/raid1/www/Hosts/bankrupt/TCR_Public/191115.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 15, 2019, Vol. 23, No. 318
Headlines
ACHAOGEN INC: Revagenix Buying Documents for $5K
AGC REFINING: U.S. Trustee Unable to Appoint Committee
APC AUTOMOTIVE: Moody's Affirms Caa2 CFR, Outlook Negative
APEX CLEANING: "Cramdown" Hearing on Plan on Nov. 26
BENTWOOD FARMS: Dec. 3 Plan Confirmation Hearing Set
BOOZ ALLEN: Moody's Rates $389.1MM Sr. Sec. Term Loan B 'Ba1'
C&M PLASTICS: Dec. 18 Plan Confirmation Hearing Set
CANNON & CANNON LAW: Plan Headed to Confirmation
CAPITAL RESTAURANT: U.S. Trustee Unable to Appoint Committee
CARTONI GROUP: U.S. Trustee Unable to Appoint Committee
CHRISTIAN CARE: Fitch Cuts Rating on $24MM Series 2016 Bonds to BB-
COMPLETE DISTRIBUTION: Clark Hill Represents BoA, Other Lenders
COOL CONCEPTS: To Present Plan for Confirmation Dec. 18
COOLSYS INC: Moody's Assigns B3 Corp. Family Rating, Outlook Stable
CREATIVE ARTISTS: Moody's Affirms B2 CFR, Outlook Stable
CREDIT ACCEPTANCE: Moody's Affirms Ba3 CFR, Outlook Stable
CSI–ABSOLUTE: Hearing on Plan & Disclosures Continued to Dec. 19
DWS CLOTHING: Debtor Resets Disclosures Hearing to Jan. 16
DYLLAN'S LLC: Case Summary & 17 Unsecured Creditors
ELECTRIC SUPPLY: Court Confirms Liquidating Plan
FF FUND I: U.S. Trustee Unable to Appoint Committee
FLEETWOOD ACQUISITION: U.S. Trustee Forms 5-Member Committee
FRONTERA ENERGY: Fitch Affirms B+ LongTerm IDRs, Outlook Negative
GEA SEASIDE: Plan Confirmation Hearing Reset to March 4, 2020
GEORGE WASHINGTON: Sets Bidding Procedures for Business
GRAMERCY GROUP: Subcontractors Object to Disclosure Statement
GREEN FAMILY FUN ZONE: Gets Cash Collateral Access Thru Nov. 30
HARD ROCK EXPLORATION: Unsecureds to Get 2.85% in Trustee Plan
HENRY IRVING LLC: Case Summary & 2 Unsecured Creditors
HOLCOMB ACQUISITIONS: Bankruptcy Administrator to Form Committee
HOTEL OXYGEN: Case Summary & 20 Largest Unsecured Creditors
HOUSTON GRANITE: U.S. Trustee Unable to Appoint Committee
HRI HOLDING: Case Summary & 30 Largest Unsecured Creditors
IEA ENERGY: Moody's Raises CFR to B3, Outlook Stable
INTEGRATED DYNAMIC: Unsecureds to Get 0.18% If $16M Claim OK'd
IPS WORLDWIDE: Prelim Order Approving Disc. Statement Vacated
ISS MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors
JARED BROOKS: Proposes Biglron Auctions of Personal Property
JWMR PROPERTY: U.S. Trustee Unable to Appoint Committee
LAREDO PETROLEUM: Moody's Affirms B1 CFR & Alters Outlook to Stable
LEVEL 3 FINANCING: Moody's Rates New Sr. Sec. Notes 'Ba1'
LEVEL HOME: Seeks Extension of Plan Confirmation Period
MARINE BUILDERS: Debtor Files Plan, Selling Equity Interests
MATTHEWS INT'L: Moody's Alters Outlook on Ba3 CFR to Negative
MICHAEL D. COHEN: Disclosure Statement Hearing Reset to Dec. 12
MILLWASP REALTY: Creditors to Get Payment from Sale of Property
MILLWASP REALTY: Dec. 3 Disclosure & Plan Confirmation Hearing Set
MLAC CASTLE ATLANTA: Case Summary & 2 Unsecured Creditors
MURPHY OIL: Fitch Rates $550MM Sr. Unsec. Notes 'BB+'
MURPHY OIL: Moody's Rates New Sr. Unsec. Notes Due 2027 'Ba2'
MURRAY ENERGY: Has Plan Deal WIth Term Lenders and Shareholders
NEAL ELECTRIC: UCB Seeks to Prohibit Use of Cash Collateral
NEST EXTENDED: U.S. Trustee Unable to Appoint Committee
NEW BEGINNERS: Unsecureds to Recover 100% With Interest in 3 Years
OAKLEY GRADING: Joseph Oakley to Get Equipment in Trustee Plan
OFFICE BARGAIN CENTER: Must File 2nd Amended Plan by Nov. 15
OLMA XXI INC: Seeks to Hire Wisdom Professional as Accountant
OWENS PRECISION: Case Summary & 2 Unsecured Creditors
PARK MONROE: Northeast Brooklyn Has 6% for Unsecureds
PGX HOLDINGS: Moody's Lowers CFR to Caa2, Outlook Negative
PLAYTIKA HOLDING: Moody's Assigns Ba3 CFR, Outlook Stable
POSITECH INTERNATIONAL: U.S. Trustee Unable to Appoint Committee
R44 LENDING: Says It Has Obtained Financing for Plan
R44 LENDING: Unsecureds to Have At Least 10% Recovery Under Plan
REGIONAL MEDICAL: Plan & Disclosures Due March 4, 2020
REGIONAL SITE: Bankr. Administrator Unable to Appoint Committee
REIHNER ENTERPRISES: Unsecureds to Get 25% Over 5 Years
ROC-IT DRYWALL: Combined Plan & Disclosures Due Nov. 22
SEALED AIR: S&P Rates $425MM Senior Unsecured Notes 'BB+'
SERVICE PAINTING: Sees Feb. 1 Exit From Chapter 11
SILVER STATE: Creditors' Recovery to Depend on TUFTA Outcome
SOTERA HEALTH: S&P Affirms 'B' ICR on Recapitalization Plan
STEARNS HOLDING: Plan Effective Date Occurred Nov. 5
STONEGATE LANDING: Dec. 18 Plan Confirmation Hearing Set
STV GROUP: S&P Assigns 'B+' Issuer Credit Rating; Outlook Stable
SUNCOAST INTERNAL: Valley Nat'l Bank Seeks Plan Compliance
TARGA RESOURCES: Moody's Rates New $750MM Unsec. Notes 'Ba3'
TARRANT COUNTY: Stayton Seeks Access to UMB Bank Cash Collateral
TATUNG COMPANY: May Continue Using Cash Collateral Until Dec. 10
UNDER ARMOUR: S&P Affirms 'BB' Issuer Credit Rating; Outlook Stable
UNIT CORP: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
UNIVAR SOLUTIONS: Moody's Rates $400MM Sec. Term Loan 'Ba3'
URBAN OAKS: Wants Amended Plan Hearing Reset to March 2020
USI INC: S&P Assigns 'B' Rating to New $550MM Term Loan Due 2024
VASCULAR ACCESS: Involuntary Chapter 11 Case Summary
VECTOR GROUP: Moody's Affirms B2 CFR & Alters Outlook to Stable
VERITY HEALTH: Wants Disclosure Statement Hearing Reset to Nov. 20
WHITE STAR: J. Patrick Mensching Advises Bostick, Winn Analytical
WILWOOD ANTIQUE: Seeks Authorization to Use Cash Collateral
[*] BOOK REVIEW: BIG BOARD: A History of the New York Stock Market
*********
ACHAOGEN INC: Revagenix Buying Documents for $5K
------------------------------------------------
Achaogen, Inc., asks the U.S. Bankruptcy Court for the District of
Delaware to authorize its Asset Purchase Agreement dated Oct. 22,
2019 with Revagenix, Inc. in connection with the immediate sale of
the Early Research Assets, including the files contained within
folders on the Box Drive, with folder names containing or
substantially similar to or pertaining to the following specific
small molecule research programs: (i) NAG, (ii) ES-AG, and (iii)
LpxC, for $5,000.
The objection deadline is Nov. 19, 2019 at 4:00 p.m. (ET).
Several weeks ago, Ryan Cirz, a former Achaogen employee,
approached the Debtor about acquiring the Documents. In doing so,
Mr. Cirz explained that as a scientist who has worked in the
anti-infectives space for over 16 years, most of that time directly
with Achaogen, he has and continues to remain committed to the
field. He further explained that he wishes to purchase the
Documents to preserve certain early-stage research and scientific
findings, including data and know-how, set forth therein. This
information was not acquired or slated to be acquired as part of
the previously conducted Auctions or executed Sale Agreements.
No other parties have expressed any interest in the Documents or
the information contained therein, and the Documents would in all
likelihood be abandoned and destroyed at the conclusion of the case
if not for the sale of the Documents to Mr. Cirz. As such, in
light of Mr. Cirz’s offer, the Debtor (upon consultation with
Silicon Valley Bank, N.A. ("DIP Lender") and the Committee)
concluded it was appropriate and in the best interest of the
Debtor's estate and stakeholders to sell the Documents to Mr. Cirz.
Mr. Cirz thus formed the Purchaser, and the Parties negotiated the
Sale to the Purchaser for consideration of $5,000. The terms and
conditions of such negotiations are memorialized in their
Agreement. Although the Purchaser is an entity wholly owned by Mr.
Cirz, one of the Debtor's former employees, Mr. Cirz is no longer
an employee and was at no time during his employment an insider.
The Debtor's DIP Lender and the Committee do not object to the
proposed Sale.
