-2016 and $758 for taxes due to the IRS for 12-31-2017.
Class 1: Wells Fargo Bank, NA, is impaired and secured with
collateral composed of All Personal Property. The allowed secured
amount is $1,203,900.00 and 1st Priority of lien,subject to
statutory liens. New promissory note: interest at 7.00% per annum
on a 10 year amortization; maturity date 5 years from the Effective
Date; monthly principal and interest payments of apprx. $13,978.30.
At the end of the five (5) year term, all remaining amounts due and
owing shall be paid in full.
Class 2: Wells Fargo Equipment Finance, Inc. is impaired and
secured with collateral composed of 2015 Nissan PF80YLP Forklift.
The amount of allowed secured claim is $16,942.19. Allowed secured
claim of cram down amount; interest at 7.0% per annum; equal
monthly payments for 1 year after Effective Date. Deficiency claim
treated as Class 8 general unsecured.
Class 5: Chrysler Capital is impaired and secured with collateral
composed of 2015 Dodge Ram 1500 Crew Cab pickup. The amount of
allowed claim is $24,575. Allowed cram down claim shall bear
interest at 4.0% per annum; equal monthly P&I payments of $452.59
starting the first day of the first month after the Effective Date,
and thereafter, for 6 years. Deficiency treated as Class 8 Claim.
Class 6: Chrysler Capital is impaired and secured with collateral
composed of 2015 Dodge Ram 1500 Crew Cab Pickup. The amount of
allowed Claim is $24,575. Allowed cram down claim shall bear
interest at 4.0% per annum; equal monthly P&I payments of $452.59
starting the first day of the first month after the Effective Date,
and thereafter, for 6 years. Deficiency treated as Class 8 Claim.
Class 7: Chrysler Capital is impaired and secured with collateral
composed of 2016 Dodge Ram 1500 pickup. The amount of allowed claim
is $27,050. Allowed cram down claim shall bear interest at 4.0% per
annum; equal monthly P&I payments of $498.17 starting the first day
of the first month after the Effective Date, and thereafter, for 6
years. Deficiency treated as Class 8 Claim.
Class 8: Non-Insider General Unsecured Claims against All-State
excluding subordinated claims are impaired. Pro-rata distributions
on an annual basis from All-State Creditor Fund within thirty (30)
days of each anniversary of the Effective Date for a period of six
(6) years.
Class 14: Non-insider General Unsecured Claims against Mr. Gibler,
excluding subordinated claims and student loans are impaired.
Pro-rata distributions on an annual basis from Gibler Creditor Fund
within thirty (30) days of each anniversary of the Effective Date
for a period of six (6) years.
Class 21: All Insider Claims against Both Debtor are impaired.
Class 21 shall receive nothing on account of their claims.
Class 22: All Subordinated Unsecured Claims against Both Debtors
are impaired. No creditor holding a Class 22 claim would be
entitled to payment until all other claims, including all other
general unsecured claims, are paid in full. Class 22 shall receive
nothing on account of their claims.
Payments and distributions under the Plan will be funded by
All-State's Net Income and Mr. Gibler’s net disposable income,
and any cash remaining in the Debtor’s Debtor-in-possession
account after paying administrative claims.
A full-text copy of the Disclosure Statement dated December 6,
2018, is available at:
http://bankrupt.com/misc/cob18-1715844TBM-451.pdf
Attorney for Mr. Gibler:
Jeffrey S. Brinen, Esq.
KUTNER BRINEN, P.C.
1660 Lincoln St., Suite 1850
Denver, CO 80264
Tel: (303) 832-2418
Fax: (303) 832-1510
Email: jsb@kutnerlaw.com
About All-State Fire Protection
All-State Fire Protection, Inc., based in Wiggins, Colo.,
specializes in the installation of fire sprinkler systems for
residential and commercial clients.
All-State Fire Protection filed a Chapter 11 petition (Bankr. D.
Colo. Case No. 17-15844) on June 23, 2016, estimating $1 million to
$10 million in assets and liabilities. The petition was signed by
Raymond Gibler, president.
The Hon. Thomas B. McNamara presides over the case.
Kenneth J. Buechler, Esq., at Buechler & Garber, serves as
bankruptcy counsel to the Debtor.
ARGOS THERAPEUTICS: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The Office of the U.S. Trustee on Dec. 13 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Argos Therapeutics, Inc.
About Argos Therapeutics
Argos Therapeutics, Inc., was incorporated in the State of Delaware
on May 8, 1997. The Company is an immuno-oncology company focused
on the development and commercialization of individualized
immunotherapies for the treatment of cancer and infectious diseases
based on its proprietary precision immunotherapy technology
platform called Arcelis.
Argos Therapeutics filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No.
18-12714) on Nov. 30, 2018. The Debtor estimated $1 million to $10
million in assets and $10,000,001 to $50 million in liabilities.
Judge Kevin J. Carey presides over the case. Matthew B. McGuire at
Landis Rath & Cobb LLP represents the Debtor as counsel.
ARP FAMILY: Great Western Bank Does Not Consent Cash Collateral Use
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Great Western Bank ("GWB") provides notice to the U.S. Bankruptcy
Court for the District of Arizona that it does not consent to ARP
Family Farms, G.P.'s use of any of its cash collateral and demands
that ARP account for same from the petition date forward and
sequester all cash collateral of Great Western Bank pending
agreement of the parties or Court order.
Great Western Bank asserts a validly perfected lien interests in
and to:
(a) All inventory, all accounts, contract rights, documents,
documents of title, payment intangibles, investment property,
letter of credit rights, commercial tort claims, chattel paper,
instruments (including promissory notes), deposit accounts, and
supporting obligations, all fixtures and equipment, in which the
Debtor has any right or interest, whether by ownership, license,
contract or otherwise, including the proceeds of any of the
foregoing, all proceeds of any crop insurance, price support
payment or other governmental program, all rents and profits of any
Collateral;
(b) Any and all rents which may be associated with the
property subject to the two State Land Leases, Nos. 01-108770 and
01-428, which leasehold interests relate to a 1,700-acre parcel of
land in Pinal County (01-108770) and a 317-acre parcel of land in
Pinal County (01-428); and
(c) Any and all "Cash Collateral," as that term is defined
under Bankruptcy Code Section 363(a) that is held or will be held
by the Debtor, which includes, but is not limited to, any rents
paid by any party for any sub-leases of the two State Land Leases
referenced above.
About ARP Family Farms
ARP Family Farms G.P. is a privately held company in Chandler,
Arizona that operates in the agricultural industry.
ARP Family Farms, based in Chandler, AZ, filed a Chapter 11
petition (Bankr. D. Ariz. Case No. 18-14173 on Nov. 19, 2018. In
the petition signed by Nathan Arp, manager, Ephesians 3:20 Farms,
LLC, the Debtor estimated $10 million to $50 million in assets and
liabilities. The Hon. Daniel P. Collins presides over the case.
Pernell W. McGuire, Esq., at Davis Miles McGuire Gardner, PLLC,
serves as bankruptcy counsel.
AZUSA PACIFIC: Moody's Confirms Ba1 on 2015B Bonds, Outlook Neg.
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Moody's Investors Service confirms the Ba1 rating on Azusa Pacific
University's (APU) (CA) Series 2015B bonds issued by the California
Municipal Finance Authority. This rating action affects
approximately $61 million of debt. The outlook is negative. The
action concludes the review for possible downgrade initiated on
September 17, 2018.
RATINGS RATIONALE
The confirmation of Ba1 rating is based on university's expected
progress on improving its financial performance for fiscal 2019.
The rating action incorporates its expectation that the university
will secure forbearance for its covenant violations on both the
Series 2015B and Series 2015A bonds. The university has already
made some progress in securing forbearance. It has received a list
of items needed for a forbearance from the Series 2015B holders,
most of which are related to enhanced disclosure on a regular
basis. Additionally, the university has executed a pre-negotiation
letter with Wells Fargo Bank, the holder of the 2015A bonds, has
received terms for the forbearance, and is negotiating those terms
at the moment. The university expects to secure forbearance on both
series of bonds in the near future. Failure to secure forbearance
could result in rapid credit deterioration should debt be
accelerated.
APU projects significant improvement in fiscal 2019 financial
performance as a result of reducing expenses by an identified $16.3
million and the university is projecting to be in compliance with
its covenants when tested on June 30, 2019.
The Ba1 rating is supported by APU's moderate scale of operations
as well as diverse program offerings and student profile. The
rating also considers the university's heavy reliance on student
charges for operating revenue, with indications of some softening
of student demand, and the university's comparatively thin
liquidity.
RATING OUTLOOK
The negative outlook primarily reflects the possibility of a rating
downgrade if the university is unable to secure forbearance on
covenant violations and its debt is accelerated, as the university
does not have sufficient unrestricted liquidity to meet all
potentially accelerated obligations. It also incorporates some risk
that the university may not meet its financial projections for
2019, and the possibility that recent softening of net tuition per
student growth could be a signal of more fundamental market
challenges.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Material and sustained improvement in operating performance
along with growth in enrollment and net tuition per student
- Significant strengthening of liquidity and spendable cash and
investment cushion to expenses
- Evidence of sustained improvement in financial performance and
management
- Reduction of debt structure risks
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Inability to secure waiver or forbearance on covenants, leading
to debt acceleration and significant deterioration of liquidity
- Further breach of covenants in June 2019
- Inability to improve operating performance in fiscal 2019 and
beyond
LEGAL SECURITY
The Series 2015B Bonds are a general obligation of the university,
secured on a parity basis with the Series 2015A direct placement by
a gross revenue pledge, the East Campus (core campus of the
university) and personal property of the university.
The university is required to meet certain covenants, tested on
June 30 and December 31 on these bonds. It is required to maintain
minimum unrestricted and temporarily restricted net assets of $55
million, and a debt service coverage ratio of 1.2x. Additionally,
there is an intercreditor agreement between the trustee of Series
2015 B bonds and Wells Fargo and a cross default provision under
which an event of default on Series 2015B bonds will constitute an
event of default on Series 2015A bonds.
The university's reported debt service coverage ratio for June 30,
2018, was 0.8x versus 1.2x required, resulting in an event of
default on these bonds as well on the Series 2015A bonds. In the
event that APU does not secure a forbearance on this covenant, debt
could be accelerated. The university was compliant on the net asset
covenant. It had $67 million of unrestricted and temporarily
restricted net assets compared to the $55 million required.
APU has one interest rate swap hedging its variable rate Series
2015A Bonds with Wells Fargo Bank, N.A. The swap adds some
counterparty risk as well as bank concentration with Wells Fargo.
The swap has a $65 million notional amount, and as of June 30, 2018
was a $13.6 million liability for the university. Any additional
payment on this swap would further pressure the university's
already thin liquidity.
PROFILE
Azusa Pacific University (APU) was founded in 1899 as an
evangelical, Christian university and is located 26 miles northeast
of Los Angeles in the City of Azusa in the San Gabriel Valley. The
university has two main campuses, an online entity and six regional
centers throughout the area. APU has over 10,000 full-time
equivalent students and total operating revenue of $266 million.
METHODOLOGY
The principal methodology used in this rating was Higher Education
published in December 2017.
BALLENGER CONSTRUCTION: Trustee Selling Trust's Remnant Assets
--------------------------------------------------------------
Michael B. Schmidt, the Liquidating Trustee of Ballenger
Construction Co., asks the U.S. Bankruptcy Court for the Southern
District of Texas to authorize the sale of Trust to Oak Point
Partners, LLC's remnant assets, consisting of known or unknown
assets or claims, which have not been previously sold, assigned, or
transferred to Oak Point Partners, LLC for $10,000, free and clear
of liens, claims, interests, and encumbrances, subject to overbid.
Objections, if any, must be filed within 21 days from the date of
service.
The Trustee has determined that there might exist property of the
Trust -- the Remnant Assets. The potential unknown assets might
include unscheduled refunds, overpayments, deposits, judgments,
claims, or other payment rights that would accrue in the future.
The Trustee has conducted due diligence and remains unaware of the
existence of any Remnant Assets, and certainly none that could
return value to the Trust greater than the Purchase Price.
Accordingly, he has determined that the cost of pursuing the
Remnant Assets will likely exceed the benefit that the Trust would
possibly receive on account of the Remnant Assets.
The Trustee and Oak Point have negotiated an agreement for the sale
of the Remnant Assets which generally provides for a purchase price
of $10,000 for all the Remnant Assets to be paid by Oak Point to
the Trustee for the benefit of the Trust.
In accordance with the Purchase Agreement, the Remnant Assets do
not include (i) cash held by the Trustee for distribution to
creditors and professionals; (ii) the unclaimed funds escheated to
the Texas Comptroller of Public Accounts under Property ID Nos.:
11543471; 594710; 15665169; 19144419; 38742829; 28169482; and
29485841; and (iii) the Purchase Price for the Remnant Assets.
In the Trustee’s business judgment, the Purchase Price represents
a fair and reasonable sales price for the Remnant Assets, and
represents the highest and best offer for the sale of the Remnant
Assets. Additionally, the benefit of receiving immediate payment
for the Remnant Assets, which are largely unknown, outweighs the
potential benefit of retaining the Remnant Assets. Finally, the
Trustee believes that the cost of pursuing the Remnant Assets will
likely exceed the benefit that the Trust would possibly receive.
The noticed provided establishes a deadline by which objections or
responses to the Motion must be filed with the Court. While the
Trustee is prepared to consummate the sale of the Remnant Assets to
Oak Point pursuant to the terms set forth and in the Purchase
Agreement, in the event a party other than Oak Point wishes to
purchase the Remnant Assets, the Trustee asks that the Court
approves the Bidding Procedures.
The salient terms of the Bidding Procedures are:
a. Each Competing Bidder who wants to participate in the
overbid process must notify the Trustee of her intention to do so
on or before the Response Deadline;
b. the first overbid for the Remnant Assets by a Competing
Bidder must be at least $3,000 more than the Purchase Price, or a
total of $13,000;
c. each Competing Bidder must submit a Cashier's Check to the
Trustee in the amount of such Competing Bidder's first overbid at
the time such overbid is made;
d. each subsequent overbid for the Remnant Assets must be in
additional increments of $1,000, unless otherwise agreed by the
parties or directed by the Court;
e. the bidder must purchase the Remnant Assets under the same
terms and conditions set forth in the Purchase Agreement, other
than the purchase price; and
f. in the event of an overbid that meets the foregoing
conditions, the Trustee will schedule an auction of the Remnant
Assets in advance of the hearing date and will request that the
Court approve the winning bidder at the auction as the purchaser
at the hearing on the Motion.
The Trustee believes that the sale of the Remnant Assets in
accordance with the terms of the Purchase Agreement serves the best
interests of the Trust and its beneficiaries, as the sale will
allow the Trustee to realize additional funds for the benefit of
the Trust. Accordingly, the sale to Oak Point should be approved
as requested.
To successfully implement the Purchase Agreement, the Trustee also
asks a waiver of the 14-day stay under Bankruptcy Rule 6004(h).
A copy of the APA attached to the Motion is available for free at:
http://bankrupt.com/misc/Ballenger_Construction_1204_Sales.pdf
About Ballenger Construction
Ballenger Construction Co. filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. 12-20645) on Dec. 7, 2012, in Corpus
Christi. In the petition signed by Joe C. Ballenger Jr./Joe C.
Ballinger Sr., president/CEO, the Debtor estimated under $50,000
in
assets and $10 million to $50 million in liabilities. Judge
Richard S. Schmidt oversees the case. The Debtor is represented by
Roderick Glen Ayers, Jr., Esq., at Langley Banack Inc., as
counsel.
The Debtor won confirmation of its Plan. Michael B. Schmidt was
appointed as the Liquidating Trustee under the Plan.
BEST SALES: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Best Sales Corporation as of Dec. 14,
according to a court docket.
About Best Sales Corporation
Best Sales Corporation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 18-07708) on November
16, 2018. At the time of the filing, the Debtor had estimated
assets of less than $100,000 and liabilities of less than $500,000.
The case has been assigned to Judge Randal S. Mashburn. The
Debtor tapped the Law Offices Lefkovitz & Lefkovitz as its legal
counsel.
BK RACING: Front Row Seeks Payment of NASCAR Member Fees
--------------------------------------------------------
Front Row Motorsports, Inc., the Buyer of certain assets of BK
Racing, LLC, asks the U.S. Bankruptcy Court for the Western
District of North Carolina to allow the Chapter 11 Trustee to use
cash collateral to pay an outstanding invoice, totaling $66,139,
issued by NASCAR Event Management, Inc. to BK Racing for
outstanding NASCAR charter member fees.
Before the Aug. 27, 2018 Closing, the Debtor was in the business of
operating a NASCAR-chartered, Monster Energy cup series race team.
The Debtor's right and license to participate in NASCAR chartered
events was authorized and otherwise governed by that certain NASCAR
Cup Series Charter Member Agreement entered into by and between
NASCAR and the Debtor. The Charter generally required the Debtor to
pay NEM charter member fees to continue to participate in the Cup
Series
From the time of Trustee's appointment, the Trustee regularly paid
NEM charter member fees assessed when the Debtor remained in
possession of the Race Team Assets. Payment of the charter member
fees allowed Debtor to continue to operate and participate in the
Cup Series. The charter member fees invoiced by NEM were being paid
out of the Debtor's cash collateral as "obligations or expenses
incurred in the ordinary course of the Debtor’s business."
On July 20, 2018, the Trustee sought and obtained the Court's
approval of the bidding and sale procedures in connection with the
sale of the NASCAR charter and related assets and to "establish the
amount of the cure payment due NASCAR for assumption of the
Charter."
Front Row reasonably relied on the representations made in open
court, during the Aug. 21, 2018 hearing, that NASCAR would be paid
a full cure payment out of the proceeds of the sale. No party,
including Union Bank & Trust, voiced any objection to the NASCAR
cure payment being paid out of the sale proceeds at closing.
The Sale Order, entered on August 24, 2018, states that "upon
closing of the sale to Front Row…the Trustee will use a portion
of the sale proceeds to pay NASCAR all unpaid charter member fees
due and owing under the Charter as the cure payment to NASCAR,
which, if the closing occurs prior to September 1, 2018, will be in
the amount of $68,046." Front Row closed on the sale of the Race
Team Assets of the Debtor pursuant to the Sale Order on August 27,
2018, three days after the Invoice was issued to Debtor.
However, the Trustee did not pay NEM all "unpaid charter member
fees" out of the sales proceeds upon the closing of the sale to
Front Row. The Invoice remains outstanding and due. NEM re-issued
the Invoice the day after the Closing to Front Row and has demanded
that Front Row pay the full balance of the Invoice totaling
$66,139. Thus, in order to maintain its standing with NASCAR, Front
Row has paid all race entry fees and charter member fees assessed
in connection with races in the Cup Series that occurred after
Closing. Front Row did not permit the sale of the Race Team Assets
to close while knowing that the Invoice remained unpaid.
Pursuant to the Sale Order and the terms of the Asset Purchase
Agreement executed between the Trustee and Front Row, the Trustee
was required to assume the Charter, pay a full cure payment to
NASCAR out of the sales proceeds, and then assign the Charter to
Front Row as the winning bidder. Front Row contends that it was not
immediately notified of the Invoice, nor did Front Row receive any
written notice from the Seller/Trustee about the existence of the
Invoice before the Closing. Thus, by failing to fully pay and cure
the amounts due and owing to NASCAR at Closing, Front Row is being
denied the full benefit of its bargain with the Trustee/Seller, as
NASCAR is now looking to Front Row to satisfy Debtor's pre-Closing
Invoice.
In addition, on Aug. 3, 2018, the Court further authorized the
Trustee to "use the cash collateral to satisfy obligations or
expenses incurred in the ordinary course of the Debtor's business
during the period Aug. 1, 2018 and continuing through Aug. 31,
2018." Consistent with the prior Cash Collateral Orders and the
prior payments to NASCAR for charter member fees, Front Row avers
that the Trustee was authorized to pay outstanding charter member
fees that were incurred prior to the Closing in the ordinary course
of Debtor's business.
Front Row believes that the Trustee is able, and willing, to pay
the Invoice with cash collateral it currently held, but cannot do
so without the Court authorizing such a payment because a secured
creditor, namely Union Bank & Trust, objected to the Trustee's
payment of the Invoice.
For all these reasons, Front Row asserts that the Invoice should be
paid in full out of the cash collateral of the Debtor to enforce
the terms and spirit of the Court's prior Orders, including the
Sale Order which required that the Trustee use the sale proceeds to
"pay NASCAR all outstanding charter member fees due and owing under
the Charter."
A full-text copy of the Motion is available at
http://bankrupt.com/misc/ncwb18-30241-211.pdf
About BK Racing
BK Racing, LLC, is a Monster Energy NASCAR Cup Series Toyota Racing
team headquartered in Charlotte, North Carolina. The team was
founded in 2012 after owners Ron Devine and Wayne Press acquired
Red Bull Racing.
BK Racing sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case No. 18-30241) on Feb. 15, 2018. In its
petition signed by Kathy Burch, power of attorney for managing
member Brenda Devine, the Debtor estimated assets and liabilities
of $10 million to $50 million.
Judge Craig J. Whitley presides over the case.
The Debtor hired The Henderson Law Firm PLLC as its legal counsel.
Matthew W. Smith was appointed to serve as Chapter 11 trustee for
the Debtor. The trustee hired Grier Furr & Crisp, PA as his legal
counsel, and The Finley Group, Inc. as his financial advisor.
BOYD GAMING: Bank Debt Trades at 2% Off
---------------------------------------
Participations in a syndicated loan under which Boyd Gaming
Corporation is a borrower traded in the secondary market at 97.60
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.16 percentage points from the
previous week. Boyd Gaming pays 250 basis points above LIBOR to
borrow under the $1.265 billion facility. The bank loan matures on
September 15, 2023. Moody's rates the loan 'Ba3' 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, December 7.
C.R. OF ATTALLA: Disclosures OK'd; Jan. 9 Plan Confirmation Hearing
-------------------------------------------------------------------
Chief Bankruptcy Judge James P. Smith issued an order approving
C.R. of Attalla, LLC’s disclosure statement, dated Oct. 9, 2018,
referring to its proposed chapter 11 plan.
Ballots accepting or rejecting the plan and any objections to the
confirmation of the plan must be filed on or before Jan. 7, 2019.
That a hearing for the consideration of confirmation of the Plan
and any objections to confirmation of the Plan will be held on Jan.
9, 2019 at 11:00 a.m. in 433 Cherry Street, Courtroom B, Macon GA
31201.
About C.R. of Attalla
C.R. of Attalla, LLC, is healthcare provider in Attalla, Alabama,
that operates a skilled nursing facility.
C.R. of Attalla filed a Chapter 11 petition (Bankr. M.D. Ga. Case
No. 18-50546) on March 21, 2018. In the petition signed by Michael
E. Winget, Sr., manager, the Debtor estimated $500,000 to $1
million in assets and $1 million to $10 million in estimated
liabilities. The case is assigned to Judge James P. Smith.
Wesley J. Boyer, Esq., of Boyer Law Firm, L.L.C., is the Debtor's
counsel.
Pending bankruptcy cases of affiliates:
Debtor Petition Date Case No.
------ ------------- --------
C. R. of Shadecrest, LLC 8/15/17 17-51753
Chandler Health & Rehab Center, LLC 7/20/17 17-51550
Fairhope Health & Rehab, LLC 7/20/17 17-51551
Gordon Oaks at Greystoke, LLC 7/12/17 17-51472
Greystoke Health Systems, Ltd. 8/17/17 17-51772
Meadowbrook Extended Care, LLC 7/20/17 17-51552
Medical Management Concepts, LLC 8/15/17 17-51752
Porter Field Health & Rehab Center, LLC 6/27/17 17-51362
Ridgeview Extended Care, LLC 7/20/17 17-51553
CAFE HOLDINGS: Seeks to Hire Donlin as Administrative Advisor
-------------------------------------------------------------
Cafe Holdings Corp. seeks approval from the U.S. Bankruptcy Court
for the District of South Carolina to hire Donlin, Recano &
Company, Inc. as its administrative advisor.
The firm will assist the company and its affiliates in the
solicitation, balloting and tabulation of votes in connection with
their bankruptcy plan; prepare reports; manage the distributions
under the plan; and provide other bankruptcy administration
services.
Donlin's hourly rates for professional services are:
Senior Bankruptcy Consultant $175
Case Manager $140
Technology/Programming Consultant $110
Consultant/Analyst $90
Clerical $45
The Debtors provided Donlin Recano a retainer of $30,000, plus
$10,000 for the firm's pre-bankruptcy services.
Nellwyn Voorhies, executive director of Donlin, disclosed in a
court filing that the firm is "disinterested" as defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Nellwyn Voorhies
Donlin, Recano & Company, Inc.
6201 15th Avenue,
Brooklyn, NY 11219
Phone: 212.481.1411
About Cafe Holdings Corp.
Cafe Enterprises, Inc. -- www.fatz.com -- and its subsidiaries are
privately-owned operators of casual dining restaurant brand, "Fatz
Cafe", with headquarters in Taylors, South Carolina. They operate
38 locations spread across five states. The Debtors employ nearly
1,700 persons.
Cafe Holdings Corp., Cafe Enterprises, Inc., CE Sportz LLC and CES
Gastonia LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. S.C. Lead Case No. 18-05837) on Nov. 15, 2018. At
the time of the filing, the Debtors disclosed $23 million in assets
and $51 million in liabilities.
The cases have been assigned to Judge Helen E. Burris.
The Debtors tapped Haynes and Boone, LLP as their bankruptcy
counsel; McNair Law Firm, PA as local counsel; Loughlin Management
Partners + Company as financial advisor; Duff & Phelps, LLC as
investment banker; and Donlin Recano & Company, Inc. as claims and
noticing agent.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on Nov. 28, 2018. The committee tapped
Pachulski Stang Ziehl & Jones LLP and Nelson Mullins Riley &
Scarborough LLP as its legal counsel.
CAFE HOLDINGS: Seeks to Hire Haynes and Boone as Legal Counsel
--------------------------------------------------------------
Cafe Holdings Corp. seeks approval from the U.S. Bankruptcy Court
for the District of South Carolina to hire Haynes and Boone, LLP as
its legal counsel.
The firm will advise the company and its affiliates regarding their
duties under the Bankruptcy Code; assist the Debtors in the
negotiation and documentation of financing agreements and debt
restructuring; give advice regarding any potential sale of their
assets; assist in the preparation of a plan of reorganization; and
provide other legal services related to their Chapter 11 cases.
Haynes and Boone will charge these hourly fees:
Ian Peck Partner $725
J. Frasher Murphy Partner $675
Christina Marshall Partner $618
David Staab Associate $456
Kim Morzak Paralegal $328
The firm received a retainer of $211,281 prior to the petition
date.
Ian Peck, Esq., a partner at Haynes and Boone, disclosed in a court
filing that his firm is "disinterested" as defined in section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Ian T. Peck, Esq.
J. Frasher Murphy, Esq.
David L. Staab, Esq.
Haynes and Boone, LLP
2323 Victory Avenue, Suite 700
Dallas, TX 75219
Tel: (214) 651-5000
Fax: (214) 651-5940
E-mail: ian.peck@haynesboone.com
E-mail: frasher.murphy@haynesboone.com
E-mail: david.staab@haynesboone.com
About Cafe Holdings Corp.
Cafe Holdings Corp., Cafe Enterprises, Inc., CE Sportz LLC and CES
Gastonia LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. S.C. Lead Case No. 18-05837) on Nov. 15, 2018.
Cafe Enterprises, Inc. -- http://www.fatz.com/-- and its
subsidiaries are privately-owned operators of casual dining
restaurant brand, "Fatz Cafe", with headquarters in Taylors, South
Carolina. They operate 38 locations spread across five states.
The Debtors employ nearly 1,700 persons.
At the time of the filing, the Debtors disclosed $23 million in
assets and $51 million in liabilities.
The cases have been assigned to Judge Helen E. Burris.
The Debtors tapped Haynes and Boone, LLP as their bankruptcy
counsel; McNair Law Firm, PA as local counsel; Loughlin Management
Partners + Company as financial advisor; Duff & Phelps, LLC as
investment banker; and Donlin Recano & Company, Inc. as claims and
noticing agent.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on Nov. 28, 2018. The committee tapped
Pachulski Stang Ziehl & Jones LLP and Nelson Mullins Riley &
Scarborough LLP as its legal counsel.
CAFE HOLDINGS: Seeks to Hire Loughlin Management, Appoint CRO
-------------------------------------------------------------
Cafe Holdings Corp. seeks approval from the U.S. Bankruptcy Court
for the District of South Carolina to hire Loughlin Management
Partners & Co., Inc. and appoint its managing director John
Sordillo as chief restructuring officer.
Mr. Sordillo and his firm will assist the company and its
affiliates in the preparation of a plan of reorganization; review
any valuation material prepared to determine the Debtors'
enterprise value; help the Debtors develop strategic options
including refinancing and other potential restructuring scenarios;
assist in the sale of the Debtors' assets; and provide other
services related to their Chapter 11 cases.
The firm charges these hourly fees:
Managing Directors $695
Directors $550
Vice-Presidents $475
Senior Associates $425
Associates $375
Analysts $300
As of the petition date, Loughlin holds a retainer of $12,500 for
post-petition services.
Mr. Sordillo disclosed in a court filing that his firm neither
holds nor represents any interest adverse to the interest of the
Debtors, creditors and equity security holders.
The firm can be reached through:
John Sordillo
Loughlin Management Partners & Co., Inc.
20 West 55th Street, 5th Floor
New York, NY 10019
Phone: 212-340-8420
Email: jsordillo@lmcopartners.com
About Cafe Holdings Corp.
Cafe Holdings Corp., Cafe Enterprises, Inc., CE Sportz LLC and CES
Gastonia LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. S.C. Lead Case No. 18-05837) on Nov. 15, 2018.
Cafe Enterprises, Inc. -- www.fatz.com -- and its subsidiaries are
privately-owned operators of casual dining restaurant brand, "Fatz
Cafe", with headquarters in Taylors, South Carolina. They operate
38 locations spread across five states. The Debtors employ nearly
1,700 persons. To learn more, visit.
At the time of the filing, the Debtors disclosed $23 million in
assets and $51 million in liabilities.
The cases have been assigned to Judge Helen E. Burris.
The Debtors tapped Haynes and Boone, LLP as their bankruptcy
counsel; McNair Law Firm, PA as local counsel; Loughlin Management
Partners + Company as financial advisor; Duff & Phelps, LLC as
investment banker; and Donlin Recano & Company, Inc. as claims and
noticing agent.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on Nov. 28, 2018. The committee tapped
Pachulski Stang Ziehl & Jones LLP and Nelson Mullins Riley &
Scarborough LLP as its legal counsel.
CAFE HOLDINGS: Seeks to Hire McNair Law Firm as Local Counsel
-------------------------------------------------------------
Cafe Holdings Corp. seeks approval from the U.S. Bankruptcy Court
for the District of South Carolina to hire, P.A.
The firm will serve as local bankruptcy counsel for the company and
its affiliates and will assist Haynes and Boone, LLP, the firm
tapped by the Debtors to be their lead counsel in connection with
their Chapter 11 cases.
McNair charges these hourly fees:
Shareholders/Counsel $275 - $500
Associates $140 - $300
Of Counsel/Special Counsel Attorneys $275 - $400
Paralegals $100 - $150
Law Clerks $70 - $90
The firm received a retainer of $215,000, of which $142,848.50 was
used to pay the filing fee and its pre-bankruptcy fees and
expenses.
Michael Weaver, Esq., shareholder of McNair, disclosed in a court
filing that his firm is "disinterested" as defined in Section
101(14) of the Bankruptcy Code.
McNair can be reached through:
Michael H. Weaver, Esq.
Robin C. Stanton, Esq.
Weyman C. Carter, Esq.
McNair Law Firm, P.A.
1221 Main Street, 18th Floor
Post Office Box 11390
Columbia, SC 29211
Tel: (803) 799-9800
Fax: (803) 753-3277
E-mail: mweaver@mcnair.net
E-mail: rstanton@mcnair.net
E-mail: wcarter@mcnair.net
About Cafe Holdings Corp.
Cafe Holdings Corp., Cafe Enterprises, Inc., CE Sportz LLC and CES
Gastonia LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. S.C. Lead Case No. 18-05837) on November 15, 2018.
Cafe Enterprises, Inc. -- www.fatz.com -- and its subsidiaries are
privately-owned operators of casual dining restaurant brand, "Fatz
Cafe", with headquarters in Taylors, South Carolina. They operate
38 locations spread across five states. The Debtors employ nearly
1,700 persons.
At the time of the filing, the Debtors disclosed $23 million in
assets and $51 million in liabilities.
The cases have been assigned to Judge Helen E. Burris.
The Debtors tapped Haynes and Boone, LLP as their bankruptcy
counsel; McNair Law Firm, PA as local counsel; Loughlin Management
Partners + Company as financial advisor; Duff & Phelps, LLC as
investment banker; and Donlin Recano & Company, Inc. as claims and
noticing agent.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on November 28, 2018. The committee tapped
Pachulski Stang Ziehl & Jones LLP and Nelson Mullins Riley &
Scarborough LLP as its legal counsel.
CARESTREAM HEALTH: Moody's Rates 1st Lien Loans Due 2021 'B1'
-------------------------------------------------------------
Moody's Investors Service affirmed Carestream Health, Inc.'s
Corporate Family Rating at B3 and its Probability of Default Rating
at B3-PD. Moody's affirmed the company's B1 first lien secured debt
rating and downgraded the second lien secured debt rating to Caa2
from Caa1. The rating outlook remains negative.
The actions follow from the company's announcement that is
proceeding with an 'amend and extend' transaction for its existing
first and second lien credit facilities. The company will extend
the maturity of both its $127.5 million revolving credit facility
and up to $720 million of its first lien term loan to February
2021. Carestream will also be extending the maturity of its $372
million second lien term loan to June 2021.
Moody's considers the extension a credit positive, as it will
lengthen the company's maturity profile. Gaining traction on its
cost saving initiatives, or if trade tensions with China were to
ease resulting in reduced tariffs, would be credit positive as
well. However the rating outlook remains negative reflecting the
elevated headwinds from trade tariffs which will increase the
company's overall costs. The negative outlook also reflects the
execution risk on the company's restructuring efforts. If cost
restructuring fails to mitigate the impact of trade tariffs over
the coming year, it may make further refinancing transactions more
challenging over the next year. If the company does not refinancing
its loans by the end of 2019, it will face material step-ups in
interest expense as well as minimum debt amortization requirements.
The B1 ratings for the first lien facilities as extended reflects
their senior position vis-à-vis the second lien term loan and
other non-debt liabilities in Carestream's capital structure. The
downgrade of the second lien term loan as extended reflects the
shifts in the company's capital structure. The Caa2 rating reflects
the second lien term loan's structural subordination to the
significant amount of first lien debt in Carestream's capital
structure.
The following ratings were affirmed:
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
First lien credit facilities due 2019 at B1 (LGD 3) (to be
withdrawn at close)
The following rating was downgraded:
Second lien term loan due 2019 to Caa2 (LGD 5) from Caa1 (LGD 5)
(to be withdrawn at close)
The following ratings were assigned:
First lien credit facilities due 2021 at B1 (LGD 3)
Second lien term loan due 2021 at Caa2 (LGD 5)
Outlook Action:
Rating Outlook: remains negative
CCF HOLDINGS: S&P Assigns CCC+ Issuer Credit Rating, Outlook Neg.
-----------------------------------------------------------------
S&P Global Ratings said it assigned a 'CCC+' long-term issuer
credit rating to CCF Holdings LLC (CCF). The outlook is negative.
S&P said, "At the same time, we assigned a 'CCC-' rating on the
company's new pay-in-kind (PIK) notes due 2023. The recovery rating
is '6', indicating our expectation for negligible (0%) recovery in
the event of default.
"We also raised the issue-level rating on the senior secured notes
due 2023 issued by Community Choice Financial Issuer LLC to 'CCC+'
from 'D'. The recovery rating is '3', indicating our expectation
for meaningful (65%) recovery in the event of default.
"We withdrew our 'D' issuer credit rating on Community Choice
Financial Inc. at the issuer's request, as well as our issue-level
ratings on its existing senior secured notes.
The rating action follows the formation of CCF following the
default of senior secured notes issued by Community Choice
Financial Inc. The new holding company is issuing $276.9 million
10.75% senior unsecured pay-in-kind (PIK) notes due December 2023
to satisfy the previous $260 million senior secured notes due in
2019 and 2020, as well as accrued interest. S&P said, "As the new
PIK notes do not require interest payments, we expect the
transaction will significantly reduce its debt service requirements
in the near-term. We view positively the company's improved
adjusted EBITDA relative to last year, as a 14% decline in
provisions year to date and lower operating expenses resulted from
tighter underwriting and cost cutting."
However, the company's poor operational performance due to an
elevated expense base and regulatory uncertainties continue to
negatively affect the rating. The company reported a net loss of
$36 million year to date as of Sept. 30, 2018, and its adjusted
EBITDA margins were about 12% over the last 12 months--lower than
peers. In addition, the Ohio House Bill 123 may significantly
affect CCF's operations in Ohio when the law becomes effective in
April 2019, as the law will prohibit CCF from functioning as a
credit services organization (CSO) in the state. CSO receivables in
Ohio totaled about $31 million as of Sept. 30, 2018, or about 31%
of gross finance receivables. With 92 stores in Ohio as of Sept.
30, 2018, it is the company's second largest retail presence.
More generally, S&P believes CCF's short-term loan fees are at risk
to the Consumer Financial Protection Bureau's (CFPB) final rules,
although recent developments at the CFPB have opened up the
possibility of a lighter stance on the ability-to-repay requirement
in the revised final rules. CCF has not transitioned away from
short-term lending, unlike other peers', and short-term loan fees
and interest were 40% of total revenues year to date.
With this transaction, CCF still has to make about $15 million in
interest payments in 2019 on its $42 million senior secured notes
and its $63.5 million asset-based lending (ABL) facility. The ABL
is subject to financial covenants, including minimum cash, asset
coverage, and EBITDA tests, as well as dividend limits.
S&P said, "The negative outlook reflects our view that CCF's credit
profile could continue to deteriorate within the next year due to
adverse regulatory developments or poor operational performance. We
nevertheless expect CCF will maintain EBITDA margins above 10% and
EBITDA to cash interest coverage above 1.5x.
"We could lower the ratings if we believe that a default is
imminent over the next 12 months. This could happen if new
regulations or operational challenges disrupt the company's
business model or if the company fails to make required cash
interest payments on its senior secured notes or ABL facility."
An upgrade is unlikely over the next 12 months.
Recovery Analysis
Key analytical factors
S&P's simulated default scenario contemplates a payment default in
2020 as a result of significant operational issues.
S&P assumes a reorganization following the default, using an
emergence EBITDA multiple of 4x to value the company.
Simulated default assumptions
-- Simulated year of default: 2020
-- EBITDA at emergence: $19.7 million
-- EBITDA multiple: 4.0x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $74.8
million
-- Priority claims: $0
-- Collateral value available to senior secured creditors after
priority claims: $74.8 million
-- Total first-lien debt: $112.7 million
--Recovery expectations: 65% ('3')
-- Total second priority debt: $304.2 million
--Recovery expectations: 0% ('6')
Note: All debt amounts include six months of prepetition interest.
CHECKOUT HOLDING: S&P Lowers ICR to 'D' on Bankruptcy Filing
------------------------------------------------------------
U.S.-based Checkout Holdings Corp. (d/b/a Catalina Marketing Corp.)
has filed for bankruptcy, which S&P considers a general default
under its criteria. On Dec. 13, 2018, S&P lowered all its ratings
on Checkout Holdings and subsidiary Catalina Marketing Corp.
(together Checkout Holdings) to 'D', including the issuer credit
rating and first- and second-lien issue ratings. S&P is not
revising any recovery ratings at this time.
S&P expects to withdraw its 'D' ratings once they have been
outstanding for 30 days.
CHICAGO SURGICAL: Cash Collateral Use Through Jan. 17 Okayed
------------------------------------------------------------
The Hon. LaShonda A. Hunt of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized Chicago Surgical Clinic
LTD to use cash collateral to pay post-petition expenses to third
parties during the period of Nov. 1, 2018 through Jan. 17, 2019, to
the extent set forth on the Budget plus 10% variance.
A final hearing on the Cash Collateral Motion is scheduled on Jan.
16, 2019, at 10:30 a.m. Any objections are due on or before Jan.
9.
In return for the Debtors' continued interim use of cash
collateral, First Bank and Trust (now known as Byline Bank) is
granted the following adequate protection for their claimed secured
interests in the cash collateral:
(1) The Debtor will permit Byline Bank to inspect, upon
reasonable notice, within reasonable hours, the Debtor's books and
records;
(2) The Debtor will maintain and pay premiums for insurance;
(3) The Debtor will, upon reasonable request, make available
to Byline Bank evidence of that which constitutes their collateral
or proceeds; and
(4) The Debtor will properly maintain the Collateral in good
repair and properly manage the Collateral.
In addition, Byline Bank is granted replacement liens, attaching to
the Collateral, but only to the extent of their pre-petition liens.
The Debtor will also pay Byline Bank, on the first day of each
month, all accrued unpaid interest calculated at 5% interest as set
forth in the Note in the principal amount of $600,000 and will be
at least $2,625.
A full-text copy of the Order is available at
http://bankrupt.com/misc/ilnb18-30089-29.pdf
About Chicago Surgical Clinic LTD
Chicago Surgical Clinic LTD operates a surgical center in Arlington
Heights, Illinois. The Clinic offers a full range of services,
including general surgery, minimally invasive surgery, colorectal
surgery, plastic surgery, endoscopy lab, pain management, hand
surgery and podiatry.
Chicago Surgical Clinic LTD filed a Chapter 11 petition (Bankr.
N.D. Ill. Case No. 18-30089) on Oct. 26, 2018. In the petition
signed by Yelena Levitin, president, the Debtor estimated up to
$50,000 in assets and $1 million to $10 million in liabilities as
of the bankruptcy filing. The case is assigned to Judge LaShonda
A. Hunt. The Debtor is represented by Jeffrey Strange, Esq. of
Jeffrey Strange & Associates.
CM RESORT: Silverthorne Buying Assets for Not Less than $2 Million
------------------------------------------------------------------
CM Resort, LLC, Sundance Lodge, LLC, and Specfac Group, LLC, ask
the U.S. Bankruptcy Court for the Northern District of Texas to
authorize their sale of parcels of real estate and other asset to
Silverthorne Holdings, LLC for not less than $2 million.
The Selling Debtors each own parcels of real estate and other asset
that are more specifically described in their bankruptcy
schedules.
Suzann Ruff sued Michael Ruff in the Probate Court of Dallas
County. The Probate Court ultimately entered its Amended and
Corrected Final Judgment on April 10, 2018. The Probate Judgment
imposes a constructive trust over Michael’s interests in certain
assets. However, Michael has no interest in the Sale Assets.
Subsequently and simultaneously, Suzy sued the Selling Debtors in
Palo Pinto County for, inter alia, breach of fiduciary duty,
conversion, and constructive trust. The Palo Pinto Litigation is
the subject of the adversary proceeding styled: Ruff v. Ruff, Adv.
Pro. No. 18-04147, currently pending before the Court.
Importantly, none of the Selling Debtors (or any of the affiliated
debtors for that matter) were parties to the Probate Suit. The
Selling Debtors are not subject to the Probate Judgment, and the
Selling Debtors are confident that upon resolution of the Palo
Pinto Adversary, the Court will ultimately determine that neither
the Selling Debtors nor any of their assets are liable for any of
the liabilities of Michael.
The Buyer is offering to purchase the Sale Assets for their fair
market value, but in no event less than $2 million, free and clear
of liens and encumbrances. At the hearing on the Motion, the
Selling Debtors intend to put on evidence that the Sale Price is
equal to or greater than the fair market value of the Sale Assets.
Upon consummation of the sale proposed, the Selling Debtors propose
to hold the proceeds from the sale in escrow until the final
resolution of the Palo Pinto Adversary Proceeding, with any
constructive trusts, liens, or encumbrances attaching to the
proceeds of the Sale Assets until the final resolution of the Palo
Pinto Adversary Proceeding.
The parties intend to close the sale as soon as practicable after
the entry of the final order approving the Motion. Although Suzy
may object to the proposed sale, it is unlikely to succeed on any
such objection and would likewise be unsuccessful on appeal.
