/raid1/www/Hosts/bankrupt/TCR_Public/190805.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, August 5, 2019, Vol. 23, No. 216
Headlines
3-D INNOVATIVE: Case Summary & 13 Unsecured Creditors
3800 LUMBERYARD: Hires Stanley A. Zlotoff as Attorney
4EDM Realty: Hires the Law Office Of Opal Hinds as Counsel
5171 CAMPBELLS: U.S. Trustee Forms 4-Member Committee
8341 BEECHCRAFT: Sept. 30 Approval Hearing on Plan Outline
968 EAST 48 LLC: Hires Charles Wertman as Counsel
99 CENTS: S&P Hikes ICR to CCC+ on Completed Exchange
ACCREDITED LIMOUSINE: Taps Joseph F. Eaton CPA PC as Accountant
ACETO CORP: Plan, Disclosure Statement Hearing Set for Sept. 12
ACETO CORPORATION: Brown Rudnick Updates Security Holders
ADAMIS PHARMACEUTICALS: Prices Offering of Common Stock & Warrants
AGILE THERAPEUTICS: Incurs $3.48 Million Net Loss in 2nd Quarter
AGILE THERAPEUTICS: May Issue 1.4M Added Shares Under 2014 Plan
AGILE THERAPEUTICS: Prices $12M Underwritten Public Offering
AGILE THERAPEUTICS: Terminates Sales Agreement with H.C. Wainwright
ALBERTSON'S LLC: Moody's Rates New $1.7-Bil. Secured Debt 'Ba2'
ALBERTSONS COS: S&P Rates New $1.7BB Senior Secured Term Loan 'BB'
AMERICAN AGAPE: S&P Lowers 2015AB Revenue Bond Rating to 'B+'
AMERICAN PARKING: Plan Confirmation Hearing Set for Aug. 30
AMYRIS INC: Signs $5 Million Loan Agreement with Nikko Chemicals
APPALACHIAN LIGHTING: T. Mallen Objects to Plan, Disclosures
APPLE LAND: Case Summary & 20 Largest Unsecured Creditors
ARADIGM CORPORATION: Exclusive Filing Period Extended to Oct. 15
ASPC CORP: Objection to EBL's Notice of Designation Sustained
AUTORAMA ENTERPRISES: Unsecureds to Get 25% in 3 Equal Payments
BALL METALPACK: S&P Downgrades ICR to 'B-'; Outlook Negative
BAY TERRACE: Exclusive Filing Period Extended Until Oct. 17
BC OF QUEENS: Taps Mark Cohen as Legal Counsel
BIG DOG II: UPS Files Limited Objection to Disclosure Statement
BIOSCRIP INC: Incurs $18.7 Million Net Loss in Second Quarter
BIOSCRIP INC: Shareholders Approve Merger with Option Care
BLACKLICK HOTSPOT: Seeks to Hire Robert O Lampl as Special Counsel
BRIGHT MOUNTAIN: Signs Merger Agreement with Slutzky & Winshman
CAH ACQUISITION: Committee Taps Arst & Arst as Bankruptcy Counsel
CALIFORNIA RESOURCES: Posts 2nd Quarter Net Income of $12 Million
CARRIERWEB LLC: Aug. 29 Plan Confirmation Hearing
CEC ENTERTAINMENT: S&P Affirms 'B-' ICR; Outlook Stable
CENTER CITY HEALTHCARE: Hires Mr. Wilen of EisnerAmper as CRO
CENTER CITY HEALTHCARE: Hires Omni as Administrative Agent
CENTER CITY HEALTHCARE: Hires SSG Advisors as Investment Banker
CENTURY III MALL: West Mifflin Oppose to Approval of Plan Outline
CFO MGMT: Trustee's LaGesse Auction of Stores Items Approved
CHESAPEAKE BAY: Seeks Access to Harbor Bank Cash Collateral
CHEYENNE HOTELS: Seeks to Hire Thomas F. Quinn as Counsel
CHICKENONTHE RUN: Seeks to Hire Eric A. Liepins as Legal Counsel
CHINA FISHERY: CFGL's Sale Procedures for Singapore Property Okayed
CLA PROPERTIES: Exclusive Plan Filing Period Extended Until Aug. 16
CLEAR CHANNEL: S&P Upgrades ICR to 'B-' on Refinancing Plans
CLEARWATER TRANSPO: Sale of Rental Car Operations to Hertz Approved
CLICKAWAY CORP: Given Until Dec. 2 to Exclusively File Plan
DETROIT COMMUNITY SCHOOLS: S&P Puts 'B-' Bond Rating on Watch Neg.
DN TRUCKING: Aug. 27 Hearing on Plan and Disclosures
DURR MECHANICAL: Exclusivity Period Extended Until Aug. 12
EKSO BIONICS: Incurs $3.06 Million Net Loss in Second Quarter
ELECTRONIC SERVICE: Plan Outline OK'd; Sept. 25 Plan Hearing Set
EMERGE ENERGY: U.S. Trustee Forms 5-Member Committee
EVEN STEVENS: Seeks 90-Day Extension of Exclusivity Period
FANNIE MAE: Reports Second Quarter Net Income of $3.4 Billion
FLOORS TODAY: Allowed to Use Cash Collateral Through Sept. 13
FREEPORT-MCMORAN INC: Fitch Rates $1.2B Sr. Unsec. Notes BB+
FREEPORT-MCMORAN INC: Moody's Rates New 2027/2029 Unsec. Notes Ba1
FREEPORT-MCMORAN INC: S&P Rates New $1.2BB Unsecured Notes 'BB'
FRONTIER INSURANCE: Holds Title, Improvement to Land in Sullivan NY
GLASS MOUNTAIN: S&P Upgrades ICR to 'B' on Lower Forecast Leverage
GLENVIEW HEALTH: Case Summary & 20 Largest Unsecured Creditors
GOLDEN OIL: Hires Weycer Kaplan as Special Litigation Counsel
GREGORY TE VELDE: Trustee's Surplus Vehicles/Equipment Auction OKd
H2O BAGEL: Seeks to Extend Plan Filing Deadline to Aug. 20
HONEY BEE BAKERS: Authorized to Use Schertz Bank Cash Collateral
HUTCHESON MEDICAL: CMC Suit vs Blue Cross Remanded to State Court
IFRESH INC: All Five Proposals Approved at Annual Meeting
IFRESH INC: Board OKs Resignation of VP of Human Resources
IHEARTCOMMUNICATIONS INC: Moody's Rates New $500MM Notes B1
IHEARTMEDIA INC: S&P Rates Subsidiary's New $500MM Sec. Notes BB-
INVERNESS VILLAGE: Court OKs Interim DIP Loan, Cash Collateral Use
JAMES MEDICAL: DOJ Watchdog Seeks Appointment of Examiner
KENNY STRANGE: Exclusivity Period Extended Until Sept. 30
KEVIN WRIGHT: $79K Private Sale of Philadelphia Property Approved
LANTHEUS HOLDINGS: S&P Affirms 'B+' ICR; Outlook Stable
LAREDO HOUSING: S&P Suspends 'CCC+' Rating on 1994 Revenue Bonds
LBI MEDIA: Seeks Extension of Exclusive Period to Nov. 16
LEGRACE CORP: Hires Oaktree Law as General Bankruptcy Counsel
LEHMAN BROTHERS: Court Junks Defendants' Bid for Leave to Appeal
LEMKCO FLORIDA: Seeks More Time to File Reorganization Plan
MATTEL INC: Fitch Rates $250MM Sr. Unsec. Notes 'B+', Outlook Neg.
MATTEL INC: Moody's Rates New $250MM Bonds 'B1', Outlook Stable
MATTEL INC: S&P Rates $250MM Sr. Unsecured Guaranteed Notes 'BB-'
MATTRESS PAL: Seeks to Extend Exclusive Filing Period to Nov. 4
MC LOGGINGS: Seeks to Hire Allen P. Turnage as Attorney
MEG ENERGY: Moody's Raises CFR to B2, Outlook Stable
MJW FILMS: Plan Deferred Until Retention of New Counsel
MONTESQUIEU INC: Seeks to Hire Stretto as Administrative Agent
MWM OIL: Seeks to Hire Morris Laing Evans as Attorneys
NAMR1726 LLC: Case Summary & 4 Unsecured Creditors
NCR CORP: Moody's Gives Ba2 Rating to New 1st Lien Credit Facility
NCR CORP: S&P Affirms 'BB' ICR on Debt Transaction; Outlook Stable
NORTH AMERICA: New Plan Adds Information on Ownership, Management
OLAIDE DARAMOLA: Must File Amended Plan Outline Before August 15
OLMA-XXI INC: Case Summary & 10 Unsecured Creditors
PACIFIC ENERGY: Seeks to Hire Spencer and Jensen as Counsel
PARK MONROE: Seeks to Hire CPEX Real Estate as Real Estate Broker
PERSPECTA INC: Moody's Rates Revised Bank Credit Facility 'Ba3'
PHI INC: Gets Final Nod to Use Cash Collateral Until Sept. 30
PIER 3: $392K Private Sale of Lunenbaurg Property to Groarks Okayed
PPT HOLDINGS: S&P Affirms B-' Issuer Credit Rating; Outlook Stable
RANDAL D. HAWORTH: Plan Confirmation Hearing Set for Oct. 3
RED APPLE RESOURCES: Second Interim Cash Collateral Order Entered
REFINITIV US: Moody's Reviews B3 CFR for Upgrade on Pending Sale
RENAISSANCE HEALTH: Seeks to Extend Exclusivity Period to Oct. 17
SADDY FAMILY: Hires Bielat Santore as Real Estate Broker
SCHRAD LTD: Allowed to Use Schertz Bank Cash Collateral
SCIENTIFIC GAMES: May Issue 3.5M Additional Shares Under 2003 Plan
SCIENTIFIC GAMES: Widens Net Loss to $75M in Second Quarter
SHALE SUPPORT GLOBAL: Hires Greenberg Traurig as Counsel
SHALE SUPPORT GLOBAL: Hires Mr. Barton of Alvarez & Marsal as CRO
SHALE SUPPORT GLOBAL: Hires Ordinary Course Professionals
SHALE SUPPORT GLOBAL: Hires Piper Jaffray as Investment Banker
SHALE SUPPORT GLOBAL: Taps McGlinchey Stafford as Special Counsel
SIZMEK INC: Sale of Peer39 Business to P39 for $13M Approved
SJV INC: Hires Bielat Santore as Real Estate Broker
SMS ENTERPRISES: Seeks to Hire Withum Smith as Accountant
SPORTCO HOLDINGS: Panel Taps Emerald Capital as Financial Advisor
STAGE PRESENCE: Ct. Affirms Ruling in Favor of A.Newman, M. Weiner
STEARNS HOLDINGS: Hires Alvarez & Marsal as Financial Advisor
STEELFUSION CLINICAL: Taps Cohen & Grigsby as Special Counsel
TAJ GRAPHICS: Court Seals Defamatory Paper Filed by Former Lawyer
THURSTON MANUFACTURING: $800K Sale of Iowa Equipment Approved
TRILOGY INTERNATIONAL: Fitch Affirms B- LT IDR, Outlook Stable
TRULY FIT STUDIO: Seeks Authority to Use Cash Collateral
UNIT CORP: Fitch Lowers IDR to B, On Rating Watch Neg.
VEA INVESTMENTS: Seeks to Hire BransonLaw as Counsel
VISTEON CORP: Moody's Lowers CFR to Ba3, Outlook Stable
WALL TO WALL: Seeks to Hire Bennington & Moshofsky as Accountant
WITTER HARVESTING: Seeks to Extend Exclusivity Period to Sept. 25
WORLD ENDURANCE: S&P Affirms 'B' ICR on Proposed Refinancing
XTL-PA INC: Case Summary & 20 Largest Unsecured Creditors
[*] S&P Takes Various Actions on 26 Classes From Five US RMBS Deals
[^] BOND PRICING: For the Week from July 29 to August 3, 2019
*********
3-D INNOVATIVE: Case Summary & 13 Unsecured Creditors
-----------------------------------------------------
Debtor: 3-D Innovative Properties, LLC
2165 Spencers Way
Stone Mountain, GA 30087
Business Description: 3-D Innovative Properties, LLC classifies
its business as Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)). The
Debtor is the fee simple owner of a property
located at 4650 Stone Mountain Hwy, Lilburn,
Georgia, having an appraised value of $3.5
million.
Chapter 11 Petition Date: August 1, 2019
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Case No.: 19-61946
Debtor's Counsel: Rodney L. Eason, Esq.
THE EASON LAW FIRM
6150 Old National Highway
Suite 200
College Park, GA 30349-4367
Tel: 770-909-7200
Fax: 770-909-0644
E-mail: reason@easonlawfirm.com
Total Assets: $4,003,497
Total Liabilities: $3,511,942
The petition was signed by Windell C. Davis-Boutte, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at:
http://bankrupt.com/misc/ganb19-61946.pdf
3800 LUMBERYARD: Hires Stanley A. Zlotoff as Attorney
-----------------------------------------------------
3800 Lumberyard Development LLC seeks authority from the United
States Bankruptcy Court for the Northern District of California
(San Jose) to hire Stanley A. Zlotoff, a Professional Corporation,
as attorney.
3800 Lumberyard requires the counsel to:
(a) give debtor legal advice with respect to its powers and
duties as debtor in possession in the continued
management of its property;
(b) prepare necessary applications, answers, orders, reports
and other legal papers;
(c) perform all other legal services for debtor as debtor in
possession which may be necessary.
Stanley A. Zlotoff will charge its standard hourly rates of $350
per hour including a retainer of $3,283.
Stanley A. Zlotoff, employee of Stanley A. Zlotoff, a Professional
Corporation, assures the Court that his firm represents no interest
adverse to debtor or the bankruptcy estate in the matters upon
which he is to be engaged
for the debtor in possession.
The counsel can be reached through:
Stanley A. Zlotoff, Esq.
LAW OFFICES OF STANLEY A. ZLOTOFF
300 South 1st St. #215
San Jose, CA 95113
Tel: (408) 287-5087
Email: zlotofflaw@gmail.com
About 3800 Lumberyard Development LLC
3800 Lumberyard Development LLC owns in fee simple two vacant land
parcels located in Santa Cruz, California having a total current
value of $6.12 million (based on recent cost valuation).
3800 Lumberyard Development LLC filed a voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No.
19-51462) on July 22, 2019. In the petition signed by Franklin
Loffer, manager, the Debtor estimated $6,125,010 in assets and
$5,749,345 in liabilities. Stanley A. Zlotoff, Esq. at Stanley A.
Zlotoff, a Professional Corporation represents the Debtor as
counsel.
4EDM Realty: Hires the Law Office Of Opal Hinds as Counsel
----------------------------------------------------------
4EDM Realty, LLC, seeks authority from the U.S. Bankruptcy Court
for the Northern District of New York to employ the Law Office of
Opal Hinds, as counsel to the Debtor.
4EDM Realty requires the Law Office Of Opal Hinds to:
a. give legal advice with respect to its powers and duties as
debtor-in-possession of the continued operation of the
business and management of its property;
b. prepare on its behalf as debtor-in-possession necessary
applications necessary applications, answers, reports,
orders, a disclosure statement and plan and other legal
papers;
c. present the Debtor in litigation;
d. represent the debtor-in-possession in other legal matters
as may be required; and
e. perform all legal services for the Debtor as may be
necessary herein.
The Law Office Of Opal Hinds will be paid at the hourly rate of
$225. The Debtor paid the Firm a retainer in the amount of $1,500.
It will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Opal Fayne Hinds, partner of the Law Office of Opal Hinds, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
The Law Office Of Opal Hinds can be reached at:
Opal Fayne Hinds, Esq.
THE LAW OFFICE OF OPAL HINDS
650 Franklin Street, Suite 304
Schenectady, NY 12305
Tel: (518) 893-8100
About 4EDM Realty, LLC
4EDM Realty LLC filed a Chapter 11 bankruptcy petition (Bankr.
N.D.N.Y. Case No. 19-11258) on July 3, 2019, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Opal Fayne Hinds, at the Law Office of Opal Hinds.
5171 CAMPBELLS: U.S. Trustee Forms 4-Member Committee
-----------------------------------------------------
The U.S Trustee for Region 3 on August 1 appointed four creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 cases of 5171 Campbells Land Co., Inc., and its
affiliates.
The committee members are:
1. Perkins & Marie Callender’s, LLC
6075 Poplar Avenue, Suite 800
Memphis, TN 38119
Attn: General Counsel
Tel: (901) 766-6400
Fax: (901) 766-6482
Email: andy.whiteley@prkmc.com
2. Store Capital
8377 E. Hartford Drive
Scottsdale, AZ 85255
Tel: (480) 256-1199
Email: Lhale@storecapital.com
3. Vincent A. DiAntonio
3D Acquisitions, LP
1520 Gilmore Drive
Jefferson Hills, PA 15025-2706
Tel. (412) 443-6317
Email: vdianton@aol.com
4. L-Four, LP
c/o Michael Oliverio, Esquire
The Lynch Law Group, LLC
501 Smith Drive, Suite 3
Cranberry Twp., PA 16066
Tel. (724 776-8000
Email: moliverio@lynchlaw-group.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About 5171 Campbells
Based in Rankin, Pennsylvania, 5171 Campbells Land Co., Inc. is a
privately held company that operates in the restaurant industry.
5171 Campbells filed a Chapter 11 petition (Bankr. W.D. Pa. Case
No. 19-22715) on July 8, 2019, and is represented by Robert O.
Lampl, Esq., in Pittsburgh, Pennsylvania.
At the time of filing, the Debtor estimated $1 million to $10
million in assets and $10 million to $50 million in liabilities.
The petition was signed by William T. Kane, 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/pawb19-22715.pdf
8341 BEECHCRAFT: Sept. 30 Approval Hearing on Plan Outline
----------------------------------------------------------
Bankruptcy Judge Thomas J. Catliota will convene a hearing on Sept.
30, 2019 at 2:00 p.m. to consider approval of 8341 Beechcraft,
L.L.C.'s disclosure statement referring to its chapter 11 plan.
August 29, 2019 is fixed as the last day for filing and serving
written objections to the disclosure statement.
The Troubled Company Reporter previously reported that the Debtor's
Property will satisfy the Allowed Claims from either a sale of the
Property or the proceeds of a refinance of the Property for an
amount not less than the Minimum Net Refinance Amount.
A copy of the Disclosure Statement is available at
https://tinyurl.com/yyysy8f3 from Pacermonitor.co at no charge.
About 8341 Beechcraft
Based in Gaithersburg, Maryland, 8341 Beechcraft, L.L.C., listed
itself as a single asset real estate as defined in 11 U.S.C.
Section 101(51B). 8341 Beechcraft, L.L.C., based in Gaithersburg,
MD, filed a Chapter 11 petition (Bankr. D. Md. Case No. 18-11393)
on Feb. 1, 2018. In the petition signed by David I. Bacharach,
managing member, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The Hon. Thomas J. Catliota presides
over the case. Marc E. Shach, Esq., at Coon & Cole, LLC, serves as
bankruptcy counsel to the Debtor. No official committee of
unsecured creditors has been appointed in the Chapter 11 case.
968 EAST 48 LLC: Hires Charles Wertman as Counsel
-------------------------------------------------
968 East 48 LLC seeks authority from the U.S. Bankruptcy Court for
the Eastern District of New York to employ the Law Offices of
Charles Wertman, P.C., as counsel to the Debtor.
968 East 48 LLC requires Charles Wertman, P.C. to:
(a) assist in the administration of its Chapter 11 proceeding;
(b) prepare or review of operating reports;
(c) assist in the compliance with applicable law and rules;
(d) set a bar date;
(e) review claims and resolve claims which should be
disallowed;
(f) address mortgage issues; and
(g) assist in reorganizing and confirming a Chapter 11 plan.
Charles Wertman, P.C. will be paid at these hourly rates:
Attorneys $425
Paralegals $135
Charles Wertman will be paid a retainer in the amount of $6,000.
Charles Wertman will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Charles Wertman, founding partner, assured the Court that the firm
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estates.
Charles Wertman, can be reached at:
Charles Wertman, Esq.
LAW OFFICES OF CHARLES WERTMAN, P.C.
11 Sunrise Plaza, Suite 301
Valley Stream, NY 11580
Tel: (516) 284-0900
About 968 East 48
968 East 48 LLC filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 19-43306) on May 30, 2019, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by the Law Offices of Charles Wertman, P.C.
99 CENTS: S&P Hikes ICR to CCC+ on Completed Exchange
-----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on 99 Cents Only
Stores LLC to 'CCC+' from 'SD' (selective default). The outlook is
developing. The 'CCC+' issue-level rating on the company's
first-lien term debt and 'CCC-' issue-level rating on its unsecured
notes are unaffected.
The rating actions came after the company completed a distressed
exchange of its second-lien term loan and secured notes facilities
for its common and preferred equity. S&P views the exchange as
tantamount to a default based on the transaction terms and its
criteria.
The rating and outlook revision reflect S&P's assessment of 99
Cents Only's high pro forma leverage of around 7x for the
transaction, offset by positive trends in operating performance.
"The developing outlook on 99 Cents Only reflects our view that its
ongoing turnaround initiatives, if successfully executed, could
lead to sustained improvement in operating performance and positive
cash flow generation," S&P said. The rating agency thinks better
cost management and profitability could enable the company to
refinance its capital structure.
"We could lower our rating if operating performance weakens such
that negative free operating cash flow (FOCF) accelerates,
liquidity tightens, and we view the probability of a payment crisis
over the next 12 months as likely," S&P said.
"We could revise the outlook to stable or raise our rating with
sustained improvement in operating performance, including positive
same-store sales growth and EBITDA expansion, such that the company
generates positive FOCF and fixed-charge coverage improves to
around 1.5x," the rating agency said.
ACCREDITED LIMOUSINE: Taps Joseph F. Eaton CPA PC as Accountant
---------------------------------------------------------------
Accredited Limousine Service LLC received approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Joseph F. Eaton CPA PC as its accountants.
The Debtor requires Joe Eaton to:
a. assist the Debtor with the preparation of financial
projections, liquidation analyses and tax returns or other
financial documents in furtherance of the Debtor's efforts to
confirm a chapter 11 plan;
b. review and advise the Debtor and its other professionals as
to any tax claims filed in the Debtor's case;
c. assist the Debtor and its other professionals with any
accounting or tax related aspects of any proposed chapter 11 plan
or any proposed sale of any assets of the Debtor; and
d. perform any other accounting and financial advisory
services that the Debtor may require in connection with the case.
Hourly billing rates customarily charged by Eaton are:
Partners $250
Senior Staff $175
Support Staff $100
Joe Eaton, President of Joseph F. Eaton CPA PC, attests that his
firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Joseph F. Eaton, CPA
Joseph F. Eaton CPA PC
7 Dawson Street
Huntington Station, NY 11721
Tel: (631) 424-6500
Fax: (631) 424 - 6511
About Accredited Limousine Service
Accredited Limousine Service, LLC -- https://accreditedlimo.com --
is a chauffeured black car service that provides local, national
and worldwide limousine services. It services commercial as well
as corporate fleets, FBOs and aircraft/management charter
companies. The company offers a wide selection of vehicles,
serving LaGuardia, Kennedy, Newark, Teterboro and White Plains
airport.
Accredited Limousine Service sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-22215) on Feb. 6,
2019. At the time of the filing, the Debtor disclosed $663,575 in
assets and $1,494,868 in liabilities. The case is assigned to
Judge Robert D. Drain.
ACETO CORP: Plan, Disclosure Statement Hearing Set for Sept. 12
---------------------------------------------------------------
Bankruptcy Judge Vincent F. Papalia approved Aceto Corporation and
affiliates' disclosure statement referring to a chapter 11 plan.
The Court will hold a combined hearing to consider approval of the
Disclosure Statement on a final basis and confirmation of the Plan
on Sept. 12, 2019 at 11:00 a.m. (Eastern Time).
Objections to final approval of the disclosure statement and
confirmation of the plan and ballots accepting or rejecting the
plan must be filed by August 30, 2019.
The Troubled Company Reporter previously reported that
distributions under the Plan and the Plan Administrator’s
post-Effective Date operations will be funded from the Debtors'
Cash on hand and proceeds of the Sales held by the Estates as of
the Effective Date, and proceeds of other asset dispositions and
net proceeds of Litigation and Other Recoveries.
A full-text copy of the First Modified Disclosure Statement dated
June 27, 2019, is available at https://tinyurl.com/y2scp5tk from
PacerMonitor.com at no charge.
About ACETO Corp.
ACETO Corporation (NASDAQ: ACET), incorporated in 1947, is focused
on the global marketing, sale and distribution of Human Health
products (finished dosage form generics and nutraceutical
products), Pharmaceutical Ingredients (pharmaceutical intermediates
and active pharmaceutical ingredients) and Performance Chemicals
(specialty chemicals and agricultural protection products).
The Company employs approximately 180 people.
With business operations in nine countries, ACETO distributes over
1,100 chemical compounds used principally as finished products or
raw materials in the pharmaceutical, nutraceutical, agricultural,
coatings and industrial chemical industries. ACETO's global
operations, including a staff of 25 in China and 12 in India, are
distinctive in the industry and enable its worldwide sourcing and
regulatory capabilities.
Aceto Corporation and eight affiliates sought Chapter 11 protection
(Bankr. D.N.J. Case No. 19-13448) on Feb. 19, 2019. ACETO
disclosed assets of $753,159,000 and liabilities of $702,848,000 as
of Dec. 31, 2018.
The Hon. Vincent F. Papalia is the case judge.
The Debtors tapped Lowenstein Sandler LLP as counsel; Simmons &
Simmons as foreign counsel; PJT Partners LP as investment banker
and financial advisor; AP Services LLC as restructuring advisor;
and Prime Clerk LLC as claims and noticing agent.
The U.S. Trustee, on February 28, appointed five members to the
official committee of unsecured creditors. Counsel for the
Committee is Stroock & Stroock & Lavan LLP and Porzio, Bromberg &
Newman, P.C. Houlihan Lokey Capital, Inc., is the Committee's
investment banker. GlassRatner Advisory & Capital Group, LLC, as
its financial advisor.
ACETO CORPORATION: Brown Rudnick Updates Security Holders
---------------------------------------------------------
In the Chapter 11 cases of Aceto Corporation, et al., the law firm
Brown Rudnick LLP filed an amended report under Rule 2019 of the
Federal Rules of Bankruptcy Procedure, to disclose an updated list
of equity holders that it is representing.
Brown Rudnick represents only the members of the Ad Hoc Committee
of Equity Security Holders in their respective capacities as such,
and does not represent or purport to represent any other entities
with respect to the Debtors' chapter 11 cases. In addition, the Ad
Hoc Committee does not purport to act, represent or speak on behalf
of any other entity in connection with the Debtors' chapter 11
cases.
As of July 18, 2019, members of the Ad Hoc Committee and their
disclosable economic interests are:
(1) Scoggin Worldwide Fund Ltd.
660 Madison Ave., #20
New York, NY 10065
* Units: 600,000
(2) Argo Group US, Inc.
175 E. Houston St., Suite 1300
San Antonio, TX 78205
* Units: 1,361,022
(3) HZ Investments Family LP
650 Halstead Ave, Ste201B2
Mamaroneck, NY 10543
* Units: 104,296
Counsel to the Ad Hoc Committee of Equity Security Holders can be
reached at:
BROWN RUDNICK LLP
David Molton, Esq.
Robert Stark, Esq.
Jessica Meyers, Esq.
Seven Times Square
New York, NY 10036
Tel: (212) 209-4800
Fax: (212) 209-4801
E-mail: dmolton@brownrudnick.com
E-mail: rstark@brownrudnick.com
E-mail: jmeyers@brownrudnick.com
- and -
Jeffrey Jonas, Esq.
One Financial Center
Boston, MA 02111
Tel: (617) 856-8200
Fax: (617) 856-8201
E-mail: jjonas@brownrudnick.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at
http://bankrupt.com/misc/Aceto_Corporation_741_Rule2019.pdf
About ACETO Corp.
ACETO Corporation (NASDAQ: ACET), incorporated in 1947, is focused
on the global marketing, sale and distribution of Human Health
products (finished dosage form generics and nutraceutical
products), Pharmaceutical Ingredients (pharmaceutical intermediates
and active pharmaceutical ingredients) and Performance Chemicals
(specialty chemicals and agricultural protection products).
The Company employs approximately 180 people.
With business operations in nine countries, ACETO distributes over
1,100 chemical compounds used principally as finished products or
raw materials in the pharmaceutical, nutraceutical, agricultural,
coatings and industrial chemical industries. ACETO's global
operations, including a staff of 25 in China and 12 in India, are
distinctive in the industry and enable its worldwide sourcing and
regulatory capabilities.
Aceto Corporation and eight affiliates sought Chapter 11 protection
(Bankr. D.N.J. Case No. 19-13448) on Feb. 19, 2019. ACETO
disclosed assets of $753,159,000 and liabilities of $702,848,000
as
of Dec. 31, 2018.
The Hon. Vincent F. Papalia is the case judge.
The Debtors tapped Lowenstein Sandler LLP as counsel; Simmons &
Simmons as foreign counsel; PJT Partners LP as investment banker
and financial advisor; AP Services LLC as restructuring advisor;
and Prime Clerk LLC as claims and noticing agent.
The U.S. Trustee, on Feb. 28, 2019, appointed five members to the
official committee of unsecured creditors. Counsel for the
Committee is Stroock & Stroock & Lavan LLP and Porzio, Bromberg &
Newman, P.C. Houlihan Lokey Capital, Inc., is the Committee's
investment banker. GlassRatner Advisory & Capital Group, LLC, is
its financial advisor.
ADAMIS PHARMACEUTICALS: Prices Offering of Common Stock & Warrants
------------------------------------------------------------------
Adamis Pharmaceuticals Corporation announced the pricing of its
underwritten public offering of 12,000,000 shares of its common
stock and warrants to purchase up to 12,000,000 shares of its
common stock. Each share of common stock is being sold together
with a warrant to purchase one share of common stock for a combined
public offering price of $1.00, resulting in gross proceeds of
approximately $12,000,000, before deducting underwriting discounts
and commissions and other estimated offering expenses payable by
the company and excluding the proceeds from the exercise of any
warrants. All shares of common stock and warrants to purchase
common stock to be sold in the public offering are being sold by
Adamis. The warrants will be exercisable commencing on the date of
issuance, will expire five years from the date of issuance, and
have an exercise price of $1.15 per share, subject to certain
adjustments. The shares of common stock and warrants will be
purchased together but will be issued separately and will be
immediately separable upon issuance.
The offering is expected to close on Aug. 5, 2019, subject to the
satisfaction of customary closing conditions. The company has also
granted the underwriters a 30-day option to purchase up to
1,800,000 additional shares of its common stock and/or warrants to
purchase up to 1,800,000 additional shares of its common stock.
Raymond James & Associates, Inc. is acting as the sole book-running
manager for the offering. Maxim Group LLC is acting as lead
manager for the offering.
The Company intends to use the net proceeds from this offering for
general corporate purposes, which may include, without limitation,
expenditures relating to research, development and clinical trials
relating to its products and product candidates, manufacturing,
capital expenditures, hiring additional personnel, acquisitions of
new technologies or products, the repayment, refinancing,
redemption or repurchase of existing or future indebtedness or
capital stock and working capital.
About Adamis
San Diego, Calif.-based Adamis Pharmaceuticals Corporation
(OTCQB:ADMP) -- http://www.adamispharmaceuticals.com/-- is a
specialty biopharmaceutical company primarily focused on developing
and commercializing products in various therapeutic areas,
including respiratory disease and allergy. The Company's Symjepi
(epinephrine) Injections 0.3mg and 0.15mg were approved for use in
the emergency treatment of acute allergic reactions, including
anaphylaxis. Adamis recently announced a distribution and
commercialization agreement with Sandoz, a division of Novartis
Group, to market Symjepi in the U.S. Adamis is developing
additional products, including the company's ZIMHI naloxone
injection product candidate for the treatment of opioid overdose,
and a metered dose inhaler and dry powder inhaler product
candidates for the treatment of asthma and COPD. The company's
subsidiary, U.S. Compounding, Inc., compounds sterile prescription
drugs and certain nonsterile drugs for human and veterinary use, to
patients, physician clinics, hospitals, surgery centers and other
clients throughout most of the United States.
Adamis incurred a net loss of $39 million in 2018, following a net
loss of $25.53 million in 2017. As of March 31, 2019, Adamis had
$52.66 million in total assets, $12.88 million in total
liabilities, and $39.77 million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Diego, California, the Company's
auditor since 2007, issued a "going concern" qualification in its
report on the Company's consolidated financial statements for the
year ended Dec. 31, 2018. The auditors noted that the Company has
incurred recurring losses from operations, and is dependent on
additional financing to fund operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
AGILE THERAPEUTICS: Incurs $3.48 Million Net Loss in 2nd Quarter
----------------------------------------------------------------
Agile Therapeutics, Inc., filed with the Securities and Exchange
Commission on Aug. 1, 2019, its quarterly report on Form 10-Q
reporting a net loss of $3.48 million for the three months ended
June 30, 2019, compared to a net loss of $5.34 million for the
three months ended June 30, 2018.
For the six months ended June 30, 2019, the Company reported a net
loss of $8.15 million compared to a net loss of $12.17 million for
the six months ended June 30, 2018.
As of June 30, 2019, the Company had $24.92 million in total
assets, $1.77 million in total current liabilities, $82,000 in
lease liability (long-term), and $23.06 million in total
stockholders' equity.
As of June 30, 2019, Agile had $10.6 million of cash and cash
equivalents compared to $7.8 million of cash and cash equivalents
as of Dec. 31, 2018. During the quarter ended June 30, 2019, the
Company raised net proceeds of approximately $1.4 million from the
sale of 992,072 shares of common stock from its "at-the-market"
equity offerings. The Company believes its cash and cash
equivalents as of June 30, 2019 will be sufficient to meet its
projected operating requirements through the end of 2019. The
Company will require additional capital to fund operating needs for
2020 and beyond, which will include, among other items, the
completion of its commercial plan for Twirla, if approved, which
primarily includes validation of the commercial manufacturing
process and the commercial launch, and advancing the development of
its other potential product candidates.
Research and development expenses were $1.8 million for the quarter
ended June 30, 2019, compared to $2.4 million for the comparable
period in 2018. The decrease in R&D expenses was primarily due to
a decrease in manufacturing and commercialization expenses and a
decrease in stock compensation expense. The reduction in
manufacturing and commercialization expenses reflects reduced
activity associated with the scale-up of the commercial
manufacturing process which was implemented as a result of the
receipt of the 2017 CRL. The decrease in stock compensation
expense was primarily the result of a lower stock price associated
with the January 2019 stock option grants as compared to the
January 2018 stock option grants.
General and administrative expenses were $1.8 million for the
quarter ended June 30, 2019, compared to $2.3 million for the
comparable period in 2018. The decrease in G&A expenses was
primarily due to decreased stock compensation expense primarily the
result of a lower stock price associated with the January 2019
stock option grants as compared to the January 2018 stock option
grants and the suspension of pre-commercialization activities as a
result of the receipt of the 2017 CRL.
At June 30, 2019, Agile had 44,632,329 shares of common stock
outstanding.
Recent Corporate Developments
Twirla Update
* Acceptance of New Drug Application (NDA) Resubmission of
Twirla: The Company resubmitted its Twirla NDA on May 16,
2019. The NDA resubmission was intended to be a complete
response to the complete response letter the Company
received from the U.S. Food and Drug Administration (FDA) in
December 2017 (2017 CRL) and included the results from a
comparative wear study, which was recommended by the FDA,
additional information on the Company's manufacturing
process, and other analyses responding to the 2017 CRL. The
FDA informed the Company that it considers the resubmission
to be a complete, class 2 response to the CRL and
established Nov. 16, 2019 as the Prescription Drug User Fee
Act (PDUFA) goal date.
* Advisory Committee Meeting for Twirla NDA: In June 2019, the
Company announced that a meeting of the Bone, Reproductive
and Urologic Drugs Advisory Committee of the FDA has been
scheduled for Oct. 30, 2019 to review the Company's NDA for
Twirla.
* Combined Safety Data from Three Phase 3 Studies Presented: A
poster presenting the combined safety data from three Phase
3 studies of Twirla (AG200-15) was presented in an ePoster
session at the 2019 Annual Clinical and Scientific Meeting
of the American Congress of Obstetricians and Gynecologists
(ACOG). The poster, titled "Safety of AG200-15, an
Investigational Transdermal Patch in Three Phase 3 Studies,"
was presented by lead author Anita Nelson, M.D., Professor
and Chair of Obstetrics and Gynecology, Western University
of Health Sciences and a Principle Investigator for SECURE,
the pivotal Phase 3 study of Twirla (AG200-15)
"The second quarter of 2019 was a very productive quarter for the
Company," said Al Altomari, chairman and chief executive officer of
Agile. "Between the resubmission and acceptance of our Twirla NDA
as well as the announcement of the advisory committee meeting, we
believe we are on track to seek the approval of Twirla. We
continue to believe that Twirla, if approved, will provide women
with an important contraception option they do not currently have
-- a once-weekly contraceptive patch designed to deliver a low dose
of estrogen."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/M97VgV
About Agile Therapeutics
Agile Therapeutics, headquartered in Princeton, New Jersey --
http://www.agiletherapeutics.com/-- is a forward-thinking women's
healthcare company dedicated to fulfilling the unmet health needs
of today's women. The Company's product candidates are designed to
provide women with contraceptive options that offer freedom from
taking a daily pill, without committing to a longer-acting method.
Its lead product candidate, Twirla, (ethinyl estradiol and
levonorgestrel transdermal system), also known as AG200-15, is a
once-weekly prescription contraceptive patch that has completed
Phase 3 trials.
Agile Therapeutics reported a net loss of $19.77 million for the
year ended Dec. 31, 2018, compared to a net loss of $28.30 million
for the year ended Dec. 31, 2017. As of March 31, 2019, the
Company had $26.13 million in total assets, $1.34 million in total
current liabilities, $128,000 in long term lease liability, and
$24.66 million in total stockholders' equity.
Ernst & Young LLP, in Iselin, New Jersey, the Company's auditor
since 2010, issued a "going concern" qualification in its report on
the consolidated financial statements for the year ended Dec. 31,
2018, stating that the Company has suffered recurring losses from
operations, has experienced delays in the approval of its product
candidate and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
AGILE THERAPEUTICS: May Issue 1.4M Added Shares Under 2014 Plan
---------------------------------------------------------------
Agile Therapeutics, Inc. filed a Form S-8 registration statement
with the Securities and Exchange Commission relating to the
registration of an additional 1,375,094 shares of its common stock,
par value $0.0001 per share. The Shares are securities of the same
class and relate to the same employee benefit plan, the Amended and
Restated 2014 Incentive Compensation Plan, as amended and restated
on June 7, 2018, as those registered pursuant to the Company's
registration statements on Form S-8, previously filed with the SEC
on Oct. 17, 2014, June 19, 2015, March 9, 2016, May 9, 2017, and
Nov. 2, 2018. A full-text copy of the prospectus is available for
free at: https://is.gd/2GTIHU
About Agile Therapeutics
Agile Therapeutics, headquartered in Princeton, New Jersey --
http://www.agiletherapeutics.com/-- is a forward-thinking women's
healthcare company dedicated to fulfilling the unmet health needs
of today's women. The Company's product candidates are designed to
provide women with contraceptive options that offer freedom from
taking a daily pill, without committing to a longer-acting method.
Its lead product candidate, Twirla, (ethinyl estradiol and
levonorgestrel transdermal system), also known as AG200-15, is a
once-weekly prescription contraceptive patch that has completed
Phase 3 trials.
Agile Therapeutics reported a net loss of $19.77 million for the
year ended Dec. 31, 2018, compared to a net loss of $28.30 million
for the year ended Dec. 31, 2017. As of June 30, 2019, the Company
had $24.92 million in total assets, $1.77 million in total current
liabilities, $82,000 in lease liability (long-term), and $23.06
million in total stockholders' equity.
Ernst & Young LLP, in Iselin, New Jersey, the Company's auditor
since 2010, issued a "going concern" qualification in its report on
the consolidated financial statements for the year ended Dec. 31,
2018, stating that the Company has suffered recurring losses from
operations, has experienced delays in the approval of its product
candidate and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
AGILE THERAPEUTICS: Prices $12M Underwritten Public Offering
------------------------------------------------------------
Agile Therapeutics, Inc., has priced its underwritten public
offering of 12,631,579 shares of its common stock at a public
offering price of $0.95 per share. The gross proceeds from the
offering, before deducting underwriting discounts and commissions
and estimated offering expenses payable by Agile Therapeutics, are
expected to be approximately $12 million. In addition, Agile
Therapeutics has granted the underwriters a 30-day option to
purchase up to 1,894,736 additional shares of common stock at the
public offering price, less the underwriting discounts and
commissions. All shares in the offering will be sold by Agile
Therapeutics.
Oppenheimer & Co. Inc. is acting as the sole book-running manager
for the offering. H.C. Wainwright & Co., LLC is acting as lead
manager for the offering.
The offering is expected to close on or about Aug. 6, 2019, subject
to customary closing conditions.
The shares of common stock are being offered by Agile Therapeutics
pursuant to its shelf registration statement on Form S-3 previously
filed and declared effective by the Securities and Exchange
Commission. The offering is being made only by means of a
preliminary prospectus supplement and the accompanying prospectus,
copies of which may be obtained, when available, from Oppenheimer &
Co., Inc., Attention: Syndicate Prospectus Department, 85 Broad
St., 26th Floor, New York, NY 10004, by telephone at (212) 667-8055
or by email at EquityProspectus@opco.com.
About Agile Therapeutics
Agile Therapeutics, headquartered in Princeton, New Jersey --
http://www.agiletherapeutics.com/-- is a forward-thinking women's
healthcare company dedicated to fulfilling the unmet health needs
of today's women. The Company's product candidates are designed to
provide women with contraceptive options that offer freedom from
taking a daily pill, without committing to a longer-acting method.
Its lead product candidate, Twirla, (ethinyl estradiol and
levonorgestrel transdermal system), also known as AG200-15, is a
once-weekly prescription contraceptive patch that has completed
Phase 3 trials.
Agile Therapeutics reported a net loss of $19.77 million for the
year ended Dec. 31, 2018, compared to a net loss of $28.30 million
for the year ended Dec. 31, 2017. As of June 30, 2019, the Company
had $24.92 million in total assets, $1.77 million in total current
liabilities, $82,000 in lease liability (long-term), and $23.06
million in total stockholders' equity.
Ernst & Young LLP, in Iselin, New Jersey, the Company's auditor
since 2010, issued a "going concern" qualification in its report on
the consolidated financial statements for the year ended Dec. 31,
2018, stating that the Company has suffered recurring losses from
operations, has experienced delays in the approval of its product
candidate and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
AGILE THERAPEUTICS: Terminates Sales Agreement with H.C. Wainwright
-------------------------------------------------------------------
Agile Therapeutics, Inc. entered into a Common Stock Sales
Agreement on Jan. 23, 2019, with H.C. Wainwright & Co., LLC with
respect to an at the market offering program, under which the
Company was permitted, from time to time in its sole discretion,
issue and sell through or to Wainwright, acting as agent or
principal, up to $10.0 million of shares of the Company's common
stock, par value $0.0001 per share. The issuance and sale of the
Placement Shares by the Company under the Sales Agreement were
required to be made pursuant to the Company's registration
statement on Form S-3, originally filed with the Securities and
Exchange Commission on Nov. 2, 2018, and declared effective by the
SEC on Nov. 14, 2018, and a related prospectus supplement filed
with the SEC on Jan. 23, 2019. As of July 31, 2019, the Company
sold 1,801,528 shares of common stock under the ATM program.
Effective July 31, 2019, the Company terminated the Sales Agreement
and the related ATM Program.
The Company has decided to terminate the Sales Agreement because it
does not intend to utilize the Sales Agreement to raise additional
capital. The Company will not incur any termination penalties as a
result of its termination of the Sales Agreement.
About Agile Therapeutics
Agile Therapeutics, headquartered in Princeton, New Jersey --
http://www.agiletherapeutics.com-- is a forward-thinking women's
healthcare company dedicated to fulfilling the unmet health needs
of today's women. The Company's product candidates are designed to
provide women with contraceptive options that offer freedom from
taking a daily pill, without committing to a longer-acting method.
Its lead product candidate, Twirla, (ethinyl estradiol and
levonorgestrel transdermal system), also known as AG200-15, is a
once-weekly prescription contraceptive patch that has completed
Phase 3 trials.
Agile Therapeutics reported a net loss of $19.77 million for the
year ended Dec. 31, 2018, compared to a net loss of $28.30 million
for the year ended Dec. 31, 2017. As of June 30, 2019, the Company
had $24.92 million in total assets, $1.77 million in total current
liabilities, $82,000 in lease liability (long-term), and $23.06
million in total stockholders' equity.
Ernst & Young LLP, in Iselin, New Jersey, the Company's auditor
since 2010, issued a "going concern" qualification in its report on
the consolidated financial statements for the year ended Dec. 31,
2018, stating that the Company has suffered recurring losses from
operations, has experienced delays in the approval of its product
candidate and has stated that substantial doubt exists about the
Company's ability to continue as a going concern.
ALBERTSON'S LLC: Moody's Rates New $1.7-Bil. Secured Debt 'Ba2'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Albertson's
LLC's (a subsidiary of Albertsons Companies, Inc.) proposed new
$1.7 billion senior secured term loan and a B3 rating to Albertsons
Companies, Inc. proposed new $500 million senior unsecured notes.
All other ratings including Albertsons Companies, Inc.'s B1
Corporate Family Rating and B1-PD Probability of Default rating are
unchanged. The outlook remains stable.
Proceeds of the new term loan, new notes and cash on hand will be
used to refinance the company's existing senior secured term loans
due 2022 and 2023 and partially repay the term loan due 2025.
All ratings are subject to the completion of the proposed
transaction and satisfactory review of documentation.
Assignments:
Issuer: Albertsons Companies, Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
Issuer: Albertson's LLC
Senior Secured Bank Credit Facility, Assigned Ba2 (LGD2)
RATINGS RATIONALE
The B1 Corporate Family Rating of Albertsons Companies, Inc.
reflects the company's very good liquidity, its sizable scale, good
store base, its well established regional brands and its
significant store ownership. The ratings are constrained by
Albertsons' participation in a highly competitive retail segment
and high debt burden associated with its ownership by a financial
sponsor. At the end of the fiscal year ended February 23, 2019,
debt to EBITDA (including its adjustment for leases and about $7.6
billion adjustment for pension liabilities) was 6.0 times. Moody's
expects leverage to improve to about 5.5 times in the next 12-18
months as the company repays debt and improves EBITDA. The ratings
are supported by the company's track record of operational
improvements especially with regard to underperforming assets and
synergy realization. Competitive risks, coupled with a high debt
burden and risk associated with ownership by a financial sponsor,
remain major risks for the company and may impact the company's
ability to improve credit metrics in the near-term.
The company's stable outlook reflects its expectation that the
company will continue to lower its debt burden and improve
profitability.
Ratings could be upgraded if debt/EBITDA approaches 5.0 times,
EBITA/interest is sustained above 1.75 times, financial policies
remain benign and liquidity remains very good.
Ratings could be downgraded if recent operating trends are not
reversed in the near term, debt/EBITDA is sustained above 6.25
times or EBITA/interest is sustained below 1.5 times. Ratings could
also be downgraded if financial policies become aggressive or if
liquidity deteriorates.
With about $60 billion in annual sales Albertsons Companies, Inc.
is one of the largest food and drug retailers in the United States.
As of February 23, 2019, the Company operated 2,269 retail stores
with 1,739 pharmacies, 397 associated fuel centers, 23 dedicated
distribution centers and 20 manufacturing facilities. The Company's
stores predominantly operate under the banners Albertsons, Safeway,
Vons, Pavilions, Randalls, Tom Thumb, Carrs, Sav-On, Jewel-Osco,
Acme, Shaw's, Star Market, United Supermarkets, Market Street,
Amigos, Haggen and United Express.
ALBERTSONS COS: S&P Rates New $1.7BB Senior Secured Term Loan 'BB'
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '1'
recovery rating to Albertsons Cos. Inc.'s (ACI) proposed $1.7
billion senior secured term loan due 2026.
At the same time, S&P assigned its 'BB-' issue-level rating and '2'
recovery rating to the company's proposed $500 million senior
unsecured guaranteed notes due 2028. In addition, S&P raised its
issue-level rating on New Albertsons L.P.'s (NALP) notes to 'B+'
from 'B-' and revised the recovery rating to '3' from '6'.
S&P's 'BB-' issue-level rating and '2' recovery rating on Safeway
Inc.'s notes remain unchanged, though the rating agency revised its
rounded recovery estimate on the notes to 85% from 70%.
"All of our other ratings on Albertsons remain unchanged, including
the 'B+' issuer credit rating and stable outlook. We anticipate
that the grocer's operating performance will continue to improve in
fiscal year 2019 on a low-single digit percent increase in
identical-store (ID) sales," S&P said.
"The transaction will extend the company's upcoming debt maturities
beyond 2023, which we view as credit positive. We also note that
the refinancing will reduce the company's S&P lease-adjusted debt
leverage to 5.8x as of the end of fiscal year 2019 from the 6.1x
level we were expecting prior to the announcement," the rating
agency said.
Albertsons plans to repay all of the outstanding amounts under its
tranche B-5 and tranche B-6 term loan totaling $2.7 billion and
will repay nearly $350 million on its tranche B-7 loan. The company
will use about $850 million available following its recently
completed sale-leaseback transactions to help fund this
refinancing.
S&P notes that during the first quarter Albertsons repurchased $738
million of its NALP and Safeway notes ($437 million through tender
offers and $301 million through open-market purchases) and,
following the quarter end, repurchased an additional $253 million
of NALP notes. It also completed two sale-leaseback transactions,
which consisted of 50 store properties and one distribution center,
for an aggregate purchase price (net of closing costs) of
approximately $886 million.
The '1' recovery rating on the new term loan indicates S&P's
expectation for very high recovery to lenders (90%-100%; rounded
estimate: 95%) in event of a default. The '2' recovery rating on
the new 2028 notes and on the existing Safeway notes indicates
S&P's expectation for substantial recovery to lenders (70%-90%;
rounded estimate: 85%). The '3' recovery rating on the NALP notes
indicates the rating agency's expectation for meaningful recovery
to lenders (50%-70%; rounded estimate: 50%). The reduced amount of
senior debt ahead of the NALP notes and the material reduction in
the outstanding amount of these notes over the past year led S&P to
raise its rating on the debt.
Albertsons' first-quarter 2019 revenue was in line with S&P's
expectations and increased by 0.5% on a 1.5% increase in its ID
sales, which was partially offset by continued store closures. The
company's S&P lease-adjusted EBITDA margin increased by 70 basis
points during the quarter relative to the year ago period on
cost-savings initiatives, lower shrink expenses, and reduced
advertising costs. The margin boost also came from lower
acquisition and integration costs as it completed the store system
conversions related to the Safeway integration during fiscal year
2018.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's recovery rating revisions take into consideration the new
$1.7 billion senior secured term loan B-8 and the new $500 million
senior unsecured notes, which the company will use--together with
the net proceeds from its sale-leaseback transactions--to repay
debt.
-- The Safeway and NALP notes do not benefit from the subsidiary
and parent guarantees that the ACI notes have.
-- S&P's simulated default scenario contemplates that cash flow
problems due to an economic downturn, combined with new competitors
stepping up their entry into the company's markets, lead to a
significant decline in ACI's revenue and profitability.
-- S&P estimates a gross recovery value of $11.3 billion taking
into consideration the going-concern valuation of the business
operations of $4.78 billion and the value of its real estate at
$6.6 billion. Its going-concern valuation assumes an emergence
EBITDA of $955 million (net of $577 million in assumed additional
rent expense if the company did a sale leaseback on its owned real
estate).
-- For the owned real estate properties, S&P bases its valuation
on $577 million in estimated rent income (assuming triple net lease
contracts) to which it applies an 8.05% capitalization rate.
Simulated default assumptions
-- Simulated year of default: 2023
Going-concern valuation:
-- EBITDA at emergence: $955 million
-- EBITDA multiple: 5.0x
Real estate valuation:
-- Implied rent income: $577 million
-- Capitalization rate: 8.05%
Simplified waterfall
-- Net enterprise value (after administrative costs): About $10.8
billion
-- Net available to first-lien debt (after asset-based lending
[ABL] debt is repaid): $9.7 billion
-- Secured ABL debt: $1.9 billion
-- Secured first-lien debt: $3.3 billion
-- Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Net residual value available to ACI unsecured notes: $5.58
billion
-- Aggregate ACI unsecured senior note debt: $3.7 billion
-- Other unsecured obligations: $480 million
-- Recovery expectations: Capped at 70%-90% (rounded estimate:
85%)
-- Net residual value available to Safeway unsecured senior notes:
$801 million
-- Aggregate Safeway note debt: $669 million
-- Recovery expectations: Capped 70%-90% (rounded estimate: 85%)
-- Net residual value available to NALP notes: $306 million
-- Aggregate NALP note debt: $528 million
-- Recovery expectations: 50-70% (rounded estimate: 50%)
Note: All debt amounts include six months of prepetition interest.
AMERICAN AGAPE: S&P Lowers 2015AB Revenue Bond Rating to 'B+'
-------------------------------------------------------------
S&P Global Ratings lowered its long-term rating on the Public
Finance Authority, Wis.' series 2015A multifamily housing revenue
bonds, issued for American Agape Foundation, Inc., Texas to 'B+'
from 'BBB-'. At the same time, S&P lowered its long-term rating on
the authority's series 2015B bonds, also issued for American Agape,
to 'B' from 'BB-'. The outlook is negative.