To preserve the value of the Debtor's estate and limit the costs of
administering and preserving the Documents, it is important that
the Debtor close the Sale and fulfill its obligations under the
Agreement as soon as possible. Accordingly, the Debtor asks that
the Court waives the 14-day stay period under Bankruptcy Rule
6004(h).
A copy of the Agreement attached to the Motion is available for
free at:
https://tinyurl.com/vobzvcn
About Achaogen Inc.
South San Francisco, California-based Achaogen, Inc. --
http://www.achaogen.com/-- is a biopharmaceutical company focused
on the discovery, development, and commercialization of innovative
antibacterial treatments against multi-drug resistant gram-negative
infections.
Achaogen, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10844) on April
25, 2019. In the petition signed by CEO Blake Wise, the Debtor
disclosed assets of $91.61 million and liabilities of $119.96
million as of Jan. 31, 2019.
The case is assigned to Judge Brendan Linehan Shannon.
The Debtor tapped Hogan Lovells US LLP as its bankruptcy counsel;
Morris, Nichols, Arsht & Tunnell LLP as co-counsel; Meru LLC as
financial advisor; Cassel Salpeter & Co., LLC as investment banker;
and Kurtzman Carson Consultants LLC as claims, noticing and
solicitation agent.
Andrew Vara, acting U.S. trustee for Region 3, appointed a
committee of unsecured creditors in the Debtor's case on April 23,
2019.
AGC REFINING: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The Office of the U.S. Trustee on Nov. 13, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of AGC Refining & Filtration
LLC.
About AGC Refining & Filtration
AGC Refining & Filtration LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Mo. Case No. 19-61153) on Sept.
20, 2019. At the time of the filing, the Debtor disclosed $619,766
in assets and $7,427,959 in liabilities. The case is assigned to
Judge Cynthia A. Norton. The Debtor tapped David E. Schroeder,
Esq., at David Schroeder Law Offices, P.C., as its legal counsel.
APC AUTOMOTIVE: Moody's Affirms Caa2 CFR, Outlook Negative
----------------------------------------------------------
Moody's Investors Service affirmed APC Automotive Technologies,
LLC's Caa2 Corporate Family Rating and upgraded the company's
Probability of Default Rating to Caa2-PD/LD from Caa3-PD following
the close of the company's recapitalization. Moody's considers the
second lien debt-to-equity conversion and amendment to APC's senior
secured first lien credit agreement a distressed exchange default.
Moody's will remove the "/LD" designation that reflects the limited
default in approximately three business days. Moody's also assigned
Caa1 ratings to the new senior secured Term A Loans (A-1, A-2, and
A-3) and a Caa3 rating to the new senior secured Term B Loan issued
as part of the transaction. Moody's withdrew the Caa3 rating on the
$315 million senior secured term loan that was exchanged into the
new term loans. The rating outlook remains negative.
APC's restructured balance sheet following the amendment alleviates
some liquidity pressure over the next year through new money
investments and reduces leverage on a pro forma basis through the
full equitization of the $125 million second lien term loan.
However, Moody's expects leverage to remain very high at above 12x
debt/EBITDA (Moody's adjusted) through 2020 and liquidity to remain
weak with negative free cash flow despite the elimination of the
second lien interest and partial pay-in-kind interest on a portion
of the new term loans. Moody's affirmed the Caa2 CFR reflects
elevated risk of another restructuring absent a significant
operational turnaround.
Moody's took the following rating actions for APC Automotive
Technologies, LLC:
Assignments:
Issuer: APC Automotive Technologies, LLC
Senior Secured Term A Loans, Assigned Caa1 (LGD3)
Senior Secured Term B Loan, Assigned Caa3 (LGD5)
Upgrades:
Issuer: APC Automotive Technologies, LLC
Probability of Default Rating, Upgraded to Caa2-PD /LD from
Caa3-PD
Affirmations:
Issuer: APC Automotive Technologies, LLC
Corporate Family Rating, Affirmed Caa2
Withdrawals:
Issuer: APC Automotive Technologies, LLC
Senior Secured First Lien Term Loan, Withdrawn, previously rated
Caa3 (LGD3)
Outlook Actions:
Issuer: APC Automotive Technologies, LLC
....Outlook, Remains Negative
RATINGS RATIONALE
The Caa2 CFR reflects APC's very high debt/EBITDA leverage (over
12x pro forma LTM 6/30/19 for the recapitalization), deteriorating
EBITDA margin and weak liquidity with continually negative free
cash flow. Moody's believes the risk of another balance sheet
restructuring is high even with the expected improvement in EBITDA
in 2020 and the reduction in leverage and cash interest from the
restructuring transactions. The recapitalization provides
additional liquidity cushion over the next 12 months with $40
million net in new money investment and cash savings on interest
expense because of the PIK feature of the new A term loans. This
liquidity reprieve allows the company additional runway over the
next 12 months to realize cost savings from shifting its caliper
production to Mexico. However, liquidity will remain weak in 2020
based on Moody's expectation for negative free cash flow, continued
high usage on the company's $90 million asset-based revolving
credit facility (ABL), and minimal cushion under the 1.0x minimum
fixed charge coverage ratio covenant on the revolver should it be
triggered.
Moody's anticipates APC's EBITA margin to trough by the end of 2019
and moderately improve in 2020 because the company will realize
some cost savings from its restructuring initiatives. The company's
earnings still remain highly vulnerable, though, to competitor
actions and raw material price volatility. Moody's expects leverage
to continue to strain the credit profile with debt/EBITDA likely to
remain very high at above 12x despite moderate improvement in
profitability in 2020.
The Caa1 rating on the $205 million in senior secured Term A Loans
(A1 -- A3) reflects the facilities priority of claim in the capital
structure. The Term A Loans maintain a first lien first out
position on the existing first lien collateral and a 1.5 lien on
the priority collateral supporting APC's $90 million asset-based
revolving credit facility. The Caa3 rating on the $143 million
senior secured Term B Loan reflects its first lien second out
position on existing first lien collateral and a second lien on ABL
priority collateral.
The negative outlook reflects Moody's view that the company will be
challenged to meaningfully improve its operating performance,
leverage and liquidity in the next 12 months, leading to elevated
risk of another restructuring and potential weakening of recovery
prospects.
The ratings could be downgraded if the company is unable to improve
EBITDA and free cash flow generation due to challenges in the
operating environment, increases in material, labor or freight
costs, or an inability to translate anticipated cost savings into
higher earnings. A deterioration in liquidity, increased potential
for another balance sheet restructuring, or reduction in debt
recovery expectations could also result in a downgrade.
The ratings could be upgraded if the company improves its operating
performance and realizes sufficient sustained improvements in
earnings, including the achievement of planned synergies, to
meaningfully reduce leverage. An upgrade would also require
positive free cash flow generation and the maintenance of at least
adequate overall liquidity.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
APC is a domestically focused emissions manufacturer and brake and
chassis distributor in the automotive aftermarket. The company's
products include drums and rotors, catalytic converters, friction,
chassis, calipers and other products. Revenue for the 12 months
ended June 30, 2019 was approximately $462 million. The business is
currently co-owned by Harvest Partners, LP and Audax Group.
APEX CLEANING: "Cramdown" Hearing on Plan on Nov. 26
----------------------------------------------------
Honorable Judge Jeffrey A. Deller of the U.S. Bankruptcy Court for
the Western District of Pennsylvania on Oct. 22, 2019, held a
hearing on confirmation of Apex Cleaning Supply Inc.'s Amended
Chapter 11 Small Business Plan.
The Debtor requested a "cramdown" hearing pursuant to 11 U.S.C.
Sec. 1129(b) as the Debtor believes that confirmation of the Plan
is in the best interest of Creditors and the Estate, regardless
of the balloting of the Plan which failed to support plan
acceptance permitting confirmation pursuant to 11 U.S.C. Sec.
1126(c).
Accordingly, Judge Deller ordered that:
* The Amended Disclosure Statement accompanying the Plan is
finally approved.
* The deadline for the Debtor to confirm the Plan is extended to
Nov. 26, 2019.
* The deadline for creditors to file objections to confirmation
of the Plan pursuant to the cramdown provisions of Sec. 1129(b) is
Nov. 19, 2019.
* A cramdown hearing is scheduled on Nov. 26, 2019 at 10:00 a.m.
* On or before Nov. 22, 2019, the Debtor shall provide to the
Court and any party in interest objecting to the cramdown copies of
all exhibits to be offered, including the necessary financial
information in support of its claim for cramdown.
About Apex Cleaning Supply
Apex Cleaning Supply, Inc., is a full line janitorial supply and
service company located in Uniontown, Pennsylvania. The company's
service division has been in business for over 25 years. The
company specializes in daily maintenance, post construction
clean-up, stripping and refinishing all types of flooring, carpet
cleaning, kitchen degreasing, window cleaning and more.
Apex Cleaning Supply filed a Chapter 11 petition (Bankr. W.D. Pa.
Case No. 17-25033) on Dec. 15, 2017. The petition was signed by
Mark Suchevits, president/owner. Donald R. Calaiaro, Esq., at
Calaiaro Valencik. At the time of filing, the Debtor was estimated
to have $100,000 to $500,000 in assets and $1 million to $10
million in liabilities.
BENTWOOD FARMS: Dec. 3 Plan Confirmation Hearing Set
----------------------------------------------------
On Oct. 15, 2019, the U.S. Bankruptcy Court for the Western
District of North Carolina, Charlotte Division, held a hearing on
the disclosure statement filed by debtor Bentwood Farms, LLC. On
Oct. 29, 2019, Judge J. Craig Whitley approved the disclosure
statement and established these dates and deadlines:
* Dec. 3, 2019, at 9:30 a.m. is fixed for the hearing to consider
confirmation of the plan of reorganization to be held at the
Charles R. Jonas Federal Courthouse in Charlotte, North Carolina.
