/raid1/www/Hosts/bankrupt/TCR_Public/190917.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, September 17, 2019, Vol. 23, No. 259
Headlines
3-D INNOVATIVE: U.S. Trustee Unable to Appoint Committee
ACEMLA DE PUERTO RICO: Preliminary Bid for Reconsideration Junked
ADVANCE SPECIALTY: PCO Files 7th Interim Report
AEGERION PHARMACEUTICALS: CEO Plan Objection Overruled; Plan OK'd
AHEAD DB BORROWER: Moody's Assigns B2 Corp. Family Rating
AIR FORCE VILLAGE: PCO Files 2nd Report
ALL FAMILY FINANCE: Seeks Cash Access Thru December 2019
ALTA MESA: Davis Polk, Rapp & Krock Represent Noteholder Group
ALTA MESA: Moody's Affirms Ca CFR & Alters Outlook to Stable
APOLLO COMPANIES: Ct. Grants $2.2K Judgment Against Winfred Fields
ARCTIC GLACIER: Moody's Lowers CFR to B3, Outlook Stable
ASPEN VILLAGE: Amends Treatment of Assisted Living Interest Claims
BEAZER HOMES: Fitch Affirms B- LT IDR & Alters Outlook to Stable
BEAZER HOMES: S&P Rates $350MM Senior Notes 'B-'
BROOKFIELD RESIDENTIAL: S&P Rates New $400MM Sr. Unsec. Notes 'BB-'
BURKHALTER RIGGING: Court Confirms Ch. 11 Liquidation Plan
C&M PLASTICS: Oct. 16 Disclosure Statement Hearing
CENTURY LEASING: U.S. Trustee Unable to Appoint Committee
CENTURYLINK INC: Moody's Affirms Ba3 CFR & Alters Outlook to Stable
CERENCE INC: S&P Assigns Prelim 'B' ICR After AVA Segment Spin-Off
CIRCLE BAR: U.S. Trustee Unable to Appoint Committee
COLORADO GROUP 3: U.S. Trustee Unable to Appoint Committee
COLORADO GROUP: U.S. Trustee Unable to Appoint Committee
CORE & MAIN: Moody's Lowers CFR to Ba3, Outlook Stable
CORMICAN'S INC: Court Converts Case to Chapter 7
CROCKETT COGENERATION: Moody's Hikes Sr. Secured Notes to Caa1
CUMULUS MEDIA: Moody's Rates New $525MM Term Loan B 'B2'
CUMULUS MEDIA: S&P Rates New $525MM Senior Secured Term Loan 'B'
DELUXE ENTERTAINMENT: S&P Cuts ICR to 'CC' on Debt Exchange Plan
DITECH HOLDING: Court Denies Bid to Disband Consumer Committee
DIXON MECHANICAL: U.S. Trustee Unable to Appoint Committee
EAST COAST INVEST: U.S. Trustee Unable to Appoint Committee
EMPIRE FARMSTEAD: U.S. Trustee Unable to Appoint Committee
ESH HOSPITALITY: S&P Rates New $500MM Senior Unsecured Notes 'BB-'
FRED'S INC: Sept. 18 Meeting Set to Form Creditors' Panel
FURIE OPERATING: U.S. Trustee Unable to Appoint Committee
GATHERING PLACE: Counsel to Get $1,000 Per Month Under Plan
GCX LIMITED: Case Summary & 30 Largest Unsecured Creditors
GCX LIMITED: Files for Chapter 11 with Prepackaged Plan
GCX LIMITED: Has $54.5MM of DIP Financing from Noteholders
GLOBAL ENTERPRISES: U.S. Trustee Unable to Appoint Committee
GUIDEHOUSE LLP: Moody's Affirms B2 CFR & Rates 1st Lien Debt B1
IHEARTMEDIA INC: Samantha Springs Allowed to Amend Proof of Claim
INSTALLED BUILDING: Moody's Rates New $300MM Unsec. Notes 'B3'
ISTAR INC: Fitch Affirms 'BB-' IDR, Outlook Stable
J & K LOGGING: Case Summary & 16 Unsecured Creditors
JEFFERSON REALTY: Inks Settlement With Mortgagee
JIM PARKER: Unsecured Creditors to Get $2K for 20 Quarters
KAPKOWSKI ROAD: Moody's Alters Outlook on Ba2 Project Bonds to Pos.
LA TRINIDAD ELDERLY: Court Dismisses Chapter 11 Bankruptcy Petition
LEVEL 3 FINANCING: Fitch Rates New $500MM Unsec. Notes 'BB'
LIGHTHOUSE PLUMBING: Voluntary Chapter 11 Case Summary
LIONHEART EVENT: Pursues Chapter 7 Liquidation
LOGISTICS BUDDY: U.S. Trustee Unable to Appoint Committee
MAYFLOWER COMMUNITIES: PCO Files 1st Supplemental Report
MERITAGE HOMES: S&P Alters Outlook to Pos., Affirms 'BB' ICR
METRONET SYSTEMS: Moody's Assigns B3 CFR, Outlook Stable
MONOTYPE IMAGING: Moody's Assigns B3 CFR, Outlook Stable
OCWEN LOAN: Moody's Affirms B2 Rating on Secured Term Loan
ONE AVIATION: Seeks Approval of Joint Prepackaged Ch. 11 Plan
OUTERSTUFF LLC: Moody's Lowers CFR to Caa1, Outlook Negative
P&D INVESTMENTS: U.S. Trustee Unable to Appoint Committee
PANOCHE ENERGY: Moody's Hikes Sr. Sec. Notes Rating to Caa1
PANTALEO LAFORGIA: Plan Violates Absolute Priority Rule
PANTHERA ENTERPRISES: Case Summary & 20 Top Unsecured Creditors
PETROSHARE CORP: U.S. Trustee Forms 3-Member Committee
PINE CREEK MEDICAL: Case Summary & 20 Largest Unsecured Creditors
PONY TAIL: Oct. 10 Hearing on 1st Amended Disclosure Statement
PRADHAN AND COMPANY: Unsecureds to Get $10K Over 60 Months
PURDUE PHARMA: Case Summary & 50 Largest Unsecured Creditors
PURDUE PHARMA: Consolidated Balance Sheet at Aug. 31, 2019
PURDUE PHARMA: Enters Chapter 11 to Wipe Out Over 2,000 Lawsuits
PURDUE PHARMA: Sackler Family Issues Statement on Ch.11 Filing
PURDUE PHARMA: Sacklers Give Up Ownership in $10 Billion Deal
PURDUE PHARMA: Seeks to Shield Sackler Family From Litigation
PURDUE PHARMA: To Seek Injunction Against Governmental Plaintiffs
RAIN CARBON: Moody's Reviews B1 CFR for Downgrade
ROCKY MOUNTAIN: Moody's Rates $6.8MM Education Bonds 'Ba1'
SAFEBUY ACCEPTANCE: Involuntary Chapter 11 Case Summary
SAFEBUY FINANCIAL: Involuntary Chapter 11 Case Summary
SAFEBUY LLC: Involuntary Chapter 11 Case Summary
SAFEBUY PROPERTIES: Involuntary Chapter 11 Case Summary
SENSATA TECHNOLOGIES: S&P Rates New Senior Unsecured Notes 'BB+'
SOUTH COAST BEHAVIORAL: PCO Files 1st Interim Report
SOUTH COAST BEHAVIORAL: U.S. Trustee Appoints Tamar Terzian as PCO
SOVRANO LLC: Oct. 17 Plan Confirmation Hearing
SPECTRUM BRANDS: S&P Rates New $300MM Senior Unsecured Notes 'B+'
SPENGLER PLUMBING: U.S. Trustee Forms 3-Member Committee
ST. JUDE NURSING: PCO Files Report for May to August 2019
STEINER BROTHER: U.S. Trustee Unable to Appoint Committee
STEPHEN DERNICK: Court OK's Emergency Bid for Protective Order
TARA RETAIL: Court Trims Claims in Countersuit vs Comm2013, et al.
TOPAZ SOLAR: Moody's Hikes Sec. Debt to Caa1, Alters Outlook to Pos
TSAWD HOLDINGS: WSFS Wins Summary Judgment Bid vs Sport Dimension
VIDA CAPITAL: Moody's Assigns B2 CFR, Outlook Stable
WELLS ENTERPRISES: S&P Affirms BB- ICR, Alters Outlook to Negative
WG PARTNERS: Moody's Alters Outlook on B1 Debt Rating to Positive
WISE ENTERPRISE: U.S. Trustee Unable to Appoint Committee
WPX ENERGY: S&P Rates $500MM Senior Unsecured Debt 'BB-'
WYNN RESORTS: Moody's Assigns Ba3 CFR, Outlook Positive
XTL-PA INC: Sept. 17 Meeting Set to Form Creditors' Panel
ZELIS PAYMENTS: Moody's Assigns B2 CFR, Outlook Stable
[^] Large Companies with Insolvent Balance Sheet
*********
3-D INNOVATIVE: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of 3-D Innovative Properties, LLC as of Sept.
12, according to a court docket.
About 3-D Innovative Properties
3-D Innovative Properties, LLC classifies its business as a single
asset real estate (as defined in 11 U.S.C. Section 101(51B)). It
is the fee simple owner of a property located at 4650 Stone
Mountain Highway, Lilburn, Ga., having an appraised value of $3.5
million.
3-D Innovative Properties sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-61946) on Aug. 1,
2019. At the time of the filing, the Debtor disclosed $4,003,497
in assets and $3,511,942 in liabilities. The Eason Law Firm is the
Debtor's counsel.
ACEMLA DE PUERTO RICO: Preliminary Bid for Reconsideration Junked
-----------------------------------------------------------------
Bankruptcy Judge Enrique S. Lamoutte denied Debtors ACEMLA de
Puerto Rico and Latin American Music Co. Inc.'s preliminary motion
for reconsideration and for additional time to file a motion for
reconsideration.
The Debtors state that the court found "cause" for dismissal
because of the Debtors' "former counsel's difficulties of
explaining the complex nature of [] Debtors businesses in their
disclosure statements and of the apparent confusion caused by []
Debtors' accountants by the poor communication between and among []
Debtors, former counsel, and the accountants." It is further
alleged that the "Debtors, advised by their only recently approved
undersigned counsel, were not afforded an opportunity to remedy the
deficiencies in both their Disclosure Statements and Plans of
Reorganization."
ACEMLA and LAMCO request the court to consider the "Preliminary
Motion" and allow an additional term of 15 days to supplement the
motion and to propose an Amended Disclosure Statement. The Debtors
allege that "new evidence" was obtained after the hearing that
shows that the Debtors' projections and testimonies are credible.
The Debtors argue that the dismissal constitutes a "manifest
injustice." To support the assertion, the Debtors include a "list"
of the court's discussion of the testimony of CPA Aquino and his
projections and of Mr. Alan McAbee's testimony. The Debtors assert
that CPA Aquino is preparing a supplemental financial report, to
complement information related to 2018 revenues, past due accounts
receivables, licenses, amongst other. They also provide a list of
Mr. McAbee's strategies to improve ACEMLA's business and request
"the opportunity to supplement this motion and amend the Disclosure
Statement." The Debtors state that "Mr. McAbee will make a proffer
to this Honorable Court by an Unsworn Declaration Under Penalty of
Perjury, to provide more details regarding the above-mentioned
strategies to improve ACEMLA's businesses."
The Debtors, essentially, argue that (1) there is "newly discovered
evidence" and (2) the order dismissing the cases constitutes a
manifest injustice, both grounds for reconsideration under Rule
59(e). For a motion for reconsideration to succeed, "the movant
must demonstrate either that newly discovered evidence (not
previously available) has come to light or that the rendering court
committed a manifest error of law."
The Debtors have failed to show the court any "newly discovered
evidence." The information provided in their Preliminary Motion
should've been in possession of the Debtors prior to the hearing
for the approval of the Disclosure Statement and, therefore,
presented therein. The fact that the Debtors request an opportunity
to supplement the Disclosure Statement and the Plans, as well as
the projections and the witnesses' testimonies, reveal the Debtors'
attempt to relitigate the matters considered by the court during
the hearing. As stated by the opposing parties, "…the Debtors are
transparently trying to cure at the reconsideration stage the
deficiencies of their disclosure statements and plans and their
evidentiary presentation at trial by attempting to make new
arguments and by presenting new evidence for the court to
consider." The court agrees with the opposing parties when stating
that the Debtors are using the motion for reconsideration as a
vehicle to undo its own procedural errors.
Furthermore, the Preliminary Motion for Reconsideration and the
request for time to "supplement" or amend the Disclosure Statement
and the plans fails to consider the time limitations imposed by 11
U.S.C. section1121(e) for a small business case. Similarly, the
allowance of an extension of time to supplement the Disclosure
Statements and Plans, as requested by the Debtors, contravenes the
requirements of 1129(e) which mandate the court to confirm a plan
within 45 days after the plan is filed.
A copy of the Court's Opinion and Order dated August 29, 2019 is
available at https://tinyurl.com/yy8cfn46 from Pacermonitor.com at
no charge.
About ACEMLA de Puerto Rico Inc.
ACEMLA de Puerto Rico Inc. is one of the four "Performance Rights
Organization" (PRO), in the United States and No. 76 in the CISAC
world roster. It controls and licenses LAMCO's non-exclusive
performance rights and those of its affiliate music publisher's
editors and composers. This institution was created to defend the
Latin composer's rights in the United States and the world, and it
is as such that in 1985, by an appeal presented before the highest
federal court in this country, against a decision of the Copyright
Royalty Tribunal against ASCAP, BMI and SESAC, is successful, and
since then ACEMLA operates as the fourth society, or a performance
Rights Society (PRO), in the United States.
ACEMLA de Puerto Rico Inc. and Latin American Music Co Inc. filed
Chapter 11 petitions (Bankr. D.P.R. Case Nos. 17-02021 and
17-02023) on March 24, 2017. In its petition, ACEMLA estimated
assets of less than $500,000 and liabilities of $1 million to $10
million. LAMCO estimated assets and liabilities of less than $1
million.
The Hon. Enrique S. Lamoutte Inclan presides over the cases.
Gratacos Law Firm, PSC, serves as bankruptcy counsel.
ADVANCE SPECIALTY: PCO Files 7th Interim Report
-----------------------------------------------
Tamar Terzian as Patient Care Ombudsman (PCO) for Advanced
Specialty Care filed a Seventh Interim Report for the period June
2019 to July 2019.
The PCO continued to observe the Registered Nurses ("RNs") and some
of the Licensed Vocational Nurse ("LVNs") at the patients' homes.
Each RN visits about 14 patients per month.
The family provides a plan of care stated by the doctors depending
on the situation. The home was clean and had ample medical
supplies. The patients visited needed all day home care. However,
some patients need all day homecare meaning there is an LVN between
8:00 a.m. and 5:00 p.m.
These patients are primarily pediatric and have severe conditions
that require 24/7 monitored care. The PCO's observation of the LVNs
in charge was positive as they are fully trained by the Debtor to
assure the patients are safe and have the proper medication or
medical equipment based on each patient's needs.
The LVNs are trained for emergency issues and assist the families
in the daily care of the patients. Through the efforts of the LVNs
patients remain stable and improve in their condition with the
daily therapy received.
The Debtor has received no complaints from any patient or with
respect to the caregivers.
The families of the patient had no complaints with the level of
care provided by the LVN. The procedures and protocols of the
registered nurses and LVNs are properly implemented.
Therefore, the PCO finds that all care provided to the patients by
the Debtor is well within the standard of care. The PCO will
continue to monitor and is available to respond to any concerns or
questions of the Court or interested party.
A full-text copy of the PCO's Seventh Report is available at
https://is.gd/y2vLKC from PacerMonitor.com at no charge.
About Advance Specialty Care
Based in Los Angeles, California, Advance Specialty Care, LLC, is a
home-health care provider offering nursing, physical therapy,
occupational therapy, speech pathology, medical social, and home
health aide services. The company previously sought bankruptcy
protection on March 19, 2016, (Bankr. C.D. Calif. Case No.
16-13521) and Oct. 24, 2017 (Bankr. C.D. Calif. Case No.
17-23070).
Advance Specialty Care, LLC, a/k/a ASC, LLC filed a Chapter 11
petition (Bankr. C.D. Calif. Case No. 17-24737) on Nov. 30, 2017.
The petition was signed by Moises L. Simbulan, chief financial
officer. At the time of filing, the Debtor estimated $500,000 to
$1 million in assets and $10 million to $50 million in liabilities.
The case is assigned to Judge Robert N. Kwan.
AEGERION PHARMACEUTICALS: CEO Plan Objection Overruled; Plan OK'd
-----------------------------------------------------------------
Bankruptcy Judge Martin Glenn issued a memorandum opinion
confirming Aegerion Pharmaceuticals, Inc. and affiliates' first
amended joint chapter 11 plan.
Counsel for Marc Beer filed an objection to the confirmation on
August 22, 2019. Beer served as Chief Executive Officer of Aegerion
from August 2010 until July 2015. In addition to the standard
by-laws entitlement to the right of indemnification protecting all
of the officers and directors of Aegerion, Beer entered into a
separate indemnification agreement with Aegerion effective August
19, 2010. Aegerion indemnified Beer continuously since 2013 and
advanced his legal fees and expenses through Dec. 31, 2018. Beer
and other former officers and directors have incurred legal fees
and expenses in defending government investigations that resulted
in the Class 5 Government Settlement Claims that will be paid in
full under the Plan. The investigations continue, however, with
respect to some or all of the former officers and directors so they
are likely to continue to incur legal fees and expenses.
Beer objects to the Plan's creation of only two classes of general
unsecured creditors' claims--Class 6A (Ongoing Trade Creditors) and
Class 6B (Other Unsecured Claims). Beer's claim and those of other
former officers and directors were included in Class 6B Other
Unsecured Creditors, along with all unsecured creditors other than
the ongoing trade creditors. Beer does not object to the separate
classification of Class 6A (Ongoing Trade Creditors). Rather, he
and the other former officers and directors who joined Beer's
objection contend that they should have been separately classified
in a class of unsecured former employee claims rather than lumped
with all Other General Unsecured Claims. In other words, rather
than arguing that former directors and officers were improperly
grouped with dissimilar claims, Beer argues that there should have
been an additional class that separately grouped claims even more
similar to his own. Beer contends that the failure to separately
classify their claims fails to satisfy sections 1129(a)(1) and
1129(a)(3).
The Court concludes that Beer's first objection, namely that the
Debtors impermissibly separately classified Class 6A Ongoing Trade
Claims and Class 6B Other General Unsecured Claims, is without
merit. Caselaw is clear that "[a] debtor in bankruptcy has
considerable discretion to classify claims and interests in a
chapter 11 reorganization plan."
Further, courts have confirmed plans that separately classify trade
creditors and other general unsecured creditors where, as is the
case here, trade creditors are vital to the debtors' ongoing,
post-emergence business.
The Court also rejects the Beer Objection's next argument that the
Debtors incorrectly classified dissimilar claims together in Class
6B (i.e., combining former D&O claims with the Convertible Notes
Claims) in order to "gerrymander" an impaired accepting Class to be
unfounded. In this case, the Debtors' two other impaired Classes
(Classes 3 and 4) unanimously voted to accept the Plan. Further,
the Beer Objection suggests that the Debtors should have created a
separate class comprised exclusively of claims of former directors
and officers and that after such class rejected the Plan, the
Debtors would be unable to satisfy cramdown without providing
payments in full in cash for this new class of unsecured creditors
similar to the treatment provided to the Class 6A creditors. Courts
have rejected "unfair discrimination" arguments in cases where
trade creditors are treated better than other unsecured classes
that have rejected a plan.
Thus, the Court concludes that the Plan complies with all
requirements for confirmation in the Bankruptcy Code, the
Bankruptcy Rules, and other applicable law. As such, the Beer
Objection is overruled, and the Plan is confirmed.
A copy of the Court's Memorandum Opinion dated Sept. 10, 2019 is
available at https://tinyurl.com/y6gl6x3h from Pacermonitor.com at
no charge.
Attorneys for Debtors:
Paul V. Shalhoub, Esq.
Andrew S. Mordkoff, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019-6099
Counsel for Marc Beer:
David C. McGrail, Esq.
Ilana Volkov, Esq.
McGrail & Bensinger LLP
888-C 8th Avenue #107
New York, NY 10019
-and-
Douglas R. Gooding, Esq.
Melissa Bayer Tearney, Esq.
R.J. Cinquegrana, Esq.
Choate Hall & Stewart LLP
Two International Place
Boston, Massachusetts 02110
About Aegerion Pharmaceuticals
Aegerion Pharmaceuticals Inc. is a global biopharmaceutical company
dedicated to developing and commercializing therapies that deliver
new standards of care for people living with rare diseases. With a
global footprint and an established commercial portfolio, including
MYALEPT (metreleptin) and JUXTAPID (lomitapide), the Company's
business is supported by differentiated treatments that treat
severe and rare diseases.
On Nov. 29, 2016, Aegerion entered into a merger transaction with
non-debtor Novelion Therapeutics Inc. (formerly QLT Inc.), a
publicly traded company formed under the laws of the Province of
British Columbia. As a result of that transaction, Aegerion became
an indirect wholly owned subsidiary of Novelion.
Aegerion Pharmaceuticals, Inc., and U.S. affiliate Aegerion
Pharmaceuticals Holdings, Inc., sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 19-11632) on May 20, 2019.
API estimated $100 million to $500 million in assets and the same
range of liabilities as of the bankruptcy filing.
The Hon. Martin Glenn is the case judge.
The Debtors tapped Willkie Farr & Gallagher LLP as legal advisor;
Moelis & Company LLC as financial and restructuring advisor; AP
Services, LLC as financial advisor and chief restructuring officer;
and Prime Clerk LLC as claims and noticing agent and administrative
advisor.
The ad hoc group of convertible noteholders tapped Latham & Watkins
LLP and King & Spalding LLP as legal advisors; and Ducera Partners
LLC as financial advisor.
The U.S. Trustee for Region 2 on May 29, 2019, appointed two
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 cases. The Committee tapped Kenneth H. Eckstein,
Esq., Rachael L. Ringer, Esq., and Priya K. Baranpuria, at Kramer
Levin Naftalis & Frankel LLP, in New York. Cassels Brock &
Blackwell LLP, as Canadian counsel to the Committee.
AHEAD DB BORROWER: Moody's Assigns B2 Corp. Family Rating
---------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
a B2-PD Probability of Default Rating to Ahead DB Borrower, LLC. As
part of the rating action, Moody's assigned a B2 rating to the
company's proposed $65 million 1st lien senior secured revolver and
$440 million 1st lien senior secured term loan. The rating outlook
is stable.
As majority owner of two portfolio companies (Ahead, LLC and Data
Blue, LLC), Court Square Capital Partners will roll over equity
from both investments to create the merged entity, Ahead DB.
Proceeds from the new borrowings will be used to fund a $74 million
distribution, refinance $355 million of existing debt for the two
individual companies, and pay related expenses. The assigned
ratings are subject to review of final documentation and no
material change in the terms and conditions of the transaction as
advised to Moody's.
The following ratings were assigned:
Assignments:
Issuer: Ahead DB Borrower, LLC
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Gtd Senior Secured 1st lien Term Loan, Assigned B2 (LGD3)
Gtd Senior Secured 1st lien Revolving Credit Facility, Assigned
B2 (LGD3)
Outlook Actions:
Issuer: Ahead DB Borrower, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The B2 CFR reflects Ahead DB's small scale compared to competing IT
value-added resellers and managed services firms, and the evolving
requirements of IT deployments for enterprises including the
ongoing transition to cloud platforms. The proposed merger,
including refinancing of existing debt and the $74 million
distribution, results in debt to EBITDA of roughly 4.5x at closing
(Moody's adjusted). Although the combination of Ahead, LLC and Data
Blue, LLC benefit from greater scale and geographic expansion, the
company has high vendor concentration, with 59% of the company's
non-service revenues represented by Dell EMC products. In addition,
there is some revenue concentration risk given more than 40% of
revenues are derived from the health care or financial services
sectors.
Ratings are supported by Ahead DB's position as an important U.S.
channel partner for Dell EMC resulting in favorable vendor terms
and a good referral pipeline. Combined revenues have grown
consistently in the last few years, and Moody's expects continued
growth in the low to mid single digit percentage range over the
next 24 months, adjusting for the initial revenue ramp of a recent
large customer win. Moody's base case projections do not include
the potential for revenue synergies which management believes can
be achieved given the majority of non-overlapping customer
relationships of the pre-merged companies.
Moody's views Ahead DB's financial policy to be somewhat aggressive
characterized by high financial leverage and private-equity
ownership which will lead to debt financed distributions or
acquisitions to enhance equity returns. Lack of public financial
disclosure and the absence of board independence are also
incorporated in the B2 CFR.
Moody's expects Ahead DB will maintain good liquidity over the next
12 months, despite being a full taxpayer, supported by adjusted
free cash flow of at least $40 million (more than 7% adjusted free
cash flow to debt) and the proposed $65 million revolver (undrawn
at closing). Good free cash flow reflects the low level of reported
annual capital expenditures (less than 1% of revenue) and modest
working capital needs which is supported by favorable vendor
terms.
Ratings for Ahead DB's debt instruments reflect the B2-PD overall
probability of default and an average family recovery in a default
scenario. The B2 rating assigned to the 1st lien senior secured
revolver and term loan is in line with the CFR as they represent
the preponderance of funded debt.
The stable outlook reflects Moody's expectation that management
will achieve most of its integration targets as planned in the
first 12 months post-merger and that the combined Ahead DB will
maintain its position in the southeast and midwestern regions of
the US as a leading provider of technology-based solutions serving
Fortune 1000 companies in the data center and cloud as well as a
high-value sales channel partner for OEMs. Moody's also expects the
company will continue to grow its revenue base while maintaining
adjusted EBITDA margins at more than 8% (roughly 12% margins
post-adoption of ASC 606).
Ratings could be upgraded if Ahead DB continues to grow its
combined top line (adjusting for near term adoption of ASC 606),
expand its geographic reach, and improve its credit metrics
resulting in adjusted debt to EBITDA being sustained below 4.0
times with adjusted free cash flow to debt above 12%. Ratings could
be downgraded if a decline in revenue or cash flow lead to adjusted
debt to EBITDA being sustained above 6.0x or lower EBITDA margins.
There would be downward pressure on ratings if liquidity were to
weaken resulting in adjusted free cash flow to debt below 5% or
reduced revolver availability.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Ahead DB Borrower, LLC, headquartered in Chicago, IL, is a domestic
provider of technology-based solutions serving Fortune 1000
companies in the data center and cloud as well as a high-value
sales channel partner for OEMs. Upon closing, the company will be
owned by Court Square Capital Partners (54%) and management (46%)
with estimated revenues of $1.2 billion (or roughly $800 million
post-adoption of ASC 606) as of June 2019, pro forma for the merger
and a recent acquisition.
AIR FORCE VILLAGE: PCO Files 2nd Report
---------------------------------------
Joseph Rodrigues, the Patient Care Ombudsman for Air Force Village
West, Inc., d/b/a Altavita Village, submits his second 60-day
report.
Altavita Village facility is a Continuing Care Retirement Community
(CCRC). It is located at 17050 Arnold Drive, Riverside, California.
The following information describes the number of visits made to
the facility (complaint and non-complaint related), observations
about staffing, food, supplies, the environment, the general status
of the residents, and complaints made by or on behalf of residents
to the LTC Ombudsman Program.
1. The licensed capacity of the facility is 770 beds, with a
current census total of 309 the following are:
(a) Skilled Nursing - 46
(b) Assisted Living - 42
(c) Memory Care - 31
(d) Independent Living - 190
2. The local Ombudsman Program has not received any concerns
involving vendors, utilities, or external support factors that may
affect residents or resident care.
3. The Administrator reports having no current staff openings and
the local Ombudsman Program did not find any issues with the
staffing levels.
4. There were no reports from any regulatory agency provided to the
local Ombudsman Program during this reporting period.
The Patient Care Ombudsman has no recommendations to the court at
this time.
A full-text copy of the PCO's Second Report is available at
https://tinyurl.com/y6fx3q5e from PacerMonitor.com at no charge.
About Air Force Village West
Air Force Village West -- https://livealtavita.org/ -- owns and
operates a continuing care retirement community with assisted
living, independent living, skilled nursing and memory care
services. Air Force Village is a not-for-profit entity opened in
1989.
Air Force Village West, Inc., based in Riverside, CA, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-11920) on March
10, 2019. The petition was signed by Mary Carruthers, chairman of
the Board. In its petition, the Debtor estimated $50 million to
$100 million in both assets and liabilities. The Hon. Scott C.
Clarkson oversees the case. Samuel R. Maizel, Esq., at Dentons US
LLP, is the Debtor's bankruptcy counsel.
ALL FAMILY FINANCE: Seeks Cash Access Thru December 2019
--------------------------------------------------------
All Family Finance, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Georgia to authorize use of cash collateral
relating to the interest of Charleston Financial Group, in order to
pay operating expenses, pursuant to a budget from Sept. 1, 2019
through the first week of December 2019.
The budget provides for $33,153 in total operating cash
disbursements for the week-ending Sept. 22, 2019, of which $22,610
is for insurance, and $9,443 for payroll. Charleston Financial
asserts a first priority lien on and security interest in the
Debtor's assets.
The Debtor seeks an expedited interim hearing, and a final hearing
on the motion.
About All Family Finance
All Family Finance, LLC, is a private finance company that provides
loans for automobiles. As its business, All Family Finance
collects sub-prime loans acquired from "Buy Here, Pay Here" car
lots with its offices located at 124 Powers Ferry Road, Suite K,
Marietta, Georgia. The business is generating approximately
$150,000 in revenues per month.
Alleged creditors filed an involuntary Chapter 11 petition for All
Family Finance on Aug. 9, 2019 (Bankr. N.D. Ga. Case No. 19-62597).
G. Frank Nason, IV, Esq., at LAMBERTH, CIFELLI, ELLIS & NASON,
P.A., serves as counsel to Alice Gipson and Jeff Hurd and other
alleged creditors.
On Sept. 11, 2019, the Court entered an order for relief under
Chapter 11 of the Bankruptcy Code. No trustee has been appointed,
and All Family continues to operate is business and manage its
affairs as DIP.
The Debtor's attorney:
JONES & WALDEN, LLC
Cameron M. McCord
21 Eighth Street, NE
Atlanta, Georgia 30309
Tel: (404) 564-9300
ALTA MESA: Davis Polk, Rapp & Krock Represent Noteholder Group
--------------------------------------------------------------
In the Chapter 11 cases of Alta Mesa Resources, Inc., et al., the
law firms of Davis Polk & Wardwell LLP and Rapp & Krock, PC,
submitted a verified statement under Rule 2019 of the Federal Rules
of Bankruptcy Procedure to disclose that that they are representing
the members of the Ad Hoc Noteholder Group, comprised of holders of
7.875% senior notes due 2024 issued by the Debtors.
In or around February 2019, the Ad Hoc Noteholder Group engaged
Davis Polk to represent it in connection with the Members' holdings
of Prepetition Unsecured Notes. In September 2019, the Ad Hoc
Noteholder Group engaged Rapp & Krock to act as co-counsel in these
Chapter 11 Cases.
As of Sept. 9, 2019, the members of the Ad Hoc Noteholder Group and
their disclosable economic interests are:
(1) Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* $42,470,000 in aggregate principal amount of Prepetition
Unsecured Notes
(2) Firefly Value Partners, LP
601 West 26th Street, Suite 1250
New York, NY 10001
* $30,000,000 in aggregate principal amount of Prepetition
Unsecured Notes
(3) Leroy DH, L.P.
9 West 57th Street, 37th Floor
New York, NY 10019
* $166,700,000 in aggregate principal amount of Prepetition
Unsecured Notes
(4) PGIM, Inc.
655 Broad Street, 7th Floor
Newark, NJ 07102
* $218,046,000 in aggregate principal amount of Prepetition
Unsecured Notes
(5) PPM America, Inc.
225 West Wacker Drive, Suite 1100
Chicago, IL 60606
* $28,694,000 in aggregate principal amount of Prepetition
Unsecured Notes
Counsel to the Ad Hoc Noteholder Group can be reached at:
RAPP & KROCK, PC
Henry Flores, Esq.
Kenneth Krock, Esq.
1980 Post Oak Blvd, Suite 1200
Houston, TX 77056
Telephone: (713) 759-9977
Facsimile: (713) 759-9967
E-mail: hflores@rappandkrock.com
kkrock@rappandkrock.com
- and -
DAVIS POLK & WARDWELL LLP
Damian S. Schaible, Esq.
Angela M. Libby, Esq.
Stephanie P. Massman, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Facsimile: (212) 701-5800
E-mail: damian.schaible@davispolk.com
angela.libby@davispolk.com
stephanie.massman@davispolk.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/MuHnGg
About Alta Mesa Resources
Alta Mesa Resources, Inc., is an independent energy company focused
on the development and acquisition of unconventional oil and
natural gas reserves in the Anadarko Basin in Oklahoma, and through
Kingfisher Midstream, LLC, provides best-in-class midstream energy
services, including crude oil and gas gathering, processing and
marketing and produced water disposal to producers in the STACK
play.
Alta Mesa reported $1.4 billion in assets and $864 million in
liabilities as of Dec. 31, 2018.
Alta Mesa Resources, Inc., and six affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Case No. 19-35133) on Sept. 11, 2019.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Porter Hedges LLP and LATHAM & WATKINS LLP as
attorneys; and PERELLA WEINBERG PARTNERS LP AND ITS AFFILIATE TUDOR
PICKERING HOLT & CO ADVISORS LP as investment bankers. PRIME CLERK
LLC is the claims agent.
ALTA MESA: Moody's Affirms Ca CFR & Alters Outlook to Stable
------------------------------------------------------------
Moody's Investors Service downgraded Alta Mesa Holdings, LP's
Probability of Default Rating to D-PD from Ca-PD following the
announcement that the company has filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
Southern District of Texas. The company's other ratings were
affirmed, including its Ca Corporate Family Rating and Ca senior
unsecured notes rating. The SGL-4 Speculative Grade Liquidity
Rating remained unchanged. The rating outlook was changed to stable
from negative.
Subsequent to the actions, Moody's will withdraw the ratings due to
Alta Mesa's bankruptcy filing.
Issuer: Alta Mesa Holdings, LP
Ratings Downgraded:
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Ratings Affirmed:
Corporate Family Rating, Affirmed Ca
Senior Unsecured Notes, Affirmed Ca (LGD5)
Remains Unchanged
Speculative Grade Liquidity Rating, SGL-4
Outlook:
Changed Outlook to Stable from Negative
RATINGS RATIONALE
The downgrade of the PDR to D-PD from Ca-PD reflects Alta Mesa's
bankruptcy filing on September 11, 2019. The Ca CFR and the Ca
rating on the senior unsecured notes reflect Moody's estimate of
35%-65% expected recovery.
Alta Mesa is looking to reduce debt and return to a more
sustainable capital structure through the restructuring process. A
high level of capital expenditures in excess of operating cash flow
leading to a rapid increase in debt, poor cost management and weak
commodity prices during 2018, combined with diminished liquidity
and restrictive capital market conditions in 2019 precipitated the
bankruptcy filing.
The Chapter 11 filing involves Alta Mesa, its parent company Alta
Mesa Resources, Inc.. and several other entities, but the
bankruptcy filing does not include the midstream operations of
Kingfisher Midstream, LLC (unrated) and its subsidiaries.
Alta Mesa Holdings, LP is an exploration and production company and
subsidiary of Alta Mesa Resource, Inc, a Houston, Texas based
public company.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
APOLLO COMPANIES: Ct. Grants $2.2K Judgment Against Winfred Fields
------------------------------------------------------------------
On Oct. 1, 2018, the plaintiff, Apollo Companies Inc. initiated the
adversary proceeding captioned APOLLO COMPANIES INC, Plaintiff(s),
v. WINFRED FIELDS, Defendant(s), Adversary No. 18-08020 (Bankr.
S.D. Tex.) by filing a complaint against Winfred Fields.
Upon analysis Bankruptcy Judge Jeffrey P. Norman grants Apollo a
judgment for $2,298.82, plus $919.20 in attorney fees.
On May 5, 2017, Apollo filed its voluntary petition under Chapter
11 of the Bankruptcy Code. Apollo has a confirmed Chapter 11 Plan
and has instituted a number of adversary proceedings to collect on
past due accounts. Apollo's business includes the sale and service
of photocopiers and Fields is in the business of providing tax
preparation services. On August 24, 2017, Apollo and Fields
executed a two-page Equipment Agreement for a Xerox VersaLink
B405/DNM Copier, including a maintenance (service) agreement. The
first page of the agreement addresses the cost terms of the lease
and service agreement, and the second page addresses the additional
terms of the service portion of the agreement. The Equipment
Agreement provided for a 48-month lease at $98.77 per month, plus a
base service fee of $10 and a black and white copy charge of .0169
cents per copy over 1,000 copies per month. On Sept. 25, 2017,
Apollo attempted to deliver the copier, but Fields refused
delivery. Apollo charged Fields a restocking fee of $1,796.24 for
his refusal to accept delivery. Apollo invoiced Fields for a total
of $2,298.92, which includes the restocking fee, a delivery charge,
a prior invoice for service on his old copier, and finance
charges.
This is a simple contract dispute. The plaintiff contends there was
a binding, valid, and enforceable contract on which defendant
Fields ultimately did not perform, and the defendant disputes that
contention. The Court finds the Equipment Agreement, signed by both
parties, is a valid contract.
The Equipment Agreement states Texas law will govern the contract.
Under Texas law, the plaintiff must prove four elements to
establish breach of contract: (1) a valid contract; (2) plaintiff's
performance; (3) defendant's breach; and (4) resulting damages.
Here, there was a valid, binding, enforceable contract between
Fields and Apollo. Fields signed and dated the agreement,
indicating his intention to be bound. Stated plainly, Fields did
not honor his contractual obligation and promise on the Equipment
Agreement by refusing to accept delivery of the Xerox copier to the
detriment of Apollo, who had ordered and paid for the copier based
on the agreement.
Fields' arguments to the contrary are unpersuasive. According to
the pretrial statement, Fields claims to not be bound to the
two-page Equipment Agreement because Fields never paid Apollo,
which Fields believes was required for the contract to effective,
according to the terms and conditions of the contract.
Moreover, the Court finds that Fields failed to give any notice of
cancelation of the Equipment Agreement until its delivery on Sept.
25, 2017. The Court makes these findings using a preponderance of
the evidence standard, with the burden of proof allocated to
Apollo, the plaintiff. The Court places the burden of proof for
damage mitigation on Fields by the same evidentiary standard.
Further, the Court finds that the mitigation of damages was not
raised in the pretrial statement and is, therefore, waived. Even if
Fields did not waive a mitigation of damages, Fields failed prove
by a preponderance of the evidence that Apollo failed to mitigate
its damages. While the Court notes that Apollo's testimony, under
the Court's questioning, was that the copier was eventually sold to
some other party, Fields has failed to meet its burden of proof.
Accordingly, the Court declines to lessen its damage award.
The complaint of Apollo is granted in part and denied in part.
Apollo Companies Inc. is granted judgment against Winfred Fields in
the amount of $2,298.82, plus $919.20 in attorney fees and costs of
court.
A copy of the Court's Memorandum Opinion dated April 12, 2019 is
available at https://bit.ly/2kNLCiT from Leagle.com.
Apollo Companies Inc, Plaintiff, represented by Nicholas Anthony
Milazzo, The Bennett Law Firm.
Winfred Fields, Defendant, represented by Marcellous S. McZeal,
Grealish McZeal PC.
About Apollo Companies
Headquartered in Alvin, Texas, Apollo Office Systems, LLC --
http://www.apolloofficesystems.com-- is a growing company that
sells and services all brands of copiers, printers, scanners,
faxes, wide format laser printers and any other type of office
machine. The Debtor is an authorized Xerox Channel Partner. It also
sells Canon, Kyocera-Mita/Copystar, Konica-Minolta, Oce, Okidata,
HP, Brother, Samsung, Ricoh, GEI, Fujitsu, etc. AOS is a family
owned and has been in the business for over twenty-five years.
Apollo Companies Inc., doing business as Apollo Office Systems LLC,
doing business as Southwest Office Systems, filed for Chapter 11
bankruptcy protection (Bankr. S.D. Tex. Case No. 17-80148) on May
5, 2017. In the petition signed by Jeffrey Foley, director, the
Debtor estimated assets of less than $1 million and liabilities of
$1 million to $10 million. Judge Marvin Isgur presides over the
case. The Debtor hired E. Rhett Buck, Esq., serves as bankruptcy
counsel to the Debtor, and Eric C. Grimm, PLLC, and the Law Office
of William L. Bennett, as its special litigation counsel. An
official committee of unsecured creditors has not been appointed in
the Chapter 11 case.
ARCTIC GLACIER: Moody's Lowers CFR to B3, Outlook Stable
--------------------------------------------------------
Moody's Investors Service downgraded Arctic Glacier U.S.A., Inc.'s
Corporate Family Rating to B3 from B2, and affirmed the company's
Probability of Default Rating at B3-PD. In addition, Moody's
downgraded the ratings on the company's first lien credit
facilities to B3 from B2, consisting of its $437 million principal
($413 million outstanding) first lien term loan and a $60 million
revolving credit facility. The outlook is stable.
"Arctic Glacier's downgrade stems from a rapid and material
deterioration of credit metrics in 1H19, largely resulting from
very unfavorable weather in most regions the company serves, with
debt-to-EBITDA increasing roughly a turn in 2Q19 alone to about 7
times from about 6 times at 1Q19", said Brian Silver, Moody's Vice
President and lead analyst for Arctic Glacier. "Although management
is taking steps to reduce costs and improve the company's
operational efficiency, a large part of its performance is driven
by weather, which is uncertain and outside of management's control,
and we believe leverage levels are too high for a B2 rating
relative to the potential for volatility in profitability and cash
flow going forward."
Downgrades:
Issuer: Arctic Glacier U.S.A., Inc.
Corporate Family Rating, Downgraded to B3 from B2
Senior Secured First Lien Term Loan, Downgraded to
B3 (LGD3) from B2 (LGD3)
Senior Secured First Lien Revolving Credit Facility,
Downgraded to B3 (LGD3) from B2 (LGD3)
Outlook Actions:
Issuer: Arctic Glacier U.S.A., Inc.
Outlook, Remains Stable
Affirmations:
Issuer: Arctic Glacier U.S.A., Inc.
Probability of Default Rating, Affirmed B3-PD
RATINGS RATIONALE
Arctic Glacier U.S.A., Inc.'s B3 CFR is broadly constrained by its
high financial leverage of 7 times debt-to-EBITDA and weak interest
coverage of 0.7 times EBIT-to-interest for the twelve months ended
June 30, 2019, pro forma for acquisitions. The company also has a
very narrow product focus and is small in size relative to the
rated consumer packaged goods universe. Arctic Glacier has high
exposure to weather and a very high degree of seasonality, and the
company will continue to make bolt-on acquisitions in an effort to
grow its size and scale while enhancing its route density.
However, the Arctic Glacier's credit profile benefits from its
position as the second largest manufacturer and distributor of ice
in the US and leading position in the smaller Canadian market. The
company also has a relatively diverse customer base and generates
EBITDA margins greater than 25%. Arctic Glacier also has good
liquidity supported by its expectation for moderately positive free
cash flow generation on an annual basis, albeit not in all
quarterly periods, while maintaining access to its $60 million
revolving credit facility.
The stable outlook reflects Moody's expectation that Arctic Glacier
will grow its sales volumes while executing on cost reduction
initiatives such that profitability and cash flow generation
improve. The outlook further assumes the company will remain
acquisitive while maintaining at least a good liquidity profile.
Arctic Glacier's ratings could be upgraded if the company's
debt-to-EBITDA approaches 5.5 times and interest coverage is
greater than 1 time EBIT-to-interest. In addition, the company must
also maintain at least a good liquidity profile. Alternatively,
Arctic Glacier's ratings could be downgraded if debt-to-EBITDA is
sustained above 7 times, if the company generates negative free
cash flow on an annual basis, or if there is a material weakening
of liquidity for any reason.
The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.
Arctic Glacier U.S.A., Inc., a subsidiary of holding company Chill
Parent, Inc., is a manufacturer, marketer, and distributor of
packaged ice products in the US and Canada. The company sells to
more than 75,000 retail locations including mass merchants,
national and regional grocery chains, convenience stores, and gas
stations among others. Arctic Glacier's infrastructure includes 96
production and distribution facilities and over 52,000 stand-alone
merchandising freezer units. Arctic Glacier was sold to The Carlyle
Group in March 2017 for approximately $723 million. The company is
private and does not publicly disclose financial information.
Arctic Glacier generated approximately $274 million of revenue for
the twelve month period ended June 30, 2019.
ASPEN VILLAGE: Amends Treatment of Assisted Living Interest Claims
------------------------------------------------------------------
Aspen Village at Lost Mountain Assisted Living, LLC, filed with the
U.S. Bankruptcy Court for the Northern District of Georgia, Rome
Division, a second modification to plan for reorganization on Aug.
30 to address the treatment of Class 8, Interest Claims. The
pre-petition Interest in the Debtor are held by Robert Fouse (45%)
and Anderson Glover (55%).
The Second Modification provided that Interest claims Class 8
comprises of the interest claims. All pre-petition interests in the
Debtor will be cancelled, particularly including the pre-petition
55% membership interest of Anderson Glover in Debtor and the 45%
membership interest of Rob Fouse in Debtor shall be cancelled. The
issuance of 100% of the membership interest to Mr. Glover in the
Debtor is essential for the implementation of the plan as the plan
expects the Debtor will attain funding for the completion of the
development of the Memory Care Project.
Mr. Fouse, Mr. Glover and the Debtor have conferred regarding the
treatment of the Class 8, Interest Claims, and new terms regarding
treatment of interest in the Debtor pursuant to the Plan are set
forth a Third Modification of the Plan filed on Sept. 13.
Class 8 consists of the Interest Claims. Anderson Glover and
Robert Fouse shall each
retain their interest in the Debtor as follows: (i) Mr Glover 55%
Ownership Interest (i.e. 55 Membership Interest units) and (ii) Mr.
Fouse 45% Ownership Interest (i.e. 45 Membership Interest units);
provided that, Debtor (by through Debtor's Manager) is authorized
to issue additional Membership Interests (i.e. units) in the Debtor
post-Confirmation in Debtor's business judgment and admit the
holders of such new units as Members of Debtor. Any such issuance
shall reduce Mr. Glover's and Mr. Fouse's Members Interest and
therefore Ownership Interest (including the economic interest) in
the company pro-rata. Accordingly, and for purpose of demonstration
only, in the event Debtor issues an additional 900 shares for a
total of 1,000 outstanding Membership Interests (i.e. units) in
Debtor, then Mr. Fouse shall retain 45 Membership Interest units
representing 4.5% of the Ownership Interest in the Debtor and Mr.
