/raid1/www/Hosts/bankrupt/TCR_Public/190614.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, June 14, 2019, Vol. 23, No. 164
Headlines
2260 SAN YSIDRO: Taps Richard T. Baum as Legal Counsel
281 NE 78TH ST: U.S. Trustee Unable to Appoint Committee
7 HILLS INC: Case Summary & 20 Largest Unsecured Creditors
A1-PRIVATE CARE: U.S. Trustee Unable to Appoint Committee
ACTT RIVER: Voluntary Chapter 11 Case Summary
ACTUAL BREWING: Frost Brown Represents EBP and Airport Plaza
ADVANCE SPECIALTY: Unsecured Creditors to Get 5% Dividend
ADVANCED MICRO: S&P Rates New Revolving Credit Facility 'BB+'
ALLIANCE HEALTHCARE: S&P Cuts ICR to 'B-' on Tightening Liquidity
AMADO AMADO: Unsecureds to Get $5,891 in 10 Semiannual Payments
ANEW YOU MEDICAL: Seeks to Hire Dean W. Greer as Legal Counsel
AVINGER INC: Adjourns Annual Meeting Until June 19
BERRY'S RESTAURANT: Case Summary & 20 Largest Unsecured Creditors
BLACKSTONE CQP: S&P Affirms 'B+' Sec. Term Loan B Rating on Upsize
BLUE HOUSE: Voluntary Chapter 11 Case Summary
BRITLIND OIL: Seeks Conditional Approval of Proposed Plan Outline
BUTLER SPECIALTIES: Taps Potter & Company as Accountant
CALIFORNIA RESOURCES: Stockholders Approve Amended Incentive Plan
CAROUSEL CENTER: Moody's Cuts 2016A/B PILOT Bonds Rating to Ba2
CITIGROUP INC: Fitch Affirms BB+ Preferred Stock Rating
CLARKE'S TOWING: U.S. Trustee Unable to Appoint Committee
CLEAR CHANNEL: Fitch Lowers Senior Subordinated Notes to CCC
CLIFTON HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors
COMMUNITY HEALTH: Fitch Affirms CCC LT Issuer Default Rating
CUMULUS MEDIA: S&P Rates New $300MM Sr. Secured Notes Due 2027 'B'
CWGS ENTERPRISES: Moody's Confirms B1 CFR, Outlook Negative
DON FRAME: Plan Outline Hearing Scheduled for July 1
EASTMAN KODAK: Southeastern Asset Has 55.8% Stake as of May 31
EIRINI INVESTMENTS: S. Peck to Fund Proposed Chapter 11 Plan
ELITE TRANSPORTATION: Case Summary & 20 Top Unsecured Creditors
EMC BRONXVILLE: Trustee Files Chapter 11 Liquidation Plan
EST GROUP: Unsecureds to Recoup 8.2% Over 5-Year Period
FC GLOBAL: Completes First Stage of Integration with Gadsden Growth
FERNLEY & FERNLEY: Cash on Hand, Revenue Stream to Fund Plan
FERRELL TRANSPORTATION: U.S. Trustee Unable to Appoint Committee
FORUM ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR
FRONTIER COMMUNICATIONS: Fitch Lowers IDR to 'B-', Outlook Stable
FTD COMPANIES: Bankruptcy Court Approves First Day Motions
FTD COMPANIES: U.S. Trustee Forms 7-Member Committee
FUELCELL ENERGY: Bottone Out, Arasimowicz In as President
FUELCELL ENERGY: Delays Quarterly Report, Has Going Concern Doubt
FUELCELL ENERGY: Hercules Capital Agrees to Relax Loan Covenants
FUSION CONNECT: June 18 Meeting Set to Form Creditors' Panel
GAMING & LEISURE: Moody's Affirms Ba1 CFR, Outlook Stable
GIGA WATT: Trustee Taps Stretto as Claims Agent
GOGO INC: All Three Proposals Approved at Annual Meeting
GRAPHIC PACKAGING: S&P Rates New $300MM Sr. Unsecured Notes 'BB+'
HANNON ARMSTRONG: Fitch Assigns 'BB+' IDR & Unsecured Debt Rating
HARSCO CORP: Fitch Rates Planned $500MM Unsecured Notes 'BB'
HAVEN HEIGHTS: Online Auction Set to Begin on June 19
ICONIX BRAND: UBS Group Reports 6.9% Stake as of May 31
IMERYS TALC: U.S. Trustee Appoints New Rep for Donna Arvelo Estate
INVERSIONES CARIBE: Unsecured Creditors to Get 5% in 60 Months
JAGUAR HEALTH: Registers 13,782 Shares for Possible Resale
JAGUAR HEALTH: Registers 473,565 Shares for Possible Resale
JC FAMILY SERVICES: Unsecureds to Get 25% Distribution Under Plan
JOHNSON PUBLISHING: Hilco to Hold Mid-July Auction for Assets
LA VINAS MD: Seeks to Hire Kelley Fulton as Legal Counsel
LANDS' END: Moody's Alters Outlook on B3 CFR to Positive
LASALLE GROUP: Seeks to Hire Crowe & Dunlevy as Legal Counsel
LIFECARE HOLDINGS: Physicians Realty Provides Update on Exposure
MAINEGENERAL HEALTH: Fitch Affirms 'BB' Issuer Default Rating
MARRONE BIO: May Issue 1 Million Shares Under 2019 ESPP
MCCLAIN TRUCKING: Seeks to Hire Pamela Magee as Legal Counsel
MDC HOLDINGS: S&P Alters Outlook to Positive & Affirms 'BB+' ICR
MERITOR INC: Fitch Rates $175MM Secured Term Loan 'BB+'
MESOBLAST LIMITED: Expands License Agreement with JCR in Japan
MUSCLE MAKER: 1Q 2018 Financial Results Cast Going Concern Doubt
NEIMAN MARCUS: S&P Cuts ICR to 'SD' After Restructuring Settlement
NEOVASC INC: OPKO Health Has 5% Stake as of June 12
NICE SERVICES: U.S. Trustee Unable to Appoint Committee
NORDIC AMERICAN: KPMG AS Raises Going Concern Doubt
NORTHERN MARIANA: Fitch Affirms B+ on $9.5MM 1998A Airport Bonds
NORTHERN MARIANA: Fitch Affirms BB on $21MM 1998/2005 Seaport Bonds
NORTHERN POWER: Continues to Explore all Strategic Alternatives
NORTHERN POWER: Interim Co-Chief Executive Officer Resigns
O'BENCO IV: U.S. Trustee Forms 3-Member Committee
OMEROS CORP: May Issue 5.4 Million Added Shares Under 2017 Plan
OUTFRONT MEDIA: Moody's Rates $550MM Sr. Unsecured Notes 'B1'
OUTLOOK THERAPEUTICS: Further Amends Partnership Deal with MTTR
PEOPLE HELPING: U.S. Trustee Unable to Appoint Committee
PETES CHICKEN: Unsecureds to be Paid in Full at 4% Over 7 Years
PETROCAPITA G.P.: Court Appoints Hudson and Company as Receiver
PG&E CORP: Yanni Appointed as Wildfire Assistance Administrator
PIONEER ENERGY: Receives Noncompliance Notice from the NYSE
POET TECHNOLOGIES: Marcum LLP Raises Going Concern Doubt
POST PRODUCTION: Aug. 29 Plan Confirmation Hearing
POWER SOLUTIONS: 2018 & 2019 Financial Reports Delayed
PRECIPIO INC: CEO Buys $2,500 Worth of Common Stock
PRESERBA COMPANIA: Unsecured Creditors to Get 5% in 60 Months
PUMAS CAB: Discloses Treatment of PI Claimants in New Plan
QUEST SOLUTION: RBSM LLP Raises Going Concern Doubt
QUIZHPI CAB: Discloses Treatment of PI Claims in New Plan
QUORUM HEALTH: To Cease Inpatient Operations at MetroSouth Hospital
REGENTS HOLDINGS: Taps Curtis Castillo as Legal Counsel
REMLIW INC: Files Chapter 11 Liquidating Plan
RESORT SAVERS: Needs More Capital to Continue as Going Concern
REWALK ROBOTICS: Prices $5 Million Registered Direct Stock Offering
SHARING ECONOMY: Malone Bailey Replaces RBSM as Auditor
SHUTTERFLY INC: S&P Places 'BB-' ICR on Watch Neg. on Apollo Deal
SIF SERVICES: Taps Fox Law Corp. as Legal Counsel
SPANISH BROADCASTING: Stockholders Elect Six Directors
STEEL CONNECT: Operating Results, Deficit Cast Going Concern Doubt
TALON REAL ESTATE: March 2017 Form 10-Q Shows $2.82M Loss
TEGNA INC: S&P Places 'BB' Issuer Credit Rating on Watch Negative
TRIP II PARTNERSHIP: Fitch Cuts Rating on 1999/2005 Bonds to BB
TWIN CITY BEER: U.S. Trustee Unable to Appoint Committee
UPLAND SOFTWARE: S&P Assigns 'B' ICR; Outlook Stable
US 1 ASSOCIATES: Approval Hearing on Disclosures Set for July 25
US VIRGIN ISLANDS: Moody's Puts Caa3 Issuer Rating on Review
VOYA FINANCIAL: Fitch Rates New $300MM Preferred Stock 'BB+'
WAYPOINT LEASING: Plan Confirmation Hearing Set for July 25
WILKENS 2003 TRUST: To Pay Unsecureds in Full at 4% Over 2 Years
YINGLI GREEN: PricewaterhouseCoopers Raises Going Concern Doubt
YUS INTERNATIONAL: Centurion ZD CPA Raises Going Concern Doubt
[*] Jeffrey Patterson Named Allen Matkins' New Managing Partner
[*] Sam Newman Joins Sidley Austin's Global Restructuring Group
[*] Two Supreme Court Advocates Join McDermott's D.C. Office
[] CohnReznick Adds Four Partners to Restructuring Practice
*********
2260 SAN YSIDRO: Taps Richard T. Baum as Legal Counsel
------------------------------------------------------
2260 San Ysidro LLC received approval from the U.S. Bankruptcy
Court for the Central District of California to hire the Law
Offices of Richard T. Baum as its legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include legal advice regarding the
requirements of the Bankruptcy Code; examinations of witnesses and
claimants; and assistance in the sale of its assets.
Richard Baum, Esq., the firm's attorney who will be handling the
case, will charge an hourly fee of $450. His firm received a
pre-bankruptcy retainer of $25,000, plus $1,717 for the filing fee.
Mr. Baum disclosed in court filings that he is "disinterested" as
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Richard T. Baum, Esq.
Law Offices of Richard T. Baum
11500 W Olympic Blvd, Ste.400
Los Angeles, CA 90064
Tel: 310-277-2040
Fax: 310-286-9525
Email: rickbaum@hotmail.com
About 2260 San Ysidro
2260 San Ysidro, LLC, is a Single Asset Real Estate Debtor, as
defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner
of a property located at 2260 San Ysidro Drive, Beverly Hills,
Calif., with an estimated value of $3.2 million.
2260 San Ysidro filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-15021) on April 30,
2019. In the petition signed by John LaCroix, member, the Debtor
estimated $3,200,000 in assets and $2,304,815 in liabilities. The
case is assigned to Judge Vincent P. Zurzolo.
Richard T. Baum, Esq. at the Law Offices of Richard T. Baum, is the
Debtor's counsel.
281 NE 78TH ST: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
281 NE 78th St LLC, according to court dockets.
About 281 NE 78th St LLC
281 NE 78th St LLC listed its business as single asset real estate
(as defined in 11 U.S.C. Section 101(51B)).
281 NE 78th St sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 19-15323) on April 24, 2019. At
the time of the filing, the Debtor disclosed $1.8 million in assets
and $750,000 in liabilities.
The case has been assigned to Judge Laurel M. Isicoff. Robert C.
Meyer, PA is the Debtor's legal counsel.
7 HILLS INC: Case Summary & 20 Largest Unsecured Creditors
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Debtor: 7 Hills, Inc.
dba Shawnee Market
dba Chiknfry
7120 Roanoke Road
Shawsville, VA 24162
Business Description: 7 Hills, Inc. owns and operates convenience
stores and gasoline stations.
Chapter 11 Petition Date: June 12, 2019
Court: United States Bankruptcy Court
Western District of Virginia (Roanoke)
Case No.: 19-70804
Judge: Hon. Paul M. Black
Debtor's Counsel: Andrew S. Goldstein, Esq.
MAGEE GOLDSTEIN LASKY & SAYERS, P.C.
PO BOX 404
ROANOKE, VA 24003
Tel: 540 343-9800
E-mail: agoldstein@mglspc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Rajendra Patel, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/vawb19-70804.pdf
A1-PRIVATE CARE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
A1-Private Care Corp., according to court dockets.
About A1-Private Care Corp.
A1-Private Care Corp sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-15936) on May 3,
2019. Elias Leonard Dsouza, Esq., is the Debtor's bankruptcy
counsel.
ACTT RIVER: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: ACTT River Road LLC
4935 River Road
Point Pleasant, PA 18950
Business Description: ACTT River Road LLC classifies its business
as Single Asset Real Estate (as defined in
11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: June 12, 2019
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Case No.: 19-13789
Judge: Hon. Ashely M. Chan
Debtor's Counsel: Mark S. Haltzman, Esq.
SILVERANG, ROSENZWEIG & HALTZMAN LLC
595 East Lancaster Avenue, Suite 203
St. Davids, PA 19087
Tel: 610-263-0115
Fax: 215-754-4932
E-mail: mhaltzman@sanddlawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Carolyn Kroll, as sole member of ACCT
Investments, LLC, sole member of ACTT River Road, LLC.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/paeb19-13789.pdf
ACTUAL BREWING: Frost Brown Represents EBP and Airport Plaza
------------------------------------------------------------
Frost Brown Todd LLC filed a verified statement pursuant to Rule
2019(a) of the Federal Rules of Bankruptcy Procedure to disclose
that it represents:
(1) EBP 2800 North High LLC
4300 E. Fifth Avenue
Columbus, Ohio 43219
(2) Airport Plaza Limited
3016 Maryland Avenue
Columbus, Ohio 43209
Each of EBP and Airport Plaza lease property to the Debtor. EBP
holds a claim against the Debtor in the amount of not less than
$35,942, including but not limited to all amounts due and owing
under the lease between EBP and the Debtor plus any rejection
damages and/or administrative priority claims for unpaid
post-petition rent and other charges.
Airport Plaza holds a claim against the Debtor in the amount of not
less than $117,839, including but not limited to all amounts due
and owing under the lease between Airport Plaza and the Debtor plus
any rejection damages and/or administrative priority claims for
unpaid postpetition rent and other charges.
Counsel for the Claimants:
Ronald E. Gold, Esq.
A.J. Webb, Esq.
FROST BROWN TODD LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202
Tel: 513-651-6800
Fax: 513-651-6981
E-mail: Facsimilergold@fbtlaw.comawebb@fbtlaw.com
A copy of the Rule 2019 filing is available at PacerMonitor.com at
https://is.gd/TbFx0v
About Actual Brewing Company
Actual Brewing Company, LLC, is a craft brewery. It was founded in
Columbus in 2012 and soon thereafter began production in a facility
on the east side of town. Actual Brewing makes a range of unique
beers, including its habanero infused Conductor IPA and Photon, a
rare craft light beer. The Company has a loyal following. As of the
Petition Date Actual Brewing employed 19 individuals across
management, operations, production, sales, distribution, behind the
bar, and in the kitchen. The company has 72 members, most of whom
are local, private investors who contributed a small amount of
money to be involved in a local brewery with ambitious plans. The
company did not take on any bank debt, and instead relied on the
support of its community of investors.
Actual Brewing Company filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Ohio Case No. 19-50813) on Feb. 14, 2019. In the
petition signed by Nicole Felter, manager, the Debtor estimated
both assets and liabilities under $1 million. The Debtor is
represented by Mark Kenneth Stansbury, Esq. at Stansbury Weaver
Ltd.
ADVANCE SPECIALTY: Unsecured Creditors to Get 5% Dividend
---------------------------------------------------------
Advance Specialty Care, LLC, filed a second amended Chapter 11 Plan
and accompanying second amended disclosure statement.
Class 6 - General Unsecured Claims are impaired. General unsecured
creditors, Class 6 Claimants, will receive a dividend of 5% of
their claims paid in 83 equal monthly installments of $737.62 each,
commencing on the first day of the 38th full month after the
Effective Date.
Class 1 - Secured claim of Los Angeles Country Treasurer and Tax
Collector are impaired. The allowed secured claim of the LACTTC,
estimated at $1,015.34 as of the Petition Date, will be paid in
full, which payment will include accrued interest at the rate of
18% per annum, in equal monthly payment of $35.96 each over 37
month period, commencing on the first day of the first full month
after the Effective Date.
Class 2 - Secured claim of IRS are impaired. The allowed secured
claim of the IRS, Class 2 Claimant, estimated at $313,170.35 as of
the Petition Date, will be paid in full, which payment will include
accrued interest at the rate that is in effect as of effective date
and penalties incurred since the Petition Date, in equal monthly
payments of $7,242.16 each over a 50 month period, commencing on
the first day of the of the first full month after the Effective
Date.
Class 3 - Secured claim of Toyota Motor are impaired. The
prepetition arrearages owed to Toyota, Class 3 Claimant in the
amount approximately $608.83 as of Petition Date will be paid,
together with interest at the rate of 6.25% per annum, in equal
monthly payments of $18.14 each over 37 month period, commencing on
the first day of the first full month after the Effective Date.
Class 4 - Kaiser Foundation Health Plan are impaired. The allowed
priority claim of Kaiser Permanente estimated at $38,509.55 as of
the petition date, will be paid in full, which payment will include
accrued interest at the rate 3.25% per annum, in equal monthly
payments of $1,095.23 each over a 37-month period, commencing on
the first day of the first full month after the Effective Date.
Class 5 - Borges' general unsecured claim arising from the judgment
issued in her favor in a tort action, which is currently on appeal
are impaired. Borges, Class 5 Claimant, will receive a dividend of
10% of her claim paid in 120 equal monthly installments of
approximately $3,390.95 each, commencing on the first day of the
first full month after the Effective Date.
The plan will be funded by the following: (a) cash on hand
($213,782.07 as of April 30, 2019); (b) at least $150,000 "new
value" contribution from the current equity holders; (c) at least
$349,000 in retroactive payments from Medi-Call; and (d) net
monthly income from operation of ASC's business ranging between
$5,754.85 to $64,482.90 per month during the term of the Plan.
A full-text copy of the Second Amended Disclosure Statement dated
May 29, 2019, is available at https://tinyurl.com/yylthan4 from
PacerMonitor.com at no charge.
The General Insolvency Counsel for the Debtor is Raymond H. Aver,
Esq., in Los Angeles, California.
About Advance Specialty Care
Based in Los Angeles, California, Advance Specialty Care, LLC, is a
home-health care provider offering nursing, physical therapy,
occupational therapy, speech pathology, medical social, and home
health aide services. The company previously sought bankruptcy
protection on March 19, 2016, (Bankr. C.D. Calif. Case No.
16-13521) and Oct. 24, 2017 (Bankr. C.D. Calif. Case No.
17-23070).
Advance Specialty Care, LLC, a/k/a ASC, LLC filed a Chapter 11
petition (Bankr. C.D. Calif. Case No. 17-24737) on Nov. 30, 2017.
The petition was signed by Moises L. Simbulan, chief financial
officer. At the time of filing, the Debtor estimated $500,000 to
$1 million in assets and $10 million to $50 million in liabilities.
The case is assigned to Judge Robert N. Kwan.
ADVANCED MICRO: S&P Rates New Revolving Credit Facility 'BB+'
-------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level and '1' recovery
rating to Santa Clara.-based semiconductor firm Advanced Micro
Devices Inc.'s new $500 million senior secured revolving credit
facility. This new facility will replace an existing $500 million
asset-based lending (ABL) facility. S&P also affirmed its 'BB-'
issue-level rating on the firm's senior unsecured notes and the '4'
recovery rating is unchanged. S&P's 'BB-' issuer credit rating on
AMD is unchanged, and the outlook remains positive.
"The positive outlook on AMD reflects our view that significant
share gains in the consumer CPU market and a recent reentry into
the server CPU market will enable AMD to continue to grow EBITDA
and cash flow even as GPU demand remains weak. We forecast leverage
will decline further and to approach 1.5x within 12 months," S&P
said.
Issue Ratings - Recovery Analysis
Key analytical factors
-- The recovery and issue-level ratings on AMD reflect S&P's
modeling of stressed value, which remains modest considering the
company's limited share in core products.
-- S&P values the company on a going-concern basis using a 5x
multiple of its projected emergence EBITDA.
-- AMD has a secured revolving credit facility, and all other
outstanding debt is unsecured and pari- passu.
Simplified waterfall
-- Emergence EBITDA: about $190 million
-- Multiple: 5.0x
-- Gross recovery value: about $950 million
-- Net recovery value for waterfall after administrative expenses:
about $900 million
-- Obligor/non-obligor valuation split: 65%/35%
-- Estimated secured claims: about $440 million
-- Recovery range: 30%-50%
-- Remaining recovery value: about $460 million
-- Estimated unsecured claims: about $1.3 billion
-- Recovery range: 30%-50% (rounded estimate: 35%)
All debt amounts include six months of prepetition interest.
Collateral value equals asset pledge from obligors after priority
claims plus equity pledge from nonobligors after nonobligor debt.
Ratings List
Advanced Micro Devices Inc.
Issuer Credit Rating BB-/Positive/--
New Rating
Advanced Micro Devices Inc.
Senior Secured
US$500 mil revolver due 2024 BB+
Recovery Rating 1(95%)
Ratings Affirmed
Advanced Micro Devices Inc.
Senior Unsecured BB-
Recovery Rating 4(35%)
ALLIANCE HEALTHCARE: S&P Cuts ICR to 'B-' on Tightening Liquidity
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Irvine,
Calif.-based radiology and oncology provider Alliance HealthCare
Services to 'B-' from 'B+'. At the same time, S&P lowered its
issue-level rating on Alliance's senior secured first-lien debt to
'B-' from 'B+' and its issue-level rating on Alliance's second-lien
debt to 'CCC' from 'B-'. The '3' recovery rating on the senior
secured first-lien debt and the '6' recovery rating on the
second-lien debt remain unchanged.
The downgrade reflects S&P's view that the company will struggle to
significantly improve financial performance, generate
discretionary cash flow, and remain in compliance with its
covenants in December 2019 when they step down. Alliance continues
to experience operational challenges including service mix changes
which pressure margins, ongoing integration issues from its 21st
Century acquisition that has adversely impacted EBITDA, as well as
much higher interest costs. Furthermore, the company needs to
maintain a high level of capital spending to offset revenue and
margin declines. These factors have caused leverage to increase,
rather than decrease as S&P had anticipated earlier.
The negative outlook reflects S&P's belief that, without material
improvement, ongoing margin pressures, limited cash flow, and
weakening liquidity will reduce the chances that the company can
remain in compliance with its financial covenants as it faces
step-downs in December 2019.
"We could lower the rating if operating performance fails to
improve, resulting in persistent cash flow deficits. We could also
lower the rating if we have diminished confidence in Alliance's
ability to remain in compliance with its financial covenants, or
receive an amendment, as it faces step-downs in December 2019," S&P
said.
"We could revise the outlook to stable if the company is able to
successfully increase margins in the radiology segment and
integrate its new oncology acquisition, bringing discretionary cash
flow (after distributions to noncontrolling interest holders) to
about $10 million and sustaining it at that level while maintaining
a 20% cushion to its leverage covenant," S&P said.
AMADO AMADO: Unsecureds to Get $5,891 in 10 Semiannual Payments
---------------------------------------------------------------
Amado Amado Salon & Body Corp. and Amado Salon de Belleza Inc.
filed an amended Chapter 11 Plan and accompanying Amended
Disclosure Statement.
Class 5 - General Unsecured Creditors are impaired. The total
unsecured claim subject to distribution is $1,078.788, Class 5
claimant shall receive from Consolidated Debtor a non-negotiable,
interest bearing at 3.25% annually, promissory note dated as of the
Effective Date. Creditors in this class shall receive total
repayment of 5% of their claimed or listed debt which equals
$53,939.40 to be paid pro rata to all allowed claimants under this
class. Unsecured Creditors will receive 10 semiannual payments in
the amount of $5,891.11 to be distributed pro rata among them, for
the term of 10 semiannual periods beginning September 1, 2019.
Class 1 - Internal Revenue Service are impaired. IRS filed claim
number 2 in the amount of $156,351.65: $36,772.09 secured,
$72,575.93 priority and $47,003.63 as general unsecured. IRS's
secured claim number 2 and 5 in the total amount of $105,221.90
shall be paid in sixty monthly installments of $1,938.00 which
includes principal plus interest of 4% beginning April 5, 2018.
Class 2 - Centro De Recaudacion De Ingresos Municipales are
impaired. Secured portion of Claim 1 in the amount $2,229.93 for
personal property taxes was paid in full plus 4% annual interest on
March 1, 2019.
The funds will be obtained from Consolidated Debtor' businesses.
A full-text copy of the Amended Disclosure Statement dated May 29,
2019, is available at https://tinyurl.com/y54urdce from
PacerMonitor.com at no charge.
Attorney for the Consolidated Debtor is Gloria M. Justiniano
Irizarry, Esq., in Mayaguez, Puerto Rico.
About Amado Amado Salon & Body Corp.
Amado Amado Salon & Body Corp. and Amado Salon De Belleza, Inc. are
privately-held companies in San Juan, Puerto Rico, engaged in the
beauty salon business. The Debtors first filed for Chapter 11
bankruptcy protection (Bankr. D.P.R. Case Nos. 14-10459 and
14-10460) on Dec. 23, 2014.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.P.R. Lead Case No. 18-01144) on March 5, 2018.
In the petitions signed by Amado Navarro Elizalde, president, Amado
Amado Salon estimated assets and liabilities of $1 million to $10
million. Amado Salon De Belleza estimated assets and liabilities
of less than $1 million.
Judge Mildred Caban Flores presides over the cases.
ANEW YOU MEDICAL: Seeks to Hire Dean W. Greer as Legal Counsel
--------------------------------------------------------------
Anew You Medical Weight Loss and Spa, LLC, seeks approval from the
U.S. Bankruptcy Court for the Western District of Texas to hire the
Law Offices of Dean W. Greer as its legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include legal advice regarding its powers
and duties under the Bankruptcy Code; negotiation and preparation
of a bankruptcy plan; and representation in adversary cases.
The firm's hourly rates are:
Dean William Greer, Esq. $300
Legal Assistants $90
Dean Greer neither holds nor represents any interest adverse to the
Debtor's bankruptcy estate, according to court filings.
The firm can be reached through:
Dean William Greer, Esq.
Law Offices of Dean W. Greer
2929 Mossrock, Suite 117
San Antonio, TX 78230
Tel: (210) 342-7100
Fax: (210) 342-3633
Email: dwgreer@sbcglobal.net
About Anew You Medical Weight
Loss and Spa LLC
Anew You Medical Weight Loss and Spa PLLC is a non-public
corporation founded in 2016 in the medical wellness business. It
offers a variety of services, including weight loss, IV therapy,
laser hair removal, skin treatments, coolsculpting, hormone
therapy, and hair rejuvenation.
Anew You Medical Weight Loss and Spa sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
19-51171) on May 15, 2019. The case is jointly administered with
the Chapter 11 case of Margaret Sheryl Wehner, the Debtor's
managing member (Bankr. W.D. Tex. Case No. 19-51172). At the time
of the filing, Anew estimated assets of between $1 million and $10
million and liabilities of the same range. The cases are assigned
to Judge Craig A. Gargotta.
The Law Offices of Dean W. Greer is Anew's legal counsel.
AVINGER INC: Adjourns Annual Meeting Until June 19
--------------------------------------------------
Avinger, Inc.'s annual meeting of stockholders scheduled for and
convened on June 11, 2019 has been adjourned to June 19, 2019, at
1:00 p.m. Pacific Time. The adjourned meeting will be held at the
offices of Dorsey & Whitney LLP at 305 Lytton Avenue, Palo Alto,
California 94301. A quorum was present for the authorization of
the meeting of June 11, 2019, as there were present, in person or
by proxy, a majority of all issued and outstanding shares of the
Company's common stock entitled to vote at the Annual Meeting.
As of June 11, 2019, the stockholders entitled to vote at the
Annual Meeting had voted to approve the proposal to adjourn the
Annual Meeting (Proposal 6) for the purpose of continuing to
solicit votes in favor of the proposals contained in the Company's
Proxy Statement.
About Avinger, Inc.
Headquartered in Redwood City, California, Avinger --
http://www.avinger.com/-- is a commercial-stage medical device
company that designs and develops the first-ever image-guided,
catheter-based system that diagnoses and treats patients with
peripheral artery disease (PAD). PAD is estimated to affect over
12 million people in the U.S. and over 200 million worldwide.
Avinger is dedicated to radically changing the way vascular disease
is treated through its Lumivascular platform, which currently
consists of the Lightbox imaging console, the Ocelot family of
chronic total occlusion (CTO) catheters, and the Pantheris family
of atherectomy devices.
Avinger reported a net loss applicable to common stockholders of
$35.69 million for the year ended Dec. 31, 2018, compared to a net
loss applicable to common stockholders of $48.73 million for the
year ended Dec. 31, 2017. As of March 31, 2019, Avinger had $26.25
million in total assets, $12.97 million in total liabilities, and
$13.27 million in total stockholders' equity.
Moss Adams LLP, in San Francisco, California, the Company's auditor
since 2017, issued a "going concern" qualification in its report
dated March 6, 2019, on the Company's consolidated financial
statements for the year ended Dec. 31, 2018, stating that the
Company's recurring losses from operations and its need for
additional capital raise substantial doubt about its ability to
continue as a going concern.
BERRY'S RESTAURANT: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Berry's Restaurant, Inc.
dba Berry's Restaurant
15 West Main Street
Norwalk, OH 44857
Business Description: Berry's Restaurant, Inc. owns and operates
a restaurant in Norwalk, Ohio.
Chapter 11 Petition Date: June 12, 2019
Court: United States Bankruptcy Court
Northern District of Ohio (Toledo)
Case No.: 19-31885
Judge: Hon. John P. Gustafson
Debtor's Counsel: Eric R. Neuman, Esq.
DILLER AND RICE, LLC
1105-1107 Adams Street
Toledo, OH 43604
Tel: 419-724-9047
419-244-8500
E-mail: eric@drlawllc.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Douglas Berry, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/ohnb19-31885.pdf
BLACKSTONE CQP: S&P Affirms 'B+' Sec. Term Loan B Rating on Upsize
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issue-level rating and '2'
recovery rating on Blackstone CQP Holdco L.P.'s (BXCQP) senior
secured term loan B upsized to $2.6 billion.
BXCQP is using the total amount to refinance its capital structure
and pay a dividend to its sponsor. S&P's other ratings, including
the 'B' issuer credit rating and stable outlook, are unchanged.
BXCQP is a holding company that owns certain affiliates of
Blackstone's 40.5% interest in Cheniere Energy Partners L.P. (CQP).
There are no other substantive assets at BXCQP.
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario is driven by underperformance
at Sabine Pass, leading to reduced cash flow to CQP and therefore
reduced distributions to BXCQP.
-- Given this level of operating challenge at CQP's subsidiaries,
financial markets would subsequently have a bearish view on the
equity prospects of CQP.
Simulated default assumptions
-- Simulated year of default: 2021
-- Assumed drop in valuation of CQP shares: 75% from the average
six-month unit price of $41.13
Simplified waterfall
-- Net enterprise value (after 5% bankruptcy administrative
costs): $1.94 billion
-- Secured debt: $2.64 billion (includes six months of prepetition
interest)
-- Recovery rating: 70%-90% (rounded estimate: 70%)
Ratings List
Blackstone CQP Holdco LP
Issuer Credit Rating B/Stable/--
Ratings Affirmed; Recovery Ratings Unchanged
Blackstone CQP Holdco LP
Senior Secured
Local Currency B+
Recovery Rating 2(70%)
BLUE HOUSE: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Blue House Charter LLC
1150 Connecticut Avenue NW, Suite 900
Washington, DC 20036
Business Description: Blue House Charter LLC is a privately held
company whose principal assets are located
at 227 E Street NE Washington, DC 20002.
Chapter 11 Petition Date: June 12, 2019
Court: United States Bankruptcy Court
District of Columbia (Washington, D.C.)
Case No.: 19-00379
Judge: Hon. S. Martin Teel, Jr.
Debtor's Counsel: Johnnie D. Bond, Jr., Esq.
JOHNNIE BOND LAW
1100 H Street NW, Suite 315
Washington, DC 20005
Tel: (202) 683-6803
E-mail: jbond@bondpllc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Eric James Hougen, sole manager-member.
The Debtor stated it has no unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/dcb19-00379.pdf
BRITLIND OIL: Seeks Conditional Approval of Proposed Plan Outline
-----------------------------------------------------------------
Britlind Oil, LLC, filed a motion asking conditional approval of
its small business disclosure statement with regard to its chapter
11 plan.
The Debtor also asked the court to set deadlines and a confirmation
hearing.
The Troubled Company Reporter previously reported that the
Unsecured Creditors will share pro-rata in the Unsecured Creditor's
Pool. The Debtor will pay into the Unsecured Creditors Pool an
amount equal to 75% of the net income received by the Debtor under
the New Lease Agreement for a period of 60 months commencing 90
days after the Effective Date. The Debtor shall make payments into
the Unsecured Creditors Pool for a period of 60 months or until the
Allowed Unsecured Creditors have been paid in full whichever comes
first.
A full-text copy of the Disclosure Statement dated May 27, 2019, is
available at https://tinyurl.com/y52jlqze from PacerMonitor.com at
no charge.
About Britlind Oil
Britlind Oil, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
N.D. Tex. Case No. 18-33693) on Nov. 7, 2018, disclosing less than
$1 million in assets and liabilities. The Debtor is represented by
Eric A. Liepins, Esq., at Eric A. Liepins, P.C.
BUTLER SPECIALTIES: Taps Potter & Company as Accountant
-------------------------------------------------------
Butler Specialties Inc. received approval from the U.S. Bankruptcy
Court for the Middle District of North Carolina to hire Potter &
Company Certified Public Accounting.
The firm will provide bookkeeping and accounting services. The
majority of the work will be performed by Kathy Griffin. Ms.
Griffin is a bookkeeper and will work under the supervision of John
Kapelar, a certified public accountant.
The firm will charge these hourly fees:
John Kapelar $350
Kathy Griffin $175
Mr. Kapelar disclosed in court filings that he and other members of
his firm do not have a conflict of interest in the Debtor's Chapter
11 case.
Potter & Company can be reached through:
John W. Kapelar
Potter & Company
Certified Public Accounting
114 North S. Church St.
Monroe, NC 28112
About Butler Specialties
Founded in 1981, Butler Specialties, Inc. --
https://www.butlerbuilt.net/ -- is a manufacturer of motorsports
car seats. Located in Concord, N.C., Butler also offers safety
products for the motorsports industry and is a dealer for Arai
Helmets, Hooker Harness seat belts and NecksGen Head and Neck
Restraints.
Butler Specialties sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D.N.C. Case No. 19-50417) on April 23,
2019. At the time of the filing, the Debtor disclosed $1,180,685
in assets and $3,821,628 in liabilities. The case is assigned to
Judge Lena M. James. Nardone Law, PLLC, is the Debtor's bankruptcy
counsel.
CALIFORNIA RESOURCES: Stockholders Approve Amended Incentive Plan
-----------------------------------------------------------------
California Resources Corporation held its annual meeting of
stockholders on May 8, 2019. At the Annual Meeting, the Company's
stockholders approved the California Resources Corporation
Long-Term Incentive Plan, as amended and restated effective as of
May 8, 2019. Awards may be made to eligible individuals under the
Amended LTIP at the discretion of the Compensation Committee (or a
subcommittee thereof) and the Board of Directors.
The Company's Amended LTIP is administered by the Compensation
Committee of the Board of Directors, which is and will be composed
of at least two of its independent directors. Subject to the
provisions of the Amended LTIP, the Committee has the authority to
select the participants who will receive the awards, to determine
the type and terms of the awards, and to interpret and administer
the Amended LTIP. The Committee may delegate to the Company's CEO
the authority to grant awards to any eligible person who is not
then subject to Section 16 of the Securities Exchange Act of 1934,
as amended, to the extent not inconsistent with applicable laws or
regulations.
The Amended LTIP increases the number of shares of common stock
authorized for awards under the plan by 2,575,000 shares, bringing
the aggregate maximum number of shares of common stock authorized
for grant to 7,275,000 (subject to adjustment as provided in the
Amended LTIP). Under the Amended LTIP, no more than 7,275,000
shares of common stock (subject to adjustment as provided in the
Amended LTIP) may be issued pursuant to incentive stock options.
Shares of common stock covered by an award that expires or is
forfeited, cancelled, or for any reason is terminated or fails to
vest will be available for subsequent awards under the Amended
LTIP. Shares of common stock covered by a stock option or stock
appreciation right that expires or terminates prior to exercise and
shares of restricted stock returned to the Company upon forfeiture
will be available for subsequent awards. Shares of common stock
tendered or withheld to satisfy an exercise price or tax
withholding obligation for an award and shares of common stock the
Company repurchases using stock option proceeds will not again be
available for issuance under the Amended LTIP. Shares of common
stock subject to stock options or stock appreciation rights that
are exercised will not again be available for issuance under the
plan.
The Amended LTIP includes a limit on the awards that can be made
under the plan to each non-employee director. Under the Amended
LTIP, the aggregate grant date fair value (computed as of the date
of grant in accordance with applicable financial accounting rules)
of all awards granted under the plan to any individual non-employee
director during any single calendar year cannot exceed $750,000,
determined without regard to grants of awards made under the plan
to a non-employee director during any period in which such
individual was an employee or contractor (other than in the
capacity of a non-employee director).
Subject to the limitation of awards to non-employee directors, the
Amended LTIP also includes the following limits:
* subject to adjustment as provided in the Amended LTIP, no
individual may be granted stock options or stock appreciation
rights during any calendar year with respect to more than
1,000,000 shares of common stock;
* no individual may be granted other awards denominated in
shares
(other than stock options or stock appreciation rights) during
any calendar year with respect to more than 1,000,000 shares
of
common stock (subject to adjustment as provided in the Amended
LTIP); and
* the maximum amount of compensation that may be paid under all
performance-based awards that are not denominated in shares
(including the fair market value of any shares of common stock
paid in satisfaction of such performance-based awards) granted
to any one individual during any calendar year may not exceed
$20,000,000.
Consistent with the terms of the plan prior to amendment and
restatement, the following awards may be granted under the Amended
LTIP: stock options, stock appreciation rights, restricted stock
awards, stock bonuses, dividend rights or equivalents,
performance-based awards, and any other awards that are valued,
denominated, paid or otherwise based on or related to common stock.
Cash awards may also be granted as separate awards, or as
supplements to any other awards.
Generally, with respect to awards granted on or after May 4, 2016,
in the event of a change in control while the holder of the award
is employed by or otherwise providing services to the Company or an
affiliate followed by a termination of employment or services as a
result of the change in control, unless otherwise provided in an
award agreement or overridden by the Committee, each such award
will become immediately vested and fully exercisable upon such
termination and any restrictions applicable to the award will lapse
on that date.
About California Resources
California Resources Corporation -- http://www.crc.com/-- is an
oil and natural gas exploration and production company
headquartered in Los Angeles, California. The Company operates its
resource base exclusively within the State of California, applying
complementary and integrated infrastructure to gather, process and
market its production. Using advanced technology, California
Resources Corporation focuses on safely and responsibly supplying
affordable energy for California by Californians.
California Resources reported net income attributable to common
stock of $328 million for the year ended Dec. 31, 2018, compared to
a net loss attributable to common stock of $266 million for the
year ended Dec. 31, 2017. As of March 31, 2019, California
Resources had $7.23 billion in total assets, $689 million in total
current liabilities, $5.16 billion in long-term debt, $203 million
in deferred gain and issuance costs, $692 million in other
long-term liabilities, $766 million in redeemable non-controlling
interests, and a total deficit of $289 million.
* * *
In March 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit
rating on California Resources Corp. The affirmation reflects
S&P's expectation that CRC will continue to support its liquidity
by balancing its spending with its cash flow, selling non-core
assets, and potential for joint ventures in 2019 as mentioned in
the company's fourth quarter conference call.
In November 2017, Moody's Investors Service upgraded California
Resources' Corporate Family Rating (CFR) to 'Caa1' from 'Caa2' and
Probability of Default Rating (PDR) to 'Caa1-PD' from 'Caa2-PD'.
Moody's said the upgrade of CRC's CFR to 'Caa1' reflects CRC's
improved liquidity and the likelihood that it will have sufficient
liquidity to support its operations for at least the next two
years
at current commodity prices.
CAROUSEL CENTER: Moody's Cuts 2016A/B PILOT Bonds Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service has downgraded to Ba2 from Baa3 the
rating on Syracuse Industrial Development Agency, NY's Carousel
Center Project's PILOT Revenue Bonds Series 2007B, Series 2016A,
Series 2016B and removes the rating from review for downgrade. The
rating was placed on review on April 23, 2019 due to the transfer
of the subordinate CMBS loan to special servicing, indicating
difficulties extending or refinancing the loan. The outlook is
negative.
Downgrades:
Issuer: Syracuse Industrial Development Agency, NY
Senior Unsecured Revenue Bonds, Downgraded to Ba2 from Baa3
Underlying Senior Unsecured Revenue Bonds, Downgraded to Ba2
from Baa3
RATING RATIONALE
The downgrade to Ba2 reflects Moody's view that the Carousel Center
will continue to be challenged to materially grow operating margins
owing to its challenging operating environment that is unlikely to
materially improve in the near term. As a result, while Carousel
Center Company L.P. signed a three year loan extension and
modification agreement with the special servicer of its subordinate
CMBS loan on May 31, 2019, the ability to meet the new Debt Yield
covenants in 2020 and 2021 to secure the second and third year of
the loan extension remains uncertain. While Moody's expects an
equity contribution is likely to be needed in each year to reduce
the total subordinate CMBS loan to satisfy the Debt Yield covenant
for further annual extensions, the second year covenant calculation
is likely to require a substantial amount of equity in order to
achieve the third year of the loan extension. As such, the near
term financial viability of Carousel Center Company L.P. may
require additional equity support to reduce total leverage to a
more manageable level. The strong parent company guarantee of the
subordinate CMBS loan from the Pyramid Company of Onondaga, a
general partnership, indicates a high likelihood of future equity
support if needed.
While the loan extension provides time to execute the proposed
business plan that has tangible agreements and other likely new
tenants in the pipeline over the next few years, Carousel Mall will
likely remain challenged to grow margins to meet an annually rising
debt service repayment schedule at about 4% per year through the
PILOT bond's maturity. The declining net operating income (NOI) for
the last couple of years has steepened the NOI growth needed to
keep pace with the rising PILOT bond debt service costs. The risk
to future NOI is exacerbated by ongoing pressure from online retail
competition and changes in user preferences for brick and mortar
retail as well as general variations in demand through economic
cycles.
The rating is supported by the mall's strong and established
regional market position as a regional super mall with limited
direct competition in the Syracuse region, as well as its continued
ability to consistently attract visitors from a wider catchment
area. However, this market position and cashflow predictability has
been gradually diminished by online retail over the last several
years.
The rating also incorporates the strength of the seniority of the
PILOT payments and the enforcement of the PILOT payments with
corresponding notes and mortgages that should result in full
bondholder recovery in case of default. Moreover, the sponsor has a
strong incentive to pay its PILOT obligations since failure to do
so, barring an equity cure, would lead to a foreclosure and tax
lien sale on the Carousel Center, resulting in a loss of
collateral. Moody's expects the PILOT revenue bonds to continue to
be timely paid and to continue to benefit from their strong legal
position with a first mortgage interest in the Carousel Mall
(excluding the expansion), a cash funded $31 million debt service
reserve fund, and an inability to accelerate the PILOT bonds.
However, the borrower for the CMBS loan is Carousel Center Company
L.P., the same obligor of the PILOT revenue bonds, which
potentially exposes the PILOT bonds to a bankruptcy filing if
operations weaken and reduce cashflow available to service the CMBS
loan.
Rating Outlook
The negative outlook reflects the uncertainty surrounding the
broader retail sector and Carousel's ability to timely execute its
business plan to meet new Debt Yield covenants to ensure the CMBS
subordinate loan extension continues beyond the first year. The
outlook also incorporates the pressure the mall faces in a
challenging market for brick and mortar retail while a portion of
tenant leases are up for renewal or replacement each year.
Factors that Could Lead to an Upgrade
- A material reduction in debt and/or a corresponding material
improvement in operating margins from new tenants or higher
tenant rents and recoveries.
- The outlook could be changed to stable if NOI begins to grow
or at least stabilize.