Further, the sale proceeds are going to be escrowed pending the
resolution of the Palo Pinto Adversary Proceeding and thus there is
no harm to Suzy. Consequently, the Selling Debtors ask that the
Court waives the 14-day stay periods under Federal Rules of
Bankruptcy Procedure 6004(h).
About CM Resort LLC
Based in Gordon, Texas, CM Resort LLC, a single asset real estate,
filed a voluntary petition for bankruptcy under chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case no. 18-43168) on Aug. 15,
2018. In the petition signed by Mark Ruff, member and authorized
agent, the Debtor estimated $1 million to $10 million in assets and
$10 million to $50 million in liabilities. Judge Russell F. Nelms
presides over the case. Gerrit M. Pronske, Esq. at Pronske Goolsby
& Kathman, P.C., is the Debtor's counsel.
CONSOLIDATED ENERGY: Moody's Hikes CFR to Ba3, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service upgraded Consolidated Energy Finance,
S.A.'s corporate family rating to Ba3 from B1. In addition, it
upgraded the company's Senior Secured Bank Credit Facility rating
to Ba2 from Ba3; both CEF and Methanol Holding Limited are
co-obligors under this facility. The rating actions were based on
holding company Consolidated Energy Limited's lower credit risk,
derived from additional production capacity, lower exposure to
natural gas supply, and higher geographic diversification in
production and sales, which in aggregate results in lower business
risk and higher cash flows. The outlook on the ratings is stable.
Ratings upgraded:
Issuer: Consolidated Energy Finance S.A.
Corporate Family Rating, upgraded to Ba3 from B1
BACKED Senior Secured Bank Credit Facility, upgraded to Ba2 from
Ba3
Senior unsecured, upgraded to B1 from B2
Outlook remains stable
RATINGS RATIONALE
The ratings on CEF are based on the credit risk of CEL. The rating
upgrades reflect Moody's view that CEL's credit risk has declined
as the company added new capacity of 1.75 million tons of methanol
per year through Natgasoline LLC (Ba3 stable), whose producing
plant is in the US; besides strengthening CEL's scale and EBITDA,
the new capacity helped the company to geographically diversify
production and sales markets. In addition, Moody's understands that
CEL's exposure to curtailments of natural gas supply in Trinidad
and Tobago declined after one of its subsidiaries signed a
long-term natural gas supply agreement with National Gas Company of
Trinidad & Tobago (NGC, Ba1 stable), which, however, the rating
agency did not review. Moreover, last November the CEL-related
company DeNovo became fully operational and started delivering 80
million cubic feet of gas a day in Trinidad, increasing supply
availability. All these factors have strengthened CEL's credit
profile and credit metrics, which Moody's believe will continue to
improve in the next couple of years.
Moody's believes that a more resilient cash flow will help sustain
CEL's adjusted debt leverage at around 4 times and, in the case of
a down cycle, leverage should not surpass 6.5 times. However, the
ratings also consider the fact that CEL's product portfolio is
concentrated on methanol, which accounts for most of revenues and
EBITDA (ammonia, fertilizer and melamine account for the rest). For
this reason, the company continues exposed to volatile commodity
prices and the cyclical nature of pricing and demand for methanol
and fertilizers.
CEL benefits from meaningful methanol market shares, low cost
structure, high EBITDA margins, and adequate liquidity. Its world
scale methanol plant and AUM (anhydrous ammonia, urea ammonium
nitrate, and melamine) complex in Trinidad benefits from natural
gas purchased at prices referenced to market prices of methanol,
thereby alleviating the negative impact on its profitability of
volatile end product selling prices. In addition, last March CEL
transferred certain operating lease agreements of about $894
million to a related company outside the group, which will help to
reduce Moody's-adjusted debt/EBITDA metric by about 1 turn in 2018.
CEL has adequate liquidity, supported by $213 million in
consolidated cash and equivalents in September 2018, plus $225
million in available revolver. Moody's expects the company's free
cash flow (defined as cash from operations minus dividends minus
capital expenditures) to be positive in 2018 from higher cash from
operations combined with lower capital expenditures. CEL's debt
maturity profile is comfortable with no debt maturing before 2022.
The stable rating outlook reflects Moody's expectation that CEL
will be able to improve its profitability and sustain credit
metrics in the next years.
The ratings could be upgraded if CEL reduces its adjusted
debt/EBITDA to below 3.0 times and sustains adjusted interest
coverage (EBITDA/Interest expense) above 7.0 times in addition to
maintaining adequate liquidity. To be considered for an upgrade,
the company should maintain strong profitability and have a stable
supply of natural gas, with no curtailments.
The ratings could be downgraded if adjusted leverage skyrockets to
above 7 times during a down cycle or if adjusted leverage does not
rapidly decline to around 4 times after a down cycle. A
deterioration in liquidity or in profitability, for example due to
volatility in its gas supply, could also lead to a downgrade.
The principal methodology used in these ratings was Chemical
Industry published in January 2018.
Consolidated Energy Finance, S.A. is a special purpose vehicle
wholly-owned by its holding company Consolidated Energy Limited
(CEL), which in turn is the second largest methanol producer in the
world. In addition to its wholly owned subsidiaries, CEL owns
minority stakes in methanol producer Oman Methanol Company and in
ammonia producers Nitrogen 2000 Unlimited and Caribbean Nitrogen
Company Limited. Through its wholly owned subsidiary Methanol
Holdings (Trinidad) Limited, CEL is the largest methanol exporter
to North America and a significant producer of fertilizer products
(anhydrous ammonia, urea ammonium nitrate, and melamine). The
company reported revenues of $1,174 million in September 2018.
CONVERGENT HEALTHCARE: Bid to Reconsider Heisler Cert. Denial Nixed
-------------------------------------------------------------------
In the case, CHAD H. HEISLER, Plaintiff, v. CONVERGENT HEALTHCARE
RECOVERIES, INC., And JOHN AND JANE DOES Nos. 1-25, Defendants,
Case No. 16-CV-1344 (E.D. Wis.), Magistrate Judge Nancy Joseph of
the U.S. District Court for the Eastern District of Wisconsin
denied Heisler's motion for reconsideration of the Sept. 27, 2018
order denying his motion for class certification.
Heisler filed a single count complaint against Convergent
Healthcare Recoveries, Inc. ("CHRI") alleging that a debt
collection letter sent to him violated the Fair Debt Collection
Practices Act ("FDCPA"). He filed a motion for class certification
and the Magistrate denied it.
Pending before the Court is Heisler's motion for correction of, or
relief from, the class certification order, pursuant to Fed. R.
Civ. P. 54(b) or 60(b)(1) and 60(b)(6).
CHRI argued that Heisler was not an adequate class representative
because he was subject to a defense that could not be sustained
against other class members, namely judicial estoppel. CHRI argued
that on Sept. 26, 2016, Heisler filed for Chapter 7 bankruptcy
protection and identified CHRI as an entity attempting to collect a
debt of $250 owed to Elmbrook Memorial. It argued that 10 days
later, Heisler filed the FDCPA action alleging that he was confused
by CHRI's abbreviation of Elmbrook Memorial. CHRI argued that
Heisler's bankruptcy was formally discharged.
CHRI argued Heisler should be judicially estopped from pursuing
this action because he failed to list the class action as an asset
and showed no signs of being confused by CHRI's letter, namely, he
was able to identify Elmbrook Memorial as a creditor and CHRI as
the entity collecting the account on Elmbrook Memorial's behalf.
Heisler was then able to secure a discharge of the debt.
Heisler's reconsideration motion primarily challenges CHRI's first
argument. He argues that standing -- not judicial estoppel -- is
the correct analysis in the case. He argues that because CHRI
argues he never disclosed the class action as an asset during his
bankruptcy, he cannot be the "real party in interest" because when
an action is not disclosed by the debtor, it remains property of
the bankruptcy estate even after the case is closed unless it is
administered or abandoned by the trustee. He argues if he did not
disclose the asset, then only the trustee, not Heisler, could be
the real party in interest. Heisler reasons that because CHRI
concedes that Heisler is a real party in interest, Heisler must
have disclosed the asset.
Magistrate Judge Joseph disagrees with Heisler's analysis. Heisler
effectively argues that it is impossible for the trustee to abandon
an asset when it was never disclosed. Heisler's position is not
without support. The key dividing line that separates when the
doctrines of standing or judicial estoppel is appropriate, is the
closing of a bankruptcy estate. While Heisler may disagree with
her interpretation of Cannon-Stokes v. Potter, he has not
demonstrated a manifest error of law. Thus, judicial estoppel was
the proper doctrine to invoke.
The remainder of Heisler's arguments go to the merits of whether
his claim should be foreclosed by judicial estoppel, the Magistrate
holds. Again, whether Heisler could win on the merits is not
before the Court at this time. Rather, the fact that CHRI has
presented at least an arguable defense to Heisler's claim renders
him an inadequate class representative. Nothing Heisler presents
in his motion persuades the Magistrate to reconsider her earlier
finding. Thus, Heisler's motion for reconsideration is denied.
A full-text copy of the Court's Dec. 4, 2018 Decision and Order is
available at https://is.gd/z81TF1 from Leagle.com.
Chad H Heisler, Plaintiff, represented by Daniel A. Edelman --
dedelman@edcombs.com -- Edelman Combs Latturner & Goodwin LLC,
Francis R. Greene -- fgreene@edcombs.com -- Stern Thomasson LLP,
Andrew T. Thomasson -- andrew@sternthomasson.com -- Stern Thomasson
LLP, Philip D. Stern -- philip@sternthomasson.com -- Stern
Thomasson LLP & Heather B. Jones -- heather@sternthomasson.com --
Stern Thomasson LLP.
Convergent Healthcare Recoveries Inc, Defendant, represented by
Avanti D. Bakane -- abakane@grsm.com -- Gordon Rees Scully
Mansukhani LLP & Chirag Haresh Patel -- cpatel@grsm.com -- Gordon
Rees Scully Mansukhani LLP.
CORAL POINTE: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Coral Pointe 604, LLC as of Dec. 14,
according to a court docket.
About Coral Pointe 604
Based in Miami Beach, Florida, Coral Pointe 604, LLC, filed a
voluntary petition under Chapter 11 of the US Bankruptcy Code (S.D.
Fla. Case No. 18-23013) on Oct. 19, 2018, estimating less than $1
million in assets and liabilities. Joel M. Aresty, Esq., serves as
counsel to the Debtor.
CORRECT CLAIM: Court Approves Disclosures, Confirms Ch. 11 Plan
---------------------------------------------------------------
Bankruptcy Judge Bruce T. Beesley approved Correct Claim Public
Adjusters, LLC's disclosure statement and confirmed its chapter 11
plan.
The Court found that the Disclosure Statement contains "adequate
information," as that term is defined in 11 U.S.C. section
1125(a).
Debtor, as Plan proponent, has complied with the applicable
provisions of the Bankruptcy Code, thereby satisfying the
requirements of 11 U.S.C. 1129(a)(2).
The Plan has also been proposed in good faith, thereby satisfying
the requirements of 11 U.S.C. 1129(a)(3).
The principal purpose of the Plan is not the avoidance of taxes or
avoidance of the requirements of section 5 of the Securities Act of
1933. No governmental unit has requested that the Court deny
confirmation on such basis. Therefore, the Plan satisfies the
requirements of section 1129(d) of the Bankruptcy Code.
About Correct Claim Public Adjusters
Based in El Paso, Texas, Correct Claim Public Adjusters, LLC --
http://www.correctclaim.com/-- is a licensed public adjuster that
helps homeowners in determining the value of their claim, reviewing
their existing insurance policy to establish coverage, and
documenting the claim for submission to their insurer. The
company's experience includes both broad-based events such as
hurricanes, hailstorms, wildfires, explosions, or tornados, and
single-property incidents including fires, theft, or
plumbing-related water damage. Correct Claim is also based in the
Rio Grande Valley of Texas and in Denver, Colorado. Correct Claim
was founded by Sergio De La Canal.
Correct Claim Public Adjusters, based in San Antonio, Texas, filed
a Chapter 11 petition (Bankr. D. Nev. Case No. 17-16483) on Dec. 6,
2017. In the petition signed by Sergio De La Canal, its managing
member, the Debtor estimated $500,000 to $1 million in assets and
$1 million to $10 million in liabilities.
The Hon. Laurel E. Davis presides over the case.
Robert Atkinson, Esq., at Atkinson Law Associates, Ltd., serves as
bankruptcy counsel.
CORY SCHULTZ: Ct. Narrows Claims in A. Thomas Suit vs AutoZone
--------------------------------------------------------------
Plaintiff Alyssa Thomas commenced the sexual harassment and
retaliation action captioned ALYSSA THOMAS, Plaintiff, v. AUTOZONE,
INC., ET AL., Defendants, Case No. 17-10126 (E.D. Mich.) against
Defendants AutoZone, LLC and Cory Schultz on Jan. 16, 2017.
Defendant AutoZone filed a Motion for Summary Judgment. On May 15,
2017, the action was stayed as to Schultz because he had filed for
Chapter 11 bankruptcy. The Court held a hearing on the motion on
Oct. 23, 2018. Upon careful consideration, Senior District Judge
Arthur J. Tarnow granted in part and denied in part AutoZone’s
motion for summary judgment.
Plaintiff began working at AutoZone's Port Huron Store on Sept. 4,
2013. Plaintiff was employed as a part-time commercial driver in
the Store's Commercial Department. At the time of Plaintiff's
employment, Andrea Childers was the Store Manager, Vicki Summerer
was the Commercial Manager, and Cory Schultz was a Part Sales
Manager.
Plaintiff alleged both quid pro quo and hostile work environment
sexual harassment in violation of Title VII and Michigan's Elliot
Larsen Civil Rights Act (ELCRA). Quid pro quo sexual harassment
"occurs when an employee's submission to unwanted sexual advances
becomes either a condition for the receipt of job benefits, or the
means to avoid an adverse employment action." As such, to establish
quid pro quo sexual harassment, Plaintiff would need to show that
Schultz was authorized to take, and took, some tangible employment
action against her. On the other hand, to establish hostile work
environment harassment, Plaintiff need not show Schultz took a
tangible employment action against her but must overcome AutoZone's
affirmative defense under Ellerth.
Given that Plaintiff has provided no evidence to support her claim
that she reasonably believed Schultz could fire her, her Title VII
sexual harassment claim against AutoZone must fail. Because she can
neither demonstrate that Schultz was a supervisor within the
meaning of Title VII nor that she reasonably believed Shultz was
her supervisor, the Court need not reach the question of whether a
reduction in hours constitutes a "tangible employment action" for
purposes of distinguishing between her quid pro quo or hostile work
environment claims. Plaintiff's ELCRA quid pro quo claim fails for
the same reasons.
To establish a prima facie case of retaliation under Title VII,
Plaintiff must show that: 1) she engaged in a protected activity;
2) Defendant knew of her protected conduct; 3) Defendant took an
adverse employment action towards her; and 4) there was a causal
connection between the protected activity and the adverse
employment action.
AutoZone concedes that Plaintiff has satisfied the first three
prongs, arguing only that Plaintiff cannot meet her burden with
respect to demonstrating a causal connection between her act of
reporting Schultz and the reduction in her hours.
Here, the Court finds that the unusually close temporal proximity
between Plaintiff's complaint of sexual harassment and AutoZone's
prohibition on up north deliveries, coupled with Childers and
Summerer's hostile reactions to the accusations against Schultz,
sufficiently establish a causal connection between the two
activities for purposes of alleging a prima facie case of
retaliation.
Plaintiff has offered sufficient evidence of pretext to survive
summary judgment. The close temporal proximity between Plaintiff's
report of Schultz and the reduction in her hours, Childers and
Summerer's hostile reactions to her claim of harassment, and the
disparate treatment of her and Ellery, "create an inference of
causation." Viewing the facts in the light most favorable to
Plaintiff, a reasonable jury could find that AutoZone engaged in
retaliatory conduct in violation of Title VII and the ELCRA.
In sum, the Defendant’s motion for summary judgment is granted in
part and denied in part. The Court orders that Plaintiff's hostile
work environment, quid pro quo, and intentional infliction of
emotional distress claims are dismissed. Remaining in this action
are Plaintiff's retaliation claims in violation of Title VII and
the ELCRA.
A copy of the Court's Order dated Nov. 20, 2018 is available at
https://bit.ly/2zY03VN from Leagle.com.
Alyssa Thomas, Plaintiff, represented by Heather Brooks-Szachta,
Shoults, Picard & Brooks, PLLC & Renee E. Picard , Shoults, Picard
& Brooks.
AutoZoners, LLC, Defendant, represented by Mary M. Spell --
mspell@joneswalker.com -- Jones Walker LLP, Ridley S. Nimmo, II,
Plunkett & Cooney & Tracy E. Kern -- tkern@joneswalker.com --
Jones, Walker.
Coty Schultz, Defendant, represented by Steven A. Heisler, Steven
A. Heisler Assoc.
AutoZoners, LLC, Cross Claimant, represented by Ridley S. Nimmo, II
, Plunkett & Cooney & Tracy E. Kern, Jones, Walker.
Coty Schultz, Cross-Defendant, represented by Steven A. Heisler,
Steven A. Heisler Assoc.
CT TECHNOLOGIES: Moody's Lowers CFR to Caa3, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service downgraded CT Technologies Intermediate
Holdings, Inc.'s Corporate Family Rating to Caa3 from B3, the
Probability of Default Rating to Caa3-PD from B3-PD and the first
lien senior secured credit facilities' ratings to Caa3 from B2. The
outlook remains stable.
"The downgrade reflects CIOX's Health's rapid deterioration in cash
flow which has resulted in it generating a free cash flow deficit
of -$18.5 million for the first three quarters of 2018 versus
positive free cash flow of $11 million for the same period in 2017.
This when combined with its very high leverage of about 10.2x and
the expiration of its revolving credit facility in December 2019
elevates the probability of a default, including a balance sheet
restructuring, over the next 12 to 18 months," said Moody's analyst
Joanna Zeng O'Brien.
Moody's took the following ratings actions:
Issuer: CT Technologies Intermediate Holdings, Inc.
Corporate Family Rating, downgraded to Caa3 from B3
Probability of Default Rating, downgraded to Caa3-PD from B3-PD
$35 million senior secured first lien revolving credit facility
expiring December 2019, downgraded to Caa3 (LGD3) from B2 (LGD3)
$597 million ($578 million outstanding) senior secured first lien
term loan due 2021, downgraded to Caa3 (LGD3) from B2 (LGD3)
Outlook: remains stable
Ratings Rationale
CIOX Health's Caa3 corporate family rating (CFR) broadly reflects
its very high financial leverage with LTM as of September 30, 2018
Moody's adjusted debt-to-EBITDA of about 10.2x, very weak liquidity
profile, as well as its modest size and narrow business focus
providing medical information exchange management and retrieval
services. The rating is also constrained by CIOX Health's
deteriorating operating performance and continued pricing pressure
due to federal regulations, legal and reputational risks associated
with the release of protected health information, as well as event
risks associated with private equity ownership. However, the rating
is supported by the company's established position in the medical
information exchange management and retrieval industry, contracts
with a large number of US hospitals, as well as relatively high
although declining retention rates at about 90%.
The stable outlook reflects Moody's expectation that the
possibility of a default under Moody's definition including a
pre-emptive restructuring such as a distressed exchange is high
over the next 12 to 18 months and is appropriately reflected in the
Caa3 rating.
The ratings could be downgraded if liquidity deteriorates and
ensuing default risk rises further, including through a distressed
exchange.
The ratings could be upgraded if the company is able to materially
improve revenue, earnings, and liquidity profile. A successful
extension of its first lien revolver in advance of its expiration
in December 2019 could also warrant an upgrade.
The principal methodology used in these ratings was the Business
and Consumer Service Industry published in October 2016.
CIOX Health, headquartered in Alpharetta, GA, is a large provider
of healthcare information services and technology solutions to
hospitals, health systems, physician practices and authorized
recipients of protected health records in the United States. The
affiliates of New Mountain Capital, LLC own and control CIOX
Health. LTM revenue as of September 30, 2018 was $624 million.
CT TECHNOLOGIES: S&P Affirms CCC Issuer Credit Rating, Outlook Dev.
-------------------------------------------------------------------
CT Technologies Intermediate Holdings Inc.'s (CIOX) equity sponsor,
New Mountain Capital LLC provided CIOX with a $40 million draw
facility to contribute additional common equity capital into CT
Technologies Intermediate Holdings, Inc. to support near-term
liquidity given limited access to the existing revolver and
negative cash flow year to date.
On Dec. 13, 2018, S&P Global Ratings affirmed all ratings,
including its 'CCC' issuer credit rating, on CIOX and removed them
from CreditWatch, where S&P placed them with negative implications
on Nov. 30, 2018.
The affirmation reflects S&P's belief that CIOX has improved its
liquidity position as its financial sponsor, New Mountain Capital,
has provided a $40 million draw facility at the parent level. This
commitment improved near-term liquidity and reduced risk that CIOX
will enter into a distressed exchange or file for bankruptcy over
the next 12 months.
The developing outlook reflects improved prospects for near-term
liquidity following the issuance of the draw facility and potential
for an improved cost position and revenue growth to support the
successful refinancing of its revolving credit facility due
December 2019, while restoring adequate covenant cushion. On the
other hand, the inability to refinance its revolving credit
facility well ahead of maturity and slower-than-expected revenue
growth could result in greater use of cash in the next year.
S&P said, "We could consider taking a positive rating action on
CIOX if it improves its capital structure and successfully extends
its revolving credit facility while restoring adequate covenant
cushion. Under this scenario, we'd expect CIOX's business prospects
to be sustainable, though implementation of its operating platform
and ability to improve its margin profile and working capital
trends.
"We could lower our rating on CIOX if we believe a default or debt
restructuring is likely over the next 12 months. This could be
driven by slower-than-expected revenue growth, higher-than-expected
level of operating expenses, resulting in higher cash burn, further
straining liquidity."
CUKER INTERACTIVE: Case Summary and List of 19 Unsecured Creditors
------------------------------------------------------------------
Debtor: Cuker Interactive, LLC
5600 Avenida Encinas, Suite 175
Carlsbad, CA 92008
Business Description: Cuker Interactive is a digital marketing,
design, and eCommerce agency growing brands
in today's connected world.
On the Net: https://www.cukeragency.com/
Chapter 11 Petition Date: December 13, 2018
Court: United States Bankruptcy Court
Southern District of California (San Diego)
Case No.: 18-07363
Debtor's Counsel: Michael D. Breslauer, Esq.
Solomon Ward Seidenwurm & Smith LLP
401 B Street, Suite 1200
San Diego, CA 92101-4295
Tel: 619-231-0303
E-mail: mbreslauer@swsslaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
A copy of the petition is available at https://bit.ly/2EzFVxf from
PacerMonitor.com at no extra charge.
The petition was signed by company CEO Aaron Cuker.
List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Pillsbury Winthrop Professional $1,416,376.50
Shaw Pittman Services
501 West Broadway,
Suite 1100
San Diego, CA 9210
Henry Law Firm Professional $1,100,000.00
240 N Block Avenue Services
Fayetteville, AR 72701
Shults & Brown LLP Professional $354,000.00
200 West Capitol Services
Ave, Ste 1600
Little Rock, AR
72201-3637
Torrey Partners Professional $241,357.41
3394 Carmel Services
Mountain Road
Suite 100
San Diego, CA 92121
Husch Blackwell LLP Professional $184,920.63
33 East Main Street, Services
Suite 300
Madison, WI
53701-1379
The Hashem Law Professional $175,000.00
Firm, PLC Services
437 West Conrad
Street
P.O. Box 739
Monticello, AR
71657-0739
Robins Kaplan LLP Professional $108,323.00
800 La Salle Ave, Services
Suite 2800
Minneapolis, MN
55402
Resonent Legal Media Professional $47,447.22
413 S. Washington Street Services
Alexandria, VA 22314
Chuck Easttom $26,673.33
5605 Woodspring Drive
Plano, TX 75093
American Arbitration Assoc. Professional $22,989.58
45 E River Park Place W #308 Services
Fresno, CA 93720
Modus Ediscovery Inc. Professional $14,001.26
Five Concourse Services
Pkwy, Ste 3000
Atlanta, GA 30328
Ardent Law Group Professional $9,000.00
4340 Von Karman Services
Ave, Suite 290
Newport Beach, CA 92660
Lincoln Loop $8,000.00
1608 S Ashland Ave #96971
Chicago, IL 60608
TekWorks, Inc. $1,854.26
13000 Gregg Street
Poway, CA 92064
Jan-Pro Office Services $399.00
4125 Sorrento Valley Blvd.
Suite E
San Diego, CA 92121
Interior Plant Service, Inc. Office Services $143.00
3971 Goldfinch Street, Ste B
San Diego, CA 92117
MAKE - Carlsbad, LLC Lessor $0.00
5600 Avenida Encinas
Carlsbad, CA 92008
The Brad Hendricks Law Firm Professional $0.00
500 Pleasant Valley Dr, Blg C Services
Little Rock, AR 72227
Wolfe Legal Group, PC Professional $0.00
402 West Broadway, Ste 400 Services
San Diego, CA 92101
CUSTOM AIR: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Custom Air Design, Inc. as of Dec. 14,
according to a court docket.
About Custom Air Design
Custom Air Design, Inc., is an air conditioning contractor in
Wellington, Florida. Custom Air Design sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
18-23754) on Nov. 5, 2018. In the petition signed by Robert
Anderson, president, the Debtor disclosed $416,521 in assets and
$1,445,051 in liabilities. The case has been assigned to Judge
Mindy A. Mora. The Debtor tapped Sue Lasky, PA as its legal
counsel.
DAVID'S BRIDAL: Moody's Rates $60MM Bankr. Term Loan 'B2'
---------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the $60 million
senior secured super-priority debtor-in-possession term loan of
David's Bridal, Inc. as Debtor-in-Possession. In addition to the
DIP term loan facility, David's Bridal will also enter into an
unrated $125 million senior secured super-priority DIP asset-based
revolving credit facility, which will replace the pre-petition $125
million ABL facility.
Proceeds of the DIP facilities will be used to refinance the
company's $125 million pre-petition ABL revolving credit facility
(approximately $26 million outstanding at the time of filing) as a
"roll up" of existing indebtedness and to fund the company's
operations while it is in Chapter 11. David's Bridal and various
subsidiaries filed for Chapter 11 on November 19, 2018. Moody's
withdrew all ratings of David's Bridal, Inc. following the filing.
The current rating is being assigned on a point-in-time basis and
will not be monitored going forward.
Moody's took the following rating actions for David's Bridal, Inc.
(DIP):
- $60 million guaranteed senior secured super-priority
debtor-in-possession term loan, assigned B2
RATINGS RATIONALE
The B2 rating assigned to David's Bridal's DIP Term Loan facility
primarily reflects the estimated collateral coverage of the loan,
as well as structural considerations including upstream and
downstream guarantees, priority of liens, the nature of the
collateral, and the covenants. Other considerations include the
nature of the bankruptcy and reorganization, and the size of the
DIP relative to pre-petition debt.
The Chapter 11 filing was driven by high debt levels associated
with the company's 2012 leveraged buyout combined with earnings
declines as a result of growing competition particularly from
online players, the trend towards more casual wedding attire, as
well as company-specific execution issues. The ongoing
deterioration in David's Bridal's earnings resulted in a
unsustainable capital structure as the company's debt maturities
approached.
The company has reached an agreement to reduce its debt burden by
around $450 million, or almost 58%, with 90% of its pre-petition
term loan lenders and 97% of its pre-petition unsecured notes
lenders. The bankruptcy process will enable the company to move to
a more manageable capital structure and meaningfully reduce
interest expense. The restructuring plan anticipates no impairment
to leases, customer deposits, or any other unsecured claims.
The pre-petition capital structure consisted of a $125 million ABL
revolver with approximately $26 million outstanding, a $481 million
senior secured term loan, and $270 million of unsecured notes. When
accounting for outstanding ABL balances and letters of credit, the
combined amount outstanding on the DIP facilities represents just
under 20% of pre-petition debt. Under the prearranged plan, the
$125 million pre-petition ABL will be rolled into the $125 million
DIP ABL Credit Facility, then rolled into a $125 million exit ABL
facility upon exiting bankruptcy. The $60 million DIP Term Loan
will represent new liquidity for the company.
Upon exiting bankruptcy, the $481 million pre-petition term loan
will convert into a Takeback Term Loan of $300 million less the
$40-60 million commitment amount of the Priority Exit Term Loan,
the right to provide commitments for their pro-rata share of the
Priority Exit Term Loan, and 76.25% of the new common stock in the
reorganized DB Topco, Inc. parent entity (subject to dilution
provisions). The $270 million pre-petition unsecured notes will
convert to 8.75% of the new common stock (subject to dilution
provisions) and warrants for 20% of the new common stock subject to
valuation conditions. All existing equity interests will be
cancelled. The company expects to emerge from Chapter 11 by January
14, 2019.
The DIP Term Loan Facility will contain upstream guarantees from
the company's U.S. subsidiaries, and a downstream guaranty from its
parent, DB Topco, Inc. It will have a second priority interest in
the assets comprising the ABL priority collateral (cash, inventory,
accounts receivable and intellectual property) and a first priority
interest in the remaining assets. Moody's estimates collateral
coverage for the DIP Term Loan Facility will approach 1 time,
noting that in a liquidation scenario, recovery would be negatively
impacted by the size of the DIP ABL Credit Facility and letters of
credit, and their priority lien on the majority of the company's
assets.
The DIP Term Loan Facility will contain maintenance covenants
including a weekly minimum inventory test and minimum cash receipts
test tested against the DIP budget. Additionally, the agreement
will contain negative covenants including limitations on
indebtedness, liens, restricted payments, investments and other
limitations.
The DIP Term Facility will mature the earliest of (i) May 21, 2019,
(ii) the consummation of any sale of all or substantially all
assets, (iii) expiration of the Interim Order if the Final Order
does not become effective, (iv) an acceleration due to default, (v)
the effective date of the Plan of Reorganization, (vi) conversion
of the Chapter 11 case into a Chapter 7 case unless consent is
given, or (vii) dismissal of any of the Chapter 11 cases unless
consent is given.
The principal methodology used in this rating was
Debtor-In-Possession Lending published in June 2018.
Headquartered in Conshohocken, Pennsylvania, David's Bridal, Inc.
is a bridal retailer with 292 stores throughout the US, 11 stores
in Canada and 4 in the UK. The company sells both value-oriented
wedding gowns at under $600 and higher price point gowns up to
$2,000, as well as other wedding- and special-occasions apparel and
accessories and services. Revenues for the twelve months ended
September 30, 2018 were approximately $724 million. The company has
been controlled by Clayton, Dubilier & Rice, LLC (75%) and Leonard
Green & Partners, L.P. (25%) since the October 2012 buyout from
Leonard Green & Partners, L.P.
EXECUTIVE NON-EMERGENCY: Seeks to Hire Ewald Auctions as Appraiser
------------------------------------------------------------------
Executive Non-Emergency Transportation Inc. seeks approval from the
U.S. Bankruptcy Court for the Middle District of Florida to hire an
appraiser.
The Debtor proposes to employ Ewald Auctions, Inc. to conduct an
appraisal of its six vehicles. The firm will be paid $150 for the
appraisal of the first vehicle and $100 for each of the other five
vehicles.
Robert Ewald, an appraiser employed with Ewald Auctions, disclosed
in a court filing that his firm is "disinterested" as defined in
section 101(14) of the Bankruptcy Code.
Ewald Auctions can be reached through:
Robert H. Ewald
Ewald Auctions, Inc.
14272 Lake Underhill Road
Orlando, FL 32828
About Executive Non-Emergency
Transportation Inc.
Executive Non-Emergency Transportation Inc. sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
18-03958) on June 29, 2018. At the time of the filing, the Debtor
estimated assets of less than $50,000 and liabilities of less than
$50,000. Judge Karen S. Jennemann oversees the case. Bartolone
Law, PLLC, is the Debtor's counsel.
F.A.S.S.T LLC: Allowed to Use Cash Collateral Through Feb. 13
-------------------------------------------------------------
The Hon. Ernest M. Robles of the U.S. Bankruptcy Court for the
Central District of California has authorized F.A.S.S.T, LLC and
Los Angeles Training Center, LLC, to use cash collateral to pay all
of the expenses set forth in the Budget for the interim period
through Feb. 13, 2019.
A hearing will be held on Feb. 13, 2019 at 10:00 a.m. regarding the
Debtors' continued use of Cash Collateral. Any opposition to
Debtors' continued use of Cash Collateral must be filed and served
no later than Jan. 30. The Debtor's Reply will be submitted no
later than Feb. 6, 2019.
The Debtor is also authorized to deviate from the total expenses
contained in the Budget for the Budgeted Period by no more than
20%, on a line by line basis, and to deviate by category (provided
the Debtor does not pay any expenses outside any of the approved
categories) without the need for further Court order.
Secured Claimants are granted a replacement lien upon all
postpetition assets of the Debtor's estate, except any Avoidance
Actions, to the extent of the Debtor's use of cash collateral
during the Budgeted Period, with such replacement liens to have the
same extent, validity and priority, if any, as the Secured
Claimants' lien upon the Debtor's prepetition assets.
A carve-out for Debtor's attorneys' fees in the amount of $3,500 a
month. Such funds will not be paid until the Court has entered an
appropriate order regarding same. However, such funding will be
placed in a separate debtor in possession account pending the use.
A full-text copy of the Order is available at
http://bankrupt.com/misc/cacb18-21828-75.pdf
About F.A.S.S.T, LLC
F.A.S.S.T, LLC, filed a Chapter 11 bankruptcy petition (Bankr. C.D.
Cal. Case No. 18- 21828) on Oct. 10, 2018. In the petition signed
by its managing member, Charles Debus, the Debtor estimated assets
of less than $100,000 and liabilities of less than $1 million. The
Debtor hired the Law Firm of Robert M. Yaspan, as bankruptcy
counsel.
FINANCIAL & RISK: Bank Debt Trades at 4% Off
--------------------------------------------
Participations in a syndicated loan under which Financial & Risk US
Holdings Inc. [dba Refinitiv US Holdings Inc.] is a borrower traded
in the secondary market at 96.38 cents-on-the-dollar during the
week ended Friday, December 7, 2018, according to data compiled by
LSTA/Thomson Reuters MTM Pricing. This represents a decrease of
1.11 percentage points from the previous week. Financial & Risk
pays 375 basis points above LIBOR to borrow under the $6.5 billion
facility. The bank loan matures on October 1, 2025. 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, December 7.
FLEXI-VAN LEASING: S&P Alters Outlook to Negative & Affirms B- ICR
------------------------------------------------------------------
Flexi-Van leasing continues to experience lower contractual pricing
with ocean shipping lines and reduced free cash flow due to its
ongoing fleet upgrade initiatives. As a result, S&P Global Ratings
now expects Flexi-Van Leasing's free operating cash flow to be
significantly lower than its previous expectations.
S&P has revised its assessment of the company's liquidity to less
than adequate from adequate. S&P said, "We believe Flexi-Van's
ability to use its revolving credit facility will be partially
constrained due to its springing financial covenants, which would
apply if excess capacity falls below a certain amount.
"Therefore, we revised our outlook to negative from stable. We
could lower our ratings if the company experiences an operating
performance decline in its core leasing business, or if its
liquidity position further deteriorates.
"All of our ratings, including the 'B-' issuer credit rating, are
affirmed. We have revised our rounded recovery estimate on the
company's second lien notes based on changes to our depreciation
assumptions.
"The outlook revision reflects our expectation that Flexi-Van's
free operating cash flow and liquidity will be constrained over the
next 12 months due to the company's fleet upgrade initiative.
Starting in early 2018, the company began upgrading its existing
fleet with radial tires and LED lighting. Although the company
expects to save money over the longer term, given the longer
lifespan of the new tires and lights, the program has led to
capital spending above our previous expectations for 2018. Although
the company could lower this spending if its liquidity is reduced,
we expect the company to spend about $60 million-$65 million
annually through 2019 on total capital expenditures, including this
fleet initiative.
"Our outlook on Flexi-Van is negative. The company continues to
face lower contractual pricing from ocean carriers and derives a
higher proportion of its lease revenues through chassis pools,
which tend to be less profitable than direct leases. At the same
time, its capital spending and debt levels have risen. Therefore,
we expect the company's credit metrics to remain weak, with EBIT
interest coverage below 1x and funds from operations (FFO) to debt
in the mid-single-digit percent area.
"We could lower our rating over the next 12 months if the company's
operating performance deteriorates such that we view the company's
capital structure as unsustainable long-term. This could occur due
to a continued unfavorable revenue mix or lower U.S. import
volumes. We could also lower our rating if the company's liquidity
position continues to deteriorate as a result of
higher-than-expected capital spending, insufficient revolver
availability, or limited covenant headroom.
"We could revise our outlook to stable over the next 12 months if
the company's liquidity position improves such that the company's
net sources of liquidity remain positive even if EBITDA were to
decline by 15%. We would also need to see improved availability
under the company's revolving credit facility and lease pricing to
stabilize, sustaining better operating performance. We would expect
FFO to debt in the high-single-digit percent area, even though EBIT
interest coverage may remain below 1x."
FLOOR & DECOR: S&P Lowers $146MM 1st Lien Loan Rating to 'BB-'
--------------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Floor & Decor
Holdings Inc.'s $146 million first-lien term loan to 'BB-' from
'BB' and revised the recovery rating to '3' from '2'. The '3'
recovery rating indicates S&P's expectation for meaningful recovery
(50%-70%; rounded estimate: 65%) in the event of a payment
default.
S&P said, "We recognize that Floor & Decor's larger asset-based
lending (ABL) credit facility will bolster its liquidity options
and help the company fund its rapid growth. We also acknowledge
that the company does not currently have any outstanding borrowings
under the revolver. However, we based the rating action on Floor &
Decor's decision to exercise its rights under the accordion feature
of the revolving credit facility to increase the facility's total
borrowing commitment to $300 million from $200 million. Given the
increased size of the revolver, our projected level of revolver
borrowings outstanding in a hypothetical default has increased,
reducing the recovery prospects for the term loan lenders.
"All of our other ratings on Floor & Decor, including the 'BB-'
issuer credit rating, remain unchanged."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
S&P said, "Our simulated default scenario contemplates a default in
2022 due to declining revenue and EBITDA because of reduced
consumer discretionary spending that leads to weakness in the home
remodeling industry and associated weakness in the housing market.
"We also contemplate the loss of Floor & Decor's direct purchasing
price advantages, which leads to meaningful margin declines and
heightened competitive pressures from existing and new market
entrants that are able to effectively compete with the company on
product pricing and assortment. These factors all lead to a loss of
market share and require management to use aggressive promotions
and discounting to move inventory.
"We assume the company will emerge from bankruptcy and value it on
a going-concern basis by applying a 5x multiple to our projected
emergence-level EBITDA. The 5x multiple is similar to the multiples
we use for Floor & Decor's comparably rated peers.
We believe a 63% EBITDA decline (from 2017 EBITDA levels) or $57
million of emergence EBITDA would be a prudent rebound from a
default scenario. We assume 35% of its stores close and that it is
subject to inventory clearance at discounted rates with cost
cutting. After emerging from bankruptcy, the company could return
its EBITDA margin to the 6%-8% range."
Simulated default assumptions
-- Simulated year of default: 2022
-- EBITDA at emergence: $57 million
-- Implied enterprise value (EV) multiple: 5x
-- Estimated gross EV at emergence: About $288 million
Simplified waterfall
-- Net EV after 5% administrative costs: $273 million
-- Valuation split (obligors/nonobligors/unpledged): 100%/0%/0%
-- ABL credit facility claims: $183 million*
-- First-lien secured term loan claims: $138 million*
--Recovery expectations: 50%-70% (rounded estimate: 65%)
*Debt amounts include six months of prepetition interest.
RATINGS LIST
Floor & Decor Holdings Inc.
Issuer Credit Rating BB-/Stable/--
Issue-Level Rating Lowered; Recovery Rating Revised
To From
Floor & Decor Holdings Inc.
Senior Secured BB- BB
Recovery Rating 3(65%) 2(80%)
FLORIDA COSMETOGYNECOLOGY: Jan. 24 Disclosure Statement Hearing
---------------------------------------------------------------
The hearing to consider the approval of the disclosure statement
explaining Florida Cosmetogynecology, PLLC's Chapter 11 plan of
reorganization will be held on January 24, 2019 at 1:30 P.M., in
Courtroom A, 1515 North Flagler Drive, 8th Floor, Flagler Waterview
Building, United States Bankruptcy Court, West Palm Beach, Florida
33401.
January 17, 2019 is the deadline for objections to the Disclosure
Statement.
As previously reported by The Troubled Company Reporter, Class 3
consists of all Allowed Unsecured Claims against the Debtor. The
only allowed unsecured claim against the Debtor is Creditor Answer
Connect, with a claim of $1,191.38. The Debtor's Plan proposes to
pay the unsecured creditors 100% of their claims over 5 years
through yearly payments. This class is impaired and entitled to
vote.
Funds to be used to make payments under the Plan to Class 1 and
Class 2 creditors will be made out of the future income of the
Debtor. The Class 2 creditor will be paid by the Debtor's President
and sole equity holder Joel Borgella. Dr. Borgella has agreed to
personally make the 5 yearly payments to the unsecured creditor of
$238.28 per year for a total of $1,191.38, each payment to provide
new value and in exchange for the re-vesting of the shares of the
company so that Dr. Borgella will retain his 100% pre-petition
equity interest in the Debtor post-petition.. To the extent that
the Debtor wishes to prepay any amounts due under the Plan from
exempt assets or other third party sources, the Debtor reserves the
right to do so without penalty and to seek the entry of a final
decree closing this case.
In order to assist in funding the Debtor's business operations
under the Plan, the Debtor may retain any cash on hand, any funds
in its bank accounts, and may retain amounts received from accounts
receivable to pay accounts payable.
A copy of the Disclosure Statement is available for free at:
http://bankrupt.com/misc/flsb17-23003-79.pdf
About Florida Cosmetogynecology
Florida Cosmetogynecology, PLLC, a company that runs a medical
practice that specializes in gynecology and obstetrics, cosmetic
surgery and fertility, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 17-23003) on Oct. 27,
2017.
In the petition signed by Joel Borgella, M.D., managing member,
the Debtor estimated assets of less than $50,000 and liabilities of
less than $500,000. Judge Paul G. Hyman, Jr., is handling the
case. Chad T. Van Horn, Esq., at Van Horn Law Group, Inc.,
represents the Debtor.
The U.S. Trustee notified the U.S. Bankruptcy Court for the
Southern District of Florida that no official committee of
unsecured creditors was appointed for Florida Cosmetogynecology,
PLLC.
FLORIDA MICROELECTRONICS: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Florida Microelectronics, LLC as of Dec. 14,
according to a court docket.
About Florida Microelectronics
Florida Microelectronics, LLC, is a contract manufacturer that
provides manufacturing services, which include electronic and
mechanical design and fabrication for a wide range of industry
applications, from basic components to complex, turnkey systems,
including kiosk assemblies.
On Nov. 5, 2018, Florida Microelectronics filed voluntary petitions
under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.
Fla. Case No. 18-23807) on Nov. 5, 2018, listing less than $1
million in assets and liabilities. Craig I. Kelley, Esq. at Kelley
& Fulton, PL, represents the Debtor.
GENON ENERGY: Completes Reorganization, Exits Chapter 11
--------------------------------------------------------
Effective Dec. 14, 2018, GenOn Energy, Inc. (GenOn) has
successfully concluded a reorganization of substantially all of its
businesses. GenOn's reorganization, initiated with a Chapter 11
filing on June 14, 2017, included a separate reorganization of its
wholly owned subsidiary NRG REMA LLC (REMA), which began in October
2018, and concluded today with the simultaneous emergence of GenOn
and REMA.
Through the reorganization process, GenOn satisfied over $1.8
billion of GenOn notes with a combination of (i) $790 million of
cash ($190 million in connection with emergence), (ii) $400 million
of corporate debt and (iii) reorganized equity, closed or announced
$1.2 billion of asset sales, repaid approximately $700 million of
claims related to certain notes of GenOn's wholly owned subsidiary
GenOn Americas Generation, LLC, and resolved more than 800 other
general unsecured claims.
Through the REMA reorganization, the company amended the Shawville
Generating Station facility lease which removed certain covenant
restrictions governing REMA's assets, and eliminated substantial
and burdensome lease obligations by transferring its interests in
the Keystone and Conemaugh Generating Stations and other
consideration to new owners.