* Nov. 26, 2019, is fixed pursuant to Rule 3020(b)(1) as the last
day for filing and serving written objections to confirmation of
the plan.
* Nov. 26, 2019, is fixed as the last day for filing and serving
written acceptances or rejections to the Debtor's Plan of
Reorganization.
About Bentwood Farms
Bentwood Farms, LLC, is a North Carolina limited liability company
having a corporate headquarters located at 1101 Circle Drive,
Monroe, NC 28110. The Company operates in the crop farming
industry.
Bentwood Farms filed a Chapter 11 petition (Bankr. W.D.N.C. Case
No. 18-31823) on Dec. 7, 2018. In the petition signed by Charlie
B. Baucom, president, the Debtor estimated less than $50,000 in
assets and less than $10 million in liabilities. Judge Craig J.
Whitley oversees the case. Moon Wright & Houston, PLLC, is the
Debtor's counsel, and GreerWalker LLP, is the financial advisor.
BOOZ ALLEN: Moody's Rates $389.1MM Sr. Sec. Term Loan B 'Ba1'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Booz Allen
Hamilton Inc.'s existing $389.1 million first lien senior secured
term loan B upon the extension of this facility's maturity by 3.4
years, beyond the currently scheduled maturity of June 30, 2023.
The Ba2 corporate family and all other ratings of BAH as well as
the positive outlook are unaffected by the assignment.
Assignments:
Issuer: Booz Allen Hamilton Inc.
Senior Secured Bank Credit Facility, Assigned Ba1 (LGD3)
RATINGS RATIONALE
The Ba2 corporate family rating reflects BAH's wide coverage of US
federal agencies, low contract concentration and well established
position serving US defense agencies. Moody's expects that
execution of BAH's backlog will drive debt/EBITDA and funds from
operations to debt (Moody's-adjusted basis) to about 3x and between
20%-25%, respectively, in the coming years. The rating considers
potential event risk because of one or more debt-funded
acquisitions; however, Moody's expectation is for credit metrics to
initially weaken to within tolerable limits and that BAH would
prioritize the timely repayment of debt to restore credit metrics.
Upward rating momentum would depend on debt/EBITDA approaching
2.5x, funds from operations to debt approaching 25%, a continued
good liquidity profile and an expectation that the impact from the
pending federal investigations of the company will not meaningfully
reduce free cash flow, impede the businesses' ability to operate or
meaningfully erode financial metrics. Expectations of a steady
budgetary setting for the U.S. Government would likely be a
prerequisite for a prospective ratings upgrade.
Downward rating pressure would follow debt/EBITDA being sustained
above 4x, funds from operations to debt below 15%, significant
reputational or financial effects associated with the
investigations, or a diminished liquidity profile.
The principal methodology used in this rating was Aerospace and
Defense Industry published in March 2018.
Booz Allen Hamilton Inc. is a provider of management and technology
consulting and engineering services to governments in the defense,
intelligence and civil markets, global corporations and
not-for-profit organizations. The company is headquartered in
McLean, VA and reported revenues of approximately $7.1 billion for
the twelve months ended September 30, 2019.
C&M PLASTICS: Dec. 18 Plan Confirmation Hearing Set
---------------------------------------------------
C&M Plastics, LLC and owner Sandra Craven filed with the U.S.
Bankruptcy Court for the District of Arizona a First Amended Plan
of Reorganization and an explanatory Disclosure Statement.
On Oct. 29, 2019, Judge Madeleine C. Wanslee approved the
Disclosure Statement and established the following dates:
* Dec. 18, 2019, at 1:30 p.m. is fixed for the hearing to
confirm the Plan to be held in Courtroom 702, at the U.S.
Bankruptcy Court, 230 N. First Ave., Phoenix, AZ 85003.
* Dec. 11, 2019, is fixed as the deadline to file written
objections to confirmation of the Plan.
As reported in the TCR, debtors C&M Plastics, LLC, and Sandra
Craven filed with the U.S. Bankruptcy Court for the District of
Arizona a First Amended Joint
Disclosure Statement. Holders of Allowed Unsecured Claims owed
$1,398,337.22 for business-related debt (Class 1-F) will be paid on
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. Interest holders, which
are retaining their interests, will contribute to C&M the sum of
$5,000 coupled with an interest free loan in the amount of $75,000
to be repaid back to Interest Holders over four years beginning in
2021. A full-text copy of the Disclosure Statement dated Oct. 22,
2019, is available at https://tinyurl.com/y59nf27o from
PacerMonitor.com at no charge.
About C&M Plastics
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. In the petition signed by Sandra
Craven, manager/member, the Debtor was estimated to have estimated
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities.
Sandra Lee Craven filed her own Chapter 11 petition (Bankr. D.
Ariz. Case No. 19-01872) on Feb. 21, 2019.
Judge Madeleine C. Wanslee oversees the cases.
Patrick F. Keery, Esq., at Keery McCue, PLLC, is the Debtors'
counsel.
CANNON & CANNON LAW: Plan Headed to Confirmation
------------------------------------------------
The Honorable Judge Kevin R. Anderson of the U.S. Bankruptcy Court
for the Central District of Utah approved the disclosure statement
in support of Cannon & Cannon Law P.C.'s Chapter 11 plan.
The Court ordered that:
* Objections, if any, to confirmation of the Plan shall be filed
with the Clerk of the Court and copies served upon counsel for the
Debtor and the United States Trustee at the addresses set forth in
the Disclosure Statement no later than Nov. 26, 20196.
* All original Ballots must be returned to the Debtor’s
counsel no later than 4:30 p.m. on Nov. 26, 2019, to be counted.
Copies of the completed Ballots shall also be sent to the United
States Trustee at the address set forth in the Ballot.
* Counsel for the Debtor will file a Report of Balloting with
the completed Ballots attached no later than Nov. 29, 2019.
* A hearing on confirmation of the Debtor's Plan will be held on
December 3, 2019, at 10:30 a.m
As reported in the TCR, the Debtor has proposed a plan that
provides that the reorganized Debtor shall pay the claims of
nonpriority unsecured creditors owed $147,879 through the pro rata
distribution of a single lump sum payment in the amount of
$100,000, to be paid within 30 days after the Effective Date of the
Plan. BWC will remain the shareholder of the reorganized Debtor.
A full-text copy of the Amended Disclosure Statement dated Oct. 22,
2019, is available at https://tinyurl.com/y3wylh83 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Andres Diaz
Timothy J. Larsen
DIAZ & LARSEN
307 West 200 South, Suite 3003
Salt Lake City, UT 84101
Tel: (801) 596-1661
Fax: (801) 359-6803
Email: courtmail@adexpresslaw.com
About Cannon & Cannon
Cannon & Cannon Law, PC, filed a Chapter 11 petition (Bankr. D.
Utah Case No. 19-21589) on March 15, 2019, and is represented by
Andres Diaz, Esq., at Diaz & Larsen, in Salt Lake City, Utah.
CAPITAL RESTAURANT: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The Office of the U.S. Trustee on Nov. 12, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Capital Restaurant Group,
LLC.
About Capital Restaurant Group
Capital Restaurant Group, LLC owns and operates 17 restaurants in
South Carolina under franchise agreements with Burger King
Corporation. It employs over 400 people in the greater Orangeburg,
Charleston, and Myrtle Beach communities, and employs up to 600
people during its peak season.
Capital Restaurant Group filed a voluntary Chapter 11 petition
(Bankr. N.D. Ga. Case No. 19-65910) on Oct. 10, 2019. At the time
of the filing, the Debtor had estimated assets of between $10
million and $50 million and liabilities of between $1 million and
$10 million.
The case is assigned to Judge Wendy L. Hagenau. Benjamin Keck at
Rountree, Leitman & Klein, LLC, represents the Debtor as counsel.
CARTONI GROUP: 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
Cartoni Group LLC, according to court dockets.
About Cartoni Group
Cartoni Group, LLC is a lessor of real estate in New Port Richey,
Fla. It owns in fee simple two properties having an aggregate
current value of $1.425 million.
Cartoni Group sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 19-09576) on Oct. 9, 2019. At the
time of the filing, the Debtor disclosed $1,499,000 in assets and
$1,053,781 in liabilities. The case is assigned to Judge Caryl E.
Delano. The Debtor tapped Buddy D. Ford, P.A. as its legal
counsel.
CHRISTIAN CARE: Fitch Cuts Rating on $24MM Series 2016 Bonds to BB-
-------------------------------------------------------------------
Fitch Ratings downgraded to 'BB-' from 'BB+' the rating on the
following bonds issued by Mesquite Health Facilities Development
Corporation, TX on behalf of Christian Care Centers:
-- $24.4 million retirement facility revenue bonds, series 2016;
-- $29.8 million retirement facility revenue bonds, series 2014.
The Rating Outlook remains Negative.
SECURITY
The bonds are secured by a gross revenue pledge, mortgage liens on
Christian Care's property, and debt service reserve funds.
KEY RATING DRIVERS
WEAKER LIQUIDITY: The downgrade is based on the deterioration of
Christian Care's unrestricted cash and investments position, which
reduces the margin of safety against default. In its unaudited
Sept. 30 financial statements, Christian Care reported a $4 million
decline year over year in its unrestricted cash and investment
position from approximately $14 million to $10 million. This amount
translates into a weak 105 days cash on hand (DCOH) and 18.8% cash
to debt. The Negative Outlook reflects the potential for further
liquidity erosion into fiscal 2020 due to continued spending on
capital projects.