Factors that Could Lead to a Downgrade
- Continued deterioration in Carousel's operating or financial
performance that further weakens debt service coverage
- Inability to meet Debt Yield targets resulting in need for
a large equity infusion
- A decline in tax rates collected from tenants below
scheduled SIDA PILOT payment increases
- Any use of the debt service reserve funds (DSRF) or need
for servicing advances on the CMBS loan due to
insufficient project cash flow
LEGAL SECURITY
The PILOT bonds are special obligations of SIDA, secured solely by
the trust estate and funds held by the bond trustee pledged to
secure the bonds, including scheduled PILOT payments for the
existing Carousel Center (pursuant to a PILOT agreement between the
Carousel owner and SIDA). The PILOT bonds are senior to the
subordinate $300 million CMBS loan except under an unlikely
casualty, condemnation, or eminent domain scenario. A cash-funded
debt service reserve fund (DSRF) held under a guaranteed investment
contract at $31 million satisfies the DSRF requirement of 125% of
average annual debt service.
OBLIGOR PROFILE
Carousel Center Company, L.P. is a New York limited partnership and
a single purpose entity with the sole purpose of owning and
operating the Carousel Center. Syracuse Industrial Development
Agency, NY (SIDA) is a public benefit corporation established to
enhance the city's economic development, and has acted as the
financing conduit by issuing the bonds on behalf of the Carousel
Center Company, L.P.
CITIGROUP INC: Fitch Affirms BB+ Preferred Stock Rating
-------------------------------------------------------
Fitch Ratings has affirmed Citigroup Inc.'s Viability Rating at 'a'
and Long-Term Issuer Default Rating at 'A'. Fitch has also affirmed
Citibank, N.A.'s VR at 'a' and IDR at 'A+'. The Rating Outlooks for
the Long-Term IDRs are Stable.
Fitch affirmed Citi's ratings in conjunction with its periodic
review of the Global Trading and Universal Banks.
KEY RATING DRIVERS
IDRS, VR AND SENIOR DEBT
The affirmation of Citigroup's VR reflects Citi's solid capital and
liquidity levels. Fitch also views Citi's successful execution of
its strategic plans favorably. Citi has particular strength in
fixed income, especially in its rates and currencies business, and
also has a leading Treasury and Trade Solutions (TTS) franchise.
Citi also remains the largest credit card issuer in the world.
Citi's complexity of operations, weaker relative asset quality and
earnings profile partially offset these ratings strengths. Further,
Citi's operating environment includes some markets with weaker
economies that negatively affect the overall operating environment
assessment. Fitch views Citi's global operations as limiting
ratings upside, absent a material improvement in the risk-adjusted
earnings profile.
Citi's capital ratios continue to remain solid. While Citi's Common
Equity Tier 1 and Fitch Core Capital ratios are below peer
averages, other complementary capital ratios, including the
Leverage and tangible common equity to tangible assets ratios, are
above peers, and provide cushion against unexpected losses.
Furthermore, Fitch expects capital distributions to remain governed
by regulatory stress testing and, as such, are not anticipated to
be outsized over the rating horizon.
Citi's CET1 target remains unchanged at 11.5% since it was first
outlined at Investor Day in July 2017. Citi plans to reach this
target by year-end 2019. The company had incorporated a 3%
estimated stress capital buffer and, as such, its capital target is
not affected by the recent Federal Reserve stress capital buffer
proposal. Fitch views this target as reasonable for its risk
profile. At March 31, 2019, Citi's CET1 was 11.9%, with
approximately 40bps cushion above its target. Since there has been
less regulatory relief provided to the eight U.S. global
systemically important banks (G-SIBs), Fitch expects regulatory
capital ratios will remain above other large U.S. banks,
particularly given Citi's G-SIB surcharge of 3%.
Citi's liquidity profile is a secondary key rating driver,
underpinning its VR. Citi's loan to deposit ratio was approximately
66% at quarter-end, with approximately 55% of deposits in offices
outside the U.S. The company has good access to the capital markets
and other contingent sources of funding, including the Federal Home
Loan Banks, the Federal Reserve and other central banks, though
Fitch notes that Citi's customer deposits to total funding falls
below other large U.S. banks due in part to a smaller retail
footprint in the U.S. Citi is in the midst of building out a
digital consumer bank. Fitch views this newer initiative as still
in its nascent stages, and as such, cannot yet assess it execution
on this strategic initiative.
Offsetting the solid capital and liquidity profiles, Citi's
earnings profile lags higher rated peers. Citi's weaker relative
earnings profile is due primarily to a higher effective tax rate,
greater credit costs given its business model, as well as the drag
related to the wind-down of its legacy assets. Citi reported an ROA
of 0.98% during first-quarter 2019, with the corporate/other
segment dragging down the consolidated ROA by 16bps, reflecting the
wind-down of legacy assets.
Citi is targeting higher returns in the future with a 12% ROTCE
target in 2019 and over 13.5% in 2020. Even if Citi achieves these
levels, they are still expected to lag similarly or higher-rated
peers. Given Citi's business model, which includes a higher
proportion of higher yielding assets in credit cards and certain
emerging markets, Citi's risk-adjusted earnings profile compares
unfavorably with other large U.S. banks, and is a key ratings
constraint.
Consolidated credit risk ratios for Citi remain higher than some
peers despite an improving overall trend over the past several
years. Fitch assesses Citi's asset quality based on the level of
net charge-offs and provision expenses, rather than just levels of
impaired loans, which tend to be line with other large U.S. banks.
Citi's large credit card portfolio, which accounts for roughly 23%
of total loans, are not included in impaired balances as they are
typically charged off after 180 days, in line with industry
standards. Furthermore, loan losses in Mexico, which account for
around 8% of the consumer loan book, tend to be much higher than
other countries. Fitch expects loan losses may increase for the
industry given the very benign credit environment and unsustainably
low levels of credit losses. This is reflected in Citi's current
ratings.
Citi's international franchise necessitates the need for a
sophisticated risk management infrastructure to manage risk around
the globe which, by and large, has proven generally effective at
combating various geopolitical events over time. Nonetheless, Fitch
views Citi's expansive and complex operations as presenting
elevated operational risk.
The VRs remain equalized between Citi and its material operating
subsidiaries. The common VR of Citi and its operating companies
reflects the correlated performance, or failure rate between Citi
and these subsidiaries. Fitch takes a group view on the credit
profile from a failure perspective, while the IDR reflects each
entity's non-performance (default) risk on senior debt. Fitch
believes that the likelihood of failure is roughly equivalent,
while the default risk at the operating companies that given a
higher IDR would be lower given a sufficient qualifying junior debt
(QJD) buffer in the form of Total loss-absorbing capacity (TLAC)AC
at the Bank Holding Company for domestic subsidiaries and internal,
pre-positioned TLAC or QJD. All U.S. bank subsidiaries carry a
common VR, regardless of size, as U.S. banks are cross-guaranteed
under the Financial Institutions Reform, Recovery and Enforcement
Act (FIRREA).
SUPPORT RATING AND SUPPORT RATING FLOOR
The support rating (SR) and support rating floor (SRF) reflect
Fitch's view that senior creditors cannot rely on receiving full
extraordinary support from the sovereign in the event that Citi
becomes non-viable. Fitch believes implementation of the Dodd Frank
Orderly Liquidation Authority legislation is now sufficiently
progressed to provide a framework for resolving banks that is
likely to require holding company senior creditors participating in
losses, if necessary, instead of or ahead of the company receiving
sovereign support.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Subordinated debt and other hybrid capital issued by Citi and its
subsidiaries are all notched down from the common VR in accordance
with Fitch's assessment of each instrument's respective
non-performance and relative loss severity risk profiles, which
vary considerably.
Subordinated debt issued by the operating companies is rated at the
same level as subordinated debt issued by Citi reflecting the
potential for subordinated creditors in the operating companies to
be exposed to loss ahead of senior creditors in Citi. Subordinated
lower Tier 2 debt is rated one notch below the VR for loss
severity, reflecting below average recoveries.
Legacy Tier 1 securities are generally rated four notches below the
VR, made up of two notches for high loss severity relative to
average recoveries and two further notches for non-performance
risk, reflecting the fact that coupon omission is not fully
discretionary.
Preferred stock instruments are rated five notches below the VR.
The issues are notched down twice for loss severity, reflecting
poor recoveries as the instruments can be converted to equity or
written down well ahead of resolution. In addition, they are also
notched down three times for very high non-performance risk,
reflecting fully discretionary coupon omission.
SUBSIDIARY AND AFFILIATED COMPANY
Citigroup Global Markets Holdings Inc., Citigroup Global Markets
Limited, Citigroup Global Markets Inc., Citibank Canada, Citigroup
Global Markets Funding Luxembourg, and Citibank Europe plc are
wholly owned subsidiaries of Citi or Citibank, N.A.
These subsidiaries' IDRs and debt ratings are aligned with Citi or
Citibank, N.A., reflecting Fitch's view that these entities are
integral to Citi's business strategy and operations. Their ratings
would be sensitive to the same factors that might drive a change in
Citi's IDR.
Domestic subsidiaries and international subsidiaries that have not
been upgraded are, in Fitch's opinion, not sufficiently material to
benefit from domestic support from Citi or are international
subsidiaries that would not benefit from TLAC or where TLAC has not
yet been sufficiently pre-positioned. This includes Citigroup
Global Markets Holdings Inc, Citigroup Global Markets Limited,
Citibank Canada, Citibank Europe plc, and Citigroup Global Markets
Funding Luxembourg.
DEPOSIT RATINGS
U.S. deposit ratings are rated one notch higher than senior debt
reflecting the deposits' superior recovery prospects in case of
default given depositor preference in the U.S.
DERIVATIVE COUNTERPARTY RATING
Fitch has assigned a Derivative Counterparty Rating (DCR) of
'A+(dcr)' to Citibank, N.A and Citigroup Global Markets Inc. and
'A(dcr)' to Citigroup, Inc. and Citigroup Global Markets Limited. A
DCR expresses Fitch's view of a bank's relative vulnerability to
default under derivative contracts with third-party, non-government
counterparties.
DCRs have been assigned to these companies because they have
significant derivatives activity. The DCR of Citi, Citibank, N.A.,
and Citigroup Global Markets Limited are equalized with their
respective long-term IDRs because derivative counterparties have no
definitive preferential status over other senior obligations in a
resolution scenario and therefore the DCR ratings will move in line
with their respective IDRs.
RATING SENSITIVITIES
IDRS, VR AND SENIOR DEBT
Fitch sees limited near-term upward VR momentum given a relatively
high and absolute rating. The company's complex organizational
structure, weaker relative asset quality and exposure to emerging
markets, which are not offset by a higher risk-adjusted earnings
profile, all act as key constraints to further upward movement of
the ratings. If Citi were to improve its risk-adjusted earnings
profile, and close the earnings gap to higher rated peers, upward
ratings momentum could occur.
Downward pressure on the VR could result from a material
deterioration in capital or liquidity levels. The strength of the
liquidity and capital profiles underpins Citi's ratings. The
affirmations incorporate Fitch's expectation that Citi will manage
its capital and liquidity profiles relatively conservatively, and
although capital distributions will likely increase over time, they
will still be governed by regulatory stress testing and, as such,
tangible and leverage ratios will remain reasonable.
While there is no outsized reliance on a single market outside of
the U.S., if there are issues related to economic slowdowns or
political unrest in a particular emerging market, it is possible
there may be effects for Citi. The secondary effects of a slowdown
in a particular country, and those cascading impacts on the global
economy are much harder to quantify and assess for any implications
to Citi or its peers. Given the ongoing trade negotiations with
Mexico, any material disruption in trade between the U.S. and
Mexico could have a larger relative impact to Citi than its peers
given the company's operations in Mexico.
Citi's ratings would be sensitive to conduct related matters that
could result in outsized fines or settlements. Citi's ratings could
also be vulnerable to a large operational loss or if an operational
event calls into question Fitch's assessment of Citi's risk
management function and its ability to accurately identify, monitor
and mitigate risks throughout the organization.
Citi, along with its peer banks, may be exposed to elevated credit
losses stemming from rising corporate debt levels, including losses
on leveraged loans, under any future downturn. While Fitch is
expecting some mean reversion in currently unsustainably low credit
losses, if Citi were to report losses that exceed peer or industry
averages, its ratings may be affected.
Citigroup's IDRs and senior debt are sensitive to any changes in
the VR, while Citibank's IDR and senior debt are sensitive to the
size of the qualifying junior debt buffer in the form of TLAC at
the BHC, which serves to reduce the default risk of domestic
operating subsidiaries' senior liabilities relative to holding
company senior debt.
SUPPORT RATING AND SUPPORT RATING FLOOR
The SR and SRF reflect Fitch's view that senior creditors cannot
rely on receiving full extraordinary support from the sovereign in
the event that Citi becomes non-viable. In Fitch's view,
implementation of the Dodd-Frank Orderly Liquidation Authority
legislation has now sufficiently progressed to provide a framework
for resolving banks that is likely to require holding company
senior creditors participating in losses, if necessary, instead of
or ahead of the company receiving sovereign support.
Any upward revision to the SR and SRF would be contingent on a
positive change in the U.S.'s propensity to support its banks.
While not impossible, this is highly unlikely in Fitch's view.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
These ratings are primarily sensitive to any change in the VR. The
securities' ratings are also sensitive to a change in their
notching, which could arise if Fitch changes its assessment of the
probability of their non-performance relative to the risk captured
in the issuers' VRs. This may reflect a change in capital
management in the group or an unexpected shift in regulatory buffer
requirements.
SUBSIDIARY AND AFFILIATED COMPANIES
The IDRs of Citigroup Global Markets Holdings Inc., Citigroup
Global Markets Limited, Citigroup Global Markets Inc., Citibank
Canada, Citibank Europe plc, Citigroup Global Markets Funding
Luxembourg and Citigroup Global Markets Holding Inc. are sensitive
to a change in Citi's VR. Their IDRs are also sensitive to changes
in Fitch's view of Citi's ability or propensity to provide support
to these entities.
DEPOSIT RATINGS
The long-and short-term deposit ratings are sensitive to any change
in Citi's long-and short-term IDR.
DERIVATIVE COUNTERPARTY RATING
DCRs are primarily sensitive to changes in the respective issuers'
long-term IDRs. In addition, they could be upgraded to one notch
above the IDR if a change in legislation creates legal preference
for derivatives over certain other senior obligations and, in
Fitch's view, the volume of all legally subordinated obligations
provides a substantial enough buffer to protect derivative
counterparties from default in a resolution scenario.
Fitch has affirmed the following ratings:
Citigroup Inc.
-- Long-Term IDR at 'A'; Outlook Stable;
-- Senior unsecured at 'A';
-- Short-Term IDR at 'F1';
-- Subordinated at 'A-';
-- Preferred at 'BB+';
-- Viability Rating at 'a';
-- Support at '5';
-- Support floor at 'NF';
-- Derivative Counterparty Rating at 'A(dcr)'.
Citibank, N.A.
-- Long-Term IDR at 'A+'; Outlook Stable;
-- Senior unsecured debt at 'A+';
-- Long-Term deposits at 'AA-';
-- Short-Term deposits at 'F1+';
-- Viability rating at 'a';
-- Short-Term IDR at 'F1'.
-- Support at '5';
-- Support floor at 'NF';
-- Derivative Counterparty Rating at 'A+(dcr)'.
Citigroup Funding Inc.
-- Senior unsecured at 'A';
-- Short-Term debt at 'F1'.
Citigroup Global Markets Holdings Inc.
-- Long-Term IDR at 'A'; Outlook Stable;
-- Senior unsecured at 'A';
-- Short-Term IDR at 'F1';
-- Short-Term debt at 'F1'.
Citigroup Global Markets, Inc.
-- Long-Term IDR at 'A+'; Outlook Stable;
-- Short-Term IDR at 'F1';
-- Commercial paper at 'F1';
-- Short-Term debt at 'F1';
-- Derivative Counterparty Rating at 'A+(dcr)'.
Citigroup Global Markets Limited
-- Long-Term IDR at 'A'; Outlook Stable;
-- Short-Term IDR at 'F1';
-- Senior unsecured long-term notes at 'A';
-- Short-Term debt at 'F1';
-- Derivative Counterparty Rating at 'A(dcr)'.
Citibank Canada
-- Long-Term IDR at 'A'; Outlook Stable.
Citibank Europe plc
-- Long-Term IDR at 'A'; Outlook Stable;
-- Short-Term IDR at 'F1';
-- Support affirmed at '1'.
Commercial Credit Company
Associates Corporation of North America
-- Senior unsecured at 'A'.
Citigroup Global Markets Funding Luxembourg
-- Long-Term IDR at 'A'; Outlook Stable;
-- Short-term IDR at 'F1';
-- Senior unsecured notes at 'A'.
Citigroup Capital III, XIII, XVIII
-- Trust preferred at 'BBB-'.
CLARKE'S TOWING: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Clarke's Towing & Transportation Service,
Inc. as of June 11, according to a court docket.
About Clarke's Towing & Transportation Service
Clarke's Towing & Transportation Service, Inc. sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
19-57186) on May 6, 2019. At the time of the filing, the Debtor
had estimated assets of less than $500,000 and liabilities of less
than $1 million.
The case has been assigned to Judge Sage M. Sigler. The Debtor is
represented by Paul Reece Marr, P.C.
CLEAR CHANNEL: Fitch Lowers Senior Subordinated Notes to CCC
------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of
Clear Channel Worldwide Holdings, Inc. (CCWW) and its wholly-owned
operating subsidiary, Clear Channel International B.V. (CCIBV).
CCWW and CCIBV are indirect, wholly owned subsidiaries of Clear
Channel Outdoor Holdings, Inc. The Rating Outlook is Stable.
Fitch has downgraded the CCWW senior subordinated notes to
'CCC'/'RR6' from 'CCC+'/'RR5'. The one-notch downgrade reflects the
higher proportion of senior debt following Clear Channel's
separation from iHeart on May 1, 2019, specifically the installment
of an unsecured revolving line of credit from iHeart for up to $200
million which will be available for three years following the
separation. While this line of credit bolsters iHeart's back-stop
liquidity over the near-term, iHeart would be an unsecured creditor
in a bankruptcy assuming a draw on the facility, thus reducing the
recovery prospects for the CCWW subordinated notes.
The 'B-' rating incorporates the company's high Fitch-calculated
leverage, as measured as total debt with equity credit to operating
EBITDA, of 9.0x for the LTM period ending March 31, 2019. Fitch
expects that Clear Channel will prioritize reducing its high debt
burden over the rating horizon. This will include some modest
deleveraging through improved top-line performance and achieving
operational efficiencies. Fitch also believes that Clear Channel
has additional levers it can execute upon to more meaningfully
reduce leverage, either through asset sales or acquisitions of
outdoor assets (funded partially with equity). Fitch estimates that
Clear Channel will continue to experience FCF deficits. However,
better operating performance will somewhat offset the increased
cash interest burden following the company's February 2019
refinancing of the CCWW senior subordinated notes.
Clear Channel's liquidity has improved following the iHeart
separation supported by the $107 million net cash payment received
from iHeart related to the intercompany loan obligation and the $45
million issuance of Series A perpetual preferred stock. Fitch
expects that the iHeart unsecured revolving line of credit could
also provide a source of incremental liquidity until Clear Channel
installs a more sizeable source of alternate liquidity in its
capital structure.
Clear Channel had balance sheet cash of $170.5 million and $30.7
million in availability under its receivables-based revolving
credit facility as of March 31, 2019. Clear Channel's next sizable
maturity comes in Dec. 15, 2020 when the $375 million of 8.75%
CCIBV senior unsecured notes mature. The company has limited
headroom to address this maturity with available liquidity.
However, Fitch believes refinancing risk is somewhat mitigated by
the smaller size of this maturity and the company's successful
refinancing of the CCWW $2.2 billion of senior subordinated notes
in February 2019.
KEY RATING DRIVERS
Strong Asset Portfolio: Clear Channel benefits from its strong
market position with owned and operated display structures in 43 of
the 50 largest markets in the U.S., including all of the 20 largest
markets. Clear Channel also has more than 440,000 displays across
31 countries in international territories. Operations are
concentrated in metro areas with dense populations. Clear Channel's
revenues are diversified geographically and no single market or
advertising category represented more than 11% and 9% of total U.S.
revenues. Clear Channel generated revenues and EBITDA of $2.7
billion and $595 million for the LTM period ended March 31, 2019.
Effective Advertising Medium: Long-term stability of outdoor
business and relative immunity to secular challenges facing other
traditional advertising media position outdoor advertising to be an
attractive medium for advertisers. Fitch is optimistic on the
outdoor industry, given the low price point, captive audience, and
government regulation of inventory as a barrier to entry.
Meaningful Barriers to Entry: Clear Channel faces limited
competition in its U.S. markets as a result of billboard
regulation. Federal law regulates billboards along Interstates and
other federal roadways and also requires states to maintain control
over billboard's size, lighting and spacing. This regulation could
hinder the construction of new billboards and control the number of
digital billboards. Similarly, regulation in international markets
varies by territory but also provides limitations on the quantity
and placement of outdoor displays. Fitch believes the regulation
reinforces the value of Clear Channel's outdoor displays.
High Debt Burden: Fitch estimates that Clear Channel's leverage, as
measured as total debt with equity credit to operating EBITDA,
approximated roughly 9.0x for the LTM period ending March 31, 2019,
down from 9.1x at year-end 2018 and 9.5x at year-end 2017. The
gradual decline in leverage has been driven by improved operating
performance, particularly in the Americas segment which has
experienced high single-digit growth for the last couple of
quarters. Fitch expects that management will prioritize
strengthening the operating and financial profile of the company
now that it is operating as a stand-alone entity.
Clear Channel's credit profile deteriorated for the last several
years owing largely to cash leakage to parent iHeart to support its
high cash interest payments and unsustainable capital structure.
Clear Channel completed asset sales (Australia in 2016 and Canada
in 2017) and incremental debt issuance.
The outstanding balance of Clear Channel's intercompany loan to
iHeart stood at $1.051 billion at its peak. iHeart filed for
bankruptcy in March 2018, and Clear Channel became a senior
unsecured creditor of iHeart. Clear Channel received $149 million
in cash for its recovery of the intercompany loan (14.4% recovery
percentage). Net of other intercompany liabilities, Clear Channel
received just $107 million.
FCF Deficits Persist: Clear Channel's FCF deficits were
approximately $81 million for the LTM period ending March 31, 2019.
Fitch expects that increases to the cash interest burden resulting
from the February 2019 refinancing will further pressure FCF, but
this will be offset somewhat by improvements in operating
performance. Clear Channel's liquidity is supported by $170.5
million in balance sheet cash and $30.7 million in available
liquidity under its receivables-based facility as of March 31,
2019. The company also benefits from an unsecured revolving line of
credit from iHeart of up to $200 million.
Clear Channel's near-term liquidity was bolstered by the $107
million net cash payment received related to the recovery of the
iHeart intercompany loan and the $45 million preferred stock
issuance. Clear Channel's next maturity comes in December 2020 when
the CCIBV 8.75% senior notes become due. The company has limited
headroom to address this maturity with available liquidity.
However, Fitch believes refinancing risk is somewhat mitigated by
the smaller size of this maturity and the company's successful
refinancing of the CCWW $2.2 billion of senior subordinated notes
in February 2019.
Cyclical Revenues with Largely Fixed Cost Based: Nearly all
revenues are from advertising, which subjects Clear Channel's
operating performance to cyclicality and seasonality. Fitch expects
the outdoor industry to continue to track the overall macroeconomic
environment, given the largely discretionary nature of advertising
spend. The industry declined 15.6% in 2009 but grew 4.1% in 2010
and 4.0% in 2011.
DERIVATION SUMMARY
Clear Channel's ratings consider the company's strong portfolio of
outdoor display assets in the U.S. and international territories
and Fitch's favorable view of the outdoor advertising subsector
which remains insulated from the audience fragmentation impacting
other mediums. The ratings also reflect the weakening credit
profile, elevated leverage and reduced FCF generation as a result
of the refinancing of the CCWW senior subordinated notes. Clear
Channel has more scale than peers, Lamar Advertising Corp. and
OUTFRONT Media, Inc. (more than 1.5x on a revenue basis), but its
margins lag at roughly 22%. While Clear Channel's domestic margins
compare favorably to peers, its international margins are much
lower due to the business mix (concentration towards street
furniture which is a lower margin business) and lack of sufficient
scale in these regions. Fitch expects the international markets
will remain a drag on Clear Channel's consolidated margins.
Additionally, Clear Channel is much more highly levered, with total
debt with equity credit to operating EBITDA of roughly 9.0x,
relative to Lamar and OUTFRONT which are levered at 4.0x and 4.8x
respectively.
KEY ASSUMPTIONS
-- Low single-digit outdoor revenue growth over the forecast
period;
-- EBITDA margins modestly improving on cost management and
increasing penetration of digital boards;
-- Annual capital expenditures of $215-225 million (roughly 8%
of revenues).
-- FCF deficits improving over the forecast period as higher
cash interest payments from recent refinancing are somewhat
offset by improving EBITDA generation;
-- Liquidity bolstered by $107 million net cash payment from
iHeart related to the recovery of its senior unsecured claim
for the iHeart intercompany loan, the $35 million upsizing
of the senior subordinated notes issuance and the $45 million
in new preferred.
-- Clear Channel has access to a $200 million unsecured
revolving line of credit from iHeart for up to three years
from separation;
-- Given improved but limited liquidity cushion, Fitch
anticipates a refinancing of the $375 million CCIBV 8.75%
senior unsecured notes due December 2020;
-- Fitch-calculated leverage remains high in excess of 8x.
Recovery Assumptions and Considerations
-- The CCWW and CCIBV Recovery Ratings reflect Fitch's
expectation that the enterprise value of the company and
hence recovery rate for its creditors will be maximized in a
restructuring scenario (as a going concern) rather than
liquidation.
Clear Channel Worldwide Holdings, Inc. (CCWW) Debt:
-- Fitch estimates an adjusted distressed enterprise valuation
for CCWW of $3.0 billion using a 7.0x multiple and $425
million in going-concern EBITDA. The going-concern EBITDA
reflects the impact on revenues of a softening in the
domestic advertising market, which negatively impacts
outdoor advertising revenues. Additionally, given the high
fixed costs, EBITDA declines by a greater degree than
revenues. The 7.0x multiple incorporates Clear Channel
Outdoor's leading position in North America. Fitch
estimates that iHeart sold domestic non-core outdoor assets
for a multiple of roughly 12.5x in 2016. Additionally,
current public trading multiples are in the 15x-17x range.
-- Fitch also assumes that CCIBV is sold for $1.0 billion at an
8.5x EBITDA multiple and once CCIBV debt is paid off, the
residual value goes to CCWW. By Fitch's estimates, residual
value to CCWW debt holders is roughly $630 million.
-- Fitch assumes a fully drawn asset-based credit facility of
$125 million.
-- Fitch also assumes that Clear Channel fully utilizes the up
to $200 million unsecured revolving line of credit from
iHeart.
-- The recovery analysis results in a 'B+' issue rating for the
senior unsecured notes, +2 notches from the 'B-' Long-Term
IDR, and an 'RR2' category.
-- The recovery model results in a 'CCC' issue rating and 'RR6'
category for the senior subordinated notes. This represents a
one-notch downgrade from the previous 'CCC+'/'RR5' issue and
Recovery Rating. The downgrade reflects the impact of the
higher amount of unsecured claims in the Clear Channel's debt
structure. Following the separation, Clear Channel has access
to a new $200 million unsecured line of credit from iHeart.
Fitch assumes a full draw of this unsecured line of credit.
This reduces the recovery prospects for the CCWW senior
subordinated claims.
Clear Channel International B.V. (CCIBV) Debt:
-- Fitch estimates an adjusted distressed enterprise valuation
for CCIBV of $602 million using a 6.0x multiple and $100
million in going-concern EBIDA. The going-concern EBITDA
reflects the impact on revenues of a softening in the
advertising market, which negatively impacts outdoor
advertising revenues. Additionally, given the high fixed
costs, EBITDA declines by a greater degree than revenues.
The 6.0x multiple reflects the overall smaller scale of
Clear Channel's international operations.
-- The recovery analysis results in a 'B+' issue rating for
the senior unsecured notes, +2 notches from the 'B-'
Long-Term IDR, and an 'RR2' category.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
Fitch does not expect any positive momentum in the ratings
over the near term.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
An inability to reduce leverage and improve liquidity through
a combination of operational efficiencies and asset sales could
lead to negative rating action.
Fitch-calculated FFO fixed charge coverage falling below 1x.
LIQUIDITY AND DEBT STRUCTURE
Clear Channel's liquidity is constrained by the company's high
leverage and the resulting cash interest burden. The refinancing of
the senior subordinated notes in February 2019 removed near-term
refinancing risk by pushing out the next sizeable maturity wall.
However, Fitch estimates that it also increased Clear Channel's
annual cash interest expense by roughly $40 million. Fitch
anticipates that incremental costs related to operating as a
standalone entity and higher cash interest will result in FCF
deficits over the near term. However, this will be somewhat
mitigated by Fitch's expectations of better top-line performance
and the resulting EBITDA margin expansion.
Clear Channel has balance sheet cash of $170.5 million and $30.7
million in availability under its receivables-based revolving
credit facility as of March 31, 2019 ($116.2 million borrowing base
less $85.5 million in letters of credit outstanding). Notably,
Clear Channel recovered approximately $149 million in cash from
iHeart related to its $1,037.1 million claim for the intercompany
note (a $107 million net payment after intercompany liabilities).
Also bolstering liquidity, following the separation Clear Channel
issued $45 million in new perpetual preferred stock. Clear Channel
also benefits from a new $200 million unsecured revolving line of
credit from iHeart that will be available for up to three years.
Clear Channel's next sizable maturity comes in Dec. 15, 2020 when
the $375 million of 8.75% CCIBV senior unsecured notes mature.
CLIFTON HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Four affiliates that have filed voluntary petitions seeking relief
under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Clifton Hospitality Inc. (Lead Case) 19-11094
7 Northside Drive
Clifton Park, NY 12065
Clifton Restaurant Group LLC 19-11095
Clifton Suites, Inc. 19-11096
Clifton Motel II, LLC 19-11097
Business Description: Clifton Hospitality Inc., a New York
corporation, operates an independent,
75-room hotel at 7 Northside Drive, Clifton
Park, New York. The Property is owned by
Clifton Motel II, LLC, a separate entity
with some common ownership with the Debtor
and includes restaurant and banquet
facilities, operated by Clifton Restaurant
Group, LLC. Clifton Suites, Inc. is the
managing member of Clifton Motel.
Chapter 11 Petition Date: June 12, 2019
Court: United States Bankruptcy Court
Northern District of New York (Albany)
Case No.: 19-11094
Judge: Hon. Robert E. Littlefield Jr.
Debtors' Counsel: Francis J. Brennan, Esq.
NOLAN HELLER KAUFFMAN LLP
80 State Street, 11th Floor
Albany, NY 12207
Tel: 518 449-3300
Fax: 518-432-3189
Email: fbrennan@nhkllp.com
Clifton Hospitality's
Total Assets: $1,960,674
Clifton Hospitality's
Total Liabilities: $9,044,773
The petitions were signed by Frank M. Carnevale, authorized
representative.
A full-text copy of Clifton Hospitality's petition containing,
among other items, a list of the Debtor's 20 largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/nynb19-11094.pdf
COMMUNITY HEALTH: Fitch Affirms CCC LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed Community Health System Inc.'s Long-Term
Issuer Default Rating at 'CCC'. As of March 31, 2019, the ratings
apply to approximately $13.8 billion of debt.
KEY RATING DRIVERS
Very High Debt Burden: CHS's balance sheet has been highly
leveraged since the acquisition of rival hospital operator, Health
Management Associates (HMA) in late 2014. EBITDA growth has been
hampered by difficulties in integration and secular headwinds to
volumes of patients in rural and small suburban hospital markets.
Fitch-calculated leverage at March 31, 2019 was 9.3x versus 5.2x
prior to the acquisition.
Since the beginning of 2016, CHS has paid down about $3 billion of
term loans using proceeds from the spinoff of Quorum Health Corp.,
the sale of a minority interest in several hospitals in Las Vegas
and a series of smaller divestitures. Proceeds from a February 2019
debt issuance paid down the remaining term loan balance, giving the
company greater flexibility to use future divestiture proceeds.
Although CHS has recently sold hospitals for multiples of EBITDA
that are slightly deleveraging, erosion in the base business has
swamped the effect, resulting in a steady increase in the company's
leverage since mid-2016.
Incremental Progress Addressing Capital Structure: A June 2018
transaction that Fitch considered a distressed debt exchange (DDE),
slightly enhanced near-term liquidity by pushing out a 2019-2020
unsecured debt maturity wall, buying the company more time to
execute an operational turnaround plan focused on restoring organic
growth and improving profitability of hospitals in certain targeted
markets. Proceeds of secured note issuances in June 2018 and
February 2019 paid down secured bank term loans. The issuance of
these longer-dated notes incrementally improves the debt maturity
profile. However, a high overall debt burden, persistently weak
operating trends and a large unsecured bond maturity in 2022 remain
key credit concerns.
Forecast Reflects Hospital Divestitures: Fitch's $1.6 billion
operating EBITDA forecast for CHS in 2019 reflects completed
hospital divestitures and hospitals under definitive agreement for
sale. During 2017 and 2018, the company divested 43 hospitals with
$4.5 billion of annualized revenues, raising about $2 billion of
cash proceeds and leaving a footprint of 106 hospitals in 20 states
at March 31, 2019. The divestiture program is part of a longer-term
plan to improve same-hospital margins and sharpen focus on markets
with better organic operating prospects.
The company is currently working on further divestitures of a group
of hospitals producing $900 million of annual revenues with
mid-single-digit EBITDA margins, including several hospitals
currently subject to definitive agreements for sale. Similar to the
completed divestitures, the expected valuations imply a
deleveraging multiple, but with nearly $14.0 billion of debt
outstanding, long-term repair of the balance sheet will require the
company to expand EBITDA through a return to organic growth and
expansion of profitability in the group of remaining hospitals.
Headwinds to Less-Acute Volumes: CHS's legacy hospital portfolio
faces secular headwinds to less-acute patient volumes. Volume
trends are highly susceptible to weak macroeconomic conditions and
seasonal influences on flu and respiratory cases. Health insurers
and government payors have recently increased scrutiny of
short-stay admissions and preventable hospital readmissions. CHS's
same-hospital operating trends were weak in 2017 and 2018, although
quarterly results did show sequential improvement in year-over-year
(yoy) performance on various patient volume measures throughout
2018 and in 1Q19. The operating EBITDA margin also showed signs of
stabilization during 2018 after five consecutive quarters of yoy
declines in this metric in 1Q17 to 1Q18.
Repositioning Will Require Investment: A strategy of repositioning
the hospital portfolio around larger, faster-growing markets is
well aligned with secular trends. However, Fitch thinks that
successful execution of this plan is not without challenges from
both an operational execution and capital investment perspective,
particularly as it is occurring at a time when cash flow is
depressed relative to historical levels and there is a certain
amount of management attention consumed by executing the
divestiture program.
CHS produced CFO of $178 million in 2018, including a $266 million
payment to settle legal liabilities related to hospitals acquired
from HMA. Forecasting is complicated by the timing of divestitures,
but Fitch currently expects CFO of about $500 million in 2019. At
the 4% capital intensity that management has guided to in 2019,
capex would narrowly eclipse Fitch's forecast CFO, resulting in FCF
of negative $50 million.
Liquidity Slim but Adequate: Between organic cash generation,
access to committed lines of credit and divestiture proceeds, Fitch
thinks that CHS has slim but adequate access to capital to fund
day-to-day operations and a $155 million unsecured note maturity in
November 2019. A February 2019 amendment to the terms of the credit
facility increased headroom under financial maintenance covenants
in exchange for reducing commitments under the revolver to $385
million from $425 million. The DDE and the refinancing of the term
loans assuage some concerns about near-term debt maturities but did
not address longer-term refinancing concerns, which Fitch believes
will require a return to solid organic growth in the business after
completion of the divestiture plan.
DERIVATION SUMMARY
CHS's 'CCC' Issuer Default Rating reflects the company's weak
financial flexibility with high gross debt leverage and stressed
FCF generation (CFO less capex and dividends). The operating
profile is among the weakest in the investor-owned acute care
hospital category due to a historical focus on rural and small
suburban hospital markets that are facing secular headwinds to
organic growth. Fitch believes that some of the company's hospital
markets may require additional capital investment to improve
organic growth and profit margins, and this is concerning since
cash generation is thin.
KEY ASSUMPTIONS
- Revenue decline of 5% in 2019 reflects completed divestitures
and divestitures under definitive agreement for sale. The company
currently plans to sell additional hospitals during 2019 and these
are not included in the Fitch forecast.
- Same-hospital revenue growth of about 2% annually throughout
the 2019-2022 forecast period is driven by pricing as patient
volumes are assumed to be flat.
- EBITDA before associate and minority dividends of $1.6 billion
in 2019 assumes an operating EBITDA margin of 11.6%, reflecting
ongoing negative operating leverage due to stagnant patient volumes
in the same-hospital group outweighing the benefit of the lower
margin hospital divestitures.
- CFO of about $500 million in 2019.
- Total debt/EBITDA after associate and minority dividends is
around 9.0x through the 2019-2022 forecast period.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
An upgrade to a 'CCC+' IDR could result from:
- The operational turn-around plan gains some traction in the
next 12-18 months, evidenced by stabilization in the operating
EBITDA margin and building on the recent trend of better growth in
organic patient volumes.
- An expectation that ongoing CFO generation will be sufficient
to fund investment in the remaining hospital markets to support an
expectation of improved organic growth;
- An expectation that the company will be able to successfully
refinance the 2021 and 2022 note maturities.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A downgrade to 'CCC-' or below would reflect an expectation
that the company will struggle to refinance upcoming maturities,
particularly the unsecured notes due in 2022. This would likely be
a result of further deterioration in revenues and EBITDA, leading
Fitch to expect either another DDE or a more comprehensive
restructuring.
LIQUIDITY AND DEBT STRUCTURE
Slim but Adequate Liquidity: Sources of liquidity include $277
million of cash on hand at Mar. 31 2019 and availability under the
$1 billion asset-based lending (ABL) facility; $723 million was
outstanding under the ABL facility at Mar. 31, 2019, and
availability is subject to a borrowing base calculation. The
company also has about $265 million available under the downsized
$425 million revolving credit facility after taking into account
$120 million in outstanding letters of credit as of March 31, 2019.
Fitch forecasts EBITDA/interest paid of 1.4x in 2019.
Upcoming Debt Maturities: CHS has $155 million and $121 million of
unsecured notes due in November 2019 and July 2020, respectively.
Fitch thinks the company will have adequate liquidity to pay down
these maturities with cash on hand, divestiture proceeds, or
drawing on the revolving lines of credit. Longer term concerns
about the capital structure include steps down in the bank
agreement financial maintenance covenant, which Fitch thinks the
company could breach in 3Q20 based on its rating case forecast, as
well as $1 billion of secured notes maturing in August 2021 and
$2.6 billion of unsecured notes maturing in February 2022.
Executing hospital divestiture in excess of the amount included in
the Fitch ratings case forecast and using proceeds to repay secured
debt could help the company maintain compliance with the
covenants.
Recovery Analysis: Fitch's recovery assumptions result in a
recovery rate for CHS's approximately $8.1 billion of first-lien
senior secured debt, which includes the ABL, revolver, and senior
secured notes, within the 'RR1' range to generate a three-notch
uplift to the debt issue ratings from the IDR. The $3.1 billion
senior secured junior priority notes are notched down by one to
reflect estimated recoveries in the 'RR5' range, and the $3.2
billion unsecured notes are notched down by two to reflect
estimated recoveries in the 'RR6' range. Fitch assumes that CHS
would fully draw the $1 billion ABL facility and the $385 million
bank credit facility revolver prior to a bankruptcy scenario and
includes those amounts in the claims waterfall.
Fitch estimates an enterprise value (EV) on a going concern basis
of $9.0 billion for CHS, after a deduction of 10% for
administrative claims. The EV assumption is based on
post-reorganization EBITDA after payments to non-controlling
interests of $1.4 billion and a 7.0x multiple. Fitch's post
reorganization EBITDA estimate assuming ongoing deterioration in
the business is offset by corrective measures taken to arrest the
decline in EBITDA after the reorganization. The EBITDA estimate is
7% lower than Fitch's 2019 forecasted EBITDA. This differs from
Fitch's typical approach to determining post-reorganization EBITDA
for hospital companies, which implements a 30%-40% decline to LTM
EBITDA based on the operational attributes of the acute care
hospital sector, including a high proportion of revenue generated
by government payors, the legal obligation of hospital providers to
treat uninsured patients, and the highly regulated nature of the
hospital industry. The CHS recovery scenario is different in that
it reflects a reorganization provoked by secular headwinds to
organic growth in rural hospital markets rather than a regulatory
change that leads to lower payments to the industry.
There is a dearth of bankruptcy history in the acute care hospital
segment. In lieu of data on bankruptcy emergence multiples in the
sector, the 7.0x multiple employed for CHS reflects a history of
acquisition multiples for large acute care hospital companies with
similar business profiles as CHS in the range of 7.0x-10.0x since
2006 and the average public trading multiple (EV/EBITDA) of CHS's
peer group (HCA, UHS, LPNT and THC), which has fluctuated between
approximately 6.5x and 9.5x since 2011. CHS has recently sold
hospitals in certain markets for a blended multiple that Fitch
estimates is higher than the 7.0x assumed in the recovery analysis.
However, Fitch believes the higher multiple on recent transactions
is due to strong interest by strategic buyers in markets where they
have an existing footprint and so is not necessarily indicative of
the multiple that the larger CHS entity would command.
CUMULUS MEDIA: S&P Rates New $300MM Sr. Secured Notes Due 2027 'B'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '2'
recovery rating to the proposed $300 million senior secured notes
due 2027 issued by Atlanta-based radio broadcaster Cumulus Media
Inc.'s subsidiary Cumulus Media New Holdings Inc. The '2' recovery
rating indicates S&P's expectation for substantial (70%-90%;
rounded estimate: 70%) recovery for lenders in the event of a
payment default.
Cumulus plans to use the proceeds from the proposed debt to
refinance a portion of its existing term loan B due 2022, which had
roughly $1.2 billion outstanding as of March 31, 2019. The
transaction does not affect S&P's 'B-' issuer credit rating or
stable outlook on Cumulus because it is relatively leverage and
cash flow neutral. The rating agency expects the company' adjusted
debt to EBITDA to decline to the 5.1x-5.3x range in 2019 from 5.4x
as of Mar. 31, 2019.
Cumulus recently announced that it used $115 million from the sale
of six stations in various markets to Educational Media Foundation
and cash on hand to prepay its term loan. Additionally, S&P expects
the company to use the net proceeds from the announced $43 million
sale of KLOS FM to further reduce debt. However, S&P's base-case
forecast remains relatively unchanged because its previous forecast
assumed the company would use discretionary cash flow and proceeds
from asset sales to repay its debt.
"We believe the company will continue to pursue non-core asset
sales in an effort to reduce its leverage. We could raise our
rating on Cumulus if it improves its leverage well below 5x by
establishing a track record of substantial debt repayment and
demonstrates that its organic revenue and EBITDA growth can
outperform the overall radio industry for a sustained period," S&P
said.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Cumulus' proposed capital structure consists of a $50 million
asset-based lending (ABL) facility, a $1.3 billion senior secured
term loan (roughly $800 outstanding after the refinancing), and
$300 million of senior secured notes.
-- The senior secured debt is secured by a first-priority lien on
substantially all of the company's assets and those of its
guarantors. The ABL facility has a first-priority lien on its
accounts receivable, qualified cash, and related assets.
Simulated default assumptions
-- S&P's simulated default scenario contemplates a default
occurring in 2021 stemming from increased competition by
alternative media and a station ratings underperformance that leads
to steep revenue declines and cash flow deficits.
-- S&P also assumes that Cumulus would reorganize in the event of
a default and value the company using a 6.0x EBITDA multiple, which
reflects its scale, market position, and geographic diversity
compared with that of its broadcast radio peers.
-- S&P assumes the ABL facility is 60% drawn in its simulated year
of default.
Simplified waterfall
-- EBITDA at emergence: About $157 million
-- EBITDA multiple: 6.0x
-- Net enterprise value (after 5% administrative costs): About
$900 million
-- Value available to secured debt: About $865 million
-- Secured first-lien debt: About $1.2 billion
-- Recovery expectations: 70%-90% (rounded estimate: 70%)
Note: All debt amounts include six months of prepetition interest.
Ratings List
New Rating
Cumulus Media New Holdings Inc.
Senior Secured
US$300 mil 1st lien nts due 2027 B
Recovery Rating 2(70%)
CWGS ENTERPRISES: Moody's Confirms B1 CFR, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service confirmed all ratings of CWGS
Enterprises, LLC, including the B1 Corporate Family rating, and
assigned a negative outlook. Concurrently, Moody's also assigned a
Speculative Grade Liquidity Rating at SGL-3.