"The downgrades reflect our view of the project's change in
property management, resulting in higher-than-expected reported
vacancy losses, deterioration in financial performance, the
application of our criteria's rating cap when debt service coverage
falls below 1.0x, poor loss-coverage assessment, and the project's
strategy and management as below average," said S&P credit analyst
Jose Cruz.
The negative outlook reflects S&P's opinion of the volatility of
the project's financial performance. Further rating stress could
occur should the project's financial performance remain at current
levels (specifically vacancy losses and maintenance and repair
expenses) or the project incurring additional higher-than-expected
expenses over the two-year outlook period. Examples of
higher-than-expected expenses that could negatively affect the
project's financial performance could be a Real Estate Assessment
Center inspection and the subsequent costs from the preparation of
the inspection and possible remedies, according to S&P.
AMERICAN PARKING: Plan Confirmation Hearing Set for Aug. 30
-----------------------------------------------------------
Bankruptcy Judge Edward A. Godoy issued an order approving American
Parking System, Inc.'s disclosure statement referring to its
chapter 11 plan dated June 29, 2019.
Acceptances or rejections of the Plan and any objection to
confirmation of the plan may be filed 14 days prior to the date of
the hearing on confirmation of the Plan.
A hearing for the consideration of confirmation of the Plan will be
held on August 30, 2019 at 9:30 AM at the United States Bankruptcy
Court, Jose V. Toledo Fed Bldg & US Courthouse, 200 Recinto Sur
Street, 2nd Floor, Courtroom 1, San Juan, Puerto Rico.
The Troubled Company Reporter previously reported that the Plan
contemplates the sale of the three parcels of land at Monacillos
Ward, Rio Piedras, to the Universidad Interamericana de Puerto
Rico, for $2,600,000. Such funds will be used for the payment of
the IRS' secured, priority, and unsecured claims, on the Effective
Date.
A copy of the Disclosure Statement is available at
https://tinyurl.com/y327yhyq from Pacermonitor.com at no charge.
About American Parking System
Headquartered in San Juan, Puerto Rico, American Parking System
owns and manages parking lots. The Company previously sought
bankruptcy protection (Bankr. D.P.R. Case No. 16-02761) on April 8,
2016.
American Parking System, filed a Chapter 11 petition (Bankr. D.P.R.
Case No. 19-02243) on April 24, 2019. In the petition signed by
Miguel A. Cabral Veras, president, the Debtor estimated $10 million
to $50 million in both assets and liabilities. Alexis
Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC, serves as
bankruptcy counsel to the Debtor.
AMYRIS INC: Signs $5 Million Loan Agreement with Nikko Chemicals
----------------------------------------------------------------
Amyris, Inc. entered into a loan agreement with Nikko Chemicals
Co., Ltd., the Company's partner with respect to its Aprinnova, LLC
joint venture, to make available to the Company secured loans in an
aggregate principal amount of $5.0 million, to be issued in
separate installments of $3.0 million and $2.0 million,
respectively, with each installment being subject to certain
closing conditions, including the entry into certain commercial
agreements and other matters relating to the JV. The Loans would
(i) mature on Dec. 18, 2020, (ii) accrue interest at a rate of 5%
per annum from and including the applicable Loan date through the
Maturity Date, which interest would be required to be prepaid in
full on the date of the applicable Loan, and (iii) be secured by a
first-priority lien on 12.8% of the JV interests owned by the
Company. The Loan Agreement contains customary terms, provisions
and covenants, including certain events of default after which the
Loans would be due and payable immediately.
On July 30, 2019, the Company borrowed the first installment of
$3.0 million under the Loan Agreement and received net cash
proceeds of $2.8 million, with the remaining $0.2 million being
withheld by Nikko as prepayment of the interest payable on such
Loan through the Maturity Date.
About Amyris
Amyris, Inc., based in Emeryville, California, is an industrial
biotechnology company that applies its technology platform to
engineer, manufacture and sell natural, sustainably sourced
products into the health & wellness, clean skincare, and flavors &
fragrances markets. The Company's proven technology platform
enables it to rapidly engineer microbes and use them as catalysts
to metabolize renewable, plant-sourced sugars into large volume,
high-value ingredients. The Company's biotechnology platform and
industrial fermentation process replace existing complex and
expensive manufacturing processes. The Company has successfully
used its technology to develop and produce five distinct molecules
at commercial volumes.
The report from the Company's independent accounting firm KPMG LLP,
the Company's auditor since 2017, on the consolidated financial
statements for the year ended Dec. 31, 2017, includes an
explanatory paragraph stating that the Company has suffered
recurring losses from operations and has current debt service
requirements that raise substantial doubt about its ability to
continue as a going concern.
Amyris reported net losses attributable to the company of $72.32
million in 2017, $97.33 million in 2016, and $217.95 million in
2016. As of Sept. 30, 2018, Amyris had $122.7 million in total
assets, $323.3 million in total liabilities, $5 million in
contingently redeemable common stock, and a total stockholders'
deficit of $205.6 million.
APPALACHIAN LIGHTING: T. Mallen Objects to Plan, Disclosures
------------------------------------------------------------
Thomas Mallen filed an objection to Appalachian Lighting Systems,
Inc.'s disclosure statement describing its first amended chapter 11
plan dated June 27, 2019.
The proposed Disclosure Statement to Accompany the First Amended
Chapter 11 Plan of Reorganization Dated June 27, 2019 of
Appalachian Lighting Systems, Inc. should not be approved for at
least two reasons.
First, the Proposed D/S supports a plan of reorganization that
cannot be confirmed as a matter of law and, therefore, soliciting
ballots regarding the Proposed Plan would be wasteful and not in
the best interest of creditors of the estate.
Second, the Proposed D/S fails to provide "adequate information" to
enable creditors to make an informed voting decision with regard to
the Proposed Plan. The Proposed D/S is fatally flawed because it
fails to adequately describe, explain and address numerous matters
critical to the Debtor’s reorganization:
As an initial matter, the Proposed D/S fails to disclose the
Debtor’s relationship to insider entities, including Ailed, LLC.
Moreover, the Proposed D/S fails to provide sufficient financial
information and/or projections, particularly with regard to the IP
Monetization. The Debtor should be required to provide full and
thorough disclosure of the anticipated amounts to be received from
IP Monetization, such that creditors can understand the actual
amount of funds available to them.
Mallen also complains that Proposed Plan is not fair and equitable
as to Class 6 because the holders of interests in Class 7, who are
equity security holders of the Debtor, would be paid a total of
$1,000,000, while General Unsecured Creditors are paid only 3% of
their claims.
Moreover, the Proposed Plan is not fair and equitable as to Class 6
because it proposes that no funds from the IP Monetization will be
paid to General Unsecured Creditors, but that funds over and above
amounts paid to senior classes of creditors from the IP
Monetization (and a junior class of creditors, i.e., Class 7) be
retained by the Debtor
A copy of Mallen's Objection is available at
https://tinyurl.com/yy2tl9ut from Pacermonitor.com at no charge.
As previously reported by the Troubled Company Reporter, each
Holder of an Allowed Class 6 Claim will be paid in Cash on the
Initial Distribution Date, or when the respective Claim becomes an
Allowed Claim pursuant to the Terms of this Plan, their respective
pro rata share of the $40,0000 Unsecured Claim Fund.
A full-text copy of the Disclosure Statement dated June 27, 2019,
is available at https://tinyurl.com/yxl65sja from PacerMonitor.com
at no charge.
Counsel to Thomas Mallen:
Kathryn L. Harrison, Esq.
CAMPBELL & LEVINE, LLC
310 Grant Street
1700 Grant Building
Pittsburgh, PA 15219
Telephone: 412.261.0310
Facsimile: 412-261-5066
Email: kharrison@camlev. corn
About Appalachian Lighting Systems
Founded in 2007, Appalachian Lighting Systems, Inc. --
http://www.alled.co/-- specializes in the development and
manufacturing process of solid-state lighting (SSL). The company
makes solid-state lighting solutions for small and large area
outdoor and indoor applications. These fixtures are engineered to
deliver at least 150,000 hours of maintenance-free operation and to
provide 70 to 90 percent energy savings compared to the traditional
lights they replace. The company is based in Ellwood City,
Pennsylvania, where it designs, engineers and manufactures its
product.
Appalachian Lighting Systems, based in Ellwood City, Pennsylvania,
filed a Chapter 11 petition (Bankr. W.D. Pa. Case No. 17-24454) on
Nov. 3, 2017. In the petition signed by James J. Wassel,
president, the Debtor estimated $1 million to $10 million in both
assets and liabilities. The Hon. Gregory L. Taddonio oversees the
case. Robert O Lampl, Esq., at the Law Office of Robert Lampl,
serves as bankruptcy counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Alliance BioEnergy Plus, Inc. as of Dec. 3,
according to a court docket.
APPLE LAND: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Apple Land Sports Supply, Inc.
P.O. Box 22
Gays Mills, WI 54631
Business Description: Apple Land Sports Supply Inc. is a
wholesaler of sporting goods, including
fishing, hunting, and archery items.
Chapter 11 Petition Date: August 1, 2019
Court: United States Bankruptcy Court
Western District of Wisconsin
Case No.: 19-12609
Judge: Hon. Catherine J. Furay
Debtor's Counsel: Greg P. Pittman, Esq.
PITTMAN & PITTMAN LAW OFFICES, LLC
712 Main Street
La Crosse, WI 54601
Tel: 608-784-0841
Fax: 608-784-2206
E-mail: greg@pittmanandpittman.com
Info@PittmanandPittman.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael K. Pettit, owner.
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/wiwb19-12609.pdf
ARADIGM CORPORATION: Exclusive Filing Period Extended to Oct. 15
----------------------------------------------------------------
U.S. Bankruptcy Judge William Lafferty III extended the exclusive
period during which Aradigm Corporation can file a Chapter 11 plan
of reorganization to Oct. 15 and the exclusive period during which
the company can solicit acceptances for the plan to Dec. 13.
About Aradigm Corporation
Aradigm Corporation -- http://www.aradigm.com/-- is an emerging
specialty pharmaceutical company focused on the development and
commercialization of products for the treatment and prevention of
severe respiratory diseases. Over the last decade, the company
invested a large amount of capital to develop drug delivery
technologies, particularly the development of a significant amount
of expertise in respiratory (pulmonary) drug delivery as
incorporated in its lead product candidate that recently completed
two Phase 3 clinical trials, Linhaliq inhaled ciprofloxacin,
formerly known as Pulmaquin. The company is headquartered in
Hayward, California.
Aradigm Corporation sought Chapter 11 protection (Bankr. N.D. Cal.
Case No. 19-40363) on Feb. 15, 2019. In the petition signed by John
M. Siebert, executive chairman and interim principal executive
officer, the Debtor estimated $10 million to $50 million in both
assets and liabilities.
The case is assigned to Judge William J. Lafferty.
Bennett G. Young, Esq. at Jeffer, Mangels, Butler & Mitchell LLP,
is the Debtor's counsel. Sheppard Mullin Richter & Hampton LLP, is
special patent counsel. EMA Partners, LLC, is the investment
banker. Sheppard Mullin Richter & Hampton LLP, is the special
patent counsel to the Debtor.
ASPC CORP: Objection to EBL's Notice of Designation Sustained
-------------------------------------------------------------
Bankruptcy Court John E. Hoffman, Jr. sustains Debtor ASPC Corp.,
f/k/a AcuSport Corporation and the Official Committee of Unsecured
Creditors' objection to Ellett Brothers, LLC's notice designating
the Debtor's distributor agreement with Smith & Weeson Corp. for
assumption and assignment.
This case pits Chapter 11 debtor ASPC Corp. and the Official
Committee of Unsecured Creditors against firearms manufacturer
Smith & Wesson Corp. and one of S&W's distributors, Ellett
Brothers, LLC. Earlier in the case, Ellett entered into an asset
purchase agreement with the Debtor for the primary purpose of
purchasing the Debtor's real estate and information technology
assets, including related contracts and leases. After the Court
entered an order approving the APA and the sale closed, Ellett
filed a notice designating the Debtor's firearms distribution
agreement with S&W as a contract to be assumed by the Debtor and
assigned to Ellett under the APA and the Sale Order. S&W supports
the designation of the Distributor Agreement for assumption and
assignment. The Debtor and the Committee, however, oppose the
designation while decrying the unusual manner in which it was made.
Ellett, which was a party to its own distribution agreement with
S&W, never expressed any interest in the Distributor Agreement or
similar agreements with other manufacturers during the negotiations
over the APA. In fact, even after S&W pressured Ellett to designate
the Distributor Agreement for assumption and assignment shortly
before the sale hearing, Ellett resisted, relenting only after S&W
agreed to reimburse it for the attorneys' fees and expenses it
would incur in connection with the designation and to give it more
than $155,000 of additional value. S&W agreed to these concessions
for one primary reason: it intends to interpose the assumption and
assignment of the Distributor Agreement as a complete defense to
the $4.2 million preference claim that the Debtor has asserted
against it.
The Debtor and the Committee contend that the elimination of a
multimillion-dollar preference claim is reason enough for the Court
to decline to approve the assumption and assignment of the
Distributor Agreement. For their part, S&W and Ellett insist that
the consequences of the assignment are irrelevant because the APA
afforded Ellett the absolute right to decide which executory
contracts would be assumed and assigned. In response, the Debtor
and the Committee argue that the APA should not be interpreted to
have bargained away the Debtor's business judgment and that the
Distributor Agreement cannot be assumed and assigned in any event
because it is not an executory contract.
The Court holds that the assumption and assignment of the
Distributor Agreement cannot be approved even though it is indeed
an executory contract that Ellett at one time had the unfettered
right to designate for assignment. Under the terms of the APA,
Ellett had this right only up until two days before the closing.
Ellett, however, failed to designate the Distributor Agreement for
assignment before the deadline. And, as the Debtor and the
Committee point out, the Sale Order included a provision negotiated
by the parties that carved the Distributor Agreement out of the
APA's process for assuming and assigning contracts. Under this
agreed provision, Ellett's designation of the Distributor Agreement
for assumption and assignment was subject to the rights of parties
in interest to object "for any reason, including, but not limited
to, challenging whether the [Distributor Agreement] is a contract
that can be assumed and assigned under section 365 of the
Bankruptcy Code."
In light of this agreed provision, S&W and Ellett are left to argue
that the phrase "for any reason" does not mean what it says, but
instead essentially means "for any reason that a party in interest
could have objected if Ellett had designated the Distributor
Agreement for assumption and assignment within the time period
originally contemplated by the APA." This argument is unpersuasive.
It is not, after all, a court's role to add language to an agreed
order that simply is not there, and the language that is used in
the Sale Order unambiguously permits the Debtor and the Committee
to object to the assumption and assignment of the Distributor
Agreement on the grounds they have asserted. Moreover, even if the
Sale Order were ambiguous in this regard, extrinsic evidence
demonstrates that the "for any reason" language of the Sale Order
was intended to encompass the objections raised by the Debtor and
the Committee. In the end, it is clear that the assumption and
assignment of the Distributor Agreement would harm the bankruptcy
estate in a significant way and that the Debtor's and the
Committee's objections to the assumption and assignment accordingly
must be sustained. The Debtor's and the Committee's objections to
the Notice of Designation, therefore, are sustained.
A copy of the Court's Order and Opinion dated May 10, 2019 is
available at https://tinyurl.com/y2a2o45a from Pacermonitor.com at
no charge.
About AcuSport Corp.
Based in Bellefontaine, Ohio, AcuSport Corporation is a nationwide
distributor of shooting sports products and business solutions for
the independent firearms retailer with regional sales offices in
Ohio, Pennsylvania, Georgia, Minnesota, Texas, Montana and
California.
AcuSport Corporation filed a Chapter 11 petition (Bankr. S.D. Ohio,
Case No. 18-52736) on May 1, 2018. In the petition signed by CFO
John K. Flanagan, the Debtor estimated $10 million to $50 million
in assets and $50 million to $100 million in liabilities.
The Hon. John E. Hoffman Jr. presides over the case.
The Debtor hired Allen Kuehnle Stovall & Neuman LLP, as local
counsel; Bryan Cave Leighton Paisner LLP, as general counsel; Huron
Transaction Advisory LLC, as investment banker; Huron Consulting
Services LLC, as financial advisor; and Donlin Recano & Company,
Inc., as claims noticing & solicitation agent.
Daniel M. McDermott, U.S. Trustee for Region 9, on May 10, 2018,
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case of AcuSport Corporation.
The Committee retained Goldstein & McClintock LLLP as counsel,
Frost Brown Todd LLC as local counsel to the Committee, and BDO
USA, LLP as financial advisor.
On June 28, 2018, the Bankruptcy Court approved the sale of certain
of the Debtor's assets. The Sale closed on June 29, 2018.
Following consultation with all requisite parties, the Debtor has
changed its name with the Ohio Secretary of State to ASPC Corp.
AUTORAMA ENTERPRISES: Unsecureds to Get 25% in 3 Equal Payments
---------------------------------------------------------------
Autorama Enterprises Inc. filed a disclosure statement in
connection with its proposed chapter 11 plan of reorganization
dated July 26, 2019.
Under the plan, each Holder of a Class 4 Unsecured Claim, except
with regard to any Disputed Claims, will receive cash in the amount
of 25% of its allowed Unsecured Claim in three equal payments, with
the first payment to be made three months after the Effective Date,
and the remaining two payments to be made on the anniversary of the
initial payment.
The Plan of Reorganization proposes to pay creditors of the Debtor
from cash on hand and cash flow from operations, in addition to a
new value contribution of $210,000 from the Debtor's Interest
Holders.
A copy of the Disclosure Statement dated July 26, 2019 is available
at https://tinyurl.com/y2mn6z8a from Pacermonitor.com at no charge.
About Autorama Enterprises
Autorama Enterprises Inc. is a dealer of used car automobiles
headquartered in Bronx, New York. The Company also provides towing
and auto repair services. Autorama previously sought bankruptcy
protection on Jan. 11, 2017 (Bankr. S.D.N.Y. Case No. 17-40009).
The prior case was dismissed on March 8, 2017.
Autorama Enterprises filed a Chapter 11 petition (Bankr. S.D.N.Y.
Case No. 18-13837), on Nov. 28, 2018. The petition was signed by
Daniel Powers, president. At the time of filing, the Debtor had $1
million to $10 million in estimated assets and $500,000 to $1
million in estimated liabilities. The case has been assigned to
Judge Stuart M. Bernstein. The Debtor is represented by Robinson
Brog Leinwand Greene Genovese & Gluck, P.C.
BALL METALPACK: S&P Downgrades ICR to 'B-'; Outlook Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Ball
Metalpack Finco LLC to 'B-' from 'B' and its issue-level rating on
the company's first-lien term loan to 'B-' from 'B'. The '3'
recovery rating is unchanged, indicating S&P's expectation for
meaningful (50%-70%; rounded estimate: 50%) recovery of principal
in the event of a payment default.
S&P also lowered its issue-level rating on the company's
second-lien term loan to 'CCC' from 'CCC+'. The '6' recovery rating
is unchanged, indicating the rating agency's expectation for
negligible (0%-10%; rounded estimate: 0%) recovery of principal in
the event of a payment default."
Operational challenges have beset the company in recent periods.
The downgrade reflects Ball Metalpack's operational challenges,
insufficient realization of operational improvement benefits so
far, and weak credit measures. Lower volumes in some segments
(particularly in the higher-margin aerosol side), the shutdown of a
customer's operating facility due to fire, weather-related issues
during the important pack season, and revolver borrowings to fund
steel purchases have all slowed Ball Metalpack in recent periods.
Despite the company's high proportion of domestic steel supply, it
has not been fully insulated from the effect of tariffs.
The negative outlook on Ball Metalpack reflects the 1-in-3
potential for lower ratings in the next 12 months. Ball Metalpack
has faced pressure from reduced aerosol can volumes, high steel
costs, its G3 production line being down for two months, and
weather-related issues in the Midwest that may have affected
conditions during the important pack season. Restructuring and
plant rightsizing costs will continue to depress the company's
weaker-than-expected profit margins. Healthy consumer sentiment
domestically and production efficiency should support its operating
performance over time, but its pace of realization regarding the
benefits from operational initiatives is slower than S&P initially
expected.
S&P said it could lower its ratings on Ball Metalpack if free cash
flow continues to be negative, liquidity becomes constrained,
credit measures stay weak, and the capital structure becomes
unsustainable, adding that this outcome could occur in a variety of
ways. The company may be unable to cope with macro-related
headwinds, realize the anticipated benefits from planned
investments/initiatives, or it may face operational challenges
following unexpected volume declines caused by attrition from its
food and aerosol customers, according to the rating agency.
Changing customer tastes and market share movements between large
consumer products goods companies and smaller upstarts could result
in prolonged pressure on the company's prices and ability to keep
or win business at attractive terms. Ball Metalpack could also
experience additional increases in commodity and other costs that
it cannot effectively pass through. If it becomes more vulnerable
to such adverse market conditions and faces unexpected operational
headwinds, a shortfall in free cash flow generation could constrain
liquidity while leverage remains elevated. If its capital structure
becomes unsustainable, Ball Metalpack could find it more difficult
to meet fixed charges stemming from the high debt burden, which
could prompt S&P to lower the rating. This downside scenario could
occur if Ball Metalpack's revenue and operating margins both weaken
by more than 200 basis points.
S&P said it could revise the outlook to stable in the next year if
the company generates positive free cash flow, makes progress in
deleveraging, and raises and maintains its EBITDA to interest
coverage to above 1.5x while maintaining adequate liquidity. This
could occur despite low top-line growth if the company cannot
enhance its adjusted EBITDA margin to 12% on better results from
operational efficiency and the absence of one-time costs, according
to the rating agency.
BAY TERRACE: Exclusive Filing Period Extended Until Oct. 17
-----------------------------------------------------------
Judge Robert Grossman of the U.S. Bankruptcy Court for the Eastern
District of New York extended the period during which Bay Terrace
Plaza, LLC has the exclusive right to file a Chapter 11 plan
through Oct. 17, and to solicit acceptances for the plan through
Dec. 16.
As reported by the Troubled Company Reporter on July 10, the
company needed additional time to deliberate upon and formulate its
course of action with respect to the sale of its business and
lease. From the outset of the case, Bay Terrace has stated that its
goal is to sell its business and lease. Thus, any plan of the
company will detail such a sale process. At this juncture, however,
the company believed it is premature to file its plan as the
marketing has just begun and a buyer has yet to be secured.
About Bay Terrace Plaza
Bay Terrace Plaza, LLC operates a restaurant in the Bay Terrace
Shopping Center located at 210-35 26th Avenue, Bayside, N.Y.
Bay Terrace Plaza filed a voluntary Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 19-41616) on March 21, 2019, listing under $1
million in both assets and liabilities. On April 30, 2019, the case
was reassigned to Judge Robert E. Grossman from Judge Elizabeth S.
Stong, and was assigned a new case number (Case No. 19-73115).
The Debtor is represented by LaMonica Herbst & Maniscalco, LLP.
BC OF QUEENS: Taps Mark Cohen as Legal Counsel
----------------------------------------------
BC of Queens, Inc., seeks authority from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Mark E. Cohen, Esq.,
as counsel to the Debtor.
BC of Queens requires Mark E. Cohen to:
a. provide the Debtor with advice and prepare all necessary
documents regarding debt restructuring, bankruptcy and asset
dispositions, including working with the secured creditors to
negotiate modifications of mortgages;
b. take all necessary actions to protect and preserve the
Debtor's estate during the pendency of the Chapter 11, case,
including the prosecution of actions by the Debtor, the defense of
actions commenced against the Debtor, negotiations concerning
litigation in which the Debtor is involved and object to claims
filed against the estate;
c. prepare on behalf of the Debtor, as a Debtor in possession,
all necessary motions, applications, answers, orders, reports and
papers in connection with the administration of the Chapter 11
case;
d. counsel the Debtor with regard to its rights and
obligations as a Debtor in possession;
e. appear in Court and protect the interest of the Debtor
before the Court; and
f. perform all other legal services for the Debtor which may
be necessary and proper in the bankruptcy proceeding.
Mark E. Cohen will be paid at the hourly rate of $400. Mark E.
Cohen received $6,000 as retainer, with $1,717 filing fee.
Mark E. Cohen will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mark E. Cohen, Esq., assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
Mark E. Cohen can be reached at:
Mark E. Cohen, Esq.
108-18 Queens Boulevard, 4th Floor ,Suite 3
Forest Hills, NY 11375
Tel: (718) 258-1500
Fax: (718) 793-1627
About BC of Queens, Inc.
Based in Cambria Heights, New York, BC of Queens, Inc. is a single
asset real estate. It owns a fee simple interest in a property
located at 227-02 Linden Boulevard Cambria Heights, New York, with
a current valuation of $1.8 million. The Debtor previously filed
for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 17-41880) on April 20, 2017.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 19-44272) on July 12, 2019. The
petition was signed by William Vil, president. The Debtor hired
Mark Cohen, Esq., as counsel. The case is assigned to Judge Carla
E. Craig.
At the time of the filing, the Debtor disclosed $1,805,775 in
assets and $1,352,549 in liabilities.
BIG DOG II: UPS Files Limited Objection to Disclosure Statement
---------------------------------------------------------------
Creditor Utah Power Systems, LLC, filed a limited objection to Big
Dog II, LLC's disclosure statement.
Utah Powers complains that the disclosure statement does not
contain adequate information. Specifically, Debtor fails to
reference in its disclosure statement the pending state court
action that Utah Power filed against the Debtor for conversion and
civil theft. The claims, in that case, arise out of Debtor's
improper withholding of Utah Power's property - 26 organic rankine
cycle power generators.
In the context of an individual Chapter 11 like this, accurate
disclosure of the Debtor's potential liabilities is necessary to
determine disposable income, so the unsecured creditors can
maximize recovery on their respective claims through the Plan.
Without additional information regarding this significant
liability, or any reference to the State Court Litigation
whatsoever, the disclosure statement is inadequate.
A copy of Utah Powers’ Objection is available at
https://tinyurl.com/y4ln6zyg from Pacermonitor.com at no charge.
The Troubled Company Reporter previously reported that the Debtor
will pay creditors from the rental income it receives from leasing
the property to tenants, and to the extent necessary, from owner
contributions.
A full-text copy of the Disclosure Statement dated June 13, 2019,
is available at https://tinyurl.com/y4yattwg from
PacerMonitor.com at no charge.
Attorney for Utah Power Systems, LLC:
Douglas A. Bates, Esq.
125 East Intendencia Street (32502)
P.O. Box 13010
Pensacola, Florida 32591-3010
Telephone: (850) 434-9200
Email: dbates@clarkpartington.com
About Big Dog II LLC
Big Dog II, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 19-30284) on March 15,
2019. At the time of the filing, the Debtor had estimated assets
and liabilities of between $1 million and $10 million.
The case has been assigned to Judge Jerry C. Oldshue Jr. Wilson,
Harrell, Farrington, Ford, Wilson, Spain & Parsons P.A. is the
Debtor's bankruptcy counsel.
BIOSCRIP INC: Incurs $18.7 Million Net Loss in Second Quarter
-------------------------------------------------------------
BioScrip, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q reporting a net loss attributable
to common stockholders of $18.73 million on $191.51 million of net
revenue for the three months ended June 30, 2019, compared to a net
loss attributable to common stockholders of $17.89 million on
$175.78 million of net revenue for the three months ended June 30,
2018.
For the six months ended June 30, 2019, the Company reported a net
loss attributable to common stockholders of $31.97 million on
$370.47 million of net revenue compared to a net loss attributable
to common stockholders of $33.56 million on $344.37 million of net
revenue for the same period last year.
As of June 30, 2019, the Company had $600.57 million in total
assets, $675.78 million in total liabilities, $3.44 million in
series A convertible preferred stock, $95.87 million in series C
convertible preferred stock, and a total stockholders' deficit of
$174.52 million.
Liquidity and Capital Resources
At June 30, 2019, the Company had net working capital of $61.5
million, including $14.4 million of cash on hand, compared to $67.4
million of net working capital at Dec. 31, 2018. The $5.9 million
decrease was the result of an increase in the current portion of
long-term debt as principal payments on the First Lien Note
Facility begin Sept. 30, 2019, a net increase in other accounts
payable and accrued expenses, and a decrease in prepaid expenses.
At June 30, 2019, the Company had outstanding letters of credit
totaling $4.3 million, collateralized by restricted cash of $4.3
million.
On March 14, 2019 the Company entered into a definitive merger
agreement with the shareholder of Option Care Enterprises, Inc.,
the nation's largest independent provider of home and alternate
treatment site infusion therapy services. Under the terms of the
merger agreement, the Company will issue new shares of its common
stock to the Option Care's shareholder in a non-taxable exchange,
which will result in BioScrip shareholders holding approximately
20% of the combined company. The shareholder of Option Care has
secured committed financing, the proceeds of which will be used to
retire the Company's First Lien Note Facility, Second Lien Note
Facility and 2021 Notes at the close of the transaction. Following
the close of the transaction, the combined company common stock
will continue to be listed on the Nasdaq Global Market. The
transaction is currently expected to close during the third quarter
of 2019.
Bioscrip said, "We regularly evaluate market conditions and
financing options to improve our current liquidity profile and
enhance our financial flexibility. These options may include
opportunities to raise additional funds through the issuance of
various forms of equity and/or debt securities or other
instruments, or the sale of assets or refinancing all or a portion
of our indebtedness.
"In May 2019, the First Lien Note Facility was amended to allow for
additional borrowings up to $8.0 million under terms materially
consistent with the existing agreement. During the second quarter,
the company drew the full $8.0 million and no additional borrowings
are available. These borrowings are intended to provide us with
working capital resources and financial flexibility needed before
the close of the anticipated merger with Option Care.
"While the contemplated merger is in process of closing, we will
continue to execute on our strategic plans, which include growing
revenue, improving our EBITDA margins, and accelerating our cash
collections. If the merger does not close and/or we are
unsuccessful in executing our strategic plans, including the
acceleration of cash collections, there would be an adverse effect
on our liquidity and results of operations and we will likely
require additional or alternative sources of liquidity, including
additional borrowings. However, there is no assurance that, if
necessary, we would be able to raise enough capital to provide the
required liquidity.
"As of the filing of this Quarterly Report, and notwithstanding the
above, we expect that our cash on hand, cash from operations, and
additional borrowing capacity under the First Lien Note Facility
will be sufficient to fund our anticipated working capital,
scheduled interest repayments and other cash needs for at least the
next 12 months. Principal payments on the Notes Facilities
commence on September 30, 2019."
Operating Activities
Net cash used in operating activities from continuing operations
totaled $3.9 million during the six months ended June 30, 2019
compared to $20.3 million during the six months ended June 30,
2018, a decrease of $16.4 million. The change is primarily related
to fluctuations in the timing of collections of accounts
receivable, inventory purchases and cash disbursements.
Investing Activities
Net cash used in investing activities from continuing operations
during the six months ended June 30, 2019 was $3.2 million compared
to $6.9 million during the same period in 2018. The decrease in
cash used in investing was primarily due to a decrease in equipment
purchases and renovations of branch locations.
Financing Activities
Net cash provided by financing activities from continuing
operations during the six months ended June 30, 2019 was $7.0
million compared to $8.6 million during the same period in 2018,
which was driven by a decrease in borrowings of long-term debt
during the six months ended June 30, 2019 offset by lower finance
lease payments.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/GUOXSC
About BioScrip, Inc.
Headquartered in Denver, Colo., BioScrip, Inc. --
http://www.bioscrip.com/-- is an independent national provider of
infusion and home care management solutions, with approximately
2,100 teammates and nearly 70 service locations across the U.S.
BioScrip partners with physicians, hospital systems, payors,
pharmaceutical manufacturers and skilled nursing facilities to
provide patients access to post-acute care services. BioScrip
operates with a commitment to bring customer-focused pharmacy and
related healthcare infusion therapy services into the home or
alternate-site setting.
BioScrip reported a net loss attributable to common stockholders of
$62.90 million in 2018, following a net loss attributable to common
stockholders of $74.27 million in 2017. As of March 31, 2019,
Bioscrip had $597.19 million in total assets, $657.28 million in
total liabilities, $3.33 million in series A convertible preferred
stock, $92.9 million in series C convertible preferred stock, and a
total stockholders' deficit of $156.34 million.
* * *
In mid-May 2019, Moody's Investors Service upgraded the Corporate
Family Rating of BioScrip to 'B3' from 'Caa1'. The upgrade
reflects the improvement in BioScrip's credit profile due to the
pending merger with HC Group Holdings III, Inc., d/b/a Option
Care.
S&P Global Ratings in May 2019 said all of its ratings on BioScrip,
including the 'CCC+' issuer credit rating and issue level ratings,
remain on CreditWatch with positive implications until the close of
its all-stock merger with competitor HC Group Holdings III Inc.
BIOSCRIP INC: Shareholders Approve Merger with Option Care
----------------------------------------------------------
BioScrip, Inc.'s stockholders approved the proposals that are
conditions to the proposed merger with Option Care at the Company's
special meeting of stockholders held on Aug. 2, 2019.
BioScrip held the Special Meeting of stockholders in connection
with the proposed merger of HC Group Holdings II, Inc. with and
into a wholly-owned subsidiary of the Company. As of the record
date of the Special Meeting, there were a total of 128,956,878
shares of the Company's common stock outstanding, 21,630 shares of
Series A preferred stock outstanding (representing 665,079 shares
of common stock on an as-converted basis) and 614,177 shares of
Series C preferred stock outstanding (representing 19,300,700
shares of common stock on an as-converted basis) entitled to vote
at the Special Meeting. At the Special Meeting, 105,899,145 shares
of common stock (inclusive of the Series A and Series C preferred
stock voting on an as-converted basis) were represented in person
or by proxy; therefore, a quorum was present.
The Company's stockholders:
(a) approved the proposal relating to the issuance of
542,261,567 shares of the Company's common stock to HC
Group Holdings I, LLC ("Omega Parent") in connection with
the proposed Merger and the issuance of an additional
28,193,428 shares of the Company's common stock to Omega
Parent to be held in escrow in accordance with the terms
of the merger agreement;
(b) approved an amendent to the Third Amended and Restated
Certificate of Incorporation of the Company, to be
effective upon consummation of the Merger;
(c) approved the amendment to the Certificate of Designations
of Series A Convertible Preferred Stock of the Company,
to be effective upon the consummation of the Merger;
(d) approved an advisory vote on executive compensation; and
(e) approved an adjournment of the Special Meeting to solicit
additional proxies if there are not sufficient votes to
approve the Share Issuance Proposal, the Amended Charter
Proposal or the Series A COD Proposal or to ensure that
any supplement or amendment to the definitive proxy
statement in respect of the Proxy Statement is timely
provided to the Company's stockholders.
BioScrip's merger with Option Care is expected to close on or about
Aug. 6, 2019.
About BioScrip, Inc.
Headquartered in Denver, Colo., BioScrip, Inc. --
http://www.bioscrip.com/-- is an independent national provider of
infusion and home care management solutions, with approximately
2,100 teammates and nearly 70 service locations across the U.S.
BioScrip partners with physicians, hospital systems, payors,
pharmaceutical manufacturers and skilled nursing facilities to
provide patients access to post-acute care services. BioScrip
operates with a commitment to bring customer-focused pharmacy and
related healthcare infusion therapy services into the home or
alternate-site setting.
BioScrip reported a net loss attributable to common stockholders of
$62.90 million in 2018, following a net loss attributable to common
stockholders of $74.27 million in 2017. As of June 30, 2019, the
Company had $600.57 million in total assets, $675.78 million in
total liabilities, $3.44 million in series A convertible preferred
stock, $95.87 million in series C convertible preferred stock, and
a total stockholders' deficit of $174.52 million.
* * *
In mid-May 2019, Moody's Investors Service upgraded the Corporate
Family Rating of BioScrip to 'B3' from 'Caa1'. The upgrade
reflects the improvement in BioScrip's credit profile due to the
pending merger with HC Group Holdings III, Inc., d/b/a Option
Care.
S&P Global Ratings in May 2019 said all of its ratings on BioScrip,
including the 'CCC+' issuer credit rating and issue level ratings,
remain on CreditWatch with positive implications until the close of
its all-stock merger with competitor HC Group Holdings III Inc.
BLACKLICK HOTSPOT: Seeks to Hire Robert O Lampl as Special Counsel
------------------------------------------------------------------
Blacklick Hotspot Corp. seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire Robert O
Lampl Law Office as special counsel.
The firm will assist the Debtor to commence litigation against
Empire Petroleum to prosecute a breach of contract claim.
The firm's hourly rates are:
Robert Lampl $450
John Lacher $400
David Fuchs $375
Ryan Cooney $300
Sy Lampl $250
Paralegal $150
The firm received a retainer in the amount $12,500.00 plus
$2,500.00 for costs for legal representation.
Neither the firm nor any of its employees represents interest
adverse to the Debtor or any other "parties-in-interest," according
to court filings.
The firm can be reached through:
Robert O Lampl, Esq.
John P. Lacher, Esq.
David L. Fuchs, Esq.
Ryan J. Cooney, Esq.
Sy O. Lampl, Esq.
Robert O Lampl Law Office
223 Fourth Avenue, 4th Fl.
Pittsburgh, PA 15222
Phone: (412) 392-0330
Fax: (412) 392-0335
E-mail: rlampl@lampllaw.com
About Blacklick Hotspot Corp.
Blacklick Hotspot Corp. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 19-70269) on May 3, 2019.
At the time of the filing, the Debtor estimated assets of less than
$100,000 and liabilities of less than $50,000. The case is
assigned to Judge Jeffery A. Deller. Robert O Lampl, Esq. at
Robert O Lampl Law Officer represents the Debtor as counsel.
BRIGHT MOUNTAIN: Signs Merger Agreement with Slutzky & Winshman
---------------------------------------------------------------
Bright Mountain Media, Inc., and its to be organized wholly-owned
subsidiary Bright Mountain Israel Acquisition Ltd, an Israeli
corporation (the "Merger Sub"), entered into a Share Exchange
Agreement and Plan of Merger with Slutzky & Winshman Ltd., an
Israeli company and the shareholders of S&W. The Merger Agreement
dated July 31, 2019, provides that on the closing date, the Company
will acquire all of the outstanding shares of S&W from the
Shareholders in exchange for (i) an aggregate of 13,000,000 shares
of the Company's common stock, and (ii) promissory notes in the
aggregate principal amount of $750,000. Following the Closing the
Company will issue an aggregate of 60,000 shares of its common
stock to the employees of S&W as compensation. At Closing, the S&W
Shares and the Consideration Shares will be placed in escrow with a
third party escrow agent pending the Effective Time of the Merger.
As required under Israeli law, following the Closing and upon
receipt of regulatory approvals, including receipt of a merger
certificate from the Israeli Companies Registrar and the expiration
or termination of any waiting period under Israeli law; and
assuming there are no statutes, judgments, injunctions orders or
decrees prohibiting consummation of the transactions contemplated
under the Merger Agreement, the Merger Sub will merge with an into
S&W with S&W as the surviving entity.
S&W, headquartered in Tel Aviv, Israel, is a data-driven marketing
company which utilizes programmatic solutions for over the top, or
"OTT", video and mobile advertising. Leveraging machine learning
data, S&W provides technology for content creators to deploy,
distribute, and monetize their content. S&W reported unaudited
revenues of $1,565,000 and a net loss of $284,000 for the three
months ended March 31, 2019, audited revenues of $12,175,000 and a
net loss of $832,000 for the year ended December 31, 2018 and
audited revenues of $31,621,000 and net income of $2,873,000 for
the year ended Dec. 31, 2017.
Following the Effective Time, (i) the S&W Shares will be released
to the Company, (ii) a portion of the Consideration Shares will be
placed in escrow with a third party escrow agent for a period of 24
months following the Closing, and (iii) the remaining Consideration
Shares will be released. Under the terms of the escrow, the Escrow
Shares will be released to Bright Mountain Media to satisfy any AR
Collection Shortfall (as defined in the Merger Agreement) or to
satisfy indemnification claims made by us under the terms of the
Merger Agreement. In the event any Escrow Shares are returned to
us pursuant to the terms of the Merger Agreement, those shares will
be cancelled and returned to the status of authorized but unissued
shares of the Company's common stock. Any Escrow Shares which
remain in escrow at the end of the 24 month period will be
distributed to the Shareholders.
The Notes, which will be issued at Closing, will not bear interest
and will be unsecured. 50% of the principal amount will be due on
or before one year from the Closing and the balance will be due two
years from the Closing. The amount of the Note will be forgiven by
the two of the three Shareholders in the event (i) the Shareholder
ceases to provide continuous services to S&W or an affiliate, in
the capacity of an employee, consultant or other service provider
following the termination of the employment agreements described
below, (ii) if the employment agreement or consulting agreement is
terminated for cause (as defined in the agreement), (iii) voluntary
termination by the Shareholder of the employment or consulting
agreement, other than for "good reason" as defined in the Note, or
(ii) if S&W fails to achieve certain milestones set forth in the
Note within one year from Closing. The third Shareholder is not
subject to these forgiveness terms in order to comply with certain
provisions of the Israeli tax code.
The Merger Agreement contains customary representations and
warranties from each party to the agreement, and each party has
agreed to customary covenants, including, among others, covenants
relating to (1) the conduct of S&W's business during the interim
period between the execution of the Merger Agreement and the
Closing, (2) mutual continued access to information regarding the
other entity's operations, and (3) Bright Mountain Media's, S&W's
and the Shareholder's obligations to use their reasonable best
efforts to take all steps necessary to consummate the Merger.
In addition to customary conditions to closing, the Closing of the
Merger is subject to:
* Bright Mountain Media will be satisfied in its sole
discretion with the results of its due diligence
investigation of S&W;
* the required tax rulings pursuant to the Israeli Income Tax
Ordinance, 1961, as amended, and the rules and regulations
thereunder shall have been received;
* S&W will have entered into three year employment and/or
consulting agreements with each of the Shareholders which
are satisfactory to Bright Mountain Media in order to
preserve the continued business and operations of S&W post-
Closing;
* the Shareholders will have entered into lock-up and leak out
agreements for the Consideration Shares and certain
affiliates of Bright Mountain Media shall have entered into
lock up agreements covering, together with the Consideration
Shares, an aggregate of at least 25% of the outstanding
shares of common stock of Bright Mountain Media immediately
following the Closing;
* S&W shall have delivered the required closing financial
statements and business description; and
* Bright Mountain Media shall have increased the size of its
Board of Directors to six members. At Closing, one of the
Shareholders designated by all of the Shareholders will be
appointed to the Company's Board of Directors and Bright
Mountain Media will enter into a director indemnification
agreement with such individual,
together with certain additional Closing conditions as set forth in
the Merger Agreement.
The Merger Agreement may be terminated by:
* the mutual written consent of the parties;
* Bright Mountain Media if any of the conditions precedent to
Closing have not occurred by August 15, 2019, unless such
failure is the responsibility of Bright Mountain Media;
* the Shareholders if any of the conditions precedent to
Closing have not occurred by August 15, 2019, unless such
failure is the responsibility of the Shareholders; or
* any party in the event any law or government entity
prohibits or restrains the Merger.
The Merger Agreement contains mutual indemnification provisions,
and requires the purchase of post-Closing of an irrevocable prepaid
policy or policies providing director and officer "tail" coverage
for S&W's existing directors and officers for a period of seven
years from the Closing.
Upon Closing, the Company has agreed to pay Spartan Capital
Securities, LLC a finder's fee equal to (i) $165,000 in cash,
payable from the proceeds of a future offering, and (ii) 5% of the
shares of its common stock which the Company will issue in the
transaction.
Following the Closing, the transaction may be terminated if any
Israeli Governmental Entity (as that term is defined in the Merger
Agreement) issues an order restraining or enjoying the Merger, and
such order has become final and non-appealable. In that event, the
S&W Shares would be returned by the Company to the Shareholders,
the Consideration Shares would be returned to the Company the
Shareholders, the Notes would be surrendered, and the transaction
would be considered null and void.
A full-text copy of the Share Exchange Agreement and Plan of Merger
is available for free at: https://is.gd/mxB9uQ
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
http://www.brightmountainmedia.com/-- is a digital media holding
company whose primary focus is connecting brands with consumers as
a full advertising services platform. Bright Mountain Media's
assets include an ad network, an ad exchange platform and 25
websites (owned and/or managed) that provide content, services and
products. The websites are primarily geared for a young, male
audience with several that focus on active, reserve and retired
military audiences as well as law enforcement and first responders.
Bright Mountain reported a net loss attributable to common
shareholders of $5.33 million for the year ended Dec. 31, 2018,
compared to a net loss attributable to common shareholders of $3.01
million for the year ended Dec. 31, 2017. As of March 31, 2019,
Bright Mountain had $5.39 million in total assets, $1.88 million in
total liabilities, and $3.51 million in total shareholders'
equity.
EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
April 12, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, stating that the Company has
experienced recurring net losses, cash outflows from operating
activities, and has an accumulated deficit that raise substantial
doubt about its ability to continue as a going concern.
CAH ACQUISITION: Committee Taps Arst & Arst as Bankruptcy Counsel
-----------------------------------------------------------------
The Unsecured Creditor Committee of CAH Acquisition Company #5,
LLC, seeks authority from the U.S. Bankruptcy Court for the
District of Kansas to retain Arst & Arst, P.A., as its counsel.
Professional services to be rendered by Arst & Arst are:
a) advise the Unsecured Creditor Committee of its rights,
powers and duties as Unsecured Creditor Committee;
b) advise the Unsecured Creditor Committee concerning, and
assist in, the negotiation and documentation of financing
agreements, cash collateral orders and related transactions;
c) investigate and advise the Unsecured Creditor Committee
concerning, and take those action as may be necessary to collect
payment in accordance with applicable law;
d) prepare on behalf of the Unsecured Creditor Committee the
applications, motions, pleadings, orders, notices, and other
documents as may be necessary and appropriate, and review the
financial and other reports to be filed;
f) advise the Unsecured Creditor Committee concerning, and
prepare responses to, applications, motions, pleadings, notices and
other documents which may be filed and served;
g) counsel the Unsecured Creditor Committee in connection with
the negotiation and promulgation of plan or plans of reorganization
and related documents; and
h) perform other legal services for and on behalf of the
Unsecured Creditor Committee as may be necessary or appropriate in
the administration of the case.
David G. Arst's current hourly rate is $285 per hour. His Legal
Assistant's hourly rate is $80 per hour.
Mr. Arst attests that he is a "disinterested person" within the
meaning of 11 U.S.C. 101(14).
The Counsel can be reached through:
David G. Arst, Esq.
Arst & Arst, P.A.
555 N. Woodlawn, Ste. 115
Wichita, KS 67208
Phone: (316) 265-4222
Fax: (316) 265-1241
Email: david@arstarst.kscoxmail.com
About Hillsboro Community Hospital
Hillsboro Community Hospital offers a broad range of services
including emergency, surgery services, radiology, laboratory,
inpatient care, rehabilitation services and swing bed. Also
offered at Hillsboro Community Hospital are EEGs and EKGs,
treadmill, nerve conduction, and sleep apnea studies.
Hillsboro Community Hospital filed a voluntary Chapter 11 petition
under Chapter 11 (Bankr. W.D. Mo. Case No. 19-10359) on March 13,
2019. The Debtor previously sought bankruptcy protection (Bankr.
W.D. Mo. Case No. 11-44743) on Oct. 10, 2011.
In the petition signed by Kathy Hammons, chief executive officer of
the court-appointed receiver, the Debtor estimated $10 million to
$50 million in both assets and liabilities.
Bruce E. Strauss, Esq., at Merrick, Baker & Strauss, P.C.,
represents the Debtor as counsel.
On March 26, 2019, Brent King was appointed as Chapter 11 trustee.
CALIFORNIA RESOURCES: Posts 2nd Quarter Net Income of $12 Million
-----------------------------------------------------------------
California Resources Corporation filed with the Securities and
Exchange Commission on Aug. 1, 2019, its quarterly report on Form
10-Q reporting net income attributable to common stock of $12
million on $653 million of total revenues and other for the three
months ended June 30, 2019, compared to a net loss attributable to
common stock of $82 million on $549 million of total revenues and
other for the three months ended June 30, 2018.
For the six months ended June 30, 2019, the Company reported a net
loss attributable to common stock of $55 million on $1.34 billion
of total revenues and other compared to a net loss attributable to
common stock of $84 million on $1.15 billion of total revenues and
other for the same period during the prior year.
As of June 30, 2019, the Company had $7.03 billion in total assets,
$610 million in total current liabilities, $5.06 billion in
long-term debt, $185 million in deferred gain and issuance costs,
$679 million in other long-term liabilities, $777 million in
redeemable noncontrolling interests, and a $279 million total
deficit.
Highlights
* Reported adjusted EBITDAX of $255 million; adjusted EBITDAX
margin of 39%; net cash provided by operating activities of
$114 million
* Second quarter 2019 average daily production of 129,000
barrels of oil equivalent (BOE) per day, and oil production
of 79,000 barrels per day
* CRC invested $124 million of internally funded capital and
$140 million including JV capital
* Drilled 33 wells in the San Joaquin basin and 6 wells in the
Los Angeles basin including JV wells
* Entered into a joint venture with subsidiaries of Colony
Capital, Inc. to invest up to $500 million to further develop
the Company's flagship Elk Hills field, with an initial
commitment of $320 million
Todd Stevens, CRC's president and chief executive officer, said,
"Our portfolio of quality assets continues to attract outside
capital seeking reliable returns. Our three largest development
joint ventures potentially provide for over $1 billion from our
partners to drill our broad project inventory. We remain
disciplined in utilizing our internal VCI metric to dynamically
allocate our capital to maximize value in our portfolio.
Strengthening our balance sheet remains a top focus and we're
continuing to target 10 to 15 percent of our discretionary cash
flow towards balance sheet strengthening. We continue to pursue
other transactions that will enhance these efforts. Our capital
plan calls for CRC's investments to be modestly lower in the second
half of the year, while JV capital will increase with our new
partner's investment. This will result in a slight increase in
production through the end of the year."
Second Quarter 2019 Results
For the second quarter of 2019, CRC reported net income
attributable to common stock of $12 million, or $0.24 per diluted
share, compared to a loss of $82 million, or $1.70 per diluted
share, for the same period of 2018. Adjusted net loss for both the
second quarter of 2019 and 2018 was $14 million, or $0.29 per
diluted share. Second quarter 2019 adjusted net loss excluded a
net gain of $20 million on debt repurchases, $4 million of non-cash
derivative gains on commodity derivatives and income of $2 million,
net, for unusual and infrequent items.
Adjusted EBITDAX for the second quarter of 2019 was $255 million
and cash provided by operating activities was $114 million.
Total daily production volumes decreased 4% year-over-year, from
134,000 BOE per day for the second quarter of 2018 to 129,000 BOE
per day for the second quarter of 2019. Total daily production for
the second quarter of 2019 was lower partially due to a strategic
divestiture which was completed in the second quarter of 2019. The
divestiture, together with PSC effects, reduced the Company's
second quarter 2019 production by over 2,000 BOE per day.
Non-recurring events including power and plant outages lowered
quarterly production by 1,000 BOE per day. Oil volumes averaged
79,000 barrels per day, NGL volumes averaged 16,000 barrels per day
and gas volumes averaged 203,000 thousand cubic feet (Mcf) per
day.
Despite lower Brent index prices, the Company's realized crude oil
prices, including the effect of settled hedges, increased by $6.55
per barrel from $64.11 in the second quarter of 2018 to $70.66 per
barrel in the second quarter of 2019. In the second quarter of
2019, hedge settlements increased the Company's realized crude oil
prices by $1.89 per barrel compared to a reduction of $9.08 per
barrel in the prior year period. Realized NGL prices were $27.82
per barrel, down $14.31 over the prior year period as local and
national markets experienced excess supply resulting from Canadian
imports coupled with weaker demand. Realized natural gas prices
were $2.33 per Mcf for the second quarter of 2019, $0.08 higher
than the same prior year period due to stronger California demand.
Production costs for the second quarter of 2019 were $230 million
compared to $231 million for the second quarter of 2018.
General and administrative (G&A) expenses were $79 million for the
second quarter of 2019 compared to $90 million for the same
prior-year period. CRC's obligation for cash-settled stock-based
compensation awards is adjusted for changes in the Company's stock
price at the end of each quarter and the related expense decreased
approximately $16 million due to a lower stock price in the second
quarter of 2019. This decrease was partially offset by higher
overhead expenses in 2019.
CRC reported taxes other than on income of $36 million for the
second quarter of 2019 compared to $37 million for the same
prior-year period. Exploration expense was $10 million for the
second quarter of 2019, $4 million higher than the same prior-year
period.
CRC's internally funded capital investment for the second quarter
of 2019 totaled $124 million, of which $89 million was directed to
drilling and capital workovers. CRC's JV partner Benefit Street
Partners (BSP) also invested $16 million, which is included in
CRC's consolidated results.
Six-Month Results
For the first six months of 2019, CRC net loss attributable to
common stock was $55 million, or $1.13 per diluted share, compared
to a loss of $84 million, or $1.81 per diluted share, for the same
period of 2018. Including hedge settlements, the 2019 results
reflected higher year-over-year revenue despite a lower oil price
environment. Adjusted net income for the first six months of 2019
was $17 million, or $0.35 per diluted share, compared with an
adjusted net loss1 of $6 million, or $0.13 per diluted share, for
the same period of 2018. The 2019 adjusted net income1 excluded
$93 million of non-cash derivative losses, a net gain of $26
million from debt repurchases and a net $5 million charge related
to other unusual and infrequent items.