The newly formed company, GenOn Holdings, Inc. (new GenOn), has
strong credit metrics, $400 million of corporate debt, over $85
million of cash, and a $125 million revolving credit facility to
provide liquidity and letters of credit for general corporate
purposes. A total of 5,000,000 of Class A and B shares are issued
and outstanding, comprised initially of 1,905,902 Class A shares
and 3,094,098 Class B shares. The Class B shares are linked to
3,094,098 interests in new GenOn's subsidiary, GenOn Holdings, LLC
GenOn and REMA were each represented with respect to their
reorganizations by Kirkland & Ellis LLP as lead counsel and by
Rothschild & Co. as financial advisor. The adhoc group of GenOn
noteholders, which includes holders of a majority of new GenOn's
new equity, was represented by Davis Polk& Wardwell LLP as lead
counsel and by Ducera Partners LLC as financial advisor.
MANAGEMENT TEAM
The new GenOn formally appointed David Freysinger as Chief
Executive Officer. He is an experienced industry leader who has
served as an independent consultant to power industry clients and
held executive level positions at EquiPower Resources, and at GenOn
and predecessor companies from 2001 to 2011.
"This is a significant day for GenOn, having accomplished a
comprehensive restructuring and deleveraging of its balance sheet,"
said Mr. Freysinger. "I am joining a company that is on solid
financial footing, with a low-cost operating structure, and poised
to deliver value in its next phase."
Mr. Freysinger is joined on the GenOn management team by an
experienced group of industry leaders, including:
-- Darren Olagues, Chief Financial Officer
-- Dan McDevitt, General Counsel
-- Eric Watts, Chief Commercial Officer
-- Mark Gouveia, Senior Vice President, Plant Operations
-- Jon Sacks, Senior Vice President, Strategy
BOARD OF DIRECTORS
GenOn's new Board of Directors is:
-- Mark "Mac" McFarland, the Chairman of the GenOn Board; CEO of
GenOn during the Company's restructuring; Chairman of the Board of
the Perot Museum of Nature and Science in Dallas; Independent
Director of TerraForm Power
-- Ari Barzideh, Director with SVP Global, a leading global
investment firm
-- Philip Brown, Partner with P. Schoenfeld Asset Management, a
leading global alternative asset management firm; Director for
Riviera Resources
-- David Freysinger, Chief Executive Officer of GenOn
-- David Geenberg, Co-Head of SVP Global's North American
investment team; Director for Chaparral Energy, SilverBow Resources
and Penn Virginia, where he serves as Co-Chairman
-- Alex Mazier, Founder and Managing Partner of E&A Capital, a
financial advisory firm, and a Former Partner and Portfolio Manager
at Sandell Asset Management
-- Stephen Schaefer, formerly a Partner with Riverstone Holdings;
Director for Element Markets and HB2 Energy and Chairman of the
Board for Texgen Power
GENERATING ASSETS
The GenOn assets form a diverse portfolio of environmentally
compliant generating facilities, with nearly 75% of the fleet
powered by natural gas. The assets are primarily in the PJM and
NYISO markets. GenOn Mid-Atlantic LLC (GENMA) and its assets
remained outside the Chapter 11 process and have a separate legal
and financing structure.
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.
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 (Bankr. S.D. Tex. Lead
Case No. 17-33695) on June 14, 2017, to implement a restructuring
plan negotiated with stakeholders prepetition.
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.
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.
The court on December 12, 2017, entered the order confirming the
third amended joint Chapter 11 plan of reorganization of GenOn
Energy, Inc. and its affiliates.
GEOSTABILIZATION INT'L: S&P Assigns B ICR, Outlook Stable
---------------------------------------------------------
Commerce City, Colo.-based geohazard mitigation solutions provider
Soil-Nail Holdings LLC (dba GeoStabilization International [GSI])
is being purchased by affiliates of financial sponsor Kohlberg
Kravis Roberts & Co. L.P. (KKR). The transaction will be funded by
a proposed $150 million first-lien term loan due 2025 and cash
equity; the transaction will include a proposed $25 million senior
secured revolving credit facility (RCF) due 2023. Pro forma for the
transaction, debt-to-EBITDA leverage will be approximately 5.1x.
The issuer will be Geo Parent Corporation, the direct parent of
Soil-Nail Holdings LLC.
S&P Global Ratings is assigning its 'B' issuer credit rating to GSI
and its 'B' issue-level ratings and '3' recovery ratings to the
company's proposed senior secured credit facility, including its
term loan and revolving credit facility. The '3' recovery ratings
indicates its expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery to lenders in the event of a default.
S&P said, "The stable rating outlook on GSI reflects our favorable
view of public infrastructure maintenance and repair spending and,
to a lesser extent, nonresidential construction growth, both
representing the majority of the company's end markets. We project
both to grow in the low- to mid-single-digit range over the next
two years. We expect the company to sustain debt-to-EBITDA in the
low 5x range and FFO to debt of 11%-13%, with interest coverage of
about 3x over the next 12 months. The outlook reflects our belief
that GSI will remain owned by a financial sponsor and maintain
adequate liquidity over this time frame.
"We view a downgrade as relatively unlikely over the next 12
months. However, we could take such an action if GSI's EBITDA
interest coverage fell below 2x and trended towards 1.5x, and free
cash flow fell below breakeven levels." This could unfold if the
company were to be displaced by a larger competitor or if
operational difficulties, including job failures, caused a loss of
market share and demand. In this instance, a downgrade would be
prefaced by a sales decline of at least 20% and EBITDA margin
erosion of at least 4% in 2019. A more aggressive financial policy
on the part of the company's financial sponsor (for instance,
debt-financed acquisitions or dividends) could also lead to EBITDA
interest coverage deterioration."
Given the company's small size and niche product focus, S&P views
an upgrade as highly unlikely unless the company grew significantly
and diversified its business. In addition, an upgrade would be
conditioned on debt leverage falling and remaining well below 4x,
as well as a commitment from the financial sponsor owner that
leverage would remain in that range going forward.
GSI is a focused provider of highly specialized and
nondiscretionary geohazard mitigation solutions across the U.S. and
Canada. Services are often time-sensitive and are required to
restore and maintain the safety and usability of roadways and other
vital infrastructure. The company operates in four main business
segments: soil stabilization, rockfall mitigation, bridge and wall
repair, and ground improvement. The company has generated $153
million in revenue on a rolling-12-month basis as of Sept. 30,
2018.
GETHSEMANE MINISTRIES: Jan. 29 Plan Confirmation Hearing
--------------------------------------------------------
The disclosure statement explaining Gethsemane Ministries, Inc.'s
Chapter 11 plan dated October 29, 2018, is approved.
Tuesday, January 29, 2019 at 10:00 AM in Courtroom D, 54th Floor,
U.S. Steel Tower, 600 Grant Street, Pittsburgh, PA 15219, is the
date and time fixed for hearing on confirmation of the Plan.
January 22, 2019, is fixed as the last day for filing and serving
written objections to the confirmation of the Plan.
The last day for filing a complaint objecting to discharge, if
applicable, shall not be later than January 29, 2019.
About Gethsemane Ministries
Gethsemane Ministries, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Pa. Case No. 18-20775) on March 1,
2018. In the petition signed by Reverend Sylvester Howard,
authorized representative, the Debtor estimated assets of less than
$1 million and liabilities of less than $100,000.
Judge Jeffery A. Deller presides over the case.
The Office of the U.S. Trustee on April 13 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Gethsemane Ministries, Inc.
GOOD SAMARITAN: Moody's Cuts Rating on $114MM Bonds to Ba1
----------------------------------------------------------
Moody's Investors Service has downgraded the revenue bond rating of
Good Samaritan Hospital to Ba1 from Baa3 affecting approximately
$114 million of outstanding debt. The outlook has been revised to
stable from negative.
RATINGS RATIONALE
The downgrade to Ba1 reflects a high degree of operating
variability and expected cash flow challenges because of
unfavorable payer mix shifts, declining volumes and significant
expense increases anticipated under the Indiana Hospital Assessment
Fee (HAF) program. Thin cash flow will limit flexibility and
prospects for meaningful liquidity growth and deleveraging a high
debt burden. The rating favorably incorporates a lead market
position with limited competition, low capital needs over the next
several years following the recent completion of major campus
construction and EMR installation, and a conservative debt
structure that will limit demands on liquidity.
RATING OUTLOOK
The stable outlook expects that GSH will maintain current levels of
operating performance and continue to improve liquidity slowly as
cost reductions will mitigate low revenue growth and capital needs
will be manageable.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Sustained improvement in operating cash flow margins and
several years of stable volumes
- Growth of liquidity and debt coverage
- Volume growth leading to enterprise expansion at the hospital
- Meaningful reduction in leverage
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Significant decline in financial performance at core hospital
operations
- Material declines in liquidity
- Thinner headroom under bond covenants
- Additional leverage
LEGAL SECURITY
The bonds are secured by a joint and several obligation of gross
revenue and mortgage pledge of the obligated group. Nursing home
revenues are excluded in the pledged revenues and may be subject to
other senior liens of the respective operators; many of the
facilities are in other security arrangements. The nursing home
agreements are terminable after 90 days without cause and up to 30
days upon an event of default or bankruptcy.
PROFILE
GSH is a 501(c)(3) acute care hospital with 158 beds located in
Vincennes, Indiana. The hospital is owned by Knox County and a
component unit of the county. GSH is the licensed operator of
twelve nursing facilities located throughout Indiana; through
leasing arrangements, the hospital contracts with third-party
operators to manage day to day facility operations. The property
and revenues of the nursing facilities are excluded from pledged
revenues.
METHODOLOGY
The principal methodology used in these ratings was Not-For-Profit
Healthcare published in November 2017.
GREAT CANADIAN GAMING: S&P Withdraws 'BB+' Issuer Credit Rating
---------------------------------------------------------------
S&P Global Ratings withdrew its ratings on Great Canadian Gaming
Corp., including its 'BB+' long-term issuer credit rating on the
company, and 'BBB-' issue-level rating on the senior secured debt,
at the issuer's request.
GREGORY TE VELDE: Trustee Hires A&M to Auction Surplus Cattle
-------------------------------------------------------------
Randy Sugarman, the Chapter 11 Trustee for Gregory John te Velde,
asks the U.S. Bankruptcy Court for the Eastern District of
California to authorize the sale of approximately 4,200 Holstein
heifers currently located at G.J. te Velde Ranch by public action
to be conducted by A&M Livestock Auction, Inc., free and clear of
liens.
The Trustee has concluded that it is the best interests of the
Estate to sell GJT as a going concern and has listed the property
for sale with a broker specializing in large dairies and other
substantial agricultural properties. It is anticipated that a sale
of GJT should close in the second quarter of 2019, and the assets
sold will likely include the productive milking herd at GJT.
In addition to the productive milking herd, the cattle located at
GJT between one day and 120 days old. These heifers will not
produce milk income for approximately 18 months. In the meantime,
the Trustee is informed by dairy management that they cost
approximately $1.75 per head per day to maintain. The Trustee is
further informed that dairy cattle prices are dropping.
If the Trustee intended to operate GJT on a long term basis, it
might make economic sense to maintain the 420 heifers to replenish
the milking herd as it is culled in the year 2020 forward.
However, given his plan to sell GJT as quickly as possible, it is
in the best interests of the Estate to eliminate the daily cost of
maintaining the GJT heifers and to generate funds to pay down the
secured claim of Rabobank, the senior secured creditor on this
collateral.
The sale of these assets should generate net proceeds in the low
seven figures which can be used to pay down the blanket lien of
Rabobank and free up equity in other assets for junior secured and
unsecured creditors. After consultation with various parties the
Trustee has determined that the best means to sell the GJT heifers
is through public auction.
The Trustee has selected A&M Livestock for purpose, and has
determined that it is well qualified to act as auctioneer for the
Estate, holds or represents no interests adverse to this Estate,
and has no material connections to the Trustee, the Debtor,
creditors, parties in interest, their respective attorneys and
accountants, and/or the Office of the United States Trustee. He
asks authority to compensate the auctioneer at a 4% commission rate
and pay other expenses directly from the auction proceeds.
In connection with any such auction, the Trustee will file prepare
and file a report and return of sale as is required by FRBP
6004(f)(1).
The GJT heifers are subject to certain of UCC-1 Financing liens in
favor of various parties. The Consensual Lien of Rabobank, N.A. is
cross collateralized by most other personalty owned by the Estate
including accounts receivable, furniture fixtures and equipment,
and the livestock herds at the other two dairies owned by the
Estate. The Consensual Lien of J.D. Heisell Holdings, LLC is
cross-collateralized by junior blanket liens on all real and
personal property of the Estate, including the GJT heifers. The
Consensual Lien of Overland Stockyards, Inc. is
cross-collateralized by junior blanket liens on all real and
personal property of the Estate, including the GJT heifers. The
Trustee believes that all of the Consensual Liens on the GJT
Heifers are subject to a sale free and clear.
About Gregory John te Velde
Tipton, California-based Gregory John te Velde filed for Chapter 11
bankruptcy (Bankr. E.D. Cal. Case No. 18-11651) on April 26, 2018.
In his Chapter 11 petition, the Debtor estimated both assets and
liabilities between $100 million and $500 million. Mr. te Velde
does business as GJ te Velde Dairy, Pacific Rim Dairy and Lost
Valley Farm. He formerly did business as Willow Creek Dairy.
Judge Fredrick E. Clement oversees the bankruptcy case.
Mr. te Velde is represented by Riley C. Walter, Esq., who has an
office in Fresno, California.
GRIFOLS WORLDWIDE: Bank Debt Trades at 2% Off
---------------------------------------------
Participations in a syndicated loan under which Grifols Worldwide
Operations USA Inc. is a borrower traded in the secondary market at
97.98 cents-on-the-dollar during the week ended Friday, December 7,
2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 1.12 percentage points from
the previous week. Grifols Worldwide pays 225 basis points above
LIBOR to borrow under the $3 billion facility. The bank loan
matures on January 31, 2025. Moody's rates the loan 'Ba2' 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, December 7.
HCA HEALTHCARE: Fitch Affirms BB LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed HCA Healthcare, Inc.'s ratings,
including the company's Long-Term Issuer Default Rating (IDR) at
'BB'. The ratings apply to approximately $33.3 billion of debt at
Sept. 30, 2018. The Rating Outlook is Stable.
KEY RATING DRIVERS
Industry-Leading Financial Flexibility: HCA has for-profit hospital
industry-leading operating margins and generates consistent and
ample discretionary FCF (operating cash flows less dividends,
payments to minority interests and capex). Financial flexibility
has improved significantly in recent years as a result of organic
growth in the business and proactive management of the capital
structure.
Stable Leverage: Fitch forecasts HCA will produce cash flow from
operations of $5.7 billion in 2018, and will prioritize use of cash
for organic investment in the business, tuck-in M&A and payments to
shareholders, including a recently established common dividend that
will consume about $500 million of cash in 2018. At 3.8x at Sept.
30, 2018, HCA's leverage is below the average of the group of
publicly traded hospital companies, and Fitch does not believe
there is a compelling financial incentive for the company to use
cash for debt reduction.
Secular Headwinds Buffet Operating Outlook: Measured by revenues,
HCA is the largest operator of for-profit acute care hospitals in
the country, with a broad geographic footprint and good depth of
care delivery assets in the company's markets. This favorable
operating profile makes HCA relatively resilient, although not
immune, to weak organic operating trends in the for-profit hospital
industry. HCA's top line growth has consistently outpaced most
industry peers; however, secular trends, including a shift to
lower-cost care driven by health insurer scrutiny, increasing
healthcare consumerism, and growth in Medicare patient volumes
outpacing growth of patients with commercial health insurance, will
be headwinds to organic growth and profitability.
Increasing Focus on M&A: HCA has recently increased the pace of
acquisitions, which will help bolster growth in the intermediate
term. Recent transactions have been tuck-in in nature, as HCA
follows a strategy of adding hospitals, mainly in existing markets.
The recent acquisition of Memorial Health System in Savannah, GA
and the definitive agreement to acquire Mission Health, in
Asheville, NC represent the first new hospital markets HCA is
entering in more than a decade, signalling openness to geographic
expansion when the right situations present themselves. Integration
of these newly acquired hospitals will be a headwind to
profitability and FCF generation, due to associated capital project
commitments in the near term.
Regulatory Environment In Flux: With the Democrats gaining a
majority in the House of Representatives in the Nov. 2018 midterm
election, repeal and replacement of the Affordable Care Act (ACA)
appears to be off the table for the time being. HCA's management
has stated that the company has benefited from the ACA, and that
enrollees in the ACA health insurance marketplaces comprised 2.6%
of admissions in 2017 and 2.5% in 1Q18, the latest data points
provided. Any changes to the ACA that result in more uninsured or
underinsured individuals will result in a weaker payor mix for
acute care hospitals, which would pressure margins unless offset by
cost-saving measures or higher reimbursement through a rollback of
the fees and payment cuts required by the ACA.
ACA Insurance Expansion Undermined: The Trump administration has
made several changes that weaken the ACA's insurance expansion
elements. These include removal of the individual mandate penalty,
effective in 2019; an extended timeline for short-term, less
comprehensive health plans; increased state Medicaid waiver
flexibility; and cuts to ACA healthcare exchange open enrollment
advertising spending. Fitch expects these changes will lead to only
small increases in the number of uninsured and underinsured
individuals, which will not influence business profiles enough to
change any ratings in the for-profit hospital industry.
Expect Continuity Under New CEO: HCA's current CEO, Milton Johnson,
will step down at the end of 2018, and the current COO, Sam Hazen,
will assume the role. Fitch does not anticipate any change in the
company's financial or operational strategy under the new
leadership regime. Mr. Hazen is a 35-year veteran of the company
and has held numerous roles with escalating levels of
responsibility over the years; Fitch believes he is a logical
successor for the CEO role. Mr. Johnson will remain chairman of the
board until the company's next shareholder meeting in April 2019.
Thomas Frist, III, the son of the founder, Thomas Frist, Jr., will
then succeed him in the role. Mr. Frist has been a board member
since 2006 and the founding Frist family remains the largest holder
of HCA's public equity.
DERIVATION SUMMARY
HCA's 'BB' IDR reflects the company's good financial flexibility
with moderate financial leverage relative to the four publicly
traded hospital company peers (Tenet Healthcare Corp., Community
Health Systems, Inc., Universal Health Services, Inc., and Quorum
Healthcare Corp.), industry leading profitability and FCF
generation. The operating profile is the strongest in the investor
owned acute care hospital category, benefiting from good geographic
diversification and depth of operating assets within the company's
markets. The hospital industry is facing secular headwinds to
organic growth, but HCA's hospitals are primarily located in urban
or large suburban markets that have relatively favorable prospects.
The IDRs of HCA Healthcare Inc. and HCA Inc. are the same due to
strong legal and operational ties between the entities. HCA
Healthcare Inc.'s only asset is 100% ownership of HCA Inc., which
is the indirect owner of all the operating subsidiaries. There are
cross default provisions on the debt of the two entities.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
--Organic revenue growth of 4%-5% from 2018 - 2021, driven equally
by pricing and volume.
--Operating EBITDA margins for 2018 in-line with FY2017 at 19.5%.
Margins in 2019 are compressed by about 40bps versus 2018,
primarily the result of integrating lower margin hospitals, and
2020 - 2021 margins level off at around 19%.
--Fitch forecasts 2018 EBITDA before associate and minority
dividends of $9.0 billion and 2018 FCF after associate and minority
distributions of $1.7 billion for HCA, with capital expenditures of
about $3.5 billion and dividends slightly under $500 million.
Higher capital spending versus historical levels is related to
growth projects that support the expectation of EBITDA growth
through the forecast period.
--The $1.5 billion acquisition of Mission Health is assumed to
close in the beginning of 2019.
--Debt due in 2019-2021 is assumed to be refinanced, and company
issues debt to fund share repurchases and M&A, resulting in gross
debt/EBITDA after associate and minority dividends maintained just
under 4.0x through the forecast period.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- The 'BB' rating considers HCA operating with leverage (total
debt/EBITDA after associate and minority dividends) around 4.0x
with a FCF margin of 3% - 4%;
-- An upgrade to 'BB+' from 'BB' is possible if HCA maintains
leverage (total debt/EBITDA after associate and minority
dividends) at 3.5x or below.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A downgrade to 'BB-' could occur if leverage is sustained
above 4.5x; however, this is unlikely in the near term because
these targets afford HCA with significant financial flexibility to
increase acquisitions and organic capital investment, while still
returning a substantial amount of cash to shareholders.
LIQUIDITY
Good Financial Flexibility: HCA's liquidity profile is solid for
the 'BB' IDR. There are no significant debt maturities until 2020,
when $3.0 billion of HCA Inc. secured notes mature and the final
$1.1 billion on the term loan A comes due. In 2021, the $1 billion
unsecured, structurally subordinated HCA Holdings, Inc. notes will
mature. Fitch's forecast assumes that HCA will refinance this debt.
Cash on hand is typically $500 million - $600 million. HCA does not
have large cash needs for working capital or exhibit much
seasonality in cash flow generation. The company has $5.75 billion
in revolving credit capacity and in recent periods has maintained
at least $2.0 billion in available capacity on these credit lines.
HCA also has good flexibility under the debt agreement covenants.
The bank agreement includes a financial maintenance covenant that
limits consolidated net leverage to 6.75x or below, and an
incurrence covenant for first lien secured net leverage (includes
debt under the bank facilities and first lien secured notes) of
3.75x. At Sept. 30, 2018, Fitch estimates the HCA has incremental
secured first-lien debt capacity of about $13.0 billion and a 46%
EBITDA cushion under the 6.75x consolidated leverage ratio test.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
HCA, Inc.
-- Long-Term IDR at 'BB';
-- Senior secured ABL facility at 'BBB-'/'RR1';
-- Senior secured cash flow revolver and term loans at
'BB+'/'RR1';
-- Senior secured first-lien notes at 'BB+'/'RR1';
-- Senior unsecured notes at 'BB'/'RR4'.
HCA Healthcare, Inc.
-- Long-Term IDR at 'BB';
-- Senior unsecured notes at 'B+'/'RR6'.
The notes outstanding at the HCA Healthcare Inc. (Hold Co) level
are structurally subordinate to the debt outstanding at HCA Inc.,
and are rated 'B+'/'RR6', two notches below the IDR, to reflect
this subordination.
The ABL facility has a first-lien interest in substantially all
eligible accounts receivable (A/R) of HCA, Inc. and the guarantors,
while the other bank debt and first-lien notes have a second-lien
interest in certain of the receivables; because of this priority
secured interest, the ABL is rated 'BBB-', two notches higher than
the IDR. The availability on the ABL facility is based on eligible
A/R as defined per the credit agreement.
The first lien obligations, including the cash flow revolver, term
loans and first lien secured notes, are rated 'BB+'/'RR1', one
notch above the IDR. These obligations are not notched up to
investment grade because of a large amount of non-guarantor value
in the capital structure (operating subsidiaries that are not
guarantors of the secured debt comprise about 40% of total assets),
and a relatively lenient secured debt incurrence covenant that
allows for net secured debt/EBITDA of up to 3.75x.
HERO INC: Unsecured Creditors to Get 42% Under Chapter 11 Plan
--------------------------------------------------------------
HERO Inc. filed a Chapter 11 plan of reorganization and
accompanying disclosure statement.
Secured Claim of Nakida Jones, classified in Class 2, is impaired
under the Plan. The Class 2 Claim is impaired by the Debtor's
Property and other assets, which are de minimis. The value reached
by the Bankruptcy Court will become the new Class 2 Secured Claim
and will be paid out based upon a 15-year principal amortization
with interest accruing at a market rate fixed by the Bankruptcy
Court. Class 2 will retain its lien position until the Class 2
secured claim is paid. Any deficiency claims will be treated in
Class 3.
Unsecured Claims, classified in Class 3, is Impaired. Class 3
Claims total approximately $11,848.59, not including any amounts of
Class 2 Claims which may be determined to be unsecured and which
will also be included in Class 3 Claims. The Debtor will pay $5,000
to satisfy Class 3 Claims, thus creating a distribution of
approximately 42% per dollar amount of each Class 3 Claim. The
Debtor will make equal monthly payments on account of each Allowed
Class 3 Claim. Payments will commence the first day of the first
calendar month after the Effective Date and continue for 60
months.
The Debtor believes that it can successfully reorganize and even
fund its Plan payments through its continued operations.
A full-text copy of the Disclosure Statement dated December 6,
2018, is available at:
http://bankrupt.com/misc/paeb18-1813703amc-33.pdf
About HERO Inc.
Hero, Inc. is an organization that offers social services in
Philadelphia, Pennsylvania.
Hero sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Pa. Case No. 18-13703) on June 4, 2018. At the time
of the filing, the Debtor estimated assets of less than $500,000
and liabilities of $1 million to $10 million. The case is assigned
to Judge Ashely M. Chan. The Moretsky Law Firm is the Debtor's
counsel.
HH & JR: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of HH & JR Inc. as of Dec. 14, according to a
court docket.
About HH & JR, Inc.
Headquartered in Lake Worth, Florida, HH & JR Inc., which conducts
business under the name One Stop, previously filed for Chapter 11
bankruptcy protection (Bankr. S.D. Fla. Case No. 17-19473) on July
27, 2017.
HH & JR Inc. again filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Fla. Case No. 18-23132) on Oct. 23, 2018, disclosing under $1
million in both assets and liabilities.
Chad T. Van Horn, Esq., at Van Horn Law Group, P.A., serves as the
Debtor's bankruptcy counsel.
HOOK LINE: R. Jurasek Objects to Disclosure Statement
-----------------------------------------------------
Robert Jurasek objects to Debtor Hook Line & Sinker, Inc.'s second
amended disclosure statement and second amended plan.
The Debtor identifies "local and statewide economic conditions,
tourism levels and increased competition" as the sole risk factors.
Jurasek complains that the Debtor fails to identify other material
risk factors, such as likely annual increases and/or one time or
periodic spikes in food and beverage costs, costs of labor and
potential loss of staff or management members, increased utility
and shipping costs, or other force majeure events.
The Debtor projects revenue increases of 3%-4% and 2%-5% increases
of "certain expenses" per year, Jurasek further points out that
fails to adequately describe the assumptions made to reach those
revenue increase assumptions. Each of those factors, and the
assumptions made in the projections, could materially impact the
likelihood of a "100% payment" plan, but according to Jurasek,
there is no actual assurance that payments will be made, much less
a 100% payment.
The Plan proposes $1,000,000 in payments over 5 years, with the
possibility, but no guarantee, of an additional $1.425 million in
projected payments, Jurasek asserts that the Disclosure Statement
includes no details.
Jurasek further complains that he was never served with a copy of
the Plan, and thus, holding a hearing on confirmation is a
violation of due process in that the mandatory notice timeframes
for disclosure statement
Counsel for Robert Jurasek:
Michael R. Mills, Esq.
Shane K. Kanady, Esq.
DORSEY & WHITNEY LLP
1031 W. 4th Avenue, Suite 600
Anchorage, AK 99501-5907
Tel: (907) 276-4557
Fax: (907) 276-4152
Email: mills.mike@dorsey.com
kanady.shane@dorsey.com
About Hook Line & Sinker Inc.
Hook Line & Sinker, Inc., filed for Chapter 11 bankruptcy
protection (Bankr. D. Alaska Case No. 17-00415). Judge Gary
Spraker presides over the case. David H. Bundy, Esq., is the
Debtor's bankruptcy counsel.
HOOK LINE: Salamatof Objects to Disclosure Statement Approval
-------------------------------------------------------------
Salamatof Native Association, Inc., objects to Debtor Hook Line &
Sinker, Inc.'s second
amended disclosure statement and second amended plan.
Creditors Carl Brady Jr. and Collin Szymanski complain that
Salamatof's claim is not discounted because of Salamatof's
beneficial interest in a second deed of trust secured by real
property which is owned by a non-debtor entity. Brady and
Szymanski both have security interests in real property, the
judgment they have against the Debtor's principals. Salamatof
points out that Brady and Szymanski need to determine the value of
their security interests in the real property owned by debtors to
discount its claims by the amount of the security interest created
by the recordation of the judgment lien.
Brady and Szymanski have a pledge of the ownership interests of Big
Island Ale House, LLC, and Kohola, LLC, to secure the debt owed
them. They also have charging orders against the two entities
requiring that any payments made to debtor be paid to it.
Salamatof further point out that Brady and Szymanski need to value
the security interests and charging order to determine the amount
to discount to their claims.
Attorney for Salamatof Native Association, Inc:
David D. Clark, Esq.
LAW OFFICE OF DAVID D. CLARK
737 W. 5th Ave., Suite 203
Anchorage, AK 99501
Tel: (907) 272-7989
Fax: (907) 274-9829
Email: dclark@lawddc.com
About Hook Line & Sinker Inc.
Hook Line & Sinker, Inc., filed for Chapter 11 bankruptcy
protection (Bankr. D. Alaska Case No. 17-00415). Judge Gary
Spraker presides over the case. David H. Bundy, Esq., is the
Debtor's bankruptcy counsel.
HUFFERMEN INC: Seeks Authorization on Cash Collateral Use
---------------------------------------------------------
Huffermen, Inc., seeks authorization from the U.S. Bankruptcy Court
for the District of Arizona to use cash collateral in the ordinary
course of its business in accordance with the Budget.
The Debtor proposes to use revenue from Huffermen to pay operating
expenses in accordance with its Budget based upon actual
operations. The Debtor asserts that it is crucial have access to
cash collateral to continue to provide goods and services to its
customers and to pay employees and pay other ordinary and necessary
operating expenses to avoid (a) disruption of their work force, (b)
maintain customer relations and loyalty, (c) maintain their market
presence, and (d) preserve the going concern value of the Debtor
and its estate while the Debtor formulates and implements a plan of
reorganization.
JP Morgan Chase Bank, N.A. may claim liens on the Property. The
Debtor believes Chase may claim the revenue generated by the
operation of Debtor is its cash collateral. The Debtor has not had
sufficient time to determine the validity, priority,
enforceability, and/or the extent of the claimed liens. In
addition, no formal creditors committee has yet to be formed.
Accordingly, the Debtor assumes all claimed liens are valid and
enforceable, but expresses no position as to the priority of such
liens.
As and for adequate protection for the limited use of cash
collateral as set forth in the Budget, the Debtor offers
post-petition replacement liens to Chase on its inventory, accounts
and contract rights, (a) to the extent of cash collateral actually
expended; (b) on the same assets and in the same order of priority
as currently exists between the Debtor and Chase; and (c) with the
Debtor's full reservation of rights with respect to the issues set
forth above.
The Debtor contends that the proposed use of the income to maintain
its business by paying for maintenance, repairs, insurance, taxes
and the like protects Chase's interests and reduces the possibility
that the business will decrease in value. By allowing the Debtor to
use cash collateral to continue and increase the business, Chase
will have a greater assurance of recovering their claims.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/azb18-14369-20.pdf
About Huffermen Inc.
Huffermen, Inc., is in the business of plastic bottle manufacturing
and advertising specialties printing and has been in operation
since 2000. Huffermen is owned and operated by Ross Dodson and
Eric Miller. Mr. Dodson owns 75% of the outstanding shares in
Huffermen and Mr. Miller owns the remaining shares.
Huffermen, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 18-14369) on Nov. 26,
2018. In the petition signed by Ross Dodson, president, the Debtor
estimated assets and liabilities of $500,000 to $1 million. Keery
McCue, PLLC, is the Debtor's counsel.
INGEVITY CORP: Fitch Affirms BB LongTerm Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has affirmed Ingevity Corporation's (NYSE: NGVT)
Long-Term Issuer Default Rating (IDR) at 'BB'.
The Rating Outlook is Stable.
The rating reflects the company's modest size, strong margins owing
to technological and market leadership in activated carbon for auto
emissions control, and its generally modest leverage. The Stable
Outlook reflects Fitch's expectation that the company will
prioritize capital deployment to de-leverage to a total debt to
EBITDA of at or below 2.5x by year-end 2020 following the
acquisition of Perstorp Holding's caprolactone division.
KEY RATING DRIVERS
Recent Acquisitions Increase Leverage: Ingevity acquired
Georgia-Pacific's pine chemicals business in March 2018 for $310
million in cash using cash on hand from its January debt issuance
to fund the purchase price. The acquisition adds scale, additional
sources of crude tall oil, complementary products, and synergistic
and tax benefits.
Additionally, the company announced its intent to purchase the Capa
caprolactone division of Perstorp Holding AB for approximately
EUR590 million (about $675 million) to be funded with cash on hand
and drawings of $625 million under the company's $750 million
revolver. The acquisition adds diversification and further benefits
Ingevity given the higher EBITDA margin (2018E 34.5%) products that
Capa produces in what is a niche, oligopolistic and highly
technical business that has significant barriers to entry.
Fitch believes total debt to EBITDA, after the acquisition, would
be 3.9x up from 2.5x at Sept. 30, 2018, but would drop to 2.5x by
the end of 2020. Fitch expects FFO-adjusted net leverage to drop to
around 3.0x by the end of 2020.
Activated Carbon Growth Fundamentals: Volume in the Performance
Materials segment is driven by gasoline vapor emissions regulation.
The company has a very high market share and technology leadership
which should enable segment EBITDA margins to be sustained over
40%. Regulations are already in place in the U.S. and Canada to
phase in control systems that make more use of higher margin
activated carbon and other regions are expected to follow over
time.
The company completed a $100 million manufacturing facility in
Zhuhai, China in the fourth quarter of 2015 to take advantage of
future growth in the region and for exports. Existing capacity
should support projected growth through 2019, when spending on
additional capacity may be required.
Challenges to Tall Oil Business: Some of Ingevity's Performance
Chemicals (PC) segment products compete with products derived from
petroleum. Fitch's outlook on oil prices is flat to modestly down
through 2020, a trend that would limit price appreciation for some
PC products.
The oil field technologies end-market, including well service
additives, suffered from reduced domestic production in the
2015-2016 timeframe. The pavement technologies end-market benefits
from specific characteristics to extend road life and reduce energy
usage and should benefit from any increase in infrastructure
spending. Ink resins suffer from reduced print related to
electronic delivery of written material.
Share-repurchase Program: On Nov. 1, 2018, the board authorized the
repurchase of up to $350 million of common stock, in addition to
the $100 million authorization made in February 2017. As of Sept.
30, 2018, the company repurchased $24.7 million, which leaves
$425.3 million remaining available for repurchase. The program is
fully discretionary, and Fitch believes purchases will be modest
while leverage is above 2.5x.
DERIVATION SUMMARY
While Ingevity Corp. is smaller than specialty chemical peers such
as Axalta Coatings Systems, Ltd, Ashland Global Holdings, Inc. and
W.R.Grace & Co., Ingevity generally maintains a conservative
capital structure. Fitch expects the company's total debt to EBITDA
to be at or near 2.5x by year-end 2020, as management prioritizes
de-leveraging following the acquisition of Perstorp Group's Capa
business.
KEY ASSUMPTIONS
- 2018 figures track management guidance
- Performance Chemicals revenue grows with the acquisition of
Georgia-Pacific's pine oil chemicals business in 2018 and with
Capa's caprolactone business in 2019 and 2% per year, thereafter;
- Performance Materials grow at 14% per year on average beginning
in 2019;
- Operating EBITDA margins at around 29%-30% on average;
- Capex at roughly 10% of revenues beyond 2019;
- No dividends or share repurchases throughout forecast;
- Excess cash flow applied to debt repayment while leverage is
greater than 2.5x.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Adherence to financial policy that demonstrates a clear
commitment to de-leveraging to a FFO net leverage sustainably below
2.5x;
- Continued trend towards higher EBITDA margins that demonstrates
successful execution of the shift towards higher value add
products.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Deviation from financial policy resulting in FFO net leverage
sustainably above 3.0x on average;
- Capital allocation prioritization towards additional
acquisitions or stock repurchases in favor of debt repayments;
- Deterioration in EBITDA margins suggesting an inability to
execute its strategy of high-grading.
LIQUIDITY
Adequate Liquidity: The August 2018 amendment bolstered liquidity
by increasing the revolver by $200 million, and extended the
maturity of the facilities by one year to August 2023. At Sept. 30,
2018, pro forma for the acquisition of the Capa caprolactone
division of Perstorp Holding AB, cash on hand was $26 million and
revolver availability was $125 million.
FULL LIST OF RATING ACTIONS
Fitch affirms the following ratings for Ingevity Corp.:
-- Long-term IDR at 'BB';
-- Senior secured revolving credit facility at 'BB+'/'RR1';
-- Senior secured term loan at 'BB+'/'RR1';
-- Senior unsecured debt at 'BB'/'RR4'.
INGEVITY CORP: Moody's Alters Outlook on Ba2 CFR to Negative
------------------------------------------------------------
Moody's Investors Service has changed Ingevity Corporation's
outlook to negative from stable. At the same time, Moody's has
affirmed Ingevity's Ba2 Corporate Family Rating and the Ba3 rating
on the existing $300 million senior unsecured notes. On December
10, 2018, Ingevity announced that it has agreed with Perstorp
Holding AB to acquire the Capa caprolactone division of Perstorp in
a cash transaction valued at EUR590 million (about $675 million).
Ingevity will use its revolver and cash to finance this
acquisition, which is expected to close in the first quarter of
2019.
Rating action:
Issuer: Ingevity Corporation
Outlook, Changed to Negative from Stable
Rating affirmation:
Issuer: Ingevity Corporation
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Speculative Grade Liquidity Rating, Affirmed SGL-2
Senior Unsecured Notes, Affirmed Ba3 (LGD5)
RATINGS RATIONALE
"The negative outlook reflects a significant increase in Ingevity's
leverage that will breach the downgrade trigger of 3.5x debt/EBITDA
providing no headroom for any earnings weakness in the next 12 to
18 months", says Jiming Zou, a Moody's Vice President and the Lead
Analyst for Ingevity.
The acquisition of Perstorp's caprolactone business will increase
Ingevity's EBITDA by about $60 million and net debt by almost $675
million, raising its pro-forma debt/EBITDA to about 3.7x. Assuming
$100 million annual free cash flow to pay down debt under
business-as-usual conditions, Ingevity should be able to improve
leverage to 3.3x by the end of 2020. However, a softening economy
as indicated by slowing automotive sales, global trade frictions
and a stronger dollar could deter earnings growth and delay cash
flow needed to reduce debt leverage below 3.5x in the next 12 to 18
months.
Moody's expects the company to issue additional senior unsecured
debt to secure long-term capital and pay down some of its $750
million first-lien secured revolver which will be substantially
drawn to finance the acquisition. The issuance of senior unsecured
debt would reduce the outstanding secured debt in the capital
structure and prevent a deterioration in the expected recovery rate
of the unsecured debt based on Moody's LGD model. Without such debt
issuance, the Ba3 rating on the senior unsecured debt would come
under downgrade pressure. The $300 million senior unsecured notes
is rated Ba3 due to its effective subordination to the $375 million
first-lien term loan and $750 first-lien million revolver.
On the positive side, the acquisition of Perstorp's caprolactone
business will broaden Ingevity's business portfolio, diversify its
earnings and lift its profit margin given the strong growth
prospects, high profitability and the market leadership position of
the acquired caprolactone business. However, Moody's expects
limited business synergies given different manufacturing processes
and customer bases. Capa Caprolactone is derived from benzene and
its derivatives find applications in polyurethane coatings and
adhesives for many downstream products such as automotive coatings,
skateboard wheels and textiles. As management continues to look for
growth opportunities, Moody's expects event risks will remain
elevated and deleveraging could be delayed in the absence of equity
issuance given typically high price multiples.
Ingevity's Ba2 CFR continues to reflect the company's market
leadership in activated carbon for gasoline vapor control and pine
chemicals, its strong profitability and ample free cash flow
generation, but also takes into account its relatively small
business scale, reliance on key raw material suppliers and a short
operating history after its spin-off from Westock RKT Company
(WestRock Company, Baa2, stable) in 2016.
Moody's expects Ingevity to have good liquidity supported by its
expectations of positive free cash flow in the next 12 months, $750
million availability under its revolving credit facility and $57.5
million cash balance as of September 30, 2018. The company will use
its cash on hand and revolver to fund the acquisition, before
issuing long-term debt. Ingevity does not have any debt maturities
until the revolver expires in 2023. Term loan amortization is $9
million in 2018 and $19 million in 2019. The revolving credit
facility has two financial covenants, a maximum total leverage
ratio covenant of 4.0x (up to 4.5x allowed within four quarters
after permitted acquisition), and a minimum interest coverage
covenant of 3.0x. Moody's expects the company to maintain good
availability under its revolver as well as remain in compliance
under its covenants. The majority of assets are encumbered by the
secured credit facilities.
A ratings upgrade is unlikely given the negative outlook.An upgrade
would require a longer track record as a stand-alone entity that
would demonstrate the company's commitment to the conservative
financial policy and organic growth and earnings improvement. An
upgrade could be considered if the company is able to increase its
business scale and diversification, maintain its strong credit
metrics, with debt/EBITDA below 3 times and RCF/Debt over 20%.
The rating could be downgraded if the company's performance
deteriorated or it undertook a large debt-funded acquisition or
shareholder-friendly actions. Specifically, the rating could be
downgraded if EBITDA margin falls sustainably below 20%; or its
debt/EBITDA ratio remains above 3.5x and RCF/Debt declines to
mid-teens.
The principal methodology used in these ratings was Chemical
Industry published in January 2018.
Headquartered in North Charleston, SC, Ingevity Corporation
(Ingevity) is a global manufacturer of pine-based chemicals
(Performance Chemicals segment) used in pavement technologies,
oilfield technologies and industrial specialties such as inks and
adhesives, and high performance carbon materials (Performance
Materials segment) used in gasoline vapor emission control systems
in fuel tanks, as well as applications for water, food, beverage
and chemical purification. The company was spun off by WestRock
Company on May 15, 2016. For the twelve months ended September 30,
2018, the company generated approximately $1.1 billion in revenues.
INNOVATIVE XCESSORIES: Moody's Alters Outlook of B2 CFR to Negative
-------------------------------------------------------------------
Moody's Investors Service revised the rating outlook of Innovative
XCessories & Services LLC,to negative from stable. In a related
action Moody's affirmed IXS' Corporate Family Rating at B2,
Probability of Default Rating at B3-PD, and senior secured credit
facilities at B2.
The following ratings were affirmed:
Issuer: Innovative XCessories & Services LLC:
Corporate Family Rating, at B2;
Probability of Default, at B3-PD;
$628 million (remaining amount) senior secured term loan, at B2
(LGD3);
$18 million senior secured revolver, at B2 (LGD3);
Issuer: Line-X Canada Ltd.
$10 million senior secured revolver, at B2 (LGD3);
Rating Outlook
Issuer: Innovative XCessories & Services LLC:
Changed to Negative, from Stable
Issuer: Line-X Canada Ltd.:
Changed to Negative, from Stable
RATINGS RATIONALE
The revision of IXS's rating outlook to negative from stable
reflects weaker than expected profit and free cash flow levels
following the company's asset purchases and special dividend
executed in December 2017. In that transaction IXS upsized its term
loan by $235 million and used balance sheet cash to purchase i)
Ultimate Linings ("UL", a marketer of protective coatings and
related technical support), ii) Kingsville Plastics ('KPL", a
manufacturer of custom and proprietary injection molding products),
fund a $150 million shareholder distribution to the company's
equity sponsors (affiliates of Olympus Partners), and pay related
fees and expenses. At that time, Moody's estimated, pro forma for
the transaction, IXS's debt/EBITDA (inclusive of the acquisitions,
certain anticipated cost savings, and Moody's standard adjustments)
to be 4.7x. IXS's Debt/EBITDA remains high for the LTM period
ending September 30, 2018 at 6.2x, and 5.1x after adjusting for
certain special compensation payments. IXS's EBITA margins have
remained below Moody's expectations of over 20% for the recent
quarters, as a result of higher than anticipated raw material
costs, and higher launch costs related to expanded OEM programs.
This, combined with higher than expected capital expenditures and
special compensation payments, has also resulted in free cash flow
generation and debt reduction lower than expected.
The affirmation of IXS's B2 CFR incorporates the company's
competitive position as a leading supplier of spray-on pick-up
truck bedliners, combined with steady strong demand for light
trucks, supported by relatively low fuel prices. While performance
remains below Moody's expectations, recent monthly performance
indicates that operational improvements are being achieved. These
positives are balanced with company's limited nische product focus,
the cyclical nature of automotive demand, and the private equity
ownership structure wherein almost half of the company's current
debt has supported shareholder returns over the recent years.