"T[he] rating action considers the negative impact on Camping
World's credit profile from a confluence of events during late-2018
and Q1 2019, including the ramp-up and integration of the Gander
Mountain locations acquired out of bankruptcy and rolled-out during
2018, as well as the unexpected and precipitous decline in RV sales
in Q4, representing the worst quarter for the industry in several
years," stated Moody's Vice President Charlie O'Shea. "At present,
both leverage and interest coverage are outside of Moody's
downgrade triggers, with sequential improvement beginning in Q2
necessary so that tangible progress towards levels more appropriate
for the rating are achieved," continued O'Shea. "A key rating
factor is the maintenance throughout this period of solid liquidity
and a conservative financial policy, with de minimus shareholder
returns."
Assignments:
Issuer: CWGS Enterprises, LLC
Speculative Grade Liquidity Rating, Assigned SGL-3
Outlook Actions:
Issuer: CWGS Enterprises, LLC
Outlook, Changed To Negative From Rating Under Review
Confirmations:
Issuer: CWGS Enterprises, LLC
Probability of Default Rating, Confirmed at B1-PD
Corporate Family Rating, Confirmed at B1
Senior Secured Bank Credit Facility, Confirmed at B1 (LGD4)
RATINGS RATIONALE
Camping World's credit profile (B1 negative) considers its weak
quantitative credit profile due to the negative impact of the costs
involved in the acquisition and integration of Gander Mountain
locations, which were purchased out of bankruptcy, as well as
late-2018 softening in the RV market. As of March 2019, leverage
increased to 5.7 times due to the negative EBITDA impact of
approximately $100 million in Gander-related costs incurred during
the 2018, as well as softness in the RV segment, and EBIT to
interest deteriorated to 2.3 times. A key rating factor is the
immediate sequential and consistent improvement from Q1 levels such
that metrics return the quantitative profile to a more
representative B1 profile. Camping World's credit profile is
supported by its leading market position within the recreational
vehicle segment, with a business model that provides multiple
sources of revenue, with retail sales, membership sales, and parts
and accessories through its dealership and retail networks, as well
as the risks inherent with its acquisition-based growth strategy. A
key rating constraint remains the highly-discretionary nature of
recreational vehicles, which represent a significant portion of the
company's revenue and profit mix. The negative outlook reflects
Moody's concern that credit metrics may not rebound to roughly FYE
2017 levels within the next several quarters.
Ratings could be downgraded if, due to either weakness in operating
performance or financial policy decisions such as any but de
minimus share repurchases, credit metrics fail to exhibit
sequential improvement such that debt/EBITDA does not approach
around 4.5 times and EBITA/interest does not approach 3 times
within the next 12-18 months, or if liquidity were to weaken. Given
the negative outlook, an upgrade in the near future is unlikely.
Over time, an upgrade could occur if operating performance
significantly reversed its present negative trends such that
debt/EBITDA was sustained below 4 times, and EBIT/interest was
sustained above 3.5 times, and good liquidity was maintained.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
CWGS Group, LLC (CWGS) operates businesses predominantly involved
in the recreational vehicle industry including: (1) FreedomRoads RV
dealerships, which sells new and used RVs, parts, and services
under the Camping World brand name (2) Membership Services,
including Good Sam, which sells club membership, products, services
and publications to RV owners, and (3) Retail, which includes
Camping World retail stores that provide merchandise and services
to RV users, as well as Gander Mountain stores. Fiscal year-end
2018 revenues were around $4.8 billion.
DON FRAME: Plan Outline Hearing Scheduled for July 1
----------------------------------------------------
Chief Bankruptcy Judge Carl L. Bucki will convene a hearing on July
1, 2019 at 2:00 p.m. to consider approval of Don Frame Trucking,
Inc.'s disclosure statement referring to a chapter 11 plan.
June 28, 2019 is fixed as the last day for filing and serving
written objections to the disclosure statement.
The Troubled Company Reporter previously reported that Class 3
General Unsecured Claims will receive an initial pro-rata
distribution of 55% of the cumulative allowed amounts of Allowed
Class 3 Claims, with the Debtor permitted to reserve cash in excess
of the initial pro rata distribution in the estimated initial
amount of $256,250, for ongoing expenses, as soon as practicable
after the Effective Date.
A full-text copy of the Disclosure Statement dated May 22, 2019, is
available at https://tinyurl.com/y5krwjq8 from PacerMonitor.com at
no charge.
About Don Frame Trucking
Don Frame Trucking, Inc., is a trucking company in Fredonia, New
York specializing in the transport of dry bulk commodities,
construction and hazardous materials.
Don Frame Trucking filed a Chapter 11 petition (Bankr. W.D.N.Y.
Case No. 18-11147) on June 13, 2018. In the petition signed by
John D. Frame, vice president/treasurer, the Debtor estimated $1
million to $10 million in assets and liabilities. The Hon. Carl L.
Bucki oversees the case. Gross Shuman P.C., led by Robert J.
Feldman, serves as bankruptcy counsel to the Debtor. Woods Oviatt
Gilman LLP, is special counsel.
EASTMAN KODAK: Southeastern Asset Has 55.8% Stake as of May 31
--------------------------------------------------------------
Southeastern Asset Management, Inc., disclosed in a Schedule 13G/A
filed with the Securities and Exchange Commission that as of May
31, 2019, it beneficially owns 47,952,051 shares of common stock of
Eastman Kodak Company, which represents 55.8 percent of the shares
outstanding. Longleaf Partners Small-Cap Fund also reported
beneficial ownership of 44,075,040 Common Shares of the Company. A
full-text copy of the regulatory filing is available for free at:
https://is.gd/UVrTPQ
About Eastman Kodak
Headquartered in Rochester, New York, Eastman Kodak Company --
http://www.kodak.com/-- is a technology company focused on
imaging. The Company provides -- directly and through partnerships
with other innovative companies -- hardware, software, consumables
and services to customers in graphic arts, commercial print,
publishing, packaging, electronic displays, entertainment and
commercial films, and consumer products markets.
Eastman Kodak reported a net loss of $16 million for the year ended
Dec. 31, 2018, compared to net earnings of $94 million for the year
ended Dec. 31, 2017. As of March 31, 2019, Eastman Kodak had $1.53
billion in total assets, $1.37 billion in total liabilities, $175
million in redeemable, convertible Series A preferred stock, and a
total shareholders' deficit of $16 million.
PricewaterhouseCoopers LLP, in Rochester, New York, the Company's
auditor since at least 1924, issued a "going concern" qualification
in report dated April 1, 2019, on the Company's consolidated
financial statements for the year ended Dec. 31, 2018, citing that
the Company has debt maturing in 2019, operating losses and
negative cash flows that raise substantial doubt about its ability
to continue as a going concern.
EIRINI INVESTMENTS: S. Peck to Fund Proposed Chapter 11 Plan
------------------------------------------------------------
Eirini Investments, LLC, filed a disclosure statement in support of
its chapter 11 plan of reorganization dated May 31, 2019.
The plan provides for the Debtor to retain The Home and make
periodic payments to the ad valorem tax authorities and Citezens
National Bank of Texas in order to cure the payment defaults.
Unsecured creditor Cynthia Peck will be granted a junior lien
against The Home to secure her allowed claim, the equity interest
of Scott Peck in the Debtor will be cancelled and Cynthia Peck will
be issued the sole member certificate.
The Debtor has no other unsecured claimants.
Scott Peck will deposit with the Debtor, allowing adequate time for
payments to be timely made by the Debtor, sufficient funds to
satisfy all distributions and payments due under the plan to
holders of allowed administrative, priority, Class 1, Class 2,
Class 3, and Class 5 claims.
A copy of the Disclosure Statement dated May 31, 2019 is available
at https://tinyurl.com/y6o526vv from Pacermonitor.com at no charge.
About Eirini Investments
Eirini Investments, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-40974) on March 5,
2019. At the time of the filing, the Debtor estimated assets of
less than $1 million and liabilities of less than $500,000. The
case is assigned to Judge Mark X. Mullin. Goodrich Postnikoff &
Associates, LLP, is the Debtor's legal counsel.
ELITE TRANSPORTATION: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Elite Transportation of New Jersey Inc.
dba Elite Transport of NJ
5507 Crescent Blvd.
Pennsauken, NJ 08110
Business Description: Elite Transportation of New Jersey Inc.
is a New Jersey corporation that provides
transportation services.
Chapter 11 Petition Date: June 12, 2019
Court: U.S. Bankruptcy Court
District of New Jersey (Camden)
Case No.: 19-21734
Judge: Hon. Jerrold N. Poslusny Jr.
Debtor's Counsel: Donald A. Nogowski
EARP COHN PC
20 Brace Road, 4th Floor
Cherry Hill, NJ 08034
Tel: 856-354-7700
Fax: 856-354-0766
E-mail: dnogowski@earpcohn.com
vbromley@earpcohn.com
Total Assets: $1,184,791
Estimated Liabilities: $1,514,232
The petition was signed by Russel Cook, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/njb19-21734.pdf
EMC BRONXVILLE: Trustee Files Chapter 11 Liquidation Plan
---------------------------------------------------------
Fred Stevens, solely in his capacity as chapter 11 trustee, filed a
disclosure statement referring to a plan of liquidation, dated May
31, 2019, for Debtor EMC Bronxville Metropolitan LLC.
Each Holder of an Allowed General Unsecured Claim will receive one
or more distributions on a pro rata basis, up to 100% of such
Allowed General Unsecured Claim, in full and final satisfaction of
such Allowed General Unsecured Claim from the Unsecured Creditor
Fund, if any remains after satisfaction of senior claims in Class
3.
As of the filing of the disclosure statement, approximately 15
parties have filed Class 4 Claims in the aggregate amount of
approximately $7.5 million. The Debtor estimates that after
reconciliation of such claims is complete and either negotiations
or objections are concluded, the aggregate amount of Class 4
Claims, including Deficiency Claims from senior classes will be
between approximately $10 million and $16 million, excluding
Deficiency Claims of the Prepetition Lender.
The Plan will be funded by the net proceeds of Sale of the New
Jersey Property. The proceeds of the Sale will be distributed
substantially in accordance with the Prepetition Lender Claim
Stipulation and Order, which provides that before payment is made
to Prepetition Lender from such proceeds, the Trustee must receive
and reserve for the Estate Carve-Out, including for (i) all fees
required to be paid to the Clerk of the Bankruptcy Court and to the
Office of the United States Trustee under section 1930(a) of title
28 of the United States Code plus interest pursuant section 3717 of
title 31 of the United States Code, (ii) any allowed commissions
and disbursement of the Trustee not to exceed the limitations
imposed by Section 326 of the Bankruptcy Code (as further limited
in the same); (iv) the payment of allowed professional fees,
commissions and disbursements incurred by the professionals or
brokers retained by the Trustee for reasonable and necessary case
matters, other than investigation and prosecution of any Causes of
Action, (v) closing costs and title charges necessary to close
title on the sale of the Sale Property, and (vi) $200,000 to be
retained by the Trustee and used in the administration of the
estate.
A copy of the Disclosure Statement dated May 31, 2019 is available
at https://tinyurl.com/y4o4r5er from Pacermonitor.com at no charge.
About EMC Bronxville Metropolitan
Creditors Thomas E Haynes Architect, Werner E. Tietjen, PE and Hall
Heating & Cooling Service, Inc., filed an involuntary petition
against EMC Bronxville Metropolitan LLC under Chapter 7 of the
Bankruptcy Code on June 22, 2018. On July 23, 2018, the court
entered an order converting the case from Chapter 7 to one under
Chapter 11 (Bankr. S.D.N.Y. Case No. 18-22963) following request
from the Debtor.
On Sept. 24, 2018, the Office of the U.S. Trustee appointed Fred
Stevens as the Debtor's Chapter 11 trustee. Mr. Stevens tapped
Klestadt Winters Jureller Southard & Stevens, LLP as his legal
counsel.
EST GROUP: Unsecureds to Recoup 8.2% Over 5-Year Period
-------------------------------------------------------
EST Group, LLC, filed a disclosure statement in support of its
proposed chapter 11 plan of reorganization.
Through the Plan, the Debtor will effectuate an internal
reorganization per the terms and conditions set forth in the Plan.
The Debtor's current Equity Interest Holders will retain their
Equity Interests.
The Debtor will pay its secured creditors in full or up to the
value of the Debtor's interest in their collateral. General
unsecured creditors in Class 4 will receive their Pro Rata share of
$400,000 that will be paid in 20 quarterly installments commencing
in the first quarter of 2020. Payments will be made each year on
Feb. 15, May 15, August 15 and Nov. 15. The quarterly payments in
the first year will be $15,000 ($60,000 annually). In the second
year, quarterly payments will be $17,500 ($70,000 annually). In the
third year, quarterly payments will be $20,000 ($80,000 annually).
In the fourth year, quarterly payments will be $22,500 ($90,000
annually). In the fifth and final year, quarterly payments will be
$25,000 ($100,000 annually). The Debtor estimates that the holders
of Class 4 Claims will receive approximately an 8.2% recovery on
account of their Claims.
The Plan will be funded from the revenue generated from the
continued operation of the Debtor's business. If there is an
auction of the Debtor's equity interest, the proceeds will be used
to support the continued operation of the Debtor's business. The
Reorganized Debtor may prepay all or part of any scheduled Plan
payment at any time without penalty.
A copy of the Disclosure Statement is available at
https://tinyurl.com/y5dbcwze from Pacermonitor.com at no charge.
About EST Group
EST Group, LLC -- https://www.est-grp.com/ -- is an IT solutions
company that provides integration and consulting services tailored
around automating, managing, and securing an organization's IT
environment.
EST Group, LLC, filed a Chapter 11 petition (Bankr. N.D. Tex. Case
No. 18-45031) on Dec. 26, 2018. In the petition signed by Timothy
B. Spires, president, the Debtor estimated $1 million to $10
million of assets and the same range of liabilities.
The case is assigned to Judge Mark X. Mullin.
Whitaker Chalk Swindle & Schwartz, PLLC, led by Robert A. Simon, is
the Debtor's counsel.
FC GLOBAL: Completes First Stage of Integration with Gadsden Growth
-------------------------------------------------------------------
Gadsden Growth Properties, Inc., a privately-held real estate
corporation, and FC Global Realty Incorporated had completed the
first stage of integration of their operations after previously
closing a Stock Purchase Agreement in April. FC Global has now
acquired all of the general partnership interests and Class A
limited partnership interests in Gadsden's operating partnership
Gadsden Growth Properties, L.P.
"We are pleased that we have been able to bring this unique
opportunity to fruition, which is a vital step in continuing our
strategic real estate investment strategy," stated John E. Hartman,
chief executive officer of Gadsden Growth Properties, Inc. and FC
Global Realty Incorporated. We believe combining these two
companies will create a more integrated investment vehicle to
acquire and manage real estate assets concentrated in the retail
and mixed-use sectors across the United States. Gadsden's real
estate expertise and business acumen will be instrumental in
creating a high-quality real estate portfolio under FC Global,
which we believe will create long-term shareholder value."
Through this transaction, FC Global acquired from Gadsden a
property known as Mission Hills Square, a new mixed-use development
located in Fremont, California and slated for completion in late
2019. Situated in the foothills of the San Francisco Bay Area along
Highway 680, Mission Hills Square will offer 158 residential
apartment units and more than 53,900 square feet of commercial
retail space. Mission Hills future commercial tenants are
anticipated to include retail stores, sit-down restaurants, and
casual eateries that will serve not only the residents of Mission
Hills but also the populations that live in the surrounding areas,
as Mission Hills Square will be an easily accessible shopping and
dining destination.
Also transferred in the transaction were two separate investment
parcels, referred to as Roseville and Jessie. The Roseville parcel
is located on Roseville Road in Sacramento, California and is an
approximately 9.6 acres parcel that is entitled for the development
of approximately 65 small lot single family detached homes. The
Jessie parcel is comprised of approximately 13.6 acres and located
on Jessie Avenue in Sacramento, California. This parcel is
entitled for the development of 94 small lot single family detached
homes. The parcels are in established residential neighborhoods.
As part of the integration of operations, the management of Gadsden
has now become the management of FC Global, with Mr. Hartman as
chief executive officer; Scott Crist as chief financial officer;
George P. Bell as chief operating officer; and Brian Ringel as
corporate controller. James Walesa and BJ Parrish, members of
Gadsden's board of directors, have joined the board of directors of
FC Global with Douglas A. Funke appointed, and Kristen E. Pigman
re-appointed, to FC Global's board. In addition, National
Securities Corporation acted as the exclusive financial advisor to
Gadsden Growth Properties in this transaction.
FC Global will be asking its shareholders to approve a change of
its name to Gadsden Properties, Inc. and to approve an amendment to
its Articles of Incorporation to increase its authorized shares of
Common Stock. The Company also plans to explore a potential
up-listing of its stock to the New York Stock Exchange (NYSE) or
another national trading platform.
About FC Global Realty
Formerly known as PhotoMedex, Inc., FC Global Realty Incorporated
-- http://www.fcglobalrealty.com/-- has recently transitioned to a
company focused on real estate development and asset management,
concentrating primarily on investments in, and the management and
development of, income producing real estate assets. The Company
is headquartered in Scottsdale, Arizona.
FC Global reported a net loss attributable to common stockholders
and participating securities of $4.66 million for the year ended
Dec. 31, 2018, compared to a net loss attributable to common
stockholders and participating securities of $19.38 million for the
year ended Dec. 31, 2017. As of March 31, 2019, the Company had
$4.17 million in total assets, $4.79 million in total liabilities,
and a total stockholders' deficit of $622,000.
Fahn Kanne & Co. Grant Thornton Israel, in Tel Aviv, Israel, issued
a "going concern" opinion in its report dated April 1, 2019, on the
Company's consolidated financial statements for the year ended Dec.
31, 2018, citing that the Company has incurred net losses for each
of the years ended Dec. 31, 2018 and 2017 and has not yet generated
any significant revenues from real estate activities. As of Dec.
31, 2018, there is an accumulated deficit of $139.7 million. These
conditions, along with other matters, raise substantial doubt about
the Company's ability to continue as a going concern.
FERNLEY & FERNLEY: Cash on Hand, Revenue Stream to Fund Plan
------------------------------------------------------------
Fernley & Fernley, Inc., filed a disclosure statement in connection
with its proposed plan of reorganization dated June 1, 2019.
The Plan has been proposed by the Debtor with the principal
objective of providing maximum recovery to its Creditors while at
the same time giving the Debtor every opportunity to grow stronger
and flourish. The Debtor has begun to reorganize by significantly
cutting its expenses and by taking steps to obtain new clients to
increase revenue. In combination, these steps should permit the
Debtor to pay her pre-petition obligations over time.
Class 2 under the plan consists of the general unsecured claims
which total $2,061,840. This class will be paid $1,000 monthly over
four years for a total payout of $48,000.
The claims to be paid on the Effective Date will be paid from funds
on hand. The Claims to be paid on an ongoing basis will be paid
from the Debtor’s revenue stream.
A copy of the Disclosure Statement dated June 1, 2019 is available
at https://tinyurl.com/y38x47f4 from Pacermonitor.com at no charge.
About Fernley & Fernley
Founded in 1886, Fernley & Fernley, Inc., is one of the most
distinguished association management companies in the nation.
Bases in Philadelphia, Pennsylvania, Fernley & Fernley filed a
voluntary petition for relief under Chapter 11 of title 11, United
States Code (Bankr. E.D. Pa. Case No. 18-16122) on Sept. 14, 2018,
estimating under $1 million in assets and liabilities. Ellen M.
McDowell, Esq., at McDowell Law, PC, is the Debtor's counsel.
FERRELL TRANSPORTATION: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------------
The Office of the U.S. Trustee on June 11 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Ferrell Transportation, Inc.
About Ferrell Transportation Inc.
Ferrell Transportation, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Ind. Case No. 19-03257) on May 7,
2019. At the time of the filing, the Debtor disclosed assets of
between $100,001 and $500,000 and liabilities of the same range.
The case has been assigned to Judge James M. Carr. Redman Ludwig,
PC is the Debtor's bankruptcy counsel.
FORUM ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on Forum Energy Technologies
Inc. to negative from stable and affirmed its 'B' ratings on the
company and its senior unsecured debt.
The negative outlook reflects Forum Energy Technologies' elevated
debt leverage, including its forecast FFO to debt of less than 12%
and debt to EBITDA of more than 5x in 2019, and its need to
deleverage over the next 12 months while facing challenging
industry conditions. Like its industry peers, Forum faces a
trifecta of headwinds including an oversupply of equipment, the
elevated capital discipline of the E&P industry, and the continued
volatility of crude oil prices, which creates uncertainty around
its customers' cash flows and returns. In particular, Forum's
exposure to the volatile North American market led to a
weaker-than-expected financial performance. S&P now expects the
company's operating margins to remain near their 2018 levels of
roughly 31%, which is weak relative to Forum's historical results.
Although S&P expects the conditions in the company's international
markets to improve, with E&P spending increasing by 5%-10% in 2019,
the rating agency also believes that similar declines in North
American spending will offset much of the benefits. In addition,
although there have been some positive signs, S&P believes the
offshore markets will remain weak until late 2020 or 2021.
Therefore, the rating agency expects the company's FFO to debt to
average between 10% and 12% in 2019 before recovering in 2020. S&P
anticipates that much of the near-term improvement will come from
Forum's ability to lower its costs and generate cash flow from
working capital to support its debt repayment. However, if its
markets, especially North America, fail to improve, it could be
challenging for the company to achieve FFO to debt of more than
12%.
The negative outlook on Forum reflects the company's need to repay
its debt and improve its financial performance during a period of
challenging market conditions. Although S&P expects the company to
improve its FFO to debt, Forum will need to outperform the broader
market and execute financially conservative strategies to maintain
the current rating. If the company fails to illustrate a clear path
to improving its FFO to debt comfortably above 12%, S&P said it
could lower the rating.
"We could lower our rating on Forum if its FFO to debt and debt to
EBITDA remain below 12% and above 5x, respectively. Additionally,
we could lower the rating if Forum fails to proactively address the
maturity of its 2021 senior notes," S&P said. Both scenarios are
possible if crude oil prices remain highly volatile and the
company's markets fail to improve, negatively affecting its cash
flows and ongoing financial performance, according to the rating
agency.
"We could revise our outlook on Forum to stable if its market
conditions improve and the company executes its financial
strategies such that its expected FFO to debt remains securely
above 12%. Additionally, we would need to be comfortable that
management has a plan to address its maturities in 2021," S&P said.
FRONTIER COMMUNICATIONS: Fitch Lowers IDR to 'B-', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating of Frontier
Communications Corp. and its subsidiaries to 'B-' from 'B'. Fitch
has also taken action on the ratings of the company's debt issues.
The Rating Outlook is Stable.
KEY RATING DRIVERS
Operating Trends and Debt Maturities: The downgrade reflects
Fitch's concerns regarding Frontier's continued weak operating
trends and looming maturities. Frontier has not disclosed the debt
issues that will be repaid with the proceeds from a pending asset
sale and FCF beyond the 2019-2021 maturities; however, Fitch notes
that the company has nearly $2.7 billion in debt maturing in 2022,
and nearly $900 million in 2023.
Fitch believes the asset sale provides a buffer to the unknowns
regarding Frontier's ability (or market receptiveness) to access
the market (on an unsecured basis) in the future at reasonable
economic terms. A key step in terms of market access consists of
stabilizing and growing EBITDA on a sustained basis. While the
company has a transformation program underway targeting benefits of
up to a $500 million run rate exiting 2020, Fitch acknowledges the
high degree of execution risk in terms of achieving such savings,
and that a significant portion of savings achieved will go toward
offsetting secular revenue declines.
Pending Asset Sale: Frontier has a definitive agreement to sell its
operations in Washington, Oregon, Idaho and Montana to WaveDivision
Capital, LLC (WDC) for $1.352 billion (subject to closing
adjustments) in cash and plans to use the proceeds from the
transaction (expected close in first half 2020) to repay debt. The
sale proceeds boost Frontier's near-term liquidity. Fitch estimates
the transaction multiple is approximately 5.3x based on 2019
estimated EBITDA for the operations (5% below 2018 EBITDA [Fitch
calculated EBITDA is before restructuring and other charges and a
goodwill impairment]). The transaction is generally leverage
neutral given Frontier's last 12 month's Fitch-calculated gross
debt leverage of 5.0x at March 31, 2019.
Challenging Operating Environment: Frontier's rating and Outlook
incorporate a challenging operating environment for wireline
operators. While the Stable Outlook incorporates Fitch's
expectations for improving, albeit still negative, revenue trends
in 2019 and improving EBITDA margins, organic EBITDA is expected to
continue to decline at a moderate pace. The boost to FCF from the
suspension of the dividend in early 2018, combined with the efforts
in 2018 and early 2019 to address near-term maturities are also
supportive of the Outlook.
Business Transformation Program: In mid-2018, Frontier disclosed a
new business transformation program that would provide EBITDA
benefits of up to a $500 million run rate exiting 2020. The company
expects benefits to be in the $50 million-$100 million range during
2019, with the run rate being $200 million exiting the year.
Additional EBITDA enhancing initiatives have the potential to
mitigate the secular pressures on the company's EBITDA and cash
flows. Fitch believes there is a notable degree of execution risk
in achieving its goals, as some of the benefits depend on better
revenue performance.
FCF and Debt: In 2018, Frontier generated $513 million of FCF on a
Fitch-calculated basis ($620 million on a pro forma basis, which
adds back $107 million in preferred dividends following the
conversion of the mandatory convertible preferred to common in
mid-2018). Pro forma for the sale of the Northwest operations and
related debt reduction, Fitch estimates FCF in 2018 would have been
around $550 million annually. At this run rate, FCF would more than
be sufficient to repay $585 million in maturing debt, and the $375
million currently outstanding on the revolver, over 2019 through
2021.
Parent-Subsidiary Relationship: Fitch has linked the IDRs of
Frontier and its operating subsidiaries based on their strong
operational ties.
Recovery: The recovery analysis assumes Frontier would be
considered a going concern in a bankruptcy and the company would be
reorganized rather than liquidated. Fitch assumed a 10%
administrative claim.
Frontier's going concern EBITDA is based on LTM results ended March
31, 2019. The EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level. The going concern
EBITDA incorporated in the analysis is well below LTM EBITDA to
reflect the industry's intense competitive dynamics, resulting in
customer losses and pricing pressures stressing profitability. The
overall decline also reflects Frontier's cost-cutting efforts to
partially offset the declines. In sum, the going concern EBITDA is
approximately 25% lower than LTM actual results.
An enterprise value (EV) multiple of 4.8x is used to calculate a
post-reorganization valuation. There are two bankruptcy cases of
similar businesses analyzed in Fitch's Telecom, Media & Technology
bankruptcy case study report — FairPoint Communications, Inc. and
Hawaiian Telcom — both of which filed bankruptcy in 2008 and
emerged with multiplies of 4.6x and 3.7x, respectively. Both were
also sold in recent acquisitions for 5.9x and 5.6x, respectively.
Frontier's announced sale of its Northwest operations was in the
low 5x range, taking into account the modest decline in EBITDA
expected by the time the sale closes. The median multiple for the
nine telecom companies in Fitch's report was 5.2x, and the slightly
lower recovery multiple for Frontier takes into account its weaker
competitive position in the industry and the company's exposure to
legacy assets. Fitch notes the company benefits from a strong
fiber-to-the-home network and the potential for broadband customer
growth through the CAF II program.
The RCF is assumed to be fully drawn upon default. The waterfall
analysis results in an 'RR1' Recovery Rating for the secured debt,
including the first-lien credit and RCFs, and the second-lien
senior secured notes. The waterfall also indicates an 'RR4'
recovery for senior unsecured notes.
The 'RR2' assigned to the approximately $450 million of outstanding
subsidiary unsecured debt, excluding Frontier Florida LLC, reflects
its structural seniority to all of the parent debt. The 'RR5'
assigned to Frontier Florida's unsecured debt reflects Frontier
Florida as a guarantor of Frontier's secured credit facility. The
guarantee results in a lower estimated recovery value, 'RR5' for
Frontier Florida's unsecured debt, as it ranks pari passu with the
secured credit facility.
DERIVATION SUMMARY
Frontier has a higher exposure to the more volatile residential
market compared with CenturyLink, Inc. (BB/Stable), one of its
wireline peers, and to some extent, Windstream Services, LLC (NR).
Within the residential market, incumbent wireline operators face
wireless substitution and competition from cable operators with
facilities-based triple-play offerings, including Comcast Corp.
(A-/Stable) and Charter Communications Inc. (Fitch rates Charter's
indirect subsidiary, CCO Holdings, LLC BB+/Stable). Cheaper
alternative offerings, such as voice over internet protocol and
over-the-top video services provide additional challenges.
Incumbent wireline operators had modest success with bundling
broadband and satellite video service offerings in response to
these threats.
Frontier has a relatively weak competitive position based on the
scale and size of its operations in the higher margin enterprise
market. In this market, Frontier is smaller than AT&T, (A-/Stable),
Verizon Communications Inc. (A-/Stable) and CenturyLink. All three
companies have an advantage with national or multinational
companies given their extensive footprints in the U.S. and abroad.
Frontier also has a slightly smaller enterprise business than its
wireline peer Windstream.
Compared with Frontier, AT&T and Verizon maintain lower financial
leverage, generate higher EBITDA margins and FCF, and have wireless
offerings that provide more service diversification.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Organic revenues are expected to decline in the low 4% range
in 2019 to slightly less than 4% thereafter;
-- The EBITDA margin is expected to improve about 60 bps to 70
bps annually relative to the Fitch-calculated EBITDA margin of
40.3% in 2018;
-- Capital spending reflects company guidance of $1.15 billion in
2019. During the forecast period capital intensity is in the 13.8%
to 13.9% range, with the absolute amount declining with the sale of
the operations in the Northwest;
-- Cash taxes are nominal in 2019-2022. Fitch assumes that the
company is able to use NOLs to offset taxes that may be due on the
asset sale.
-- The sale of the operations in the Northwest closes on July 1,
2020. Proceeds are used to reduce debt by $1.3 billion in 2020.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Gross leverage (total debt with equity credit/operating
EBITDA) sustained below 4.5x or net FFO-adjusted leverage below
5.0x;
-- The company demonstrating its ability to stabilize revenue and
EBITDA trends;
-- FCF margins sustained in the mid to high single digits.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Gross leverage sustained above 5.5x or net FFO-adjusted
leverage above 6.0x as a result of continued weak operating trends,
shareholder-friendly activities or additional material
acquisitions;
-- A return to midsingle-digit declines in revenue;
-- A deteriorating liquidity position, as evidenced by an
inability to generate sufficient FCF to mitigate declines in EBITDA
on leverage;
-- A liquidity ratio below 1.0x (available cash + availability on
RCF + FCF/12-month maturities).
LIQUIDITY AND DEBT STRUCTURE
Refinancing Plans and Activities: Frontier's liquidity position was
adequate as of March 31, 2019, supported by $119 million of cash
and $405 million of availability (net of letters of credit) under
its $850 million RCF. Fitch expects FCF will be positive, in the
mid- to high-single digits as a percentage of revenue in the
forecast period. Fitch expects Frontier to repay upcoming senior
unsecured note maturities (in 2019-2021) through cash flow, and, if
needed, interim RCF borrowings. Frontier has $800 million of
capacity to issue first-lien secured debt under its incurrence
covenants in its bank agreement and additional capacity to issue
junior-lien secured debt through an amendment to its credit
agreements from January 2018. However, certain unsecured bond
indentures may limit the company's ability to issue additional
secured debt.
In March 2019, Frontier issued $1.65 billion of 8.0% first lien
senior secured notes due 2027. Proceeds were used to repay in their
entirety the outstanding borrowings on its term loan A facility
(Dec. 31 balance of $1.4 billion), which would have matured in
2021, and its CoBank ACB facility (Dec. 31 balance of $239
million), which also would have matured in 2021. The remaining
proceeds were used to pay related fees and expenses. Following the
close of the transaction, Frontier amended its credit agreement to
extend the maturity of the $850 million revolver from February 2022
to February 2024 (subject to certain springing maturity dates to
any tranche of existing debt with in excess of $500 million).
Pricing on the revolver also increased by 0.25%, and certain
amendments were made to the debt and restricted payments
covenants.
The springing maturities on the Revolver and Term Loan B occur if
91 days before the maturity of senior unsecured notes in 2020, 2023
and 2024 more than $500 million in principal remains outstanding on
any series or if 91 days before the maturity of notes maturing in
2021 or 2022 more than $500 million remains outstanding in the
aggregate on the two series of notes maturing in such year. As of
March 31, $227 million is outstanding on the two series of notes
maturing in 2020 and $309 million on the two series of notes
maturing in 2021. Based on the current principal amounts
outstanding, the springing maturities would first come into play
with respect to $500 million of notes due in April 2022 and $2.2
billion of notes due in September 2022. There are also single
series of notes exceeding $500 million in each of 2023 and 2024 in
the amounts of $850 million and $750 million, respectively.
Frontier borrowed an incremental $240 million on its senior secured
term loan B facility in July 2018. Proceeds were used to repay all
borrowings under its CoBank credit facility due in October 2019. A
small portion of the CoBank facility due in 2021 was also paid
down. Frontier also obtained technical amendments to its credit
agreements with JPMorgan Chase Bank and CoBank to replace certain
operating subsidiary equity pledges — with negative pledges
provided to the former pledge subsidiaries — with equity pledges
of direct, intermediate holding company subsidiaries of Frontier
not previously pledged. The change increases the percentage of
revenue, EBITDA and assets in the security package for the
facilities.
Frontier entered into amendments to its bank credit agreement in
January 2018, replacing the company's net leverage maintenance test
of 5.25x with a first-lien net leverage ratio maintenance test
providing for a maximum first-lien net leverage ratio of 1.50x,
stepping down to 1.35x for the fiscal quarter ending June 30, 2020
and thereafter. The amendments provided for junior-lien capacity on
any debt permitted under the credit agreements. The security
package was expanded, adding equity interests of subsidiaries in
Pennsylvania and Connecticut to the previous package.
Fitch expects financial flexibility to be relatively solid, with
FCF in the mid to high single digits as a percentage of revenue. An
excess cash flow (ECF) sweep is in effect on the term loan,
requiring mandatory prepayments of 25% and 50% of ECF if net
debt/EBITDA is above 5.00x and 5.25x, respectively. The ECF sweep
commenced at the end of fiscal 2018.
FTD COMPANIES: Bankruptcy Court Approves First Day Motions
----------------------------------------------------------
FTD Companies, Inc., a premier floral and gifting company, on June
5 disclosed that the Company has received approvals from the U.S.
Bankruptcy Court for the District of Delaware for "First Day"
motions related to the voluntary Chapter 11 petitions filed on June
3, 2019.
The Bankruptcy Court granted the Company interim approval to access
up to $47 million of up to $94.5 million in debtor-in-possession
("DIP") financing. The DIP financing, combined with cash generated
from the Company's ongoing operations, will be used to, among other
things, support the business during the court-supervised
restructuring process.
In addition, the Company received Bankruptcy Court approval to,
among other things, continue ongoing payments and services without
interruption to member florists and business partners supporting
the Company's operations, manage its continuing relationships with
vendors and customers, and pay wages and benefits for continuing
employees.
Scott Levin, FTD's President and Chief Executive Officer, said,
"The court's approvals of our First Day motions will enable us to
continue supporting our member florists and business partners and
providing customers the outstanding service they expect from us as
we work to complete the initiatives coming out of our strategic
review. Looking ahead, we will continue to build on our important
relationships with our member florists and business partners. I
would like to thank our employees for their continued hard work and
commitment."
About FTD Companies
FTD Companies, Inc. -- http://www.ftdcompanies.com/-- is a premier
floral and gifting company. Through its diversified family of
brands, it provides floral, specialty foods, gifts, and related
products to consumers primarily in North America. It also provides
floral products and services to retail florists and other retail
locations throughout these same geographies.
FTD has been delivering flowers since 1910, and the
highly-recognized FTD brand is supported by the iconic Mercury Man
logo, which is displayed in over 30,000 floral shops in more than
125 countries. In addition to FTD, its diversified portfolio of
brands includes these trademarks: ProFlowers, Shari's Berries,
Personal Creations, Gifts.com, and ProPlants. FTD Companies is
headquartered in Downers Grove, Ill.
On June 3, 2019, FTD Companies and 14 domestic subsidiaries sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11240). The
Debtors disclosed $312.7 million in assets and $374.9 million in
liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Jones Day as legal advisor, and Moelis & Company
LLC and Piper Jaffray & Co. as investment bankers and financial
advisors. AP Services, LLC, an affiliate of AlixPartners, provides
restructuring services. Omni Management Group is the claims agent
and has put up the site http://www.FTDrestructuring.com/
FTD COMPANIES: U.S. Trustee Forms 7-Member Committee
----------------------------------------------------
Andrew Vara, acting U.S. trustee for Region 3, on June 12 appointed
seven creditors to serve on the official committee of unsecured
creditors in the Chapter 11 case of FTD Companies, Inc.
The committee members are:
(1) United Parcel Services, Inc.
Attn: Jill Termini
55 Glenlake Parkway, NE
Atlanta, GA 30328
Phone: 404-829-6455
Fax: 404-828-6912
(2) Atlas Flowers, Inc.
d/b/a Golden Flowers
Attn: Gabriel Becerra
2600 NW 79th Ave.
Doral, FL 33122
Phone: 305-599-0193
Fax: 305-477-0616
(3) Farm Direct Corp.
Attn: Roger Wright
9500 S. Dadeland Blvd.
Miami, FL 33156
Phone: 305-670-3211
Fax: 305-670-3229
(4) Veritiv Corporation
Attn: Darin Ball
1000 Abernathy Rd NE
Bldg. 400, Suite 1700
Atlanta, GA 30328
Phone: 770-391-8355
(5) Ad Results, Media, LLC
Attn: Michael Kropko
320 Westcott Street, Suite 101
Houston, TX 77007
Phone: 713-783-1800
(6) Legacy Staffing Solutions LLC
Attn: Evelin Valdivieso
218 Westinghouse Blvd., Suite 205
Charlotte, NC 28273
Phone: 704-919-0346
(7) Packaging Corp. of America
Attn: Giacomo Mauro
1 N. Field Ct.
Lake Forest, IL 60045
Phone: 847-482-2134
Fax: 847-440-5498
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About FTD Companies
FTD Companies, Inc. -- http://www.ftdcompanies.com/-- is a premier
floral and gifting company. Through its diversified family of
brands, it provides floral, specialty foods, gifts, and related
products to consumers primarily in North America. It also provides
floral products and services to retail florists and other retail
locations throughout these same geographies.
FTD has been delivering flowers since 1910, and the
highly-recognized FTD brand is supported by the iconic Mercury Man
logo, which is displayed in over 30,000 floral shops in more than
125 countries. In addition to FTD, its diversified portfolio of
brands includes these trademarks: ProFlowers, Shari's Berries,
Personal Creations, Gifts.com, and ProPlants. FTD Companies is
headquartered in Downers Grove, Ill.
On June 3, 2019, FTD Companies and 14 domestic subsidiaries sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-11240). The
Debtors disclosed $312.7 million in assets and $374.9 million in
liabilities.
Judge Laurie Selber Silverstein presides over the cases.
The Debtors tapped Jones Day as legal advisor, and Moelis & Company
LLC and Piper Jaffray & Co. as investment bankers and financial
advisors. AP Services, LLC, an affiliate of AlixPartners, provides
restructuring services. Omni Management Group is the claims agent
and has put up the site http://www.FTDrestructuring.com/
FUELCELL ENERGY: Bottone Out, Arasimowicz In as President
---------------------------------------------------------
Jennifer D. Arasimowicz is taking over as Interim President of
FuelCell Energy, Inc., the company disclosed in a regulatory filing
this week.
On June 7, 2019, the Board of Directors of FuelCell appointed
Arasimowicz to serve as the Company's Interim President. As a
result of this appointment, Arasimowicz will serve as Interim
President, Chief Commercial Officer, Executive Vice President,
General Counsel, and Corporate Secretary and will function as, and
perform the functions of, the principal executive officer of the
Company.
On and effective as of June 5, FuelCell terminated the employment
of its President and Chief Executive Officer, Arthur A. Bottone,
without cause. Additionally, on June 5, Bottone resigned as a
director of the Company and its subsidiaries, effective
immediately, and the Company agreed to waive Bottone's obligation
not to compete with the Company pursuant to his employment
agreement dated February 8, 2011 and amended on January 1, 2012.
Arasimowicz, 47, has served as the Company's Chief Commercial
Officer and Executive Vice President since June 4, 2019, and as
General Counsel and Corporate Secretary since April 2017. She also
served as Senior Vice President of the Company from April 2017 to
June 4, 2019. As Senior Vice President, General Counsel and
Corporate Secretary, Arasimowicz, a licensed attorney in
Connecticut, New York and Massachusetts, has served as the chief
legal officer and chief compliance officer of the Company, having
responsibility for oversight of all of the Company's legal and
government affairs, and providing leadership in all aspects of the
Company's business, including compliance, corporate governance and
board activities.
Arasimowicz joined the Company in 2012 as Associate Counsel and was
promoted to Vice President in 2014. Prior to joining the Company,
she served as General Counsel of Total Energy Corporation, a New
York-based diversified energy products and services company
providing a broad range of specialized services to utilities and
industrial companies. Previously, Arasimowicz was a partner at
Shipman & Goodwin, LLP in Hartford, Connecticut, chairing the
Utility Law Practice Group and began her legal career as an
associate at Murtha Cullina, LLP. She Arasimowicz earned her Juris
Doctor at Boston University School of Law and holds a bachelor's
degree in English from Boston University.
About FuelCell
Based in Danbury, Connecticut, FuelCell Energy, Inc., together with
its subsidiaries, designs, manufactures, installs, operates and
services ultra-clean, efficient and reliable stationary fuel cell
power plants. The company has commercialized its stationary
carbonate fuel cells and is also pursuing the complementary
development of planar solid oxide fuel cells and other fuel cell
technologies. As of Jan. 31, 2019, FuelCell had $345,955,000 in
total assets against $192,923,000 in total liabilities, $94,178,000
in redeemable preferred stock, and $58,854,000 in total
stockholders' equity.
FUELCELL ENERGY: Delays Quarterly Report, Has Going Concern Doubt
-----------------------------------------------------------------
FuelCell Energy, Inc., advised the Securities and Exchange
Commission early this week that its Quarterly Report on Form 10-Q
for the three months ended April 30, 2019 could not be filed within
the prescribed time period without unreasonable effort or expense.
The delay in filing is due to:
(i) the Company's ongoing process of exploring refinancing
alternatives and negotiations with its senior lender,
(ii) the recent changes in the Company's management and the
related consideration of any updates to the Company's internal
controls which may be required as a result of those changes, and
(iii) management's continuing review, analysis and assessment of
certain financial and other related data and the disclosures
required in connection therewith.
"Management is continuing to review the Company's liquidity
position and related disclosures. Given the Company's current
liquidity position, management expects to disclose that there is
substantial doubt about the Company's ability to continue to
operate as a going concern within one year after the date the
Quarterly Report is filed," says Michael S. Bishop, who acts as the
Company's Executive Vice President, Chief Financial Officer, and
Treasurer.
"In addition, an impairment analysis of certain assets is being
finalized given recent decreases in the production rate, the
reorganization undertaken during the quarter ended April 30, 2019,
and changes in cash flow forecasts. Based on assessments to date,
an impairment charge of $2.8 million will be recognized; however,
it is possible that additional impairments may be recognized once
the analysis is complete.
"Management is also committed to providing sufficient time for its
auditors to complete their review in order for the Company to
prepare complete filings."
$22.9MM Net Loss Seen
The Company anticipates reporting total revenues of approximately
$9.2 million for the three month period ended April 30, 2019 as
compared to total revenues of $20.8 million for the three month
period ended April 30, 2018. "This anticipated decrease in revenue
was primarily a result of the fact that no product revenue was
recorded for the three months ended April 30, 2019, whereas product
revenue for the three months ended April 30, 2018 was $12.2
million, which included the sale of a 2.8 megawatt fuel cell power
plant project located at the waste water treatment facility in
Tulare, California," according to Bishop.
Pending completion of the impairment analysis, the Company
anticipates reporting:
-- a gross loss of $3.6 million for the three month period
ended April 30, 2019 compared to a gross loss of $0.6 million for
the three month period ended April 30, 2018. The increase in the
gross loss was primarily a result of a charge for a specific
non-commercial construction in process asset related to automation
equipment for use in manufacturing with a carrying value of $2.8
million, which was impaired due to uncertainty as to whether the
asset will be completed as a result of the Company's liquidity
position and continued low level of production rates.
-- a net loss attributable to common stockholders of $22.9
million for the three month period ended April 30, 2019 compared to
a net loss attributable to common stockholders of $18.2 million for
the three month period ended April 30, 2018. The increase in the
net loss attributable to common stockholders is primarily
attributable to an increase in the gross loss, an increase in
administrative and selling expenses primarily relating to legal and
consulting costs incurred in connection with the Company's
restructuring and refinancing initiatives, and charges for a
warrant exchange and Series D preferred stock deemed dividends,
partially offset by Series C preferred stock deemed contributions
of $1.6 million for the three month period ended April 30, 2019
compared to Series C preferred stock deemed dividends of $4.2
million for the three month period ended April 30, 2018.