Total daily production volumes averaged 131,000 BOE per day for the
first six months of 2019, compared with 129,000 BOE per day for the
same period in 2018, an increase of 2 percent. The 2018 volumes
reflected only one quarter of production from the Elk Hills
acquisition. The 2019 volumes reflected the effect of a strategic
divestiture and non-recurring events in the second quarter.
In the first six months of 2019, realized crude oil prices,
including the effect of settled hedges, increased $4.43 per barrel
to $67.90 per barrel from $63.47 per barrel for the same period in
2018. Settled hedges increased 2019 realized crude oil prices by
$1.93 per barrel, compared with a reduction of $6.88 per barrel for
the same period in 2018. Realized NGL prices decreased 18 percent,
or $7.66 per barrel to $34.97 per barrel in the first six months of
2019 from $42.63 per barrel for the same period of 2018. Realized
natural gas prices increased to $2.87 per Mcf, compared with $2.51
per Mcf for the same period in 2018.
Production costs for the first six months of 2019 were $463
million, or $19.54 per BOE, compared to $443 million, or $19.01 per
BOE, for the same period in 2018. The increase is primarily
attributable to the Elk Hills transaction, higher surface
operations and maintenance costs and other items, partially offset
by lower downhole maintenance activity and lower costs resulting
from the Lost Hills divestiture. Per unit production costs,
excluding the effect of PSCs, were $17.99 and $17.44 per BOE for
the first six months of 2019 and 2018, respectively.
G&A expenses for the first six months of 2019 were $162 million and
for the first six months of 2018 were $153 million, with the
increase largely due to higher expenses across a number of
functions, partially offset by lower equity compensation expense in
the first half of 2019.
Taxes other than on income of $77 million for the first six months
of 2019 were comparable to the same period of 2018, when taxes were
$75 million. Exploration expense of $20 million for the first six
months of 2019 was $6 million higher than the same period of 2018.
Capital investment in the first six months of 2019 totaled $228
million excluding JV capital, of which $158 million was directed to
drilling and capital workovers. BSP also invested $43 million,
which is included in CRC's consolidated results.
Cash provided by operating activities for the first six months of
2019 was $272 million and free cash flow was $44 million after
taking into account capital investment that was funded by BSP.
Operational Update
In the second quarter of 2019, CRC operated an average of seven
drilling rigs, with two rigs focused on conventional primary
production, two on waterfloods, one on steamfloods and two on
unconventional production. With total invested capital, the
Company drilled 39 development wells and no exploration wells (5
steamflood, 20 waterflood, 4 primary and 10 unconventional).
Steamfloods and waterfloods have different production profiles and
longer response times than typical conventional wells and, as a
result, the full production contribution may not be experienced in
the same period that the well is drilled. The San Joaquin basin
produced 94,000 BOE per day and operated six rigs. The Los Angeles
basin contributed 24,000 BOE per day of production and operated one
rig directed toward waterflood projects. The Ventura and
Sacramento basins, where we had no active drilling program,
produced 6,000 BOE per day and 5,000 BOE per day, respectively.
2019 Capital Budget
CRC's internally funded investments will be largely directed to
short payout projects, such as primary drilling of both vertical
and lateral wells and capital workovers, and low-risk projects
including waterflood and steamflood investments that maintain base
production. CRC estimates its 2019 internally funded capital
program will range from $350 million to $385 million. CRC entered
into a JV with subsidiaries of Colony Capital, Inc. in July 2019.
As a result, CRC will increase its JV investment contributions to a
range of $175 to $225 million for 2019. CRC anticipates a total
capital program of approximately $525 to $610 million for the
year.
Strategic Asset Divestiture
As previously disclosed, CRC sold 50% of its working interest and
transferred operatorship in certain zones in the Company's Lost
Hills field in the San Joaquin Basin on May 1, 2019. The total
consideration was in excess of $200 million, including
approximately $168 million in cash before transaction costs and a
carried 200-well development program to be drilled through 2023
with an estimated value of $35 million. The cash proceeds of $165
million, net of transaction costs and purchase price adjustments,
were used to pay down the revolver. CRC also benefits from
accelerated development from the drilling carry.
Recent Joint Venture
In July 2019, CRC entered into a JV with Colony, under which Colony
has committed to invest $320 million for the development of
portions of its flagship Elk Hills field, located in the San
Joaquin basin. Colony's total investment may be increased to $500
million, subject to the mutual agreement of the parties. The
initial commitment will cover multiple development opportunities in
portions of the Elk Hills field and is intended to be invested over
approximately three years in accordance with a development plan
that has been agreed to by the parties consisting of 275 wells.
Colony will fund 100% of the development wells and will earn a 90%
working interest in those wells. If Colony receives an agreed upon
return, CRC's working interest will increase from 10% to 82.5%.
Colony also received a warrant to purchase up to 1.25 million
shares of the Company's common stock, at an exercise price of $40
per share.
Repurchases and Balance Sheet Update
During the second quarter of 2019, CRC repurchased $58 million in
face value of CRC's Second Lien Notes for $45 million, bringing the
aggregate face value of Second Lien Notes repurchased since
issuance to approximately $260 million. Total net debt outstanding
at the end of the second quarter was $5.1 billion.
Hedging Update
CRC continues to execute an opportunistic hedging program to
protect its cash flow, operating margins and capital program, while
maintaining adequate liquidity. For the third and fourth quarters
of 2019, CRC has protected the downside price risk on 40,000 and
35,000 barrels per day at approximately $73 Brent and $76 Brent,
respectively. These put spreads provide full upside to oil price
movements and downside protection until Brent prices drop below
approximately $58 and $60 per barrel in the third and fourth
quarters, respectively, at which point the Company receives Brent
plus approximately $15 per barrel. For the first and second
quarters of 2020, CRC has protected the downside risk of 25,000 and
10,000 barrels per day at approximately $72 Brent and $70 Brent,
respectively. These put spreads provide downside price protection
until Brent prices drop below $57 and $55 per barrel in the first
and second quarters, respectively, at which point the Company
receive Brent plus $15 per barrel. CRC also entered into a swap
for 5,000 barrels per day in the second quarter of 2020 at
approximately $70 Brent, which is subject to another 5,000 barrel
per day at the same price at the option of the counterparties.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/lDcILB
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. CRC operates its
resource base exclusively within the State of California, applying
complementary and integrated infrastructure to gather, process and
market its production.
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.
CARRIERWEB LLC: Aug. 29 Plan Confirmation Hearing
-------------------------------------------------
Bankruptcy Judge Lisa Ritchey Craig approved CWEB Liquidation, LLC
f/k/a CarrierWeb, LLC and the Official Committee of Unsecured
Creditors' disclosure statement with regard to its chapter 11
plan.
August 27, 2019 is fixed as the last day for filing ballots
indicating written acceptances or rejections of the Plan and the
last day for filing and serving written objections to confirmation
of the Plan.
August 29, 2019 at 10:15 a.m., Eastern Time, is fixed as the time
for the hearing on confirmation of the Plan. The hearing will be
held in Courtroom 1204, United States Courthouse, 75 Ted Turner
Drive, S.W., Atlanta, Georgia 30303.
The Troubled Company Reporter previously reported that on the
Effective Date, the Holders of Allowed General Unsecured Claims
(excluding any Claim of efreightrac) will receive Pro-Rata their
share of the funds in the Distribution Fund until such Holders
receive their Allowed Claims in full.
A copy of the Disclosure Statement is available at
https://tinyurl.com/y5nxmrjp from Pacermonitor.com at no charge.
About CarrierWeb LLC
Headquartered in Smyrna, Georgia, CarrierWeb, LLC, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 17-54087) on March 6, 2017. In the petition signed by R.
Fenton-May, manager, the Debtor estimated $1 million to $10 million
in assets and $10 million to $50 million in liabilities.
The Debtor hired G. Frank Nason, IV, Esq., at Lamberth, Cifelli,
Ellis & Nason, P.A., as bankruptcy counsel; and G2 Capital
Advisors, LLC, as financial advisor and investment banker.
On March 27, 2017, Guy Gebhardt, acting U.S. trustee for Region 21,
appointed an official committee of unsecured creditors. The
committee retained Pachulski Stang Ziehl & Jones LLP as bankruptcy
counsel and Henry F. Sewell, Jr., LLC as local counsel.
CEC ENTERTAINMENT: S&P Affirms 'B-' ICR; Outlook Stable
-------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating and
assigned its 'B-' issue-level and '3' recovery rating to
Texas-based CEC Entertainment Inc.'s (CEC) proposed senior secured
facilities, which consist of a revolver due in 2024 and $760
million term loan due in 2026.
S&P also affirmed its 'CCC' issue-level rating on CEC's $255
million senior unsecured facility due 2022. The '6' recovery rating
is unchanged.
The affirmation on CEC reflects S&P's expectation that the
company's stabilized operating performance will continue to exhibit
modest growth over the next 12 months, driven by same-store sales
increases. The rating agency thinks that the company's value
proposition generated by the "All You Can Play" and "More Tickets"
initiatives could continue to drive customer appeal.
The stable outlook reflects S&P's expectations of normalized
performance trends and the completion of the senior secured
facility refinancing. The outlook also incorporates the rating
agency's view that liquidity will remain adequate and that the
company's store investment plans are discretionary, providing it
with some flexibility, if needed.
"We could lower the rating if we believe the company won't complete
the planned debt refinancing. Performance issues that lead to weak
same-store sales and EBITDA declines could also cause a downgrade.
For instance, if same-store sales are flat and EBITDA margins
contract by 100 basis points below our base-case forecast, free
operating cash flow (FOCF) could become negative and lead to
borrowings under the revolver," S&P said.
"We could raise the rating if the company's gaming initiatives and
unit remodels lead to further improvements in operating performance
and leverage below 6x. In this scenario, we would expect to see the
recent improvement in same-store sales continue, customer traffic
trends improve, and EBITDA margins expand by about 150 basis
points. We would also need to believe a leveraging event for
dividends is less likely," the rating agency said.
CENTER CITY HEALTHCARE: Hires Mr. Wilen of EisnerAmper as CRO
-------------------------------------------------------------
Center City Healthcare, LLC, d/b/a Hahnemann University Hospital,
and its debtor-affiliates seek authority from the U.S. Bankruptcy
Court for the District of Delaware to employ Mr. Allen Wilen of
EisnerAmper LLP, as chief restructuring officer to the Debtors.
Center City Healthcare EisnerAmper to:
a. provide certain consulting services to the Debtors to
assist with the financial restructuring of the Debtors.
EisnerAmper will provide the services of Allen Wilen to
serve as the CRO;
b. develop a range of transaction alternatives, including
divestitures, restructuring, adjustments to business model
,and both judicial and non-judicial reorganization options;
c. negotiate on behalf of the Debtors, and at an arms-length
basis, terms of agreements between the Debtors and its
parent entities, including but not limited to: (i) vendor
contracts; (ii) licensing and sales agreements, as
applicable; (iii) debtor-in-possession and/or other
financing arrangements; (iv) lead communications with key
constituents; (v) with the assistance of on-site personnel,
cash preservation, including maintenance of a 13-week
rolling cash flow statement and vendor management; and (vi)
other intercompany agreements and obligations;
d. assist the Debtors in contingency planning including the
evaluation, planning and execution of a potential chapter
11 filing;
e. assist the Debtors and its other advisors with the
formulation of a chapter 11 plan of reorganization,
liquidation and the preparation of the corresponding
disclosure statement;
f. advise and assist the Debtors in the assembly and
preparation of financial information, statements,
schedules, budgets and monthly operating reports
necessary due to requirements of the Bankruptcy Court and
Office of the U.S. Trustee;
g. assist the Debtors in the preparation of a liquidation
valuation for a reorganization plan or negotiation
purposes;
h. assist the Debtors' personnel with the communications and
negotiations, at Debtors' request and under Debtors'
guidance, with lenders, creditors, and other parties-in-
interest including the preparation of financial information
for distribution to such parties-in-interest;
i. assist in the preparation of weekly and monthly reporting
in accordance with the debtor-in-possession credit facility
or other financing arrangements; and
j. assist with such other accounting and financial services as
requested by the Debtors and which are not duplicative of
services provided by other professionals.
EisnerAmper will be paid as follows:
a. the amount of $92,250 on a weekly basis for fees incurred
in connection with the Healthcare Consulting Services and
the Financial Restructuring Services, plus reasonable out-
of-pocket expenses incurred.
b. hourly rate of $315.
EisnerAmper received from the Debtor the amount of $150,000 in
advance of the Petition Date. After applying the Cash on Account to
unpaid pre-filing fees, charges and disbursements, there is a
balance of $36,684 which will be applied to EisnerAmper's final
invoice.
EisnerAmper will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Allen Wilen, partner of EisnerAmper LLP, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtors and their/its estates.
EisnerAmper can be reached at:
Allen Wilen, Esq.
EISNERAMPER LLP
130 North 18th Street, Suite
3000, Philadelphia, Pennsylvania 19103
Tel: (215) 881-8800
About Center City Healthcare
d/b/a Hahnemann University Hospital
Center City Healthcare, LLC, is a Delaware limited liability
company that operates Hahnemann University Hospital. Its parent
company is Philadelphia Academic Health System, LLC, which is also
the parent company of St. Christopher's Healthcare, LLC and its
affiliated physician groups.
Center City Healthcare and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
19-11466) on June 30, 2019. At the time of the filing, the Debtors
estimated assets of between $100 million and $500 million and
liabilities of the same range.
The cases are assigned to Judge Kevin Gross.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel;
EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as
investment banker; and Omni Management Group, Inc. as claims and
noticing agent.
CENTER CITY HEALTHCARE: Hires Omni as Administrative Agent
----------------------------------------------------------
Center City Healthcare, LLC, d/b/a Hahnemann University Hospital,
and its debtor-affiliates seek authority from the U.S. Bankruptcy
Court for the District of Delaware to employ Omni Management Group,
as administrative agent to the Debtors.
Center City Healthcare requires Omni to:
a. assist with, among other things, solicitation, balloting,
and tabulation of votes, and prepare any related reports,
as required in support of confirmation of a chapter 11
plan, and in connection with such services, process
requests for documents from parties in interest, including,
if applicable, brokerage firms, bank back-offices, and
institutional holders;
b. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
c. assist with preparation of the Debtors' schedules of assets
and liabilities and statements of financial affairs and
gather data in conjunction therewith;
d. provide a confidential data room, if requested;
e. manage and coordinate any distributions pursuant to a
chapter 11 plan; and
f. provide such other processing, solicitation, balloting, and
other administrative services described in the Engagement
Agreement, but not included in the Section 156(c)
Application, as may be requested from time to time by the
Debtors, the Court, or the Office of the Clerk of the
Bankruptcy Court.
Omni will be paid at these hourly rates:
Analyst $25 - $40
Consultant $50 - $125
Senior Consultant $140 - $155
Equity Services $175
Technology/Programming $85 - $135
President/Executive Waived
Omni will be paid a retainer in the amount of $20,000.
Omni will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Paul H. Deutch, senior vice president of Omni Management Group,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their/its
estates.
Omni can be reached at:
Paul H. Deutch
OMNI MANAGEMENT GROUP, INC.
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
Tel: (818) 906-8300
About Center City Healthcare
d/b/a Hahnemann University Hospital
Center City Healthcare, LLC, is a Delaware limited liability
company that operates Hahnemann University Hospital. Its parent
company is Philadelphia Academic Health System, LLC, which is also
the parent company of St. Christopher's Healthcare, LLC and its
affiliated physician groups.
Center City Healthcare and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
19-11466) on June 30, 2019. At the time of the filing, the Debtors
estimated assets of between $100 million and $500 million and
liabilities of the same range.
The cases are assigned to Judge Kevin Gross.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel;
EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as
investment banker; and Omni Management Group, Inc. as claims and
noticing agent.
CENTER CITY HEALTHCARE: Hires SSG Advisors as Investment Banker
---------------------------------------------------------------
Center City Healthcare, LLC, d/b/a Hahnemann University Hospital,
and its debtor-affiliates seek authority from the U.S. Bankruptcy
Court for the District of Delaware to employ SSG Advisors, LLC, as
investment banker to the Debtors.
Center City SSG Advisors to:
a. prepare an information memorandum describing the Debtors,
or any part thereof, as applicable, its historical
performance and prospects, including existing contracts,
patient census information, medical services offered,
medical, nursing and staff information, management and
anticipated financial results of the Debtors;
b. assist the Debtors in developing a list of suitable
potential buyers for specific assets of the Debtor who will
be contacted on a discreet and confidential basis after
approval by the Debtors;
c. assist the Debtors in compiling a data room of any
necessary and appropriate documents related to the Sale;
d. coordinate the execution of confidentiality agreements for
potential buyers wishing to review the information
memorandum;
e. assist the Debtors in coordinating site visits for
interested buyers and work with the management team to
develop appropriate presentations for such visits;
f. solicit competitive offers from potential buyers;
g. advise and assist the Debtors in structuring the Sale and
negotiating the Sale agreements, including, without
limitation, advising and negotiating with respect to Sale
structures that include, as may be necessary or desirable,
licenses or assignments of intellectual property and
leasing arrangement of GME/IME caps/slots; and
h. otherwise assist the Debtors, its attorneys and
accountants, as necessary, through closing on a best
efforts basis.
SSG Advisors will be paid as follows:
a. Initial Fee. An initial fee (the "Initial Fee") equal to
$50,000 due upon acceptance of the Engagement Agreement by
the Debtors. SSG received this Initial Fee on June 5, 2019.
b. Monthly Fees. A monthly fee (the "Monthly Fee") of $50,000
per month payable beginning July 1, 2019 and on the first
of each month thereafter throughout the Engagement
Term. If the Engagement Term ends prior to the
last day of any month, the Monthly Fee for the last month
of the Engagement Term shall be prorated for such month.
50% of the Monthly Fees and Initial Fee paid will be
credited to the Transaction Fee. However, there will be no
such Monthly Fee credit for any Sale to Drexel University.
SSG received the July Monthly Fee prior to the Petition
Date.
c. Financing Fee. Upon the closing and funding of a Financing
Transaction from any party other than Midcap Financial,
Harrison Street Real Estate, Tenet Business Services
Corporation, Conifer Revenue Cycle Management,
or any of their respective Affiliates (each, an "Existing
Financing Source"), SSG shall be entitled to a fee
("Financing Fee") payable in cash, in federal
funds via wire transfer or certified check, at and as a
condition of closing of such Financing Transaction equal to
(a) the greater of (i) $450,000 or (ii) one and a half
percent (1.5%) of the principal amount of any Senior Debt,
plus 4% of the principal amount of any Tranche B or
Traditional Subordinated Debt or the aggregate securities
proceeds (net of any fees and expenses thereof) of Equity
(each such term as hereafter defined) raised from any
financing source other than an Existing Financing Source.
The Financing Fee shall be reduced by 50% if a Financing
Transaction is with, or is led by, Capital One or Sector
Financial, or their Affiliates. Notwithstanding the
foregoing, SSG shall be entitled to a Financing Fee of
$150,000 for a Financing Transaction from an Existing
Financing Source.
d. Sale Fee. Upon the consummation of a Sale Transaction, SSG
shall be entitled to a fee (the "Sale Fee"), payable in
cash, in federal funds via wire transfer or certified
check, at and as a condition of closing of such Sale
Transaction, equal to the greater of: (a) $750,000; or (b)
1.5% of Total Consideration up to and including $100
million; plus 2% of Total Consideration over $100 million.
However, in the event that a Sale to Drexel University, or
any of its Affiliates, closes outside of a Chapter 11
bankruptcy proceeding and within 100 days from the date
hereof, then the Sale Fee for such Transaction shall be
$250,000. In the event of a Sale to Drexel University in
a Chapter 11 bankruptcy proceeding or outside of a Chapter
11 bankruptcy proceeding but after 100 hundred days from
the date hereof, then the Sale Fee for such Transaction
shall be $750,000. In the event of a liquidation of either
or both of the operating hospital entities in a PAHC
Chapter 11 bankruptcy proceeding, then SSG shall be
entitled to a liquidation fee of $250,000 ("Liquidation
Fee").
e. Restructuring Fee. Upon the closing of a Restructuring
Transaction, SSG shall be entitled to a fee ("Restructuring
Fee") payable in cash, in federal funds via wire transfer
or certified check, at and as a condition of closing of
such Restructuring Transaction, equal to $750,000.
f. Out-of-Pocket Expenses. In addition to the foregoing
Initial Fee, Monthly Fee and Transaction Fee noted above,
whether or not a Transaction is consummated, SSG will be
entitled to reimbursement for all of SSG's reasonable and
documented out-of-pocket expenses, other than any overhead
expenses of SSG, incurred in connection with the subject
matter of the Engagement Agreement; provided that no
expenses in excess of $25,000 in the aggregate will be
reimbursed by any Company or the Company Group without the
prior written approval thereof.
J. Scott Victor, managing director of SSG Advisors, LLC, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
SSG Advisors can be reached at:
J. Scott Victor
SSG ADVISORS, LLC
300 Barr Harbor Drive
West Conshohocken, PA 19428
Tel: (610) 940-1094
About Center City Healthcare
d/b/a Hahnemann University Hospital
Center City Healthcare, LLC, is a Delaware limited liability
company that operates Hahnemann University Hospital. Its parent
company is Philadelphia Academic Health System, LLC, which is also
the parent company of St. Christopher's Healthcare, LLC and its
affiliated physician groups.
Center City Healthcare and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
19-11466) on June 30, 2019. At the time of the filing, the Debtors
estimated assets of between $100 million and $500 million and
liabilities of the same range.
The cases are assigned to Judge Kevin Gross.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel;
EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as
investment banker; and Omni Management Group, Inc. as claims and
noticing agent.
CENTURY III MALL: West Mifflin Oppose to Approval of Plan Outline
-----------------------------------------------------------------
West Mifflin Borough & West Mifflin Area School District object to
the approval of Century III Mall PA LLC's disclosure statement
dated June 21, 2019.
West Mifflin Borough & West Mifflin Area School District object to
the approval of the Debtor's Disclosure Statement if it does not
provide for the full payment of all real estate taxes, penalty
portions, and reasonable attorney's fees owed.
The Disclosure Statement states that the holders of the Allowed
Class 1 Claims will be paid in full on the Plan Effective Date.
However, the Debtor does not expressly disclose whether this
includes all penalty portions, interest and reasonable attorney’s
fees owed to the Claims.
Moreover, the Disclosure Statement does not provide adequate
information as to the payment of the delinquent post-petition real
estate taxes, penalty portions and fees. It does not provide
adequate information as to whether the delinquent post-petition
real estate taxes will be paid along with the rest of the
Administrative Expenses or with the Class 1 Claim.
Although not disclosed in the Plan, the Debtor has significant
relationships with affiliates, which affiliates have provided tax,
management, and legal advice, both before and throughout this case.
The Equity Owners of the Debtor have been involved in the
rehabilitation of other properties. The Disclosure Statement does
not offer sufficient information about their track record or past
success or failures in these endeavors.
The uncertainties presented in the Disclosure Statement and Chapter
11 Plan leave open too many contingencies and questions that West
Mifflin Borough and West Mifflin Area School District cannot
ignore.
The anticipated future of the company is not supported by any
historical data or information which creditors may investigate from
filings in this case. The Disclosure Statement does not contain
sufficient information and the assumptions for an informed creditor
to make a decision.
West Mifflin Borough and West Mifflin Area School District request
that approval of the Debtor’s Disclosure Statement be denied,
deny confirmation of the Chapter 11 Plan of Reorganization.
A copy of West Mifflin Borough and West Mifflin Area School
District's Objection is available at https://tinyurl.com/yxz3vm5a
from Pacermonitor.com at no charge.
The Troubled Company Reporter previously reported that the Debtor
intends to convert the portion of the Funds available from the DIP
Facility on the Effective Date into the Exit Facility. As a result
of Debtor's Redevelopment, Debtor will also obtain Tax Increment
Funding as well as funding from a Traditional Commercial Lender.
Beginning approximately 44 months after the Effective Date, Debtor
anticipates generating revenue from the Redevelopment such that the
Plan will then be funded by revenue created by the Debtor.
A copy of the Disclosure Statement dated June 21, 2019 is available
at https://tinyurl.com/y4jr9fkr from Pacermonitor.com at no
charge.
Attorneys for West Mifflin Borough and West Mifflin Area School
District:
Donald R. Calaiaro, Esq.
David Z. Valencik, Esq.
CALAIARO VALENCIK
938 Penn Avenue, Suite 501
Pittsburgh, PA 15222-3708
(412) 232-0930
About Century III Mall PA LLC
Century III Mall PA LLC -- http://www.centuryiiimall.com/-- owns
the Century III Mall shopping center located in West Mifflin,
Pennsylvania.
Century III Mall PA sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 18-23499) on Sept. 3,
2018. In the petition signed by Edward Sklyaroff, president, the
Debtor estimated assets of $1 million to $10 million and
liabilities of $1 million to $10 million.
The case is assigned to Judge Carlota M. Bohm.
The Debtor tapped Kirk B. Burkley, Esq., at Bernstein-Burkley,
P.C., as its legal counsel.
No official committee of unsecured creditors has been appointed.
CFO MGMT: Trustee's LaGesse Auction of Stores Items Approved
------------------------------------------------------------
Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the
Eastern District of Texas authorized David Wallace, the Chapter 11
trustee for CFO Management Holdings, LLC, to sell office furniture
and other stored assets being held in two storage units in Frisco,
Texas, at a public auction.
The sale will be free and clear of all liens, claims, and
encumbrances, in accordance with the terms of the Auction
Agreement.
Upon completion of the inventory of the Stored Items, the Trustee
will file with the Court a notice attaching an itemized list of
those items to be sold at the Auction. Any party asserting a
conflicting ownership or other interest in any of the Stored Items
must notify the Trustee within seven days of the filing of the
Stored Item Inventory or such interest will be forfeited and such
party will be deemed to have consented to the sale of the
applicable Stored Item(s). If a Stored Item is the subject of such
a conflicting interest (that is not otherwise resolved prior to the
Auction) or a Stored Item is discovered that, in the Trustee's
judgment, is of such a nature and/or value as to fall significantly
outside of the scope of the relief granted in the Order, the
Trustee will exclude such item from the Auction and request
additional approval of the Court prior to any disposition of that
item.
As soon as reasonably practicable following the Auction, LaGesse
Auctioneers, LLC (or whatever auctioneer is approved for the sale
of the Stored Items) will provide the Trustee with the information
necessary for the Trustee to file with the Court a "Report of
Auction," including (a) an itemized list of the property sold, (b)
the name of each purchaser, (c) the price received for each item,
(d) the gross proceeds of the Auction of the Stored Items, (e) the
commission paid to LaGesse, and (f) the net proceeds paid to the
Trustee.
The Trustee will file with the Court such a "Report of Auction,"
containing the information outlined, as soon as reasonably
practicable following receipt of such information from the
auctioneer.
If one or more objections to the sale of specific items (under the
procedures regarding the Stored Item Inventory) results in the
auctioneer having to cover costs for moving and/or storage beyond
the time periods contemplated by the Motion, the Trustee is
authorized to reimburse the auctioneer for such costs
.
The terms and conditions of the Order will be immediately effective
and enforceable upon its entry regardless of the applicability of
Bankruptcy Rule 6004(h)
.
A copy of the Auctioneer Agreement attached to the Order is
available for free at:
http://bankrupt.com/misc/CFO_Management_239_Order.pdf
About CFO Management Holdings
CFO Management Holdings, LLC, through its subsidiaries, engages in
developing and selling residential and commercial real estate in
Collin County, Texas, and owns and manages a wild game ranch in
Southern Oklahoma. The subsidiaries are Carter Family Office, LLC,
Christian Custom Homes, LLC, Double Droptine Ranch, LLC, Frisco
Wade Crossing Partners, LLC, Kingswood Development Partners, LLC,
McKinney Executive Suites at Crescent Parc Development Partners,
LLC, North-Forty Development LLC, and West Main Station
Development, LLC.
CFO Management Holdings and its subsidiaries sought Chapter 11
protection (Bankr. E.D. Tex. Case No. Lead Case No. 19-40426) on
Feb. 17, 2019. In the petition signed by CRO Lawrence Perkins, CFO
Management estimated $50 million to $100 million in both assets and
liabilities. Annmarie Chiarello, Esq. and Joseph J. Wielebinski
Jr., Esq., at Winstead PC, serve as the Debtor's bankruptcy
counsel.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on March 4, 2019. The committee is represented
by Singer & Levick PC as its legal counsel.
David Wallace was appointed as Chapter 11 trustee for the Debtors'
estates on April 10, 2019.
CHESAPEAKE BAY: Seeks Access to Harbor Bank Cash Collateral
-----------------------------------------------------------
Chesapeake Bay Associates Limited Partnership filed with the U.S.
Bankruptcy Court for the District of Maryland a consent motion
seeking authority to use cash collateral in which Harbor Bank of
Maryland asserts a security interest.
Specifically, the Debtor intends to use its rents and accounts to
pay those obligations as set forth in the budget for a period of
approximately 45 days from the Petition Date, through and including
Aug. 31.
The Debtor is indebted to Harbor Bank pursuant to various loan
documents. As of the Petition Date, Harbor Bank claims the Debtor
owed approximately $3,016,667, secured by a first priority, duly
perfected security interest in and to the real property and
improvements located at 105 Eastern Avenue, Annapolis, Maryland
21403.
The Debtor will grant Harbor Bank adequate protection, retroactive
to the Petition Date, of its interest in the Prepetition
Collateral, including the cash collateral in an amount equal to the
aggregate diminution in value, if any, of such interests from and
after the Petition Date.
Harbor Bank will also be granted replacement lien on the same
assets and in the same priority of its Prepetition Liens.
The Debtor offers to provide Harbor Bank monthly operating reports
required by the Office of the U.S. Trustee, as well as such other
periodic financial information the Bank may reasonably request of
the Debtor (in addition to, and not in replacement of, those
reporting obligations that the Debtor may have under the
Prepetition Loan Documents).
A copy of the Cash Collateral Motion is available for free at
http://bankrupt.com/misc/mdb19-19318-13.pdf
About Chesapeake Bay Associates
Chesapeake Bay Associates Limited Partnership, a privately held
company in Annapolis, Maryland, owns a marina in Annapolis commonly
known as Horn Point Harbor Marina, located at 105 Eastern Avenue,
Annapolis, MD 21403. The marina consists of wet and dry boat
slips and storage, as well as on-site office space.
Chesapeake Bay Associates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Md. Case No. 19-19318) on July 9, 2019.
The petition was signed by J. Seth Lehner, partner. At the time of
the filing, the Debtor disclosed assets of between $1 million to
$10 million and liabilities of the same range. The Debtor is
represented by James Greenan, Esq. at McNamee, Hosea, et. al.
CHEYENNE HOTELS: Seeks to Hire Thomas F. Quinn as Counsel
---------------------------------------------------------
Cheyenne Hotels Investments LLC seeks authority from the U.S.
Bankruptcy Court for the District of Colorado to employ Thomas F.
Quinn, P.C., as its counsel, nunc pro tunc to June 27, 2019.
As counsel, the firm will:
(a) provide the Debtor with legal advice with respect to its
powers and duties;
(b) aid the Debtor in the development of a plan of
reorganization under Chapter 11;
(c) file the necessary petitions, pleadings, reports, and
actions that may be required in the continued administration of the
Debtor's property under Chapter 11;
(d) take necessary actions to enjoin and stay until a final
decree the continuation of pending proceedings and to enjoin and
stay until a final decree the commencement of lien foreclosure
proceedings and all matters as may be
provided under 11 U.S.C. Sec. 362; and
(e) perform all other legal services for the Debtor that may be
necessary.
The Firm charges $250 per hour for Mr. Quinn's services.
Thomas Quinn, Esq., attests that his Firm does not hold or
represent any interest adverse to the estate, and is
"disinterested" in the estate, as provided in Section 327 (a) of
the Bankruptcy Code.
The counsel can be reached through:
Thomas F. Quinn, Esq.
THOMAS F. QUINN, P.C.
303 E. 17th Ave., Ste. 920
Denver, CO 80203
Tel: 303-832-4355
Fax: 303-672-8281
E-mail: tquinn@tfqlaw.com
About Cheyenne Hotel Investments
Cheynney Hotel operates a Homewood Suites by Hilton Hotel located
in Colorado Springs, Colorado. The Debtor previously filed for
Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No.
11-25379) on June 28, 2011.
Cheyenne Hotel Investments LLC filed for Chapter 11 bankruptcy
protection (Bankr. D. Colo. Case No. 19-15473) on
June 27, 2019, disclosing assets of $10 million to $50 million and
liabilities of $1 million to $10 million as of the Petition Date.
The petition was signed by Samira Khan, manager. Thomas F. Quinn,
Esq., represents the Debtor as counsel.
CHICKENONTHE RUN: Seeks to Hire Eric A. Liepins as Legal Counsel
----------------------------------------------------------------
Chickenonthe Run, Inc. seeks authority from the U.S. Bankruptcy
Court for the Northern District of Texas (Dallas)to employ Eric A.
Liepins and the law firm of Eric A. Liepins, P.C., as counsel for
the Debtor.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code and will provide other legal services related to
its Chapter 11 case.
Eric Liepins, Esq., the attorney who will be handling the case,
charges $275 per hour. The hourly rates for paralegals and legal
assistants range from $30 to $50.
The firm received a retainer of $5,000, plus the filing fee.
Mr. Liepins disclosed in a court filing that his firm does not
represent any interest adverse to the Debtor's bankruptcy estate.
The firm can be reached through:
Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Phone: (972) 991-5591
Fax: (972) 991-5788
E-mail: eric@ealpc.com
About Chickenonthe Run, Inc.
Based in DeSoto, Texas, Chickenonthe Run, Inc. filed its Voluntary
Petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. N.D. Tex. Case No.19-32377) on July 18,
2019. The Debtor is represented by Eric A. Liepins, P.C.
CHINA FISHERY: CFGL's Sale Procedures for Singapore Property Okayed
-------------------------------------------------------------------
Judge James L. Garrity, Jr. of the U.S. Bankruptcy Court for the
Southern District of New York authorized the sale procedures of
CFGL (Singapore) Private Limited, an affiliate of China Fishery
Group, in connection with the sale of its real property located at
#11-01 GB Building, 143 Cecil Street, Singapore.
A hearing on the Motion was held on July 18, 2019.
The Sale Procedures for Sale Transactions are approved as follows:
a. Upon execution of the Purchase Agreement, the Debtors will
file a notice of such transaction with the Court under seal and
serve a copy thereof.
b. The parties receiving a Transaction Notice will have 20
calendar days after the service of a Transaction Notice to file and
serve any objections to the Sale Transaction;
c. If any material economic term of the Sale Transaction is
amended after transmittal of the Transaction Notice, but prior to
the expiration of the Notice Period, the Debtor will serve a
revised Transaction Notice on all parties that received the
Transaction Notice describing the proposed Sale Transaction, as
amended. If a revised Transaction Notice is required, the Notice
Period will be extended for an additional seven calendar days;
d. Any objections to the Sale Transaction must be served on
Klestadt Winters Jureller Southard & Stevens LLP, 200 W 41st
Street, Floor 17, New York, NY 10018 (Attn: Tracy L. Klestadt) as
the counsel to the Debtors, so as to be received on 4:00 p.m. (ET)
on the last day of the Notice Period;
e. If an Objection is properly filed and served: (i) the
Objection will be deemed a request for a hearing on the Sale
Transaction, and the Objection will be heard at the next scheduled
omnibus hearing in these Chapter 11 cases that is at least 14
calendar days after service of the Objection; and (ii) the Sale
Transaction may not proceed absent (a) written withdrawal of the
Objection or (b) entry of an order by the Court specifically
approving the Sale Transaction;
f. If no Objection is timely filed and served, the Debtor will
be deemed to be fully authorized by the Court to consummate the
Sale Transaction, and no further notice or Court approval will be
required to consummate the Sale Transaction; and
g. The Debtor may consummate the Sale Transaction prior to
expiration of the Notice Period only if it obtains written consent
to the Sale Transaction from each of the Sale Notice Parties.
h. Upon consummation of the Sale Transaction, the purchaser
will take the Singapore Real Property sold by the Debtors pursuant
to the Sale Procedures and subject to the terms of the
documentation executed in connection with the Sale Transaction.
The Debtor's sale of the Singapore Real Property will be free and
clear of liens pursuant to section 363(f) of the Bankruptcy Code.
All Encumbrances, if any, will attach to the Proceeds.
Notice of the Motion is adequate under Bankruptcy Rule 6004(a).
Notwithstanding any applicability of Bankruptcy Rule 6004(h), the
terms and conditions of the Order will be immediately effective and
enforceable upon its entry. The Sale Transaction will be deemed
authorized pursuant to the terms of the Order and no further or
additional waivers of the 14-day stay of Bankruptcy Rule 6004(h)
will be required for the Debtor to consummate the Sale Transaction,
subject to compliance with the Sale Procedures.
About China Fishery Group
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group
estimated its assets at $500 million to $1 billion and debt at $10
million to $50 million.
The cases are assigned to Judge James L. Garrity Jr.
Weil, Gotshal & Manges LLP has been tapped to serve as lead
bankruptcy counsel for China Fishery and its affiliates other than
CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal
replaces Meyer, Suozzi, English & Klein, P.C., the law firm
initially hired by the Debtors. The Debtors have also tapped
Klestadt Winters Jureller Southard & Stevens, LLP, as conflict
counsel; Goldin Associates, LLC, as financial advisor; RSR
Consulting LLC as restructuring consultant; and Epiq Bankruptcy
Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as
special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11
trustee for CFG Peru Investments Pte. Limited (Singapore), one of
the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as
the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as
special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves
as special litigation counsel.
CLA PROPERTIES: Exclusive Plan Filing Period Extended Until Aug. 16
-------------------------------------------------------------------
U.S. Bankruptcy Judge Brenda Moody Whinery extended CLA Properties
SPE LLC's exclusive period within which to file a Chapter 11 plan
to Aug. 16.
About CLA Properties SPE
CLA Properties SPE, based in Scottsdale, Arizona, and its
debtor-affiliates sought Chapter 11 protection (Bankr. D. Ariz.
Lead Case No. 17-14851) on Dec. 18, 2017. The debtor-affiliates are
CLA Maple Grove, LLC; CLA Carmel, LLC; CLA West Chester, LLC; CLA
One Loudoun, LLC; CLA Fishers, LLC; CLA Chanhassen, LLC; CLA
Ellisville, LLC; CLA Farm, LLC; and CLA Westerville, LLC.
The cases are jointly administered before the Hon. Brenda Moody
Whinery.
In the petition signed by Richard Sodja, its authorized
representative, CLA estimated $1 million to $10 million in assets
and liabilities.
The Debtors tapped Michael W. Carmel, Esq., at Michael W. Carmel,
Ltd., as bankruptcy counsel; Schian Walker, PLC, as co-counsel; and
Cockriel & Christofferson, LLC, as special counsel.
CLEAR CHANNEL: S&P Upgrades ICR to 'B-' on Refinancing Plans
------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on outdoor
advertising company Clear Channel Outdoor Holdings Inc. (CCOH) to
'B-' from 'CCC+' following disclosure of the company's plan to
issue a $2 billion senior secured first-lien term loan and $1.185
billion of other secured debt(unrated) to refinance most of its
capital structure. S&P removed the rating and all outstanding
issue-level ratings from CreditWatch, where they were placed with
positive implications on July 23, 2019.
Meanwhile, S&P assigned its 'B+' issue-level and '1' recovery
ratings to the company's proposed first-lien term loan and
revolver.
S&P expects the proposed transaction will result in annual interest
savings of $25 million to $35 million. In August, the company will
repay $334 million of high-priced debt with equity proceeds, which
will reduce annual interest expense by another $31 million. The
rating agency expects these actions, coupled with organic revenue
and EBITDA growth, will result in $10 million to $20 million of
FOCF in 2020.
The stable outlook reflects S&P's expectation that CCOH will
complete its refinancing with no major changes to the proposed
terms, and that the company's FOCF will turn positive by the end of
2020, reflecting lower interest expense, a favorable outdoor
advertising environment, and ongoing conversion to more-profitable
digital billboards.
"We could lower the rating if the company is unable to execute the
refinancing transaction as expected, resulting in a much higher
annual interest expense and continued negative FOCF through 2020.
We could also lower the rating if CCOH's operating performance
deteriorates because of economic pressure and advertising revenue
declines resulting in negative FOCF and liquidity concerns," S&P
said.
"We could raise the rating if we expect annual FOCF to improve to
more than $50 million on a sustained basis and the company uses
FOCF to repay debt. We believe this would happen if the company
continues to grow its revenue and EBITDA margin," the rating agency
said.
CLEARWATER TRANSPO: Sale of Rental Car Operations to Hertz Approved
-------------------------------------------------------------------
Judge Craig A. Gargotta of U.S. Bankruptcy Court for the Western
District of Texas authorized Clearwater Transportation, Ltd.'s sale
and transfer to The Hertz Corp. of its rental car operations at the
Killeen-Fort Hood GRK Regional Airport, including the assumption
and assignment of the Concession Agreement, dated Jan. 1, 2019
between Debtor and the City of Killeen.
On the terms in the Asset Purchase Agreement, at the Closing, the
Buyer will (i) pay to the respective counterparty the cure costs
and amounts for actual pecuniary loss necessary in connection with
the assumption and assignment of the Assigned Contract; and (ii)
pay to Clearwater $3,000, in full and final payment for the Assets
described on Schedule 2.2.1 ("PPEF Price").
The sale is free and clear of any and all Claims and Interests,
subject only to the Assumed Liabilities. Any and all Claims and
Interests against the Assets will attach to the funds received by
the Debtor from Hertz representing the PPEF Price to the extent and
in the order of priority as existed prior to the closing, and the
Debtor will hold and thereafter disburse such funds pursuant to
other and further orders of the Court.
The notice of the Sale Motion and the Sale Hearing (and the
transactions contemplated thereby), as well as the Agreement and
all other documents ancillary thereto, and all of the terms and
conditions thereof, are approved.
Pursuant to sections 105(a) and 365 of the Bankruptcy Code, and
subject to and conditioned upon the closing of the Sale, the
Debtor's assumption and assignment to the Buyer, and the Buyer's
assumption on the terms set forth in the Agreement, of the Assigned
Contract is approved.
The total Cure Amount due to be paid by Hertz to the City of
Killeen will be $77,532 plus payment of CFCs for July determined
under and paid as provided by the Assigned Contract, which total
amount will not exceed $100,000 in connection with the assumption
and assignment of the Assigned Contract.
As of the date of the Order, the Debtor's and Hertz's modification
of the License Documents per the APA and Ancillary Documents is
approved, and the Debtor's License Documents will be deemed
modified to reflect that the Debtor has ceased operating in the
City of Killeen in Bell County and in the City of San Angelo in Tom
Green County. All time periods set forth in the Order will be
calculated in accordance with Bankruptcy Rule 9006(a).
The Order will take effect immediately and will not be stayed
pursuant to Bankruptcy Rules 6004(g), 6004(h), 6006(d), 7062, 9014,
or otherwise. The Debtor and the Buyer are authorized to close the
Sale immediately upon entry of the Order.
About Clearwater Transportation
Clearwater Transportation, Ltd., a company in San Antonio, Texas,
that provides car rental services, sought protection under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 19-50292) on
Feb. 7, 2019. At the time of the filing, the Debtor estimated
assets of $1 million to $10 million and liabilities of the same
range. The case is assigned to Judge Craig A. Gargotta. Dykema
Gossett PLLC is the Debtor's legal counsel.
CLICKAWAY CORP: Given Until Dec. 2 to Exclusively File Plan
-----------------------------------------------------------
Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the
Northern District of California extended the exclusive period for
Clickaway Corporation to file a Chapter 11 reorganization plan to
Dec. 2 and the exclusive period to solicit acceptances for the plan
to Jan. 31, 2020.
About Clickaway Corporation
Clickaway Corporation, a computer repair, service, sales and
networking company, has been headquartered in Campbell and serving
more than 50,000 customers in Bay Area since 2002. Clickaway filed
a voluntary Chapter 11 petition (Bankr. N.D. Cal. Case No.
18-51662) on July 27, 2018, estimating $1 million to $10 million in
assets and liabilities.
The Debtor tapped The Law Offices of Binder and Malter as its
bankruptcy counsel; Willoughby Stuart Bening & Cook as special
counsel; and Crawford Pimentel Corporation as accountant.
DETROIT COMMUNITY SCHOOLS: S&P Puts 'B-' Bond Rating on Watch Neg.
------------------------------------------------------------------
S&P Global Ratings placed its 'B-' long-term rating on Detroit
Community Schools (DCS), Mich.'s series 2005 public school academy
revenue bonds on CreditWatch with negative implications.
"The CreditWatch action follows our repeated attempts to obtain
timely information of satisfactory quality to maintain our rating
on the securities in accordance with our applicable criteria and
policies," said S&P Global Ratings credit analyst Avani Parikh.
In December 2018, the charter authorizer, Bay Mills Community
College (BMCC), extended DCS' charter to June 2021. In addition,
BMCC suspended the school's board, terminated the contract with the
former chief administrative officer, and appointed an authorizer
representative as the school's conservator. Based on S&P's review
of publicly available information, the school's fiscal 2018 audit
showed some financial improvement over prior year results, though
enrollment has been on a declining trend with notable 8% drop in
fall 2018. In S&P's view, this could have a measurable impact on
fiscal 2019 operating results and liquidity, As DCS' financial
profile is already strained, with just shy of 10 days' cash on hand
at the end of fiscal 2018 and variable operating results, further
weakening could pressure the school's ability to meet debt service
obligations. Given the lack of timely response, S&P is unable to
assess the school's response to its enrollment declines, the impact
of the recent management changes, or expectations for the upcoming
school year. The rating is currently supported by DCS' debt service
reserve fund of approximately $1.3 million as of June 30, 2018.
If S&P is unable to receive the required documentation within a
reasonable timeframe to allow it to resolve the CreditWatch action,
it will likely withdraw the affected rating. This will be preceded,
in accordance with its policies, by any change to the rating that
it considers appropriate, based on available information.
DN TRUCKING: Aug. 27 Hearing on Plan and Disclosures
----------------------------------------------------
Bankruptcy Judge John K. Sherwood conditionally approved DN
Trucking, LLC's small business disclosure statement referring to a
chapter 11 plan dated July 25, 2019.
August 20, 2019 is fixed as the last day for filing and serving
written objections to the Disclosure Statement and confirmation of
the Plan, and the last day for filing written acceptances or
rejections of the Plan.
A hearing will be held on August 27, 2019 at 10:00 a.m. for final
approval of the disclosure statement and for confirmation of the
plan.
About DN Trucking
DN Trucking, LLC filed for chapter 11 bankruptcy protection (Bankr.
D.N.J. Case No. 18-29412) on Sept. 28, 2018, and is represented by
Scott C. Pyfer, Esq. of Pyfer Law Group, LLC.
DURR MECHANICAL: Exclusivity Period Extended Until Aug. 12
----------------------------------------------------------
Judge Stuart Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York extended the period during which only
Durr Mechanical Construction, Inc. can file a Chapter 11 plan
through Aug. 12, and the period during which the company can
solicit acceptances for the plan through Oct. 11.
About Durr Mechanical
Durr Mechanical Construction, Inc. -- http://www.durrmech.com/--
is a mechanical contracting company headquartered in New York. It
offers commercial HVAC, scheduling and cost control, BIM drafting,
erecting and setting equipment, process piping, power piping, and
emergency services.
Durr Mechanical Construction filed a voluntary petition for
reorganization under Chapter 11 of Title 11 of the United States
Code (Bankr. S.D.N.Y. Case No. 18-13968) on Dec. 7, 2018. In the
petition signed by Kenneth A. Durr, president, the Debtor estimated
$100 million to $500 million in assets and $50 million to $100
million in liabilities. LaMonica Herbst & Maniscalco, LLP, led by
Michael Thomas Rozea, and Adam P. Wofse, serves as counsel to the
Debtor.
EKSO BIONICS: Incurs $3.06 Million Net Loss in Second Quarter
-------------------------------------------------------------
Ekso Bionics Holdings, Inc. filed with the Securities and Exchange
Commission on Aug. 1, 2019, its quarterly report on Form 10-Q
reporting a net loss of $3.06 million on $3.26 million of revenue
for the three months ended June 30, 2019, compared to a net loss of
$7.97 million on $2.96 million of revenue for the three months
ended June 30, 2018.
Gross profit for the quarter ended June 30, 2019 was $1.6 million,
compared to $1.0 million in the same period in 2018, representing a
gross margin of approximately 48%, compared to a gross margin for
the same period in 2018 of 33%. The overall increase in gross
margin is primarily due to higher average selling prices and lower
production costs of the Company's EksoGT devices.
Sales and marketing expenses for the quarter ended June 30, 2019
were $3.0 million, compared to $3.9 million for the same period in
2018, a decrease of $0.9 million or approximately 23%. The
decrease was primarily due to lower general marketing and trade
show expenses and a decrease in clinical trial activities as the
Company nears completion of the WISE (Walking Improvement for
spinal cord injury with Exoskeletons) study.
Research and development expenses for the quarter ended June 30,
2019 were $1.5 million, compared to $1.4 million for the same
period in 2018.
General and administrative expenses for the quarter ended June 30,
2019 were $2.1 million, compared to $2.8 million for the same
period in 2018, a decrease of $0.7 million or approximately 25%.
The decrease was primarily due to lower external consulting costs
associated with business development related activities in China
and lower legal expenses.
As of June 30, 2019, the Company had $25.58 million in total
assets, $20.17 million in total liabilities, and $5.40 million in
total stockholders' equity.
Total operating expenses decreased 18% to $6.7 million in the
second quarter of 2019, compared to $8.2 million in the same period
of 2018.
Cash used in operating activities decreased to $9.7 million in the
six months ended June 30, 2019, compared to $12.8 million in the
first six months of 2018.
"Second quarter growth was primarily the result of higher sales and
a higher rental-to-sale conversion rate of EksoGT units in the
U.S.," said Jack Peurach, president and chief executive officer of
Ekso Bionics. "These gains were partially offset by softer
performance in the Europe and APAC regions. Looking ahead, we
expect that the appointment of Bill Shaw, an experienced sales
leader in the global robotics industry, as Chief Commercial
Officer, will help drive increased traction in our key markets.
The expansion of our U.S. customer base increases our confidence in
our progress in educating current and potential customers about the
benefits that our EksoGT exoskeletons provide to patients and care
providers. Our focus remains on strengthening our customer
pipeline and maintaining a disciplined approach to managing costs,
which helped increase second quarter gross margins and decrease
operating expenses and production costs, compared with the same
period in 2018."
Six months ended June 30, 2019
For the six months ended June 30, 2019, the Company reported a net
loss of $9.61 million on $6.87 million of revenue compared to a net
loss of $15.87 million on $5.48 million of revenue for the same
period last year. The increase in revenue for the 2019 period is
primarily due to a higher volume of EksoGT sales.
Gross profit for the six months ended June 30, 2019 was
approximately $3.2 million, representing a gross margin of
approximately 46%. This compares to gross profit of $1.7 million
for the same period in 2018, representing a gross margin of 32%.
The increase was primarily due to higher average selling prices and
lower production costs of EksoGT devices.
Sales and marketing expenses were $5.8 million for the six months
ended June 30, 2019, compared to $7.8 million for the same period
in 2018, a decrease of $1.9 million. The decrease was primarily due
to lower general marketing and trade show expenses and a decrease
in clinical trial activities.
Research and development expenses were $2.9 million for the six
months ended June 30, 2019, compared to $3.2 million in the same
period in 2018, a decrease of $0.3 million.
General and administrative expenses were $4.4 million for the six
months ended June 30, 2019, compared to $6.6 million in the same
period in 2018, a decrease of $2.1 million. The decrease was
primarily due to an absence of a one-time severance to the
departure of the former chief executive officer, lower external
consulting costs and activities to establish a leaner, more
efficient organization.
Cash on hand at June 30, 2019 was $13.3 million, compared to $7.7
million at Dec. 31, 2018. For the six months ended June 30, 2019,
the Company used $9.7 million of cash in operations, compared to
$12.8 million for the same period in 2018.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/MUaBSt
About Ekso Bionics
Headquartered in Richmond, California, Ekso Bionics --
http://www.eksobionics.com/-- is a developer of exoskeleton
solutions that amplify human potential by supporting or enhancing
strength, endurance, and mobility across medical and industrial
applications. Founded in 2005, the Company's wearable exoskeletons
are worn over clothing and are mechanically controlled by a trained
operator to augment human strength, endurance and mobility.
Ekso Bionics reported a net loss of $26.99 million for the year
ended Dec. 31, 2018, following a net loss of $29.12 million for the
year ended Dec. 31, 2017. As of March 31, 2019, the Company had
$20.86 million in total assets, $16.32 million in total
liabilities, and $4.53 million in total stockholders' equity.
OUM & CO. LLP, in San Francisco, California, the Company's
independent auditor since 2010, issued a "going concern"
qualification in its report dated Feb. 28, 2019, on the Company's
consolidated financial statements for the year ended Dec. 31, 2018,
citing that the Company has incurred significant recurring losses
and negative cash flows from operations since inception and an
accumulated deficit. These raise substantial doubt about the
Company's ability to continue as a going concern.
ELECTRONIC SERVICE: Plan Outline OK'd; Sept. 25 Plan Hearing Set
----------------------------------------------------------------
Bankruptcy Judge Ann M. Nevins approved Electronic Service Products
Corporation's second amended disclosure statement in support of its
second amended plan of reorganization dated July 24, 2019.