Glover shall retain 55 units representing 5.5% of the Ownership
Interest in the Debtor. The Amended and Restated Operating
Agreement of Aspen Village at Lost Mountain Assisted Living, LLC
dated February 27, 2013 will be modified to include the provisions
of this Class 8. The Put Call provisions in Paragraph 12.04 of the
Operating Agreement shall be deleted in their entirety.
The Debtor anticipates that the acquisition of funding for
completion of the Memory Care facility will require that the party
providing such funding acquire a substantial and majority ownership
interest in the Debtor. The terms of the ownership structure in the
Debtor are still subject to further negotiation. However, as
stated, 100% of the Ownership Interest in the Debtor shall be
vested in Mr. Glover and Mr. Fouse upon the Confirmation Date;
provided that Debtor may provide for issuance and transfer of
interests in the Debtor to the new investor or funding source.
A full-text copy of the Second Modification to the Plan is
available at https://tinyurl.com/y3donw42 from PacerMonitor.com at
no charge.
A full-text copy of the Third Modification to the Plan is available
at https://tinyurl.com/y2zyhzcy from PacerMonitor.com at no
charge.
The Debtor is represented by:
Leslie Pineyro, Esq.
Leon S. Jones, Esq.
Jones & Walden, LLC
21 Eighth Street, NE
Atlanta, GA 30309
Tel: (404) 564-9300
About Aspen Village at Lost Mountain
Aspen Village at Lost Mountain Assisted Living, LLC and Aspen
Village at Lost Mountain Memory Care, LLC filed voluntary Chapter
11 petitions (Bankr. Case N.D. Ga. Nos. 19-40262 and 19-40263,
respectively) on Feb. 5, 2019. Both operate assisted living
facilities in Georgia.
At the time of filing, both Debtors had estimated assets of less
than $50,000 and liabilities of $1 million to $10 million.
The cases have been assigned to Judge Barbara Ellis-Monro. The
Debtors tapped Leslie M. Pineyro, Esq., at Jones & Walden, LLC, as
their legal counsel.
BEAZER HOMES: Fitch Affirms B- LT IDR & Alters Outlook to Stable
----------------------------------------------------------------
Fitch Ratings affirmed Beazer Homes USA, Inc.'s Long-Term Issuer
Default Rating at 'B-'. The Rating Outlook was revised to Stable
from Positive. In addition, Fitch has assigned a 'B-'/'RR4' rating
to BZH's offering of $350 million 7.25% senior unsecured notes due
2029 and $150 million senior unsecured term loan maturing in
September 2022. Proceeds from the notes issuance and the unsecured
term loan will be used to finance the repurchase of its 8.75%
senior notes due 2022.
The revision of the Rating Outlook to Stable from Positive reflects
Fitch's expectation that BZH's credit metrics are unlikely to trend
toward Fitch's thresholds for a 'B' IDR in the next 12-24 months.
In particular, BZH's net debt/capitalization (excluding $100
million of cash classified by Fitch as not readily available for
working capital and liquidity) will remain around 70% at
fiscal-year end 2019 and will be between 65% and 70% at the end of
fiscal 2020. Fitch had previously expected BZH's net
debt/capitalization ratio will approach 60% by fiscal year-end
2020. This compares to Fitch's 'B' IDR sensitivity of net
debt/capitalization approaching 60%.
Debt/operating EBITDA is projected to be in the 6x-7x range during
the next few years compared to Fitch's previous expectation of this
ratio falling below 6x by fiscal year-end 2019. EBITDA/interest
incurred is forecast to be 2.1x during fiscal year 2019.
KEY RATING DRIVERS
BZH's IDR is based on the company's execution of its business model
in the current housing environment, land policies, and geographic
diversity. Risk factors include the cyclical nature of the
homebuilding industry, the company's high debt load and, although
improved, still weak credit metrics, particularly its elevated
leverage (debt/capitalization of 71.3% and debt/EBITDA of 7.3x),
and its above-average exposure to the credit-challenged,
entry-level market (approximately 55% of BZH's customers are
first-time homebuyers).
Deleveraging Strategy: Debt/EBITDA declined to 6.3x at fiscal
year-end 2018 compared with 7.8x, 8.9x and 12.1x at fiscal
years-end 2017, 2016 and 2015, respectively. The company reduced
debt by almost $300 million since fiscal year-end 2015 and also
grew EBITDA to more than $200 million in fiscal 2018 from $131
million in fiscal 2015. However, debt/EBITDA increased to 7.3x for
the LTM ending June 30, 2019 as EBITDA margins declined modestly
and debt levels increased relative to year-end levels due to
seasonal working capital.
Net debt/capitalization (excluding $100 million of cash classified
by Fitch as not readily available for working capital and
liquidity) stood at 71.3% at June 30, 2019. The higher ratio is due
to losses reported this year relating to $148.6 million of
inventory impairment charges as well as reduction of shareholder's
equity from share repurchases. Fitch expects this ratio will remain
above 70% at the end of fiscal 2019 and will settle between 65% and
70% at the end of fiscal 2020.
Share Repurchases: In November 2018, the board approved a $50
million share-repurchase program (including $16.5 million allocated
to an accelerated repurchase program completed in November 2018).
Through the first nine months of fiscal 2019, the company
repurchased $34.6 million of its stock. Management initially
indicated that it would match the dollar value of its share
repurchases with reductions of its senior notes. More recently,
management said its debt reduction will exceed the dollar value of
its share repurchases. Fitch expects the company will complete the
repurchase authorization in the next 12 months.
Well-Laddered Debt Maturity: BZH completed several transactions
during the past 24 months that pushed out its debt maturities and
lessened refinancing risk relating to debt maturing in 2019. The
$350 million notes offering and the $150 million unsecured term
loan further enhances the company's debt maturity schedule and
allows BZH to further reduce debt through amortization of its term
loan ($50 million annually in 2020, 2021 and 2022). Following the
tender offer for its 2022 notes, the next major debt maturity will
be in 2025, when $229.6 million of senior notes mature.
Focus on Growth After Debt Reduction: BZH increased its investment
in land during fiscals 2017 and 2018 following lower spending in
fiscal 2016 as the company focused on debt reduction. BZH spent
$636 million on land and development activities in fiscal 2018 and
$447 million in fiscal 2017 compared with $337 million in fiscal
2016. Through the first nine months of 2019, BZH spent $363.7
million on land and development activities, down modestly from the
$441 million spent during the same period last year. The company is
also activating previously mothballed land, which should further
support community count growth. In July 2018, BZH also completed
the acquisition of Venture Homes, a leading private homebuilder in
the Atlanta market, for $60.6 million.
Modest Geographic Diversity: BZH was the 13th largest homebuilder
in 2018 (based on closings) and has active operations in 31 markets
across 13 states. BZH ranks among the top 10 builders in several
metro markets.
Exposure to Entry Level: BZH has above-average exposure to the
credit-challenged, entry-level market, wherein about 55% of its
customers are first-time homebuyers. This buyer segment is
typically more sensitive to rising interest rates and higher home
prices. Home affordability, particularly for first-time homebuyers,
has eroded as the housing cycle matures and the pace of increases
in home prices has outpaced wage growth in recent years. However,
the first-time/entry-level segment was relatively strong during the
past year and demographics should continue to support demand in
this segment. Most homebuilders are pivoting toward more
entry-level products to cater to this segment and address
affordability issues. The company is also expanding its Gatherings
business (targeting active adult buyers) across its geographic
footprint and has accelerated its operational and land investment
to support its rollout.
Slowing Housing Market Growth: Fitch expects new housing activity
will improve slightly in 2019 as lower interest rates and slowing
home price appreciation somewhat mitigates eroding affordability.
Fitch believes the general strength of the economy, combined with
still-high consumer confidence, low unemployment, improving wage
growth, and low mortgage rates will continue to support the housing
market this year. Fitch expects housing starts will improve 1%,
while new homes sales advance more than 2% and existing home sales
decline modestly, constrained by the lack of inventory,
particularly at the entry level.
DERIVATION SUMMARY
BZH's IDR is based on the company's execution of its business model
in the current housing environment, land policies, and geographic
diversity. Risk factors include the cyclical nature of the
homebuilding industry, the company's high debt load and, although
improved, still-weak credit metrics, particularly its elevated
leverage (debt/capitalization of 71.3% and debt/EBITDA of 7.3x),
and its above-average exposure to the credit-challenged,
entry-level market (approximately 55% of BZH's customers are
first-time homebuyers).
BZH's closest peer is M/I Homes (BB-/Stable). Hovnanian (CCC) is a
less appropriate peer given that its debt-to-capitalization exceeds
100%, making its capital structure untenable absent a continued
improvement in the housing market. M/I Homes is comparable in size
with BZH but is less geographically diversified. M/I Homes has
better leverage metrics, with debt-to-capitalization 46.9% and
debt/EBITDA of 3.7x, but modestly lower EBITDA margin compared with
BZH.
KEY ASSUMPTIONS
-- Total housing starts increase 1%, while new home sales
improve
more than 2% and existing home sales decline modestly during
2019;
-- BZH's homebuilding revenues are slightly lower in fiscal 2019
and grows modestly in 2020;
-- The company's EBITDA margins decline slightly in fiscal 2019
compared with fiscal 2018;
-- BZH's net debt to capitalization ratio is around 70% at the
end of fiscal 2019 and settles between 65% and 70% at the end
of fiscal 2020;
-- The company's total debt / operating EBITDA is between
6.0x-7.0x in the next few years;
-- Interest coverage is above 2x in fiscal 2019 and 2020.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Positive rating actions may be considered if BZH improves
its credit metrics, including net debt/capitalization
approaching 60% and debt/EBITDA consistently below 7x and
the company preserves a healthy liquidity position.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Fitch may consider negative rating actions if the company
consistently generates negative free cash flow, leading to a
deterioration of its liquidity profile, including EBITDA to
interest coverage falling below 1x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company has adequate liquidity with cash of
$68.5 million and $105 million of availability under its $210
million secured revolving credit facility. On Sept. 9, 2019, the
company amended its revolving credit facility to increase the
commitment from $210 million to $250 million and extend the
maturity date to February 2022.
Cash Flow from Operations: Fitch expects the company will modestly
reduce land and development spending this year relative to 2018
levels, resulting in CFFO of $50 million to $100 million in fiscal
2019. Lower interest payments from the recent refinancing and
expected debt reduction should also enahance cash flow going
forward. Fitch expects the company will use excess cash flow to
fund share repurchases and further reduce debt.
Recovery Assumptions:
The recovery analysis assumes that BZH would be considered a
going-concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim. The going-concern EBITDA estimate of $160
million reflects Fitch's view of a sustainable, post-reorganization
EBITDA level, upon which the agency bases the valuation of the
company. The going-concern EBITDA is about 14% lower than the
company's LTM EBITDA.
An EV multiple of 6x is used to calculate a post-reorganization
valuation. Transactions involving homebuilding companies include a
9.5x enterprise value to EBITDA multiple on the 2018 acquisition of
CalAtlantic Homes by Lennar Corporation (based on a transaction
value of $9.3 billion at the time of the announcement and
Fitch-calculated EBITDA of $981 million for CalAtlantic Homes for
the LTM ending June 30, 2017). Trading multiples (EV/EBITDA) for
public homebuilders are currently average around 9.5x and has been
in the 6.0x-10.x range for the past 12 months.
The secured revolving credit facility is assumed to be fully drawn
upon default. The credit facility and other secured loans are
senior to the senior unsecured notes and term loan in the
waterfall. The allocation of the value in the liability waterfall
results in a recovery corresponding to an 'RR1' for the first-lien
secured credit facility and a recovery corresponding to an 'RR4'
for the unsecured notes and term loan.
The junior subordinated notes ($100.8 million) initially had a zero
recovery under the waterfall calculation. However, Fitch assumes a
consensual concession allocation equal to 1.5% of the residual
value remaining for the senior unsecured notes and term loan to
reflect potential settlement payments in the bankruptcy process.
The recovery rating for the subordinated notes are at 'RR6'.
BEAZER HOMES: S&P Rates $350MM Senior Notes 'B-'
------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '4'
recovery rating to Beazer Homes USA Inc.'s proposed $350 million
senior notes due 2029. The '4' recovery rating indicates S&P's
expectation for average (30%-50%; rounded estimate: 45%) recovery
for bondholders in the event of a payment default.
The company intends to use the net proceeds from this offering,
together with borrowings under a proposed $150 million unsecured
term loan facility and cash on hand, to repurchase $500 million of
senior notes due March 2022.
BROOKFIELD RESIDENTIAL: S&P Rates New $400MM Sr. Unsec. Notes 'BB-'
-------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '2'
recovery rating to Brookfield Residential Properties Inc.'s
proposed issuance of $400 million in senior unsecured notes due in
2027. The '2' recovery rating indicates S&P's expectation for
significant (70%-90%; rounded estimate: 75%) recovery in the event
of a payment default. The rating agency anticipates the company
will use the proceeds from these notes and a draw on their
revolving credit facility to fully redeem its $600 million of
outstanding 6.500% senior unsecured notes due December 2020.
BURKHALTER RIGGING: Court Confirms Ch. 11 Liquidation Plan
----------------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division, on Sept. 10, issued an order
confirming the amended Chapter 11 plan of liquidation for
Burkhalter Rigging, Inc., and its debtor affiliates.
Objections to confirmation of the Plan were filed by (i)
Westchester Fire Insurance Company, and (ii) ACE American Insurance
Company, ACE Indemnity Insurance Company, Westchester Fire
Insurance Company and Westchester Surplus Lines Insurance Company.
The Objections have been resolved.
Confirmation and consummation of the Plan shall have no effect on
insurance policies of the Debtors in which the Debtors are or were
an insured party or the insured parties.
Each insurance company is prohibited from -- and the Order shall
include an injunction against -- denying, refusing, altering, or
delaying coverage on any basis regarding or related to the Chapter
11 Cases or the Plan. For the avoidance of doubt, the proceeds of
any insurance policy shall only be considered Assets to the extent
such proceeds are
payable to the Debtors (as opposed to solely a third party
claimant) pursuant to the terms of any such applicable insurance
policy.
The automatic stay of Bankruptcy Code section 362(a) and the
injunctions set forth
in Section 12.6 of the Plan, if and to the extent applicable, shall
be deemed lifted without further order of this Court, solely to
permit: (I) claimants with valid workers' compensation claims or
direct action claims against an insurer under applicable
non-bankruptcy law to proceed with their claims; and (II) insurers
to administer, handle, defend, settle, and/or pay, in the ordinary
course of business and without further order of this Bankruptcy
Court, (A) workers' compensation claims, (B) claims where a
claimant asserts a direct claim against any insurer under
applicable non-bankruptcy law, or an order has been entered by this
Court granting a claimant relief from the automatic stay or the
injunctions set forth in Section 12.6 of the Plan to proceed with
its claim, and (C) all costs in relation to each of the foregoing
provided, however, that the Debtors shall not be responsible for
any such costs.
A full-text copy of the Plan Confirmation Order is available at
https://tinyurl.com/yybs8x8d from Stretto.com at no charge.
On August 30, 2019, the Debtors filed the Notice of Plan Supplement
to and in Support of
Amended Chapter 11 Plan of Liquidation, which included the proposed
Liquidation Trust Agreement and notice of the identity of the
proposed Liquidation Trustee. A full-text copy of the Plan
Supplement is available at https://tinyurl.com/yxd6zwt3 from
Stretto.com at no charge.
The Debtors are represented by Marcus A. Helt, Esq., at Foley
Gardere and Foley Lardner LLP, in Dallas, Texas; and Jack G. Haake,
Esq., at Foley & Lardner LLP, in Washington, D.C.
About Burkhalter Rigging
Burkhalter Rigging, Inc., Burkhalter Transport, Inc., and
Burkhalter Specialized Transport, LLC, each filed voluntary
petitions seeking relief under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Tex. Lead Case No. 19-30495) on Jan. 31, 2019. In the
petition signed by Brooke Burkhalter, president, the Debtor
estimated $10 million to $50 million in assets and $10 million to
$50 million in liabilities.
The case is assigned to Judge Marvin Isgur.
Marcus Alan Helt, Esq., at Foley & Lardner LLP, is the Debtor's
counsel. Dacarba LLC is serving as chief restructuring officer.
National Transaction Advisors, Inc., is financial advisor and
investment banker.
Henry Hobbs Jr., acting U.S. trustee, appointed an official
committee of unsecured creditors in the Debtors' cases on Feb. 19,
2019. The committee tapped Lugenbuhl, Wheaton, Peck, Rankin &
Hubbard as its legal counsel, and Stout Risius Ross, LLC as its
financial advisor.
C&M PLASTICS: Oct. 16 Disclosure Statement Hearing
--------------------------------------------------
The Bankruptcy Court will consider the approval of the First
Amended Disclosure Statement explaining the First Amended Chapter
11 Plan filed by C&M Plastics, LLC and Sandra Craven at a hearing
on October 16, 2019, at 10:30 a.m.
Any party desiring to object to the Court's approval of the First
Amended Disclosure Statement must file a written objection and the
objection must be filed by October 9, 2019.
Under the Amended Disclosure Statement, Class 1-F consists of the
Allowed Unsecured Claims of Creditors. Class 1-F Creditors shall be
paid a pro-rata share from the Debtors' Excess Cash Flow, on a
quarterly basis, in an amount sufficient to fund the value of the
Debtors' Liquidation Equity, after all senior Allowed Claims have
been paid in accordance with the terms of the Plan. Any Allowed
Unsecured Claims that are determined to be non-dischargeable will
continue to receive a pro-rata distribution of the Excess Cash Flow
until satisfied in full.
On or about February 19, 2019, the Court entered an order setting
the C&M Claims Bar Date for April 22, 2019. Only claimants who
were either not scheduled as contingent, unliquidated or disputed
or those who timely filed proofs of claim will receive their
pro-rata distribution of the Liquidation Equity. The balance of
the unsecured claims reflected in the schedules and statements who
did not file proofs of claim and were listed as contingent
unliquidated or disputed are now barred from a distribution by the
Craven Claims Bar Date. Ms. Craven estimates that payments to the
Allowed Unsecured Claims shall commence in December 2019 (and paid
quarterly in payments of $10,000 per quarter thereafter).
Attorneys for the Debtor are Martin J. McCue, Esq., and Patrick F.
Keery, Esq., at Keery McCue, PLLC, in Scottsdale, Arizona.
About C&M Plastics, LLC
C&M Plastics -- http://www.cm-plastics.com-- is an (EBM) Extrusion
Blow molding company with over 25 years of experience in
manufacturing and packaging for the nutraceutical, pharmaceutical,
food, beverage, and cosmetic industries. C&M Plastics offers a
wide range of services such as custom EMB molds, bottle design,
custom packaging and filling, manufacturing, inventory management
and stocking programs. The Company is headquartered in Phoenix,
Arizona.
C&M Plastics filed a Chapter 11 petition (Bankr. D. Ariz. Case No.
19-01871), on Feb. 21, 2019. The petition was signed by Sandra
Craven, manager/member. The case is assigned to Judge Madeleine C.
Wanslee. The Debtor is represented by Patrick F. Keery, Esq., at
Keery McCue, PLLC. At the time of filing, the Debtor estimated
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of C&M Plastics, LLC as of Aug. 27, according
to a court docket.
CENTURY LEASING: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on Sept. 12 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Century Leasing, LLC.
About Century Leasing
Century Leasing LLC is a privately held company in the truck rental
business.
Century Leasing sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. S.D. Case No. 19-40296) on July 8, 2019.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
The case has been assigned to Judge Charles L. Nail Jr. Brende &
Meadors LLP is the Debtor's bankruptcy counsel.
CENTURYLINK INC: Moody's Affirms Ba3 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service affirmed the Ba3 corporate family rating
for CenturyLink, Inc. Moody's has also affirmed CenturyLink's
Ba3-PD probability of default rating, its senior unsecured rating
of B2, and its senior secured rating of Ba3. The SGL-2 speculative
grade liquidity rating is unchanged. Moody's has also assigned a
Ba3 rating to Level 3 Financing, Inc.'s proposed $500 million
senior unsecured notes. The proceeds from the new notes, along with
cash on hand, are expected to reduce debt and pay for transaction
fees and expenses.
Moody's has changed CenturyLink's ratings outlook to stable from
negative based on a more sustainable deleveraging trajectory
following a meaningful dividend reduction in early 2019, strong
execution on cost synergies since the Level 3 Parent, LLC (Level 3,
f/k/a Level 3 Communications, Inc.) acquisition in November 2017
and solid opportunities for continuing transformational cost
synergies over the next several years. Moody's expects this more
conservative financial policy, which also targets company-defined
net leverage of 2.75x to 3.25x by year-end 2021, will result in
increased free cash flow from lower dividends being dedicated
primarily to debt reduction over the next several years. Moody's
now forecasts CenturyLink's leverage to steadily fall below 4.0x
(Moody's adjusted) by year-end 2020 from a recent peak of 4.6x
following the Level 3 acquisition. While the pressures of steady
revenue declines across most of CenturyLink's business segments
will take longer to stabilize than previously expected, Moody's
believes that the company's increased free cash flow generation
will enhance future operational and financial flexibility.
Affirmations:
Issuer: CenturyLink, Inc.
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD4)
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5)
Issuer: Centel Capital Corp.
Senior Unsecured Regular Bond/Debenture , Affirmed Ba2 (LGD3)
Issuer: Embarq Corporation
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD3)
Issuer: Embarq Florida, Inc.
Senior Secured First Mortgage Bonds, Affirmed Baa3 (LGD1
from LGD2)
Issuer: Level 3 Escrow II, Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4)
Issuer: Level 3 Financing, Inc.
Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4)
Issuer: Level 3 Parent, LLC
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
Issuer: Qwest Corporation
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD3)
Underlying Senior Unsecured Regular Bond/Debenture, Affirmed
Ba2 (LGD3)
Issuer: Mountain States Telephone and Telegraph Co.
Senior Unsecured Regular Bond/Debenture , Affirmed Ba2
Issuer: Northwestern Bell Telephone Company
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2
Assignments:
Issuer: Level 3 Financing, Inc.
Proposed $500 million Senior Unsecured Notes, Assigned
Ba3 (LGD4)
Outlook Actions:
Issuer: Centel Capital Corp.
Outlook, Changed To Stable From Negative
Issuer: CenturyLink, Inc.
Outlook, Changed To Stable From Negative
Issuer: Embarq Corporation
Outlook, Changed To Stable From Negative
Issuer: Embarq Florida, Inc.
Outlook, Changed To Stable From Negative
Issuer: Level 3 Financing, Inc.
Outlook, Changed To Stable From Negative
Issuer: Level 3 Parent, LLC
Outlook, Changed To Stable From Negative
Issuer: Mountain States Telephone and Telegraph Co.
Outlook, Changed To Stable From Negative
Issuer: Northwestern Bell Telephone Company
Outlook, Changed To Stable From Negative
Issuer: Qwest Corporation
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
CenturyLink's Ba3 CFR reflects its predictable and further enhanced
cash flow from its 2019 dividend reduction, its broad base of
operations and strong market position. In addition, CenturyLink's
continuing record of consistent network investment at a level
generally above its peer group average demonstrates its commitment
to its long term competitive position. These positives are offset
by still high but declining leverage and revenue weakness across
its business units, exacerbated by secular industry challenges and
a highly competitive operating environment. Revenue declined 2.8%
for year-end 2018 compared to the prior year. While current top
line trends remain negative, a portion of the decline relates to
the company's focus on profitable revenue management, which is
expected to lessen in 2020. Moody's expects annual revenue declines
to steadily shrink beginning in 2020.
CenturyLink has demonstrated strong cost cutting success at a
faster than planned pace from initial Level 3 synergy targets,
significantly offsetting the impact of revenue weakness on
operating margins. CenturyLink increased its company-calculated
adjusted EBITDA in 2018 by 4.3% over the prior year, and has
identified further margin expansion opportunities over the next few
years. Company-calculated adjusted EBITDA margins have increased
every quarter since the close of the Level 3 transaction to 40.7%
for the second quarter of 2019, up over 500 basis points from a
pre-close third quarter 2017 level of 35.5%. With Moody's
expectation for EBITDA margins to continue increasing along with
increased free cash flow from the 2019 dividend cut, CenturyLink is
now well-positioned to pay down about $2 billion of debt each year
over the next three years. As of June 30, 2019, CenturyLink's
leverage (Moody's adjusted) was 3.9x. Moody's expects leverage
(Moody's adjusted) to sustainably remain below 4x through year-end
2020.
Moody's expects CenturyLink to have a good liquidity profile over
the next 12 months, reflected by its SGL-2 SGL rating and supported
by $410 million cash on hand as of June 30, 2019, its expectation
of at least $1.6 billion of after dividend free cash flow for full
year 2019 and approximately $1.4 billion of near term debt
maturities.
CenturyLink also has $1.5 billion availability under its $2.2
billion senior secured revolving credit facility that expires in
November 2022. With respect to the term loan A facilities and the
revolver, the credit agreement requires CenturyLink to maintain a
total leverage ratio of not more than 5x that steps down to 4.75x
for December 31, 2019 and thereafter and a minimum consolidated
interest coverage ratio of at least 2x. The term loan B facility is
not subject to the leverage or interest coverage covenants. Moody's
estimates CenturyLink will remain comfortably in compliance with
the total leverage ratio and interest coverage ratio for the next
12 to 18 months. Moody's expects CenturyLink to maintain at least
$1.4 billion of availability under its revolver over the next 12 to
18 months.
The ratings for the debt instruments comprise both the overall
probability of default rating of CenturyLink, to which Moody's
maintains a PDR of Ba3-PD, an average family loss given default
(LGD) assessment and the composition of the debt instruments in the
capital structure.
CenturyLink's corporate structure includes two layers of debt
(secured/unsecured) at the holding company (CenturyLink, Inc.)
level and three main operating company credit pools (Qwest
Corporation, Embarq Corporation and Level 3 Parent, LLC) with
multiple classes of debt within each.
At the holding company level, Moody's rates the company's secured
credit facility Ba3 and unsecured notes B2. CenturyLink's senior
secured credit facilities, including its revolver and term loans,
are rated Ba3, reflecting their senior position ahead of
CenturyLink's unsecured debt. The senior secured credit facilities
are guaranteed by Wildcat Holdco LLC (Parent of Level 3 Parent,
LLC), Qwest Communications International Inc. (QCII), Qwest
Services Corp. (QSC), Qwest Capital Funding, Inc. (QCF) and Embarq
Corporation (Embarq). The credit facility also benefits from a
pledge of stock of Wildcat Holdco LLC, QCF and QSC. The B2 senior
unsecured rating of CenturyLink Inc. reflects its junior position
in the capital structure and the significant amount of senior debt,
including CenturyLink's $9.8 billion secured credit facility, $10.5
billion of debt at Level 3, $6.1 billion of debt at Qwest
Corporation (QC), $0.4 billion of debt at QCF, and $1.6 billion of
debt at Embarq and its subsidiaries.
The senior unsecured debt of QC, the company's largest operating
subsidiary, is rated Ba2 based on its structural seniority and
relatively low leverage of 1.6x (Moody's adjusted) as of June 30,
2019. Moody's notes that CenturyLink has historically refinanced
maturing debt at QC at this entity. Consequently, leverage at QC
could increase over the next few years, since Moody's expects its
EBITDA to face pressure.
The senior unsecured notes of Level 3 Parent, LLC are rated B1
reflecting their junior position in the Level 3 credit pool. The
senior unsecured notes of Level 3 Financing, Inc. (LFI) are rated
Ba3, reflecting their structural seniority to Level 3 Parent, LLC,
and junior position relative to LFI's senior secured bank credit
facility that is rated Ba1. Leverage within the Level 3 credit pool
was 3.6x (Moody's adjusted) as of June 30, 2019.
The senior unsecured debt of Embarq Corporation is rated Ba2,
reflecting a structurally senior (relative to CenturyLink) claim on
the assets of Embarq, which had leverage of 1.1x (Moody's adjusted)
as of June 30, 2019. The senior secured debt of Embarq's operating
subsidiary, Embarq Florida, Inc., is rated Baa3. The senior
unsecured debt of Centel Capital Corp. is rated Ba2, in line with
the unsecured debt at its guarantor, Embarq Corporation.
The stable outlook reflects CenturyLink's sustainable deleveraging
trajectory following an early 2019 dividend reduction, strong
execution on cost synergies since the Level 3 acquisition in
November 2017 and solid opportunities for continuing
transformational synergies over the next several years. Moody's
expects that CenturyLink's leverage (Moody's adjusted) will fall
below 4x before year-end 2020, supported by solid operational
execution and continued margin expansion despite continued secular
pressures on top line growth, with excess cash flow dedicated to
debt reduction.
Moody's could downgrade CenturyLink's CFR to B1 if leverage
(Moody's adjusted) increases above 4.25x or free cash flow turns
negative, both on a sustained basis, or if capital investment is
reduced to levels that could weaken the company's competitive
position.
Moody's could upgrade CenturyLink's CFR to Ba2 if both revenue and
EBITDA were stabilized, leverage (Moody's adjusted) was sustained
below 3.75x and free cash flow to debt was in the high single digit
percentage range.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
CenturyLink, Inc., headquartered in Monroe, Louisiana, is an
integrated communications company that provides an array of
communications services to residential, business, governmental and
wholesale customers. In October of 2017, CenturyLink acquired Level
3 Parent, LLC, (f/k/a Level 3 Communications, Inc.) an
international communications company with one of the world's
largest long haul communications and optical internet backbones.
The company generated approximately $22.8 billion in revenue over
the last 12 months ended June 30, 2019.
CERENCE INC: S&P Assigns Prelim 'B' ICR After AVA Segment Spin-Off
------------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' issuer credit
rating to Cerence Inc., a new company to be created from the
spin-off of Nuance Communications Inc.'s automotive voice
assistance segment.
Cerence, which is set to become an independent, publically traded
company on Oct. 1, 2019, will raise a new credit facility
consisting of a $75 million revolving credit facility and a $425
million first-lien term loan to both fund cash to balance sheet and
send proceeds to Nuance. S&P assigned its preliminary 'B'
issue-level rating and preliminary '3' recovery rating to the
proposed revolving credit facility and first-lien term loan.
The ratings are preliminary and based on draft documentation. S&P
will assign final ratings equivalent to its preliminary ratings if
the transaction closes with materially similar terms as those
expected by the company.
The stable outlook reflects S&P's view that the company's market
leading position and increasing penetration of voice assistance in
the automotive market will allow the company to deliver consistent
operating performance, and that the rating includes enough cushion
to absorb modest transition risk. S&P expects strong revenue growth
on increasing penetration from connected (cloud-based) services
into cars, a decline in EBITDA margin to the mid-20% range as
Cerence incurs extra operating expense to run as a stand-alone
company, and breakeven FOCF over the next 12 months on increased
one-time capex spend.
"We could lower the rating if leverage increases above 6.5x. This
could occur if Cerence suffers business disruptions from the
spin-off, impairing revenue or causing larger or longer than
expected one-time or restructuring costs," S&P said. Leverage could
also increase if Cerence suffers increased competition or
macro-economic factors limiting discretionary consumer spending,
according to the rating agency.
"Although unlikely over the next 12 months, we could raise the
rating on Cerence if the company is able to minimize disruptions
from the spin-off, generate good FOCF for debt repayment, and
establish a good track record maintaining leverage below 5x through
acquisitions and shareholder returns," S&P said.
CIRCLE BAR: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The Office of the U.S. Trustee on Sept. 12 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Circle Bar T Demolition and
Grading, Inc.
About Circle Bar T Demolition
and Grading
Circle Bar T Demolition and Grading, Inc. sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 19-04350)
on Aug. 16, 2019. At the time of the filing, the Debtor had
estimated assets of between $100,001 and $500,000 and liabilities
of between $500,001 and $1 million.
The case has been assigned to Judge David R. Duncan. The Debtor is
represented by Eddye L. Lane, Esq., and J. Carolyn Stringer, Esq.
COLORADO GROUP 3: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Colorado Group 3, LLC as of Sept. 11,
according to a court docket.
About Colorado Group 3
Colorado Group 3 LLC operates short term and long term rental on
its property at 124 River Bend Way, Glenwood Springs, Colo.
Colorado Group 3 LLC sought Chapter 11 protection (Bankr. D. Colo.
Case No. 19-16388) on July 26, 2019, estimating less than $50,000
in assets and liabilities.
The bankruptcy filing was prompted due to the Debtor's inability to
pay off their loan with Lead Funding II LLC and the subsequent
appointment of a receiver for their property on July 12, 2019 in
the state court cases filed for that purpose. The Debtor plans on
asking the Court to require the receiver to turnover the property
to continue operation. The rental income is the only source of
income for the Debtor that allows it to make loan payments and pay
its creditors.
Michael J. Davis, Esq., of DLG Law Group LLC, represents the
Debtor.
COLORADO GROUP: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Colorado Group LLC, I as of Sept. 11,
according to a court docket.
About Colorado Group
Colorado Group LLC 1 is into the business of acquiring short term
and long terms renters for its property located at 66 Davis Court,
Breckenridge, Colo.
The Company sought Chapter 11 protection (Bankr. D. Colo. Case No.
19-16386) on July 26, 2019. As of the filing of this case, the
Debtor's assets are valued at up to $50,000 and its liabilities are
within the same range.
The bankruptcy filing was prompted due to the Debtor's inability to
pay off their loan with Lead Funding II LLC and the subsequent
appointment of a receiver for their property on July 12, 2019 in
the state court cases filed for that purpose. The Debtor plans on
asking the Court to require the receiver to turnover the property
to continue operation. The rental income is the only source of
income for the Debtor that allows it to make loan payments and pay
its creditors.
Michael J. Davis, Esq., at DLG Law Group LLC, is the Debtor's
counsel.
CORE & MAIN: Moody's Lowers CFR to Ba3, Outlook Stable
------------------------------------------------------
Moody's Investors Service downgraded Core & Main LP's Corporate
Family Rating to B3 from B2, Probability of Default Rating to B3-PD
from B2-PD and senior unsecured notes to Caa2 from Caa1. In
addition, Moody's affirmed the B2 rating on the company's senior
secured term loan. Moody's also assigned a Caa2 rating to the
proposed $400 million senior unsecured PIK toggle notes of Core &
Main Holdings, LP, the parent of Core & Main LP. Upon closing of
the transaction, Moody's will reassign the CFR and PDR ratings to
Core & Main Holdings, LP. The outlook remains stable.
This rating action was driven by the announcement that Core & Main
would fund a significant distribution to the company's equity
owner, CD&R, with proceeds from the issuance of the new senior
unsecured PIK toggle notes. Moody's estimates that Debt/LTM EBITDA
will increase to 7.2x at fiscal year-end 2020 from 5.9x at August
2019. Leverage includes the $225 million add-on to the company's
term loan completed in July 2019. That incremental debt was used to
fund the acquisition of Long Island Pipe Supply. On a proforma
basis, inclusive of a full year of earnings from Long Island Pipe,
Debt/LTM EBITDA was 5.5x at August 2019.
Downgrades:
Issuer: Core & Main LP
Corporate Family Rating, downgraded to B3 from B2
Probability of Default Rating, downgraded to B3-PD
from B2-PD
Senior Unsecured Global Notes, downgraded to Caa2 (LGD5)
from Caa1 (LGD5)
Affirmations:
Issuer: Core & Main LP
Senior Secured Term Loan, affirmed at B2 (LGD3 from LGD4)
Assignments:
Issuer: Core & Main Holdings, LP
$400 million Senior Unsecured PIK Toggle Notes, assigned to
Caa2 (LGD6)
Outlook Actions:
Issuer: Core & Main LP
Outlook, remains stable
Issuer: Core & Main Holdings, LP
Outlook, assigned stable
RATINGS RATIONALE
Core & Main's B3 CFR reflects weaker credit metrics following the
shareholder distribution, including lower EBITA/Interest Expense of
1.9x for the fiscal year-end 2020 compared with 2.3x for the twelve
month period ended August 4, 2019 as well as higher leverage. Core
& Main does have a history of successfully deleveraging through
EBITDA growth, however this will take time. Moody's expects
leverage levels will remain close to 7.0x for at least the next
12-18 months. The CFR also considers the potential for future
debt-funded acquisitions and shareholder distributions at Core &
Main. Other rating considerations include the cyclicality of Core &
Main's end markets, particularly new housing construction, and the
company's exposure to volatile commodity pricing on PVC pipe,
ductile iron pipe, HDPE pipe and copper pipe products. Mitigating
these risks somewhat are Core & Main's leading position as a
national water products distributor, solid demand fundamentals and
ability to generate positive free cash flow.
Moody's expects Core & Main to maintain a prudent level of
liquidity, which included $29 million of cash and an undrawn $700
million five-year ABL revolving credit facility at the end of Q2
2019. Core & Main will be free cash flow negative this year, due to
the shareholder distribution, however should return to positive
free cash flow generation by fiscal year 2021.
The stable outlook reflects Moody's expectation of low-to-mid
single digit revenue growth at Core & Main over the next 12 months
driven by a continued need for water infrastructure maintenance and
repair.
The rating could be upgraded if the company's credit metrics
improve such that debt to EBITDA declines closer to 5.5x on a
sustained basis and adjusted EBITA coverage of interest improves
closer to 2.0x or better. In addition, positive ratings movement
would be considered should the company continue to build scale
while operating conditions remain favorable.
The rating could be downgraded if debt to EBITDA increases closer
to 7.5x, EBITA interest coverage declines below 1.5x on a
consistent basis or if free cash flow generation consistently turns
negative, which would likely be indicative of weaker operating
conditions.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Core & Main LP, headquartered in Saint Louis, Missouri, is a US
based distributor of water, sewage, drainage, storm water, and fire
protection products. Revenue for the twelve month period ended May
5, 2019 was $3.3 billion.
CORMICAN'S INC: Court Converts Case to Chapter 7
------------------------------------------------
The Bankruptcy Court has issued an order granting the U.S.
Trustee's request to convert the Chapter 11 case of Cormican's Inc.
to a case under Chapter 7 of the Bankruptcy Code.
In his motion for conversion, the U.S. Trustee asserted that the
Plan proposed is not confirmable because it was not proposed in
good faith and it proposes to cherry-pick the assets that
individual Cormican family members want to retain, while selling
the balance of assets for the benefit of secured creditors, leaving
nothing for unsecured creditors.
The U.S. Trustee also pointed out that there will also be ongoing
losses to the estate while the debtor goes through the plan
confirmation process with no prospect of plan confirmation. The
debtor is admittedly unable to stay current with its ongoing
expenses.
The Debtor, before the Court ruled on the U.S. Trustee's motion for
conversion, filed an amended plan and accompanying disclosure
statement to address the U.S. Trustee's objection. A full-text
copy of the Amended Disclosure Statement dated September 6, 2019,
is available at https://tinyurl.com/y4xlbb6g from PacerMonitor.com
at no charge.
About Cormican's Inc.
Cormican's Inc. is a road contractor serving the Northwest
Minnesota area.
Based in Mentor, Minnesota, Cormican's Inc. filed a petition for
reorganization under Chapter 11, Title 11, United States Code
(Bankr. D. Minn. Case No. 18-60636) on Oct. 10, 2018. In the
petition signed by Sandra Cormican, president, the Debtor estimated
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. Judge Michael E. Ridgway is assigned to the case.
Duffy Law Office, led by Kevin T. Duffy, is the Debtor's counsel.
James L. Snyder, U.S. Trustee for Region 12, on Oct. 25 appointed
two creditors to serve on the official committee of unsecured
creditors in the Chapter 11 case of Cormican's Inc.
CROCKETT COGENERATION: Moody's Hikes Sr. Secured Notes to Caa1
--------------------------------------------------------------
Moody's Investors Service upgraded Crockett Cogeneration, LP's
senior secured notes to Caa1 from Caa3. The outlook has been
revised to positive from negative.
RATINGS RATIONALE
The upgrade to Caa1 and the outlook revision to positive reflects
Pacific Gas & Electric Company's proposed plan of reorganization
that incorporates PG&E assuming its power purchase agreements
(PPA). PG&E's bankruptcy and the risk of PPA rejection in
bankruptcy has been the primary risk constraining Crockett's credit
quality since the project derives most of its operating cash flow
from its PPA with PG&E and the proposed plan would ensure that PG&E
honors its obligation to the project. While plans proposed by other
groups also contemplate PG&E affirming the PPAs, Crockett's credit
quality remains tempered by the possibility that PG&E's final
approved plan could differ from the current plan particularly if
PG&E is not able to emerge from bankruptcy by June 30, 2020 or if
additional claims surface from wildfires that might occur over the
next several months which would be treated as administrative
claims. PG&E has reserved its rights to amend its plan and certain
groups have already indicated opposition to the plan. PG&E
continues to meets its contractual obligations to Crockett since
filing for bankruptcy in January 2019. Moreover, the rating
acknowledges Crockett's operational and financial performance which
has remained adequate through the first half of 2019 and Crockett's
low level of indebtedness owing to its debt amortization schedule.
From a liquidity perspective, Crockett has a $25 million letter of
credit facility backing the debt service reserve ($12 million) and
other letter of credit obligations which expires on March 6, 2020,
and $11.8 million in cash as of 7/01/2019. To date, none of the
issued L/Cs have been drawn on. If drawn, the reimbursement terms
for the L/C require principal to be repaid at the later of the
expiration date or within eighteen months of disbursement, on a
pari-passu basis with the senior secured bonds. These reimbursement
terms provide some level of flexibility to the project in managing
its liquidity. That said, to the extent that the facility is drawn,
debt service obligations will increase further, weakening already
thin coverages. However as of June 30th, 2019 there was sufficient
cash on hand to cash fund the debt service reserve if the L/C
credit facility cannot be extended. The major maintenance balance
as of 6/30/19 was $3.5 million.
Rating Outlook
The positive outlook considers PG&E's plan to resolve its
bankruptcy by June 30, 2020, a timeframe supported by key
stakeholders, including the bankruptcy court and the California
Public Utilities Commission, and the likelihood for further
improvement to the project's credit quality if the bankruptcy court
approves PG&E's assumption of its PPA obligations. If PG&E resolves
its bankruptcy as proposed, Crockett's rating could increase by
more than one notch depending on PG&E's post-bankruptcy credit
quality, and project's standalone operating and financial
performance.
Factors that could lead to an upgrade
An upgrade could occur if the PG&E plan of reorganization includes
the assumption of Crockett's PPA, and PG&E's obligations under the
agreement continue to be met without interruption or delays, and
the project maintains a strong operating performance.
Factors that could lead to a downgrade
Crockett's rating could be downgraded if the plan of reorganization
does not include the assumption of Crockett's PPA, resulting in its
termination, or if PG&E's obligations under the PPA are interrupted
or renegotiated on less favorable terms. Also, Crockett's rating
would be negatively affected if the project lost its Qualifying
Facility (QF) status.
Crockett is a California limited partnership formed in 1986 to own
and operate a 240 megawatt natural gas-fired electric power and
steam cogeneration facility located at the C&H sugar refinery in
Crockett, California. The entire electric output is sold to PG&E
under a 30-year Power Purchase Agreement (PPA) that expires in May
2026, and the steam is sold to C&H under a steam sales agreement
that expires in 2026. The facility operates as a QF as defined
under the Public Utility Regulatory Policies Act of 1978 (PURPA).
Consolidated Asset Management Services (CAMS) provides operations
and maintenance services.
Crockett is currently indirectly owned by GEPIF NAP I Holdings,
LLC, who is indirectly owned by an infrastructure fund managed by
BlackRock, and 8.27% by Osaka Gas Company, Ltd.
The principal methodology used in this rating was Power Generation
Projects published in June 2018.
CUMULUS MEDIA: Moody's Rates New $525MM Term Loan B 'B2'
--------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Cumulus Media New
Holdings Inc.'s proposed $525 million senior secured term loan B
due 2026. The B2 Corporate Family Rating and B2 rating on the $500
million senior secured notes due 2026 are unchanged. The outlook
remains unchanged at stable.
The net proceeds from the proposed offering and cash of
approximately $34 million are expected to be used to repay the
remaining portion of the existing 1st lien term loan. The
transaction provides a maturity extension for the term loan to 2026
and is slightly deleveraging, leading to a reduction in pro forma
leverage to 4.8x from 4.9x as of Q2 2019 (excluding Moody's
standard adjustments). The transaction is also expected to lead to
lower interest expense due to the $29 million reduction in
outstanding debt which is in addition to a $50 million debt
repayment that occurred earlier in Q3 2019. The rating on the
existing term loan will be withdrawn after repayment.
Assignments:
Issuer: Cumulus Media New Holdings Inc.
Senior Secured Term Loan B due 2026, Assigned B2 (LGD3)
RATINGS RATIONALE
Cumulus's B2 CFR reflects the improved pro forma debt-to-EBITDA
leverage of 4.8x (excluding Moody's standard lease adjustments) as
of Q2 2019 which is down from 5.4x at the end of 2018. The
terrestrial radio industry faces challenging market conditions and
is being negatively affected by the shift of advertising dollars to
digital mobile and social media as well as heightened competition
for listeners from several digital music providers. Secular
pressures and the cyclical nature of radio advertising demand have
the potential to exert substantial pressure on EBITDA performance
over time.
Cumulus benefits from its large portfolio of stations, a small but
growing local digital marketing services platform, and its Westwood
One network that provides syndicated radio programming. Improved
operations following the change in management at the end of 2015
also support the ratings. Organic EBITDA improved in 2018 due to
lower costs, high margin political advertising dollars, and
continued improvement at the Westwood One division following
several years of decline. Cumulus has also aggressively paid down
debt with free cash flow and asset sales and reduced debt by $275
million since exiting from bankruptcy in June 2018. Moody's expects
Cumulus will consider additional deleveraging transactions going
forward and will maintain a conservative financial policy.
The SGL-2 Speculative Grade Liquidity Rating reflects $15 million
of pro forma cash on the balance sheet as of Q2 2019 and access to
a $50 million ABL facility due August 2023 that is not rated by
Moody's. There is no balance outstanding on the ABL facility,
except for $4 million of letters of credit. Cumulus spent $24
million in capex as of LTM Q2 2019 and free cash flow (FCF) as a
percentage of debt was over 5% during the same period. Pro forma
interest coverage is expected to be over 3.0x during the next 12
months, improving as a result of lower outstanding debt and
potentially lower interest rates. The term loan is covenant lite.
Moody's expects that Cumulus will remain in compliance with its
covenants for its ABL revolver. The new term loan matures in March
2026.