-- a net loss per common share of $2.06 for the three month
period ended April 30, 2019 as compared to a net loss per common
share of $2.74 for the three month period ended April 30, 2018. Net
loss per common share is lower due to the increase in shares
compared to the prior period. As of April 30, 2019, basic and
diluted weighted average shares outstanding was approximately 11.1
million compared to 6.6 million as of April 30, 2018. The net
losses per common share reflect a 1-for-12 reverse stock split that
was effected on May 8, 2019, and all per share amounts have been
adjusted to retroactively reflect this reverse stock split.
The Company anticipates reporting that unrestricted cash and cash
equivalents was $14.9 million as of April 30, 2019 compared to
$39.3 million as of October 31, 2018, and that restricted cash and
cash equivalents was $38.1 million as of April 30, 2019 compared to
$40.9 million as of October 31, 2018.
The Company has significant short-term debt and other obligations
currently due or maturing in less than one year, which are in
excess of the Company's cash and current asset balance, and the
Company has been delaying certain payments to conserve cash. The
Company has entered into a series of amendments to its corporate
loan agreement with its senior lender Hercules Capital, Inc. to,
among other things, provide for a lower minimum cash covenant and
avoid events of default and acceleration of amounts due under the
loan agreement. Most recently, Hercules provided an amendment
through August 9, 2019. In exchange for this new amendment, the
Company has agreed to pay down a portion of the outstanding
principal amount in June 2019. As of April 30, 2019, the Company
had an accumulated deficit from recurring net losses for the
current and prior years.
These factors as well as negative cash flows from operating and
investing activities raise substantial doubt about the Company's
ability to continue as a going concern, Bishop says.
"Management has plans to alleviate the substantial doubt," he
continues. "These plans include exploring refinancing alternatives
for the Company's senior secured credit facility with Hercules.
However, the Company may not be able to obtain such refinancing on
acceptable terms, or at all. If the Company is not able to
consummate such a refinancing transaction by August 9, 2019, and if
Hercules is not willing to provide further accommodations, the
Company could default on its obligations under its senior secured
credit facility with Hercules, which would trigger additional
defaults under other agreements. Other plans include implementing
cost reduction measures such as the reduction in force implemented
in April, increasing sales activity related to the Company's
products, and negotiating and entering into advanced technology
research and development contracts. The Company may also consider
licensing certain of its technology, sales of intellectual property
and other assets, and/or sales of common stock directly to
investors or through the Company's at-the-market sales plan (which
is subject to contractual requirements, trading windows and market
conditions) to raise capital in the future."
"The terms of any financing and other measures to obtain funds that
may be undertaken by the Company may adversely affect the holdings
or the rights of the Company's stockholders. If the Company is
unable to obtain funding, the Company could be forced to delay,
reduce or eliminate some or all of its research and development
efforts and commercialization efforts and sell intellectual
property and other assets, which could adversely affect its
business prospects, or the Company may be unable to continue
operations. Although management continues to pursue these plans,
there is no assurance that the Company will be successful in
obtaining sufficient funding on terms acceptable to the Company to
fund continuing operations, if at all. Based on its recurring
losses from operations, expectation of continuing operating losses
for the foreseeable future, and need to raise additional capital to
finance its future operations, the Company has concluded that there
is substantial doubt about its ability to continue as a going
concern for a period of one year after the date that the financial
statements are issued."
About FuelCell
Based in Danbury, Connecticut, FuelCell Energy, Inc., together with
its subsidiaries, designs, manufactures, installs, operates and
services ultra-clean, efficient and reliable stationary fuel cell
power plants. The company has commercialized its stationary
carbonate fuel cells and is also pursuing the complementary
development of planar solid oxide fuel cells and other fuel cell
technologies. As of Jan. 31, 2019, FuelCell had $345,955,000 in
total assets against $192,923,000 in total liabilities, $94,178,000
in redeemable preferred stock, and $58,854,000 in total
stockholders' equity.
FUELCELL ENERGY: Hercules Capital Agrees to Relax Loan Covenants
----------------------------------------------------------------
FuelCell Energy, Inc., and each of its qualified subsidiaries, as
borrower, on June 11, 2019, entered into a ninth amendment to the
Loan and Security Agreement with certain banks and other financial
institutions, as lender, and Hercules Capital, Inc., as
administrative agent for itself and lender.
Under the Ninth Amendment, FuelCell has agreed, among other things,
to:
(a) no later than June 11, 2019, pay the lender $1.4 million
to be applied towards the outstanding balance of the loan;
(b) no later than June 26, 2019, direct ExxonMobil Research
and Engineering Company to pay the lender $6.0 million of the $10.0
million payable under FuelCell's License Agreement with EMRE to be
applied towards the outstanding balance of the loan; and
(c) on each of July 1, 2019 and August 1, 2019, pay the lender
interest-only payments on the outstanding principal balance of the
loan.
Hercules has agreed to waive the borrower's compliance with certain
financial reporting covenants and the minimum unrestricted cash
balance covenant set forth in the Loan and Security Agreement, in
each case from the Effective Date through the end of the Amendment
Period. The term "Amendment Period" is defined as the period from
and after the Effective Date through the earlier of (i) August 9,
2019 and (ii) the occurrence of any event of default under the
Hercules Amendment.
Hercules and the lender further agreed that the borrower is
permitted to use and maintain one or more deposit accounts that are
not subject to any account control agreements for the purpose of
borrower's receipt and use of $4.0 million of the $10.0 million to
be received from EMRE under the License Agreement.
The Borrower has further agreed that interest at the default rate
will accrue from June 3, 2019; provided, however, that, in the
event that all of the secured obligations are paid in full on or
prior to the last day of the Amendment Period, the lender will
fully and unconditionally waive its right to payment of accrued and
unpaid default interest.
In those circumstances, the lender will also fully and
unconditionally waive payment of the prepayment charge.
FuelCell and Hercules originally entered into the Loan and Security
Agreement in April 2016. The Agreement was subsequently amended on
September 5, 2017, October 27, 2017, March 28, 2018, August 29,
2018, December 19, 2018, February 28, 2019, March 29, 2019, and May
8, 2019.
FuelCell's qualified subsidiaries are Versa Power Systems, Inc. and
Versa Power Systems Ltd.
Any failure by borrower to timely perform any of the obligations
under the Ninth Amendment will constitute an event of default under
the Loan and Security Agreement. Upon any failure by the borrower
to timely perform any of the obligations under the Amendment,
Hercules will be permitted to issue a notice of default with
respect to such an event of default and any other defaults that may
exist, whether arising prior to the Effective Date or otherwise.
As of June 11, 2019, prior to the application of the payments made
and to be made to Hercules, the outstanding principal balance under
the Loan and Security Agreement was approximately $20.9 million.
A copy of the Ninth Amendment to Loan and Security Agreement, dated
June 11, 2019, by and among FuelCell Energy, Inc., Versa Power
Systems, Inc., Versa Power Systems Ltd., Hercules Capital, Inc. and
Hercules Funding II, LLC., is available at https://is.gd/T9AUSd
License Agreement with EMRE
Effective as of June 11, 2019, FuelCell entered into a License
Agreement with EMRE, pursuant to which the Company has agreed,
subject to the terms of the License Agreement, to grant EMRE and
its affiliates a non-exclusive, worldwide, fully paid, perpetual,
irrevocable, non-transferrable license and right to use the
Company's patents, data, know-how, improvements, equipment designs,
methods, processes and the like to the extent it is useful to
research, develop, and commercially exploit carbonate fuel cells in
applications in which the fuel cells concentrate carbon dioxide
from industrial and power sources and for any other purpose
attendant thereto or associated therewith. Such right and license
is sublicensable to third parties performing work for or with EMRE
or its affiliates, but shall not otherwise be sublicensable. Upon
the payment by EMRE to the Company of $10.0 million, which is
expected to occur within 15 days, EMRE and its affiliates will be
fully vested in the rights and licenses granted in the License
Agreement.
About FuelCell
Based in Danbury, Connecticut, FuelCell Energy, Inc., together with
its subsidiaries, designs, manufactures, installs, operates and
services ultra-clean, efficient and reliable stationary fuel cell
power plants. The company has commercialized its stationary
carbonate fuel cells and is also pursuing the complementary
development of planar solid oxide fuel cells and other fuel cell
technologies. As of Jan. 31, 2019, FuelCell had $345,955,000 in
total assets against $192,923,000 in total liabilities, $94,178,000
in redeemable preferred stock, and $58,854,000 in total
stockholders' equity.
FUSION CONNECT: June 18 Meeting Set to Form Creditors' Panel
------------------------------------------------------------
William K. Harrington, United States Trustee, for Region 2, will
hold an organizational meeting on June 18, 2019, at 11:00 a.m. in
the bankruptcy case of Fusion Connect, Inc., et al.
The meeting will be held at:
United States Bankruptcy Court
For the Southern District of New York
One Bowling Green, Room 511
New York, NY 10004
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors pursuant
to Section 341 of the Bankruptcy Code. A representative of the
Debtor, however, may attend the Organizational Meeting, and provide
background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States Trustee
appoint a committee of unsecured creditors as soon as practicable.
The Committee ordinarily consists of the persons, willing to serve,
that hold the seven largest unsecured claims against the debtor of
the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee may
consult with the debtor, investigate the debtor and its business
operations and participate in the formulation of a plan of
reorganization. The Committee may also perform other services as
are in the interests of the unsecured creditors whom it
represents.
About Fusion
Fusion Connect -- http://www.fusionconnect.com/-- provides
integrated cloud solutions to small, medium and large businesses,
is the industry's Single Source for the Cloud. Fusion's advanced,
proprietary cloud services platform enables the integration of
leading edge solutions in the cloud, including cloud
communications, contact center, cloud connectivity, and cloud
computing. Fusion's innovative, yet proven cloud solutions lower
customers' cost of ownership, and deliver new levels of security,
flexibility, scalability, and speed of deployment.
On June 3, 2019, Fusion Connect and each of its U.S. subsidiaries
sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No.
19-11811). Fusion's two Canadian subsidiaries are not included in
the filing.
Fusion disclosed $570,432,338 in assets and $760,720,713 in
liabilities as of April 30, 2019.
Fusion is advised in this process by FTI Consulting and PJT
Partners, Inc., as financial advisors, and Weil, Gotshal & Manges
LLP as legal advisor. Prime Clerk LLC is the claims agent.
The First Lien Ad Hoc Group is advised by Greenhill & Co, LLC, as
financial advisor, and Davis Polk & Wardwell LLP, as legal advisor.
GAMING & LEISURE: Moody's Affirms Ba1 CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service has affirmed Gaming & Leisure Properties,
Inc.'s Ba1 corporate family rating and the Ba1 senior unsecured
debt rating of its main operating subsidiary, GLP Capital L.P. In
the same action, Moody's assigned a speculative grade liquidity
rating of SGL-2 to GLPI. The rating outlook remains stable.
The following ratings were affirmed:
GLP Capital L.P. -- Senior unsecured bank credit facility at
Ba1; Gtd. senior unsecured debt at Ba1 (Co-Issued by GLP
Financing II, Inc.)
Gaming & Leisure Properties, Inc. -- corporate family rating
at Ba1
The following rating was assigned:
Gaming & Leisure Properties, Inc. -- Speculative Grade
Liquidity Rating of SGL-2
Outlook Actions:
Issuers: GLP Capital L.P., Gaming & Leisure Properties, Inc.
-- Outlook, remains stable
RATINGS RATIONALE
GLPI's Ba1 CFR reflects the REIT's profitable growth, stable
operating cash flows, and reasonable leverage for the rating
category. GLPI has increased gross assets to $9.9 billion as of
1Q19, up from $8.3 billion as of 4Q17. Recent acquisitions have
established the REIT's relationships with new gaming operator
tenants, providing expanded opportunities for continued growth.
GLPI's leverage is expected to decline from 5.9x Net Debt/EBITDA
(as of 1Q19) to around 5.5x over the next twelve to eighteen
months. The REIT is committed to sustaining leverage in the mid-5x
range, even as it continues to seek strategic growth
opportunities.
GLPI's ratings continue to reflect steady cash flows from its
long-term triple-net master leases. The REIT's primary leases have
many structural benefits, including rent coverage above 1.8x, which
help insulate it from the volatility of the underlying gaming
business.
Key credit challenges include GLPI's tenant concentration with Penn
National Gaming (about 80% of cash revenues), as well as its
ownership of specialized casino assets that have more limited
recovery prospects under a stress scenario. Moody's also notes that
the gaming business is volatile, and Moody's has concerns about
long-term consumer demand trends and increased competition in many
markets.
The SGL-2 speculative grade liquidity rating reflects the REIT's
sound liquidity profile, supported by retained cash flow and its
$1.175 billion unsecured revolver that had $341 million drawn as of
1Q19. The REIT doesn't have any debt maturities this year, but does
have a $1 billion unsecured bond maturing in November 2020 -- this
is a large obligation considering its total line capacity. GLPI's
property portfolio is entirely unencumbered, which enhances
financial flexibility.
The stable outlook reflects Moody's expectation that GLPI's
leverage will trend down towards 5.5x, and the REIT will prudently
manage its liquidity as it seeks growth.
A ratings upgrade would likely reflect Net Debt/EBITDA in the low
5x range and fixed charge coverage above 3.5x, each on a sustained
basis. Property type diversification outside of gaming investments
would also support an upgrade. Stable operating performance, with
ample rent coverage for each of its largest tenants, would also be
necessary.
Negative rating pressure would likely result should Net Debt/EBITDA
increase above 6x on a sustained basis, fixed charge coverage fall
below 3x, or if tenant credit quality/property rent coverage
metrics were to deteriorate.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.
Gaming & Leisure Properties, Inc. (NASDAQ: GLPI) is engaged in the
business of acquiring, financing, and owning real estate property
to be leased to gaming operators in triple net lease arrangements.
As of March 31, 2019, the REIT owned 46 assets across 16 states.
GIGA WATT: Trustee Taps Stretto as Claims Agent
-----------------------------------------------
Mark Waldron, the Chapter 11 trustee for Giga Watt Inc., received
approval from the U.S. Bankruptcy Court for the Eastern District of
Washington to hire Stretto as claims and noticing agent and
administrative advisor.
The firm will oversee the distribution of notices and the
maintenance, processing and docketing of proofs of claim filed in
the Debtor's Chapter 11 case. It will also assist in the
solicitation of votes for any proposed Chapter 11 plan and will
review, tabulate and audit ballots.
The firm's hourly rates for its services are:
Analyst $30 - $50
Associate/Senior Associate $65 - $165
Director/Managing Director $175 - $210
Chief Operating Oficer/Senior
Managing Director Waived
Solicitation Associate $190
Stretto does not represent any interest adverse to the Debtor and
its estate, according to court filings.
The firm maintains an office at:
Stretto
5 Peters Canyon Road, Suite 200
Irvine, CA 92606
Phone: 800.634.7734
About Giga Watt Inc.
Giga Watt Inc., a cryptocurrency mining services provider based in
East Wenatchee, Washington, filed for Chapter 11 protection (Bankr.
E.D. Wash. Case No. 18-03197) on Nov. 19, 2018. In the petition
signed by Andrey Kuzenny, secretary, the Debtor estimated up to
$50,000 in assets and $10 million to $50 million in liabilities.
The case is assigned to Judge Frederick P. Corbit.
Winston & Cashatt, Lawyers, led by shareholder Timothy R. Fischer,
is the Debtor's counsel.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Dec. 19, 2018. The committee tapped DBS Law
as its legal counsel.
On Jan. 23, 2019, the court approved the appointment of Mark D.
Waldron as the Chapter 11 trustee for the Debtor's estate. The
Trustee is represented by CKR Law LLP.
GOGO INC: All Three Proposals Approved at Annual Meeting
--------------------------------------------------------
Gogo Inc. held its 2019 annual meeting of stockholders on June 11,
2019, at which the stockholders:
(a) elected Robert L. Crandall, Christopher D. Payne, and
Charles C. Townsend as Class III directors to serve three-
year terms expiring at the Company's 2022 annual meeting of
stockholders or until their successors are duly elected and
qualified;
(b) approved the advisory resolution approving executive
compensation; and
(c) ratified the appointment of Deloitte & Touche LLP as the
Company's independent registered public accounting firm for
the fiscal year 2019.
About Gogo
Gogo Inc. -- http://www.gogoair.com/-- is a global provider of
broadband connectivity products and services for aviation. The
Company designs and sources innovative network solutions that
connect aircraft to the Internet and develop software and platforms
that enable customizable solutions for and by its aviation
partners. Gogo's products and services can be found on thousands
of aircraft operated by global commercial airlines and thousands of
private aircraft, including those of the largest fractional
ownership operators. Gogo is headquartered in Chicago, IL, with
additional facilities in Broomfield, CO, and locations across the
globe.
Gogo reported a net loss of $162.03 million for the year ended Dec.
31, 2018, compared to a net loss of $172.0 million for the year
ended Dec. 31, 2017. As of March 31, 2019, Gogo had $1.29 billion
in total assets, $1.58 billion in total liabilities, and a total
stockholders' deficit of $283.97 million.
* * *
As reported by the TCR on April 18, 2019, Moody's Investors Service
changed the outlook on Gogo Inc. to stable from negative.
Concurrently, Moody's affirmed Gogo's corporate family rating at
Caa1. Moody's said that despite the improvement in liquidity,
Gogo's Caa1 CFR remains warranted given the company's high leverage
which Moody's expects at around 9.9x (Moody's adjusted debt/EBITDA)
by end 2019 along with the continued need for Gogo to invest
heavily in technology and equipment installs to pursue its growth
ambitions outside of North America. Gogo's Caa1 also reflects the
company's small scale relative to other players in the wider
telecommunications industry as well as the highly competitive
environment it operates in.
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Gogo
Inc, according to a TCR report dated April 19, 2019. S&P said the
company's proposed refinancing of its capital structure will boost
its short-term liquidity by extending the maturity profile of its
obligations but the rating agency expects the company to burn cash
over the next year. The rating agency said it affirmed its 'CCC+'
issuer credit rating because it does not envision a default within
the next year.
GRAPHIC PACKAGING: S&P Rates New $300MM Sr. Unsecured Notes 'BB+'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '3'
recovery rating to Graphic Packaging International LLC's proposed
$300 million senior unsecured notes. The '3' recovery rating
indicates its expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery in the event of a payment default. The
company will use the proceeds from these notes for general working
capital purposes.
All of S&P's other ratings on Graphic Packaging remain unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'BB+' issue-level rating and '3' recovery
rating (50%-70%; rounded estimate: 55%) to the company's proposed
$300 million senior unsecured notes.
-- S&P's simulated default scenario contemplates a default
occurring in 2024 in the wake of an abnormally weak macroeconomic
environment that negatively affects end-market demand, resulting in
lower business volumes, along with rising raw material and energy
costs. Therefore, its cash flow would be insufficient to cover its
interest expense, required amortization on the term loans, working
capital, and maintenance capital outlays.
-- S&P assumes these conditions impair the company's ability to
meet its fixed charges, which eventually drains its liquidity and
triggers a bankruptcy filing.
-- S&P believes Graphic Packaging's underlying business would
continue to have considerable value and expect that it would emerge
from bankruptcy rather than pursue a liquidation.
-- S&P assumes the company will seek covenant amendments on its
path to default--resulting in higher interest costs--and anticipate
that it will have drawn approximately 85% on its revolving credit
facilities.
-- S&P assesses Graphic Packaging's recovery prospects on the
basis of a gross reorganization value of approximately $3.7
billion, which reflects about $612 million of emergence EBITDA and
a 6x multiple.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA at emergence: $612 million
-- EBITDA multiple: 6x
-- Gross enterprise value: $3.7 billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $3.5
billion
-- Obligor/nonobligor valuation split: 85%/15%
-- Estimated first-lien debt claim (inclusive of a $660 million
term loan, which S&P does not rate): $2.75 billion
-- Collateral available to first-lien claims: $3.3 billion
-- Recovery expectation: 90%-100% (rounded estimate: 95%)
-- Value available for unsecured notes claims: $737.2 million
-- Unsecured notes claim: $1.3 billion
-- Recovery expectation: 50%-70% (rounded estimate: 55%)
Ratings List
Graphic Packaging International LLC
Issuer Credit Rating BB+/Stable/--
New Rating
Graphic Packaging International LLC
Senior Unsecured
US$300 mil sr nts due 2027 BB+
Recovery Rating 3(55%)
HANNON ARMSTRONG: Fitch Assigns 'BB+' IDR & Unsecured Debt Rating
-----------------------------------------------------------------
Fitch Ratings has assigned Hannon Armstrong Sustainable
Infrastructure Capital a Long-Term Issuer Default Rating and
unsecured debt rating of 'BB+'. Additionally, Fitch has assigned a
rating of 'BBB-' to HASI's senior secured revolving recourse credit
facility. The Rating Outlook is Stable.
KEY RATING DRIVERS
The ratings of HASI reflect its established, albeit niche, market
position within the renewable energy financing sector, experienced
management team, diversified investment portfolio, strong credit
track record and a fairly conservative underwriting culture. They
also reflect its adherence to leverage targets that are
commensurate with the risk profile of the portfolio, demonstrated
access to public equity markets, and long-term relationships with
its customers.
Rating constraints include a largely secured wholesale funding
profile that results in a high encumbered assets ratio relative to
peers, modest scale, dependence on access to the capital markets to
fund portfolio growth and a limited ability to retain capital due
to dividend distribution requirements as a REIT. Additionally,
HASI's planned opportunistic shift in the company's portfolio mix
toward higher-risk mezzanine debt and common equity exposures is
viewed with caution by Fitch.
At March 31, 2019, HASI's investment portfolio consisted of
commercial and government receivables (48% of the portfolio),
equity-method investments (24%), real estate (19%) and debt
investments (9%). The company has a diversified portfolio
consisting of more than 190 projects (with a balance of at least
USD1 million) with an average size of USD10 million and a weighted
average remaining life of 14 years. The ultimate obligor in more
than 80% of the receivables, debt and real estate portfolio, is the
U.S. federal government, state and/or local governments or
commercial entities with high investment-grade ratings (rated
either by an independent rating agency or based on HASI's internal
credit analysis), which Fitch views as a credit strength. The
remaining 20% of the receivables, debt and real estate portfolio
are projects in which the ultimate obligor is a commercial entity
that either has ratings below investment grade or where the nature
of the subordination in the asset causes it to be viewedas
non-investment grade by HASI.
HASI has also made non-controlling equity investments in a number
of renewable energy projects, which accounted for 24% of the
portfolio at end-March 2019. HASI generally receives a preferred
distribution of cash flows until an agreed-upon return is achieved
in preferred equity in utility-scale wind projects. HASI has also
made debt and equity investments in real estate underlying the
utility-scale solar and wind projects for which it collects lease
payments. The lease payments are treated as operating expenses by
the lessor and are senior to project-level debt and equity. Fitch
views the preferred nature of cash flows and structural protections
in these investments favorably.
HASI syndicated more than USD2.6 billion of transaction volume
since its IPO in 2013. For those transactions that HASI chooses not
to hold on its balance sheet, it transfers all or a portion of
them, typically using securitization trusts, to institutional
investors in exchange for a gain on the transfer and in some cases,
ongoing servicing fees. Fitch believes HASI has a flexible business
model combining fee and net investment income, which helps to
create more recurring and stable earnings.
HASI's programmatic relationships with the same customers, such as
energy-saving companies or renewable energy developers, and
consistent documentation for the provided financings can be
competitive advantages. This enables the company to invest in
smaller-size projects and compete at sizes that other larger
players typically cannot or do not.
HASI's asset quality metrics have been strong since inception,
although some of the company's more recent strategies, such as debt
and equity investments in commercial and residential solar
projects, have not been tested through a full credit cycle. Since
2000 HASI has recorded an aggregate net loss of USD18 million
across two projects. At financial year ended March 2019, HASI had
two commercial receivables on non-accrual status, which accounted
for 0.9% of total receivables. The company has initiated legal
claims to recover the carrying value of the projects based on
projected cash flows, and thus has not recorded an allowance for
losses on the loans.
HASI has USD25 million of equity investments in a wind project that
is currently experiencing operating losses and the company had
recognized USD19 million of cumulative losses through the end of
1Q19. HASI also has USD10 million of an equity investment in a
solar project located in the U.S. Virgin Islands that was
materially damaged in the 2017 hurricanes. The company was able to
recover 80% of the carrying value from insurance receipts. HASI
believes there are sufficient cash flows to recover the original
value of its investments in these two projects over time.
Fitch expects HASI's asset quality to remain solid given the
company's conservative underwriting, but believes that larger
losses are possible as the company is planning to increase its
investment in higher-risk mezzanine debt and common equity
securities.
HASI's profitability metrics have been improving steadily over the
past several years. Pre-tax income, adjusted for the economic
reality of equity method investment income in preferred equity
transactions, as a percentage of average assets has increased to
2.8% in 2018 and 3% in 1Q19 (annualized) from 1.2% in 2014 .
Stronger profitability has been driven largely by HASI's
higher-yielding equity portfolio in recent years. Fitch expects
HASI's profitability ratios to remain broadly stable over the
near-term.
Leverage, as measured by par debt-to-tangible equity, was 1.5x at
end-March 2019; down from 2.3x at FYE17, and below the company's
long-term leverage target of up to 2.5x. While HASI does not have a
defined leverage limit by asset class, consolidated leverage
factorsin the portfolio mix and an assessment of the credit,
liquidity, and price volatility of each investment. Fitch believes
HASI's leverage target is appropriate for the portfolio risk and
ratings and expects HASI to maintain appropriate headroom to the
target to account for potential increases in mezzanine debt or
common equity securities.
At end-March 2019, only 12% of HASI's outstanding debt was
unsecured, based on the par amount of total debt, which was within
Fitch's 'bb' category quantitative benchmark range of less than 35%
for balance sheet-intensive finance and leasing companies.
Unsecured debt consists of a USD150 million convertible note, which
was issued in 2017 and matures in 2022.
In December 2018, the company entered into two senior revolving
credit facilities with various lenders, with maturities of July
2023 and aggregate borrowing total committments of USD191 million.
Fitch believes that HASI will continue to seek to diversify its
funding profile over time, including opportunistically issuing
unsecured debt, which, Fitch believes would improve funding
flexibility.
HASI is dependent on access to public equity markets to fund
portfolio growth. Since its IPO in 2013, the company has completed
a number of equity offerings, raising approximately USD979 million
of aggregate capital through to 1Q19. It accesses the market
through its at-the-market program and via public offerings.
Fitch views HASI's liquidity position as adequate for the rating
category. At end-March 2019, the company had USD62.1 million of
balance-sheet cash and equivalents. The company generated USD58.8
million of cash flow from operations and USD50.8 million of cash
flow from investments in 2018.
While HASI generally intends to hold its balance-sheet assets as
long-term investments, its unencumbered pool could be pledged or
liquidated to provide additional liquidity to the company. At
end-March 2019 the company had USD691 million of unencumbered
assets on its balance sheet consisting high-credit quality
receivables, preferred equity and mezzanine debt and equity
investments.
Dividend payments as a percentage of net income have been declining
to 170% in 2018 from 393% in 2015. Adjusting net income for the
true economics of the equity-method investments, non-cash
equity-based compensation charges and other core adjustments, this
ratio declined to an average of 97% during 2015-2018. Although HASI
is required to distribute at least 90% of its REIT taxable income
by the U.S. federal income tax law, there are two taxable REIT
subsidiaries that are subject to corporate income taxes. Hence,
HASI's required dividend distribution is less than their recent
dividend payments and Fitch believes the company has the
flexibility to reduce dividends and still be REIT-compliant.
The Stable Outlook reflects Fitch's expectation for broadly
consistent operating performance, the continuation of strong asset
quality trends, the management of leverage in a manner that is
consistent with the risk profile of the portfolio and an
improvement in the funding profile with the opportunistic issuance
of additional unsecured debt.
The one-notch uplift to the senior secured revolving recourse
credit facility rating versus the IDR reflects the first-priority
security interest in HASI's assets and its expectations for
above-average recovery prospects under a stressed scenario.
The equalization of the unsecured debt rating with HASI's IDR
reflects the availability of the unencumbered asset pool, which
suggests average recovery prospects for debtholders under a
stressed scenario.
RATING SENSITIVITIES
Fitch believes upward rating momentum is limited over the near-term
until the credit performance of recent mezzanine debt and common
equity investment vintages can be fully assessed. Thereafter,
upward rating momentum could be driven by demonstrated franchise
resilience in an increasingly competitive environment, the
maintenance of fairly low leverage that is consistent with the risk
profile of the portfolio, enhanced liquidity, and further
improvement in funding flexibility, as demonstrated by an increase
in the proportion of unsecured funding. An upgrade would also be
contingent on the maintenance of strong credit performance on the
portfolio as a whole and consistent core operating performance.
Conversely, negative rating actions could be driven by a sustained
increase in leverage above 2.5x and/or a material shift in HASI's
risk profile, including a material increase in mezzanine debt
and/or equity investments without a commensurate decline in
leverage. A spike in non-accrual levels or write-down in equity
investments, weaker funding flexibility, including a decline in the
proportion of unsecured funding, and/or weaker core earnings
coverage of dividends would also be negative for ratings.
HARSCO CORP: Fitch Rates Planned $500MM Unsecured Notes 'BB'
------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB'/'RR4' to Harsco
Corporation's planned $500 million issuance of senior unsecured
notes due 2027. The proceeds from the issuance, together with
borrowings on the revolver, will be used to fund the purchase of
CEHI Acquisition Corporation (Clean Earth). Harsco announced in May
2019 that it has agreed to acquire Clean Earth for $625 million in
cash and sell its Air-X-Changers business for $592 million in cash.
The company also announced that it plans to divest its other
industrial businesses - IKG, which makes industrial grating
products, and Patterson Kelly, which makes commercial boilers and
water heaters.
Fitch has also affirmed Harsco's Long-Term Issuer Default Rating
(IDR) at 'BB' and its secured revolver and term loan at
'BB+'/'RR1'. The Rating Outlook is Stable.
KEY RATING DRIVERS
Business Portfolio Shift: Harsco's planned acquisition of Clean
Earth and sale of Air-X-Changers and other industrial businesses
will result in a portfolio that is weighted toward environmental
services, which will account for 75% of Harsco's revenues on a pro
forma basis. The Clean Earth business provides processing and
beneficial reuse solutions for hazardous waste, contaminated
materials and dredged volumes. The business complements Harsco's
existing environmental segment, which provides environmental
solutions and services to steel producers and others. In addition,
the Clean Earth business generates strong organic growth and is
inherently more stable than the industrial businesses that are to
be sold.
Steady Financial Leverage: Debt/EBITDA was 2.0x as of March 31,
2019 and is expected to increase to the low-2.0x range following
the completion of the two announced transactions. This takes into
account the incremental debt from the acquisition of Clean Earth
and the subsequent repayment of the revolver and part of the term
loan from the proceeds of the sale of Air-X-Changers, together with
expected growth in EBITDA from Harsco's remaining businesses.
Longer term, Fitch expects leverage will likely track above 2.0x as
the company pursues faster growth, both organically and through
acquisitions.
Cyclical End-Markets: The ratings take into account the cyclicality
inherent in Harsco's operations, which are tied to the steel,
mineral and rail equipment markets. In addition, Harsco will now
have more exposure to the more-stable environmental services
market. The ratings also take into account Harsco's improved
financial profile and positive FCF balanced against the company's
moderate size and the need for ongoing investment to support
growth.
Improved FCF: Fitch expects Harsco to generate FCF of around $50
million-$60 million, or 3% of sales, in 2019 despite higher levels
of growth capex. Fitch expects Harsco's FCF will be used for
bolt-on acquisitions, opportunistic share repurchases and debt
reduction. The company does not pay dividends, which provides
flexibility to apply cash flow for other purposes. Fitch expects
FCF to remain positive going forward and that the company will
maintain disciplined cash deployment.
Growth Orientation: Harsco has returned to a focus on growth in its
environmental segment (formerly Metals and Minerals), with higher
capex to capitalize on growth opportunities over the medium term.
These opportunities include the potential for new contracts at
existing locations and with mills in China, India and other
emerging markets.
Business Recovering: Harsco's consolidated EBITDA margin improved
to 18.5% in 2018, though it is expected to narrow modestly in 2019
due to growth investments before expanding in 2020. The company's
largest segment, Harsco environmental (63% of 2018 revenues),
reported 6% revenue growth and slightly higher margins in 2018 due
to new contracts and higher steel output and service levels. The
industrial segment (22% of sales) generated healthy sales and
earnings growth in the period due primarily to a rebound in demand
for heat exchangers sold into the U.S. energy market. The rail
segment (16% of sales) also generated higher earnings in 2018.
DERIVATION SUMMARY
Harsco is a diversified manufacturer and service provider that
participates in a variety of end-markets, each of which has a
different set of competitors. Another diversified industrial in the
'BB' category is Trinity Industries, a manufacturer and lessor of
rail cars. When compared with Trinity's manufacturing operations,
Harsco has lower financial leverage and generates higher EBITDA
margins. Trinity also has a substantial railcar leasing business
that broadens its scale and helps to mitigate the cyclicality in
its railcar manufacturing operations. No country ceiling,
parent/subsidiary or operating environment aspects affect the
rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions within Its Rating Case for the Issuer
- The assumptions for 2019 assume the company's current mix of
businesses;
- Sales grow by around 12% in 2019, driven by a recovery in the
industrial and rail segments and continued mid-single-digit
growth in Harsco environmental;
- EBITDA margins are moderately lower in 2019 due to growth
investments;
- FCF is projected at around 3% of sales in 2019 despite higher
levels of growth capex;
- Debt/EBITDA is steady in the low-2.0x range, pro forma for
the announced transactions.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Harsco develops into a larger, more diversified operation with
less inherent cyclicality;
- Mid-cycle debt/EBITDA is sustained under 2.5x and funds from
operations (FFO)-adjusted leverage under 3.5x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Fitch's expectation that mid-cycle debt/EBITDA will remain
above 3.0x-3.5x, and FFO-adjusted leverage will remain above
4.0x-4.5x;
- Negative FCF on a sustained basis.
LIQUIDITY AND DEBT STRUCTURE
The planned senior unsecured notes will be guaranteed on a senior
unsecured basis by all of Harsco's wholly-owned U.S. subsidiaries
that guarantee the credit facility. As part of its planned
financing, Harsco plans to upsize its $500 million secured revolver
by $200 million and extend the maturity to June 2024.
Harsco's liquidity at March 31, 2019 was supported by cash of $85
million and a $500 million secured revolver maturing in November
2021, on which $351 million was available. Liquidity is also
supported by FCF, which is projected at around 3% of sales in
2019.
Harsco's debt structure as of March 31, 2019 consisted primarily of
$119 million drawn on the secured revolver and $540 million
outstanding on a secured term loan maturing in December 2024. The
collateral backing the credit facilities includes the capital stock
of each direct subsidiary (65% of stock of first-tier foreign
subsidiaries) and substantially all of the company's domestic
tangible and intangible assets. In addition, all of the company's
domestic, wholly owned restricted subsidiaries guarantee the
facilities.
HAVEN HEIGHTS: Online Auction Set to Begin on June 19
-----------------------------------------------------
The upcoming bankruptcy auction of the Haven Heights Subdivision is
expected to be one of the biggest real estate auctions in the
history of McDowell County, according to Will Lilly, of Iron Horse
Auction Company, which is marketing the land.
Iron Horse will conduct the online auction from June 19 to June 26
for the U.S. Bankruptcy Court for Western District of North
Carolina.
Properties offered include 77 platted home sites as well as land
for future development. "The home sites will be offered
individually, and the additional 56-acre parcel will sell as one
lot," said Mr. Lilly, who is hoping that the auction will lead to
new construction, providing a shot in the arm of the local
economy.
"Everybody loses when developed land sits idle. The dozen or so
families living in Haven Heights want to see it built out so they
can have neighbors and get their homeowners' association fully
established, and I wouldn't be surprised to see some of them
bidding. The upcoming auction will put the sites and land in the
hands of builders or future homeowners seeking to build homes for
themselves. This will create jobs and generate other economic
activity by creating demand for building materials, landscapers and
others. We could have scores of buyers, or one bidder could
purchase all of it," said Lilly.
While the bidding will be online, the auction company will also
have a bid center in the Marion Community Building, 191 North Main
Street. Inspection dates and times will be announced.
Bidding will take place at http://www.ironhorseauction.com/
beginning at 8:00 a.m. Wednesday, June 19, and begin to close 2:00
p.m. Wednesday, June 26. Those seeking additional information may
call 704-985-9300 or visit the Web site.
ICONIX BRAND: UBS Group Reports 6.9% Stake as of May 31
-------------------------------------------------------
In a Schedule 13D/A filed with the U.S. Securities and Exchange
Commission, UBS Group AG (for the benefit and on behalf of the UBS
Asset Management division of UBS Group AG) disclosed that as of May
31, 2019, it beneficially owns 804,799 shares of common stock of
Iconix Brand Group, Inc., which represents 6.95 percent of the
shares outstanding. A full-text copy of the regulatory filing is
available for free at:
https://is.gd/sieV3u
About Iconix Brand
Broadway, New York-based Iconix Brand Group, Inc. --
http://www.iconixbrand.com/-- is a brand management company and
owner of a diversified portfolio of over 30 global consumer brands
across the women's, men's, entertainment, home and international
segments. The Company's business strategy is to maximize the value
of its brands primarily through strategic licenses and joint
venture partnerships around the world, as well as to grow the
portfolio of brands through strategic acquisitions. As of Dec. 31,
2018, the Company's brand portfolio includes Candie's, Bongo, Joe
Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP,
Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet,
Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut &
Sew, Zoo York, Umbro, Lee Cooper, and Artful Dodger; and interests
in Material Girl, Ed Hardy, Truth or Dare, Modern Amusement,
Buffalo, Hydraulic, and PONY.
Iconix Brand incurred a net loss attributable to the Company of
$100.5 million for the year ended Dec. 31, 2018, following a net
loss attributable to the Company of $489.3 million for the year
ended Dec. 31, 2017. As of March 31, 2019, Iconix had $622.98
million in total assets, $715.6 million in total liabilities,
$29.84 million in redeemable non-controlling interest, and a total
stockholders' deficit of $122.46 million.
IMERYS TALC: U.S. Trustee Appoints New Rep for Donna Arvelo Estate
------------------------------------------------------------------
Andrew Vara, acting U.S. trustee for Region 3, on June 11 disclosed
in a court filing that he appointed Nolan Zimmerman as the new
estate representative for Donna Arvelo.
Ms. Arvelo was appointed on March 5 to serve on the official
committee of tort claimants in the Chapter 11 cases of Imerys Talc
America, Inc. and its affiliates.
As of June 11, the members of the tort claimants' committee are:
(1) Robin Alander
c/o W. Mark Lanier, Esq.
c/o Maura Kolb, Esq.
10940 West Sam Houston Pkwy N., Suite 100
Houston, TX 77064
Phone: 713-659-5200
Fax: 713659-2204
Email: wml@lanierlawfirm.com
Maura.kolb@lanierlawfirm.com.
(2) Nolan Zimmerman1
Representative of the estate
of Donna M. Arvelo
c/o Audrey Raphael, Esq.
Levy Konigsberg LLP
800 Third Ave., 11th Floor
NY, NY 10022
Phone: 212-605-6206
Fax: 212-605-6290
Email: ARaphael@LevyLaw.com
(3) Christine Birch
c/o Wendy M. Julian, Esq.
Gori Julian & Assocs, P.C.
156 N. Main Street
Edwardsville, IL 62025
Phone: 618-659-9833
Fax: 618-659-9834
Email: randy@gorijulianlaw.com
(4) Bessie Dorsey-Davis
c/o Amanda Klevorn, Esq.
Burns Charest LLP
365 Canal Street, Suite 1170
New Orleans, LA 70130
Phone: 504-799-2845
Fax: 504-8811765
Email: aklevorn@burnscharest.com
(5) Lloyd Fadem
Representative of the estate
of Margaret Ferrell
c/o Steve Baron, Esq.
Baron & Budd, P.C.
3102 Oak Lawn Ave., Ste 1100
Dallas, TX 75219
Phone: 214-521-3605
Fax: 214-520-1181
Email: sbaron@baronbudd.com
(6) Timothy R. Faltus
Representative of the estate
of Shari C. Faltus
c/o James G. Onder, Esq.
OnderLaw, LLC
110 E. Lockwood, 2d Floor
St. Louis, MO 63119
Phone: 314-963-9000
Fax: 314-963-1700
Email; Onder@onderlaw.com
(7) Deborah Giannecchini
c/o Ted G. Meadows, Esq.
Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.
P.O. Box 4160
Montgomery, AL 36103
Phone: 334-2692342
Fax: 334-954-7555
Email: Ted.Meadows@beasleyallen.com.
(8) Kayla Martinez
c/o Leah Kagan, Esq.
Simon Greenstone Panatier, P.C.
1201 Elm Street, Suite 3400
Dallas, Texas 75270
Phone: 214-276-7680
Fax: 214-276-7699
Email: lkagan@sgptrial.com.
(9) Lynne Martz
c/o Ashcraft & Gerel, LLP
1825 K Street, NW, Suite 700
Washington, D.C. 20006
Phone: 202-783-6400
Fax: 202-416-6392
Email: mparfitt@ashcraftlaw.com
(10) Nicole Matteo
c/o Christopher Placitella, Esq.
127 Maple Ave.
Red Bank, N.J. 07701
Phone: 732-747-9003
Fax: 732-747-9004
Email: cplacitella@cprlaw.com
(11) Charvette Monroe
Representative of the estate
of Margie Evans
c/o John R. Bevis, Esq.
31 Atlanta Street
Marietta, GA 30060
Phone: 770-227-6755
Fax: 770227-6373
Email: bevis@barneslawgroup.com
About Imerys Talc America
Imerys Talc and its subsidiaries --
https://www.imerys-performance-additives.com/ -- are in the
business of mining, processing, selling, and distributing talc.
Talc is a hydrated magnesium silicate that is used in the
manufacturing of dozens of products in a variety of sectors,
including coatings, rubber, paper, polymers, cosmetics, food, and
pharmaceuticals. Its talc operations include talc mines, plants,
and distribution facilities located in: Montana (Yellowstone,
Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas
(Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet).
It also utilizes offices located in San Jose, California and
Roswell, Georgia.
Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc
Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13,
2019.
The Debtors estimated $100 million to $500 million in assets and
$50 million to $100 million in liabilities as of the bankruptcy
filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Richards, Layton & Finger, P.A., and Latham &
Watkins LLP as counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Prime Clerk LLC as claims agent.
INVERSIONES CARIBE: Unsecured Creditors to Get 5% in 60 Months
--------------------------------------------------------------
Inversiones Caribe Delta, Inc., filed a Chapter 11 Plan and
accompanying disclosure statement proposing that general unsecured
claims, classified in Class 7, which total amount $139,670, will be
paid a 5% dividend of their allowed claim in a term of 60
consecutive months, commencing on the Effective Date. This class is
impaired.
Class 3 - Secured Creditor CRIM - Ponce Property. This class shall
consist of the allowed secured claim of CRIM on account of the
Ponce commercial property. The Debtor listed CRIM as a secured
creditor on account of the property taxes over the Ponce real
estate property in the total amount of $240,160.19. CRIM filed
Proof of Claim No. I with a claim in the total amount
of$388,636.84 with a secured portion of $134,018.74. CRIM asserts
that this claim includes $6,859.67 as the secured portion relating
to the Ponce property. The Debtor is reconciling CRIM's claim in
order to determine the correct amount owed. Any and all allowed
claims under this class will be paid on or before 60 months from
the date of relief, in monthly payments including interest at the
prevailing prime rate. This class is impaired.
Class 4 - Secured Creditor CRIM - Dorado Property. This class shall
consist of the allowed secured claim of CRIM on account of the
Dorado commercial property. The Debtor listed CRIM as a secured
creditor on account of the property taxes over the Ponce real
estate property in the total amount of $240,160.19. CRIM filed
Proof of Claim No. I with a claim in the total amount of
$388,636.84 with a secured portion of$ 134,018.74. CRIM asserts
that this claim includes $ 127,149.07 as the secured portion
relating to the Dorado property for the periods of 2009-2019.
Nevertheless, the Debtor since 2016 has a real estate property tax
exemption due to its historical monument decree. The patties are
reconciling the allowed amounts of CRIM's secured claim. Any and
all allowed claims under this class will be paid on or before 60
months from the date of relief, in monthly payments including
interest at the prevailing prime rate. This class is impaired.
Class 8 - Equity Security and/or Other Interest Holders. This
class includes all equity and interest holders who are the owners
of the stock of the Debtor. This class shall not receive a dividend
under the Plan and is not entitled to vote.
The proposed plan will be funded with Debtor's own assets, the
collection of any account receivables, the Debtor's cash in bank,
funds from the Debtor's post petition operations and if Condado
accepts the alternative treatment of payment on the Effective Date,
a post petition financing in the amount of $5,000,000.