Sept. 13, 2019 is fixed as the last day for returning written
ballots accepting or rejecting the plan and the last day for filing
written objections to confirmation of the plan.
Sept. 25, 2019 at 2:00 p.m. is fixed as the hearing date to
consider confirmation of the chapter 11 plan.
The Troubled Company Reporter previously reported that payment to
unsecured creditors will begin October 2019.
A copy of the Second Amended Disclosure Statement is available at
https://tinyurl.com/yylamt8u from Pacermonitor.com at no charge.
About Electronic Service Products
Founded in 1992, Electronic Service Products Corporation is engaged
in the wholesale distribution of electronic parts and electronic
communications equipment.
Electronic Service Products filed a Chapter 11 petition (Bankr. D.
Conn. Case No. 17-30704) on May 12, 2017. In the petition signed
by William Hrubiec, its president, the Debtor estimated $100,000 to
$500,000 in assets and $1 million to $10 million in liabilities.
The case is assigned to Judge Ann M. Nevins. The Debtor tapped
William E. Carter, Esq., at the Law Office of William E. Carter,
LLC, as counsel.
EMERGE ENERGY: U.S. Trustee Forms 5-Member Committee
----------------------------------------------------
Andrew R. Vara, Acting United States Trustee for Region 3, on July
31 appointed five creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of Emerge Energy
Services LP, and it’s affiliates.
The committee members are:
1. Trinity Industries Leasing Company.
Attn: Scott Ewing
2525 N. Stemmons Freeway
Dallas, TX 75207
Phone: 214-589-6531
2. The Andersons, Inc. an Ohio Corporation
Attn: Sean Hankinson
1947 Briarfield Boulevard
Maumee, OH 43537
Phone: 419-891-6352
3. Iron Mountain Trap Rock Co.
Attn: Dale Hoette
2320 Creve Coeur Mill Road
Maryland Heights, MO 63043
Phone: 314-473-3710
Fax: 319-344-0970
4. Greenbrier Leasing Company, LLC
Attn: John Lawrence
One Centerpointe Drive, Suite 200
Lake Oswego, OR 97035
Phone: 503-598-3830
5. BMT Consulting Group, LLC
Attn: Paul McCarthy
36 Redwood Drive
Butte, MT 59701
Phone: 406-490-2598
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
The Committee's proposed counsel are:
Jeremy W. Ryan, Esq.
Christopher M. Samis, Esq.
D. Ryan Slaugh, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, Sixth Floor
P.O. Box 951
Wilmington, DE 19899
Tel: (302) 984-6000
Fax: (302) 658-1192
Email: jryan@potteranderson.com
csamis@potteranderson.com
rslaugh@potteranderson.com
-- and --
Todd C. Meyers, Esq.
David M. Posner, Esq.
Kelly Moynihan, Esq.
KILPATRICK TOWNSEND & STOCKTON LLP
The Grace Building
1114 Avenue of the Americas
New York, NY 10036
Tel: (212) 775-8700
Fax: (212) 775-8800
Email: tmeyers@kilpatricktownsend.com
dposner@kilpatricktownsend.com
kmoynihan@kilpatricktownsend.com
-- and --
Lenard M. Parkins, Esq.
KILPATRICK TOWNSEND & STOCKTON LLP
700 Louisiana Street, Suite 4300
Houston, TX 77002
Tel: (281) 809-4100
Fax: (281) 929-0797
Email: lparkins@kilpatricktownsend.com
About Emerge Energy Services
Emerge Energy Services LP -- http://www.emergelp.com/-- is engaged
in the mining, processing and distributing silica sand, a key input
for the hydraulic fracturing of oil and gas wells. The Debtors
conduct their mining and processing operations from facilities
located in Wisconsin and Texas. In addition to mining and
processing silica sand primarily for use in the oil and gas
industry, the Debtors also, to a lesser degree, sell their sand for
use in building products and foundry operations. Emerge Energy was
formed in 2012 by management and affiliates of Insight Equity
Management Company LLC and its affiliated investment funds.
Emerge Energy Services and its affiliates protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11563)
on July 15, 2019.
As of Sept. 30, 2018, the Debtors had total assets of $329,385,000
and total liabilities of $266,077,000.
The Debtors tapped Richards, Layton & Finger, P.A. and Latham &
Watkins LLP as bankruptcy counsel; Houlihan Lokey Capital Inc. as
financial advisor; and Kurtzman Carson Consultants LLC as claims
and noticing agent and administrative advisor. The Debtors also
hired Ankura Consulting Group LLC to provide interim management
services.
EVEN STEVENS: Seeks 90-Day Extension of Exclusivity Period
----------------------------------------------------------
Even Stevens Arizona, LLC and its debtor-affiliates asked the U.S.
Bankruptcy Court for the District of Arizona for a 90-day extension
of the exclusive period for filing their Chapter 11 plan and the
exclusive period for confirming their Chapter 11 plan
Unless extended, the Debtors' exclusivity period to file and to
solicit votes in favor of their Chapter 11 plan is set to expire on
July 19, and Sept. 17, respectively.
The extension sought here is necessary to allow enough time for the
Debtors to complete their negotiations with the Committee and other
creditors and craft their plan of reorganization based on these
negotiations.
Although the Debtors intend to work closely with the Committee as
they craft their plan of reorganization, they have not yet had the
opportunity to engage the Committee regarding their proposed plan.
The Committee was appointed less than 60 days ago, and counsel for
the Committee approved less than 30 days ago.
According to Debtors' counsel, M. Preston Gardner, Esq. at Davis
Miles Mcguire Gardner, PLLC, "Confirmable plans need support and
the Debtors hope that their negotiations with the Committee will
avoid the time and expense of a contested confirmation battle. If
the Debtors are able to reach an agreement with even one
constituency, the confirmation process can be streamlined and will
be far less expensive. The Debtors intend to move forward
diligently, but to reach their goal of confirming a plan of
reorganization that will keep a business intact additional time is
needed."
About Even Stevens Arizona
Even Stevens -- https://evenstevens.com/ -- is a craft-casual
restaurant chain that specializes in sandwiches and salads.
Even Stevens Arizona LLC and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Lead Case No.
19-03235) on March 21, 2019.
At the time of the filing, the Debtors estimated assets and
liabilities as follows:
Estimated Assets Estimated Debt
---------------- --------------
Even Stevens Arizona $0 to $50,000 $10-mil. to $50-mil.
Even Stevens Sandwiches $1-mil. to $10-mil. $1-mil. to $10-mil.
Even Stevens Utah $0 to $50,000 $1-mil. to $10-mil.
Even Stevens Idaho $0 to $50,000 $500,000 to $1-mil.
The cases are assigned to Judge Daniel P. Collins.
Davis Miles McGuire Gardner, PLLC is the Debtors' legal counsel.
The Debtors tapped ESBE Stategic Partners, Inc. as management and
financial consultant
The Office of the U.S. Trustee on May 17 appointed three creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 cases of Even Stevens Arizona LLC and its affiliates.
FANNIE MAE: Reports Second Quarter Net Income of $3.4 Billion
-------------------------------------------------------------
Federal National Mortgage Association, a/k/a Fannie Mae, filed with
the Securities and Exchange Commission on Aug. 1, 2019, its
quarterly report on Form 10-Q reporting net income of $3.43 billion
on $30.15 billion of total interest income for the three months
ended June 30, 2019, compared to net income of $4.45 billion on
$28.85 billion of total interest income for the three months ended
June 30, 2018.
Fannie Mae's net income of $3.4 billion for the second quarter of
2019 compares with net income of $2.4 billion for the first quarter
of 2019. The increase in net income in the second quarter of 2019
was driven primarily by increases in credit-related income, net
interest income, and investment gains during the quarter.
For the six months ended June 30, 2019, the Company reported net
income of $5.83 billion on $60.69 billion of total interest income
compared to net income of $8.71 billion on $57.37 billion of total
interest income for the same period last year.
As of June 30, 2019, Fannie Mae had $3.44 trillion in total assets,
$3.43 trillion in total liabilities, and $6.36 billion in total
stockholders' equity.
Fannie Mae expects to pay a $3.4 billion dividend to Treasury by
Sept.r 30, 2019. Through the second quarter of 2019, the company
has paid $181.4 billion in dividends to Treasury.
Business Highlights
* Fannie Mae provided $213.1 billion in liquidity to the single
-family mortgage market in the first half of 2019 and was the
largest issuer of single-family mortgage-related securities in
the secondary market. More than 56% of the single-family
mortgage loans the company acquired in the first half of 2019
were affordable to families earning at or below 120% of the
area median income, providing support for both affordable and
workforce housing. The company's estimated market share of new
single-family mortgage-related securities issuances was 35% for
the second quarter of 2019.
* Fannie Mae has transferred a portion of the credit risk on
single-family mortgages with an unpaid principal balance of
more than $1.7 trillion since 2013, measured at the time of the
transactions, including $148 billion in the first half of 2019.
As of June 30, 2019, $1.2 trillion in single-family mortgages
or approximately 42% of the loans in the company's single-
family conventional guaranty book of business, measured by
unpaid principal balance, were covered by a credit risk
transfer transaction.
* Fannie Mae provided $34.1 billion in multifamily financing in
the first half of 2019, which supported 354,000 units of
multifamily housing. Approximately 90% of the multifamily
units the company financed were affordable to families earning
at or below 120% of the area median income, providing support
for both affordable and workforce housing. Through the second
quarter of 2019, Fannie Mae continued to be one of the largest
issuers of Green bonds in the world, issuing $6.8 billion in
Green bonds in the first half of 2019 and over $58 billion
since inception of the program.
* Fannie Mae continued to share credit risk with lenders on
nearly 100% of the company's new multifamily business volume,
primarily through its Delegated Underwriting and Servicing
(DUS) program. To complement the company's lender loss sharing
program through DUS, the company has completed five multifamily
Credit Insurance Risk Transfer (CIRT) transactions to date. As
of June 30, 2019, $48 billion in multifamily mortgages or 15%
of the loans in the company's multifamily guaranty book of
business, measured by unpaid principal balance, were covered by
a CIRT transaction.
Hugh R. Frater, chief executive officer of Fannie Mae commented,
"Fannie Mae's results continue to show the strength of our business
model and our ability to generate solid returns.
"We are sharpening our focus on capital management through the lens
of FHFA's proposed capital framework.
"We continue to work with industry stakeholders to identify and
enable new solutions to our country's housing challenges and
increase the supply of housing.
"And we will continue to improve the company in order to deliver
value, liquidity, and stability to the housing finance system."
Financial Performance Outlook
Fannie Mae's long-term financial performance will depend on many
factors, including:
* the size of and its share of the U.S. mortgage market, which
in turn will depend upon such factors as population growth,
household formation, and home price appreciation; and
* actions by FHFA, the Administration, and Congress relating to
its business and housing finance reform, including the
capital requirements that will be applicable to the company,
its ongoing financial obligations to Treasury, and its
competitive environment.
While Fannie Mae expects to remain profitable on an annual basis
for the foreseeable future, certain factors could result in
significant volatility in the company's financial results from
quarter to quarter or year to year. Fannie Mae expects quarterly
volatility in its financial results due to a number of factors,
particularly changes in market conditions that result in
fluctuations in the estimated fair value of derivatives and other
financial instruments that it marks to market through its earnings.
Other factors that may result in volatility in the company's
quarterly financial results include factors that affect its loss
reserves, such as redesignations of loans from held for investment
to held for sale, changes in interest rates, home prices or
accounting standards, or events such as natural disasters, and
other factors.
The potential for significant volatility in the company's financial
results could result in a net loss in a future quarter. Fannie Mae
is permitted to retain up to $3.0 billion in capital reserves as a
buffer in the event of a net loss in a future quarter. However,
any net loss the company experiences in the future could be greater
than the amount of its capital reserves, which would result in a
net worth deficit for that quarter. For example, the company
currently estimates that its implementation of the CECL standard
will result in a reduction in the company's retained earnings in
the first quarter of 2020 of up to $4 billion on an after-tax
basis, which could result in a net worth deficit for that quarter.
Proving Liquidity and Support to the Market
Fannie Mae provided $247.2 billion in liquidity to the mortgage
market in the first half of 2019. Through its purchases and
guarantees of mortgage loans in the first half of 2019, Fannie Mae
acquired approximately 870,000 single-family mortgage loans. Fannie
Mae also financed approximately 354,000 units of multifamily
housing in the first half of 2019.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/kVyWrb
About Fannie Mae and Freddie Mac
Federal National Mortgage Association (OTCQB: FNMA), commonly known
as Fannie Mae -- http://www.FannieMae.com/-- is a
government-sponsored enterprise (GSE) that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold. Fannie Mae helps make the 30-year
fixed-rate mortgage and affordable rental housing possible for
millions of Americans. The Company partners with lenders to create
housing opportunities for families across the country.
A brother organization of Fannie Mae is the Federal Home Loan
Mortgage Corporation (FHLMC), better known as Freddie Mac. Freddie
Mac (OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established
by Congress in 1970 to provide liquidity, stability and
affordability to the nation's residential mortgage markets.
Freddie Mac supports communities across the nation by providing
mortgage capital to lenders.
About Fannie Mae's Conservatorship
and Agreements with Treasury
Fannie Mae has operated under the conservatorship of FHFA since
Sept. 6, 2008. Treasury has made a commitment under a senior
preferred stock purchase agreement to provide funding to Fannie Mae
under certain circumstances if the company has a net worth deficit.
Pursuant to this agreement and the senior preferred stock the
company issued to Treasury in 2008, the conservator has declared
and directed Fannie Mae to pay dividends to Treasury on a quarterly
basis for every dividend period for which dividends were payable
since the company entered conservatorship in 2008.
FLOORS TODAY: Allowed to Use Cash Collateral Through Sept. 13
-------------------------------------------------------------
Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Floors Today, LLC, to use cash
collateral in accordance with the Budget through and including
Sept. 13, 2019.
A continued hearing on the Debtor's request for entry of the Final
Cash Collateral Order is scheduled for Sept. 13 at 12:30 p.m. The
Debtor must file on or before Sept. 6: (i) a reconciliation of its
actual income and expenses for the period July 9 to Aug. 30 and
(ii) an updated budget for the period Sept. 4 to Dec. 3.
Secured Creditors Hometown Bank; American Express Bank, FSB;
Mulligan Funding, LLC; Masco Cabinetry, LLC; Supreme Capital
Source, LLC; LG Funding, LLC; Compass Solutions, LLC; Kitchens
Today, Inc.; and Peter Perkins may assert liens on Debtor's assets
and may have an interest in the Debtor's cash collateral.
Secured Creditors are granted replacement liens on the same types
of postpetition property of the Debtor's estates against which the
Secured Creditors held liens as of the Petition Date. The
Replacement Liens will maintain the same priority, validity and
enforceability as the Secured Creditors' respective pre-petition
liens. The Replacement Liens will be recognized only to the extent
of the post-petition diminution in value of the Secured Creditors'
pre-petition collateral resulting from the Debtor's use of the Cash
Collateral. The Replacement Liens, however, will not attach to any
avoidance powers held by any of the Debtor or any trustee for the
Debtor, or to the proceeds of any claims under or actions commenced
pursuant to such powers.
Hometown Bank is granted an allowed super-priority administrative
expense claim to the extent provided in Sections 503(b) and 507(b)
of the Bankruptcy Code, but only to the extent of any post-petition
diminution in the value of its pre-petition collateral resulting
from the Debtor's use of its Cash Collateral. In addition, the
Debtor will make the payments to Hometown Bank as reflected in the
Budget attached to the Motion.
Commencing on Aug. 20, and continuing thereafter on the 20th day of
each successive month, the Debtor will provide the following
reporting to each Secured Creditor: (a) a budget to actual report
with respect to the Budget, and (b) a copy of the Debtor's monthly
operating report submitted to the Office of the U.S. Trustee.
A copy of the Interim Cash Collateral Order is available for free
at
http://bankrupt.com/misc/mab19-41126-22.pdf
About Floors Today
Floors Today, LLC -- https://www.floorsandkitchenstoday.com/ --
owns and operates flooring stores offering carpets, tiles, woods,
waterproof floors, laminates, area rugs and more. The Company also
retails bathroom and kitchen furniture including cabinetry,
countertops, and interior products. The Company has locations in
the Greater Boston, Providence, and Worcester areas.
Floors Today, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mass. Case No. 19-41126) on July 7,
2019. At the time of the filing, the Company disclosed assets of
between $500,000 to $1 million and liabilities of between $1
million to $10 million. The petition was signed by the Company's
managing partner, Vincent Virga. The Hon. Elizabeth D. Katz is the
case judge. The Company is represented by Donald Ethan Jeffery,
Esq., at Murphy & King, Professional Corporation.
FREEPORT-MCMORAN INC: Fitch Rates $1.2B Sr. Unsec. Notes BB+
------------------------------------------------------------
Fitch Ratings has assigned a 'BB+/RR4' to Freeport-McMoRan Inc.'s
(FCX) $1.2 billion senior unsecured note issuance. The proceeds
will be used to repay debt.
The ratings reflect Freeport-McMoRan Inc.'s high-quality assets,
strong liquidity and improved capital structure. While Fitch
Ratings expects FFO-adjusted leverage to be above 5.0x in 2019 as
the Grasberg deposit transitions to underground mining, substantial
cash on hand will allow development capital spending and debt
repayment through the transition. Fitch expects FFO leverage in
2020 to be below 3.5x and below 3.0x thereafter.
KEY RATING DRIVERS
Competitive Cost Profile: The company's assets are large-scale,
long-lived mines with competitive costs in North America, average
costs in South America and low first-quartile costs in Indonesia.
FCX scaled back development during the commodities slump, except
for the Cerro Verde (Peru) expansion completed in 2015, underground
development at Grasberg and development at Lone Star (U.S., first
production expected at the end of 2020). FCX has several brownfield
development opportunities to pursue if the company believes copper
prices would justify investment.
Transition Years at Grasberg: Mining at Grasberg is transitioning
to underground, which is expected to reduce copper volumes by 46%
and 33% from 2018 volumes in 2019 and 2020, respectively. Fitch
expects operating EBITDA to decline to about $3.2 billion in 2019
and $3.9 billion in 2020, compared with $6.4 billion in 2018 under
its rating case. Fitch expects FCF to be negative by as much as
$710 million in 2019 and $150 million in 2020 but to eclipse 2018
levels on average thereafter. The company had available cash of
$2.4 billion as of March 31, 2019, which should handily support
current dividends and capex guidance over the next two years.
Deleveraging: FCX redeemed the $1 billion notes due in 2020 and
prepaid $200 million under the Cerro Verde term loan in 1Q19. Debt
repayment in 2018 included $704 million of prepayments and $1.4
billion that was paid at maturity. FCX's FFO-adjusted net leverage
was 1.8x at March 31, 2019 but could rise above 4.0x by year-end
(YE) 2019 as the open pit operations at Grasberg wind down and the
underground operations ramp up. FFO net leverage would fall below
2.0x by YE 2021 at copper prices in the $2.72/pound-$3.00/pound
range.
Exposure to Copper: Copper accounted for 75% of consolidated
revenues in 2018. FCX estimates a $0.10/pound change in the price
of copper would change operating cash flow by $185 million in 2H
2019. Average realized copper prices were $2.91/pound in 2018,
compared with the London Metal Exchange average price for the year
through July 31, 2019 of $2.78/pound and Fitch's assumptions of
$2.90/pound in 2019, $2.95/pound in 2020 and $3.04/pound in 2021.
DERIVATION SUMMARY
FCX's closest operational peer is Southern Copper Corporation (SCC;
BBB+/Stable), given the spread of its copper assets. FCX is less
profitable than SCC and is expected to have higher leverage in 2019
as underground mining at Grasberg ramps up but would generally have
a financial profile consistent with SCC's. FCX's financial profile
is broadly in line with peers rated 'BBB-', including Teck
Resources Ltd., Kinross Gold Corporation and Yamana Gold Inc.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
-- Copper production at 3.1 billion, 3.3 billion and 4.1
billion pounds in 2019, 2020 and 2021, respectively;
-- Unit site cost at $1.94/pound on average in 2019-2021;
-- Fitch's commodity price assumptions: gold at $1,200/ounce;
LME spot copper at $6,400/tonne in 2019, $6,500/tonne in
2020 and $6,700/tonne in 2021;
-- Capex at guidance;
-- No change in dividend policy.
FREEPORT-MCMORAN INC: Moody's Rates New 2027/2029 Unsec. Notes Ba1
------------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Freeport-McMoRan
Inc's new guaranteed senior unsecured notes due in 2027 and 2029.
The notes will be issued under the company's well-known seasoned
issuer shelf registration, rated (P)Ba1 for senior unsecured debt
securities. All other ratings remain unchanged, including the SGL-1
speculative grade liquidity rating.
Proceeds will be used to redeem the 6.875% senior unsecured notes
due 2023 and to tender for portions of the 4% senior unsecured
notes due 2021, the 3.55% senior unsecured notes due 2022, and the
3.875% senior unsecured notes due 2023.
"This refinancing will eliminate higher coupon debt and improve the
debt maturity towers, particularly in 2022 and 2023" said Carol
Cowan, Senior Vice President and lead analyst for FCX.
Assignments:
Issuer: Freeport-McMoRan Inc.
Gtd. Senior Unsecured Regular Bond/Debentures, Assigned Ba1
(LGD4)
RATINGS RATIONALE
FCX's Ba1 Corporate Family Rating incorporates the company's
leading position in the global copper market as a low cost producer
with a diversified operating footprint in the US, South America and
Indonesia. The rating also acknowledges FCX's continued focus on
costs, and debt reduction undertaken in 2018. Actions taken by the
company in recent years have provided a better cushion to tolerate
a level of downward movement in copper prices, as seen in 2019 as
well as the production volume and cost impact of transitioning to
underground mining at the Indonesian operations given the depletion
of the open pit mine.
Factored into the CFR is the reduced gold and copper production and
resulting higher costs at Grasberg in 2019 and 2020 as the Grasberg
Block Cave and Deep MLZ underground mine developments continue.
Initial production at the Grasberg Block Cave is expected to
commence during the first half of 2019 and a similar expectation
exists for the Deep MLZ, with full production expected in 2022.
Particularly impactful to FCX's performance in 2019, in addition to
lower copper prices, is the significant reduction in expected gold
production at Grasberg to around 800,000 ounces (2.4mm ounces in
2018) and resultant increase in costs given the absence of
significant by-product credits. Unit net cash costs at the
Indonesian mining operations were $1.99/lb for the six months
through June 30, 2019 as compared with a credit of $0.70/lb for the
comparable 2018 period. This will continue to impact performance
through the balance of 2019 with improvement slowly being seen in
2020 and more substantively in 2021 and beyond as production
continues to ramp up.
With approximately $2.8 billion EBITDA anticipated for 2019
($2.75/lb copper) leverage, as measured by the debt/EBITDA ratio,
is expected to peak at around 3.9x but stabilize and improve
thereafter. Given the lower cash flow generation and higher capital
expenditures, moderate negative free cash flow is anticipated in
2019 but can be comfortably accommodated within FCX's overall
liquidity profile.
By the nature of its business, FCX faces a number of ESG risks
typical for a company in the mining industry including but not
limited to wastewater discharges, site remediation and mine
closure, waste rock and tailings management, air emissions, and
social responsibility given its often fairly remote operating
locations. The company is subject to many environmental laws and
regulations in the areas in which it operates all of which vary
significantly. The mining sector overall is viewed as a very
high-risk sector for soil/water pollution and land use restrictions
and a high risk sector for water shortages and natural and man-made
hazards. In 2018 approximately 81% of FCX's water usage
requirements were from recycled and reused sources. The company has
spent between $400 million and $500 million on environmental
capital expenditures and other environmental costs in each of the
last several years
The SGL-1 speculative grade liquidity rating considers FCX's very
good liquidity including its $2.6 billion cash position at June 30,
2019 and borrowing availability of approximately $3.5 billion ($13
million in letters of credit issued) under its $3.5 billion
unsecured revolving credit facility (RCF - $3.26 billion matures
April 20, 2024 with the balance maturing April 20, 2023).
Financial covenants include a total net leverage ratio (total
debt/EBITDA) of no more than 3.75x and an interest coverage ratio
(EBITDA/cash interest expense) of no less than 2.25x. The amendment
to the RCF in May 2019 increased the amount off attributable cash
that could be applied to the leverage covenant calculation.
The stable outlook reflects expectations that FCX will continue to
progress its transition to underground mining at the Grasberg
complex in accordance with its plans described to date and
gradually achieve increasing production volumes over the 2020 and
2021 timeframe. The outlook also incorporates its view that
leverage will not exceed 4x during the next twelve to fifteen
months.
Copper market fundamentals remain favorable over the medium term
due to market deficits and increasing demand, notwithstanding
short-term pressures due to global market uncertainties, trade
tensions between the US and China, and reduced GDP expectations for
China. Copper prices are expected to trade sideways through the
balance of 2019 and remain range bound absent improved market
sentiment but not deteriorate significantly from current levels.
Copper prices averaged $2.78/lb for the six months through June 30,
2019.
An upgrade to the ratings is unlikely until such time as the
underground expansion at Grasberg is completed and the production
profile at this mining site returns to higher copper and gold
levels. Additionally, an upgrade would require better clarity on
the company's financial policy and strategic growth objectives. An
upgrade would be considered if the company can sustain
EBIT/interest of at least 5x, debt/EBITDA under 2.5x and
(CFO-dividends)/debt of at least 40% through various price points.
A downgrade would result should liquidity materially contract,
(CFO-dividends)/debt be sustained below 20% or leverage increase
and be sustained above 3.5x.
Under Moody's Loss Given Default methodology, the Ba1 rating on the
FCX unsecured notes, at the same level as the CFR, reflects the
absence of secured debt in the capital structure and the parity of
instruments.
FCX, a Phoenix, Arizona based mining company, is predominately
involved in copper mining and the related by-product credits from
the mining operations. The company's global footprint includes
copper mining operations in Indonesia, the United States, Chile,
and Peru. Revenues for the 12 months ended June 30, 2019 were $15.9
billion. Revenues in 2018 were $18.6 billion.
FREEPORT-MCMORAN INC: S&P Rates New $1.2BB Unsecured Notes 'BB'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '3'
recovery rating to Phoenix-based miner Freeport-McMoRan Inc.'s new
$1.2 billion aggregate unsecured notes due 2027 and 2029. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a payment default.
The company will use the proceeds from the proposed notes to redeem
all of its $728.0 million outstanding 6.875% senior notes due 2023.
In addition, Freeport announced cash tender offers to repurchase a
portion of its $600 million outstanding 4.00% senior notes due
2021, $1,892.5 million outstanding 3.55% senior notes due 2022, and
$1,922.5 million outstanding 3.875% senior notes due 2023 with the
remaining $420 million of proceeds from the new offering.
S&P expects Freeport's adjusted debt leverage to be in the
3.5x-4.0x range in 2019 and in the 3.0x-3.5x range in 2020 as it
ramps up the transition to underground mining at its Grasberg mine.
The transition to underground mining at Grasberg will require $1
billion-$1.5 billion in annual capital spending and S&P expects the
company's operating costs to remain elevated until the end of
2020.
Ratings List
Freeport-McMoRan Inc.
Issuer Credit Rating BB/Stable
New Rating
Freeport-McMoRan Inc.
Senior Unsecured
Nts due 2027 BB
Recovery Rating 3(60%)
Nts due 2029 BB
Recovery Rating 3(60%)
FRONTIER INSURANCE: Holds Title, Improvement to Land in Sullivan NY
-------------------------------------------------------------------
In the case captioned IN RE: FRONTIER INSURANCE GROUP, INC. and
Frontier Insurance Group, LLC, Debtor/Reorganized Debtor. Benjamin
Lawsky, Superintendent of Financial Services of the State of New
York, as Liquidator of Frontier Insurance Company,
Plaintiff-Appellant, v. Frontier Insurance Group, LLC,
Defendant-Appellee, 18-CV-3211 (CS) (S.D.N.Y.), Plaintiff-Appellant
Benjamin Lawsky, Superintendent of Financial Services of the State
of New York in his capacity as Liquidator of Frontier Insurance
Company appeals from the bankruptcy court's Feb. 15, 2018
Memorandum of Decision After Trial and March 12, 2018 Partial
Judgment ruling that Defendant-Appellee Frontier Insurance Group,
LLC holds title to, and all reversionary interests in, land and
improvements thereon in Sullivan County, New York, that the parties
have labeled in this litigation "Parcels B and C."
Upon analysis, District Judge Cathy Seibel affirmed the bankruptcy
court's orders.
In 2001, the Supreme Court of the State of New York placed FIC in a
temporary rehabilitation proceeding under the New York Insurance
Law, and subsequently entered a final rehabilitation order. The
rehabilitation order vested the Superintendent of Insurance with
ownership and possession of FIC's property. The Superintendent of
Insurance is the statutory predecessor of the Superintendent of
Financial Services, meaning the Rehabilitator is
Plaintiff-Appellant's predecessor.
Frontier Insurance Group, Inc. was the corporate parent of FIC, and
on July 5, 2005, FIGI filed a voluntary petition in the U.S.
Bankruptcy Court for the Southern District of New York for relief
under chapter 11 of title 11 of the United States Code. Under
FIGI's chapter 11 plan, FIGL became FIGI's successor.
Plaintiff-Appellant argues that Judge Drain erred because neither
the Amended Plan nor the Amended Disclosure Statement indicated
that FIGI claimed any interest in Parcels B or C, and the court's
confirmation order made no reference to them. Accordingly,
Plaintiff-Appellant argues even though FIGI's Amended Schedule A
may have claimed an interest in those Parcels, because FIGI did not
"explicitly incorporate" its Amended Schedule A into its Disclosure
Statement or Plan, Judge Drain erred by considering it.
Plaintiff-Appellant offers no support for the notion that a
Schedule A must be "explicitly incorporated" into a Disclosure
Statement or Plan to be considered by the bankruptcy court. The
case on which Plaintiff-Appellant relies, In re Arcapita, involved
a plan in which the debtor defined its "Assets," in part, as "all
property disclosed in the Debtor's respective Schedules and the
Disclosure Statement," but that case did not hold that the language
emphasized above is required to give effect to a debtor's
schedules. To the contrary, cases often discuss whether a debtor
sufficiently disclosed or identified assets in "its Schedules,
Disclosure Statement or confirmed Plan." Here, FIGI filed with the
bankruptcy court its Schedule A and Amended Schedule A, and
referenced those schedules repeatedly in its Disclosure Statement
as the source from which FIGI listed, among other things, its
assets and creditors' claims, Thus, the Court sees no reason why it
would be error to consider FIGI's Amended Schedule A.
Except for Judge Drain's erroneous finding that Nana's House, the
pole barn, and the Headquarters shared an address, (id. at 20), all
of the bankruptcy court's factual findings are supported by
evidence in the record. And that error was only a partial one, as
Judge Drain was correct that the pole barn and the Headquarters
shared an address, and thus it would have been at least confusing
to attempt to identify Parcel C by that address or to refer to it
by the address of Nana's House, which might suggest FIGI was
claiming an interest in less than the full Parcel. Further, as
noted, the designations "Parcel A," "Parcel B," and "Parcel C" were
not used until the events giving rise to this dispute occurred.
Thus, as a practical matter, at the time the settlement and Plan
were negotiated and consented to by all parties, including the
Liquidator's predecessor, the Rock Hill property consisted of 1)
the Headquarters, 2) Nana's House and the pole barn, and 3) the
parking lots between them. Nobody thought of the land as three
parcels. By disclaiming any interest in the Headquarters and the
parking lot on its Parcel but claiming an interest in Nana's House,
the pole barn and their neighboring parking lots, FIGI indicated --
clearly enough for the Liquidator to understand, as he plainly did
-- that it was claiming an interest in what is now regarded as
Parcels B and C but not A.
Finally, testimony from FIC, the Rehabilitator, and FIGI support
the finding that they understood, at the time of FIGI's bankruptcy
proceeding, that FIGI owned the reversionary interests in Parcels B
and C.
Plaintiff-Appellant also argues that the bankruptcy court failed to
consider that FIC's rehabilitation status granted the state court
exclusive jurisdiction over the Parcels and prohibited FIC from
transferring any property interests to FIGI without permission from
the state court. But Judge Drain did not order that the Liquidator
transfer anything to FIGL or find that it had. He only found that
under the Plan, the reversionary interests in Parcels B and C
rested with FIGL, regardless of who might have owned them
pre-bankruptcy. He did not purport to strip the Liquidator of FIC's
interests, but rather only found that even assuming FIC had a right
to those interests, the Liquidators' predecessor had lost it when,
knowing that FIGI claimed the same interests, it consented to the
Plan that would vest them in FIGL.
A copy of the Court's Opinion and Order dated March 18, 2019 is
available at https://bit.ly/310m4yg from Pacermonitor.com at no
charge.
William F. Costigan , Costigan Law PLLC, New York, New York,
Counsel for Plaintiff-Appellant.
Robert E. Malchman , Allegaert Berger & Vogel LLP, New York, New
York, Counsel for Defendant-Appellee.
About Frontier Insurance
Frontier Insurance Company is a property and casualty insurer
domiciled in the State of New York. The company was placed in
rehabilitation and the New York Superintendent of Insurance was
appointed as Rehabilitator on Oct. 15, 2001, by order of the
Supreme Court of the State of New York, New York County.
Since 2001, Frontier has settled roughly 12,000 claims, paid
roughly $750 million in losses, and reduced its insolvency on a
statutory accounting basis from an estimated $170 million in 2001
to $90.6 million as of December 31, 2008.
On November 9, 2012, the Albany County Supreme Court converted
FIC's rehabilitation proceeding to a liquidation proceeding styled
In the Matter of the Liquidation of Frontier Insurance Co., Index
No. 97/06.
Frontier Insurance Group, LLC filed its Chapter 11 case (Bankr.
S.D.N.Y. Case No. 05-36877) on June 5, 2005. On December 2, 2005,
the Court confirmed the Debtor's chapter 11 plan, which became
effective on September 20, 2007. The plan vested certain property
of the Debtor -- principally cash and causes of action -- in a
liquidating trust for the benefit of creditors. On August 1, 2007,
this Court entered a final decree in the Debtor's chapter 11 case.
The case was closed on October 24, 2007.
GLASS MOUNTAIN: S&P Upgrades ICR to 'B' on Lower Forecast Leverage
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Glass
Mountain Pipeline LLC to 'B' from 'B-' to reflect its lower
forecast leverage following the company's decision to fund the
southern extension project with equity contributions from its
sponsor instead of raising debt through an incremental term loan
facility.
At the same time, S&P raised its issue-level rating on the
company's term loan B facility to 'B+' from 'B-' and revised its
recovery rating to '2' from '3' to reflect the lower level of debt
for repayment at default. The '2' recovery rating indicates S&P's
expectation for substantial (70%-90%; rounded estimate: 70%)
recovery in the event of a payment default.
The upgrade reflects the reduction in the company's forecast
leverage metrics due to the equity contribution. S&P now expects
Glass Mountain's 2019 term loan B debt balance to be $295 million
rather than $420 million with the previously proposed add-on.
"We also expect BlackRock to contribute equity to the company to
fund the southern expansion project," S&P said, adding that it
expects Glass Mountain's leverage metrics will be significantly
lower, including 6.4x in 2019 (versus 9.0x previously) and between
4.75x and 5.00x in 2020 (versus between 7.00x and 7.25x
previously). S&P's issuer credit rating on the company is now in
line with its rating prior to the announcement of the add-on. While
S&P expects Glass Mountain's leverage metrics to be lower, the
rating agency continues to assess its financial risk profile as
highly leveraged.
The negative outlook on Glass Mountain Pipeline LLC reflects S&P's
expectation that the company's adjusted debt to EBITDA will remain
above 6.25x in 2019 despite its lower leverage due to the equity
funding from its sponsor. However, S&P expects that the company's
leverage will improve over the medium term as the southern
expansion of its pipeline system comes online and it expands its
customer profile.
"We could lower our ratings on Glass Mountain if its leverage
remains above 6x through the first half of 2020. This could occur
due to lower-than-expected volume growth from depressed commodity
prices or delayed construction of the southern extension," S&P
said.
"We could revise our outlook on Glass Mountain to stable if its
leverage declines below 6x on a sustained basis. This could occur
if the company completes the southern extension of the pipeline and
realizes additional throughput volumes," S&P said.
GLENVIEW HEALTH: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Glenview Health Care Facility, Inc.
1002 Glenview Drive
Glasgow, KY 42141
Business Description: Glenview Health Care Facility Inc. owns and
operates a small health care facility with
60 beds that provides nursing home services.
Chapter 11 Petition Date: August 1, 2019
Court: United States Bankruptcy Court
Western District of Kentucky (Bowling Green)
Case No.: 19-10795
Judge: Hon. Joan A. Lloyd
Debtor's Counsel: Mark H. Flener, Esq.
MARK H. FLENER
P.O. Box 8
1143 Fairway Street, Suite 101
Bowling Green, KY 42102-0008
Tel: (270) 783-8400
Fax: (270) 783-8873
E-mail: mark@flenerlaw.com
mflener@bellsouth.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kay Bush, authorized representative of
the Debtor.
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/kywb19-10795.pdf
GOLDEN OIL: Hires Weycer Kaplan as Special Litigation Counsel
-------------------------------------------------------------
Golden Oil Holding Corporation seeks authority from the U.S.
Bankruptcy Court for the Southern District of Texas Jerrad D.
Bloome and Weycer, Kaplan, Pulaski & Zuber, P.C. as special
litigation counsel.
During Fall of 2018, Bernardo Polanco and his wife Angelica Polanco
(Respondents) agreed to repair and refurbish certain of the
Debtor's critically important oilfield equipment, which is property
of the estate.
Respondents have taken estate property and will not return it.
Respondents' refusal to turn over the estate property also inhibits
the Debtor's ability to operate the wells and perform the cleanup.
The Debtor requires WKPZ to:
-- assist Golden Oil in analyzing, prosecuting and/or defending
any claims relevant to regaining possession of the Equipment;
-- prepare and file such pleadings as are necessary regarding
regaining possession of the property of the estate;
-- conduct appropriate examinations of witnesses, claimants and
other parties in interest in connection with such litigation;
-- represent Debtor in any adversary proceedings and other
proceedings before the Court and in any other judicial or
administrative proceeding in which the claims described herein may
be affected;
-- handle any appeals that may result from the contemplated
litigation; and
-- perform any other legal services that may be appropriate in
connection with the prosecution of the litigation described above.
Mr. Bloome's hourly rate is $355/hour, and the paralegal rate is
$155/hour of the Firm.
Mr. Bloome assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
The firm can be reached at:
Jerrad D. Bloome, Esq.
Weycer, Kaplan, Pulaski & Zuber, P.C.
11 Greenway Plaza, Suite 1400
Houston, Tx 77046
Tel: (713) 961-9046
Fax: (713) 961-5341
About Golden Oil Holding Corporation
Based in Houston, Texas, Golden Oil Holding Corporation, a
privately held company in Houston, Texas, in the oil and gas
extraction business, filed a voluntary Chapter 11 petition (Bankr.
S.D. Tex. Case No. 18-31594) on March 30, 2018. The petition was
signed by Ralph McElvenny, president and director.
The case is assigned to Judge Karen K. Brown. The Debtor is
represented by Edward L. Rothberg, Esq., at Hoover Slovack, LLP, in
Houston, Texas.
At the time of filing, the Debtor had estimated assets of $1
million to $10 million and estimated liabilities of $100,000 to
$500,000.
GREGORY TE VELDE: Trustee's Surplus Vehicles/Equipment Auction OKd
------------------------------------------------------------------
Judge Fredrick E. Clement of the U.S. Bankruptcy Court for the
Eastern District of California authorized Randy Sugarman, the
Chapter 11 Trustee for Gregory John te Velde, to sell surplus
vehicles and equipment currently located at the G.J. te Velde Ranch
and Pacific Rim Dairy, listed in Exhibits A & B, by public action.
A hearing on the Motion was held May 22, 2019 at 1:30 p.m.
In the conduct of the auction, the Trustee is authorized to (1)
employ Ritchie Bros. Auctioneers as auctioneer for the Estate, and
(2) to pay compensation to the auctioneer of a 15% commission [or a
25% commission for any lot selling at less than $2,500].
The Trustee is authorized to disburse the net proceeds of sale of
the surplus equipment identified in Exhibit A to Rabo AgriFinance,
LLC, as successor in interest to Rabobank, N.A., on account of its
lien on these assets. He is also authorized to retain the net
proceeds of sale of the surplus vehicles identified in Exhibit B in
the general account of the Estate.
About Gregory John te Velde
Tipton, California-based Gregory John te Velde filed for Chapter 11
bankruptcy (Bankr. E.D. Cal. Case No. 18-11651) on April 26, 2018.
In his Chapter 11 petition, the Debtor estimated both assets and
liabilities between $100 million and $500 million. Mr. te Velde
does business as GJ te Velde Dairy, Pacific Rim Dairy and Lost
Valley Farm. He formerly did business as Willow Creek Dairy.
Judge Fredrick E. Clement oversees the bankruptcy case.
Mr. te Velde is represented by Riley C. Walter, Esq., who has an
office in Fresno, California.
H2O BAGEL: Seeks to Extend Plan Filing Deadline to Aug. 20
----------------------------------------------------------
H2O Bagel No. 2, LLC and its affiliates asked the U.S. Bankruptcy
Court for the Southern District of Florida to extend through Aug.
20 the deadline for the companies to file their proposed plan and
disclosure statement as well as the exclusivity period during which
only the companies can file a plan. They also asked the court
extend the exclusivity period to solicit acceptances for the plan
through Oct. 15.
"The debtors, after having finally closed on both sales liquidating
their assets, are preparing to file a motion to voluntarily dismiss
these cases and disburse funds to creditors," said the companies'
attorney, Eric Pendergraft, Esq., at Shraiberg, Landau & Page,
P.A., in Florida. "In an abundance of caution, the debtors believe
it is prudent to avoid the lapsing of the Plan Deadline and the
Exclusive Filing Period."
Accordingly, cause exists to extend the Plan Deadline, the
Exclusive Filing Period, and the Exclusive Solicitation Period by
thirty days in order to preserve the status quo in the short term.
About H2O Bagel No. 2
H2O Bagel No. 2, LLC, is a specialty store retailer in Boca Raton,
Florida. H2O Bagel No. 2 and its affiliate The Original Brooklyn
Store, LLC, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case Nos. 18-17542 and 18-17544) on June 22,
2018. H2O Bagel Parkland filed a Chapter 11 petition on July 9,
2018. All three cases are jointly administered under Case No.
18-17542.
At the time of the filing, H2O Bagel No. 2 estimated assets of less
than $50,000 and liabilities of $10 million.
The Debtor tapped Philip Landau, Esq., and the law firm of
Shraiberg, Landau & Page, P.A. as its general bankruptcy counsel.
The Office of the U.S. Trustee advised the Court on Aug. 28, 2018,
that until further notice, it will not appoint a committee of
creditors in the Debtors' cases.
HONEY BEE BAKERS: Authorized to Use Schertz Bank Cash Collateral
----------------------------------------------------------------
Judge Ronald B. King of the U.S. Bankruptcy Court for the Western
District of Texas has entered a second interim order authorizing
Honey Bee Bakers LLC to use the cash collateral of Schertz Bank &
Trust until Aug. 14, 2019.
The Debtor may use cash solely for the purpose of funding utility
and insurance premium payments while the Real Property is being
marketed. The Debtor will list the property for sale and obtain a
contract for sale no later than Nov. 8, 2019. The projected utility
and insurance costs are as follows: $1,100 (estimated) for
utilities service, $1,500 for insurance.
Schertz Bank & Trust Bank has two claims from two loans with
balances which total approximately $1,067,000 as of the Petition
Date pursuant to certain loan documents and instruments executed in
connection with extensions of credit.
Schertz Bank is granted a valid, perfected and enforceable first
priority and senior security interest, in accordance with and based
upon the validity and extent of its pre-petition liens, in and upon
all of the presently existing and hereafter acquired or arising
property of the Debtor and the bankruptcy estate. Schertz Bank
security interest in the Post-Petition Collateral will be subject
to no equal or prior lien recorded lien, whether previously,
contemporaneously or hereafter granted.
The Debtor is also required to: (a) continue to maintain, insure
and otherwise preserve and protect all Prepetition and
Post-Petition Collateral, including payment of utilities; and, (b)
provide all financial and other reports required to be provided to
Schertz Bank & Trust under the Loan Agreements.
A copy of the Second Interim Cash Collateral Order is available for
free at
http://bankrupt.com/misc/txwb19-51334-29.pdf
About Honey Bee Bakers
Honey Bee Bakers, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 19-51334) on June 3,
2019. At the time of the filing, the Debtor disclosed assets of
less than $50,000 and liabilities of less than $500,000. The
petition was signed by James E. Schrad, managing majority partner.
The Debtor is represented by Michael J. O'Connor, Esq., at the Law
Office of Michael J. O'Connor.
HUTCHESON MEDICAL: CMC Suit vs Blue Cross Remanded to State Court
-----------------------------------------------------------------
Bankruptcy Judge Paul W. Bonapfel remands the adversary proceeding
captioned CORNERSTONE MEDICAL CENTER, LLC; and VALORBRIDGE PARTNERS
LLC, Plaintiffs, v. BLUE CROSS/BLUE SHIELD HEALTHCARE PLAN OF
GEORGIA, INC.; and BLUE CROSS AND BLUE SHIELD OF GEORGIA INC.,
Defendants, Adversary No. 18-04025-pwb (Bankr. N.D. Ga.) to the
Superior Court of Walker County and leave resolution of the motion
to dismiss for that Court.
The adversary proceeding began with a complaint that the
Plaintiffs, Cornerstone Medical Center, LLC and Valorbridge
Partners, LLC filed against the Defendants, Blue Cross and Blue
Shield of Georgia, Inc. and Blue Cross/Blue Shield Healthcare Plan
of Georgia, Inc. in the Superior Court of Walker County, Georgia.
The complaint states claims against the Defendants for fraud and
for breach of fiduciary duty based on their refusal to reimburse
Cornerstone for hospital and medical services provided to their
insureds. Because the allegations involve the purchase of the
hospital assets in a bankruptcy sale and a motion to assume and
assign a contract with BCBS Georgia, the Defendants removed it to
this Court under 28 U.S.C. section 1452(a). They invoked bankruptcy
jurisdiction under 28 U.S.C. section 1334(b), which covers civil
actions "arising in" or "relating to" bankruptcy cases.
After removal, the Defendants moved to dismiss the complaint and
the Plaintiffs moved to remand it to the Superior Court.
This adversary proceeding involves claims under Georgia tort law
originally brought in a Georgia court. None of the Plaintiffs or
Defendants is a party in interest in the Debtors' bankruptcy cases,
the outcome of this litigation will have no effect on the
administration of these cases, the estates of the Debtors, or their
creditors; and bankruptcy law does not govern the rights and duties
of the parties in any material way. Principles of comity and the
proper allocation of scarce federal judicial resources favor the
prosecution of this lawsuit in the Superior Court where it
originated and in Georgia's judicial system where state law tort
claims are regularly determined. The Plaintiffs' choice of forum is
entitled to deference, and remand will cause no cognizable
prejudice to the Defendants.
For all of these reasons, the Court concludes that equitable
grounds exist for remand under 28 U.S.C. section 1452(b), and the
Court will exercise its discretion to remand this proceeding to the
Superior Court of Walker County, Georgia.
A copy of the Court's Order dated March 18, 2019 is available at
https://bit.ly/2Gz6S3u from Leagle.com at no charge.
Cornerstone Medical Center LLC, ApolloMD Business Services, L.L.C.
& ValorBridge Partners LLC, Plaintiffs, represented by Richard E.
Crum, Shealy, Crum & Pike, P.C.
Blue Cross and Blue Shield of Georgia, Inc. & Blue Cross Blue
Shield Healthcare Plan of Georgia, Inc., Defendants, represented by
Jaime L. Theriot, Troutman Sanders LLP.
About Hutcheson Medical Center
Hutcheson Medical Center, Inc., operates the 179-bed hospital and
related ancillary facilities, including, without limitation, a
skilled nursing home and an ambulatory surgery center, located in
Ft. Oglethorpe, Georgia, known as Hutcheson Medical Center. HMC
leases the land and buildings that comprise the Medical Center from
The Hospital Authority of Walker, Dade and Catoosa Counties.
HMC and Hutcheson Medical Division, Inc., sought Chapter 11
bankruptcy protection (Bankr. N.D. Ga. Case No. 14-42863 and
14-42864) in Rome, Georgia, on Nov. 20, 2014. The cases are
jointly administered under Case No. 14-42863.
The cases have been assigned to the Honorable Paul W. Bonapfel.
The Debtors are represented by Ashley Reynolds Ray, Esq., and J.
Robert Williamson, Esq., at Scroggins and Williamson, in Atlanta,
Georgia.
HMC disclosed $32.8 million in assets and $52.9 million in
liabilities as of the Chapter 11 filing.
Ronald Glass, the Chapter 11 Trustee of Hutcheson Medical Center,
Inc., hired Alston & Bird LLP, as counsel.
IFRESH INC: All Five Proposals Approved at Annual Meeting
---------------------------------------------------------
iFresh, Inc., held its Annual Meeting of Stockholders on July 30,
2019, at which the stockholders:
(1) elected Long Deng, Lilly Deng, Harvey Leibowitz, Mark
Fang, and Jay Walder as directors for one-year terms
expiring on the next annual meeting of stockholders;
(2) ratified the appointment of Friedman LLP to serve as the
Company's independent registered public accounting firm
for the fiscal year ended March 31, 2019;
(3) approved, by a non-binding vote, the Company's executive
compensation;
(4) approved, by a non-binding vote, the yearly frequency of
future Stockholder advisory votes relating to the
Company's executive compensation; and
(5) approved the Company's 2019 Equity Incentive Plan.
About iFresh, Inc.
iFresh Inc., headquartered in Long Island City, New York --
http://www.ifreshmarket.com/-- is an Asian American grocery
supermarket chain and online grocer. iFresh currently has 10
retail supermarkets across New York, Massachusetts and Florida. In
addition to retail supermarkets, iFresh operates two in-house
wholesale businesses, Strong America Inc. and New York Mart Group,
that offer more than 6,000 wholesale products and service to iFresh
retail supermarkets and over 1,000 external customers including
wholesale stores, retail supermarkets, and restaurants.
iFresh Inc. reported a net loss of $12 million for the year ended
March 31, 2019, compared to a net loss of $791,293 for the year
ended March 31, 2018. As of March 31, 2019, iFresh had $47.10
million in total assets, $48.13 million in total liabilities, and a
total shareholders' deficiency of $1.03 million.
Friedman LLP, in New York, the Company's auditor since 2016, issued
a "going concern" qualification in its report dated June 28, 2019,
citing that the Company incurred operating losses and did not meet
the financial covenant required in its credit agreement. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
IFRESH INC: Board OKs Resignation of VP of Human Resources
----------------------------------------------------------
Mei Deng tendered her resignation as vice president of Human
Resources of iFresh Inc., effective July 1, 2019. Ms. Deng's
resignation was not the result of any disagreement with the
Company's operations, policies or procedures, according to a Form
8-K filed by the Company with the Securities and Exchange
Commission.
The resignation was approved by the Board of Directors of the
Company on Aug. 1, 2019. The Company has decided that the position
is not necessary and does not expect to appoint successor to this
position.
About iFresh, Inc.
iFresh Inc., headquartered in Long Island City, New York --
http://www.ifreshmarket.com/-- is an Asian American grocery
supermarket chain and online grocer. iFresh currently has 10
retail supermarkets across New York, Massachusetts and Florida. In
addition to retail supermarkets, iFresh operates two in-house
wholesale businesses, Strong America Inc. and New York Mart Group,
that offer more than 6,000 wholesale products and service to iFresh
retail supermarkets and over 1,000 external customers including
wholesale stores, retail supermarkets, and restaurants.
iFresh Inc. reported a net loss of $12 million for the year ended
March 31, 2019, compared to a net loss of $791,293 for the year
ended March 31, 2018. As of March 31, 2019, iFresh had $47.10
million in total assets, $48.13 million in total liabilities, and a
total shareholders' deficiency of $1.03 million.
Friedman LLP, in New York, the Company's auditor since 2016, issued
a "going concern" qualification in its report dated June 28, 2019,
citing that the Company incurred operating losses and did not meet
the financial covenant required in its credit agreement. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
IHEARTCOMMUNICATIONS INC: Moody's Rates New $500MM Notes B1
-----------------------------------------------------------
Moody's Investors Service assigned a B1 rating to
iHeartCommunications, Inc.'s proposed $500 million senior secured
notes due 2027. The B2 Corporate Family Rating and B2-PD
Probability of Default Rating are unchanged. Additionally, the B1
rating on the $3.5 billion senior secured term loan due 2026, the
B1 rating on the $800 million senior secured notes due 2026, and
the Caa1 rating on the $1.45 billion senior unsecured notes due
2027 are also unchanged. The outlook is unchanged at stable.
The projected net proceeds of the offering of $494 million are
anticipated to repay a similar amount of the existing senior
secured term loan. The transaction is largely leverage neutral and
Moody's expects the company to achieve a modest reduction in
interest expense.