The stable outlook reflects Moody's view that revenue will be
relatively flat, but organic EBITDA will decline in the mid to high
single digit percentage range by the end of 2019 due largely to a
reduction in high margin political advertising revenue in a
non-election year. Performance is expected by Moody's to be
relatively flat in 2020 due to higher political ad revenue in an
election year. Cumulus is expected to face challenging industry
conditions going forward, but Moody's anticipates that the company
will consider additional asset sales and direct free cash flow
towards debt repayment.
An upgrade could occur if Cumulus generated positive organic
revenue growth overall as well as in its radio station division
with expanding margins, and debt-to-EBITDA leverage sustained below
4.5x (excluding Moody's standard lease adjustments). Free cash flow
as a percentage of debt over 10% and a good liquidity position
would also be required with a financial policy consistent with a
higher rating.
Ratings could be downgraded if performance were to deteriorate due
to secular pressures, competition, or economic weakness so that
debt-to-EBITDA leverage increased above 5.75x (excluding Moody's
standard lease adjustments). A deterioration in liquidity or
negative free cash flow could also lead to negative rating
pressure.
The principal methodology used in these ratings was Media Industry
published in June 2017.
Headquartered in Atlanta, GA, Cumulus Media New Holdings Inc. is
one of the largest radio broadcasters in the U.S. with
approximately 428 stations in 87 markets, a nationwide network
serving approximately 8,000 broadcast affiliates, and numerous
digital channels. Cumulus emerged from Chapter 11 bankruptcy
protection in June 2018. The company reported $1.1 billion of net
revenue during the LTM period ending in Q2 2019.
CUMULUS MEDIA: S&P Rates New $525MM Senior Secured Term Loan 'B'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '2'
recovery rating to the proposed $525 million senior secured term
loan B due 2026 issued by Atlanta-based radio broadcaster Cumulus
Media Inc.'s subsidiary Cumulus Media New Holdings Inc. The '2'
recovery rating indicates S&P's expectation of substantial
(70%-90%; rounded estimate: 70%) recovery for lenders in the event
of a payment default.
Cumulus plans to use the proceeds from the proposed debt, along
with cash on hand to refinance the remaining balance of its
existing term loan B due 2022, which had roughly $554 million
outstanding as of the transaction. The transaction does not affect
S&P's 'B-' issuer credit rating or stable outlook on Cumulus
because it is relatively leverage and cash flow neutral.
ISSUE RATINGS – RECOVERY ANALYSIS
Key analytical factors
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 asset-based lending (ABL) facility has a
first-priority lien on its accounts receivable, qualified cash, and
related assets.
Simulated default assumptions
-- S&P's simulated default scenario contemplates a default in
2021, stemming from increased competition from alternative media
and a station-ratings underperformance that leads to steep revenue
declines and cash flow deficits.
-- S&P values the company as a going concern, using a 6x multiple
of its projected emergence EBITDA, which is in line with that for
other radio companies it rates.
-- S&P assumes the ABL facility is 60% drawn in its simulated year
of default.
Simplified waterfall
-- EBITDA at emergence: About $137 million
-- EBITDA multiple: 6.0x
-- Net enterprise value (after 5% administrative costs): About
$783 million
-- Value available to secured debt: About $753 million
-- Secured first-lien debt: About $1.05 billion
--Recovery expectations: 70%-90% (rounded estimate: 70%)
Note: All debt amounts include six months of pre-petition interest.
DELUXE ENTERTAINMENT: S&P Cuts ICR to 'CC' on Debt Exchange Plan
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Deluxe
Entertainment Services Group Inc. (Deluxe) to 'CC' from 'CCC-'. At
the same time, S&P lowered its issue-level ratings on the company's
senior secured first-lien term loan to 'CC' from 'CCC-' and senior
secured delayed-draw priming term loan to 'CCC+' from 'B-'. The
recovery ratings are unchanged.
The rating actions follow the company's announcement that it has
entered into a restructuring support agreement (RSA) with its term
loan lenders that will reduce its debt load by more than half the
current outstanding amount ($782 million due February 2020). Under
the proposed agreement, Deluxe will offer to exchange all of its
existing term-loan debt for 100% of the reorganized company's
common stock. Concurrent with the RSA, the company will solicit
its senior lenders to approve a pre-packaged plan of reorganization
(Chapter 11 bankruptcy filing), which would be implemented if the
exchange offer does not garner unanimous consent.
The downgrade reflects S&P's expectation that it now views a
distressed exchange or a default as a certainty within the next six
months as determined by the terms of the RSA and the company's
pre-packaged plan of reorganization as an alternative to the
exchange. S&P does not expect the company to be able to generate
sufficient funds to repay its asset-based lending (ABL) facility
(unrated) when it comes due in November 2019, supporting the rating
agency's expectation that Deluxe will need to pursue one of the two
options: a distressed exchange offer or a Chapter 11 bankruptcy
filing.
The negative outlook reflects S&P's view that it expects default to
be a virtual certainty, regardless of the time to default.
"We expect to lower the rating to 'SD' (selective default) or 'D'
depending on whether Deluxe executes its exchange offer or will
need to implement its pre-packaged plan of reorganization leading
to a Chapter 11 bankruptcy filing, respectively," S&P said.
"We will review our upside scenario after the company has either
completed its distressed exchange or emerged from a bankruptcy
filing," the rating agency said.
DITECH HOLDING: Court Denies Bid to Disband Consumer Committee
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
denied the motion filed by Ditech Holding Corp. to disband the
official committee of consumer creditors appointed by the U.S.
trustee in the company's Chapter 11 case.
About Ditech Holding Corp.
Ditech Holding Corporation and its subsidiaries --
http://www.ditechholding.com/-- are independent servicer and
originator of mortgage loans. Based in Fort Washington, Pa., the
Debtors have approximately 3,300 employees and service a diverse
loan portfolio.
Ditech Holding and certain of its subsidiaries, including Ditech
Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary
Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19-10412) on
Feb. 11, 2019, after reaching terms with lenders of a Chapter 11
plan that will reduce debt by $800 million.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel,
Houlihan Lokey as investment banker and AlixPartners LLP as
financial advisor. Epiq Bankruptcy Solutions LLC is the claims and
noticing agent.
Kirkland & Ellis LLP and FTI Consulting Inc. serve as the
consenting term lenders' legal counsel and financial advisor,
respectively.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Debtors' cases on Feb. 27, 2019. The
creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as
its legal counsel and Goldin Associates, LLC, as its financial
advisor.
On May 2, 2019, the U.S. trustee appointed an official committee of
consumer creditors. The consumers committee tapped Quinn Emanuel
Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as
financial advisor.
DIXON MECHANICAL: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Dixon Mechanical, LLC, according to court dockets.
About Dixon Mechanical
Dixon Mechanical, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 19-07459) on August 7, 2019, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Melody D. Genson, Esq., at the Law Office of Melody
D. Genson.
EAST COAST INVEST: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
East Coast Invest, LLC, according to court dockets.
About East Coast Invest
East Coast Invest LLC is a privately held company whose principal
assets are located at 3195 W. hallandale Beach Blvd., Hollywood,
Fla.
East Coast Invest sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-20513) on Aug. 6,
2019.
At the time of the filing, East Coast Invest had estimated assets
of between $1 million and $10 million and liabilities of between
$10 million and $50 million.
The case has been assigned to Judge John K. Olson.
East Coast Invest tapped Markowitz, Ringel, Trusty & Hartog, P.A.
as its legal counsel, and Barry Makumal as its accountant and
financial advisor.
EMPIRE FARMSTEAD: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------
The Office of the U.S. Trustee on Sept. 11 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 cases of Empire Farmstead Brewery, Inc.
and Empire Brewing Properties, LLC.
About Empire Farmstead Brewery and
Empire Brewing Properties
Opened in 2016, Empire Farmstead Brewery, Inc.'s objective is to
expand the existing facility and agricultural component of Empire
Brewing Co. to a stand-alone manufacturing and agritourism facility
in Cazenovia, N.Y. Empire Brewing Co is a Syracuse, New York-based
microbrewery and restaurant founded by owner, David Katleski, in
1994.
Empire Farmstead Brewery and its affiliate Empire Brewing
Properties, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. N.Y. Case Nos. 19-61188 and 19-61189)
on Aug. 20, 2019.
At the time of the filing, Empire Farmstead disclosed $434,071 in
assets and $10,994,407 in liabilities. Empire Brewing disclosed
$3,000,416 in assets and $9,254,384 in liabilities.
The cases have been assigned to Judge Diane Davis.
ESH HOSPITALITY: S&P Rates New $500MM Senior Unsecured Notes 'BB-'
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to the proposed $500 million senior unsecured notes
due 2027 issued by ESH Hospitality Inc., a subsidiary of Extended
Stay America Inc. S&P assumes the company will use proceeds from
these notes to repay $500 million of its outstanding senior secured
term loan B.
S&P rated the proposed unsecured notes at the same level as its
issue-level rating on Extended Stay's existing unsecured debt
because, despite the company's plans to issue additional unsecured
notes, it assumes the company will use proceeds from the notes
issuance to repay secured debt, and as such, recovery prospects for
unsecured lenders will not be impaired. The ratings on the
company's existing notes are also unchanged because S&P estimates
nearly full recovery prospects for unsecured lenders. However, the
rating agency caps its recovery ratings on most unsecured debt
issued by companies with an issuer credit rating of 'BB-' or higher
at '3'. This cap is intended to account for the risk that the
recovery prospects for the unsecured lenders are at greater risk of
being impaired by the issuance of additional priority or pari passu
debt prior to default. The '3' recovery rating indicates S&P's
expectation of average (50%-70%; rounded estimate: 65%) recovery
for unsecured lenders in the event of a simulated payment default.
At the same time, S&P's issue-level rating on the senior secured
debt issued by Extended Stay America's subsidiary ESH Hospitality
remains 'BB+' because it assumes nearly full recovery prospects for
secured lenders, and less secured debt in the capital structure
only bolsters that assumption. The senior secured debt consists of
a REIT revolving credit facility due 2024 with $350 million of
capacity and a senior secured term loan B, which S&P assumes will
have $631 million outstanding pro forma for the proposed $500
million unsecured notes issuance and subsequent partial term loan B
repayment. The recovery rating on the secured debt remains '1',
indicating S&P's expectation of very high (90%-100%; rounded
estimate: 95%) recovery for secured lenders in the event of a
simulated payment default. The rating agency also understands the
company plans to extend the maturity of its existing term loan B to
2026.
ISSUE RATINGS – RECOVERY ANALYSIS
Key analytical factors:
-- S&P's recovery rating on ESH Hospitality Inc.'s senior secured
debt remains '1', indicating its expectation ofr very high
(90%-100%; rounded estimate: 95%) recovery for lenders in the event
of a payment default.
-- S&P's recovery rating on ESH Hospitality Inc.'s senior
unsecured debt remains '3', indicating its expectation of
meaningful (capped at 50%-70%; rounded estimate: 65%) recovery for
lenders in the event of a payment default.
-- Although S&P's recovery analysis suggests full recovery for the
unsecured noteholders, its criteria requires them to cap its
recovery ratings on most unsecured debt issued by companies with an
issuer credit rating of 'BB-' or higher at '3'. This cap is
intended to account for the risk that the recovery prospects for
the unsecured lenders are at greater risk of being impaired by the
issuance of additional priority or pari passu debt prior to
default.
Simulated default assumptions:
S&P's simulated default scenario contemplates a payment default
occurring in 2023 and assumes the following:
-- A severe economic downturn that hurts hotel demand;
-- Increased competition;
-- External shocks that discourage travel;
-- Cyclical overbuilding in the hotel industry; and
-- An 85% draw on the revolving credit facility at default.
S&P utilizes an income-capitalization approach in valuing ESH
Hospitality. It assumes a 35% stress level on net operating income
(NOI) that results in an assumed NOI at emergence from bankruptcy
of about $356 million. S&P capitalized NOI at 10.7% resulting in a
gross enterprise value of about $3.2 billion. The rating agency
reduces the gross enterprise value by 5% for property level sales
and marketing costs and by 5% for bankruptcy administrative
expenses.
Simplified waterfall:
-- Net enterprise value available to lenders after 5% property
level sales and marketing expenses and 5% bankruptcy administrative
expenses: $3.0 billion
-- Senior secured debt: $928 million
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Value available for unsecured lenders: $2.1 billion
-- Unsecured debt (including senior unsecured notes and unsecured
intercompany credit facility): $1.9 billion
--Recovery expectations: Capped at 50%-70% (rounded estimate:
65%)
Note: All debt amounts include six months of prepetition interest.
FRED'S INC: Sept. 18 Meeting Set to Form Creditors' Panel
---------------------------------------------------------
Andy Vara, Acting United States Trustee, for Region 3, will hold an
organizational meeting on September 18, 2019, at 10:00 a.m. in the
bankruptcy cases of Fred’s Inc, et al.
The meeting will be held at:
McConnell Johnson
1201 Connect Conference Room
Lobby Level
1201 N. Market Street
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors pursuant
to Section 341 of the Bankruptcy Code. A representative of the
Debtor, however, may attend the Organizational Meeting, and provide
background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States Trustee
appoint a committee of unsecured creditors as soon as practicable.
The Committee ordinarily consists of the persons, willing to serve,
that hold the seven largest unsecured claims against the debtor of
the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee may
consult with the debtor, investigate the debtor and its business
operations and participate in the formulation of a plan of
reorganization. The Committee may also perform other services as
are in the interests of the unsecured creditors whom it
represents.
About Fred's, Inc.
Since 1947, Fred's, Inc. (NASDAQ:FRED) -- http://www.fredsinc.com/
-- has been an integral part of the communities it serves
throughout the southeastern United States. Fred's mission is to
make it easy AND exciting to save money. Its unique discount value
store format offers customers a full range of value-priced everyday
items, along with terrific deals on closeout merchandise throughout
the store.
Fred's, Inc.and its subsidiaries, sought Chapter 11 protection on
September 9, 2019 (Bankr. D. Del. Lead Case No. 19-11982) in
Delaware.
The petitions were signed by Joseph M. Anto, chief executive
officer.
Hon. Christopher S. Sontchi presides over the case.
The Debtor disclosed $474,774,000 in assets and $380,167,000 in
liabilities as of May 4, 2019.
The Debtor tapped Morris, Nichols, Arsht & Tunnell LLP as counsel;
Kasowitz Benson Torres LLP as general bankruptcy counsel; Akin Gump
Strauss Hauer & Feld LLP as special counsel; Epiq Bankruptcy
Solutions LLC as claims and noticing agent; and Berkeley Research
Group, LLC as financial advisor.
FURIE OPERATING: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on Sept. 12 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Furie Operating Alaska, LLC.
About Furie Operating Alaska
Headquartered in Anchorage Alaska, Furie Operating Alaska LLC and
its affiliates operate as independent energy companies primarily
focused on the acquisition, exploration, production, and
development of offshore oil and gas properties in the State of
Alaska's Cook Inlet region. They hold a majority working interest
in 35 competitive oil and gas leases in the Cook Inlet.
Additionally, they wholly own and operate an offshore production
platform in the middle of the Cook Inlet to extract natural gas
under the oil and gas leases.
Furie Operating Alaska and its affiliates, Cornucopia Oil & Gas
Company LLC and Corsair Oil & Gas LLC, each filed voluntary
petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Case Nos. 19-11781 to 19-11783) on Aug. 9, 2019. The petitions
were signed by Scott M. Pinsonnault, interim chief operating
officer. The Debtors estimated $10 million to $50 million in
assets and $100 million to $500 million in liabilities.
Matthew P. Ward, Esq. at Womble Bond Dickinson (US) LLP and Timothy
W. Walsh, Esq., at McDermott Will & Emery LLP, are the Debtors'
counsel.
The Debtors tapped Seaport Global Securities LLC as investment
banker; Ankura Consulting Group as financial advisor; and Prime
Clerk LLC as claims and noticing agent; Prime Clerk LLC as
administrative advisor; Seaport Global Securities LLC, as
investment banker.
GATHERING PLACE: Counsel to Get $1,000 Per Month Under Plan
-----------------------------------------------------------
The Gathering Place of Columbus filed a Second Amended Plan of
Reorganization and accompanying second amended disclosure statement
on August 30, 2019, which proposes to pay all its creditors from
the operation's cash flow.
The plan aims to settle in full the Debtor's administrative and
priority claims. It also plans to settle in full all of its
non-priority unsecured creditors holding allowed claims
approximately five years from the effectivity of the Plan.
Counsel for the Debtor, Allen Stovall Neuman Fisher & Ashton LLP,
and the Debtor have agreed to a payment schedule that will allow
the Debtor to retain sufficient funds for all required payments and
maintain inadequate cash reserves before they pay the law firm.
Starting in the first full month after the Effective Date, payment
will be made in the amount of $1,000 per month. In any month that
the Debtor's cash holdings exceed $70,000 (which is approximately
two times the sum of the Debtor's average operating expenses and
Plan payments), the Debtor will make additional monthly payments of
$2,500 toward outstanding attorney fees.
Non-Priority Unsecured Creditors will receive an aggregate amount
of 100% of their claims on a quarterly basis for the next five
years. The payment starts on January 2020.
Payments under the Plan will come from the Debtor's funds derived
through the contributions from the Debtor's congregation and
operations of their daycare facility. The funds can also be
available through the Debtor's pursuit of avoidance actions under
Chapter 5 of the Bankruptcy Code, if the Debtor's pursue such
claims.
There will also be a selection of officers and board of trustees
consistent with Section 1123 (a) (7). After the effective date,
the Debtor will continue to elect officers, directors, and trustees
as per the provision of Ohio non-profit corporation law. They need
to serve as per the applicable non-bankruptcy law.
A full-text copy of the Second Amended Disclosure Statement dated
August 30, 2019, is available at https://is.gd/vrX4IX from
PacerMonitor.com at no charge.
Counsel for Debtor:
Thomas R. Allen, Esq.
J. Matthew Fisher, Esq.
James A. Coutinho, Esq.
Allen Stovall Neuman Fisher & Ashton LLP
17 South High Street, Suite 1220
Columbus, OH 43215
Tel: (614)221-8500
Fax: (614)221-5988
Email: allen@aksnlaw.com
fisher@aksnlaw.com
coutinho@asnfa.com
About The Gathering Place of Columbus
The Gathering Place of Columbus is an Ohio non-profit 501(c)(3)
religious organization serving the Columbus area, operating out its
church facility located at 3550 E. Deshler Ave., Columbus, OH
43227. It was founded in May of 1993, as an Ohio non-profit
corporation then known as Romans Church of God of the Apostolic
Faith, Inc. Effective Jan. 1, 2014, the organization merged with
another Ohio non-profit corporation called The Gathering Place of
Columbus.
The Gathering Place of Columbus sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Ohio Case No. 18-55347) on Aug.
24, 2018. At the time of the filing, the Debtor estimated assets
of $1 million and liabilities of $1 million. Judge C. Kathryn
Preston oversees the case.
GCX LIMITED: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: GCX Limited
3190 S. Vaughn Way, Suite 550
Aurora CO 80014
Business Description: The Debtors, together with their non-Debtor
affiliates are a leading global data
communications service provider, operating
one of the world's largest fiber networks.
The Company provides its services through a
global network of subsea cables, landing
stations, terrestrial networks, IP network,
and managed network platforms controlled by
a fully global network operating center.
The GCX Global Network connects to most of
the major telecommunications hubs across the
globe, from the developed markets in the
U.S. and Europe to key emerging markets in
the Middle East and Asia, including India
and China. The GCX Global Network consists
of, among other things, five owned subsea
systems with over 66,000 route kilometers of
cable, landing at 46 landing stations in 27
countries. The Company supports its
operations with principal offices in Mumbai,
Hong Kong, and London and has a workforce of
924 full-time individuals across 18
countries.
On the web:
https://www.globalcloudxchange.com/
Chapter 11 Petition Date: September 15, 2019
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Sixteen affiliates that filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code on Sept. 15, 2019:
Debtor Case No.
------ --------
GCX Limited (Lead Case) 19-12031
Vanco US, LLC 19-12029
FLAG Telecom Network USA Limited 19-12030
FLAG Telecom Development Limited 19-12032
FLAG Telecom Group Services Limited 19-12033
FLAG Telecom Ireland Network DAC 19-12034
FLAG Telecom Network Services DAC 19-12035
Reliance FLAG Atlantic France SAS 19-12036
Reliance FLAG Telecom Ireland DAC 19-12037
Reliance Globalcom Limited 19-12038
Reliance Vanco Group Limited 19-12039
Vanco Australasia Pty Limited 19-12040
Vanco GmbH 19-12041
Vanco SAS 19-12042
Vanco UK Limited 19-12043
VNO Direct Limited 19-12044
Judge: Hon. Christopher S. Sontchi
Debtors' Local
Bankruptcy
Counsel: Jaime Luton Chapman, Esq.
M. Blake Cleary, Esq.
Matthew B. Lunn, Esq.
Jared W. Kochenash, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: jchapman@ycst.com
mbcleary@ycst.com
mlunn@ycst.com
jkochenash@ycst.com
Debtors'
General
Bankruptcy
Counsel: Chris L. Dickerson, Esq.
Brendan M. Gage, Esq.
Robert A. Dixon Jr., Esq.
PAUL HASTINGS LLP
71 South Wacker Drive, Suite 4500
Chicago, Illinois 60606
Tel: (312) 499-6000
Fax: (312) 499-6100
Email: chrisdickerson@paulhastings.com
brendangage@paulhastings.com
robertdixon@paulhastings.com
- and -
Todd M. Schwartz, Esq.
PAUL HASTINGS LLP
1117 S. California Avenue
Palo Alto, California 94304
Tel: (650) 320-1800
Fax: (650) 320-1900
Email: toddschwartz@paulhastings.com
Debtors'
Financial
Advisor: FTI CONSULTING, INC.
Debtors'
Investment
Banker: LAZARD & CO., LIMITED
Debtors'
Notice,
Claims Agent &
Administrative
Advisor: PRIME CLERK LLC
https://cases.primeclerk.com/gcx/Home-DocketInfo
Estimated Assets: $1 billion to $10 billion
Estimated Liabilities: $1 billion to $10 billion
The petitions were signed by Michael Katzenstein, chief
restructuring officer.
A full-text copy of GCX Limited's petition is available for free
at:
http://bankrupt.com/misc/nysb19-12031.pdf
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Telecom Egypt Company Trade $15,989,612
Attn: Hisham Ali
B7, Smart Village K28
Cairo-Alexandria Desert Ro
Cairo 12577
Egypt
Tel: 20 2 3131 5819
Fax: 20 2 3131 6115
Email: hisham.Ali@telecomegypt.com
2. Alcatel Submarine Trade $6,006,374
Networks SASU
Attn: Grace Lou
Ctr De Villarceaux
Nozay 91625
France
Tel: 33 1 60407103
Fax: 33 1 30776808
Email: grace.louw@alcatel-lucent.com
3. E-Marine PJSC Trade $5,523,549
Attn: President or General Counsel
Etisalat Business Center
Bank Street
Dubai 282727
United Arab Emirates
Tel: 971 4 881 4433
Fax: 971 4 881 4422
Email: emarine@emarine.ae
4. Emirates Telecommunication Group Trade $3,685,695
Company PJSC
Attn: Pavan Bhavanasi
Rashid Bin Saeed Al Maktoum St
PO Box 3838
Dubai 502666
United Arab Emirates
Tel: 971-2-628-3333
Fax: 971-2-631-7000
Email: Pavan.Bhavanasi@du.ae
5. China Mobile Limited Trade $3,100,000
Attn: President or General Counsel
51 Kwai Cheong Road
Tower 1, Kowloon Commerce
Level30
Kwai Chung
Hong Kong
Tel: (852) 3121 8888
Fax: (852) 3188 1660
6. Verizon Communications Inc. Trade $1,844,240
Attn: Priti Panchal
600 Hidden Ridge Drive
Irving, TX 75038
Attn: Priti Panchal
Tel: (972) 444-5516
Fax: (972) 444-5178
Email: priti.panchal@verizon.com
7. Ciena Communications Int'l LLC Trade $1,954,323
Attn: President or General Counsel
7035 Ridge Road
Hanover, MD 21076
Tel: (932) 005-4232
Fax: (410) 694-5750
Email: ggoyal@ciena.com
8. Reliance BPO Private Limited Trade $1,714,618
Attn: President or General Counsel
A Block Dhirubhai
Ambani Knowledge City
Navi Mumbai 400710
India
Tel: 91 022 30388005
Email: mca.rocfiling@relianceada.com
9. Telecom Italia Sparkle S.p.A Trade $1,551,597
Attn: President or General Counsel
Via Cristoforo Columbo 142
Rome 00147
Italy
Tel: +39 06 52741
Fax +39 06 52745347
Email: adminpec@tisparkle.telecompost.it
10. Telecommunications Trade $1,425,000
Infrastructure Company
Attn: President or General Counsel
TIC Central Bld, Shariati St
Seied Khandan Overpass
Tehran 1631713711
Iran
Tel: +98 21 88405463
Fax: +98 21 88468517
Email: FINANCE@TIC.IR
11. Tata Communications Trade $1,083,236
International PTE LTD
Attn: President or General Counsel
35 Tai Seng Street #06-01
Singapore 534103
Singapore
Tel: +65-66326700
Fax: +65 66348570
Email: Billing-Data@tatacommunications.com
12. Telekom Malaysia Berhad Trade $1,178,392
Attn: President or General Counsel
North Wine Menara TM, Level 51
Jalan Pantai Baharu
Kuala Lumpur 50672
Malaysia
Tel: 603 2240 6066
Fax: 603 2283 2415
Email: cic@tm.com.my
13. Earthlink Trade $1,175,000
Attn: President or General Counsel
Arasat st
Earthlink building
Baghdad
Iraq
Tel: 964 771 7713662
Email: sales@earthlinktele.com
14. NEECO s.r.o. Company Trade $1,043,429
Attn: Alena Hornikova
Reckova 1652/4
Phase 3
Zizkov 13000
Czech Republic
Tel: 44 20 7193 6308
Email: alena.hornikova@neeco.com
15. Vodofone Mobile Trade $937,500
Services Limited
Attn: Vikas Srivastava
C-48
Okhla Industrial Area Phase 2
New Dehli 110076
India
Tel: 1171718000
Fax: +91 011 26940154
Email: vikas.srivastava@vodafone.com
16. Fuze Inc. Trade $922,086
Attn: President or General Counsel
2 Copeley Place, Floor 7
Boston, MA 02116
Tel: (342) 507-8827
Email: merrigo@fuze.com
17. PrimeTel PLC Trade $865,763
Attn: President or General Counsel
The Martitime Center
141 Omonia Avenue
Limassol 3045
Cyprus
Tel: (357) 2210 2210
Fax: (357) 25 568131
Email: info@prime-tel.com
18. Zayo Group LLC Trade $856,232
Attn: President or General Counsel
400 Centennial Parkway, Suite 200
Louisville, CO 80027
Tel: (303) 381-4683
Email: customerservice@zayo.com
19. Du Emirates Integrated Trade $801,604
Telecommunications Corporation
Attn: Pavan Bhavanasi
Al Salam Tower
PO Box 502666
Dubai
United Arab Emirates
Tel: 971-2-628-3333
Email: Pavan.Bhavanasi@du.ae
20. British Telecommunications PLC Trade $632,035
Attn: President or General Counsel
81 Newgate Street
London EC1A 7AJ
United Kingdom
Tel: +44 0800 616094
Fax: +44 1904 657225
Email: gwbilling03@bt.com
21. Integrated Telecom Company Trade $580,814
Attn: President or General Counsel
21 PO Box 8732
Riyadh 11492
Saudi Arabia
Tel: 966-11-406-2222
Fax: 966-11-406-2221
Email: info@itc.net.sa
22. Milbank LLP Professional $555,932
Attn: President or General Counsel
55 Hudson Yards
New York, NY 10001-2163
Tel: (212) 530-5000
Fax: (212) 530-5219
Email: JDeCarvalho@milbank.com
23. Shabakat Alardh Trade $544,351
Attn: President or General Counsel
Arasat st
Earthlink building
Baghdad
Iraq
Tel: 9647717713662
Email: sales@earthlinktele.com
24. Infinera Corporation Trade $486,405
Attn: President or General Counsel
140 Caspian Court
Sunnyvale, CA 94089
Tel: (408) 572-5200
Fax: (408) 572-5343
Email: tdaniels@infinera.com
25. KT Corporation Trade $456,159
Attn: President or General Counsel
39 Saesulmak gil
7/F Smart Tower
Gwacheon 13807
South Korea
Tel: 031-727-0114
Email: misoon.leem@kt.com
26. State Oceanic Administration Regulatory $392,780
Attn: President or General Counsel
No.1, Fuxingmenwai Ave
Beijing 100860
China
Tel: +86-10-68036469
Fax: +86-10-68012776
Email: chinare@263.net.cn
27. Jordan Telecom Group Trade $325,000
Attn: President or General Counsel
City Center Building
Amman 1689
Jordan
Tel: 962 6 4606666
Fax: 962 6 460611
28. Equinix France SAS Trade $319,087
Attn: President or General Counsel
Friedrich-Ebert-Allee 140
Bonn 53113
Germany
Tel: 49-61-515-8
Email: info_nonvoice@telekom.de
29. Lanka Bell Services Limited Trade $307,564
Attn: President or General Counsel
Central House
Beckwith Knowle
Harrogate HG3 1UG
United Kingdom
Tel: 01423 850000
Email: credit.control@redcentricplc.com
30. RT America Inc. Trade $300,000
Attn: Muneeb Mahood
12353 Sunrise Valley Dr.
Reston, VA 20191
Tel: 964-7504-383835
Email: mahmood.muneeb@newroztelecom.com
GCX LIMITED: Files for Chapter 11 with Prepackaged Plan
-------------------------------------------------------
Global Cloud Xchange filed for Chapter 11 bankruptcy protection
Sept. 15, 2019, after reaching a deal with lenders that will cut
debt by $150 million and hand ownership of the telecommunications
company to its senior bondholders.
Global Cloud Xchange also unveiled a pre-packaged Plan of
Reorganization that will support its long-term growth and
development by reducing bond debt by $150 million, providing a
permanent capital structure that includes working capital facility,
and transitioning the business to new ownership.
The Company continues to serve its customers as usual. Upon
emergence from Chapter 11, the Company expects to be
well-positioned to aggressively pursue its business plan
independent of the overhang caused by its corporate parent's
challenges.
More than 75% of the Company's lenders have already committed their
support for the Plan, which outlines the terms for a transaction
through which GCX's senior secured noteholders would become owners
of the Company and provide new loans to support and grow the
business. To ensure GCX maximizes value for its stakeholders in
this process, the Company also will use the protections and
framework of Chapter 11 to undertake a sale process that welcomes
additional prospective buyers.
GCX expects to complete the Chapter 11 process and emerge as a
stronger company within the fourth quarter of 2019, subject to all
required regulatory approvals.
Customers, suppliers and employees should expect to work with all
GCX entities as usual throughout the Chapter 11 process, the
Company said. The Plan does not contemplate any changes in
business arrangements or activities for any GCX subsidiary, and
according to the terms of the Plan, all trade/vendor claims will be
paid in full.
GCX filed the customary motions as part of its Chapter 11 case to
compensate employees as usual, maintain its usual programs for
customers and partners, and otherwise operate its business as
usual.
"We appreciate the strong collaboration with our lenders, which has
resulted in a Plan of Reorganization that allows us to honor our
commitments to employees, customers and suppliers while also
securing a financially strong future for our business," said Bill
Barney, Chairman and CEO of GCX. "We are a fundamentally strong
company, providing mission-critical, expertly managed network
solutions for telecommunications, global enterprise and OTT
customers. The steps we are announcing today will allow us to
continue to build on our strengths and emerge as an even stronger
employer and business partner."
Entities included in the Chapter 11 process are borrowers or
guarantors under the Company's senior secured notes.
The Company's total revenue declined between fiscal years 2017 and
2018, but increased in fiscal 2019, as a result of a large capacity
sale to a tier 1 technology company. For the fiscal years ended
March 31, 2017, 2018, and 2019, the Company's revenue was $403.1
million, $361.9 million, and $368.1 million, respectively.
As of the Petition Date, the Debtors employ 165 employees in the
aggregate, which includes three fulltime contractors. Including
non-debtors, GCX supports its operations with principal offices in
Mumbai, Hong Kong, and London and has a workforce of approximately
924 full-time employees across 18 countries, comprised of 309 sales
and sales support staff and 615 engineering and operational support
staff.
Prepetition Capital Structure
As of June 30, 2019, the Company had approximately $1.14 billion in
assets on account of (1) $174,753,445 in current assets comprised
of (a) trade and other receivables and (b) cash and cash
equivalents, and (2) $961,269,284 in non-current assets
As of June 30, 2019, the Company's liabilities totaled
approximately $1.09 billion on account of (a) $648.96 million in
current liabilities comprised of (i) $360.2 million of 7.00% senior
secured notes due 2020, (ii) $143.5 million of current trade and
other payables, (iii) $138.0 million of current deferred revenue,
and (iv) $7.253 million of current tax liabilities, and (b) $439.39
million in non-current liability.
The Bank of New York Mellon is the Trustee and Collateral Agent for
the Senior Secured Notes.
Milestones
The Company has agreed to certain chapter 11 milestones,
memorialized in the Restructuring Support Agreement and the
debtor-in-possession credit agreement:
* File Bidding Procedures Motion: Sept. 17, 2019
* File Required Regulatory Applications or Other Filings to
Effectuate the Restructuring Transaction: Oct. 6, 2019
* Entry of Bidding Procedures Order: Oct. 10, 2019
* Entry of the Final DIP Order: Oct. 20, 2019
* Auction (if necessary): Oct. 27, 2019
* Entry of Order Confirming Plan: Nov. 29, 2019
* Occurrence of Plan Effective Date: Dec. 31, 2019
About Global Cloud Xchange
Global Cloud Xchange (GCX), a subsidiary of Reliance
Communications, offers a comprehensive portfolio of solutions
customized for carriers, enterprises and new media companies. GCX
-- http://www.globalcloudxchange.com/-- owns the world's largest
private undersea cable system spanning more than 68,000 route kms
which, seamlessly integrated with Reliance Communications' 200,000
route kms of domestic optic fiber backbone, provides a robust
Global Service Delivery Platform. With connections to 40 key
business markets worldwide spanning Asia, North America, Europe and
the Middle East, GCX delivers leading edge next generation
Enterprise solutions to more than 160 countries globally across its
Cloud Delivery Network.
GCX Limited and 15 subsidiaries filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lead Case No. 19-12031) on Sept. 15,
2019, to seek confirmation of a pre-packaged Plan of
Reorganization.
The Restructuring Support Agreement, and the Plan implementing the
same, contemplates (a) a debt-to-equity recapitalization
transaction, whereby the Senior Secured Noteholders will receive a
pro rata share of (i) 100% of the new equity interests of
reorganized GCX and (ii) second lien term loans in an aggregate
principal amount of $200 million and (b) a simultaneous "go-shop"
process in which the Debtors will solicit bids for the potential
sale of all or a portion of their business pursuant to the Plan.
The Debtors are estimated to have $1 billion to $10 billion in
assets and liabilities, according to the petitions signed by CRO
Michael Katzenstein.
The Hon. Christopher S. Sontchi is the case judge.
The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP as local
bankruptcy counsel; PAUL HASTINGS LLP as general bankruptcy
counsel; FTI CONSULTING, INC. as financial advisor; and LAZARD &
CO., LIMITED, as investment banker. PRIME CLERK LLC is the claims
agent.
GCX LIMITED: Has $54.5MM of DIP Financing from Noteholders
----------------------------------------------------------
In further support of GCX Limited, et al.'s restructuring, the Ad
hoc group of senior secured noteholders holding in excess of 76% of
the senior secured notes has committed to provide the Debtors with
$54.5 million of debtor-in-possession financing, which should be
sufficient to finance the Debtors through February 28, 2020.
It is critical that the Debtors have access to the DIP Financing so
that they will have the necessary liquidity to continue operating
their business in the ordinary course to maximize value. The DIP
Financing has a maturity date that coincides with the timeline
contemplated by the plan of reorganization and RSA, with additional
time built in to account for any necessary and advisable regulatory
approvals.
The Company and its advisors undertook an extensive marketing
effort to ensure that the DIP Financing was the best available
postpetition financing option under the circumstances. They first
analyzed the Company's liquidity needs in a chapter 11 scenario,
and then Lazard, as the Company's investment banker, contacted
numerous potential third-party financing sources -- both
traditional bank lenders and alternative financing lenders -- to
solicit offers for postpetition financing that would adequately
satisfy the Company's liquidity needs. Due to the Company's
financial position and existing capital structure, the Company and
Lazard did not receive any actionable alternative financing
proposals. The Company has received one non-binding proposal from
HPS Investment Partners, LLC ("HPS"); however, further loan due
diligence inhibited HPS's ability to underwrite the full amount
necessary to refinance the maturing senior secured notes.
$54.5 Million of DIP Financing
Pursuant to the DIP Financing Motion, the Debtors request, among
other things: (1) authority to enter into a superpriority secured
debtor in possession credit facility in an aggregate principal
amount of up to $54.5 million, with interim authority to draw up to
$23.1 million, and authority to pay fees related thereto.
The Debtors propose to grant a first priority perfected lien on all
prepetition and postpetition assets (excluding certain avoidance
actions) of the Debtors to the DIP Lenders.
The salient terms of the DIP facility are:
* Borrower: GCX Limited DIP Credit
* Guarantors: Each of the other Debtors
* DIP Lenders: Certain of the prepetition Senior Secured
Noteholders.
* Administrative Agent: Wilmington Trust National Association
* Term: "Maturity Date" means earliest to occur of:
(a) 5:00 p.m. (prevailing NY time) on Dec. 31, 2019,
(b) the date of the closing of a sale transaction,
(c) the effective date of an Acceptable Plan, and
(d) the date of acceleration of the Loans or termination
of the commitment by the Required Lenders or the Administrative
Agent (at the direction of the Required Lenders) following an Event
of Default;
The definition of Maturity Date will be automatically
extended to 5:00 p.m. (prevailing New York time) on Feb. 28, 2020
if all conditions to the effective date of an Acceptable Plan have
been satisfied (or waived in the sole discretion of the Required
Lenders) in accordance with the terms thereof other than any such
condition that the Debtors will have obtained all approvals
required by any Governmental Authority.
* Commitment: Commitment means $54,500,000, as the same may be
reduced from time to time or terminated.
* Interest Rate: All obligations of the DIP Borrower under the
DIP Facility will bear interest at a rate per annum equal to 8.50%,
payable in cash on a monthly basis in arrears. After the
occurrence and during the continuance of an Event of Default, the
DIP Loans will bear interest at an additional 2.00% per annum.
* Expenses and Fees: (A) The Borrower shall pay a commitment fee
equal to 3.25% of the aggregate amount of the Commitment of each
Lender provided on the Closing Date, which will be earned and paid
in-kind on the Closing Date to the Administrative Agent for the
account of each Lender (based on each Lender's pro rata share of
the Commitment). (B) The Borrower will pay an exit fee equal to
3.00% of the aggregate outstanding Loans repaid as of the effective
date of an Acceptable Plan or the consummation date of the Sale
Transaction to the Administrative Agent for the account of each
Lender. (C) The Borrower will pay to the Administrative Agent for
its own account fees in the amounts and at the times specified in
the Fee Letter.
Cash Collateral
The Debtors are also seeking authority to use their cash
collateral, as set forth in the DIP Financing Motion. On the
Petition Date, the Company had approximately $13.37 million in
cash, of which approximately $3.87 million is the Debtors' cash.
The Debtors seek relief under the DIP Financing Orders to utilize
the Debtors' cash together with postpetition receipts from
operations to prosecute these chapter 11 cases and operate their
businesses on a postpetition basis.
The Debtors will use cash collateral to fund all operating expenses
associated with Debtors' businesses, consistent with an agreed to
budget.
The Debtors have agreed to an adequate protection package that
generally includes replacement and adequate protection liens and
superpriority administrative claims for any diminution in value of
the secured lenders' collateral, payment of the professional fees
and expenses, and certain reporting and budgeting obligations.
The DIP Agent:
Jeffery Rose, Vice President
Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
E-mail: jrose@wilmingtontrust.com
The DIP Agent's attorneys:
Christopher M. Winter, Esq.
Duane Morris LLP
222 Delaware Avenue, Suite 1600
Wilmington, DE 19801
E-mail: cmwinter@duanemorris.com
Ad Hoc Group of Secured Noteholders / DIP Lenders' attorneys:
Brian Pfeiffer, Esq.
White & Case LLP
200 S. Biscayne Blvd. Suite 4900
Miami, Florida 33131
E-mail: brian.pfeiffer@whitecase.com
- and -
Andrew T. Zatz, Esq.
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020-1095
E-mail: brian.pfeiffer@whitecase.com
azatz@whitecase.com
- and -
William A. Guerrieri, Esq.
White & Case LLP
111 South Wacker Drive, Suite 5100
Chicago, IL 60606
E-mail: william.guerrieri@whitecase.com
About Global Cloud Xchange
Global Cloud Xchange (GCX), a subsidiary of Reliance
Communications, offers a comprehensive portfolio of solutions
customized for carriers, enterprises and new media companies. GCX
-- http://www.globalcloudxchange.com/-- owns the world's largest
private undersea cable system spanning more than 68,000 route kms
which, seamlessly integrated with Reliance Communications' 200,000
route kms of domestic optic fiber backbone, provides a robust
Global Service Delivery Platform. With connections to 40 key
business markets worldwide spanning Asia, North America, Europe and
the Middle East, GCX delivers leading edge next generation
Enterprise solutions to more than 160 countries globally across its
Cloud Delivery Network.
GCX Limited and 15 subsidiaries filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Lead Case No. 19-12031) on Sept. 15,
2019, to seek confirmation of a pre-packaged Plan of
Reorganization.
The Restructuring Support Agreement, and the Plan implementing the
same, contemplates (a) a debt-to-equity recapitalization
transaction, whereby the Senior Secured Noteholders will receive a
pro rata share of (i) 100% of the new equity interests of
reorganized GCX and (ii) second lien term loans in an aggregate
principal amount of $200 million and (b) a simultaneous "go-shop"
process in which the Debtors will solicit bids for the potential
sale of all or a portion of their business pursuant to the Plan.
The Debtors are estimated to have $1 billion to $10 billion in
assets and liabilities, according to the petitions signed by CRO
Michael Katzenstein.
The Hon. Christopher S. Sontchi is the case judge.
The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP as local
bankruptcy counsel; PAUL HASTINGS LLP as general bankruptcy
counsel; FTI CONSULTING, INC. as financial advisor; and LAZARD &
CO., LIMITED, as investment banker. PRIME CLERK LLC is the claims
agent.
GLOBAL ENTERPRISES: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The Office of the U.S. Trustee on Sept. 12 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Global Enterprises
International, Inc.
About Global Enterprises International
Global Enterprises International Inc., a company engaged in renting
and leasing real estate properties, is the fee simple owner of a
real property located at 1750 E. Palomar St., Chula Vista, Calif.
The property has a comparable sale value of $4.5 million.
Global Enterprises International sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Calif. Case No. 19-04782) on
Aug. 9, 2019. At the time of the filing, Global Enterprises
International disclosed $4,511,500 in assets and $2,745,000 in
liabilities.
The case has been assigned to Judge Margaret M. Mann. Global
Enterprises International is represented by David L. Speckman,
Esq., at Speckman Law Firm.
GUIDEHOUSE LLP: Moody's Affirms B2 CFR & Rates 1st Lien Debt B1
---------------------------------------------------------------
Moody's Investors Service has affirmed ratings of Guidehouse LLP,
including the B2 corporate family, and assigned a B1 rating to the
first lien bank facility increase and a Caa1 to the second lien
facility increase. The rating outlook is unchanged at stable.
The combined $840 million proceeds of the expanded first/second
lien term loans as well as $315 million of new equity will be used
to fund Guidehouse's acquisition of Navigant Consulting, Inc.
According to Moody's Lead Analyst, Bruce Herskovics, "The
combination with publicly traded Navigant will more than double the
company's revenue base, expand the service offerings and customer
end markets." Regarding the affirmation of the B2 corporate family
rating Herskovics added, "while the transaction is leveraging
Moody's expects credit metrics at suitable levels for the rating,
especially with the cost synergies that should result from the
operational integration planned near term."
Assignments:
Issuer: Guidehouse LLP
Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3)
Senior Secured 2nd Lien Term Loan, Assigned Caa1 (LGD5)
Outlook Actions:
Issuer: Guidehouse LLP
Outlook, Remains Stable
Affirmations:
Issuer: Guidehouse LLP
Probability of Default Rating, Affirmed B2-PD
Corporate Family Rating, Affirmed B2
Senior Secured 1st Lien Bank Credit Facility, Affirmed
B1 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Affirmed
Caa1 (LGD5)
RATINGS RATIONALE
The B2 rating reflects Guidehouse's elevated financial leverage, a
brief operating history since becoming independent with only modest
revenue growth in the past year, and likelihood of low free cash
flow near term as integration activity occurs. The rating also
considers greater organizational scale that will follow the
combination with Navigant, enabling Guidehouse to more readily
pursue larger contracts, develop new service programs and
recruit/retain talented workers. Depending on the degree of
post-integration efficiencies achieved, Moody's expects that
Guidehouse should ultimately be able to achieve EBITDA margin in
the 15% range (Moody's adjusted basis).
The calculation of leverage, pro forma for the business
combination, is made complicated by special integration costs that
will occur in combining the operations of the two businesses, as
well as non-recurring items that Guidehouse incurred during its
first year as a stand alone business. Initial pro forma leverage,
is estimated to be mid 6x on a Moody's adjusted basis with leverage
improving to below 6x by the end of 2020.
A supportive demand setting favors the company's near-term
performance. While Guidehouse lost its largest prime contract in
fiscal year 2019, excluding that contract revenues grew over 13%
and the company's portfolio now has fewer outsized programs.
Navigant has been growing, albeit more slowly than has Guidehouse.
Moody's expects combined annual revenue growth of 3% to 5% near
term.
Governance risk considerations factor into the rating, stemming
from Guidehouse's ownership by a private equity sponsor. As a
result, the rating considers increased risk of financial policy
aggressiveness, including a continuation of M&A-related debt
issuance. The rating nonetheless also envisions a pause in
acquisition spending over the ensuing 12-18 month as Guidehouse
integrates with Navigant.
The liquidity profile is good based on the $140 million cash
balance that will exist at transaction close, more than half of
which will fund integration costs. The company's revolver will be
upsized to $125 million from $50 million and Moody's expects no
borrowing at close, giving extra financial flexibility to absorb
working capital fluctuation and maintain the necessary pace of new
business development opportunities. Scheduled debt amortization
will only be $2.4 million per quarter. The company's only
maintenance covenant activates when revolver use exceeds $43
million and Moody's expects that even if the test were to activate,
cushion would exist.