IMPROVING PROFITABILITY FROM TRANSFORMATION PROJECT: The nine month
interim period shows an improvement in profitability as the
operating ratio of 97.2% and net operating margin of 9.3% improved
from 101.8% and 4.3% in fiscal 2018. Though profitability is
improving, continued utilization gains are needed to improve debt
service coverage as the combination of weak cash flow relative to
debt service and negative net entrance fees receipts in 2019 is
pressuring coverage metrics. The current rating assumes that though
liquidity may weaken due to high capex, Christian Care's ongoing
transformation project produces occupancy gains in fiscal 2020 that
translate to stronger profitability and debt service coverage.
ELEVATED DEBT PROFILE: Christian Care's debt burden is high as
total debt measured an elevated 14.2% of annualized 2019 net
available. Maximum annual debt service (MADS) of $4 million is a
moderate 10.9% of annualized nine month revenues. Debt service was
a weak 0.99x through the nine month interim period according to the
master trust indenture (MTI) calculation. Though management
anticipates achieving 1.2x coverage by fiscal year-end 2019, the
downgrade and Negative Outlook incorporate the potential risk that
Christian Care's DCOH below 160 and coverage below 1.2x could
trigger an event of default.
ASYMMETRIC RISK FACTORS: There are no asymmetric risk
considerations affecting the rating determination.
RATING SENSITIVITIES
OCCUPANCY, PROFITABILITY AND COVERAGE IMPROVEMENTS: The inability
of Christian Care Centers to improve overall occupancy, net
entrance fee receipts and the SNF payor mix could pressure
operating results and debt service coverage, ultimately resulting
in a rating downgrade. Improving profitability could result in the
revision of the rating outlook to Stable.
LIQUIDITY STABILIZATION: Though Fitch expects some liquidity
erosion in fiscal 2020, a material deterioration in liquidity
without profitability gains would increase the potential risk of
default and result in a downgrade. Furthermore, a failure to
stabilize liquidity and manage capital spending by fiscal 2021
could put pressure on the current rating. Stabilized liquidity
could result in a revision of the Outlook to Stable.
CREDIT PROFILE
Christian Care serves the Dallas-Fort Worth metroplex with three
senior living campuses in Mesquite, Fort Worth and Allen Texas.
Aggregate capacity as of Sept. 30, 2019 consists of 411 independent
living units (ILUs), 229 assisted living units (ALUs) (including 77
memory care units), and 119 skilled nursing facility (SNF) beds.
Total fiscal 2018 operating revenue was $35.7 million.
OPERATIONAL CHALLENGES
Christian Care had historically benefited from desirable locations,
religious affiliation, and a reputation for quality care. As a
result, occupancy averaged a strong 91% for ILUs, 92% for ALUs and
90% in the SNFs between fiscal 2012 and 2016. Recent challenges
began in fiscal 2016 as the opening of the Allen facility, which
was financed in 2014, was delayed 12 months causing capitalized
interest to be depleted prior to the achievement of stabilized
occupancy. In addition to the delayed opening, the Allen campus
faced strong memory care price competition that resulted in slow
fill-up, price decreases as well as the conversion of 18 units from
memory care to assisted living efficiency apartments. Though the
conversion of units improved occupancy, the new assisted living
efficiency apartments were priced lower than the originally planned
memory care units, negatively affecting profitability.
In addition to the challenges at the Allen campus, Christian Care's
operations were also affected by management's decision to convert
nursing and rehab at the Fort Worth campus to assisted living in
2017 and the lowering of capital spending to meet its liquidity
covenant. Deferred capital spending into the older Fort Worth and
Mesquite campuses are now being remedied to improve the market's
view of the product offerings. Management expects to continue
investing additional capital over the next few years to improve
occupancy and profitability.
WEAKER LIQUIDITY; IMPROVING MARGINS
Though Christian Care's efforts to strengthen the competitive
positioning of its campuses are viewed positively, these efforts
have and will continue to weaken Christian Care's liquidity
position, reducing the margin of safety against default. Christian
Care violated its MTI liquidity covenant of 160 DCOH as of Dec. 31,
2018. Management submitted on April 15, 2019 an officer's
certificate that disclosed the deficiency and explained the reasons
for the deficiency and provided a plan to address the liquidity
shortfall as required by the MTI.
Efforts to address the liquidity shortfall entail near-term capital
investments into the Fort Worth and Mesquite campuses that are
expected to produce a longer-term benefit of improving occupancy in
the independent living and healthcare service lines. Fitch views
these efforts favorably as they have recently produced positively
trending occupancy and profitability, but the plans have eroded and
will likely continue to weaken Christian Care's liquidity position
through fiscal 2020. As of Sept. 30, 2019, Christian Care had $10
million in unrestricted cash and investments which equated to an
MTI calculated 105 DCOH. This level of unrestricted cash and
investments is much weaker than the $14.1 million of unrestricted
cash and investments as of a year prior, which equated to 152 DCOH.
Christian Care has spent $3.1 million in capital improvements
through the nine month interim period and expects to spend around
current levels into 2020. Management will be challenged to maintain
balance sheet strength in the midst of elevated capex, especially
given Christian Care's prevalence of rental contracts that do not
provide the benefit of entrance fee related cash generation.
Efforts to strengthen the marketability of the Fort Worth and
Mesquite campuses have shown positive results and improved
Christian Care's overall occupancy, through the first nine months
of fiscal 2019, to 88.8% from the fiscal 2018 average of 87.1%. The
88.8% average occupancy incorporates a weaker ILU occupancy of
89.9%, as well as stronger occupancies of 76.9% (SNF), 92.4% (ALU)
and 94.2% (memory care). Fitch expects Christian Care to realize
improved occupancy levels in fiscal 2020 based on the completion of
additional transformation projects that improve demand, the
continual turnaround of SNF operations and enhanced relationships
with referring organizations.
Improving occupancy translates directly into a profitability
turnaround in fiscal 2019 as the net operating margin (NOM) of 9.3%
through the nine month interim period is much improved versus the
NOMs of 3.9% and 4.3% in fiscal 2017 and 2018. Though profitability
has improved, cash flow still remains weak and continues to be
pressured by governmental payors at Christian Care's skilled care
centers. Medicaid reimbursement has not kept pace with general
expense growth and Medicare payments were reduced by the clinical
transformation of post-acute care services. If Christian Care can
reduce exposure to governmental payors, profitability should be
able to improve overtime as residents turnover through attrition.
ELEVATED DEBT PROFILE; WEAK COVERAGE
Leverage is high as Christian Care's debt to net available of 14.2x
through Sept. 30 2019 is unfavorable compared to Fitch's below
investment grade category median of 10.9x. Recent margin
improvements are moving the organization in the right direction,
but income available for debt service remains thin relative to debt
service requirements. One factor that has particularly affected
debt service coverage in fiscal 2019 is Christian Care's negative
$354 thousand in net entrance fees through the nine month interim
period that contributed to a thin MTI calculated historical debt
service coverage of only 0.99x.
Christian Care's weak debt service coverage exposes the
organization to the risk of potentialy triggering an event of
default. The inability to maintain 160 DCOH and 1.2x coverage at
fiscal year-end 2019 would provide 25% of the bondholders the
ability to provide notice of a potential event of default to the
trustee, which would give Christian Care 45 days to cure the
default. If the default cannot be cured within 45 days, but
Christian Care institutes corrective action within the 45 day
period and diligently pursues the corrective action to cure the
default, the covenant violations do not trigger an event of
default. As mentioned earlier, Christian Care has already adopted a
plan to address the liquidity shortfall and has been implementing
the plan since it was submitted in April 2019.
Management currently expects to achieve 1.2x coverage by fiscal
year-end 2019 through improved net entrance fee receipts and
occupancy. The current rating and Outlook incorporate the potential
risk of triggering an event of default by the end of the fiscal
year. Fitch will monitor Christian Care's year-end results and the
outcome of a potential event of default and take any necessary
rating action if an event of default is triggered.
COMPLETE DISTRIBUTION: Clark Hill Represents BoA, Other Lenders
---------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Clark Hill Strasburger provided notice that it is
representing Banc of America Leasing & Capital, LLC, CIT Finance,
LLC and Direct Capital, a division of CIT Bank, N.A. in the Chapter
11 cases of Complete Distribution Services, Inc.
The multiple representation of clients in this matter resulted from
counsel joining the firm. CHS did not represent multiple clients
when the Debtor's bankruptcy petition was filed.
As of Nov. 5, 2019, the parties listed and their disclosable
economic interests are:
(1) Banc of America Leasing & Capital, LLC
2600 W. Big Beaver
Troy, MI 48084
* Unpaid equipment loan payments on one (1) loan
* Principal amount of claim: $24,937.00
(2) CIT Finance, LLC
10201 Centurion Parkway
Jacksonville, FL 32256
* Unpaid equipment loan payments on two (2) loans
* Principal amount of claim: $113,269.36
(3) Direct Capital, a division of CIT Bank, N.A.
155 Commerce Way
Portsmouth, NH 03801
* Unpaid equipment loan payments on one (1) loan
* Principal amount of claim: $73,847.96
CHS reserves the right to amend this Verified Statement as
necessary.
The Firm can be reached at:
CLARK HILL STRASBURGER
Robert P. Franke, Esq.
Andrew G. Edson, Esq.
901 Main St., Suite 6000
Dallas, TX 75202
Tel: (214) 651-4300
Fax: (214) 651-4330
E-mail: andrew.edson@clarkhillstrasburger.com
Anne Marie Laney Hill, Esq.