Summary of Moody's actions:
Issuer: iHeartCommunications, Inc.:
$500 million senior secured first lien note due 2027, Assigned a B1
(LGD3)
RATINGS RATIONALE
iHeart's B2 CFR reflects the high pro forma leverage level of 5.9x
as of LTM Q1 2019 (excluding Moody's standard lease adjustments)
following the exit from bankruptcy and separation from Clear
Channel Outdoor Holdings, Inc. in May 2019. Moody's expects
leverage to decline from modest EBITDA growth as well as debt
repayment. iHeart is constrained by the negative secular trends in
the radio industry as well as its sensitivity to a decline in the
economy. As a result, competition for listeners and advertiser
dollars are expected to remain high going forward. iHeart benefits
from its size as the largest radio operator in the US as well as
its geographic diversity and leading market positions in most of
the approximately 160 markets in which it operates. iHeart also
derives strength from its iHeartRadio service, live events,
syndicated network, podcasting service, and data analytics
services. iHeart has EBITDA margins above the industry average at
27% as of Q1 2019. While most of the revenue comes from local
advertising revenue, iHeart has an advantage in obtaining national
advertising dollars given its leading position in the industry.
The SGL-3 liquidity rating reflects iHeart's adequate liquidity
profile due to its $450 million ABL revolving credit facility due
in 2023 (not rated by Moody's) as well as its cash balance of
approximately $30 million pro forma for the separation of the
outdoor group and reorganization adjustments as of March 31, 2019.
Moody's expects free cash flow to be directed to debt repayment or
reinvested back into the business in the near term. iHeart is
projected to spend approximately $130 million in capex in 2019 and
is not expected to pay a dividend in the near term. iHeart also has
$60 million in preferred equity outstanding which is not included
in Moody's leverage calculation but raises the potential for free
cash flow or additional debt to be used to repay the preferred over
time. The ABL credit facility is subject to a fixed charge coverage
ratio of at least 1x if borrowing availability is less than the
greater of $40 million and 10% of the aggregate commitments for two
consecutive days. The term loan and secured note are covenant
lite.
The stable outlook reflects Moody's projection of low single digit
revenue and EBITDA growth that is expected to lead to a modest
reduction in leverage by the end of 2019. iHeart is projected to
face a reduction in political ad spend in a non-election year and
challenging conditions in the radio industry over time.
A reduction in leverage to under 5x with sustained organic revenue
and EBITDA growth with stable EBITDA margins could lead to an
upgrade. Free cash flow as a percentage of debt would also have to
be well above 5% with a strong liquidity position and no near term
debt maturities.
The rating would be downgraded if EBITDA were to decline due to
economic weakness or if secular pressures in the radio industry
increased so that leverage increased above 6x. A deterioration in
its liquidity position could also lead to negative rating
pressure.
The principal methodology used in this rating was Media Industry
published in June 2017.
iHeartCommunications, Inc. with its headquarters in San Antonio,
Texas, is the leading terrestrial radio operator in the US. In
addition, iHeart operates its iHeartRadio digital platform, live
events, syndicated network, data analytic services, and podcasting
service. iHeart emerged from Chapter 11 bankruptcy protection and
separated from Clear Channel Outdoor Holdings, Inc. in Q2 2019.
Consolidated revenue pro forma from the separation from Clear
Channel Outdoor was approximately $3.6 billion as of Q1 2019.
IHEARTMEDIA INC: S&P Rates Subsidiary's New $500MM Sec. Notes BB-
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '2'
recovery rating to the proposed $500 million senior secured notes
due 2027 issued by San Antonio-based radio broadcaster iHeartMedia
Inc.'s subsidiary iHeartCommunications Inc. The '2' recovery rating
indicates S&P's expectation for substantial (70%-90%; rounded
estimate: 75%) recovery for lenders in the event of a payment
default. iHeartMedia plans to use the proceeds from these notes to
repay a portion of its outstanding $3.5 billion senior secured term
loan B maturing in 2026. The rating agency expects that the
transaction will reduce iHeartMedia's annual interest expense by
around $5 million.
"Our 'B+' issuer credit rating and stable outlook on iHeartMedia
remain unchanged because the proposed transaction will not affect
its net leverage. We continue to expect the company's net leverage
to approach 5x over the next 12 months due to a combination of
voluntary debt repayment and EBITDA growth in the low-single-digit
percent area, supported by modest revenue growth and cost-saving
initiatives," S&P said.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Following the transaction, iHeartCommunications Inc. will be
the borrower of an unrated $450 million senior secured asset-based
lending (ABL) facility maturing in 2023, a $3.5 billion senior
secured term loan maturing in 2026 ($3 billion outstanding), $800
million of 6.375% senior secured notes due in 2026, $500 million of
senior secured notes due in 2027, and $1.5 billion of 8.375% senior
unsecured notes due in 2027.
-- 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.
-- All debt is guaranteed by iHeartCommunications' existing and
future material wholly owned subsidiaries and iHeartMedia Capital I
LLC (its direct parent).
Simulated default assumptions
-- S&P's simulated scenario contemplates a default occurring in
2023 primarily due to increased competition from alternative media
and a cyclical downturn in advertising that materially reduce
iHeartMedia's revenue and cash flow given its largely fixed cost
base.
-- Other default assumptions include a 60% draw on the ABL
facility, LIBOR of 2.5%, and all debt includes six months of
prepetition interest.
-- S&P has valued the company on a going-concern basis using a 6x
multiple of its projected emergence EBITDA, which is in line with
that of other radio companies S&P rates.
Simplified waterfall
-- EBITDA at emergence: $650 million
-- EBITDA multiple: 6x
-- Gross recovery value: $3.9 billion
-- Net recovery value for waterfall after administrative expenses
(5%): $3.7 billion
-- Estimated priority claims: $215 million
-- Value available for senior secured debt: $3.5 billion
-- Estimated senior secured debt: $4.4 billion
-- Recovery expectations: 70%-90% (rounded estimate: 75%)
-- Value available for senior unsecured debt: $0
-- Estimated senior unsecured debt: $1.5 billion
-- Recovery expectations: 0%-10% (rounded estimate: 0%)
INVERNESS VILLAGE: Court OKs Interim DIP Loan, Cash Collateral Use
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Oklahoma
authorized Inverness Village to obtain DIP financing from UMB Bank,
National Association, on an interim basis, for a maximum aggregate
principal of $920,200 at an interest of 4.25% per annum. The
Interim DIP Loan is due and payable on the earlier of (i) September
1, 2019 - the DIP Loan maturity date, (ii) the occurrence of an
event of default, and (iii) the closing of a sale of all or
substantially all of the Debtor's assets.
The Court also authorized Inverness to use cash collateral until
Sept. 1, 2019, absent the event of a default, to pay (i) the
necessary operating and maintenance costs of a modern senior living
retirement facility operated by the Debtor, and (ii) the
administrative costs and expenses of its Chapter 11 case, pursuant
to a budget.
UMB Bank is the prepetition indenture trustee with respect to bonds
under a (a) Trust Indenture dated as of May 1, 2012, and (b) a
Trust Indenture dated as of July 1, 2013, between the Oklahoma
Development Finance Authority and UMB Bank. UMB Bank is also
master trustee with respect to the Master Notes issued under a
Master Trust Indenture dated as of Nov. 1, 2007, among the Debtor,
its sole member, Asbury Communities, Inc., and UMB Bank.
Following issuance by Oklahoma Development Finance Authority of (i)
$47,130,000 in original aggregate principal amount of its
Continuing Care Retirement Community Revenue Refunding Bonds
pursuant to the 2012 Bond Indenture, and (ii) $24,100,000 in
original aggregate principal amount pursuant to the 2013 Bond
Indenture, the Authority loaned to the Debtor the proceeds from the
sale of the Bonds under two separate loan agreements dated as of
May 1, 2012 and July 1, 2013. The proceeds were used to (i)
refinance previously issued obligations relating to the Inverness
Facility;(ii) fund reserves for the respective Bonds; and (iii) pay
certain costs of issuing the respective Bonds. The Debtor
subsequently issued Master Notes in the principal amounts of the
Series 2012 and Series 2013 Bonds to secure the payment of the
Bonds.
Pursuant to this Order, as security for the amounts owed on the
Master Notes, the Debtor granted to the Master Trustee, pursuant to
the Master Indenture, (i) all gross revenues of the Debtor,
excluding certain items specified in the Master Indenture, (ii) all
personal property of the Debtor as set forth in the Master
Indenture, (iii) any amounts on deposit in any fund or account
created under the Master Indenture, and, (iv) the real property of
the Debtor pursuant to a certain mortgage dated Nov. 1, 2007.
The Court further ordered that, as adequate protection, UMB Bank as
Bond Trustee, will be granted rollover liens for any decrease in
the value of the prepetition collateral. Moreover, Bond Trustee is
granted valid and perfected continuing supplemental liens on, and
security interest in, all of the assets of the Debtor whether
acquired or arising before or after the Petition Date, excluding
avoidance actions and proceeds thereof, subject to post-petition
liens and the carve-out. The Bond Trustee also shall receive a
super-priority claim on all unpaid administrative expenses.
Prepetition, on Dec. 20, 2018, the Debtor and UMB Bank entered into
a Forbearance Agreement, approved by order of the District Court of
Creek County, State of Oklahoma, following Bond Trustee’s
petition and application for appointment of a receiver. In the
Forbearance Agreement, Debtor acknowledged liability on the Bond
Claim, without setoff or counterclaim, and that the Prepetition
Liens constitute a first priority security interest in all of the
Prepetition Collateral .
As of Petition Date, the Debtor owes UMB Bank, with respect to the
Bonds, (i) $37,515,000 in principal and $2,220,753.75 in accrued
interest on the Series 2012 Bonds, (ii) $24,110,000 in principal
and $1,464,680.42 in accrued interest on the Series 2013 Bonds.
The Debtor has sought postpetition loan financing from UMB Bank of
up to $2,200,000, with $920,200 of such amount to be made available
on an interim basis.
A hearing to consider final approval of the Debtor's authority to
borrow in excess of the Interim DIP Loan, and its use of cash
collateral, is set on August, 14, 2019 at 9:30 a.m. in Courtroom
No. 1, The Federal Building, 224 South Boulder Avenue, Tulsa,
Oklahoma. Objections must be filed and served before 3:00 p.m. CST
on Aug. 7, 2019.
Counsel to the DIP Loan Lender and Bond Trustee can be reached at:
Daniel S. Bleck
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Phone: (617) 348-4498
E-mail: DSBleck@mintz.com
- and -
Mark Craige
Crowe & Dunley
321 S. Boston
500 Kennedy Building
Tulsa, OK 74103
About Inverness Village
Inverness Village -- https://www.invernessvillage.com/ -- is an
Oklahoma not-for-profit corporation that operates the Inverness
Village continuing care retirement community. The Inverness
Facility is a modern senior living community that was completed in
2003 and accommodates residents' needs based on their required
level of care through its integrated independent living facility,
assisted living facility, and skilled nursing, and memory-care
facilities.
On July 22, 2019, Inverness Village sought Chapter 11 protection
(Bankr. N.D. Okla. Case No. 19-11510) in Tulsa.
The Debtor disclosed $62.3 million in assets and $174.9 million in
debt as of June 30, 2019.
The Hon. Dana L. Rasure is the case judge.
The Debtor tapped TOMLINS & PETERS, PLLC, as counsel; CONNER &
WINTERS, LLP, as co-counsel; RBC CAPITAL MARKETS, LLC and B. RILEY
FBR, INC., as investment bankers; and GLASSRATNER ADVISORY &
CAPITAL GROUP, LLC, as financial advisor. EPIQ CORPORATE
RESTRUCTURING, LLC, is the claims agent.
JAMES MEDICAL: DOJ Watchdog Seeks Appointment of Examiner
---------------------------------------------------------
A hearing regarding Paul A. Randolph, the Acting U.S. Trustee for
Region 8's motion to appoint a Chapter 11 Examiner pursuant to
Section 1104(c) of the Bankruptcy Code in the bankruptcy case of
James Medical Equipment, Ltd., is scheduled for Aug. 13, 2019, at
01:30 PM (Eastern time).
The U.S. Trustee asserts that an examiner should be authorized to
conduct an investigation of the conduct of the Debtor and the
Debtor-in-Possession, which would include acts or conduct of
possible fraud, dishonesty, incompetence, mismanagement or other
irregularities in the management of the Debtor, including but not
limited to any possible irregularities in the prepetiton or
postpetition management of the Debtors or the DIP's accounts
receivables or inventory.
In part, the U.S. Trustee has formed this position, based on, among
other things, the report prepared by iHealth Solutions LLC, d/b/a
Advantum Health, suggests that the Debtor collected a total of
$211,043.98 in April, 2019. The April MOR indicates that the A/R
also increased by an additional $190,571 in that same month. Read
together, even with Advantum, the Debtor only collected 55% of the
Debtor's total receivables in April 2019. Advantum is an agency
that generally assists clients with their receivables, by charging,
capturing, posting, scrubbing and submitting accounts receivables.
The U.S. Trustee added that although it has requested information
about the metric's used to compile Advantum's report, the DIP has
failed to provide this information. Pursuant to the DIP's contract
with Advantum, as approved by the Court, Advantum would provide the
DIP with certain key financial metrics which it tracked, including
charges, volumes, payment trends, aging, collection statistics,
write-off reasons, turnaround rates, payment delay reasons and
provider comparisons. When the U.S. Trustee requested this
information, the DIP appears not to have any idea what these were
or how to get them.
The U.S. Trustee points out that the Debtor's monthly operating
reports also demonstrate that the DIP's cash balances have been
consistently decreasing: The cash balances have gone from $42,429
in March to a negative balance of $-16,085 as of May 31, 2019.
Further, the U.S. Trustee points out that the DIP admits that its
records are not accurate and reliable.
About James Medical Equipment
James Medical Equipment, Ltd.'s line of business includes renting
or leasing medical equipment. The company was founded in 1979 and
is based in Campbellsville, Ky.
James Medical Equipment filed a voluntary Chapter 11 petition
(Bankr. W.D. Ky. Case No. 19-10187) on March 1, 2019. At the time
of filing, the Debtor estimated $1 million to $10 million in both
assets and liabilities. The case is assigned to Judge Joan A.
Lloyd. The Debtor tapped David M. Cantor, Esq., at Seiller
Waterman LLC, as its legal counsel.
KENNY STRANGE: Exclusivity Period Extended Until Sept. 30
---------------------------------------------------------
Judge Karen Specie of the U.S. Bankruptcy Court for the Northern
District of Florida extended to Sept. 30 the period during which
only Kenny Strange Electric, Inc. can file a plan. The bankruptcy
judge also extended the period during which the company has the
right to confirm a plan to Sept. 30 or 45 days after the company's
plan is filed.
About Kenny Strange Electric Inc.
Kenny Strange Electric, Inc. provides electrical work and services.
It was founded in 2004 and is based in Panama City, Florida.
Kenny Strange Electric sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 19-50012) on Jan. 23,
2019. At the time of the filing, the Debtor disclosed $2,405,817
in assets and $790,920 in liabilities.
The case has been assigned to Judge Karen K. Specie. The Debtor
tapped David Jennis, P.A. as its legal counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Kenny Strange Electric, Inc. as of Feb. 26,
according to a court docket.
KEVIN WRIGHT: $79K Private Sale of Philadelphia Property Approved
-----------------------------------------------------------------
Judge Jean K. FitzSimon of the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania authorized Kevin J. Wright's
private sale of the real estate located at 2707 Ingram Street,
Philadelphia, Pennsylvania to Greys Ferry 09, LLC or Assigns for
$78,500.
The Debtor is authorized to pay at closing real estate and transfer
taxes, water/sewer liens, 6% realtor's commission to Keller
Williams, Center City and other ordinary settlement costs.
Kevin J. Wright sought Chapter 11 protection (Bankr. E.D. Penn.
Case No. 15-17104) on Oct. 1, 2015.
LANTHEUS HOLDINGS: S&P Affirms 'B+' ICR; Outlook Stable
-------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
Billerica, Mass.-based diagnostic medical imaging agent provider
Lantheus Holdings Inc.
The rating affirmation follows the company's refinancing of its
$275 million term loan and $75 million revolver with a new $200
million term loan facility and $200 million revolving credit
facility, using approximately $73 million of cash on hand to reduce
debt balances. The new term loan and revolving credit facility are
unrated at the company's request.
The ratings on Lantheus incorporate the recent deleveraging as part
of its refinancing and strong cash flow generation, as well as the
business pressures leading to lower growth in 2019. S&P believes
the company has sufficient capital to pursue partnerships with
modest up-front payments or larger acquisitions, and that there is
no immediate need for the company to increase debt.
S&P's stable outlook on Lantheus reflects its expectation that the
company will maintain market leadership in top product DEFINITY,
despite a likely increase in domestic competition in the near term
and continued pricing pressure.
"We could lower the rating if financial performance suffers
materially from competitive pressures in DEFINITY, or further
supply disruptions with TechneLite, or if the company takes on a
more aggressive financial policy, resulting in materially weaker
credit measures," S&P said. This could occur if Lantheus pursues
debt-financed acquisitions of approximately $120 million or if
EBITDA margins decline 300 basis points, which would push adjusted
debt leverage above 4.0x, according to the rating agency.
"Although highly unlikely, we could raise the rating if Lantheus
meaningfully broadens its product offerings and increases scale
while continuing to grow its current business. This could occur if
EBITDA margins remain around 25%, with adjusted debt leverage
sustained below 3.0x," S&P said.
LAREDO HOUSING: S&P Suspends 'CCC+' Rating on 1994 Revenue Bonds
----------------------------------------------------------------
S&P Global Ratings has suspended its 'CCC+' rating on the Laredo
Housing Finance Corp., Texas' series 1994 single-family mortgage
revenue bonds due to the trustee's delay in providing sufficient
information to maintain the rating.
On May 1, 2019, the bonds were placed on CreditWatch with negative
implications due to S&P's view of lack of sufficient information to
complete its review on the bonds.
Due to the bonds' distressed position and because the rating is
subject to S&P's "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And
'CC' Ratings" (published Oct. 1, 2012), the rating agency said it
is essential to determine the likelihood of default on the bonds to
appropriately determine the ratings as set forth in the criteria.
S&P has requested and failed to receive from the trustee financial
information regarding fund balances and updated debt service
schedule to project the potential default date.
"Our continued inability to obtain the requested information within
30 days will likely result in our withdrawal of the affected
rating, preceded, in accordance with our policies, by any change to
the rating that we consider appropriate given available
information," said S&P credit analyst Jose Cruz. "However, if we
receive information that we consider sufficient and of satisfactory
quality within this 30 day time frame, we will conduct a review and
take appropriate rating action."
LBI MEDIA: Seeks Extension of Exclusive Period to Nov. 16
---------------------------------------------------------
LBI Media, Inc. and its affiliated debtors request the U.S.
Bankruptcy Court for the District of Delaware to extend their
exclusive period to file a chapter 11 plan for each Debtor, through
and including Nov. 16, 2019, as well as their exclusive period to
solicit acceptances of a chapter 11 plan, through and including
Jan. 15, 2020.
The Debtors are requesting for extension solely to continue working
towards obtaining regulatory approval for effectiveness of the
Plan.
The Debtors commenced these Chapter 11 Cases to accomplish a
comprehensive financial restructuring that would, among other
things: (i) deleverage their capital structure and better position
the Debtors to compete in the highly competitive television and
radio broadcasting and production industry; (ii) maximize
recoveries for their economic stakeholders; and (iii) preserve more
than 1,000 jobs and maintain key customer and vendor relationships
that are critical to their businesses.
The Debtors have made significant progress towards that goal.
Indeed, on April 17, the court confirmed the Third Amended Joint
Chapter 11 Plan of Reorganization of the Debtors. However, the Plan
will not become effective until regulatory approvals of the
transactions contemplated thereby are obtained. The Debtors have
filed the necessary applications to seek such regulatory approval,
and are preparing for emergence, but recognize that it may require
additional time to obtain approval.
About LBI Media
Headquartered in Burbank, California, LBI Media --
http://www.lbimedia.com/-- is a national television and radio
broadcasting company that was co-founded in 1987 by Lenard
Liberman, LBI's chief executive officer, and his father Jose
Liberman, who immigrated to the United States from Mexico in 1946.
LBI is a national media company that owns or licenses 27
Spanish-language television stations and radio stations in the
United States, as well as EstrellaTV, a Spanish-language television
broadcast network.
LBI Media Inc and more than 15 of its affiliates filed for
bankruptcy protection (Bankr. D. Del. Case No. 18-12655) on Nov.
21, 2018.
In the petition signed by CFO Brian Kei, the Debtors reported total
assets of $238.7 million and total liabilities of $532.9 million as
of June 30, 2018.
Richards Layton & Finger, P.A., and Weil, Gotshal & Manges LLP
serve as counsel to the Debtors. Guggenheim Securities LLC has been
tapped as investment banker, Alvarez & Marsal North America LLC as
financial advisor, and Epiq Corporate Restructuring LLC as claims
and noticing agent.
Andrew Vara, acting U.S. trustee for Region 3, on Dec. 6, 2018,
appointed five creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of LBI Media, Inc. and
its affiliates. The Committee tapped Squire Patton Boggs (US) LLP
as lead counsel, Bayard, P.A., as co-counsel, and Dundon Advisers
LLC as financial advisor.
LEGRACE CORP: Hires Oaktree Law as General Bankruptcy Counsel
-------------------------------------------------------------
Legrace Corp. seeks authority from the U.S. Bankruptcy Court for
the Central District of California (Santa Ana) to employ Julie J
Villalobos and Oaktree Law as general bankruptcy counsel.
Legrace requires Oaktree to:
a. advise the Debtor regarding matters of bankruptcy law and
concerning the requirement of the Bankruptcy Code, and Bankruptcy
Rules relating to the administration of this case, and the
operation of the Debtor's estate as a debtor in possession;
b. represent the Debtor in proceedings and hearings in the
court involving matters of bankruptcy law;
c. assist in compliance with the requirements of the Office of
the United States trustee;
d. provide the Debtor legal advice and assistance with respect
to the Debtor's powers and duties in the continued operation of the
Debtor's business and management of property of the estate;
e. assist the Debtor in the administration of the estate's
assets and liabilities;
f. prepare necessary applications, answers, motions, orders,
reports and/or other legal documents on behalf of the Debtor;
g. assist in the collection of all accounts receivable and
other claims that the Debtor may have and resolve claims against
the Debtor's estate;
h. provide advice, as counsel, concerning the claims of
secured and unsecured creditors, prosecution and/or defense of all
actions;
i. prepare, negotiate, prosecute and attain confirmation of a
plan of reorganization.
The firm's hourly rates are:
Julie Villalobos, Esq. $400
Larry Fieselman, Esq., $400
Justin Kirk $300
Ryan Moradi $150
Jennifer Leonard $150
Oaktree Law received a pre-bankruptcy retainer in the sum of
$20,000.
Ms. Villalobos, owner of Oaktree Law, disclosed in a court filing
that she does not hold any interests adverse to the Debtor's
estate, creditors or equity security holders.
The firm can be reached through:
Julie J. Villalobos, Esq.
Oaktree Law
10900 183rd St., Suite 270
Cerritos, CA 90703
Tel: 562-741-3938
Fax: 888-408-2210
Email: julie@oaktreelaw.com
About Legrace Corp.
Based in Orange, California, Legrace Corp. filed its Voluntary
Petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. C.D. Cal. Case no. 19-12812) on July 22,
2019. Julie J Villalobos at Oaktree Law represents the Debtor as
counsel.
LEHMAN BROTHERS: Court Junks Defendants' Bid for Leave to Appeal
----------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliates brought adversary
proceedings against more than 100 Defendants seeking
indemnification for losses relating to the purchase and sale of
mortgage-backed securities. Approximately 70 of those Defendants
filed motions to dismiss for lack of subject-matter jurisdiction
and venue. The Bankruptcy Court denied the motions in an order
dated August 13, 2018. The Movants seek leave to appeal the
Bankruptcy Court's Order. In the alternative, all but a handful of
the Movants ask this Court to treat the Order as proposed findings
of fact and conclusions of law and to subject the Order to an
immediate de novo review.
Upon review, District Judge Valerie Caproni denied the motions for
leave to appeal and for an immediate de novo review of the
Bankruptcy Court's Order.
The Court agrees with the Bankruptcy Court that it is not necessary
to determine which test applies in these cases because they easily
satisfy the "close nexus" test. The "close nexus" test has two
requirements: first, the case must "affect[] the interpretation,
implementation, consummation, execution or administration of the
confirmed plan," and second, the bankruptcy plan "must provide for
the retention of jurisdiction over the dispute." Accordingly, there
is no "substantial ground for difference of opinion" over whether
the Bankruptcy Court has subject-matter jurisdiction over LBHI's
claims. Thus, even assuming that the other section 1292(b) criteria
were satisfied here, leave to appeal the Order would not be
appropriate.
Although the Bankruptcy Court's ruling as to venue arguably
provides a "substantial ground for difference of opinion," the
Movants' appeal does not involve a "controlling question of law,"
would not "materially advance the ultimate termination of the
litigation," and would have a negative impact on judicial economy.
Accordingly, leave to appeal the venue ruling is not warranted
here.
The motion for an immediate de novo review of the Bankruptcy
Order's order is also denied.
The Movants are incorrect that the Bankruptcy Court lacked
authority to adjudicate subject-matter jurisdiction. The
constitutional limitations discussed above prevent a bankruptcy
court only from entering a final judgment in a non-core proceeding;
as to non-final matters, the bankruptcy court has full power to
enter all appropriate orders, subject to the district court's
review at the end of the case.
Put differently, until a non-core bankruptcy case is ready to be
submitted to an Article III district court for de novo review and
entry of final judgment, the Article I bankruptcy court is entitled
to enter any interlocutory rulings that are required. Because a
denial of a motion to dismiss for lack of subject-matter
jurisdiction is a non-final order, the Bankruptcy Court was
entitled to enter the Order without immediate review by this Court.
Absent leave to appeal--which this Court has denied, the Movants
have no right to interlocutory review of the Order.
A copy of the Court's Order dated May 8, 2019 is available at
https://tinyurl.com/yxrykn5d from Pacermonitor.com at no charge.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in U.S.
history. Several other affiliates followed thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC
sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases were assigned to Judge James M. Peck.
Judge Shelley Chapman took over the case after Judge Peck retired
from the bench to join Morrison & Foerster.
A team of Weil, Gotshal & Manges, LLP, lawyers led by the late
Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., served as the
Committee's investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for
the SIPA liquidation of the business of LBI. He is represented by
Hughes Hubbard & Reed LLP.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
* * *
As of March 2018, the trustee for LBI has made sixth interim
distributions in the aggregate amount of at least $9 billion. The
distributions bring total general unsecured creditor claim
recoveries to 39.75%, an achievement far in excess of any
reasonable expectation during the midst of Lehman's collapse and
the financial crisis of the Great Recession. As of March 31, 2018,
the Trustee has allowed or settled 4,813 general creditor claims
with an aggregate asserted amount of $70.1 billion for an allowed
amount of $22.9 billion.
As for LBHI, following the 15th distribution announced by the team
winding down LBHI in March 2018, Lehman's total distributions to
unsecured creditors will amount to approximately $124.6 billion.
The actual distributions to bondholders are already way above the
projected recovery 21 cents on the dollar when Lehman's bankruptcy
plan went into effect in early 2012.
LEMKCO FLORIDA: Seeks More Time to File Reorganization Plan
-----------------------------------------------------------
Lemkco Florida, Inc. requests the U.S. Bankruptcy Court for the
Middle District of Florida to extend the deadline to file a
disclosure statement and plan of reorganization to Oct. 17, and
exclusivity period within which to file and obtain confirmation of
a chapter 11 plan, to Oct. 17 and Dec. 16, respectively.
Lemkco is presently in discussions with Alan Garman of Procivil360
f/k/a Civil Tech Consulting Services, LLC to prepare a master
development plan which will allow for redevelopment of Lemkco's
real estate. Lemkco claims its future income will be based on the
viability of the master development plan.
Lemkco estimates that it will take between 90 and 180 days to
complete the master development plan, plus an additional 90 days
for approval of the proposed rezoning. Consequently, Lemkco cannot
draft a disclosure statement or propose a plan of reorganization
until such time as the master development plan is substantially
completed.
About Lemkco Florida Inc.
Lemkco Florida, Inc., a single asset real estate as defined in 11
U.S.C. Section 101(51B), is the fee simple owner of Spring Hill
Golf & Country Club located at 12079 Coronado Drive Spring Hill,
Fla.
Lemkco Florida filed its voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-10971) on Dec. 21,
2018. In the petition signed by Darren Kahanyshyn, chief
restructuring officer, the Debtor disclosed $591,080 in total
assets and $5,456,546 in liabilities. The Debtor tapped Buddy D.
Ford, P.A. as its bankruptcy counsel, and DHW Law, P.A. as its
special counsel.
Gyden Law Group will represent the Debtor in the state appellate
court actions styled, Lemkco Florida, Inc. v. Golf Properties of
Florida, LLC (Case No. 5D18-3928) and Lemkco Florida, Inc. v. Golf
Properties of Florida, LLC (Case No. 5D18-3306), both of which are
presently pending in the Fifth District Court of Appeal, Florida.
MATTEL INC: Fitch Rates $250MM Sr. Unsec. Notes 'B+', Outlook Neg.
------------------------------------------------------------------
Fitch Ratings has assigned a 'B+/RR2' rating to Mattel, Inc.'s $250
million offering of senior unsecured notes due 2027. The Rating
Outlook is Negative. The notes will be guaranteed on a senior
unsecured basis by all of Mattel's existing and, subject to certain
exceptions, future wholly owned domestic restricted subsidiaries
that are borrowers or guarantors under the company's senior secured
revolving credit facilities. Net proceeds from the note offering,
plus cash on hand, will be utilized to fully redeem the company's
$250 million of 4.35% senior notes due 2020.
Mattel's 'B-' Issuer Default Rating (IDR) and Negative Outlook
reflect execution risk in stabilizing revenue and growing EBITDA
from depressed levels. Mattel continues to face revenue pressures
at Fisher-Price, Thomas and Friends and American Girl, which
collectively generated approximately $1.5 billion or 30% of total
gross revenue in 2018. EBITDA at $267 million in 2018, excluding
$182 million of charges related to restructuring, integration,
asset impairment and the Toys R Us bankruptcy, and $278 million in
2017 are significantly down from the $900 million levels in
2015/2016 and FCF remains materially negative. The company's LTM
gross leverage (debt/EBITDA) is elevated at nearly 7x and there is
some refinancing risk with $350 million of aggregate non-guaranteed
unsecured debt due in 2021, though the company has the capacity to
issue guaranteed debt to refinance this maturity, similar to the
2018 refinancing of $0.5 billion in maturities.
KEY RATING DRIVERS
Challenged Execution: Mattel's net revenue has steadily declined
from a peak of $6.5 billion in 2013 to $4.9 billion in 2017 and
$4.5 billion in 2018. Fitch believes the company has been unable to
effectively evolve its product portfolio commensurate with changes
in children's play patterns. Children are increasingly
digitally-oriented and marginally less interested in traditional
toys. The industry is also challenged by the phenomenon of
children, particularly girls, outgrowing traditional toys at a
younger age, with greater interest in consumer electronics, beauty,
sports and social media. Relative to Mattel, Hasbro has more
successfully responded to these changes through brand storytelling
and creating digital experiences and revenue streams to support its
portfolio's customer relevance and create additional sales
opportunities.
Fitch estimates Mattel's net revenue declined 7% at constant
currency in 2018 compared with an 11% decline in 2017, due to
ongoing execution issues exacerbated by the Toys R Us bankruptcy.
The significant sales disruption caused by Toys R Us' bankruptcy
filing in September 2017 and ultimate liquidation of the U.S.
business in March 2018, is no longer a headwind for Mattel.
Mattel's goal of regaining top-line growth in the short-to-medium
term may prove challenging in the absence of improving performance
at Fisher-Price, Thomas and Friends and American Girl, which
collectively generated approximately $1.5 billion, or 30.1% of
total gross revenue in 2018, and declined 16.9% and 12.0% on a
constant currency basis in 2018 and 1Q19, respectively. The company
previously anticipated Fisher-Price revenue would stabilize in the
second half of 2019 due to new product launches, but Fitch believes
the recall of the Fisher-Price Rock 'n Play Sleeper in 1Q19, which
will reduce Fisher-Price revenue by $35 million-$40 million in
2019, and the negative publicity regarding the recall may make it
more difficult to stabilize the brand's revenue in the near term.
Adequate Near-Term Liquidity: As of June 30, 2019, Fitch estimates
Mattel's liquidity totaled approximately $900 million and consisted
of $194 million of cash and equivalents and estimated $650
million-$700 million of availability (defined as borrowing base
less outstanding borrowings and letters of credit) under its $1.6
billion senior secured revolving credit facilities due June 1,
2021.
The $1.6 billion credit facilities consist of a $1.31 billion asset
based lending facility, subject to borrowing base capacity, and a
revolving credit facility with $294.0 million in aggregate
commitments secured by certain fixed assets and intellectual
property of the U.S. Borrowers and certain equity interests in
various subsidiaries of Mattel, subject to borrowing base capacity.
The facilities are secured by the inventory and accounts receivable
of its large subsidiaries in developed markets and certain U.S.
fixed assets and intellectual property. The net book value of the
accounts receivable and inventory currently pledged as collateral
under the senior secured revolving credit facilities was
approximately $900 million per Mattel's 2018 10-K, which equates to
approximately 60% of total working capital assets ($900
million/total AR of $970 million and Inventory of $543 million) as
of Dec. 31, 2018. Fitch assumes 60% of Mattel's total inventory and
accounts receivable as a proxy for available collateral going
forward and assumes 60% is available from a borrowing base
perspective after adjusting for net orderly liquidation value and
applicable advance rates against the net orderly liquidation value
(NOLV). Fitch further assumes the $294 million of the fixed asset
and IP facility is well collateralized and fully available at all
times.
Given FCF expectations of negative $50 million-negative $75 million
in 2019 and modestly positive thereafter, Fitch expects excess
liquidity after seasonal borrowings and letters of credit to remain
in the $600 million-$700 million range in 2019/2020. Inability to
access financial markets to refinance upcoming maturities or
material shortfall in EBITDA could materially affect liquidity.
The company's upcoming debt maturities, consisting of $250 million
of senior unsecured bonds due on Oct. 1, 2020, which are expected
to be refinanced with proceeds from the proposed notes offering,
and $350 million due on Aug. 15, 2021, execution risk, demand
headwinds in the event of incremental U.S. tariffs, and/or
deteriorating economic conditions could adversely affect Mattel's
business, thereby pressuring liquidity. Under its covenants, Mattel
currently has the capacity to issue guaranteed debt to refinance
these maturities, similar to the 2018 refinancing of $0.5 billion
in maturities.
Significant Leverage: The company's LTM gross leverage
(debt/EBITDA) is elevated at 7x. Fitch projects it will improve to
6x by 2020, assuming low single digit top line growth, gross margin
expansion and stable selling, general and administrative expenses
(SG&A).
Structural Simplification Strengthens Profitability: Mattel's
structural simplification cost savings program has helped offset
the sales and gross profit decline in 2018, yielding EBITDA of $267
million, excluding $182 million of charges related to
restructuring, integration, asset impairment and the Toys R Us
bankruptcy, essentially flat with EBITDA of $278 million in 2017.
Mattel initiated its structural simplification cost savings program
in the 3Q17 and expects to exceed $650 million in cost savings by
2020 by reducing manufacturing complexity and organizational
headcount as well as optimizing advertising spend. Mattel realized
$372 million of cost savings in 2018, on track to exceed $200
million of incremental cost savings in 2019, partially offset by
$100 million of strategic investments.
Renewed Tariff Risk: Deteriorating U.S. and China trade
negotiations reintroduced significant uncertainty regarding
tariffs, which would have a material adverse impact on the toy
industry, given the significant volume of toy products manufactured
in China that likely would be subject to a 25% U.S. tariff.
Significant and Increasing Customer Concentration: In 2018,
Mattel's two largest customers, Walmart and Target collectively
accounted for approximately 34% of net sales following the
liquidation of Toys R Us. Walmart and Target represented 23.7% and
10.0% of Mattel's revenue, respectively, in 2018. The company's 10
largest customers accounted for approximately 49% of net sales in
2018 compared with 47% in 2017.
DERIVATION SUMMARY
Mattel's 'B-' IDR and the Negative Outlook reflect execution risk
in stabilizing revenue and growing EBITDA from depressed levels.
Mattel continues to face revenue pressures at Fisher-Price, Thomas
and Friends and American Girl, which collectively generated
approximately $1.5 billion or 30% of total gross revenue in 2018.
EBITDA of $267 million in 2018, excluding $182 million of charges
related to restructuring, integration, asset impairment and the
Toys R Us bankruptcy, and $278 million in 2017 are significantly
down from the $900 million levels in 2015/2016 and FCF remains
materially negative. Fitch estimates EBITDA would need to grow to
$450 million for Mattel to become FCF breakeven. This would require
low-single-digit sales growth and gross margin improvement as cost
savings subside in 2021. The company's LTM gross leverage
(debt/EBITDA) is elevated at 7x and there is some refinancing risk
with $350 million of aggregate non-guaranteed unsecured debt due in
2021, although the company has the capacity to issue guaranteed
debt to refinance this maturity, similar to the 2018 refinancing of
$0.5 billion in maturities.
Mattel is one of the largest companies in the approximately $90
billion global toy industry, generating revenue of $4.5 billion in
2018, similar to other leading players including Hasbro Inc.
(BBB+/Stable), The Lego Group, and Bandai Namco Holdings, which
generate annual revenue of $4.6 billion-$5.5 billion.
Hasbro's operating results have been significantly less volatile
than Mattel's; with revenue increasing at a five-year CAGR of 2.3%
through 2018 compared with a 7.0% decline at Mattel in the same
period. Hasbro's revenue growth is attributed to its successful
focus on brand extensions and product innovation, and entertainment
licensing wins, such as its takeover of the Disney princess license
from Mattel beginning in 2016. Hasbro's gross leverage was 2.2x at
YE 2018 and is forecast to range between 1.6x and 2.0x through 2022
compared with Mattel's leverage of nearly 11.0x at YE 2018 and
forecast range of 5.5x-6.5x through 2022. Hasbro's liquidity
position is also significantly stronger supported by consistent
positive FCF generation and nearly $1.2 billion of cash and
equivalents.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Revenue growth is forecast to be nearly flat at constant
currency in 2019, but decline approximately 1.0% - 2.0% on
an as reported basis due to negative FX. Fitch expects YoY
revenue growth at constant currency to moderate in
second-half 2019 due to lost revenue from the Fisher Price
Rock 'n Play Sleeper recall and more difficult YoY
comparisons for Barbie and Hot Wheels.
-- Fitch assumes revenue is relatively flat through 2020 and
grows 1% and 2% in 2021 and 2022, respectively, assuming
slowing, but continued growth in Barbie, Hot Wheels and
licensed entertainment brands, stabilization of the
Fisher-Price brand, offset by continued weak revenues at
Thomas and Friends and American Girl.
-- Operating EBITDA is forecast to increase to $450 million
- $475 million in 2019 compared with $267 million (5.9%
margin) in 2018 primarily due to Mattel's structural
simplification cost savings partially offset by
inflation pressures.
-- Capex is sustained between $150 million-$160 million
through the forecast.
-- FCF is expected to be negative $50 million - negative
$75 million in 2019 and flat to modestly positive thereafter.
-- The $350 million of senior non-guaranteed unsecured
notes maturing in 2021 are assumed to be refinanced
with guaranteed unsecured notes.
-- Gross leverage (total debt/operating EBITDA) is forecast
to decline to 6.0x - 6.5x in 2019 compared with 10.9x
in 2018 and decline to low-6.0x in 2020, assuming flat
debt balances.
Fitch's assumptions do not factor in potential incremental tariffs
that could be enacted in 2019.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Stabilization of the Outlook
-- Fitch could stabilize Mattel's Rating Outlook given improved
confidence in the company's ability to meet or exceed the current
base case forecast and refinance upcoming maturities.
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- A positive rating action could result if the pace of EBITDA
rebound well exceeds Fitch's current base case of approximately
$0.5 billion by 2020, yielding increased comfort in the company's
turnaround prospects and ability to generate sustainable positive
FCF and demonstrate the ability to refinance ongoing debt
maturities in a timely fashion.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A negative rating action could be caused by weaker than
expected results, which increase refinancing risk as Mattel
approaches the 2021 maturity. Liquidity concerns stemming from
ongoing negative FCF and reduced borrowing capacity would also be a
concern.
LIQUIDITY AND DEBT STRUCTURE
Adequate Near-Term Liquidity: As of June 30, 2019, Fitch estimates
Mattel's liquidity totaled approximately $900 million and consisted
of $194 million of cash and equivalents and estimated $650
million-$700 million of availability (defined as borrowing base
less outstanding borrowings and letters of credit) under its $1.6
billion senior secured revolving credit facilities due June 1,
2021.
The $1.6 billion credit facilities consist of a $1.31 billion asset
based lending facility, subject to borrowing base capacity, and a
revolving credit facility with $294.0 million in aggregate
commitments secured by certain fixed assets and intellectual
property of the U.S. Borrowers and certain equity interests in
various subsidiaries of Mattel, subject to borrowing base capacity.
The facilities are secured by the inventory and accounts receivable
of its large subsidiaries in developed markets and certain U.S.
fixed assets and intellectual property. The net book value of the
accounts receivable and inventory currently pledged as collateral
under the senior secured revolving credit facilities was
approximately $900 million or approximately 60% of total working
capital assets as of Dec. 31, 2018. Fitch will assumes 60% of
Mattel's total inventory and accounts receivable as a proxy for
available collateral going forward and assumes 60% is available
from a borrowing base perspective after adjusting for net orderly
liquidation value and applicable advance rates against the NOLV.
Fitch further assumes the $294 million of the fixed asset and IP
facility is well collateralized and fully available at all times.
Given FCF expectations of negative $50 million - negative $75
million in 2019 and flat to modestly positive thereafter, Fitch
expects excess liquidity after seasonal borrowings and letters of
credit to remain in the $600 million-$700 million range in
2019/2020. Inability to access financial markets to refinance
upcoming maturities or material shortfall in EBITDA could
materially affect liquidity.
The company's upcoming debt maturities, consisting of $250 million
of senior unsecured bonds due on Oct. 1, 2020, which are expected
to be refinanced with proceeds from the proposed notes offering,
and $350 million due on Aug. 15, 2021, execution risk, demand
headwinds in the event of incremental U.S. tariffs, and/or
deteriorating economic conditions could adversely affect Mattel's
business, thereby pressuring liquidity. Under its covenants, Mattel
currently has the capacity to issue guaranteed debt to refinance
these maturities, similar to the 2018 refinancing of $0.5 billion
in maturities.
Recovery Considerations:
Fitch has assigned Recovery Ratings (RRs) to the various debt
tranches based on a bespoke analysis in accordance with Fitch
criteria.
Fitch's recovery analysis is based on a liquidation value of nearly
$3.2 billion as of June 30, 2019, which exceeds the estimated
going-concern value of approximately $2.1 billion. Fitch assumes
75% of the book value for receivables and 50% of the book value
inventory and net fixed assets under a net orderly liquidation. In
addition, Fitch has valued Mattel's intellectual property,
including the Barbie, Fisher-Price, Hot Wheels and Thomas & Friends
power brands, at approximately $2 billion.
Approximately $2.9 billion of value is available to satisfy claims
in a liquidation scenario after deducting 10% for administrative
claims. Fitch assumes the senior secured credit facilities and
guaranteed notes have priority claims on 60% of the liquidation
value of accounts receivable, inventory and PP&E, and a pro rata
share of IP that is owned by guarantor subsidiaries. The collateral
is first allocated to the senior secured credit facilities,
reflecting the collateral securing the facility, resulting in a
'BB-'/'RR1' rating for the senior secured revolving credit
facilities. The remaining portion of the collateral value is then
assigned to the senior secured guaranteed notes due to contractual
seniority on the assets of the guarantor subsidiaries relative to
the nonguaranteed notes. The remaining unencumbered value is then
allocated on a pro rata basis to the guaranteed and nonguaranteed
notes. This results in ratings of 'B+'/'RR2' for the guaranteed
unsecured notes and 'B'/'RR3' for the non-guaranteed unsecured
notes.
Fitch expects Mattel to refinance its $350 million of
non-guaranteed notes maturing in 2021 with guaranteed debt, which
modestly weakens the recovery on the guaranteed notes, but would
not affect the 'RR2' (71%-90%) recovery ratings.
Fitch's going-concern valuation is based on a $300 million
going-concern EBITDA, similar to TTM results as Fitch views
Mattel's recent operating trajectory as somewhat distressed. Fitch
applies a 7.0x enterprise value/EBITDA multiple, at the upper end
of the typical 5.0x-7.0x range for consumer products companies
under a distressed scenario given Mattel's historically strong
brand franchises.
MATTEL INC: Moody's Rates New $250MM Bonds 'B1', Outlook Stable
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Mattel, Inc's new
$250 million bonds due 2027. The outlook is stable. Other ratings
were unchanged. Proceeds will be used for general corporate
purposes including prefunding of debt maturities.
The following rating was assigned:
Guaranteed notes due 2027 at B1 (LGD3)
The outlook remains stable
RATINGS RATIONALE
Mattel's ratings reflects the company's high leverage and weak
profitability after several years of operating challenges. These
issues were exacerbated by the 2018 liquidation of Toys "R" Us,
Inc. (TRU), one of Mattel's most important retailers. Moody's
believes Mattel's turnaround plan will restore its credit metrics
over the next few years. However, execution risk is high, since a
successful turnaround will require Mattel to grow its sales at the
same time it reduces its cost base. To achieve this, Mattel will
need to invest some of its savings to support its brands and
develop new content. The company has taken some important steps in
revitalizing many of the company's brands through strategic
entertainment and licensing projects. However the success of these
initiatives in reinvigorating growth remains to be seen. Mattel's
ratings also reflects its limited segment diversification (toys and
games), concentrated customer base, and exposure to cost increases
and product recalls. The $250 million guaranteed bonds are rated
B1, The same as the Corporate Family Rating, reflecting the
material loss absorption by the unguaranteed bonds in the capital
structure.
The stable outlook reflects Moody's expectations that Mattel's
credit metrics will begin to slowly improve over the next 12-18
months due to earnings improvement from the realization of cost
savings.
The rating could be downgraded if there are delays in realizing
cost savings, liquidity weakens or operating or brand performance
deteriorates. Factors that could lead to an upgrade include growth
in sales and operating profits, realization of planned cost savings
leading to improved margins, positive free cash flow, and
Debt/EBITDA below 5.0x.
MATTEL INC: S&P Rates $250MM Sr. Unsecured Guaranteed Notes 'BB-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to Mattel Inc.'s planned $250 million senior
unsecured guaranteed notes due 2027. The '3' (capped) recovery
rating indicates S&P's expectation for meaningful (50%-70%; rounded
estimate: 65%) recovery in the event of a payment default.
At the same time, S&P affirmed its 'BB-' issue-level rating on the
company's existing $1.5 billion senior unsecured guaranteed notes
due 2025. The '3' recovery rating remains unchanged.
"While our estimated recovery on Mattel's cumulative $1.75 billion
of senior unsecured guaranteed notes would indicate full recovery
for the lenders, we have capped the recovery rating at '3' because
we generally cap our recovery ratings on the unsecured debt of
issuers that we rate in the 'BB' category," S&P said. The cap
reflects that these creditors' recovery prospects are at greater
risk of being impaired by the issuance of additional priority or
pari passu debt prior to a default, according to the rating agency.
Mattel plans to use the proceeds from the $250 million notes to
redeem all of its existing 4.35% senior notes without guarantees
due in 2020.
S&P also lowered its issue-level rating on Mattel's $1.15 billion
of senior unsecured notes that do not benefit from subsidiary
guarantees to 'B' from 'B+' and revised the recovery rating to '6'
from '5'. The '6' recovery rating indicates S&P's expectation for
negligible (0%-10%; rounded estimate: 5%) recovery for lenders in
the event of a payment default. The $1.15 billion of senior
unsecured notes include $350 million of notes maturing in 2021,
$250 million of notes maturing in 2023, $250 million of notes
maturing in 2040, and $300 million of notes maturing in 2041. S&P
revised the recovery rating because the incremental guaranteed
notes in the company's capital structure have lowered the recovery
prospects for the lenders that do not benefit from certain domestic
subsidiary guarantees.
"Our ratings on the company's $250 million senior notes due 2020
remain unchanged because Mattel plans to redeem them. We will
withdraw all of our ratings on these senior notes when they are
redeemed," S&P said.
All of S&P's other ratings on the company remain unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'BB-' issue-level rating with a recovery
rating of '3' (capped) to Mattel's planned $250 million senior
unsecured guaranteed notes maturing in 2026. The '3' recovery
rating indicates its expectation for meaningful (50%-70%; rounded
estimate: 65%) recovery for unsecured lenders in a default
scenario.
-- S&P affirmed its 'BB-' issue-level rating on the existing $1.5
billion of senior unsecured guaranteed notes maturing in 2025. The
'3' recovery rating remains unchanged.
-- S&P lowered its issue-level rating on the company's $1.15
billion of senior unsecured notes that do not benefit from
subsidiary guarantees to 'B' from 'BB+'. The $1.15 billion of
senior unsecured notes include $350 million of notes maturing in
2021, $250 million of notes maturing in 2023, $250 million of notes
maturing in 2040, and $300 million of notes maturing in 2041.
-- S&P also revised its recovery rating on the $1.15 billion of
senior unsecured notes that do not benefit from subsidiary
guarantees to '6' from '5'. The '6' recovery rating indicates S&P's
expectation for negligible (0%-10%; rounded estimate: 5%) recovery
for lenders in the event of a payment default.
-- S&P's ratings on the $250 million senior notes due 2020 remain
unchanged because the company plans to redeem them.
-- The recovery prospects for the $1.15 billion senior unsecured
noteholders are lower due to the increased priority claims in the
capital structure from the secured asset-based lending (ABL)
revolver and subsidiary guarantees in the planned cumulative $1.75
billion notes.
Simulated default scenario
-- S&P assumes the $1.6 billion ABL revolver is 60% drawn in its
simulated default scenario.
-- S&P's simulated default scenario assumes a default occurring in
2023 due to a substantial decline in cash flows stemming from a
prolonged economic downturn, management missteps, or significantly
reduced demand for the company's products. S&P believes that these
factors would significantly decrease the Mattel's sales and
EBITDA.
-- S&P believes that if the company were to default it would
continue to have a viable business model and that lenders would
achieve greater recovery through a reorganization than through a
liquidation of the business. Therefore, S&P assumes that Mattel
would reorganize following a default and use an emergence EBITDA
multiple of 6.5x to value the company.
Simplified waterfall
-- EBITDA at emergence: $470 million
-- EBITDA multiple: 6.5x
-- Net enterprise value (after administrative expenses of 5%):
$2.90 billion
-- Valuation split (obligors/nonobligors): 100%/0%
-- Collateral value available to priority debt (includes the ABL
revolver): $2.90 billion
-- Total priority debt claims (ABL revolver): $982 million
-- Residual collateral value available to senior unsecured debt
with subsidiary guarantees: $1.92 billion
-- Total senior unsecured debt claims with subsidiary guarantees
(high-yield notes): $1.81 billion
-- Recovery expectations: 50%-70% (rounded estimate: 65%
[capped])
-- Residual collateral value available to senior unsecured debt
without subsidiary guarantees: $81 million
-- Total senior unsecured debt claims without subsidiary
guarantees: $1.17 billion
-- Recovery expectations: 0%-10% (rounded estimate: 5%)
Note: All debt amounts include six months of prepetition
interest.
Ratings List
Mattel Inc.
Issuer Credit Rating B
New Rating
Mattel Inc.
Senior Unsecured
US$250 mil nts due 2027 BB-
Recovery Rating 3(65%)
Ratings Affirmed; Recovery Rating Unchanged
Mattel Inc.
Senior Unsecured BB-
Recovery Rating 3(65%)
Ratings Lowered; Recovery Rating Revised
To From
Mattel Inc.
Senior Unsecured B B+
Recovery Rating 6(5%) 5(20%)
MATTRESS PAL: Seeks to Extend Exclusive Filing Period to Nov. 4
---------------------------------------------------------------
Mattress Pal Holding, LLC requests the U.S. Bankruptcy Court for
the Middle District of Florida to extend for an additional 90 days
the periods during which the Debtor has the exclusive right to file
and to solicit acceptances of a Chapter 11 plan, through and
including Nov. 4, 2019 and Jan. 2, 2020, respectively.
The Debtor will not have information regarding the total number of
claims and size of those claims until after the July 22 -- the
general claims bar date and a claims reconciliation process --
which is crucial information needed to calculate projected plan
payments to creditors. The Debtor submits that it should be
permitted an opportunity to submit a plan to pay creditors once it
knows the number and amount of claims at issue.
The Debtor submits the existence of good faith progress towards
reorganization favors an extension of the exclusivity period. The
Debtor claims it has already rejected 84 leases of non-residential
real property and resolved a significant adequate protection matter
with TD Bank. Also, the Debtor received assurance from SOS
Furniture Company, Inc. -- its largest creditor and parent -- which
will provide a DIP Financing Exit Facility, if necessary, to
satisfy administrative expense claims upon plan confirmation and
Debtor has negotiated rent concessions with certain landlords.
About Mattress Pal Holding
Mattress Pal Holding, LLC, is a Florida limited liability company
that operates retail stores that sell mattresses and related
products.
Mattress Pal Holding sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-02247) on April 7,
2019. At the time of the filing, the Debtor estimated assets and
liabilities of between $1 million and $10 million. The case is
assigned to Judge Cynthia C. Jackson. The Debtor is represented by
Andrew Kamensky, Esq., at Navarro McKown.