The rating on the first lien bank facility of B1, one notch above
the CFR, reflects the benefit of second lien debt in the capital
structure. The second lien debt would absorb significant first loss
in a stress scenario-- hence its Caa1 rating, two notches below the
CFR-- and thereby benefit the first lien recovery prospect.
Upward rating momentum would require solid revenue growth with an
expectation of leverage below 5x, free cash flow to debt of 10%,
and a good liquidity profile.
Downward rating pressure would mount with leverage continuing at
mid 6x rather then declining as expected, expectation of free cash
flow below $50 million by 2021, and a deteriorating liquidity
profile, such as one with an ongoing level of revolver dependence.
While no M&A activity is expected near-term, significant
transactions before the Navigant integration work concludes would
be unfavorable.
Guidehouse LLP, headquartered in McLean, VA, is a provider of
strategic advisory services primarily to agencies of the US
government with annual revenues in the fiscal year ending June 30,
2019 of about $590 million. Pro forma for the merger with,
commercial end market oriented, Navigant Consulting, Inc. annual
revenues will be approximately $1.3 billion and the company's end
markets will include regulated industries such as healthcare,
financial services and energy/infrastructure. Guidehouse is
majority owned by Veritas Capital.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
IHEARTMEDIA INC: Samantha Springs Allowed to Amend Proof of Claim
-----------------------------------------------------------------
Samantha Springs filed a proof of claim in iHeartMedia, Inc.'s
chapter 11 bankruptcy case. Ms. Springs's proof of claim listed
iHeartMedia as the debtor of record and sought to recover
$5,000,000 based on claims of gender discrimination, hostile work
environment, intentional infliction of emotional harm, and breach
of contract. Subsequently, Ms. Springs learned that her employment
contract was with a different affiliate, iHeartMedia +
Entertainment, Inc. ("Entertainment") and not iHeart. Ms. Springs
seeks leave to amend her proof of claim to list Entertainment as
the correct debtor, reflecting her employment contract.
Bankruptcy Judge Marvin Isgur grants Ms. Springs leave to amend her
proof of claim.
iHeart does not dispute that Ms. Springs's original proof of claim
was timely filed prior to the claims bar date. However, iHeart
argues that Ms. Springs's failure to list the correct debtor in her
proof of claim is an attempt to circumvent the claims bar date and
failed to provide Entertainment with adequate notice of potential
liability.
The first proof of claim Ms. Springs filed listed a claim amount of
$500,000 and "iHeart Media Inc." as the debtor. Although the
original proof of claim did not state a specific cause of action,
the attachments described her intent to pursue binding arbitration
due to sexual harassment. Ms. Springs then amended her proof of
claim and increased the amount of the claim to $5,000,000, added
specific causes of action based on the alleged sexual harassment,
and attached a sworn declaration describing the alleged harassment.
However, "iHeart Media" remained the debtor of record in the
amended claim. Now Ms. Springs seeks leave to amend her claim to
add name Entertainment as the correct debtor against whom the claim
is asserted.
iHeart argues that Ms. Springs's inclusion of her employment
contract in her proof of claim and amendment demonstrates her
knowledge that Entertainment was her employer. Contrary to iHeart's
assertion, at the February 19, 2019 hearing, Ms. Springs presented
testimony that her failure to list Entertainment as the correct
debtor was the result of inadvertence and her genuine belief that
iHeartMedia rather than Entertainment was her employer. Ms.
Springs's testimony was corroborated by other evidence such as her
business card which listed her title as "General Sales Manager
iHeartMedia" and her corporate e-mail address as
"samsprings@iHeartMedia.com." Additionally, Ms. Springs provided
the "iHeartMedia Inc. Employee Guide" she received when she began
working. The Employee Guide's table of contents contains sections
such as "About iHeartMedia, Inc." and introduces each topic using
phrases such as "iHeartMedia, Inc. will strive to remain in the
forefront . . ." or "The tollfree iHeartMedia, Inc. The sole
reference to Entertainment in the Employee Guide was an addendum
titled "iHeartMedia, Inc., Media + Entertainment Addendum."
However, even this section began by stating, "iHeartMedia Inc. will
conduct training. . . ."
Given the volume of uncontested information presented, it would be
reasonable for Ms. Springs to conclude that iHeart was her employer
rather than Entertainment. As a result, her proposed amendment was
not proposed in bad faith. Similarly, since Ms. Springs did not
realize that iHeart was not her employer until November 2018, she
could not have corrected her error in her first amendment to her
proof of claim. This balances the factors of undue delay and
previous failures to cure in Ms. Springs's favor.
The futility of the amendment also weighs in favor of granting Ms.
Springs leave to amend her proof of claim. Allowing the amendment
will place Ms. Springs's claim in the correct class. iHeart (or
Entertainment) may then object. The parties may then contest the
merits of Ms. Springs's claim rather than attempt to win on
procedural grounds. Accordingly, granting leave to amend is in line
with the goals of the claims resolution process and would not be a
futile exercise.
The bankruptcy case is in re: IHEARTMEDIA, INC., et al., Chapter
11, Debtors, Case No. 18-31274 (Bankr. S.D. Tex.).
A copy of the Court's Memorandum Opinion dated April 12, 2019 is
available at https://bit.ly/2lOqFof from Leagle.com.
iHeartMedia, Inc., Debtor, represented by Kevin S. Allred, Munger
Tolles & Olson, William Arnault, Kirkland & Ellis LLP, Gavin
Campbell, Kirkland & Ellis LLP, Matthew D. Cavenaugh, Jackson
Walker LLP, AnnElyse S. Gibbons, Kirkland & Ellis LLP, Seth
Goldman, Munger Tolles Olson LLP, William A. Guerrieri, Kirkland &
Ellis LLP, Stephen C. Hackney, Kirkland & Ellis LLP, Richard U.S.
Howell, Kirkland & Ellis LLP, Dan Latona, Kirkland & Ellis LLP,
Christopher Marcus, Kirkland & Ellis LLP, Casey James McGushin,
Kirkland & Ellis LLP, Benjamin M. Rhode, Kirkland & Ellis LLP,
Daniel Rudewicz, Kirkland & Ellis LLP, Anup Sathy, Kirkland & Ellis
LLP, John W. Spiegel, Munger Tolles & Olson, Patricia Baron
Tomasco, Quinn Emanuel Urquhart & Sullivan, Thomas B. Walper,
Munger, Tolles & Olson LLP, Jennifer F. Wertz, Jackson Walker LLP &
Brian Wolfe, Kirkland & Ellis LLP.
About iHeartMedia, Inc. and
iHeartCommunications, Inc.
iHeartMedia, Inc. (PINK:IHRT), the parent company of
iHeartCommunications, Inc., is a global media and entertainment
company. Based in San Antonio, Texas, iHeartCommunications
specializes in radio, digital, outdoor, mobile, social, live
events, on-demand entertainment and information services for local
communities, and uses its unparalleled national reach to target
both nationally and locally on behalf of its advertising partners.
The Company operates 849 radio stations. The Company's outdoor
business reaches over 34 countries across five continents.
To implement a balance sheet restructuring, iHeartMedia and 38 of
its subsidiaries, including iHeartCommunications, Inc., filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 18-31274) on March
14, 2018. The cases are jointly administered before Judge Marvin
Isgur.
Clear Channel Outdoor Holdings, Inc. and its subsidiaries did not
commence Chapter 11 proceedings.
As of Sept. 30, 2017, iHeartCommunications had $12.25 billion in
total assets, $23.93 billion in total liabilities, and a total
stockholders' deficit of $11.67 billion.
The Debtors hired Kirkland & Ellis LLP as legal counsel; Jackson
Walker L.L.P. as local bankruptcy counsel; Munger, Tolles & Olson
LLP as conflicts counsel; Moelis & Company and Perella Weinberg
Partners L.P as financial advisors; Alvarez & Marsal as
restructuring advisor; and Prime Clerk LLC as notice & claims
agent.
The 2021 Noteholder Group is represented by Gibson Dunn & Crutcher
LLP and Quinn Emanuel Urquhart & Sullivan, LLP as co-counsel; and
GLC Advisors & Co. as financial advisor. The ad hoc group of Term
Loan Lenders is represented by Arnold & Porter Kaye Scholer LLP as
counsel; and Ducera Partners as financial advisor. The Legacy
Noteholder Group is represented by White & Case LLP as counsel. The
Debtors' equity sponsors are represented by Weil, Gotshal & Manges
LLP as counsel.
The Office of the U.S. Trustee for Region 7 on March 21, 2018,
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of iHeartMedia, Inc.
and its affiliates. The Committee tapped Akin Gump Strauss Hauer &
Feld LLP as its legal counsel, FTI Consulting, Inc., as its
financial advisor, and Jefferies LLC as its investment banker.
INSTALLED BUILDING: Moody's Rates New $300MM Unsec. Notes 'B3'
--------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Installed
Building Products Inc.'s proposed $300 million senior unsecured
notes due 2028. Proceeds from the notes issuance will be used to
reduce the company's term loan by $189 million to $200 million, to
put $107 million of cash on balance sheet, and to pay fees and
expenses. Cash on balance sheet will be used general corporate
purposes including bolt-on acquisitions. In related rating actions,
Moody's upgraded the ratings on IBP's senior secured term loan
maturing 2025 to Ba3 from B1, upgraded IBP's Speculative Grade
Liquidity Rating to SGL-1 from SGL-2, affirmed the company's B1
Corporate Family Rating and its B1-PD Probability of Default
Rating, and changed the outlook to positive from stable.
Moody's views the proposed transaction as credit positive, since
IBP is extending its maturity profile, reducing refinancing risk
when its term loan matures in 2025, and putting additional cash on
the balance sheet. The upgrade of IBP's Speculative Grade Liquidity
Rating to SGL-1 from SGL-2 reflects Moody's expectations of
continued solid free cash flow throughout the year, projected to be
about $80 million in both 2019 and 2020. A large pro forma cash
balance of approximately $213 million and unfettered access to its
revolving credit facility, which is being upsized and extended,
further support the company's very good liquidity profile.
The change in outlook to positive from stable reflects Moody's
expectations that IBP will continue to perform well resulting in
solid debt metrics, such as leverage trending toward 2.5x. A better
liquidity profile and industry fundamentals that will support
growth over the next 18 months further support the positive
outlook.
The rating upgrade of IBP's senior secured term loan maturing 2025
to Ba3 from B1 results from the reconfiguration of IBP's debt
capital structure. The term loan now has a priority of payment
relative to the company's new senior unsecured notes. The B3 rating
assigned to the proposed $300 million senior unsecured notes
results from their effective subordination to the company's bank
debt. These notes are in a first-loss position in a recovery
scenario relative to IBP's secured debt.
The following ratings/assessments were assigned:
Upgrades:
Issuer: Installed Building Products Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from
SGL-2
Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD3)
from B1 (LGD4)
Assignments:
Issuer: Installed Building Products Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
Affirmations:
Issuer: Installed Building Products Inc.
Probability of Default Rating, Affirmed B1-PD
Corporate Family Rating, Affirmed B1
Outlook Actions:
Issuer: Installed Building Products Inc.
Outlook, Changed To Positive From Stable
RATING RATIONALE
IBP's B1 Corporate Family Rating reflects Moody's consideration of
the company's small size based on revenues, intense competition,
and end-market concentration to the homebuilding sector. Although
fundamentals support growth, homebuilding is very cyclical and that
embedded volatility poses significant credit risk to IBP.
However, Moody's also considers IBP's sound operating performance
with good margins and manageable leverage. Over the next 12 to 18
months Moody's projects revenues reaching $1.6 billion in 2020, and
operating margin sustained above 8%. Moderate price increases
should help offset higher material costs. Increased operating
leverage is likely to be the source of any margin growth as IBP
decreases administrative expenses associated with bolt-on
acquisitions. Moody's also forecasts interest coverage, measured as
EBITA-to-interest expense, remaining above 5.5x through 2020 and
debt-to-EBITDA below 3.0x by year-end 2020 and trending towards
Moody's rating upgrade trigger. Moody's believes that IBP will
maintain moderate leverage and very good liquidity to offset the
risk of extreme swings in new housing starts that could occur in an
economic downturn.
The rating could be upgraded if (all ratios include Moody's
standard adjustments):
-- Revenues approaching $2 billion
-- Debt/EBITDA trending towards 2.5x
-- Preservation of its very good liquidity profile
-- Ongoing trends in end markets that support sustained organic
growth
The rating could be downgraded if:
-- Operating margin nearing 5%
-- Debt/EBITDA is sustained above 4.0x
-- Deterioration in the company's liquidity profile
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Installed Building Products Inc., headquartered in Columbus, Ohio,
primarily installs insulation and other products for residential
and commercial builders throughout the United States. Revenue for
the 12 months ended June 30, 2019 was about $1.4 billion.
ISTAR INC: Fitch Affirms 'BB-' IDR, Outlook Stable
--------------------------------------------------
Fitch Ratings affirmed iStar Inc.'s Long-Term Issuer Default Rating
at 'BB-'. Fitch has also affirmed iStar's senior secured debt
rating at 'BB+', unsecured debt rating at 'BB' and preferred stock
rating at 'B-'. The Rating Outlook is Stable.
Concurrently, Fitch has assigned an expected rating of 'BB (EXP)'
to iStar's new senior unsecured notes following iStar's
announcement that the company is issuing $675 million of new senior
unsecured notes due 2024. Fitch does not expect the issuance to
have a material impact on iStar's leverage as the company intends
to use the proceeds from the new unsecured notes issuance to repay
existing debt, including $400 million of 4.625% senior unsecured
notes due September 2020 and $275 million of 6.50% senior unsecured
notes due July 2021.
KEY RATING DRIVERS
IDR, SENIOR DEBT and HYBRID SECURITIES
The rating affirmations reflect iStar's unique platform and
strategy relative to other commercial real estate (CRE) finance and
investment companies, improvement in asset quality resulting from
declining exposure to legacy land assets and non-performing loans
(NPLs), declining leverage, meaningful proportion of unsecured debt
funding relative to similarly rated finance and leasing companies,
and solid liquidity profile.
Rating constraints include the material shift in the firm's
strategy in early 2019 and execution risk associated with the
continued monetization of legacy assets in the near term, which
have negatively affected iStar's earnings; increased performance
pressures on certain CRE sub-sectors; continued exposure to certain
longer-term legacy land assets; variable earnings resulting from a
reliance on gain on sale income; and a reliance on wholesale
funding. Additionally, Fitch believes that key person risk
associated with CEO Jay Sugarman has increased following turnover
among executive officers in recent years.
Fitch's benchmark leverage ratio for iStar is debt-to-tangible
equity, treating the preferred securities as 50% equity. On this
basis, leverage was 3.6x at June 30, 2019, which is down from 6.1x
at March 31, 2019 and in-line with Fitch's expectation following
the reduction in debt resulting from the Preferred Freezer
Services, LLC (Preferred Freezer) sale and the gains from the
Preferred Freezer sale and Bowlero Corporation (Bowlero)
transaction. Fitch expects iStar to continue to manage its leverage
below 4x over the Outlook horizon, which compares favorably with
historical leverage levels.
At June 30, 2019, 62.1% of iStar's debt (including 50.0% of the
preferred securities) was unsecured, which is above levels of many
other diversified real estate investment trusts (REITs) and
similarly rated balance sheet-intensive finance and leasing
companies. If the consolidated iStar Net Lease I LLC (Net Lease
Venture I) secured debt was excluded, Fitch estimates that this
ratio would have been higher, at 73% at the end of second-quarter
2019 (2Q19). Fitch believes that unsecured debt enhances the
company's operational and financial flexibility and expects
unsecured debt to remain around current levels over the Outlook
horizon.
Fitch views iStar's liquidity as adequate for the rating category.
At June 30, 2019, iStar had $330.1 million of cash and cash
equivalents and $325.0 million available under its revolving credit
facility. Following the refinancing transaction, iStar will not
have any outstanding debt maturing until April 2022, when $375
million of senior unsecured notes come due. iStar's senior secured
revolving credit facility is scheduled to mature in September 2020,
but there were no borrowings drawn under the facility at June 30,
2019. Fitch views the firm's ability to continue managing its debt
maturity profile favorably.
REITs must generally distribute at least 90% of their net taxable
income, excluding capital gains, to shareholders each year.
However, iStar's liquidity position is further enhanced by its
ability to retain earnings, as it holds net operating loss (NOL)
carryforwards that can generally be used to offset ordinary taxable
income in future years. These NOLs begin to expire in 2029 and will
fully expire in 2036 if unused. iStar initiated a quarterly common
dividend, beginning 3Q18, of $0.09 per share, which was increased
to $0.10 per share beginning 2Q19. Fitch expects the company's
liquidity position to continue to benefit from the NOL carryfowards
prior to expiration.
In February 2019, iStar announced a redefined strategic focus,
which includes growing its ground lease business through its 66.5%
ownership in Safehold Inc. (SAFE) and refocusing its lending
business to provide one-stop capital solutions, combining the
ground lease product of SAFE with a first mortgage leasehold loan
from iStar. Fitch believes there is limited performance data on the
ground lease business given SAFE's short operating history, which
has been untested through a market cycle, although this is somewhat
mitigated by the seniority of ground lease investments.
On May 2, 2019, iStar announced that in light of its strategic
shift, Andrew Richardson has decided to step down as CFO and
president of the land portfolio. Additionally, in March 2019, iStar
announced the retirement of Vice Chairman Nina Matis, who had
served as Chief Investment Officer from April 2007 to February
2018. Fitch believes the recent management changes and uncertainty
around the CFO position have increased key person risk associated
with CEO Jay Sugarman, but recognizes the company's other executive
officers have sufficient industry experience. iStar noted on its
2Q19 earnings call that the firm intends to identify a new CFO by
the end of 2019.
iStar has been focused on opportunistically selling legacy assets,
reducing the book by 44% from Dec. 31, 2017 through June 30, 2019.
However, as part of the strategic shift, iStar has elected not to
move forward with the development of certain legacy assets in order
to free up resources to focus on the new strategy. Of the $969
million of remaining legacy assets at the end of 2Q19,
approximately $563 million (14% of the total portfolio) was
comprised of three legacy assets that iStar intends to develop or
hold over a longer period of time. iStar intends to monetize the
remaining $406 million of legacy assets, which includes around 30
to 40 assets, in the near term, thereby reducing legacy assets to
approximately 10%-15% of its total portfolio. Fitch believes that
the land portfolio has adversely influenced iStar's overall asset
quality given the illiquidity of these assets and the inconsistent
cash flow generation, and would therefore view the continued
reduction in exposure favorably.
At June 30, 2019, iStar's $4.0 billion portfolio (excluding cash
and other assets) consisted of real estate finance (21% of gross
carrying value), net lease properties (53%, of which 10% is the
firm's equity method investment in SAFE), land and development
properties (18%), operating properties (6%), and other assets (1%).
Operating properties and land and development should continue to
decline as a proportion of the portfolio as part of the firm's
strategic focus, which Fitch believes will improve the risk profile
of the portfolio. iStar will focus on growing its lending business,
which will primarily co-originate leasehold loans alongside SAFE
ground leases, and its net lease business.
iStar's loan portfolio has generally performed well since the
crisis with no losses incurred on loans originated since 2008.
Approximately $740 million of loans (91.8% of gross loans) at June
30, 2019 were performing and generated a 9.1% yield, down from 9.7%
a year ago due to the payoff of higher yielding loans in 2018. The
company's loan portfolio quality improved following the resolution
of the non-performing Hammons loan in 2Q18. The gross carrying
value of NPLs represented 8.2% of total gross loans in this segment
at 2Q19, compared to 6.8% at 2Q18 and down significantly from 18.4%
at YE 2017.
Fitch views the net lease real estate portfolio as a benefit to
overall asset quality since it provides cash flow stability.
iStar's net lease portfolio includes its equity investment in SAFE,
a publicly traded REIT focused exclusively on the ground lease
asset class, which completed its public offering in June 2017.
Ground leases generally represent ownership of the land underlying
CRE projects that is triple net leased by the fee owner of the land
to the owners/operators of the real estate projects built thereon.
iStar will continue to participate in the ground lease business
through its ownership of SAFE and will also offer leasehold loans
and leasehold equity to SAFE's tenants. Fitch views the increased
exposure to SAFE ground lease assets as an improvement in portfolio
risk, relative to legacy assets, given the senior position of
ground leases in the capital structure. Still, the performance of
iStar's investment in SAFE will be driven by SAFE's ability to grow
and generate consistent earnings over time.
iStar is entitled to a management fee of 1.0% of total SAFE equity
up to $1.5 billion, 1.25% for incremental equity of up to $3.0
billion, 1.375% for incremental equity of up to $5.0 billion, and
1.5% for incremental equity over $5.0 billion. Fees will be paid in
cash or in shares of SAFE common stock, at the discretion of SAFE's
independent directors. iStar's management fee from SAFE amounted to
$3.1 million in 1H19. iStar had waived management fees prior to
3Q18.
Following net losses in 2018 and 1Q19, iStar's earnings increased
significantly during 2Q19, resulting in $367 million of pre-tax net
income during the first six months of 2019. iStar's earnings in
2Q19 were largely driven by the firm closing on the previously
announced sale of seven cold storage properties leased to Preferred
Freezer, which generated a $220 million gain, and the purchase of
nine additional bowling centers from Bowlero, which generated a
$180 million gain as a result of iStar revaluing the properties
originally subject to the leases at fair market value.
While opportunistic asset sales have provided significant gains for
iStar in recent years, the reliance on income from sales has
resulted in earnings volatility. Fitch believes that earnings could
continue to benefit from opportunistic transactions in the near
term as iStar continues to recognize value from its existing
portfolio, but expects the firm to reduce its reliance on variable
gain income over time as the portfolio shifts into asset classes
that provide more stable cash flows.
iStar's earnings will be largely dependent on the pace of business
expansion and the performance of SAFE longer term. iStar accounts
for its investment in SAFE under the equity method of accounting,
and will therefore record a higher portion of SAFE's net income as
earnings to iStar following the increased investment in SAFE.
Additionally, the amendment to the management fee agreement in
January 2019 as well as the end of the fee waiver in 2Q18 should
provide earnings benefits as SAFE continues to grow. Management
expects to be able to realize material upside to the underlying
value of the SAFE portfolio in the marketplace. However, Fitch
believes that this could take some time to materialize given the
relatively short operating history of SAFE.
The Stable Rating Outlook reflects Fitch's expectations for
continued improvements in iStar's earnings and asset quality over
the outlook horizon. However, exposure to certain legacy assets
could continue to cause earnings volatility in the near term until
the portfolio is rotated into more consistent earning investments.
The Stable Outlook also reflects expectations for the maintenance
of appropriate leverage levels, sufficient liquidity and a heavily
unsecured funding profile.
The secured debt rating is two notches above iStar's Long-Term IDR
and reflects the collateral backing these obligations, indicating
superior recovery prospects for secured debtholders under a
stressed scenario.
The 'BB(EXP)' expected rating on the new senior unsecured notes is
equalized with the ratings assigned to iStar's existing senior
unsecured debt, as the new notes will rank equally in the capital
structure. The unsecured debt rating is one notch above iStar's
Long-Term IDR and reflects the availability of sufficient
unencumbered assets, which provide support to unsecured creditors,
and relatively low levels of secured debt in the firm's funding
profile. This profile indicates good recovery prospects for
unsecured debtholders under a stressed scenario. In addition, the
company adheres to a 1.2x unencumbered assets-to-unsecured debt
covenant, which provides protection to bondholders during periods
of market stress. Unencumbered asset coverage of unsecured notes
was approximately 1.8x at June 30, 2019, but coverage would be
lower on a stressed basis, which would contemplate declines in the
value of the company's unencumbered portfolio.
The preferred stock rating is three notches below iStar's Long-Term
IDR, reflecting that these securities are deeply subordinated and
have loss absorption elements that would likely result in poor
recovery prospects.
RATING SENSITIVITIES
IDR, SENIOR DEBT AND HYBRID SECURITIES
Positive rating momentum will depend on iStar's ability to
successfully execute on its efforts to monetize legacy assets and
redeploy proceeds in assets viewed as core under its new operating
strategy, thereby resulting in improved operating performance and a
reduced reliance on gain on sale income. Positive rating momentum
would also be conditioned upon continued growth and solid
performance in the SAFE business, consistent profitability, the
maintenance of sufficient liquidity and the maintenance of
Fitch-calculated leverage below 4.0x.
Negative rating pressure could arise if iStar is unable to execute
on its strategic plan, including monetizing additional legacy
investments and redeploying proceeds into new net lease and real
estate finance assets, thereby improving the firm's profitability
and resulting in a more a stable earnings profile. Negative rating
action could also be driven by material deterioration in the
quality of iStar's loan portfolio, a significant reduction in
long-term unsecured funding and/or a sustained increase in
Fitch-calculated leverage above 5.0x.
The secured debt rating, unsecured debt rating and preferred stock
ratings are sensitive to changes in iStar's Long-Term IDR as well
as changes in the firm's secured and unsecured funding mix and
collateral coverage for each class of debt. If secured debt were to
meaningfully increase as a proportion of the firm's debt funding
and/or unencumbered asset coverage of unsecured debt were to
decline, it is possible that the upward notching for the secured
debt and unsecured debt, relative to the IDR, could begin to
compress.
J & K LOGGING: Case Summary & 16 Unsecured Creditors
----------------------------------------------------
Debtor: J & K Logging, Inc.
PO Box 401
Fred, TX 77616
Business Description: J & K Logging, Inc. is a trucking company
providing freight transportation services.
Chapter 11 Petition Date: September 13, 2019
Court: United States Bankruptcy Court
Southern District of Texas (Houston)
Case No.: 19-35189
Judge: Hon. Jeffrey P. Norman
Debtor's Counsel: Russell Van Beustring, Esq.
THE LANE LAW FIRM
6200 Savoy Dr., Suite 1150
Houston, TX 77036
Tel: (713) 595-8200
Fax: (713) 973-7811
E-mail: russell@beustring.com
Total Assets: $1,323,905
Total Liabilities: $1,314,807
The petition was signed by Joshua Russell, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 16 unsecured creditors is available for free
at:
http://bankrupt.com/misc/txsb19-35189.pdf
JEFFERSON REALTY: Inks Settlement With Mortgagee
------------------------------------------------
Jefferson Realty Partners LLC filed an amended Chapter 11 plan and
accompanying amended Disclosure Statement to disclose that since
filing the initial plan and disclosure statement, the Debtor
negotiated the Settlement Agreement with the Mortgagee that will
facilitate payment in full for all creditors, and a
post-confirmation joint venture agreement between the Debtor's
Interest Holders and the Mortgagee under which the Property will be
transferred to a joint venture entity with a defined profit
participation waterfall among the Interest Holders.
That agreement is the cornerstone of the Plan. Most importantly,
under the Settlement Agreement, the only creditor impaired is the
Mortgagee.
As of this date, the Debtor's Interest Holders disagree on entering
into the Settlement Agreement and by extension, the Plan. Until
recently, Orazio Petito has acted as managing member. Under an
agreement produced to the undersigned by Lorenzo DeLuca, however,
Mr. Deluca has authority to assume managing member control. He has
exercised that authority to enter into the Settlement Agreement and
to propose the Plan. Mr. Petito's right to object is fully
preserved.
Class 4: General Unsecured Claims are unimpaired. Projected maximum
Allowed Claims total approximately $44,873. Payment in Cash of
Allowed Amount of each such Claim plus interest at the Legal Rate
through the payment date.
Class 2: 1308 Jefferson Capital LLC Claim are impaired and as
asserted totals approximately $2,078,727.72 as of June 30, 2019.
Entitled to joint venture participation as set forth in Settlement
Agreement annexed to Plan as Exhibit A.
Class 5: Interests Holders are impaired. Entitled to joint venture
participation as set forth in Settlement Agreement annexed to Plan
as Exhibit A.
Effective Date obligations under the Plan will be satisfied from
Exit Financing under the Settlement Agreement annexed to the Plan
and out of the funds otherwise to be paid to the minority member of
the Joint Venture pursuant to Section 5.2(a) of the Joint Venture
Agreement.
A full-text copy of the Amended Disclosure Statement dated
September 6, 2019, is available at https://tinyurl.com/y5z9wufo
from PacerMonitor.com at no charge.
A full-text copy of the Amended Plan dated September 6, 2019, is
available at https://tinyurl.com/y2d7chtl from PacerMonitor.com at
no charge.
A redlined version of the Amended Disclosure Statement dated
September 6, 2019, is available at https://tinyurl.com/y472lj5b
from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Mark A. Frankel, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
800 Third Avenue
New York, New York 10022
Telephone: (212) 593-1100
Facsimile: (212) 644-0544
About Jefferson Realty Partners
Jefferson Realty Partners LLC is a privately-held company engaged
in activities related to real estate. It is the fee simple owner
of a real property located at 1308 Jefferson Ave., Brooklyn New
York, valued by the company at $2.5 million.
Jefferson Realty Partners sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. N.Y. Case No. 18-44060) on July 15,
2018.
In the petition signed by Orazio Petito, member, the Debtor
disclosed $2.5 million in assets and $732,000 in liabilities.
Judge Elizabeth S. Stong presides over the case.
JIM PARKER: Unsecured Creditors to Get $2K for 20 Quarters
-----------------------------------------------------------
Jim Parker Farms, LLC, filed a Plan of Reorganization and
accompanying disclosure statement.
Class 6 Claimants (Holders of Allowed Unsecured Claims) are
impaired and consists of Allowed Unsecured Class 6 Claims against
the Debtor, including the portions of creditors' claims in excess
of the value of the collateral securing such claims or paid as a
secured claim under the Plan. In full and final satisfaction of the
Class 6 Claims, the Debtor shall pay to Class 6 Claimants,
quarterly installments of $2,000 each, to be shared pro rata among
allowed Class 6 Claims, for twenty (20) quarters. The quarterly
payments to Class 6 Claimants shall begin ninety (90) days
following the Effective Date or the date of the entry of a Final
Order allowing the Class 6 Claim.
The obligations under the Plan will be satisfied out of continued
business operations of the Reorganized Debtor and/or refinancing.
A full-text copy of the Disclosure Statement dated September 6,
2019, is available at https://tinyurl.com/y4vonare from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Susan B. Hersh, Esq.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 503-7070
Fax: (972) 503-7077
Email: susan@susanbhershpc.com
About Jim Parker Farms
Jim Parker Farms, LLC, based in Yantis, TX, filed a Chapter 11
petition (Bankr. N.D. Tex. Case No. 19-70125) on May 6, 2019. In
the petition signed by Zachary D. Parker, managing member, the
Debtor estimated up to $50,000 in assets and $1 million to $10
million in liabilities. The Hon. Harlin DeWayne Hale oversees the
case. Susan B. Hersh, P.C., serves as bankruptcy counsel to the
Debtor.
KAPKOWSKI ROAD: Moody's Alters Outlook on Ba2 Project Bonds to Pos.
-------------------------------------------------------------------
Moody's Investors Service affirms the Ba2 on $113.8 million
Kapkowski Road Landfill Reclamation Improvement District Project
Bonds, issued by the New Jersey Economic Development Authority. The
outlook has been revised to positive from stable.
RATINGS RATIONALE
The Ba2 rating reflects the healthy cash flow from the Mills at
Jersey Gardens Mall, whose payment-in-lieu-of-tax (PILOT) secures
the bonds. Broad changes in consumer behavior shifting away from
traditional brick and mortar to online retail platforms have not
impacted the financial performance of mall property. Tenant sales
remain strong year-over-year which is underpinned by strong
property management by JG Elizabeth II, LLC (JGE II) as a wholly
owned subsidiary of Simon Property Group, L.P. (Senior Unsecured,
A2, Stable). The mall has a diverse and stable retail tenant base
and an accessible location adjacent to the New Jersey Turnpike and
Newark-Liberty International Airport, with direct transportation
links to New York City. The credit is challenged by the absence of
a debt service reserve fund in lieu of an advancing agreement by a
Midland Loan Services (NR) to provide timely payment of debt
service.
The PILOT payments commenced August 2004 and will terminate on the
date of the final payment of the bonds in February 2031. The FY
2018 PILOT payment is just below $3.0 million quarterly, totaling
$11.9 million annually. PILOT payments increase by 10% every 5
years, next increase is scheduled for May 1, 2021. Moody's
calculates 5.67x coverage of the PILOTs pledged to debt service in
FY 2018, up from 4.60x in FY 2017 and 4.14x in FY 2016. The mall
has a $350 million interest-only 3.83% mortgage note with Wells
Fargo, subordinate to the PILOTs. The mortgage is secured by the
investment property and related rents and leases, maturing November
1, 2020. Simon does not expect difficulty in refinancing.
RATINGS OUTLOOK
The positive outlook is based on its expectation that Jersey
Gardens will continue to outperform the broader brick-and-mortar
retail segment, resulting in growth in revenues cashflows to
support the PILOTs and underlying mortgage. The outlook also
factors in the ability to refinance the mortgage in 2020.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Demonstration that new market entrants to the competitive
landscape result in no sustained material impact on cashflows
- Refinancing of the mortgage note due in 2020
- Long term improvement in the liquidity position and/or the
creation of a debt service reserve fund with adequate funding
- Shift in industry conditions favoring brick-and-mortar retail
or tenants that are less exposed to competition
FACTORS THAT COUL LEAD TO A DOWNGRADE
- A change in competitive market position or tax environment
which results in lower occupancy rates or sales
- A decline in financial performance such that PILOT coverage
falls below 2.0x on a sustained basis
LEGAL SECURITY
The bonds are payable solely from PILOTs made by JGE II to the City
of Elizabeth, which has assigned the payment to the bondholders'
trustee. If there is a shortfall of PILOT payments, which are
remitted quarterly to a trustee, the PILOT's total value will not
be accelerated. The Landfill Improvement Act of NJ provides for
imposition of a special assessment as a back-up taxing mechanism to
the lien of PILOTs. The city's Assessment Ordinance prescribes the
lien on the special assessment as $180 million and requires it to
be pay so long as the bonds are outstanding, or 30 years, whichever
is less. There is no explicit rate covenant but the deal is
structured so that the fixed PILOT payments provide sum sufficient
debt service coverage.
PROFILE
JG Elizabeth II, LLC was formed for the purpose of operating and
holding the Mills at Jersey Gardens for long-term investment and is
a wholly-owned subsidiary of Simon Property Group, L.P. JG
Elizabeth II, LLC is responsible for quarterly PILOTs to an
affiliate, New Jersey Metromall Urban Renewal LLC, who is legally
required to pay the PILOTs to the trustee. Simon replaced Glimcher
Realty as owner and operator of the mall in January 2015.
The Mills at Jersey Gardens is an enclosed two-level,
value-oriented fashion and entertainment mega-mall located in
Elizabeth, New Jersey with a gross leasable area of approximately
1.3 million square feet. It is located approximately three miles
from Newark International Airport and 15 miles from Manhattan at
Exit I3A of the New Jersey Turnpike in an urban enterprise zone
with a reduced sales tax rate. Advertised as "New Jersey's Largest
Outlet Mall," Jersey Gardens has over 200 stores and is located in
northern New Jersey and the New York City metro area. Construction
was completed in late 1999. Jersey Gardens is anchored by sixteen
major retailers: Gap Factory, Nike Factory Store, Old Navy Outlet,
Tommy Hilfiger, Forever21, Camile La Vie, Century 21 Department
Store, Cohoes, Marshalls, Saks Fifth Avenue OFF 5TH, Neiman Marcus
Last Call, Burlington, Bed Bath & Beyond, VF Outlet, and Modell's
Sporting Goods.
LA TRINIDAD ELDERLY: Court Dismisses Chapter 11 Bankruptcy Petition
-------------------------------------------------------------------
Bankruptcy Judge Enrique S. Lamoutte issued an order granting Loiza
Ponce Holdings, LLC's motion to dismiss the chapter 11 bankruptcy
case of Debtor La Trinidad Elderly LP SE.
Loiza Ponce alleges that the petition was filed in bad faith as the
purpose for filing the same was solely to stay the judicial sale of
its real estate property and that Debtor lacks any reasonable
likelihood of rehabilitation. Debtor opposes the motion to dismiss
alleging that it has complied with all requirements regarding the
filing of schedules, statement of financial affairs, monthly
reports of operation, a disclosure statement and chapter 11 plan.
Debtor also challenges the validity of Loiza Ponce's secured claim
as the forbearance agreement which was entered by the debtor
regarding the secured loan is null and void for not being
authorized by the entity required to do so. Debtor also alleges
that the petition was filed to protect its main asset from
foreclosure. Loiza Ponce replied alleging that the instant
petition, as well as the prior petition were exclusively filed to
thwart the execution of the pending judicial sale of Debtor's only
asset, the real property in which the elderly housing project sits.
Regarding the nullity of the forbearance agreement Loiza Ponce
alleges that the issue was presented before the state court and
Debtor is now estopped by its own acts as it created the situation
which it now challenges.
It is the debtor's position that the Forbearance and Settlement
Agreement subscribed on October 28, 2016 and the complementary
documents are null ab initio and invalid because the limited
partner 1602 CATS #1 Investments, LLC did not authorize any of
those transactions in conformity with the Partnership Agreement.
With this contention as a basis, the Debtor has submitted a chapter
11 plan which classifies Loiza Ponce (Class 5) as a creditor
holding a disputed claim as to both the nature and amount owed,
fixed at no more than $3,682,427. Loiza Ponce filed a proof of
claim as a secured creditor in the amount of $6,082,818.91.
Distribution to Loiza Ponce under the proposed chapter 11 plan
hinges on a final determination of an adversary proceeding
challenging the nature of the claim and an objection to claim
opposing the amounts claimed by as secured. The Debtor has not
filed an adversary proceeding against Loiza Ponce nor an objection
to its proof of claim. Consequently, the secured proof of claim
filed by Loiza Ponce is deemed allowed. Moreover, the claim is
based on a final judgment in a state court action, which this court
may not revisit under the Rooker Feldman doctrine.
The undisputed value of the real property which is subject to Loiza
Ponce's lien is $3,500,000. Therefore, Loiza Ponce is an under
secured creditor.
The holders of the lien over the Debtor's real property, CPG/GS PR
NPL LLC and now Loiza Ponce have tried to collect on the amounts
owed by the Debtor and foreclose the real property since Nov. 1,
2012. The state court has entered a final judgment in favor of the
plaintiff secured creditor, has issued execution orders, writs of
execution, and has scheduled a public sale for Sept. 26, 2018 and
April 3, 2019. The Debtor filed the first chapter 11 petition on
Sept. 25, 2018 and the current petition on April 2, 2019, that is
the day before each of the dates for which the public sale of the
property was scheduled.
The Debtor is not making current payments to the secured creditor
and is presumptively reserving the amounts in its bank account. The
repayment terms proffered in the chapter 11 plan are not clear and
premised on weak legal basis. Thus, any positive cash balance in
the monthly reports of operations must be adjusted to conform to
this reality.
The court notes that the Debtor does not have employees and is
operated by a state court ordered judicial administrator, Star
Management Corporation.
After considering the facts in light of the applicable law, the
court finds that the instant bankruptcy petition was filed solely
for the purpose of forestalling the imminent public sale of its
real property. The court further finds that the Debtor has not
shown a likelihood to have a chapter 11 plan within a reasonable
time in view of its treatment of the secured claim held by Loiza
Ponce. Therefore, the court concludes that the petition was not
filed in good faith, that is, for a valid bankruptcy purpose.
In view of the foregoing reasons, the motion to dismiss filed by
Loiza Ponce is granted and the instant bankruptcy petition is
dismissed.
A copy of the Court's Opinion and Order dated Sept. 13, 2019 is
available at https://tinyurl.com/yxpfmww7 from Pacermonitor.com at
no charge.
About La Trinidad Elderly LP SE
San Juan, Puerto Rico-based La Trinidad Elderly LP SE, which owns
an affordable residential unit apartment building located at
Castillo Street #11, Ponce, Puerto Rico, filed a voluntary Chapter
11 petition (Bankr. D. P.R., Case No. 19-01830) on April 2, 2019.
The Company previously sought bankruptcy protection on Sept. 25,
2018 (Bankr. D. P.R. Case No. 18-05549).
The case is assigned to Hon. Enrique S. Lamoutte Inclan.
The Debtor's Counsel is Wigberto Lugo Mender, Esq., at Lugo Mender
Group, LLC, in Guaynabo, Puerto Rico.
At the time of filing, the Debtor had estimated assets of $1
million to $10 million and estimated liabilities of $10 million to
$50 million.
LEVEL 3 FINANCING: Fitch Rates New $500MM Unsec. Notes 'BB'
-----------------------------------------------------------
Fitch Ratings assigned a 'BB'/'RR2' rating to Level 3 Financing,
Inc.'s offering of $500 million of senior unsecured notes due 2027.
Level 3 Financing is an indirect wholly owned subsidiary of
CenturyLink, Inc. Net proceeds from the offering, together with
cash on hand, are expected to be used for general corporate
purposes, including the redemption of any of the Level 3 Financing
6.125% notes due 2021 and a portion of the Level 3 Parent, LLC
5.75% notes due 2022. As of Sept. 10, 2019, there were $240 million
of the 6.125% notes due 2021 outstanding and $600 million of the
5.75% notes due 2022 outstanding.
KEY RATING DRIVERS
Alternatives for Consumer Business: CenturyLink, Inc. disclosed in
May 2019 it hired an advisor to consider strategic alternatives for
its Consumer segment. No details regarding the completion of the
review or the structure of any potential transactions were
disclosed. The Consumer segment produced 25.4% of the company's
revenue in 2Q19. While alternatives are under review, Fitch does
not expect any changes to company debt-reduction goals, operations
or investments in the Consumer segment.
If a divestiture of the Consumer segment or another form of
transaction occurs at the conclusion of the review, there could be
an effect on CenturyLink's credit profile. This would depend on the
ultimate capital structure of the company and an assessment of
CenturyLink's business risk profile at the time. A divestiture
without a corresponding reduction in debt, or nominal debt
reduction, would have the most negative result on the company's
credit metrics. There are also unknown effects within the company's
capital structure, as issuing entities such as Qwest Corporation
(QC) and Embarq Corporation derive a significant amount of revenue
from the Consumer segment, given the historical make up of their
businesses.
Dividend Reduction Accelerates Delevering: The company announced in
February 2019 a reduction of approximately 54% in the per-share
common stock dividend, reducing the annual amount paid to
approximately $1.08 billion from $2.30 billion. Additional FCF of
more than $1.2 billion stemming from the reduction will be directed
to a faster pace of debt repayment over the next three years than
previously expected, leading to a quicker delevering pace. Company
FCF guidance for 2019 indicates post-dividend FCF of just more than
$2 billion and approximately $2 billion annually is expected to be
directed to debt reduction over the next three years.
Lowered Leverage Target: Concurrent with the review of the Consumer
segment, CenturyLink reaffirmed its early 2019 commitment to a
lower and narrower net target leverage range. During the next few
years, the company is aiming for a 2.75x-3.25x net debt/adjusted
EBITDA leverage range, down from a previous target range of
3.0x-4.0x. Fitch is encouraged by the revised capital-allocation
policies and believes this will better position the company in the
long term.
New Cost Reductions: CenturyLink achieved its targeted $850 million
of run-rate synergies arising from the Level 3 Communications, Inc.
merger by YE 2018, approximately two years sooner than originally
planned. New operational initiatives were set in motion in early
2019, aiming for an annualized $800 million-$1 billion of
additional EBITDA-improving initiatives in a three-year period, at
a cost of $450 million-$650 million. Through 2Q19, CenturyLink
states it achieved a run rate of $290 million in cost savings.
CenturyLink indicated these initiatives, combined with the faster
pace of debt reduction, will enable the company to get within its
target range within three years.
Execution Risk: Fitch believes the dividend-reduction and
EBITDA-improvement initiatives signal support for the credit
profile, although the EBITDA initiatives are not without execution
risk. Fitch believes significant debt reductions are achievable,
but there is some execution risk in reaching the full amount
targeted by CenturyLink, as part of the sustained FCF levels will
depend on successful execution of EBITDA-improvement initiatives.
Key Competitor in Business Services: In an industry where scale is
a key factor, CenturyLink is a large competitor and the
second-largest operator serving business customers, after AT&T Inc.
(A-/Stable), and modestly larger than the business customer
operations of Verizon Communications Inc. (A-/Stable).
CenturyLink's network capabilities, particularly its strong
metropolitan network and a broad product and service portfolio
emphasizing IP-based infrastructure and managed services, provide
the company with a solid base to grow enterprise segment revenue.
Secular Challenges Facing Telecoms: In Fitch's view, CenturyLink
continues to face secular challenges similar to other wireline
operators in the residential portion of its business. Following the
acquisition of Level 3, the consumer business has become a much
smaller part of the overall business and accounted for
approximately 25.4% of revenue in 2Q19, down from 35% in 2016.
Fitch expects this percentage to continue to decline over time,
given legacy revenue trends and a more targeted investment strategy
in the segment.
Parent-Subsidiary Relationship: Fitch linked the ratings of
CenturyLink and Level 3 Parent, LLC based on strong operational and
strategic ties.
DERIVATION SUMMARY
CenturyLink has a relatively strong competitive position based on
the scale and size of its operations in the enterprise/business
services market. In this market, CenturyLink has a moderately
smaller position, in terms of revenue relative to AT&T, and is
slightly larger than Verizon. All three companies have an advantage
with national or multinational companies, given extensive
footprints in the U.S. and abroad. CenturyLink also has a larger
enterprise business than wireline peers, Windstream Services, LLC
and Frontier Communications Corporation (B-/Stable).
AT&T and Verizon maintain lower financial leverage, generate higher
EBITDA margins and FCF and have wireless offerings providing more
service diversification compared with CenturyLink. FCF improved at
CenturyLink due to the dividend reduction and cost synergies.
CenturyLink has a higher FCF margin than Windstream or Frontier.
Following the acquisition of Level 3 Communications, CenturyLink
has lower exposure to the secularly challenged residential market
compared with wireline peers, Frontier and Windstream. Within the
residential market, incumbent wireline operators face wireless
substitution and competition from cable operators with
facilities-based triple-play offerings, including Comcast Corp.
(A-/Stable) and Charter Communications Inc. Fitch rates Charter's
indirect subsidiary, CCO Holdings, LLC at 'BB+' with a Stable
Outlook. Cheaper alternative offerings, such as voice over internet
protocol and over-the-top video services, provide additional
challenges. Incumbent wireline operators had modest success with
bundling broadband and satellite video service offerings in
response to these threats.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
Fitch assumes revenues will decline in the low-single-digits range
over the forecast horizon. Fitch assumed for 2019 a similar pace of
decline as the 2.8% pro forma decline in 2018. The rate of decline
slows after 2019 as the company continues to exit low margin
products and service lines.