A full-text copy of the Disclosure Statement dated May 29, 2019, is
available at https://tinyurl.com/y24oxfcg from PacerMonitor.com at
no charge.
Attorney for the Debtor is Carmen D. Conde Torres, in San Juan,
Puerto Rico.
About Inversiones Caribe
Inversiones Caribe owns a parcel of land in Dorado, Puerto Rico,
which is valued at $6 million, and a commercial property in Ponce,
Puerto Rico, which is valued at $1.4 million.
Inversiones Caribe Delta filed a Chapter 11 petition (Bankr. D.P.R.
Case No. 19-00388) on Jan. 29, 2019. In the petition signed by
Carlos F. Muratti, president, the Debtor disclosed $7,415,061 in
assets and $3,619,549 in liabilities. The case has been assigned
to Judge Brian K. Tester. Carmen D. Conde Torres, Esq., at C.
Conde & Assoc., is the Debtor's counsel.
JAGUAR HEALTH: Registers 13,782 Shares for Possible Resale
----------------------------------------------------------
Jaguar Health, Inc. filed a Form S-1 registration statement with
the Securities and Exchange Commission relating to the offering
offering on a resale basis from time to time an aggregate of up to
13,782 shares of voting common stock, par value $0.0001 per share,
of Jaguar Health, Inc. by Oasis Capital, LLC, Pacific Capital
Management, LLC, and Charles Conte. Of these shares, (i) 1,071
shares are outstanding shares of Common Stock and (ii) 12,711
shares are shares of Common Stock issuable upon exercise of
warrants. The Company is not selling any shares of Common Stock
under this prospectus and will not receive any of the proceeds from
the sale by the Selling Stockholders of the Common Stock. The
Company will, however, receive the net proceeds of any warrants
exercised for cash.
The Selling Stockholders or their pledgees, assignees or successors
in interest may sell or otherwise dispose of the Common Stock
covered by this prospectus in a number of different ways and at
varying prices.
The Company will pay all expenses (other than discounts,
concessions, commissions and similar selling expenses) relating to
the registration of the Common Stock with the Securities and
Exchange Commission.
Jaguar Health's common stock is listed on the NASDAQ Capital
Market, under the symbol "JAGX." On June 7, 2019, the last
reported sale price of its Common Stock on the NASDAQ Capital
Market was $9.10 per share.
A full-text copy of the prospectus is available for free at:
https://is.gd/PiCUdK
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
Its wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on
developing and commercializing proprietary human gastrointestinal
pharmaceuticals for the global marketplace from plants used
traditionally in rainforest areas. Jaguar Health's principal
executive offices are located in San Francisco, California.
Jaguar Health reported a net loss of $32.14 million for the year
ended Dec. 31, 2018, compared to a net loss of $21.96 million for
the year ended Dec. 31, 2017. As of March 31, 2019, Jaguar Health
had $40.66 million in total assets, $24.86 million in total
liabilities, $9 million in series A convertible preferred stock,
and $6.79 million in total stockholders' equity.
BDO USA, LLP, in San Francisco, California, the Company's auditor
since 2013, issued a "going concern" opinion in its report dated
April 10, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company has
suffered recurring losses from operations and an accumulated
deficit that raise substantial doubt about its ability to continue
as a going concern.
JAGUAR HEALTH: Registers 473,565 Shares for Possible Resale
-----------------------------------------------------------
Jaguar Health, Inc. filed a Form S-1 registration statement with
the Securities and Exchange Commission relating to the offering by
Sagard Capital Partners, L.P. on a resale basis from time to time
an aggregate of up to 473,565 shares of voting common stock, par
value $0.0001 per share, of Jaguar Health issuable upon conversion
of 5,524,926 shares of the Company's Series A Convertible
Participating Preferred Stock purchased pursuant to a securities
purchase agreement by and among the Company and the Selling
Stockholder, dated March 23, 2018. The Company is not selling any
shares of Common Stock under this prospectus and will not receive
any of the proceeds from the sale by the Selling Stockholder of the
Common Stock.
The Selling Stockholder or its pledgees, assignees or successors in
interest may sell or otherwise dispose of the Common Stock covered
by this prospectus in a number of different ways and at varying
prices.
The Company will pay all expenses (other than discounts,
concessions, commissions and similar selling expenses) relating to
the registration of the Common Stock with the Securities and
Exchange Commission.
The Company's common stock is listed on the NASDAQ Capital Market,
under the symbol "JAGX." On June 7, 2019, the last reported sale
price of its Common Stock on the NASDAQ Capital Market was $9.10
per share.
A full-text copy of the prospectus is available for free at:
https://is.gd/YrAAzK
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
Its wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on
developing and commercializing proprietary human gastrointestinal
pharmaceuticals for the global marketplace from plants used
traditionally in rainforest areas. Jaguar Health's principal
executive offices are located in San Francisco, California.
Jaguar Health reported a net loss of $32.14 million for the year
ended Dec. 31, 2018, compared to a net loss of $21.96 million for
the year ended Dec. 31, 2017. As of March 31, 2019, Jaguar Health
had $40.66 million in total assets, $24.86 million in total
liabilities, $9 million in series A convertible preferred stock,
and $6.79 million in total stockholders' equity.
BDO USA, LLP, in San Francisco, California, the Company's auditor
since 2013, issued a "going concern" opinion in its report dated
April 10, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company has
suffered recurring losses from operations and an accumulated
deficit that raise substantial doubt about its ability to continue
as a going concern.
JC FAMILY SERVICES: Unsecureds to Get 25% Distribution Under Plan
-----------------------------------------------------------------
JC Family Services, Inc., filed a small business disclosure
statement in support of a chapter 11 plan of reorganization dated
May 31, 2019.
Since 2013, the Debtor has been in the business of operating group
home housing for severely mentally ill youth and adults in Washoe
County, Nevada. Debtor currently has nine group homes in the Reno
and Sparks area.
General unsecured creditors under the plan are classified in Class
3 and will receive a distribution of 25% of their allowed claims.
The plan proponent's financial projection show that the Debtor will
have an aggregate annual average cash flow after paying operating
expenses and post-confirmation taxes of $132,000. The final plan
payment is expected to be paid on Sept. 25, 2023.
A copy of the Disclosure Statement dated May 31, 2019 is available
at https://tinyurl.com/y38oycl4 from Pacermonitor.com at no charge.
JC Family Services
JC Family Services, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. D. Nev. Case No. 18-51077) on Sept. 26, 2018, disclosing
under $1 million in assets and liabilities. The Debtor is
represented by Kevin A. Darby, Esq., at Darby Law Practice, LTD.
JOHNSON PUBLISHING: Hilco to Hold Mid-July Auction for Assets
-------------------------------------------------------------
Hilco Streambank, a leading intellectual property advisory firm
specializing in the valuation and sale of intangible assets, has
been hired by Miriam R. Stein, the chapter 7 trustee of Johnson
Publishing, LLC, to run the sale process for Johnson Publishing's
historic photography and media archive, which includes more than 4
million images and thousands of hours of video and music footage
dating back to 1948. The archive was appraised at $46 million in
2015.
The sale process has commenced, with an auction to be held in
mid-July 2019, subject to approval of the Bankruptcy Court. More
information regarding the opportunity is available at
https://is.gd/x4jxlG
Gabe Fried, CEO of Hilco Streambank, said, "There has been a great
deal of interest in this significant collection of visual assets
for months now, with interested parties ranging from large
corporations, family offices and estates, celebrities, sports
figures, museums and private collectors."
Mr. Fried indicated that Hilco Streambank will soon advise
interested parties of details regarding the bid deadline and
auction date following approval by the bankruptcy court, with a
live auction likely to be held in Chicago in mid-July. He said,
"we've already been getting offers for the collection as well as
calls from many interested parties who would love to see these
assets end up in good hands or in a museum which would make them
available to the public." Mr. Fried indicated that he and his team
are prepared to arrange for pre-qualified buyers to view the iconic
assets, which are housed in Chicago, prior to the bid deadline.
Johnson Publishing, which filed for bankruptcy on April 9, 2019,
previously owned and published the storied Ebony and Jet magazines.
The two publications are known to have visually captured African
American life for decades, having featured historic photos that
reflect the African American experience at a pivotal time in the
nation's history, from the post-war, pre-civil rights era through
the end of the 20th century.
Mr. Fried said, "The sale represents a unique opportunity to
purchase an unmatched, comprehensive collection of historically
significant photographs."
The collection includes photographs of Dr. Martin Luther King Jr.,
Sammy Davis Jr., Diana Ross, Nat "King" Cole, Muhammad Ali, Jackie
Robinson, Prince and Stevie Wonder.
Top subject matters covered by the collection include church,
television, sports, food and fashion. Many of the photographs that
comprise the archive graced the pages of Ebony and Jet
publications. The collection includes 3.35 million negatives and
slides, 983,000 photographs, 9,000 audio/visual items, and 166,000
contact sheets.
Hilco Streambank CEO Gabe Fried said, "The buyer of this archive
has a once-in-a-lifetime opportunity to acquire one of the most
unique and important collections documenting African American
history ever to come to market."
Parties interested in the archive assets or learning more about the
sale process should visit https://is.gd/x4jxlG or contact Hilco
Streambank directly using the contact information provided below.
Gabe Fried
CEO – Hilco Streambank
gfried@hilcoglobal.com
617.458.9355
Richelle Kalnit
Senior Vice President – Hilco Streambank
rkalnit@hilcoglobal.com
212.993.7214
Ben Kaplan
Associate – Hilco Streambank
bkaplan@hilcoglobal.com
646.651.1978
About Hilco Streambank
Hilco Streambank -- http://www.hilcostreambank.com/-- is one of
the foremost authorities on intellectual property asset valuation
and monetization. Acting as an agent or principal, Hilco
Streambank advises upon and executes strategies for both healthy
and distressed clients seeking to maximize the value of their
intellectual property assets including brands, trademarks, domain
names, patents, copyrights, IPv4 addresses, and customer lists.
Hilco Streambank has established itself as the premier intermediary
in the consumer brand, internet and telecom communities with
successes in publicly reported Chapter 11 bankruptcy cases, private
transactions, and online sales through IPv4.Global. Hilco
Streambank is part of Northbrook, Illinois based Hilco Global --
http://www.hilcoglobal.com-- the world's leading authority on
maximizing the value of business assets by delivering valuation,
monetization and advisory solutions to an international
marketplace. Hilco Global operates more than twenty specialized
business units offering services that include asset valuation and
appraisal, retail and industrial inventory acquisition and
disposition, real estate and strategic capital equity investments.
LA VINAS MD: Seeks to Hire Kelley Fulton as Legal Counsel
---------------------------------------------------------
L.A. Vinas, M.D., P.A., seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to hire Kelley, Fulton &
Kaplan, P.L. as its legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include legal advice regarding its powers
and duties under the Bankruptcy Code; negotiation with its
creditors; and the preparation of a bankruptcy plan.
The firm has agreed to represent the Debtor at the
reduced hourly rate of $450. The retainer fee is $22,500, which
includes the filing fee of $1,717.
Kelley Fulton does not represent any interest adverse to the
Debtor, according to court filings.
The firm can be reached through:
Dana L. Kaplan, Esq.
Kelley, Fulton & Kaplan, P.L.
1665 Palm Beach Lakes Blvd #1000
W. Palm Beach, FL 33401
Tel: 561-491-1200
Fax: 561-684-3773
Email: dana@kelleylawoffice.com
About L.A. Vinas
Based in West Palm Beach, Florida, L.A. Vinas, M.D., P.A. owns
plastic surgery, med spa & skin care centers. It offers breast
augmentation, body contouring, liposuction, breast lift, face lift,
gynecomastia, tummy tuck, facial, and butt lift services. The
Company previously sought bankruptcy protection on April 17, 2017
(Bankr. S.D. Fla. Case No. 17-14765).
L.A. Vinas, M.D., P.A. filed a Chapter 11 petition (Bankr. S.D.
Tex. Case No.: 19-17065) on May 29, 2019. The petition was signed
by Luis A. Vinas, M.D., president. At the time of the filing, the
Debtor estimated $0 to $50,000 in assets and $1 million to $10
million in liabilities. Judge Erik P. Kimball oversees the case.
Kelley, Fulton & Kaplan, P.L., is the Debtor's legal counsel.
LANDS' END: Moody's Alters Outlook on B3 CFR to Positive
--------------------------------------------------------
Moody's Investors Service affirmed Lands' End, Inc.'s B3 Corporate
Family Rating, B3-PD Probability of Default Rating, and B3 senior
secured term loan due 2021. At the same time Moody's downgraded the
company's Speculative Grade Liquidity rating to SGL-2 from SGL-1.
The outlook has been changed to positive from stable.
"The affirmation of Lands' End's ratings and change to a positive
outlook reflects the company's ongoing credit metric improvement,
driven in large part by a material strengthening in operating
performance over the last few years and recently hastened by a
voluntary $100 million prepayment on its term loan using balance
sheet cash," said Brian Silver, Moody's lead analyst for Lands'
End. "However, Lands' End's liquidity has recently weakened, in
part because the debt repayment was funded with cash, but also
because the term loan due April 2021 maturity is approaching, and
the company must successfully refinance at reasonable rates in a
difficult market environment for retail companies, which if
successful would likely lead to upward rating pressure."
Affirmations:
Issuer: Lands' End, Inc.
Probability of Default Rating, at B3-PD
Corporate Family Rating, at B3
Senior Secured Term Loan, at B3 (LGD4)
Downgrades:
Issuer: Lands' End, Inc.
Speculative Grade Liquidity Rating, Downgraded to SGL-2
from SGL-1
Outlook Actions:
Issuer: Lands' End, Inc.
Outlook, Changed to Positive from Stable
RATINGS RATIONALE
Lands' End, Inc.'s ratings are constrained by the highly
promotional, potentially volatile, and evolving specialty apparel
market in which the company competes, as well as its moderate
Moody's-adjusted leverage and interest coverage of 5.2 times
debt-to-EBITDA and 1.2 times EBIT-to-interest, respectively. The
company also faces refinancing risk associated with the April 2021
maturity of its term loan. Lands' End's topline and profitability
are subject to uneven order patterns from its Outfitters business
(uniforms), and revenue continues to face headwinds from the
ongoing but largely completed closure of its stores that are
located within Sears stores. Lands' End also is subject to
execution risk from its retail store expansion initiative.
However, Lands' End benefits from its large concentration in the
e-commerce segment, which positions it well to capitalize on
continued growth in online apparel spending. The company also
benefits from its good liquidity profile over the next twelve
months supported by its expectation for positive free cash flow
generation, moderate cash balances, and healthy revolver
availability. Lands' End also has a well-recognized brand name and
the positive momentum in its operating performance over the last
few years is expected to continue.
The positive outlook reflects Moody's expectation that Lands' End
will continue to gradually strengthen its credit metrics and
improve its leverage toward the 4.5 times range over the next 12-18
months. It also incorporates Moody's expectation the company will
successfully refinance its term loan in advance of its April 2021
maturity.
The ratings could be upgraded if the company continues to grow its
topline and improve its EBIT margins, sustains its debt-to-EBITDA
below 6.5 times, sustains its EBIT-to-interest above 1.4 times, and
maintain at least a good liquidity profile prior to upward rating
consideration. The company would also have to successfully
refinance its term loan at a reasonable interest rate.
Alternatively, the ratings could be downgraded if debt-to-EBITDA is
approaches 8 times, EBIT-to-interest is sustained below 1 time, or
if there is a significant deterioration in the company's liquidity
for any reason.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
Headquartered in Dodgeville, Wisconsin, Lands' End Inc. (Nasdaq:
LE) is a leading multi-channel retailer of casual clothing,
accessories, footwear and home products. The company offers
products online at both US and international Lands' End websites,
on third party online marketplaces, as well as through 39 Lands'
End Shops at Sears and 21 company operated stores. ESL Investments,
Inc. and its investment affiliates, including Edward S. Lampert,
owned 64.8% of the company's outstanding stock. Revenue for the
twelve month period ended May 3, 2019 was approximately $1.41
billion.
LASALLE GROUP: Seeks to Hire Crowe & Dunlevy as Legal Counsel
-------------------------------------------------------------
The LaSalle Group, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to hire Crowe & Dunlevy,
P.C., as its legal counsel.
The firm will provide services to the company and its affiliates in
connection with their Chapter 11 cases, which include legal advice
regarding their powers and duties under the Bankruptcy Code;
prosecution of actions to protect their estates; and representation
in corporate and litigation matters.
Crowe & Dunlevy's hourly rates are:
Shareholders/Directors $370 - $545
Associates $220 - $285
Paraprofessionals $150 - $200
Prior to the petition date, the Debtors paid Crowe & Dunlevy the
sum of $425,000.
Vickie Driver, Esq., a Crowe & Dunlevy director, disclosed in court
filings that the firm is "disinterested" as defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Vickie L. Driver, Esq.
Christina W. Stephenson, Esq.
Christopher M. Staine, Esq.
Spaces McKinney Avenue
1919 McKinney Avenue, Suite 100
Dallas, TX 7501
Telephone: 214.420.2163
Facsimile: 214.736.1762
Email: vickie.driver@crowedunlevy.com
Email: christina.stephenson@crowedunlevy.com
Email: christopher.staine@crowedunlevy.com
About LaSalle Group
The LaSalle Group, Inc., along with certain of its subsidiaries,
designs, develops, builds, and owns interests in memory care
assisted living communities designed specifically for people with
Alzheimer's and other forms of dementia. The communities operate
under the name Autumn Leaves.
LaSalle is a holding company for numerous wholly owned, non debtor
subsidiaries and affiliates. It directly and indirectly owns
interests in 40 memory care assisted living communities located in
Texas, Illinois, Georgia, Florida, Kansas, Missouri, Oklahoma,
South Carolina, and Wisconsin.
LaSalle and its subsidiaries sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 19-31484) on
May 2, 2019. At the time of the filing, the Debtors estimated
assets of between $10 million and $50 million and liabilities of
the same range.
The cases are assigned to Judge Stacey G. Jernigan.
The Debtors tapped Crowe & Dunlevy, P.C., as their legal counsel,
and Donlin, Recano & Company, Inc. as their claims and noticing
agent.
LIFECARE HOLDINGS: Physicians Realty Provides Update on Exposure
----------------------------------------------------------------
Physicians Realty Trust, a self-managed healthcare real estate
investment trust, is providing this update as to its financial
exposure to LifeCare Holdings, LLC, which, along with several
related entities, filed for Chapter 11 bankruptcy on May 6, 2019 in
order to facilitate a sale process under bankruptcy protection.
The U.S. Bankruptcy Trustee appointed a representative of
Physicians Realty Trust to the Official Committee of Unsecured
Creditors in relation to the bankruptcy process.
LifeCare operates 17 properties across the United States, including
three properties owned by the Company. The Company's assets,
located in Plano, Texas; Fort Worth, Texas; and Pittsburgh,
Pennsylvania, are subject to a single master lease. Annualized
base revenue attributable to the master lease totals $4.5 million,
representing 1.6% of the Company's annualized base revenue as of
March 31, 2019. Straight-line rent receivable balances
attributable to the master lease as of March 31, 2019 total $3.3
million. The Company has not received contractually-owed rent for
April and May 2019, representing an aggregate $0.8 million. Lease
coverage, excluding management fees, for the three assets owned by
the Company was 2.1x for the trailing twelve-month period ending
March 31, 2019.
The Company will continue to closely monitor any developments with
the intention of obtaining the best possible resolution on behalf
of our shareholders.
About Physicians Realty Trust
Physicians Realty Trust is a self-managed healthcare real estate
company organized to acquire, selectively develop, own and manage
healthcare properties that are leased to physicians, hospitals and
healthcare delivery systems. The Company invests in real estate
that is integral to providing high quality healthcare. The Company
conducts its business through an UPREIT structure in which its
properties are owned by Physicians Realty L.P., a Delaware limited
partnership (the "operating partnership"), directly or through
limited partnerships, limited liability companies or other
subsidiaries. The Company is the sole general partner of the
operating partnership and, as of March31, 2019, owned approximately
97.3% of OP units.
About LifeCare
Headquartered in Plano, Texas, and founded in 1992, LifeCare
Holdings LLC and its subsidiaries --
https://www.lifecarehealthpartners.com/ -- are operators of
long-term acute care hospitals. LifeCare provides clinical
services to patients with serious and complicated illnesses or
injuries requiring extended hospitalization. LifeCare operate a
49-bed behavioral health hospital in Pittsburgh, Pennsylvania as
well as three out-patient wound care centers located within its
Plano, Texas, Fort Worth, Texas and Dallas Texas hospitals. As of
the Petition Date, the Debtors operate 17 facilities in nine
states.
LifeCare Holdings LLC and its affiliates sought Chapter 11
protection on May 6, 2019. The lead case is In re Hospital
Acquisition LLC (Bankr. D. Del. Lead Case No. 19-10998).
LifeCare estimated $100 million to $500 million in assets and the
same range of liabilities as of the bankruptcy filing.
The Debtors tapped AKIN GUMP STRAUSS HAUER & FELD LLP as counsel;
YOUNG CONAWAY STARGATT & TAYLOR, LLP, as local counsel; HOULIHAN
LOKEY, INC., as financial advisor; BRG CAPITAL ADVISORS LLC as
investment banker; and PRIME CLERK LLC as claims agent.
MAINEGENERAL HEALTH: Fitch Affirms 'BB' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed MaineGeneral Health's Issuer Default
Rating at 'BB' and approximately $280 million outstanding series
2011 revenue bonds issued by the Maine Health and Higher
Educational Facilities Authority on behalf MGH at 'BB'.
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a pledge of gross receipts, mortgage on
certain obligated group property and a debt service reserve fund.
ANALYTICAL CONCLUSION
The ratings and Outlook primarily reflect Fitch's expectation that
MGH will maintain a stable, albeit weaker, net leverage profile
under a moderate economic stress case scenario, highlighting MGH's
current sensitivity to a potential stress event. The rating also
reflects Fitch's expectations for sustained operational
improvements over the next five fiscal years, moderate future
capital needs and maintenance of a 'midrange' revenue defensibility
assessment, characterized by leading market share and gross patient
revenues that are not heavily reliant on Medicaid and self-pay.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'; Leading Market Share, Mixed Service
Area Demographics
MGH's revenue defensibility is midrange, indicating low
Medicaid/self-pay as a percentage of revenue, a strong statewide
market share and mixed, but stable service area demographics.
Maine's certificate of need (CON) regulations limit significant
competitive activity, supporting Fitch's expectation that MGH's
market position will remain stable.
Operating Risk: 'a'; Expectations for Stabilized Operations at
Improved Levels; Moderate Capital Needs
MGH met Fitch's expectations to sustain improved profitability,
posting operating EBITDA margins of 8.4% in fiscal 2018 (FYE June
30) and 7.5% in the first nine months of fiscal 2019, following the
implementation of a financial improvement plan to address a very
weak 5.7% operating EBITDA margin in fiscal 2017. Over the next
five fiscal years, Fitch expects MGH's operations will stabilize at
levels that are consistent with its recent performance. MGH's
average age of plant increased in fiscal 2018, due primarily to a
change in its accounting for depreciation expense, but Fitch still
considers it to have very low capital expenditure needs, following
the opening of a replacement hospital and other significant
renovations in 2013 and 2014. Fitch expects MGH's capital
expenditures to average an adequate 89% of depreciation expense
over the next five fiscal years, further supporting expectations
for moderate lifecycle capital investment needs.
Financial Profile: 'bb'; Stable, but Weaker Net Leverage under
Stress Case Scenario
Despite a fairly high degree of portfolio sensitivity, Fitch
expects MGH's leverage ratios to remain relatively stable through
the stress case scenario, albeit at weaker levels that are
currently more consistent with a 'bb' financial profile assessment.
MGH's liquidity profile, characterized by improved debt service
coverage levels, adequate days cash on hand (DCOH) and access to
external liquidity sources through an investment-grade rated
financial institution, is neutral to the assessment of its
financial profile and supports the existing 'BB' rating.
Asymmetric Additional Risk Considerations
No asymmetric risk considerations were applied in the rating
determination.
RATING SENSITIVITIES
SUSTAINED OPERATIONAL IMPROVEMENTS: MGH's long-term rating could be
upgraded if operating results stabilize at Fitch's base case
expectation level, resulting in cash-to-adjusted debt and net
adjusted debt-to-adjusted EBITDA ratios that are more consistent
with a rating at the higher end of the below-investment grade
category in the stress case scenario, and more resilient to a
potential stress event. While not expected at this time,
particularly given fiscal 2018's improved operations, a sustained
deterioration in MGH's expected operating trajectory, would have a
commensurate negative effect on its unrestricted cash and
investment levels in Fitch's stress case scenario, potentially
signaling a lower rating.
CREDIT PROFILE
MGH is the third-largest health system in Maine, operating 192
licensed beds in Augusta and another healthcare center in
Waterville (20 miles north of Augusta), along with a full range of
primary, secondary and tertiary services and a 212-member employed
physician network. MGH also owns and operates long term care
facilities and a retirement community with independent and assisted
living services.
Revenue Defensibility
MGH's payor mix is heavily weighted toward governmental payors,
with just over 61% of gross revenues coming from Medicare and
Medicaid in fiscal 2018. However, this ratio has been relatively
stable over the past five fiscal years. Medicaid and self-pay
combined were at 16.6% of MGH's gross revenues in fiscal 2018 and
the nine months ended March 31, 2019, well below Fitch's 25%
threshold.
In January, Maine moved forward with Medicaid expansion retroactive
to an effective date of July 2, 2018, which was the date this
measure was approved by voters via referendum. MGH estimates that
approximately one-third of expected new enrollees in the state have
enrolled in Medicaid to date (approximately 20,000 enrolled out of
70,000 expected) and anticipates enhanced reimbursement of
approximately $1.5 million from Medicaid in fiscal 2019. Fitch
expects Medicaid expansion to have a neutral effect on MGH's
revenue source characteristics, as increases in Medicaid payor mix
should be offset by a commensurate decline in self-pay.
MGH maintains a stable and strong market position, which had
historically been about 60% of inpatient admissions from its
primary service area (PSA). In fiscal 2017, MGH began utilizing a
broader comparison of market share from the statewide Maine
Hospital Association (MHA) dataset, which is not zip code specific
and therefore cannot be narrowed to the PSA.
The MHA dataset reflects MGH as capturing approximately 8.0% of
statewide total adjusted discharges in 2018, giving it leading
statewide market share as the third largest hospital in Maine,
after Maine Medical Center (MMC, part of Portland-based
MaineHealth), located about 55 miles south, capturing 22.8% of
statewide adjusted discharges and Eastern Maine Medical Center
(EMMC, part of Bangor-based Eastern Maine Health System), located
about 75 miles northeast, capturing 15.7% of statewide adjusted
discharges. Neither MMC, nor EMMC is located in MGH's PSA.
MGH's nearest competitor in its PSA is 48-bed Inland Hospital (also
part of Eastern Maine Health System), located about 16 miles north
of Augusta in Waterville, which captured well below half of MGH's
market share at only 1.3% of statewide adjusted discharges in
2018.
Fitch expects MGH's market share to remain stable, reinforced by
its replacement facility, as well as success in expanding its
medical staff and outpatient service lines. Moreover, Maine's CON
program, which regulates beds, major medical equipment, capital
expenditures, new health services and other related projects,
reduces the potential for new competition, supporting Fitch's
expectations for stability in MGH's market position.
MGH's PSA is defined as Kennebec County, which includes the state
capital of Augusta. Overall service area economic and demographic
characteristics are mixed, but stable, with lower than average
unemployment, flat population growth, and below-average income
levels supporting expectations for relative stability in MGH's
payor mix.
Operating Risk
MGH met Fitch's expectations to sustain improved margins during
fiscal 2018, following weaker than average performance in fiscal
2017. MGH's operating EBTIDA margin improved to 8.4% in fiscal 2018
from a very weak 5.7% in fiscal 2017, due to continued
implementation of its financial improvement plan. In turn, its
five-year average operating EBITDA margin improved to 7.2% in
fiscal 2018 from 6.9% in fiscal 2017.
Fitch's longer range expectations are for MGH's operating
performance to stabilize at this improved level, resulting in
operating EBITDA and EBITDA margins that are expected to average
about 8.6% and 9.4%, respectively, over the next five fiscal years.
Fitch bases these expectations on the structural nature of MGH's
cost containment measures implemented as part of its financial
improvement plan, which position the organization to sustain
operational improvements over the longer term. In addition, Fitch
expects MGH to experience consistent revenue growth, based on its
continued success in growing its medical staff, volume gains in
both outpatient services and general and specialty surgical
procedures and recent enhancements to its revenue cycle, which
improved MGH's days in accounts receivable to 54.8 through the
first nine months of fiscal 2019 from 68.1 in fiscal 2017.
Capital Expenditures
MGH opened a replacement hospital in Augusta in November 2013 and
completed significant renovations to its Thayer outpatient campus
in Waterville in 2014. The completion of these two projects
resulted in a significant decline in MGH's average age of plant to
8.1 years in fiscal 2017, from 11.0 years at the end of fiscal
2013. MGH's average age of plant increased to 11.2 years in fiscal
2018; however management reports that this increase largely
reflects a change in accounting for the average useful life of its
depreciable assets, which lowered its depreciation expense. Despite
this elevated ratio, Fitch still considers MGH to have moderate
lifecycle capital needs, given that its replacement hospital is
relatively new (less than six years old).
Fitch expects MGH's annual capital expenditures to average about
89% of depreciation expense over the next five fiscal years. In
Fitch's view, this level of capital spending is adequate to
maintain MGH's clinical outcomes and underscores expectations for
moderate lifecycle capital investment needs at its relatively new
facilities. Planned capital projects in the near-term are primarily
expected to comprise IT investment -- implementing software
solutions for MGH's Finance and HR departments, as well as its
population health management initiatives and aligning its inpatient
and outpatient EHR systems on the same platform (Allscripts SCM).
MGH has no new largescale physical plant projects or additional
debt planned at this time.
Financial Profile
MGH's liquidity position has historically been very light, with
cash-to-adjusted debt of 43.7% and net-adjusted-debt-to-adjusted
EBITDA (NADAE) of 3.5x at June 30, 2018. MGH's adjusted debt
totaled $329.2 million as of fiscal year-end 2018, including
approximately $297 million of long-term debt (including about $2.4
million in capital leases), the debt equivalent (5x) of
approximately $5.3 million in operating lease expense and exposure
to a liability under its defined benefit pension plan, which was
79% funded as of fiscal year-end 2018. MGH's defined benefit
pension plan has been frozen since Dec. 31, 2004 and is not
accruing additional liabilities.
The base case reflects Fitch's expectations for operating
performance over the next five fiscal years, resulting in improving
cash flow and gradual liquidity accretion. Cash to adjusted debt
begins at 49% as of fiscal 2019 year-end and gradually improves to
72% in year five of the base case scenario. NADAE begins at 2.8x
and improves to 1.2x, again showing solid cash accretion through
the base case, which also incorporates Fitch's baseline
expectations for capital expenditures.
Based on Fitch's FAST scenario analysis, MGH's capital-related
ratios should remain consistent with a 'bb' assessment of its
financial profile, assuming the organization is able to sustain
cash flow margins in line with Fitch's base case expectations and
given its midrange revenue defensibility. Cash to adjusted debt
declines incrementally as it is subjected to a period of economic
and operational stress, falling to a low 33% by year two of the
stress case scenario, but then recovers modestly to 36% in year
five, supporting the existing 'BB' rating.
The stress case scenario applies Fitch's standard stress to its
base case expectations for revenue and expenditure growth. However,
Fitch believes that MGH retains a fair degree of flexibility to
limit non-routine capital spending, in light of its relatively new
facilities, and therefore incorporates an assumption that MGH would
scale back its capital expenditures by approximately 25% in years
two and three of the stress case scenario.
MGH's asset allocation exhibits a relatively high degree of
sensitivity to an economic downturn, with the portfolio declining
12.6% and 2.0% in years one and two of the FAST stress case
scenario, respectively. However, while NADAE begins at a high 5.7x
in year one of the stress case, it ultimately stabilizes at 3.5x in
year five, consistent Fitch's expectations for sustained solid cash
flow margins and debt moderation over the next five fiscal years.
MGH's liquidity profile metrics are neutral to the assessment of
its financial profile and support a rating in the middle of the
'BB' category. MGH produced 1.9x coverage of actual annual debt
service (AADS) and 87.7 DCOH in fiscal 2017, both of which are
neutral to the assessment of its financial profile. MGH's coverage
of maximum annual debt service (MADS) improved to 1.7x in fiscal
2018, from a weak 1.2x in fiscal 2017, providing adequate cushion
relative to its 1.2x debt service coverage covenant, which is based
on AADS. MGH is in compliance with all of its financial covenants
under its debt agreements.
MGH also has additional liquidity of up to $7.5 million through a
line of credit with KeyBank National (IDR A-/Stable). There are
currently no draws on this line and it was recently renewed through
November 2019.
Asymmetric Additional Risk Considerations
No asymmetric risk considerations were applied in the rating
determination. MGH's debt structure is relatively conservative, at
100% fixed-rate, with no exposure to variable-rate debt or swaps.
Included in its long-term debt is an approximately $7.3 million
fixed-rate Bangor Savings Bank term loan , which previously had a
balloon payment due in April 2018. This loan was refinanced prior
to its original maturity date and now is structured with a
straight-line amortization through 2023, eliminating the
refinancing risk associated with this debt.
MARRONE BIO: May Issue 1 Million Shares Under 2019 ESPP
-------------------------------------------------------
Marrone Bio Innovations, Inc. has filed with the U.S. Securities
and Exchange Commission a Form S-8 registration statement to
register an aggregate of 1,000,000 shares of common stock of the
Company authorized for issuance under the Company's 2019 Employee
Stock Purchase Plan. A full-text copy of the prospectus is
available for free at https://is.gd/hcUg1b
About Marrone Bio Innovations
Based in Davis, California, Marrone Bio Innovations, Inc. --
http://www.marronebio.com/-- discovers, develops and sells
innovative biological products for crop protection, plant health
and waterway systems treatment. MBI has screened over 18,000
microorganisms and 350 plant extracts, leveraging its in-depth
knowledge of plant and soil microbiomes enhanced by advanced
molecular technologies to rapidly develop seven effective and
environmentally responsible pest management products to help
customers operate more sustainably while uniquely improving plant
health and increasing crop yields. Supported by a robust portfolio
of over 400 issued and pending patents around its natural product
chemistry, MBI's currently available commercial products are
Regalia, Grandevo, Venerate, Majestene, Haven Stargus and
Amplitude, Zelto and Zequanox.
Marrone Bio inccured a net loss of $20.21 million for the year
ended Dec. 31, 2018, compared to a net loss of $30.92 million for
the year ended Dec. 31, 2017. As of March 31, 2019, Marrone Bio
had $52.38 million in total assets, $42.80 million in total
liabilities, and $9.57 million in total stockholders' equity.
Marcum LLP, in San Francisco, CA, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
28, 2019, on the Company's consolidated financial statements for
the year ended Dec. 31, 2018, citing that the Company has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
MCCLAIN TRUCKING: Seeks to Hire Pamela Magee as Legal Counsel
-------------------------------------------------------------
McClain Trucking LLC received interim approval from the U.S.
Bankruptcy Court for the Middle District of Louisiana to hire
Pamela Magee LLC as its legal counsel.
The firm will advise the Debtor of its powers and duties under the
Bankruptcy Code and will provide other legal services in connection
with its Chapter 11 case.
Pamela Magee will charge an hourly fee of $375. The firm received
$1,500 prior to the petition date, plus $1,717 for the filing fee.
The firm does not hold any interest adverse to the Debtor's
bankruptcy estate, according to court filings.
Pamela Magee can be reached through:
Pamela Magee, Esq.
Pamela Magee LLC
11745 Bricksome Avenue, Suite B-1
Baton Rouge, LA 70816
Phone: (225) 367-4667
Email: pam@AttorneyPamMagee.com
About McClain Trucking LLC
McClain Trucking LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. La. Case No. 19-10589) on May 17,
2019. At the time of the filing, the Debtor disclosed assets of
between $100,001 and $500,000 and liabilities of the same range.
Pamela Magee LLC is the Debtor's legal counsel.
MDC HOLDINGS: S&P Alters Outlook to Positive & Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Denver-based MDC Holdings
Inc. to positive from stable and affirmed its 'BB+' issuer credit
rating and its 'BB+' issue-level rating on the company's senior
unsecured debt.
S&P revised its outlook on MDC Holdings to positive to reflect the
company's improved credit metrics stemming from a 20% increase in
revenue in 2018 (to over $3 billion) and a 200 basis point
improvement in its EBITDA margin. During this period the company's
reported debt levels held steady, which caused its adjusted debt to
EBITDA to fall below 2x and its adjusted debt to capital to drop to
30%. Currently, S&P forecasts that MDC will experience a modest
further improvement in its metrics in 2019 amid a stabilizing
housing market. Importantly, maintaining adjusted debt to EBITDA of
less than 2x during the housing recovery would provide the company
with a cushion of more than one full turn above S&P's downgrade
threshold for a 'BBB-' rating.
The positive outlook on MDC Holdings is based on S&P's view that
the company will maintain its recently improved credit measures,
including adjusted debt to EBITDA of 2x or below, even as the
prolonged housing recovery slows over the next 12-24 months.
"We would upgrade MDC over the next 12-24 months if it demonstrates
that it can maintain adjusted debt to EBITDA of less than 2x and
adjusted debt to capital of around 30% as the growth in housing
demand stalls, reducing the pricing power of the homebuilders. The
company would also need to maintain its current financial risk
profile while executing its largely organic growth strategy,
increasing its market share in local markets, and further improving
its EBITDA margins," S&P said.
"We would revise our outlook on MDC to stable if the conditions in
the housing market are weaker than we assume in our base-case
forecast, causing the company's debt to EBITDA to increase to 3x or
higher. For example, this could occur if there is a very sharp
downturn that causes MDC's revenue to decline by 33% from our
forecast level while its EBITDA margin underperforms our
expectations by 400 basis points," S&P said.
MERITOR INC: Fitch Rates $175MM Secured Term Loan 'BB+'
-------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB+'/'RR1' to Meritor,
Inc.'s (MTOR) $175 million five-year secured term loan. MTOR's
Long-Term Issuer Default Rating is 'BB-', and its Rating Outlook is
Positive.
Fitch expects proceeds from the new term loan will primarily be
used to support MTOR's acquisition of AxleTech from The Carlyle
Group for $175 million. MTOR expects the acquisition to close in
the company's third fiscal quarter that will end Sept. 30, 2019.
KEY RATING DRIVERS
Ratings Overview: MTOR's ratings and Positive Outlook are driven by
Fitch's expectations that the significant improvement seen in the
company's credit profile over the past several years can be
sustained going forward, even as the Class 8 truck market comes off
its cyclical peak. A meaningful portion of the improvement in
MTOR's credit profile over the past couple of years was driven by
the company's use of proceeds from the sale of its 50% stake in the
Meritor WABCO Vehicle Control Systems (Meritor WABCO) joint venture
to permanently reduce long-term debt in fiscal year (FY) 2018. In
addition, over the past several years MTOR has improved its
operational flexibility, which has allowed it to produce
consistently positive annual FCF, despite swings in North American
Class 8 truck demand over that time.
Rating Concerns: Despite the improvements to MTOR's operational
performance and credit profile, Fitch continues to have several
significant rating concerns. Chief among these remains the extreme
cyclicality of the global commercial truck and off-highway vehicle
markets. North American Class 8 truck production in FY2018 was up
about 30% after declining about 6% in FY2017. Production in FY2017
was down about 28% from the most recent cyclical peak reached only
two years before in FY2015, illustrating the extreme shifts that
can take place in this end market from one year to the next. These
heavy shifts in demand heighten the importance of MTOR maintaining
relatively conservative mid-cycle credit metrics. However, the
company has demonstrated its ability over the past several years to
both grow margins and generate positive FCF through both the peaks
and troughs of the Class 8 cycle. This represents an important
improvement from previous cycles, when the company's margins and
FCF were heavily pressured at both the top and the bottom of the
cycle.
Credit Facility Amendment: The new term loan has been added as part
of an amendment of MTOR's credit facility agreement, which also
includes revisions to the company's existing revolving credit
facility. Among the changes to the revolver are an increase in the
limit t to $625 million from $525 million; an extension of the
maturity to June 2024 from March 2022; a loosening of certain
covenants, including those related to share repurchase and capex
limitations, and switch to a cash flow-based structure from the
previous ABL structure. The maturity of the amended credit
agreement will be accelerated to Nov. 16, 2023 if more than $75
million of the company's 6.25% senior unsecured notes remains
outstanding on Nov. 10, 2023. As of March 31, 2019, $450 million in
6.25% notes were outstanding.
Fitch expects the amendments to the revolver to provide the company
with increased financial flexibility. Despite the loosening of the
covenants and the addition of the term loan, Fitch does not expects
leverage to rise meaningfully over the intermediate term as
management remains committed to the publicly articulated 1.5x net
leverage target (according to its calculations) in its M2019 plan.
AxleTech Acquisition: MTOR's acquisition of AxleTech is essentially
a larger bolt-on acquisition that will expand the company's axle
and brake offerings into a more diverse group of end-markets, such
as construction, mining and agriculture. AxleTech was previously
part of MTOR, so the company is quite familiar with its operations.
AxleTech produced about $248 million in revenue in CY2018, and MTOR
expects the acquisition to generate more than $15 million in annual
synergies by FY2022.
Moderate Leverage: Although the term loan borrowings will increase
MTOR's debt, Fitch continues to expect the company's gross EBITDA
leverage (gross debt/EBITDA as calculated by Fitch) to run in the
mid- to upper-2x range over the intermediate term, which is roughly
consistent with the 1.5x net leverage target in MTOR's M2019 plan.
Fitch also continues to expect FFO adjusted leverage to run in the
3x to 4x range over the intermediate term, with it running closer
to the higher end of that range over the next couple of years as
the North American truck cycle turns.
MTOR has previously stated that it expects that either it or WABCO
will terminate MTOR's exclusive distribution rights for the former
Meritor-WABCO joint venture, and this termination is included in
the assumptions underpinning the company's M2022 strategic plan.
Upon termination, WABCO will pay MTOR between $225 million and $265
million. Fitch expects the company could use a portion of those
proceeds to reduce amounts outstanding on the new term loan. If so,
gross leverage could be a little lower than Fitch's previous
expectations as a result of incremental EBITDA from the AxleTech
acquisition.
Solid FCF: Fitch expects MTOR to produce positive FCF over the
intermediate term, with FCF margins generally running in the low-
to mid-single-digit range (based on Fitch's calculations). In
FY2019, Fitch expects MTOR's FCF to margin to run near 3%, roughly
in line with the level in FY2018, as the company continues to
benefit from profit improvement initiatives in its M2019 and M2022
plans and from new business wins in products for other end markets.
Fitch expects capex as a percentage of revenue to run in the 3% to
3.5% range over the intermediate term. According to Fitch's
calculations, FCF in FY2018 was $136 million, equal to a 3.3% FCF
margin.
Ratings Notching: The 'BB+'/'RR1' rating on the secured term loan
reflects Fitch's notching criteria for issuers with IDRs in the
'BB' range and results in a two-notch uplift from MTOR's IDR.
DERIVATION SUMMARY
MTOR is a capital goods supplier with product lines focused
primarily on driveline components and brakes for commercial
vehicles, off-highway equipment and trailers. Compared with its
primary competitor, Dana Incorporated (BB+/Stable), MTOR is smaller
and fully focused on the capital goods industry, without any
meaningful light vehicle exposure. However, MTOR generally retains
a top-three market position in most of the product segments where
it competes.
Compared with other capital goods and automotive suppliers rated in
the 'BB' category, such as Delphi Technologies PLC (BB/Stable), The
Goodyear Tire and Rubber Company (BB/Stable), Allison Transmission
Holdings, Inc. (BB/Stable) or Tenneco Inc. (BB-/Stable), MTOR's
margins, FCF generation and leverage have trended toward levels
more commensurate with issuers in the middle of the category. A few
years ago, its metrics were more in line with issuers at the lower
end of the category. MTOR's EBITDA leverage has trended down toward
the high-2x range from the high-3x range a few years ago, while
EBITDA margins have risen above 10%. FCF margins have improved, and
the company has begun consistently generating positive annual FCF.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Global commercial truck production continues to increase, but
at a slower rate, in FY2019 before falling in FY2020 and
stabilizing at a lower level in FY2021;
-- Revenue grows modestly in FY2019 before declining in FY2020 on
lower production levels;
-- FCF remains solidly positive over the next several years, with
FCF margins running in the low-single-digit range;
-- Capital expenditures run at about 3% to 3.5% of revenue over
the next several years as the company invests in new technologies
and to accommodate new business wins;
-- The AxleTech acquisition is completed in the fourth quarter of
FY2019;
-- MTOR generally maintains year-end cash balances in the $100
million to $115 million range, with excess cash used for share
repurchases or modest acquisitions.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Maintaining mid-cycle Debt/EBITDA leverage below 3.0x;
-- Maintaining mid-cycle FFO adjusted leverage below 4.5x;
-- Maintaining a positive mid-cycle FCF margin;
-- Maintaining a mid-cycle EBITDA margin above 10%.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A material deterioration in the global commercial truck or
industrial equipment markets for a prolonged period;
-- An increase in mid-cycle Debt/EBITDA leverage to above 4.0x
for an extended period;
-- An increase in mid-cycle FFO adjusted leverage to above 5.0x
for an extended period;
-- A decline in the mid-cycle FCF margin to below 1.0% for an
extended period;
-- A decline in the mid-cycle EBITDA margin to below 8.5% for an
extended period.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects MTOR's liquidity to remain
adequate over the intermediate term. The company had $98 million in
cash and cash equivalents at March 31, 2019. In addition to its
cash, MTOR also has access to the aforementioned $625 million
secured revolving credit facility that matures in 2024. As of March
31, 2019 there were no outstanding borrowings on the facility and
no letters of credit issued against it.