The U.S. Trustee for Region 21 appointed three creditors to serve
on the official committee of unsecured creditors on May 29, 2019.
The committee tapped Kelley Drye & Warren LLP as its legal counsel;
hire Akerman LLP as local counsel; and Province, Inc. as its
financial advisor.
MC LOGGINGS: Seeks to Hire Allen P. Turnage as Attorney
-------------------------------------------------------
M.C. Logging Inc. seeks authority from the U.S. Bankruptcy Court
for the Northern District of Florida (Tallahassee) to hire Allen P.
Turnage as attorney for the Debtor.
The firm will advise the company regarding their duties under the
Bankruptcy Code, and will provide other legal services related to
their Chapter 11 cases.
Allen Turnage, Esq., will charge an hourly fee of $400.
Mr. Turnage disclosed in a court filing that he does not hold any
claim against the Debtors and does not have any connection with
their creditors.
The firm can be reached through:
Allen P. Turnage, Esq.
Law Office of Allen P. Turnage
P.O. Box 15219
Tallahassee, FL 32317
Voice: 850-224-3231
Fax: 850-224-2525
Email: service@turnagelaw.com
About M.C. Logging Inc.
M C Logging, Inc is a privately held company in Madison, FL and is
a Single Location business.
M.C. Logging Inc filed sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 19-40380) on July 25,
2019. Allen Turnage at Allen Turnage, P.A. represents the Debtor as
counsel.
MEG ENERGY: Moody's Raises CFR to B2, Outlook Stable
----------------------------------------------------
Moody's Investors Service upgraded MEG Energy Corp.'s Corporate
Family Rating to B2 from B3, Probability of Default Rating to B2-PD
from B3-PD, second lien secured notes to Ba3 from B3, and senior
unsecured notes rating to B3 from Caa2. The SGL-1 Speculative Grade
Liquidity Rating was affirmed. The outlook remains stable.
"The rating upgrade to B2 for MEG reflects the improving credit
metrics in 2019 and 2020 due to narrower differentials and debt
reduction funded with free cash flow," said Paresh Chari VP-Senior
Analyst "MEG's stable, low cost and long-lived asset base, and very
good liquidity profile also supports the rating."
Upgrades:
Issuer: MEG Energy Corp.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Senior Secured Second Lien Regular Bond/Debenture, Upgraded
to Ba3 (LGD2) from B3 (LGD3)
Senior Unsecured Regular Bond/Debenture, Upgraded to B3 (LGD5)
from Caa2 (LGD5)
Affirmations:
Issuer: MEG Energy Corp.
Speculative Grade Liquidity Rating, Affirmed SGL-1
Withdrawals:
Issuer: MEG Energy Corp.
Senior Secured First Lien Revolving Credit Facility,
Withdrawn, previously rated Ba3 (LGD2)
Senior Secured First Lien Term Loan, Withdrawn, previously
rated Ba3 (LGD2)
Outlook Actions:
Issuer: MEG Energy Corp.
Outlook, Remains Stable
RATINGS RATIONALE
MEG (B2 stable) is supported by: (1) a stable bitumen production
base of around 95,000 bbls/d (net of royalties), with substantial
reserves in key productive areas of the Athabasca oil sands region;
(2) a long-lived reserve base that requires a low C$6/bbl to
maintain production; (3) a marketing strategy that can move two
thirds of MEG's blend volumes outside of Alberta by mid-2020; and
(4) very good liquidity. MEG is constrained by: (1) its exposure to
wider Western Canadian heavy oil differentials in 2020, which is
caused by pipeline apportionment and capacity constraints, and the
current Alberta curtailment which is expected to end in 2019; (2)
weak credit metrics in 2020 when compared to peers, with retained
cash flow/debt at about 14% and EBITDA/interest at 3x; and (3)
concentration in one asset - the Christina Lake oil sands project.
MEG is exposed to material environmental risk. It produces bitumen
in Canada, and environmental and social opposition to new oil
pipeline construction has resulted in a shortage of pipeline
take-away capacity that will widen the WCS price discount to WTI
when the Alberta production curtailment ceases at the end of 2019.
The wider differential will depress MEG's average realized price
and moving crude-by-rail will reduce MEG's margins compared to
moving by pipe.
MEG's liquidity is very good (SGL-1). Pro forma for the term loan
repayment, at June 30, 2019, MEG had about C$100 million in cash
and an undrawn C$800 million revolving credit facility. The
facility matures in July 2024 but will spring to 91 days prior to
the US$800 million note maturity date of January 30, 2023, if more
than US$300 million remains outstanding at that time. Moody's
expects positive free cash flow of over C$300 million from Q3 2019
to Q3 2020. MEG will be in compliance with its sole financial
covenant through this period, with the covenant being tested at or
above C$400 million of utilization.
MEG's second lien secured notes are rated Ba3, two notches above
the CFR, and the senior unsecured notes are rated B3, one notch
below the B2 CFR, due to the priority ranking first lien revolver
and second lien notes.
The stable outlook reflects its expectation that production and
operating costs will remain stable.
The ratings could be upgraded if retained cash flow to debt is
above 25%, EBITDA to interest rises above 4x and if MEG can
maintain positive free cash flow.
The ratings could be downgraded if retained cash flow to debt is
below 10% or if EBITDA to interest falls below 2x.
MEG is a publicly-listed Calgary, Alberta-based
steam-assisted-gravity-drainage (SAGD) oil sands developer and
operator. MEG produced about 94,000 bbls/day of bitumen in Q2 2019
(net of royalties) at the Christina Lake project in the Athabasca
Oil Sands region in Northern Alberta.
MJW FILMS: Plan Deferred Until Retention of New Counsel
-------------------------------------------------------
The Official Joint Committee of Unsecured Creditors of MJW Films,
LLC, and J Wick Productions, LLC asked the U.S. Bankruptcy Court
for the District of Arizona to further extend the exclusivity
periods during which only the companies may file a plan of
reorganization and during which only the Debtors may solicit
acceptances of their plan by 30 days each.
The court has recently entered an order granting the Motion of
Michael Singer to Disqualify Engelman Berger P.C. as General
Counsel for the Chapter 11 Debtors and for Disgorgement of Retainer
and Denial of Fees. As part of its ruling, the court set a status
conference hearing for July 30, and stayed all briefing in the
cases through that hearing.
While the Court stayed all briefing in the cases pending the status
conference hearing, the exclusivity deadline under Section 1121(b)
expires in advance of the hearing. The companies' current exclusive
filing and solicitation periods are set to expire on July 24 and
Sept. 24, respectively.
The Committee believes the intent of the Court was to maintain
status quo in the cases pending retention of new counsel for the
Debtors. Out of an abundance of caution, therefore, the Committee
is now requesting the court to further extend the exclusivity
periods for an additional 30 days.
About MJW Films and JW Films
MJW Films, LLC and J Wick Productions, LLC are movie production
companies based in Gilbert, Arizona. MJW Films and J Wick filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Ariz. Case No. 18-12874) on Oct. 22, 2018. In the
petitions signed by John Glassgow, designated representative, the
Debtors estimated $1 million to $10 million in both assets and
liabilities. Patrick A. Clisham, Esq., at Engelman Berger, P.C.,
represents the Debtors.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Nov. 16, 2018. The committee is represented
by May, Potenza, Baran & Gillespie PC.
MONTESQUIEU INC: Seeks to Hire Stretto as Administrative Agent
--------------------------------------------------------------
Montesquieu, Inc., and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Stretto as administrative agent.
Administrative Services to be rendered by Stretto are:
a. assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs
(collectively, the "Schedules and Statements") and gather data in
conjunction therewith;
b. create and maintain databases for maintenance and
formatting of Schedules and Statements data;
c. coordinate collection of data from Debtors and their
advisors;
d. provide data entry and quality assurance assistance
regarding Schedules and Statements;
e. in the event the Debtors file or seek confirmation of a
chapter 11 plan of liquidation, generate an official ballot
certification, testify, if necessary, in support of the ballot
tabulation results and managing any distributions pursuant to a
confirmed plan; and
f. provide such other claims processing, noticing,
solicitation, balloting, and administrative services described in
the Engagement Agreement, but not included in the order approving
the Claims Agent Application, as may be requested from time to time
by the Debtors.
Stretto will be paid based upon its normal and usual hourly billing
rates.
Stretto will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Travis Vandell, partner of Stretto, assured the Court that the firm
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtors and their estates.
Stretto can be reached at:
Travis Vandell
STRETTO
410 Exchange, Suite 100
Irvine, CA 92606
Tel: (800) 634-7734
About Montesquieu, Inc.
Montesquieu, Inc., is a wine maker headquartered in San Diego,
California that focuses on producing "first-rate boutique" wines
from family-owned and operated vineyards. The Company is committed
to producing hand-crafted, limited-production, and exquisite
wines.
Montesquieu, Inc., based in San Diego, CA, and its affiliates
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
19-10599) on March 20, 2019. The Hon. Brendan Linehan Shannon
oversees the case.
In their petitions, Montesquieu, Inc., estimated assets and
liabilities of $100,000 to $500,000; Montesquieu Corporation's
estimated assets of $1 million to $10 million, and estimated
liabilities of $50,000 to $100,000; and WG Best Weinkellerie
estimated assets of $100,000 to $500,000, and estimated liabilities
of $1 million to $10 million.
Mette H. Kurth, Esq., at Fox Rothschild LLP, serves as bankruptcy
counsel.
MWM OIL: Seeks to Hire Morris Laing Evans as Attorneys
------------------------------------------------------
RAG Oil Co., Inc. and MWM Oil Company, Inc. seek authority from the
U.S. Bankruptcy Court for the District of Kansas (Wichita) to
employ Morris, Laing, Evans, Brock & Kennedy, Chartered as
attorneys.
The Debtors' require Morris Laing to:
a. assist the Debtors in the preparation of schedules, lists,
and summary reports required in the Chapter 11 proceeding;
b. the assist the Debtors in the negotiation, formulation, and
drafting of a plan of liquidation and sale pleadings;
c. oversee compliance with Chapter 11 rules and procedures,
and to be available for direct consultation with the Debtors; and
d. take such action as may be necessary with respect to claims
that may be asserted against the Debtors, and to prepare on behalf
of the Debtors such applications, motions, complaints, orders,
reports and other legal papers as may be necessary in connection
with the proceeding, and to perform all other legal services for
the debtors which may be required.
Morris Laing's hourly rates are:
William B. Sorensen, Jr. $300.00
Karl R. Swartz $300.00
Jonathan A. Schlatter $245.00
Ryan M. Peck $255.00
Rita R. Lowe, legal assistant $100.00
Morris Laing received an initial retainer of $10,000.00.
William B. Sorensen, Jr. of Morris, Laing, Evans, Brock & Kennedy,
Chartered, attests that his firm is a disinterested person within
the meaning of 11 U.S.C. Sec. 101(14).
The firm can be reached through:
William B. Sorensen, Jr.
Morris Laing Evans Brock And Kennedy
Old Town Square
300 N Mead Suite 200
Wichita, KS 67202-2722
Phone: (316) 262-2671
Email: wsorensen@morrislaing.com
About RAG Oil Co., Inc.
Based in Towanda, Kansas, RAG Oil Co., Inc. & MWM Oil Company, Inc.
filed voluntary bankruptcy petitions under Chapter 11 (Bankr. D.
Kan. Case No. 19-11405 & Case No. 19-11404, respectively) on July
26, 2019. The Debtors are represented by William B. Sorensen, Jr.
at Morris Laing Evans Brock And Kennedy.
NAMR1726 LLC: Case Summary & 4 Unsecured Creditors
--------------------------------------------------
Debtor: NAMR1726 LLC
8033 Sunset Blvd., #419
Los Angeles, CA 90046
Business Description: NAMR1726 LLC owns a 10% interest in a real
property located at 8527 Hedges Way, Los
Angeles, California valued by the Debtor at
$9.5 million and a 100% interest in a
property located in the San Bernardino
County valued by the Debtor at $3.5 million.
Chapter 11 Petition Date: August 1, 2019
Court: United States Bankruptcy Court
Central District of California (Los Angeles)
Case No.: 19-18998
Judge: Hon. Neil W. Bason
Debtor's Counsel: Thomas B. Ure, Esq.
URE LAW FIRM
800 West 6th Street, Ste. 940
Los Angeles, CA 90017
Tel: 213-202-6070
Fax: 213-202-6075
E-mail: tbuesq@aol.com
tom@urelawfirm.com
Total Assets: $13,000,500
Total Liabilities: $17,896,670
The petition was signed by Nazaret Chakrian, president.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/cacb19-18998.pdf
List of Debtor's Four Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. David Fogel P.C. Judgment $379,670
c/o In Advance Capital LLC
1225 Franklin Ave., Suite 522
Garden City, NY 11530
2. David L. Husman Personal Loan $1,400,000
1535 North Elston Avenue
Chicago, IL 60642
3. Franchise Tax Board 8527 Hedges Way $92,000
P.O. Box 1468 Los Angeles, CA
Sacramento, CA 90069
94267-0011
4. HDA Trucking, LLC 8527 Hedges Way $3,025,000
11023 Ventura Blvd., #7 Los Angeles, CA
Studio City, CA 91604 90069
NCR CORP: Moody's Gives Ba2 Rating to New 1st Lien Credit Facility
------------------------------------------------------------------
Moody's Investors Service affirmed NCR Corporation's B1 Corporate
Family Rating, B1-PD Probability of Default Rating, the company's
SGL-2 Speculative Grade Liquidity rating, and the B2 rating on the
issuer's unsecured bonds. Concurrently, Moody's assigned a Ba2
rating to the company's proposed first lien credit facility. The
rating action follows the announcement of NCR's partial refinancing
of its debt structure in a largely debt leverage neutral
transaction. In addition to the repayment of the company's existing
bank debt with proceeds from the proposed facility, the rating
action also considers Moody's expectation that NCR will issue an
incremental $1.0 billion of unsecured debt (in aggregate) to
refinance $900 million of existing bonds maturing in 2021 in the
near term. The outlook is stable.
Affirmations:
Issuer: NCR Corporation
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Speculative Grade Liquidity Rating, Affirmed SGL-2
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD4
from LGD5)
Assignments:
Issuer: NCR Corporation
Senior Secured 1st lien Term Loan B due 2026, Assigned
Ba2 (LGD2)
Senior Secured 1st lien Delayed Draw Term Loan B due 2026,
Assigned Ba2 (LGD2)
Senior Secured 1st lien Revolving Credit Facility due 2024,
Assigned Ba2 (LGD2)
Outlook Actions:
Issuer: NCR Corporation
Outlook, Remains Stable
RATINGS RATIONALE
NCR's B1 CFR is constrained by the company's elevated gross
leverage of approximately 5x debt-to-EBITDA (Moody's adjusted and
including preferred equity, 6x including expensed capitalized
software), expectations for a challenging operating environment
within the company's core automated teller machine ("ATM") market
over the coming year, and the company's willingness to take on
incremental credit risk to fund acquisitions and shareholder
returns. These risk factors are partially mitigated by NCR's
leading market position across its financial self-service and
retail point-of-sale hardware business, a growing proportion of
recurring revenues supported by long term contracts, and good
geographic and customer diversification. Additionally, the
company's credit profile should benefit from NCR's ongoing efforts
to enhance its offerings in higher growth, higher margin, and more
predictable software and services product lines that complement its
hardware portfolio and provide higher predictability in revenues
and, on balance, support stronger free cash flow ("FCF")
generation.
The Ba2 ratings for NCR's proposed bank debt instruments reflect a
B1-PD PDR and a Loss Given Default ("LGD") assessment of LGD2. The
ratings for these instruments reflect a one-notch differential from
Moody's LGD model due to uncertainty surrounding the amount and
treatment of non-debt liabilities in a default scenario. The senior
secured bank credit facility benefits from a collateral package
that includes upstream guarantees of certain domestic subsidiaries,
a pledge of the shares of certain domestic subsidiaries and certain
international subsidiaries, and a pledge of the assets of certain
domestic subsidiaries. As a result, NCR's senior unsecured notes
are rated B2 reflecting their junior position in the capital
structure as the notes do not share in the collateral package with
the senior secured debt holders.
NCR's SGL-2 liquidity rating reflects the company's good liquidity,
with projected pro forma cash of $300 million-$350 million as of
June 30, 2019, and Moody's expectation of more than $300 million in
FCF in 2019. NCR's liquidity is also supported by nearly full
availability on the company's proposed $900 million revolver and
$100 million of incremental borrowing capacity under a $200 million
trade receivables securitization facility. Moody's expects NCR to
remain compliant with its financial covenants over the next 12
months. The company's liquidity is an important element of NCR's
credit profile given seasonally weak FCF trends in the first half
of the year and periods of elevated required capital expenditures
to support product deployments.
The stable outlook reflects Moody's expectation that NCR's revenues
will rise modestly in the year ahead while cost reduction
initiatives and a more profitable sales mix fuel more meaningful
gains in EBITDA growth. Debt (including preferred equity)-to-EBITDA
is expected to decline to just under 5x (6.4x including expensed
capitalized software) during this period while FCF/Debt levels
approach 8%.
What Could Change the Rating -- Up
NCR's rating could be upgraded if the company demonstrates
sustained revenue growth, operating margin improvements, and
consistent levels of FCF with lower volatility. The rating could
also be considered for an upgrade if the company sustains adjusted
Debt (including preferred equity)-to-EBITDA below 5x.
What Could Change the Rating -- Down
NCR's ratings could be downgraded if operating performance does not
improve as anticipated, there is a deterioration in NCR's
competitive position, or if the company maintains aggressive
financial policies, resulting in an increase in adjusted Debt
(including preferred equity)-to-EBITDA above 5.5x or a decrease in
FCF/debt below 5%.
The principal methodology used in these ratings was Diversified
Technology published in August 2018.
NCR is a leading provider of ATMs as well as retail and
hospitality-oriented point of sale terminals while also offering
software and global end-to-end services solutions to these markets.
Moody's projects the company to generate over $6.6 billion in
revenues in 2019.
NCR CORP: S&P Affirms 'BB' ICR on Debt Transaction; Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issuer credit rating on ATM
and point-of-sale (POS) hardware, software, and service solution
provider NCR Corp. The outlook is stable.
S&P also assigned its 'BBB-' issue-level ratings to the company's
proposed first-lien credit facilities. The recovery rating is '1',
reflecting S&P's expectation for very high recovery (90%-100%;
rounded estimate: 95%) in the event of a payment default. The
rating agency would withdraw its issue-level ratings on the
company's existing secured debt due in 2021 when it has been
repaid.
The ratings affirmation reflects NCR's progress under its
restructuring program and its announcement that it plans to
refinance its secured debt. The debt transaction will push out
secured debt maturities to 2024 from 2021 on the revolving credit
facility and to 2026 from 2021 on the term loan facility. S&P
expects debt amortization will meaningfully reduce, as the proposed
term loan B will have a 1% annual requirement, or $7.5 million,
compared to over $80 million currently. The transaction is largely
leverage neutral. For the last 12 months ended June 30, 2019, S&P
Global Ratings-adjusted leverage was 6.1x.
The stable outlook reflects S&P's expectation that leverage will
decline to the low-5x area by the end of 2019 and into the 4x area
in 2020. The rating agency forecasts annual organic revenue growth
in the low-single-digit percentage area and higher investment
spending than in recent years for more software and services
solutions. While NCR may execute on debt-funded acquisitions, S&P
believes it will maintain leverage below 5x after 2019.
"We could lower the rating if structural headwinds in NCR's end
markets are greater than expected, such as an expectation for ATMs
to decline in developed markets. This may result in more
restructuring costs and persistent revenue declines. We could also
lower the rating if investment spending or restructuring costs for
further initiatives accelerates such that we expect leverage to
remain above 5x after 2019," S&P said. A meaningfully sized
debt-funded acquisition with extensive integration activity could
also lead to a downgrade if pro forma leverage crosses 5x,
according to the rating agency.
"We could raise the rating if NCR commits to a more conservative
financial policy and sustains leverage below 4x. While unlikely
over the next 12 months, this could occur longer-term with
sustained margin improvement and revenue growth in the mid- to
high-single-digit percentages," S&P said.
NORTH AMERICA: New Plan Adds Information on Ownership, Management
-----------------------------------------------------------------
North America Steel & Wire, Inc., filed a second amended disclosure
statement referring to a chapter 11 plan.
This latest filing provides additional information on the ownership
and management of the Debtor. It states that:
The Debtor is owned by Stemar Investments, Inc. is operated by
Maroune Farah who is the President. The Board of Directors is made
up of Stephen Gauci.
The following individuals own shares in Stemar Investments Inc.:
a. Maroune Farah (1/3 ownership in the company);
b. Stephen Gauci (1/3 ownership in the company);
c. Anis Farah (1/2 of 1/3 ownership in the company); and Elie
Farah (1/2 of 1/3 ownership in the company).
Stemar is operated by Maroune Farah who is the President. The Board
of Directors is made up of Stephen Gauci. Stemar Investments also
owns ISM Enterprises.
Maroune Farah is the sole owner of Butler Finance Corporation.
Butler Finance Corporation is a Canadian company. Butler Finance
Corporation is a financial conduit only and was only created
because of no financing alternatives available in the United
States. Butler Finance received money to finance all aspects of the
operation from its inception. All funds were borrowed and
originated from Canada from third parties and family members and
these monies were in turn loaned to the Debtor since the Debtor had
no ability to receive financing on its own in the United States.
Killarney Finance is an entity owned and operated by Peter
McMullen. Peter McMullen and Killarney Finance are not owners of
directors, or shareholders in the Debtor or Maroune & Stemar
Investments. The only relation between the entities is Peter
McMullen and Maroune Farah are personal friends. Maroune Farah is
not a shareholder, officer or a Board Member of Killarney Finance.
Cambos Global Enterprises, LP owns the real estate used by the
Debtor. A brother of Maroune Farah is one of the owners of that
entity. There is only a verbal tenancy. The Debtor has not paid
rent during this bankruptcy. They have a claim for unpaid rent.
Maroune Farah is not an owner of that entity.
A copy of the Second Amended Disclosure Statement is available at
https://tinyurl.com/yxrwy6tq from Pacermonitor.com at no charge.
About North America Steel
North America Steel & Wire Inc. is a manufacturer of copper and
zinc coated wires and is located in Butler, Pennsylvania. North
America Steel & Wire sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 18-20718) on Feb. 27,
2018. In its petition signed by Maroune Farah, president, the
Debtor estimated assets of less than $50,000 and liabilities of $1
million to $10 million. Donald R. Calaiaro, Esq., David Z.
Valencik, Esq., and Michael Kaminski, Esq., at Calaiaro Valencik
serve as the Debtor's bankruptcy counsel. Judge Thomas P. Agresti
presides over the case.
OLAIDE DARAMOLA: Must File Amended Plan Outline Before August 15
----------------------------------------------------------------
Bankruptcy Judge Nancy V. Alquist denied approval of Olaide
Daramola, Gbamgbade G. Daramola and Grace Solutions, LLC’s
disclosure statement.
The Debtors are directed to file an amended disclosure statement no
later than August 15, 2019.
Olaide Daramola filed for chapter 11 bankruptcy protection (Bankr.
D. Md. Case No. 16-21657) on August 30, 2016, and is represented by
Thomas E. Crowe, Esq.
OLMA-XXI INC: Case Summary & 10 Unsecured Creditors
---------------------------------------------------
Debtor: Olma-XXI, Inc.
204 28th Street
Brooklyn, NY 11232
Business Description: Olma-XXI, Inc. is a food products supplier
in Brooklyn, New York.
Chapter 11 Petition Date: August 1, 2019
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Case No.: 19-44731
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
3099 Coney Island Avenue, 3rd Floor
Brooklyn, NY 11235
Tel: (718) 513-3145
Fax: (347) 342-3156
E-mail: alla@kachanlaw.com
Total Assets: $246,471
Total Liabilities: $1,965,500
The petition was signed by Valeri Eliachov, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 10 unsecured creditors is available for free
at:
http://bankrupt.com/misc/nyeb19-44731.pdf
PACIFIC ENERGY: Seeks to Hire Spencer and Jensen as Counsel
-----------------------------------------------------------
Pacific Energy & Mining seeks authority from the United States
Bankruptcy Court for the District of Utah (Salt Lake City) to hire
Spencer and Jensen as counsel.
Pacific Energy requires Spencer and Jensen to:
(a) provide advice to the Debtors with respect to their powers
and duties as debtors in possession in the continued operation of
their business and the management of their properties;
(b) prepare, on behalf of the Debtors, applications, motions,
answers, orders, reports, memoranda of law, and other papers in
connection with the Chapter 11 Cases;
(c) represent the Debtors in negotiations with creditors,
equity holders, and parties in interest, including governmental
agencies and authorities; and
(d) perform other necessary or appropriate legal services in
connection with the chapter 11 cases.
The current hourly rates charged by SJ are:
Partners $300
Paralegal $150
Terry R. Spencer, partner at the law firm of Spencer & Jensen PLLC,
attests that SJ is a "disinterested person" as that phrase is
defined in Bankruptcy Code section 101(14).
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Mr.
Spencer disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- SJ has represented the Debtors since January 2019 in
connection with their restructuring efforts, and since December 10,
2015 with respect to certain corporate matters. The material
financial terms for the prepetition engagement remained the same as
the engagement was hourly-based subject to economic adjustment;
and
-- SJ, in conjunction with the Debtors, has developed a
staffing plan and is developing a prospective budget for the
Chapter 11 Cases.
The firm can be reached at:
Terry R. Spencer, Esq.
TR SPENCER & ASSOCIATES
140 West 9000 South, Suite 9
Sandy, UT 84070
Tel: (801) 566-1884
Fax: (801) 748-4022
E-mail: trspencer@live.com
terry@spencerandcollier.com
About Pacific Energy & Mining
Reno, Nevada-based Pacific Energy & Mining owns and operates
pipelines that transport natural gas.
Pacific Energy & Mining filed a voluntary petition for relief
pursuant to chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case
No. 19-25030) on July 10, 2019. In the petition signed by Tariq
Ahmad, president, the Debtor estimated $500,000 to $1 million in
assets and $1 million to $10 million in liabilities.
The case is assigned to Judge R. Kimball Mosier. Terry R. Spencer,
Esq. at TR SPENCER & ASSOCIATES represents the Debtor as counsel.
PARK MONROE: Seeks to Hire CPEX Real Estate as Real Estate Broker
-----------------------------------------------------------------
Park Monroe Housing Development Fund Corp. and its
debtor-affiliates seek authority from the U.S. Bankruptcy Court for
the Eastern District of New York to hire CPEX Real Estate, as real
estate broker with respect to its properties: five residential
buildings and an additional lot.
-- 409 Kosciuszko Street
Brooklyn, New York 11211
-- 403 Kosciuszko Street
Brooklyn, New York 11211
-- 399 Kosciuszko Street
Brooklyn, New York 11211
-- 397 Kosciuszko Street
Brooklyn, New York 11211
-- 675 Halsey Street
Brooklyn, New York 11233
-- 671 Halsey Street
Brooklyn, New York 11233
The professional services that CPEX has been called upon to render
include, but shall not be limited to, delivering to Northeast
Brooklyn Partnership a purchaser of the Buildings and brokering a
sale.
The Retention Agreement provides for a Commission to CPEX, paid by
NBP in connection with the sale of the property, of 2.0% of the
gross sales price plus payment of certain expenses.
Brian T. Leary, managing partner of CPEX Real Estate, attests that
his firm does not hold or represent any interest adverse to the
Debtor or its chapter 11 estate, its creditors or any other
party-in-interest, and is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Brian T. Lear
CPEX Real Estate
81 Willoughby St.
Brooklyn, NY 11201
Phone: +1 718-935-1800
About Park Monroe Housing Development
Park Monroe Housing Development Fund Corporation is a
not-for-profit and tax-exempt corporation that develops a housing
project for persons of low income, pursuant to Section 573 of
Article XI of the New York Private Housing Finance Law. The
Company's primary tangible assets are located at 477 Saratoga
Avenue a/k/a 1352-1354 East New York Avenue, Brooklyn, N.Y.; 1350
Park Place, Brooklyn, N.Y.; 180 Grafton Street, Brooklyn, N.Y.; 257
Mother Gaston Boulevard, Brooklyn, N.Y.; and 249-251 Mother Gaston
Boulevard, Brooklyn, N.Y.
984-988 Greene Avenue Housing Development Fund is a not-for-profit
corporation whose tangible assets are properties located at 984-988
Greene Avenue, Brooklyn, N.Y. Its assets are used consistent with
its charitable purposes of providing affordable housing units for
families of low income in the central sections of Brooklyn, N.Y.
Northeast Brooklyn Partnership is a for-profit partnership whose
primary tangible assets are properties located at 409 Kosciuszko
Street, Brooklyn, N.Y.; 403 Kosciuszko Street, Brooklyn, N.Y.; 399
Kosciuszko Street, Brooklyn, N.Y.; 397 Kosciuszko Street, Brooklyn,
N.Y.; 675 Halsey Street, Brooklyn, N.Y.; and 671 Halsey Street,
Brooklyn, N.Y.
Park Monroe and its affiliates sought Chapter 11 protection (Bankr.
E.D.N.Y. Case Nos. 19-40820 to 19-40823) on Feb. 11, 2019. The
petitions were signed by Jeffrey E. Dunston, president and chief
executive officer. At the time of filing, the Debtors estimated
assets and liabilities under $10 million. The Debtors are
represented by Allen G. Kadish, Esq., of Archer & Greiner, P.C.
PERSPECTA INC: Moody's Rates Revised Bank Credit Facility 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned Ba3 ratings to the revised bank
credit facility of Perspecta Inc., on par with the existing bank
facility ratings. Existing ratings, including the company's Ba3
corporate family rating and Ba3-PD probability of default rating,
as well as its SGL-2 speculative grade liquidity rating are all
unaffected. The outlook is stable.
The planned bank facility revisions include extension of maturity
under the revolver and term loans A1 and A2, each by 15 months, and
a revolver commitment increase to $750 million from $600 million.
Among other changes, the revisions will loosen the step-down
scheduled under the facility's net leverage covenant test threshold
to 4.25x rather than 3.75x (from the initial 4.5x threshold) and
extend the time until the step-down applies to Q3-2020 from
Q4-2019. Moody's noted that the amended facility terms effectively
provide Perspecta greater financial flexibility for acquisition
spending and/or other corporate purposes.
The following ratings were assigned:
Assignments:
Issuer: Perspecta Inc.
Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3)
RATINGS RATIONALE
The Ba3 CFR is unaffected from the amend/extend transaction and
continues to reflect Perspecta's competitive scale within defense
and federal services contracting, with good qualifications for
managed services, cyber security and advanced analytics projects.
During its first year of independent operations, the company's low
single-digit revenue growth and EBITDA margin of 17% were in step
with Moody's expectations. The good booking rate achieved (book to
bill of 1.6x) reflects marketing traction, a primary objective from
the combination with Vencore and Keypoint Government Solutions at
inception. Competitive intensity, nonetheless, remains high within
defense services contracting following a period of rapid industry
consolidation. The emergence of several pure-play service
contractors with $5 billion or more of annual revenue makes
Perspecta's continued booking success more important. The company's
largest contract, the US Navy's NGEN program, represents about
15%-20% of total revenue and is under recompete, with an award
decision expected by late 2019/early 2020. That award will be
pivotal to sustained revenue growth beyond 2020.
The stable outlook continues to reflect the company's backlog of
$10.7 billion and Moody's expectation of leverage below 4x in
fiscal 2020, with annual free cash flow of $300 million to $350
million.
The Ba3 ratings assigned to the bank credit facility are on par
with the company's CFR, reflecting that this constitutes the
preponderance of debt within the company's capital structure.
Upward rating momentum would depend on a healthy backlog trend with
revenues above $5 billion, annual free cash flow of $400 million
and leverage below 4x.
Downward rating pressure would mount with revenue pressure,
leverage above 5x, free cash flow below $250 million or a weakened
liquidity profile.
Headquartered in Chantilly, Virginia, Perspecta Inc. is an
end-to-end information technology services and mission solutions
provider to government customers at the US federal, state and local
level. Perspecta's annual revenue run rate is about $4.3 billion.
The company was formed on May 31, 2018 when DXC Technology Company
completed the spin-off of its United States Public Sector business,
which subsequently merged with Vencore Holding Corp. and KGS
Holding Corp. Both Vencore and KGS were portfolio companies of
Veritas Capital, who held about 14% of Perspecta's outstanding
stock at close of the merger.
PHI INC: Gets Final Nod to Use Cash Collateral Until Sept. 30
-------------------------------------------------------------
Judge Harlin DeWayne Hale of the U.S. Bankruptcy Court for the
Northern District of Texas signed a final order authorizing PHI,
Inc. and its debtor-affiliates to use cash collateral through and
including Sept. 30, 2019.
The Debtors may use cash for (a) general corporate purposes, (b)
capital expenditures, (c) payment of costs of administration of
these chapter 11 cases, and (d) payment of the costs and expenses
of Thirty Two, L.L.C. and Blue Torch in connection with these
chapter 11 cases.
PHI, Inc., as borrower, and certain subsidiary guarantors, were
each jointly and severally indebted and liable to Thirty Two,
L.L.C. in respect of the Prepetition Working Capital Loan Documents
in the amount of $130 million, plus accrued and unpaid interest as
of the Petition Date. The obligations under the Prepetition Working
Capital Loan Documents are secured by first priority, valid,
binding, perfected and enforceable liens and security interests
granted by each Obligor upon and in all inventory, accounts, and
spare parts located in the United States, but excluding the O&G
Aircraft Spare Parts, and all interest, income, fruits, returns,
accessions, profits, products and proceeds of any of the
foregoing.
Each of the Debtors were jointly and severally indebted and liable
to the Aircraft Lenders in respect of the Blue Torch Loan Documents
in the amount of $70 million, secured by (i) first priority, valid,
binding, perfected and enforceable liens and security interests
granted by each Debtor upon and in all the Aircraft Priority
Collateral and (ii) second priority, valid, binding, perfected and
enforceable liens and security interests granted by each Debtor
upon and in the Working Capital Priority Collateral.
Thirty Two, L.L.C. is granted first priority, continuing, valid,
binding, enforceable, non-avoidable, and automatically properly
perfected replacement liens and security interests granted by each
Obligor upon and in all accounts acquired or generated from and
after the Petition Date and all proceeds, products, offspring or
profits of such accounts to the extent of any decrease in the value
of the TTL's interest in its Prepetition Collateral (including cash
collateral) that would result from any use, sale, or lease of the
Prepetition Collateral.
In addition, TTL is granted a superpriority administrative expense
claim to the extent of any diminution and taking into account any
of its Adequate Protection Liens, which will have priority in these
chapter 11 cases under sections 503(b) and 507(b) of the Bankruptcy
Code and otherwise over all administrative expense claims and
unsecured claims against the Obligors and their estates of any kind
or nature whatsoever, and will be subordinate only to the
Carve-Out.
Blue Torch, for the ratable benefit of the Aircraft Lenders, will
receive:
(a) first priority, continuing, valid, binding, enforceable,
non-avoidable, and automatically properly perfected replacement
liens and security interests granted by each Debtor upon and in all
Aircraft Priority Collateral acquired or generated from and after
the Petition Date;
(b) second priority, continuing, valid, binding, enforceable,
non-avoidable, and automatically properly perfected replacement
liens and security interests granted by each Debtor upon and in all
Working Capital Priority Collateral acquired or generated from and
after the Petition Date, to the extent of any decrease in the value
of the Aircraft Lenders' (including Blue Torch's) interest in their
Prepetition Collateral (including cash collateral) that would
result from any use, sale, or lease of the Prepetition Collateral
(including cash collateral) absent such a grant of the Adequate
Protection Liens to Blue Torch; and
(c) a superpriority administrative expense claim to the
extent of any diminution, which will have priority in these chapter
11 cases under sections 503(b) and 507(b) of the Bankruptcy Code
and otherwise over all administrative expense claims and unsecured
claims against the Debtors and their estates of any kind or nature
whatsoever, except such claim will be junior to the TTL's
Superpriority Claim and will be subordinate to the Carve-Out.
A copy of the Final Cash Collateral Order is available for free at
http://bankrupt.com/misc/txnb19-30923-793.pdf
About PHI Inc.
PHI, Inc. -- http://www.phihelico.com/-- is a provider of
helicopter transportation services in the oil and gas industry,
primarily transporting crews and materials, and in the healthcare
and emergency medical services industry, primarily transporting
patients. It is a publicly held company and provides services in
the United States and abroad.
As of the petition date, PHI owns or operates 238 aircraft
worldwide, of which 17 are leased while eight are owned by the
customer and operated by the company. The remaining 213 are owned
by PHI. The company employs 2,218 people, including pilots,
mechanics, medical and administrative staff.
PHI and its affiliates sought protection under Chapter 11 of the
Bankruptcy Code Bankr. N.D. Tex. Lead Case No. 19-30923) on March
14, 2019. At the time of the filing, PHI estimated assets of $1
billion to $10 billion and liabilities of $500 million to $1
billion.
The cases are assigned to Judge Harlin DeWayne Hale.
The companies tapped DLA Piper LLP (US) as their bankruptcy
counsel; Jones Walker LLP as regular outside counsel; Houlihan
Lokey Capital Inc. and FTI Consulting Inc. as financial advisors;
and Prime Clerk LLC as claims, noticing and solicitation agent.
The Office of the U.S. Trustee on March 25 appointed five creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 cases of PHI, Inc. and its affiliates. Haynes and Boone,
LLP, is co-counsel to the Creditors' Committee. Milbank, LLP, is
counsel to the Creditors' Committee. PJT Partners LP, is investment
banker to the Creditors' Committee.
The Office of the U.S. Trustee on April 25, 2019, appointed an
official committee of equity security holders in the Chapter 11
cases of PHI, Inc. and its affiliates. David B. Golubchik, Esq.,
Eve H. Karasik, Esq., and Gary E. Klausner, Esq., at Levene, Neale,
Bender, Yoo & Brill L.L.P., in Los Angeles, California; and Jason
S. Brookner, Esq., Lydia R. Webb, Esq., and Amber M. Carson, Esq.,
at Gray Reed & McGraw LLP, in Dallas, Texas, represent the Equity
Committee.
PIER 3: $392K Private Sale of Lunenbaurg Property to Groarks Okayed
-------------------------------------------------------------------
Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the
District of Massachusetts denied without prejudice Pier 3 Builders,
LLC's private sale of the real property known and numbered as 141
Beal Street, Lunenburg, Massachusetts, by private sale, to William
J. and Donna M. Groark for $391,900, free and clear.
Pier 3 is authorized to:
a. assume the Purchase and Sale Agreement with the
Purchasers;
b. pay directly to Fidelity Co-operative Bank the outstanding
balance due on the Construction Loan executed between the bank and
Pier 3 for the property;
c. credit the Purchasers the funds provided and used by the
Debtor that are secured by the mortgage granted to them; and
d. pay directly at the closing all ordinary closing costs,
including, but not limited to, excise taxes and filing fees,
counsel's fee for handling the closing, and a broker's fee of 4.5%
payable to Coldwell Banker Residential Mortgage.
The sale of the property is free and clear of liens and
encumbrances, with any other liens and encumbrances to attach to
the proceeds.
The 14-day stay of the Order provided by Fed. R. Bankr. P. 6004(h)
is waived.
About Pier 3 Builders
Pier 3 Builders, LLC is a privately held company in the residential
building construction business. The Company offers construction
and remodeling services such as custom home building, additions,
basement remodeling, and more.
Pier 3 Builders, LLC sought Chapter 11 protection (Bankr. D. Mass
Case No. 19-41022) on June 24, 2019. Judge Elizabeth D. Katz is
assigned to the case.
The Debtor estimates assets and liabilities in the range of $1
million to $10 million.
The Debtor tapped David M. Nickless, Esq., at Nickless, Phillips
and O'Connor as counsel.
The petition was signed by Brian Campanale, manager.
PPT HOLDINGS: S&P Affirms B-' Issuer Credit Rating; Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on PPT
Holdings I LLC, parent of Park Place Technologies LLC, and all the
debt ratings.
PPT is raising $31 million of incremental first-lien term loan and
$30 million of incremental second-lien term loan. The company
expects to use the loan proceeds along with a capital infusion from
new private equity sponsor, Charlesbank Capital Partners LLC, which
acquired 46% of the company, to fund a dividend distribution to the
existing shareholders, and the acquisition of Entuity for about $21
million.
The ratings on PPT reflect the company's limited scale in a highly
competitive and fragmented third-party maintenance (TPM) market and
a highly leveraged financial profile. Partially offsetting these
factors are a substantial recurring maintenance revenue base,
excellent customer retention, and a diverse client base that spans
across numerous industry verticals.
The stable outlook reflects S&P's view that the company will
generate organic revenue growth at about 10% per year, and maintain
relatively consistent EBITDA margins over the coming year. Despite
initial leverage in the low-9x, S&P expects deleveraging to come
from EBITDA growth and modest debt reduction as the company
integrates recent acquisitions.
"We could consider lowering the ratings if increased competition
from OEMs or weakened operating performance leads to negative free
operating cash flow or higher leverage such that we view the
capital structure as unsustainable. We could also lower the rating
if we no longer expect the company to have sufficient liquidity to
service its debt," S&P said.
"While unlikely over the next year, we could consider raising the
ratings if the company applies much of its free cash flow to debt
repayment, reducing leverage to below 6x. Improved performance over
the coming year could come from a faster-than-expected adoption of
the ParkView product and by growing customer base substantially
while maintaining a conservative cost structure," S&P said.
RANDAL D. HAWORTH: Plan Confirmation Hearing Set for Oct. 3
-----------------------------------------------------------
Bankruptcy Judge Julia W. Brand issued an order approving Randal D.
Haworth, M.D., Inc.'s disclosure statement describing its chapter
11 plan.
Ballots accepting or rejecting the plan and objections to
confirmation of the plan must be filed and served no later than
August 26, 2019.
Oct. 3, 2019 at 10:00 a.m. is scheduled as the hearing on the
confirmation of the Plan.
About Randal D. Haworth
Randal D. Haworth M.D. Inc. filed a Chapter 11 bankruptcy petition
(Bankr. C.D. Cal. Case No. 18-16306) on May 31, 2018, estimating
less than $1 million in assets and liabilities.
The Debtor tapped Havkin & Shrago, Attorneys At Law, as counsel.
Elliot M. Hirsch was appointed as patient care ombudsman in the
Debtor's case.
On Aug. 9, 2018, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. Buchalter is the
Committee's legal counsel.
RED APPLE RESOURCES: Second Interim Cash Collateral Order Entered
-----------------------------------------------------------------
Judge Ronald B. King of the U.S. Bankruptcy Court for the Western
District of Texas has signed a second interim order authorizing Red
Apple Resources of SouthTexas, LLC, to use the cash collateral of
Schertz Bank & Trust until Aug. 14, 2019.
The Debtor is allowed to use cash solely for the purpose of funding
utility and insurance premium payments while the Real Property is
being marketed. The Debtor is required to list the property for
sale and obtain a contract for sale no later than Nov. 8, 2019.
The only items necessary to be listed in a budget are: (i) the
projected $1,100 for utilities service; and (ii) insurance premium
payments in the amount of $1,500 for the period from June 15
through Dec. 15, 2019. All expenses must be paid when due and
payable.
Schertz Bank & Trust Bank has two claims from two loans with
balances which total approximately $1,067,000 as of the Petition
Date pursuant to certain loan documents and instruments executed in
connection with extensions of credit.
Schertz Bank is granted a valid, perfected and enforceable first
priority and senior security interest, in accordance with and based
upon the validity and extent of its pre-petition liens, in and upon
all of the presently existing and hereafter acquired or arising
property of the Debtor and the bankruptcy estate. Schertz Bank
security interest in the Post-Petition Collateral will be subject
to no equal or prior lien recorded lien, whether previously,
contemporaneously or hereafter granted.
The Debtor is also required to: (a) continue to maintain, insure
and otherwise preserve and protect all Prepetition and
Post-Petition Collateral, including payment of utilities; and, (b)
provide all financial and other reports required to be provided to
Schertz Bank & Trust under the Loan Agreements.
A copy of the Second Interim Cash Collateral Order is available for
free at
http://bankrupt.com/misc/txwb19-51338-34.pdf
About Red Apple Resources of South Texas
Red Apple Resources of South Texas, Inc., sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
19-51338) on June 3, 2019. The petition was signed by James E.
Schrad, president. At the time of the filing, the Debtor estimated
assets of less than $50,000 and debts of less $500,000. The Debtor
is represented by Michael J. O'Connor, Esq., at the Law Office of
Michael J. O' Connor.
REFINITIV US: Moody's Reviews B3 CFR for Upgrade on Pending Sale
----------------------------------------------------------------
Moody's Investors Service placed Refinitiv US Holdings Inc.'s B3
Corporate Family Rating and existing debt ratings on review for
upgrade following the announcement that the company has entered
into a definitive agreement to be acquired by London Stock Exchange
Group plc for approximately $27 billion in an all share
transaction.
The $27 billion purchase price reflects an EV/EBITDA multiple of
13x Refinitiv's as-reported adjusted EBITDA excluding run-rate cost
synergies (or approximately 11x including run rate cost synergies)
as of LTM 30 June 2019 based on Moody's calculations. Under the
terms of the transaction, Refinitiv's existing shareholders will
hold an approximate 37% stake in LSEG and just under 30% of LSEG's
total voting rights. Refinitiv's shareholders will be subject to a
share lock-up over a two to four year period (excluding a small
amount that will be free to trade at closing). Based on LSEG's
announcement, Moody's expects Refinitiv's rated debt instruments to
be fully repaid at closing or shortly thereafter.
RATINGS RATIONALE
Refinitiv's B3 CFR considers its leading global market positions
across its financial information, data management, analytics and
risk management segments, meaningful recurring revenue, relatively
high customer retention levels and minimal execution risk to the
cost savings plan. The rating also reflects the company's elevated
financial leverage, competitive challenges that historically
produced low-single digit organic revenue growth and substantial
one-time carve-out costs over the near-term to achieve future cost
savings.
The outcome of the review will depend on the amount of debt
repayment that occurs upon close, the nature of LSEG's support for
any of the existing debt of Refinitiv that remains in the capital
structure post-combination and the position of such remaining debt
within LSEG's capital structure. Upon repayment of the debt
obligations, Moody's will withdraw all of Refinitiv's ratings,
including the CFR and instrument ratings.
LSEG anticipates a lengthy and in-depth antitrust review from US
and European regulatory bodies, potentially lasting up to 18
months, likely due to scrutiny related to the combination of LSEG's
clearing business and Refinitiv's over-the-counter trading
platforms, in Moody's opinion. "Moody's believes Refinitiv's
financial data, analytics and risk businesses will have better
prospects for executing on its plan to create an improved customer
value proposition and achieving mid-single digit organic revenue
growth as a strategic asset of LSEG rather than operating as a
standalone entity with high leverage," according to Gregory Fraser,
Moody's VP-Senior Analyst. Moody's view is driven by LSEG's greater
financial resources and stronger credit profile that should enable
it to fund the necessary growth investments to transform the
combined group into a global financial market infrastructure and
data provider at scale.
LSEG has arranged underwritten bridge financing of approximately
$13.5 billion to refinance the entirety of Refinitiv's term loans
and notes. Given the change of control provisions embedded in
Refinitiv's credit agreement and notes indentures, Moody's expects
the company's sizable bank credit facilities and secured and
unsecured notes will be completely repaid and/or refinanced at
closing at LSEG's more attractive cost of capital. Notwithstanding
the indentures' portability clause exception, a change of control
gives bondholders the right to put the notes to Refinitiv at a
price equal to 101% of the principal amount plus accrued and unpaid
interest if the combined group's pro forma consolidated net debt to
EBITDA is greater than 4x. Refinitiv's approximate $1.1 billion
outstanding PIK preferred equity security (unrated) will be
converted to LSEG's common equity under the terms of the
agreement.
Ratings Placed Under Review for Upgrade:
Issuer: Refinitiv US Holdings Inc.
Corporate Family Rating, Placed on Review for Upgrade,
currently B3
Probability of Default Rating, Placed on Review for Upgrade,
currently B3-PD
Senior Secured Revolving Credit Facility, Placed on Review for
Upgrade, currently B2 (LGD3)
Senior Secured Term Loan B, Placed on Review for Upgrade,
currently B2 (LGD3)
Senior Secured First-Lien Notes, Placed on Review for Upgrade,
currently B2 (LGD3)
Senior Unsecured Notes, Placed on Review for Upgrade, currently
Caa2 (LGD6)
Outlook Actions:
Outlook, Changed to Rating Under Review from Stable
RENAISSANCE HEALTH: Seeks to Extend Exclusivity Period to Oct. 17
-----------------------------------------------------------------
Renaissance Health Publishing, LLC, d/b/a Renown Health Products,
requests the U.S. Bankruptcy Court for the Southern District of
Florida to extend the exclusive periods within which only the
Debtor may propose a Plan and within which only the Debtor may
solicit acceptances to its Plan for 90 days through and including
Oct. 17 and Dec. 17, respectively.
The Debtor currently requires additional time to establish a
clearer track record of income and expenses in order to formulate a
feasible plan. In addition, the Debtor is currently seeking
resolutions with several creditors, which will also have a material
effect on the plan.
About Renaissance Health Publishing
d/b/a Renown Health Products
Renaissance Health Publishing, LLC, doing business as Renown Health
Products, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla.
Case No. 19-13729) on March 22, 2019, disclosing under $1 million
in both assets and liabilities. The Debtor tapped Aaron A.
Wernick, Esq., at Furr Cohen, P.A., as bankruptcy counsel, and
Schneider Rothman IP Law Group, as special counsel.
SADDY FAMILY: Hires Bielat Santore as Real Estate Broker
--------------------------------------------------------
Saddy Family, LLC, seeks authority from the U.S. Bankruptcy Court
for the District of New Jersey to employ Bielat Santore & Company,
as real estate broker to the Debtor.
Saddy Family requires Bielat Santore to market and sell the
Debtor's real property located at 203 Blvd., 419 Blvd., 117 Webster
Ave, 125 Webster Ave. and 126 Hamilton Ave, Seaside Heights, NJ.
Bielat Santore will be paid a commission of 7% of the sales price.
Bielat Santore will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Barry Bielat, a partner at Bielat Santore, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Bielat Santore can be reached at:
Barry Bielat, Esq.
BIELAT SANTORE & COMPANY
201 Main St.
Allenhurst, NJ 07711
Tel: (732) 531-4200
About Saddy Family
Saddy Family, LLC, owner of commercial buildings in Seaside
Heights, New Jersey, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 19-14223) on Feb. 28, 2019.
At the time of the filing, the Debtor estimated assets of less
than $50,000 and liabilities of $1 million to $10 million. The
case is assigned to Judge Christine M. Gravelle. The Law Office of
Eugene D. Roth is the Debtor's counsel.
SCHRAD LTD: Allowed to Use Schertz Bank Cash Collateral
-------------------------------------------------------
Schrad Ltd received authorization from the U.S. Bankruptcy Court
for the Western District of Texas use the cash collateral of
Schertz Bank & Trust through Aug. 14, 2019 as set forth in the
second interim order.
The Debtor may use cash solely for the purpose of funding utility
and insurance premium payments while the Real Property is being
marketed. The Debtor will list the property for sale and obtain a
contract for sale no later than Nov. 8, 2019. The projected utility
and insurance costs are as follows: $1,100 (estimated) for
utilities service, $1,500 for insurance.
Schertz Bank & Trust has two claims from two loans with balances
which total approximately $1,067,000 as of the Petition Date.
Schertz Bank is granted a valid, perfected and enforceable first
priority and senior security interest in and upon all of the
presently existing and hereafter acquired or arising property of
the Debtor and the Debtor's bankruptcy estate, in accordance with
and based upon the validity and extent of its pre-petition liens
which are, based upon the terms of the pre-petition Loan
Agreements, having priority over all other creditors, in and upon
all of the presently existing and hereafter acquired or arising
property of the Debtor and the Debtor's bankruptcy estate.
A copy of the Second Interim Cash Collateral Order is available for
free at
http://bankrupt.com/misc/txwb19-51331-43.pdf
About Schrad Ltd
Schrad Ltd. and its affiliates, Honey Bee Bakers, LLC and Red Apple
Resources of South Texas, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Lead Case No. 19-51331) on June
3, 2019. In the petitions signed by James E. Schrad, president,
Schrad estimated assets and liabilities of less than $50,000. The
companies are represented by the Law Office of Michael J.
O'Connor.
SCIENTIFIC GAMES: May Issue 3.5M Additional Shares Under 2003 Plan
------------------------------------------------------------------
Scientific Games Corporation filed a Form S-8 registration
statement with the Securities and Exchange Commission to register
3,500,000 shares of common stock which may be issued under the
Scientific Games Corporation 2003 Incentive Compensation Plan, as
amended and restated.
Pursuant to Rule 416(a) under the Securities Act of 1933, as
amended, the Registration Statement will also cover any additional
shares of Common Stock that may become issuable under the 2003 Plan
pursuant to the Registration Statement by reason of any stock
dividend, stock split, recapitalization or any other similar
transaction effected without receipt of consideration which results
in an increase in the number of the Company's outstanding shares of
Common Stock.
A full-text copy of the prospectus is available for free at:
https://is.gd/AC79Wl
About Scientific Games
Based in Las Vegas, Nevada, Scientific Games Corporation
(NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer
of technology-based products and services and associated content
for the worldwide gaming, lottery, social and digital gaming
industries. Its portfolio of revenue-generating activities
primarily includes supplying gaming machines and game content,
casino-management systems and table game products and services to
licensed gaming entities; providing instant and draw-based lottery
products, lottery systems and lottery content and services to
lottery operators; providing social casino solutions to retail
consumers and regulated gaming entities, as applicable; and
providing a comprehensive suite of digital RMG and sports wagering
solutions, distribution platforms, content, products and services.