909 Fannin, Suite 2300
Houston, TX 77010
Tel: (713) 750-5506
Fax: (832) 397-3519
E-mail: annemarie.laneyhill@clarkhillstrasburger.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/qiZZW4
About Complete Distribution Services
Complete Distribution Services, Inc., doing business as Complete
Trailer Leasing, is a diversified shipping service company,
providing short and long-haul support, including transportation,
customer support, and logistics. The Company offers local dispatch
at its El Paso, Texas, facility to meet its customers' needs.
Complete Distribution Services sought Chapter 11 protection (Bankr.
W.D. Tex. Case No. 18-31995) on Nov. 29, 2018. In the petition
signed by Salvador A. Herrera, president, the Debtor disclosed
$2,784,801 in total assets and $8,049,386 in total debt. The Hon.
Christopher H. Mott is the case judge. E.P. Bud Kirk is the
Debtor's counsel.
COOL CONCEPTS: To Present Plan for Confirmation Dec. 18
-------------------------------------------------------
Judge Mike K. Nakagawa granted Cool Concepts Inc.'s motion for
conditional approval of the disclosure statement explaining its
Chapter 11 Plan.
The bankruptcy judge in Las Vegas, Nevada, on Oct. 31, 2019 ordered
that:
* A hearing will be conducted Dec. 18, 2019 at 9:30 a.m., to
consider final approval of the Disclosure Statement and
confirmation of the Plan.
* Dec. 11, 2019, is fixed as the last day for submitting
completed ballots to Debtor's counsel.
* Dec. 4, 2019, is fixed as the last day for filing objections
to the plan and to file all declarations and evidence in support of
said objection(s).
* Dec. 11, 2019, is fixed as the last day for filing any
response to objections to the plan, to file points and authorities
in support of plan confirmation, and to file all declarations and
evidence in support of plan confirmation.
* Dec. 12, 2019 is fixed as the last day for the Debtor to
submit a tabulation of ballots to the Court.
Counsel for the Debtor:
Ryan J. Works, Esq.
Amanda M. Perach, Esq.
McDONALD CARANO LLP
2300 West Sahara Avenue, Suite 1200
Las Vegas, Nevada 89102
Tel: (702) 873-4100
Fax: (702) 873-9966
E-mail: rworks@mcdonaldcarano.com
aperach@mcdonaldcarano.com
About Cool Concepts
Founded in 2002, Cool Concepts -- https://www.coolconceptsusa.com/
-- provides HVAC services to commercial and residential clients.
The Company also offers expert maintenance checks as well as
repairs. Cool Concepts is headquartered in Las Vegas, Nevada.
Cool Concepts, Inc., filed a Chapter 11 petition (Bankr. D. Nev.
Case No. 19-10595) on Jan. 31, 2019. In the petition signed by
Terence T. Tarver, president, the Debtor disclosed $1,134,210 in
assets and $1,244,054 in liabilities. The Hon. Mike K. Nakagawa
oversees the case. McDonald Carano Wilson, serves as bankruptcy
counsel to the Debtor.
COOLSYS INC: Moody's Assigns B3 Corp. Family Rating, Outlook Stable
-------------------------------------------------------------------
Moody's Investors Service assigned first-time ratings for CoolSys,
Inc.,including a B3 Corporate Family Rating and a B3-PD Probability
of Default Rating. Concurrently, Moody's assigned B3 ratings to the
company's proposed $35 million senior secured first lien revolver,
$235 million senior secured first lien term loan, and $40 million
senior secured first lien delayed draw term loan. The outlook is
stable.
CoolSys will utilize proceeds from the proposed term loan to
refinance the company's existing debt, including a bridge loan from
private equity sponsor Ares Management which along with a sizable
equity contribution, funded the March 2019 acquisition of CoolSys.
The delayed draw term loan availability expires in 24 months, and
is subject to a pro forma first lien net leverage ratio test not to
exceed closing date level. Proceeds from the delayed draw term loan
can be used for permitted acquisitions, other permitted
investments, and for capital expenditures, or to repay revolver
borrowings incurred to fund the foregoing transactions. All ratings
are subject to Moody's review of final documentation.
"The B3 CFR reflects CoolSys' position as a leading provider in the
highly fragmented commercial refrigeration-HVAC services sector, as
well as the company's relative small scale and aggressive growth
strategy through acquisitions," said Oliver Alcantara, Moody's lead
analyst for CoolSys. "We expect free cash flow generation will
continue to be pressured by on-going acquisition related charges,
and we project organic revenue growth by low single digit over the
next 12-18 months," added Alcantara.
Assignments:
Issuer: CoolSys, Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured First Lien Revolving Credit Facility,
Assigned B3 (LGD3)
Senior Secured First Lien Term Loan, Assigned B3 (LGD3)
Senior Secured First Lien Delayed Draw Term Loan,
Assigned B3 (LGD3)
Outlook Actions:
Issuer: CoolSys, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
CoolSys' B3 CFR reflects the company's strong market position and
recurring revenue base counterbalanced by its small scale and
aggressive growth strategy through acquisitions. CoolSys is a
leading provider of refrigeration and HVAC services in the US,
primarily to grocery, retail, and foodservice end markets. The
sector is highly fragmented, and CoolSys has gained market share
mainly by being a consolidator over the past few years, a trend
that will continue. Pro forma for the proposed refinancing
debt/EBITDA leverage is high at 6.0x for the twelve months period
ending September 29, 2019. Moody's leverage calculation excludes
the $40 million delayed draw term loan and gives full year credit
for recently closed acquisitions. Moody's projects the company will
reduce debt-to-EBITDA leverage to around 5.6.x by the end of fiscal
2020, mainly through earnings growth, driven by low single digit
organic revenue growth.
CoolSys' broad geographic reach coupled with its status as a
"one-stop-shop" is a competitive advantage over smaller local or
regional players, because it allows the company to service large
national or super regional customers. Furthermore, 54% of revenue
is generated from recurring maintenance service contracts, and
CoolSys' longstanding relationships with its key customers with
high retention rates of 96%, supports revenue stability. However,
the rating also reflects the company's small scale with annual
revenue under $500 million, and its aggressive growth strategy
through debt funded acquisitions. Furthermore, CoolSys's roll-up
strategy will continue to pressure free cash flows because of
on-going cash charges related to acquisitions. The rating also
reflects the company's exposure to cyclical client spending,
customer concentration highlighted by its top 10 customers
generating a material portion of the revenue, and aggressive
financial strategies under private equity ownership. The company's
liquidity is adequate, characterized by minimal cash balances, and
access to its $35 million revolver (undrawn at close) that provides
flexibility to manage seasonal operating cash flow volatility.
The stable outlook reflects Moody's expectation that the company
will grow revenue by low single digits organically while gradually
improving profit margins and credit metrics over the next 12-18
months. Moody's also expects the company will continue executing
its acquisition strategy prudently with minimal disruption both
operationally and financially, and that the company will generate
positive free cash flow on an annual basis by fiscal the end of
fiscal 2020.
Ratings could be upgraded if the company meaningfully increases its
scale and customer diversification while debt/EBITDA is sustained
below 5.5x and free cash flow/debt above 5%. In addition, a ratings
upgrade will require financial strategies that support credit
metrics at those levels, and good liquidity. Ratings could be
downgraded if revenue growth slows materially, profitability
deteriorates or the company loses a major customer such that
debt/EBITDA is above 6.5x or EBITA/interest is below 1.0x. Ratings
could also be downgraded if liquidity weakens for any reason, if
the company fails to generate free cash flow on an annual basis by
2020, or the company's financial strategies become more aggressive,
including undertaking a large debt-financed acquisition or dividend
distribution.
Preliminary terms in the company's first lien credit agreement
indicate that CoolSys has incremental facility capacity of up to
the greater of a fix amount or 100% of consolidated pro forma
adjusted EBITDA over the prior four quarter period, plus an
additional amount subject to a pro forma first lien net leverage
ratio test. Only wholly-owned subsidiaries must provide guarantees;
partial dividends of ownership interests could jeopardize
guarantees. The credit agreement also permits the designation of
unrestricted subsidiaries and the transfer of assets to
unrestricted subsidiaries, subject to the limitations and baskets
in the negative covenants. In addition, the asset-sale proceeds
prepayment requirement has leverage-based step-downs, and is
eliminated if the first lien net leverage ratio is at least one
turn below the closing date first lien net leverage ratio, with the
right to reinvest or commit to reinvest within 180 days.
The proposed terms and the final terms of the credit agreement can
be materially different.
Headquartered in Brea, California, CoolSys is a leading independent
provider of HVAC and refrigeration services in the US, mainly for
grocery, retail, foodservice, convenience, and other end markets.
The company is majority owned by private equity sponsor Ares
Management. Annual revenue pro forma for recent acquisitions is
less than $500 million.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CREATIVE ARTISTS: Moody's Affirms B2 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service affirmed Creative Artists Agency, LLC's
B2 Corporate Family Rating and assigned a B2 rating on the proposed
first lien credit facility (including a proposed $1.15 billion term
loan and a $125 million revolving credit facility). The Probability
of Default Rating was upgraded to B2-PD from B3-PD. The outlook
remains stable.
The proposed transaction increases the amount of outstanding debt
by almost $400 million and increases pro forma leverage to over 7x
from 5.5x as of June 30, 2019 (excluding Moody's standard
adjustments), but Moody's projects leverage will decrease to
approximately 7x by the end of 2020, with further improvement
thereafter, driven by continued EBITDA growth. CAA is expected to
benefit from positive industry conditions including strong demand
for content over the next two years.
The net proceeds are expected to be used to buy back employee
equity. The proposed transaction follows the recent removal of the
Entertainment Benefits Group from the credit group which negatively
impacted EBITDA levels. The transaction represents the fourth
increase in debt since the initial term loan closed in December
2014. The rating on the existing revolver due 2023 and term loan B
due 2024 will be withdrawn upon repayment. The PDR was upgraded to
B2-PD from B3-PD and in line with the B2 CFR due to the limited
financial maintenance covenant protection offered by the proposed
transaction, with Moody's assuming a standard average recovery in
the event of default.