EBITDA margins are expected to be around 40% in 2019, slightly
higher than in 2018. Thereafter EBITDA margins improve into the low
40% area as cost initiatives continue. Fitch's assumptions
regarding additional cost savings are slightly below the $800
million-$1 billion range targeted by the company.
Capex is expected to be in line with the company's capex guidance
of approximately $3.7 billion for 2019 and remain relatively flat
in the forecast period.
Higher FCF resulting from the early 2019 dividend reduction are
primarily directed to delevering.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Fitch expects gross leverage (total debt with equity
credit/operating EBITDA) to remain at or below 3.0x (FFO net
leverage of 3.5x) while consistently generating positive FCF in the
midsingle digits.
-- The company will need to demonstrate consistent EBITDA and FCF
growth.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A weakening of CenturyLink's operating results, including
deteriorating margins and consistent midsingle-digit or greater
revenue erosion brought on by difficult economic conditions or
competitive pressure that the company is unable to offset through
cost reductions.
-- Discretionary management decisions including, but not limited
to, execution of M&A activity that increases gross leverage beyond
4.5x (FFO net leverage of 5.0x) in the absence of a credible
deleveraging plan.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: CenturyLink's total debt was $35.1 billion as
of June 30, 2019, and readily available cash totaled $410 million.
To provide liquidity, a $2.17 billion senior secured revolving
credit facility is in place, of which there was $650 million drawn
on the facility as of June 30, 2019. The revolving facility expires
Nov. 1, 2022. Fitch expects FCF, or cash flow from operations less
capex and dividends, to be in the $1.8 billion-$2.0 billion range
in 2019, after taking into consideration costs to achieve
additional expense savings. Fitch's assumptions are modestly lower
than CenturyLink's guidance of approximately $2.0 billion-$2.3
billion. Fitch expects FCF to be around $2 billion in 2020, as cost
savings take hold and some savings are generated by lower interest
costs.
CenturyLink has made solid progress thus far in 2019 on its debt
reduction plans. In the first half of 2019, debt was reduced by
more approximately $1.3 billion through a tender offer, repayment
through maturities and amortization, and through open market
purchases. In August 2019, the company completed a partial
redemption of $400 million of 6.125% senior unsecured notes due
2021 at Level 3 Financing, Inc. Debt will be further reduced to the
extent cash is used to redeem, in the current transaction, the
Level 3 Financing 6.125% notes due 2021 and a portion of the Level
3 Parent, LLC 5.75% notes due 2022.
CenturyLink's secured credit facility benefits from secured
guarantees by Qwest Communications International, Inc. (QCII);
Qwest Services Corporation; CenturyTel Investments of Texas, Inc.;
CenturyLink Communications, LLC; and CenturyTel Holdings, Inc. A
stock pledge is provided by Wildcat HoldCo, LLC, the parent of
Level 3 Parent. The credit facility is guaranteed on an unsecured
basis by Embarq and Qwest Capital Funding, Inc. The largest
regulated subsidiary, QC, does not guarantee CenturyLink's secured
facility, nor does Level 3 Parent.
The secured revolving facility and Term Loan A limit CenturyLink's
debt/EBITDA to no more than 5.00x, which steps down to 4.75x after
Nov. 1, 2019. The credit agreement requires cash interest coverage
to be no less than 2.0x and includes incurrence covenants for Level
3 Parent and QC of 3.75x and 1.90x, respectively. In terms of
repayment, the company is subject to an excess cash flow sweep of
50%, with stepdowns to 25% and 0%, at total leverage of 3.5x and
3.0x, respectively. The excess cash flow calculation provides
credit for voluntary prepayments and certain other investments.
LIGHTHOUSE PLUMBING: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Lighthouse Plumbing & Mechanical, LLC
d/b/a Lighthouse Plumbing
1201 KAS Drive, Suite D
Richardson, TX 75081
Business Description: Lighthouse Plumbing & Mechanical, LLC is a
building finishing contractor in Richardson,
Texas.
Chapter 11 Petition Date: September 13, 2019
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Case No.: 19-42516
Judge: Hon. Brenda T. Rhoades
Debtor's Counsel: Michael S. Mitchell, Esq.
DEMARCO-MITCHELL, PLLC
1255 West 15th Street, 805
Plano, TX 75075
Tel: 972-578-1400
Fax: 972-346-6791
Email: mike@demarcomitchell.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Terrance J. Wooten, president and
managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/txeb19-42516.pdf
LIONHEART EVENT: Pursues Chapter 7 Liquidation
----------------------------------------------
Pittsburgh, Pennsylvania-based promotions company LionHeart Event
Group, LLC, filed a petition seeking relief under Chapter 7 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 19-23630) on Sept. 13,
2019.
LionHeart is estimated to have between $500,000 and $1 million in
liabilities, and less than $50,000 in assets, according to
bankruptcy petition signed by company President Derek Weber.
According to the filing, no funds will be available to unsecured
creditors after any administrative expenses are paid.
The company says it has less than 50 employees.
LionHeart Event Group's attorneys:
Brian C. Thompson
Thompson Law Group, P.C.
Tel: 724-799-8404
E-mail: bthompson@thompsonattorney.com
The Pittsburgh Three Rivers Regatta, named for the confluence of
the Allegheny, Monongahela and Ohio Rivers at Pittsburgh, is an
annual motorboat and river festival held in Pittsburgh,
Pennsylvania, United States. The festival was first held in 1978.
LionHeart was the promotion company hired to put together this
year's regatta.
TribLive.com recounts that in July, LionHeart officials said they
were forced to cancel the regatta, scheduled for the first weekend
of August, because LionHeart misled the regatta's board and the
city about payments, insurance and other details. It was the first
time the regatta had been cancelled in its history.
According to TribLive.com, the Allegheny County Sheriff's Office is
suing LionHeart in county court, claiming the company owes nearly
$33,000 for security services it provided during the 2018 regatta
and the EQT Flashes of Freedom Celebrate America fireworks display
on July 4.
The regatta, according to TribLive, was conducting an audit to
determine how LionHeart spent event revenue provided mainly by
corporate sponsors.
LOGISTICS BUDDY: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on Sept. 12 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Logistics Buddy Transportation,
LLC.
About Logistics Buddy
Logistics Buddy Transportation, LLC, a cargo and freight company
based in Sioux Falls, S.D., sought Chapter 11 protection (Bankr.
D.S.D. Case No. 19-40294) on July 5, 2019. The Debtor's assets as
of the petition date range from $500,000 to $1 million, and its
liabilities range from $1 million to $10 million. The case is
assigned to Hon. Charles L. Nail Jr. Gerry & Kulm Ask, Prof. LLC,
led by partner Clair R. Gerry, Esq., is the Debtor's legal counsel.
MAYFLOWER COMMUNITIES: PCO Files 1st Supplemental Report
--------------------------------------------------------
Susan N. Goodman, as Patient Care Ombudsman for Mayflower
Communities, Inc., filed a First Supplemental Report in
anticipation of a September confirmation hearing.
During the interim reporting cycle, the PCO remained in contact
with the Plaza Administrator. The Debtor had a Survey completed by
the Indiana State Department of Health and shared the survey
findings to the PCO.
On August 8, 2019, the Debtor underwent a life safety and emergency
preparedness survey by the same state agency.
The PCO will remain engaged on the three survey findings (none of
which were associated with substandard quality of care) as
corrective actions are completed and accepted by the survey agency.
Therefore, no concerns noted and presented a data percentage format
as internal quality metric tracking through July 2019.
The percentages appeared consistent month-over-month. Fall data was
slightly increased with falls-with-injury data remaining flat.
Position vacancies are consistent with that reported in PCO's
Second Report.
A full-text copy of the PCO's 1st Supplemental Report is available
at https://tinyurl.com/y2tff8q6 from PacerMonitor.com at no
charge.
The PCO can be reached at:
Susan N. Goodman (AZ Bar No. 091483)
PIVOT HEALTH LAW, LLC
P.O. Box 69734
Oro Valley, AZ 85737
Phone: (520) 744-7061
Fax: (520) 575-4075
Email: sgoodman@pivothealthaz.com
Counsel for the PCO:
James L. Sowder
THOMPSON COE COUSINS & IRONS, L.L.P.
700 N. Pearl St. | 25th Floor
Dallas, Texas 75201
Phone: (214) 871-8253
Fax: (214) 871-8209
Email: jsowder@thompsoncoe.com
About Mayflower Communities
Mayflower Communities, Inc. --
https://www.thebarringtonofcarmel.com/ -- operates The Barrington
of Carmel a senior living retirement community in Carmel, Indiana.
Mayflower provides nursing care, memory support, rehabilitation,
retirement home, assisted living, and independent living.
Mayflower Communities sought Chapter 11 relief (Bankr N.D. Tex.
Case No. 19-30283) on Jan. 30, 2019, estimating $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Harlin DeWayne Hale oversees the case.
DLA Piper LLP (US), led by Andrew Ball Zollinger and Thomas R.
Califano, and Rachel Nanes, serve as the Debtor's counsel. The
Debtor also tapped Ankura Consulting Group, LLC as restructuring
advisor; Larx Advisors, Inc. as financial advisor; Cushman &
Wakefield U.S., Inc. as investment banker; and Donlin Recano &
Company, Inc. as claims agent.
The Office of the Trustee appointed an official residents'
committee on Feb. 11, 2019. The residents' committee tapped
Neligan LLP as its legal counsel.
MERITAGE HOMES: S&P Alters Outlook to Pos., Affirms 'BB' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on Scottsdale, Ariz.-based
real estate development company Meritage Homes Corp. (Meritage) to
positive from stable and affirmed its 'BB' issuer credit rating. At
the same time, S&P also affirmed its 'BB' issue-level rating on the
company's senior unsecured borrowings.
S&P's outlook revision to positive reflects Meritage's deployment
of improved operating profits into lowering its debt. Even as
Meritage further expands its asset base into the coming year with a
greater proportion of affordably priced homes, S&P expects the
homebuilder to reduce debt below the $1.0 billion mark by
late-2020. Over these next 12 to 15 months, the rating agency
projects annualized EBITDA to remain at or slightly above $400
million, resulting in leverage narrowing further to around 2.5x.
The outlook is positive based on S&P's view that Meritage will
continue to sustain debt to EBITDA below 3x. Over the next 12
months, S&P expects that Meritage will continue to expand its
platform with an emphasis on entry-level product, maintain its
gross margin around 21%, and further trim overall debt.
"We would upgrade Meritage during the next year if leverage remains
below 3x, even amid further moderation in new home demand. Under
this scenario, the company would need to sustain EBITDA margins at
close to 11.0%, on stable revenues, and keep debt around $1.0
billion. We could also consider an upgrade if the company were to
expand its platform such that overall market share significantly
improved, and without material diminution of its credit profile,"
S&P said.
"We could revise the outlook to stable if we thought debt to EBITDA
would rise back above 3x. This could happen if Meritage reversed
recent profitability improvements in the Eastern region, if it
endured further softening in California markets, or if a sharply
weaker macro-environment contributed to a 40% decline in our
12-month EBITDA forecasts, to less than $250 million," the rating
agency said.
METRONET SYSTEMS: Moody's Assigns B3 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating and
a B3-PD probability of default rating to MetroNet Systems Holdings,
LLC, a subsidiary of MetroNet Holdings, LLC. Concurrently, Moody's
assigned a B2 rating to the company's senior secured first lien
facilities, which consist of a $55 million revolver and a $240
million term loan. The financing will also include an $85 million
senior secured second lien facility (unrated). The proceeds will be
used to refinance existing indebtedness, fund a distribution to the
Development Group, fund capital expenditures and pay related fees
and expenses. The outlook is stable.
Assignments:
Issuer: MetroNet Systems Holdings, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Gtd Senior Secured 1st lien Term Loan, Assigned B2 (LGD3)
Gtd Senior Secured 1st lien Revolving Credit Facility, Assigned
B2 (LGD3)
Outlook Actions:
Issuer: MetroNet Systems Holdings, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The B3 CFR reflects (1) the small scale of the company relative to
other fiber, cable and telecom companies, some of which compete in
MetroNet's markets; (2) the company's aggressive financial policy
as evidenced by high leverage (Moody's adjusted debt to EBITDA) of
about 6.8x that Moody's projects for 2019; (3) the large
distributions to DevCo that will be used to fund the overall
company's growth strategy which relies on building out its fiber
footprint and expanding to new markets; (4) the competitive
environment MetroNet operates in, which includes large-scale
telecom and cable companies providing comparative services to
residential and commercial customers.
MetroNet's B3 CFR also reflects (1) the high quality of its 100%
fiber-to-the-premises network which limits maintenance capex needs
in its established markets and allows the company to remain
attractive to new subscribers who value broadband speed; (2) high
profitability of the company's products with an estimated Moody's
adjusted EBITDA margin in the mid 40% for FYE19; (3) good broadband
subscriber growth and consistently low churn.
MetroNet provides fiber-based high-speed broadband, video and voice
services to residential and commercial customers in
small-to-mid-sized communities in the Midwest. Through its 100%
fiber-to-the-premises network, it is able to offer reliable speeds
of up to 1 GB which allows it to compete at the top of current
speed offerings. MetroNet is typically mostly present in markets
where it is the only provider of fiber-based broadband with its
competitors in those markets made up of cable and telecom
operators.
While operating in Tier 2 and Tier 3 markets means MetroNet is able
to achieve high penetration rates, it also restricts meaningful
scale.
The company's capex includes some growth capex but only in areas
that are already covered by its footprint. Any actual speculative
growth of the network is funded through DevCo. The process of
MetroNet funding DevCo is governed by a maximum investment. As
DevCo's developments grow and start generating EBITDA, these are
transferred to MetroNet and availability under the investment
basket is freed-up. There is currently no financial debt at DevCo
and the ratings assume there will be no material amount of debt
raised at that entity going forward.
MetroNet has an adequate liquidity profile which is supported by a
$55 million revolver which Moody's expects the company will draw on
in the coming 24 months to fund DevCo's growth capex. The revolver
and first lien term loan are expected to have a maximum net total
leverage ratio that cannot exceed 9.25x, and the second lien term
loan is expected to have a maximum net total leverage ratio that
cannot exceed 10.15x. Moody's expects the company to maintain ample
cushion under both covenants. The company's liquidity profile is
also supported by the company's long dated maturity profile.
Moody's expects MetroNet can adequately address basic cash
obligations with internally generated cash flow but will remain
reliant on the revolver to fund DevCo's growth capex.
MetroNet's B3-PD PDR, at the same level as the CFR, reflects its
assumption of a 50% recovery rate, as is customary for capital
structure made up of a mixed priority of claims. The capital
structure also includes unrated claims for trade payables and lease
rejection claims. The senior secured first lien facilities are
rated B2, one notch above the CFR given their secured, priority
first lien claim on material owned property and assets and
substantial lift provided by the senior secured second lien term
loan. The facilities will be guaranteed by Holdings, DevCo,
Inter-Metro Fibernet, LLC, and all existing and future material
direct and indirect subsidiaries of DevCo and MatureCo.
The stable outlook reflects Moody's expectations that the company
is likely to operate at high leverage of around 6.5x over the next
12-18 months as the company utilizes its revolver to fund
distributions for capital expenditure at DevCo. The stable outlook
also reflects Moody's views that MetroNet's broadband subscriber
growth will continue.
What could change the rating up
Given the company's scale, upward pressure is limited but could
develop should MetroNet's Moody's adjusted debt/EBITDA decrease to
below 5.5x on a sustainable basis on the back of a successful
implementation of the company's strategy to continue developing new
markets through success-based and build-out capex plans that will
grow EBITDA. An upgrade would also require the company to maintain
a good liquidity profile.
What could change the rating down
Downward pressure on the rating could arise should Moody's adjusted
debt/EBITDA increase above 6.5x on a sustainable basis or should
the company's liquidity deteriorate.
The principal methodology used in these ratings was Communications
Infrastructure Industry published in September 2017.
Headquartered in Evansville, Indiana, MetroNet provides high-speed
broadband, video and voice services over a 100%
fiber-to-the-premises network serving residential and commercial
customers.
MONOTYPE IMAGING: Moody's Assigns B3 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned first-time ratings for Monotype
Imaging Holdings Inc., including a B3 Corporate Family Rating, a
B3-PD Probability of Default Rating, and a B2 rating for the
company's proposed senior secured first lien bank credit facility.
The outlook is stable.
Financial sponsor HGGC has entered into an agreement to acquire a
controlling majority stake in Monotype at an $863 million
enterprise value (9.1x PF Mgmt. Adj. EBITDA of $95 million) in a
take-private transaction. The acquisition will be financed with a
$50 million first lien senior secured revolver (undrawn at close),
a $440 million first lien term loan, a $135 million second lien
term loan (unrated), and $298 million of new cash equity.
"Very high execution risk, given the need to continue the
transition to an enterprise sales model while also attempting to
extract substantial cost savings, and elevated initial leverage
drove the assignment of the B3 CFR," according to Harold Steiner,
Moody's lead analyst for Monotype. "Limited covenant protections
and a large portion of material IP held overseas only adds to its
concerns," finished Steiner.
Moody's took the following rating actions:
Assignments:
Issuer: Monotype Imaging Holdings Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Gtd Senior Secured First Lien Term Loan, Assigned B2 (LGD3)
Gtd Senior Secured First Lien Revolving Credit Facility, Assigned
B2 (LGD3)
Outlook Actions:
Issuer: Monotype Imaging Holdings Inc.
Outlook, Assigned Stable
Marvel Merger Sub, Inc. will be the initial borrower under the
credit facilities. Following the consummation of the transaction,
Monotype Imaging Holdings Inc. will be the surviving entity and
final borrower.
RATINGS RATIONALE
Monotype's B3 CFR broadly reflects a business model that remains in
transition and high leverage following the buyout by HGGC. The
company is being taken private as it is transitioning from
declining and slow growth sales channels to an enterprise sales
model. Opening leverage of 7.1x (Moody's-adjusted debt-to-EBITDA,
not giving credit for the pull-forward of $18 million of cost
savings), a plethora of free substitutes, and its third wave of
restructuring activities in as many years, threaten its transition
efforts. Nevertheless, the company has increasingly converted its
license revenues from a perpetual to subscription-based sales
model, improving its overall revenue stability. While near-term
free cash flow generation will be constrained by elevated working
capital needs and restructuring costs, run-rate free cash flow
should be eventually healthy in the $25 to $30 million range come
2021. A track record of successfully taking out cost also supports
Moody's view that planned cost savings are achievable, and will
result in leverage declining into the mid- to low-6.0x range by the
end of 2020.
The stable outlook reflects Moody's expectation for flat to
slightly negative revenue growth over the next 12 months, robust
earnings growth owing to the successful implementation of cost
savings, and breakeven to modestly positive free cash flow.
The ratings could be upgraded if cost savings are enacted
successfully, enterprise sales continue to grow while the other
segments stabilize, and the company commits to more conservative
financial policies. Quantitatively, this could be represented by
debt-to-EBITDA sustained below 6.0x, EBITA-to-Interest sustained
above 2.0x, and FCF-to-debt sustained around 5%.
The ratings could be downgraded if revenues or earnings decline,
cost savings benefits fail to be realized, liquidity deteriorates,
or if financial policies become more aggressive. This could be
exemplified by debt-to-EBITDA sustained above 7.5x,
EBITA-to-interest sustained below 1.25x, or FCF-to-debt sustained
below 1%.
The first lien credit facility is expected to contain covenant
flexibility for transactions that could adversely affect creditors,
including initial incremental facility capacity of up to $92
million, the ability to release a guarantee when a subsidiary is
not wholly-owned, and step downs in the asset sale prepayment
requirement to 50% and 0% if the First Lien Leverage Ratio is equal
to or less than 4.0x and 3.5x, respectively. The company will be
able to add back run-rate cost savings to EBITDA for a period of up
to 24 months, subject to a cap of 25%. First lien lenders will
benefit however from a "blocker" provision which will restrict the
transfer of Material IP into an unrestricted subsidiary.
While approximately 77% of the company's EBITDA is generated from
U.S. entities, a large proportion of the company's intellectual
property will be held by non-guarantors. This includes 57% of the
company's trademarks, 55% of its patents, and 33% of its
copyrights. Moody's views this as a considerable structural
weakness as Moody's believes that the preponderance of the
company's collateral value lies in its IP.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Woburn, Massachusetts, and majority owned by
affiliates of private equity sponsor HGGC, Monotype Imaging
Holdings Inc. owns and licenses out some of the most well-known
fonts (and the associated software and services) in the world. The
company generated approximately $244 million of revenue as of the
last twelve months ended June 30, 2019.
OCWEN LOAN: Moody's Affirms B2 Rating on Secured Term Loan
----------------------------------------------------------
Moody's Investors Service affirmed Ocwen Loan Servicing, LLC's B2
senior secured term loan and Caa2 senior secured debt ratings. In
the same rating action, Moody's has assigned a Caa1 corporate
family rating and a negative outlook to PHH Mortgage Corporation
and withdrawn the Caa1 corporate family rating of Ocwen Financial
Corporation and the relevant stable outlook.
PMC is a wholly-owned operating subsidiary of Ocwen, which in the
second quarter of 2019 merged OLS into PMC, with PMC being the
surviving entity.
Affirmations:
Issuer: Ocwen Loan Servicing, LLC
Senior Secured Term Loan , Affirmed B2
Senior Secured Debt, Affirmed Caa2
Assignments:
Issuer: PHH Mortgage Corporation
Corporate Family Rating, Assigned Caa1
Withdrawals:
Issuer: Ocwen Financial Corporation
Corporate Family Rating, Withdrawn, previously rated Caa1
Outlook Actions:
Issuer: PHH Mortgage Corporation
Outlook, Assigned Negative Outlook
Outlook Actions:
Issuer: Ocwen Financial Corporation
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
The assignment of the negative outlook to PMC reflects Ocwen's
eroding capitalization, resulting from net losses driven by changes
in the fair value of its mortgage servicing rights (MSRs), along
with weak core profitability. Ocwen's capitalization, as measured
by GAAP tangible common equity to GAAP tangible managed assets
(TCE/TMA) declined to approximately 4.4% as of 30 June 2019, from
5.9% as of year-end 2018. Moody's expects the firm's capitalization
to have declined further during the third quarter of 2019 due to
additional negative changes in the MSRs fair value.
PMC's Caa1 corporate family rating is derived from its Caa1
standalone assessment, which Moody's calculates based on Ocwen's
consolidated financials, reflecting the firm's weak capital level,
currently constrained profitability and challenges to building a
resilient business model. Ocwen's financial profile also reflects
the challenges resulting from limited opportunities available in
its core market, credit impaired residential mortgage servicing. In
addition, the market for new transfers of credit impaired servicing
is much smaller as delinquencies remain low.
The affirmation of OLS's ratings reflects Moody's view of the
firm's Caa1 standalone assessment.
The withdrawal of Ocwen's corporate family rating and its outlook,
as well as the assignment of a Caa1 corporate family rating to PMC,
follows Ocwen's corporate restructuring of its operating
subsidiaries during the second quarter of 2019 and reflects Moody's
policy of maintaining a corporate family rating at the most senior
corporate entity that holds rated debt and maintaining outlooks at
the issuer level only for entities that have corporate debt.
WHAT COULD CHANGE THE RATINGS UP/DOWN
The negative outlook indicates that a ratings upgrade is unlikely
over the next 12-18 months. PMC's outlook could return to stable if
the company is able to achieve sustainable breakeven
profitability.
The ratings could be downgraded if capitalization weakens further,
as measured by TCE/TMA below 3.0% or in the event that regulatory
action or litigation materially restricts the company's business
activities, or harms its franchise and reputation, or the company
is subject to additional regulatory or legal action resulting in
material fines or judgments.
The principal methodology used in these ratings was Finance
Companies published in December 2018.
ONE AVIATION: Seeks Approval of Joint Prepackaged Ch. 11 Plan
-------------------------------------------------------------
Each of ONE Aviation Corporation; OAC Management, Inc.; Kestrel
Tooling Company; Kestrel Manufacturing, LLC; Kestrel Brunswick
Corporation; Kestrel Aircraft Company; Innovatus Holding Company;
Eclipse Aerospace, Inc.; DR Management, LLC; Brigadoon Aircraft
Maintenance, LLC; Aircraft Design Company; and ACC Manufacturing,
Inc., filed with the U.S. Bankruptcy Court for the District of
Delaware a memorandum in support of the confirmation of their
prepackaged Chapter 11 plan of reorganization and accompanying
disclosure statement.
The Plan will eliminate approximately $189 million of the Debtors'
prepetition debt obligations and allow the Debtors to emerge from
chapter 11 as a healthy and viable enterprise. Additionally, the
Plan as amended, implements a hard-fought settlement with the
Committee that contemplates, among other things, (i) the
Prepetition First Lien Lender providing a $825,000 recovery for
holders of Allowed ONE Aviation General Unsecured Claims, (ii)
waivers and releases of claims between the Debtors, the Prepetition
First Lien Lender, and the Committee, (iii) the Prepetition First
Lien Lender's agreement to waive and receive no distribution on
account of its unsecured deficiency claims arising under the
Prepetition First Lien Credit Agreement, (iv) reconciling Committee
claims after the Effective Date, and (v) reserved causes of action
for Reorganized Debtors.
Similarly the Plan now includes a settlement (the "Noteholder
Settlement") with the holders of Senior Subordinated Secured Note
Claims that contemplates, among other things, (i) the Prepetition
First Lien Lender providing a $700,000 recovery for holders of
Allowed Senior Subordinated Secured Note Claims, who will receive
their pro rata share on the Effective Date and (ii) waivers and
releases of claims between the Debtors, the Prepetition First Lien
Lender, and the Senior Subordinated Noteholders.
The Plan, as modified, also includes a consensual deal with certain
holders of Kestrel Secured Claims that provides for, among other
things, (i) the distribution of approximately $200,000 on a pro
rata basis and (ii) the inclusion of the holders of Kestrel Secured
Claims as Releasing and Released Parties under the Plan.
Certain parties have filed objections to confirmation of the Plan
and the adequacy of the Disclosure Statement. Debtors expect these
to be largely, if not entirely, resolved by the Confirmation
Hearing, except with respect to certain objections of the U.S.
Trustee. Generally, the U.S. Trustee objects to Confirmation on the
basis that the Debtors have not provided sufficient notice and
disclosure to creditors regarding the amendments and modifications
made to the Plan. The Debtors believe that this objection is
unfounded.
The Debtors assert that the Plan satisfies the required elements of
the Bankruptcy Code and Bankruptcy Rules, and more importantly, the
Plan represents the culmination of a lengthy and difficult process
wherein the Debtors and their primary stakeholders negotiated a
beneficial and effective restructuring transaction that will enable
the Debtors to emerge from chapter 11 as a viable and competitive
market participant. The Plan further provides value to classes of
claims and interests that would otherwise have been unavailable,
including a meaningful cash recovery for certain junior lien and
unsecured creditors. The Plan, therefore, represents the best
available outcome for the Debtors and all other parties in
interest. For these reasons, the Debtors ask the Court to confirm
the Plan.
A full-text copy of the Second Amended Joint Prepackaged Chapter 11
Plan dated Aug. 30, 2019, is available at
https://tinyurl.com/y3zg7gre from PacerMonitor.com at no charge.
A summary of creditor class recoveries resulting from amendments to
the Plan since the Petition Date is available at
https://tinyurl.com/y2cxjqnj from Epiq11.com at no charge.
Full-text copies of amendments to Plan Supplement, including the
New ABL/Term Loan Exit Facility Term Sheet is available at
https://tinyurl.com/y5ythhwx from Epiq11.com at no charge.
The Debtors are represented by Chris L. Dickerson, Brendan M. Gage,
and Nathan S. Gimpel of Paul Hastings LLP; and Robert S. Brady, M.
Blake Cleary, Sean M. Beach, Jaime Luton Chapman, and Jordan E.
Sazant of Young Conaway Stargatt & Taylor, LLP.
About ONE Aviation
Headquartered in Albuquerque, New Mexico, ONE Aviation Corporation
-- http://www.oneaviation.aero-- and its subsidiaries are original
equipment manufacturers of twin-engine light jet aircraft.
Primarily serving the owner/operator, corporate, and aircraft
charter markets, ONE Aviation is on the forefront of private
aviation technology. They provide maintenance and upgrade services
for their existing fleet of aircraft through two Company-owned
Platinum Service Centers in Albuquerque, New Mexico and Aurora,
Illinois, five licensed, global Gold Service Centers in locations
including San Diego, California, Boca Raton, Florida,
Friedrichshafen, Germany, Eelde, Netherlands, and Istanbul, Turkey,
as well as a research and development center located in Superior,
Wisconsin. They currently employ 64 individuals.
ONE Aviation and its affiliates filed for Chapter 11 bankruptcy
protection (Bankr. D. Del. Case. Nos. 18-12309 to 18-12320) on Oct.
9, 2018. In the petition signed by Alan Klapmeier, CEO, the Debtor
estimated its assets at $10 million to $50 million and liabilities
at $100 million to $500 million.
Counsel for the Debtors are Robert S. Brady, Esq., M. Blake Cleary,
Esq., Sean M. Beach, Esq., Jaime Luton Chapman, Esq., and Jordan E.
Sazant, Esq., at Young Conaway Stargatt & Taylor, LLP, in
Wilmington, Delaware; Chris L. Dickerson, Esq., Brendan M. Gage,
Esq., and Nathan S. Gimpel, Esq., at Paul Hastings LLP, in Chicago,
Illinois; and Todd M. Schwartz, Esq., at Paul Hastings LLP, in Palo
Alto, California.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Oct. 22, 2018. The committee tapped
Lowenstein Sandler LLP as its legal counsel; Landis Rath & Cobb LLP
as the firm's co-counsel; and Conway MacKenzie, Inc. as financial
advisor.
OUTERSTUFF LLC: Moody's Lowers CFR to Caa1, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Outerstuff LLC's ratings,
including its Corporate Family Rating to Caa1 from B2, Probability
of Default Rating to Caa1-PD from B2-PD, and its Senior Secured
Term Loan rating to Caa2 from B3. The outlook was changed to
negative from rating under review. This concludes the review for
downgrade that began on May 30, 2019.
"The downgrade and negative outlook reflect Outerstuff's very weak
profitability and credit metrics, and its need to improve to more
sustainable levels over the very near term in order to address
looming debt maturities ahead of the obligations becoming current,"
stated Moody's apparel analyst, Mike Zuccaro. Outerstuff's Senior
Secured Term Loan is set to mature on July 28, 2021, and its
unrated ABL revolving credit facility expires on the earliest of
March 29, 2024 or 90 days prior to the Term Loan maturity.
Outerstuff's earnings have been severely pressured by recent
inventory clearance activities, continued NFL royalty shortfalls,
sales mix changes towards lower margined private label businesses,
international growth related investments, and higher variable
expenses. Cash flow has also been pressured by increased working
capital related to new licensed business, and timing delays related
to retail customers ordering later in the year.
Zuccaro added, "With the servicing of new license contracts with
partners such as Fanatics set to begin later this year, Outerstuff
is poised to return to growth. We also expect margins to begin to
recover due to the increased sales of higher margin licensed
businesses, reduced inventory liquidation activities, and strategic
realignment and cost reduction initiatives. When coupled with a
focus on inventory reduction, we also expect improved free cash
flow with significant revolver paydown by the end of the year."
Downgrades:
Issuer: Outerstuff LLC
Corporate Family Rating, Downgraded to Caa1 from B2
Probability of Default Rating, Downgraded to Caa1-PD from B2-PD
Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD4) from
B3 (LGD4)
Outlook Actions:
Issuer: Outerstuff LLC
Outlook, Changed To Negative from Rating Under Review
RATINGS RATIONALE
The Caa1 CFR reflects Outerstuff's very weak credit metrics, small
revenue scale, narrow product concentration primarily in licensed
children's sports apparel in North America and a nascent adult and
international presence, and reliance on licensing arrangements from
several sports leagues for a significant majority of revenue. Also
considered are the increased volatility related to new license
servicing cycles, as well as private equity ownership and the joint
control by management and the private equity sponsor. Ratings are
supported by the Company's diversification across retail channels,
its entrenched market position related to exclusive license
contracts with the NFL, NBA, NHL, MLB, MLS, and U.S.A. Olympics,
which allow it to sell virtually all children's apparel with the
teams' logos, and Moody's view that the children's licensed sports
apparel market is relatively stable and recession resistant because
of its low fashion risk, natural replenishment cycle and consumers'
steady interest in team sports.
Liquidity is weak, reflecting the Company's need to address looming
debt maturities ahead of the obligations becoming current in April
and July 2020. Aside from the maturities, Moody's expects that
modest cash and operating cash flow will be sufficient to cover
annual cash flow needs over the next twelve months, with high
reliance on its revolving credit facility to fund seasonal needs
throughout the first three quarters of the year.
Ratings could be downgraded if it appears that the Company will be
unable to extend its debt maturity profile prior to maturing debt
obligations becoming current, or substantially improve
profitability and generate positive free cash flow to reduce debt
and leverage; including seasonal revolver borrowing so as to
maintain ample excess revolver availability.
An upgrade would require the Company to significantly improve
operating performance and credit metrics, and improved liquidity,
such as sustained positive free cash flow and an extended debt
maturity profile. Specific metrics include lease-adjusted
debt/EBITDAR sustained below 6.0 times and EBITA/Interest above
1.25 times.
The principal methodology used in these ratings was Apparel
Companies published in December 2017.
Outerstuff is a designer, manufacturer and marketer of licensed
children's sports apparel. The company generates the majority of
its revenues from products sold under exclusive licenses with the
NFL, NBA, NHL, MLB, MLS, U.S.A. Olympics, Umbro as well as licenses
with over 200 NCAA colleges and universities, and sells to team
shops, specialty sports chain stores, department stores, and mass
merchants mainly in the United States. Since the May 2014
investment by Blackstone, the private equity sponsor and management
have equal equity stakes of approximately 50% and share control of
the company.
P&D INVESTMENTS: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 cases
of P&D Investments LLC, PCD Investments LLC and Whale Cay Group,
Limited, according to court dockets.
About P&D Investments
P&D Investments LLC, PCD Investments LLC and Whale Cay Group,
Limited were established to acquire and develop real estate
properties in The Bahamas.
P&D Investments and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case Nos. 19-18740,
19-18744 and 19-18748) on June 28, 2019.
At the time of the filing, P&D Investments and PCD Investments had
estimated assets of between $1 million and $10 million and
liabilities of between $10 million and $50 million. Meanwhile,
Whale Cay Group disclosed assets of between $10 million and $50
million and liabilities of the same range.
PANOCHE ENERGY: Moody's Hikes Sr. Sec. Notes Rating to Caa1
-----------------------------------------------------------
Moody's Investors Service upgraded Panoche Energy Center, LLC's
senior secured notes to Caa1 from Caa2. The outlook has been
revised to positive from negative.
RATINGS RATIONALE
The upgrade to Caa1 from Caa2 and the outlook revision to positive
reflects Pacific Gas & Electric's (PG&E) proposed plan of
reorganization that incorporates PG&E assuming its power purchase
agreements (PPA). PG&E's bankruptcy and the risk of PPA rejection
in bankruptcy has been the primary risk constraining Panoche's
credit quality since the project derives all of its operating cash
flow from its PPA with PG&E and the proposed plan would ensure that
PG&E honors its obligation to the project. While plans proposed by
other groups also contemplate PG&E affirming the PPAs, Panoche's
credit quality remains tempered by the possibility that PG&E's
final approved plan could differ from the current plan particularly
if PG&E is not able to emerge from bankruptcy by June 30, 2020 or
if additional claims surface from wildfires that might occur over
the next several months which would be treated as administrative
claims. PG&E has reserved its rights to amend its plan and certain
groups have already indicated opposition to the plan. PG&E
continues to meets its contractual obligations to Panoche since
filing for bankruptcy in January 2019.
The rating action recognizes Panoche's position and intrinsic value
from a capacity standpoint as a peaking unit in a high load pocket.
While liquidity has been impacted by the need to repay a drawn
letter of credit (L/C) obligation and by ongoing purchases of
carbon allowances, Panoche's operational and financial performance
has remained adequate through the first half of 2019. Regarding
liquidity, on July 30th, Panoche drew on its six-month debt service
reserve L/C of $16.3 million as the associated credit facility
expired and was not extended. Per the terms of the L/C
reimbursement agreement, principal is to be repaid by October 2022.
The repayment of any drawn L/Cs would occur in the
trustee-administered cash flow waterfall on a pari passu basis with
the senior secured bonds.
Positively, Panoche recently received lenders' approval for the
sale of its PG&E pre-petition claim of $4.6 million, receiving $4.2
million in proceeds, which were used to pay down a portion of the
DSR LC loan drawn leaving approximately $12.1 million to be
repaid.
Panoche's remaining liquidity includes a major maintenance reserve
cash funded on a 3 year look forward basis with a balance of $5.23
million as of 12/31/2018, based upon expected major maintenance
costs verified by an independent engineer. The project also had
$1.1 million of cash on its balance sheet at 6/30/2019. Positively,
Panoche was able to extend an expiring $36 million L/C fulfilling
its requirements under the PPA.
Rating Outlook
The positive outlook considers PG&E's plan to resolve its
bankruptcy by June 30, 2020, a timeframe that is supported by key
stakeholders, including the bankruptcy court and the California
Public Utilities Commission, under the broad terms of the proposed
plan. Under that scenario, Panoche's rating could increase by
multiple notches depending on PG&E's post-bankruptcy credit
quality, and project's standalone operating and financial
performance.
Factors that could lead to an upgrade
To the extent PG&E's proposed plan or a similar one that affirms
the Panoche PPA is confirmed, Panoche's rating could increase by
multiple notches depending on PG&E's credit quality post
bankruptcy, and the project's operating and financial performance.
Factors that could lead to a downgrade
Panoche's rating could be downgraded if the plan of reorganization
does not include the assumption of Panoche's power purchase
agreement, resulting in its termination without the honoring of
contractually determined termination payments, or if PG&E's
obligations under the PPA are interrupted or renegotiated on less
favorable terms.
Panoche Energy Center, LLC owns an approximate 400 MW natural
gas-fired simple-cycle generating facility operating primarily as
an intermediate and peaking generation plant. Panoche consists of
four GE LMS100 turbine units and is located 50 miles west of the
City of Fresno in Firebaugh, California. Panoche is owned by
affiliates of Ares Management, L.P.
The principal methodology used in these ratings was Power
Generation Projects published in June 2018.
PANTALEO LAFORGIA: Plan Violates Absolute Priority Rule
-------------------------------------------------------
Chief Bankruptcy Judge Kathryn C. Ferguson sustained the IRS'
objection to the confirmation of Pantaleo LaForgia and Anna Maria
LaForgia's second modified chapter 11 plan.
The Debtors filed a Second Modified Chapter 11 Plan that provides
for the secured claim of the IRS in the amount of $225,884.28 to be
reduced to $41,905. The reduced number represents the value of the
Debtors' personal property, with the remainder of the claim to be
reclassified as a general unsecured claim. The Plan provides for
general unsecured creditors (Class 8) totaling approximately
$1,882,348 to be paid approximately 2% of their claims at a rate of
$630 a month for 5 years. The Plan further provides that the
Debtors (Class 9) will retain ownership of all their assets.
The IRS objected to confirmation of the Plan on several grounds,
including that it violates the absolute priority rule; it does not
provide for the IRS' secured claim to be paid in full within the
period required by section 1129(a)(9); and it is not feasible.
The issue presented here is whether the absolute priority rule
applies in an individual chapter 11 case.
The Debtors assert that the rule does not apply because section
1129(b)(2)(B)(ii) provides that despite non-acceptance by one or
more unsecured creditors a plan may be found to be fair and
equitable if: "(ii) the holder of any claim or interest that is
junior to the claims of such class will not receive or retain under
the plan on account of such junior claim or interest any property,
except that in case in which the debtor is an individual, the
debtor may retain property included in the estate under section
1115."
After reviewing the extant cases on the topic, the court is
convinced of only two things: 1) that there is no plain meaning
reading of section 1129(b)(2)(B)(ii) and section 1115; and 2) that
there is no way to fully reconcile the amendments to the Code made
by BAPCPA.
The Debtors argue that post-BAPCPA debtors are worse off because
they "are caught between the Scylla of Ahlers and the Charybdis of
section 1115" and that "Congress must have been aware of this and
ascribing to Congress an intention to create such a draconian
legislative scheme while enacting numerous other provisions dealing
with individual Chapter 11 cases is illogical." The court
disagrees. Preservation of the absolute priority rule is consistent
with Congress's express goal of curbing perceived abuses of the
bankruptcy system. It is not illogical to think that Congress might
view the LaForgias' plan, which pays $37,800 to discharge $1.8
million in unsecured debt while allowing the debtors to retain a
home and three investment properties, as abusive. As noted by
several courts, the new provisions pertaining to individual chapter
11 debtors are designed to impose greater burdens on individual
debtors' rights so as to ensure greater payout to creditors. This
interpretation does make things harder for individual debtors
because they cannot use post-petition earnings to make a new value
contribution. But when BAPCPA is viewed as a whole, it is clear
that Congress intended to make things harder for all debtors, not
just individual chapter 11 debtors.
A copy of the Court's Memorandum Opinion dated Sept. 3, 2019 is
available at https://tinyurl.com/y23jwp3h from Pacermonitor.com at
no charge.
Attorney for Debtors:
Timothy P. Neumann, Esq.
Broege, Neumann, Fischer & Shaver
25 Abe Voorhees Drive
Manasquan, NJ 08736
Pantaleo LaForgia and Anna Maria LaForgia filed for chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 17-22853) on June 23,
2017, and is represented by Timothy P. Neumann, Esq. of Broege,
Neumann, Fischer & Shaver.
PANTHERA ENTERPRISES: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Panthera Enterprises, LLC
f/k/a TENX Group LLC
2506 Fishpond Road
Old Fields, WV 26845
Business Description: Panthera Enterprises LLC provides
electrical work and services.
Chapter 11 Petition Date: September 13, 2019
Court: United States Bankruptcy Court
Northern District of West Virginia (Elkins)
Case No.: 19-00787
Debtor's Counsel: Robert S. Bernstein, Esq.
BERNSTEIN-BURKLEY, P.C.
707 Grant Street, 220 Gulf Tower
Pittsburgh, PA 15219
Tel: (412) 456-8101
Fax: (412) 456-8251
E-mail: rbernstein@bernsteinlaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by James Punelli, managing member.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/wvnb19-00787.pdf
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Anthony McIntyre Monies/Loaned $1,580,000
4000 Midlantic Drive, Suite 200 Advanced
Mount Laurel, NJ, 08054
Tel: 856-675-2355
Email: Tony_McIntyre@ajg.com
2. A.L.L. Construction, Inc. Monies Loaned/ $714,842
P.O. Box 232 Advanced
Mount Storm, WV, 26739
Jason Kitzmiller
Tel: 304-693-7131
Email: kitzmillerjason@msn.com
3. Duncan Development Services $379,231
Group, LLC
420 Park Street
Charlottesville, VA, 22902
Rob Duncan
Tel: 434-906-2278
4. Arthur J. Gallagher & Co. Insurance $174,879
4000 Midlantic Drive, Suite 200
Mount Laurel, NJ, 08054
Anthony McIntyre
Tel: 856-482-9900
Email: Tony_McIntyre@ajg.com
5. State of West Virginia/ Sale Tax $170,113
State Tax Dept.
397 Mid-Atlantic Pkwy, Suite 2
Martinsburg, WV, 25401
Jennifer Sikes
Tel: (304) 707-9513
Email: Jennifer.M.Sikes@wv.gov
6. Tim Miller Monies Loaned/ $151,500
440 Premier Circle, Suite 200 Advanced
Charlottesville, VA, 22901
Tel: 434-882-0121
Email: tmiller@meridianwbe.com
7. James Michael Dowty Monies Loaned/ $122,036
1477 Seaside Circle Advanced
Gulf Breeze, FL, 32566
Tel: 407-443-1427
8. Raymond Barbic Monies Loaned/ $103,580
26098 Huntwick Glen Square Advanced
Aldie, VA, 20105
Tel: 302-379-7608
Email: rvbarbic@gmail.com
9. Unity Technology Corporation Services $96,957
3001 Ward Kline Road
Myersville, MD, 21773
Joe Dorsey
Tel: 301-508-7065
Email: joe.dorsey@unitytec.com
10. Michael L. Cranston, CPA, Ltd. Services $54,973
4085 Chain Bridge Road, Suite 400
Fairfax, VA 22030
Tel: 703-218-9818
Email: mcranston@verizon.net
11. Parker, Ostovic & Associates Services $47,806
1940 Duke Street, Suite 200
Alexandria, VA, 22314
Rudy Ostovich, III
Tel: 703-684-4421
Email: rudy@parkerostovich.com
12. Spectrum Consulting, LLC Services $31,113
11 Canal Center Plaza, Suite 300
Alexandria, VA, 22314
Tel: 703-683-4222
13. United Health Care Insurance $26,169
185 Asylum Street
Hartford, CT, 06103
Samantha Liappes
Tel: 860-702-5403
Email; samantha_liappes@uhc.com
14. Dinsmore & Schohl, LLP Services $21,247
Accounts Receivable
PO Box 639038
Cincinnati, OH 45263
Tel: 513-977-8131
15. Brian Riso Monies Loaned/ $18,000
138 Woodbridge Drive Advanced
Morehead City, NC, 28557
Tel: 252-723-7897
Email: phrogs364@gmail.com
16. n8 Consulting LLC Services $11,525
PO Box 651163
Sterling, VA, 20165
Frank Chille
Tel: 703-483-0037
Email: frank.chille@n8-consulting.com
17. Atlantic Union Bank Bank Fees $6,013
1800 Robert Fulton Drive, Suite 310
Reston, VA, 20191
Christopher Rieley
Tel: 703-871-7355
Email: crieley@atlanticunionbank.com
18. Squadron Defense Group Services $5,643
PO Box 1381
Sterling, VA, 20167
Tel: 571-203-0245
19. The U Company Construction $4,775
453 Mae West Road Materials
Confluence, PA, 15424
Tel: 724-329-5627
20. Leesburg Junction Rent $4,592
215 Depot Court SE
Leesburg, VA, 20175
Barbara James
Tel: 703-737-6946
Email: bjames@nuvurealestate.com
PETROSHARE CORP: U.S. Trustee Forms 3-Member Committee
------------------------------------------------------
The Office of the U.S. Trustee on Sept. 11 appointed three
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 case of PetroShare Corp.