Based on its criteria, Fitch has estimated the amount of cash that
it believes MTOR needs to keep on hand to cover seasonal changes in
cash flows without any incremental borrowing, and it treats this
cash as not readily available for purposes of calculating net
metrics. Based on the company's recent performance, Fitch estimates
that the company will produce sufficient operating cash flow
through the year to meet is seasonal cash needs, and Fitch has
therefore treated all of MTOR's cash as readily available in its
forecasts.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has adjusted MTOR's debt to include off-balance sheet
factored receivables. Also, for purposes of calculating
EBITDA-based metrics, Fitch has included dividends received from
equity method investments in its calculation of EBITDA. However,
Fitch has not included these dividends in its standalone
calculations of EBITDA or the EBITDA margin.
MESOBLAST LIMITED: Expands License Agreement with JCR in Japan
--------------------------------------------------------------
Mesoblast Limited has expanded its partnership with JCR
Pharmaceuticals Co. Ltd. in Japan to the use of mesenchymal stem
cells (MSCs) for the treatment of newborns who lack sufficient
blood supply and oxygen to the brain, a condition termed neonatal
hypoxic ischemic encephalopathy (HIE).
HIE occurs in 2.5 per 1,000 live births and can cause seizures,
delayed development of motor skills and cognitive function, and
cerebral palsy. In preclinical studies, MSCs have been shown to
have a significant positive effect on neurobehavioral outcome
following HIE injury3.
JCR is marketing the allogeneic MSC product TEMCELL4 HS Inj. for
the treatment of steroid-refractory acute graft versus host disease
(aGVHD) in children and adults in Japan. Under the terms of the
partnership, Mesoblast receives royalties on TEMCELL product sales
for all licensed indications. The license agreement was previously
expanded for use in wound healing in patients with Epidermolysis
Bullosa (EB), and JCR filed to extend marketing approval of TEMCELL
in Japan for this indication in March 2019.
The license agreement has now been further expanded to provide JCR
with rights to sell TEMCELL for HIE and to access Mesoblast's broad
patent portfolio for this indication. JCR plans to initiate a
clinical trial of TEMCELL in newborns with HIE in July 2019 in
order to further extend the label in this indication.
Mesoblast has the right to use all safety and efficacy data
generated by JCR in Japan to support its development and
commercialization plans for its MSC product candidate remestemcel-L
in the United States and other major healthcare markets, including
for GVHD, wound healing, and now HIE. In the United States there
are approximately 6,000 new patients annually with moderate-severe
HIE2 who could potentially benefit from treatment with
remestemcel-L.
Mesoblast Chief Executive Dr Silviu Itescu stated: "We are pleased
with the strategy by our partner to expand TEMCELL marketing
approval for indications beyond aGVHD. This supports our own
strategic growth plans for our MSC product candidate remestemcel-L
beyond aGVHD in children, including other pediatric indications
such as HIE and adult conditions such as aGVHD, chronic GVHD,
biologic-refractory Crohn's disease, and osteoarthritis."
Mesoblast recently initiated a rolling Biologics License
Application to the U.S Food and Drug Administration for
remestemcel-L, its proprietary MSC product candidate, in the
treatment of children with aGVHD.
About Mesoblast
Headquartered in Melbourne, Australia, Mesoblast Limited (ASX:MSB;
Nasdaq:MESO) -- http://www.mesoblast.com-- is a global developer
of innovative cell-based medicines. The Company has leveraged its
proprietary technology platform to establish a broad portfolio of
late-stage product candidates with three product candidates in
Phase 3 trials - acute graft versus host disease, chronic heart
failure and chronic low back pain due to degenerative disc disease.
Through a proprietary process, Mesoblast selects rare mesenchymal
lineage precursor and stem cells from the bone marrow of healthy
adults and creates master cell banks, which can be industrially
expanded to produce thousands of doses from each donor that meet
stringent release criteria, have lot to lot consistency, and can
be
used off-the-shelf without the need for tissue matching. Mesoblast
has facilities in Melbourne, New York, Singapore and Texas and is
listed on the Australian Securities Exchange (MSB) and on the
Nasdaq (MESO).
Mesoblast reported a net loss attributable to the owners of
Mesoblast of US$35.29 million for the year ended June 30, 2018,
compared to a net loss attributable to the owners of Mesoblast of
US$76.81 million for the year ended June 30, 2017.
As of March 31, 2019, Mesoblast had $675.7 million in total assets,
$174.8 million in total liabilities, and $500.9 million in total
equity.
PricewaterhouseCoopers, in Melbourne, Australia, the Company's
auditor since 2008, issued a "going concern" opinion in its report
on the consolidated financial statements for the year ended June
30, 2018. The auditors noted that the Company has suffered
recurring losses from operations that raise substantial doubt
about
its ability to continue as a going concern.
MUSCLE MAKER: 1Q 2018 Financial Results Cast Going Concern Doubt
----------------------------------------------------------------
Muscle Maker, Inc., in June 2019 filed (late) its quarterly report
on Form 10-Q, disclosing a net loss of $3.191 million on $2.038
million of total revenues for the three months ended March 31,
2018, compared to a net loss of $5.190 million on $1.966 million of
total revenues for the same period in 2017.
At March 31, 2018 the Company had total assets of $4.228 million,
total liabilities of $6.742 million, and $2.514 million of total
stockholders' deficit.
As of March 31, 2018, the Company had a cash balance, a working
capital deficiency and an accumulated deficit of $62,567, $5.110
million, and $20.24 million, respectively. For the three months
ended March 31, 2018, the Company incurred a pre-tax net loss of
$3.191 million. These conditions indicate that there is
substantial doubt about the Company's ability to continue as a
going concern for at least one year from the date of the issuance
of these consolidated financial statements.
A copy of the Form 10-Q is available at:
https://is.gd/kJTP0y
Muscle Maker, Inc., operates under the name Muscle Maker Grill as a
franchisor and owner-operator of Muscle Maker Grill restaurants.
The company is based in Burleson, Texas.
NEIMAN MARCUS: S&P Cuts ICR to 'SD' After Restructuring Settlement
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on The Neiman
Marcus Group LLC to 'SD' (selective default) from 'CC'.
The rating action follows the company's announcement of the
settlement of its comprehensive restructuring including a
second-lien note offering and debt exchange. S&P lowered its
issue-level ratings on the company's secured term loan facility,
unsecured cash pay notes, and unsecured payment-in-kind (PIK) notes
to 'D'.
The downgrade reflects S&P's assessment of Neiman Marcus'
comprehensive restructuring as a distressed exchange. S&P views the
restructuring (including the second-lien note offering and debt
exchange) as a selective default because of the company's current
distressed financial condition, the likelihood of a conventional
default in absence of the restructuring, and because debt investors
received less than the promise of the original securities.
Specifically, the new securities' maturities extend beyond the
original without adequate offsetting compensation and the exchange
of structurally subordinated debt in the transaction in S&P's view.
This includes both the term loan lenders and unsecured
noteholders.
"We expect to review our issuer and issue-level credit ratings on
Neiman Marcus over the next several days as we assess the company's
operating performance expectations and capital structure. We will
likely raise our issuer credit rating on the company to 'CCC' when
we reassess the ratings under our base-case assumptions," S&P said.
These assumptions include a continued risk of restructuring over
the next 12 months because of the remaining meaningful outstanding
balance of about $137 million on the unsecured notes due in Oct.
2021 that were not exchanged in the restructuring, according to the
rating agency.
NEOVASC INC: OPKO Health Has 5% Stake as of June 12
---------------------------------------------------
In a Schedule 13D filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of common stock of Neovasc, Inc. as of June 12, 2019:
Shares Percent
Beneficially of
Name Owned Class
---- ------------ -------
OPKO Health, Inc. 3,385,753 5.0%
Phillip Frost, M.D. 1,165,147 1.7%
Frost Gamma Investments Trust 1,165,147 1.7%
The percentages are calculated based on 67,475,883 shares of Common
Stock outstanding as of May 2, 2019, as reported by the Issuer in
its Information Circular furnished to the SEC on Form 6-K on May
29, 2018.
SEC Investigation
On Sept. 7, 2018, the SEC filed a civil complaint in the Southern
District of New York, against a number of individuals and entities,
including OPKO and its CEO and Chairman, Dr. Frost. In December
2018, OPKO, Dr. Frost and FGIT entered into settlements with the
SEC, which, upon approval by the court in January 2019, resolved
the claims against OPKO, Dr. Frost and FGIT. Pursuant to the
settlement between OPKO and the SEC, and without admitting or
denying any of the allegations of the Complaint, OPKO agreed to be
enjoined from future violations of Section 13(d) of the Securities
Exchange Act of 1934, a claim that requires no showing of scienter,
and to pay a civil monetary penalty, which has been paid. OPKO
also agreed, within certain stipulated time periods, to: (i)
establish a Management Investment Committee that will make
recommendations to an Independent Investment Committee of OPKO's
board of directors in connection with existing and future strategic
minority investments; and (ii) retain an Independent Compliance
Consultant on a time-limited basis to, among other things, advise
OPKO on whether filings pursuant to Section 13(d) of the Exchange
Act for previous strategic minority investments made at the
suggestion of or in tandem with Dr. Frost and his related persons
or entities should be made or amended to reflect group membership
with Dr. Frost.
Under the terms of the settlement between the SEC, Dr. Frost and
FGIT, and without admitting or denying any of the allegations in
the Complaint, Dr. Frost agreed to injunctions from violations of
Sections 5(a) and (c) and 17(a)(2) of the Securities Act of 1933,
claims which may be satisfied by strict liability and negligence,
respectively, and Section 13(d) of the Exchange Act, also a strict
liability claim; to pay a civil monetary penalty, disgorgement and
pre-judgment interest, which have been paid; and to be prohibited,
with certain exceptions, from trading in penny stocks.
The ICC has concluded his work. The ICC determined that certain
prior investments by OPKO and Dr. Frost with respect to other
issuers should have been grouped under Section 13(d) of the
Exchange Act and that amended filings under Section 13(d) of the
Exchange Act should be made. OPKO and Dr. Frost made the
recommended filings on May 9, 2019. The ICC did not recommend any
additional filings in connection with the Issuer. However, because
of the relationship between Dr. Frost and OPKO, the Reporting
Persons have elected to make such filings with respect to certain
additional issuers, including the Issuer.
OPKO has now established the MIC and IIC, and following the
establishment of these committees, any group between OPKO and Dr.
Frost with respect to investments in the Issuer has ceased to
exist.
A full-text copy of the regulatory filing is available at:
https://is.gd/bItQf0
About Neovasc Inc.
Based in Richmond, British Columbia, Neovasc Inc. --
http://www.neovasc.com/-- is a specialty medical device company
that develops, manufactures and markets products for the rapidly
growing cardiovascular marketplace. Its products include the
Neovasc Reducer, for the treatment of refractory angina, which is
not currently available in the United States and has been available
in Europe since 2015, and the Tiara, for the transcatheter
treatment of mitral valve disease, which is currently under
clinical investigation in the United States, Canada and Europe.
Neovasc reported a net loss of US$108.04 for the year ended Dec.
31, 2018, compared to a net loss of US$22.90 million for the year
ended Dec. 31, 2017. As of Dec. 31, 2018, Neovasc had US$11.99
million in total assets, US$21.66 million in total liabilities, and
a total deficit of US$9.66 million.
Grant Thornton LLP, in Vancouver, BC, the Company's auditor since
2002, issued a "going concern" opinion in its report on the
Company's consolidated financial statements for the year ended Dec.
31, 2018, stating that the Company incurred a net loss of US$108.04
million during the year ended Dec. 31, 2018, and as of that date,
the Company's liabilities exceeded its assets by US$9.667 million.
These conditions, along with other matters, raise substantial doubt
about the Company's ability to continue as a going concern.
NICE SERVICES: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Nice Services, Inc., according to court dockets.
About Nice Services Inc.
Nice Services, Inc. is a privately held company headquartered in
Tampa, Fla.
Nice Service filed for Chapter 11 bankruptcy protection (Bankr.
M.D. Fla. Case No. 19-04386) on May 9, 2019. At the time of the
filing, the Debtor estimated $1 million to $10 million in both
assets and liabilities. Thomas C. Little, Esq., at Thomas C.
Little, P.A., represents the Debtor as counsel.
NORDIC AMERICAN: KPMG AS Raises Going Concern Doubt
---------------------------------------------------
Nordic American Tankers Limited filed with the U.S. Securities and
Exchange Commission its annual report on Form 20-F/A, disclosing a
Net Loss and Comprehensive Loss of $197,294,000 on $20,654,000 of
Charter Revenues for the year ended Dec. 31, 2018, compared to a
Net Loss and Comprehensive Loss of $29,326,000 on $17,895,000 of
Charter Revenues for the year ended in 2017.
The audit report of KPMG AS states that the Company has suffered
recurring losses from operations and is required to raise
additional capital in order to refinance its Initial Credit
Facility which raises substantial doubt about its ability to
continue as a going concern.
The Company's balance sheet at Dec. 31, 2018, showed total assets
of $191,074,000, total liabilities of $137,009,000, and $54,064,000
in total shareholders' equity.
A copy of the Form 20-F/A is available at:
https://is.gd/kdUjTD
Nordic American Tankers Limited, a tanker company, acquires and
charters double-hull tankers in Bermuda and internationally. It
operates a fleet of 23 Suezmax crude oil tankers. The company was
founded in 1995 and is based in Hamilton, Bermuda.
NORTHERN MARIANA: Fitch Affirms B+ on $9.5MM 1998A Airport Bonds
----------------------------------------------------------------
Fitch Ratings has affirmed the 'B+' rating on Commonwealth Ports
Authority (CPA), Commonwealth of Northern Mariana Islands' (CNMI)
approximately $9.5 million of outstanding senior series 1998A
airport revenue bonds. The Rating Outlook is Stable.
KEY RATING DRIVERS
The rating reflects a small air traffic base with risk of elevated
volatility tied to the islands' limited economy. Also reflected are
improving cash flows and debt service coverage, anchored by use of
full passenger facility charge (PFC) collections. Manageable
capital needs coupled with balance sheet liquidity in excess of
debt outstanding further support the rating. Due to the damage
caused by Super Typhoon Yutu, Fitch's projected rating case debt
service coverage ratio (DSCR) averages 1.25x when fully applying
PFC collections as revenues. Additionally, the authority maintains
insurance coverage and exceedingly strong cash reserves and
unrestricted liquidity that are more than adequate to meet debt
service requirements. Fitch takes further comfort in the expected
implementation of a new improved airline use and lease agreement
(AUA) in fiscal 2020, and relatively low debt resulting in
essentially negative leverage.
Highly Volatile Enplanement Base - Revenue Risk (Volume): Weaker
The airport system is an essential enterprise, serving as the
gateway to and within the Mariana Islands. The enplanement base of
around 732,394 passengers is relatively small taking into account
the overall population base and the island's more limited, weaker
economy. Traffic performance is potentially vulnerable to
underlying economic stresses given the significant component of
traffic tied to the tourism industry and that service offerings are
limited.
Limited Pricing Power - Revenue Risk (Price): Weaker
Rate setting practices with airlines have not been clearly
established and have historically been more reactive, based on
financial pressures. Limited pricing power could constrain
financial flexibility under an adverse operating environment. Fitch
views positively CPA's proactive move to negotiate a new defined
rate methodology with airlines and the implementation of a new AUA
expected for fiscal 2020. The ability for the airports to utilize
100% of PFC collections for debt service provides enhanced cushion
to manage revenue levels and support financial obligations while
keeping airline costs stable. The current PFC collection authority
runs through November of 2023.
Moderate Capital Plan - Infrastructure Development & Renewal:
Midrange
The authority's capital improvement plan (CIP) is modest at
approximately $28 million. Existing projects include improvement to
passenger loading bridges, perimeter fence replacement and
improvements to the aircraft rescue firefighting training
facilities (ARFF), among others. The CIP is predominately
grant-funded with only a modest amount coming from CPA funds. To
the extent a significant portion of PFC revenue is needed for debt
service, it could hamper the airports' ability to provide required
matching funds, thus limiting grant receipts. However, CPA's
substantial build-up of liquidity partially mitigates this risk.
The authority is currently in the application process for a loan
from the USDA to complete a $16 million runway rehabilitation
project.
Conservative Capital Structure - Debt Structure: Stronger
The authority maintains 100% fixed-rate, fully amortizing senior
debt. Annual debt service payments are essentially level and final
maturity on the bonds is in 2028. Structural features are strong
and in line with most of Fitch's rated airports. No additional
bonds are anticipated in the near term.
Financial Profile
CPA generated a DSCR of 2.8x is fiscal 2018, benefitting from full
PFC application as revenues, up from 1.9x in fiscal 2017. The
authority has reserves in excess of debt outstanding such that
leverage is presently negative. The ability to treat all PFCs as
revenues provides stability and has helped grow the
Fitch-calculated days cash on hand (DCOH) significantly over the
past several years to approximately 640 days in fiscal 2018. Fitch
estimates cost per enplanement (CPE) in fiscal 2018 to have
decreased to $14.51, down from $15.28 in fiscal 2017.
PEER GROUP
Harrisburg (PA), rated 'BB+'/Stable, serves as a comparable peer in
terms of its small hub size with weaker revenue characteristics and
elevated CPE profile. Both historically have had enplanement bases
of around 600,000 and CPE of around $15-$16; however, Harrisburg
has a more stable enplanement base due to a stronger MSA workforce.
CPA demonstrates higher coverage and significantly lower leverage,
though these are necessary to mitigate its more volatile operating
and financial profiles.
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead to
Positive Rating Action:
The CPA airports' heavy reliance on tourism and leisure travellers,
creating an elevated degree of vulnerability to economic recessions
both within its narrow local market as well as to the larger,
neighboring Asian markets, limits upward rating mobility.
Notwithstanding the former:
-- Continued FAA approval to collect and use 100% of PFCs as
gross revenues, leading to sustained favorable trends in balance
sheet liquidity and strong financial ratios;
-- Continued improvements in the underlying service area economy
and the airports' ability to maintain or grow its current traffic
base.
Future Developments That May, Individually or Collectively, Lead to
Negative Rating Action:
-- Material declines in enplanement volume given the small,
volatile base;
-- Material declines in DSCR resulting from increased operating
expenses and/or the CPA Board's failure to sufficiently apply the
full collection of PFCs as gross revenues;
-- Identified longer-term capital projects that would rely on
significant debt issuances for funding that materially weaken the
financial profile.
CREDIT UPDATE
Performance Update
System enplanements were down 3.4% to 732,394 in fiscal 2018. CPA's
enplanement growth continues to be driven by Saipan International
Airport (93% of total), which decreased 4.4% in fiscal 2018 to
683,383. West Tinian enplanements grew nearly 20% to 34,468 and
Rota International remained flat at 14,543. Nonetheless, these two
airports minimally affect the overall enplanement size.
Enplanements grew by a five-year CAGR of 5.8% and 10-year rate of
3.7%.
Fiscal year to date 2019 (four months through January) system
enplanements are down 43% due to Super Typhoon Yutu, which hit CNMI
in October 2018. The typhoon caused severe damage to the airport
and limited flights significantly in October and November. Six jet
ways at Saipan Airport (valued at $2 million each) were declared
unusable; three are being replaced by the FAA. Normal operations
were resumed at the end of November 2018, but major repairs are
still necessary. CPA has a pending property insurance claim for
business interruption and extra expense, for which they have
received a $5 million advance. The claim is expected to be closed
out by July 2019 and management estimates it to be approximately
$28 million. According to news reports, as of May 2019 (eight
months fiscal year to date), the airport was approximately 70%
recovered.
The airport system maintains a diverse carrier mix. Jeju Airlines
is currently the largest carrier, capturing 27% market share, while
Sichuan and Asiana Airlines both account for 13%. Collectively,
these three airlines comprise more than 50% of the airport system's
market share. Notably, since June 2018, Delta Airlines, Cape Air
and Jin Air ceased operations. This loss was somewhat offset by the
start of United Airlines' daily operations in June 2018; Skymark
also commenced charter operations in 2018.
Fiscal 2018 aviation and other fees were down 8.3% to $10.6
million, while enplanements fell 3.4%. Aviation and other fees'
five-year CAGR is 4.2%. Non-aviation revenues grew 17.4% to $6.6
million. The five-year CAGR is 6.7%. Operating costs increased 9.6%
to $16.8 million primarily due to increases in water and sewer
expenses.
The current capital improvement plan is modest and totals $28
million. Approximately 58% of capex spending is directed toward
Saipan Airport, 27% to Tinian and 14% to Rota. The CIP is nearly
all FAA-funded, with a select few projects partly funded by CPA.
Existing projects include improvements to the passenger loading
bridges, perimeter fence replacement, improvements to the aircraft
rescue firefighting training facility (ARFF), ARFF building typhoon
repairs, and improvements to the commuter terminal system at Saipan
International Airport, along with general maintenance and
improvements to facilities. The airport recently completed the TNI
terminal improvement projects and is nearing completion on the
Saipan ARFF building typhoon repairs. Management is currently in
the application process for a loan from the USDA to fund a $16
million runway rehabilitation project.
Fiscal 2018 DSCR is 2.8x (including 100% PFCs), up from 1.9x due to
increased CFADS of $3.9 million and a level debt service profile.
CPE fell slightly to $14.51 from $15.28 in fiscal 2017. Days cash
on hand declined to 641 from 712 in fiscal 2017, which is
attributed to a decrease in unrestricted cash & equivalents to
$22.6 million from $25.4 million. Leverage (net debt/CFADS) became
increasingly negative as balance sheet liquidity exceeded debt
outstanding. The $4.50 PFC collection authority was recently
extended through November 2023.
CPA has postponed the implementation of the new rate methodology
until fiscal year 2020. The previous AUA remains in effect.
Fitch Cases
The Fitch base case forecasts enplanements to fall by 30% in 2019,
due to the impact of Super Typhoon Yutu, with non-aviation revenues
following enplanements. Aviation revenues are forecast to decline
22%. Recovery to 2018 levels for enplanements and revenues is
projected for 2020; thereafter, enplanements grow by 1.0% per annum
and revenues by 1.5% per annum. Expenses are grown at 2.5% per
year, following the 4.6% increase for fiscal 2019 based on
year-to-date results. Management currently anticipates receiving
$28 million in an insurance settlement; the base case assumes the
receipt of $20 million over five years. DSCR averages 3.9x, with a
minimum of 1.3x in 2019. CPE is forecast to remain relatively flat,
averaging $14.90 through 2023, and leverage is forecast to become
increasingly negative.
The Fitch rating case follows the same assumptions as the rating
case in 2019. Thereafter, enplanements and non-aviation revenues
are held flat to reflect no further recovery from the typhoon.
Aviation revenues grow by a four-year CAGR (2020-2023) of 3.7%.
Operating expenses and insurance income follow the base case
assumptions. Under these assumptions, DSCR averages 1.25x through
2023. Liquidity remains a key credit strength and provides a
mitigant to periods of financial underperformance. The
implementation of the new AUA, which would provide increased cost
recovery, in fiscal 2020 is also viewed positively.
NORTHERN MARIANA: Fitch Affirms BB on $21MM 1998/2005 Seaport Bonds
-------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on approximately $21.9
million of outstanding Commonwealth Ports Authority (CPA),
Commonwealth of the Northern Mariana Islands (CNMI) senior series
1998A and 2005A seaport revenue bonds. The Rating Outlook is
Stable.
KEY RATING DRIVERS
The 'BB' rating reflects the essentiality of the ports to a small,
island economy amidst high exposure to economic volatility from
tourism and a nearly 100% import-based cargo operation. Sustained
revenue performance and a history of controlled expenses, along
with the ports' stable-to-improving debt service coverage ratio
(DSCR), moderate leverage, increasing liquidity, and small capital
plan provide some mitigation to the potential impact of future
macroeconomic stresses. Average DSCR through 2028 under the Fitch
rating case is 1.6x.
Concentrated but Vital Cargo Base - Revenue Risk (Volume): Weaker
The seaports remain essential for the import of goods to an island
economy; however, there is potential for stagnant operational
trends due to CNMI's exposure to macroeconomic factors and its
elevated dependence on a limited tourist base. Volume stability is
expected given that food and fuel related cargos account for more
than 50% of import-dependent revenue tonnage.
Limited Pricing Power - Revenue Risk (Price): Weaker
CNMI's narrow economy and exposure to economic volatility limit
management's economic flexibility to raise rates on seaport system
tenants and users. Following the last increase in 2009, the
authority's focus has instead been on effective containment of
operating expenses.
Modest Capital Improvement Plan - Infrastructure Development and
Renewal: Midrange
The ports once handled nearly twice as much cargo and are in
satisfactory condition to deal with current and forecast demand.
The authority's capital improvement plan (CIP) is manageable with
current on-going projects estimated at $1 million. The CIP is
predominantly grant-funded with remaining dollars expected to come
from internally generated funds. No additional debt is anticipated
in the near to medium term.
Conservative Capital Structure - Debt Structure: Stronger
The authority maintains 100% fixed-rate, fully amortizing debt with
a level debt service profile and a 2031 final maturity. Structural
features and reserves are sufficient and consistent with other
Fitch-rated ports.
Financial Profile
CPA currently maintains favorable leverage and liquidity metrics
offset by modest coverage ratios. Estimated fiscal 2018 net
debt-to-cash flow available for debt service (CFADS) is negative,
reflecting cash balances exceeding debt outstanding. The CPA
maintains strong balance sheet cash and reserves available for
operating expenses, such that days cash on hand (DCOH) have more
than doubled since 2014 and currently exceed 3,000. These liquidity
and leverage metrics provide the CPA with some degree of
flexibility to meet financial commitments in weak performing
periods. DSCR has stabilized following the 2009 rate increase; as a
result of increased construction activity as economic conditions
improve, coverage has remained above 2.0x since 2015, reaching 2.3x
in 2018.
PEER GROUP
Paita (Peru), rated 'BB'/Outlook Stable, serves as a global peer
with a similar coverage level and regionally focused importance,
but with higher leverage; both ports have weaker volume risk
attributes, with CPA relying nearly 100% on import-based cargo. The
Hawaii Department of Transportation, rated 'AA-'/Outlook Stable, is
a U.S. port with a similar operational profile, strong financial
metrics and island economy structure. However, Hawaii's operations
are on a much larger scale, the service area is seen as less
economically volatile, and tariff increases are agreed upon for the
next several years, resulting in stronger volume assessment and
midrange price assessment all contributing to Hawaii's much higher
rating. North Carolina, rated 'A-'/Outlook Stable, is the closest
U.S. peer in terms of ratings; however, it too has a stronger
franchise than CPA and larger, less volatile operations accounting
for its higher rating.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Negative Rating Action:
-- A severely weakened underlying service area economy that
results in the seaports' inability to maintain base cargo levels at
or near current levels;
-- Depressed DSCR levels resulting from declining operating
revenues despite growth in revenue tonnage;
-- A shift in the seaports' balance sheet liquidity and financial
flexibility resulting from changes in operating expense management
or pricing power.
Developments That May, Individually or Collectively, Lead to
Positive Rating Action:
-- Given the ports' limited operating profile and significant
exposure to local economic factors, positive rating migration is
not anticipated at present.
CREDIT UPDATE
Performance Update
Cargo tonnage remains concentrated with import-based commodities
such as fuel, food, and construction materials accounting for
approximately, 32.7%, 17.7% and 13.1%, respectively. Total tonnage
decreased by 18% in fiscal 2018 to 507,267 tons. The decrease was
driven by a decline in inbound vehicles and heavy equipment. Saipan
is the largest port in the system, contributing approximately 96%
(or 482,431 tons) of total cargo volume, and is vital to the
islands' economy.
CPA exhibited weaker operational performance that impacted the
port's financial performance. Total operating revenues were
approximately $8.8 million in fiscal 2018, down from $10.2 million
the prior year. Seaport fees are the port's primary revenue driver,
and fell by 22% to $6.3 million due to the decline in inbound cargo
revenue tons. Non-harbor revenues exhibited stronger growth, up 16%
to $2.4 million, continuing an overall upward trajectory since
2012.
Fiscal 2018 operating expenses increased 20% to $2.1 million. The
increase is largely due to growth in personnel expenses. With the
exception of 2016, operating expenses have trended downward
historically.
YTD 2019 performance has been impacted by Super Typhoon Yutu, which
hit CNMI on Oct. 24, 2018. The seaport was able to return to normal
operations at the end of November 2018 and has a pending insurance
claim for damages. The typhoon affected port revenues; seaport fees
were flat for the first three months of the fiscal year and
non-harbor revenues were down 42%.
Due to the port's weaker operating performance, DSCR declined to
2.3x in fiscal 2018 from 3.1x in 2017. However, liquidity remains
strong, such that CPA continues to have more than 3,000 DCOH and
leverage below 1x net debt/CFADS.
Fitch Cases
Fitch's base case assumes flat growth of harbor revenues through
2028. Non-harbor revenues are projected to decline by 25% in fiscal
2019 due to the impact of Super Typhoon Yutu. Recovery to 2018
levels is projected in fiscal 2020, followed by growth of 2% per
annum through 2028. Operating expenses are grown at 11% in fiscal
2019, reflecting 2019 budgeted expenses, held flat during the
recovery in 2020, and grown by 3% per annum thereafter. DSCR is no
less than 2.0x, averaging 2.2x through fiscal 2028. Leverage
remains negative through the debt's tenor.
Fitch's rating case uses the base case assumptions for fiscal 2019.
An aggregate 32% reduction is then evenly applied to harbor
revenues from fiscal 2020-2023, simulating a contraction to the
local economy that erodes the current construction boom to pre-2014
levels. Annual growth of 2% is assumed for fiscal 2024 onwards.
Non-harbor revenues are projected to have flat growth through 2023,
followed by 2% growth per annum thereafter. Operating expenses are
held flat through the stresses applied in 2020-2023, then projected
to grow at 4% per annum through 2028. DSCR is forecast to be no
less than 1.4x through 2028 and averages 1.6x. Similar to the base
case, leverage remains negative through the debt's tenor.
NORTHERN POWER: Continues to Explore all Strategic Alternatives
---------------------------------------------------------------
Northern Power Systems, Inc., a wholly owned subsidiary of Northern
Power Systems Corp., disclosed in a Form 8-K filed with the U.S.
Securities and Exchange Commission on June 11, 2019, that the
Company continues to explore all strategic alternatives,
transactions and other related actions, as it fails to meet
Comerica Bank's demand to satisfy its obligations under a loan
agreement.
On Feb. 7, 2019, NPS Inc. entered into the Second Amended and
Restated Forbearance Agreement with Comerica Bank. On May 29,
2018, Comerica informed NPS Inc. that NPS Inc. was not currently in
compliance with two covenants under the Loan. Ultimately, Comerica
and NPS Inc. entered into (i) a Forbearance Agreement dated Aug. 2,
2018 and an Amended and Restated Forbearance Agreement dated Nov.
30, 2018. The Amended Forbearance Agreement amends and restates
the Forbearance Agreement. As of April 1, 2019, NPS Inc. is in
breach of its obligations under the Amended Forbearance Agreement
and Comerica may call the Loan at any time. Further, Comerica
demanded NPS Inc. pay-off the Loan in its entirety as of April 30,
2019. NPS Inc. was unable to meet Comerica's demand and satisfy
its obligations under the Loan. As of June 11, 2019, NPS Inc. an
aggregate of $193,709 is due and payable to Comerica by NPS Inc.
under the Loan.
Northern Power said, "Continued and prolonged cash constraints, the
on-going breach of the Amended Forbearance Agreement, the current
lack of accessible commercial loans or other financing and the
continued delay in the implementation of a new Feed in Tariff in
Italy with respect to distributed wind have significantly strained
the Company operationally, commercially and financially."
NPS Inc. has reduced its US-operations to three employees, one of
which is part-time and has been unable to execute and satisfy
potential commercial orders. NPS Inc.'s wholly-owned operating
subsidiary in Italy, NPS SRL, currently has 12 employees and
continues to maintain and service NPS and other 3rd party turbines
in Italy.
"It is uncertain if the Company's efforts (i) to address its cash
constraints and its legal difficulties with Comerica and/or (ii) to
effect one or more strategic transactions will be successful in the
near term, if at all. Even if the Company is successful in
identifying and completing a strategic transaction, the likelihood
of any economic return to the equity owners of the Company at this
point is remote," the Company said.
About Northern Power Systems
Northern Power Systems -- http://www.northernpower.com/-- designs,
manufactures, and sells distributed power generation and energy
storage solutions with its advanced wind turbines, inverters,
controls, and integration services. With approximately 21 million
run-time hours across its global fleet, Northern Power wind
turbines provide customers with clean, cost-effective, reliable
renewable energy. NPS turbines utilize patented permanent magnet
direct drive (PMDD) technology, which uses fewer moving parts,
delivers higher energy capture, and provides increased reliability
thanks to reduced maintenance and downtime. Northern Power also
develops Energy Storage Solutions (ESS) based on the FlexPhase
power converter platform, which features patented converter
architecture and controls technology for advanced grid support and
generation applications.
Northern Power reported net income of $59,000 for the year ended
Dec. 31, 2017, compared to a net loss of $8.94 million for the year
ended Dec. 31, 2016. As of June 30, 2018, Norther Power had $8.92
million in total assets, $13.90 million in total liabilities and a
total shareholders' deficiency of $4.97 million.
RSM US LLP, in Boston, Massachusetts, the Company's auditor since
2014, issued a "going concern" opinion in its report on the
consolidated financial statements for the year ended Dec. 31, 2017,
citing that the Company has suffered recurring cash losses from
operations and its total liabilities exceed its total assets. This
raises substantial doubt about the Company's ability to continue as
a going concern.
NORTHERN POWER: Interim Co-Chief Executive Officer Resigns
----------------------------------------------------------
Reinout Oussoren, the interim co-chief executive officer of
Northern Power Systems Corp. and NPS Corp's US subsidiary Northern
Power Systems, Inc., provided the Board of Directors with a notice
of his resignation from his position as interim co-chief executive
officer of NPS Corp and NPS Inc., effective on June 6, 2019. Mr.
Oussoren continues to serve as an officer and director of Northern
Power Systems SRL, NPS Inc.'s wholly-owned operating subsidiary in
Italy. There is no current intention to fill the vacancies
resulting from Mr. Oussoren's resignation.
About Northern Power Systems
Northern Power Systems -- http://www.northernpower.com/-- designs,
manufactures, and sells distributed power generation and energy
storage solutions with its advanced wind turbines, inverters,
controls, and integration services. With approximately 21 million
run-time hours across its global fleet, Northern Power wind
turbines provide customers with clean, cost-effective, reliable
renewable energy. NPS turbines utilize patented permanent magnet
direct drive (PMDD) technology, which uses fewer moving parts,
delivers higher energy capture, and provides increased reliability
thanks to reduced maintenance and downtime. Northern Power also
develops Energy Storage Solutions (ESS) based on the FlexPhase
power converter platform, which features patented converter
architecture and controls technology for advanced grid support and
generation applications.
Northern Power reported net income of $59,000 for the year ended
Dec. 31, 2017, compared to a net loss of $8.94 million for the year
ended Dec. 31, 2016. As of June 30, 2018, Norther Power had $8.92
million in total assets, $13.90 million in total liabilities and a
total shareholders' deficiency of $4.97 million.
RSM US LLP, in Boston, Massachusetts, the Company's auditor since
2014, issued a "going concern" opinion in its report on the
consolidated financial statements for the year ended Dec. 31, 2017,
citing that the Company has suffered recurring cash losses from
operations and its total liabilities exceed its total assets. This
raises substantial doubt about the Company's ability to continue as
a going concern.
O'BENCO IV: U.S. Trustee Forms 3-Member Committee
-------------------------------------------------
The Office of the U.S. Trustee on June 12 appointed three creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 case of O'Benco IV, LP.
The committee members are:
(1) Bryan Lusk
c/o Stephanie Yu Lusk
517 Rives Place
Shreveport, LA 71106
(318) 918-4394
stephanieluskbox@gmail.com
(2) David Fite
P.O. Box 1231
Shreveport, LA 71163
(318) 422-2992
defite1@gmail.com
(3) Patrick Crow
HPS Long Creek, LP
P.O. Box 670506
Dallas, TX 75367
(214) 616-7999
pat@claycrow.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About O'Benco IV LP
O'Benco IV, LP -- https://www.obrienenergyco.com/ -- is an
exploration and production company based in Shreveport, La.
O'Benco IV sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Texas Case No. 19-60384) on June 3, 2019. At the
time of the filing, the Debtor disclosed assets of between $100
million and $500 million and liabilities of the same range. The
Debtor is represented by William A. Wood, III, Esq., at Bracewell
LLP.
OMEROS CORP: May Issue 5.4 Million Added Shares Under 2017 Plan
---------------------------------------------------------------
Omeros Corporation has filed with the U.S. Securities and Exchange
Commission a Form S-8 registration statement to register 5,433,514
additional shares of its common stock to be issued pursuant to the
Omeros Corporation 2017 Omnibus Incentive Compensation Plan, as
amended and restated effective June 7, 2019.
The Common Stock being registered under this registration statement
pertains to securities issued, and to be issued, to employees,
consultants, officers, advisers and/or directors as compensation
under the Omeros Corporation 2017 Omnibus Incentive Compensation
Plan, as amended and restated effective as of
June 7, 2019 and for no other purpose. Equity awards granted under
the 2017 Plan may include stock options, restricted stock,
restricted stock units, stock appreciation rights, performance
units and performance shares.
A full-text copy of the prospectus is available for free at:
https://is.gd/0ceBXx
About Omeros Corporation
Omeros Corporation -- http://www.omeros.com-- is a
commercial-stage biopharmaceutical company committed to
discovering, developing and commercializing small-molecule and
protein therapeutics for large-market as well as orphan indications
targeting inflammation, complement-mediated diseases and disorders
of the central nervous system. The Company's drug product OMIDRIA
(phenylephrine and ketorolac intraocular solution) 1% / 0.3% is
marketed for use during cataract surgery or intraocular lens (IOL)
replacement to maintain pupil size by preventing intraoperative
miosis (pupil constriction) and to reduce postoperative ocular
pain. In the European Union, the European Commission has approved
OMIDRIA for use in cataract surgery and other IOL replacement
procedures to maintain mydriasis (pupil dilation), prevent miosis
(pupil constriction), and to reduce postoperative eye pain. Omeros
has multiple Phase 3 and Phase 2 clinical-stage development
programs focused on: complement-associated thrombotic
microangiopathies; complement-mediated glomerulonephropathies;
Huntington's disease and cognitive impairment; and addictive and
compulsive disorders. In addition, Omeros has a diverse group of
preclinical programs and a proprietary G protein-coupled receptor
(GPCR) platform through which it controls 54 new GPCR drug targets
and corresponding compounds, a number of which are in pre-clinical
development. The company also exclusively possesses a novel
antibody-generating platform. The Company is headquartered in
Seattle, Washington.
Omeros reported a net loss of $126.75 million for the year ended
Dec. 31, 2018, compared to a net loss of $53.48 million for the
year ended Dec. 31, 2017. As of March 31, 2019, the Company had
$101.24 million in total assets, $44.50 million in total current
liabilities, $26.57 million in lease liabilities, $151.18 million
in unsecured convertible senior notes, and a total shareholders'
deficit of $121.01 million.
Ernst & Young LLP, in Seattle, Washington, issued a "going concern"
opinion in its report on the consolidated financial statements for
the year ended Dec. 31, 2018 stating that the Company has suffered
losses from operations and has stated that substantial doubt exists
about the Company's ability to continue as a going concern.
OUTFRONT MEDIA: Moody's Rates $550MM Sr. Unsecured Notes 'B1'
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to OUTFRONT Media
Inc.'s subsidiary, Outfront Media Capital LLC's proposed $550
million senior unsecured note due 2027. The existing Ba3 corporate
family rating of OUTFRONT Media Inc., the Ba1 senior secured
rating, and B1 senior unsecured notes rating issued by its
subsidiary will remain unchanged. The outlook remains unchanged at
stable.
The net proceeds of the $550 million senior unsecured note will be
used to repay $550 million of senior unsecured notes due 2022. Pro
forma leverage is expected to remain unchanged at 5.1x as Q1 2019.
The transaction extends the maturity date of its debt so that the
next material maturity date (excluding the revolver in 2022) is
2024 when the company's term loan and senior unsecured note mature.
The ratings on the senior unsecured notes due 2022 will be
withdrawn after repayment.
Assignments:
Issuer: OUTFRONT Media Capital LLC
Proposed $550 million Gtd Senior Unsecured Notes due
2027, Assigned B1 (LGD5)
RATINGS RATIONALE
OUTFRONT Media Inc. benefits from its market position as one of the
largest outdoor advertising companies in the US with positions in
all the top 25 markets and approximately 140 markets in the US and
Canada. The continued conversion of traditional static billboards
to digital is expected to support revenue and EBITDA growth
although the company has historically spent less than its largest
competitors on digital billboard displays. The outdoor advertising
industry benefits from restrictions on the supply of billboards
which help support advertising rates and high asset valuations.
Leverage as of Q1 2019 was 5.1x (excluding Moody's standard lease
adjustments) which is high for the rating. The company has also
generated negative free cash flow after dividends in recent years
which has led to higher debt levels, but OUTFRONT has experienced
strong revenue and EBITDA growth in the past few quarters that has
led to lower overall leverage levels. EBITDA margins are good, but
are below the industry average of its US competitors at
approximately 28% as calculated by Moody's due to its lower margin
transit business.
The outdoor industry also remains vulnerable to consumer ad
spending and ad contract periods are generally shorter than they
were historically. OUTFRONT also derives significant revenue from
national advertisers and has business concentration in both New
York City and Los Angeles which can lead to increased volatility.
OUTFRONT renewed a material contract with the New York Metropolitan
Transit Authority (MTA) which will cause OUTFRONT to deploy over
50,000 digital transit displays (including platform, subway, and
railcar displays) over the next several years. Moody's expect the
company will continue to evaluate acquisitions that could be funded
with cash, debt, or equity.
Moody's expects OUTFRONT to maintain good liquidity as reflected by
its SGL-2 liquidity rating. Liquidity is supported by the company's
$430 million revolver due March 2022 with $35 million of
borrowings, $66 million of LCs outstanding, and $53 million of cash
on the balance sheet as of Q1 2019. There is an additional $150
million L/C facility which had $143 million outstanding as of Q1
2019. In June 2017, OUTFRONT entered into an Accounts Receivable
facility which expires in June 2021 that had $80 million
outstanding as of Q1 2019 in addition to a $75 million structured
repurchase facility. OUTFRONT has good cash flow from operations
prior to shareholder distributions, but free cash flow was negative
in 2017, 2018 and LTM Q1 2019 after capex and dividends. If the
company continues to retain its distribution rate above the amount
of free cash flow for an extended period of time, the liquidity
position would deteriorate.
OUTFRONT's liquidity position would benefit if the company
continues to sell shares under its $300 million At-the-Market
equity offering plan ($17 million issued in Q1 2019) that was put
in place in November 2017. The term loan facility is covenant lite,
but the revolver is subject to a maximum consolidated net secured
leverage ratio when drawn of 4x compared to a ratio of 1.5x as of
Q1 2019. Moody's anticipates OUTFRONT will maintain a significant
cushion of compliance. OUTFRONT also has the ability to issue
Incremental term loans in the amount of the greater of $400 million
or an unlimited amount subject to an incurrence test of 6x the
consolidated total leverage ratio compared to a ratio of 4.6x as of
Q1 2019.
The outlook is stable and Moody's expects mid-single digit organic
revenue and EBITDA growth in 2019. Moody's also anticipates that
OUTFRONT may potentially issue equity that could be used for
general corporate purposes, capex or to help fund the MTA digital
buildout. However, additional debt has the potential to offset the
impact of projected EBITDA growth and could lead to negative rating
action given the current high leverage for the existing ratings and
negative free cash flow.