A summary of Moody's actions are as follows:
Upgrades:
Issuer: Creative Artists Agency, LLC
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Affirmations:
Issuer: Creative Artists Agency, LLC
Corporate Family Rating, Affirmed at B2
Assignments:
Issuer: Creative Artists Agency, LLC
Proposed $1,150 million Senior Secured Term Loan due 2026, Assigned
B2 (LGD3)
Proposed $125 million Senior Secured Revolving Credit Facility due
2024, Assigned B2 (LGD3)
Outlook Actions:
Issuer: Creative Artists Agency, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Creative Artists Agency, LLC's B2 CFR reflects the company's global
business model with leading talent representation positions in
motion pictures, television, music, and sports. The company also
benefits from contractual revenues from TV packages and sports
contracts that provide some visibility to future results. The media
industry is projected to maintain strong demand for content that
should support future growth at the company.
CAA's leverage is very high pro-forma for the transaction at over
7x as of June 30, 2019 (excluding Moody's standard adjustments),
which leaves very little availability for additional debt or future
underperformance over the next two years. The rating is constrained
by high compensation expense (including member distributions) which
limits free cash flow available for debt repayment or new
acquisitions. CAA depends heavily on its employee base to drive
revenues given its limited tangible asset value. Longer term,
Moody's expects CAA to maintain an aggressive financial strategy
that is likely to result in debt funded acquisitions or equity
friendly transactions. The company has been acquisitive over the
past few years and Moody's anticipates that CAA will continue to
look for potential acquisitions that would further diversify its
business model or enhance its existing businesses as well as reduce
the cyclicality of the firm. Acquisitions have been funded with
additional debt or equity historically and Moody's expects such
activity to have an impact on leverage going forward.
Moody's expects liquidity will be good due to CAA's unrestricted
cash balance of over $100 million pro forma for the proposed
transaction as of June 30, 2019 and its access to the proposed $125
million revolver due 2024. Moody's anticipates that the cash
balance will be impacted by the seasonality of the business as well
as employee bonuses and member distributions following the
company's year end. The revolver is subject to a springing senior
secured first lien net leverage covenant when 35% is drawn. The
first lien term loan will be covenant lite. CAA is expected to have
the ability to issue an unlimited amount of additional senior
secured debt subject to a 5x secured first lien net leverage test
or issue additional junior or unsecured debt subject to a total net
leverage ratio of 6.75x.
The stable outlook reflects Moody's expectation of EBITDA growth in
the high single digit percentages driven by strong content demand
in the media industry. EBITDA growth should lead to a decline in
leverage to under 6.5x over time, but any future debt increases or
underperformance would likely result in downward ratings pressure.
Given CAA's very high leverage level, an upgrade is not expected in
the near term. However, the ratings could be upgraded if leverage
declined to the low 4x range on a sustained basis as calculated by
Moody's with positive organic revenue and EBITDA growth. A good
liquidity profile (including free cash flow as a percentage of debt
in excess of 5%) would also be needed in addition to confidence
that the private equity owners intend to maintain leverage below
the stated level.
CAA's ratings could be downgraded if leverage was expected to
remain above 6.5x due to declines in operating performance or
additional debt increases. A decline in its liquidity position
could also lead to a negative rating action.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Creative Artists Agency, LLC is a global talent representation
agency with leading positions in motion pictures, television,
music, and sports and includes television packaging rights,
commercial endorsements, and other business services. Prior to the
proposed transaction, TPG Capital Partners owned over 50% of the
company.
CREDIT ACCEPTANCE: Moody's Affirms Ba3 CFR, Outlook Stable
----------------------------------------------------------
Moody's Investors Service affirmed the Ba3 long-term corporate
family and senior unsecured ratings of Credit Acceptance
Corporation. The rating outlook remains stable.
Moody's has also withdrawn the outlooks on CACC's corporate family
rating and senior unsecured debt ratings for its own business
reasons.
Affirmations:
Issuer: Credit Acceptance Corporation
Corporate Family Rating, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3
Outlook Actions:
Issuer: Credit Acceptance Corporation
Outlook, Remains Stable
RATINGS RATIONALE
The ratings affirmation reflects Moody's unchanged assessment of
CACC's credit profile, which is supported by its strong and stable
profitability, solid capitalization and leverage despite an
increasingly competitive environment in the US subprime auto
lending market. CACC relies heavily on secured warehouse and
securitization financing to fund its operations, but has continued
to diversify its funding sources, including the issuance of $400
million senior unsecured debt earlier this year. Like other
subprime auto lenders, the firm faces high regulatory scrutiny,
however this has not materially impacted its performance thus far.
CACC's profitability compares favorably to other specialty finance
companies, with annualized net income to average assets of
approximately 9.9% in first nine months of 2019 and an average of
9.6% in the last three full years. CACC makes advances to US auto
dealers in respect of loans to individuals with subprime credit
profiles. On average in 2019, CACC made advances to dealers equal
to 44% of the contractual cash flows of each loan but it expects to
collect 64.8%. CACC is able to generate strong returns by
maintaining a high spread between collection rates and average
advance rates to dealers. The spread was 20.8% in 2019 and has
decreased over the last 9 years as competition in US subprime auto
lending has intensified. Nevertheless, CACC has maintained expense
and pricing discipline, somewhat offsetting these profitability
pressures.
CACC offers a unique dealer loan product where dealers bear the
first loss risk in the receivables they assign to CACC, which
mitigates the associated credit risk. CACC also has a more
traditional purchased loan program, under which it purchases loans
directly and bears the full credit risk. While dealer loans still
comprise 64% of gross loans receivable as of 30 September 2019,
purchased loans have increased as a percentage of the overall loan
portfolio, resulting in a weakening of CACC's loan book quality
because purchased loans typically carry higher credit risk relative
to dealer loans.
Despite growing net loans receivables by an average rate of 14% per
year between 2016 and 2018, CACC has maintained a ratio of tangible
common equity to tangible managed assets between 27% and 32% during
this time period, funding a substantial portion of its growth with
retained earnings.
Moody's expects the implementation of the Current Expected Credit
Losses accounting methodology in 2020 to have a significant
negative impact on CACC's reported earnings due to the difference
in timing between the recognition of both higher loan loss
provisions and revenues. However, CECL will not impact the cash
flows CACC will continue to receive, and therefore will not impact
Moody's assessment of the firm's credit profile.
CACC faces moderate environmental risks due to its exposure to the
automotive sector. CACC also faces moderate social risks due to the
nature of its interactions with consumers. Moody's does not have
any particular concerns with respect to CACC's governance.
WHAT COULD CHANGE THE RATING UP/DOWN
CACC's ratings could be upgraded if the company is able to maintain
its competitive position in the US subprime auto lending market and
to demonstrate stable asset quality, particularly with respect to
its growing purchased loan program, while maintaining strong
profitability and debt to equity below 2.5 times, adjusted for the
impact of CECL.
CACC's ratings could be downgraded if debt to equity on a
CECL-adjusted basis increases beyond 2.5 times, or if profitability
falls below 6.5% as measured by net income to tangible managed
asset or if asset quality deteriorates.
The principal methodology used in these ratings was Finance
Companies published in December 2018.
CSI–ABSOLUTE: Hearing on Plan & Disclosures Continued to Dec. 19
------------------------------------------------------------------
Following a hearing on Oct. 29, 2019, Judge Deborah L. Thorne from
the U.S. Bankruptcy Court for the Northern District of Illinois has
continued the combined hearing for the confirmation and adequacy of
the Disclosure Statement to CSI–Absolute Clean to Dec. 19, 2019
at 10:30 a.m.
As reported in the TCR, CSI-Absolute Clean, Inc., filed an Amended
Plan and Disclosure
Statement, which provide that the Department of Treasury, owed
$43,267, will receive full payment through 36 monthly payments of
$826.43, which includes 5.5% interest.
A full-text copy of the Amended Disclosure Statement dated Oct. 28,
2019, is available at https://tinyurl.com/y6jla5g8 from
PacerMonitor.com at no charge.
About CSI-Absolute Clean
CSI-Absolute Clean, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-04406) on Feb. 19,
2019. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $500,000. The case
is assigned to Judge Deborah L. Thorne. Schneider & Stone is the
Debtor's counsel.
DWS CLOTHING: Debtor Resets Disclosures Hearing to Jan. 16
----------------------------------------------------------
Judge Erik P. Kimball from the U.S. Bankruptcy Court for the
Southern District of Florida signed an agreed order continuing the
hearing on the disclosure statement explaining DWS Clothing's
Chapter 11 plan.
The new date for the Disclosure Hearing is set on Jan. 16, 2020 at
10:30 a.m.
The deadline for objections to the Disclosure Statement is Jan. 9,
2020.
A full-text copy of the agreed order is available at
https://tinyurl.com/y6hrn8oc from PacerMonitor.com at no charge.
The Debtor filed a Plan of Reorganization and Disclosure Statement
on Oct. 10, 2019.
About DWS Clothing Too
Operating as Alene Too, DWS Clothing Too, LLC, sells women's
clothes. DWS Clothing Too sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-25551) on Dec. 14,
2018. In the petition signed by Maxine Schwartz, member, the
Debtor was estimated to have assets of less than $50,000 and
liabilities of $1 million to $10 million. The case is assigned to
Judge Mindy A. Mora. Rappaport Osborne & Rappaport, PLLC, is the
Debtor's counsel.