Scientific Games reported a net loss of $352.4 million for the year
ended Dec. 31, 2018, compared to a net loss of $242.3 million on
$3.08 for the year ended Dec. 31, 2017. As of June 30, 2019, the
Company had $7.93 billion in total assets, $10.05 billion in total
liabilities, and $2.11 billion in total stockholders' deficit.
SCIENTIFIC GAMES: Widens Net Loss to $75M in Second Quarter
-----------------------------------------------------------
Scientific Games Corporation filed with the Securities and Exchange
Commission on Aug. 2, 2019, its quarterly report on Form 10-Q
reporting a net loss of $75 million on $845 million of total
revenue for the three months ended June 30, 2019, compared to a net
loss of $6 million on $845 million of total revenue for the three
months ended June 30, 2018. The result was primarily driven by a
$60 million debt financing expense related to the successful notes
offering that lowered cash interest costs and extended debt
maturities. This quarter also included a $3 million loss on
remeasurement of Euro denominated debt versus a $34 million gain in
the prior year period.
For the six months ended June 30, 2019, the Company reported a net
loss of $99 million on $1.68 billion of total revenue compared to a
net loss of $208 million on $1.65 billion of total revenue for the
same period last year.
As of June 30, 2019, the Company had $7.93 billion in total assets,
$10.05 billion in total liabilities, and $2.11 billion in total
stockholders' deficit.
Net cash provided by operating activities was $95 million compared
to $102 million in the year ago period, driven by the factors
impacting Gaming revenue.
Free cash flow, a non-GAAP financial measure, increased by $109
million from the year ago period to $38 million. Net debt, a
non-GAAP financial measure, was $8.6 billion ($9 billion in face
value of debt outstanding less $369 million of cash and cash
equivalents) at quarter end. Net debt leverage ratio, a non-GAAP
financial measure, decreased to 6.5x on a $308 million decrease in
net debt. The company is targeting net debt leverage of
approximately 5.5x by the end of 2020.
In the second quarter, the Company completed the initial public
offering of an 18.0% minority interest in its Social gaming
business, SciPlay Corporation. The total proceeds to Scientific
Games including the partial exercise of the over-allotment option
were $342 million, of which $30 million was used by SciPlay for IPO
fees and general corporate purposes, and the balance enables the
Company to further reduce its debt.
"We are pleased with the growth we are continuing to see across
Lottery, Digital, and SciPlay while also stabilizing gaming
operations driven by the successful launches of several new games.
The second quarter really highlights the diversity of our business
and the many avenues we have to generate revenue across the globe,"
said Barry Cottle, president and chief executive officer of
Scientific Games. "The entire organization is laser focused on
strengthening our core business and capturing market share in
emerging digital markets while making our business more efficient.
These key focus areas will allow us to deliver the greatest returns
for our stakeholders, set ourselves up for profitable growth, and
generate significant cash flow to continue on our deleveraging
path."
Michael Quartieri, chief financial officer of Scientific Games,
added, "This quarter, we paid down another $155 million in debt
bringing our year to date total to $300 million, and the SciPlay
IPO proceeds will continue to enable us to make substantial
payments on our debt as we work toward our deleveraging goal."
Key Highlights vs. Second Quarter 2018
* Gaming operations - U.S. and Canadian revenue was flat
sequentially driven by a $0.52 increase in average daily
revenues from the prior quarter, while the installed base
decreased by 902 units from the removal of older machines
and the closure of a racino in the Northeast. Total gaming
operations revenues decreased by $2 million sequentially as
international operations revenue was slightly impacted, as
anticipated, by the implementation of the GBP2 max bet limit
in April.
* Gaming machine sales - total new unit shipments in the U.S.
and Canada decreased due to lower replacement units, while
international units increased. The company launched the new
Twinstar Wave XL cabinet on a for sale model with six themes
and the entire library of content from the Twinstar J43.
* Gaming systems revenue was down due to fewer Canadian
systems launches.
* Table games continued to grow with revenue up $3 million
from the prior year to $62 million on continued strength in
the business.
* Lottery systems revenue was $24 million higher primarily
related to equipment sales as part of a recent award of a
10-year sports betting contract in Turkey.
* Instant products revenue was flat reflecting growth in
international business offset by a decline domestically
related to the anniversary of the Willy Wonka linked game.
* SciPlay revenue increased 18%, which was more than twice the
rate of market growth. The growth was driven by increased
monetization of paying players, with ARPDAU up 14% to $0.48.
* Digital casino platform reliably processed over $9 billion
in total wagers. The company was awarded platform of the
year at the EGR 2019 B2B Awards for Open Gaming System (OGS)
and Open Platform System (OPS). Currently launching mobile
sports in Pennsylvania, Indiana, and Iowa with more on the
horizon.
Liquidity
As of June 30, 2019, the Company's principal sources of liquidity,
other than cash flows provided by operating activities were cash
and cash equivalents and amounts available under its revolving
credit facility and the SciPlay Revolver (for its SciPlay business
segment).
On April 4, 2019, the Company redeemed $1,000 million of its
outstanding 2022 Unsecured Notes and paid accrued and unpaid
interest thereon plus related premiums, fees and costs.
Scientific Games said, "The amount of our available cash and cash
equivalents fluctuates principally based on borrowings or
repayments under our credit facilities, investments, acquisitions
and changes in our working capital position. The total borrowing
capacity under our revolving credit facility will depend on the
amount of outstanding borrowings and letters of credit issued and
remaining in compliance with the covenants under the credit
facility, including a maintenance covenant based on consolidated
net first lien leverage. The total borrowing capacity under the
SciPlay Revolver will depend on the amount of outstanding
borrowings and letters of credit issued and remaining in compliance
with the covenants under the SciPlay Revolver, including
maintenance covenants based on total net leverage and fixed charge
coverage beginning in the third quarter of 2019. We were in
compliance with the covenants under all of our credit agreements as
of June 30, 2019.
"We believe that our cash flow from operations, available cash and
cash equivalents and available borrowing capacity under our
existing financing arrangements will be sufficient to meet our
liquidity needs for the foreseeable future; however, we cannot
assure that this will be the case. We believe that substantially
all cash held outside the U.S. is free from legal encumbrances or
similar restrictions that would prevent it from being available to
meet our global liquidity needs."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/moePlz
About Scientific Games
Based in Las Vegas, Nevada, Scientific Games Corporation
(NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer
of technology-based products and services and associated content
for the worldwide gaming, lottery, social and digital gaming
industries. Its portfolio of revenue-generating activities
primarily includes supplying gaming machines and game content,
casino-management systems and table game products and services to
licensed gaming entities; providing instant and draw-based lottery
products, lottery systems and lottery content and services to
lottery operators; providing social casino solutions to retail
consumers and regulated gaming entities, as applicable; and
providing a comprehensive suite of digital RMG and sports wagering
solutions, distribution platforms, content, products and services.
Scientific Games reported a net loss of $352.4 million for the year
ended Dec. 31, 2018, compared to a net loss of $242.3 million on
$3.08 for the year ended Dec. 31, 2017. As of March 31, 2019,
Scientific Games had $8.83 billion in total assets, $11.26 billion
in total liabilities, and a total stockholders' deficit of $2.42
billion.Scientific Games Corporation filed with the Securities and
Exchange Commission on Aug. 2, 2019, its quarterly report on Form
10-Q reporting a net loss of $75 million on $845 million of total
revenue for the three months ended June 30, 2019, compared to a net
loss of $6 million on $845 million of total revenue for the three
months ended June 30, 2018. The result was primarily driven by a
$60 million debt financing expense related to the successful notes
offering that lowered cash interest costs and extended debt
maturities. This quarter also included a $3 million loss on
remeasurement of Euro denominated debt versus a $34 million gain in
the prior year period.
For the six months ended June 30, 2019, the Company reported a net
loss of $99 million on $1.68 billion of total revenue compared to a
net loss of $208 million on $1.65 billion of total revenue for the
same period last year.
As of June 30, 2019, the Company had $7.93 billion in total assets,
$10.05 billion in total liabilities, and $2.11 billion in total
stockholders' deficit.
Net cash provided by operating activities was $95 million compared
to $102 million in the year ago period, driven by the factors
impacting Gaming revenue.
Free cash flow, a non-GAAP financial measure, increased by $109
million from the year ago period to $38 million. Net debt, a
non-GAAP financial measure, was $8.6 billion ($9 billion in face
value of debt outstanding less $369 million of cash and cash
equivalents) at quarter end. Net debt leverage ratio, a non-GAAP
financial measure, decreased to 6.5x on a $308 million decrease in
net debt. The company is targeting net debt leverage of
approximately 5.5x by the end of 2020.
In the second quarter, the Company completed the initial public
offering of an 18.0% minority interest in its Social gaming
business, SciPlay Corporation. The total proceeds to Scientific
Games including the partial exercise of the over-allotment option
were $342 million, of which $30 million was used by SciPlay for IPO
fees and general corporate purposes, and the balance enables the
Company to further reduce its debt.
"We are pleased with the growth we are continuing to see across
Lottery, Digital, and SciPlay while also stabilizing gaming
operations driven by the successful launches of several new games.
The second quarter really highlights the diversity of our business
and the many avenues we have to generate revenue across the globe,"
said Barry Cottle, president and chief executive officer of
Scientific Games. "The entire organization is laser focused on
strengthening our core business and capturing market share in
emerging digital markets while making our business more efficient.
These key focus areas will allow us to deliver the greatest returns
for our stakeholders, set ourselves up for profitable growth, and
generate significant cash flow to continue on our deleveraging
path."
Michael Quartieri, chief financial officer of Scientific Games,
added, "This quarter, we paid down another $155 million in debt
bringing our year to date total to $300 million, and the SciPlay
IPO proceeds will continue to enable us to make substantial
payments on our debt as we work toward our deleveraging goal."
Key Highlights vs. Second Quarter 2018
* Gaming operations - U.S. and Canadian revenue was flat
sequentially driven by a $0.52 increase in average daily
revenues from the prior quarter, while the installed base
decreased by 902 units from the removal of older machines
and the closure of a racino in the Northeast. Total gaming
operations revenues decreased by $2 million sequentially as
international operations revenue was slightly impacted, as
anticipated, by the implementation of the GBP2 max bet limit
in April.
* Gaming machine sales - total new unit shipments in the U.S.
and Canada decreased due to lower replacement units, while
international units increased. The company launched the new
Twinstar Wave XL cabinet on a for sale model with six themes
and the entire library of content from the Twinstar J43.
* Gaming systems revenue was down due to fewer Canadian
systems launches.
* Table games continued to grow with revenue up $3 million
from the prior year to $62 million on continued strength in
the business.
* Lottery systems revenue was $24 million higher primarily
related to equipment sales as part of a recent award of a
10-year sports betting contract in Turkey.
* Instant products revenue was flat reflecting growth in
international business offset by a decline domestically
related to the anniversary of the Willy Wonka linked game.
* SciPlay revenue increased 18%, which was more than twice the
rate of market growth. The growth was driven by increased
monetization of paying players, with ARPDAU up 14% to $0.48.
* Digital casino platform reliably processed over $9 billion
in total wagers. The company was awarded platform of the
year at the EGR 2019 B2B Awards for Open Gaming System (OGS)
and Open Platform System (OPS). Currently launching mobile
sports in Pennsylvania, Indiana, and Iowa with more on the
horizon.
Liquidity
As of June 30, 2019, the Company's principal sources of liquidity,
other than cash flows provided by operating activities were cash
and cash equivalents and amounts available under its revolving
credit facility and the SciPlay Revolver (for its SciPlay business
segment).
On April 4, 2019, the Company redeemed $1,000 million of its
outstanding 2022 Unsecured Notes and paid accrued and unpaid
interest thereon plus related premiums, fees and costs.
Scientific Games said, "The amount of our available cash and cash
equivalents fluctuates principally based on borrowings or
repayments under our credit facilities, investments, acquisitions
and changes in our working capital position. The total borrowing
capacity under our revolving credit facility will depend on the
amount of outstanding borrowings and letters of credit issued and
remaining in compliance with the covenants under the credit
facility, including a maintenance covenant based on consolidated
net first lien leverage. The total borrowing capacity under the
SciPlay Revolver will depend on the amount of outstanding
borrowings and letters of credit issued and remaining in compliance
with the covenants under the SciPlay Revolver, including
maintenance covenants based on total net leverage and fixed charge
coverage beginning in the third quarter of 2019. We were in
compliance with the covenants under all of our credit agreements as
of June 30, 2019.
"We believe that our cash flow from operations, available cash and
cash equivalents and available borrowing capacity under our
existing financing arrangements will be sufficient to meet our
liquidity needs for the foreseeable future; however, we cannot
assure that this will be the case. We believe that substantially
all cash held outside the U.S. is free from legal encumbrances or
similar restrictions that would prevent it from being available to
meet our global liquidity needs."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/moePlz
About Scientific Games
Based in Las Vegas, Nevada, Scientific Games Corporation
(NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer
of technology-based products and services and associated content
for the worldwide gaming, lottery, social and digital gaming
industries. Its portfolio of revenue-generating activities
primarily includes supplying gaming machines and game content,
casino-management systems and table game products and services to
licensed gaming entities; providing instant and draw-based lottery
products, lottery systems and lottery content and services to
lottery operators; providing social casino solutions to retail
consumers and regulated gaming entities, as applicable; and
providing a comprehensive suite of digital RMG and sports wagering
solutions, distribution platforms, content, products and services.
Scientific Games reported a net loss of $352.4 million for the year
ended Dec. 31, 2018, compared to a net loss of $242.3 million on
$3.08 for the year ended Dec. 31, 2017. As of March 31, 2019,
Scientific Games had $8.83 billion in total assets, $11.26 billion
in total liabilities, and a total stockholders' deficit of $2.42
billion.
SHALE SUPPORT GLOBAL: Hires Greenberg Traurig as Counsel
--------------------------------------------------------
Shale Support Global Holdings, LLC, and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ Greenberg Traurig, LLP, as counsel to the
Debtor.
Shale Support Global requires Greenberg Traurig to:
a. provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their businesses and management of their
property;
b. negotiate, draft, and pursue all documentation necessary in
these chapter 11 cases;
c. prepare applications, motions, answers, orders, reports,
and other legal papers necessary to the administration of
the Debtors' estates;
d. appear in Court and protect the interests of the Debtors
before the Court;
e. assist with any disposition of the Debtors' assets, by
reorganization, sale or otherwise;
f. negotiate and take all necessary or appropriate actions in
connection with a Chapter 11 plan and all related documents
thereunder and transactions contemplated therein;
g. attend meetings and negotiating with representatives of
creditors, the U.S. Trustee, and other parties-in-interest;
h. provide legal advice regarding bankruptcy law, corporate
law, corporate governance, securities, employment,
transactional, tax, labor, litigation, intellectual
property and other issues to the Debtors in connection with
the Debtors' ongoing business operations;
i. take all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against the
Debtors, and representing the Debtors in negotiations
concerning litigation in which the Debtors are involved,
including objections to claims filed against the Debtors'
estates; and
j. perform other legal services for, and providing other
necessary legal advice to, the Debtors, which may be
necessary and proper in these chapter 11 cases.
Greenberg Traurig will be paid at these hourly rates:
Shareholders $485 to $1,455
Of Counsels $365 to $1,225
Associates $300 to $860
Legal Assistants/Paralegals $120 to $465
In the 90 days prior to the Petition Date, Greenberg Traurig
received payments from the Debtors in the amount of $1,050,945. Of
that amount, $550,000 has been applied to Greenberg Traurig's
prepetition fees and expenses, which totaled $550,000, and $945 was
for payment of prepetition fees incurred and paid in the ordinary
course of business. Greenberg Traurig has a remaining retainer of
$500,000 as of the Petition Date.
Greenberg Traurig will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Karl D. Burrer, a partner at Greenberg Traurig, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Greenberg Traurig can be reached at:
Karl D. Burrer, Esq.
Shari L. Heyen, Esq.
David R. Eastlake, Esq.
GREENBERG TRAURIG, LLP
1000 Louisiana St., Suite 1700
Houston, Texas 77002
Tel: (713) 374-3500
Fax: (713) 374-3505
E-mail: Burrerk@gtlaw.com
HeyenS@gtlaw.com
EastlakeD@gtlaw.com
About Shale Support
Shale Support Global Holdings, LLC -- https://shalesupport.com/ --
is a privately owned, vertically integrated proppant supplier to
the exploration and production sector of the oil and gas industry.
Their proppants are comprised of monocrystalline sand (i.e., "frac
sand") designed to keep an induced hydraulic fracture open to
enhance oil and gas product recovery in unconventional shale
deposits.
On July 11, 2019, Shale Support Global Holdings, LLC, and seven
affiliates sought Chapter 11 protection (S.D. Tex. Lead Case No.
19-33884).
Shale Support Global disclosed total assets of $3,150,225 and
$127,899,025 as of May 31, 2019.
The Hon. David R. Jones is the case judge.
The Debtors tapped GREENBERG TRAURIG, LLP, as counsel; ALVAREZ &
MARSAL as financial advisor; PIPER JAFFRAY & CO. as investment
banker; and DONLIN, RECANO & COMPANY, INC., as claims agent.
McGlinchey Stafford PLLC, is special counsel.
SHALE SUPPORT GLOBAL: Hires Mr. Barton of Alvarez & Marsal as CRO
-----------------------------------------------------------------
Shale Support Global Holdings, LLC, and its debtor-affiliates, seek
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ Mr. Gary Barton of Alvarez & Marsal North
America, LLC, chief restructuring officer to the Debtors.
Shale Support Global requires Alvarez & Marsal to:
(a) assist in evaluation of the Debtors' current business plan
and in preparation of a revised operating plan and cash
flow forecast and presentation of such plan and forecast
to the Debtors' Board of Directors and its creditors;
(b) assist in the development and management of a 13-week cash
flow forecast, including ongoing variance reports and
discussion with the Debtors' stakeholders regarding such;
(c) assist in financing issues including the preparation of
debtor in possession facility sizing and assistance in
preparation of reports and liaison with creditors;
(d) assist with all aspects of contingency planning in
connection with a potential chapter 11 proceeding,
including in preparation of any first-day motions, first-
day declarations and supporting material in support of
potential first- and second-day hearings;
(e) report to the Board as desired or directed by the
Responsible Officers; and
(f) provide other activities as are approved by the
Responsible Officers or the Board and agreed to by Alvarez
& Marsal.
Alvarez & Marsal will be paid at these hourly rates:
Managing Directors $875 to $1,100
Directors $675 to $850
Analysts/Associates $400 to $650
Alvarez & Marsal received $125,000 as a retainer in connection with
preparing for and conducting the filing of these Chapter 11 cases.
In the 90 days prior to the Petition Date, Alvarez & Marsal
received payments on invoices totaling $481,406.50 in the aggregate
for services performed for the Debtor. Prior to the Petition Date,
Alvarez & Marsal applied a portion of the Retainer, in the amount
of $22,624.18, to a pre-petition invoice. The total amount of
Alvarez & Marsal's invoices for services during the 90-day period
were $504,030.68. The Firm has a remaining retainer of
approximately $102,375.82 as of the Petition Date.
Alvarez & Marsal will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Mr. Gary Barton, managing director of Alvarez & Marsal North
America, LLC, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtors and
their/its estates.
Alvarez & Marsal can be reached at:
Mr. Gary Barton
ALVAREZ & MARSAL NORTH AMERICA, LLC
700 Louisiana Street, Suite 3300
Houston, TX 77002
Tel: (713) 571-2400
About Shale Support
Shale Support Global Holdings, LLC -- https://shalesupport.com/ --
is a privately owned, vertically integrated proppant supplier to
the exploration and production sector of the oil and gas industry.
Their proppants are comprised of monocrystalline sand (i.e., "frac
sand") designed to keep an induced hydraulic fracture open to
enhance oil and gas product recovery in unconventional shale
deposits.
On July 11, 2019, Shale Support Global Holdings, LLC, and seven
affiliates sought Chapter 11 protection (S.D. Tex. Lead Case No.
19-33884).
Shale Support Global disclosed total assets of $3,150,225 and
$127,899,025 as of May 31, 2019.
The Hon. David R. Jones is the case judge.
The Debtors tapped GREENBERG TRAURIG, LLP, as counsel; ALVAREZ &
MARSAL as financial advisor; PIPER JAFFRAY & CO. as investment
banker; and DONLIN, RECANO & COMPANY, INC., as claims agent.
McGlinchey Stafford PLLC, is special counsel.
SHALE SUPPORT GLOBAL: Hires Ordinary Course Professionals
---------------------------------------------------------
Shale Support Global Holdings, LLC, and its debtor-affiliates, seek
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ ordinary course professionals.
Shale Support Global hires the following ordinary course
professionals
Professionals Service Provided
Baker, Donelson, Bearman, Non-bankruptcy Legal Counsel
Caldwell & Berkowitz
3414 Peachtree Road N.E.
Monarch Plaza Suite 1600
Atlanta, GA 30326
Bennett Jones LLP Non-bankruptcy Legal Counsel
4500 Bankers Hall East,
855-2Nd St SW
Calgary, Alberta, Canada T2P 4K7
Butler Snow, LLP Non-bankruptcy Legal Counsel
1020 Highland Colony Pkwy Ste. 1400
Ridgeland, MS 39157
Darnall Sikes & Frederick Accounting
2000 Kaliste Saloom Rd., Suite 300
Lafayette, LA 80609
Headwaters, Inc. Environmental Consultant
307 Highland Park Co.
Ridgeland, MS 39157
McGlinchey Stafford, PLLC Non-bankruptcy Legal Counsel
301 Main Street, 14th Floor
Baton Rouge, LA 70801
Whitley Penn, LLP Litigation Consultant 1400
West 7Th St, Suite 400
Fort Worth, TX 76102
To the best of the Debtor's knowledge the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtors and
their/its estates.
About Shale Support
Shale Support Global Holdings, LLC -- https://shalesupport.com/ --
is a privately owned, vertically integrated proppant supplier to
the exploration and production sector of the oil and gas industry.
Their proppants are comprised of monocrystalline sand (i.e., "frac
sand") designed to keep an induced hydraulic fracture open to
enhance oil and gas product recovery in unconventional shale
deposits.
On July 11, 2019, Shale Support Global Holdings, LLC, and seven
affiliates sought Chapter 11 protection (S.D. Tex. Lead Case No.
19-33884).
Shale Support Global disclosed total assets of $3,150,225 and
$127,899,025 as of May 31, 2019.
The Hon. David R. Jones is the case judge.
The Debtors tapped GREENBERG TRAURIG, LLP, as counsel; ALVAREZ &
MARSAL as financial advisor; PIPER JAFFRAY & CO. as investment
banker; and DONLIN, RECANO & COMPANY, INC., as claims agent.
McGlinchey Stafford PLLC, is special counsel.
SHALE SUPPORT GLOBAL: Hires Piper Jaffray as Investment Banker
--------------------------------------------------------------
Shale Support Global Holdings, LLC, and its debtor-affiliates, seek
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ Piper Jaffray & Co., as investment banker to the
Debtors.
Shale Support Global requires Piper Jaffray to:
a. familiarize with the business, operations, properties,
financial condition and prospects of the Debtors;
b. review the Debtors' financial condition and outlook;
c. assist the Debtors in the development of financial data;
d. present to the Debtors' Board of Directors, creditors, as
you request;
e. analyze the Debtors' financial liquidity and evaluate
alternatives to improve such liquidity;
f. evaluate the Debtors' debt capacity and alternative capital
structures;
g. participate in negotiations among the Debtors and their
creditors, suppliers, lessors and other interested parties
with respect to any of the transactions contemplated by
this Agreement; and
h. provide such other advisory services as are customarily
provided in connection with the analysis and negotiation of
any of the transactions contemplated by this Agreement, as
requested and mutually agreed.
Piper Jaffray will be paid as follows:
a. Monthly Fees. Pursuant to the Engagement Agreement dated
July 3, 2019 included herein, a monthly advisory fee of
$100,000 for each month of the Engagement, with the first
monthly fee due and payable on July 3, 2019, and each
subsequent monthly fee due and payable in advance of each
subsequent calendar month commencing on August 3, 2019. The
monthly fees are 50% creditable against the fees described
in (b) and (d) below;
b. Financing Fee. In the event of Financing, a fee equal to
(1) two and a half percent (2.5%) of the aggregate
principal amount with respect to any debt financing; (2)
seven percent (7%) of the total gross proceeds, with
respect to any rights offering of equity securities; and
(3) $1,000,000 with respect to any rights offering
transaction, payable promptly upon consummation of
each such Financing.
c. Restructuring Fee. A fee of $2,250,000 (the minimum fee)
payable upon consummation of any Restructuring.
Piper Jaffray will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Richard J. Shinder, managing director of Piper Jaffray & Co.,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
Piper Jaffray can be reached at:
Richard J. Shinder
PIPER JAFFRAY & CO.
345 Park Avenue, Suite 1200
New York, NY 10154
Tel: (212) 284-9456
About Shale Support
Shale Support Global Holdings, LLC -- https://shalesupport.com/ --
is a privately owned, vertically integrated proppant supplier to
the exploration and production sector of the oil and gas industry.
Their proppants are comprised of monocrystalline sand (i.e., "frac
sand") designed to keep an induced hydraulic fracture open to
enhance oil and gas product recovery in unconventional shale
deposits.
On July 11, 2019, Shale Support Global Holdings, LLC, and seven
affiliates sought Chapter 11 protection (S.D. Tex. Lead Case No.
19-33884).
Shale Support Global disclosed total assets of $3,150,225 and
$127,899,025 as of May 31, 2019.
The Hon. David R. Jones is the case judge.
The Debtors tapped GREENBERG TRAURIG, LLP, as counsel; ALVAREZ &
MARSAL as financial advisor; PIPER JAFFRAY & CO. as investment
banker; and DONLIN, RECANO & COMPANY, INC., as claims agent.
McGlinchey Stafford PLLC, is special counsel.
SHALE SUPPORT GLOBAL: Taps McGlinchey Stafford as Special Counsel
-----------------------------------------------------------------
Shale Support Global Holdings, LLC, and its debtor-affiliates, seek
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ McGlinchey Stafford PLLC, as special counsel to
the Debtors.
Shale Support Global requires McGlinchey Stafford to:
a) Plant Materials, LLC v. Shale Support Holdings, LLC, et
al., Arbitration Case No. 01-18-0004-2494, American
Arbitration Association, Commercial Arbitration.
b) Southton Rail Yard, L.L.C. v. Cudd Pumping Services, Inc.,
Civil Action No. 18:1632, United States District Court for
the Southern District of Texas, Houston Division.
c) Collection Matter Against Sabino Energy Services LLC.
McGlinchey Stafford will be paid at these hourly rates:
Members $475
Of Counsel $430
Associates $325
Legal Assistants/Paralegals $175
In the 90 days prior to the Petition Date, McGlinchey Stafford
received payments from the Debtors in the amount of $454,957.91. Of
this amount, $73,397.30 was paid by Westchester Surplus Lines
Insurance Company, the Debtors' insurer, and $60,000 is held as a
retainer. As of the Petition Date, the Debtors owed McGlinchey
Stafford $245,200.79 for legal services rendered before the
Petition Date. Some or all of these amounts may be paid by the
Debtors' insurers.
McGlinchey Stafford will also be reimbursed for reasonable
out-of-pocket expenses incurred.
M. Brent Hicks, partner of McGlinchey Stafford PLLC, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
McGlinchey Stafford can be reached at:
M. Brent Hicks, Esq.
MCGLINCHEY STAFFORD PLLC
6688 North Central Expressway, Suite 400
Dallas, TX 75206
Tel: (214) 445-2445
Fax: (214) 445-2450
About Shale Support
Shale Support Global Holdings, LLC -- https://shalesupport.com/ --
is a privately owned, vertically integrated proppant supplier to
the exploration and production sector of the oil and gas industry.
Their proppants are comprised of monocrystalline sand (i.e., "frac
sand") designed to keep an induced hydraulic fracture open to
enhance oil and gas product recovery in unconventional shale
deposits.
On July 11, 2019, Shale Support Global Holdings, LLC, and seven
affiliates sought Chapter 11 protection (S.D. Tex. Lead Case No.
19-33884).
Shale Support Global disclosed total assets of $3,150,225 and
$127,899,025 as of May 31, 2019.
The Hon. David R. Jones is the case judge.
The Debtors tapped GREENBERG TRAURIG, LLP, as counsel; ALVAREZ &
MARSAL as financial advisor; PIPER JAFFRAY & CO. as investment
banker; and DONLIN, RECANO & COMPANY, INC., as claims agent.
McGlinchey Stafford PLLC, is special counsel.
SIZMEK INC: Sale of Peer39 Business to P39 for $13M Approved
------------------------------------------------------------
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York authorized Sizmek Inc. and affiliates
to sell their portion of the Peer39 business to P39 Tech, LLC, for
$13 million, cash.
The Debtors conducted the Auction for the Purchased Assets on July
24, 2019.
The APA and all other ancillary documents, and all of the terms and
conditions thereof, are approved.
The sale is free and clear of all Encumbrances. Such Encumbrances
will attach to the proceeds received by Debtors from such sale.
The Designated Back-Up Bidder is approved as the Back-Up Bidder and
the Designated Back-Up Bid is hereby approved and authorized as the
Back-Up Bid and, in accordance with the Notice of Auction, will
remain open and irrevocable until the earliest of (i) the first
business day after the consummation of the Sale Transaction with
the Buyer, (ii) Sept. 20, 2019, and (iii) the release of the
Designated Back-Up Bid by the Debtors.
In the event the Debtors proceed with the Designated Back-Up
Bidder, no further relief or order will be required, and all
provisions of the Order referring to the Buyer will apply to the
Designated Back-Up Bidder mutatis mutandis, and all provisions of
the Order referring to the APA will refer to the asset purchase
agreement submitted by the Designated Back-Up Bidder to the
Sellers, as modified by the Designated Back-Up Bidder on the record
at the Auction, mutatis mutandis.
The Debtors are authorized and directed to assume and assign each
Assigned Contract listed on the Assigned Contracts list to the
Buyer. They are authorized to pay any of the Sellers'’ Cure
Payments, as contemplated by the APA.
The Debtors received from Hewlett-Packard Financial Services
(“HPFS") the Limited Objection and Reservation of Rights of
Hewlett-Packard Financial Service Inc. to the Debtors' Motion For
An Order Authorizing And Approving A Private Sale Of Debtor Seller'
Portion of the Peer39 Business Free and Clear of All Liens, Claims,
Encumbrances, and Other Interests, and Granting Related Relief,
following the inclusion of one or more units of equipment on the
proposed list of equipment to be sold as part of the Sale
Transaction and APA.
Pursuant to Bankruptcy Rules 7062, 9014, 6004(h), and 6006(d), the
Order will be effective immediately upon entry and Debtor Seller
and Buyer are authorized to close the Sale Transaction immediately
upon entry of the Order.
All time periods set forth in the Order will be calculated in
accordance with Bankruptcy Rule 9006(a).
In connection with the Closing of the Sale Transaction, the Debtors
are authorized and directed to pay or cause to be paid directly to
Cerberus Business Finance, LLC, as administrative agent and
collateral agent for certain revolver and term loan lenders under
that certain Financing Agreement, dated as of Sept., 2017,
$14,925,000 in cash out of the amount payable to the Sellers by the
Buyer at Closing plus 100% of any portion of the Escrow Amount
released to the Sellers pursuant to Section 3.3(e) of the APA.
Cerberus is authorized to apply the Direct Cerberus Payments to
satisfy amounts owed to the Secured Parties under the Financing
Agreement in accordance with the terms and conditions thereof.
A copy the APA attached to the Order is available for free at:
http://bankrupt.com/misc/Sizmek_Inc_364_Order.pdf
About Sizmek Inc.
Sizmek Inc. is an online advertising campaign management and
distribution platform for advertisers, media agencies, and
publishers. Sizmek Inc. filed a voluntary Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 19-10971) on March 29, 2019. Judge
Stuart M. Bernstein oversees the case. Kirkland & Ellis LLP, led
by Justin R. Bernbrock, is the Debtor's counsel.
SJV INC: Hires Bielat Santore as Real Estate Broker
---------------------------------------------------
SJV Inc. seeks approval from the U.S. Bankruptcy Court for the
District of New Jersey to hire Bielat Santore & Company, as real
estate broker to the Debtor.
SJV Inc. requires Bielat Santore to market and sell the Debtor's
liquor license, and other personal properties.
Bielat Santore will be paid a commission of 7% of the sales price.
Bielat Santore will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Barry Bielat, partner of Bielat Santore & Company, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Bielat Santore can be reached at:
Barry Bielat, Esq.
BIELAT SANTORE & COMPANY
201 Main St.
Allenhurst, NJ 07711
Tel: (732) 531-4200
About SJV Inc.
SJV Inc., a privately held company in Seaside Heights, New Jersey,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D.N.J. Case No. 19-14220) on Feb. 28, 2019. At the time of the
filing, the Debtor estimated assets of less than $1 million and
liabilities of $1 million to $10 million. The case is assigned to
Judge Christine M. Gravelle. The Law Office of Eugene D. Roth is
the Debtor's counsel.
SMS ENTERPRISES: Seeks to Hire Withum Smith as Accountant
---------------------------------------------------------
SMS Enterprises Inc., and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the District of New Jersey to employ
Withum Smith & Brown, PC, as accountant to the Debtor.
SMS Enterprises requires Withum Smith to provide accounting
services to the Debtors in relation to the Chapter 11 bankruptcy
proceedings.
Withum Smith will be paid at these hourly rates:
Partners $380 to $670
Managers $230 to $580
Staffs $130 to $380
Withum Smith will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Michael Yarrow, partner of Withum Smith & Brown, PC, assured the
Court that he is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Michael Yarrow can be reached at:
Michael Yarrow
WITHUM SMITH & BROWN, PC
506 Carnegie Center, Suite 400
Princeton, NJ 08540
Tel: (609) 520-1188
Fax: (609) 520-9882
About SMS Enterprises Inc.
The Debtor is a privately held company that operates in the
restaurant industry.
SMS Enterprises Inc., based in Marlton, NJ, filed a Chapter 11
petition (Bankr. D.N.J. Case No. 19-21332) on June 5, 2019. The
Hon. Jerrold N. Poslusny Jr. presides over the case. Paul W.
Verner, Esq., serves as bankruptcy counsel.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The petition was signed by Eric
Salisbury, chief executive officer/owner.
SPORTCO HOLDINGS: Panel Taps Emerald Capital as Financial Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of SportCo Holdings,
Inc., and debtor-affiliates seeks authorization from the U.S.
Bankruptcy Court for the District of Delaware to retain Emerald
Capital Advisors, as financial advisor to the Committee.
The Committee requires Emerald Capital to:
a) review and analyze the Debtors' operations, financial
condition, business plan, strategy, and operating
forecasts;
b) run the Debtors' going-concern sale process;
c) assist the Committee in evaluating any proposed debtor-in-
possession financing;
d) assist in the determination of an appropriate capital
structure for the Debtors;
e) advise the Committee as it assesses the Debtors' executor
contracts including assume versus reject considerations;
f) assist and advise the Committee in connection with its
identification, development, and implementation of
strategies related to the potential recoveries for the
unsecured creditors as it relates to the Debtors' Chapter
11 plan;
g) assist the Committee in understanding the business and
financial impact of various restructuring alternatives of
the Debtors;
h) assist the Committee in evaluating, structuring and
negotiating the terms and conditions of any proposed
transaction, including the value of the securities, if any,
that may be issued to thereunder;
i) assist in the evaluation of the asset sale process,
including the identification of potential buyers;
j) assist in evaluating the terms, conditions, and impact of
any proposed asset sale transactions;
k) assist the Committee in evaluating any proposed merger,
divestiture, joint venture, or investment transaction;
l) assist the Committee to value the consideration offered by
the Debtors to unsecured creditors in connection with the
sale of the Debtors' assets or a restructuring;
m) provide testimony, as necessary, in any proceeding before
the Bankruptcy Court; and
n) provide the Committee with other appropriate general
restructuring advice.
Emerald Capital will be paid at these hourly rates:
Managing Partners $550 to $600
Managing Directors $500
Vice Presidents $400 to $450
Associates $350
Analysts $200 to $300
Emerald Capital will also be reimbursed for reasonable
out-of-pocket expenses incurred.
John P. Madden, managing partner of Emerald Capital Advisors,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and (a)
is not creditors, equity security holders or insiders of the
Debtors; (b) has not been, within two years before the date of the
filing of the Debtors' chapter 11 petition, directors, officers or
employees of the Debtors; and (c) does not have an interest
materially adverse to the interest of the estate or of any class of
creditors or equity security holders, by reason of any direct or
indirect relationship to, connection with, or interest in, the
Debtors, or for any other reason.
Emerald Capital can be reached at:
John P. Madden
EMERALD CAPITAL ADVISORS
70 East 55 th Street, 17th Floor
New York, NY 10022
Tel: (212) 201-1904
About SportCo Holdings
United Sporting Companies, Inc., was founded in 1933 under the name
Ellett Brothers, Inc. before merging with Jerry's Sports, Inc. in
2009 and formally changing its name to United Sporting Companies,
Inc. on July 16, 2010. Headquartered in Chapin, S.C., the companies
are marketers and distributors of a broad line of products and
accessories for hunting and shooting sports, marine, camping,
archery, and other outdoor activities.
The companies' product line of over 55,000 SKUs includes firearms,
reloading, marine electronics, trolling motors, optics, cutlery,
archery equipment, ammunition, leather goods, camping equipment,
sportsman gifts, and a variety of other outdoor sporting goods
products. The companies carry the major brands in the outdoor
sports industry, including Remington, Ruger, Browning, Winchester,
Smith & Wesson, Glock, Bushnell, Sig Sauer, Springfield Armory,
Hornaday, Henry, Magpul, Armscor, MotorGuide, Minn Kota, Lowrance,
Federal, CCI, Taurus, and Leupold. The companies employ 321
people. SportCo, a Delaware corporation, is a holding company with
no business operations.
SportCo Holdings, Inc. and its affiliates, including United
Sporting Companies, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-11299) on June
10, 2019. At the time of the filing, SportCo had estimated assets
of less than $50,000 and liabilities of between $100 million and
$500 million. The cases are assigned to Judge Laurie Selber
Silverstein.
The Debtors tapped McDermott Will & Emery LLP as their bankruptcy
counsel; Polsinelli PC as local Delaware counsel; Winter Harbor LLC
as restructuring advisor; and BMC Group, Inc. as notice and claims
agent.
Andrew Vara, acting U.S. trustee for Region 3, on June 17, 2019,
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case. The Committee retained
Lowenstein Sandler LLP, as counsel, and Morris James LLP, as
co-counsel. Emerald Capital Advisors, is financial advisor.
STAGE PRESENCE: Ct. Affirms Ruling in Favor of A.Newman, M. Weiner
------------------------------------------------------------------
Plaintiffs Music Mix Mobile, LLC, Jeff Shaw Productions, Inc., One
Foot Productions, LLC, V.I.P. Prompting Corporation, Idea Asylum
Productions, Inc., Kenigma, Inc., East Shore Sound, Inc., Weusi
Baraka Chapman, Lloyd Jordan, and George M. Bera appeal from
several orders issued in an adversary proceeding before the
bankruptcy court. Defendants Allen Newman and Matthew Weiner
oppose, and Weiner requests the imposition of sanctions.
District Judge Jed S. Rakoff affirms the bankruptcy court's order
in all relevant respects and denies Weiner's request for
sanctions.
This bankruptcy appeal arises from a television production of a
live concert in Washington, D.C. Plaintiffs-Appellants are
employees and vendors who contracted with Debtor Stage Presence,
Inc. to provide labor and services for the concert.
Defendant-Appellee Allen Newman was the owner of Stage Presence
and, along with defendant-appellee Matthew Weiner, one of the
executive producers of the concert. Plaintiffs were never paid for
the work that they did on the show.
Stage Presence filed for bankruptcy on Feb. 9, 2012, and on Nov. 2,
2015, plaintiffs instituted the adversary proceeding. According to
the Revised Amended Complaint ("RAC"), which was filed on March 3,
2016, Stage Presence is a "loan-out corporation" through which
Newman sold his television production services over a period of
several decades.
Defendants moved to dismiss, and in a Memorandum Decision issued on
July 19, 2016, Bankruptcy Judge Michael E. Wiles granted
defendants' motions in part and denied them in part.
On appeal, plaintiffs argue that the bankruptcy court erred: (1) by
granting defendants' motions to dismiss plaintiffs' breach of
contract claim based on a partnership theory; (2) by granting
Weiner's motion to dismiss plaintiffs' breach of contract claim
based on alter ego and other theories; (3) by granting defendants'
motions to dismiss plaintiffs' fraud-based claims; (4) by granting
summary judgment for Weiner on plaintiffs' wage claims; (5) by
granting summary judgment for Newman on plaintiffs' wage claims;
(6) by denying plaintiffs' motion for summary judgment on their
breach of contract/alter ego claim against Newman; and (7) by
granting final judgment for Newman on plaintiffs' breach of
contract/alter ego claim.
After reviewing the arguments above, this Court concludes that the
bankruptcy court properly dismissed plaintiffs' breach of contract
claim based on a partnership theory. Plaintiffs contracted with
Stage Presence, and there are no allegations in the RAC that
establish a partnership between Stage Presence, on the one hand,
and Newman and Weiner, on the other. The RAC never alleged that
Newman and Weiner intended to form a partnership with Stage
Presence, and it did not allege that they intended to share profits
and losses with Stage Presence. If anything, the RAC alleged, to
the contrary, that Newman and Weiner hoped to gain at Stage
Presence's expense by using Stage Presence "as a shell corporation
in which they could rack up debts while assigning profits and
benefits elsewhere."
The Court also agrees with the bankruptcy court that the RAC failed
to allege that Weiner had control over Stage Presence, let alone
the "complete domination" that is required to establish liability
under a veil piercing theory. Moreover, the Court concludes that
the RAC failed to establish that Weiner and Newman were partners,
and Weiner therefore cannot be held liable on this basis.
Accordingly, this Court affirms the bankruptcy court's decision to
dismiss plaintiffs' breach of contract claim against Weiner insofar
as that claim was based on a veil piercing theory.
On Weiner's request, the Court holds that although it may be that
plaintiffs have not presented the most compelling case on appeal,
the Court does not conclude that their arguments and conduct have
been frivolous, "unreasonabl[e]," or "vexatious[]." Accordingly,
Weiner's request is denied.
A copy of the Court's Opinion and Order dated May 6, 2019 is
available at https://tinyurl.com/y3zljt6p from Pacermonitor.com at
no charge.
About Stage Presence
Stage Presence Incorporated filed a Chapter 11 petition (Bankr.
S.D.N.Y., Case No. 12-10525) on February 9, 2012. The petition was
signed by Allen Newman, president. The Debtor has tapped
Shafferman & Feldman, LLP as its legal counsel. The Debtor
estimated assets of $2,309,486 and debts of $1,373,349.
On March 27, 2012, the Office of the United States Trustee
appointed a Committee of Unsecured Creditors in this case. The
members of the Committee are KZ Video Consultants, Inc. and Alan
Adelman. On March 4, 2016, the Office of the United States Trustee
filed an Amended Appointment of a Committee of Unsecured Creditors
in this case, the members of which are KEnigma, Inc. and Alan
Adelman. Neither the original Committee nor the Amended Committee
has retained counsel.
STEARNS HOLDINGS: Hires Alvarez & Marsal as Financial Advisor
-------------------------------------------------------------
Stearns Holdings, LLC, and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Southern District of New
York to employ Alvarez & Marsal North America, LLC, as financial
advisor to the Debtors.
Stearns Holdings requires Alvarez & Marsal to:
(a) assist the Debtors in the preparation of financial-related
disclosures required by the Court, including the Debtors'
schedules of assets and liabilities, statements of
financial affairs, and monthly operating reports;
(b) assist the Debtors with information and analyses required
pursuant to the Debtors debtor-in-possession financing;
(c) assist with the identification and implementation of
short-term cash management procedures;
(c) render advisory assistance in connection with the
development and implementation of key employee
compensation and other critical employee benefit
programs;
(d) assist with the identification of executor contracts and
leases and performance of cost/benefit evaluations with
respect to the affirmation or rejection of each;
(e) assist the Debtors' management team and counsel focused on
the coordination of resources related to the ongoing
reorganization effort;
(f) assist in the preparation of financial information for
distribution to creditors and others, including, but not
limited to, cash flow projections and budgets, cash
receipts and disbursement analysis, analysis of various
asset and liability accounts, and analysis of proposed
transactions for which Court approval is sought;
(g) attend at meetings and assistance in discussions with
potential investors, banks, and other secured lenders, any
official committee appointed in these chapter 11 cases,
the U.S. Trustee, other parties in interest and
professionals hired by same, as requested;
(h) analyze creditor claims by type, entity, and individual
claim, including assistance with development of databases,
as necessary, to track such claims;
(i) assist in the preparation of information and analysis
necessary for the confirmation of a plan of reorganization
in these chapter 11 cases, including information contained
in the disclosure statement;
(j) assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers;
(k) assist in the analysis / preparation of information
necessary to assess the tax attributes related to the
confirmation of a plan of reorganization in these Chapter
11 Cases, including the development of the related tax
consequences contained in the disclosure statement;
(l) provide litigation advisory services with respect to
accounting and tax matters, along with expert witness
testimony on case related issues as required by the
Debtors; and
(m) render such other general business consulting or
such other assistance as Debtors' management or counsel
may deem necessary consistent with the role of a financial
advisor to the extent that it would not be duplicative of
services provided by other professionals in this
proceeding.
Alvarez & Marsal will be paid at these hourly rates:
Restructuring Advisory
Managing Directors $875 to $1,100
Directors $675 to $850
Analysts/Associates $400 to $650
Case Management
Managing Directors $825 to $950
Directors $650 to $800
Analysts/Associates $400 to $600
Alvarez & Marsal received $350,000 as a retainer in connection with
preparing for and conducting the filing of these Chapter 11 cases.
In the 90 days prior to the Petition Date, Alvarez & Marsal
received retainers and payments totaling $1,448,999 in the
aggregate for services performed for the Debtors. The unapplied
residual retainer of $300,000 is held in the Firm's trust account.
Alvarez & Marsal will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Robert A. Campagna, a managing director of Alvarez & Marsal,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
Alvarez & Marsal can be reached at:
Robert A. Campagna
ALVAREZ & MARSAL NORTH AMERICA, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: (212) 759-4433
Fax: (212) 759-5532
About Stearns Holdings
Stearns Lending, LLC, is a provider of mortgage lending services in
Wholesale, Retail, Strategic Alliances, Non-Delegated Correspondent
and Financial Institutions sectors throughout the United States.
Stearns Lending is an equal housing lender and is licensed to
conduct business in 49 states and the District of Columbia.
Additionally, Stearns Lending is an approved HUD (United States
Department of Housing and Urban Development) lender; a Single
Family Issuer for Ginnie Mae (Government National Mortgage
Association); an approved Seller/Servicer for Fannie Mae (Federal
National Mortgage Association); and an approved Seller/Servicer for
Freddie Mac (Federal Home Loan Mortgage Corporation). Stearns
Lending is also approved as a VA (United States Department of
Veterans Affairs) lender, a USDA (United States Department of
Agriculture) lender, and is an approved lending institution with
FHA (Federal Housing Administration). Stearns Lending is located
at 4 Hutton Centre Drive, 10th Floor, Santa Ana, CA 92707.
Stearns Holdings, LLC and six subsidiaries, including Stearns
Lending, LLC, each filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-12226) on July 9, 2019.
Stearns estimated assets of $1 billion to $10 billion and
liabilities of the same range as of the bankruptcy filing.
Stearns' cases have been assigned to the Honorable Shelley C.
Chapman.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
advisor to Stearns, PJT Partners is serving as its financial
advisor and Alvarez & Marsal is serving as its restructuring
advisor. Prime Clerk LLC is the claims and noticing agent,
maintaining the sites https://cases.primeclerk.com/stearns and
http://www.stearnsrestructuring.com/
STEELFUSION CLINICAL: Taps Cohen & Grigsby as Special Counsel
-------------------------------------------------------------
SteelFusion Clinical Toxicology Laboratory, LLC seeks authority
from the U.S. Bankruptcy Court for the Western District of
Pennsylvania to hire Matthew H. Clark of Cohen & Grigsby, as
special counsel.
SteelFusion requires the assistance of Cohen & Grigsby for various
legal duties in the estate, including representation in general
corporate matters and such additional legal matters that the Debtor
may require.
Cohen & Grigsby's hourly rates are:
Matthew H. Clark $545
Directors $315 to $640
Associates $235 to $360
Matthew H. Clark, Esq. assures the Court that his firm represents
no adverse interest to the Debtor or the Estate in the matters upon
which he is proposed to be employed and that said attorney and the
members of his firm are disinterested persons within the meaning of
11 U.S.C. Sections 101(13), 327 and 328.
The firm can be reached through:
Matthew H. Clark, Esq.
Cohen & Grigsby
625 Liberty Venue
Pittsburgh, PA 15222-3152
Phone: 412-297-4900
Fax: 412-209-0672
About SteelFusion Clinical Toxicology
Laboratory LLC
SteelFusion Clinical Toxicology Laboratory, LLC, is a medical
laboratory in Monessen, Pennsylvania, that provides forensic and
clinical toxicology laboratory services.
SteelFusion sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Pa. Case No. 18-24112) on Oct. 23, 2018. At the
time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of $1 million to $10 million. The Debtor
tapped Robert H. Slone, Esq., at Mahady & Mahady, as its legal
counsel.
TAJ GRAPHICS: Court Seals Defamatory Paper Filed by Former Lawyer
-----------------------------------------------------------------
Bankruptcy Judge Thomas J. Tucker granted in and denied in part the
motion to strike defamatory paper filed by Debtor Taj Graphics
Enterprises, LLC's attorney Thomas R. Morris.
The Motion to Strike seeks an order striking a specific document
filed in this case by John D. Hertzberg, the Debtor's former
attorney. The document at issue was filed at Docket # 996 in this
case. The Motion alleges that the Paper at Issue is both
"scandalous" and "defamatory" within the meaning of 11 U.S.C.
section 107(b)(2). That section of the Bankruptcy Code states, in
pertinent part, that "[o]n request of a party in interest, the
bankruptcy court shall . . . protect a person with respect to
scandalous or defamatory matter contained in a paper filed in a
case under this title."
In his response to the Motion, Hertzberg denied that the Paper at
Issue was scandalous or defamatory, but he also indicated that
while he objected to an order striking the Paper at Issue, he did
not object to the Court entering an order sealing the Paper at
Issue. In his Reply in support of the Motion, Morris then argued
that sealing the Paper at Issue was insufficient, and that it
should be stricken.
Under the circumstances, the Court grants the Motion to Strike in
part, by sealing the Paper at Issue -- that is, by restricting
public access to it -- and also by restricting public access to the
Motion to Strike itself and the papers filed regarding that Motion,
which discuss and refer to the content of the Paper at Issue. But
the Court will not "strike" the Paper at Issue. Nor does the Court
make a determination of whether the Paper at Issue (or its
attachment) contain "scandalous or defamatory matter" within the
meaning of section 107(b)(2). It is not necessary to do these
things in order to rule on the Motion.
Effective immediately, the Clerk will restrict public access to
each of the following documents filed in this case, unless and
until this Court orders otherwise in a future order: Docket ## 996,
1022, 1027, 1029, and 1030.
A copy of the Court's Opinion and Order dated May 7, 2019 is
available at https://tinyurl.com/y5arllkh from Pacermonitor.com at
no charge.
About Taj Graphics
Based in Rochester, Michigan, TAJ Graphics Enterprises, LLC, filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No.
09-72532) on Oct. 21, 2009. John D. Hertzberg, Esq., in Bingham
Farms, Michigan, serves as the Debtor's counsel. In its petition,
the Debtor estimated $10 million to $50 million, and $1 million to
$10 million in debts.
THURSTON MANUFACTURING: $800K Sale of Iowa Equipment Approved
-------------------------------------------------------------
Judge Shon Hastings of the U.S. Bankruptcy Court for the District
of Nebraska authorized Thurston Manufacturing Co.'s sale of its
Spencer, Iowa facility equipment as outlined in Exhibit 1 to
Godbersen Metal Works, LLC for $800,000.
The sale is free and clear of all Interests. All Interests that
represent interests in the property will attach to the net
proceeds.
The Court authorizes the assumption and assignment of certain
executory contracts and unexpired leases as contemplated by the
terms and conditions of the APA. It authorizes Debtor to enter
into the Transition Services Agreement to effectuate the terms and
conditions of the APA.
The Debtor is not subject to any stay in the implementation,
enforcement, or realization of the relief granted in the Order.
BizCapital BIDCO, I, L.L.C., the only secured lienholder of the
Iowa Equipment, consents to the sale and the Debtor will remit the
proceeds of the sale to BizCapital in full satisfaction oftheir
lien on the Iowa Equipment. BizCapital will release its lien on
the Iowa Equipment upon receipt of the sale proceeds.
Notwithstanding the applicability, or the possible applicability,
of Bankruptcy Rules 4001, 6004(h), 6006(d), 7062, 9014, the Order
will not be stayed and will be immediately effective and
enforceable upon its entry. Debtor is not subject to any stay in
the implementation, enforcement, or realization of the relief
granted in the Order.