IXS is expected to have an adequate liquidity over the next 12-15
months supported by modest positive free cash flow generation and
availability under its $28 million revolving credit facilities. IXS
maintains adequate levels of cash on hand in the low double digit
range as of September 30, 2018. As the company's cash flow
performance over the past year has been below its expectations,
Moody's free cash flow expectation is tempered to the low-single
digits as a percentage of debt over the next 12-15 months. The
revolving credit facility was unfunded at September 30, 2018, with
about $1 million in outstanding letters of credit. The primary
financial covenant under the secured credit facilities is a maximum
total 5.75x net leverage ratio that Moody's anticipates will have
sufficient covenant cushion over the near-term. Alternate liquidity
will be limited as the company's largely domestic assets secure the
term loan and revolving credit facilities.
The opportunity for a higher rating over the intermediate-term is
limited given the company's moderate size and demonstrated
willingness to support shareholder returns. Profitable growth that
increases scale could lead to an upgrade if the company can sustain
debt/EBITDA at around 3.0x or lower and EBITA/interest expense,
inclusive of restructuring charges, above 4x.
Future events that have the potential to drive a lower rating
include weakness in light truck sales, a consumer shift away from
up-fitting options, or declining volume with one of the company's
large customers or platforms, resulting in debt/EBITDA above 4.75x,
or EBITA/interest expense approaching 2.0x. A weakening liquidity
profile could also drive a negative rating action.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
Innovative XCessories & Services LLC (IXS), is a holding company
subsidiary of IXS Holdings, Inc. (headquartered in Huntsville, AL).
Through subsidiaries, IXS provides protective coatings for pick-up
truck beds, as well as a wide range of other up-fit services and
accessories to automotive manufacturers. IXS is also engaged in the
sale of Line-X franchises within North America that are primarily
used for the application of spray-on truck bedliners, and the sale
of chemicals and machinery to franchise and licensees that are used
primarily for the application of spray-on truck bedliners
nationally and internationally. Revenues for the LTM period ending
September 30, 2018 were approximately $596 million. The company is
owned by affiliates of Olympus Partners.
ISRS REALTY: Hires DelBello Donnellan as Attorney
-------------------------------------------------
ISRS Realty and IRS Realty seek approval from the United States
Bankruptcy Court for the Southern District of New York (White
Plains) to hire DelBello Donnellan Weingarten Wise & Wiederkehr,
LLP as their attorneys.
Professional services DDWWW will render are:
a. give advice to the Debtors with respect to its powers and
duties as Debtor-in-Possession and the continued management of its
property and affairs;
b. negotiate with creditors of the Debtors and work out a plan
of reorganization and take the necessary legal steps in order to
effectuate such a plan including, if need be, negotiations with the
creditors and other parties in interest;
c. prepare the necessary answers, orders, reports and other
legal papers required for the Debtors' protection from their
creditors under Chapter 11 of the Bankruptcy Code;
d. appear before the Bankruptcy Court to protect the interest
of the Debtor and to represent the Debtors in all matters pending
before the Court;
e. attend meetings and negotiate with representatives of
creditors and other parties in interest;
f. advise the Debtors in connection with any potential sale of
the businesses;
g. represent the Debtors in connection with obtaining
post-petition financing, if necessary;
h. take any necessary action to obtain approval of a
disclosure statement(s) and confirmation of a plan(s) of
reorganization; and
i. perform all other legal services for the Debtors which may
be necessary for the preservation of the Debtors' estate and to
promote the best interests of the Debtors, its creditors and its
estate.
DDWWW's 2018 hourly rates are:
Attorneys $375 to $595
Law Clerks $200
Legal Assistants/ Paralegals $150
Erica Feynman Aisner, Esq., partner of the firm DelBello Donnellan
Weingarten Wise & Wiederkehr, LLP, assures the Court that DDWWW
does not hold or represent any interest adverse to the Debtor's
estate, and is a "disinterested person" as defined in Sec. 101(14)
of the Bankruptcy Code.
The counsel can be reached at:
Erica R. Aisner, Esq.
DELBELLO, DONNELLAN, WEINGARTEN, WISE & WIEDERKEHR, LLP
One North Lexington Avenue
White Plains, NY 10601
Phone: (914) 681-0200
About ISRS Realty
ISRS Realty and IRS Realty are single asset real estate debtors (as
defined in 11 U.S.C. Section 101(51B)).
ISRS Realty and IRS Realty each filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Case no. 18-23867 & Case no. 18-23868, respectively) on December 5,
2018. In the petitions signed by Dr. Rajeev Sindhwani, managing
member, the Debtors each estimated $1 million to $10 million in
both assets and liabilities.
Julie Cvek Curley, Esq. and Erica R. Aisner, Esq.. at DelBello
Donnellan Weingarten Wise & Wiederkehr, LLP, serve as the Debtors'
counsel.
J CREW: Bank Debt Trades at 19% Off
-----------------------------------
Participations in a syndicated loan under which J Crew Group Inc.
is a borrower traded in the secondary market at 81.17
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 3.29 percentage points from the
previous week. J Crew pays 322 basis points above LIBOR to borrow
under the $1.184 billion facility. The bank loan matures on
February 28, 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, December 7.
JAMES SKEFOS: IPS Assets Buying Memphis Properties for $1.5 Million
-------------------------------------------------------------------
James Skefos asks the U.S. Bankruptcy Court for the Western
District of Tennessee to authorize the sale of a portfolio of real
properties located in Memphis, Tennessee, to IPS Asset Management
for $1,524,290, in "as is" condition, subject to IPS' inspection.
The Debtor owns numerous real properties in Memphis, Tennessee and
he is asking authorization to sell several of them as a portfolio.
There are mortgages on the proposed properties in favor of
Community Bank in the approximate amount of $250,000; there are
also outstanding back taxes in the approximate amount of $100,000.
For the most part the properties are vacant and many are in need of
extensive repairs and per the Debtor's course of dealing, the
Buyer's inspection can result in a reduction of the purchase price
but the Debtor believes he will receive in a worst cast situation
no less than approximately $1.1 million from the sale of said
properties, thereby netting him approximately $850,000 all of which
will be paid into the DIP account.
The Debtor has not obtained a formal appraisal on any of the
properties, but the cumulative purchase price is far in excess of
the Shelby County Assessor's appraisals on said properties and in
excess of what he believes he could receive for the properties if
sold individually. The Debtor believes the overall sales price
obtained is more than reasonable and is in the best interest of
Debtor and ultimately his creditors to sell said properties.
The Debtor asks that the Court (i) waives the notice requirement of
Bankruptcy Rule 2002 and sets the matter for an expedited hearing
preferably on Dec. 13, 2018 when other matters are set; and (ii)
approves the sale of the portfolio of properties for a sum not less
than $1.1 million.
A list of the Memphis Properties to be sold attached to the Motion
is available for free at:
http://bankrupt.com/misc/James_Skefos_280_Sales.pdf
James Skefos sought Chapter 11 protection (Bankr. W.D. Tenn. Case
No. 17-28243) on Sept. 18, 2017. The Debtor tapped Daniel Lofton,
Esq., at Craig & Lofton, P.C., as counsel.
JBECKS PROPERTIES: Allowed to Continue Using Cash Collateral
------------------------------------------------------------
The Hon. Carl L. Bucki of the U.S. Bankruptcy Court for the Western
District of New York authorized and permitted JBecks Properties,
Inc., to continue using cash collateral until the Secured Creditors
requests that the Court rule otherwise.
Secured Creditors New York Business Development Corporation,
Colonial Funding Group, LLC, and CIT Bank, N.A. d/b/a Direct
Capital have or allege to have a lien or security interest on said
cash collateral.
Secured Creditors are granted rollover replacement liens in
postpetition assets of the Debtor of the same relative priority and
on the same types and kinds of collateral they possessed
prepetition, as the same may ultimately be determined, to the
extent of cash collateral actually used.
A full-text copy of the Order is available at
http://bankrupt.com/misc/nywb18-11425-72.pdf
About JBecks Properties
JBecks Properties, Inc., is a Sub-chapter "C" corporation that owns
and operates Mr. Bills Restaurant & Bar located at 1500 Cleveland
Drive, Cheektowaga, New York. It is in the business of operating a
bar/restaurant and activities incidental thereto.
JBecks Properties filed its voluntary petition for relief under
Chapter 11 (Bankr. W.D.N.Y. Case No. 18-11425) on July 24, 2018.
In the petition signed by John A. Beck, president, the Debtor
estimated under $100,000 in assets and under $1 million in debt.
The Debtor is represented by Robert B. Gleichenhaus at
Gleichenhaus, Marchese & Weishaar, P.C.
JELD-WEN INC: Bank Debt Trades at 2% Off
----------------------------------------
Participations in a syndicated loan under which Jeld-Wen
Incorporated is a borrower traded in the secondary market at 97.88
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.14 percentage points from the
previous week. Jeld-Wen Incorporated pays 200 basis points above
LIBOR to borrow under the $440 million facility. The bank loan
matures on December 14, 2024. Moody's rates the loan 'Ba2' 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, December 7.
JORGE A. ALVAREZ: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Jorge A. Alvarez DDS, P.A. as of Dec. 14,
according to a court docket.
About Jorge A. Alvarez DDS, P.A.
Jorge A. Alvarez DDS, P.A. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-23777) on
November 5, 2018. At the time of the filing, the Debtor disclosed
that it had estimated assets of less than $100,000 and liabilities
of less than $1 million.
Judge Erik P. Kimball presides over the case. The Debtor tapped
Van Horn Law Group, Inc. as its legal counsel.
JOSEPH'S TRANSPORTATION: Seeks Access to Use Cash Until Jan. 30
---------------------------------------------------------------
Joseph's Transportation, Inc., requests the U.S. Bankruptcy Court
for the District of Massachusetts to authorize its use of the use
cash collateral claimed by Brookline Bank for the period of Nov.
26, 2018 through Jan. 30, 2019.
The Debtor seeks to collect account receivables in the normal
course of business. The Debtor requires the use of all its income
generated from its business operations on a monthly basis to pay
the expenses listed on the budget. The proposed cash collateral
budget shows projected expenses totaling $734,000 covering the
months of December 2018 through January 2019 combined.
Brookline Bank holds an all asset security interest in the assets
of the Business, including cash collateral. As of the Filing Date,
the balance due to Brookline Bank is approximately $400,000.
Brookline Bank is asserting a security interest in all assets of
the Debtor including cash collateral.
The Debtor believes there are no additional consensual liens on the
Business. The Debtor estimates the value of the collateral in its
present condition as $4,350,500 for vehicles and equipment and
$198,848 for accounts receivable.
Brookline Bank consents to the Debtor's requested use of cash
collateral. The Debtor seeks authority to pay to Brookline Bank a
monthly payment of $2,000 toward the secured business line note and
$14,000 toward various vehicle loans for a total of $16,000, and
which payment will be adequate protection for the Debtor's usage of
the cash collateral claimed by Brookline Bank pursuant to the loan
documentation between the parties.
As adequate protection for the position of Brookline Bank, the
Debtor seeks authority to grant to Brookline Bank a rollover lien
in all post-petition accounts receivable and any postpetition
assets. The Debtor will also remain current on all post-petition
operating expenses for the Business and will continue to pay
insurance and necessary operating expenses.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/mab18-14282-6.pdf
About Joseph's Transportation
Joseph's Transportation is a family-owned and operated full
transportation company that has been serving the New England area
for more than 40 years.
Joseph's Transportation filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
18-14282) on Nov. 11, 2018. In the petition signed by Joseph
Albano III, president, the Debtor estimated assets of $500,001 to
$1 million and liabilities of the same range. The Law Office of
Gary W. Cruickshank serves as counsel to the Debtor.
JWCCC LLC: Seeks Conditional Approval of Disclosure Statement
-------------------------------------------------------------
JWCCC, LLC, a/k/a Marwill Grain Company, filed an application
asking the Bankruptcy Court to conditionally approve the disclosure
statement explaining the Debtor's Combined Plan Reorganization
The Plan proposes for holders of general unsecured claims to recoup
10% of their total allowed claim amount over five years.
Class 1: Ally Financial is impaired. Secured claim for 2009
Chevrolet 2500. The claim amount is $8,619.96. According to
Debtor's records through end of November 2018, the sum of $877.50
has been paid as adequate protection payment to Claimant. The
Allowed Secured Claim of $7,742.46 will accrue interest at 6.00%.
The Allowed Secured Claim of $7,742.46 will be paid in 60 equal
monthly payments of $149.68 starting on the Effective Date of the
Plan.
Class 2: Ally Financial is impaired. Secured claim for 2015
Chevrolet Silverado. The claim amount is $26,814.92. According to
Debtor's records through end of November 2018, the sum of $2,295.00
has been paid as adequate protection payment to Claimant. The
Allowed Secured Claim of $24,519.92 will accrue interest at 6.00%.
The Allowed Secured Claim of $24,519.92 will be paid in 60 equal
monthly payments of $474.04 starting on the Effective Date of the
Plan.
Class 3: Tarrant County is impaired. Secured claim for tangible
commercial personal property 2017 & 2018. The claim amount is
$6,162.77. This Allowed Secured Claim will accrue interest at
12%.
This Allowed Secured Claim will be paid over a period of 60 months
in equal monthly payments of $137.09.
Class 4: City of Grapevine is impaired. Secured claim for tangible
commercial personal property 2017 & 2018. The claim amount is
$3,054.09. This Allowed Secured Claim will accrue interest at
12%.This Allowed Secured Claim will be paid over a period of 60
months in equal monthly payments of $67.94.
Class 5: Grapevine-Colleyville ISD is impaired. Secured claim for
Tangible commercial personal property 2017 & 2018. The claim
amount is $14,746.22. This Allowed Secured Claim will accrue
interest at 12%. This Allowed Secured Claim will be paid over a
period of 60 months in equal monthly payments of $328.02.
Class 7: Sheffield Financial is impaired. Secured claim for 2016
Big Tex Dump Trailer. The claim amount is $3,558.44. Adequate
protection payments made during the pendency of this case get
deducted from the Allowed Secured Claim amount. According to
Debtor's records through end of November 2018, the sum of $270.00
has been paid as adequate protection payment to Claimant. The
Allowed Secured Claim of $3,288.49 will accrue interest at 6.00%.
The Allowed Secured Claim of $3,288.49 will be paid in 60 equal
monthly payments of $63.58 starting on the Effective Date of the
Plan.
Class 8: Navitas Credit Corp is impaired. Secured claim for
Lighting Fixtures. The claim amount is $32,314.32. This Claim is
bifurcated into an Allowed Secured Claim in the amount of
$13,500.00 and an Allowed Unsecured Claim in the amount of
$18,814.32. According to Debtor's records through end of November
2018, the sum of $450.00 has been paid as adequate protection
payment to Claimant. The Allowed Secured Claim of $13,050.00 will
accrue interest at 6.00%. The Allowed Secured Claim of $13,050.00
will be paid in 60 equal monthly payments of $252.29 starting on
the Effective Date of the Plan.
Class 9: Americredit Financial Services, Inc., dba GM Financial
impaired. Secured claim for 2016 Chevrolet Silverado 2500H. The
claim amount is $26,281.32. This Claim is bifurcated into an
Allowed Secured Claim in the amount of $21,575.00 and an Allowed
Unsecured Claim in the amount of $4,706.32. According to Debtor's
records through end of November 2018, the sum of $1,941.78 has
been
paid as adequate protection payment to Claimant. The Allowed
Secured Claim of $19,633.22 will accrue interest at 6.00% The
Allowed Secured Claim of $19,633.22 will be paid in 60 equal
monthly payments of $379.57 starting on the Effective Date of the
Plan.
Class 10: Marlin Equipment Finance is impaired. Secured claim for
VOIP Phone System. The claim amount is $14,726.44. This Claim is
bifurcated into an Allowed Secured Claim in the amount of
$10,000.00 and an Allowed Unsecured Claim in the amount of
$4,726.22. According to Debtor's records through end of November
2018, the sum of $1,509.19 has been paid as adequate protection
payment to Claimant. The Allowed Secured Claim of $8,490.81 will
accrue interest at 6.00%. The Allowed Secured Claim of $8,490.81
will be paid in 60 equal monthly payments of $164.15 starting on
the Effective Date of the Plan.
Class 11: Marlin Equipment Finance is impaired. Secured claim for
Server. The claim amount is $1,699.55. This Claim is bifurcated
into an Allowed Secured Claim in the amount of $700.00 and an
Allowed Unsecured Claim in the amount of $999.55. According to
Debtor's records through end of November 2018, the sum of $26.31
has been paid as adequate protection payment to Claimant. The
Allowed Secured Claim of $673.63 will accrue interest at 6.00% .
The Allowed Secured Claim of $673.69 will be paid in 60 equal
monthly payments of $13.02 starting on the Effective Date of the
Plan.
Class 12: Marlin Equipment Finance is impaired. Secured claim for
Computers, printers and other equipment. The claim amount is
$6,551.78. This Claim is bifurcated into an Allowed Secured
Claim
in the amount of $3,400.00 and an Allowed Unsecured Claim in the
amount of $3,151.78. According to Debtor's records through end of
November 2018, the sum of $53.25 has been paid as adequate
protection payment to Claimant. The Allowed Secured Claim of
$3,098.53 will accrue interest at 6.00% . The Allowed Secured
Claim
of $3,151.78 will be paid in 60 equal monthly payments of $60.93
starting on the Effective Date of the Plan.
Class 13: Marlin Equipment Finance is impaired. Secured claim for
Mini Skid Steer. The claim amount is $35,791.71. This Claim is
bifurcated into an Allowed Secured Claim in the amount of
$28,800.00 and an Allowed Unsecured Claim in the amount of
$6,991.71. According to Debtor's records through end of November
2018, the sum of $2,249.57 has been paid as adequate protection
payment to Claimant. The Allowed Secured Claim of $26,550.43 will
accrue interest at 6.00% . The Allowed Secured Claim of $26,550.43
will be paid in 60 equal monthly payments of $513.29 starting on
the Effective Date of the Plan.
Class 14: Marlin Equipment Finance is impaired. Secured claim for
Ryan Jr. 18, Sod Cutter. The claim amount is $3,433.82. This
Claim is bifurcated into an Allowed Secured Claim in the amount of
$2,000.00 and an Allowed Unsecured Claim in the amount of
$1,433.82. According to Debtor's records through end of November
2018, the sum of $181.12 has been paid as adequate protection
payment to Claimant. The Allowed Secured Claim of $1,818.88 will
accrue interest at 6.00%. The Allowed Secured Claim of $1,818.88
will be paid in 60 equal monthly payments of $35.16 starting on
the
Effective Date of the Plan.
Class 15: Colonial Savings F.A. is impaired. The claim amount is
$433,847.98. This Claim is bifurcated into an Allowed Secured
Claim
in the amount of $372,625.00 and an Allowed Unsecured Claim in the
amount of $61,222.98. According to Debtor's records through end of
November 2018, the sum of $30,000.00 has been paid as adequate
protection payment to Claimant. The Allowed Secured Claim of
$342,625.00 will accrue interest at 6.00% . The Allowed Secured
Claim of $342,625.00 will be paid in 84 equal monthly payments of
$5,005.26 starting on the Effective Date of the Plan.
Class 16: General Unsecured Class Claim is impaired. The total
general unsecured Claims under the Plan is estimated to be
approximately $1,116,000.00. However, this amount may be reduced
based on certain Claims not being Allowed Claims and/or not being
entitled to receive distribution under the Plan. The parties with
allowed general unsecured Claims will start receiving payments at
the end of the first quarter after the Effective Date of the Plan.
The Debtor believes based on the dollar figures included in the
Plan each allowed general unsecured Claim will be paid
approximately 10% of its Claim over a period of 5 years in equal
quarterly payments. Therefore, the Debtor expects to distribute
amongst Class 16 creditors, with allowed Claims, the approximate
sum of $111,600.00. Any holder of a general unsecured Claim,
whose
Claim on Debtor's Schedules were reflected as disputed, contingent
or unliquidated and who did not file a claim before the Bar Date
will not receive any distribution under the Plan.
Payments and distributions under the Plan will be funded by future
income. The sources of this income consist of income derived from
running the business.
A full-text copy of the Disclosure Statement dated Dec. 5, 2018,
is
available at:
http://bankrupt.com/misc/txnb18-1841853elm-55.pdf
About JWCCC, LLC
a/k/a Marwill Grain Company
JWCCC, LLC, a/k/a Marwill Grain Company --
http://www.marwillgrain.com/-- operates an organic garden center
and a pet supply store in North Texas. The Company has been
serving the needs of organic gardeners, urban farmers, modern
homesteaders, and pet lovers since 1946. Through its Landscape
Services Division, Marwill Grain offers design and installation
projects, drainage and irrigation services, hardscaping, and
organic maintenance services. Currently the division serves
Grapevine and its surrounding cities.
Marwill Grain Company filed a Chapter 11 petition (Bankr. N.D.
Tex.
Case No. 18-41853) on May 8, 2018, estimating $100,000 to $500,000
in assets and $1 million to $10 million in liabilities. Behrooz
P.
Vida, Esq., at The Vida Law Firm, PLLC, is the Debtor's counsel.
K & B DIRECTIONAL: Seeks Authority to Use Cash Collateral
---------------------------------------------------------
K & B Directional, Inc., requests the U.S. Bankruptcy Court for the
Eastern District of Texas for authority to use of cash collateral
of AeroFund Financial and Texas Heritage Bank ("THB") to maintain
operations of the business.
The continued operations of the Debtor will necessitate the use of
the cash collateral. Accordingly, the Debtor seeks to use the cash
collateral to make the payroll and continue operations of the
company while effectuating a plan of reorganization.
AeroFund and THB assert liens on the accounts receivable of the
Debtor. The Collateral may constitute the cash collateral of
AeroFund and THB.
The Debtor is willing to provide AeroFund and THB with replacement
liens pursuant to 11U.S.C. Section 552 in accordance with their
existing priority.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/txeb18-42643-3.pdf
About K & B Directional
K & B Directional, Inc.'s business consists of the ownership and
operation of oil and g
as drilling rigs.
K & B Directional sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Tex. Case No. 18-42643) on Nov. 27,
2018. At the time of the filing, the Debtor estimated assets of
less than $50,000 and liabilities of $1 million to $10 million.
The Hon. Brenda T. Rhoades is the case judge. Eric A. Liepins,
P.C., is the Debtor's counsel.
KENDALL FROZEN: Taps Channel Marketing as Financial Advisor
-----------------------------------------------------------
Kendall Frozen Fruits, Inc., seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Channel Marketing Resources, Inc. as its operations and financial
advisor.
The firm will assist the Debtor's management in formulating
financial, management and operating plans; participate in
negotiations; give advice regarding the management of the Debtor's
business and business plans; assist in the preparation of a plan of
reorganization; prepare reports to be filed with the U.S. Trustee's
office; and provide other financial advisory services related to
its Chapter 11 case.
Norman Broadhurst, president and chief executive officer of CMR who
will be providing the services, will charge an hourly fee of $150.
CMR received a $24,000 retainer, of which $14,000 was used to pay
the fees and costs incurred by the firm prior to the Debtor's
bankruptcy filing.
Mr. Broadhurst disclosed in a court filing that his firm does not
hold any interest adverse to the interest of the Debtor's
bankruptcy estate, creditors and equity security holders.
CMR can be reached through:
Norman N. Broadhurst
Channel Marketing Resources, Inc.
34145 Pacific Coast Highway, Suite 327
Dana Point, CA 92629
Cell: (949) 500-0961
Email: Norm@channelmarketingresources.net
About Kendall Frozen Fruits Inc.
Newport Beach, California-based Kendall Frozen Fruits, Inc. --
https://www.kendallfruit.com/ -- is an industrial food supplier
specializing in the sale and marketing of fruit and vegetable
products since 1939. It offers frozen fruits, dried fruits, juice
concentrates, purees, freeze dried fruit, fruit powders, vegetable
products, chocolate covered dried fruit, and yogurt covered dried
fruit.
Kendall Frozen Fruits sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 18-14052) on Nov. 5,
2018. At the time of the filing, the Debtor estimated assets of $1
million to $10 million and liabilities of the same range. Judge
Scott C. Clarkson oversees the case. SULMEYERKUPETZ, A
PROFESSIONAL CORPORATION, is the Debtor's counsel.
KING'S PEAK ENERGY: Seeks OK on 14th Agreed Cash Collateral Use
---------------------------------------------------------------
King's Peak Energy, LLC, filed with the U.S. Bankruptcy Court for
the District of Colorado its Fourteenth Agreed Motion to Continue
Final Hearing on Use of Cash Collateral.
KPE and Macquarie are in agreement concerning KPE's use of cash
collateral through December 31, 2018 pursuant to the budget. KPE's
proposed cash collateral budget provides total expense in the
aggregate sum of $69,500 for the month of December 2018.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/cob17-16046-517.pdf
About King's Peak Energy
King's Peak Energy, LLC, is a corporation entity based in Lakewood,
Colorado and named as a lessee in 27 oil and gas leases. The
Debtor filed a Chapter 11 petition (Bankr. D. Colo Case No.
17-16046) on June 29, 2017. In the petition signed by Fred Soliz,
manager/member, the Debtor estimated $10 million to $50 million in
assets and liabilities. The Hon. Elizabeth E. Brown presides over
the case.
Andrew D. Johnson, Esq. and Christian C. Onsager, Esq., of Onsager
Fletcher Johnson LLC, serve as the Debtor's counsel. Meagher
Energy Advisors, Inc., has been tapped as broker.
KLOECKNER PENTAPLAST: Bank Debt Trades at 11% Off
-------------------------------------------------
Participations in a syndicated loan under which Kloeckner
Pentaplast SA is a borrower traded in the secondary market at 89.40
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents an increase of 1.30 percentage points from the
previous week. Kloeckner Pentaplast pays 425 basis points above
LIBOR to borrow under the $835 million facility. The bank loan
matures on June 17, 2022. 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, December 7.
Kloeckner Pentaplast SA, headquartered in Montabaur, Germany and
with legal domicile in Luxembourg, is a leader in the manufacturing
of rigid plastic films for the pharmaceuticals, food, medical,
electronics, and other packaging industries.
L.E. DIETRICH: Seeks Authorization on Cash Collateral Use
---------------------------------------------------------
L.E. Dietrich, Inc., requests the U.S. Bankruptcy Court for the
Northern District of Indiana to authorize its use of cash
collateral, for payment of those expenses identified as necessary
to provide for the uninterrupted operation of its business.
L.E. Dietrich, Inc., is indebted to Lake City Bank, in the
approximate amount of $380,000. Lake City Bank asserts a blanket
lien on the assets of the Debtor including deposit accounts,
accounts receivable, inventory and proceeds thereof in addition to
a mortgage on the Debtor's real estate.
The Debtor believes that the Internal Revenue Service and
Corporation Service Company, as Representative, may also assert a
lien on the Debtor's assets.
As adequate protection for the use of cash collateral, the Debtor
will offer a replacement lien on assets to each secured creditor in
the same priority and to same extent of the value of each such
creditor's lien at the commencement of the case. Further, Debtor
will provide financial reports upon request to each secured
creditor to provide ongoing information as to the status of
operations, sales and the creation of post-petition cash collateral
assets.
The Debtor believes that through continuous operation, it can
maintain and increase the value of accounts receivable, preserving
and maintaining the value of the business operation and thereby
adequately protecting Debtor's use of cash collateral herein.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/innb18-12265-4.pdf
About L.E. Dietrich
L.E. Dietrich, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ind. Case No. 18-12265) on Nov. 27,
2018. In the petition signed by its president, Bridget A. Wengert,
the Debtor estimated assets of less than $50,000 and liabilities of
less than $1 million. The case has been assigned to Judge Robert
E. Grant. The Debtor tapped Haller & Colvin, PC, as its legal
counsel.
LANDS' END: Moody's Affirms B3 CFR & Alters Outlook to Stable
-------------------------------------------------------------
Moody's Investors Service affirmed Lands' End, Inc.'s Corporate
Family Rating and Probability of Default Rating at B3 and B3-PD,
respectively, affirmed the B3 rating on the company's $515 million
principal senior secured term loan due 2021, and affirmed the
company's Speculative Grade Liquidity rating at SGL-1. In addition,
Moody's changed the company's rating outlook to stable from
negative.
"The stabilization of Lands' End's rating outlook reflects the
company's significant improvement in credit metrics and its
expectation that the positive momentum will continue despite
exposure to an evolving retail environment, albeit at a more
measured pace going forward owing to stronger comps," said Brian
Silver, Moody's lead analyst for Lands' End. "The company has grown
its topline and profitability over the last several quarters,
largely driven by continued success in its direct channel, which is
helping offset headwinds in its brick & mortar business mostly
resulting from the closure of its namesake stores embedded in Sears
locations."
The following ratings were affirmed at Lands' End, Inc.:
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
$515 million principal (approximately $492 million outstanding)
senior secured term loan B due April 2021 at B3 (LGD4)
Speculative Grade Liquidity Rating at SGL-1
Outlook Action:
The outlook has been changed to stable from negative
RATINGS RATIONALE
Lands' End Inc.'s B3 Corporate Family Rating ("CFR") largely
reflects its elevated leverage and moderate interest coverage,
primarily resulting from several years of topline declines and
associated profitability challenges following the company's 2014
spin-off from Sears. It also considers the highly promotional and
evolving specialty apparel market in which the company competes.
Lands' End continues to face topline headwinds from the ongoing
closure of its stores that are located within Sears stores, and the
company continues to use Sears for some of its sourcing needs, but
the closure of Sears' stores is not expected to have a meaningful
impact on the company's profitability.
However, Lands' End benefits from its very good liquidity profile
featuring its substantial balance sheet cash, positive free cash
flow generation, and healthy revolver availability. The company
also has a high concentration in e-commerce, with most of its
revenue being generated by its direct segment (e-commerce and
catalog) which positions it well to capitalize on continued growth
in online apparel spending. The company also has a well-recognized
brand name and has experienced positive momentum in its operating
performance over the last year and a half, which bodes well for
future performance.
The stable outlook reflects Moody's expectation that the company's
ratings and/or outlook could improve over the next year or two if
Lands' End is able to maintain its positive momentum and continue
to strengthen its credit metrics.
The ratings could be upgraded if the company continues to grow its
topline and improve its EBIT margins while sustaining
debt-to-EBITDA below 6.5 times and EBIT-to-interest above 1.4
times. In addition, the company must maintain at least a good
liquidity profile prior to upward rating consideration.
Alternatively, the ratings could be downgraded if there is a
deterioration in the company's liquidity profile, including a
meaningful reduction in cash or availability under the revolver, if
debt-to-EBITDA approaches 8 times, or EBIT-to-interest weakens and
is sustained below 1 time.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
Headquartered in Dodgeville, Wisconsin, Lands' End Inc. is a
leading multi-channel retailer of casual clothing, accessories,
footwear and home products. The company offers its products through
catalogs, online, international websites, third party online
marketplaces, as well as through 125 Lands' End Shops at Sears and
18 Company operated stores. Revenue for the twelve month period
ended November 2, 2018 was approximately $1.46 billion.
LANDS' END: S&P Alters Outlook to Stable & Affirms 'B-' ICR
-----------------------------------------------------------
Apparel retailer Lands' End Inc. has made progress on merchandising
initiatives that improved its direct segment (online) and
profitability, a trend that S&P expects to continue.
S&P Global Ratings is revising its outlook to stable from negative
and affirming all ratings, including the 'B-' issuer credit
rating.
The outlook revision reflects improved credit metrics, including
fixed-charge coverage to the 2x area for 2018 from the mid-1x area
in 2017. The improvement stems from enhanced merchandising as the
company leverages its data analytics to create better product
assortments, and bolsters its digital platform through investments
in search engine optimization and improved website functionality.
S&P said, "We also expect the company to benefit from a healthier
store footprint following the closure of underperforming Sears
locations, and the expansion of more efficient stand-alone stores.
As a result of these initiatives, we forecast modest continued
margin gains and sales growth in direct-to-consumer sales. Still,
we take note of Lands' End's participation in the highly
competitive and challenging specialty apparel segment, its history
of volatile operating performance, and its relatively small EBITDA
base. We believe these dynamics, combined with a sizable debt load,
remain significant credit risks."
S&P said, "The stable outlook reflects our expectation that the
company will continue to increase revenue and EBITDA through
positive same-store sales, unit expansion, and cost management. We
also expect the company will continue to improve the business
through operating initiatives and a better customer experience,
translating to profitability gains.
"We could lower the ratings if the company underperforms our
expectations resulting in deteriorating profitability and negative
free operating cash flow (FOCF). This could occur if operating
initiatives do not yield traffic gains and margin improvement,
resulting in reduced confidence in its ability to refinance at par
its term loan due in April 2021.
"We could raise the rating if we expect fixed-charge coverage to be
sustained over 2.2x and believe the company is less subject to
volatile swings, in part by developing a longer track record of
operational execution. We would expect further steady EBITDA margin
improvement and sustained positive FOCF to support a higher rating.
This could occur if, for instance, we expect sales to increase by
the high-single–digit percents in fiscal 2019, along with gross
margin expansion of about 100 basis points (bps) above our
base-case expectations, and favorable trends to continue."
LBU FRANCHISES: Post-Petition Cash Collateral Use Okayed
--------------------------------------------------------
The Hon. Jeffrey P. Norman of the U.S. Bankruptcy Court for the
Southern District of Texas authorized LBU Franchises Corporation's
post-petition use of cash collateral to meet the expenses, in the
aggregate sum of $94,866, set forth on the budget through
confirmation of Debtor's plan of reorganization.
The Debtor is authorized to pay each creditor following amount,
with each monthly payment applied to creditor's existing claim:
Ace $959.25
Mantis $12.68
Advance $101.58
CFG $61.06
Midnight $721.59
Yellowstone $737.66
Yes $2,844.19
IRS $2,061.99
In addition, each creditor individually is granted a continuing
perfected security interested in the prepetition personal property
of Debtor, but only to the priority, validity and extent as it
existed on the date the Debtor's bankruptcy case was filed.
A full-text copy of the Order is available at
http://bankrupt.com/misc/txsb18-36106-39.pdf
About LBU Franchises Corporation
LBU Franchises Corporation filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Tex. Case No. 18-36106) on Nov. 2, 2018, estimating
less than $1 million in assets and liabilities. The Debtor is
represented by Alan Gerger, Esq., at The Gerger Law Firm PLLC. No
official committee of unsecured creditors has been appointed in the
Chapter 11 case.
MARINER CHIROPRACTIC: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Mariner Chiropractic as of Dec. 13,
according to a court docket.
About Mariner Chiropractic
Mariner Chiropractic sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wash. Case No. 18-14392) on November
15, 2018. At the time of the filing, the Debtor had estimated
assets of less than $500,000 and liabilities of less than $500,000.
The case has been assigned to Judge Christopher M. Alston.
MBIA INSURANCE: Moody's Affirms 'Caa1' IFS Rating
-------------------------------------------------
Moody's Investors Service has affirmed the Caa1 insurance financial
strength rating of MBIA Insurance Corporation. In the same rating
action, Moody's also affirmed the ratings of MBIA Corp.'s surplus
notes at Ca(hyb) and its preferred stock at C(hyb). The outlook for
the ratings remains developing.
This rating action has no implications for the senior debt rating
of MBIA Inc. (MBIA, Ba3 stable) or the IFS ratings of National
Public Finance Guarantee Corporation (National, Baa2 stable) and
MBIA Mexico, S.A. de C.V. (MBIA Mexico, Caa1/B3.mx developing).
RATINGS RATIONALE
MBIA Corp.'s Caa1 IFS rating and developing outlook reflects the
firm's weak capital adequacy position and the volatility associated
with the outcomes of several ongoing loss recovery efforts, which
could put either upward or downward pressure on its IFS rating.
MBIA Corp.'s liquidity position remains very weak, with liquid
assets of approximately $157 million at 3Q2018.
MBIA Corp.'s longer-term viability rests on the ability of the
company to recover the substantial majority of the firm's $1.4
billion of booked salvage recoverables, primarily relating to
excess spread recoveries on second-lien RMBS securities, a mortgage
loan put-back settlement related to alleged breaches of
representations and warranties by Credit Suisse on a legacy insured
RMBS transaction and recoveries from sales of collateral backing
the defaulted Zohar I and Zohar II collateralized loan obligation
transactions. Moody's expects significant developments related to
these recovery efforts to occur within the next 12 to 18 months.
The inability of MBIA Corp. to realize substantial recoveries from
these efforts would likely result in regulatory intervention, which
could result in a claims payment freeze, partial claims payments,
or rehabilitation proceedings.
Moody's added that the ratings of MBIA Corp.'s preferred stock (C
(hyb)) and surplus notes (Ca (hyb)) reflect their high expected
loss content given the company's weak capital profile and the
deeply subordinated nature of these securities.
According to Moody's, credit deterioration at MBIA Corp. has only a
limited impact on the broader MBIA group given the substantial
delinking following the removal of the cross-default provision with
MBIA Inc.'s debt in 2012, and MBIA Corp.'s repayment of a loan from
affiliate National.
RATING DRIVERS
The following factors could result in an upgrade of MBIA Corp.'s
rating: 1) improved capital adequacy and liquidity profile; 2) a
reduction in exposure to large single risks; and 3) favorable
settlement of outstanding RMBS put-back claims and substantial
recoveries from Zohar collateral sales.
Conversely, the following factors could result in a downgrade: 1)
unfavorable settlement of outstanding RMBS put-back claims; 2)
failure to secure substantial recoveries on Zohar collateral; 3)
portfolio losses meaningfully in excess of current expectations; 4)
a meaningful reduction in expected excess-spread recoveries on
second-lien RMBS; and 5) further deterioration in the company's
liquidity profile.
RATING LIST
The following ratings have been affirmed:
MBIA Insurance Corporation -- insurance financial strength at Caa1,
surplus notes at Ca(hyb), preferred stock at C(hyb), and preferred
stock non-cumulative at C(hyb).
Outlook actions:
Issuer: MBIA Insurance Corporation
Outlook, Remains Developing
MBIA Insurance Corporation is a financial guaranty insurance
company domiciled in New York and is a wholly owned subsidiary of
MBIA Inc. As of September 30, 2018, MBIA Insurance Corporation had
gross par outstanding of approximately $12.6 billion and reported
total claims paying resources of approximately of $1.4 billion.
The principal methodology used in these ratings was Financial
Guarantors published in May 2018.
MCDERMOTT INTERNATIONAL: Bank Debt Trades at 5% Off
---------------------------------------------------
Participations in a syndicated loan under which McDermott
International Incorporated is a borrower traded in the secondary
market at 95.29 cents-on-the-dollar during the week ended Friday,
December 7, 2018, according to data compiled by LSTA/Thomson
Reuters MTM Pricing. This represents a decrease of 1.08 percentage
points from the previous week. McDermott International pays 500
basis points above LIBOR to borrow under the $2.26 billion
facility. The bank loan matures on March 28, 2025. Moody's rates
the loan 'Ba3' 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, December 7.
MED CARE EMERGENCY: Seeks Authorization to Use Cash Collateral
--------------------------------------------------------------
Med Care Emergency Medical Services, Inc., requests the U.S.
Bankruptcy Court for the Southern District of Texas to authorize
its use of the cash collateral in the ordinary course of business.
The Debtor has no source of income other than from the continued
operations and collection of accounts receivable. If the Debtor is
not permitted to use such proceeds, it will have to close down
operations without paying employees, and without replacing any
trucks, vans, medical equipment or paying any expenses.
In the event it is authorized to use such cash collateral, the
Debtor submits that lien holders are adequately protected by the
value of the trucks and vans. The Debtor will provide continuing
postpetition liens to the lienholders to the extent the lienholders
have valid prepetition security interests in the cash collateral.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/txsb18-70408-3.pdf
About Med Care Emergency Medical Services
Med Care Emergency Medical Services, Inc., is a privately-held
company that provides emergency ambulance services. Med Care
Emergency Medical Services sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 18-70408) on Nov.
19, 2018. In the petition signed by Candelario Ontiveros,
president, the Debtor estimated assets of less than $1 million and
liabilities of less than $10 million. Judge Eduardo V. Rodriguez
oversees the case. The Debtor tapped Villeda Law Group as its
legal counsel.
MISYS PLC: Bank Debt Trades at 6% Off
-------------------------------------
Participations in a syndicated loan under which Misys Plc is a
borrower traded in the secondary market at 94.50
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.25 percentage points from the
previous week. Misys Plc pays 725 basis points above LIBOR to
borrow under the $1.245 billion facility. The bank loan matures on
April 28, 2025. 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,
December 7.
Misys is one of the world's largest independent applications
software products groups and the UK's biggest. Its main activities
include selling software solutions to banks, transaction processing
and claims administration for physicians in the U.S., systems for
insurance brokers in the U.K., and administrative and compliance
services for Independent Financial Advisors, or IFs. It's
corporate address is London, United Kingdom.
MOBILE MINI: Moody's Hikes Corp. Family Rating to Ba3
-----------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Ratings of
Mobile Mini, Inc. (Mobile Mini) to Ba3 from B1, Oxford Finance LLC
to Ba2 from Ba3, New Residential Investment Corp. to Ba3 from B1,
PennyMac Mortgage Investment Trust's to Ba3 from B1, and Private
National Mortgage Acceptance Co, LLC's to Ba3 from B1. At the same
time, Moody's affirmed Mobile Mini's B2 senior unsecured rating,
Oxford's Ba3 senior unsecured rating, New Residential's B2
long-term issuer rating, PMT's B2 long-term issuer rating,
PennyMac's B2 long-term issuer rating and Freedom Mortgage
Corporation's B2 senior unsecured bond rating. The outlook for
Mobile Mini, Oxford, New Residential, PMT and PennyMac is stable
and the outlook for Freedom is negative.
Moody's also upgraded Freedom's senior secured bank credit facility
to Ba2 from B1 and Ocwen Loan Servicing, LLC's senior secured bank
credit facility to B2 from B3 while downgrading Williams Scotsman
International Inc.'s senior secured debt to B3 from B2. The CFRs of
Freedom and Williams Scotsman were affirmed at B1 and B2,
respectively. Moody's affirmed Ocwen Financial Corporation's Caa1
CFR and Caa2 senior unsecured debt, as well as Ocwen Loan
Servicing, LLC's Caa2 senior secured debt. The outlook for Ocwen
Financial and Ocwen Loan Servicing is stable. Ocwen Loan Servicing,
LLC is a wholly-owned subsidiary of Ocwen Financial Corporation.
The outlook for Williams Scotsman is negative.
These rating actions follow the publication of Moody's new finance
company rating methodology, which now is the primary methodology
that Moody's uses to rate finance companies globally, except in
jurisdictions where certain regulatory requirements must be
fulfilled prior to the new methodology's implementation.
Moody's has also withdrawn the outlooks on Mobile Mini, Oxford, New
Residential, PMT, PennyMac, Freedom, Ocwen Financial Corporation,
Ocwen Loan Servicing, LLC, and Williams Scotsman existing
instrument ratings for its own business reasons. This has no impact
on the rating outlooks for Mobile Mini, Oxford, New Residential,
PMT, PennyMac, Freedom, Ocwen Financial Corporation, Ocwen Loan
Servicing, LLC, and Williams Scotsman. Over the course of the next
year, Moody's will be withdrawing all instrument level outlooks for
entities rated under the Finance Companies Rating Methodology.
Downgrades:
Issuer: Williams Scotsman International Inc.
Senior Secured Regular Bond/Debenture, Downgraded to B3 from B2
Upgrades:
Issuer: Freedom Mortgage Corporation
Senior Secured Term Loan, Upgraded to Ba2 from B1
Issuer: Mobile Mini, Inc.
Corporate Family Rating, Upgraded to Ba3 from B1
Issuer: New Residential Investment Corp.
Corporate Family Rating, Upgraded to Ba3 from B1
Issuer: Ocwen Loan Servicing, LLC
Senior Secured Term Loan, Upgraded to B2 from B3
Issuer: Oxford Finance LLC
Corporate Family Rating, Upgraded to Ba2 from Ba3
Issuer: PennyMac Mortgage Investment Trust
Corporate Family Rating, Upgraded to Ba3 from B1
Issuer: Private National Mortgage Acceptance Co, LLC
Corporate Family Rating, Upgraded to Ba3 from B1
Outlook Actions:
Issuer: Freedom Mortgage Corporation
Outlook, Remains Negative
Issuer: Mobile Mini, Inc.