DYLLAN'S LLC: Case Summary & 17 Unsecured Creditors
---------------------------------------------------
Debtor: Dyllan's LLC
7916 Robison Road
Bethesda, MD 20817
Business Description: Dyllan's LLC --
https://dyllansrawbargrill.com -- is an
owner and operator of Dyllan's Raw Bar
Grill, a restaurant specializing in American
cuisine.
Chapter 11 Petition Date: November 11, 2019
Court: United States Bankruptcy Court
District of Columbia (Washington, D.C.)
Case No.: 19-00757
Judge: Hon. S. Martin Teel, Jr.
Debtor's Counsel: Robert W. Lannan, Esq.
LANNAN LEGAL PLLC
1717 K. Street, NW, Suite 900
Washington, DC 20006
Tel: 202-223-8901
E-mail: robert.lannan@lannanlegal.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Donald Carlin, managing member.
A copy of the Debtor's list of 17 unsecured creditors is available
for free at:
http://bankrupt.com/misc/dcb19-00757_creditors.pdf
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/dcb19-00757.pdf
ELECTRIC SUPPLY: Court Confirms Liquidating Plan
------------------------------------------------
Judge Robert H Jacobvitz from the U.S. Bankruptcy Court for the
District of New Mexico entered an order granting final approval to
Electric Supply Co. of Carlsbad Inc.'s Disclosure Statement and
confirming the Liquidating Plan dated Sept. 3, 2019.
CNB Bank's objection has been resolved by modifications to the Plan
set forth in the Confirmation Order, and thus have been withdrawn
and CNB Bank votes to accept the Plan as modified herein.
The Plan is modified as follows::
* Class 1 (CNB Bank). Class 1 is impaired.
A. Class 1 Creditor will be paid in full, With Interest,
from the sale of the Debtor's assets that are subject to its lien.
Any remaining deficiency will be treated as a Class 2 Claim.
B. Class 1 Creditor shall retain all of its lien rights
granted by Debtor prepetition as well as those granted in any Cash
Collateral Order. Except as provided herein, Debtor shall comply
with all obligations contained in the prior lending documents
regarding taxes (including ad valorem, gross receipts and
lodger's), insurance, maintenance of the property and other
"non-payment" requirements.
C. Carla Combs ("Guarantor"), Debtor's principal and the
guarantor of the Class 1 claim of CNB Bank, has agreed that either
the Debtor or Guarantor shall pay CNB Bank in full on or before
November 30, 2019. If said payment is not made, CNB Bank may,
without further notice to third parties and without further order
of the Bankruptcy Court, deliver a notice to the Debtor requiring
the Debtor to turn over all collateral that secures the Debtor's
obligations to CNB Bank within 30 days of service of the notice.
Such notice shall be effective if served in accordance with
Paragraph 2.4 of the Plan.
In addition, Guarantor shall maintain a balance of at least
$38,366.32 in her savings account at CNB Bank until CNB Bank is
paid in full. If CNB Bank demands turnover of its collateral, CNB
Bank must first exercise its rights under the Uniform Commercial
Code against the collateral to satisfy the debt owed to it. If
there is any deficiency owed following disposition of the
collateral, CNB Bank may exercise its right of set-off against
guarantor's savings account to satisfy the indebtedness. Until
paid in full, CNB Bank may freeze withdrawals from said account.
* Class 2 (Allowed General Unsecured Non-Priority Claims).
Class 2 is impaired. Class 2 Creditors will be paid Pro Rata from
the net sale proceeds of the real property and inventory following
the payment of the Class 1 Claim and any outstanding administrative
expenses or costs, in an amount not to exceed payment in full of
their claim plus interest at the rate of 1% per annum unless a
contract specifies a different interest rate.
The Debtor shall continue to utilize its broker to sell its
assets, and shall make reasonable, good-faith efforts to do so.
Any creditor can file a motion to re-open this case in the event
that they believe that Debtor is not proceeding in good faith.
* Class 3 (Allowed Claims of Equity Interest Holders). Class 3
is unimpaired. Unless all allowed Class 1 and Class 2 Claims are
paid in full as set forth above, Debtor's equity holder shall not
retain her interest under this Plan. Upon payment of Class 2
Claims Pro Rata, the Debtor shall cease all operations and shall be
formally dissolved.
However, to incentivize a timely disposition of assets and
because the Debtor has ceased operating, Ms. Combs shall be
responsible personally for payment of the Debtor's expenses that
become due and payable after the Effective Date. All payments
personally made on behalf of the Debtor shall be considered loans,
accruing interest at the rate of 6% per annum, and shall be
repayable to Ms. Combs as a cost of sale when the Debtor’s real
property sells.
A final hearing on the Plan and Disclosure Statement was held Oct.
21, 2019.
A full-text copy of the Confirmation Order is available at
https://tinyurl.com/y4rh92h9 from PacerMonitor.com at no charge.
Attorneys for CNB Bank
Daniel White, Esq.
ASKEW & MAZEL, LLC
1122 Central Ave. SW, Ste 1
Albuquerque, NM 87102
Tel: 505.433.3097
Fax: 505.717.1494
E-mail: dwhite@askewmazelfirm.com
About Electric Supply Co.
Based in Carlsbad, New Mexico, Electric Supply Co. of Carlsbad,
Inc. -- http://electricsupplyofcarlsbad.com/-- provides
engineering services for installation, startup, maintenance and
shutdowns. The Company was established in 1964 to serve the
industrial and construction markets specilizing in mining and oil
and gas industries.
The company filed a voluntary Chapter 11 Petition (Bankr. D.N.M.
Case No. 18-12777) on Nov. 5, 2018. At the time of filing, the
Debtor had total assets of $2,469,042 and total liabilities of
$1,431,702.
The case is assigned to Hon. Robert H. Jacobvitz.
The Debtor's counsel is Christopher M. Gatton, Esq., at Giddens,
Gatton & Jacobus, P.C., in Albuquerque, New Mexico.
FF FUND I: 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
FF Fund I LP, according to court dockets.
About FF Fund I L.P.
FF Fund I L.P., an investment company based in Miami, filed a
voluntary petition for relief under Chapter 11 of Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the
petition signed by Soneet R. Kapila, chief restructuring officer,
the Debtor was estimated to have $50 million to $100 million in
assets and $1 million to $10 million in liabilities. Paul J.
Battista, Esq., at Genovese Joblove & Battista, P.A., is serving as
the Debtor's counsel.
FLEETWOOD ACQUISITION: U.S. Trustee Forms 5-Member Committee
------------------------------------------------------------
Andrew Vara, acting U.S. trustee for Region 3, on Nov. 13, 2019,
appointed five creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of Fleetwood
Acquisition Corporation and its affiliates.
The committee members are:
(1) B&L Wood Creations Inc.
Attn: Jon Suess
669 S 1st Ave, Ste 100
Hillsboro, OR 97123
Phone: 503-648-6735
Fax: 503-693-1420
E-mail: jon.suess@blwood.com
(2) Wuxi Senyo Wood Display Co.
Attn: Alex Gong
No 68, Xihu East road
Anxhen Town, Xishan District 214105
China
0086-510-88789595
E-mail: alex.gong@senyometal.com
(3) CML Custom Metal Limited
Attn: Patrick Madahain
47 Ortona Court
Concord, ON L4K 3M2
Canada
Phone: 905-761-6868
Fax: 905-761-6882
E-mail: patrick@cmlcustommetal.com
(4) Aire-Ride Transfer, Inc.
Attn: Matt Geiger
595 Shrewsbury Avenue, Suite 204
Shrewsbury, NJ 07702
Phone: 732-528-0911
E-mail: matt@aireride.com
(5) CargoTrans Inc.
Attn: Anthony De Filippis
170 E Sunrise Hwy.
Valley Stream, NY 11581
Phone: 516-593-5871
Fax: 516-593-8404
E-mail: adefilippis@cargotransinc.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Fleetwood Acquisition
Fleetwood Acquisition Corp. and its affiliates, Fleetwood
Industries Inc. and High Country Millwork Inc., sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case
No. 19-12330) on Nov. 4, 2019.
Fleetwood Industries and High Country Millwork --
http://www.fleetwoodfixtures.com/-- are providers of customized
fixtures and displays, with decades of experience serving a wide
variety of customers in the retail and hospitality industries.
At the time of the filing, Fleetwood Acquisition was estimated to
have assets of between $10 million and $50 million and liabilities
of between $50 million and $100 million.
The cased have been assigned to Judge Kevin Gross.
The Debtors tapped Bayard, P.A., as their legal counsel, and
Bankruptcy Management Solutions, Inc. as their claims and noticing
agent.
FRONTERA ENERGY: Fitch Affirms B+ LongTerm IDRs, Outlook Negative
-----------------------------------------------------------------
Fitch Ratings affirmed Frontera Energy Corporation's Long-Term
Foreign and Local Currency Issuer Default Ratings at 'B+', and
maintained the Rating Outlook at Negative. Fitch also affirmed
Frontera's senior unsecured notes at 'B+'/'RR4'.
The affirmation of Frontera's ratings reflects the company's strong
credit metrics and liquidity. Fitch estimates the company gross
leverage, defined as total debt to EBITDA will be 0.5x in 2019, and
EBITDA to interest expense at 18.9x in 2019. The company has a
strong liquidity profile with cash on hand covering interest
expense for the entire life of the outstanding bond.
The Negative Outlook reflects the expectation that Frontera will
not renew its service contract in Peru after first-quarter 2020
(1Q20), accounting for nearly 10% of total production in 2019,
coupled with its weak reserve life of 4.5 years of 1P reserve and
weak financial policy. Fitch believes the company has weak
financial policy, which prioritizes shareholder distributions over
cash retention and investment. Fitch will continue to monitor the
company's ability to effectively invest in improving its reserve
life and production profile, particularly relative to cash flows
diverted to shareholders.