A copy of the Exhibit 1 attached to the Motion is available for
free at:
http://bankrupt.com/misc/Thurston_Manufacturing_184_Sales.pdf
About Thurston Manufacturing Co
Thurston Manufacturing Co., a company based in Thurston, Neb.,
filed a Chapter 11 petition (Bankr. D. Neb. Case No. 19-80108) on
Jan. 23, 2019. In the petition signed by CEO Ryan J. Jensen, the
Debtor estimated $1 million to $10 million in both assets and
liabilities. The Hon. Shon Hastings oversees the case. Elizabeth
M. Lally, Esq., at Goosman Law Firm PLC, serves as bankruptcy
counsel.
TRILOGY INTERNATIONAL: Fitch Affirms B- LT IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed all of Trilogy International Partners,
LLC's ratings, including the 'B-' Issuer Default Rating. The Rating
Outlook is Stable.
Trilogy's rating reflects its small scale, challenger brand
strategy, low profitability and limited financial flexibility with
material exposure to the higher risk operational environment in
Bolivia (BB-/Negative). Fitch expects NuevaTel PCS de Bolivia, S.A
operations will remain challenged as profitability has materially
deteriorated due to an intense competitive environment that
increased churn and repriced the base. Subscriber growth and
operating momentum is expected to continue for Two Degrees Mobile
Limited (2degrees) in New Zealand (AA/Stable) that should support
revenue and EBITDA expansion over the rating horizon.
Fitch views the Bolivian tower monetization and subsequent
sale-leaseback as positive to Trilogy's credit profile with net
proceeds bolstering overall liquidity position. Consequently, the
added liquidity along with Trilogy's intercompany loan structure
should enable the company to have sufficient liquidity for holding
company (HoldCo) debt servicing costs over the rating horizon.
KEY RATING DRIVERS
Continued NZ Growth Expected: Further traction on improving
operational momentum has continued during the past several quarters
for 2degrees and resulted in postpaid churn declining close to
historical levels, increased postpaid subscribers and expanded
EBITDA margins. Slight ARPU pressure is expected from family plans
that have gained acceptance and should drive long-term churn
benefits. Improved execution around sales strategy with bundling
broadband packages which is a lower cost acquisition channel
combined with cost efficiency initiatives should help support solid
EBITDA growth prospects.
Bolivian Operations Challenged: The intense competitive environment
in Bolivia, which was further affected by the introduction of
mobile number portability in the latter half of 2018, has resulted
in material erosion to NuevaTel's EBITDA. Expectations for EBITDA
in 2019 are for roughly USD40 million, which compares to USD66
million in 2018 and USD92 million in 2015. Various strategic
alternatives for NuevaTel remain under consideration following the
appointment of a new CEO and the tower sale in February 2019. An
advisory firm was also brought in to assist the evaluation of
revenue enhancement and operating efficiency initiatives. Fitch
believes these actions should help support stabilization of EBITDA
going forward.
Operating Company Reliance: Trilogy is dependent upon
distributions, including dividends, inter-company debt servicing
payments and management fees from its two operating companies
(OpCos) to service notes at the HoldCo level. Cash leakage on
upstreaming dividends occurs due to taxes and minority interests at
both OpCos. Distributions are subject to foreign exchange risk,
given the U.S. dollar-denominated HoldCo debt structure and local
currency EBITDA generation.
Fitch expects growing cash distributions from 2degrees over the
rating horizon to support cash requirements at the HoldCo level. A
shareholder loan of USD24 million provides a shorter-term path
during the next 12 months to upstream cash with no cash leakage.
While 2degrees has not paid dividends to Trilogy in the past, Fitch
expects dividend payments to Trilogy will begin in 2020 given the
growing cash flows within the New Zealand operations.
Fitch expects Trilogy will upstream a portion of excess cash
created from the Bolivian tower sale-leaseback transaction.
Additional dividends are not expected from NuevaTel for the
foreseeable future given the deterioration in operating cash flow.
NuevaTel was historically a dividend contributor and paid
approximately USD278 million in dividends since 2008.
Capital Structure Stable: Both 2degrees and NuevaTel executed on
financing initiatives during 2018 that when combined with the
proceeds of the tower sale-leaseback have improved financial
flexibility and provided stability within the capital structure.
Fitch expects 2degrees will take steps during the next year before
the senior facilities agreement becomes current (July 2021
maturity) to negotiate a longer dated debt agreement. In Bolivia,
Fitch expects debt levels will remain relatively constant to
potentially increasing despite amortization requirements in the
USD6 million to USD10 million range during the next three years.
Low 5x Leverage Expected: Trilogy had core telecommunications
leverage (adjusted debt/EBITDAR) of approximately 4.1x at the end
of the first quarter 2019, adjusted for handset-related financial
services operations and minority dividend distributions. Fitch
expects leverage will increase to the low 5x range due to increased
rental expense and the deterioration in NuevaTel's EBITDA. To
determine core telecom leverage, Fitch applied a 1:1 debt/equity
ratio to the company's equipment installment plan device
receivables.
Recovery: The recovery analysis assumes Trilogy would be considered
a going concern in a bankruptcy and the company would be
reorganized rather than liquidated. Fitch assumed a 10%
administrative claim.
The Recovery Rating (RR) considers the structural subordination to
the local operating subsidiaries' debt. Fitch believes the recovery
analysis for Trilogy is best performed using a "sum of the parts"
approach, where a waterfall analysis for recovery is performed
individually for each operating subsidiary and rolled up to the
parent level. Consequently, Fitch determined a going-concern EBITDA
for each operating subsidiary. The recovery also takes into account
the minority stakes at each operating subsidiary and assigns a
proportionate EBITDA to Trilogy. Fitch's recovery analysis includes
an additional discount related to the withholding tax the company
is subject to in Bolivia of 12.5% and New Zealand of 7.5%.
The going concern EBITDA, which assumes both depletion of the
current position to reflect the distress that provoked a default
and a level of corrective action Fitch assumes either would have
occurred during restructuring, or would be priced into a purchase
price by potential bidders. The recovery analysis reflects a
scenario, in which EBITDA declines as a result of a continued
erosion of the subscriber base in both Bolivia and New Zealand.
This is due to aggressive price discounting by the larger,
financially stronger competitors that causes a repricing of the
subscriber bases and additional challenges for Bolivia, which could
be due to a combination of country risk factors including
political, social, economic and legal.
In the Bolivian operations, the going concern EBITDA of
approximately USD40 million assumes an approximate 37% decline to
NuevaTel's LTM EBITDA as of March 31, 2019. This is in-line with
expectations for 2019 of roughly USD40 million, which Fitch views
as a trough level EBITDA. For the New Zealand operations, the going
concern EBITDA of USD73 million for 2degrees is an increase from
the previous analysis and represents an approximate 25% decline to
the LTM EBITDA. The increase in going concern EBITDA reflects
2degrees current position in the New Zealand wireless market,
improved operating momentum and the level of required sustainable
cash flow to support required investments for network
infrastructure and the expected spectrum payments to maintain its
competitive position.
Fitch assigned a multiple of 5.0x to NuevaTel based on a range of
multiples used for similar companies using near-proxy sectors in
the Latin American region. New Zealand's multiple of 6.5x reflects
the better overall operating fundamentals than Bolivia. This
includes market position, growth prospects and the country's better
ranking, in creditor friendly policies, and general enforceability.
The multiples compare with the 5.5x median Technology, Media and
Telecommunications (TMT) emergence enterprise value (EV)/forward
EBITDA multiple and the median 6.1x cross-sector multiple.
Fitch uses a recovery cap based on an analysis weighted by the
economic value realized from Trilogy's existing markets of
operation in Bolivia and New Zealand per Fitch's Country-Specific
Treatment of Recovery Ratings Criteria. The criteria limits the
upward notching of issue ratings from Issuer Default Ratings to
reflect recovery expectations for entities based on the effect of
country-specific factors. The criterion provides a cap of 'RR4' on
Bolivia and 'RR2' on New Zealand based on country groupings leading
to a combined weighted cap of 'RR3', thus constraining the RR for
the senior secured notes to 'RR3'.
The assumptions result in a recovery rate for the senior secured
notes at Trilogy within the 'RR3' range to generate a one-notch
uplift to the debt rating from the IDR.
DERIVATION SUMMARY
Trilogy International Partners LLC's rating reflects its small
scale, material exposure to the higher risk operational environment
in Bolivia, challenger brand strategy, low profitability and
limited financial flexibility. Two Degrees Mobile Limited
(2degrees) in New Zealand and NuevaTel PCS de Bolivia, S.A. in
Bolivia compete against much larger peers in three-competitor
markets. The companies maintain approximately 24% and 23% market
share respectively with substantial exposure in both markets to
lower-valued prepaid subscribers.
In New Zealand, 2degrees competes against a former operating
subsidiary of Vodafone Group Plc (BBB+/Stable), with a much more
expansive scale, geographic scope and financial resources. Vodafone
recently concluded its agreement to sell the operations to a New
Zealand infrastructure company and Canadian asset management firm.
Fitch does not expect the sale to negatively affect the competitive
environment.
In Bolivia, NuevaTel competes against Tigo, S.A., an operating
subsidiary of Millicom International Cellular S.A (MIC; BB+/Stable)
with a much stronger business and financial profile. MIC's ratings
reflect the company's geographic diversification, strong brand
recognition and network quality. These factors contributed to MIC's
leading positions in its key markets, strong subscriber base and
solid operating cash flow generation.
Trilogy's ratings are similar to Oi S.A. (B-/Stable). Oi's ratings
reflect its restructured financial profile and uncertain outlook
for its turnaround strategy. Oi S.A. has a weaker competitive
market position in South America. Both Trilogy and Oi S.A. have
weak financial profiles with limited financial flexibility and low
profitability that constrains capital investment.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case in 2019 for the
Issuer
-- Consolidated EBITDA of approximately $130 million;
-- Capital expenditures modestly higher than 2018;
-- Bolivia spectrum payment of approximately $25 million;
-- Reported consolidated ending cash greater than $70
million;
-- Core telecom leverage (adjusted debt to EBITDAR) in
the low 5x range;
-- Annual operating cash costs of approximately $40 million
required for Trilogy at the holdco level with intercompany
loan repayment from New Zealand and a dividend
distribution from Bolivia utilizing excess cash.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- A material increase in EBITDA generation from the New
Zealand operations due to sustained improvement in the
operating profile that includes postpaid churn in low 1%
range, stable ARPUs, postpaid net addition growth, and a
stable-to-improving operating trajectory in the Bolivian
subsidiary while maintaining core telecom leverage
(adjusted debt/EBITDAR) less than 5x;
-- Sustained FCF on a consolidated basis;
-- FFO fixed charge coverage sustained above 2x;
-- A sale of the NuevaTel subsidiary.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Insufficient liquidity due to an inability, or any material
limitations, with upstreaming cash from the operating
subsidiaries. This could include any unforeseen impediment,
regulatory or of another nature, in upstreaming cash to
the parent level;
-- Deterioration in the operating profile of 2degrees,
including an increase in subscriber churn, ARPU pressure,
loss of market share and declines in operating margins;
-- FFO fixed charge coverage sustained less than 1.5x;
-- A material change in the Bolivian country risk including
regulatory, political, economic, foreign currency or the
operating environment that further affects NuevaTel's
operating cash flows.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Satisfactory: Fitch views Trilogy's improved liquidity as
satisfactory with consolidated cash, cash equivalents and
short-term investments of approximately USD102 million for
first-quarter 2019, an increase from YE 2018 of USD46 million due
to cash proceeds of USD64 million from the initial closing of the
tower sale-leaseback transaction in Bolivia. Cash and cash
equivalents include USD87 million and USD2 million held by NuevaTel
and 2degrees, respectively, leaving approximately USD13 million of
cash, cash equivalents and short-term investments at corporate
headquarters. Subsequent closings are expected to be completed over
the remainder of the year that should generate an approximate $35
million in additional net proceeds.
Trilogy does not have a revolving bank facility at the HoldCo level
and is subject to foreign currency fluctuations that could
negatively affect debt servicing costs at the HoldCo. Fitch does
not expect the dividend of CAD0.02 per common share at Trilogy
International Partners Inc. will increase for the foreseeable
future with cash dividend requirements, on an annualized basis,
expected at less than CAD1 million.
The consolidated leverage debt incurrence covenant, less than or
equal to 4.0x, in the HoldCo secured notes, limits additional debt
within Trilogy's capital structure. However, carve-outs within the
indentures offer some additional debt flexibility. Carve-outs
include debt at the Bolivian subsidiary of USD50 million, permitted
receivables financing not to exceed NZD50 million, indebtedness at
2degrees not to exceed the greater of an aggregate total debt of
NZD245 million, or on a pro forma basis, consolidated leverage of
2.0x, after incurrence of additional debt.
Both 2degrees and NuevaTel operations have local facilities
agreements to provide local debt capacity for operational support.
In July 2018, 2degrees completed a bank syndication for a NZD250
million (USD170 million based on exchange rate at March 31, 2019)
senior facilities agreement maturing 2021. The agreement consisting
of a NZD195 million (USD133 million) facility that is fully drawn
with no amortization requirements, a NZD35 million investment
facility with NZD10 million (USD7 million) drawn and a NZD20
million working capital facility with NZD8 million (USD 5 million)
drawn. The senior facilities agreement also provides for an
uncommitted NZD35 million accordion facility that can be utilized
to fund capital expenditures. 2degrees has substantial cushion
under its main covenants, including a senior leverage ratio of less
than 2.75x. An additional covenant requires a leverage ratio of
2.0x, immediately following a permitted dividend distribution.
In Bolivia, NuevaTel has a USD25 million syndicated loan with USD13
million outstanding maturing in December 2021. The facility
amortizes by 26.7% annually during the remaining term. NuevaTel
also has two bank loans, $7 million and $8 million at the time of
the initial draw with amortization requirements that mature in 2022
and 2023 respectively. The 2021 loan agreement contains a financial
covenant requiring NuevaTel to maintain an indebtedness ratio of
less than 2.15x. The 2022 and 2023 bank loan agreements contain no
financial covenants. NuevaTel is subject to a profits test for
dividend distributions.
2degrees and NuevaTel have spectrum related payments over the
rating horizon. 2degrees has approximately USD7 million in 2019
related to a long-term payable to the government of New Zealand for
the acquisition of its 700MHz license. NuevaTel's expects to renew
the 30MHz license in the 1900MHz band that expires in November 2019
with an estimated expected payment of approximately $25 million.
Additionally New Zealand will have an expected future payment
required for the 1800 MHz and 2100 MHz license renewal of
approximately NZD50 million with installment terms beginning in
2020.
SUMMARY OF FINANCIAL ADJUSTMENTS
-- Adjustments for factoring and outstanding handset
receivables related to FS operations that Fitch brought
back on balance sheet (assessed using a debt-to-equity
ratio of 1x).
-- In calculating its leverage metrics, EBITDA is reduced
to reflect any dividends to minorities.
-- Removed the tower financing obligation from debt as the
accounting treatment does not accurately reflect the
obligation. Fitch has included the operating lease
expense within adjusted debt metrics.
-- Cash in Bolivia is considered restricted given frictional
costs of accessing. Fitch expects a portion of excess cash
from the tower asset sales will be upstreamed to Trilogy.
TRULY FIT STUDIO: Seeks Authority to Use Cash Collateral
--------------------------------------------------------
Truly Fit Studio Inc. seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to use cash collateral to
fund the continued operation of its business.
Truly Fit also seeks permission to: (a) exceed any line item on the
budget by an amount equal to 10% of each such line item; or (b) to
exceed any line item by more than 10% so long as the total of all
amounts in excess of all line items for the Budget do not exceed
10% in the aggregate of the total budget.
Truly Fit acknowledges that Synovus Bank and Regions Bank --
successor in interest to Western Equipment Finance, Inc. may claim
blanket liens against the company's assets. As of the Petition
Date, Synovus Bank is owed approximately $175,728 and Regions Bank
is owed $99,800. In addition, the company recognizes Geneva
Capital, LLC, which is owed approximately $52,360, holds first
position (purchase money interest) liens on specific equipment of
the company.
Truly Fit offers the Secured Creditors: (a) postpetition
replacement liens on the Secured Creditor Assets to the same
extent, validity and priority as existed prepetition; (b) the right
to inspect the Secured Creditor Assets on 48-hours' notice; and (c)
copies of monthly financial documents generated in the ordinary
course of business and other information as the Secured Creditors
reasonably request with respect to the company's operations.
A copy of the Cash Collateral Motion is available for free at
http://bankrupt.com/misc/flmb19-05436-24.pdf
About Truly Fit Studio
Truly Fit Studio Inc., a privately held company in Tampa, Fla.,
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Case No. 19-05436) on June 7, 2019. In the
petition signed by Manuel C. Gonzalez, president, the Debtor
estimated under $1 million in both assets and liabilities. Buddy
D. Ford, P.A., is the Debtor's legal counsel. The U.S. Trustee,
until further notice, will not appoint an official committee of
unsecured creditors in the Chapter 11 case.
UNIT CORP: Fitch Lowers IDR to B, On Rating Watch Neg.
------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Rating
(IDR) of Unit Corporation (Unit; NYSE: UNT) to 'B' from 'B+', the
senior secured revolver to 'BB'/'RR1' from 'BB+'/'RR1' and the
senior subordinated notes to 'B'/'RR4' from 'BB-'/'RR3'. The IDR
and instrument ratings have also been placed on Rating Watch
Negative.
The Rating Watch Negative reflects the company's heightened
refinancing and liquidity risks. Unit currently faces a challenging
capital market environment to refinance its near-term maturities
and may have to encumber assets, which will restrict its financial
flexibility, in order to facilitate execution. Fitch plans to
downgrade Unit within the next three months if management is unable
to refinance the 2021 notes and extend access to its revolver until
2023. Fitch believes an inability to refinance the notes prior to
the credit facility's springing maturity trigger date (Nov. 16,
2020) will heighten the risk of an exchange that may result in a
material reduction in terms for noteholders.
The downgrade reflects Unit Corporation's heightened refinancing
and liquidity risks and Fitch's base case expectation for negative
FCF in 2019. Another consideration is the limited higher-margin,
oil-weighted inventory in the Red Fork and SOHOT formations (Fitch
estimates to be approximately four years at current activity
levels) that will necessitate M&A in order to preserve netbacks,
particularly in a low natural gas price environment. The rating
also reflects the relatively weak market position of Unit's
drilling rig (13 high-spec rigs operating and one under
construction) business. However, Fitch recognizes that the drilling
rig and midstream segments could be a source of contingent
liquidity as demonstrated by the $300 million midstream JV
divestment in 2018.
KEY RATING DRIVERS
Elevated Refinancing, Liquidity Risks: Capital market access for
high-yield energy issuers has been challenging in 2019. Fitch
believes that access for Unit has weakened considerably over the
past few months despite a relatively solid leverage profile with
Fitch's base case expectation of 2.0x-2.5x over the next few years.
The credit facility becomes callable on Nov. 16, 2020 if the
company fails to refinance its 2021 notes by Nov. 15, 2020. Fitch's
base case forecasts the company will be moderately FCF negative for
YE 19. Fitch projects Unit will be FCF neutral for 2020 under a
$2.75 base case scenario limiting the ability to further reduce the
revolver balance with operating cash flows.
Weak Gas Prices Stunt Optimization: Low natural gas prices in 1Q19
forced Unit to accelerate its development of oil-weighted inventory
in the Red Fork and SOHOT formations. As of May 2019, Unit was
running four rigs in the two formations and expected to bring 10
wells online in 2Q19 and 3Q19 (80- 90 identified drilling locations
as of July 2019). Fitch believes the accelerated pace will improve
liquids content and cash margins for 2H19 into 2020. The company
estimates the SOHOT has cash margins of $4.99/mcfe (88% liquids),
and the Red Fork has cash margins of $3.18/mcfe (60% liquids).
However, given the limited inventory of higher margin reserves
(estimated to be approximately four years), Fitch believes that the
oil mix and, as a consequence, margins are likely to decrease in
the coming years. Fitch expects Unit to look for additional
oil-weighted inventory, but believes the ability to expand its
footprint in its existing core areas will be a challenge. While
more transformative transactions into new basins could occur, Fitch
does not view Unit as an advantaged acquirer given its near-term
refinance and liquidity risks, footprint, and current equity market
capitalization. However, Unit's business profile would be
consistent with 'B' rating tolerance if the company was able to
deepen its higher-margin drilling inventory via oil-weighted M&A or
a sustained improvement in natural gas prices.
Continued Drilling Rig Pressure: At the end of 2018, Unit removed
41 drilling rigs from its fleet due to their weak longer-term
competitive position. This also coincided with Fitch's estimated
decrease in U.S. onshore E&P capital spending of over 10% and rig
counts of 10.2% likely driven by a 40% drop in WTI crude oil prices
from December through January and an industry shift to FCF. Unit
has 57 drilling rigs in its fleet, including 13 fully utilized BOSS
rigs, and has another BOSS rig under construction. As of July 2019,
Unit had 23 rigs contracted, down from 32 rigs at YE 18. Fitch
expects utilization to be flat at 40% under base case assumptions
with the BOSS rigs fully utilized at 13 for 2019 and 14 thereafter,
with mix shift-linked average daily margins improvement in the
outer years.
Strong Credit Metrics: Unit maintained a conservative balance sheet
in the commodity downturn and was FCF positive in 2016 and 2017,
when it decided to slow drilling activity. Fitch expects
continuation of a relatively conservative balance sheet, with
relatively strong forecasted leverage metrics for the rating
category. Debt/EBITDA in 2019 is forecasted to be 2.1x, while
debt/flowing barrel below $15,000. Fitch estimates a $0.25/mcf
decrease in natural gas price will result in an increase in
leverage by about half a turn in the outer years of Fitch's
forecast.
DERIVATION SUMMARY
Unit Corporation's unique business profile has no direct publicly
rated peers. In terms of the upstream business, as of 1Q19, Unit's
production profile 45.8 mboepd (46% liquids) is smaller than SM
Energy (B+/Stable; 118.7 mboepd [63 % liquids]), Extraction Oil &
Gas (B+/Stable; 80.4 mboepd [68% liquids]) and Magnolia Oil & Gas
(B/Positive; 62.4 mboepd [71% liquids]) but larger than Great
Western Petroleum (B-/Positive; 34.3 mboepd [73% liquids]) and
Lonestar Resources (B-/Stable; 11.4 mboepd [79% liquids]). Given
the company's gas oriented production profile, the company's
unhedged netbacks were the lowest of the peer group at $1.6/mcf(44%
margin), with SM Energy and Lonestar the next closest at $14.7/boe
(45% margin) and $15.9/boe (40% margin), respectively. Lonestar was
the only peer with a lower unhedged cash netback margin.
Units leverage profile compares favorably to the peer group with
debt/flowing of $15,289/bbl was better than every peer except
Magnolia ($6,409). SM, Extraction and Great Western all have
debt/flowing above $20,000/bbl and Lonestar has debt/flowing above
$48,000/bbl. Unit's debt/1P of $4.4/boe is consistent with 'B'
category peers and Fitch's forecasted debt/EBITDA of 2.1x for YE 19
is in line with but slightly better than peers except for
Magnolia's forecasted YE 19 debt/EBITDA of 0.5x.
Unit has some diversification benefits via its other two businesses
although both segments are relatively small. The company has fewer
top-tier drilling rigs (57 total rigs; 13 BOSS rigs) than pure
drilling companies Nabors Industries (BB-/Stable) and Precision
Drilling (B+/Stable; 233 drilling rigs). The midstream business is
conducted through a 50/50 JV and has 22 active gathering systems,
12 gas processing plants, three natural gas treatment plants for
approximately 323 mmcfpd total processing capacity and about 1,500
miles of pipe.
KEY ASSUMPTIONS
Fitch's Key Assumptions within its Rating Case for the Issuer
- WTI Oil price of $57.50/bbl in 2019 and 2020 and $55.00/bbl
in 2021 and the long term;
- Henry Hub natural gas price of $2.75/mcf in 2019, 2020, 2021
and the long term;
- Modest low single digit production growth through the
forecast, increasing gas mix in the outer years;
- BOSS rigs fully utilized, including the 14th under
construction, with dayrates greater than $20,000 and
margins above $8,500/day;
- Capex of $355 million in 2019 and $315 million thereafter.
Fitch's Key Recovery Rating Assumptions for the Issuer
Fitch's recovery analysis for Unit Corporation used both an asset
value based approach on observed transactions of like assets and a
going-concern approach. The recovery analysis assumes that Unit
Corp. would be considered a going-concern in bankruptcy and that
the company would be reorganized rather than liquidated. Fitch's
assumptions are as follows:
Going-Concern Approach
Unit's going concern EBITDA of $205 million generally in line with
Fitch's forecasted 2020-2021 stress case assumes a prolonged
commodity price downturn (Natural gas prices of $2.25/mcf in 2019
and $2.00/mcf in 2020; Oil prices of $50.00/bbl in and $42.50/bbl
in 2020) causing a loss of operational momentum at the E&P and
drilling rig segments and a negative FCF profile with 2021
maturities.
An EV multiple of 4.0x is used to calculate a post-reorganization
valuation and reflects a mid-cycle multiple. The estimate
considered a weighted average for the three segments:
-- Fitch assumed a 4.0x multiple for the exploration & production
business and reflects the company's decision to accelerate its
oil-weighted drilling program, which will result in a lower margin,
gas-oriented production profile as the company exits bankruptcy.
-- Fitch assumed a 3.5x multiple for the drilling rig business.
The multiple reflects the fleet's small size (57 total rigs) and
limited value outside of the 13 BOSS rigs.
-- Fitch assumed a 5.0x multiple on the midstream business, lower
than Fitch's typical multiple of 6.0x to reflect the limited size
and scale and a 34% exposure to Unit, as of YE 18.
Liquidation Approach
The liquidation value reflects Fitch's view of the value of
inventory and other assets that can be realized in a reorganization
and distributed to creditors.
Fitch assumed an advance rate of 50% for accounts receivables
reflecting, among other things, a decreasing "order book" as price
erodes and demand for the drilling services lowers.
Fitch assumed a liquidation value of $98 million for the drilling
rigs, or $7 million for each drilling rig, inclusive of the 14th
BOSS rig currently being constructed. This is lower than the
newbuild price, which Fitch estimates to be around $20 million.
Fitch assumed an oil & gas valuation of $525 million, lower than
the PDP PV-10 of $831 million to reflect the impact of lower
commodity prices and a loss of economic drilling inventory over the
course of an assumed bankruptcy scenario.
These assumptions lead to a liquidation value of $795 million, less
than the going-concern approach.
Waterfall
The recovery is based on the assumed enterprise value of $820
million. After the assumed administrative claim of 10%, there is
$738 million available to creditors. The revolving credit facility
is assumed to be drawn at 100%. Fitch's recovery assumptions result
in a recovery rating for the senior secured revolver within the
'RR1' range and result in a 'BB' rating and the senior subordinated
notes recovery rating falls within the 'RR4' range and results in a
'B' rating.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Successful refinancing of the 2021 notes that helps mitigates
liquidity risks;
-- Increased size and scale of Unit's E&P operations with
production over 65,000 boe/d with significant economic
drilling inventory, and some combination of the following
metrics;
-- Mid-cycle debt/EBITDA below 3.0x on a sustained basis;
-- Mid-cycle debt/flowing barrel below $18,000 on a
sustained basis.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Inability to refinance the 2021 notes and extend
revolver access to 2023 in the next three months;
-- Deteriorating liquidity profile outlook;
-- Loss of size and scale evidenced by production trending
below 40 mboe/d or continued reductions in economic
drilling inventory;
-- Mid-cycle debt/EBITDA trending above 4.5x (FFO adjusted
leverage above 4.5x) or Interest coverage below 2.0x.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Dependent on Refinancing: As of 1Q19, Unit had $4 million
in cash on hand and $385 million of availability under the revolver
credit facility. Due the springing termination date on the
revolver, Unit's liquidity profile could materially deteriorate.
VEA INVESTMENTS: Seeks to Hire BransonLaw as Counsel
----------------------------------------------------
VEA Investments LLC seeks authority from the United States
Bankruptcy Court for the Middle District of Florida to hire Jeffrey
S. Ainsworth and BransonLaw, PLLC as its counsel.
The professional services BransonLaw is to render are:
(a) prosecute and defend any causes of action on behalf of the
Debtor; prepare, on behalf of the Debtor, all necessary
applications, motions, reports and other legal papers;
(b) assist in the formulation of a plan of reorganization and
preparation of disclosure statement;
(c) provide all other services of a legal nature.
BransonLaw's standard hourly rates for attorneys and paralegals
range from $350.00 to $150.00.
Edward Tejada, on behalf of the Debtor, paid an advance fee of
$3,423.00 for post-petition services and expenses in connection
with this case and the filing fee of $1,717.00. Additionally,
Javier A. Bengoa, on behalf of the Debtor,
paid the sum of $2,600.00 on July 3, 2019, and the sum of $1,000.00
on July 19, 2019, to bring the total retainer paid to $7,023.00.
Jeffrey S. Ainsworth of BransonLaw, PLLC, attests that neither BL
nor any attorney employed by BL represents any creditors, any party
to an executory contract of the Debtor, or any person otherwise
adverse or potentially adverse to the Debtor or the estate on any
matter, whether such representation is related or unrelated to the
Debtor or the estate.
The firm can be reached through:
Jeffrey Ainsworth, Esq.
BRANSONLAW, PLLC
1501 E. Concord Street
Orlando, FL 32803
Tel: (407) 894-6834
Fax: (407) 894-8559
E-mail: jeff@bransonlaw.com
About VEA Investments LLC
VEA Investments LLC owns seven properties in Orlando, Florida,
having a total current value of $1.67 million.
VEA Investments LLC filed a petition for relief under Chapter 11 of
Title 11 of the United States Code (Bankr. M.D. Fla. Case No.
19-04148) on June 25, 2019. In the petition signed by Viviana M.
Tejada Cruz, managing member, the Debtor estimated $1,677,350 in
assets and $1,602,591 in liabilities.
Jeffrey Ainsworth, Esq. at BRANSONLAW, PLLC represents the Debtor
as counsel.
VISTEON CORP: Moody's Lowers CFR to Ba3, Outlook Stable
-------------------------------------------------------
Moody's Investors Service downgraded Visteon Corporation's
Corporate Family Rating and Probability of Default Rating, to Ba3
and Ba3-PD, from Ba2 and Ba2-PD, respectively. In a related action
Moody's downgraded the ratings on Visteon's senior secured credit
facilities to Ba3 from Ba2, and affirmed the Speculative Grade
Liquidity Rating at SGL-1. The rating outlook is stable.
Moody's took the following rating actions on Visteon Corporation:
The following ratings were downgraded:
Corporate Family Rating, to Ba3 from Ba2;
Probability of Default, to Ba3-PD from Ba2-PD;
$300 million senior secured revolving credit facility
due 2022, to Ba3 (LDG4) from Ba2 (LGD3);
$350 million senior secured term loan facility due 2024,
to Ba3 (LDG4) from Ba2 (LGD3).
The following rating was affirmed:
Speculative Grade Liquidity Rating, at SGL-1.
Outlook, remains Stable
RATINGS RATIONALE
The downgrade of Visteon's CFR to Ba3 reflects Moody's expectation
that the company's debt leverage will remain elevated over the
near-term, the risk that a strong recovery in automotive demand in
the company's end-markets will be delayed over the intermediate
term, and the risk of continued excess costs related to new
business launches in 2020. Over the recent quarters, Visteon's
operating performance has been negatively impacted by deteriorating
global automotive production levels, particularly in Asia; high
levels of excess costs and engineering costs related to new
programs launches; product mix weakness in North America, and other
operational inefficiencies. Visteon is making progress on these
issues, as sequential operational performance for the second
quarter of 2019 has improved slightly. Yet, the expectation of
continued weakness in global automotive production has led
Visteon's management to reduce profit guidance in 2019 for the
second time. For the LTM period ending June 30, 2019, Visteon's LTM
Debt/EBITDA and EBITA/interest, were 3.9x and 3.4x, respectively
compared to 2.5x, and 5.8x, respectively at year-end 2018. These
metrics are expected to remain weak through 2019. Visteon's sales
in China are outpacing regional trends, yet will remain below
Moody's previous expectations through 2019. While managements
expects a recovery in performance in the 4th quarter of 2019,
global automotive production trends are likely to challenge this
expectation.
The Ba3 CFR is supported by Visteon's strong competitive position
as a leading global supplier of automotive instrument clusters,
displays and audio/infotainment products. The company's industry
position has led to strong new business wins of $6.9 billion during
2018 including products experiencing increasing vehicle content.
Visteon's customer concentrations are gradually improving with the
top 3 customers representing about 50% of revenues for the first
six months of 2019 compared to 59% of revenues in 2017.
Moody's notes that Visteon's complex organizational structure
includes consolidated overseas joint-venture interests that
contribute a significant amount of the company's consolidated
operating profits. The downgrade of the U.S. based secured debt to
Ba3 reflects Moody's belief that the value the company would be
able to realize for its U.S.-based secured debt holders from its
diverse global operations in a distress scenario would not be
materially different the overall family recovery.
The stable rating outlook is supported by Visteon's strong backlog
of lifetime business and the company's sizeable cash balances of
$435 million at June 30, 2019. These new business wins include
infotainment and digital display products experiencing increasing
vehicle content and should support increasing profitability. Yet,
Moody's believes the timing of the positive impact of these
business win is uncertain given global automotive production
trends.
Visteon's SGL-1 Speculative Grade Liquidity Rating continues to
reflect the expectancy of a very good liquidity over the next 12-15
months. Visteon's liquidity is supported by strong global cash
balances, and availability under a $300 million revolving credit
facility. At June 30, 2019, Visteon had $435 million of
unrestricted cash on hand. This cash balance is anticipated to be
largely maintained, despite Moody's expectation of break-even to
slightly negative free cash flow generation (after dividends) over
the next 12-15 months. Given the company's weak earnings, share
repurchases during the quarter were executed using free cash flow
generated in quarter, which maintained cash levels from the prior
quarter end. Moody's expects this financial discipline to continue
over the near term as the company contends with the challenging
global production environment and managing launch costs. Visteon's
revolving credit facility was unfunded at June 30, 2019 and is
expected remain largely unfunded over the next 12-15 months, given
the company's cash balances and the typical seasonal year-end cash
inflows. The revolving credit facility includes a net leverage
ratio test under which the company is anticipated to have ample
cushion over the next 12-15 months.
Developments that could lead to higher ratings include a
demonstrated ability to deliver improved operating performance and
positive free cash flow generation without the need for more
restructuring charges, resulting in EBITA margin (inclusive of
restructuring charges) above 8%; EBITA/interest above 4x;
Debt/EBITDA approaching 2.5x The demonstration, in its view, that
the company's cash repatriation strategies support stronger debt
service will also be a consideration for higher ratings.
Developments that could lead to lower ratings include further
deterioration in automotive industry conditions that are not offset
by cost saving actions, or debt funded acquisitions. Consideration
for a lower rating could result from Moody's expectation of
EBITA/interest being sustained below 2.5x or Debt/EBITDA expected
to be sustained above 4x. Deteriorating liquidity could also lead
to a lower rating.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
Visteon Corporation, headquartered in Van Buren Township, Michigan,
is a global automotive supplier that designs, engineers and
manufactures cockpit electronics and connected car solutions for
the world's major vehicle manufacturing companies. Visteon has an
international network of manufacturing operations, technical
centers and joint venture operations, supported by approximately
10,000 employees. Visteon had sales of $2.9 billion in for the LTM
period ending June 30, 2019.
WALL TO WALL: Seeks to Hire Bennington & Moshofsky as Accountant
----------------------------------------------------------------
Wall to Wall Tile & Stone, LLC and its debtor-affiliates seek
authority from the United States Bankruptcy Court for the District
of Oregon (Portland) to hire Bennington & Moshofsky as
accountants.
The professional services that Bennington & Moshofsky are to render
include: assisting Debtor with accounting for and preparation of
Rule 2015 monthly operating reports, as Debtors may require;
accounting for and preparation of Debtors' federal and state
corporate tax returns, if Debtors may require; and generally
assisting the Debtors in such accounting and tax matters as Debtor
may require.
Bennington & Moshofsky's current billing rates are:
Hourly Rate
Stephen P. Moshofsky $250.00
Judith Bennington $240.00
Inna L. Schtokh $210.00
Lai Wa Ng $210.00
Trudy E. Bradetich $100.00
Inna Schtokh, CPA, Shareholder of Bennington & Moshofsky assures
the Court the her firm does not have any connection with Debtors,
their creditors, any other party in interest, or their respective
attorneys or accountants.
The accountant can be reached through:
Inna Schtokh, Shareholder, CPA
Bennington & Moshofsky, P.C.
4800 SW Griffith Dr., Ste. 350
Beaverton, OR 97005
Phone: +1 503-641-2600
About Wall to Wall
Wall to Wall -- http://walltowallcountertops.com-- is a granite
and quartz stones supplier in Vancouver, Washington.
Wall to Wall Tile & Stone, LLC and its debtor affiliates filed
voluntary petitions for relief under Chapter 11 of Title 11 of the
United States Code (Bankr. D. Or. Lead Case No. 19-32600) on July
16, 2019. In the petitions signed by Tyler Kruckenberg, managing
member, Wall to Wall Tile & Stone estimated $10 million to $50
million in both assets and liabilities, while Wall to Wall Tile &
Stone-Oregon estimated $100,000 to $500,000 in assets and $10
million to $50 million in liabilities.
The cases are assigned to Judge David W. Hercher. Timothy J.
Conway, Esq. at TONKON TORP LLP represents the Debtors as counsel.
WITTER HARVESTING: Seeks to Extend Exclusivity Period to Sept. 25
-----------------------------------------------------------------
Witter Harvesting Inc. requests the U.S. Bankruptcy Court for the
Southern District of Florida to extend its exclusive period to file
a Plan of Reorganization and its exclusive period to solicit
acceptances of any such Plan, through and including Sept. 25 and
Nov. 24, respectively.
The deadline for creditors in the case to file proofs of claims is
July 31, 2019 and the deadline for governmental claims to be filed
Sept. 25, 2019.
Accordingly, the Debtor requests that the exclusivity deadline be
extended so all claims be filed prior to Debtor being required to
propose a Plan of Reorganization. In addition, Debtor request the
additional time to review claims to propose a Plan of
Reorganization.Posted: July 26, 2019 at 08:31
About Witter Harvesting
Witter Harvesting Inc. provides agricultural and crop harvesting
services in Okeechobee, Fla.
Witter Harvesting sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-14063) on March 29,
2019. At the time of the filing, the Debtor estimated assets and
liabilities of between $1 million and $10 million. The case is
assigned to Judge Mindy A. Mora.
The Debtor tapped Kelley & Fulton, PL, as its bankruptcy counsel;
and CPA Tax Solutions, LLC as accountant
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Witter Harvesting, Inc., according to court dockets.
WORLD ENDURANCE: S&P Affirms 'B' ICR on Proposed Refinancing
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on U.S.
triathlon and endurance event company World Endurance Holdings Inc.
(WEH).
In addition, S&P assigned its 'B' issue-level rating and '3'
recovery rating to the senior secured credit facility proposed by
WEH to refinance its existing facility. The new senior secured
credit facility, which WEH intends to raise through its borrower
subsidiary World Triathlon Corp., consists of a $25 million
revolving credit facility due in 2024 and a $265 million term loan
due in 2026.
"Our affirmation of the 'B' rating on WEH reflects our expectation
for a good leverage cushion and our view that the proposed
refinancing transaction is approximately leverage-neutral. We also
forecast good interest coverage and adequate liquidity through
2020," S&P said.
S&P's stable rating outlook reflects its expectation for good
operating performance, adequate liquidity, adjusted debt to EBITDA
of mid- to high-5x in 2019, and good EBITDA coverage of interest
expense. In addition, the rating agency expects WEH to continue to
make tuck-in acquisitions over the forecast period using cash flow
from operations and revolver capacity, which will likely sustain
leverage above 5x.
"We could consider lower ratings if WEH's operating results are
below our base-case forecast, such that the cushion on the
revolving credit facility's springing financial covenant weakens to
15% or if the company's liquidity profile becomes impaired. We
would also consider lower ratings if WEH's owner undertakes
additional meaningful leveraging transactions such that adjusted
debt to EBITDA is above 6.5x and EBITDA interest coverage falls
toward the mid-1x area," S&P said.
"We could raise the rating if we become confident that management
and WEH's controlling owner would continue to finance acquisitions
and other growth opportunities in a manner that sustains leverage
at less than 5x. Rating upside would also depend on successful
integration of recent acquisitions and progress toward improving
its margins," the rating agency said.
XTL-PA INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
XTL-PA, Inc. 19-14843
3200 S. 70th St.
Philadephia, PA 19153
XTL, Inc. 19-14844
3200 S. 70th St.
Philadelphia, PA 19153
Ootzie Properties -- CB, LLC 19-14845
3200 S. 70th Street
Philadelphia, PA 19153
Business Description: XTL, Inc. is a transportation & logistics
company that provides customized logistics
solutions for warehousing and inventory
control of commodities and finished goods.
Ootzie Properties classifies itself as a
Single Asset Real Estate (as defined in 11
U.S.C. Section 101(51B)) whose principal
assets are located at South 24th and Hwy.
275 Industrial Council Bluffs, IA 51501.
Chapter 11 Petition Date: August 1, 2019
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Hon. Eric L. Frank
Debtors' Counsel: Allen B. Dubroff, Esq.
ALLEN B. DUBROFF, ESQ. & ASSOCIATES, LLC
1500 JFK Blvd, Suite 1020
Philadelphia, PA 19102
Tel: 215-568-2700
Fax: 215-689-3777
Email: allen@dubrofflawllc.com
XTL-PA, Inc.'s
Estimated Assets: $10 million to $50 million
XTL-PA, Inc.'s
Estimated Liabilities: $10 million to $50 million
XTL, Inc.'s
Estimated Assets: $10 million to $50 million
XTL, Inc.'s
Estimated Liabilities: $10 million to $50 million
Ootzie Properties'
Estimated Assets: $10 million to $50 million
Ootzie Properties'
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Louis J. Cerone, president.
Full-text copies of the petitions are available for free at:
http://bankrupt.com/misc/paeb19-14843.pdf
http://bankrupt.com/misc/paeb19-14844.pdf
http://bankrupt.com/misc/paeb19-14845.pdf
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Insurance Office of America $168,741
P.O. Box 162207
Altamonte Springs, FL 32716-2207
2. Accu Staffing Services $164,352
P.O. Box 8326
Cherry Hill, NJ 08002-0326
3. Kaplin Stewart Melofff Reiter & Stein $150,267
P.O. Box 3037
Blue Bell, PA 19422-3037
4. National Interstate Insurance Co. $117,367
P.O. Box 547
Richfield, OH 44286-0547
5. Service Tire Truck Center, Inc. $116,204
2255 Avenue A
Bethlehem, PA 18017-8933
6. Independence Blue Cross $73,535
PO Box 8500
Lockbox 3092
Philadelphia, PA 19178-3092
7. Teamsters Health & Welfare Fund $69,659
Kevon Office Center
2500 McClellan Avenue, Suite 140
Pennsauken, NJ 08109
8. National Workforce Opportunity $48,496
100 South Jniper St, 3rd Floor
Philadelphia, PA 19107
9. Miller Truck Leasing $45,638
1824 Route 38
Lumberton, NJ 08048
10. Penn Jersey Diesel & Trailer $45,488
2950 State Road
Bensalem, P 19020
11. MHS Lift, Inc. $43,898
6965 Airport Highway Lane
Pennsauken, NJ 08109
12. Assets Protection, Inc. $43,360
140 E Richardson Ave Ste 2
Langhorne, PA 19047-2857
13. RSM US LLP $38,000
5155 Paysphere Circle
Chicago, IL 60674
14. Salerno Tire Corp $37,822
P.O. Box 1232
Sharon Hill, 19079
15. Randstad $37,621
P.O. Box 7247-6655
Philadelphia, PA 191706655
16. Teamsters Pension Fund $37,464
Kevon Office Center
2500 McClellan Avenue, Suite 140
Pennsauken, NJ 08109
17. Bergey's $28,657
1003 Ridge Pike
Conshohocken, PA 19428
18. Teamsters Local 830 $27,771
Employee Benefit Funds
P.O. Box 6040
Philadelphia, PA 19114
19. Onsite Personnel $28,880
PO Box 634
Montgomeryville, PA 18936
20. Star Leasing Co. $22,090
P.O. Box 76100
Cleveland, OH 44101-4755
[*] S&P Takes Various Actions on 26 Classes From Five US RMBS Deals
-------------------------------------------------------------------
S&P Global Ratings completed its review of 26 classes from five
U.S. residential mortgage-backed securities (RMBS) transactions
issued in 2003. All of these transactions are backed by subprime
collateral. The review yielded four downgrades and 22
affirmations.
ANALYTICAL CONSIDERATIONS
S&P incorporate various considerations into its decisions to raise,
lower, or affirm ratings when reviewing the indicative ratings
suggested by its projected cash flows. These considerations are
based on transaction-specific performance or structural
characteristics (or both) and their potential effects on certain
classes. Some of these considerations include:
-- Collateral performance/delinquency trends;
-- Erosion of or increases in credit support;
-- Historical interest shortfalls or missed interest payments;
-- Priority of principal payments; and
-- Available subordination and/or overcollateralization.
RATING ACTIONS
The affirmations of ratings reflect S&P's opinion that its
projected credit support and collateral performance on these
classes has remained relatively consistent with its prior
projections.
A list of Affected Ratings can be viewed at:
https://bit.ly/314jPdh
[^] BOND PRICING: For the Week from July 29 to August 3, 2019
-------------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Acosta Inc ACOSTA 7.750 15.824 10/1/2022
Acosta Inc ACOSTA 7.750 15.948 10/1/2022
Approach Resources Inc AREX 7.000 14.884 6/15/2021
BNC Bancorp BNCN 5.500 93.476 10/1/2024
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
BPZ Resources Inc BPZR 6.500 3.017 3/1/2015
Bon-Ton Department
Stores Inc/The BONT 8.000 10.500 6/15/2021
Bristow Group Inc BRS 6.250 20.875 10/15/2022
Bristow Group Inc BRS 4.500 23.000 6/1/2023
Cenveo Corp CVO 8.500 1.346 9/15/2022
Cenveo Corp CVO 8.500 1.346 9/15/2022
Cenveo Corp CVO 6.000 0.894 5/15/2024
Chukchansi Economic
Development Authority CHUKCH 9.750 60.000 5/30/2020
Chukchansi Economic
Development Authority CHUKCH 10.250 60.000 5/30/2020
Cloud Peak Energy
Resources LLC /
Cloud Peak Energy
Finance Corp CLD 12.000 15.250 11/1/2021
Cloud Peak Energy
Resources LLC /
Cloud Peak Energy
Finance Corp CLD 6.375 0.313 3/15/2024
DFC Finance Corp DLLR 10.500 67.125 6/15/2020
DFC Finance Corp DLLR 10.500 67.125 6/15/2020
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 6.375 2.883 6/15/2023
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 1.564 9/1/2022
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 19.423 2/15/2025
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 20.741 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 20.673 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 1.230 9/1/2022
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 19.969 2/15/2025
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 1.230 9/1/2022
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Future Intermediate
Holding Co LLC /
EFIH Finance Inc TXU 9.750 38.125 10/15/2019
Ferrellgas Partners LP /
Ferrellgas Partners
Finance Corp FGP 8.625 75.370 6/15/2020
Ferrellgas Partners LP /
Ferrellgas Partners
Finance Corp FGP 8.625 78.015 6/15/2020
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Foresight Energy LLC /
Foresight Energy
Finance Corp FELP 11.500 38.572 4/1/2023
Foresight Energy LLC /
Foresight Energy
Finance Corp FELP 11.500 38.085 4/1/2023
Frontier Communications Corp FTR 8.500 76.050 4/15/2020
Frontier Communications Corp FTR 9.250 62.753 7/1/2021
Frontier Communications Corp FTR 8.875 70.505 9/15/2020
Goodman Networks Inc GOODNT 8.000 49.000 5/11/2022
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Halcon Resources Corp HKUS 6.750 19.057 2/15/2025
Halcon Resources Corp HKUS 6.750 19.160 2/15/2025
Halcon Resources Corp HKUS 6.750 11.500 2/15/2025
Halcon Resources Corp HKUS 6.750 19.125 2/15/2025
Halcon Resources Corp HKUS 6.750 19.125 2/15/2025
High Ridge Brands Co HIRIDG 8.875 10.000 3/15/2025
High Ridge Brands Co HIRIDG 8.875 10.250 3/15/2025
Horizon Pharma USA Inc HZNP 8.750 107.102 11/1/2024
Horizon Pharma USA Inc HZNP 8.750 106.185 11/1/2024
Hornbeck Offshore
Services Inc HOS 5.875 61.686 4/1/2020
Hornbeck Offshore
Services Inc HOS 5.000 51.337 3/1/2021
Hornbeck Offshore
Services Inc HOS 1.500 95.500 9/1/2019
Iconix Brand Group Inc ICON 5.750 31.250 8/15/2023
JC Penney Corp Inc JCP 7.125 34.085 11/15/2023
Legacy Reserves LP / Legacy
Reserves Finance Corp LGCY 8.000 3.690 12/1/2020
Legacy Reserves LP / Legacy
Reserves Finance Corp LGCY 6.625 6.000 12/1/2021
Legacy Reserves LP / Legacy
Reserves Finance Corp LGCY 8.000 3.500 9/20/2023
Lehman Brothers Inc LEH 7.500 1.847 8/1/2026
MF Global Holdings Ltd MF 9.000 14.750 6/20/2038
MF Global Holdings Ltd MF 6.750 14.750 8/8/2016
MModal Inc MODL 10.750 6.125 8/15/2020
Mashantucket Western
Pequot Tribe MASHTU 7.350 16.250 7/1/2026
Medtronic Inc MDT 3.125 102.240 3/15/2022
Murray Energy Corp MURREN 11.250 27.000 4/15/2021
Murray Energy Corp MURREN 11.250 27.000 4/15/2021
Murray Energy Corp MURREN 9.500 27.000 12/5/2020
Murray Energy Corp MURREN 9.500 27.000 12/5/2020
NWH Escrow Corp HARDWD 7.500 60.000 8/1/2021
NWH Escrow Corp HARDWD 7.500 59.240 8/1/2021
New Gulf Resources LLC/
NGR Finance Corp NGREFN 12.250 3.963 5/15/2019
New WEI Inc WLTG 8.500 0.834 4/15/2021
Northwest Hardwoods Inc HARDWD 7.500 58.638 8/1/2021
Northwest Hardwoods Inc HARDWD 7.500 58.638 8/1/2021
Pernix Therapeutics
Holdings Inc PTX 4.250 2.250 4/1/2021
Pernix Therapeutics
Holdings Inc PTX 4.250 2.250 4/1/2021
Pioneer Energy Services Corp PES 6.125 40.521 3/15/2022
Powerwave Technologies Inc PWAV 3.875 0.164 10/1/2027
Powerwave Technologies Inc PWAV 1.875 0.171 11/15/2024
Powerwave Technologies Inc PWAV 1.875 0.171 11/15/2024
Powerwave Technologies Inc PWAV 3.875 0.164 10/1/2027
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rolta LLC RLTAIN 10.750 9.204 5/16/2018
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 8.000 66.000 6/15/2020
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.125 17.250 11/1/2020
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.375 24.000 11/1/2021
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 8.000 67.653 6/15/2020
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.125 10.174 11/1/2020
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.375 9.761 11/1/2021
Sanchez Energy Corp SNEC 7.750 5.961 6/15/2021
Sanchez Energy Corp SNEC 6.125 5.253 1/15/2023
Sears Holdings Corp SHLD 6.625 7.000 10/15/2018
Sears Holdings Corp SHLD 6.625 13.576 10/15/2018
Sears Roebuck
Acceptance Corp SHLD 7.500 1.633 10/15/2027
Sears Roebuck
Acceptance Corp SHLD 7.000 1.545 6/1/2032
Sears Roebuck
Acceptance Corp SHLD 6.500 1.417 12/1/2028
Sears Roebuck
Acceptance Corp SHLD 6.750 1.437 1/15/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
Stearns Holdings LLC STELND 9.375 50.387 8/15/2020
Stearns Holdings LLC STELND 9.375 50.387 8/15/2020
TerraVia Holdings Inc TVIA 6.000 4.644 2/1/2018
Transworld Systems Inc TSIACQ 9.500 26.000 8/15/2021
Transworld Systems Inc TSIACQ 9.500 26.000 8/15/2021
UCI International LLC UCII 8.625 4.780 2/15/2019
Ultra Resources Inc UPL 7.125 8.005 4/15/2025
Ultra Resources Inc UPL 6.875 7.759 4/15/2022
Ultra Resources Inc UPL 6.875 8.239 4/15/2022
Ultra Resources Inc UPL 7.125 7.948 4/15/2025
Windstream Services LLC /
Windstream Finance Corp WIN 7.500 29.500 6/1/2022
Windstream Services LLC /
Windstream Finance Corp WIN 6.375 28.563 8/1/2023
Windstream Services LLC /
Windstream Finance Corp WIN 8.750 31.250 12/15/2024
Windstream Services LLC /
Windstream Finance Corp WIN 6.375 31.500 8/1/2023
Windstream Services LLC /
Windstream Finance Corp WIN 8.750 29.500 12/15/2024
Windstream Services LLC /
Windstream Finance Corp WIN 7.750 26.815 10/15/2020
Windstream Services LLC /
Windstream Finance Corp WIN 7.750 25.470 10/1/2021
rue21 inc RUE 9.000 1.428 10/15/2021
*********
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
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