Outlook, Remains Stable
Issuer: Ocwen Financial Corporation
Outlook, Remains Stable
Issuer: Ocwen Loan Servicing, LLC
Outlook, Remains Stable
Issuer: Oxford Finance LLC
Outlook, Remains Stable
Issuer: PennyMac Mortgage Investment Trust
Outlook, Remains Stable
Issuer: Private National Mortgage Acceptance Co, LLC
Outlook, Remains Stable
Issuer: Williams Scotsman International Inc.
Outlook, Remains Negative
Issuer: New Residential Investment Corp.
Outlook, Remains Stable
Affirmations:
Issuer: Freedom Mortgage Corporation
Corporate Family Rating, Affirmed B1
Senior Unsecured Regular Bond/Debenture, Affirmed B2
Issuer: Mobile Mini, Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed B2
Issuer: New Residential Investment Corp.
Issuer Rating, Affirmed B2
Issuer: Ocwen Financial Corporation
Corporate Family Rating, Affirmed Caa1
Senior Unsecured Regular Bond/Debenture, Affirmed Caa2
Issuer: Ocwen Loan Servicing, LLC
Senior Secured Regular Bond/Debenture, Affirmed Caa2
Issuer: Oxford Finance LLC
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3
Issuer: PennyMac Mortgage Investment Trust
Issuer Rating, Affirmed B2
Issuer: Private National Mortgage Acceptance Co, LLC
Issuer Rating, Affirmed B2
Issuer: Williams Scotsman International Inc.
Corporate Family Rating, Affirmed B2
RATINGS RATIONALE
Moody's rating actions on Mobile Mini, Oxford, New Residential, PMT
and PennyMac follow the publication of Moody's new finance company
rating methodology and were driven by revisions of their standalone
profile as reflected by changes to the companies' CFRs, resulting
from the significant changes and enhancements from Moody's previous
rating methodology for rating these firms. These changes and
enhancements for rating finance companies include the introduction
of new financial ratios such as a net charge-offs ratio and a debt
maturity coverage ratio, the dynamic weighting of operating
environment conditions that can adversely influence firms'
creditworthiness, and the incorporation of specific qualitative
factors as direct notching adjustments to ratings.
The rating actions for Freedom, Ocwen and Williams Scotsman were
driven by application of the loss given default framework which is
introduced in the new Finance Company methodology for the first
time.
FIRM-SPECIFIC CONSIDERATIONS
Moody's specific rating considerations for each issuer affected by
these rating actions is as follows:
Mobile Mini
Moody's said Mobile Mini's CFR was upgraded to Ba3 as a result of
the increased weighting placed on the Financial Profile in the new
methodology. Specifically, Mobile Mini's profitability and asset
quality appear stronger and more resilient in the new methodology.
The affirmation of Mobile Mini's B2 senior unsecured rating
reflects the application of Moody's Loss Given Default for
Speculative-Grade Companies and the priority of the senior
unsecured debt in the company's capital stack.
The ratings could be upgraded if the company reduces debt/EBITDA
leverage to 4x and builds up its tangible equity. The ratings would
be downgraded if the company's financial and operating performance
substantially deteriorates and if its leverage, measured as
Debt/EBITDA increases, either due to additional borrowings or as a
result of weak financial performance.
Oxford Finance
Moody's said Oxford Finance's CFR was upgraded to Ba2 as a result
of the increased weighting placed on the Financial Profile in the
new methodology. Specifically, Oxford Finance's profitability
appears stronger and more resilient in the new methodology. The
affirmation of Oxford Finance's Ba3 senior unsecured rating
reflects the application of Moody's Loss Given Default for
Speculative-Grade Companies and the priority of the senior
unsecured debt in the company's capital stack.
The ratings could be upgraded if the company diversifies its
funding sources whereas secured debt to gross tangible assets falls
meaningfully below 35%, while maintaining profitability, capital
level and asset quality strength.
The ratings could be downgraded if the company's loan performance
suffers or its leverage as measured by the company's debt
(including non-recourse secured financing and securitization
facilities) to equity ratio increases above 3x.
New Residential
Moody's said New Residential's CFR was upgraded to Ba3 as a result
of the increased weighting placed on the Financial Profile in the
new methodology. Specifically, New Residential's profitability and
asset quality appear stronger and more resilient in the new
methodology. The affirmation of New Residential's B2 long-term
issuer rating reflects the application of Moody's Loss Given
Default for Speculative-Grade Companies.
The ratings could be upgraded if the company reduces risks related
to its reliance on Nationstar, DiTech Holding Corporation and Ocwen
or reduces its reliance on short-term secured funding while
maintaining solid profitability and strong capital; for example,
net income to average managed assets and tangible common equity
(TCE) to tangible managed assets (TMA) remain above 2.5% and 17.5%,
respectively.
The ratings could be downgraded if New Residential's net income to
average managed assets or TCE to TMA dropped below 1.5% and 14%,
respectively, for a sustained period. Negative rating pressure
could also result from a weakening liquidity position or increased
risks related to its reliance on its subservicers.
PMT
Moody's said PMT's CFR was upgraded to Ba3 as a result of the
increased weighting placed on the Financial Profile in the new
methodology. Specifically, PMT's profitability appears stronger and
more resilient in the new methodology. The affirmation of PMT's B2
issuer rating reflects the application of Moody's Loss Given
Default for Speculative-Grade Companies and the priority of the
senior unsecured claims in the company's capital stack.
The ratings could be upgraded if the company further diversifies
its production channels and reduces its reliance on secured debt
while maintaining solid capital levels such as if tangible common
equity to tangible assets remains consistently above 20.0% and
profitability improves with net income to average assets
consistently above 2.5%. The ratings could be downgraded if
financial performance deteriorates - for example, if net income to
managed assets falls consistently below and is expected to remain
below 1.5% or if leverage increases such that the company's
tangible common equity to assets falls below and is expected to
remain below 20%.
PennyMac
Moody's said PennyMac's CFR was upgraded to Ba3 as a result of the
increased weighting placed on the Financial Profile in the new
methodology. Specifically, PennyMac's profitability and liquidity
appear stronger and more resilient in the new methodology. The
affirmation of PennyMac's B2 issuer rating reflects the application
of Moody's Loss Given Default for Speculative-Grade Companies and
the priority of the senior unsecured claims in the company's
capital stack.
The ratings could be upgraded if the company further strengthens
its franchise position. In addition, positive ratings pressure
could occur if the company further diversifies its production
channels and reduces its reliance on secured debt while maintaining
solid capital levels such as if tangible common equity to tangible
assets remains consistently above 20.0% and profitability improves
with net income to average assets consistently above 4.0%. The
ratings could be downgraded if financial performance deteriorates -
for example, if net income to managed assets falls consistently
below and is expected to remain below 2.5% or if leverage increases
such that the company's tangible common equity to assets falls
below and is expected to remain below 20%.
Freedom
The affirmation of Freedom's B1 CFR reflects the company's
historically strong profitability with net income to assets above
4% per annum over the last several years and solid capital level
with tangible common equity (TCE) to tangible managed assets (TMA)
of 19.2% as of Q3 2018. The negative outlook reflects the potential
negative impact on the company's franchise of the June 1, 2018
announcement that the Government National Mortgage Association
("Ginnie Mae") restricted Freedom from contributing VA
single-family loans to Ginnie Mae I and Ginnie Mae II multi-issuer
securities as of July 1, 2018. Freedom is allowed to sell VA loans
into Ginnie Mae II custom pools. Freedom remains an approved Ginnie
Mae issuer to pool FHA and RHS single-family insured mortgages in
all eligible Ginnie Mae pool types. The upgrade of Freedom's senior
secured bank credit facility to Ba2 and the affirmation of the
company's B2 senior unsecured bond rating reflects the application
of Moody's Loss Given Default for Speculative-Grade Companies and
their priorities of claims and asset coverage in the company's
capital stack.
Given the negative credit impact of the Ginnie Mae announcement, it
is unlikely that positive ratings pressure will occur over the next
12 to 18 months. Positive ratings pressure could occur if the
company is able to maintain its strong profitability and solid
capital levels for example sustained profitability with net income
excluding MSR fair value marks to assets above 3.0% and tangible
common equity to tangible assets close to 20%. Additionally, a
reduction in the company's reliance on secured corporate debt to
less than 35% of total corporate debt would be viewed favorably.
The ratings could be downgraded if the company's tangible common
equity to tangible managed assets falls below and is expected to
remain below 15%, profitability deteriorates with net income to
assets falling below and expected to remain below 2.0%, the
company's liquidity position weakens, or the company continues to
be restricted with respect to Ginnie Mae issuance beyond January
2019. Further material negative regulatory actions or disclosure of
a material operating weakness would also be viewed unfavorably.
Ocwen
Moody's said Ocwen Loan Servicing, LLC's senior secured bank credit
facility was upgraded to B2 from B3 as a result of the application
of Moody's Loss Given Default for Speculative-Grade Companies and
the priority of the senior secured bank credit facility in the
company's capital stack. The affirmation of the company's Caa2
senior secured rating, as well as Ocwen Financial Corporation's
Caa2 senior unsecured rating also were driven by the application of
the loss given default framework. The affirmation of Ocwen
Financial Corporation's Caa1 CFR reflects the regulatory scrutiny
the company is experiencing and the company's very weak
profitability, largely due to the impact of high legal, regulatory
and servicing expenses, as well as the limited opportunities
available in its core market, credit impaired residential mortgage
servicing.
The ratings could be upgraded in the event the company achieves
sustainable profitability as measured by positive net income to
total assets. The ratings could be downgraded in the event that
regulatory action or litigation materially restricts the company's
business activities, or harms its franchise and reputation, or the
company is subject to additional regulatory or legal action
resulting in material fines or judgments.
Williams Scotsman
Moody's said Williams Scotsman International Inc.'s senior secured
debt rating was downgraded to B3 from B2 as a result of the
application of Moody's Loss Given Default for Speculative-Grade
Companies and the priority of the senior secured debt in the
company's capital stack. The affirmation of the company's B2 CFR
reflects William Scotsman's increasing leverage and integration
requirements as the company continues to finance acquisitions in
part with debt, as well as the uncertainty about the company's
future performance as a recently reconstituted publicly-traded
entity, its profitability challenges due to transaction,
integration and restructuring costs, as well as its reliance on
secured financing to fund its operations, which encumbers assets
and reduces financial flexibility.
The negative outlook reflects Moody's expectation that Williams
Scotsman will continue to increase its leverage through
debt-financed acquisitions. The ratings could be upgraded if it
achieves and sustains solid profitability with pre-tax,
pre-provision income to average managed assets (PPI/AMA) above 1%,
while it continues to maintain its solid capital level. The ratings
could be downgraded if its financial and operating performance
substantially deteriorates, and if its leverage, measured as
Debt/EBITDA increases, either due to additional borrowings or as a
result of weak financial performance.
The principal methodology used in these ratings was Finance
Companies published in December 2018.
NASROLLAH GASHTILI: Cheng Buying Calabasas Property for $1.4M
-------------------------------------------------------------
Nasrollah Gashtili asks the U.S. Bankruptcy Court for the Central
District of California to authorize the sale of the single-family
residential real property located at 23311 Park Soldi, Calabasas,
California to Cheng Family Foundation for $1,384,615, subject to
overbid.
A hearing on the Motion is set for Dec. 20, 2018 at 2:00 p.m.
The Debtor's main assets include interests in two operating
corporations and three parcels of real property. The first
property is the Park Soldi Property. The other two properties
consist of office condominiums, located at 31194 La Baya Drive,
Unit 203 and 207, Westlake Village, California. The units are
leased by the Debtor to the Debtor's two corporations for the sum
of $2,500/month.
The Park Soldi Property is encumbered by two deeds of trust. The
first deed of trust is in favor of Specialized Loan Servicing in
the original principal amount of $860,000. The second deed of
trust is in favor of Abra Management, Inc. in the original
principal amount of $360,000.
In addition to the two deeds of trust, there are two judgment
liens. The first judgment lien is in favor of First National Bank
of Omaha in the principal amount of $13,192 plus interest. The
second judgment lien is in favor of VitaVet Labs, Inc. The
judgment lien arises out of an arbitration award against Debtor and
his corporation Integrated Dynamic Solutions, Inc. The Proof of
Claims filed by VitaVet provides ajudgment amount of $1,083,732.
Pursuant to the Motion, the Debtor asks to pay the two deeds of
trust in full, from escrow and sell the Park Soldi Property free
and clear of these two judgment liens and any other liens that may
exist. Unpaid real estate property taxes in the aggregate amount
of $4,880 from July 1, 2018 through Nov. 1, 2018 are owed on the
Park Soldi Property. Upon approval of the sale pursuant to the
Motion, the Park Soldi Property Taxes will be paid through escrow
from the proceeds of the sale. The real property taxes for the
current fiscal year will be prorated in accordance with the
Stalking Horse Agreement.
Stephanie Vitacco of Keller Williams Realty was principally
responsible for listing, marketing and showing the Park Soldi
Property. The Park Soldi Property has been extensively marketed.
The current offer is for $1,384,615 from the Cheng Family
Foundation. The Park Soldi continues to be listed and actively
marketed to attract over bidders.
The Stalking Horse Purchaser has paid a deposit of $40,000 and an
escrow has been opened with Glen Oaks Escrow as escrow No.
043187-MK. Concurrently with the filing of the Motion, Debtor has
prepared and filed the Notice of Sale of Estate Property in
accordance with Local Bankruptcy Rule 6004-2.
These Consensual Liens exist against the Park Soldi Property:
1. Specialized Loan Servicing, holder of a first deed of trust
with an original principal balance of $860,000. On April 29, 2018,
Specialized Loan Servicing filed a secured Proof of Claim in the
amount of $667,094.
2. Abra Management, Inc., is the holder of a second deed of
trust with an original principal balance of $360,000. On Aug. 17,
2018, Abra Management, Inc. filed a secured Proof of Claim in the
amount of $401,141.
These Non-Consensual Liens exist against the Park Soldi Property:
1. First National Bank of Omaha Judgment Lien with a balance
due of $13,192.
2. VitaVet Labs, Inc. Judgment Lien: As set forth in the
Debtor's declaration, VitaVet obtained a pre-petition judgment
against Debtor.
3. Homeowners Association dues in the amount of $2,456.
The Debtor asks approval of the Bidding Procedures.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Dec. 14, 2018 at 4:00 p.m.
b. Initial Bid: $1,410,000
c. Deposit: $42,300 (3% of Initial Bid) made payable to Glen
Oaks Escrow
d. Auction: All Qualified Bidders must appear, telephonically
or in person at the hearing on the Motion at 2:00 p.m. on Dec. 13,
2018.
e. Bid Increments: $20,000
f. If the Stalking Horse Bidder is not the successful bidder,
the Debtor agrees to reimburse the Stalking Horse Bidder up to
$5,000 for expense incurred in connection with inspections relating
to the Park Soldi Property.
The Debtor asks that the Court orders that the sale of the Park
Soldi Property will be free and clear of the First National Bank of
Omaha judgment lien and the VitaVet judgment lien along with any
and all other liens, claims and interests, whether or not of record
with all liens, claims and interests (if any) in the Park Soldi
Property to attach to the net proceeds.
The Debtor also asks authority to pay from escrow a total
commission of up to 2.5% of the final purchase price to Keller
Williams Realty in accordance with the Keller Williams Employment
Order and 2.5% to RVM Associations, agent for the Stalking Horse
Purchaser.
Pursuant to the Purchase and Sale Agreement, the Debtor has agreed
to reimburse Stalking Horse Purchaser up to $5,000 for inspection
expenses incurred, if the Stalking Horse Purchaser is not the
successful bidder.
Pursuant to the Preliminary Title Report, a Declaration of
Homestead was recorded on Dec. 19, 2017 by Fatemeh Kiani, the
Debtor's wife (now separated). The Debtor proposes to pay the
Homestead in the amount of $100,000.
Finally, the Debtor asks the Court to waive the 14-day stay on the
effectiveness of an order authorizing the sale of estate property
imposed by Federal Rule of Bankruptcy Procedure 6004(h).
A copy of the Contract attached to the Motion is available for free
at:
http://bankrupt.com/misc/Nasrollah_Gashtili_98_Sales.pdf
Nasrollah Gashtili sought Chapter 11 protection (Bankr. C.D. Cal.
Case No. 18-10715) on March 20, 2018. The Debtor tapped Andrew
Goodman, Esq., at Goodman Law Offices, APC as counsel.
Counsel for the Debtor:
Andrew Goodman, Esq.
GOODMAN LAW OFFICES, APC
6345 Balboa Boulevard, Suite I-300
Encino, CA 91316-1523
Telephone: (818) 827-5169
Facsimile: (818) 975-5256
E-mail: agoodman@andyglaw.com
NASSAU JOHN: Files for Chapter 11 to Save Purchase Deal
-------------------------------------------------------
Nassau John Holdings LLC, a New York-based limited liability
company, sought Chapter 11 bankruptcy protection on Sunday amid
contract issues with the owner of a property it had planned to
acquire.
David Goldwasser, who signed the petition, said Nassau John
Holdings is currently under contract to purchase the real property
located at 72-78 Nassau Street, New York, New York. The Property
is currently owned by Galb Realty Associates, LLC. Nassau John
Holdings and Galb Realty entered into a Agreement of Sale and
Purchase dated July 3, 2018, to sell the Property to the Debtor.
Pursuant to an Agreement to Adjourn Closing, the closing date was
adjourned to December 17. In exchange for the December 17 closing
date, Nassau John Holdings released its $3,030,000 deposit to the
Seller. However, as of December 17, the Debtor is unable to close
under the terms of the Contract.
"The Debtor's case is being commenced in order for it to exercise
its rights under the Bankruptcy Code in order to preserve its
position as a contract vendee under the Contract and close on the
sale of the Property," Goldwasser said.
According to PropertyShark.com, the Property is a "three-floor,
20-unit residential condo located in the Financial District of
Manhattan. It has 32,107 square feet and was built in 1930. This
pre-war building was renovated and converted to a condominium in
2003 and is managed by Baldwin Realty. The units vary between
lofts, one- and two-bedroom apartments. Amenities include an
elevator, washer/dryer, walk-in closets, dishwasher, central air
conditioning, and a deck/patio." See https://is.gd/LWMXyL
Goldwasser is the managing member of GC Realty Advisors, LLC, which
serves as manager of Nassau John Holdings. He noted that no
property of the Debtor is in the possession and control of a
receiver.
Nassau John Holdings declared $50 million to $100 million in
estimated assets and $1 million to $10 million in estimated
liabilities. The Debtor indicated in the petition that funds will
be available for distribution to unsecured creditors.
An affiliate of the Debtor, 444 East 13th LLC, filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 17-23143) on July 21, 2017.
A summary of the bankruptcy case is available in today's issue of
the Troubled Company Reporter.
NASSAU JOHN: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Nassau John Holdings LLC
80 Maiden Lane, Suite 1004
New York, NY 10038
Business Description: Nassau John Holdings LLC is a limited
liability company.
Chapter 11 Petition Date: December 16, 2018
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 18-23921
Debtor's Counsel: A. Mitchell Greene, Esq.
ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK
P.C.
875 Third Avenue
New York, NY 10022
Tel: (212) 603-6300
E-mail: amg@robinsonbrog.com
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $1 million to $10 million
A copy of the petition is available at https://bit.ly/2EyHxaB from
PacerMonitor.com at no extra charge.
The petition was signed by David Goldwasser, as the Managing Member
of GC Realty Advisors, LLC, the Manager of Nassau John Holdings
LLC.
An affiliate of the Debtor, 444 East 13th LLC, filed for Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 17-23143) on July 21, 2017.
The Debtor did not file a list of its largest unsecured creditors
together with the petition.
NATIONAL AUTO: Has Interim Approval to Use Cash Collateral
----------------------------------------------------------
The Hon. Laurel Myerson Isicoff of the United States Bankruptcy
Court for the Southern District of Florida has signed an interim
order authorizing National Auto Lenders, Inc. to use cash
collateral to fund its ongoing operations as itemized on the
budget.
The approved budget provides total operating expenditures of
approximately $1,833,398 during the period of November 24, 2018
through February 16, 2019
Wells Fargo Bank, N.A., as agent for itself, and Bank United assert
that, as of the Petition Date: (i) they are owed the principal
amount of approximately $36 million, and (ii) repayment of the
Indebtedness is secured by a security interest in substantially all
of the Debtor's assets, including cash collateral.
Wells Fargo and Bank United will have adequate protection in the
form of an equity cushion. Wells Fargo and Bank United will also
have a replacement lien on and in all property of the Debtor
acquired or generated after the Petition Date, but solely to the
same extent and priority and of the same kind and nature, as the
property of the Debtor securing repayment of the Indebtedness under
the Loan Documents, which Replacement Lien will secure solely such
use and diminution.
Wells Fargo and Bank United will have an Administrative Expense
Claim under section 507(b) of the Bankruptcy Code with priority
over all other administrative expense claims, including the DIP
Loan, in the event that diminution occurs in the value of cash
collateral from and after the Petition Date as a result of Debtor's
use thereof in excess of the value of the Replacement Lien.
The Replacement Lien and the Administrative Expense Claim granted
to Wells Fargo and Bank United will be at all times be subject and
junior to: (a) all unpaid fees due to the Office of the U.S.
Trustee, and (b) all unpaid fees required to be paid to the Clerk
of the Bankruptcy Court.
In addition, the Debtor has agreed to provide Wells Fargo and Bank
United Bank with financial reporting and access to its premises,
and books and records by its outside financial advisors and
collateral auditors as described by Debtor's counsel on the record
at the hearing.
The Court will conduct a final hearing on Debtor's Cash Collateral
Motion on December 17, 2018 at 2:00 p.m.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/flsb18-24586-33.pdf
About National Auto Lenders
National Auto Lenders, Inc. -- http://www.nalenders.com/-- is a
non-prime auto finance company that purchases loans from auto
dealers. It has been established for more than 20 years and buys
loans in multiple states. National Auto Lenders is headquartered
in Miami, Florida.
National Auto Lenders, Inc. filed a voluntary petition for relief
under chapter 11 of title 11 of the United States Code (Bankr. S.D.
Fla. Case No. 18-24586) on Nov. 23, 2018. In the petition signed
by Dania Ramos-Infante, vice president, CFO, and COO, the Debtor
estimated $100 million to $500 million in assets and $50 million to
$100 million in liabilities. Judge Laurel M. Isicoff presides over
the case. Berger Singerman LLP, led by Paul Steven Singerman, is
the Debtor's counsel.
The U.S. Trustee for Region 21 on Dec. 4 appointed nine creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 case of National Auto Lenders, Inc.
NATIONAL AUTO: Seeks Authorization to Use Cash Collateral
---------------------------------------------------------
National Auto Lenders, Inc., seeks authority from the United States
Bankruptcy Court for the Southern District of Florida to use cash
collateral to continue to operate its business in the ordinary
course until such time as the Lenders are either paid in full, a
plan is confirmed, the case is dismissed, or further order of the
Court.
The Debtor proposes to use cash collateral for working capital
purposes (operating its sub-prime auto financing business),
including paying wages, funding new loans in the ordinary course of
business, purchasing supplies, paying outside vendors. Such use
will be limited to the payment of such amounts and for such items
set forth in the operating budget. However, the Debtor's compliance
with the Budget will be subject to deviation, of no more than 10%
for any line item, and an aggregate deviation of no more than 10%
in the overall Budget, which the Debtor may exceed with the written
consent of the Agent or Court approval.
The Debtor believes that Wells Fargo Bank, N.A., successor by
merger with Wells Fargo Preferred Capital, Inc. (as agent and
lender), and Bank United (as lender) are the only entities that may
have an interest in Cash Collateral. Pursuant to the Loan
Documents, Wells Fargo asserts a security interest in substantially
all of the Debtor's assets to secure the obligations of NAL to the
Lenders. The Lenders contend that the Debtor owes the Lenders
approximately $36 million, in the aggregate.
The Debtor believes that the value of the collateral exceeds the
amount of the indebtedness asserted to be due the Lenders. The
equity cushion enjoyed by the Lenders, of approximately 60%, will
serve as adequate protection for the use of their cash collateral.
Alternatively, and to the extent necessary, as adequate protection
for the Debtor's use of Cash Collateral, the Debtor will grant
Lenders replacement lien on and in all property of the Debtor
acquired or generated after the Petition Date, but solely to the
same extent and priority, and of the same kind and nature, as the
property of the Debtor securing the prepetition obligations to the
Lenders under the Loan Documents.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/flsb18-24586-8.pdf
About National Auto Lenders
National Auto Lenders, Inc. -- http://www.nalenders.com/-- is a
non-prime auto finance company that purchases loans from auto
dealers. It has been established for more than 20 years and buys
loans in multiple states. National Auto Lenders is headquartered
in Miami, Florida.
National Auto Lenders filed a voluntary petition for relief under
chapter 11 of title 11 of the United States Code (Bankr. S.D. Fla.
Case No. 18-24586) on Nov. 23, 2018. In the petition signed by
Dania Ramos-Infante, vice president, CFO, and COO, the Debtor
estimated $100 million to $500 million in assets and $50 million to
$100 million in liabilities. Judge Laurel M. Isicoff presides over
the case. Berger Singerman LLP, led by Paul Steven Singerman, is
the Debtor's counsel.
The U.S. Trustee for Region 21 on Dec. 4, 2018, appointed nine
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 case.
NATURE'S BOUNTY: Bank Debt Trades at 8% Off
-------------------------------------------
Participations in a syndicated loan under which Nature's Bounty is
a borrower traded in the secondary market at 92.25
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.67 percentage points from the
previous week. Nature's Bounty pays 350 basis points above LIBOR to
borrow under the $1.5 billion facility. The bank loan matures on
September 30, 2024. 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, December 7.
NORTHWEST ACQUISITIONS: S&P Alters Outlook to Neg & Affirms B+ ICR
------------------------------------------------------------------
S&P expects Northwest Acquisitions ULC to generate earnings and
cash flows below its previous expectations in 2018 and 2019,
leading to estimated credit measures that are weak for the rating.
S&P Global Ratings revised its outlook on the company to negative
from stable. S&P also affirmed all its ratings on Northwest
including its 'B+' long-term issuer credit rating on the company.
S&P said, "The outlook revision primarily reflects our expectation
for Northwest Acquisitions ULC to generate earnings and cash flows
below our previous estimates in 2018 and 2019. Lower rough diamond
production and unit costs are primarily responsible, leading to
leverage ratios we consider weak for the rating. We expect 2019
rough diamond output to come in well below 2018 levels, mainly
related to the transition of the Misery pipe at the Ekati mine from
open pit to underground (including the associated time lag) as
output from the Sable pipe, which achieved first production in
October 2018, ramps up well into the next year.
"The negative outlook reflects the increase in Northwest's
estimated leverage metrics, and our view of the company's
heightened dependence on higher rough diamond prices and lower unit
costs to generate stronger credit measures and maintain the rating.
We now expect adjusted FFO-to-debt in the mid-20% area over the
next year.
"We could lower the rating if we expect Northwest's adjusted
FFO-to-debt ratio to remain meaningfully below 30% in 2019, with
limited prospects for improvement in the following year.
Higher-than-expected capital spending that leads to material free
cash flow deficits and increased debt levels could also lead to a
lower rating.
"We could revise the outlook to stable if, over the next 12 months,
Northwest generates and sustains an adjusted FFO-to-debt ratio of
about 30%. In this scenario, we would expect production from Ekati
mine to ramp up ahead of our expectation with cash costs and rough
diamond prices that exceed our base-case estimates."
Northwest is engaged in mining and marketing of rough diamonds. The
company's assets consist of a 100% interest in Dominion Diamond
Mines, the fourth-largest global producer of diamonds--estimated at
close to 9 million carats in 2018. Dominion Diamond owns
substantially all of the Ekati mine and 40% of the Diavik mine
(operated and 60% owned by Rio Tinto plc; A/Stable/A-1) in the
Northwest Territories. The company also have sorting and related
sales operations in Canada, Belgium, and India.
-- Production of about 9 million carats in 2018 and significantly
lower production (in the low-6 million carats area) in 2019 as the
Ekati mine's Misery pipe transitions to underground mining from
open pit, and as production at the Sable pipe ramps up
-- Average realized rough diamond prices in the
high-US$70-per-carat area for 2018 and much higher in 2019 (above
US$100 per carat) as relatively high-grade, high-value rough
diamond output from the Diavik mine contributes a higher proportion
of overall production
-- An average U.S.-dollar/Canadian-dollar exchange rate in the
77-79 U.S.-cent range through 2020
-- Cash cost per carat produced in the high-U$40 area in 2018 and
in the mid-US$60 area in 2019 (the impact on margins offset by
higher expected realized rough diamond prices in 2019)
-- Capital expenditures of about US$160 million in 2018 and close
to US$100 million in 2019 (until the company commits to growth
spending related to replace production and increase life of its
mines)
-- No near-term maturities or dividend payments
Based on these assumptions, S&P estimates the following adjusted
credit measures through 2019:
-- Debt-to-EBITDA in mid-3x area
-- FFO-to-debt in mid-20% area
-- EBITDA interest coverage of 5x-6x
S&P said, "We continue to view Northwest's liquidity as adequate.
We expect that, in the next 12 months, sources of funds will exceed
uses by more than 1.2x, and that this measure will remain above
1.0x in the subsequent 12 months. We also expect that the company
will achieve positive sources less uses in the short term, even if
EBITDA declines by 15%.
"Notwithstanding our view of the company's sources of cash in the
next couple of years, we believe Northwest's liquidity is
constrained by our estimate that the company may breach its
financial covenants if EBITDA is 10%-15% lower than our forecast in
2019. Our liquidity assessment also reflects our view that the
company has a limited history in the credit markets with its first
public debt offering completed a year ago."
Principal liquidity sources include:
-- Cash on hand of US$121 million at Sept. 30, 2018
-- About US$112 million availability under the US$200 million
revolving facility
-- About US$170 million FFO over the next 12 months
Principal liquidity uses includes:
-- Capital spending of about US$160 million in 2018 and close to
US$100 million in 2019
-- Modest working capital outflows over the next 12 months
-- No near-term maturities
Under its credit agreement, Northwest must comply with a net
leverage ratio of 2.25x at Dec. 31, 2018, and 2.00x at Dec. 31,
2019. S&P said, "We estimate that the company will remain compliant
with the covenant under our base-case scenario but we expect the
company to have very limited headroom in 2019. While it is not
certain, we expect the company to manage any short-term covenant
risks through equity cure option, with potential funding from The
Washington Companies, or covenant amendments."
S&P said, "Our recovery analysis assumes the company is sold or
restructured as a going concern at the corporate holding-company
level in Canada following a sharp decline in rough diamond prices
and a period of high capital spending that exhausts liquidity and
limits Northwest's ability to fund fixed charges.
"Our distressed enterprise value on Northwest is derived by
applying a 5x multiple to the company's projected EBITDA at
emergence, which is consistent with the multiple applied to most
upstream mining companies.
"Our emergence EBITDA proxy of about US$126 million represents a
significant decline from estimated 2019 EBITDA, but is close to its
estimated fixed charges in the simulated year of default.
"We assume claims on Northwest's US$200 million first-lien senior
secured credit facility (85% drawn) are fully covered, resulting in
very high (90%-100%; rounded estimate 95%) recovery, which
corresponds with a '1' recovery rating and 'BB' issue-level
rating.
"We assume the remaining value is allocated to Northwest's US$550
million second-lien senior secured noteholders, resulting in
substantial (70%-90%; rounded estimate 80%) recovery, which
corresponds with a '2' recovery rating and 'BB-' issue-level
rating.
"Our analysis assumes that, at the point of default, there is no
debt held at Northwest's 40%-owned Diavik JV."
The company's proposed debt is secured by its equity interest in
Diavik, and any debt held at the JV would lead to a subordination
of Northwest's claims on this equity interest.
-- Simulated year of default: 2022
-- EBITDA at emergence: US$126 million
-- EBITDA multiple: 5x
-- Net enterprise value (after 5% administrative costs): US$597
million
-- Valuation split in % (obligors/non-obligors): 100/0
-- Collateral value available to first-lien debt holders: US$597
million
-- Secured first-lien debt: US$116 million (net of C$77 million
issued in letters of credit)
--Recovery expectations: 90%-100% (rounded estimate 95%)*
-- Collateral value available to second-lien debt holders: US$481
million
-- Second-lien secured debt and pari passu claims: US$570 million
--Recovery expectations: 70%-90% (rounded estimate 80%)
--- All debt amounts include six months of prepetition interest.
*A higher recovery rating (1+) is not applicable because the
proposed revolver is secured by an equity pledge.
NSC WHOLESALE: Committee Taps Bederson LLP as Financial Advisor
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of NSC Wholesale
Holdings and its debtor-affiliates seeks authority from the United
States Bankruptcy Court for the District of Delaware (Delaware) to
retain Bederson LLP, nunc pro tunc to November 7, 2018, as
financial advisors to the Committee.
The Committee requires Bederson to:
a) review and analyze the Debtors' operations, financial
condition, and operating forecasts;
b) assist the Committee in evaluating the Debtors' proposed
use and/or disposition of their assets;
c) advise the Committee as it assesses the Debtors' executory
contracts including assume versus reject considerations;
d) assist and advise the Committee in connection with its
identification, development, and implementation of strategies
related to the potential recoveries for the unsecured creditors as
it relates to the Debtors’ Chapter 11
plan;
e) assist in the evaluation of the store sale process,
including the identification of potential buyers;
f) assist in evaluating the terms, conditions, and impact of
any proposed asset sale transactions;
g) assist the Committee in evaluating the effectiveness of the
Debtors' store liquidation process;
h) assist the Committee to value the consideration offered by
the Debtors to unsecured creditors in connection with the sale of
the Debtors' assets or liquidation of their stores;
i) assist the Committee and Drinker Biddle with evaluating any
financial terms of any proposed chapter 11 plan;
j) assist the Committee with any litigation support required
by its counsel including, but not limited to, analyzing potential
preference and fraudulent transfer claims;
k) provide testimony, as necessary, in any proceeding before
the Bankruptcy Court; and
l) provide the Committee with other appropriate general
restructuring advice.
Bederson's hourly billing rates are:
Partners $390 - $515
Outside Consultant $300
Directors $325
Managers $305
Tax Manager $280
Supervisor $265
Senior Accountants $265
Technology IT Director $200
Semi Sr. Accountants $240
Staff Associate $175
Para Professionals $170
Sean Raquet, Partner of Bederson LLP, attests that Bederson does
not have or represent any interest materially adverse to the
interest of the Debtors, or of any class of creditors or equity
security holders of the Debtors, by reason of any direct or
indirect relationship to, connection with, or interest in the
Debtors.
The attorney can be reached at:
Sean Raquet, CPA
Bederson LLP
347 Mt. Pleasant Ave., Suite 200
West Orange, NJ 07052
Phone: 973-530-9140 / 973-736-3333
Fax: 973-736-9219
Email: sraquet@bederson.com
About NSC Wholesale
NSC Wholesale Holdings and its subsidiaries --
https://www.nwlshop.com/ -- own and operate a chain of 11 general
merchandise close-out stores located in four states: Massachusetts,
New Jersey, New York and Pennsylvania. The Stores, which operate
under the name "National Wholesale Liquidators," are targeted to
lower and lower/middle income customers in densely populated urban
and suburban markets. At October 2018, the Company had 695
employees, 629 of whom are employed on a full time basis and 66 of
whom are employed part time.
On Oct. 24, 2018, NSC Wholesale and six of its subsidiaries filed
for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 18-12394).
In the petition signed by CEO Scott Rosen, the Debtors estimated
assets and liabilities at $10 million to $50 million.
Hon. Kevin J. Carey presides over the cases.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as bankruptcy
counsel; Getzler Henrich & Associates LLC and SSG Advisors LLC as
financial advisor and investment banker; and Omni Management Group
Inc. as claims & noticing agent.
OHIO VALLEY ELECTRIC: Moody's Alters Outlook to Stable
------------------------------------------------------
Moody's Investors Service affirmed the senior unsecured ratings of
the Ohio Valley Electric Corporation at Ba1 and revised the outlook
to stable from negative.
RATINGS RATIONALE
"The stable outlook recognizes the steps taken by OVEC management
to bridge the approximate 5% shortfall in its revenue stream caused
by the bankruptcy of one of its sponsors, FirstEnergy Solutions
Corp. (FES)", said Laura Schumacher, Senior Credit Officer. These
steps have included the funding of a debt reserve and the retention
of earnings that can be used to offset future payment shortfalls.
The affirmation of OVEC's Ba1 rating also considers the otherwise
strong cost recovery provisions of the long term Inter-Company
Power Agreement (ICPA) from which OVEC's revenues are derived, and
acknowledges the solid overall credit quality of the remainder of
the sponsor group.
In March 2018, FES filed for Chapter 11 bankruptcy protection,
sought to reject the ICPA, and stopped paying its approximately 5%
share of OVEC's costs. In July 2018, the bankruptcy court granted
FES's motion to reject the contract based on a "business judgment"
rather than a "public interest" standard. OVEC is currently
challenging the bankruptcy court's approval of FES' rejection of
the ICPA, as well as the court's decision to bar the Federal Energy
Regulatory Commission (FERC) from the process. OVEC's challenges
have been accepted for review by the United States Court of appeals
for the Sixth Circuit. In the meantime, OVEC has filed a rejection
damages claim of approximately $540 million against FES. Any damage
awards could be used to offset future FES obligations, including
debt repayment.
Following rejection of the ICPA, the FES share of energy and
capacity has been allocated to the other sponsors, who have been
paying their share of OVEC's variable costs; however, no one has
"stepped-up" for FES' share of OVEC's fixed cost obligations.
Moody's estimates FES' share of OVEC's fixed costs to be
approximately $17 million per year. In sensitivity testing, taking
into account FES' share of energy and capacity revenues that are
being paid, Moody's estimates the shortfall could be reduced to
about $10-$13 million per year; however these revenues are
currently being allocated to the non-defaulting sponsors. As such,
OVEC is currently bearing the entire cost of the shortfall,
illustrating the exposure created by the lack of step-up provision
in the current ICPA.
The shortfall created by the FES default is relatively modest, and
as the default was widely anticipated, OVEC management was able to
take steps to mitigate its impact. These steps have included
funding a debt reserve at a rate of about $30 million per year
(current balance is about $60 million), and the retention of the
return on equity portion of its rates (approximately $2.5 million
per year) as a cushion. This equity cushion would be sufficient to
cover future FES shortfalls in the event the current FES shortfall
is covered by short-term borrowing.
To date, there have been no draws from the debt reserve, and as of
September 30, 2018, OVEC had $60 million of unrestricted cash on
hand. In addition to the debt reserve, OVEC's long-term investments
include about $70 million received as part of a prior settlement
with the Department of Energy (DOE) that could be utilized to cover
future shortfalls. The DOE funds had been ear-marked as a source of
funding for future postretirement benefits; however OVEC has the
ability to include a postretirement benefits charge in the fixed
costs billed to the sponsors. This additional liquidity provides
sufficient near-term coverage for the FES shortfall, and Moody's
expects the sponsors will continue to work toward implementing
longer term, credit enhancing improvements to the ICPA after there
is resolution of the issues surrounding the FES bankruptcy.
Rating outlook
The stable outlook recognizes the credit quality and outlooks of
OVEC's non-defaulting sponsors, and the company's actions to
address the limited financial impact of the current, ongoing, FES
default. The outlook assumes payment shortfalls will continue to be
addressed with excess operating cash, existing reserves, or via
short-term borrowing. The outlook assumes OVEC will continue to
collect reserve funds at the current rate at least until it has
accumulated a full year of debt service (currently about 45%
funded), and that it will extend the maturity of its revolving
credit facility well in advance of its current November 2019
termination date.
Factors that could lead to an upgrade
Rating upgrades are unlikely over the near-term. Longer term,
credit supportive changes to the ICPA; such as an inclusion of a
step-up provision to mitigate the risk of future sponsor payment
shortfalls or defaults; an improvement in the overall credit
profile of the sponsor group; or stronger financial metrics,
including a debt service coverage ratio above 1.6x, could put
upward pressure on the rating.
Factors that could lead to a downgrade
An inability or unwillingness to continue collecting reserves or
excess operating funds sufficient to cover payment shortfalls, an
inability to extend OVEC's revolving credit facility beyond its
November 2019 termination date in the early part of 2019, further
declines in the credit quality of any sponsors, or a sponsor
payment default that was not covered by existing reserves or
through a swift replacement of the defaulting party, could lead to
a downgrade.
Outlook Actions:
Issuer: Ohio Valley Electric Corporation
Outlook, Changed To Stable From Negative
Affirmations:
Issuer: Ohio Valley Electric Corporation
Senior Unsecured Bank Credit Facility, Affirmed Ba1
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Issuer: Indiana Finance Authority
Senior Unsecured Revenue Bonds, Affirmed Ba1
Issuer: Ohio Air Quality Development Authority
Senior Unsecured Revenue Bonds, Affirmed Ba1
OVEC owns and operates two coal-fired generating power plants,
Kyger Creek in Ohio and Clifty Creek in Indiana, that have a
combined capacity of approximately 2,400 MW. OVEC is sponsored by
nine investor-owned regulated electric utilities, two independent
generating companies (subsidiaries of a utility holding company)
and two affiliates of generation and transmission cooperatives
(collectively, the sponsors). The sponsors purchase OVEC's power at
wholesale, cost based, rates. The ownership structure is governed
by a long-term Inter-Company Power Agreement (ICPA) expiring in
2040.
The principal methodology used in these ratings was US Municipal
Joint Action Agencies published in October 2016.
PARKER DRILLING: Moody's Lowers CFR to Caa3 Amid Bankr. Filing
--------------------------------------------------------------
Moody's Investors Service downgraded Parker Drilling Company's
Probability of Default Rating to D-PD from Caa1-PD, Corporate
Family Rating to Caa3 from Caa1 and its senior unsecured rating to
Ca from Caa2. The outlook remains negative. These actions follow
the company's announcement that it had commenced voluntary Chapter
11 proceedings and filed a prearranged plan of reorganization under
Chapter 11 of the United States Bankruptcy Code. Moody's will
withdraw all ratings for the company in the near future.
Downgrades:
Issuer: Parker Drilling Company
Probability of Default Rating, Downgraded to D-PD from Caa1-PD
Corporate Family Rating, Downgraded to Caa3 from Caa1
Senior Unsecured Notes, Downgraded to Ca (LGD4) from Caa2 (LGD4)
Outlook Actions:
Issuer: Parker Drilling Company
Outlook, Remains Negative
RATINGS RATIONALE
Parker's Chapter 11 bankruptcy filing has resulted in a downgrade
of its PDR to D-PD. Moody's also downgraded the company's CFR to
Caa3 and its senior unsecured rating to Ca, reflecting Moody's view
on the potential recoveries. Shortly following this rating action,
Moody's will withdraw all Parker's ratings (refer to Moody's rating
withdrawal policy on moodys.com).
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
Parker Drilling Company, headquartered in Houston, Texas, provides
rental tools and contract drilling services to the oil & gas
industry globally.
PAULA ROBERTS WHITE: Cates Buying Jackson Property for $40K
-----------------------------------------------------------
Paula Roberts White asks the U.S. Bankruptcy Court for the Western
District of Tennessee to authorize the sale of the real property
located at 622 Anglin Lane, Jackson, Madison County, Tennessee to
Maricela Cates for $40,000.
The Debtor is an individual who now resides in Lexington,
Tennessee. She has owned and operated child care businesses in
Lexington, Tennessee for over twenty years. She currently does
business as Imagine Station. The Debtor owns the Property.
At the commencement of the case, the Property was subject to a
Lease To Own Contract with the Purchaser. Under the Lease between
the Debtor and the Purchaser, the Debtor agreed to sell the
Property for $40,000 through monthly lease/purchase payments of
$350. By this Motion, she asks the Court's approval of the sale of
the Property free and clear of liens, claims, interests and
encumbrances in consideration of the $40,000. The lease payments
to date total $8,876, leaving an amount due at closing of $31,124
due at closing.
The Debtor believes that the consummation of the transaction is in
the best interest of this estate, and creditors insofar as the
offer will produce immediate cash to the estate. There will be no
excess proceeds, but it will reduce taxes owed the County of
Madison. She asks that the remaining proceeds owed to the IRS be
escrowed pending further order of the Court.