The committee members are:
(1) Weatherford Artificial Lift Systems, LLC
c/o Timothy A. Million
Husch Blackwell LLP
600 Travis Street, Suite 2350
Houston, TX 77002
Tel: (713) 525-6221
Email: tim.million@huschblackwell.com
(2) Excell Services LLC
Attn: Andrew R. Weaver
36629 US Hwy. 385
Wray, CO 80758
Tel: (970) 332-3151
Email: aweaver@excell-llc.com
(3) ASI Capital Income Fund, LLC
Attn: Brian Cross
9475 Briar Village Point #220
Colorado Springs, CO 80920
Tel: (719) 225-4003
Email: brian@theconvergence.group
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About PetroShare Corp.
Colorado-based PetroShare Corp. (OTCQB:PRHR) --
http://www.petrosharecorp.com/-- investigates, acquires, and
develops crude oil and natural gas properties in the Rocky Mountain
or mid-continent portion of the United States, specifically focused
in the Denver-Julesburg Basin in northeast Colorado.
On Sept. 4, 2019, PetroShare Corp. and affiliate CFW Resources LLC
sought Chapter 11 protection (Bankr. D. Colo. Lead Case No.
19-17633).
As of June 30, 2019, PetroShare Corp. disclosed $36,927,856 in
assets and $45,100,988 in liabilities.
Polsinelli PC is acting as legal counsel for the company. MACCO
Restructuring Group LLC is acting as financial advisor. Mr. Drew
McManigle from MACCO has been retained by the company as its chief
restructuring officer.
PINE CREEK MEDICAL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Pine Creek Medical Center, LLC
f/d/b/a Pine Creek Medical Center, LLP
9032 Harry Hines Boulevard
Dallas, TX 75235
Business Description: Pine Creek Medical Center, LLC owns and
operates a general medical and surgical
hospital.
Chapter 11 Petition Date: September 13, 2019
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Case No.: 19-33079
Judge: Hon. Harlin DeWayne Hale
Debtor's Counsel: Buffey E. Klein, Esq.
HUSCH BLACKWELL, LLP
1900 N. Pearl Street, Suite 1800
Dallas, TX 75201
Tel: 214-999-6152
Fax: 214-999-6170
E-mail: buffey.klein@huschblackwell.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Mark D. Shapiro, chief restructuring
officer.
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/txnb19-33079.pdf
PONY TAIL: Oct. 10 Hearing on 1st Amended Disclosure Statement
--------------------------------------------------------------
The hearing to consider approval of the first amended disclosure
statement explaining the first amended Chapter 11 plan of Pony
Tail, Inc., is set for October 10, 2019, at 11:00 a.m.
The plan will bind all claim holders and Debtor against and
interests in Debtor whether they vote or entitled to vote on the
plan and whether they retain or receive any property or
distributions under the plan when and if confirmed by the
Bankruptcy Court.
Ten proof of claims have been filed that totaled $1,135,680.55 as
of the date of the first amended disclosure statement. Of those,
four persons have claimed $23,938.99 priority claims.
A full-text copy of the First Amended Disclosure Statement is
available at https://tinyurl.com/y5g2gvo7 from PacerMonitor.com at
no charge.
The Debtor is represented by:
Louis G. McBryan, Esq.
6849 Peachtree Dunwoody Road
Building B-3, Suite 100
Atlanta, GA 30328
Tel: (678)733-9322
Email: lmcbryan@mcbryanlaw.com
Pony Tail, Inc., filed a Chapter 11 Petition (Bankr. N.D. Ga. Case
No. 18-68426) on November 2, 2018, and is represented by Louis G.
McBryan, Esq., at McBryan, LLC, in Atlanta, Georgia.
PRADHAN AND COMPANY: Unsecureds to Get $10K Over 60 Months
----------------------------------------------------------
Pradhan and Company, Inc., filed a combined Plan of Reorganization
and Disclosure Statement, asserting that there is no other feasible
plan can be proposed to resolve the claims against the Debtor. The
Debtor also asks the Court to conditionally approve the Disclosure
Statement.
The Plan provides for structured payments to holders of Allowed
Claims against the Debtor over a maximum five-year period for
unsecured creditors and restructures and reduces the promissory
note and obligation to Texas Bank (the Debtor's primary secured
creditor) over a twenty-year period. In accordance with the Plan,
Debtor will continue to operate the Gas Station.
A Class 6 Claimant holding an Allowed Unsecured Claim shall be paid
a pro rata share of $10,000 over 60 months from the Effective Date
of the Confirmed Plan. The Debtor shall begin making payments in
monthly installments on the Class 6 Claims 30 days after the
Effective Date of the Confirmed Plan. To the extent a claim is not
allowed until a date after the commencement of the 60 month payment
period, payments on such allowed claim will commence and be due and
payable on the first day of the month following the date of the
order allowing such claim, and the first day of each month
remaining in the 60 month payment period in an amount sufficient to
pay the allowed unsecured claim its pro rata share.
The first payment to Class 6 Claimants will be 1/60th of the
claimant's pro rata share on the Allowed Unsecured Claim. The
1/60th payment will be computed by dividing the allowed pro rata
share of the claim by 60 months to equal a monthly payment.
Payments in an equal amount to the initial payment will continue to
be made monthly until the claim is paid its pro rata share over a
maximum payment term of 60 months.
At the time of the filing of the Debtor's Plan and Disclosure
Statement, the Debtor's schedules and the claims register reflects
approximately $28,897.25 in unsecured claims. In addition, Texas
Bank has an unsecured deficiency claim in the approximate amount of
$324,162.47. The Debtor estimates the total of allowed unsecured
claims to be approximately $350,000.00 after disputed claims are
resolved. Debtor estimates the dividend to unsecured creditors to
be approximately 3% of their allowed unsecured claims, and the
combined monthly payment to unsecured creditors will be $167.00 per
month.
The Plan contemplates a Settlement and Release of all causes of
Action that have been brought or could be brought against the
Debtor. The Debtor shall retain and have the exclusive right to
enforce all Causes of Action including, without limitation, those
under Chapter 5, and all avoidance actions under applicable
non-Bankruptcy law that arose before the Effective Date. Provided
that upon any subsequent conversion to a case under chapter 7, all
assets vesting in the Reorganized Debtor, shall pass to the chapter
7 trustee as property of the chapter 7 estate subject to those
Claims, Liens, and encumbrances as Allowed in this Plan.
A full-text copy of the Disclosure Statement is available at
https://tinyurl.com/y2o76szg from PacerMonitor.com at no charge.
Counsel for the Debtor:
Areya Holder Aurzada, Esq.
HOLDER LAW
901 Main Street, Suite 5320
Dallas, Texas 75214
Telephone: (972) 438-8800
Email: areya@holderlawpc.com
About Pradhan and Company
Pradhan and Company, Inc., owns and operates a gas station located
at 15151 FAA Boulevard, Fort Worth, Texas.
Pradhan and Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-40923) on March 4,
2019. At the time of the filing, the Debtor estimated assets of
less than $1 million and liabilities of less than $1 million. The
case is assigned to Judge Edward L. Morris. The Debtor tapped
Areya Holder Aurzada, Esq., at Holder Law, as its legal counsel.
PURDUE PHARMA: Case Summary & 50 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Purdue Pharma L.P.
One Stamford Forum
201 Tresser Boulevard
Stamford, CT 06901
Business Description: Purdue Pharma and its subsidiaries --
https://www.purduepharma.com/ -- are
physician-founded and physician-led
companies that manufacture, sell, or
distribute, among other products, extended-
release, long-acting, abuse-deterrent opioid
pain medications. Purdue operates three
main business segments through a number of
operating subsidiaries: a branded
prescription medication business, a generic
prescription medication business, and an
over-the-counter medication business. In
addition, as part of its commitment to
advancing meaningful solutions to the opioid
crisis, Purdue continues to develop, and
plans to distribute on a nonprofit basis,
opioid overdose reversal and addiction-
treatment medications. Purdue Pharma L.P.,
a Delaware limited partnership headquartered
in Stamford, Connecticut, is the Debtors'
main operating entity.
Chapter 11 Petition Date: Sept 15 and Sept. 16, 2019
Entities that filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code on Sept. 15, 2019:
Debtor Case No.
------ --------
Purdue Pharma L.P. 19-23649
Purdue Pharma Inc. 19-23648
Purdue Transdermal Technologies L.P. 19-23650
Purdue Pharma Manufacturing L.P. 19-23651
Entities that filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code on Sept. 16, 2019:
Debtor Case No.
------ --------
Purdue Pharmaceuticals L.P. 19-23652
Imbrium Therapeutics L.P. 19-23653
Adlon Therapeutics L.P. 19-23654
Greenfield BioVentures L.P. 19-23655
Seven Seas Hill Corp. 19-23656
Ophir Green Corp. 19-23657
Purdue Pharma of Puerto Rico 19-23658
Avrio Health L.P. 19-23659
Purdue Pharmaceutical Products L.P. 19-23660
Purdue Neuroscience Company 19-23661
Nayatt Cove Lifescience Inc. 19-23662
Button Land L.P. 19-23663
Paul Land Inc. 19-23664
Quidnick Land L.P. 19-23665
Rhodes Associates L.P. 19-23666
Rhodes Pharmaceuticals L.P. 19-23667
Rhodes Technologies 19-23668
UDF LP 19-23669
SVC Pharma LP 19-23670
SVC Pharma Inc. 19-23671
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Hon. Robert D. Drain
Debtors' Counsel: Marshall S. Huebner, Esq.
Benjamin S. Kaminetzky, Esq.
Timothy Graulich, Esq.
Eli J. Vonnegut, Esq.
DAVIS POLK & WARDWELL LLP
450 Lexington Avenue
New York, New York 10017
Tel: (212) 450-4000
Fax: (212) 701-5800
E-mail: marshall.huebner@davispolk.com
ben.kaminetzky@davispolk.com
timothy.graulich@davispolk.com
eli.vonnegut@davispolk.com
Debtors'
Investment
Banker: PJT PARTNERS LP
Debtors'
Restructuring
Financial
Advisor: ALIXPARTNERS LLP
Debtors'
Notice,
Claims, &
Solicitation
Agent: PRIME CLERK LLC
https://restructuring.primeclerk.com/purduepharma
Estimated Assets: $1 billion to $10 billion
Estimated Liabilities: $500 million to $1 billion
The petitions were signed by Jon Lowne, authorized person.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nysb19-23649.pdf
Consolidated List of Debtors' 50 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Pension Benefit Guaranty Pension Undetermined
Corporation
Cynthia Wong
1200 K Street NW
Washington, DC 20005
Tel: 202-229-3033
Fax: 202-326-4112
Email: wong.cynthia@pbgc.gov
2. CVS Caremark Part D Payer $19,281,161
Services, LLC Rebates
Any Zanin, Trade Director, Med D
1 CVS Drive
Woonsocket, RI 02895
Tel: 440-542-4010
Email: andrew.zanin@cvshealth.com
3. OptumRx, Inc. Payer $15,800,513
Kent Rogers, Senior VP Industry Rebates
Relations
2300 Main St.
Irvine, CA 92614-6223
Tel: 949-988-6066
Email: kent.rogers@optum.com
4. Defense Health Agency Payer $5,952,016
Colonel David Bobb, Chief Pharmacy Rebates
Operations Division, DHA
16401 E Centretech Pkwy
Aurora, CO 80011-9066
Tel: 703-681-2890
Email: david.w.bobb.civ@mail.mil
5. Department of Health Care Payer $5,162,762
Services (CA) Rebates
Robert Shun
PO Box 997413
Sacramento, CA 95899-7413
Tel: 916-552-9609
Email: robert.shun@dhcs.ca.gov
6. Caremarkpcs Health, LLC Payer $5,039,745
Sappan Bhatt, Director Trade Rebates
Relations
1 CVS Drive
Woonsocket, RI 02895
Tel: 847-559-3062
Email: sappan.bhatt@cvshealth.com
7. Amerisourcebergen Distributor $4,455,373
Dave Vietri, Vice President Fees
Branded and Specialty Contracts
3735 Glen Lakes DR
Charlotte, NC 28208
Tel: 610-727-7310
Email: dvietri@amerisourcebergen.com
8. North Carolina Department of Payer $3,703,227
Health and Human Services Rebates
John Stancil
2001 Mail Service Center
Raleigh, NC 27699-2000
Attn: John Stancil
Tel: 919-855-4305
Email: john.stancil@dhhs.nc.gov
9. McKesson Corporation Distributor $3,655,581
Chris Alverson, Senior Vice President Fees
of Supply Chain Management
One Post St
San Francisco, CA 94104-5203
Tel: 972-446-4104
Email: chris.alverson@mckesson.com
10. Cardinal Health Distributor $3,465,979
Jeff Cizl, Director Strategic Sourcing Fees
National Brands
1330 Enclave Pky
Houston, TX 77077-2025
Tel: 614-757-3694
Email: jeff.cizl@cardinalhealth.com
11. Missouri Healthnet Division Payer $3,172,515
Carolina Delarocha Rebates
PO Box 570
Jefferson City, MO 65102
Tel: 573-526-5664
Email: carolina.d.delarocha@dss.mo.gov
12. Ascent Health Services LLC Payer $3,798,697
Edward Adamcik, President Rebates
Ascent Health Services
1209 Orange St.
Wilmington, DE 19801
Tel: 908-240-1537
Email: eadamcick@ascenthealthservices.com
13. Wisconsin Department of Payer $2,021,937
Health Services Rebates
Kim Wohler
313 Blether Rd
Madison, WI 53784
Tel: 608-267-7100
Email: kim.wohler@wisconsin.gov
14. State of New York Department Payer $1,963,959
of Health Rebates
Christopher Desorbo
Riverview Center
150 Broadway Suite 355
Albany, NY 12204-2719
Tel: 518-402-0836
Email: christopher.desorbo@health.ny.gov
15. State of New Jersey Division Payer $1,614,986
of Medical Assistance and Rebates
Health Services
David Williams
Lockbox 655
Trenton, NJ 08646-0655
Tel: 609-588-7395
Email: david.r.williams@dhs.state.nj.us
16. Prime Therapeutics LLC Payer $1,533,047
Josh Bast, Senior Director Rebates
Pharmaceutical Trade Relations
PO Box 64812
St Paul, MN 08646-0655
Tel: 612-777-5621
Email: jabast@primetherapeutics.com
17. Ohio Department of Medicaid Payer $1,478,682
Tracey Archibald Rebates
4345 N. Lincoln Blvd.
Oklahoma City, OK 73105
Tel: 614-752-3522
Email: tracey.archibald@medicaid.ohio.gov
18. Commonwealth of Pennsylvania Payer $1,442,635
Medicaid Drug Rebate Program Rebates
Brittany Starr
PO Box 780634
Philadelphia, PA 19178
Tel: 717-346-8164
Email: c-bstarr@pa.gov
19. Georgia Dept of Community Health Payer $1,414,770
Rebecca Morrison Rebates
Medicaid Drug Rebate Program
Atlanta, GA 30384-8194
Tel: 404-657-7239
Email: rebecca.morrison@dch.ga.gov
20. Syneos Health fka Inventiv Health Trade Debt $1,076,469
Haiyan Wang, Director Business
Development, Early Phase
1030 Sync St.
Morrisville, NC 27560
Tel: 514-485-7579
Fax: 919-876-9360
21. Rhodes Technologies Inc. Services $1,034,752
Edward Mahony Fees
201 Tresser Boulevard
Stamford, CT 06901
Tel: 203-588-7088
Email: edward.mahony@txpsvcs.com
22. Ohio Clinical Trials Inc. Trade Debt $600,000
Glen Apseloff
1380 Edgehill Rd
Columbus, OH 43212
Tel: 614-754-1570
Email: glen@ohioclinicaltrials.com
23. PPD Development LP Trade Debt $522,334
Stephen Scaldaferri
26361 Network PL
Chicago, IL 60673
Tel: 910-465-7800
Email: stephen.scaldaferri@ppdi.com
24. Oklahoma Health Care Authority Payer $400,586
Stacey Hale Rebates
PO Box 18968
Oklahoma City, OK 73154-0299
Tel: 405-522-7453
Email: stacey.hale@okhca.org
25. Pharmaceutical Research Assoc Inc. Trade Debt $373,122
Joseph Dawn
4130 Parklake Ave Ste 400
Raleigh, NC 27612
Tel: 434-951-3208
Email: josephdawn@prahs.com
26. Wavelength Enterprises Inc. Trade Debt $361,909
Raymond Alsko
1700 Rte 23 N Ste 130 First FL
Wayne, NJ 07470
Tel: 973-832-9260
Email: raymond.alsko@wavelenghtpharma.com
27. Contract Pharmacal Corp Trade Debt $327,422
Anthony Gargano
135 Adams Ave
Hauppage, NY 11788-3633
Tel: 631-231-4610
Email: anthony.gargano@cpc.com
28. PL Development LLC Trade Debt $271,195
J Singleterry
609-2 kCantiague Rock Rd
Westbury, NY 11590
Tel: 516-986-1700
Email: jsingleterry@pldevelopments.com
29. Healthcore Inc. Trade Debt $269,621
Kelsey Gangemi
123 Justison St Ste 200
Wilmington, DE 19801
Tel: 302-230-2000
Email: kgangemi@healthcore.com
30. Cognizant Tech Solutions US Corp Trade Debt $262,216
Suranjan Kayal
24721 Network PL
Chicago, IL 60673
Tel: 201-744-3444
Email: suranjan.kayal@cognizant.com
31. Walrus LLC Trade Debt $236,471
Paula Buchma
18 E 17th St 4th FL
New York, NY 10003
Tel: 646.731.1701
Email: paula@walrusnyc.com
32. Denver Health & Hospital Auth Trade Debt $235,742
Scott Hoye, General Counsel
777 Bannock Street
Denver, CO 80204
Tel: 303-436-6000
Fax: 303-602-4934
33. S Emerson Group Inc. Trade Debt $234,029
Matt Poli
407 East Lancaster Ave
Wayne, PA 19087
Tel: 610-971-9600
Email: matt.poli@emersongroup.com
34. Integrated Behavioral Health Inc. Trade Debt $228,793
Mary Sweet
3070 Bristol St Ste 350
Costa Mesa, CA 92626
Tel: 617-765-3144
Email: msweet@inflexxion.com
35. Challenge Printing Company Trade Debt $210,841
S. Young
PO Box 27775
Newark, NJ 07101-7775
Tel: 973-471-4700
Email: syoung@challengeprintingco.com
36. Specgx LLC Trade Debt $189,371
General Counsel
385 Marshall Ave
Saint Louis, MO 63119-1831
Tel: 314-654-2000
Fax: 800-323-5039
37. GCI Health Trade Debt $161,049
Margaret Shubny
PO Box 101890
Atlanta, GA 30392
Tel: 312-596-2648
Email: margaret.shubny@cgihealth.com
38. Trialcard Inc. Trade Debt $151,286
Lindsey Dobbins
2250 Perimeter Park Dr Ste 300
Morrisvelle, NC 27560
Tel: 919-415-5494
Email: lindsey.dobbins@trialcard.com
39. Purple Strategies LLC Trade Debt $150,000
Sarah Simmons
815 Slaters LN
Alexandria, VA 22314
Tel: 703-548-7877
Email: sarah.simmons@purplestrategies.com
40. APC Workforce Solutions LLC Trade Debt $148,537
Cherish Chong
PO Box 534305
Atlanta, GA 30353
Tel: 305-490-6535
Email: cchong@workforcelogiq.com
41. Dezenhall Resources Trade Debt $142,835
Maya Shackley
1130 Connecticut Avenue NW
Washington, DC 20036-3904
Tel: 202-534-3170
Email: mshackley@dezenhall.com
42. Ashland Specialty Trade Debt $140,487
Ingredients GP
BR Kinsey
8145 Blazer Dr
Wilmington, DE 19808
Tel: 302-594-5000
Email: brkinsey@ashland.com
43. Sciecure Pharma Inc. Trade Debt $139,364
Purl
11 Deer Park Dr Ste 120
Monmouth Junction, NJ 08852
Tel: 908-723-1209
Email: nolan.wang@sciecurepharma.com
44. Frontage Laboratories Inc. Trade Debt $122,902
Kevin Li Dongmei Wang, SVP/GM, CMC
Services
700 Pennsylvania Dr
Exton, PA 19341-1129
Tel: 484-362-0395
Email: kli@frontagelab.com
45. Cobbs Creek Healthcare LLC Trade Debt $116,256
Jun Huangpu
200 Morgan Ave
Havertown, PA 19083
Tel: 610-513-8740
Email: juangpu@cobbscreekhealthcare.com
46. Bioeclipse LLC Trade Debt $113,381
PO Box 512323
Philadelphia, PA 19175
Email: mwebster@theaccessgp.com
47. Glatt Air Techniques Inc. Trade Debt $109,135
Stephen Radovanovich
20 Spear Rd
Ramsey, NJ 07446-1221
Tel: 201-825-6337
Email: stephen.radovanovich@glatt.com
48. Packaging Coordinators Inc. Trade Debt $108,815
Jim Haney
4545 Assembly Dr
Rockford, IL 61109
Tel: 845-484-8900
Email: jim.haney@pciservices.com
49. Altergon Italia SRL Trade Debt $107,512
Vincenzo Manna
Zona Industriale ASI
Morra De Sanctis, AV 83040
Italy
Email: v.manna@altergon.it
50. Thatcher Company Trade Debt $103,393
Patrick Schwartz
1905 Fortune Rd
Salt Lake City, UT 84127
Tel: 801-972-4606
Email: patrick.schwartz@tchem.com
PURDUE PHARMA: Consolidated Balance Sheet at Aug. 31, 2019
----------------------------------------------------------
Pursuant to Local Rule 1007-2(a)(6), privately held Purdue Pharma
L.P. submitted with the bankruptcy court a summary of the
(unaudited) consolidated assets and liabilities for the Debtors and
their non-debtor affiliates:
CONSOLIDATED PURDUE PHARMA L.P. & PURDUE PHARMA INC.
CONSOLIDATED BALANCE SHEET
AS OF AUGUST 31, 2019
($ In Millions)
ASSETS
CURRENT ASSETS
Cash & Cash Equivalents $1,208
Available For Sale Investments 1
Accounts Receivable, Net 90
Due From Associated Companies 8
Other Receivables 2
Inventories, Net 100
Prepaid Expenses & Other Current Assets 51
Restricted Cash 1
------
TOTAL CURRENT ASSETS 1,461
Property and Equipment, Net 144
Investments at Cost 26
Restricted Cash - Long-Term 214
Intangible Assets, Net 105
Other Assets 22
------
TOTAL ASSETS $1,972
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts Payable $28
Accrued Expenses 426
Due to Associated Companies 2
------
TOTAL CURRENT LIABILITIES 455
Other Liabilities 107
------
TOTAL LIABILITIES 562
EQUITY
Retained Earnings & Partners' Capital 1,456
Accumulated Other Comprehensive Loss (46)
------
TOTAL EQUITY 1,410
------
TOTAL LIABILITIES AND EQUITY $1,972
======
About Purdue Pharma
Privately-held Purdue Pharma L.P. and its subsidiaries
--http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers. The
company was founded by members of the Sackler family in 1952.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation facing the Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
PURDUE PHARMA: Enters Chapter 11 to Wipe Out Over 2,000 Lawsuits
----------------------------------------------------------------
Purdue Pharma LP filed for Chapter 11 bankruptcy with a more than
$10 billion plan to address claims that it illegally marketed its
addictive OxyContin painkiller and is liable for the U.S. opioid
epidemic.
In a 64-page brief submitted to the U.S. Bankruptcy Court for the
Southern District of New York, Purdue Pharma noted that:
* Purdue, the Sacklers family, attorneys general of 24 states,
and law firms representing over 1,000 counties and municipalities
have agreed to a global settlement worth $10 billion.
* As part of the settlement, the Sacklers family will relinquish
all their equity interests in Purdue and will transfer all of
Purdue's assets to a trust for the benefit of claimants and the
American public. The Sacklers will also contribute an additional
$3 billion over seven years.
* Pursue Pharma has been named in more than 2,600 lawsuits filed
throughout the state and federal court systems.
* Unlike most debtors, Purdue has no funded debt; no material
past due trade obligations; and do not have any judgment creditors.
Nonetheless, the onslaught of lawsuits has proved unmanageable.
* Purdue's sales have deteriorated significantly. In 2010,
Purdue generated opioid-related sales of $2.2 billion. By 2018,
that number had dropped over half to $975 million, and further
material declines are predicted through 2023.
* Purdue is a relatively small company with currently fewer than
700 employees. Purdue Pharma has drastically cut its number of
employees by 67% since 2017.
* OxyContin has been a primary target of lawsuits
notwithstanding that OxyContin's current market share is under 2%,
and has never exceeded 4%, of opioid prescriptions.
Purdue officials said the costs of dealing with waves of opioid
suits made a bankruptcy inevitable. The company is projected to
spend $263 million this year alone on legal fees and costs to
defend the cases.
Opioid makers in the United States are facing pressure from a
crackdown on the addictive drug in the wake of the opioid crisis
and as state attorneys general and counties file lawsuits against
manufacturers.
OxyContin Extended-Release Tablets CII ("OxyContin"), Purdue
Pharma's most prominent pain medication, has been the target of
over 2,600 civil actions pending in various state and federal
courts and other fora across the United States and its territories
("Pending Actions").
Purdue said the onslaught of lawsuits, which include case-by-case
mass tort litigation, a multiplicity of "races to the courthouse",
copycat complaints being filed against Purdue, and piecemeal
litigation, will only result to inconsistent outcomes and
inequitable treatment, as well as unsustainable cost. The lawsuits
are spread among courts across the country, involve thousands of
plaintiffs with differing interests, include a variety of legal
claims and theories of damages under multiple states' laws, and are
at various procedural stages.
"The Debtors have commenced these chapter 11 proceedings because
bankruptcy is the only way to resolve the litigation rationally;
halt the destruction of value and runaway costs associated with the
Pending Actions; centralize all of the claims against the Defendant
Debtors; adjudicate the claims asserted against them fairly and
efficiently; and, hopefully, expand the scope of parties supporting
the Settlement Structure and consummate a global resolution of the
Pending Actions -- all while conserving the assets of the Debtors'
estates so that billions of dollars in value and vital opioid
overdose rescue medications can be delivered to communities across
the country impacted by the opioid crisis. This case will present
unique challenges and require the Court and parties to navigate
uncharted legal waters. But the Debtors believe that by working
together with relevant stakeholders under this Court's direction,
the parties can achieve a groundbreaking outcome that contributes
meaningfully to the fight against the opioid crisis," the Debtors'
attorney, Marshall S. Huebner of Davis Polk & Wardwell LLP,
explained.
"Bankruptcy is the only forum that provides a collective process
that ensures equal treatment of similarly situated claimants and
the finality that is essential to any comprehensive settlement.
These attributes will, in turn, hopefully spur productive further
discussions with those plaintiffs who currently oppose the
Settlement Structure. If not, a unique opportunity to benefit
Americans in need with billions of dollars of products, assets, and
cash -- as an alternative to years of litigation and value
destruction -- may be lost."
Pending Actions vs. Purdue
As of the Petition Date, the pending actions are comprised of:
* 2,200 federal a lawsuits consolidated in the Ohio MDL. In
2017, the Judicial Panel on Multidistrict Litigation consolidated
in the Ohio MDL, for discovery and pretrial purposes, most of the
Pending Actions filed in federal court. Since that time, lawsuits
against Purdue have continued to be filed at a rapid rate, and the
Ohio MDL has grown exponentially. The first MDL "bellwether" trial
-- County of Cuyahoga v. Purdue Pharma L.P., Case No. 17-OP-45004
(N.D. Ohio) -- is scheduled to begin on Oct. 21, 2019.
* 390 lawsuits outside the MDL. There are hundreds of lawsuits
and actions proceeding in dozens of state courts and other forums,
as well as courts in the District of Columbia, Puerto Rico and
Guam. In some jurisdictions -- such as Illinois, New York,
Pennsylvania, Texas, South Carolina, and Connecticut -- actions
against the Debtors have been consolidated in coordinated state
proceedings.
Unlike nearly any other prior mass tort litigation, the vast
majority of plaintiffs -- 2,250, or more than 85% -- are
governmental entities. These governmental plaintiffs include the
attorneys general of 49 states, territories and the District of
Columbia, as well as thousands of county and municipal
governments.
The pending actions also include many nongovernmental plaintiffs.
Plaintiffs in the Ohio MDL, for example, include dozens of
third-party payors, such as hospitals, treatment centers, and
insurance companies; over 100 Native American and Alaska Native
tribes; over 100 private putative class actions on behalf of
various individuals, estates, and entities; and just over a dozen
individuals alleging personal injury or wrongful death claims.
About Purdue Pharma
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement to
resolve the massive opioid litigation facing the Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
PURDUE PHARMA: Sackler Family Issues Statement on Ch.11 Filing
--------------------------------------------------------------
The Sackler Family on Sept. 16, 2019, issued the following
statement regarding Purdue Pharma's bankruptcy filing:
"Like families across America, we have deep compassion for the
victims of the opioid crisis and believe the settlement framework
-- now supported by the attorneys general of 29 states and
territories and the plaintiffs' steering committee representing
thousands of municipalities -- is an historic step towards
providing critical resources that address a tragic public health
situation.
"It is our hope the bankruptcy reorganization process that is now
underway will end our ownership of Purdue and ensure its assets are
dedicated for the public benefit. This process will also bring the
thousands of claims into a single, efficient forum where the
settlement can be finalized, reviewed by the bankruptcy court to
ensure it is fair and just and then implemented.
"We are hopeful that in time, those parties who are not yet
supportive will ultimately shift their focus to the critical
resources that the settlement provides to people and problems that
need them. We intend to work constructively with all parties as we
try to implement this settlement."
About Purdue Pharma
Privately-held Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers. The
company was founded by members of the Sackler family in 1952.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15, 2019 and Sept. 16, 2019, Purdue Pharma L.P. and 23
affiliated debtors each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 19-23649), after reaching terms of a preliminary
agreement for settling the massive opioid litigation facing the
Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
PURDUE PHARMA: Sacklers Give Up Ownership in $10 Billion Deal
-------------------------------------------------------------
Purdue Pharma L.P. on Sept. 15, 2019, announced that after a year
of intense and arduous negotiations, Purdue Pharma, its ultimate
owners -- trusts for the benefit of members of the Sackler families
-- and a critical mass of plaintiff constituencies have reached an
agreement in principle on a framework for settling the U.S. opioid
litigation against the company.
The settlement structure is estimated to provide more than $10
billion of value to address the opioid crisis. The key elements of
the settlement, which is subject to court approval, include:
* The owners of Purdue contributing all of its assets to a
trust or other entity established for the benefit of claimants and
the American people;
* The new company ("NewCo") being governed by a new board
selected by claimants and approved by the Bankruptcy Court;
* NewCo potentially contributing tens of millions of doses of
opioid overdose reversal and addiction treatment medications at no
or low cost;
* NewCo agreeing to be bound permanently by injunctive relief,
including marketing restrictions on the sale and promotion of
opioids; and
* In addition to 100% of Purdue, the Sackler families
contributing a minimum of $3 billion, with the potential for
substantial further monetary contributions from the sales of their
ex-U.S. pharmaceutical businesses.
The Debtors acknowledged in court filings that only the framework
has been agreed, and that there are "many open points to be further
refined and resolved."
Parties that have agreed to the settlement framework are comprised
of:
-- Attorneys general of the states of Alabama, Alaska, Arizona,
Arkansas, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan,
Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota,
Ohio, South Carolina, South Dakota, Tennessee, Texas, Utah, West
Virginia, and Wyoming.
-- Officials from five U.S. territories, namely, American Samoa,
Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin
Islands.
-- The court-appointed Plaintiffs' Executive Committee ("PEC")
and Co-Lead Counsel in the federal multidistrict litigation pending
in Ohio ("Ohio MDL"), which comprises attorneys at law firms that
collectively represent over 1,000 counties.
"This unique framework for a comprehensive resolution will dedicate
all of the assets and resources of Purdue for the benefit of the
American public," said Steve Miller, Chairman of Purdue's Board of
Directors. "This settlement framework avoids wasting hundreds of
millions of dollars and years on protracted litigation, and instead
will provide billions of dollars and critical resources to
communities across the country trying to cope with the opioid
crisis. We will continue to work with state attorneys general and
other plaintiff representatives to finalize and implement this
agreement as quickly as possible."
Under the agreement reached among the parties, Purdue's unique
technical know-how and deep experience in developing medicines will
be used for the benefit of the American public. The settlement
framework contemplates that NewCo could provide to states and local
communities, at no or low cost, life-saving opioid overdose
reversal medications such as nalmefene and naloxone.
Purdue has received FDA fast-track designation for nalmefene
hydrochloride, a much-needed treatment that has the potential to
reverse overdoses from powerful synthetic opioids such as fentanyl.
NewCo could also continue supporting the development of an
over-the-counter (OTC) nasal naloxone product, and provide millions
of doses of these medicines at no or low cost to communities around
the country. It is hoped that this will dramatically increase
access to this life-saving opioid overdose reversal medication, one
of the FDA's top public health priorities.
To finalize and implement the settlement agreement, Purdue on Sept.
15, 2019, filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code as the next step in implementing this historic
agreement in principle. This court-supervised process is intended
to, among other things, facilitate an orderly and equitable
resolution of all claims against Purdue, while preserving the value
of Purdue's assets for the benefit of those impacted by the opioid
crisis.
Review of Sacklers Ongoing
Three doctors -- brothers Arthur, Mortimer and Raymond Sackler --
founded Purdue Pharma in 1952 after taking over a small New York
drug manufacturer. The company grew to a pharmaceutical giant
after it started selling OxyContin, a long-lasting, narcotic pain
reliever. According to The New Yorker, OxyContin has reportedly
generated some $35 billion in revenue for Purdue as of 2017.
While the Sackler families still own 100% of Purdue Pharma, no
member of the Sackler families currently serves as a director or
employee of Purdue.
The Debtors and the Board said in court filings that they take very
seriously the asserted claims relating to the Sackler Families'
prepetition management of the Debtors, and the Debtors' historical
distributions to their owners. The Special Committee has been
overseeing various investigations, including an exhaustive review
by outside experts of distributions made by the Debtors to the
Sackler Families and their affiliates, as well as any dealings
between the Debtors and any member of the Sackler Families or any
of their affiliates. This important work is ongoing; professionals
at AlixPartners LLP, Bates White, and Davis Polk & Wardwell LLP
have dedicated more than 12,000 hours to these projects to date at
the direction and under the supervision of the Special Committee,
which, in the past months, has been meeting multiple times each
month on these issues.
First Day Motions
To achieve a successful and smooth transition to chapter 11, the
Company has filed a variety of first-day motions.
The first-day motions include a request to pay wages and benefits
owed to employees. Certain of the Debtors' current and former
owners, officers and affiliates have been named in the 2,600 civil
actions against Purdue Pharma. In addition, 270 former employees
are witnesses or defendants in the opioid related lawsuits. As
insurance is insufficient, the Debtors anticipate that aggregate
legal costs will be approximately $1.5 million per month at the
outset of the chapter 11 cases.
The Debtors have also sought approval to pay $7.70 million for
prepetition claims of critical vendors.
A hearing on the first day motions is scheduled for today, Sept.
17, 2019, at 10:00 a.m. at the Bankruptcy Court for the Southern
District of New York, 300 Quarropas Street, White Plains, New York
10601.
About Purdue Pharma
Privately held Purdue Pharma L.P. and its subsidiaries
--http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers. The
company was founded by members of the Sackler family in 1952.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation facing the Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
PURDUE PHARMA: Seeks to Shield Sackler Family From Litigation
-------------------------------------------------------------
Peg Brickley and Sara Randazzo, writing for The Wall Street
Journal, reported that the lawyers of OxyContin maker Purdue Pharma
LP said they would ask the bankruptcy judge to issue an injunction
that would halt legal hostilities against the Sackler family from
attorneys general who won't sign the settlement the company
offered.
According to the report, the company's owners, members of the
wealthy Sackler family, are entitled to a shield from litigation,
Purdue said it would argue.
Government claims against the Sacklers, as well as Purdue's
directors and officers, are "inextricably intertwined" to
litigation with the company directly, it said, the report added.
Purdue has the backing of 24 states and thousands of local
governments for the multibillion-dollar settlement, but other
states are demanding that the company and the Sacklers pay more
than what they have offered, the report said.
The Journal noted that Massachusetts Attorney General Maura Healey,
who has pursued the Sacklers in state court, said she would oppose
the settlement and any attempt to stop her claims from going
forward.
"I see no basis by which they're entitled to a stay because they're
not declaring bankruptcy," North Carolina Attorney General Josh
Stein told the Journal of the Sacklers, adding that he is preparing
to sue family members. "They are trying to use bankruptcy to
shield their assets."
About Purdue Pharma
Privately-held Purdue Pharma L.P. and its subsidiaries
--http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers. The
company was founded by members of the Sackler family in 1952.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15, 2019 and Sept. 16, 2019, Purdue Pharma L.P. and 23
affiliated debtors each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 19-23649), after reaching terms of a preliminary
agreement for settling the massive opioid litigation facing the
Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
PURDUE PHARMA: To Seek Injunction Against Governmental Plaintiffs
-----------------------------------------------------------------
The vast majority of the 2,600 lawsuits against Purdue Pharma L.P.
-- over 85% by number -- have been brought by governmental
plaintiffs.
Unlike typical mass tort cases in which the automatic stay
virtually always protects the debtor from having to continue to
expend resources litigating actions outside of bankruptcy, the
Debtors anticipate that many or all of the governmental plaintiffs
who have not agreed to support the Settlement Structure will claim
that their actions are exempt from the automatic stay by virtue of
the section 362(b)(4) police and regulatory power exception.
In anticipation of this, the Debtors said they will soon commence
an adversary proceeding and file a motion for a preliminary
injunction ("Preliminary Injunction Motion") to enjoin the
continued prosecution of the active governmental litigation against
the Defendant Debtors, to the extent that section 362(a) does not
apply, pursuant to section 105(a) of the Bankruptcy Code.
In connection with this motion, the Debtors intend to seek an
unprecedented voluntary injunction against themselves that will
address the past conduct complained of in the Pending Actions. The
Debtors will request this relief to put beyond any doubt that they
are not attempting to frustrate governmental functions by "seeking
refuge" in bankruptcy court.
Moreover, because claims against current and former owners,
officers, directors, employees, and entities associated with the
Defendant Debtors ("Related Parties") are inextricably intertwined
with and related to the claims against the Defendant Debtors, the
Debtors will also ask this Court to enjoin active litigation
against those parties.
"Protection from uncontrolled litigation is the singular feature of
bankruptcy that makes it an effective tool for the successful
resolution of mass tort matters. Absent that protection, this case
will fail because the fundamental goal of this and any bankruptcy
will have been thwarted: the centralized, efficient and rational
resolution of claims against the Debtors and the fair distribution
of the Debtors' assets at the lowest possible cost -- hopefully
accomplished here by effectuating the consensual resolution
reflected in the Settlement Structure. The Debtors' estates will be
depleted by the blows they continue to take, and the hundreds of
millions of dollars in annual legal fees that would otherwise be
available to help address opioid overdoses will have been lost; the
plaintiffs' jockeying and race to many courthouses will continue;
coordinated negotiation of a global settlement will be all but
impossible; the plaintiffs will inevitably be subject to disparate
litigation outcomes; and any prevailing tort claimants will be
unable to enforce their money judgments against the Defendant
Debtors in any event," the Debtors' attorney, Marshall S. Huebner
of Davis Polk & Wardwell LLP, said in court filings.
About Purdue Pharma
Purdue Pharma L.P. and its subsidiaries
--http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation facing the Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
RAIN CARBON: Moody's Reviews B1 CFR for Downgrade
-------------------------------------------------
Moody's Investors Service placed under review for downgrade Rain
Carbon Inc's B1 Corporate Family Rating, B1-PD probability of
default rating, the ratings of Ba3 senior secured revolving
facility and B2 senior secured 2nd lien notes as well as the Ba3
rating of senior secured Euro term facility of Rain Carbon GmbH, a
wholly-owned subsidiary of RCI.
"The review reflects softening market conditions in US, Europe and
Asia, particularly in aluminum and automotive sectors, which in
conjunction with petcoke import restrictions implemented by India
and RCI's capex requirements, will likely constrain EBITDA and free
cash flow generation and limit the company's ability to reduce
currently high leverage", said Botir Sharipov, Vice President and
lead analyst for Rain Carbon Inc.
On Review for Downgrade:
Issuer: Rain Carbon GmbH
Gtd. Senior Secured Term Loan B, Placed on Review for
Downgrade, currently Ba3 (LGD3)
Issuer: Rain Carbon Inc.
Probability of Default Rating, Placed on Review for
Downgrade, currently B1-PD
Corporate Family Rating, Placed on Review for Downgrade,
currently B1
Gtd. Senior Secured Bank Credit Revolving Facility, Placed
on Review for Downgrade, currently Ba3 (LGD3)
Gtd. Senior Secured 2nd Lien Regular Bond/Debenture, Placed
on Review for Downgrade, currently B2 (LGD5)
Outlook Actions:
Issuer: Rain Carbon GmbH
Outlook, Changed To Rating Under Review From Positive
Issuer: Rain Carbon Inc.
Outlook, Changed To Rating Under Review From Positive
RATINGS RATIONALE
The review will focus on the expected operational performance
against the backdrop of broad global economic slowdown and specific
challenges faced by RCI. The review will evaluate the company's
capex spending required to complete two growth projects in India
and Germany and the potential for EBITDA recovery to levels that
could support, on a sustained basis, positive FCF generation and
meaningful deleveraging over the next 12-18 months. An important
part of the review will be an assessment of alternative strategies
RCI is undertaking to mitigate the fallout of the Indian petcoke
restrictions that are adversely impacting its Indian and US
operations and overall financial performance.
RCI's LTM adjusted debt/EBITDA, as measured by Moody's, has climbed
to 5.6x as of June 30, 2019 from about 4x at the end of 2018 and
under 3x a year ago. Based on the company's recent performance,
persistent weakness in the automotive and aluminum sectors which
are key end-markets for RCI, lack of visibility on the resolution
of the Indian petcoke restrictions and its expectations for EBITDA
and cash flow generation over the next several quarters, leverage,
as measured by the debt/EBITDA ratio (including Moody's standard
adjustments) could decline modestly but remain elevated at around
5x.
RCI faces a number of meaningful ESG risks as a producer of
carbon-based products and a supplier of key input ingredients for
the primary aluminum industry. India's petcoke import restrictions
were driven by environmental concerns, specifically greenhouse gas
emissions associated with the use of petcoke as fuel. These
restrictions have materially impacted the company's operating and
financial performance. Furthermore, one of RCI's Canadian
subsidiaries and other companies are being currently sued by
several cities in Minnesota over the cost of cleaning up the
allegedly polluted local stormwater ponds. The Plaintiffs claim
that the refined coal tar products made by RCI's Canadian
subsidiary and other Defendants that were used in the past in
pavement sealants have contaminated the cities' stormwater ponds.
While the lawsuit is in early stages and the final outcome is
highly uncertain, Moody's believes it represents a material credit
risk for RCI.
Rain Carbon Inc. has a good liquidity position as of June 30, 2019,
supported by cash on hand of $112 million and $163 million of
availability under the senior secured revolver maturing in 2023 and
credit facilities available to fund working capital needs at the
company's Indian operations.
Rain Carbon Inc. is an indirect wholly owned subsidiary of Rain
Industries Limited, a company incorporated in India. The company is
engaged in the business of manufacturing and sales of carbon
products and advanced materials, including calcined petroleum coke
(CPC), coal tar pitch (CTP), cogenerated energy, and other
derivatives and downstream products of the coal tar distillation
process. The company generated $1.76 billion in revenues during the
LTM ended June 30, 2019.
The principal methodology used in these ratings was Steel Industry
published in September 2017.
ROCKY MOUNTAIN: Moody's Rates $6.8MM Education Bonds 'Ba1'
----------------------------------------------------------
Moody's Investors Service has assigned an initial Ba1 rating to
Rocky Mountain School of Expeditionary Learning (RMSEL), CO's $6.8
million Education Revenue Bonds (Rocky Mountain School of
Expeditionary Learning School BOCES Project), Series 2019.
Following the sale, RMSEL will have $6.8 million in outstanding
revenue debt. The outlook is stable.
RATINGS RATIONALE
The underlying Ba1 rating reflects the Rocky Mountain School of
Expeditionary Learning's robust, more than 25-year operating
history with multiple renewals of the five-year intergovernmental
agreement, consistently healthy liquidity and sound financial
performance. The rating also considers the district's small size of
operations, full elementary and middle school enrollment with
declining enrollment in grades 9-12, and increased leverage
following the sale of the 2019 bonds.
RATING OUTLOOK
The stable outlook reflects its expectation that the district's
robust operating history coupled with full enrollment and a healthy
K-8 waitlist and recently implemented revenue enhancements will
continue supporting stable operations going forward.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Enrollment growth that consistently fills the school to
capacity
- Sustained debt service coverage and improved liquidity
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Further declines in high school enrollments that impact
operating performance and/or weakening of the wait list
- Inability to produce adequate coverage following the
issuance of the 2019 Bonds and/or weakened liquidity
- Loss of a participating district under the IGA that negatively
impacts enrollment and/or operations
LEGAL SECURITY
The Series 2019 bonds are being issued by the Colorado Educational
and Cultural Facilities Authority and will be a special obligation
of the Authority payable solely from and secured by pledged rental
payments from the Board of Cooperative Education Services (BOCES),
a non-profit corporation that oversees the administration of the
Rocky Mountain School of Expeditionary Learning (RMSEL). Pledged
rental payments are subject to annual appropriation and payable by
BOCES to the Authority under the sublease agreement. The bonds are
additionally secured by a leasehold deed of trust on the property.
USE OF PROCEEDS
Proceeds will finance a portion of the expansion of and
improvements to the existing facility. The total project will be
financed through a combination of the $6.8 million 2019 revenue
bonds, a $4.5 million Building Excellent Schools Today (BEST)
matching cash grant received by the Colorado Department of
education and a $451,000 equity contribution from the district.
PROFILE
The Board of Cooperative Education Services (BOCES) is a non-profit
corporation that operates and oversees Rocky Mountain School of
Expeditionary Learning (RMSEL) pursuant to an intergovernmental
agreement among five sponsoring school districts. The sponsoring
districts include Adams & Arapahoe Counties Joint School District
28J (Aurora) (Aa2 stable), Arapahoe County School District No. 6
(Littleton PS) (Aa1), Arapahoe County School District No. 5 (Cherry
Creek ) (Aa1 stable), Denver City & County School District No. 1
(DPS; Aa1 stable), and the Douglas County School District RE-1 (Aa1
stable). RMSEL began operations on September 7, 1993, initially
serving 215 students in grades K-9. It now serves approximately 370
students in grades K-12. The Sponsoring Districts and the BOCES
have renewed the Intergovernmental Agreement by unanimous vote five
times since 1993, most recently for a term of five years effective
July 1, 2017 through June 30, 2022.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in September 2016.