An upgrade is unlikely in the near term given the high leverage
level for the existing rating and negative free cash flow. Leverage
would need to decrease below 3.5x (excluding Moody's standard
adjustments) and OUTFRONT would need to demonstrate both the desire
and ability to sustain leverage below that level while maintaining
a good liquidity position. Positive organic revenue growth would
also be required in addition to free cash flow as a percentage of
debt above 10%.
The ratings could face downward pressure if leverage was expected
to be maintained above 5x (excluding Moody's standard adjustments).
A deterioration in its liquidity position or continued negative
free cash flow could also trigger a downgrade.
The principal methodology used in these ratings was Media Industry
published in June 2017.
OUTFRONT Media Inc. is one of the leading outdoor advertising
companies with operations primarily in the US in addition to
Canada. OUTFRONT was previously an operating subsidiary of CBS
Corporation and in July 2014 began operating as a REIT. In October
2014, OUTFRONT completed the acquisition of certain outdoor assets
from Van Wagner Communications, LLC (Van Wagner) for $690 million.
In April 2016, the company sold its Latin America outdoor assets to
JCDecaux S.A for approximately $82 million in cash. In June 2017,
OUTFRONT acquired the equity interests of certain subsidiaries of
All Vision LLC to expand its outdoor advertising assets in Canada
for $94 million of cash and equity. Reported revenues were
approximately $1.6 billion on an LTM basis as of Q1 2019.
OUTLOOK THERAPEUTICS: Further Amends Partnership Deal with MTTR
---------------------------------------------------------------
Outlook Therapeutics, Inc., has entered into a further amendment of
its Strategic Partnership Agreement with MTTR LLC dated effective
as of Feb. 15, 2018, as amended by letter amendments dated March 2,
2018 and March 4, 2019. Under the Amendment, the Company increased
the aggregate monthly payments to MTTR under the existing agreement
from $105,208 to $170,724 through December 2019 by adding an
additional monthly retainer of $115,916, and an offset of $50,000
to the existing monthly retainer while the additional monthly
retainer is in effect. The Company and MTTR also clarified the
treatment of the monthly retainer fee and additional monthly
retainer fee for purposes of calculating certain amounts payable
under the MTTR Agreement.
About Outlook Therapeutics
Outlook Therapeutics, Inc., formerly known as Oncobiologics, Inc.
-- http://www.outlooktherapeutics.com/-- is a clinical-stage
biopharmaceutical company focused on developing its lead clinical
program, ONS-5010, a proprietary ophthalmic bevacizumab product
candidate for the treatment of wet age related macular degeneration
(wet AMD). ONS-5010 is currently in its first clinical trial,
which is being conducted outside of the U.S. and is designed to
serve as the first of two adequate and well controlled studies for
wet AMD.
Outlook Therapeutics reported a net loss attributable to common
stockholders of $48.01 million for the year ended Sept. 30, 2018,
compared to a net loss attributable to common stockholders of
$40.02 million for the year ended Sept. 30, 2017. As of March 31,
2019, Outlook Therapeutics had $17.17 million in total assets,
$40.21 million in total liabilities, $5.03 million in total
convertible preferred stock, and a total stockholders' deficit of
$28.08 million.
KPMG LLP's report on the consolidated financial statements for the
year ended Sept. 30, 2018, includes an explanatory paragraph
stating that the Company has incurred recurring losses and negative
cash flows from operations and has an accumulated deficit of $216.3
million, $13.5 million of senior secured notes that may become due
in fiscal 2019 and $4.6 million of unsecured indebtedness, $1.0
million of which is due on demand, and $3.6 million of which
matures Dec. 22, 2018, that raise substantial doubt about its
ability to continue as a going concern.
PEOPLE HELPING: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
People Heping Each Other, Inc., according to court dockets.
About People Helping Each Other Inc.
People Helping Each Other, Inc. is a 501(c)(3) organization that
was formed in 2002 in Palatka, Fla., by Pastor Frederick Demps and
the Calgary Baptist Church.
People Helping Each Other filed a voluntary petition under Chapter
11 if the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-15873)
on May 1, 2019. The Debtor is represented by Nicholas B. Bangos,
P.A. as counsel.
PETES CHICKEN: Unsecureds to be Paid in Full at 4% Over 7 Years
---------------------------------------------------------------
Petes Chicken N More, Inc., filed a disclosure statement explaining
its chapter 11 plan of reorganization dated June 2, 2019.
Petes Chicken is a Texas corporation. While at one time Petes
Chicken owned and operated fried chicken restaurants in Corpus
Christi, Texas, Petes Chicken currently owns two notes payable in
connection with the sale of previously owned fried chicken
restaurants.
The Plan proposes, starting on the Effective Date, for the Debtor
to pay secured claims in full or the value of their claim. Debtor
will pay 100% of the general unsecured claims in Class 2 over seven
years at a rate of 4% interest per annum. Regular monthly payments
of approximately $1,612.00, beginning on the effective date, will
be distributed on a pro-rata basis to the various creditors holding
unsecured claims.
Beginning on the Effective Date, the Debtor will allocate
sufficient funds from its profits to make the distributions
required under the Plan.
A copy of the Disclosure Statement dated June 2, 2019 is available
at https://tinyurl.com/y3anjmsx from Pacermonitor.com at no charge.
Corpus Christi, Texas-based Petes Chicken N More, Inc., filed for
Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No.
18-20350) on Aug. 6, 2018, estimating its assets and liabilities at
up to $50,000 each. William Arthur Whittle, Esq., at The Whittle
Law Firm, PLLC, serves as the Debtor's bankruptcy counsel.
PETROCAPITA G.P.: Court Appoints Hudson and Company as Receiver
---------------------------------------------------------------
Petrocapita Income Trust (CSE:PCE.UN) (the "Trust") disclosed that
as of June 11, 2019, the Court of Queens Bench of Alberta has
appointed Hudson and Company Insolvency Trustees Inc as Receiver
and Manager of Petrocapita G.P. I Ltd and Petrocapita Oil and Gas
L.P. The Receivership Order (the "Order") was granted upon the
application of Safeway Holdings (Alberta) Ltd., one of the secured
creditors of Petrocapita G.P. I Ltd and Petrocapita Oil and Gas
L.P.
The Receiver will accordingly manage the affairs of and seek to
sell all of the assets of Petrocapita G.P. I Ltd and Petrocapita
Oil and Gas L.P. Any net proceeds generated in this process
available for distribution to creditors would first be distributed
to the Trust and Safeway Holdings (Alberta) Ltd., who are the two
equal-ranking secured creditors of Petrocapita G.P. I Ltd and
Petrocapita Oil and Gas L.P., and thereafter to any unsecured
creditors.
The Trust will work with the Receiver to ensure that the maximum
possible value for the Petrocapita G.P. I Ltd and Petrocapita Oil
and Gas L.P. assets is realized from this process and that the oil
and gas regulators in Alberta and Saskatchewan approve of any
sale.
The Trust notes that as substantially all of its assets are
affected by the Order, it is in default under the Trust/Alliance
Trust Company Debenture Indenture arrangement.
PG&E CORP: Yanni Appointed as Wildfire Assistance Administrator
---------------------------------------------------------------
On June 10, 2019, those displaced by the 2017 Northern California
wildfires and 2018 Camp Fire are one step closer to receiving aid
for alternative living expenses and other urgent needs through a
bankruptcy court-approved, independently-administered Wildfire
Assistance Program. The court approved the appointment of Cathy
Yanni as administrator of the $105 million fund that PG&E advocated
to establish and received court approval for last month. PG&E is
seeking to make the funds available to the administrator for
distribution to wildfire victims as soon as possible.
As administrator, Ms. Yanni will be responsible for developing the
specific eligibility requirements and application procedures for
the distribution of the Wildfire Assistance Fund to eligible
recipients. She will be responsible for ensuring funds are
distributed in a fair and equitable manner, and assistance is
prioritized to those victims who are most in need, including those
who are currently without shelter. When establishing eligibility
requirements, reviewing applications, and making distributions from
the fund, Ms. Yanni may engage qualified professionals to assist
with the administration of the Wildfire Assistance Program, and may
also partner with local housing agencies and community
organizations.
"At its very first meeting, the new board of directors focused on
how we could help those impacted by these devastating wildfires as
quickly as possible. This fund is an important step toward that
goal. With the appointment of Cathy Yanni as administrator of the
Wildfire Assistance Program, those who have lost so much can
continue to recover and rebuild while meeting their immediate
needs. We feel strongly that helping these communities and
individuals in their time of need is the right thing to do," said
CEO and President of PG&E Corporation Bill Johnson.
Ms. Yanni is a full-time specialist in Alternative Dispute
Resolution. Since joining JAMS in 1998, she has settled thousands
of cases. She mediated hundreds of claims arising from the October
2007 San Diego wildfires. Ms. Yanni's appointment was agreed to by
PG&E and the Official Committees that are party to the Chapter 11
proceeding.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered by
collective bargaining agreements with local chapters of three labor
unions: (i) the International Brotherhood of Electrical Workers;
(ii) the Engineers and Scientists of California; and (iii) the
Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Feb. 12, 2019. The Committee retained
Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor;
Centerview Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PIONEER ENERGY: Receives Noncompliance Notice from the NYSE
-----------------------------------------------------------
Pioneer Energy Services has been notified by the New York Stock
Exchange that its common stock does not satisfy one of the NYSE's
standards for continued listing. The NYSE requires that the
average closing price per share of a listed company's stock be no
less than $1.00 over a consecutive 30 trading-day period. As of
June 11, 2019, the date of the NYSE notice, the 30 trading-day
average closing price of Pioneer Energy Services common stock was
$0.89 per share.
Under the NYSE's rules, Pioneer has six months following receipt of
the notification to regain compliance with the minimum share price
requirement. Pioneer can regain compliance at any time during the
six-month cure period if Pioneer's common stock has a closing share
price of at least $1.00 on the last trading day of any calendar
month during the six-month period and also has an average closing
share price of at least $1.00 over the 30-trading day period ending
on the last trading day of that month. During this period,
Pioneer's common stock is permitted to continue to trade on the
NYSE under the symbol "PES," but will have an added designation of
".BC" to indicate the status of the common stock as "below
compliance." As required by the NYSE, Pioneer intends to notify
the NYSE by June 25, 2019 of its intent to cure the price
deficiency.
About Pioneer Energy
Based in San Antonio, Texas, Pioneer Energy Services --
http://www.pioneeres.com/-- provides well servicing, wireline, and
coiled tubing services to producers in the U.S. Gulf Coast,
Mid-Continent and Rocky Mountain regions through its three
production services business segments. Pioneer also provides
contract land drilling services to oil and gas operators in Texas,
the Mid-Continent and Appalachian regions and internationally in
Colombia through its two drilling services business segments.
Pioneer Energy reported a net loss of $49.01 million for the year
ended Dec. 31, 2018, compared to a net loss of $75.11 million for
the year ended Dec. 31, 2017. As of March 31, 2019, the Company
had $737.09 million in total assets, $586.12 million in total
liabilities, and $150.96 million in total shareholders' equity.
* * *
Moody's Investors Service had upgraded Pioneer Energy Services'
Corporate Family Rating to 'Caa2' from 'Caa3'. Moody's said that
Pioneer's 'Caa2' CFR reflects the company's elevated debt balance
pro forma for the $175 million senior secured term loan issuance.
Moody's said that while the company's operating cash flow is
expected to improve due to good demand for its drilling rigs and
equipment services, Pioneer Energy Services' leverage metrics are
weak, as reported by the Troubled Company Reporter on Nov. 13,
2017.
In January 2019, S&P Global Ratings lowered the issuer credit
rating on Pioneer Energy Services Corp. to 'CCC+' from 'B-'. S&P
said, "The downgrade on Pioneer Energy Services Corp. primarily
reflects what we believe to be increasing refinancing risk, as well
as subdued expectations for operating results in 2019.
POET TECHNOLOGIES: Marcum LLP Raises Going Concern Doubt
--------------------------------------------------------
POET Technologies Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 20-F, disclosing a net loss of
$16.32 million on $3.888 million of revenue for the year ended Dec.
31, 2018, compared to a net loss of $12.80 million on $2.794
million of revenue for the year ended in 2017.
The audit report of Marcum LLP states that the Company has a
significant working capital deficiency, has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
The Company's balance sheet at Dec. 31, 2018, showed total assets
of $25.14 million, total liabilities of $4.043 million, and $21.095
million in total shareholders' equity.
A copy of the Form 20-F is available at:
https://is.gd/uRWlMc
POET Technologies Inc. designs, manufactures, and sells
semi-conductor products in the United States, Canada, and
Singapore. It offers optical light source products and photonic
integrated devices for the sensing, data and telecommunications,
medical, instrumentation, industrial, defense, and security
markets. The company was formerly known as Opel Technologies Inc.
and changed its name to POET Technologies Inc. in June 2013. POET
Technologies Inc. is headquartered in Toronto, Canada.
POST PRODUCTION: Aug. 29 Plan Confirmation Hearing
--------------------------------------------------
The Bankruptcy Court has issued an order approving the first
amended disclosure statement and first amended plan of
reorganization for Post Production, Inc. The confirmation hearing
on the Plan will be held on August 29, 2019 at 11:00 a.m.
Class Six. This Class is impaired and includes all allowed general
unsecured claims against the Debtor. The total amount of such claim
is approximately $774,292. Total amount of payments to satisfy the
allowed claims: $20,000 with the first and only payments in the
amount of $20,000 on a prorata basis.
Claims are to be paid from sale of business and operating
activities which include: net receipt sale $219,000, account
receivables $300,000 and other (cash on hand - DIP) $224,000, total
$743,000.
A full-text copy of the Amended Disclosure Statement dated January
29, 2019, is available at https://tinyurl.com/y4jqtpw2 from
PacerMonitor.com at no charge.
About Post Production
Post Production, Inc. -- http://www.postproduction.com/-- is a
full-service post production company headquartered in Los Angeles,
California. Formerly known as SonicPool, Post Production provides
industry professionals with services including editorial, color,
visual effects and digital delivery. It also offers
post-production rentals and technology products. The company was
founded in 2001 by John W. Frost and Patrick Bird.
Post Production sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-17028) on June 18,
2018. In the petition signed by John Frost, president, the Debtor
disclosed $1.45 million in assets and $1 million in liabilities.
Judge Vincent P. Zurzolo oversees the case. The Debtor tapped
Kogan Law Firm, APC, as its legal counsel.
POWER SOLUTIONS: 2018 & 2019 Financial Reports Delayed
------------------------------------------------------
Power Solutions International, Inc., has delayed the filing of
certain financial reports with the Securities and Exchange
Commission.
Last month, the Company advised the agency it was unable to file,
without unreasonable effort and expense, its Quarterly Report on
Form 10-Q for the quarter ended March 31, 2019, as its focus has
now shifted to the preparation, finalization and audit of the
Company's financial statements to be included in its Annual Report
on Form 10-K for the year ended December 31, 2018, in addition to
the preparation of the Quarterly Reports on Form 10-Q for 2018.
The delay in filing the 2018 Filings, as well as the Form 10-Q for
the period ended March 31, 2019, is a consequence of the time and
effort necessary to complete such financial statements following
the Company's recent filing of certain restated and delinquent
financial statements in the Company's Form 10-K for the year ended
December 31, 2017, explains Charles F. Avery, Jr., the Company's
Chief Financial Officer.
In August 2016, the Company disclosed an internal review of certain
accounting matters. Since that time, management and the Audit
Committee of the Board, along with the assistance of outside
advisors, have been working diligently to identify and undertake
meaningful changes to remedy deficient operational and accounting
controls and are working to become current with the Company's
financial reporting requirements. The filing of the 2017 Form 10-K
is a significant step forward in that process.
The Company plans to file its Quarterly Reports on Form 10-Q for
the quarters ended March 31, June 30 and September 30, 2018, and
its Form 10-K for the period ended December 31, 2018, by the end of
the third quarter of 2019. In addition to these filings, the
Company is working to become current with its 2019 filings. When
the Company is current with all of its filings, it will seek to
relist its common stock on a national exchange and expects to host
an investor conference call to discuss its results and outlook.
The Company says sales for the three months ended March 31, 2019,
were approximately $114 million. The Company's sales results for
the three months ended March 31, 2019, reflect increased sales
across all of its end markets, with a majority of the improvement
coming from transportation and industrial, as compared to the same
period in 2018.
Results of operations for the three months ended March 31, 2019,
will be impacted by significant third-party professional fees
related to, among other items: (i) ongoing efforts to restate and
complete prior-period financial statements, (ii) audit fees related
to prior-period financial statement restatements, (iii) responding
to the governmental investigations, and (iv) internal control
remediation efforts.
The Company's sales for the full year 2018 are estimated to be
approximately $500 million, an increase of approximately 20%
compared to 2017. An associated improvement in gross profit and
gross margin is also anticipated; however, the positive impact of
the increased gross profit on operating income is anticipated to be
more than offset by significant increases in operating expenses,
largely the result of increased selling, general and administrative
expenses principally due to higher restatement related costs, and
higher research, development and engineering expenses for product
development activities in support of the Company's long-term growth
objectives.
Additionally, the Company incurred significant expenses for product
development activities in support of the Company's long-term growth
objectives.
The Company's total debt obligations were approximately $112
million at March 31, 2019, an increase of approximately $2 million
as compared with total debt at December 31, 2018. At the end of
2018, the Company's total debt was approximately $110 million,
which compares to approximately $107 million as of September 30,
2018.
The sales data is preliminary and has not been reviewed by the
Company's independent registered public accounting firm and
therefore is subject to change.
Until it has finalized and filed its financial statements for all
periods subsequent to December 31, 2017, including the quarter
ended March 31, 2019, the Company is unable to provide comparative
period financial results and report its final results. Upon such
finalization, the Company will be in a position to provide a
reasonable estimate of its financial results for the period.
Based in Wood Dale, Ill., Power Solutions International, Inc. (OTC
Pink: PSIX) -- http://www.psiengines.com/-- develops and delivers
powertrains purpose built for the Class 3 through Class 7 medium
duty trucks and buses for the North American and Asian markets,
which includes work trucks, school and transit buses, terminal
tractors, and various other vocational vehicles. In addition, PSI
develops and delivers complete industrial power systems that are
used worldwide in stationary and mobile power generation
applications supporting standby, prime, distributed generation,
demand response, and co-generation power (CHP) applications; and
mobile industrial applications that include forklifts, aerial
lifts, industrial sweepers, aircraft ground support, arbor,
agricultural and construction equipment.
PRECIPIO INC: CEO Buys $2,500 Worth of Common Stock
---------------------------------------------------
Precipio, Inc. announced on May 23, 2019, that Ilan Danieli, its
chief executive officer, adopted a stock trading plan in accordance
with Rule 10b5-1 of the Securities and Exchange Act of 1934, as
amended, to purchase shares of the Company's common stock.
On June 7, 2019, Mr. Danieli purchased $2,500 worth of the
Company's common stock on the open market. This purchase will be
alongside future purchases that are part of the stock trading plan
under Rule 10b5-1 Mr. Danieli recently entered into.
Under the Plan, a broker will purchase $2,500 of shares of the
Company's common stock at prevailing market prices on the first
business day of every third calendar month, with the next purchase
taking place on Sept. 1, 2019. Transactions under the Plan will be
reported to the Securities and Exchange Commission in accordance
with applicable securities laws, rules and regulations.
The Plan adopted by Mr. Danieli is intended to comply with Rule
10b5-1 of the Exchange Act and the Company's Insider Trading and
Anti-Tipping Policy, which permit issuers, officers, directors or
employees who are not then in possession of material non-public
information to enter into a pre-arranged plan for buying or selling
Company stock under specified conditions and at specified times.
In accordance with Rule 10b5-1, Mr. Danieli will have no discretion
over purchases under the Plan.
About Precipio
Omaha, Nebraska-based Precipio, formerly known as Transgenomic,
Inc. -- http://www.precipiodx.com/-- is a cancer diagnostics
company providing diagnostic products and services to the oncology
market. The Company has developed a platform designed to eradicate
misdiagnoses by harnessing the intellect, expertise and technology
developed within academic institutions and delivering quality
diagnostic information to physicians and their patients worldwide.
Precipio operates a cancer diagnostic laboratory located in New
Haven, Connecticut and has partnered with the Yale School of
Medicine.
Precipio incurred a net loss of $15.69 million for the year ended
Dec. 31, 2018, compared to a net loss of $20.69 for the year ended
Dec. 31, 2017. As of March 31, 2019, the Company had $21.63 million
in total assets, $11.80 million in total liabilities, and $9.83
million in total stockholders' equity.
The audit opinion included in the Company's annual report for the
year ended Dec. 31, 2018, contains a "going concern" explanatory
paragraph. Marcum LLP, in Hartford, CT, the Company's auditor
since 2016, stated in its report dated April 16, 2019 that the
Company has a significant working capital deficiency, has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
PRESERBA COMPANIA: Unsecured Creditors to Get 5% in 60 Months
-------------------------------------------------------------
Preserba Compania de Desarrollos, Inc., filed a Chapter 11 Plan and
accompanying Disclosure Statement.
The Debtor developed and constructed a 56-unit walk-up housing
project commercially known as Condominio Miraflor.
GENERAL UNSECURED CLAIMS. This class shall consist of any and all
unsecured claim scheduled or filed by any party. The Debtor listed
unsecured creditors in the total amount of $188,061.
Thereafter, Popular Auto filed Claim No. 1 in the amount of
$8,061. Should any other claim by the unsecured creditors of the
Debtor be timely filed, the same will be reconciled and if allowed,
included in this class. The Debtor proposes to pay holders of
allowed claims under this Class a 5% dividend of their allowed
claim in a term of 60 consecutive months, commencing on the
Effective Date. This class is impaired.
EQUITY SECURITY AND/OR OTHER INTEREST HOLDERS. This class includes
all equity and interest holders who are the owners of the stock of
the Debtor. This class shall not receive a dividend under the Plan
and is not entitled to vote.
The proposed plan will be funded with Debtor's own assets, the
lease of the 56 units of Condominio Miraflor, the shareholder's
contribution, if needed and if Condado accepts the alternative
treatment of payment on the Effective Date, a post petition
financing in the amount of $5,000,000.00.
A full-text copy of the Disclosure Statement dated May 29, 2019, is
available at https://tinyurl.com/y3te3aa4 from PacerMonitor.com at
no charge.
Attorney for the Debtor:
Carmen D. Conde Torres, Esq.
C. CONDE & ASSOC.
San Jose Street #254, 5th Floor
San Juan, P.R. 00901-1253
Tel: (787) 729-2900
Fax: (787) 729-2203
E-mail: condecarmen@condelaw.com
About Inversiones Caribe
Inversiones Caribe owns a parcel of land in Dorado, Puerto Rico,
which is valued at $6 million, and a commercial property in Ponce,
Puerto Rico, which is valued at $1.4 million.
Inversiones Caribe Delta filed a Chapter 11 petition (Bankr. D.P.R.
Case No. 19-00388) on Jan. 29, 2019. In the petition signed by
Carlos F. Muratti, president, the Debtor disclosed $7,415,061 in
assets and $3,619,549 in liabilities. The case has been assigned
to Judge Brian K. Tester. Carmen D. Conde Torres, Esq., at C.
Conde & Assoc., is the Debtor's counsel.
The case is jointly administered with the Chapter 11 case of
Preserba Compania de Desarrollos, Inc. (Case No. 19-00387).
PUMAS CAB: Discloses Treatment of PI Claimants in New Plan
----------------------------------------------------------
Pumas Cab Corp. filed a fourth amended Chapter 11 plan and
accompanying disclosure statement to add the debtor's monthly
operating report for the month of April 2019 and to disclose that
Class IV consists of the personal injury claims of Choon Bae Chun,
Luis Garcia, Andreina Casalinovo and Dayne C. Williams.
Class IV - (Unsecured Claims) consists of the claims of Choon Bae
Chun, Luis Garcia, Andreina Casalinovo and Dayne C. Williams.
Creditors Choon Bae Chun and Luis Garcia will not receive any
treatment under the plan, due to the fact that the claims have been
settled by the insurance company, paid as per agreed upon terms
and the cases are closed. Andreina Casalinovo and Dayne C.
Williams are claimants in separate personal injury claims that are
listed in the petition as undisputed and have filed proofs of claim
in the amount of $1,000,000 each. Therefore, the claims of the
above referenced personal injury claimants shall be limited to the
available insurance coverage limits. No additional recovery under
the Debtor's Plan of Reorganization shall be received by said
claimants.
The Plan will be financed from contributions from the personal
funds of each two loan guarantors. The Debtor provided to Melrose
Credit Union detailed individual financial statements for each
guarantor of the loan.
A full-text copy of the Fourth Amended Disclosure Statement dated
May 29, 2019, is available at https://tinyurl.com/y6e7n6zv from
PacerMonitor.com at no charge.
About Pumas Cab Corp.
Pumas Cab Corp. is a small business debtor as defined in 11 U.S.C.
Section 101(51D) under the taxi and limousine service industry. It
is an affiliate of Quizphi Cab Corp., which sought bankruptcy
protection (Bankr. E.D.N.Y. Case No. 17-44085) on Aug. 7, 2017.
Pumas Cab Corp., based in Astoria, New York, filed a Chapter 11
petition (Bankr. E.D.N.Y. Case No. 17-44151) on Aug. 10, 2017. In
the petition signed by Nelly Lucero, secretary, the Debtor
disclosed $12,415 in assets and $2.64 million in liabilities. The
Hon. Carla E. Craig presides over the Pumas Cab case.
QUEST SOLUTION: RBSM LLP Raises Going Concern Doubt
---------------------------------------------------
Quest Solution, Inc., filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K, disclosing a net loss
(before income taxes) of $5.727 million on $56.20 million of total
net revenues for the year ended Dec. 31, 2018, compared to a net
loss (before income taxes) of $2.432 million on $54.46 million of
total net revenues for the year ended in 2017.
The audit report of RBSM LLP states that the Company has an
accumulated deficit and recurring losses. These facts and others
raise substantial doubt about the Company's ability to continue as
a going concern. The Company's continuation as a going concern is
dependent upon its ability to generate sufficient cash flow to meet
its obligations on a timely basis.
The Company's balance sheet at Dec. 31, 2018, showed total assets
of $40.15 million, total liabilities of $37.86 million, and total
stockholders' equity of $2.293 million.
A copy of the Form 10-K is available at:
https://is.gd/v00MAD
Quest Solution, Inc., operates as a systems integrator with a focus
on design, delivery, deployment, and support of integrated mobile
and automatic identification data collection solutions in the
United States. It serves manufacturing, distribution,
transportation and logistics, retail, food, and healthcare sectors.
Quest Solution is based in Eugene, Oregon.
QUIZHPI CAB: Discloses Treatment of PI Claims in New Plan
---------------------------------------------------------
Quizhpi Cab Corp., filed a third amended Chapter 11 Plan and
accompanying third amended Disclosure Statement to disclose that
Class III consists of the personal injury claims of Creditors Arapi
Mahir, Double Four Corp., Gomez Marcelo and Soned Com.
Class III claims are impaired and will be limited to the available
insurance coverage limits. No additional recovery under the
Debtor's Plan of Reorganization shall be received by said
claimants. Creditor Soned Corp., will not receive any treatment
under the plan, due to the fact that the claim has been settled by
the insurance company, paid as per agreed upon terms and the case
is close.
The Plan will be financed from contributions from the personal
funds of each two loan guarantors. The Debtor provided to Melrose
Credit Union detailed individual financial statements for each
guarantor of the loan.
A full-text copy of the Third Amended Disclosure Statement dated
May 29, 2019, is available at https://tinyurl.com/y2wfpctm from
PacerMonitor.com at no charge.
About Pumas Cab Corp.
Pumas Cab Corp. is a small business debtor as defined in 11 U.S.C.
Section 101(51D) under the taxi and limousine service industry. It
is an affiliate of Quizphi Cab Corp., which sought bankruptcy
protection (Bankr. E.D.N.Y. Case No. 17-44085) on Aug. 7, 2017.
Pumas Cab Corp., based in Astoria, New York, filed a Chapter 11
petition (Bankr. E.D.N.Y. Case No. 17-44151) on Aug. 10, 2017. In
the petition signed by Nelly Lucero, secretary, the Debtor
disclosed $12,415 in assets and $2.64 million in liabilities. The
Hon. Carla E. Craig presides over the Pumas Cab case.
QUORUM HEALTH: To Cease Inpatient Operations at MetroSouth Hospital
-------------------------------------------------------------------
MetroSouth Medical Center in Blue Island, Illinois, filed an
application with the Illinois Health Facilities and Service Review
Board to discontinue hospital operations. The hospital continues
to search for a new operator to offer health care services on the
campus. If Quorum Health Corporation is not able to divest the
facility, it will discontinue all operations by the end of the
fourth quarter of 2019.
The Company's decision to discontinue operations at the facility is
a result of mounting financial losses due to decreasing patient
volumes, increasing market saturation, and reduced reimbursement
from government and commercial payors.
MetroSouth Medical Center was among the eight facilities identified
by the Company as being marketed for sale on its first quarter 2019
earnings conference call.
About Quorum Health
Headquartered in Brentwood, Tennessee, Quorum Health --
http://www.quorumhealth.com/-- is an operator of general acute
care hospitals and outpatient services in the United States.
Through its subsidiaries, the Company owns, leases or operates a
diversified portfolio of 26 affiliated hospitals in rural and
mid-sized markets located across 14 states with an aggregate of
2,458 licensed beds. The Company also operates Quorum Health
Resources, LLC, a hospital management advisory and consulting
services business.
Quorum Health incurred net losses attributable to the Company of
$200.24 million in 2018, $114.2 million in 2017, and $347.7 million
in 2016. As of March 31, 2019, Quorum Health had $1.64 billion in
total assets, $1.75 billion in total liabilities, $2.27 million in
redeemable non-controlling interests, and a total deficit of
$114.12 million.
* * *
As reported by the TCR on May 20, 2019, S&P Global Ratings lowered
its issuer credit rating on Brentwood, Tenn.-based Quorum Health to
'CCC' from 'CCC+' with negative outlook. S&P said the downgrade
reflects weak operating performance in the first quarter of 2019, a
slower-than-expected pace of divestitures, and greater prospects
for a covenant violation and possible debt restructuring,
adding that the company has only divested one of the eight planned
hospital divestitures for 2019.
REGENTS HOLDINGS: Taps Curtis Castillo as Legal Counsel
-------------------------------------------------------
Regents Holdings Inc. received approval from the U.S. Bankruptcy
Court for the Northern District of Texas to hire Curtis Castillo PC
as its legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include legal advice concerning the
administration of its estate and the investigation of the Debtor's
acts, conduct, assets and liabilities.
The firm's hourly rates are:
Clerk/Paralegal $95 - $150
Junior Associates $175 - $375
Associates $175 - $375
Senior Attorneys $175 - $375
Shareholders $425 - $500
Mark Castillo, Esq., and Robert Rowe, Esq., the attorneys who are
anticipated to handle the case, charge $425 per hour and $225 per
hour, respectively.
Curtis received $50,000 as retainer and $1,171 for the filing fee.
The firm is "disinterested" as defined in Section 101(14) of the
Bankruptcy Code, according to court filings.
Curtis can be reached through:
Mark A. Castillo, Esq.
Robert C. Rowe, Esq.
Curtis | Castillo PC
901 Main Street, Suite 6515
Dallas, TX 75202
Telephone: 214.752.2222
Facsimile: 214.752.0709
Email: mcastillo@curtislaw.net
rrowe@curtislaw.net
About Regents Holdings
Regents Holdings Inc. is a subsidiary of 1218, Inc., a staffing
agency with headquarters in Dallas.
Regents Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Texas Case No. 19-31313) on April 12,
2019. At the time of the filing, the Debtor estimated assets of
between $1 million and $10 million and liabilities of the same
range. The case is assigned to Judge Stacey G. Jernigan. Curtis |
Castillo PC is the Debtor's counsel.
REMLIW INC: Files Chapter 11 Liquidating Plan
---------------------------------------------
Remliw, Inc., filed a disclosure statement describing its chapter
11 plan of liquidation dated May 31, 2019.
Class V under the liquidation plan consists of unsecured creditors
with claims totaling approximately $1,774,342. General unsecured
claims will be paid on the Effective Date or the Closing Date on a
pro-rata basis from the available funds on that dated after payment
of Classes I, II, III, and IV.
The funds for the payment to the Debtor's creditors will originate
from the Debtor's available funds and the sale of its remaining
assets. The Debtor will conduct a sale of the business as a going
concern to maximize the economic yield of its assets. The asking
price for sale of the real property is $1,300,000.
The proposed plan has the following risk: The funding of the plan
is contingent to the sale and liquidation of all the assets of the
estate up to the maximum realized value.
A copy of the Disclosure Statement dated May 31, 2019 is available
at https://tinyurl.com/y2t4kes8 from Pacermonitor.com at no charge.
A copy of the Liquidation Plan is available at
https://tinyurl.com/y4hk5m9s from Pacermonitor.com at no charge.
About Remliw, Inc.
Remliw Inc. is a privately held company, which owns a motel located
at Carr 639 Km 2.1 Arecibo, Puerto Rico.
Remliw Inc. filed a voluntary Chapter 11 petition (Bankr. D.P.R.
Case No. 19-01179) on March 2, 2019. In the petition signed by
Wilmer Tacoronte Negron, administrator, the Debtor disclosed
$2,776,090 in total liabilities. Damaris Quinones Vargas, Esq., at
LCDA Damaris Quinones, is the Debtor's counsel.
RESORT SAVERS: Needs More Capital to Continue as Going Concern
--------------------------------------------------------------
Resort Savers, Inc. filed with the U.S. Securities and Exchange
Commission its annual report on Form 10-K, disclosing net income of
$1.434 million on $37.07 million of revenue for the year ended Dec.
31, 2018, compared to net income of $1,140 on $891,875 of revenue
for the year ended in 2017.
Resort Savers also reported net income of $271,500 for the three
months ended March 31, 2019, a turnaround from a net loss of
$112,900 for the same period a year ago.
At March 31, 2019, the Company had $19.93 million in total assets
against $10.02 million in total liabilities and $9.905 million in
total equity.
The Company's balance sheet at Dec. 31, 2018, had showed total
assets of $43.62 million, total liabilities of $34.13 million, and
a total stockholders' equity of $9.486 million.
The substantial reduction in assets is primarily in changes to the
Company's accounts receivable. As at March 31, 2019 and Dec. 31,
2018, the Company had accounts receivable of $12.19 million and
$38.17 million, respectively and trade receivables from customers
which are related to the Company of $11.48 million and $37.055
million are included in accounts receivable.
The Company has not yet had sufficient revenues to cover its
operating cost, and requires additional capital to commence its
operating plan. The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to
fund operating losses until it becomes profitable. If the Company
is unable to obtain adequate capital, it could be forced to cease
operations. These factors raise substantial doubt about its
ability to continue as a going concern.
A copy of the Form 10-K is available at:
https://is.gd/Bb2oVj
A copy of the March 2019 quarterly report is available at
https://is.gd/qYWpxM
Resort Savers, Inc., trades in oil, gas, and lubricant products in
the People's Republic of China. It also provides nutrition
consultancy services and training, as well as sells health products
through an online store. The company is based in Puchong,
Malaysia.
REWALK ROBOTICS: Prices $5 Million Registered Direct Stock Offering
-------------------------------------------------------------------
ReWalk Robotics Ltd. has entered into definitive agreements with
institutional investors providing for the issuance of approximately
833,334 ordinary shares at a purchase price of $6.00 per ordinary
share in a registered direct offering priced at-the-market.
ReWalk will also issue unregistered warrants to purchase up to
approximately 416,667 ordinary shares. The warrants will have a
term of 5.5 years, be exercisable immediately following the
issuance date and have an exercise price of $6.00 per ordinary
share. The offering is expected to result in gross proceeds of
approximately $5 million.
H.C. Wainwright & Co. is acting as the exclusive placement agent in
connection with this offering.
The closing of the sale of the securities is expected to take place
on or about June 12, 2019, subject to satisfaction of customary
closing conditions.
The ordinary shares were offered pursuant to a shelf registration
statement on Form S-3 (File No. 333-231305), which was declared
effective by the United States Securities and Exchange Commission
on May 23, 2019. Those ordinary shares may be offered only by
means of a prospectus, including a prospectus supplement, forming a
part of the effective registration statement.
When filed with the SEC, copies of the prospectus supplement and
the accompanying prospectus relating to the registered direct
offering may be obtained at the SEC's website at
http://www.sec.gov. Copies of the prospectus supplement and
accompanying prospectus relating to the registered direct offering
may also be obtained by contacting H.C. Wainwright & Co., LLC at
430 Park Avenue, 3rd Floor, New York, NY 10022, by calling (646)
975-6996 or emailing placements@hcwco.com.
The warrants were offered in a private placement pursuant to an
applicable exemption from the registration requirements of the
Securities Act of 1933, as amended, and, along with the ordinary
shares issuable upon their exercise, have not been registered under
the Act, and may not be offered or sold in the United States absent
registration with the SEC or an applicable exemption from such
registration requirements.
About ReWalk Robotics
ReWalk Robotics Ltd. -- http://www.rewalk.com-- develops,
manufactures and markets wearable robotic exoskeletons for
individuals with lower limb disabilities as a result of spinal cord
injury or stroke. ReWalk's mission is to fundamentally change the
quality of life for individuals with lower limb disability through
the creation and development of market leading robotic
technologies. Founded in 2001, ReWalk has headquarters in the
U.S., Israel and Germany.
ReWalk incurred a net loss of $21.67 million in 2018, a net loss of
$24.71 million in 2017, and a net loss of $32.50 million in 2016.
As of March 31, 2019, the Company had $17.03 million in total
assets, $14.98 million in total liabilities, and $2.05 million in
total shareholders' equity.
Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, in
Haifa, Israel, issued a "going concern" qualification in its report
dated Feb. 8, 2019, on the Company's consolidated financial
statements for the year ended Dec. 31, 2018, citing that the
Company has suffered recurring losses from operations and has
stated that substantial doubt exists about the Company's ability to
continue as a going concern.
SHARING ECONOMY: Malone Bailey Replaces RBSM as Auditor
-------------------------------------------------------
Sharing Economy International, Inc., received on June 5, 2019, a
letter from RBSM LLP confirming that RBSM will no longer serve as
the Company's auditor. On June 10, 2019, the Company engaged
Malone Bailey LLP to serve as the Company's new independent
registered public accounting firm. The decision to appoint Malone
Bailey was unanimously approved by the Company's Board of
Directors.
The Company said the change was not made due to any disagreements
with RBSM. RBSM's audit reports on the Company's consolidated
financial statements for the fiscal years ended Dec. 31, 2017 and
2018 did not contain an adverse opinion or a disclaimer of opinion,
nor were those reports qualified or modified as to uncertainty,
audit scope, or accounting principles, except as discussed in Note
1 to the Company's financial statements on Form 10-K, the Company
has suffered recurring losses from operations, generated negative
cash flows from operating activities, has an accumulated deficit
that raise substantial doubt exists about Company's ability to
continue as a going concern.
During the fiscal years ended Dec. 31, 2017 and 2018 and the
subsequent interim period through June 5, 2019, there were no (i)
disagreements between the Company and RBSM on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedure.
During each of the fiscal years ended Dec. 31, 2017 and 2018, and
the subsequent period prior to the Company's engagement of Malone
Bailey, neither the Company nor anyone on the Company's behalf
consulted Malone Bailey regarding either (i) the application of
accounting principles to a specified transaction, either completed
or proposed; or the type of audit opinion that might be rendered on
the Company's financial statements, and neither a written report
nor oral advice was provided to the Company that Malone Bailey
concluded was an important factor considered by the Company in
reaching a decision as to any accounting, auditing, or financial
reporting issue, (ii) any matter that was the subject of
disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K
and related instructions) or a reportable event (as defined in Item
304(a)(1)(v) of Regulation S-K).
About Sharing Economy
Headquartered in Jiangsu Province, China, Sharing Economy
International Inc. -- http://www.seii.com/-- is engaged in the
manufacture and sales of textile dyeing and finishing machines and
sharing economy businesses. Given the headwinds affecting its
manufacturing business, Sharing Economy continued to pursue what
it
believes are high growth opportunities for the Company,
particularly its new business divisions focused on the development
of sharing economy platforms and related rental businesses within
the company. These initiatives are still in an early stage and are
dependent in large part on availability of capital to fund their
future growth. The Company did not generate significant revenues
from its sharing economy business initiatives in 2018.
Sharing Economy reported a net loss of $42.08 million for the year
ended Dec. 31, 2018, compared to a net loss of $12.92 million for
the year ended Dec. 31, 2017. As of Dec. 31, 2018, Sharing Economy
had $46.34 million in total assets, $10.90 million in total
liabilities, and $35.43 million in total stockholders' equity.
RBSM LLP, New York, the Company's auditor since 2012, issued a
"going concern" qualification in its report dated April 16, 2019,
on the Company's consolidated financial statements for the year
ended Dec. 31, 2018, citing that the Company has suffered recurring
losses from operations, generated negative cash flows from
operating activities, has an accumulated deficit that raise
substantial doubt exists about Company's ability to continue as a
going concern.
SHUTTERFLY INC: S&P Places 'BB-' ICR on Watch Neg. on Apollo Deal
-----------------------------------------------------------------
S&P Global Ratings placed its ratings on Shutterfly Inc., including
its 'BB-' long-term issuer credit rating, on CreditWatch with
negative implications.
The rating actions follows the company's announcement that it has
agreed to be acquired by private equity firm Apollo Global
Management LLC in an all-cash transaction that values Shutterfly at
approximately $2.7 billion.
"The CreditWatch placement reflects the high likelihood of a
downgrade by two or more notches if the transaction closes, given
our belief that credit measures would weaken considerably under the
financial sponsor ownership," S&P said. This contrasts with the
rating agency's previous expectation that Shutterfly's
adjusted-debt-to-EBITDA ratio would remain 3x-4x.
According to the announced agreement, Apollo will acquire all
Shutterfly common shares outstanding for $51 each, taking full
ownership control of the company, after which Shutterfly will
operate privately held. Shutterfly's board of directors approved
the agreement and recommended that shareholders vote in favor of
the transaction, but it remains subject to customary closing
conditions, including approval under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. Shutterfly expects the
transaction to close in the fourth quarter of 2019.
Simultaneously, Apollo announced that Apollo Funds entered into a
definitive agreement to combine Snapfish LLC, an internet-based
retailer of photography products, with Shutterfly. Upon the closing
of that transaction, Snapfish owners will become significant
minority owners in the combined business. The Snapfish transaction
is subject to completion of Apollo Funds' acquisition of Shutterfly
and receipt of regulatory approvals. They are expected to close
simultaneously.
Shutterfly has about $900 million of term loan outstanding that S&P
rates, including about $296 million of its initial term loan and
$619 millionof its incremental term loan, both due Aug. 17, 2024.
S&P assumes they will be repaid with cash on hand at closing.
"The CreditWatch placement reflects the high likelihood that we
could lower the ratings by two or more notches at the close of the
transaction, or when more details about the pro forma company and
capital structure are available. We intend to resolve the
CreditWatch based upon the company's pro forma capital structure,
business strategy, and financial policies under its new ownership,
once these are available," S&P said.
SIF SERVICES: Taps Fox Law Corp. as Legal Counsel
-------------------------------------------------
SIF Services LLC received approval from the U.S. Bankruptcy Court
for the Central District of California to hire The Fox Law
Corporation, Inc., as its legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include legal advice regarding its powers
and duties under the Bankruptcy Code; examination of claims; the
preparation of a bankruptcy plan; and assistance in the sale of its
assets.
The firm's hourly rates are:
Principal $475
Associate $250 - $450
Law Clerk/Paralegal $125
The attorneys expected to handle the Debtor's bankruptcy case and
their hourly rates are:
Steven Fox $475
Janis Abrams $400
W. Sloan Youkstetter $250
Prior to the petition date, the Debtor paid a retainer of $50,000,
which included the filing fee of $1,717.
Steven Fox, Esq., at Fox Law, disclosed in court filings that he
and other employees of his firm are "disinterested" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Steven R. Fox, Esq.
The Fox Law Corporation, Inc.
17835 Ventura Blvd Ste 306
Encino, CA 91316
Tel: 818-774-3545
Fax: 818-774-3707
E-mail: emails@foxlaw.com
srfox@foxlaw.com
About SIF Services
SIF Services, LLC -- http://www.sifservices.net/-- is a provider
of business development services, including product sourcing,
import and order fulfillment. During the past 10 years, the
company has built relations with many factories in China.
SIF Services sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 19-13708) on April 30, 2019. At
the time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of between $1 million and $10 million.
The case is assigned to Judge Scott C. Clarkson. The Fox Law
Corporation, Inc., is the Debtor's counsel.
SPANISH BROADCASTING: Stockholders Elect Six Directors
------------------------------------------------------
Spanish Broadcasting System, Inc., held its Annual Meeting of
Stockholders on June 6, 2019, at which the stockholders elected
Raul Alarcon, Joseph A. Garcia, Manuel E. Machado, Jason L.
Shrinsky, Jose A. Villamil, and Mitchell A. Yelen as directors to
hold office until such time as their respective successors have
been duly elected and qualified. The stockholders also approved,
on an advisory basis, executive compensation and recommended a
triennial frequency of non-binding vote on executive compensation.