The Debtor asks an expedited hearing on the Motion in order to
close the sale before the end of the year.
A copy of the Lease attached to the Motion is available for free
at:
http://bankrupt.com/misc/Paula_White_111_Sales.pdf
Counsel for the Debtor:
Steven N. Douglass, Esq.
HARRIS SHELTON HANOVER WALSH, PLLC
40 S. Main Street, Suite 2210
Memphis, TN 38103-2555
Telepone: (901) 525-1455
E-mail: sdouglass@harrisshelton.com
On Feb. 23, 2018, Paula Roberts White filed a voluntary petition
for relief under Chapter 13 of the Title 11 of the United States
Code. The case was converted to a case under Chapter 11 (Bankr.
W.D. Tenn. Case 18-10349-JLC) on Aug. 10, 2018.
PEAK 10: Bank Debt Trades at 4% Off
-----------------------------------
Participations in a syndicated loan under which Peak 10
Incorporated is a borrower traded in the secondary market at 95.75
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.70 percentage points from the
previous week. Peak 10 pays 350 basis points above LIBOR to borrow
under the $1.2 billion facility. The bank loan matures on August 1,
2024. 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, December 7.
PON GROUP: Proposes Sale of Bensenville Property
------------------------------------------------
Pon Group, LLC, asks the U.S. Bankruptcy Court for the Northern
District of Illinois to authorize the sale of the real property
located at 951-961 W. Thorndale Ave., Bensenville, Illinois.
The Debtor acquired the Property in 2012. The Property formerly
served as the principal place of business for the Debtor's
affiliates, which engaged in freight logistics, warehousing, and
commodity import/exports businesses. The Property is in an
industrial area immediately west of Chicago O'Hare International
Airport and is zoned I-2 (Light Industrial District). It is a
219,933 square foot (5.05 acre), trapezoidal, interior (mid-block)
site, which is improved with an industrial warehouse building. The
warehouse was constructed in 1986 and is a one-story, 120,985
square-foot, precast-concrete building.
The Debtor owns fee simple title to the Property. The Property is
subject to a first mortgage in favor of Associated Bank, N.A.; a
second mortgage in favor of Nexgen Capital, LLC; and a UCC fixture
filing relating to certain lighting fixtures in favor of Leaf
Capital, LLC. The Property also is subject to a reciprocal driveway
easement with an adjoining property owner. The Property is not
subject to any long-term leases or other possessory agreements.
Shortly after the commencement of the case, the Debtor commenced an
aggressive marketing campaign of the Property. The Debtor contends
that the aggregate value of all liens on the Property is
approximately $6.2 million. The Property was professionally
appraised at a fair market value of $8 million as of November 2017.
The Debtor has received a number of letters of intent to purchase
the Property at prices in excess of the face amount of all liens
against and the appraised value of the Property. Therefore, it
contends that the value of the Property exceeds the aggregate value
of all liens against the Property.
Based upon its survey of potential purchasers, the Debtor has
determined that the maximum value of the Property can be realized
if it is sold free and clear of all liens, claims and other
interests in the Property. Thus, it proposes to offer the Property
free and clear of all liens, claims and interests, other than the
permitted title exceptions interests.
The Debtor has requested that interested parties submit irrevocable
offers by Dec. 17, 2018, in the form of a Purchase and Sale
Agreement. It will present the Agreement containing the highest
and best offer to the Court at the hearing on the Sale Motion and
invite higher and better offers. It will then ask that the Court
authorizes the Sale of the Property to the person submitting the
highest and best offer for the Property.
The Debtor asks authority to pay the undisputed amount of the
Allowed Secured Claim of Associated Bank and the 2017 second
installment of real estate taxes immediately. The Associated Bank
claim has been reduced to judgment, and (other than possible claims
for post judgment advances and attorney's fees) the claim amount is
essentially undisputed. The immediate payment of the claim will
relieve the estate of the burden of paying interest on the over
secured claim. The Debtor will escrow 125% of the amount of the
claims of Nexgen Capital and Leaf Capital, and any unliquidated
portion of the Associated Bank claim, pending resolution of such
claims.
Finally, the Debtor asks a waiver of the 14-day stay provided by
Fed. R. Bankr. P. 6004(h).
A hearing on the Motion is set for Dec. 19, 2018, at 10:00 a.m.
The objection deadline is Dec. 12, 2018.
About Pon Group LLC
Pon Group, LLC, is a lessor of real estate based in Bensenville,
Illinois.
Pon Group sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ill. Case No. 18-22505) on August 9, 2018. In the
petition signed by Ketty Pon, member and manager, the Debtor
estimated assets of $1 million to $10 million and liabilities of $1
million to $10 million. Judge Benjamin A. Goldgar presides over
the case. BAUCH & MICHAELS, LLC, is the Debtor's counsel.
POPLAR CREEK: Taps TR Mandigo & Company as Valuation Consultant
---------------------------------------------------------------
Poplar Creek, LLC, seeks approval from the U.S. Bankruptcy Court
for the Northern District of Illinois to hire TR Mandigo & Company
as its valuation consultant.
The Debtor is an Illinois limited liability company that owns the
property commonly known as 2401 West Higgins Road, Hoffman Estates,
Illinois.
A portion of the Property is improved with a conference center and
banquet facility that is currently being leased to an entity known
as Stonegate Conference & Banquet Centre, LLC. Another portion of
the Property is scheduled for development as a hotel.
First American Bank is the Debtor's primary secured creditor that
originally extended mortgage financing to the Debtor in February
2004. The mortgage terms between the parties were consensually
modified on several occasions through the present. The last loan
modification provided for, among other things, an extension of the
loan maturity date to September 1, 2017.
On October 20, 2017, the Bank demanded payment in full from the
Debtor by serving a default notice upon the Debtor.
After the Debtor failed to pay the amounts due to the Bank as
demanded, the Bank commenced a foreclosure action against the
Debtor and others on November 9, 2017, in the Circuit Court of Cook
County, Illinois.
In the Foreclosure Action, the Bank sought the appointment of a
receiver. In the event a receiver was appointed, the Debtor would
be unable to complete the development of the Hotel Project thereby
eliminating any prospect of recovery for creditors other than the
Bank.
Since the Petition Date, the Bank has elected to litigate virtually
every aspect of this Chapter 11 case. The Bank has filed motions to
designate this Chapter 11 case as one involving a "single asset
real estate” debtor, to dismiss this Chapter 11 case and for
relief from the automatic stay. The parties are engaged in
extensive discovery relating to the Bank Litigation.
Poplar requires Mandigo to:
* review in detail the financial statements for the Conference
Center as provided and prepare a comparison with industry
operations statistics to identify any areas where significant
variations appear. This would prompt a review of the detailed
financials to identify key differences or variations from industry
averages for this property. For any significant areas of variance
we would request management's comments on the reasons;
* prepare a valuation of the Conference Center facility based
on the ability of the property service debt and provide a return on
investment, relating this to a typical capital structure for such a
project.
* for the vacant parcel, we will research recent sales of
parcels in and around the Hoffman Estates area and trends in
transaction prices. Based on the unique characteristics of the the
subject parcel, we will form our opinion on the value of the parcel
as is;
* review the prospective hotel performance of the property as
revealed in any documents provided, including STR data and trends
in the performance of both the competitive set as identified in
documents and the Hoffman Estate area performance. We will research
trends in the market as well as proposed properties coming into
the market to be able to take in to consideration the impact on the
operation of the proposed property of new supply or changes
in supply in the market;
* summarize comments and conclusions in a short form report as
supporting documentation for our conclusions as to the potential
performance of the proposed property over the next several years;
* prepare a pro-forma of operations for the next several years
(typically a 6 year span) including transition operations and
ongoing operation to a stabilization. The pro-forma results will be
used in a Discounted Cash Flow estimate of the value of the
property based on the assumptions and conclusions;
* prepare a Direct Capitalization to determine the value of
the property based on the most recent performance of the property;
* research recent hotel transactions in the market to
determine the trend and values for properties that have traded
hands in the recent past; and
* provide conclusions on value of the property.
Mandigo estimates that its fees from this engagement should not
exceed $12,000.00 plus expenses. Mandigo is also requesting the
payment of a retainer in the amount of $3,000.00. Mondigo will
charge an hourly rate of $200 per hour.
Theodore R. Mandigo, valuation consultant with Mandigo, attests
that that Mandigo is "disinterested" within the meaning of Sections
101(14) and 327 of the Bankruptcy Code.
The firm can be reached at:
Theodore R. Mandigo
TR Mandigo & Company
338 North Highland Avenue
Elmhurst, IL 60126
Tel: (630) 279-8144
Fax: (630) 279-4701
About Poplar Creek
Poplar Creek, LLC, a privately-held company that owns the property
located at 2401 West Higgins Road, Hoffman Estates, Illinois.
Poplar Creek sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ill. Case No. 18-14161) on May 15, 2018. In the
petition signed by George M. Moser, manager, the Debtor estimated
assets of $10 million to $50 million and liabilities of $1 million
to $10 million. Judge LaShonda A. Hunt oversees the case. Burke,
Warren, MacKay & Serritella, P.C., is the Debtor's legal counsel.
PROMISE HEALTHCARE: Ombudsman Taps Otterbourg P.C. as Counsel
-------------------------------------------------------------
Melanie L. Cyganowski as the Patient Care Ombudsman for Promise
Healthcare Group, LLC, and its debtor-affiliates, seeks authority
from the U.S. Bankruptcy Court for the District of Delaware to
retain Otterbourg P.C. as counsel to the Ombudsman effective as of
November 27, 2018.
Services to be rendered by Otterbourg are:
a. represent the Ombudsman in any proceeding or hearing before
the Court, and in any action in other courts where the rights of
the patients may be litigated or affected as a result of these
Cases;
b. advise the Ombudsman concerning the requirements of the
Bankruptcy Code and Bankruptcy Rules and the requirements of the
Office of the United States Trustee relating to the discharge of
her duties under § 333 of the Bankruptcy Code;
c. prepare and file applications to retain any other
professionals of behalf of the Ombudsman and any related monthly,
interim or final fee applications;
d. advise and represent the Ombudsman concerning any potential
health law related issues; and
e. perform such other legal services as may be required under
the circumstances of these Cases in accordance with the
Ombudsman’s powers and duties as set forth in the Bankruptcy
Code.
The hourly rates of Otterbourg professionals are:
Partner/Counsel $450 - $1,250
Associate $295 - $775
Paralegal $295
Keith N. Costa, member of the firm of Otterbourg P.C., assures the
Court that Otterbourg does not hold or represent any interest
adverse to the Debtors or their estates, creditors, or any other
party in interest, and is a "disinterested person" as that term is
defined in Sec. 101(14) of the Bankruptcy Code.
The counsel can be reached at:
Keith N. Costa, Esq.
Otterbourg P.C.
230 Park Avenue
New York, NY 10169-0075
Tel: 212-661-9100
Fax: 212-682-6104
Phone: 212-905-3761
Email: kcosta@otterbourg.com
About Promise Healthcare
Established in 2003, Promise Healthcare is a specialty post-acute
care health company headquartered in Boca Raton, Florida.
Promise Healthcare Group, LLC and its affiliates sought bankruptcy
protection on November 4, 2018 (Bankr. D. Del. Lead Case No. Case
No. 18-12491). In the petition signed by Andrew Hinkelman, chief
restructuring officer, the Debtors estimated assets of up to
$50,000 and total liabilities of $50 million to $100 million.
The Debtors tapped DLA Piper LLP and Waller Lansden Dortch & Davis,
LLP as general counsel; McDermott Will & Emery LLP as special
counsel; FTI Consulting, as financial and restructuring advisor;
Houlihan Lokey and MTS Health Partners, L.P., as investment
bankers; and Prime Clerk LLC as claims agent.
On Nov. 14, 2018, the U.S. Trustee appointed a seven-member panel
to serve as the official committee of unsecured creditors in the
Debtor's case. The Committee tapped Pachulski Stang Ziehl & Jones
LLP and Sills Cummis & Gross P.C. as counsel.
PROMISE HEALTHCARE: PCO Taps Gibbons P.C. as Delaware Counsel
-------------------------------------------------------------
Melanie L. Cyganowski as the Patient Care Ombudsman for Promise
Healthcare Group, LLC, and its debtor-affiliates, seeks authority
from the U.S. Bankruptcy Court for the District of Delaware to
retain Gibbons P.C. as Delaware counsel to the Ombudsman, nunc pro
tunc to November 27, 2018.
The professional services that the Ombudsman expects that Gibbons
may be called upon to render include, but shall not be limited to,
the following:
(a) represent the Ombudsman as Delaware counsel in any
proceeding or hearing in the Bankruptcy Court, and in any action in
other Delaware courts where the rights of the patients may be
litigated or affected as a result of these bankruptcy cases;
(b) advise the Ombudsman and co-counsel for the Ombudsman
concerning requirements of the local rules of the Delaware
Bankruptcy Court as well as the requirements of the Office of the
United States Trustee for Region 3 relating to the discharge of her
duties under section 333 of the Bankruptcy Code;
(c) prepare fee applications for Gibbons P.C.; and
(d) perform such other legal services as may be required under
the circumstances of these cases in accordance with the Ombudsman's
powers and duties as set forth in the Bankruptcy Code.
Gibbons' current hourly rates are:
Natasha Songonuga, Esq. $535.00
Ellen Rosen, Senior Paralegal $265.50
Natasha M. Songonuga, director of the law firm of Gibbons P.C.,
attests that Gibbons does not represent or hold any interest
adverse to the interest of the Debtors or their estate, and is a
disinterested person within the meaning of sections 101(14) and
327(a) of the Bankruptcy Code.
The firm can be reached at:
Natasha M. Songonuga
Gibbons P.C.
300 Delaware Avenue, Suite 1015
Wilmington, DE 19801-1671
Tel: 302-518-6300
Fax: 302-429-6294
Email: nsongonuga@gibbonslaw.com
About Promise Healthcare Group
Established in 2003, Promise Healthcare is a specialty post-acute
care health company headquartered in Boca Raton, Florida.
Promise Healthcare Group, LLC, and its affiliates sought bankruptcy
protection (Bankr. D. Del. Lead Case No. Case No. 18-12491) on Nov.
4, 2018. In the petition signed by CRO Andrew Hinkelman, the
Debtors estimated assets of $0 to $50,000 and liabilities of $50
million to $100 million.
The Debtors tapped DLA Piper LLP and Waller Lansden Dortch & Davis,
LLP as general counsel; McDermott Will & Emery LLP as special
counsel; FTI Consulting, as financial and restructuring advisor;
Houlihan Lokey and MTS Health Partners, L.P., as investment
bankers; and Prime Clerk LLC as claims agent.
On Nov. 14, 2018, the U.S. Trustee appointed a seven-member panel
to serve as the official committee of unsecured creditors in the
Debtor's case. The Committee tapped Pachulski Stang Ziehl & Jones
LLP and Sills Cummis & Gross P.C. as counsel.
RACKSPACE HOSTING: $1.995BB Bank Debt Trades at 10% Off
-------------------------------------------------------
Participations in a syndicated loan under which Rackspace Hosting
is a borrower traded in the secondary market at 89.95
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 4.31 percentage points from the
previous week. Rackspace Hosting pays 300 basis points above LIBOR
to borrow under the $1.995 billion facility. The bank loan matures
on November 3, 2023. Moody's rates the loan 'B1' 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, December 7.
RACKSPACE HOSTING: $800MM Bank Debt Trades at 10% Off
-----------------------------------------------------
Participations in a syndicated loan under which Rackspace Hosting
is a borrower traded in the secondary market at 89.95
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 4.31 percentage points from the
previous week. Rackspace Hosting pays 300 basis points above LIBOR
to borrow under the $800 million facility. The bank loan matures on
November 3, 2023. Moody's rates the loan 'B1' 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,
December 7.
REGDALIN PROPERTIES: Trustee Taps Coldwell & Major as Brokers
-------------------------------------------------------------
R. Todd Neilson, Chapter 11 trustee for Regdalin Properties LLC,
seeks approval from the U.S. Bankruptcy Court for the Central
District of California to retain Coldwell Banker and Major
Properties Real Estate as co-brokers to the Estate to list, market
and assist the Trustee in selling the following real properties of
the Estate: (a) 1901 W. Magnolia, Burbank, California 91506, and
(b) 5761 South Anderson Street, Vernon, California 90058.
Brokers' duties are:
a) order, analyze and prepare documentation necessary to
market the Magnolia and Anderson Properties for sale;
b) listing the Magnolia and Anderson Properties for sale on
appropriate listing services based on the nature of the respective
real properties, responding to purchase inquiries, and soliciting
reasonable offers for the Magnolia and Anderson Properties;
c) convey all reasonable purchase offers to the Trustee,
advise the Trustee concerning those offers, and subject to the
Trustee's approval, confirming acceptance of offers;
d) on behalf of the Trustee, preparing any and all documents
required to consummate the respective sales of the Magnolia and
Anderson Properties.
The Brokers will receive a total commission of 5% of the gross
sales price of each of the Magnolia and Anderson Properties. In the
event that either of the Brokers represent the buyer of a property
as well as the Trustee, the total commission on the sale of that
property will be 4%. Furthermore, to the extent that a property is
sold to a tenant in a property and the Brokers do not bring in an
offer higher than that originally made by such tenant, then the
Brokers' commission will be 4%.
William Friedman, real estate sales agent with Coldwell, and Jeff
Luster, real estate sales agent with Major Properties, assure the
Court that Coldwell has no interest materially adverse t the
interests of the Debtor's estate.
The brokers can be reached at:
William Friedman
Coldwell
2444 Wilshire Blvd., Suite 102
Santa Monica, CA 90403
Tel: (310) 829-3939
-- and --
Jeff Luster
Major Properties
1200 West Olympic Blvd.
Los Angeles, CA 90015
Phone: (213) 747-4151
About Regdalin Properties
Regdalin Properties, LLC, filed a Chapter 11 petition (Bankr. C.D.
Cal. Case No. 18-20868) on Sept. 17, 2018, and was represented by
Henrik Mosesi, Esq., in Glendale, California. In the petition
signed by Edgar Sargysyan, managing member, the Debtor estimated
$10 million to $50 million in assets and liabilities.
R. Todd Neilson was appointed as the Debtor's Chapter 11 trustee on
Nov. 1, 2018. The Trustee retained Dinsmore & Shohl LLP as his
legal counsel.
REIHNER ENTERPRISES: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The Office of the U.S. Trustee on Dec. 13 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Reihner Enterprises, Inc.
About Reihner Enterprises
Reihner Enterprises, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-16436) on Oct.
25, 2018. At the time of the filing, the Debtor estimated assets
of less than $50,000 and liabilities of less than $500,000. Judge
Arthur I. Harris presides over the case. The Debtor tapped Forbes
Law LLC as its legal counsel.
REPUBLIC METALS: Selling Prepaid Products on Wholesale Basis
------------------------------------------------------------
Republic Metals Refining Corp. and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to
authorize the sale of prepaid products on a wholesale basis.
Prior to the Petition Date, certain customers of the Debtors placed
orders with and prepaid the Debtors for certain materials such as,
but not limited to, minted products or grain. The Prepaid Product
also includes custom orders placed by Customers for specialized
minter products, as well as "off-the-shelf" inventory of stock
items minted by the Debtors, to include coins and gold pieces
usually purchased for investment or resale purposes.
As of the Petition Date, the Debtors had orders for $13.55 million
worth of Prepaid Product. All parties that placed orders with the
Debtors, and prepaid for them, which such orders unfilled as of the
Nov. 2, 2018 Petition Date, are shown on Exhibit A. Of that $13.55
million in Prepaid Product, $3.2 million of Customer orders were
packaged and awaiting shipment to the Customer on the Nov. 2, 2018
Petition Date. An itemized listing of those Customers with
Packaged Product (and an estimate of the value of such Packaged
Product, based upon applicable purchase price) is shows on Exhibit
B.
Additionally, as of the Nov. 2, 2018 Petition Date, the Debtors had
an additional $5 million in Prepaid Product in their inventory
that, while available for packaging and shipping to a Customer,
remained in general inventory in the Debtors' mint. An itemized
listing of the Additional Inventory is shown on Exhibit C.
The Debtors ask Court authority to sell the Prepaid Product free
and clear of all liens, claims, and encumbrances, with such liens,
claims, and encumbrances to attach to the proceeds of such sale.
Specifically, the Debtors propose to monetize the Prepaid Product
on a wholesale basis, as expeditiously as possible, in whatever
manner the CRO determines in his business judgment will be most
beneficial to the bankruptcy estate. This includes melting the
product and reprocessing the gold and silver with other inventory
for sale in the ordinary course of business.
The Debtors believe the Customers and their prepetition secured
lenders will assert competing liens and/or property interest rights
to the Prepaid Product. Therefore, the Motion is filed out of an
abundance of caution, to put all parties that may claim an interest
in the Prepaid Product, either Packaged Product or Additional
Inventory, on notice of the Debtors' intent to melt, reprocess, and
sell the Packaged Product and Additional Inventory and include with
the Lenders' asserted cash collateral and cash collateral
interest.
To implement the foregoing successfully, the Debtors respectfully
ask a waiver of the notice requirements under Bankruptcy Rule
6004(a) and the 14-day stay of an order authorizing the use, sale,
or lease of property under Bankruptcy Rule 6004(h).
A hearing on the Motion is set for Dec. 19, 2018 at 11:00 a.m.
(ET). The objection deadline is Dec. 12, 2018 at 4:00 p.m. (ET).
A copy of the Exhibits attached to the Motion is available for free
at:
http://bankrupt.com/misc/Republic_Metals_219_Sales.pdf
About Republic Metals Refining Corp.
Founded in 1980, Republic Metals Refining Corporation and its
affiliates are refiner of precious metals with a primary focus on
gold and silver. They have the capacity to produce approximately
80 million ounces of silver and 350 tons of gold, along with over
55 million pieces of minted products per annum. Suppliers ship
unrefined gold and silver to Republic for refining from all over
The United States and the Western Hemisphere. They provide their
products and services to a diverse base of global mining
corporations, financial institutions and jewelry manufacturers.
Republic Metals Refining, Republic Metals Corporation and Republic
Carbon Company, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case Nos. 18-13359 to 18-13361) on
Nov. 2, 2018.
In the petition signed by CRO Scott Avila, Republic Metals Refining
estimated assets of $1 million to $10 million and liabilities of
$100 million to $500 million.
The Debtors tapped Akerman LLP as their legal counsel; Paladin
Management Group, LLC as financial advisor; and Donlin, Recano &
Company, Inc. as its claims and noticing agent.
RESIDENTIAL RESOURCES: Fitch Withdraws BB+ on 2017 Revenue Bonds
----------------------------------------------------------------
Fitch Ratings has withdrawn the 'BB+' rating on the following bonds
as they did not sell:
-- Allegheny County Industrial Development Authority (PA)
(Residential Resources, Inc. Project) lease revenue bonds series
2017. Previous Rating: 'BB+'/Outlook Stable.
ROCK BRIDGE: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Rock Bridge Devp., Inc. as of Dec. 14,
according to a court docket.
About Rock Bridge Devp. Inc.
Rock Bridge Devp., Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-77543) on November 8,
2018. At the time of the filing, the Debtor had estimated assets
of less than $1 million and liabilities of less than $1 million.
The case has been assigned to Judge Alan S. Trust. The Debtor
tapped Andrew G. Neal, Esq., as its legal counsel.
RUTABAGA CAFE: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Rutabaga Cafe/Soiree Catering, LLC as of
Dec. 14, according to a court docket.
About Rutabaga Cafe/Soiree Catering
Rutabaga Cafe/Soiree Catering, LLC sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 18-40586) on
November 6, 2018. At the time of the filing, the Debtor had
estimated assets of less than $50,000 and liabilities of less than
$50,000. The case has been assigned to Judge Karen K. Specie.
SAGE PARK PLACE: Has Authorization on Cash Collateral Use
---------------------------------------------------------
The Hon. Paul W. Bonapfel of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized Sage Park Place, Inc.,
Social Investments Group II, LLC, and Sage Enterprises Group III,
LLC to use cash collateral.
The Debtors may use any funds generated from the operations of each
operating restaurant that are reasonably necessary for the
operation of each such restaurant up to the maximum line item
expense amount set forth in each separate budget on a weekly basis.
Presently, only three of the restaurants (Buckhead, Perimeter and
Windy Hill) are operating. No cash proceeds or funds will be
expended in excess of the line items on each of the three budgets
for the applicable period and any expenses as to each operating
restaurant site will be confined to sales receipts on funds related
to each such restaurant site.
The Debtors have been authorized to employ and to pay, per each
operating restaurant of Debtors, CPA firm of Delerme CPA the sum of
$2,500 for services rendered in August/September of 2018 (total of
$7,500 paid). Thereafter, in following months, the sum of $2,000
per month is authorized for each operating restaurant until further
Court Order -- such sums not being considered retainers. The U.S.
Trustee quarterly fees will also be paid as and when such become
due.
To provide further adequate protection to any persons asserting an
interest in the Escrowed Funds, the Debtors that operated
restaurants in Alpharetta, Windy Hill, and Perimeter have paid and
segregated, commencing August 20, 2018 and set aside in the escrow
account of Debtors' counsel $1,500 per location per week and will
continue to do so for each Monday on each location (until it ceases
operation) until further Court Order. The purpose of such escrow is
to preserve the status quo pending a ruling by the Court. The
Escrowed Funds will be held in trust pending further Court Order
regarding the nature, extent, validity, and priority of any
interest as to any (a) purported ownership of the Escrowed Funds
and (b) purported liens or security interests in the Escrowed
Funds.
Each Secured Creditor is granted a valid, unavoidable, perfected
lien upon and security interest in -- to the extent and in the
order of priority of any valid prepetition liens or security
interests of such Secured Creditor -- all cash or other proceeds
generated post-petition by the property upon which the Secured
Creditor asserts a lien or security interest without the need to
file or execute any document as may otherwise be required under
applicable non-bankruptcy law.
To the extent any Debtor is adjudicated to (i) be a successor to
any other Debtor or (ii) have received a fraudulent transfer of
assets from another Debtor, then the right of Rewards Network
Establishment Services Inc., the Debtors, any creditor, or any
party in interest to assert that any replacement liens granted
under the Order will extend, nunc pro tunc to the petition date, to
the successor/transferee Debtor and the successor/transferee
Debtor's assets is fully reserved and will not be prejudiced by the
entry of the Order.
As additional adequate protection or protection against
non-payment of administrative expenses in the estates of cases Sage
Enterprises Group III, LLC -- Buckhead (Case No. 15-62365-pwb) and
Social Investments Group II, LLC and Sage Park Place Inc. --
Perimeter (Case Nos. 18-62358- pwb and 18-62357-pwb), the operating
Debtor entities at each such location will further pay into the
escrow account of Debtors' counsel the following amounts on the
following timetable:
(a) $3,000 from Buckhead and $3,000 from Perimeter in
November 2018;
(b) $7,000 from Buckhead and $7,000 from Perimeter in
December, 2018;
(c) $3,000 from Buckhead and $3,000 from Perimeter in January
2019; and
(d) $7,000 from Buckhead and $7,000 from Perimeter in
February, 2019.
These funds are to be paid into escrow on the request of Debtors'
counsel and Unsecured Creditor Committee counsel to provide a
possible source of administrative expense funding.
In addition, the Debtors will maintain insurance on each of the
four locations and seven Debtor businesses in amounts and for
coverages commensurate with businesses of this kind.
The Debtors will immediately cease using cash collateral upon the
occurrence of one of the following events: (a) if a trustee is
appointed in this Chapter 11 case; (b) if the case is converted to
a case under Chapter 7 of the Bankruptcy Code; (c) if a Debtor
ceases operating its respective restaurant business, then with
respect to such Debtor's use of cash collateral relating to the
respective restaurant; or (d) if the case is dismissed.
A full-text copy of the Order is available at
http://bankrupt.com/misc/ganb18-62357-29.pdf
About Oakmont Investment Group
Oakmont Investment Group, LLC, and its affiliates are
privately-held companies operating in the restaurant industry.
Oakmont Investment Group and 6 its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Lead Case
No. 18-62353) on July 26, 2018. In the petitions signed by James
Liakakos, manager, Oakmont Investment Group estimated up to $50,000
in assets and $100,000 to $500,000 in liabilities. Affiliates Sage
Park Place, Inc., and Sage Enterprises Group III, LLC, each
estimated up to $50,000 in assets and $1 million to $10 million in
liabilities.
The Debtors tapped George M. Geeslin, Esq., as their legal
counsel.
On Sept. 12, 2018, the U.S. Trustee for Region 21 appointed three
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 cases of Oakmont Investment Group, LLC and its
affiliates. The committee members are: (1) Anastasios Vasilakos;
(2) Bruce's Best Inc.; and (3) Performance Food Group, Inc.
According to a Sept. 28 notice filed by the U.S. Trustee,
Anastasios Vasilakos left the committee.
SARAH ZONE: Seeks Authorization to Use Cash Collateral
------------------------------------------------------
Sarah Zone, Inc., seeks authority from the U.S. Bankruptcy Court of
the Central District of California to continue its use of cash
collateral in the ordinary course of business.
A hearing will be held on December 20, 2018 at 8:30 a.m. for the
Court to consider authorizing the Debtor's use of cash collateral
in accordance with the Debtor's operating budget for the 16-week
period from January 6, 2019 through and including April 27, 2019.
The Debtor intends to use cash collateral to (i) pay all of the
expenses set forth in the Budget, with authority to deviate from
the line items contained in the Budget by up to 20%, on both a line
item and aggregate basis, with any unused portions to be carried
over into the following weeks; and (ii) pay all quarterly fees
owing to the Office of the U.S. Trustee and all expenses owing to
the Clerk of the Bankruptcy Court.
The Debtor's senior secured lender is Open Bank. The Debtor is a
borrower under two separate loans with Open Bank: (a) the Debtor is
currently indebted to Open Bank in the amount of approximately
$1,600,000 under the First Loan, which loan is secured by assets
owned by the Debtor's affiliates who are named as borrowers under
the First Loan, including, without limitation, a commercial
building owned S&Y located at 655 East 30th Street, Los Angeles,
California 90011; and (b) the Debtor is currently indebted to Open
Bank in the amount of approximately $1,500,000 under the Second
Loan which is also secured by the Building owned by S&Y.
Prior to the Petition Date, the Debtor also obtained a loan from
Tae Hyun Yoo (who is the founder and President of the Debtor) and
his wife, Susan Yoo, in the total sum of $350,000, which loan is
secured by substantially all of the Debtor's assets. Prior to the
Petition Date, the Yoos filed a UCC financing statement asserting a
lien against substantially all of the assets of the Debtor.
In August, 2018, the Debtor obtained a loan from an individual
named Chong Taek Lee, in the amount of $10,000, which loan is
secured by substantially all of the Debtor's assets. Prior to the
Petition Date, Lee filed a UCC financing statement asserting a lien
against substantially all of the assets of the Debtor.
The Debtor believes that the total amount currently owed to Open
Bank and Lee is approximately $3,110,000. Given the aggregate value
of the Debtor's assets (i.e., approximately $3,812,890), and the
total estimated amount currently owed to Open Bank and Lee (i.e.,
approximately $3,110,000), both Open Bank and Lee are adequately
protected by an equity cushion of more than 20%.
Furthermore, the Debtor submits that the value of the Secured
Parties' interests in the Debtor's cash collateral will be
adequately protected by, among other things, the maintenance and
continued operation of the Debtor's business.
The Debtor also proposes to provide the Secured Parties with
replacement liens and security interests against the Debtor's
post-petition assets, to the extent of any diminution in value of
such Secured Parties' interests in the Debtor's pre-petition
collateral, with such replacement liens to have the same extent,
validity, and priority as the pre-petition liens held by such
Secured Parties. Such replacement liens will provide the Secured
Parties with further adequate protection.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/cacb18-20836-64.pdf
About Sarah Zone Inc.
Sarah Zone, Inc., is a merchant wholesaler of apparel, piece goods,
and notions. The company filed its Articles of Incorporation in
California on Oct. 5, 2004, according to public records filed with
California Secretary of State.
Sarah Zone sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 18-20836) on Sept. 17, 2018. In
the petition signed by Tae Hyun Yoo, president, the Debtor
disclosed $3,833,130 in assets and $7,301,855 in liabilities. Judge
Sandra R. Klein presides over the case. The Debtor tapped Levene,
Neale, Bender, Yoo & Brill LLP as its legal counsel.
SEABROOK DENTAL: Columbia Bank Cash Collateral Stipulation Rejected
-------------------------------------------------------------------
The Hon. Christopher M. Alston of the U.S. Bankruptcy Court for the
Western District of Washington has entered an order denying
Seabrook Dental Laboratory, LLC's Motion for Authorization to Use
Cash Collateral and for Approval of Stipulation Regarding Use of
Cash Collateral and for Adequate Protection with Columbia Bank,
filed on November 14, 2018.
About Holbrook/Searight
Seabrook Dental Laboratory, LLC --
https://www.seabrookdentallab.com/ -- is an independent, full
service dental laboratory in Edmonds, Washington. Seabrook Dental
offers the newest technology and dental prosthetic solutions to
dentist clients.
Seabrook Dental Laboratory filed for Chapter 11 bankruptcy
protection (Bankr. W.D. Wash. Case No. 18-13499) on Sept. 6, 2018.
In the petition signed by Timothy R. Holbrook, managing member, the
Debtor estimated its assets and liabilities at between $1 million
and $10 million. Judge Christopher M. Alston presides over the
case. Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C.,
serves as the Debtor's bankruptcy counsel. No official committee
of unsecured creditors has been appointed in the Chapter 11 case.
SEATTLE PROTON: Taps Bush Kornfeld as Legal Counsel
---------------------------------------------------
Seattle Proton Center LLC received approval from the U.S.
Bankruptcy Court for the Western District of Washington to hire
Bush Kornfeld LLP as its legal counsel.
The firm will advise the company and its affiliates regarding their
duties under the Bankruptcy Code; assist the Debtors in the review
of and administration of claims; assist in the preparation and
implementation of a bankruptcy plan; and provide other legal
services related to their Chapter 11 cases.
Bush Kornfeld neither represents nor holds any interest adverse to
the interests of the Debtors' bankruptcy estates, according to
court filings.
The firm can be reached through:
Armand J. Kornfeld, Esq.
Aditi Paranjpye, Esq.
Aimee S. Willig, Esq.
Bush Kornfeld LLP
601 Union St., Suite 5000
Seattle, WA 98101
Tel: 206-292-2110
Email: jkornfeld@bskd.com
Email: aparanjpye@bskd.com
Email: awillig@bskd.com
About Seattle Proton Center
Seattle Proton Center, LLC -- https://www.sccaprotontherapy.com/ --
owns a cancer treatment center in Seattle, Washington that uses
highly targeted proton radiation to treat cancer. Proton therapy
is effective in treating many types of cancers, including prostate
and genitourinary, brain and central nervous system, breast,
gastrointestinal, head & neck, lung and thoracic, ocular (Uveal)
melanoma and eye tumors, sarcomas, gynecological, lymphoma, and
skin cancers.
Seattle Proton Center, Procure Seattle Holdings, LLC and Seattle
Proton Center Holdings filed Chapter 11 petitions (Bankr. W.D.
Wash. Lead Case No. 18-14380) on Nov. 14, 2018. In the petitions
signed by Anna Karin Andrews, president, Seattle Proton Center
reported $49,777,854 in total assets and $173,408,587 in total
liabilities. Judge Timothy W. Dore oversees the case.
SEATTLE PROTON: Taps Nixon Peabody as Special Counsel
-----------------------------------------------------
Seattle Proton Center LLC received approval from the U.S.
Bankruptcy Court for the Western District of Washington to hire
Nixon Peabody LLP as its special counsel.
The firm will advise the Debtor and the Public Finance Authority
regarding the proposed refinancing of the Debtor's outstanding debt
and other related transactional issues.
As of the petition date, Nixon Peabody holds $110,000 as a retainer
for post-petition work.
The firm does not hold any interest adverse to the Debtor and its
bankruptcy estate, according to court filings.
Nixon Peabody can be reached through:
Scott Singer, Esq.
Nixon Peabody LLP
55 West 46th Street
New York, NY 10036-4120
Phone: 212-940-3182 / 212-940-3000
Fax: 866-947-2466 / 212-940-3111
About Seattle Proton Center
Seattle Proton Center, LLC -- https://www.sccaprotontherapy.com/ --
owns a cancer treatment center in Seattle, Washington that uses
highly targeted proton radiation to treat cancer. Proton therapy
is effective in treating many types of cancers, including prostate
and genitourinary, brain and central nervous system, breast,
gastrointestinal, head & neck, lung and thoracic, ocular (Uveal)
melanoma and eye tumors, sarcomas, gynecological, lymphoma, and
skin cancers.
Seattle Proton Center, Procure Seattle Holdings, LLC and Seattle
Proton Center Holdings filed Chapter 11 petitions (Bankr. W.D.
Wash. Lead Case No. 18-14380) on Nov. 14, 2018. In the petitions
signed by Anna Karin Andrews, president, Seattle Proton Center
reported $49,777,854 in total assets and $173,408,587 in total
liabilities. Judge Timothy W. Dore oversees the case.
SEATTLE PROTON: Taps Ogden Murphy as Special Counsel
----------------------------------------------------
Seattle Proton Center LLC received approval from the U.S.
Bankruptcy Court for the Western District of Washington to hire
Ogden Murphy Wallace PLLC as special counsel.
The firm will advise the company and its affiliates on matters
including tax, corporate governance, healthcare and regulatory
compliance, employment, and transactional issues.
As of the petition date, Ogden Murphy holds $50,000 as a retainer
for post-petition work.
The firm neither represents nor holds any interest adverse to the
interest of the Debtors and their bankruptcy estates, according to
court filings.
Ogden Murphy can be reached through:
David G. Schoolcraft, Esq.
Ogden Murphy Wallace PLLC
901 5th Avenue, Suite 3500
Seattle, WA 98164
Phone: (206) 447-7000
Fax: (206) 447-0215
Email: dschoolcraft@omwlaw.com
Email: info@omwlaw.com
About Seattle Proton Center
Seattle Proton Center, LLC -- https://www.sccaprotontherapy.com/ --
owns a cancer treatment center in Seattle, Washington that uses
highly targeted proton radiation to treat cancer. Proton therapy
is effective in treating many types of cancers, including prostate
and genitourinary, brain and central nervous system, breast,
gastrointestinal, head & neck, lung and thoracic, ocular (Uveal)
melanoma and eye tumors, sarcomas, gynecological, lymphoma, and
skin cancers.
Seattle Proton Center, Procure Seattle Holdings, LLC and Seattle
Proton Center Holdings filed Chapter 11 petitions (Bankr. W.D.
Wash. Lead Case No. 18-14380) on Nov. 14, 2018. In the petitions
signed by Anna Karin Andrews, president, Seattle Proton Center
reported $49,777,854 in total assets and $173,408,587 in total
liabilities. Judge Timothy W. Dore oversees the case.
SENIOR CARE CENTERS: U.S. Trustee Forms 9-Member Committee
----------------------------------------------------------
The Office of the U.S. Trustee on Dec. 14 appointed nine creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 cases of Senior Care Centers LLC and its affiliates.
The committee members are:
(1) Shiftkey, LLC
Dustin Freeman
Director of Business Development
2816 Thomas Avenue, 5
Dallas, TX 75204
Phone: 972-200-6787
Email: d.freeman@shiftkey.com
(2) TXMS Real Estate Investments, Inc.
Clinton Malin, Executive Vice-President
2829 Townsgate Road, Suite 350
Westlake Village, CA 91361
Phone: 805-981-8639
Email: clint.malin@ltcreit.com
(3) Trident USA Health
Thomas McCaffery, Senior Vice-President
101 Rock Road Horsham, PA 19044
Phone: 215-375-8923
Email: thomas.mccaffery@tridentusashealth.com
(4) Performance Food Group, Inc.
Bradley Boe, Director of Credit
188 Inverness Drive West, Suite 700
Englewood, CO 80108
Phone: 303-898-8137
Email: brad.boe@pfgc.com
(5) Acadian Ambulance Service
James Troy Mayer, Regional Vice-President
P.O. Box 98000
Lafayette, LA 70509 337-291-3311
(6) Direct Supply, Inc.
Rich Lampereur, Director of Financial Services
6767 North Industrial Road
Milwaukee, WI 53223
Phone: 414-760-8142
Email: rlampereur@directs.com
(7) Healthcare Services Group, Inc.
Raymond Terwilliger, Vice-President Financial Services
3220 Tillman Drive, Suite 300
Bensalem, PA 19020
Phone: 215-688-4359
(8) Joerns Healthcare LLC
Kevin Buczynski, Vice-President National Revenue Cycle
2430 Whitehall Park Drive, Suite 100
Charlotte, NC 28273
Phone: 800-826-0270-ext. 1013
Email: kevin.buczynski@joerns.com
(9) Medline Industries Inc.
Shane Reed, Director of Credit
Three-Lakes Drive
Northfield, IL 60093
Phone: 262-367-7501 ext. 2252
Email: sreed@medline.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
Proposed Counsel for the Official Committee of Unsecured
Creditors:
Shari L. Heyen, Esq.
GREENBERG TRAURIG, LLP
1000 Louisiana St., Suite 1700
Houston, TX 77002
Tel: (713) 374-3564
Fax: (713) 374-3505
Email: HeyenS@gtlaw.com
-- and --
Nancy A. Peterman, Esq.
GREENBERG TRAURIG, LLP
77 West Wacker Dr., Suite 3100
Chicago, IL 60601
Tel: (312) 456-8410
Fax: (312) 456-8435
Email: PetermanN@gtlaw.com
-- and --
Karl G. Dial, Esq.
GREENBERG TRAURIG, LLP
2200 Ross Ave., Suite 5200
Dallas, TX 75201
Tel: (216) 665-3611
Fax: (216) 665-3601
Email: DialK@gtlaw.com
About Senior Care Centers
Senior Care Centers, LLC -- https://senior-care-centers.com/ -- is
a Dallas-based, skilled nursing and long-term care industry leader
in Texas and Louisiana. Senior Care Centers operates and manages
more than 100 skilled nursing and assisted/independent living
communities in the states of Texas and Louisiana.
On Dec. 4, 2018, Senior Care Centers and 120 of its subsidiaries
filed voluntary Chapter 11 petitions (Bankr. N.D. Tex. Lead Case
No. 18-33967).
The Debtors tapped Polsinelli PC as bankruptcy counsel; Hunton
Andrews Kutrh LLP as conflicts counsel; Sitrik and Company as
communications consultant; and Omni Management Group, Inc. as
claims, noticing, and administrative agent.
SIMPLY GREEK: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The Office of the U.S. Trustee on Dec. 13 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Simply Greek Uptown LLC.
About Simply Greek Uptown
Based in Cleveland, Ohio, Simply Greek Uptown LLC is a quick-serve
restaurant serving authentic Greek cuisine. Simply Greek Uptown
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-16614) on Nov. 2,
2018, listing under $1 million in assets and liabilities. Glenn E.
Forbes, at Forbes Law LLC, represents the Debtor.
SKY-SCAN INC: Taps William S. Gannon PLLC as Special Co-Counsel
---------------------------------------------------------------
Sky-Skan Incorporated seeks approval from the U.S. Bankruptcy Court
for the District of New Hampshire to William S. Gannon and the firm
of William S. Gannon PLLC to serve as special litigation co-counsel
with the Tamposi Law Group, for the purpose of: (a) representing
the Debtor in the adversary proceeding captioned Sky-Skan
Incorporated v. Coastal Capital, LLC, Adv. Pro. No. 17-01080
(Bankr. D.N.H. 2017), which has been pending before this Court
since November 24, 2017; (b) filing such pleadings therein as the
Debtor's General Counsel and proposed Special Counsel may deem
appropriate; (c) prosecuting/defending any Proceedings; and (d)
providing all advice, counsel and services as may be reasonably
necessary in connection with the Adversary Proceeding.
Services to be rendered by William S. Gannon are:
a. represent the Debtor in the Adversary Proceeding and draft,
file and pursue such summary judgment motions and other motions,
objections and other pleadings as may be necessary or appropriate
in the judgment of the Debtor and the Debtor's General Counsel in
consultation and conjunction with the Debtor's General Counsel;
b. appear in Court in all matters regarding the Adversary
Proceeding to advance the interests of the Debtor; and
c. perform all other legal services for the Debtor which may
be necessary and proper in Adversary Proceeding.