SAFEBUY ACCEPTANCE: Involuntary Chapter 11 Case Summary
-------------------------------------------------------
Alleged Debtor: SafeBuy Acceptance Corporation
552 S. Buckner Boulevard
Dallas, TX 75217
Business Description: SafeBuy Acceptance Corporation is a
privately held company in Dallas, Texas.
Involuntary Chapter
11 Petition Date: September 14, 2019
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Case Number: 19-33086
Petitioners' Counsel: Arnaldo Nelson Cavazos, Jr., Esq.
CAVAZOS HENDRICKS POIROT, P.C.
Suite 570, Founders Square
900 Jackson St.
Dallas, TX 75202-4425
Tel: (214) 748-8171
Fax: (214) 748-6750
E-mail: acavazos@chfirm.com
Alleged creditors who signed the involuntary petition:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Chupacabra, Ltd. Transferee $138,000
5151 Belt Line Road, Liability
Suite 77
Dallas, TX 75254
The Thor Johnston Transferee $1,000,000
Family Trust Liability
10972 Tularosa Lane
Frisco, TX 75033
Tim Turner Transferee $500,000
7042 Midcrest Drive Liability
Dallas, TX 75254
A full-text copy of the Involuntary Petition is available for free
at:
http://bankrupt.com/misc/txnb19-33086.pdf
SAFEBUY FINANCIAL: Involuntary Chapter 11 Case Summary
------------------------------------------------------
Alleged Debtor: SafeBuy Financial Services, Inc.
552 S. Buckner Boulevard
Dallas, TX 75217
Involuntary Chapter
11 Petition Date: September 14, 2019
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Case Number: 19-33087
Petitioners' Counsel: Arnaldo Nelson Cavazos, Jr., Esq.
CAVAZOS HENRICKS POIROT, P.C.
Suite 570, Founders Square
900 Jackson St.
Dallas, TX 75202-4425
Tel: (214) 748-8171
Fax: (214) 748-6750
E-mail: acavazos@chfirm.com
Alleged creditors who signed the involuntary petition:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Chupacabra, Ltd. Transferee $138,000
5151 Belt Line Road, Liability
Suite 77
Dallas, TX 75254
The Thor Johnston Family Trust Transferee $1,000,000
10972 Tularosa Lane Liability
Frisco, TX 75033
Tim Turner Transferee $500,000
7042 Midcrest Drive Liability
Dallas, TX 75254
A full-text copy of the Involuntary Petition is available for free
at:
http://bankrupt.com/misc/txnb19-33087.pdf
SAFEBUY LLC: Involuntary Chapter 11 Case Summary
------------------------------------------------
Alleged Debtor: SafeBuy, LLC
552 S. Buckner Boulevard
Dallas, TX 75217
Business Description: SafeBuy, LLC is a used car dealer in Dallas,
Texas.
Involuntary Chapter
11 Petition Date: September 14, 2019
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Case Number: 19-33084
Petitioners' Counsel: Arnaldo Nelson Cavazos, Jr., Esq.
CAVAZOS HENDRICKS POIROT, P.C.
Suite 570, Founders Square
900 Jackson St.
Dallas, TX 75202-4425
Tel: (214) 748-8171
Fax: (214) 748-6750
Email: acavazos@chfirm.com
Alleged creditors who signed the involuntary petition:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Chupacabra, Ltd. Loan $138,000
5151 Belt Line Road, Suite 77
Dallas, TX 75254
The Thor Johnston Family Trust Loan $1,000,000
10972 Tularosa Lane
Frisco, TX 75033
Tim Turner Loan $500,000
7042 Midcrest Drive
Dallas, TX 75254
A full-text copy of the Involuntary Petition is available for free
at:
http://bankrupt.com/misc/txnb19-33084.pdf
SAFEBUY PROPERTIES: Involuntary Chapter 11 Case Summary
-------------------------------------------------------
Alleged Debtor: SafeBuy Properties, LLC
3322 Shorecrest Dr, Ste 235
Dallas, TX 75235
Business Description: SafeBuy Properties, LLC is a privately held
company in Dallas, Texas.
Involuntary Chapter
11 Petition Date: September 14, 2019
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Case Number: 19-33085
Petitioners' Counsel: Arnaldo Nelson Cavazos, Jr., Esq.
CAVAZOS HENDRICKS POIROT, P.C.
Suite 570, Founders Square
900 Jackson St.
Dallas, TX 75202-4425
Tel: (214) 748-8171
Fax: (214) 748-6750
Email: acavazos@chfirm.com
Alleged creditors who signed the involuntary petition:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Chupacabra, Ltd. Transferee $138,000
5151 Belt Line Road, Suite 77 Liability
Dallas, TX 75254
The Thor Johnston Family Trust Transferee $1,000,000
10972 Tularosa Lane Liability
Frisco, TX 75033
Tim Turner Transferee $500,000
7042 Midcrest Drive Liability
Dallas, TX 75254
A full-text copy of the Involuntary Petition is available for free
at:
http://bankrupt.com/misc/txnb19-33085.pdf
SENSATA TECHNOLOGIES: S&P Rates New Senior Unsecured Notes 'BB+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '4'
recovery rating on Sensata Technologies B.V.'s proposed issue of
senior unsecured notes due 2030 (the borrower will be Sensata
Technologies Inc.).
S&P's '4' recovery rating on the company's senior unsecured notes
indicates its expectation that lenders would receive an average
(30%-50%; rounded estimate: 45%) recovery of principal in the event
of a payment default.
The rating agency expects the company to use the net proceeds to
reduce and refinance its existing term loan. Hence, the transaction
will be leverage-neutral.
S&P also affirmed its 'BBB-' issue-level rating on the company's
first-lien term loan, for which the '1' recovery rating is
unchanged. A recovery rating of '1' denotes an expectation of very
high (90%-100%) recovery in the event of default. S&P's 'BB+'
issuer credit rating on Sensata Technologies B.V. is unchanged and
the outlook remains stable.
ISSUE RATINGS – RECOVERY ANALYSIS
Key analytical factors:
S&P based its simulated default scenario on a payment default in
2024 stemming from a cyclical downturn in the U.S., accompanied by
softness in the European market and a significant correction in
Asia. This combination of events would decrease auto production
volumes and prices, causing the company's sales to drop and its
annualized EBITDA to decline sharply in 2024.
Simulated default assumptions:
-- Year of default: 2024;
-- All debt includes six months of accrued interest; and
-- Administrative claims of 5% of enterprise value.
Simplified waterfall:
-- Gross enterprise value: $2289 million
-- Administrative expenses: $114 million
-- Net enterprise value: $2174 million
-- Obligor/nonobligor valuation split: 68%/32%
-- Total collateral value for secured debt: $1478 million
-- Total first-lien debt: $831 million
-- Recovery expectation: 90%-100% (rounded estimate: 95%)
-- Total unsecured debt: $2875 million
-- Recovery expectation: 30%-50% (rounded estimate: 45%)
SOUTH COAST BEHAVIORAL: PCO Files 1st Interim Report
----------------------------------------------------
Tamar Terzian as patient care ombudsman for South Coast Behavioral
Health, Inc., filed a first interim report for the period from July
1, 2019 to August 1, 2019.
South Coast Behavioral Health comprises of six separate facilities
in the Orange County area focusing on alcohol and drug
rehabilitation. It has two commercial locations whereby the Debtor
uses for administration purposes as well as for treatment purposes.
The Debtor also has approximately three residential locations in
Costa Mesa and one residential alcohol and drug rehabilitation
location in Huntington Beach that is currently not operating.
The functioning, the staffing, and other professional coverage is
much the same throughout the residential facilities which consist
of two treatment technicians and one healthcare technician.
The Medical Records are electronic in all facilities and some hard
copy intake information sheets available for patients when needed.
The PCO made the following observations:
1. Office interview with Dr. Mcphail in 3151 Airway Avenue P3,
Costa Mesa, CA.
A. Some files of the Patients are stored in the administrative
office with his wife Dr. Nicole Poliquin, who is listed as the
Director of the Debtor.
B. Staffing consisted of one administrative clerk for intake and
the HR Department and eight other employees.
C. Licenses of certain staff need to be current,
D. CLIA (Clinical Laboratory Improvement Amendment) license is
current.
E. Medications are dated properly and no outdates.
F. Medical records well maintained. Reviewed at random patient
records and it appears the patients were properly treated with the
correct procedures based on their individual case.
2. Interview with Amanda Schofield in 559 Pierpoint Drive, Costa
Mesa, CA.
A. The Center is relatively medium sized with three bedrooms,
two baths, kitchen, and living room, and dining area.
B. Average daily patient census 4-5 patients per day.
C. Staffing includes two treatment technicians and one health
care technician.
D. Licenses of staff posted and current.
E. Supplies are appropriately labeled and stored.
F. Medication (multi-dose) appropriately dated.
3. Interview with Amanda Schofield in 1958 Baleric Drive, Costa
Mesa, CA (Dolphin)
A. The Center is relatively medium sized with four bedrooms, two
bath, kitchen, family room and living room, and dining area. The
location is licensed for both male and female with a total
occupancy of six patients. This license is held under the name of
South Coast Behavioral Health Guesthouse, Inc.
B. Average daily patient census 4-5 patients per day.
C. Staffing includes two treatment technicians and one health
care technician.
D. CLIA license is expired and needs to be updated.
E. Supplies are appropriately labeled and stored.
F. Medication (multi-dose) appropriately dated.
4. Interview with Amanda Schofield in 275 Wilson Street, Costa
Mesa, CA (Wilson)
A. The Center is relatively medium sized with three bedrooms,
two bath, kitchen, and living room, and dining area. This location
is mostly male and PCO observed four patients and is licensed for
six.
B. Average daily patient census 4-5 patients per day.
C. Staffing includes two treatment technicians and one health
care technician.
D. Licenses of staff posted and current
E. Supplies are appropriately labeled and stored.
F. Medication (multi-dose) appropriately dated.
5. Interview with Amanda Schofield in 1068 San Pablo Circle
(Spartan) -- The Facility is relatively medium sized with four
bedrooms, two baths, kitchen, family room, living room, and dining
area. This residential facility is closed.
6. Interview with Amanda Schofield in 5302 Kenilworth Huntington
Beach, CA (Gemini) -- The Facility is relatively fairly large sized
with four bedrooms, three baths, kitchen, family room, living room,
and dining area. This residential facility is closed.
7. Interview with Amanda Schofield in 6 Banyan Tree, (Banyan) --
The Facility is relatively medium sized with four bedrooms, two
baths, kitchen, and living room, and dining area. This residential
facility is closed.
8. Interview with Amanda Schofield and Dr. McPhail in 2220
University Drive, Costa Mesa, CA. -- This Facility is a commercial
building and consists of a two-story space which has various
meeting rooms and large common area. Patients check in with front
reception and have PHP and IOP meetings. This location has 30-40
patients and operated Monday through Friday from 8:00 a.m.-9:00
p.m.
Therefore, the facilities of the Debtors in every location are
well-supplied and all clean. Maintain staff files including
providing adequate training for staff and no privacy violations
noted on any of the visits.
The Patient Care Ombudsman (PCO) finds that all care provided to
the patients by the Debtor is at the minimum of standard of care
set by the Joint Commission.
The PCO will continue to monitor and is available to respond to any
concerns or questions of the Court or interested party.
A full-text copy of the PCO's 1st Interim Report is available at
https://tinyurl.com/yymlx8op from PacerMonitor.com at no charge.
The PCO can be reached at:
Tamar Terzian, Esq.
Terzian Law Group,
A Professional Corporation
1122 E. Green Street
Pasadena, CA 91106
Telephone: (818) 242-1100
Facsimile: (818) 242-1012
Email: tamar@terzlaw.com
About South Coast Behavioral Health
South Coast Behavioral Health, Inc. -- https://www.scbh.com/ -- is
a healthcare company that specializes in the in-patient and
outpatient treatment of addicts, alcoholics, and persons dealing
with mental health issues. It offers a clinically supervised
residential sub acute detox services, therapeutic and residential
treatment centers, intensive outpatient treatment services, and
partial hospitalization programs.
South Coast Behavioral Health sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12375) on June
20, 2019. At the time of the filing, the Debtor disclosed assets
of between $1 million and $10 million and liabilities of the same
range. The case is assigned to Judge Mark S. Wallace. Nicastro &
Associates, P.C., is the Debtor's legal counsel.
Tamar Terzian was appointed as patient care ombudsman.
SOUTH COAST BEHAVIORAL: U.S. Trustee Appoints Tamar Terzian as PCO
------------------------------------------------------------------
Upon consideration of the application for appointment of a Patient
Care Ombudsman for South Coast Behavioral Health, Inc., filed by
the U.S. Trustee for Region 16 on July 18, 2019, the Bankruptcy
Court approved the U.S. Trustee's application and Tamar Terzian is
appointed as patient care ombudsman.
About South Coast Behavioral Health
South Coast Behavioral Health, Inc. -- https://www.scbh.com/ -- is
a healthcare company that specializes in the in-patient and
outpatient treatment of addicts, alcoholics, and persons dealing
with mental health issues. It offers a clinically supervised
residential sub acute detox services, therapeutic and residential
treatment centers, intensive outpatient treatment services, and
partial hospitalization programs.
South Coast Behavioral Health sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12375) on June
20, 2019. At the time of the filing, the Debtor disclosed assets
of between $1 million and $10 million and liabilities of the same
range. The case is assigned to Judge Mark S. Wallace. Nicastro &
Associates, P.C., is the Debtor's legal counsel.
SOVRANO LLC: Oct. 17 Plan Confirmation Hearing
----------------------------------------------
Judge Edward L. Morris of the U.S. Bankruptcy Court for the
Northern District of Texas, Fort Worth Division, approved the
disclosure statement explaining the plan of reorganization of
Sovrano, LLC, Gigi's Operating II, LLC, Gigi's Operating, LLC,
Gigi's Cupcakes, LLC, KeyCorp, LLC, Gatti's Great Pizza, Inc., and
Mr. Gatti's LP and scheduled a hearing for the confirmation of the
Plan for October 17, 2019, at 10:00 a.m.
October 7, 2019 is fixed as the last day to file with the Court
written objections to Plan confirmation, which include the
rejection or assumption of unexpired leases and executory
contracts, cure amounts, and for servicing same so as to be
received on or before the deadline of objection upon the following
notice parties, offered that the Debtors might agree to extend such
deadline to file and serve objections without the need for an order
of the Bankruptcy Court.
Prior to the disclosure statement hearing, the Debtors filed a
first amended plan and amended disclosure statement.
The Debtors concluded that they will maximize recoveries to their
stakeholders by reorganizing Gatti's Debtors as a going concern and
winding up Gigi's Debtors after a careful review of their current
liquidity and operations, prospects as an ongoing business, and
estimated recoveries to creditors in a forced sale scenario
provided the current market conditions.
Holders of allowed claims or interests against each of the Debtors
will receive similar recovery offered to other holders of allowed
claims or interests in the applicable Class and will be entitled to
their share of assets available for distribution to such class.
A full-text copy of the First Amended Disclosure Statement is
available at https://tinyurl.com/y2vszgeo from PacerMonitor.com at
no charge.
The Debtors are represented by Michael McConnell and Nancy L.
Ribaudo of Kelly Hart & Hallman LLP.
About Sovrano LLC
Sovrano, LLC is a private equity group specializing in lower
middle-market investments. Based in Fort Worth, Texas, the company
invests in the food services or restaurant industry. In 2015,
Sovrano acquired Gatti's Pizza, a pizza chain founded in 1969.
Sovrano and its subsidiaries filed voluntary Chapter 11 petitions
(Bankr. N.D. Tex., Lead Case No. 19-40067) on Jan. 4, 2019. The
Hon. Edward L. Morris is assigned to the cases. In the petitions
signed by Kyle C. Mann, vice chairman, Sovrano estimated assets of
between $10 million and $50 million and liabilities of between $10
million and $50 million.
The Debtors tapped Kelly Hart & Hallman LLP as their bankruptcy
counsel.
SPECTRUM BRANDS: S&P Rates New $300MM Senior Unsecured Notes 'B+'
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S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Spectrum Brands Inc.'s proposed $300 million
senior unsecured notes due 2029. The '3' recovery rating indicates
S&P's expectation for meaningful (50%-70%; rounded estimate: 50%)
recovery in the event of a payment default.
The rating agency views the transaction as leverage neutral. It
expects the company will use the net proceeds from the proposed
issuance for working capital and other general corporate purposes.
The company also announced that it commenced a cash tender offer
with respect to its $285 million outstanding amount of the $570
million senior unsecured notes due 2022. The company intends to
fund the tender offer from the proceeds of the divestiture of its
Global Auto Care business. S&P will withdraw its ratings on the
$570 million notes due 2022 when they are repaid in full. S&P's
ratings assume the transaction closes on substantially the same
terms that the company provided to the rating agency. Pro forma for
the proposed transaction, Spectrum Brands has about $2.3 billion of
outstanding debt.
All of S&P's other ratings on Spectrum Brands Holdings Inc.,
including its 'B+' issuer credit rating, remain unchanged. The
outlook is stable.
S&P's ratings on Spectrum Brands incorporate the solid market
position of the company's hardware and home improvement (HHI)
business and the defensible market position held by its
value-focused home and garden (H&G) segment. The pet sector has
good fundamentals, including relatively stable underlying consumer
demand. Nevertheless, it's a highly fragmented and competitive
space and pet specialty retailers continue to struggle. Input-cost
variability also remains a key risk, especially for the company's
HHI and H&G businesses.
SPENGLER PLUMBING: U.S. Trustee Forms 3-Member Committee
--------------------------------------------------------
The U.S. Trustee for Region 10 on Sept. 12 appointed three
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 case of Spengler Plumbing Company, Inc.
The committee members are:
(1) Plumbers Local 101
Attn: Scott Deitz
8 Premier Drive
Belleville, IL 62220
Phone: 618-235-5504
Fax: 618-234-3496
Email: Scottd@local101.net
(2) Local Business Search
Attn: Jed Wilson
1715 East Belle Avenue
Belleville, IL 62221
Phone: (618) 899-7214
Email: admin@localbusinesssearch.com
(3) Plumbers Local 360
Attn: Don DeGonia, Business Manager
5 Meadow Heights Professional Park
Collinsville, IL 62234
Phone: (618) 346-2560
Email: dondegonia@sbcglobal.net
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Spengler Plumbing Company
Founded in 1971, Spengler Plumbing Company, Inc. specializes in
plumbing and HVAC services.
Spengler Plumbing Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ill. Case No. 19-30958) on July 19,
2019. At the time of the filing, Spengler Plumbing disclosed
assets of between $1 million and $10 million and liabilities of the
same range.
The case has been assigned to Judge Laura K. Grandy. Spengler
Plumbing is represented by Steven M. Wallace, Esq., at Heplerbroom,
LLC.
ST. JUDE NURSING: PCO Files Report for May to August 2019
---------------------------------------------------------
Deborah L. Fish, as patient care ombudsman for St. Jude Nursing
Center, Inc., filed a Report for the period from May 8, 2019 to
August 6, 2019.
St. Jude Nursing Center is a privately owned, licensed long-term
skilled nursing facility, consists of 64 licensed beds, and
financially managed by Mission Point Management Services, LLC
("MPMS"). It is located at 34350 Ann Arbor Trail, Livonia, Michigan
48150.
The current census is 56 residents, although it was up to 63 during
the last 60 days. The administrator of the facility was on medical
leave and during that time the Mission Point director of operations
and licensed administrator acted as the interim administrator of
the facility.
The Debtor's facility offers services such as skilled nursing care,
hospice care, Alzheimer's and dementia patient care, physical
rehabilitation, tracheal and enteral services, wound care, and
short-term respite care.
The vast majority of the Debtor's patients come from local
hospitals, the State of Michigan prison system and the surrounding
community.
Therefore, Patient staffing has not changed and there have been no
changes since the last report as to services provided, security or
supplies. It is still compliant with all state and federal
regulations. However, the facility is still in need of more
Certified Nursing Assistants. The Debtor has maintained all of its
services and is delivering similar quality care to essentially the
same patient population.
The facility is old, the cleanliness of the floors and the
residents' rooms was satisfactory given the antiquated condition of
the facility. There were no odors to report on two site visits.
The PCO observed and or confirmed the following:
1. During lunch service the residents sat in the dining room and
were eating and finishing lunch. The staff was assisting some
residents with eating. There were approximately 32 residents eating
in the dining hall. Many residents are demanding, excited and
difficult to deal with, however, the staff dealt with all residents
in a respectful way.
2. The delivery of medication and confirmation that medication
carts were locks.
3. Residents clothes were clean.
4. None of the residents complained about any of the services
being provided.
4. Reviewed the menu board.
Further, the Debtor has continued the same quality of care
post-petition as it did prepetition. Monitoring will continue.
A full-text copy of the PCO's Report is available at
https://tinyurl.com/yycx35sk from PaceMonitor.com at no charge.
About St. Jude Nursing
St. Jude Nursing Center is a privately owned and licensed long-term
skilled nursing facility located at 34350 Ann Arbor Trail, Livonia,
Michigan 48150. The Facility consists of 64 licensed beds, located
within the Debtor-owned facility. The Facility offers services
such as skilled nursing care, hospice care, Alzheimer's and
dementia patient care, physical rehabilitation, tracheal and
enteral services, wound care, and short-term respite care. The
Company previously sought bankruptcy protection on Feb. 18, 2016
(Bankr. E.D. Mich. Case No. 16-42116) and Feb. 22, 2012 (Bankr.
E.D. Mich. Case No. 12-43956).
St. Jude Nursing Center, Inc., filed a Chapter 11 petition (Bankr.
E.D. Mich. Case No. 18-54906) on Nov. 2, 2018, and is represented
by Jeffrey S. Grasl, Esq., in Farmington Hills, Michigan. In the
petition signed by Bradley Mali, president, the Debtor estimated
$500,000 to $1 million in assets, and $1 million to $10 million in
liabilities as of the bankruptcy filing.
STEINER BROTHER: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Steiner Brother Properties LLC as of Sept.
12, according to a court docket.
About Steiner Brother Properties
Steiner Brother Properties LLC classifies its business as single
asset real estate (as defined in 11 U.S.C. Section 101(51B)).
Steiner Brother Properties LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-62232) on Aug.
5, 2019. At the time of the filing, the Debtor disclosed $447,243
in assets and $3,449,075 in liabilities.
The case has been assigned to Judge Paul Baisier. The Debtor is
represented by Robl Law Group LLC.
STEPHEN DERNICK: Court OK's Emergency Bid for Protective Order
--------------------------------------------------------------
Bankruptcy Judge Eduardo V. Rodriguez granted Debtors Stephen H.
Dernick and David D. Dernick's emergency motion for protective
order. The Court also awards Debtors' counsel reasonable
attorney’s fees and costs.
On August 23, 2019, NorthStar served each of the Debtors with 12
requests for admission ("RFA"), 6 interrogatories, and 13 requests
for production of documents ("RFP") within the Bankruptcy Case. Of
the 12 RFA's, most, if not all, relate directly to Riley or Riley
Exploration Group LLC. Of the 13 RFP's, several pertain to the
various trusts and at least two pertain Riley.
On August 26, 2019, Debtors filed the instant Motion. Debtors claim
that NorthStar's August 23, 2019 discovery requests relate to the
Adversary Proceeding, and thus exceed the time required to serve
such discovery requests pursuant to this Court’s Scheduling
Order. Alternatively, Debtors assert that if the discovery requests
relate to the Pending Contested Matters, the discovery requests are
still untimely as the Court has already commenced evidentiary
proceedings. As a result, Debtors assert that they are entitled to
a protective order from this Court from having to answer the
untimely discovery requests, and that they should be awarded
attorney’s fees and costs for NorthStar's refusal to withdraw its
untimely discovery requests.
NorthStar responded on Sept. 3, 2019, claiming that their discovery
requests are not untimely as they were served in connection with
the Pending Contested Matters. That same day, Debtors replied to
NorthStar's response, and NorthStar supplemented their response.
Under Rule 9014 the Motion constitutes a contested matter as it
does not fall within the definition of adversary proceedings under
Rule 7001. Additionally and pursuant to Rule 9014, Rule 7026
applies to contested matters. Federal Rule of Civil Procedure 26,
incorporated by Rule 7026, states in part that a court must limit
the frequency or extent of discovery otherwise allowed of the
discovery sought if the party had ample opportunity to obtain the
information in the action.
If NorthStar’s August 23, 2019 discovery requests relates in any
way to the Adversary Proceeding, the Court's Scheduling Order
controls. The Court's Scheduling Order stated that all discovery
closes Sept. 20, 2019, and parties cannot make discovery requests
that cannot be completed before the close of Discovery. Because a
responding party has 30 days to serve answers to discovery
requests, the last date that the parties could have served
discovery within the Adversary Proceeding was August 21, 2019. If
NorthStar's discovery requests relates to the Adversary Proceeding,
their failure to adhere to this Court's Scheduling Order precludes
them from serving discovery within the Adversary Proceeding.
The current RFA's that NorthStar seeks to have answered by Debtors
are directly related to the documents that NorthStar sought and
obtained through its Motion to Compel, in that they seek to have
Debtors admit to or deny their authenticity. The current
interrogatories that NorthStar seeks to have answered and the
documents that NorthStar seeks to have produced are also directly
related to the documents that NorthStar sought and obtained through
its Motion to Compel in that they seek to have Debtors, inter alia,
explain their answers to the RFA's and seek answers to questions
and production of documents directly related to the Pending
Contested Matters, on which trial has already begun. However, such
a request in the middle of trial is untimely and inappropriate.
NorthStar had ample opportunity to conduct or compel discovery, and
this Court will not permit further delay to accrue on this matter.
Instead of pursuing other options that were available to them prior
to the August 14, 2019 hearing on the Pending Contested Matters,
NorthStar waited until the middle of trial to seek further
discovery. This predicament is of NorthStar's own doing, and the
Court will not reward NorthStar for their actions or lack thereof.
As such, this Court finds that Debtors’ Motion is well taken, and
should be granted.
A copy of the Court's Memorandum Opinion dated Sept. 9, 2019 is
available at https://tinyurl.com/y44m8bb9 from Pacermonitor.com at
no charge.
Stephen Harry Dernick filed for chapter 11 bankruptcy protection
(Bankr. N.D. Tex. Case No. 18-31575) on May 4, 2018, and is
represented by Eric A. Liepins, Esq.
TARA RETAIL: Court Trims Claims in Countersuit vs Comm2013, et al.
------------------------------------------------------------------
Bankruptcy Judge Patrick M. Flatley granted in part and denied in
part U.S. Bank, National Association, as Trustee for the benefit of
the holders of COMM 2013-CCRE12 Commercial Mortgage Pass-Through
Certificates, Wells Fargo Commercial Mortgage Servicing, and COMM
2013 CCRE12 Crossings Mall Road, LLC's motion seeking the dismissal
of the Third-Party Complaint and Second Amended Counterclaim filed
against them by Debtor Tara Retail Group, LLC.
According to the Movants, the court should dismiss the Debtor's
claims because the Debtor fails to state causes of action upon
which the court can grant relief. The Debtor asserts that the court
should deny the Movants' motion because it adequately states causes
of action for breaches of contract, fiduciary duty, and good faith
and fair dealing, as well as tortious interference with business
relationships, punitive damages, an accounting, and declaratory
judgment.
The Movant seeks dismissal of the Debtor's breach of contract claim
on the basis that the Debtor fails to state a claim upon which the
court can grant relief. The Movants argue that the Debtor has
failed to adequately plead its claim because, among other things,
the Debtor failed to follow the procedures under the Loan Agreement
for requesting Capital Expenditure Funds. Specifically, the Movants
allege that the Debtor was required to make the repairs before
requesting disbursement of the Capital Expenditure Funds. Because
the Debtors did not adequately perform under the contract, the
Movants assert, no obligation arose to release funds. Notably, the
Debtor acknowledges that it did not repair the bridge before
seeking the funds. The court grants the motion to dismiss as to the
Debtor's breach of contract claim. The Debtor admits that it
completed no repairs before it sought Capital Expenditure Funds.
Therefore, the Debtor's assertion that the Plaintiff, Wells Fargo,
and COMM2013 breached the loan agreement is negated by the Loan
Agreement attached to the complaint. Thus, the Loan Agreement's
description of the Movants' duties prevails over the Debtor's
contrary characterization. The court, therefore, dismisses the
Debtor's breach of contract claim.
Although the Debtor has stated the elements necessary to plead a
cause of action for the implied covenant of good faith and fair
dealing, this claim is premised on the same conduct that underlies
the breach of contract claim, specifically that the Movants refused
to release Capital Expenditure Funds to repair the culvert bridge.
Moreover, the damages in both causes of action are identical.
Because the conduct and resulting injury in both counts are
identical, and the Debtor does not allege that the Movants' refusal
to release funds was in furtherance of a bad faith scheme to deny
it of the benefit of its bargain, it cannot maintain its cause of
action for the breach of duty of good faith and fair dealing.
Therefore, the court grants the motion to dismiss as to Count II.
The Debtor pleaded the elements necessary to survive a motion to
dismiss on its breach of fiduciary duty claim. First, the Debtor
alleges that a fiduciary relationship arose by virtue of a special
relationship between it and the Movants. Specifically, the Debtor
maintains that the Movants exercised extraordinary oversight,
implying that the Movants provided services not normally provided
by a lender to a borrower through the structure of the financing
transaction. Additionally, in light of the alleged fiduciary
relationship, the Debtor asserts that the Movants had a duty to
"maintain reasonably functional commercial premises for the
transaction of [the Debtor's] business." The Debtor asserts that
the Movants breached that duty by failing and refusing to maintain
the premises. Finally, the Debtor claims that it suffered economic
loss and other damages as a result of the Movants' breach.
Therefore, the court denies the motion to dismiss as to Count III.
A copy of the Court's Order dated Sept. 12, 2019 is available at
https://tinyurl.com/yyjwptha from Pacermonitor.com at no charge.
About Tara Retail
Tara Retail Group, LLC, owns The Crossings Mall in Elkview, West
Virginia, which had tenants that included Kmart and Kroger. The
Company is headed by businessman Bill Abruzzino. The Crossings
Mall has been closed and inaccessible to the public since massive
floods swept through West Virginia on June 23, 2016.
On Dec. 23, 2016, U.S. District Judge Thomas Johnston appointed
Martin Perry, a managing director at Newmark Grubb Knight Frank's
Pittsburgh office, as receiver.
To stop a foreclosure sale of its shopping center, Tara Retail
Group, LLC, filed a Chapter 11 petition (Bankr. N.D. W.Va. Case No.
17-00057) on Jan. 24, 2017. The petition was signed by William A.
Abruzzino, managing member. The case judge is the Hon. Patrick M.
Flatley. The Debtor estimated assets and debt of $10 million to
$50 million.
The Debtor tapped Steven L. Thomas, Esq., at Kay, Casto & Chaney
PLLC as bankruptcy counsel.
Secured creditor COMM2013 CCRE12 Crossings Mall Road, LLC, is
represented in the case by Sharon Troesch, Esq., Buchanan Ingersoll
& Rooney PC, in Pittsburgh, Pennsylvania.
TOPAZ SOLAR: Moody's Hikes Sec. Debt to Caa1, Alters Outlook to Pos
-------------------------------------------------------------------
Moody's Investors Service upgraded Topaz Solar Farms LLC's senior
secured debt to Caa1 from Caa2 and changed the outlook to positive
from negative.
RATING RATIONALE
The upgrade of Topaz Solar to Caa1 from Caa2 reflects Pacific Gas &
Electric's (PG&E) proposed plan of reorganization that incorporates
PG&E assuming its power purchase agreements (PPA). PG&E's
bankruptcy and the risk of PPA rejection in bankruptcy has been the
primary risk constraining Topaz Solar's credit quality since the
project derives all of its operating cash flow from its PPA with
PG&E and the proposed plan would ensure that PG&E honors its
obligation to the project. While plans proposed by other groups
also contemplate affirming the PPAs, Topaz Solar's credit quality
remains tempered by the possibility that PG&E's final approved plan
could differ from the current plan particularly if PG&E is not able
to emerge from bankruptcy by June 30, 2020 or if additional claims
surface from wildfires that might occur over the next several
months which would be treated as administrative claims. PG&E has
reserved its rights to amend its plan and certain groups have
already indicated opposition to the plan. While PG&E continues to
remain current on its obligations to Topaz Solar, the Caa1 rating
further acknowledges actual and alleged technical debt defaults at
Topaz Solar caused by PG&E's bankruptcy.
The positive outlook considers PG&E's plan to resolve its
bankruptcy by June 30, 2020, a timeframe that is supported by key
stakeholders, including the bankruptcy court and the California
Public Utilities Commission, and the likelihood for further
improvement to the project's credit quality as PG&E's emerges from
bankruptcy under the broad terms of the proposed plan. Under that
scenario, Topaz Solar's rating could be upgraded by multiple
notches depending on the resolution of any actual and alleged
technical debt default at the project, PG&E's post-bankruptcy
credit quality, and project's standalone operating and financial
performance.
Outside of the credit impact from PG&E's bankruptcy and related
events, Topaz Solar's operational and financial performance has
remained strong owing to resource production levels generally at or
above the forecasted P50 levels after adjusting for curtailment.
Because of the performance of the solar resource, Topaz Solar's
financial performance has historically been stronger than
anticipated and the project has achieved debt service coverage
ratios (DSCR) ranging from 1.8x to 2.0x over the last three years.
Rating Outlook
Topaz Solar's positive outlook reflects the potential for a
positive resolution to PG&E's bankruptcy by June 30, 2020 including
the assumption of the project's PPA and continuation of strong
underlying fundamentals.
Factors that could lead to a upgrade
To the extent PG&E's proposed plan is confirmed, Topaz Solar's
rating could increase by multiple notches depending on the
resolution of the technical debt default that exists at the
project, PG&E's credit quality post bankruptcy, and Topaz Solar's
operating and financial performance.
Factors that could lead to a downgrade
The project's rating could be downgraded if PG&E seeks to reject
its PPA obligations or if the project's technical defaults ripen
into a payment default.
The principal methodology used in this rating was Power Generation
Projects published in June 2018.
TSAWD HOLDINGS: WSFS Wins Summary Judgment Bid vs Sport Dimension
-----------------------------------------------------------------
The case captioned TSA Stores, Inc., TSA Ponce, Inc., and TSA
Caribe, Inc., Plaintiffs, and Wilmington Savings Fund Society, FSB,
as Successor Administrative and Collateral Agent,
Plaintiff-Intervenor/Counterclaim Defendant, v. Sport Dimension
Inc. a/k/a Body Glove, Defendant/Counterclaim Plaintiff, Adv. No.
16-50368 (MFW) (Bankr. D. Del.) are cross-motions for summary
judgment filed by Wilmington Savings Fund Society, FSB and Sport
Dimension a/k/a Body Glove. The dispute is which party has a
priority interest in the inventory, and its proceeds, sold by
Debtors TSAWD Holdings, Inc. and affiliates on consignment from
Sport Dimension (the "Disputed Goods").
Upon review, Bankruptcy Judge Mary F. Walrath grants WSFS's motion
and denies Sport Dimension's motion.
WSFS argues that Article 9 of the Uniform Commercial Code governs
the priority of the competing interests in the Disputed Goods and
that WSFS's interest is superior to Sport Dimension's because its
financing statement was filed first. Sport Dimension argues that
Article 9 does not govern the priority of the parties' interests
because the Disputed Goods do not meet the UCC's definition of
"consignment."
WSFS argues that (i) it satisfied each requirement for the creation
of an enforceable security interest in the Disputed Goods under
Article 9, (ii) it perfected its security interest long before
Sport Dimension perfected its interest, and (iii) Sport Dimension
failed to take the steps necessary to obtain priority under the
UCC's inventory collateral rule. Sport Dimension only disputes the
third contention.
Under section 9-322(a), conflicting perfected security interests
rank according to priority in time of UCC-1 filings. However,
section 9-324(b) provides an exception for a party who obtains a
purchase money security interest ("PMSI"), such as a consignment
interest, in inventory collateral that is already subject to a
prior perfected security interest. Under that provision, the later
filing PMSI-holder may obtain a priority interest in inventory it
delivers to the consignee if it meets the following requirements:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the inventory;
(2) the purchase-money secured party sends an authenticated
notification to the holder of the conflicting security interest;
(3) the holder of the conflicting security interest receives the
notification within five years before the debtor receives
possession of the inventory; and
(4) the notification states that the person sending the
notification has or expects to acquire a purchase-money security
interest in inventory of the debtor and describes the inventory.
WSFS argues that Sport Dimension failed to provide proper notice
under subsections (2) and (3).
Sport Dimension filed a UCC-1 on Jan. 25, 2016, creating a PMSI in
inventory delivered to the Debtors on consignment after that date.
Sport Dimension provided notices of its UCC-1 filing that same day
to a number of the Debtors' creditors, including BOA, the
predecessor Term Loan Agent. Sport Dimension argues, therefore,
that it satisfied the requirements of section 9-324(b) and its
interest has priority over WSFS's prior perfected interest.
WSFS argues that Sport Dimension's notice to BOA failed to satisfy
the UCC's notice requirement. To satisfy the requirement, a
consignor must send notification to the addresses of other secured
parties that appear on their respective UCC-1s. At the time Sport
Dimension provided notice to BOA (Jan. 25, 2016), WSFS as successor
Term Loan Agent had already filed an amended UCC-1 reflecting its
address (Dec. 31, 2015). WSFS asserts, therefore, that Sport
Dimension failed to provide notice to the appropriate address and,
accordingly, failed to satisfy the requirements for obtaining a
priority PMSI.
The Court agrees with WSFS. Sport Dimension provides no legal
authority to support its argument that proper notice is provided by
notice to a predecessor agent to a secured party. Nor is there any
evidence that BOA forwarded the notice to WSFS. Thus, the Court
finds that Sport Dimension has failed to satisfy the requirements
of section 9-324(b) and, consequently, WSFS's lien has priority.
Therefore, the Court concludes that all proceeds of the Disputed
Goods that were paid to Sport Dimension postpetition must be
disgorged.
Thus, the Court denies Sport Dimension's motion for summary
judgment and grants WSFS's motion.
A copy of the Court's Opinion dated April 12, 2019 is available at
https://bit.ly/2klaSgf from Leagle.com.
Andrew L. Magaziner, Michael S. Neiburg, Young Conaway Stargatt &
Taylor, LLP, Wilmington, DE, for Plaintiffs.
Daniel A. O'Brien, Venable LLP, Wilmington, DE, for
Defendant/Counter-Claimant.
Joseph Charles Barsalona II, Daniel B. Butz, Morris Nichols Arsht &
Tunnell LLP, Wilmington, DE, for Intervenor-Plaintiff.
Sarah Sheldon Brooks, Venable LLP, Los Angeles, CA, for
Counter-Claimant.
About TSAWD Holdings
TSAWD Holdings Inc., formerly known as Sports Authority Holdings,
and its affiliates are sporting goods retailers with roots dating
back to 1928. The Debtors currently operate 464 stores and five
distribution centers across 40 U.S. states and Puerto Rico. The
Debtors offer a broad selection of goods from a wide array of
household and specialty brands, including Adidas, Asics, Brooks,
Columbia, FitBit, Hanesbrands, Icon Health and Fitness, Nike, The
North Face, and Under Armour, in addition to their own private
label brands. The Debtors employ 13,000 people.
TSAWD and six of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Case Nos. 16-10527 to 16-10533) on March
2, 2016. The petitions were signed by Michael E. Foss as chairman
and chief executive officer.
The Debtors have engaged Robert A. Klyman, Esq., Matthew J.
Williams, Esq., Jeremy L. Graves, Esq., and Sabina Jacobs, Esq., at
Gibson, Dunn & Crutcher LLP as general counsel; Michael R. Nestor,
Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at
Young Conaway Stargatt & Taylor, LLP as co-counsel; Rothschild Inc.
as investment banker; FTI Consulting, Inc., as financial advisor;
and Kurtzman Carson Consultants LLC as notice, claims,
solicitation, balloting and tabulation agent.
Andrew Vara, Acting U.S. trustee for Region 3, appointed seven
creditors of Sports Authority Holdings Inc. to serve on the
official committee of unsecured creditors. Lawyers at Pachulski
Stang Ziehl & Jones LLP represent the Official Committee of
Unsecured Creditors.
* * *
In May 2016, the Delaware Court allowed Sports Authority to proceed
with the liquidation of all of its roughly 450 stores across the
country after the Debtors resolved or beat out about 100 objections
to the sale. Judge Mary F. Walrath approved an agreement for a
joint venture of Gordon Brothers Retail Partners LLC, Hilco
Merchant Resources LLC and Tiger Capital Group LLC to conduct going
out of business sales. The Joint Venture won an auction for the
Debtors' inventory. The Debtors failed to obtain a winning
going-concern bid at a May 17, 2016 auction.
In July 2016, Judge Walrath approved the sale of the Debtors'
intellectual property and more than two dozens of property leases
to Dick's Sporting Goods Inc. Dick's bid was reportedly for $15
million.
VIDA CAPITAL: Moody's Assigns B2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service assigned a first-time B2 corporate family
rating to Vida Capital, Inc. The rating action follows the
company's previously announced leverage buyout by private equity
firms, Reverence Capital Partners, LP and RedBird Capital Partners
LLC. The rating outlook is stable.
The rating agency also assigned to Vida the following debt
ratings:
$40 million Senior Secured Revolving Credit Facility,
at B2
$275 million Senior Secured 1st LienTerm Loan, at B2
Probability of default, B2-PD
Corporate family rating, B2
Outlook is Stable
RATINGS RATIONALE
Vida's B2 CFR reflects its strong profitability and leading
position as an integrated alternative asset manager within the life
settlements industry. Constraining Vida's rating are the attendant
social and regulatory risks of the life settlement business as well
as the company's modest scale and weak competitive positioning
relative to the overall asset management industry.
Vida's limited financial flexibility also supports the rating at
the B2 level. Pro forma leverage, following the leveraged buyout
transaction, is expected to reach 4.9 times debt-to-EBITDA, as
adjusted by Moody's. Additionally, the company has accrued, as an
asset on its balance sheet, carried interest relating to its
closed-end vehicles on a mark-to-market basis. If this carried
interest were not to be realized it would have a negative impact on
the company's retained earnings.
The stable rating outlook reflects its expectation of limited
deleveraging as Vida pursues growth initiatives that better address
the growing market for life settlements and related structured
investments.
The following factors could lead to an upgrade of Vida's ratings:
1) leverage is sustained below 4 times debt-to-EBITDA, as adjusted
by Moody's; 2) expansion into areas outside of the life settlements
business that diversifies Vida's product suite and contribute
meaningfully to earnings; 3) reduced balance sheet exposure to
self-managed investments and/or tangible equity is available to
cover potential investment losses.
Conversely, factors that could lead to a downgrade include: 1)
leverage is sustained above 5.0 times debt-to-EBITDA, as adjusted
by Moody's; 2) risks relating to changes in regulation, market
practice or tax policies that may reduce the available supply or
profitability of life settlements; 3) reputational risk from life
settlement underwriting or investment practices or other firm
behavior that negatively impacts consumers or investors.
Vida is a Texas-based alternative asset manager focused on
longevity contingent assets. The company employs an integrated
platform that sources and services life settlement policies and
structures them into various investment vehicles. At 30 June 2019,
Vida had approximately $4.3 billion of assets under management.
The principal methodology used in these ratings was Asset Managers
published in March 2019.
WELLS ENTERPRISES: S&P Affirms BB- ICR, Alters Outlook to Negative
------------------------------------------------------------------
S&P Global Ratings affirmed the 'BB-' issuer credit rating on
Iowa-based ice cream producer Wells Enterprises Inc. (Wells).
The rating affirmation follows the company's agreement to acquire
all of the assets of Eden Creamery LLC (Halo Top) while licensing
the Halo Top brand outside of the US and Canada to the brand's
previous owners. The company has also agreed to acquire an ice
cream manufacturing plant, currently owned by Unilever, located in
Nevada (Unilever's Henderson facility). It will finance the
transaction with debt, including a $185 million add-on to the
company's first-lien term loan maturing March 2025 and a $50
million add-on to its asset-based lending facility (ABL) maturing
March 2024 (not rated). Pro forma leverage will increase to about
4.6x from 3.5x for the 12 months ended June 30, 2019.
S&P lowered its issue-level rating on the company's senior secured
term loan facilities to 'BB-' from 'BB' and revised the recovery
rating to '3', reflecting its expectation for meaningful recovery
(60% rounded estimate) in the event of a payment default, from
'2'.
The negative outlook reflects the significantly higher leverage pro
forma for the acquisitions and the risk that de-leveraging to
within the expected range will be delayed beyond a year. Pro forma
for the transactions, S&P estimates Wells' leverage will increase
significantly to 4.6x from the current 3.5x. Although the company
has a demonstrated history of deleveraging and remains committed to
repaying debt following this transaction, its EBITDA will be
constrained over the next several quarters by one-time charges for
various strategic initiatives, including integrating Halo Top and
eliminating cost redundancies. (S&P views these one-time charges as
well as any acquisition-related charges as integral to the
company's operations and growth strategy and do not add them back
to EBITDA.) Therefore, any misstep on operating execution may delay
the company's de-leveraging given the higher operating costs it
will incur. Specifically, debt to EBITDA may remain above 4x beyond
a year following the close of the transaction to the extent the
company does not achieve its cost reduction and growth targets.
The negative outlook reflects the potential for a lower rating if
Wells faces integration missteps or if operating performance
weakens, causing it to fail to reduce leverage in line with S&P's
expectations.
"We could lower our ratings on Wells if it does not appear likely
that the company will reduce debt to EBITDA to 3.5x or lower by the
end of the third quarter of fiscal 2020," S&P said. This could
occur if the company is unable to strengthen its annual DCF to at
least $50 million in 2020 and if the company experiences
acquisition-integration missteps, or if the company has difficulty
managing its costs including dairy, packaging, fuel and freight
costs that materially compresses the company's gross margins,
possibly by more than 100 basis points (bps), according to the
rating agency.
"Although less likely, we could also lower the rating if the
company adopts a more aggressive financial policy and pursues
additional acquisitions prior to deleveraging well below 3.5x," S&P
said.