About Spanish Broadcasting
Based in Miami, Florida, Spanish Broadcasting System, Inc.
(OTCMKTS:SBSAA) -- http://www.spanishbroadcasting.com/-- owns and
operates radio stations located in the top U.S. Hispanic markets of
New York, Los Angeles, Miami, Chicago, San Francisco and Puerto
Rico, airing the Tropical, Regional Mexican, Spanish Adult
Contemporary, Top 40 and Urbano format genres SBS also operates
AIRE Radio Networks, a national radio platform of over 250
affiliated stations reaching 94% of the U.S. Hispanic audience.
SBS also owns MegaTV, a network television operation with
over-the-air, cable and satellite distribution and affiliates
throughout the U.S. and Puerto Rico, produces a nationwide roster
of live concerts and events, and owns a stable of digital
properties, including La Musica, a mobile app providing
Latino-focused audio and video streaming content and HitzMaker, a
new-talent destination for aspiring artists.
Spanish Broadcasting reported net income of $16.49 million for the
year ended Dec. 31, 2018, compared to net income of $19.62 million
for the year ended Dec. 31, 2017. As of March 31, 2019, the
Company had $455.09 million in total assets, $538.40 million in
total liabilities, and a total stockholders' deficit of $83.31
million.
Crowe LLP, in Fort Lauderdale, Florida, the Company's auditor since
2013, issued a "going concern" opinion in its report dated April 1,
2019, on the Company's consolidated financial statements for the
year ended Dec. 31, 2018, citing that the 12.5% Senior Secured
Notes had a maturity date of April 15, 2017. Cash from operations
or the sale of assets was not sufficient to repay the notes when
they became due. In addition, at Dec. 31, 2018 the Company had a
working capital deficiency. These factors raise substantial doubt
about its ability to continue as a going concern.
STEEL CONNECT: Operating Results, Deficit Cast Going Concern Doubt
------------------------------------------------------------------
Steel Connect, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $9.627 million on $194.0 million of net
revenue for the three months ended April 30, 2019, compared to a
net loss of $10.33 million on $193.9 million of net revenue for the
same period in 2018.
At April 30, 2019 the Company had total assets of $734.8 million,
total liabilities of $607.2 million, and $92.49 million in total
stockholders' equity.
The Company's historical operating results and working capital
deficit indicate substantial doubt exists related to the Company's
ability to continue as a going concern.
At April 30, 2019 and July 31, 2018, the Company had cash and cash
equivalents of $20.4 million and $92.1 million, respectively. As
of April 30, 2019, the Company had a deficiency in working capital
which was primarily driven by the reduction in cash and cash
equivalents of $71.8 million, of which $65.6 million (including
interest) was used to retire the 5.25% Convertible Senior Notes on
March 1, 2019, the Company's $10.0 million outstanding on the
Revolving Facility, accrued pricing liabilities which the Company
believes will not require a cash outlay in the next twelve months,
and the additional liabilities assumed because of the IWCO
Acquisition.
At April 30, 2019, the Company had a readily available borrowing
capacity under its Credit Agreement with PNC Bank and National
Association of $12.5 million. At April 30, 2019, IWCO had a
readily available borrowing capacity under its Revolving Facility
of $15.0 million. Per the Financing Agreement, IWCO is permitted
to make distributions to Steel Connect, an aggregate amount not to
exceed $5.0 million in any fiscal year and pay reasonable
documented expenses incurred by Steel Connect. Steel Connect is
entitled to receive additional cash remittances under a "U.S.
Federal Income Tax Sharing Agreement."
The Company believes it will generate sufficient cash to meet its
debt covenants under the Credit Agreement and the Financing
Agreement to which certain of its subsidiaries are a party and that
it will be able to obtain cash through its current credit
facilities and through securitization of certain trade
receivables.
The Company's Notes matured on March 1, 2019, with a balance due of
$65.6 million, including interest to the March 1, 2019 maturity
date. The total $65.6 million balance due was paid in full by the
Company from available cash on-hand and $14.9 million from the
proceeds of the SPHG Note transaction entered into on February 28,
2019.
A copy of the Form 10-Q is available at:
https://is.gd/IE9RB9
Steel Connect, Inc., through its subsidiaries, provides supply
chain and logistics services to the consumer electronics,
communications, computing, medical devices, software, storage,
retail, and other industries. It operates through five segments:
Americas, Asia, Europe, Direct Marketing, and e-Business. The
Company was formerly known as ModusLink Global Solutions, Inc. and
changed its name to Steel Connect, Inc. in February 2018. Steel
Connect was incorporated in 1986 and is headquartered in Waltham,
Massachusetts.
TALON REAL ESTATE: March 2017 Form 10-Q Shows $2.82M Loss
---------------------------------------------------------
Talon Real Estate Holding Corp. filed (late) its quarterly report
on Form 10-Q, disclosing a net loss of $2.816 million on $2.657
million of total revenue for the three months ended March 31, 2017,
compared to a net loss of $2.030 million on $2.859 million of total
revenue for the same period in 2016.
At March 31, 2017 the Company had total assets of $72.25 million,
total liabilities of $83.11 million, and $10.86 million in total
shareholders' deficit.
For the three months ended March 31, 2017 and 2016, the Company
incurred losses of $2.816 million and $2.030 million, respectively,
and as of March 31, 2017 had a total shareholders' deficit of
$10.86 million. These circumstances raise substantial doubt about
the Company's ability to continue as a going concern. The
Company's ability to continue as a going concern is dependent on
its ability to raise the additional capital to meet short and
long-term operating requirements. Management is continuing to
pursue external Financing alternatives to improve the Company's
working capital position however additional financing may not be
available upon acceptable terms, or at all. If the Company is
unable to obtain the necessary capital, the Company may have to
cease operations.
A copy of the Form 10-Q is available at:
https://is.gd/fPervU
Talon Real Estate Holding Corp. is a real estate investment firm
specializing in investments in single and multi-tenant office,
industrial, and retail properties. The firm seeks to invest in the
Midwest and South Central regions of the United States. It
provides shareholders with attractive returns from investments in
real estate through dividend distribution and growth. Talon Real
Estate was founded in 2013 and is based in Minneapolis, Minnesota.
TEGNA INC: S&P Places 'BB' Issuer Credit Rating on Watch Negative
-----------------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S.-based TV
broadcaster TEGNA Inc., including its 'BB' issuer credit rating, on
CreditWatch with negative implications given its expectation that
leverage will increase above its 4.5x downgrade threshold.
The CreditWatch placement follows TEGNA's announcement that it is
acquiring WTHR-TV in Indianapolis, WBNS-TV in Columbus, Ohio, and
WBNS Radio in Central Ohio in a debt-funded transaction that will
increase pro forma leverage to around 4.8x in 2019. The
announcement follows TEGNA's agreements earlier in 2019 to acquire
11 TV stations from Nexstar Media Group for $740 million, and to
pay Cooper Media $77 million for two multicast networks (the 85% of
Justice Network and Quest it does not already own). These
debt-funded acquisitions had already increased TEGNA's pro forma
leverage to the upper end of S&P's previously established 4.0x-4.5x
range for the 'BB' rating. While the company is suspending share
repurchases through 2020 to reduce leverage, S&P believes potential
future shareholder returns or additional debt-funded acquisitions
may prevent the company from reducing leverage to less than 4.5x on
a sustained basis.
TEGNA plans to fund these acquisitions mostly with borrowings under
its $1.5 billion revolving credit facility ($20 million outstanding
as of March 31, 2019). The revolver is subject to a 5.0x total
leverage ratio covenant that will step down to 4.75x on Sept. 30,
2019. As a result, S&P believes the company will likely need an
amendment to its credit facility to increase covenant headroom and
revolver availability, or may have to tap capital markets. In
addition to funding the proposed acquisitions, the company has $320
million of notes due in October 2019 and $600 million of notes due
in July 2020.
"We believe operational risk will be elevated over the next year
while the company integrates its acquisitions. Pro forma for the
acquisition of TV stations from Nexstar and Dispatch Broadcast
Group, TEGNA's U.S. household reach will increase to 39% from
around 34%," S&P said. "The acquisition of TV stations from
Dispatch does not change our view of TEGNA's business given its
limited size, although it will give TEGNA two highly ranked NBC and
CBS affiliations."
TRIP II PARTNERSHIP: Fitch Cuts Rating on 1999/2005 Bonds to BB
---------------------------------------------------------------
Fitch Ratings has downgraded the rating on Toll Road Investors
Partnership II (TRIP II, the partnership) Dulles Greenway project's
approximately $1 billion in outstanding revenue bonds (series 1999
and 2005) to 'BB' from 'BB+'. The Rating Outlook remains Negative.
The downgrade is driven by traffic and revenue underperformance
from 2017 through March 2019, due in part to improvements to
toll-free alternate routes, which has weakened TRIP II's financial
profile with DSCR metrics in fiscal 2018 remaining below 1.2x. The
downgrade and maintenance of the Negative Outlook reflect the
limited visibility into TRIP II's near-term toll rate-setting,
following expiration of a legislative schedule in 2019. Future toll
rates will be set by the Virginia State Corporation Commission,
which does not guarantee a minimum level of increase in the future.
Rate setting is increasingly important in light of the narrow DSCR
metrics under Fitch's rating case, averaging 1.1x over the next 10
years, due to a significant uptick in debt service in 2022, with
gradual escalation thereafter. Resolution of the Negative Outlook
will depend on near-term traffic and operational performance in
conjunction with clarity into near-term toll increases necessary to
maintain adequate coverage levels and financial flexibility while
meeting near-term capital needs
KEY RATING DRIVERS
The 'BB' rating reflects Dulles Greenway's commuter traffic base in
the strong metropolitan Washington DC area, which has experienced
some volatility from economic downturns and recently toll-free
alternate routes. The rating reflects the limited visibility into
TRIP II's short-term rate-making predictability following
expiration of the previously approved schedule. Debt structural
features are protective, with a cash reserve funded at nearly 1x
MADS, and a somewhat flexible repayment profile. Financial metrics
under Fitch's rating case reflect high leverage and narrow DSCRs,
driven by the escalating debt service profile (0.9% CAGR from
2019-2056), including a one-time step-up in 2022.
Strong Service Area, Some Competition - Revenue Risk (Volume):
Midrange
Dulles Greenway benefits from a primarily commuter base with
minimal exposure to commercial traffic within the economically
strong metro Washington DC service area. Historical traffic
volatility is elevated, with a peak-to-trough decline of -24% as a
result of the Great Recession, and a degree of elasticity to toll
increases. Recent improvements to toll-free alternative routes has
led to softer traffic performance in 2017-March 2019. The
Greenway's toll rates are slightly higher than local peers at
around $0.41 peak per mile, though comparable to privately-owned
peers within similar, healthy service areas.
Limited Visibility into Rate-Setting - Revenue Risk (Price):
Midrange
Following expiration of the legislative toll increase schedule
through fiscal 2019, there is limited visibility into TRIP II's
future toll rates. TRIP II's current approach to pursue
rate-setting via the Virginia SCC is less predictable than the
prior legislative solution (formulaic approach resulting in annual
toll increases of approximately 2.8% per year). TRIP II's
rate-making has historically been increased at above inflationary
levels, but could be subject to political interference moving
forward, with increasing importance of timely rate increases in
advance of the debt service spike in fiscal 2022.
Manageable Near-term Capital Plan - Infrastructure Development and
Renewal: Midrange
Dulles Greenway's capital program is adequate to meet the needs of
the road, mainly focusing on roadway maintenance and congestion
relief projects, and is sufficiently funded from cash flows over
the near term. TRIP II is also funding a project to expand the
connection to the neighboring Dulles Toll Road with funds held in
the distribution lock-up account, which are not viewed as available
over the long term.
Back-loaded Debt, Sound Covenants - Debt Structure: Midrange
TRIP II's debt structure features fixed-rate, senior debt with
several bullet maturities, which have been smoothed into an
amortizing structure with mandatory early redemption features,
escalating at a CAGR of 0.9% from 2019-2056. Missing an early
redemption payment is not an event of default; however, deferral of
planned early redemptions could cause debt obligations to balloon.
Cash reserves of nearly 1x MADS (on a scheduled basis) and a
dual-prong distribution lock-up test of 1.25x DSCR and 1.15x (net
of deposits for capex) are additional enhancements against the
back-loaded and long-dated structure.
Financial Profile
TRIP II's financial profile under Fitch's rating case is
characterized by narrow DSCRs (10-year average of 1.1x through
2028) and high leverage (net debt to CFADS of 13.1x at fiscal
2023). Weak financial metrics have resulted in distributable funds
held in lock-up in recent years, with DSCR of 1.18x in fiscal 2018.
Cash balances are adequate with approximately 200 days cash on hand
in the O&M reserve, and a minimum required balance of $82 million
of restricted cash in debt reserves (nearly 1x MADS). The debt
profile escalates at a CAGR of 0.9% from 2019-2056, including a
one-time step-up in 2022, leading to continued narrow financial
metrics in Fitch's rating case in light of future toll rate
ambiguity.
PEER GROUP
Dulles Greenway's peers include similar commuter-based facilities
such as North Carolina Turnpike Authority's Triangle Expressway
System (Triangle Expressway, BBB-/Positive Outlook) and Foothills
Eastern Transportation Corridor (F/ETCA, BBB-/BB+/Outlook Stable).
Triangle Expressway and F/ETCA's investment-grade senior-lien
ratings reflect stronger average DSCR levels under Fitch's rating
case of 1.4x or better. F/ETCA's subordinate-lien DSCR is narrower
at around 1.3x, which positions it one notch above TRIP II's
average DSCR of 1.1x.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Negative Rating Action:
-- Inability to implement adequate rate increases to accommodate
the ascending debt service obligations in 2022 and thereafter;
Further narrowing of DSCR metrics;
-- Continued declines in traffic leading to a decline in EBITDA.
Developments That May, Individually or Collectively, Lead to
Stabilization of Rating Outlook or Positive Rating Action:
-- Well-defined framework to provide adequate rate increases to
accommodate the ascending debt service obligations in 2022 and
thereafter;
-- DSCR metrics (calculated net of capex) above 1.3x on a
sustained basis.
CREDIT UPDATE
Performance Update
Traffic and revenue performance declined in fiscal 2018 (year
ending December 31) roughly in line with Fitch's base case
expectations, marking the second consecutive year of traffic
decline. Traffic fell by -1.6% in fiscal 2017 and -4.5% in fiscal
2018, as network changes in the corridor that went into effect in
2016-2017 continued to drive higher traffic on competing
alternative routes in 2017 and 2018. Toll revenue declined by -1.7%
in fiscal 2018, with a 3% toll increase only partially offsetting
the traffic loss.
YTD performance through March 2019 remains weak, with traffic down
-2% YoY and revenue down -0.5%. 2019 YTD performance has been
hampered by the government shutdown in January, a heavier winter
than expected, and a toll increase on the Dulles Toll Road (DTR),
which connects at the Greenway's eastern terminus. DTR implemented
a $1.25 toll increase effective January 2019, which combined with
the Greenway's approximately 2.4% toll increase (effective April
10, 2019) has increased the full-length trip on both DTR and the
Greenway by 15% YoY. DSCR for the Dulles Greenway was 1.18x in
fiscal 2018, so distributable cash remains in lock-up through FY19.
The Greenway was unable to obtain a legislative solution with the
Commonwealth of Virginia for toll rate increases beginning in 2020.
Toll increases had previously been fixed by legislation that
provided for an approximate 2.8% increase. Future toll-rate setting
will involve TRIP II making an application to the Virginia State
Corporation Commission (SCC); the process has not been recently
tested and entails less certainty than the previous legislative
schedule. Management expects to begin conversations with the SCC
later in 2019.
Fitch Cases
Fitch's base case assumes -0.5% traffic decline in fiscal 2019, 1%
growth in 2020-2022, and a gradual erosion of traffic growth from
2023-2056, stepping down from 0.8% to 0%, reflecting a maturing
system and the long-dated forecast horizon. Toll rates increase by
1% in 2020 and by 2% annually thereafter, while expenses grow at a
2.8% CAGR, resulting in annual EBITDA growth of 2.8% in 2023,
decreasing to 1.8% in 2056. Fitch's base case yields a 10-year
average DSCR of 1.2x (net of required deposits for capex), minimum
LLCR of 1.4x, and leverage in 2023 of around 13x.
Fitch's rating case assumes YTD 2019 performance of -2%
materializes, and then models a sharper downturn of 7% in 2020 with
annual recovery of 3% in 2021-2023, with growth thereafter at half
the base case rates. Fitch conservatively assumes a 0% toll
increase in 2020 to reflect uncertainty around the SCC approval
process, with toll increases of 2% per year thereafter. Expenses
grow at a CAGR of 3.3%, resulting in EBITDA growth at a 1.8% CAGR
through 2056. Financial metrics are narrow with a 10-year average
DSCR of 1.1x net of required deposits for capex (or 1.2x, excluding
capex reserve deposits), minimum LLCR of 1.3x, and leverage of 13x
in 2023.
Fitch's additional sensitivity analyses indicate annual toll
increases below 2% would likely result in certain years of DSCR
below 1.0x (including capex deposits) and a more strained financial
profile. Fitch recognizes the financial flexibility embedded in the
debt structure's early redemption schedule, as well as the
protections to bondholders through the legal structure, including
distribution lock-ups and protections against additional leverage.
Going forward, Fitch will closely monitor the impact of competing
alternatives on TRIP II's traffic performance, including the
expected opening of the Silver Line in 2020 and the local route
improvements implemented in recent years, as well as the
rate-setting process through the SCC.
Asset Description
TRIP II is the special purpose company that owns the Dulles
Greenway. The Dulles Greenway is a six-lane, 14-mile, limited
access toll highway in Loudoun County, Virginia, a suburb of
Washington, DC, connecting Dulles International Airport with US-15
in Leesburg. It serves as an extension of the state-owned Dulles
Toll Road, which connects Dulles Airport and other high-density
employment centers in the corridor to the rest of the Washington
metropolitan area. The two toll roads connect at a toll plaza,
where drivers pay a single toll that is allocated to the two
operators.
Security
The senior bondholders have a first priority lien on the security
interest within the Trust Estate, which includes all of the rights
to net revenue, real estate interest, rights under the easements
and rights, title and interest in the equipment.
TWIN CITY BEER: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Twin City Beer Barons, LLC, according to court dockets.
About Twin City Beer Barons
Twin City Beer Barons, LLC, is a privately held company whose
principal assets are located at 356 N. Sibley Street Saint Paul,
Minn.
Twin City Beer Barons sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-04377) on May 8,
2019. At the time of the filing, the Debtor estimated assets of
less than $50,000 and liabilities of between $1 million and $10
million. The Debtor tapped Blanchard Law, P.A. as its legal
counsel.
UPLAND SOFTWARE: S&P Assigns 'B' ICR; Outlook Stable
----------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
cloud-based enterprise work management software provider Upland
Software Inc. The outlook is stable.
Upland recently announced its intention to market a new $350
million senior secured term loan B and a new $30 million senior
secured revolving credit facility. S&P assigned 'B' issue-level
ratings to the company's proposed senior secured first-lien term
loan due 2026 and $30 million revolving credit facility due 2024.
The recovery rating on this debt is '3', indicating expectations
for meaningful (50%-70%; rounded estimate: 50%) recovery in a
default.
The rating on Upland primarily reflects the company's pro forma
leverage, which S&P estimates will be approximately 7.0x at
transaction close and the rating agency forecasts a decline in
leverage to approximately 5.5x on a full run-rate pro forma basis
by the end of 2019. S&P expects this leverage reduction will
largely reflect the significant acquisition activity that Upland
has completed over the past four quarters. Key risks to Upland
include its aggressive acquisition-led growth strategy and the
company's scale, which is relatively small compared to similarly
rated peers. In addition, free cash flow remains relatively soft
due to elevated acquisition activity. Credit strengths include the
company's high recurring revenue stream, above-industry growth
rate, diversified customer base, minimal capex spend, and high
customer retention rates. The rating also is based on S&P's
expectation that Upland will maintain adequate liquidity and
sufficient cash on its balance sheet to fund operations and
acquisitions.
The stable outlook reflects S&P's expectation that Upland will
continue to generate sufficient cash flow to service its
debt-capital structure. S&P anticipates that the company will
continue to remain active with its acquisition strategy (about $100
million to $120 million per year in acquisitions and $25 million to
$50 million in annualized recurring revenue) and maintain its
strong recurring revenue growth profile, which currently represents
more than 90% of revenue. In addition, the rating agency expects
that free operating cash flow will remain positive.
"We could lower the rating if Upland's performance suffers from
missteps with its acquisition strategy, if it sustains leverage
over 7x, or if it experiences negative free cash flow. We could
also downgrade Upland if the company's sources of cash are not
sufficient to cover its uses of cash and we view its liquidity as
less than adequate," S&P said.
Given Upland's existing leverage of approximately 7x and its
acquisition strategy, an upgrade is unlikely over the next 12
months. Over the longer term, however, S&P would look to see
sustained double-digit revenue growth and expanding EBITDA margins,
as well as a clearly articulated financial policy consistent with
leverage remaining comfortably under 5.0x as factors which could
potentially result in an upgrade. Free operating cash flow to debt
of above 5% and use of excess cash to reduce debt balances, while
not sufficient on their own, would also be supportive of an upgrade
over time.
US 1 ASSOCIATES: Approval Hearing on Disclosures Set for July 25
----------------------------------------------------------------
Bankruptcy Judge Vincent F. Papalia will convene a hearing on July
25, 2019 at 11:00 a.m. to consider the adequacy of US 1 Associates,
Inc.'s disclosure statement.
Written objections to the adequacy of the Disclosure Statement must
be filed no later than 14 days prior to the hearing date.
The Troubled Company Reporter previously reported that unsecured
creditors will get 18.5% under the plan.
A full-text copy of the Disclosure Statement dated March 27, 2019,
is available at http://tinyurl.com/y6n7xnrrfrom PacerMonitor.com
at no charge.
About US 1 Associates Inc.
US 1 Associates, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 18-12231) on Feb. 2, 2018.
At the time of the filing, the Debtor estimated assets of less than
$50,000 and liabilities of less than $100,000. Middlebrooks
Shapiro, P.C., is the Debtor's bankruptcy counsel.
US VIRGIN ISLANDS: Moody's Puts Caa3 Issuer Rating on Review
------------------------------------------------------------
Moody's Investors Service has placed the US Virgin Islands' Caa3
issuer rating and the ratings of its four liens of matching fund
revenue bonds on review with direction uncertain. The matching fund
bonds were issued through the Virgin Islands Public Finance
Authority. Matching fund bond ratings placed on review are: Senior
Lien Bonds Caa2; Subordinate Lien Bonds Caa3; Subordinated
Indenture (Diageo) Bonds Caa3, and Subordinated Indenture (Cruzan)
Bonds Caa3. This action affects approximately $1.06 billion in
outstanding matching fund debt.
RATINGS RATIONALE
The placement of these ratings on review is prompted by the
protracted delay in the release of Virgin Islands government's
audited financial statements for the fiscal year ending September
30, 2017, the absence of publicly available unaudited financial
statements for fiscal years 2017 and 2018, and the government's
extremely weak financial and liquidity condition as indicated by
the limited available information, despite some signs of
improvement in the economy and tax revenues in recent months.
The matching fund revenue bonds are secured by remittances to the
Virgin Islands government from the US government of excise taxes
collected on rum produced in the territory and exported to the US.
The matching fund revenues are currently paid directly by the US
Treasury to the trustee. This mechanism, however, has not been
tested in a stress situation in which the government attempts to
divert pledged revenue for general government purposes. In
addition, the matching fund revenue bonds would likely be included
in any attempt to restructure the government's debt.
Its review will focus on an assessment of the government's
financial condition and the risks it poses to the matching fund
revenue bonds, as well as an evaluation of whether the available
information is sufficient to maintain these ratings. If sufficient
information is not received over the next 90 days, Moody's will
take appropriate rating action, which could include confirmation of
the ratings, a change in ratings or outlook or withdrawal of the
ratings.
VOYA FINANCIAL: Fitch Rates New $300MM Preferred Stock 'BB+'
------------------------------------------------------------
Fitch Ratings assigns a 'BB+' rating to Voya Financial Inc.'s new
issuance of approximately $300 million fixed rate reset
non-cumulative perpetual preferred stock. Existing ratings assigned
to Voya and its affiliates are unaffected by the rating action.
Fitch last reviewed Voya's ratings on March 8, 2019.
KEY RATING DRIVERS
Voya's offering of fixed rate non-cumulative preferred shares is
the company's second series of this security type. The preferred
shares are rated three notches below Voya's Long-Term Issuer
Default Rating, reflecting two notches for the baseline recovery
assumption of 'Poor' and one additional notch reflecting the
'Minimal' non-performance risk assessment.
Dividends on the preferred shares are not cumulative and are not
mandatory. If declared, Voya will pay dividends on the preferred
shares at a fixed rate. The preferred shares rank equally with the
prior issue of preferred shares and, similar to the first series,
do not have a maturity date and are considered to be perpetual by
Fitch. Voya is not required to redeem the preferred shares. Based
on Fitch's rating criteria, the preferred shares receive 100%
equity credit in Fitch's financial leverage calculations. Fitch
does not expect Voya's financial leverage to exceed 30% over the
intermediate term.
The net proceeds of the offering are expected to partially be used
to redeem the remaining senior notes due 2022, with the remainder
to be used for general corporate purposes.
RATING SENSITIVITIES
The rating sensitivities that could result in a downgrade include:
-- Financial leverage exceeding 30%;
-- GAAP adjusted operating earnings-based interest coverage below
6x.
-- Sustained decline in operating ROE below 6%;
-- A decline in reported RBC below 375%, and a Prism capital
model score at the low end of 'Strong'.
The rating sensitivities that could result in an upgrade include:
-- Continued growth in operating profitability which leads to an
improvement in operating ROE to over 11%;
-- Sustained maintenance of GAAP adjusted operating
earnings-based interest coverage of more than 10x;
-- Reported RBC above 450%, a Prism Capital model score of 'Very
Strong', and financial leverage below 25%.
FULL LIST OF RATING ACTIONS
Fitch has assigned the following rating:
Voya Financial, Inc.
-- Fixed rate non-cumulative perpetual preferred stock 'BB+'.
Fitch maintains the following ratings with a Stable Outlook:
Voya Retirement Insurance and Annuity Company
ReliaStar Life Insurance Company
ReliaStar Life Insurance Company of New York
Security Life of Denver Insurance Company
-- Insurer Financial Strength 'A'.
Voya Holdings Inc.
-- Senior unsecured notes 'A+'.
Voya Financial, Inc.
-- Long-Term IDR 'BBB+';
-- Senior unsecured notes 'BBB';
-- Junior subordinated notes 'BB+';
-- Preferred stock 'BB+'.
Equitable of Iowa Companies, Inc.
-- Long-Term IDR 'BBB+'.
Equitable of Iowa Companies Capital Trust II
-- Trust preferred stock 'BB+'.
Peachtree Corners Funding Trust
-- Pre-capitalized trust securities 'BBB'.
WAYPOINT LEASING: Plan Confirmation Hearing Set for July 25
-----------------------------------------------------------
The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York will hold a hearing on July 25, 2019,
at 10:00 a.m. (prevailing Eastern Time), in Room 723, One Bowling
Green, New York, New York 10004, to confirm the second amended
modified Chapter 11 plan of liquidation of Waypoint Leasing
Holdings Ltd. and its debtor-affiliates. Objections, if any, must
be filed on July 8, 2019, at 4:00 p.m. (prevailing Eastern Time).
On June 3, 2019, the Court approved the adequacy of the disclosure
statement explaining the Debtors' second amended modified
liquidation plan.
Deadline to vote to accept or reject the Debtors' liquidation plan
must be filed no later than 4:00 p.m. (prevailing Eastern Time) on
July 3, 2019.
About Waypoint Leasing
Waypoint Leasing -- http://waypointleasing.com/-- is a global
helicopter leasing company founded in 2013 focused on acquiring and
leasing rotary wing aircraft to helicopter operators throughout the
world. Though the Debtors lease aircraft to operators in the
emergency medical, search and rescue, and utility sectors, the
majority of the Debtors' lessees are helicopter service providers
servicing the offshore oil and gas industry. The company is
headquartered in Limerick, Ireland.
Waypoint Leasing Holdings Ltd. and 142 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 18-13648) on Nov. 25,
2018 to facilitate the sale of the assets to a new owner.
The Debtors disclosed $1.62 billion in total assets and $1.23
billion in liabilities as of Oct. 31, 2018.
The Honorable Stuart M. Bernstein is the case judge.
The Debtors tapped Weil, Gotshal & Manges LLP as counsel; Houlihan
Lokey Capital, Inc. as investment banker; FTI Consulting, Inc., as
financial advisor; Accenture LLP as corporate advisor; and Kurtzman
Carson Consultants LLC as claims and administrative agent.
WILKENS 2003 TRUST: To Pay Unsecureds in Full at 4% Over 2 Years
----------------------------------------------------------------
Wilkens 2003 Trust filed a disclosure statement in support of a
plan of reorganization dated May 31, 2019.
Class 6 under the plan consists of the allowed general unsecured
claims. This class will be paid in full in lump sum or in
discretionary installments on a pro-rata basis, within 2 years of
the Effective Date, with interest accruing at the rate of 4% per
annum, commencing to accrue interest from the Effective Date until
paid.
The Debtor will fund the proposed plan payments through loans
advanced by Timothy Wilkens, Trustee of the Wilkens 2003 Trust.
Based on Debtor's revenue and budget projections, Debtor believes
that it will continue to be advanced sufficient revenues to fund
the plan as proposed.
A copy of the Disclosure Statement dated May 31, 2019 is available
at https://tinyurl.com/yy9muzvq from Pacermonitor.com at no charge.
About Wilkens 2003 Trust
Wilkens 2003 Trust, based in Incline Village, NV, filed a Chapter
11 petition (Bankr. D. Nev. Case No. 19-50122) on Jan. 31, 2019.
In the petition signed by Timothy Wilkens, trustee, the Debtor
estimated $10 million to $50 million in assets and $1 million to
$10 million in liabilities. The Hon. Bruce T. Beesley oversees the
case. Stephen R. Harris, Esq., at Harris Law Practice LLC, serves
as bankruptcy counsel.
YINGLI GREEN: PricewaterhouseCoopers Raises Going Concern Doubt
---------------------------------------------------------------
Yingli Green Energy Holding Company Limited filed with the U.S.
Securities and Exchange Commission its annual report on Form 20-F,
disclosing a net loss of RMB1,654,240,000 on RMB4,456,215,000 of
total net revenues for the year ended Dec. 31, 2018, compared to a
net loss of RMB3,450,858,000 on RMB8,363,724,000 of total net
revenues for the year ended in 2017.
The audit report of PricewaterhouseCoopers Zhong Tian LLP states
that facts and circumstances including accumulated deficits and
recurring losses from operations, negative working capital,
uncertainties regarding the repayment of financing obligations and
progress of debt restructuring plan raise substantial doubt about
the Company’s ability to continue as a going concern.
The Company's balance sheet at Dec. 31, 2018, showed total assets
of RMB8,608,094,000, total liabilities of RMB20,924,883,000, and
RMB12,316,789,000 in total shareholders' deficit.
A copy of the Form 20-F is available at:
https://is.gd/dGvZ8M
Yingli Green Energy Holding Company Limited, together with its
subsidiaries, designs, develops, manufactures, assembles, sells,
and installs photovoltaic (PV) products. The company offers
polysilicon ingots and blocks, polysilicon wafers, PV cells, PV
modules, and integrated PV systems; and develops and operates solar
projects. It is also involved in the research, manufacture, sale,
and installation of renewable energy products; marketing and sale
of PV products and related accessories; and import and export
trading activities, as well as invests in renewable energy
projects. The company primarily sells its PV modules to
distributors, wholesalers, power plant developers and operators,
and PV system integrators under the Yingli and Yingli Solar brands
in the People's Republic of China, Japan, India, the United States,
England, Turkey, France, Germany, England, and internationally.
Yingli Green Energy Holding Company Limited was founded in 1998 and
is headquartered in Baoding, the People's Republic of China.
YUS INTERNATIONAL: Centurion ZD CPA Raises Going Concern Doubt
--------------------------------------------------------------
Yus International Group Limited filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K, disclosing a
net loss of $44,539 on $0 of revenue for the year ended Dec. 31,
2018, compared to a net loss of $26,811 on $0 of revenue for the
year ended in 2017.
The audit report of Centurion ZD CPA & Co. states that the Company
has suffered recurring losses from operations that raise
substantial doubt about its ability to continue as a going
concern.
The Company's balance sheet at Dec. 31, 2018, showed total assets
of $3,187,365, total liabilities of $3,040,105, and a total
stockholders' equity of $147,260.
A copy of the Form 10-K is available at:
https://is.gd/VciwXb
Yus International Group Limited does not have significant
operations. The company intends to seek and identify appropriate
business opportunity for the development of new line of business.
Previously, it provided brainstorming, storyboarding, commercials
and advertisement production, and media planning services to
advertisers in Hong Kong. The company was formerly known as Asian
Trends Media Holdings, Inc. and changed its name to YUS
International Group Limited in March 2013. YUS International was
incorporated in 2002 and is based in Kowloon Bay, Hong Kong.
[*] Jeffrey Patterson Named Allen Matkins' New Managing Partner
---------------------------------------------------------------
Allen Matkins, a California-based full service real estate and
business law firm, on June 3, 2019, disclosed that Jeffrey R.
Patterson has been elected as the firm's new Managing Partner,
effective July 1, 2019. Having played key leadership roles within
the firm throughout his career, Jeff will continue to help
implement and drive both internal and client-facing initiatives.
He is only the third managing partner since the firm's founding in
1977.
"Jeff is a proven leader, instrumental in steering critical firm
operations in his role as General Counsel, Operating Partner of the
firm's San Diego office, and as a highly respected member of the
management committee. By taking on the role of Managing Partner,
Jeff will accelerate our growth and ability to deliver an
exceptional client experience through increased efficiencies across
our firm," said David L. Osias, the firm's current Managing
Partner. "Allen Matkins continues to boast one of the largest and
most well-respected real estate practices on the West Coast. Jeff
has the experience and esteem necessary to help build upon the
firm’s vibrant legacy, and continue to grow our client base and
profitability."
"I am honored to be taking the helm as Managing Partner and look
forward to preserving a culture of client service, camaraderie, and
entrepreneurism, all the while building on existing and new client
relationships that will help grow our real estate and complimentary
practice areas," said Jeff.
Mr. Patterson began his career at Allen Matkins in 1986 in its
Orange County office, moved to the San Diego office in 1990, and
for the majority of his career practiced as a business litigator,
bankruptcy and creditors' rights attorney. He has served as the
Operating Partner of the firm's San Diego office since 2011 and as
the firm-wide General Counsel and on the firm's Management
Committee since 2012. He received his juris doctorate from
University of Southern California Gould School of Law, and
bachelor's degree in economics and drama from Duke University. He
is consistently named to Super Lawyers and Best Lawyers in America,
is an avid cyclist, and is the lead vocalist and keyboardist in a
classic rock band.
Mr. Patterson succeeds David Osias who served as Managing Partner
since 2012. Mr. Osias, also based in the firm's San Diego office,
will resume his well-respected water rights and receivership
practices.
About Allen Matkins
Founded in 1977, Allen Matkins -- http://www.allenmatkins.com/--
is a California-based law firm with approximately 200 attorneys in
four major metropolitan areas of California: Los Angeles, Orange
County, San Diego, and San Francisco. The firm's areas of focus
include real estate, construction, land use, environmental, and
natural resources; corporate and securities, real estate and
commercial finance, bankruptcy, restructurings and creditors'
rights, joint ventures, and tax; labor and employment; and trials,
litigation, risk management, and alternative dispute resolution in
all of these areas.
[*] Sam Newman Joins Sidley Austin's Global Restructuring Group
---------------------------------------------------------------
Sidley Austin LLP on June 3, 2019, disclosed that Samuel (Sam)
Newman has joined its global Restructuring group as a partner in
the Los Angeles office. Mr. Newman was previously a partner at
Gibson, Dunn & Crutcher LLP.
"While Sam will continue to live in Los Angeles, he will operate as
an integrated member of our world class Restructuring practice in
national and cross-border matters," said James F. Conlan, leader of
Sidley's global Restructuring group and member of Sidley's
Executive Committee. "Along with me and other Sidley restructuring
partners, Sam will lead in matters where clients face
mission-altering challenges and opportunities relating to their
obligations, financial and otherwise."
"Sidley's leading Restructuring and M&A practices are mutually
reinforcing and complementary, and serve as the platform on which
Mr. Newman will now operate," said Dan Clivner, managing partner of
the Greater Los Angeles offices and member of Sidley's Executive
Committee. "Sam has demonstrated the kind of dedication and
excellence our clients have come to expect from Sidley for matters
critical to their life cycle."
Sidley's Restructuring practice has 60 restructuring and insolvency
lawyers operating across the global law firm. Another 120 lawyers
from other disciplines assist the Sidley restructuring and
insolvency lawyers in some of the biggest restructuring matters in
the world, most often as lead counsel for the company/debtor.
With 2,000 lawyers in 20 offices around the globe, Sidley --
http://www.sidley.com/-- is a premier legal adviser for clients
across the spectrum of industries.
[*] Two Supreme Court Advocates Join McDermott's D.C. Office
------------------------------------------------------------
McDermott Will & Emery on June 3, 2019, announced the arrival of
established Supreme Court advocates Paul W. Hughes and Michael B.
Kimberly to the Firm's Washington, DC office. They will lead
McDermott's Supreme Court & Appellate Practice and provide
innovative and strategic counsel for clients in complex,
high-stakes matters.
"We pride ourselves on going further for our clients. When they
are facing an appeal we want to ensure that we're delivering the
strongest briefs and the best oral arguments. Paul and Michael
don't just deliver, they invest deeply in every case and work
passionately in pursuit of their clients' objectives," said
Ira Coleman, chairman of McDermott. "Our new colleagues are among
the most elite appellate advocates in the country today, and we're
proud they have chosen McDermott as their new home."
Messrs. Hughes and Kimberly brief and argue appeals throughout the
country, handling appellate matters at all levels, including in the
US Supreme Court, all thirteen federal courts of appeals, and state
appellate courts. Between the two of them, they have argued 10
cases before the Supreme Court, including Mr. Kimberly's recent 9-0
victory in Smith v. Berryhill. They are awaiting decisions in
three of their other highly anticipated cases: Manhattan Community
Access Corp. v. Halleck, Lamone v. Benisek and Kisor v. Wilkie. In
addition, the pair is scheduled to argue at least one case next
term, Kansas v. Garcia, which is garnering national attention from
the business community.
"Paul and Michael offer game-changing experience for clients
navigating complex disputes, and their commitment to appellate
advocacy is truly unmatched," said David Rosenbloom, global head of
McDermott's Litigation Practice Group. "Their thriving Supreme
Court practice is an important ingredient for us to be able to
offer seamless representation at all levels of the litigation
process, and we are thrilled to welcome them to the team."
Mr. Hughes has handled over 250 appellate matters, including 21
merits cases at the US Supreme Court. He briefs and argues complex
appeals across a wide variety of subject matters with an emphasis
on administrative law, immigration, bankruptcy, securities, and
intellectual property. He unanimously won Lamar, Archer & Confrin,
LLP v. Appling (2018), a case involving the reach of the fraud bar
to bankruptcy discharge, and Ross v. Blake, 136 S. Ct. 1850 (2016),
where he convinced the Court to reframe the issues presented. His
body of work has been lauded throughout the legal community and he
has received recognition as an MVP by Law360 in 2018, as well as an
"Appellate Rising Star" from the National Law Journal (2017) and
Law360 (2017 and 2018).
Mr. Kimberly has handled more than 200 appellate matters, including
22 merits cases at the US Supreme Court. He argues complex appeals
and trial court motions with a focus on constitutional law,
antitrust law and administrative law. He has an impressive track
record in front of the US Supreme Court including unanimous
victories in the administrative law case Smith v. Berryhill and the
gerrymandering case Shapiro v. McManus. His work has earned him
recognition as a rising star in the Supreme Court and appellate
arena by the National Law Journal, Legal 500, Law360 and Benchmark
Litigation.
"We are honored to have the opportunity to bring our experience to
bear in growing and enhancing this area of focus for McDermott."
Mr. Hughes said. "Michael and I love what we do, and we're excited
to put that passion to work for the Firm and its clients."
"It's always a privilege to stand up and advocate on behalf of our
clients, and we know that McDermott's collegial platform will
provide us with unmatched opportunities to continue giving our
clients the highest quality appellate representation," Mr. Kimberly
added. "The pride we have for our work is a pride that McDermott
lawyers share, and we are very excited to be a part of the
McDermott team."
Messrs. Hughes and Kimberly both earned their JDs from Yale Law
School where they were editors of The Yale Law Journal, and today
they are co-directors of the Yale Law School Supreme Court Clinic.
They both also clerked on the courts of appeals: Mr. Hughes for
Judge Diana Gribbon Motz of the US Court of Appeals for the Fourth
Circuit and Mr. Kimberly for Judge Michael Daly Hawkins on the US
Court of Appeals for the Ninth Circuit.
About McDermott Will & Emery
McDermott Will & Emery -- http://www.mwe.com/-- has more than 20
locations on three continents and more than 1,100 lawyers strong.
[] CohnReznick Adds Four Partners to Restructuring Practice
-----------------------------------------------------------
CohnReznick LLP, one of the leading advisory, assurance, and tax
firms in the United States, has announced the addition of four
partners and principals to its Restructuring & Dispute Resolution
practice.
Cynthia Romano, CTP, Principal, will join Kevin Clancy in
co-leading the practice, collectively responsible for strategic
growth, client relations, marketing, and talent development.
Ms. Romano has 25+ years of experience in performance improvement,
turnaround management, transaction support, and investment analysis
across a range of key industries, including healthcare,
manufacturing, technology, energy/oil & gas, distribution,
restaurants, professional services, and not-for-profit, among
others. She is based in the firm's New York City and Long Island
offices. Ms. Romano is a Smart CEO Brava Award winner and
co-winner Turnaround Management Association's Small Company
Turnaround of the Year, Northeast award. A regular industry
speaker, Ms. Romano has numerous speaking engagements to her
credit, including TMA, ABI, AIRA, XPX, MIT, and HBS and has been
quoted in, interviewed by, or authored articles for Debtwire, WSJ,
ABF Journal, and TMA Northeast Journal.
Eric Danner, CPA, CTP, CIRA, Partner. Based in Boston and New York,
Mr. Danner provides advisory services to publicly traded and
privately held companies, serving a range of industries, including
consumer, financial services, retail, and technology. With more
than 20 years of experience, Danner focuses on crisis management,
as well as implementing turnaround business plans tailored to
clients' specific needs. He is a board member of the Association
of Insolvency and Restructuring Advisors.
Antony Walker, CIRA, Principal. Based in Boston, Mr. Walker has 30
years of experience in financial and operational planning and
execution, as well as turnaround and crisis leadership. He is a
qualified Chartered Accountant and Certified Insolvency and
Restructuring Advisor. He serves clients across numerous major
industries, including healthcare, hospitality, manufacturing,
not-for-profit, retail, and technology.
Chris Creger, Principal. Based in New York and New Jersey, Mr.
Creger provides financial advisory, business restructuring, and
transaction support services to corporations, debtors, bondholders,
hedge funds, law firms, lending institutions, private equity firms,
secured lenders, unsecured creditors, and other constituents. His
industry experience includes consumer goods, distribution, retail,
healthcare, media, publications, hospitality, energy,
manufacturing, and not-for-profit. Mr. Creger has served the New
York Turnaround Management Association in various roles, including
NextGen Committee Chair. He has been recognized as M&A Advisor's
12th Annual Turnaround Award Winner "Chapter 11 Reorganization of
the Year." Other honors Mr. Creger has received include the 2019
Turnaround Atlas Award, the Corporate Turnaround of the Year, and
Energy Restructuring of the Year awards.
These seasoned financial and operational restructuring
professionals are a valuable strategic addition to the firm.
Collectively they bring a wealth of experience with prior
employment at numerous top firms, including Bain, BDO, CR3, CRG,
Deloitte, Epiq, PwC, and TRG. Over the last 20 years, CohnReznick
has been an industry leader in key segments of the restructuring
space. With the addition of these new partners, the practice is
able to expand and enhance its national debtor, creditor, and
fiduciary services across key industries including financial
services, healthcare, manufacturing, and technology.
About CohnReznick
As a leading advisory, assurance, and tax firm, CohnReznick --
http://www.cohnreznick.com/-- helps forward-thinking organizations
achieve their vision by optimizing performance, maximizing value,
and managing risk. Clients benefit from the right team with the
right capabilities; proven processes customized to their individual
needs; and leaders with vital industry knowledge and relationships.
Headquartered in New York, NY with offices nationwide, the firm
serves organizations around the world through its global
subsidiaries and membership in Nexia International.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
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The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***