William S. Gannon of William S. Gannon PLLC attests that he is a
disinterested person within the meaning of 11 U.S.C. Sec. 101(14).
The counsel can be reached at:
William S. Gannon PLLC
889 Elm Street, 4th Floor
Manchester, NH 03101-2101
Phone: 603-769-4756
Fax: 603-621-0830
About Sky-Skan Incorporated
Sky-Skan, Inc., was founded in 1967 as a company dedicated solely
to the development and manufacture of specialized devices for
depicting dynamic visualizations of astronomical and meteorological
phenomena on planetarium domes in museums, schools, and
universities. The company has since grown to become a provider of
digital full dome science visualization, theater control, and show
programming systems for hundreds of planetariums on six
continents,
serving hundreds of clients in the niche field of immersive science
interpretation and education. From the initial planning stage to
staff training and ongoing support, Sky-Skan provides all services
required by the most advanced digital full-dome planetariums and
visualization theaters.
Sky-Skan, based in Nashua, NH, filed a Chapter 11 petition (Bankr.
D.N.H. Case No. 17-11540) on Nov. 1, 2017. Steven T. Savage,
president, signed the petition. In its petition, the Debtor
estimated $0 to $50,000 in assets and $1 million to $10 million in
liabilities.
Peter N. Tamposi, Esq., at The Tamposi Law Group, P.C., serves as
bankruptcy counsel. The Debtor tapped SquareTail Advisors, LLC, as
financial advisor.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Dec. 1, 2017. The Committee retained
William S. Gannon PLLC as its bankruptcy counsel.
SMTT INC: Gets Final Authorization on Cash Collateral Use
---------------------------------------------------------
The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the
Southern District of Indiana has entered a final order authorizing
SMTT, Inc., to use cash collateral up to the aggregate amount of
$45,226 per week.
The Debtor is authorized to use cash collateral to meet the
ordinary cash needs of the Debtor (and for such other purposes as
may be approved in writing by the Secured Creditor) for the payment
of actual expenses necessary to (a) maintain and preserve its
assets; (b) continue operation of its business, including payroll
and payroll taxes, and insurance expenses as reflected in the cash
collateral budget; and (c) administrative expenses as approved by
the Court and U.S. Trustee fees as due.
Advantage Capital Funding claims a perfected security lien interest
in the Debtor's pre-petition property. Swift Financial, LLC also
claims a perfected security, but perfection has been challenged by
the Debtor and Advantage Capital Funding. The Debtor has now filed
an Adversary Proceeding to determine the priority, validity, or
extent of the liens under Cause No. 18-50339.
The Debtor acknowledges and agrees that either Advantage Capital
Funding or Swift Financial has a perfected security lien interest
in Debtor's prepetition property, which includes including deposits
of money with banking institutions, cash on hand and accounts
receivable, in addition to Debtor's equipment, motor vehicles,
inventory, and contract receivables, and that provides security for
the prepetition claims of the Secured Creditors.
The Debtor agrees to account for all cash collateral which existed
at the inception of its case.
The Debtor further agrees to provide adequate protection to the
proper First Priority Secured Creditor as determined by the Court
in the adversary proceeding with regard to its interest in the
property of the estate and for the use of cash of cash collateral,
as follows:
(A) The Debtor will escrow the sum of $4,000 on the 1st of
each month, which payments will continue until the earlier of one
of the following events: (a) dismissal, (b) conversion to Chapter
7, (c) confirmation of a plan of a plan of reorganization, or (4)
payment in full of the secured debt. Theses payments will be
applied to the allowed secured claim of the First Priority Secured
Creditor in the amount of $45,953. Once the Court determines the
proper First Priority Secured Creditor, the funds in escrow can be
paid to that creditor.
(B) The Debtor will maintain in full force and effect
insurance coverage on the property subject to the liens of the
secured creditor, insuring the reasonable value of said property
against loss or damage by theft and/or casualty, subject to the
customary deductibles in regard to such coverage.
(C) The Secured Creditors will have a replacement perfected
security interest and first position lien only for the amount that
the Debtor's assets value exceeds the actual debt to Secured
Creditors at filing, and to the extent the secured creditor's cash
collateral is used by the Debtor, with the same priority in the
Debtor's post-petition collateral and proceeds thereof that the
secured creditors held in the Debtor's pre-petition collateral.
(D) To the extent the adequate protection provided in the
Final Order proves insufficient to protect the Secured Creditors'
interest in and to the cash collateral, the Secured Creditors will
have a super-priority administrative expense claim, pursuant to
Section 507(b) of the Bankruptcy Code, senior to any and all claims
against the Debtor.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/insb18-07892-41.pdf
About SMTT Inc.
SMTT provides delivery services for Fed Ex Ground Package System,
Inc. by utilizing 10 trucks leased from Ryder to make deliveries.
The Company's primary business operations are in Indianapolis,
Indiana. SMTT is managed by its owner, Cherie Smith.
SMTT, Inc., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Ind. Case No. 18-07892) on Oct. 15, 2018. In the
petition signed by its president, Cherie D. Smith, the Debtor
estimated assets and liabilities of less than $50,000 each. Judge
Robyn L. Moberly presides over the case. The Debtor tapped Redman
Ludwig P.C. as its legal counsel.
SOUTHEAST POWERGEN: S&P Alters Outlook to Stable & Affirms 'B' ICR
------------------------------------------------------------------
Southeast PowerGen LLC's (SEPG's) term loan B balance has decreased
by almost half following the sale of the Washington County power
plant. This, as well as some improvement in SEPG's performance and
market conditions, has resulted in stronger credit metrics for the
project. However, this is not enough to affect S&P's 'B' rating.
S&P said, "We revised the outlook on SEPG to stable from negative.
We also increased our recovery estimate on the debt to 60% from 50%
(recovery rating remains '3'), indicating our expectation for
meaningful recovery in a default."
The term loan B is being partially paid down following the sale of
the Washington County power plant. SEPG has sold Mackinaw Power's
Washington County power plant (609 MW) to an affiliate of Harbert
Management Corp., resulting in about $267 million in proceeds. Of
this amount, $35 million of the notes outstanding at Mackinaw Power
LLC ($87.6 million) will be repaid, another $25 million will help
fund Carlyle's acquisition of GE Capital's 25% stake in SEPG
(making Carlyle the 100% owner of SEPG), and about $10 million will
be for make-whole payments and transaction fees and expenses. The
remaining $197.1 million has been used to pay down the balance on
the term loan B at SEPG (down to $222.9 million from $420
million).
S&P said, "The stable outlook reflects reduced debt leverage and ur
expectation that market conditions will steadily improve, but still
keep our minimum DSCR, which occurs in our refinancing period, in
the 0.8x-1.0x range. For 2019 and 2020, we expect coverage above
1.6x. Though two of the power plants within the project portfolio
are merchant exposed, cash flows from the contracted plants will
provide support and reduce volatility during the duration of the
term loan B.
"We could lower the rating if the minimum DSCR in our base-case
forecast falls below 0.75x-0.85x and the project's liquidity
position weakens. This would most likely be driven by either poor
operational performance, higher costs than forecast, or an
acceleration of major maintenance, or in conjunction with weak
future demand for capacity for the contracted assets.
"We could raise the rating if an improving power market boosts
gross margins at Effingham such that the base-case forecast minimum
DSCRs move into the lower end of the 1.0x-1.50x range, and/or if
the merchant plants can recontract on favorable terms and shore up
cash flow stability. Coverage could also improve if more of the
principal is repaid than forecast, and if costs decrease."
SOUTHERN CALIFORNIA LOGISTICS: Moody's Hikes 2007/2008A TABs to Ba2
-------------------------------------------------------------------
Moody's Investors Service has upgraded the rating to Ba2 from B3 on
Southern California Logistics Airport Authority's Subordinate Tax
Allocation Revenue Bonds (TABs), Series 2007 and 2008A, affecting
$59.6 million. Moody's has also upgraded the rating to Baa2 from
Ba1 on $35.4 million of outstanding Series 2007 Housing Set-Aside
tax allocation bonds. Moody's has also assigned a stable rating
outlook.
RATINGS RATIONALE
The upgrade to Ba2 incorporates the recent strong growth in the tax
base that generated excess revenues to cure all past defaults as of
December 1, 2018. The Ba2 takes into account the successor agency's
sizeable tax base that is poised for continued growth albeit at a
lower rate than in previous years; area residents' weak
socioeconomic profile, and improving yet still relatively weak debt
service coverage on the non-housing TAB. The rating also
incorporates low incremental to total assessed valuation (AV) ratio
and high concentration in the top ten taxpayers.
The upgrade to Baa2 on the Series 2007 bonds (housing set aside)
reflects improved debt service coverage that Moody's expects to
remain strong and a track record of timely debt service payment
that Moody's anticipates will continue. The Baa2 incorporates its
expectation that assessed valuation will continue to grow at a
moderate rate and tax base volatility, as measured by the ratio of
incremental to total project area AV, is likely to remain much
higher than average for the foreseeable future.
RATING OUTLOOK
The stable outlook of the Successor Agency to the Victor Valley
Economic Development Authority reflects the likelihood of continued
moderate tax base growth, resulting in continued adequate debt
service coverage.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Significant improvement in incremental to AV ratio
- Lower concentration of ten largest taxpayers
- Material improvement in wealth indicators for area residents
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Moderate decline in AV, leading to an erosion of debt service
coverage levels
- Material change in the California Department of Finance's
approach to the use of excess tax increment revenues
LEGAL SECURITY
The subordinate bonds are secured by allocated incremental revenues
from the sub-areas of Victor Valley Economic Development
Authority's Project Area, net of housing set-asides, debt service
on senior lien bonds, and other senior pass-throughs.
The Series 2007 housing TABs are legally secured by the 20% housing
set aside of tax increment receipts.
USE OF PROCEEDS
Not applicable
PROFILE
SCLAA, the issuer of the bonds, is a Joint Exercise of Powers
Authority that is comprised of the City of Victorville and the
Victorville Water District. VVEDA delegated all of its
redevelopment authority with respect to the airport to SCLAA.
METHODOLOGY
The principal methodology used in these ratings was Tax Increment
Debt published in December 2017.
SPRINT INDUSTRIAL: S&P Lowers ICR to 'CCC-', Outlook Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Sprint
Industrial by one notch to 'CCC-' from 'CCC'.
S&P said, "At the same time, we lowered our issue-level ratings on
the company's first-lien credit facilities to 'CCC' from 'CCC+' and
our issue-level rating on the second-lien debt to 'C' from 'CC'.
The negative outlook reflects the high likelihood that we would
lower our ratings if Sprint Industrial announces a debt
restructuring or distressed exchange."
S&P said, "The downgrade reflects our expectation that Sprint
Industrial will likely undertake a debt restructuring that we
classify as distressed over the next six months. In our view, the
company is highly unlikely to refinance its first-lien credit
facilities at par before maturity. The revolving credit facility
and first-lien term loan mature in February 2019 and May 2019,
respectively.
"The negative outlook on Sprint Industrial reflects our belief that
the company will be unable to refinance its capital structure at
par and is thus likely to pursue a distressed exchange or debt
restructuring in the next six months.
"We would lower our rating on Sprint Industrial if the company
announces a distressed exchange or debt restructuring or if we
believe a default is a virtual certainty.
"Although highly unlikely, we could raise our ratings on Sprint
Industrial if we expect it will refinance its upcoming debt
maturities at par or extend the tenor of the loans such that
lenders receive offsetting compensation that we deem to be
equivalent to the original promise."
STARION ENERGY: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The Office of the U.S. Trustee on Dec. 14 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Starion Energy, Inc.
About Starion Energy
Founded in 2009, Starion Energy -- https://www.starionenergy.com/
-- is a competitive electric supplier that markets and sells
electricity to retail customers. Starion participates in certain
"deregulated" markets -- markets in which the state has allowed
third-party energy providers to market and sell electricity supply
as an alternative to the electric supply procured and provided by
the customers' utility. It has operations in Connecticut,
Delaware, District of Columbia, Illinois, Massachusetts, Maryland,
New Jersey, New York, Ohio, and Pennsylvania. Based in Middlebury,
Connecticut, Starion Energy is a member of the Retail Energy Supply
Association (RESA).
Starion Energy and its affiliates, Starion Energy PA, Inc. and
Starion Energy NY, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 18-12608) on Nov. 14,
2018. At the time of the filing, Starion Energy disclosed
$26,888,675 in assets and $6,956,141 in liabilities.
The Hon. Mary F. Walrath is the case judge.
Gellert Scali Busenkell & Brown, LLC, is the Debtors' legal
counsel.
STOLLINGS TRUCKING: Seeks Court Approval to Employ Bookkeeper
-------------------------------------------------------------
Stollings Trucking Company, Inc., seeks approval from the U.S.
Bankruptcy Court for the Southern District of West Virginia to hire
a bookkeeper.
The Debtor proposes to employ Michelle Steele to assist in the
preparation of financial and accounting records and the financial
review of accounting records to compile its monthly operating
reports from June to December 2018.
Ms. Steele will be paid $400 per month for her services.
The bookkeeper does not represent any interest adverse to the
Debtor and its bankruptcy estate, according to court filings.
About Stollings Trucking Company
Stollings Trucking Company, Inc., began its operations in 1990.
Throughout the years, it both hauled coal and mined coal for its
own profit. As it grew, it acquired more equipment and rolling
stock. Stollings also obtained mining permits on property in Logan
County, West Virginia, and was a party to coal leases.
Stollings Trucking sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 15-20624) on Dec. 7,
2015. In the petition signed by Rhonda Marcum, president, the
Debtor estimated assets and liabilities of $1 million to $10
million.
Judge Frank W. Volk presides over the case.
Joseph W. Caaldwell, Esq., at Caldwell & Riffee, in Charleston,
West Virginia, is the Debtor's bankruptcy counsel.
SUMAR INTERNATIONAL: Seeks Authorization on Cash Collateral Use
---------------------------------------------------------------
Sumar International, Inc., seeks authorization from the U.S.
Bankruptcy Court for the Central District of California to use its
monies to operate its business, to honor existing and future
contracts for work and to do so first on an interim basis and then
on a final basis.
Based on filed financing statements, they appear to be the
following entities: (a) Bank of America is owed approximately
$285,000, holds the senior lien in monies; and (b) DS-Concept Trade
Invest LLC has recorded a financing statement but never extended
any form of credit to Sumar. DS-Concept is owed $0.00, thus, the
financing statement should not have been recorded.
Bank of America's security interest is protected for at least the
following reasons:
(a) The value of the Debtor's assets.
(b) Sumar will continue to operate the business and maintain
and service the assets.
(c) Operating the business creates additional revenues.
(d) All assets are adequately insured.
(e) Providing replacements lien to Bank of America to the
extent its prepetition lien attached to Sumar's property
prepetition and with the same validity, priority, and description
of collateral. To be clear, if there is a defect in a security
interest prepetition, that same defect would apply postpetition.
(f) The Court may order Sumar at the interim hearing or at a
final hearing to make adequate protection payments. However, as of
now, Sumar does not propose to make adequate protection payments at
least for a few months so that Sumar can start to get its finances
on a firmer basis.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/cacb18-23696-5.pdf
About Sumar International Inc.
Established in 2007, Sumar International, Inc. --
https://sumarusa.com/ -- provides in-house electronics for U.S.
hospitality and health and beauty industries. It offers TV wall
mounts, TV stands, audio cables, night lights and lamps, and
accessories under the brands SUMAR, UNO, uMOVE, uBRITE and miffy.
Sumar International is headquartered in Pasadena, California.
Sumar International sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 18-23696) on Nov. 21,
2018. At the time of the filing, the Debtor estimated assets of
less than $1 million and liabilities of $1 million to $10 million.
The case has been assigned to Judge Julia W. Brand. THE FOX LAW
CORPORATION, INC., is the Debtor's counsel.
T CAT ENTERPRISE: Allowed to Use Cash Collateral Through Dec. 31
----------------------------------------------------------------
The Hon. Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois has entered a fourth order
authorizing T CAT Enterprise, Inc.'s use of cash collateral through
and including Dec. 31, 2018.
A further hearing to consider the Cash Collateral Motion and entry
of final cash collateral order will be held on Nov. 18, 2018 at
10:30 a.m.
The Debtor may use the cash collateral to pay those items
delineated in the cash collateral budget with a variance from
actual-to-projected weekly disbursements not to exceed 10% on
cumulative basis. The approved budget provides total projected
expenses of approximately $117,813 for the month of December 2018.
Associated Bank, N.A. asserts secured claims against some or all of
the Debtor's assets, including Debtor's cash and accounts
receivable.
Associated Bank and any other secured creditor are granted
replacement liens upon and security interests in the Debtor's
post-petition cash and accounts receivable in the same priority as
Associated Bank's and any other secured creditor's existing
prepetition liens (to the extent valid), and in no event to exceed
the type, kind, priority and amount, if any, of their security
interests which existed on the Petition Date.
The Debtor proposes to initially make monthly adequate protection
payments to Associated Bank in the amount of $6,000 by December 21,
2018, consisting of principal and interest on the outstanding
balance.
A copy of the Fourth Order is available at
http://bankrupt.com/misc/ilnb18-22736-59.pdf
About T CAT Enterprise
T Cat Enterprise, Inc. -- http://www.tcatinc.com/-- is a
family-owned and operated construction company specializing in
excavation, railroad clean up, and snow plowing services in the
tri-state area. In addition, the Company also offers hauling
services, demolition services, and pavers and asphalt repairs.
T Cat Enterprise, Inc., based in Franklin Park, IL, filed a Chapter
11 petition (Bankr. N.D. Ill. Case No. 18-22736) on Aug. 13, 2018.
In the petition signed by James R. Trumbull, president, the Debtor
estimated $0 to $50,000 in assets and $1 million to $10 million in
liabilities. The Hon. Jack B. Schmetterer presides over the case.
Joseph E. Cohen, Esq., and Gina B. Krol, Esq., at Cohen & Krol,
serve as bankruptcy counsel to the Debtor.
TIERPOINT LLC: Bank Debt Trades at 5% Off
-----------------------------------------
Participations in a syndicated loan under which TierPoint LLC is a
borrower traded in the secondary market at 95.25
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.47 percentage points from the
previous week. TierPoint LLC pays 375 basis points above LIBOR to
borrow under the $700 million facility. The bank loan matures on
April 27, 2024. 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,
December 7.
TOWER AUTOMOTIVE: Moody's Alters Outlook on B1 CFR to Positive
--------------------------------------------------------------
Moody's Investors Service revised Tower Automotive Holdings USA,
LLC's rating outlook to positive following the announcement of a
definitive agreement by Tower International, Inc., Holdings's
ultimate parent, to sell all of its European Operations to
Financiere SNOP Dunois S.A."FSD ", a privately owned French
automotive supplier. In a related action Moody's affirmed the
Holdings USA's Corporate Family and Probability of Default Ratings,
at B1 and B1-PD, respectively; and senior secured credit term loan
at B1. The Speculative Grade Liquidity Rating was affirmed at
SGL-2.
Tower's European Operation's full year 2018 revenues are projected
at $650 million and Adjusted EBITDA of $55 million. The anticipated
$298 million sales price (before fees and other adjustments)
represents an enterprise multiple of 5.4x adjusted EBITDA. The
transaction is expected to close during the first quarter of 2019,
subjects to certain government approvals and other conditions.
Rating Outlook
Tower Automotive Holdings USA, LLC
To Positive, from Stable
Moody's affirmed the following ratings:
Tower Automotive Holdings USA, LLC
Corporate Family Rating, at B1;
Probability of Default Rating, at B1-PD
$306 million (remaining amount) senior secured term loan due 2024,
at B1 (LGD4 from LGD3);
Speculative Grade Liquidity Rating, at SGL-2
The revolving credit facility is not rated by Moody's.
RATINGS RATIONALE
The revision of Holdings USA's rating outlook to positive reflects
the company's strong credit metrics within the assigned rating
category and the expected further debt pay down with some of the
proceeds from the sale of its European assets. Holdings USA's pro
forma debt/EBITDA as of September 30, 2018 for sale approximates
2.5x. Holdings USA's pro forma leverage incorporates the expected
$50 million repayment at the closing of the sale as part of the
recent term lender consent. Leverage is expected to be well
positioned for the rating category. Management also has indicated
that the asset sale is accretive to the profit margins of the
remaining operations.
The affirmation of Holding's USA's B1 rating incorporates the
potential strategic risk now afforded to the company, the reduction
in scale resulting from the asset sale, and narrowing of geographic
exposure. Following the sale of the European operations, the
company will have significant levels of cash on hand available for
strategic actions supportive of improving scale, and revenue
diversity. This opportunity also brings potential risks including
additional leverage, and integration hurdles. Holdings is expected
to continue to maintain a solid position as a supplier of
engineered structural metal components and assemblies for the North
American automotive industry with a strong share of products on
large frame vehicles. Yet, already high customer concentrations are
likely to increase following the asset sale.
Holdings USA's, Speculative Grade Liquidity Profile of SGL-2,
incorporates the expectation of a good liquidity profile over the
near-term supported by cash on hand and availability under the $200
million revolving credit facility maturing in 2022. Cash on hand as
of September 30, 2018 was about $47.7 million and the $200 million
revolving credit facility was unfunded with about $8.2 million
letters of credit outstanding. Free cash flow is anticipated to
remain strong, in the low teens as a percentage of debt following
the asset sale, resulting in the revolving credit facility
remaining largely unused. The financial covenant under the
revolving credit facility includes a total net leverage ratio test
and a minimum interest coverage test. The senior secured term loan
has a total net leverage coverage ratio test. Moody's anticipates
that the company will have ample cushion under these covenants over
the near-term.
Future events that have the potential to drive the rating higher
include, pro forma for the consideration of any strategic
acquisitions: consistent free cash flow generation, improvement in
operating performance resulting in Debt/EBITDA maintained below
3.0x, and EBITA/Interest coverage inclusive of restructuring
charges above 3.0x.
Future events that have the potential to drive the outlook or
rating lower include regional weaknesses in global automotive
production which are not offset by successful restructuring
actions, or debt funded acquisitions resulting in Debt/EBITDA above
4.0x, EBITA/Interest being maintained at 2.0x, or deterioration in
the company's liquidity position.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
Tower International, Inc. headquartered in Livonia, Michigan, is a
leading integrated global manufacturer of engineered structural
metal components and assemblies primarily serving automotive
original equipment manufacturers. The company manufactures
body-structure stampings, frame and other chassis structures, as
well as complex welded assemblies, for small and large cars,
crossovers, pickups and SUVs. Revenues in for LTM period ending
September 30, 2018 approximated $2.2 billion.
TRINSEO MATERIALS: Bank Debt Trades at 3% Off
---------------------------------------------
Participations in a syndicated loan under which Trinseo Materials
Operating SCA [ex-Styron] is a borrower traded in the secondary
market at 97.25 cents-on-the-dollar during the week ended Friday,
December 7, 2018, according to data compiled by LSTA/Thomson
Reuters MTM Pricing. This represents a decrease of 1.35 percentage
points from the previous week. Trinseo Materials pays 200 basis
points above LIBOR to borrow under the $696 million facility. The
bank loan matures on September 6, 2024. Moody's rates the loan
'Ba2' 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, December 7.
TSI TELECOMMUNICATION: Bank Debt Trades at 5% Off
-------------------------------------------------
Participations in a syndicated loan under which TSI
Telecommunication Services is a borrower traded in the secondary
market at 95.13 cents-on-the-dollar during the week ended Friday,
December 7, 2018, according to data compiled by LSTA/Thomson
Reuters MTM Pricing. This represents a decrease of 1.34 percentage
points from the previous week. TSI Telecommunication pays 300 basis
points above LIBOR to borrow under the $700 million facility. The
bank loan matures on April 20, 2019. Moody's gave no rating to the
loan 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, December 7.
TUXEDO, NY: Moody's Revises Outlook on Ba1 Issuer Rating to Pos.
----------------------------------------------------------------
Moody's Investors Service has affirmed the Town of Tuxedo, New
York's Ba1 GOLT and Issuer ratings. The outlook has been revised to
positive from negative.
The issuer rating is equivalent to the town's hypothetical general
obligation unlimited tax rating; there is no debt associated with
the GOULT security. Moody's considers the outstanding debt to be
GOLT because of limitations under New York State law on property
tax levy increases.
RATINGS RATIONALE
The Ba1 issuer and GOLT ratings reflect the town's modest and
stabilizing tax base, strong resident wealth and income, and very
weak but improved financial position. The lack of distinction
between the GOLT and Issuer ratings reflects both the town board's
ability to override the property tax cap and the faith and credit
pledge supporting debt service, a security feature of all general
obligation debt issued by New York local governments.
RATING OUTLOOK
The positive outlook indicates its expectations that management
will successfully eliminate the last remaining deficit positions in
all funds and will continue the process of rebuilding reserves and
liquidity to healthier position.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Significant improvement in operating fund balance and cash
position
- Material tax base growth
FACTORS THAT COULD LEAD TO A DOWNGRADE/REMOVAL OF THE POSITIVE
OUTLOOK
- Reversion to structural imbalance across operating funds
- Significant deterioration in net cash position
- Material decline in the tax base or resident wealth and
incomes
LEGAL SECURITY
The GOLT bonds are secured by the town's general obligation pledge
as limited by the Property Tax Cap Legislation (Chapter 97 (Part A)
of the Laws of the State of New York, 2011).
PROFILE
The town of Tuxedo is located 35 miles north of New York City (Aa2
stable) in Orange County (Aa3 stable). It has a population of
approximately 3,500.
METHODOLOGY
The principal methodology used in these ratings was US Local
Government General Obligation Debt published in December 2016.
UNITED MATERIAL: Seeks Authorization to Use Cash Collateral
-----------------------------------------------------------
United Material Recovery, LLC, seeks authorization from the United
States Bankruptcy Court for the District of Kansas for postpetition
use of cash collateral to pay certain expenses as set forth in the
Budget and Payroll Summary.
The Debtor has accounts receivable owed by Mid-America Paper
Recycling, Inc. The Debtor anticipates receiving payment in the
approximate amount of $25,000 for the accounts receivable. The
Debtor intends to use the funds from the accounts receivable to pay
employees' wages and to assist in cleaning up the stored recycled
material in Licking County, Ohio in order to comply with
environmental regulations and to ready the property for possible
sale.
As of Nov. 6, 2018, the Debtor is indebted to Homeowners Realty,
LLC, as assigned to Thomas W. McNamara, Court-Appointed Creditor,
an alleged total principal amount of approximately $990,000
pursuant to that certain Promissory Note and Mortgage. To secure
payment of the obligations owing to Homeowners Realty pursuant to
the Loan Documents, the Debtor granted Homeowners Realty a valid
first mortgage on the property located at 100 Manning Street,
Newark, OH 43055.
Thomas W. McNamara was assigned David Feingold's interest in the
Debtor, and it appears that McNamara filed a blanket UCC Financing
Statement on or about Sept. 12, 2018 which may be an avoidable
preference.
In addition to Homeowners Realty, the Debtor believes that (a)
First Corporate Solutions holds a blanket lien in all of Debtor's
assets for an unknown amount, and (b) Funding Metrics LLC also has
a claim to Debtor's accounts and accounts receivables.
The Debtor submits that it does not admit that any Creditor holds a
valid, perfected or enforceable prepetition liens and security
interests in and to any of the Prepetition Collateral and the
Debtor does not waive the right to contest the validity, perfection
or enforceability of any Creditor's alleged prepetition liens and
security interests in and to any such property.
While the Debtor has not fully analyzed all loan documents and UCC
filings, the Debtor does believe that Homeowners Realty or First
Corporate Solutions or Funding Metrics LLC hold a claim to its cash
collateral.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/ksb18-22309-23.pdf
About United Material Recovery
United Material Recovery, LLC, is a privately held company in the
recycling business. Its principal assets are located at 1000
Manning St Newark, OH 43055. United Material is an affiliate of
UMR Building, LLC (Bankr. D. Kansas Case No. 18-22304).
United Material Recovery filed a Chapter 11 petition (Bankr. D.
Kansas Case No. 18-41421) on Nov. 6, 2018. In the petition signed
by David Feingold, managing member, the Debtor disclosed total
assets of $131,600 and total debt of $8,161,617 as of the
bankruptcy filing. The Debtor is represented by Colin N. Gotham,
Esq., of Evans & Mullinix, P.A.
USG CORP: Moody's Lowers CFR to Ba2, Outlook Negative
-----------------------------------------------------
Moody's Investors Service downgraded USG Corporation's Corporate
Family Rating to Ba2 from Ba1 and its Probability of Default Rating
to Ba2-PD from Ba1-PD due to lower than expected operating
performance. USG is experiencing higher unit costs and higher
transportation costs, offsetting higher volumes, better pricing,
and efficiency gains. Moody's anticipates these costs will result
in ongoing margin pressures over the next 12 to 18 months.
Additionally, higher level of balance sheet debt expected as the
result of Gebr. Knauf KG's acquisition of USG result in key debt
credit metrics indicative of lower ratings and warranting the
downgrade. In related rating actions, Moody's downgraded USG's
senior unsecured notes to Ba2 from Ba1, and its industrial revenue
bonds to B1 from Ba2. Speculative Grade Liquidity Rating of SGL-1
is affirmed. Rating outlook is negative. This concludes the review
initiated on June 12, 2018.
Knauf, a family-owned global manufacturer of buildings products and
materials located in Iphofen, Germany, announced in mid-June that
it is acquiring all outstanding shares USG in a transaction valued
at approximately $7.0 billion, representing a multiple of
approximately 11.6x USG's adjusted EBITDA for the 12 months ended
March 31, 2018. USG shareholders already received $44.00 per share,
which consists of $43.50 per share in cash payable upon closing of
the transaction, scheduled for late-1Q19, and a $0.50 per share
special dividend.
The following ratings/assessments were affected by this action:
Downgrades:
Issuer: East Chicago (City of) IN
Senior Unsecured Revenue Bonds, Downgraded to B1 (LGD6) from Ba2
(LGD6)
Issuer: OHIO (STATE OF)
Senior Unsecured Revenue Bonds, Downgraded to B1 (LGD6) from Ba2
(LGD6)
Issuer: Ohio Air Quality Development Authority
Senior Unsecured Revenue Bonds, Downgraded to B1 (LGD6) from Ba2
(LGD6)
Issuer: OREGON (STATE OF)
Senior Unsecured Revenue Bonds, Downgraded to B1 (LGD6) from Ba2
(LGD6)
Issuer: Pennsylvania Economic Dev. Fin. Auth.
Senior Unsecured Revenue Bonds, Downgraded to B1 (LGD6) from Ba2
(LGD6)
Issuer: USG Corporation
Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD
Corporate Family Rating, Downgraded to Ba2 from Ba1
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 (LGD4)
from Ba1 (LGD4)
Outlook Actions:
Issuer: USG Corporation
Outlook, Changed To Negative From Rating Under Review
Affirmations:
Issuer: USG Corporation
Speculative Grade Liquidity Rating, Affirmed SGL-1
RATINGS RATIONALE
The downgrade of USG's Corporate Family Rating to Ba2 form Ba1
results from worsening debt credit metrics due to operating
performance below its previous expectations. USG is experiencing
higher costs per unit and higher transportation costs, offsetting
higher volumes, better pricing , and efficiency gains. Higher costs
for raw material such as resins, gypsum, and oil-based commodity
costs are negatively impacting performance as well. Over the next
12 to 18 months, Moody's now projects USG's EBITA margins near 10%
versus its previous forecasts in late-November 2017 of about 15%.
Its revised margin forecast includes some price increases and
better volumes, providing some offset to higher input, personnel
and transportation costs.
Additionally, higher level of balance sheet debt expected as the
result of Gebr. Knauf KG's acquisition of USG is pressuring key
debt credit metrics too. Knauf indicated that it has secured on
behalf of USG an $800 million term loan and $858.5 million backstop
facility for USG, which could be utilized and further increase
USG's debt burden. Excluding borrowings under the backstop
facility, USG's balance sheet is growing by about 73% to $1.9
billion from $1.1 billion at September 30, 2018, an amount USG has
not experienced since FYE15. As a result of more balance sheet debt
and lower level of operating earnings, Moody's now forecasts debt
leverage slightly below 4.0x by year-end 2019 from its previous
forecast of 2.0x, and free cash flow-to-debt of around 7% over the
same time period. Pro forma total adjusted balance sheet debt is
about $2.2 billion at 2Q18. Consistent with Moody's standard
adjustments, Moody's adds an additional $193 million to balance
sheet debt for pension liabilities, which should be lower in 2018
since USG will contribute throughout the year about $71 million to
its pension plans, about $115 million for operating lease
commitments, and $11 million for unamortized debt issuance costs.
However, Moody's still expects USG will profit from sound
fundamentals in domestic repair and remodeling activity and new
residential construction, drivers of gypsum revenues and resulting
earnings and cash flow generation. Its performance expectations for
repair and remodeling end market considers trends in the National
Association of Home Builders (NAHB) Remodeling Market Index, an
industry survey that gauges remodeling contractors' expectations of
demand over the next three months. The Remodeling Market Index's
overall reading was 58.3 in 3Q18, above 50 since 1Q13 and
indicating sustained growth. An index reading above 50 indicates
majority of contractors surveyed believe market conditions are
expanding. Over next 12 to 18 months, Moody's anticipates the
overall reading remaining in expansion. Moody's projects total new
housing starts could reach 1.31 million in 2019, representing a
2.9% increase from an expected 1.27 million in 2018. Moody's
maintains a stable outlook for the US homebuilding industry.
SGL-1 Speculative Grade Liquidity Rating reflects its view that the
company will maintain a very good liquidity profile over the next
12 months, generating substantial free cash flow throughout the
year. $428 million of cash on hand and marketable securities and
$198 million in revolver availability at September 30, 2018 are
contributors as well to company's very good liquidity profile.
The negative rating outlook reflects ongoing uncertainty as to
USG's final debt capital structure following Knauf's acquisition of
USG and resulting debt credit metrics. Knauf may add more debt to
USG's balance sheet beyond $800 million term loan already
mentioned. Moody's does not anticipate Knauf guaranteeing USG's
debt.
Downgrades of USG's guaranteed senior unsecured notes to Ba2 from
Ba1 and its industrial revenue bonds to B1 from Ba2 result from
lower corporate family rating, main driver in its loss given
default methodology, and increasingly greater expected loss as the
ratings move down the scale. Moody's has excluded at this time the
proposed $800 million term loan and $858.5 million backstop
facility in its loss given default analysis, since Moody's does not
have detailed terms and conditions for each credit facility.
Further negative rating action could occur if Knauf adds more debt
on USG's balance sheet to support its acquisition. In addition, a
downgrade could occur if USG's operating performance falls below
its expectations, resulting in the following metrics (ratios
include Moody's standard adjustments) or characteristics:
-- Debt-to-EBITDA sustained near 4.5x
-- EBITA margins remaining below 10%
-- Deterioration in liquidity profile
Ratings assigned to notes and industrial revenue bonds could be
lowered further as well if USG's final debt capital structure
includes debt that is more senior to these credit facilities in
recovery scenarios. All ratings could be withdrawn if Moody's does
not receive detailed quarterly and audited financial statements,
inhibiting its ability to monitor USG's credit worthiness.
Stabilization of ratings over intermediate term is unlikely, since
USG must operate under new ownership, and exhibit operating
performance that exceeds Moody's forecast, yielding following
credit metrics ratings (all ratios include Moody's standard
adjustments) and characteristics:
-- Debt-to-EBITDA remaining near 4.0x
-- EBITA margins above 12%
-- Ongoing positive trends in end markets
The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.
USG Corporation, headquartered in Chicago, IL, is a North American
manufacturer of wallboard, substrates and surfaces, and ceiling
tiles and grids. Revenues for 12 months through September 30, 2018
approximate $3.4 billion.
VICI PROPERTIES: Bank Debt Trades at 3% Off
-------------------------------------------
Participations in a syndicated loan under which VICI Properties
Incorporated is a borrower traded in the secondary market at 97.25
cents-on-the-dollar during the week ended Friday, December 7, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.14 percentage points from the
previous week. VICI Properties pays 225 basis points above LIBOR to
borrow under the $2.20 billion facility. The bank loan matures on
December 22, 2024. Moody's rates the loan 'Ba3' and Standard &
Poor's gave a 'BBB-' 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, December 7.
VINCE INTERMEDIATE: S&P Withdraws 'CCC+' Issuer Credit Rating
-------------------------------------------------------------
S&P Global Ratings withdrew its 'CCC+' issuer credit rating on New
York–based Vince Intermediate Holding LLC. S&P withdrew its
issuer credit rating on Vince Intermediate at the issuer's request.
At time of the withdrawal, S&P's outlook on the company was
stable.
WALL STREET THEATER: Fifth Cash Collateral Stipulation Approved
---------------------------------------------------------------
The Hon. Julie A. Manning of the U.S. Bankruptcy Court for the
District of Connecticut authorized Wall Street Theater Company,
Inc., and its affiliates to use cash collateral to pay actual,
necessary ordinary course operating expenses as set forth in the
Budget and in accordance with the Fifth Stipulation and Order.
A hearing to consider the further use of cash collateral will be
held on Feb. 26, 2019 at 10:00 a.m. The Debtors will serve on the
Notice Parties a proposed order concerning further use of cash
collateral and a proposed budget on or before Feb. 5. Any
party-in-interest may file an objection concerning the further use
of cash collateral on or before Feb. 19.
In exchange for the continued use of cash collateral by Debtors,
and as adequate protection for Patriot Bank's interests, Patriot
Bank is granted senior security interests in, and liens upon, to
attach to the same validity, extent, and priority that Patriot Bank
possessed as to said liens on the Petition Date, but only to the
extent the amount of their respective secured position erodes in
value, all personal property and real estate now owned, or
hereafter created or acquired or generated by Debtors, whether
existing prior to the Petition Date or coming into being or in the
possession of Debtors thereafter.
In addition, Debtors will pay to Patriot Bank monthly interest
payments of $46,047 on the 1st of each month in accordance with the
attached Budget. Furthermore, the Debtors will maintain any and all
insurance as required by the loan documents.
The liens of Patriot and any Replacement Liens, and any priority to
which Patriot Bank may be entitled or become entitled under Section
507(b) of the Bankruptcy Code, will be forever subject to and
subordinate in right and payment to:
(i) amounts payable pursuant to 28 U.S.C. Section 1930(a)(6)
and any fees payable to the Clerk of the Court;
(ii) liens for taxes owed to governmental entities, including
sales and withholding taxes to the extent such liens have priority
over the liens and Replacement Liens of the Secured Creditors under
applicable non-bankruptcy law; and
(iii) the allowed administrative claims of attorneys and other
professionals retained by the Debtors in these Chapter 11 cases
pursuant to Section 327 accrued during any cash collateral periods
in the amounts of: $125,000 for Debtors' counsel Green & Sklarz LLC
(inclusive of its prepetition retainer) and $50,000 for Debtors'
financial advisor RJ Reuter, LLC (inclusive of its prepetition
retainer) and $15,000 for Debtors' proposed special counsel,
Hinckley Allen & Snyder LLP (inclusive of its remaining prepetition
retainer).
Brian Wishneff & Associates, LLC ("BWA") claims a secured interest,
property interests and other rights in certain cash collateral of
Debtors by virtue of that certain Tax Credit Agreement (as amended)
with Wall Street Theater Company, Wall Street Managing Member and
Wall Street Master Landlord, and other related agreements and
documents. As part of the BWA Claim, BWA also claims that 13% of
funds paid to Debtors in or about June, 2018 on account of State
Historic Tax Credits are rightfully its property, and Debtors are
wrongfully in possession of said funds (equaling $236,388). BWA
also asserts claims to, and/or interests in, additional sums,
should additional tax credits be received in the future.
The Morganti Group, Inc. has objected to the proposed payments to
BWA in the amount of $397,333 as reflected on the Budget to the
proposed Fifth Stipulation and Order. Supertech, Inc. has also
opposed any payment to BWA at this time. All parties-in-interest
reserve all rights concerning the BWA Claim, and any future claim
BWA may assert, and may dispute the secured status of BWA, may
dispute BWA's Claim (or future claims), may dispute BWA's
assertions of ownership of funds in possession of Debtors, and may
claim BWA is the holder of a nonpriority unsecured claim. At this
time, Debtors are still evaluating whether to assume or reject the
Tax Credit Agreement (as amended).
A copy of the Fifth Stipulation and Order is available at:
http://bankrupt.com/misc/ctb18-50132-383.pdf
About The Wall Street Theater
The Wall Street Theater, listed in the National Register of
Historic Places, has re-emerged as a 501c3 non-profit organization,
whose mission is to provide diverse programming and promote arts
education, thereby enriching the cultural life of the greater
Norwalk community. The Wall Street Theater --
https://www.wallstreettheater.com/ -- adopts its moniker from its
location and its mission from its history, combining live shows,
interactive entertainment, cinema, digital production, art space
and a community arena in which to play.
Wall Street Theater Company, Inc., and affiliates Wall Street
Master Landlord, LLC and Wall Street Managing Member, LLC, filed
Chapter 11 petitions (Bankr. D. Conn. Lead Case No. 18-50132) on
Feb. 4, 2018.
In the petitions signed by Suzanne Cahill, president, the WS
Theater Company and WS Master Landlord estimated $1 million to $10
million in assets and $10 million to $50 million in liabilities
while WS Managing Member estimated less than $50,000 in assets and
$10 million to $50 million in liabilities.
Judge Julie A. Manning is the case judge.
The Debtors tapped Green & Sklarz, LLC, as legal counsel; R.J.
Reuter, LLC as financial advisor; Wellspeak, Dugas & Kane, LLC as
real estate appraiser and consultant; and CohnReznick as auditor.
WEST CORP: $2.557-Bil. Bank Debt Trades at 4% Off
-------------------------------------------------
Participations in a syndicated loan under which West Corporation is
a borrower traded in the secondary market at 95.58
cents-on-the-dollar during the week ended Friday, December 7,
2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 2.89 percentage points from the
previous week. West Corporation pays 400 basis points above LIBOR
to borrow under the $2.557 billion facility. The bank loan matures
on October 10, 2024. Moody's rates the loan 'Ba3' 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, December 7.
WEST CORP: $700MM Bank Debt Trades at 5% Off
--------------------------------------------
Participations in a syndicated loan under which West Corporation is
a borrower traded in the secondary market at 95.28
cents-on-the-dollar during the week ended Friday, December 7,
2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 2.87 percentage points from the
previous week. West Corporation pays 350 basis points above LIBOR
to borrow under the $700 million facility. The bank loan matures on
October 10, 2024. Moody's rates the loan 'Ba3' 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, December 7.
WHITE EAGLE: Case Summary and 7 Unsecured Creditors
---------------------------------------------------
Debtor: White Eagle Asset Portfolio, LP
5355 Town Center Road, Suite 701
Boca Raton, FL 33486
Business Description: Privately held White Eagle Asset Portfolio
provides financial services.
Chapter 11 Petition Date: December 13, 2018
Court: United States Bankruptcy Court
District of Delaware
Case No.: 18-12808
Affiliates with pending bankruptcy cases:
Petition
Debtor Case No. Date
------ -------- ----
White Eagle General Partner, LLC 18-12615 11/14/18
Lamington Road Designated Activity Company 18-12614 11/14/18
Judge: Kevin Gross
Debtor's Counsel: Colin R. Robinson
PACHULSKI STANG ZIEHL & JONES LLP
Tel: 302-778-6426
E-mail: crobinson@pszjlaw.com
Estimated Assets: $500 million to $1 billion
Estimated Liabilities: $100 million to $500 million
The petition was signed by Miriam Martinez, CFO.
A copy of the petition is available at PacerMonitor.com at
https://www.pacermonitor.com/filings/100046028 at no extra charge.