S&P said it could revise its outlook on Wells to stable if the
company successfully integrates the Halo Top and Unilever Henderson
facility acquisitions, continues growing EBITDA from its core
operations, and applies projected DCF to debt repayment resulting
in debt to EBITDA below 3.5x.
"This would also be predicated on our belief that the company will
delay additional sizable debt-financed acquisitions until it has
deleveraged to at least the low-3x area," S&P said.
WG PARTNERS: Moody's Alters Outlook on B1 Debt Rating to Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed WG Partners Acquisition, LLC's
B1 senior secured bank credit facility rating and revised the
outlook to positive from negative.
RATINGS RATIONALE
The rating affirmation and outlook change to positive reflects
Pacific Gas & Electric Company's proposed plan of reorganization
that incorporates PG&E assuming its power purchase agreements
(PPA). PG&E's bankruptcy and the risk of PPA rejection in
bankruptcy has been the primary risk constraining WGP's credit
profile since two of WGP's six portfolio companies, the Three
Sisters and the Five Brothers, derive cash flows from PPAs with
PG&E that expire in 2020 and 2022, respectively. Collectively,
these cash flows jointly account for ~10% of WGP's total cash flows
through the debt maturity in Nov 2023. While plans proposed by
other groups also contemplate affirming the PPAs, WGP's credit
quality remains tempered by the possibility that PG&E's final
approved plan could differ from the current plan particularly if
PG&E is not able to emerge from bankruptcy by June 30, 2020 or if
additional claims surface from wildfires that might occur over the
next several months which would be treated as administrative
claims. PG&E has reserved its right to amend its plan and certain
groups have already indicated opposition to the plan. Importantly,
PG&E continues to remain current on its obligations to the Three
Sisters and the Five Brothers.
The rating action also acknowledges recent past operational issues
at another WGP's operating company, the 604 MW Hobbs generating
station in New Mexico, which had an extended outage in July 2019 to
repair cracked bolts discovered on both gas generators. Moody's
understands that the issue has been addressed and all units have
returned to service. The total estimated cost impact of the outage
is roughly $4-6 million and WGP is in discussions with its LTSA
provider, Mitsubishi, to determine how to allocate payment
responsibility. However, because of the way in which the capacity
payment is calculated (using a twelve month capacity factor
lookback formula) the extended outage will lower the amount of
capacity payments by roughly $5 million over the next twelve
months. Reduced revenues and outage costs are expected to result in
a cash trap at Hobbs, restricting 2019 distributions. WGP has
reiterated to its lenders that despite forgoing the distribution
from Hobbs, it expects to maintain a minimum DSCR above its 1.1.x
covenant on the senior debt and will pay down to its preset target
debt balance for the year as usual.
Rating Outlook
WGP's positive outlook reflects the potential for a positive
resolution to PG&E's bankruptcy by June 30, 2020 including the
assumption of the Three Sisters and Five Brothers PPAs. It also
reflects its expectation for continued improvement in portfolio
performance now that the Hobbs plant have resumed operations and
given the new steam sales agreement at Borger, another asset..
Factors that could lead to an upgrade
WGP's rating could be upgraded if PG&E assumes its contracts upon
its exit from bankruptcy and if the portfolio was expected to
produce average consolidated DSCRs above 1.3x and Project CFO to
Adjusted debt above 11% on a sustained basis.
Factors that could lead to a downgrade
WGP's rating could be downgraded should PG&E reject its contracts
or should cash restrictions at the Three Sisters asset result in
consolidated DSCR metrics below 1.1x over a sustained period. The
rating could also be downgraded if payment delays from Trinity
reappear or if Hobbs or Trinity sustains an operational
disruption.
Profile
Western Generation Partners, a holding company, owns a 1,502 MW
portfolio of twelve operating power generation plants spread over
four US states and the Republic of Trinidad and Tobago. The assets
consist of the 604 MW Hobbs power plant in New Mexico, the 225 MW
Trinity power plant in Trinidad and Tobago, the 72 MW Waterside
power plant in Connecticut, the 230 MW Borger plant in Texas, and a
net 371 MW portfolio of eight plants in California. All of the
projects are contracted with a portfolio weighted average remaining
life of around 10 years. The projects reached commercial operations
from 1988 through 2008 and use proven utility scale technology.
Hobbs, Waterside, Borger, and the Three Sisters assets had $269
million of operating company level debt at the end of 2018. WGP is
indirectly owned by a joint venture of funds managed by Harbert
Management Corporation (51%), UBS Asset Management (32%), and
Northwestern Mutual (17%).
WISE ENTERPRISE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of Wise Enterprise Group, LLC as of Sept. 12,
according to a court docket.
About Wise Enterprise Group
Wise Enterprise Group LLC, an investment holding company in
Cartersville, Ga., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-41786) on Aug. 2,
2019.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
The case has been assigned to Judge Paul W. Bonapfel. The Debtor
is represented by Theodore N. Stapleton, P.C.
WPX ENERGY: S&P Rates $500MM Senior Unsecured Debt 'BB-'
--------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to Tulsa,
Okla.-based exploration and production company WPX Energy Inc.'s
proposed $500 million senior unsecured notes due 2027. The '3'
recovery rating indicates S&P's expectation of meaningful (50%-70%;
rounded estimate: 65%) recovery to creditors in the event of a
payment default.
"We expect WPX to use the issuance proceeds to finance its cash
tender for up to $450 million in aggregate principal amount of its
outstanding 6.0% senior unsecured notes due 2022 and 8.25% senior
unsecured notes due 2023, which it also announced. Net of issuance
fees and including repurchase premiums on the tendered notes, we
expect the company's pro forma debt will increase by about $40
million," S&P said.
S&P's 'BB-' issuer credit rating and stable outlook on WPX are
unchanged.
WYNN RESORTS: Moody's Assigns Ba3 CFR, Outlook Positive
-------------------------------------------------------
Moody's Investors Service assigned ratings to Wynn Resorts Finance,
LLC, including a Ba3 Corporate Family Rating, Ba3-PD Probability of
Default Rating, and positive outlook. A Ba1 was assigned to WRF's
proposed $850 million senior secured revolver and $1 billion term
loan A. At the same time, a B1 was assigned to WRF's proposed $750
million senior unsecured notes. An SGL-1 Speculative Grade
Liquidity rating was assigned to WRF as well. The B1 senior
unsecured notes at Wynn Las Vegas, LLC and B1 senior unsecured
notes at Wynn Macau, Limited were affirmed.
Proceeds from the proposed debt offerings will be used to repay all
existing debt at Wynn Resorts, Limited and at Wynn America, LLC.
The transaction will be leverage neutral on a consolidated basis.
An organizational restructuring will also occur as part of the
refinancing. WRF, formerly Wynn America, LLC, will now hold all of
Wynn Resorts' ownership interests in Wynn Las Vegas, LLC, which
owns and operates the Wynn Las Vegas integrated resort in Las
Vegas, Nevada (excluding certain leased retail space that is owned
by Wynn Resorts directly), in Wynn Asia, and in Wynn MA, LLC, which
owns and operates Encore Boston Harbor. Wynn Resorts, Limited will
remain the ultimate parent but will no longer have any rated debt
at that entity. In effect, all issuer-level ratings moved from Wynn
Resorts, Limited to WRF, which is expected to be the primary
financing vehicle going forward.
"The Ba3 rating assigned to WRF reflects the continuation of
Moody's taking a consolidated approach to Wynn ratings, despite the
changes in the organization and financing structure," stated Keith
Foley, a Senior Vice President at Moody's, "Moody's continues to
view all the operations of Wynn Resorts, Limited and its
subsidiaries as a single enterprise for analytic purposes,
regardless of whether financings for some subsidiaries are done on
a stand-alone basis," added Foley.
Moody's views the proposed refinancing favorably as it will reduce
the organizational complexity by streamlining and simplifying
Wynn's corporate and financing structure," stated Keith Foley, a
Senior Vice President at Moody's. "The transaction will also extend
Wynn's consolidated debt maturity profile," added Foley.
Assignments:
Issuer: Wynn Resorts Finance, LLC
Probability of Default Rating, Assigned Ba3-PD
Speculative Grade Liquidity Rating, Assigned SGL-1
Corporate Family Rating, Assigned Ba3
Senior Secured Term Loan A, Assigned Ba1 (LGD2)
Senior Secured Revolving Credit Facility, Assigned Ba1 (LGD2)
Senior Unsecured Notes, Assigned B1 (LGD5)
Affirmations:
Issuer: Wynn Las Vegas, LLC
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
Issuer: Wynn Macau, Limited
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
Withdrawals:
Issuer: Wynn Resorts, Limited
Probability of Default Rating, Withdrawn , previously rated
Ba3-PD
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-1
Corporate Family Rating, Withdrawn , previously rated Ba3
Senior Secured Bank Credit Facility, Withdrawn , previously
rated
Ba3 (LGD4)
Issuer: Wynn Resorts Finance, LLC
Senior Secured Bank Credit Facility, Withdrawn, previously rated
Ba2 (LGD2)
Outlook Actions:
Issuer: Wynn Las Vegas, LLC
Outlook, Changed To Positive From No Outlook
Issuer: Wynn Macau, Limited
Outlook, Changed To Positive From No Outlook
Issuer: Wynn Resorts Finance, LLC
Outlook, Changed To Positive From No Outlook
Issuer: Wynn Resorts, Limited
Outlook, Changed To Rating Withdrawn From Positive
RATINGS RATIONALE
WRF's Ba3 Corporate Family Rating is supported by the quality,
popularity, and favorable reputation of the company's resort
properties -- a factor that continues to distinguish it from most
other gaming operators -- along with the company's well-established
and very successful track record of building large, high quality
destination resorts. WRF's very good liquidity profile and
relatively low cost of debt capital also support the ratings. The
Ba3 Corporate Family Rating also incorporates Moody's expectation
that Wynn will successfully renew its Macau concession agreement
prior to its 2022 expiration on terms that will not, in and of
itself, impair Wynn's credit quality.
Key credit concerns include WRF's limited diversification despite
being one of the largest U.S. gaming operators in terms of revenue.
WRF's revenue and cash flow will remain heavily concentrated in the
Macau gaming market, Moody's also expects that WRF will be
presented with and pursue other large, high profile, integrated
resort development opportunities around the world. As a result,
there will likely be periods where the company's leverage
experiences periods of increases due to partially debt-financed,
future development projects.
The positive rating outlook reflects Moody's expectation that
Boston Encore Harbor, which officially opened June 23, 2019 will
ramp successfully during the next 6-12 month period. The positive
rating outlook also considers Moody's favorable positive long-term
revenue and earnings prospects for the company's Macau, China and
Las Vegas Strip, Nevada casino resort assets.
An upgrade would require that the continued ramp-up of Encore
Boston Harbor supports WFA's ability to maintain net debt/EBITDA on
a Moody's adjusted basis below 5.0 times. Net debt/EBITDA on a
Moody's adjusted basis was about 4,7 times for the latest 12-month
period ended June 30, 2019 applying about 50% of the company's $1.5
billion of cash and equivalents (or $750 million) to the net debt
calculation. Debt/EBITDA on a Moody's adjusted basis on a gross
basis for that same LTM period was 5.1 times. Ratings could be
downgraded if adjusted net debt/ EBITDA rises above 6.0 times for
any reason and/or the any future material issues arise that could
affect the company's operations or ability to maintain its
license.
Wynn Resorts Finance, LLC is, an indirect wholly-owned subsidiary
of Wynn Resorts, LLC, holds all of Wynn Resorts' ownership
interests in Wynn Las Vegas, LLC, which owns and operates the Wynn
Las Vegas integrated resort in Las Vegas, Nevada (excluding certain
leased retail space that is owned by Wynn Resorts directly), in
Wynn Asia, and in Wynn MA, LLC, which owns and operates Encore
Boston Harbor.
XTL-PA INC: Sept. 17 Meeting Set to Form Creditors' Panel
---------------------------------------------------------
Andy Vara, Acting United States Trustee, for Region 3, will hold an
organizational meeting on September 17, 2019, at 2:00 p.m. in the
bankruptcy cases of XTL-PA, Inc., et al.
The meeting will be held at:
Robert N. C. Nix
Sr. Federal Courthouse
900 Market Street, Suite 304-B
Philadelphia, PA 19107
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors pursuant
to Section 341 of the Bankruptcy Code. A representative of the
Debtor, however, may attend the Organizational Meeting, and provide
background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States Trustee
appoint a committee of unsecured creditors as soon as practicable.
The Committee ordinarily consists of the persons, willing to serve,
that hold the seven largest unsecured claims against the debtor of
the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee may
consult with the debtor, investigate the debtor and its business
operations and participate in the formulation of a plan of
reorganization. The Committee may also perform other services as
are in the interests of the unsecured creditors whom it
represents.
About XTL, Inc
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.
XTL, Inc., and its subsidiaries, sought Chapter 11 protection on
Aug. 1, 2019 (Bankr. E. D. Penn. Lead Case No. 19-14843) in
Philadephia, PA.
The petitions were signed by Louis J. Cerone, president.
Hon. Eric L. Frank presides over the case.
The Debtor disclosed $10 million to $50 million in assets and $10
million to $50 million in liabilities.
The Debtor tapped Allen B. Dubroff, Esq. of Allen B. Dubroff, Esq.
& Associates, LLC as counsel.
ZELIS PAYMENTS: Moody's Assigns B2 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
B2-PD Probability of Default Rating to Zelis Payments Buyer, Inc.
Zelis Payments Buyer Inc. together with Zelis Cost Management
Buyer, Inc. are co-borrowers for the credit facilities. At the same
time, Moody's assigned a B2 rating to the proposed $1.65 billion
first lien senior secured credit facilities, including a $150
million 5-year revolving credit facility and a $1.5 billion 7-year
term loan. The outlook is stable.
Proceeds from the $1.5 billion term loan, together with new sponsor
equity from Bain Capital, will be used to effectuate the
combination of Zelis Healthcare Corporation and RedCard
Partnership, LLC, retire existing debt and to pay transaction
related fees and expenses. Currently both Zelis and RedCard are
minority owned by Parthenon Capital. Following the transaction,
Bain will own approximately 35% of the combined company, with
Parthenon, founders, and management retaining the remaining stake.
Ratings Assigned:
Zelis Payments Buyer, Inc.
Corporate Family Rating, at B2
Probability of Default Rating, at B2-PD
$150 million senior secured 1st lien revolver expiring 2024 at
B2 (LGD4)
$1.5 billion senior secured 1st lien term loan due 2026 at
B2 (LGD4)
The rating outlook is stable
Moody's anticipates that all of the ratings of the predecessor
company, Stratose Intermediate Holdings II, LLC, including its B2
CFR and ratings on its existing bank debt will be withdrawn upon
completion of the proposed transaction and repayments of existing
debt.
RATINGS RATIONALE
The B2 CFR reflects the combined company's high initial leverage,
at roughly 7 times on a pro forma basis. The rating is also
constrained by the combined company's modest (but improving) scale
relative to significantly larger competitors and customers. The
company has moderate concentration with its top customer, a large
insurance company (about 15% of revenue). Further, Zelis faces
social risks related to proposed changes to the US healthcare
system that could reduce demand for some of its services. For
example, several initiatives including the adoption of surprise
billing legislation could impact demand for some of Zelis'
services. Lastly, the rating reflects risks of aggressive financial
policies such as debt-funded dividends given the company's private
equity ownership. That said, the current transaction is supported
by a significant equity component.
The B2 rating is supported by both companies' track records of
strong revenue and earnings growth and Moody's expectation that
this growth will continue. Moody's views integration risk as
relatively modest given the rating agency's understanding that the
two businesses will focus on revenue synergies and there are
minimal cost synergies anticipated. Reflecting strong demand for
healthcare cost containment services and payment solutions, Moody's
forecasts that Zelis will generate double-digit earnings growth,
which will result in solid deleveraging. Moody's forecasts that
adjusted debt/EBITDA will decline to the mid- 5 times by the end of
2020, with further deleveraging in 2021. Given the company's profit
margins and modest capital requirements (mostly IT and systems
investments), Moody's expects the company to generate solid free
cash flow in excess of $100 million per year. The rating is
supported by Moody's expectation for very good liquidity given
solid cash flow and available revolver capacity.
The stable outlook reflects Moody's expectation that Zelis will
reduce its currently high leverage to below 6 times over the next
12-18 months.
Ratings could be downgraded if the company's operating performance
suffers due to customer losses, new competitive entrants, failure
to effectively manage its rapid growth or combination disruption.
The rating could also be downgraded if the company undertakes a
significant shareholder dividend. Specifically, the ratings could
be downgraded if adjusted debt to EBITDA is sustained over 6
times.
Ratings could be upgraded if Zelis successfully executes the
combination and benefits competitively from the larger scale and
service offerings. An upgrade would also be supported by
demonstration of conservative financial policies including debt
reduction. Specifically, the ratings could be upgraded if adjusted
debt to EBITDA was sustained below 5 times.
Zelis provides health care cost management and payment services via
contract arrangements between health insurance companies, national
and regional health plans and third-party administrators. The
company offers cost management, pricing guidelines and payment
services. Zelis is owned by Parthenon Capital Partners and Bain
Capital. Pro forma revenue was $451 million in 2018.
[^] Large Companies with Insolvent Balance Sheet
------------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABBVIE INC ABBV AV 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC 4AB GZ 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC 4AB GR 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC ABBV SW 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC ABBV* MM 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC ABBVUSD X2 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC 4AB TH 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC ABBVEUR EU 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC 4AB QT 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC ABBV US 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC 4AB TE 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC ABBVUSD EU 57,142.0 (8,566.0) (1,841.0)
ABBVIE INC-BDR ABBV34 BZ 57,142.0 (8,566.0) (1,841.0)
ABSOLUTE SOFTWRE ALSWF US 103.3 (50.6) (27.4)
ABSOLUTE SOFTWRE ABT CN 103.3 (50.6) (27.4)
ABSOLUTE SOFTWRE OU1 GR 103.3 (50.6) (27.4)
ABSOLUTE SOFTWRE ABT2EUR EU 103.3 (50.6) (27.4)
AGENUS INC AGENUSD EU 206.7 (134.7) 17.2
AGENUS INC AGEN US 206.7 (134.7) 17.2
AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2)
AMERICAN AIRLINE AAL11EUR EU 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE AAL AV 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE AAL TE 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE A1G SW 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE A1G GZ 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE A1G QT 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE AAL US 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE AAL* MM 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE A1G GR 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE AAL1USD EU 61,967.0 (22.0) (10,273.0)
AMERICAN AIRLINE A1G TH 61,967.0 (22.0) (10,273.0)
AMERICAN BRIVISI ABVC US 7.1 (3.1) (8.9)
AMYRIS INC AMRSUSD EU 172.8 (174.4) (111.5)
AMYRIS INC 3A01 QT 172.8 (174.4) (111.5)
AMYRIS INC AMRSEUR EU 172.8 (174.4) (111.5)
AMYRIS INC AMRS US 172.8 (174.4) (111.5)
AMYRIS INC 3A01 GR 172.8 (174.4) (111.5)
AMYRIS INC 3A01 TH 172.8 (174.4) (111.5)
ATLATSA RESOURCE ATL SJ 138.8 (307.6) (347.9)
AUTODESK INC ADSK AV 4,872.7 (194.3) (1,191.8)
AUTODESK INC ADSKEUR EU 4,872.7 (194.3) (1,191.8)
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AVID TECHNOLOGY AVID US 282.1 (175.8) (20.2)
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AYR STRATEGIES I AYR/A CN 136.4 (286.0) (5.6)
BABCOCK & WILCOX BW US 772.0 (343.0) (218.5)
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BEYONDSPRING INC BYSI US 7.8 (17.0) (15.9)
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BRINKER INTL BKJ QT 1,258.3 (778.2) (244.6)
BRINKER INTL EAT2EUR EU 1,258.3 (778.2) (244.6)
BRINKER INTL EAT US 1,258.3 (778.2) (244.6)
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BRP INC/CA-SUB V B15A GR 3,505.3 (614.6) (46.0)
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CADIZ INC CDZI US 77.5 (79.8) 16.7
CADIZ INC 2ZC GR 77.5 (79.8) 16.7
CASTLE BIOSCIENC CSTL US 33.3 (3.6) 16.8
CATASYS INC CATS US 16.1 (12.2) (0.5)
CDK GLOBAL INC C2G QT 2,999.0 (714.5) 149.2
CDK GLOBAL INC CDKUSD EU 2,999.0 (714.5) 149.2
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CDK GLOBAL INC CDK US 2,999.0 (714.5) 149.2
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CHEWY INC- CL A CHWY US 682.3 (357.9) (398.5)
CHOICE HOTELS CZH GR 1,214.3 (122.7) (44.1)
CHOICE HOTELS CHH US 1,214.3 (122.7) (44.1)
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CINCINNATI BELL CIB1 GR 2,655.7 (112.3) (111.3)
CINCINNATI BELL CBB US 2,655.7 (112.3) (111.3)
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CLOVIS ONCOLOGY C6O QT 686.0 (30.0) 272.6
CLOVIS ONCOLOGY C6O TH 686.0 (30.0) 272.6
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COLGATE-CEDEAR CL AR 13,151.0 (10.0) 473.0
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COLGATE-PALMOLIV CL X2 13,151.0 (10.0) 473.0
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CORREVIO PHARMA CORV CN 58.7 (0.2) 11.8
CYTOKINETICS INC KK3A TH 198.2 (4.9) 163.0
CYTOKINETICS INC CYTKUSD EU 198.2 (4.9) 163.0
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CYTOKINETICS INC KK3A QT 198.2 (4.9) 163.0
CYTOKINETICS INC KK3A GR 198.2 (4.9) 163.0
CYTOKINETICS INC CYTK US 198.2 (4.9) 163.0
DELEK LOGISTICS DKL US 769.3 (144.3) 2.3
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DENNY'S CORP DENNEUR EU 438.7 (142.6) (41.3)
DENNY'S CORP DE8 GR 438.7 (142.6) (41.3)
DENNY'S CORP DENN US 438.7 (142.6) (41.3)
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DINE BRANDS GLOB IHP GR 2,040.7 (215.1) 7.9
DOLLARAMA INC DOLEUR EU 3,535.8 (106.0) 125.9
DOLLARAMA INC DR3 GZ 3,535.8 (106.0) 125.9
DOLLARAMA INC DR3 QT 3,535.8 (106.0) 125.9
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DOLLARAMA INC DOLCAD EU 3,535.8 (106.0) 125.9
DOLLARAMA INC DOL CN 3,535.8 (106.0) 125.9
DOLLARAMA INC DR3 GR 3,535.8 (106.0) 125.9
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DOMINO'S PIZZA DPZEUR EU 1,177.2 (2,904.3) 230.5
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DOMINO'S PIZZA DPZ US 1,177.2 (2,904.3) 230.5
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DOMO INC- CL B DOMO US 234.5 (4.9) 59.5
DOMO INC- CL B 1ON GR 234.5 (4.9) 59.5
DOMO INC- CL B 1ON GZ 234.5 (4.9) 59.5
DOMO INC- CL B DOMOEUR EU 234.5 (4.9) 59.5
DOMO INC- CL B DOMOUSD EU 234.5 (4.9) 59.5
DOMO INC- CL B 1ON TH 234.5 (4.9) 59.5
DUNKIN' BRANDS G 2DB QT 3,767.9 (656.8) 288.1
DUNKIN' BRANDS G DNKNEUR EU 3,767.9 (656.8) 288.1
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DUNKIN' BRANDS G DNKN US 3,767.9 (656.8) 288.1
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DYNATRACE INC DT US 1,775.6 (437.6) (748.4)
EMISPHERE TECH EMIS US 5.2 (155.3) (1.4)
ESCUE ENERGY INC ESCU US 0.0 (7.8) (3.1)
EVERI HOLDINGS I EVRIUSD EU 1,596.3 (84.4) 6.7
EVERI HOLDINGS I EVRIEUR EU 1,596.3 (84.4) 6.7
EVERI HOLDINGS I EVRI US 1,596.3 (84.4) 6.7
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EVERI HOLDINGS I G2C TH 1,596.3 (84.4) 6.7
FC GLOBAL REALTY FCRE IT 4.2 (0.6) (3.2)
FILO MINING CORP FIL SS 11.6 (9.2) (10.5)
FRONTDOOR IN FTDR US 1,179.0 (278.0) 52.0
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FRONTDOOR IN FTDREUR EU 1,179.0 (278.0) 52.0
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GOGO INC G0G QT 1,282.1 (363.6) 207.7
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GOGO INC G0G TH 1,282.1 (363.6) 207.7
GOOSEHEAD INSU-A GSHD US 38.1 (30.5) -
GOOSEHEAD INSU-A 2OX GR 38.1 (30.5) -
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GRAFTECH INTERNA G6G GR 1,726.4 (709.8) 621.2
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GREEN PLAINS PAR GPP US 123.2 (73.9) (4.9)
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GREENLANE HOLD-A G67 GR 180.9 130.3 105.6
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HERBALIFE NUTRIT HLFEUR EU 3,078.6 (534.2) 393.4
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HILTON WORLDWIDE HLTEUR EU 15,140.0 (23.0) (565.0)
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HOME DEPOT INC HD AV 52,010.0 (1,160.0) 1,901.0
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HOME DEPOT INC HDEUR EU 52,010.0 (1,160.0) 1,901.0
HOME DEPOT INC HDI QT 52,010.0 (1,160.0) 1,901.0
HOME DEPOT INC HDUSD EU 52,010.0 (1,160.0) 1,901.0
HOME DEPOT INC HD CI 52,010.0 (1,160.0) 1,901.0
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HP INC HPQ* MM 32,405.0 (1,131.0) (4,896.0)
HP INC HPQUSD SW 32,405.0 (1,131.0) (4,896.0)
HP INC HPQEUR EU 32,405.0 (1,131.0) (4,896.0)
HP INC 7HP GZ 32,405.0 (1,131.0) (4,896.0)
HP INC HPQUSD X2 32,405.0 (1,131.0) (4,896.0)
HP INC HPQ AV 32,405.0 (1,131.0) (4,896.0)
HP INC HPQ SW 32,405.0 (1,131.0) (4,896.0)
HP INC HWP QT 32,405.0 (1,131.0) (4,896.0)
HP INC HPQUSD EU 32,405.0 (1,131.0) (4,896.0)
HP INC HPQ CI 32,405.0 (1,131.0) (4,896.0)
HP INC HPQ US 32,405.0 (1,131.0) (4,896.0)
HP INC 7HP TH 32,405.0 (1,131.0) (4,896.0)
HP INC 7HP GR 32,405.0 (1,131.0) (4,896.0)
HP INC HPQ TE 32,405.0 (1,131.0) (4,896.0)
IAA INC IAA US 2,010.3 (228.9) 155.5
IAA INC 3NI GR 2,010.3 (228.9) 155.5
IAA INC IAA-WEUR EU 2,010.3 (228.9) 155.5
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IMMUNOGEN INC IMGN* MM 287.7 (68.2) 184.8
IMMUNOGEN INC IMGN US 287.7 (68.2) 184.8
INSEEGO CORP INSGUSD EU 164.7 (37.3) (117.3)
INSEEGO CORP INSG US 164.7 (37.3) (117.3)
INSEEGO CORP INO GR 164.7 (37.3) (117.3)
INSEEGO CORP INSGEUR EU 164.7 (37.3) (117.3)
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INSEEGO CORP INO TH 164.7 (37.3) (117.3)
INSEEGO CORP INO QT 164.7 (37.3) (117.3)
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IRONWOOD PHARMAC IRWDUSD EU 315.7 (219.4) 110.1
IRONWOOD PHARMAC I76 QT 315.7 (219.4) 110.1
IRONWOOD PHARMAC IRWDEUR EU 315.7 (219.4) 110.1
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IRONWOOD PHARMAC I76 TH 315.7 (219.4) 110.1
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ISRAMCO INC ISRLEUR EU 106.7 (2.0) (7.3)
ISRAMCO INC IRM GR 106.7 (2.0) (7.3)
ISRAMCO INC ISRL US 106.7 (2.0) (7.3)
JACK IN THE BOX JBX GZ 831.3 (580.6) (112.9)
JACK IN THE BOX JBX QT 831.3 (580.6) (112.9)
JACK IN THE BOX JACK1EUR EU 831.3 (580.6) (112.9)
JACK IN THE BOX JBX GR 831.3 (580.6) (112.9)
JACK IN THE BOX JACK US 831.3 (580.6) (112.9)
L BRANDS INC LBUSD EU 10,618.3 (928.7) 436.7
L BRANDS INC LTD QT 10,618.3 (928.7) 436.7
L BRANDS INC LBRA AV 10,618.3 (928.7) 436.7
L BRANDS INC LBEUR EU 10,618.3 (928.7) 436.7
L BRANDS INC LB* MM 10,618.3 (928.7) 436.7
L BRANDS INC LTD TH 10,618.3 (928.7) 436.7
L BRANDS INC LB US 10,618.3 (928.7) 436.7
L BRANDS INC LTD GR 10,618.3 (928.7) 436.7
L BRANDS INC-BDR LBRN34 BZ 10,618.3 (928.7) 436.7
LA JOLLA PHARM LJPC US 169.9 (12.6) 110.4
LA JOLLA PHARM LJPP GR 169.9 (12.6) 110.4
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LENNOX INTL INC LXI TH 2,340.4 (217.5) 368.9
LENNOX INTL INC LII1USD EU 2,340.4 (217.5) 368.9
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LENNOX INTL INC LII US 2,340.4 (217.5) 368.9
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MARTIN MIDSTREAM MMLP US 700.5 (37.1) 88.5
MCDONALDS - BDR MCDC34 BZ 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCD AV 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCDUSD SW 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCDEUR EU 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MDO GZ 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MDO QT 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCDUSD EU 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCD CI 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MDO TH 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCD US 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCD SW 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MDO GR 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCD* MM 46,199.8 (6,808.8) 675.4
MCDONALDS CORP MCD TE 46,199.8 (6,808.8) 675.4
MCDONALDS-CEDEAR MCDD AR 46,199.8 (6,808.8) 675.4
MCDONALDS-CEDEAR MCD AR 46,199.8 (6,808.8) 675.4
MCDONALDS-CEDEAR MCDC AR 46,199.8 (6,808.8) 675.4
MERCER PARK BR-A MRCQF US 407.1 (18.8) 4.1
MERCER PARK BR-A BRND/A/U CN 407.1 (18.8) 4.1
MICHAELS COS INC MIKEUR EU 3,707.1 (1,587.6) 289.9
MICHAELS COS INC MIK US 3,707.1 (1,587.6) 289.9
MICHAELS COS INC MIM GR 3,707.1 (1,587.6) 289.9
MONEYGRAM INTERN MGIUSD EU 4,383.6 (236.7) (129.5)
MONEYGRAM INTERN 9M1N TH 4,383.6 (236.7) (129.5)
MONEYGRAM INTERN MGIEUR EU 4,383.6 (236.7) (129.5)
MONEYGRAM INTERN 9M1N QT 4,383.6 (236.7) (129.5)
MONEYGRAM INTERN 9M1N GR 4,383.6 (236.7) (129.5)
MONEYGRAM INTERN MGI US 4,383.6 (236.7) (129.5)
MOTOROLA SOL-CED MSI AR 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MSI1USD EU 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MSI1EUR EU 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MTLA GZ 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MTLA QT 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MTLA TH 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MOT TE 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MSI US 9,974.0 (954.0) 955.0
MOTOROLA SOLUTIO MTLA GR 9,974.0 (954.0) 955.0
MSCI INC MSCIUSD EU 3,425.1 (231.8) 556.1
MSCI INC 3HM QT 3,425.1 (231.8) 556.1
MSCI INC MSCI* MM 3,425.1 (231.8) 556.1
MSCI INC 3HM GR 3,425.1 (231.8) 556.1
MSCI INC MSCI US 3,425.1 (231.8) 556.1
MSG NETWORKS- A 1M4 QT 866.9 (458.8) 216.9
MSG NETWORKS- A MSGNEUR EU 866.9 (458.8) 216.9
MSG NETWORKS- A 1M4 TH 866.9 (458.8) 216.9
MSG NETWORKS- A MSGN US 866.9 (458.8) 216.9
MSG NETWORKS- A 1M4 GR 866.9 (458.8) 216.9
N/A BJEUR EU 5,152.1 (164.6) (345.8)
NATHANS FAMOUS NATHEUR EU 105.0 (65.1) 76.5
NATHANS FAMOUS NATH US 105.0 (65.1) 76.5
NATHANS FAMOUS NFA GR 105.0 (65.1) 76.5
NATIONAL CINEMED NCMIEUR EU 1,104.0 (110.5) 99.8
NATIONAL CINEMED NCMI US 1,104.0 (110.5) 99.8
NATIONAL CINEMED XWM GR 1,104.0 (110.5) 99.8
NAVISTAR INTL NAVEUR EU 7,294.0 (3,660.0) 1,521.0
NAVISTAR INTL NAVUSD EU 7,294.0 (3,660.0) 1,521.0
NAVISTAR INTL IHR GR 7,294.0 (3,660.0) 1,521.0
NAVISTAR INTL NAV US 7,294.0 (3,660.0) 1,521.0
NAVISTAR INTL IHR QT 7,294.0 (3,660.0) 1,521.0
NAVISTAR INTL IHR GZ 7,294.0 (3,660.0) 1,521.0
NAVISTAR INTL IHR TH 7,294.0 (3,660.0) 1,521.0
NEW ENG RLTY-LP NEN US 244.5 (38.0) -
NOTOX TECHNOLOGI NTOX US 0.7 (1.5) (2.0)
NOVAVAX INC NVAX US 189.4 (185.5) 68.7
NRC GROUP HOLDIN NRCG US 421.3 (42.4) 23.1
NRG ENERGY NRGEUR EU 9,171.0 (1,629.0) 751.0
NRG ENERGY NRA QT 9,171.0 (1,629.0) 751.0
NRG ENERGY NRA TH 9,171.0 (1,629.0) 751.0
NRG ENERGY NRA GR 9,171.0 (1,629.0) 751.0
NRG ENERGY NRG US 9,171.0 (1,629.0) 751.0
OMEROS CORP OMERUSD EU 89.8 (130.3) 25.3
OMEROS CORP 3O8 TH 89.8 (130.3) 25.3
OMEROS CORP OMEREUR EU 89.8 (130.3) 25.3
OMEROS CORP 3O8 GR 89.8 (130.3) 25.3
OMEROS CORP OMER US 89.8 (130.3) 25.3
OPTION CARE HEAL BIOSUSD EU 600.6 (75.2) 61.5
OPTION CARE HEAL MM6 QT 600.6 (75.2) 61.5
OPTION CARE HEAL BIOSEUR EU 600.6 (75.2) 61.5
OPTION CARE HEAL BIOS US 600.6 (75.2) 61.5
OPTION CARE HEAL MM6 GR 600.6 (75.2) 61.5
OPTIVA INC RKNEUR EU 123.6 (21.4) 26.2
OPTIVA INC RKNEF US 123.6 (21.4) 26.2
OPTIVA INC RE6 GR 123.6 (21.4) 26.2
OPTIVA INC OPT CN 123.6 (21.4) 26.2
OPTIVA INC 3230510Q EU 123.6 (21.4) 26.2
PAPA JOHN'S INTL PZZAEUR EU 726.6 (60.6) (17.4)
PAPA JOHN'S INTL PP1 GZ 726.6 (60.6) (17.4)
PAPA JOHN'S INTL PP1 GR 726.6 (60.6) (17.4)
PAPA JOHN'S INTL PZZA US 726.6 (60.6) (17.4)
PARATEK PHARMACE PRTKUSD EU 276.6 (13.7) 246.6
PARATEK PHARMACE N4CN TH 276.6 (13.7) 246.6
PARATEK PHARMACE PRTK US 276.6 (13.7) 246.6
PARATEK PHARMACE N4CN GR 276.6 (13.7) 246.6
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PHILIP MORRIS IN PMOR AV 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN 4I1 GZ 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PM* MM 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN 4I1 QT 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PMIZ EB 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PMIZ IX 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PMI SW 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PM1EUR EU 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN 4I1 GR 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PM US 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PM1 EU 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PM1CHF EU 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN 4I1 TH 39,923.0 (9,409.0) (883.0)
PHILIP MORRIS IN PM1 TE 39,923.0 (9,409.0) (883.0)
PLANET FITNESS-A PLNT1USD EU 1,523.5 (314.4) 298.7
PLANET FITNESS-A PLNT1EUR EU 1,523.5 (314.4) 298.7
PLANET FITNESS-A 3PL QT 1,523.5 (314.4) 298.7
PLANET FITNESS-A PLNT US 1,523.5 (314.4) 298.7
PLANET FITNESS-A 3PL TH 1,523.5 (314.4) 298.7
PLANET FITNESS-A 3PL GR 1,523.5 (314.4) 298.7
PRIORITY TECHNOL PRTH US 460.3 (100.6) 2.5
PURPLE INNOVATIO PRPL US 99.7 (3.4) 17.7
QUANTUM CORP QTM1EUR EU 172.1 (202.5) (27.1)
QUANTUM CORP QMCO US 172.1 (202.5) (27.1)
QUANTUM CORP QNT2 GR 172.1 (202.5) (27.1)
RADIUS HEALTH IN RDUSUSD EU 244.3 (0.1) 175.1
RADIUS HEALTH IN 1R8 TH 244.3 (0.1) 175.1
RADIUS HEALTH IN RDUSEUR EU 244.3 (0.1) 175.1
RADIUS HEALTH IN 1R8 QT 244.3 (0.1) 175.1
RADIUS HEALTH IN RDUS US 244.3 (0.1) 175.1
RADIUS HEALTH IN 1R8 GR 244.3 (0.1) 175.1
REATA PHARMACE-A 2R3 GR 300.5 (33.5) 219.5
REATA PHARMACE-A RETAEUR EU 300.5 (33.5) 219.5
REATA PHARMACE-A RETA US 300.5 (33.5) 219.5
RECRO PHARMA INC RAH GR 161.8 (18.7) 65.0
RECRO PHARMA INC REPH US 161.8 (18.7) 65.0
REVLON INC-A RVL1 TH 3,066.0 (1,187.2) (33.9)
REVLON INC-A REVEUR EU 3,066.0 (1,187.2) (33.9)
REVLON INC-A REVUSD EU 3,066.0 (1,187.2) (33.9)
REVLON INC-A REV US 3,066.0 (1,187.2) (33.9)
REVLON INC-A RVL1 GR 3,066.0 (1,187.2) (33.9)
RH RHEUR EU 2,387.8 (177.9) (267.3)
RH RS1 GR 2,387.8 (177.9) (267.3)
RH RH US 2,387.8 (177.9) (267.3)
RH RH* MM 2,387.8 (177.9) (267.3)
RIMINI STREET IN RMNI US 139.7 (130.2) (104.8)
ROSETTA STONE IN RST1EUR EU 181.5 (9.4) (71.2)
ROSETTA STONE IN RST US 181.5 (9.4) (71.2)
ROSETTA STONE IN RS8 TH 181.5 (9.4) (71.2)
ROSETTA STONE IN RS8 GR 181.5 (9.4) (71.2)
RR DONNELLEY & S RRDEUR EU 3,561.4 (270.8) 588.2
RR DONNELLEY & S DLLN GR 3,561.4 (270.8) 588.2
RR DONNELLEY & S RRD US 3,561.4 (270.8) 588.2
RR DONNELLEY & S DLLN TH 3,561.4 (270.8) 588.2
SALLY BEAUTY HOL SBHEUR EU 2,072.3 (70.5) 719.4
SALLY BEAUTY HOL S7V GR 2,072.3 (70.5) 719.4
SALLY BEAUTY HOL SBH US 2,072.3 (70.5) 719.4
SBA COMM CORP SBACUSD EU 9,269.4 (3,339.3) (1,112.4)
SBA COMM CORP 4SB GZ 9,269.4 (3,339.3) (1,112.4)
SBA COMM CORP SBAC US 9,269.4 (3,339.3) (1,112.4)
SBA COMM CORP SBJ TH 9,269.4 (3,339.3) (1,112.4)
SBA COMM CORP 4SB GR 9,269.4 (3,339.3) (1,112.4)
SBA COMM CORP SBAC* MM 9,269.4 (3,339.3) (1,112.4)
SBA COMM CORP SBACEUR EU 9,269.4 (3,339.3) (1,112.4)
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SCIENTIFIC GAMES SGMSUSD EU 7,932.0 (2,118.0) 852.0
SCIENTIFIC GAMES TJW GR 7,932.0 (2,118.0) 852.0
SCIENTIFIC GAMES TJW TH 7,932.0 (2,118.0) 852.0
SCIENTIFIC GAMES TJW GZ 7,932.0 (2,118.0) 852.0
SEALED AIR CORP SEE1EUR EU 5,216.5 (341.2) (10.8)
SEALED AIR CORP SDA TH 5,216.5 (341.2) (10.8)
SEALED AIR CORP SDA QT 5,216.5 (341.2) (10.8)
SEALED AIR CORP SEE US 5,216.5 (341.2) (10.8)
SEALED AIR CORP SDA GR 5,216.5 (341.2) (10.8)
SERES THERAPEUTI MCRB1EUR EU 146.1 (18.0) 65.9
SERES THERAPEUTI MCRB US 146.1 (18.0) 65.9
SERES THERAPEUTI 1S9 GR 146.1 (18.0) 65.9
SHELL MIDSTREAM SHLXUSD EU 2,004.0 (767.0) 279.0
SHELL MIDSTREAM 49M GR 2,004.0 (767.0) 279.0
SHELL MIDSTREAM 49M TH 2,004.0 (767.0) 279.0
SHELL MIDSTREAM SHLX US 2,004.0 (767.0) 279.0
SINO UNITED WORL SUIC US 0.1 (0.1) (0.1)
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SIRIUS XM HOLDIN SIRIUSD EU 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN SIRI TE 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN RDO GZ 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN SIRIEUR EU 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN RDO QT 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN RDO GR 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN RDO TH 11,316.0 (489.0) (2,182.0)
SIRIUS XM HOLDIN SIRI US 11,316.0 (489.0) (2,182.0)
SIX FLAGS ENTERT SIXEUR EU 2,938.1 (204.4) (66.6)
SIX FLAGS ENTERT SIXUSD EU 2,938.1 (204.4) (66.6)
SIX FLAGS ENTERT SIX US 2,938.1 (204.4) (66.6)
SIX FLAGS ENTERT 6FE GR 2,938.1 (204.4) (66.6)
SLEEP NUMBER COR SNBREUR EU 795.9 (157.3) (433.9)
SLEEP NUMBER COR SNBR US 795.9 (157.3) (433.9)
SLEEP NUMBER COR SL2 GR 795.9 (157.3) (433.9)
SPIRIT MTA REIT SMTA US 2,012.7 (24.6) -
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STARBUCKS CORP SBUXEUR EU 20,894.4 (4,319.0) 1,839.0
STARBUCKS CORP SBUX IM 20,894.4 (4,319.0) 1,839.0
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STARBUCKS CORP SRB QT 20,894.4 (4,319.0) 1,839.0
STARBUCKS CORP SBUX US 20,894.4 (4,319.0) 1,839.0
STARBUCKS CORP SBUX CI 20,894.4 (4,319.0) 1,839.0
STARBUCKS CORP SRB TH 20,894.4 (4,319.0) 1,839.0
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STARBUCKS CORP SRB GR 20,894.4 (4,319.0) 1,839.0
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STEALTH BIOTHERA MITO US 15.5 (175.3) (27.3)
STEALTH BIOTHERA S1BA GR 15.5 (175.3) (27.3)
SUNPOWER CORP SPWREUR EU 1,938.9 (96.6) 240.6
SUNPOWER CORP SPWRUSD EU 1,938.9 (96.6) 240.6
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TAUBMAN CENTERS TCO US 4,485.1 (324.0) -
TG THERAPEUTICS NKB2 TH 106.6 (599.7) 44.1
TG THERAPEUTICS NKB2 GR 106.6 (599.7) 44.1
TG THERAPEUTICS TGTX US 106.6 (599.7) 44.1
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TRIUMPH GROUP TGIEUR EU 2,823.3 (557.9) 208.3
TRIUMPH GROUP TG7 GR 2,823.3 (557.9) 208.3
TRIUMPH GROUP TGI US 2,823.3 (557.9) 208.3
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TUPPERWARE BRAND TUP1EUR EU 1,428.5 (163.1) (110.8)
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UNISYS CORP USY1 GZ 2,507.8 (1,213.7) 334.1
UNISYS CORP USY1 QT 2,507.8 (1,213.7) 334.1
UNISYS CORP UISEUR EU 2,507.8 (1,213.7) 334.1
UNISYS CORP UISCHF EU 2,507.8 (1,213.7) 334.1
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UNISYS CORP UIS1 SW 2,507.8 (1,213.7) 334.1
UNISYS CORP UIS EU 2,507.8 (1,213.7) 334.1
UNITI GROUP INC CSALUSD EU 4,790.4 (1,401.8) -
UNITI GROUP INC 8XC GR 4,790.4 (1,401.8) -
UNITI GROUP INC 8XC TH 4,790.4 (1,401.8) -
UNITI GROUP INC UNIT US 4,790.4 (1,401.8) -
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VALVOLINE INC VVVEUR EU 2,000.0 (252.0) 389.0
VALVOLINE INC 0V4 QT 2,000.0 (252.0) 389.0
VALVOLINE INC VVV US 2,000.0 (252.0) 389.0
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VECTOR GROUP LTD VGRUSD EU 1,455.2 (606.7) 80.4
VECTOR GROUP LTD VGR TH 1,455.2 (606.7) 80.4
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VERISIGN INC VRSNUSD EU 1,889.9 (1,425.2) 360.7
VERISIGN INC VRSNEUR EU 1,889.9 (1,425.2) 360.7
VERISIGN INC VRS GZ 1,889.9 (1,425.2) 360.7
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VERISIGN INC VRS GR 1,889.9 (1,425.2) 360.7
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WAYFAIR INC- A WEUR EU 2,182.1 (605.4) (276.6)
WAYFAIR INC- A W US 2,182.1 (605.4) (276.6)
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WORKHORSE GROUP WKHS US 35.7 (45.0) (26.2)
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YUM! BRANDS INC TGR TE 4,674.0 (7,994.0) (64.0)
YUM! BRANDS INC YUMEUR EU 4,674.0 (7,994.0) (64.0)
YUM! BRANDS INC TGR QT 4,674.0 (7,994.0) (64.0)
YUM! BRANDS INC YUM SW 4,674.0 (7,994.0) (64.0)
YUM! BRANDS INC TGR TH 4,674.0 (7,994.0) (64.0)
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YUM! BRANDS INC YUM* MM 4,674.0 (7,994.0) (64.0)
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Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***