List of Debtor's 7 Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Holland & Knight LLP Professional $327,739.47
P.O. Box 864084 Services
Orlando, FL 38286‐4084
701 Brickell Avenue
Suite 3300
Miami, FL 33131
Attn: Jesus Cuza
jesus.cuza@hklaw.com
MLF Lexserv Professional $144,137.50
4350 East‐West Highway Services
Suite 905
Attn: Nathan A. Evans,
President & CEO
Bethesda, MD 20814
4350 East‐West Highway,
Suite 905
Tel: (301)347-4479
Fax: (301)347-4403
Curtis, Malllet‐Prevost, Colt &
Mosle, LLP Professional $117,423.35
P.O. Box 27930 Services
New York, NY 10087‐7930
101 Park Avenue
Attn: Gabriel Hertzberg
ghertzberg@curtis.com
Weinberg Zareh Malkin Price Professional
LLP Services $22,364.75
Y 10111
45 Rockefeller Plaza
20th Floor
New York, NY 10111
Tel: (212)899-5470
Fax: (516)623-9457
K&L Gates LLP Professional
600 N King Street Services $21,028.00
Suite 901
Wilmington, DE 19801
600 N King Street
Suite 901
Wilmington, DE 19801
Attn: Scott Waxman
scott.waxman@klgates.com
Waldman Trigoboff
Hildebrandt & Calnan, P.A. Professional
Plaza 100, Suite 780 Services $13,599.96
100 N.E. Third Avenue
Fort Lauderdale, FL 33301
Tel: (954)467-8600
Fax: (954)467-6222
Daniel Coker Horton & Bell Professional $1,284.00
4400 Old Canton Road Services
Suite 400
Jackson, MS 39215‐1084
Alfred Smith
Tel: (601)969-7607
Fax: (601)969-1116
asmith@danielcoker.com
WHITE EAGLE: ECI Life Settlement Unit Enters Chapter 11
-------------------------------------------------------
White Eagle Asset Portfolio, LP, owner of a portfolio of 586 life
insurance policies -- also known as life settlements -- with an
aggregate death benefit of approximately $2.8 billion, sought
Chapter 11 protection on Dec. 13, 2018.
Two affiliates, namely White Eagle General Partner, LLC, and
Lamington Road Designated Activity Company, sought bankruptcy
protection mid-November 2018. Debtors WEGP and LRDA own the
partnership interests in WEAP.
The Debtors are indirect subsidiaries of Emergent Capital, Inc.
("ECI"), a publicly traded company. ECI is a global leader in the
life settlements industry.
A life settlement is a transaction in which an individual sells an
insurance policy to a third-party investor for an amount less than
the policy's face value, but greater than its net cash surrender
value. The investor becomes responsible for paying future premiums
on the policy and, upon the death of the individual, receives the
policy' s death benefits.
Life settlements allow senior insureds who can no longer afford
their premiums, or who desire additional liquidity, to shed their
policies for an immediate infusion of cash at a premium over the
cash surrender value offered by the insurance companies.
WEAP estimated assets $500 million to $1 billion and debt of $100
million to $500 million as of the bankruptcy filing. A total of
$367.9 million in principal obligations is due and owing to LNV
Corporation as lender and LMG Corp., as administrative agent under
a Second Amended and Restated Loan and Security Agreement, dated as
of January 31, 2017.
Events Leading to Filing
Miriam Martinez, CFO, explains that beginning in 2015, WEAP and its
ultimate parent, ECI, faced liquidity problems due to a mismatch
between cash inflows (death benefit payouts and fair value
adjustments) and outflows (operating expenses, interest and premium
payments, and legal and professional fees).
In late 2016, WEAP restructured its existing loan facility with
LNV. The Prepetition Loan Agreement executed in January 2017 is
the result of such restructure. Unfortunately, LNV has abused the
discretion that it was granted under the terms of the Prepetition
Loan Agreement to starve WEAP and its parent of the cash flows to
which they are rightfully entitled and which are necessary to
administer WEAP's insurance portfolio. For example, pursuant to
section 5.2 of the Prepetition Loan Agreement, available amounts
collected from matured life insurance policies are distributed
through a waterfall. Certain fees and costs, including fees to the
custodian, securities intermediary, and CLMG are paid first. Then
LNV as lender is entitled to receive the "Required Amortization,"
which is equal to the cash available at that point in the waterfall
multiplied by a percentage (i.e., the "Cash Flow Sweep Percentage")
that varies based on the loan-to-value of WEAP's policy portfolio.
Specifically, if the loan-to-value is greater than 65% -- meaning
that the outstanding amount of the loan equals more than 65% of the
value of the policies as determined by LNV (in its discretion) --
100% of the cash available for distribution at that point in the
waterfall must be paid entirely to LNV as amortization of the
principal due under the facility. LNV has improperly exercised its
discretion by undervaluing the insurance portfolio and LNV has
charged excessive fees in order to disallow any distributions to
WEAP.
The Debtors believe that LNV's conduct with respect to the
Prepetition Loan Agreement is actionable and intend to commence a
lawsuit against LNV and its co-conspirators for breaches of
contract, breaches of fiduciary duty, and other claims. The
Debtors also intend to challenge LNV's rights to the "Participation
Interest".
In an effort to resolve these disputes without the need for a
bankruptcy filing, the Debtors and ECI attempted to negotiate a
restructuring with LNV. This process was complicated by
announcements in October and November 2018 by the leading
underwriters in the life settlements industry regarding increases
in projected life expectancies, which would have the effect of
reducing the value of the Debtors' insurance portfolio. As a
result of these announcements and potentially other factors, the
Debtors' negotiations with LNV stalled and the Debtors were
required to commence chapter 11 cases for WEGP and LRDA on Nov. 14,
2018.
Subsequent to such filings, the Debtors and LNV entered into a
standstill agreement in an effort to negotiate the terms of a
possible global resolution of their disputes. The initial term of
the standstill agreement was through Nov. 26, 2018, but was
subsequently extended on six occasions ultimately ending on Dec.
13, 2018.
Because no consensual resolution was reached, WEAP commenced a
chapter 11 case of its own on the date hereof. The filing of the
Debtors' cases was necessary in order to prevent LNV from
exercising remedies that would have allowed LNV to take possession
of the pledged interests in WEAP and/or otherwise sweep the
Debtors' funds and insurance proceeds.
Ms. Martinez notes that notwithstanding the recent changes in life
expectancy projections, it should be undisputed that LNV is
substantially oversecured. LNV's own valuation firm has concluded
that the fair value of the insurance portfolio is $552 million as
of October 31, 2018, an equity cushion of approximately $184
million, subject to a reservation of rights to assert a downward
adjustment based on revised life expectancy models that are
currently pending. The Debtors also filed these cases with an
aggregate cash balance of approximately $33 million.
According to Ms. Martinez, the purpose of the chapter 11 cases is
to ensure that the equity value in the Debtors' estates is
preserved for the benefit of all stakeholders, and not just LNV.
Along these lines, the Debtors intend to propose a chapter 11 plan
of reorganization that will provide for the payment of LNV's
allowed claims in full, while maximizing the value of the Debtors'
assets for all concerned.
A copy of the affidavit in support of the first day motions and
Chapter 11 petition is available at PacerMonitor.com at
https://is.gd/6rppz9 at no extra charge.
About White Eagle
White Eagle Asset Portfolio, LP is the owner of a portfolio of 586
life insurance policies -- also known as life settlements -- with
an aggregate death benefit of approximately $2.8 billion, White
Eagle General Partner, LLC, and Lamington Road Designated Activity
Company, own the partnership interests in WEAP. White Eagle, et
al., are indirect subsidiaries of Emergent Capital, Inc. ("ECI"), a
publicly traded company.
WEAP sought Chapter 11 protection on Dec. 13, 2018 (Bankr. D. Del.
Case No. 18-12808). LRDA and WEGP sought bankruptcy protection
mid-November 2018 (Bankr. D. Del. Case Nos. 18-12614 to 12615).
WEAP estimated assets of $500 million to $1 billion and debt of
$100 million to $500 million as of the bankruptcy filing.
The Hon. Kevin Gross is the case judge.
The Debtors tapped PACHULSKI STANG ZIEHL & JONES LLP as counsel.
WIT'S END RANCH: Has $2.1 Million Cash Offer for Bayfield Property
------------------------------------------------------------------
Wit's End Ranch Retreat, LLC, asks the U.S. Bankruptcy Court for
the District of Colorado to authorize the sale of the real property
commonly known as 254 & 960 County Road 500, Bayfield, Colorado to
Steven Young and Bo French for $2.1 million, cash, free and clear
of all liens, claims, interests and encumbrances.
The parties have entered into the Buyers' Contract to Buy and Sell
Real Estate (Commercial). The Debtor has accepted the Purchase
Offer subject to the Court's approval of the Motion.
The Purchase Offer is a cash offer, with no financing contingencies
or objection periods. The only contingency to closing of the
proposed sale is that the sale closes prior to end of the 2018
calendar year. To that end, contemporaneous with the filing of the
Motion, the Debtor is filing its Motion to Shorten Notice, asking
to shorten the notice period for the Motion to 10 days.
A review of the potential security interests currently encumbering
the Bayfield Property is generally set forth as follows:
a. A first Deed of Trust to secure a loan made by 1st Creek
Properties, LLC, secured by the Bayfield Property. 1st Creek
asserts an amount owed of approximately $1.4 million.
b. A lien in favor of Wit's End Guest Ranch and Resort, Inc.
for unpaid wages. Wit's End Guest Ranch and Resort, Inc. has filed
a Proof of Claim asserting an amount owed on the Petition Date of
$10,000.
c. A lien in favor of David Christopher Wright, secured by a
judgment recorded by Mr. Wright. Mr. Wright filed a Proof of Claim
asserting a secured claim on the Petition Date in the sum of
$37,136.
d. A lien in favor of Jacquilyn Mecloy-Kovach. The Debtor
scheduled the debt to Ms. Mecloy-Kovach as a disputed, secured debt
in the sum of $1,000. Ms. Mecloy-Kovach filed an unsecured claim
in the sum of $2,000.
e. Tax liens in favor of taxing authorities. LaPlata County
filed a proof of claim asserting a Priority Claim of $68,140
arising out of unpaid property taxes on the Bayfield Property. In
addition, there will be taxes owed at closing for the 2018 real
estate taxes, which will be in the same approximate amount as the
Proof of Claim for prior year taxes.
In addition to paying the liens as described, under the terms of
the Purchase Offer: Pursuant to its contract with the Debtor,
Pinnacle Real Estate Advisors is entitled to a commission of 4% of
the Purchase Price, or $84,000. The Debtor estimates that the
remaining costs of closing the Bayfield Property will be between
$15,000 and $20,000. After subtracting liens, taxes, and costs of
sale, the Debtor estimates that it will net approximately $400,000
from the proposed sale of the Bayfield Property. It should be
noted that, under the Purchase Offer, the Buyers are paying their
own broker separately. All proceeds remaining after the closing
will be paid to Buechler & Garber, LLC to be held in its trust
account until further order of the Court.
By the Motion, the Debtor asks entry of an order (a) approving the
sale of the Bayfield Property to the Buyers; (b) authorizing it to
pay certain liens encumbering the Bayfield Property, (c)
authorizing the payment of all closing costs, including Pinnacle as
the Debtor's real estate broker; and (d) for all other just and
proper relief.
A copy of the Contract attached to the Motion is available for free
at:
http://bankrupt.com/misc/Wits_End_222_Sales.pdf
About Wit's End Ranch Retreat
Glenn, Colorado-based Wit's End Ranch Retreat, LLC, sought Chapter
11 protection (Bankr. D. Colo. Case No. 17-18893) on Sept. 25,
2017, estimating under $1 million in both assets and liabilities.
Judge Joseph G. Rosania Jr. presides over the case. The Debtor
hired Buechler & Garber, LLC, as bankruptcy counsel, and Carolin
Topelson Law, LLC, as special counsel. Pinnacle Real Estate
Advisors is serving as real estate broker.
WOODBRIDGE GROUP: Selling Beverly Hills Property for $1.9 Million
-----------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors, ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their California Residential Purchase Agreement and Joint Escrow
Instructions dated as of Oct. 5, 2018, with RHW Investments, LLC,
in connection with the sale of Debtor Lincolnshire Investments,
LLC's real property located at 1312 Beverly Grove Pl., Beverly
Hills, California, together with Seller's right, title, and
interest in and to the buildings located thereon and any other
improvements and fixtures located thereon, and any and all of the
Seller's right, title, and interest in and to the tangible personal
property and equipment remaining on the real property as of the
date of the closing of the sale, for $1.89 million.
A hearing on the Motion is set for Dec. 19, 2018 at 2:00 p.m. (ET).
The objection deadline is Dec. 10, 2018 at 4:00 p.m. (ET).
The Property consists of a 0.44 acre vacant lot situated in Beverly
Hills, California. The Seller purchased the Property in August
2014 for a purchase price of $3.1 million with the intention of
developing the Property for resale. After demolishing the existing
home on the Real Property, no further development was ever
completed and the Real Property remains vacant. The Debtors have
determined that selling the Property now on an "as is" basis best
maximizes the value of the Property.
The Property has been formally listed on the multiple-listing
service for over 150 days and has been widely marketed, including
through various online and print media advertisements. The
Purchaser's offer to acquire the Property under the Purchase
Agreement is the best (and only) offer the Debtors have received
for the Property. Accordingly, the Debtors determined that selling
the Property pursuant to the Purchaser's all cash offer is the best
way to maximize the value of the Property.
On Oct. 5, 2018, the Purchaser made a $1.8 million offer on the
Property. On Oct. 12, 2018, the Debtors made a counter offer in
the amount of $2.7 million. On Oct. 15, 2018, the Purchaser made a
second offer in the amount of $1.925 million. On Oct. 18, 2018,
the Debtors made a second counter offer in the amount of $2.3
million. On Oct. 19, 2018, the Purchaser made a best and final
offer in the amount of $2.015 million, which the Seller accepted.
The Debtors and the Purchaser agreed to reduce the purchase price
to $1.89 million following the Purchaser's inspections of the
Property. The Debtors believe that this purchase price provides
significant value, and accordingly, the Seller countersigned the
final Purchase Agreement, as amended, on Nov. 20, 2018.
Under the Purchase Agreement, the Purchaser agreed to purchase the
Property for $1.89 million, with a $60,450 initial cash deposit,
and the balance of $1,829,550 to be paid as a cash down payment due
at closing. The deposit is being held by A&A Escrow Services, Inc.
In connection with marketing the Property, the Debtors worked with
Sotheby' International Realty, a non-affiliated third-party
brokerage company. The Broker Agreement, as amended, provides the
Seller's broker with the exclusive and irrevocable right to market
the Property for a fee in the amount of 2% of the contractual sale
price for Sotheby's and 2.5% of the contractual sale price to a
cooperating buyer's broker. The Purchase Agreement is signed by
Marc Noah of Sotheby's as the Seller's broker and Josh Altman and
Matthew Altman of Douglas Elliman as the Purchaser's broker.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. The Debtors also rely on outside vendors
for escrow and title services in connection with property sales.
In general, vendors are mutually agreed on by the applicable
Debtors and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fees and Other Closing
Costs) will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Property is subject to a lien for the benefit of Woodbridge
Mortgage Investment Fund 2, LLC, which secures indebtedness of the
Seller to the Fund in connection with the purchase of the Property.
The Fund has consented to the Sale of the Property free and clear
of the Fund Lien.
The Debtors ask that filing of a copy of an order granting the
relief sought in Los Angeles County, California may be relied upon
by Fidelity National Title Co. to issue title insurance policies on
the Property. They further ask authority to pay the Broker Fees
out of the sale proceeds in an aggregate amount not to exceed 4.5%
of gross sale proceeds by paying the Seller's Broker Fee to
Sotheby's and paying the Purchaser's Broker Fee to Douglas
Elliman.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_3065_Sales.pdf
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter
11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODBRIDGE GROUP: Selling Beverly Hills Property for $4.2 Million
-----------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors, ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their California Residential Purchase Agreement and Joint Escrow
Instructions dated as of Oct. 14, 2018, with Kuldip Kumar Vaid and
Ananya Anna Vaid, in connection with the sale of Debtor Sagebrook
Investments, LLC's real property located at 1258 Lago Vista Dr.,
Beverly Hills, California, together with Seller's right, title, and
interest in and to the buildings located thereon and any other
improvements and fixtures located thereon, and any and all of the
Seller's right, title, and interest in and to the tangible personal
property and equipment remaining on the real property as of the
date of the closing of the sale, for $4.175 million.
A hearing on the Motion is set for Dec. 19, 2018 at 2:00 p.m. (ET).
The objection deadline is Dec. 10, 2018 at 4:00 p.m. (ET).
The Property consists of a single-family home situated on 0.91
acres in Beverly Hills, California. The Seller purchased the
Property in April 2015 for a purchase price of $6 million with the
intention of developing the Property for resale. The Property was
involved in litigation with the city of Beverly Hills, and
ultimately, the Debtors determined not to develop the Property.
The Debtors have determined that selling the Property now on an "as
is" basis best maximizes the value of the Property.
The Property has been formally listed on the multiple-listing
service with the current broker since Oct. 13, 2018, but was
previously listed with a different broker since April 13, 2018. It
has also been widely marketed, including through various online and
print media advertisements. The Debtors received three other
offers for the Property (prior to the Purchasers' offer), each of
which was in the amount of $4.5 million. The Debtors responded to
those three offers with counter offers in the range of $4.8 million
to $5.4 million. Two of the bidders did not respond to the
Debtors' counter offer. The third bidder responded and went under
contract with the Seller at a purchase price of $4.5 million;
however, escrow was cancelled after the bidder requested a $500,000
price reduction. Accordingly, the Debtors determined that selling
the Property pursuant to the Purchaser's all cash offer is the best
way to maximize the value of the Property.
On Oct. 14, 2018, the Purchasers made an all cash $4.4 million
offer on the Property. On Oct. 15, 2018, the Debtors made a
counter offer in the amount of $4.6 million, however, the
Purchasers held firm at $4.4 million. The Debtors believe that
this purchase price provides significant value, and accordingly,
the Seller countersigned the final Purchase Agreement on Oct. 18,
2018. Thereafter, on Nov. 8, 2018, the Purchasers requested
certain repairs in connection with a retaining wall, and the
parties settled on a $225,000 price reduction (the Purchaser had
requested $500,000), bringing the final purchase price to $4.175
million, comprised of a $132,000 initial cash deposit, and the
balance to be paid as a cash down payment due at closing. The
deposit is being held by A&A Escrow Services, Inc.
In connection with marketing the Property, the Debtors worked with
Sotheby's International Realty, a non-affiliated third-party
brokerage company. The Broker Agreement, as amended, provides the
Seller's broker with the exclusive and irrevocable right to market
the Property for a fee in the amount of 2% of the contractual sale
price for Sotheby's and 2.5% of the contractual sale price to a
cooperating broker. The Purchase Agreement is signed by Marc Noah
of Sotheby's as the Seller’s broker and Tomer Fridman of Compass
as the cooperating broker.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. The Debtors also rely on outside vendors
for escrow and title services in connection with property sales.
In general, vendors are mutually agreed on by the applicable
Debtors and a purchaser prior to the acceptance of an offer.
Absent authority to pay Other Closing Costs, the Seller will be
unable to close the Sale and receive Sale proceeds. If the Seller
is unable to make these payments, the Purchaser may be entitled to
rescind the Purchase Agreement or assert other remedies that could
lead to additional and unnecessary claims. Accordingly, the
Debtors ask the ability to pay Other Closing Costs in connection
with the sale.
All proceeds of the Sale (net of the Broker Fees and Other Closing
Costs) will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Property is subject to liens for the benefit of Woodbridge
Mortgage Investment Fund 3, LLC and Woodbridge Mortgage Investment
Fund 3A, LLC, which secure indebtedness of the Seller to the Funds
in connection with the purchase of the Property. The Funds have
consented to the Sale of the Property free and clear of the Fund
Liens.
The Debtors ask that filing of a copy of an order granting the
relief sought in Los Angeles County, California may be relied upon
by Fidelity National Title Insurance Co. to issue title insurance
policies on the Property. They further ask authority to pay the
Broker Fees out of the sale proceeds in an aggregate amount not to
exceed 4.5% of gross sale proceeds by paying the Seller's Broker
Fee to Sotheby's and paying the Cooperating Broker Fee to Compass.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_3060_Sales.pdf
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter
11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODBRIDGE GROUP: Selling Sachs' Carbondale Property for $180K
--------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors, ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their Contract to Buy and Sell Real Estate dated as of October 13,
2018, with Jan Silfverskiold, in connection with the sale of Debtor
Sachs Bridge Investments, LLC's real property located at 376
Crystal Canyon Drive, Carbondale, Colorado, together with Seller's
right, title, and interest in and to the buildings located thereon
and any other improvements and fixtures located thereon, and any
and all of the Seller's right, title, and interest in and to the
tangible personal property and equipment remaining on the real
property as of the date of the closing of the sale, for $180,000.
A hearing on the Motion is set for Dec. 19, 2018 at 2:00 p.m. (ET).
The objection deadline is Dec. 10, 2018 at 4:00 p.m. (ET).
The Property consists of a vacant lot situated in the River Valley
Ranch community in Carbondale, Colorado. The Seller purchased the
Real Property in July 2016 for $120,000 as part of a bulk purchase
of lots in the area with the intention of holding the various lots
for future sale as vacant lots or for future possible development.
Ultimately, the Debtors determined that there would be no benefit
to constructing a new home on the Real Property given the existing
inventory in the community. Accordingly, they have determined that
selling the Property now on an "as is" basis best maximizes the
value of the Property.
The Property has not been formally listed on the multiple-listing
service; however, the Debtors have listed comparable lots in the
River Valley Ranch community, and all their listings for lots in
the community state that other, similar lots are available for
purchase upon inquiry to the listing broker. In addition, all
their available lots for purchase in the Aspen Glen and River
Valley Ranch areas (including the Property) have been marketed
through announcements to the brokerage community and advertisements
in various publications. The Purchaser's all cash offer under the
Purchase Agreement is the highest and otherwise best offer (and the
only offer) the Debtors have received for the Property.
Accordingly, the Debtors determined that selling the Property to
the Purchaser is the best way to maximize the value of the
Property.
On Oc. 11, 2018, the Purchaser made an all cash offer for the
Property in the amount of $150,000. The Debtors verbally countered
the Purchaser's offer at $200,000, which the Purchaser rejected.
The Purchaser then raised its offer to $165,000, which the Debtors
rejected. On Oct. 14, 2018, the Purchaser further raised its offer
to $180,000. The Debtors believe that this all cash purchase price
provides significant value, and accordingly, the Seller
countersigned the Purchase Agreement on Oct. 15, 2018.
Under the Purchase Agreement, the Purchaser agreed to purchase the
Property for $180,000, with a $5,400 initial cash deposit, and the
balance of $174,600 to be paid in cash at closing, with no
financing contingencies. The deposit is being held by Commonwealth
Title Co. of Garfield County, Inc. as escrow agent.
In connection with marketing the Property, the Debtors worked with
Sotheby's International Realty, a non-affiliated third-party
brokerage company. The Broker Agreement provides Sotheby's with
the exclusive and irrevocable right to market the Property for a
fee in the amount of 5% of the contractual sale price. The
Purchase Agreement is signed by Laura Gee of Sotheby's as the
transaction broker. No broker fees are payable in connection with
the Sale other than the Broker Fee to Sotheby's.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. The Debtors also rely on outside vendors
for escrow and title services in connection with property sales.
In general, vendors are mutually agreed on by the applicable
Debtors and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fee and Other Closing
Costs) will be paid to the Debtors into the general account of
Debtor Woodbridge Group of Companies, LLC, and such net proceeds
will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order. All proceeds of the Sale (net
of the Broker Fees and Other Closing Costs) will be disbursed and
otherwise treated by the Debtors in accordance with the Final DIP
Order.
The Debtors ask that filing of a copy of an order granting the
relief sought in Garfield County, Colorado may be relied upon by
the Title Insurer to issue title insurance policies on the
Property. They further ask authority to pay the Broker Fee to
Sotheby's out of the sale proceeds in the amount of up to 5% of
gross sale proceeds.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_3063_Sales.pdf
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter
11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODBRIDGE GROUP: Selling Sherman Oaks Property for $700K
---------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors, ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their Vacant Land Purchase Agreement and Joint Escrow Instructions
dated as of Oct. 11, 2018, with Sharon Gabay and Ayalla Ben Ami, in
connection with the sale of Debtor Doubleleaf Investments, LLC's
real property located at 4030 Madelia Ave., Sherman Oaks,
California, together with Seller's right, title, and interest in
and to the buildings located thereon and any other improvements and
fixtures located thereon, and any and all of the Seller's right,
title, and interest in and to the tangible personal property and
equipment remaining on the real property as of the date of the
closing of the sale, for $700,000.
A hearing on the Motion is set for Dec. 19, 2018 at 2:00 p.m. (ET).
The objection deadline is Dec. 11, 2018 at 4:00 p.m. (ET).
The Property consists of an approximately 0.46 acre vacant lot
situated in Sherman Oaks, California. The Seller purchased the
Property in August 2014 for a purchase price of $1.325 million.
The Seller intended to develop the Property; however, no
development was ever undertaken and the Real Property remains
vacant. The Debtors have determined that selling the Property now
on an "as is" basis best maximizes the value of the Property.
The Property has been marketed for sale and formally listed on the
multiple-listing service for over 195 days, and has been widely
marketed, including in various publications. The Purchaser's all
cash offer to acquire the Property under the Purchase Agreement is
the highest and otherwise best offer (and the only offer) the
Debtors have received. Accordingly, the Debtors determined that
selling the Property on an "as is" basis to the Purchaser is the
best way to maximize the value of the Property.
On Oct. 11, 2018, the Purchasers made an all cash $700,000 offer on
the Property. On Oct. 15, 2018, the Debtors responded with a
counter offer in the amount of $850,000. On Oct. 15, 2018, the
Purchasers responded by raising its offer to $730,000. On Oct. 18,
2018, the Debtors responded with a second counter offer in the
amount of $800,000. On Oct. 18, 2018, the Purchasers responded with
a best and final offer in the amount of $750,000, which the Debtors
accepted on Oct. 19, 2018. Following the Purchasers' inspection of
the Property, however, the Debtors and the Purchaser agreed to
reduce the purchase price to $700,000. The Debtors believe that
this purchase price provides significant value, and accordingly,
countersigned the final Purchase Agreement on Oct. 19, 2018 and
countersigned the escrow instructions, dated Nov. 14, 2018, which
reflect the reduction in purchase price.
Under the Purchase Agreement, the Purchasers agreed to purchase the
Property for $700,000, with a $22,500 initial cash deposit, and the
balance of $677,500 to be paid as a single cash down payment due at
closing. The deposit is being held by A&A Escrow Services, Inc.,
as the escrow agent.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. The Debtors also rely on outside vendors
for escrow and title services in connection with property sales.
In general, vendors are mutually agreed on by the applicable
Debtors and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fees and Other Closing
Costs) will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Property is subject to a lien for the benefit of Woodbridge
Mortgage Investment Fund 2, LLC, which secures indebtedness of the
Seller to the Fund in connection with the purchase of the Property.
The Fund has consented to the Sale of the Property free and clear
of the Fund Lien.
The Debtors ask that filing of a copy of an order granting the
relief sought in Los Angeles County, California may be relied upon
by Fidelity National Title Co. to issue title insurance policies on
the Property. They further ask authority to pay the Broker Fee to
Douglas Elliman in an amount not to exceed 4% of the gross sale
proceeds out of such proceeds.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_3068_Sales.pdf
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter
11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODLAWN COMMUNITY: Committee Taps High Ridge as Accountant
-----------------------------------------------------------
The official committee of unsecured creditors of Woodlawn Community
Development Corp. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Illinois to hire High Ridge Partners, LLC
as its accountant and financial advisor.
The firm will assist the committee in analyzing the Debtor's
business plans and financial projections; give advice regarding any
sale of the Debtor's assets or businesses; assist the committee in
the formulation or evaluation of any potential plan of
reorganization; and provide other services related to the Debtor's
Chapter 11 case.
High Ridge will get an initial retainer of $20,000.
The firm does not represent any entity having an adverse interest
in connection with the Debtor's case.
High Ridge can be reached through:
Patrick D. Cavanaugh
R. Greg Apathy
High Ridge Partners, LLC
140 South Dearborn Street, Suite 420
Chicago, IL 60603
Phone: 312-456-5636
Email: pcavanaugh@high-ridge.com
Email: gapathy@high-ridge.com
About Woodlawn Community Development
Founded in 1972, Woodlawn Community Development Corp. --
https://www.wcdcchicago.com/ -- manages and develops affordable
housing for families in the Greater Metro Chicago area.
Woodlawn Community Development Corp., based in Chicago, Illinois,
filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 18-29862) on
Oct. 24, 2018. In the petition signed by Leon Finney, Jr.,
president and CEO, the Debtor estimated $50 million to $100 million
in assets and liabilities. The Hon. Carol A. Doyle presides over
the case. David R. Herzog, Esq., at Herzog & Schwartz, P.C.,
serves as bankruptcy counsel to the Debtor.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Nov. 8, 2018. The committee tapped Crane,
Simon, Clar & Dan as its legal counsel.
WW CONTRACTORS: Needs Cash Collateral for December 2018 Expenses
----------------------------------------------------------------
WW Contractors, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Virginia to authorize its use of First National
Bank of Pennsylvania ("FNB")'s cash collateral as set forth in the
Consent Order.
The Debtor and FNB have reached an agreement with respect to the
Debtor's continued use of FNB's cash collateral through the earlier
of 5:00 p.m. on Dec. 31, 2018 or the entry of an order dismissing
Debtor's case or converting the Debtor's chapter 11 case to a
chapter 7 case, in the ordinary course of its business, for the
purpose of paying the Debtor's operating expenses as set forth in
the Budget. The proposed Budget for December 2018 provides total
expenses in the aggregate sum of $1,254,400.
The Debtor is indebted to FNB under a $3 million line of credit and
a $500,000 term loan, secured by a first-priority security interest
against all of the Debtor's assets and all products and proceeds
thereof.
In consideration for permitting the Debtor to use cash collateral
during the Fifth Interim Period, the Debtor has agreed to make
various adequate protection payments to FNB and to grant FNB
replacement liens on and security interests in various
post-petition assets of the Debtor. The Debtor has also agreed to
provide FNB with other adequate protection as set forth in the
Consent Order, including acknowledging the liens of FNB and the
debt owed to FNB under the FNB Loans and providing FNB with certain
financial reporting.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/vaeb18-12095-126.pdf
About WW Contractors Inc.
WW Contractors, Inc. -- http://www.wwcontractors.com/-- is a
facilities services firm, offering complete facilities maintenance,
engineering, operations, custodial services, grounds/landscaping
services, and project management services to federal government,
local government, and private sector clients. WW Contractors was
founded in 1986 as an electrical construction firm under the
ownership and direction of Vietnam Era veteran Warren J. Wiggins.
The company is headquartered in Baltimore, Maryland.
WW Contractors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Md. Case No. 18-17927) on June 12, 2018. In the
petition signed by its president, Warren Wiggins, the Debtor
estimated assets of less than $50,000 and debts between $1 million
to $10 million.
Pursuant to an order entered on June 14, 2018, the case was
transferred to the U.S. Bankruptcy Court for the Eastern District
of Virginia (Bankr. E.D. Va. Case No. 18-12095).
Jeffrey M. Sirody, Esq., at Jeffrey M. Sirody and Associates, P.A.,
is the Debtor's counsel. Rosen Sapperstein & Friedlander, LLC, is
the accountant.
WYNN RESORTS: Pomerantz LLC to Lead in Ferris Securities Suit
-------------------------------------------------------------
In the case, JOHN V. FERRIS, et al., Plaintiff, v. WYNN RESORTS
LIMITED, et al., Defendants, Case No. 2:18-cv-00479-GMN-CWH (D.
Nev.), Magistrate Judge C.W. Hoffman, Jr. of the U.S. District
Court for the Southern District of Nevada (i) granted Plaintiffs
John V. Ferris and Joann M. Ferris' motion for appointment of the
Lead Plaintiffs and approval of the counsel; and (ii) denied as
moot Plaintiff Jeffrey Larsen's motion for appointment as the Lead
Plaintiff and approval of the counsel.
The matter arises from a federal securities class action by
purchasers of Wynn Resorts' securities between Feb. 28, 2014 and
Jan. 25, 2018. The Plaintiffs claim that the Defendants made
misleading statements and failed to disclose the CEO's alleged
sexual misconduct. As a result, Wynn Resorts' securities traded at
an inflated price during the aforementioned period. The Plaintiffs
allege that news of the CEO's alleged sexual misconduct caused Wynn
Resorts' share to prices decline, resulting in a financial loss to
the class members.
The Ferris Plaintiffs now move to be named as the Lead Plaintiffs
in the securities class action. Larsen also moved to be named the
Lead Plaintiff, but subsequently filed a notice of non-opposition
to the Ferris Plaintiffs' motion. In light of Larsen's
non-opposition, Magistrate Judge Hoffman denied Larsen's motion as
moot.
The Magistrate finds that the Ferris Plaintiffs are the presumed
most adequate Plaintiff as they have filed the instant motion in
response to the timely notice filed in the Globe Newswire on Feb.
20, 2018. Further, they have the largest financial interest, due
to the purchase of 2,000 Wynn Resorts' securities.
He also finds that the Ferris Plaintiffs have demonstrated that its
claims arise from the same facts of all other class members; and
that they are adequate representatives of the class. Therefore,
the Judge finds that the Ferris Plaintiffs have satisfied the
typicality and adequacy factors of Rule 23(a). Given that no other
class member has moved to rebut the presumption that the Ferris
Plaintiffs are the most adequate to represent the class, the Judge
granted their motion for appointment of the Lead Plaintiffs and
approval of the counsel.
The Ferris Plaintiffs also move to select Pomerantz LLP as the lead
counsel, and Muehlbauer Law Office, LTD., as the liaison counsel.
After reviewing their selected lead counsel, Pomerantz LLP, and
their choice for liaison counsel, Muehlbauer Law Office, LTD., he
finds that the firms are capable of serving in their respective
roles. Both firms have extensive experience in securities
litigation and class actions, and have demonstrated familiarity
with the applicable law. Therefore, he granted the Ferris
Plaintiffs' motion for selection of counsel.
A full-text copy of the Court's Dec. 4, 2018 Order is available at
https://is.gd/Fu8VwD from Leagle.com.
John V. Ferris, individually and on behalf of all others similarly
situated & JoAnn M. Ferris, individually and on behalf of all
others similarly situated, Plaintiffs, represented by Joseph
Alexander Hood, II -- ahood@pomlaw.com -- Pomerantz LLP, pro hac
vice, Aatif Iqbal -- aiqbal@pomlaw.com -- POMERANTZ LLP, pro hac
vice, Andrew R. Muehlbauer, Muehlbauer Law Office, Ltd., Murielle
J. Steven -- mjsteven@pomlaw.com -- Pomerantz LLP, pro hac vice &
Jeremy Alan Lieberman -- jalieberman@pomlaw.com -- Pomerantz LLP.
Jeffrey Larsen, Movant, represented by John P. Aldrich, Aldrich Law
Firm, Ltd.
Wynn Resorts Limited, Craig Scott Billings & Matthew O. Maddox,
Defendants, represented by Alex Fugazzi -- afugazzi@swlaw.com --
Snell & Wilmer, Mark Holscher -- mark.holscher@kirkland.com --
Kirkland & Ellis, pro hac vice, Matthew Solum --
matthew.solum@kirkland.com -- Kirkland & Ellis LLP, pro hac vice,
Michael John Shipley -- michael.shipley@kirkland.com -- Kirkland &
Ellis & Patrick Gerard Byrne -- pbyrne@swlaw.com -- Snell &
Wilmer.
Stephen A Wynn, Defendant, represented by Colleen C. Smith , Latham
& Watkins LLP, pro hac vice & J. Colby Williams , Campbell &
Williams.
Stephen Cootey, Defendant, represented by Alex Fugazzi, Snell &
Wilmer & Michael John Shipley, Kirkland & Ellis.
ZACKY & SONS: Western Milling Appointed as New Committee Member
---------------------------------------------------------------
The Office of the U.S. Trustee on Dec. 13 appointed Western
Milling, LLC, as new member of the official committee of unsecured
creditors in the Chapter 11 case of Zacky & Sons Poultry, LLC.
The committee is now composed of:
(1) Cal-EnviroSafe, LLC
Attention: Scott Robbins
DBA ChemStation of Northern California
1448 N. Shaw Road
Stockton, CA 95215
Email: srobbins@chemstation.com
(2) Karen Vance
c/o Rene Roupinian
Outten & Golden LLP
685 Third Avenue, 25th Floor
New York, NY 10017
Email: rsr@outtengolden.com
Email: challygirl58@gmail.com
(3) Western Milling, LLC
Attention: Mark La Bounty
P.O. Box 1029
Goshen, CA 93227
Email: mlabounty&westernmilling.com
About Zacky and Sons Poultry
Zacky & Sons Poultry, LLC -- http://zackyfarms.com-- is a grower,
processor, distributor, and wholesaler of poultry products. It
offers turkey and chicken products such as sausages, franks, and
sliced meat.
Zacky & Sons Poultry, LLC, based in City of Industry, CA, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-23361) on Nov.
13, 2018. In the petition signed by Lillian Zacky, managing
member, the Debtor estimated $50 million to $100 million in assets
and liabilities.
The Hon. Robert N. Kwan presides over the case.
Ron Bender, Esq., at Levene Neale Bender Yoo & Brill L.L.P., serves
as bankruptcy counsel; GlassRatner Advisory & Capital Group, LLC,
as financial advisor; and LKP Global Law, LLP, as special
employment and labor counsel.
ZENITH ENERGY: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Zenith Energy U.S. Logistics Holdings,
LLC's Long-term Issuer Default Rating at 'B' and its senior secured
term loan and senior secured revolver at 'B+' with an recovery
rating of 'RR3'. The 'RR3' rating reflects Fitch's expectations of
a good recovery in the range of 51% to 70% in the event of a
default.
The ratings also reflect the company's high percentage of take or
pay contracts and expectations for deleveraging. Offsetting factors
include Zenith's small size and scale, limited geographic focus,
and sole focus on terminals.
KEY RATING DRIVERS
Limited Size and Scale: The company's strategy is to focus on
secondary markets with limited competition. The assets were
acquired through several acquisitions and consist of terminaling,
storage, throughput and transloading facilities spread across the
U.S. Lower 48. In August 2017, Arc Logistics Partners LP (ARCX)
agreed to be acquired by Zenith, a portfolio company of sponsor
Warburg Pincus LLC and other private equity firms. ARCX was viewed
as lacking size and scale and had limited access to public capital
markets, which hindered its growth as a master limited partnership
(MLP). Zenith has access to equity funding through its sponsors and
eliminated distributions, providing additional capital for
potential growth.
Relatively Stable Contracted Cash Flows: Management expects that
approximately 66% of 2018 revenues will be generated from
take-or-pay contracts. These arrangements remove direct commodity
price exposure, benefiting Zenith's cash flows. Zenith's contract
tenor, however, is relatively short and management has indicated
that it is approximately three years. As such, recontracting risk
is of concern in the intermediate term (2021 and beyond).
Leverage Forecasted to Decline: Fitch's base case forecasts
debt/EBITDA will be in the range of 6.0x to 6.3x at the end of
2018. With modest debt reduction and expectations for slight EBITDA
growth, Fitch expects year-end 2019 leverage to be in the range of
5.7x to 5.2x. Fitch recognizes that the debt structural features
contain a cash flow sweep that is likely to result in leverage
below its forecast if the company is unable to execute acquisitions
or utilizes a different funding mix.
Gulf LNG Arbitration Settled: Following the June 2018 arbitration
resolution which found "frustration of purpose" (meaning there were
factors outside of Eni USA's control that prohibited it from using
the Gulf LNG facility). Consequently, the terminal use agreement
was terminated and Eni USA was only obligated for payments until
Dec. 31, 2016. To compensate for the lack of future cash flows,
Gulf LNG will receive a significant amount of cash as well as
interest from Eni USA. Its parent, ENI S.P.A. is the guarantor for
those obligations. Following this, Zenith expects to receive a
December 2018 cash infusion of $100 million to reduce its term loan
borrowings.
Active with Transactions: In October 2018, Zenith sold its Brooklyn
Terminal and entered into a 25 year lease. In addition, the company
sold a 51% stake in its Pawnee Terminal to Tallgrass for $31
million during the second quarter of 2018. In December 2018, the
company will buyout its Portland lease. This will be financed with
cash on the balance sheet as well as the company's secured $40
million delay draw term loan.
DERIVATION SUMMARY
Zenith's terminaling and storage assets are relatively small when
compared to higher-rated peers. Zenith lacks the competitive
advantage of ITT Holdings LLC's (BBB-/Negative) strategic location
in the New York Harbor and on the lower Mississippi River.
Additionally, Zenith lacks the size, scale, and diversity of other
storage and terminal operators such as Kinder Morgan, Inc.
(BBB-/Positive) and Buckeye Partners, LP (BBB-/Stable). Fitch
typically views small-scale standalone midstream companies with
EBITDA of below $100 million as possessing higher-risk credit
profiles due to business concentration risk leading to lower
competitive and financial advantages that larger scale and
diversity generally provide.
From a credit metric perspective, Zenith's 2018 leverage is
expected to be in the range of 6.0x to 6.3x at year-end 2018, which
was better than similarly rated NGL Energy Partners, LP (B/Stable);
which was approximately 7.4x as of NGL's fiscal year end 2018
(March 31, 2018), though Fitch notes NGL is larger and more
diversified and is expected to see improved metrics in fiscal 2019.
Leverage at Zenith is high initially but improves quickly similar
to other 'B' category issuer, Navitas Midstream Midland Basin, LLC.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Base case WTI oil price that moves from $66.5/barrel in 2018
to a long-term price of $55.0/barrel;
-- In 2018, Zenith entered into a sale leaseback for it Brooklyn
Terminal; the Portland Terminal lease is bought out in late 2018;
-- Fitch assumes that the Andeavor (now Marathon Petroleum Corp.)
contract for the Portland terminal will require significant capex;
this growth project is the primary driver for EBITDA growth
beginning in 2019 and continuing in 2020;
-- Fitch assumes that the term loan is reduced by $100 million by
year-end 2018 following the resolution of the Gulf LNG
arbitration.
For the Recovery Rating, Fitch utilized a going-concern approach
with a 6x EBITDA multiple which is in line with recent
reorganization multiples in the energy sector. There have been a
limited number of bankruptcies and reorganizations within the
midstream space but bankruptcies, Azure Midstream and Southcross
Holdco, had multiples between 5x and 7x by Fitch's best estimates.
In its recent Bankruptcy Case Study Report "Energy, Power and
Commodities Bankruptcies Enterprise Value and Creditor Recoveries"
published in March 2018, the median enterprise valuation exit
multiplies for 29 energy cases for which this was available was
6.7x, with a wide range of multiples observed.
Fitch's corporate recovery analysis uses $40 million sustainable,
post-default EBITDA mainly reflecting the loss of customer
contracts as they come up for renewal. Fitch's $40 million
going-concern EBITDA excludes cash distributions from restricted
subsidiaries. The estimated going-concern value then allocated 10%
of the value for administrative claims. The distributable value was
allocated to the first-lien secured credit facility, term loan, and
delayed-draw term loan on a pari passu basis. Fitch's recovery
scenario analysis results in a 64% recovery leading to a 'B+'/'RR3'
rating.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Fitch does not expect positive rating action at Zenith given
the limited size and scale, operating and geographic diversity of
the issuer. Should Zenith increase its size, scale, and asset,
geographic or business line diversity, with a focus on growing
EBITDA above $100 million per year on a sustained basis while
maintaining leverage at or below 4.5x on a sustained basis, Fitch
would consider a positive rating action.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Inability to delever from pro forma levels to below 5.5x for a
sustained period of time;
-- Heightened contractual renewal risk or weakening of Canadian
crude-by-rail economics that result in lower than expected cash
flows.
LIQUIDITY
Liquidity is Sufficient: As of Sept. 30, 2018, Zenith Energy had
$62 million of cash on the balance sheet and $42.5 million of
availability on its revolver. The company's primary source of
liquidity is a $50 million first-lien senior secured credit
facility maturing in December 2022. Fitch anticipates Zenith Energy
will maintain nominal cash balances, on average, given the excess
cash flow sweep and organic/M&A growth strategy. The $410 million
term loan, which has a $40 million delayed-draw option, matures in
December 2024. As of Sept. 30, 2018, the term loan had $372 million
outstanding.
In addition, Zenith's sponsors remain committed to infusing capital
if needed although there is a cap on additional capital that would
be contributed.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
Zenith Energy U.S. Logistics Holdings, LLC
-- Long-Term Issuer Default Rating (IDR) at 'B';
-- First-Lien Secured Credit Facility at 'B+'/'RR3';
-- First-Lien Secured Term Loans at 'B+'/'RR3'.
The Rating Outlook is Stable.
*********
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