KEY RATING DRIVERS
Reserve Concentration: Frontera's reserves are 95% concentrated
amongst three Combian fields. As of YE 2018, the company had net 1P
and 2P reserves of approximately 116 million and 171 million
barrels, respectively, equating to a short reserve life of 4.5
years for 1P and 6.6 year for 2P. The company's weak reserve life
limits its ability to adjust capex in the event of a decrease in
Brent prices, and the company's limited diversification exposes it
to operational as well as economic risks associated with
small-scale operations.
Production Continues Contracting: Fitch estimates Frontera's
production will continue to decline through the rating horizon. In
2018, the company reported average daily production of 71,035 boed,
a 7% drop from 2017 at 76,048 boed. As of 3Q19, the company
reported 71,197 boed, a modest improvement compared with 2018.
Fitch's base case estimates production in Colombia will remain
flat, replenishing the natural decline of its reserves, but Fitch
estimates total consolidated production to decrease in 2020 to
68,000 boed, after its service contract in Peru expires at the end
of 1Q20. Fitch's base case does not assume the contract will be
renewed resulting in an average production of approximately 67,000
boed in 2021 and 2022.
High Production and Replacement Costs: Frontera's fixed
transportation cost limits its profitability when compared with its
Colombian peers. Frontera's half-cycle operating cost of USD30.50
boed is 66% higher than the average of its Colombia energy peers
(Geopark, Gran Tierra and Ecopetrol), with the main difference due
to transportation costs. The high transportation cost of USD12.39
per barrel for the first nine months of 2019, is due to its
ship-or-pay agreements of 30,000 barrels per day until June 2025
with OCENSA. Fitch base case does not assume any changes to this
agreement.
Financial Policy: Fitch believes the company has a weak financial
policy prioritizing dividends over investment, after the consent
solicitation exercise in 2018, to amend the covenants allowing for
dividend payments. As eluded to earlier in this release, Frontera
has a low reserve life and stable credit and cash flow profile.
Frontera maintains a high production volume to generate strong cash
flows, but the company can reallocated those funds to invest more
in capex to material increase its reserve base.
DERIVATION SUMMARY
Frontera's credit profile compares well among other small
independent oil and gas companies in the region. The ratings of
GeoPark Limited (B+/Stable), Gran Tierra Energy International
Holdings Ltd. (B/Positive) and Compania General de Combustibles
S.A. (CGC, CCC) are constrained to the 'B' category, given the
inherent operational risks associated with small scale and low
diversification of their oil and gas production profiles.
Frontera benefits from its larger production size relative to
peers, which Fitch expects to average 67,000 boed over the rated
horizon. GeoPark is expected to report be nearly 50,000boe/d in
2020-21 and CGC of 39,000boe/d. Frontera's size advantage is
mitigated by a comparatively weak 1P reserve life of 4.5 years.
Geopark's reserve life is 8.7 years, and its lower-rated peers Gran
Tierra and CGC have reserve lives of 5.7 years and 5.0 years,
respectively.
Frontera's capital structure and liquidity position is strong
compared with peers in the category. As of YE 2018, the company
reported negative net debt, with cash on hand covering debt by
0.8x, resulting in a net leverage of negative 0.2x. Frontera's
expected gross leverage, defined as total debt to EBITDA, of 0.5x
in 2019, compares favorably with CGC at 2.1x, Geopark at 1.2x and
Gran Tierra at 1.7x. The company's total debt to 1P reserve is
USD3.00 per barrel of equivalent of 1P compared to CGC's at USD7.50
boe, Geopark's at USD3.90 and Gran Tierra's at USD10.31 boe.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
Include
- Fitch's price deck for Brent oil prices of $57.50 on average
through the midterm;
- Average Production of 68,000 boed between 2019-2022;
- Production costs averaging USD31/barrel;
- No early termination of transportation contract obligations;
- Termination of Peruvian service contract in 1Q20, no production
thereafter;
- Average annual capex of USD415 million between 2019-2022;
- Quarterly dividend payments of $15 million during quarters in
which Brent oil price averages $60/bbl or higher;
- Stock repurchase of 6.5 million (10% of outstanding) shares in
2020.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- An upgrade could occur if production is increased to
sustainable level of 75,000 boed while maintaining a 1P reserve
life of10 years or more;
- A stabilization of the Outlook could occur if the production is
sustained at its current level of approximately 70,000 boed while
maintaining a 1P reserve life of 6.0 years, coupled with maintain a
total debt to 1P reserves of below USD4.00 boe.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A reduction in the reserve replacement ratio that leads to 1P
reserve life below 5.0 years;
- Sustained deterioration in liquidity and operating profile,
particularly in conjunction with more aggressive dividend
distributions than previously anticipated.
LIQUIDITY
Strong Liquidity: Fitch views the company's liquidity position as
strong, supported by cash on hand and a manageable debt
amortization profile. As of Sept. 30, 2019, Frontera reported
USD350 million of cash on hand covering 10x of interest expense,
with its first maturity due in 2023. Fitch's base case assume a
minimum annual cash balance of USD200 million.
ESG Commentary
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3.0. ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
FULL LIST OF RATING ACTIONS
Frontera Energy Corporation
- Long Term Foreign Currency Issuer Default Rating affirmed at
'B+';
- Long Term Local Currency Issuer Default Rating affirmed at
'B+';
- Senior unsecured rating affirmed at 'B+'/'RR4'.
The Rating Outlook is Negative.
GEA SEASIDE: Plan Confirmation Hearing Reset to March 4, 2020
-------------------------------------------------------------
Judge Jerry Funk of the U.S. Bankruptcy Court for the Middle
District of Florida convened a hearing on Oct. 29, 2019, at 11:00
a.m., on the chapter 11 plan of reorganization of debtor GEA
Seaside Investment Inc. and its objections.
The confirmation hearing has been rescheduled to March 4, 2020, at
10:00 a.m.
Objections to the Disclosure Statement and Plan have been filed by
various parties, including Craig I Kelley on behalf of Creditor
Avail 2 LLC, and Arthur C Neiwirth on behalf of Creditor Arthur
Neiwirth 21st Mortgage Corporation.
The Preliminary Hearing on Motion Pursuant to Section 1129(b) Class
19, Secured Claim of HSBC Bank c/o Ocwen Filed by Taylor J King on
behalf of Debtor GEA Seaside Investment Inc. has been set to Feb.
20, 2020, at 11:00 a.m.
The Preliminary Hearing on Motion Pursuant to Section 1129(b) Class
11, Secured Claim of U.S. Bank c/o Ocwen Filed by Taylor J King on
behalf of Debtor GEA Seaside Investment Inc. has been set to Jan.
27, 2020, at 10:00 a.m.
The Preliminary Hearing on Motion Pursuant to Section 1129(b) Class
8, Secured Claim of U.S. Bank c/o Ocwen Filed by Taylor J King on
behalf of Debtor GEA Seaside Investment Inc. has been set to Jan.
28, 2020, at 11:00 a.m.
A full-text copy of the Proceeding Memo dated Oct. 29, 2019, is
available at https://tinyurl.com/y3gz4pqp from PacerMonitor.com at
no charge.
About GEA Seaside Investment
GEA Seaside Investment Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-00800) on March
12, 2018. Judge Jerry A. Funk oversees the case. The Debtor is
represented by Adam Law Group, P.A., as its legal counsel and
Miller & Wainer, P.A., as special counsel. No official committee of
unsecured creditors has been appointed in the Chapter 11 case.
GEORGE WASHINGTON: Sets Bidding Procedures for Business
-------------------------------------------------------
Debtor George Washington Bridge Bus Station Development Venture,
LLC, asks the U.S. Bankruptcy Court for the Southern District of
New York to authorize the bidding procedures in connection with the
sale of business at auction.
The Debtor intends to conduct a marketing process through its
experienced investment banker, Houlihan Lokey, Inc. ("HL"). HL
will canvass the market to obtain offers for the Acquired Assets
pursuant to an open auction process approved by the Court, which
will afford the Debtor the best opportunity to maximize value.
Subject to the Bidding Procedures, and in consultation with its
prepetition secured lenders, including George Washington Bridge Bus
Station and Infrastructure Development Fund, LLC, the Senior
Secured Lender, and New York City Regional Center, LLC, the DIP
Lender, and the Debtor and its advisors will retain the right to
pursue any transaction or restructuring strategy that, in the
Debtor's business judgment, will maximize the value of its estate.
If it receives multiple offers based on the proposed qualification
criteria set forth in the Bidding Procedures, the Debtor intends to
conduct the Auction to determine the highest or best offer for its
business.
To further maximize the competitiveness of the bidding process, the
Debtor also seeks authority, but not direction, to (a) select one
or more parties to serve as a Stalking Horse Bidder, and (b) in
connection with any Stalking Horse Bidder and related agreement,
provide a Breakup Fee and/or Expense Reimbursement, in an amount
not to exceed, in the aggregate, 3% of the proposed purchase
price.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Feb. 10, 2020 at 4:00 (EST)
b. Purchase Price: Each Bid must clearly identify the purchase
price to be paid, which Purchase Price will be paid in cash only or
such other form of consideration acceptable to the Senior Lenders,
with the exception of any Credit Bid.
c. Deposit: 10% of the Purchase Price
d. Auction: If it receives two or more Qualified Bids, the
Debtor will conduct the Auction of the Acquired Assets. If the
Auction is held, it will take place on Feb. 13, 2020 at 10:00 a.m.
(EST) at the offices of Cole Schotz P.C., 1325 Avenue of the
Americas, 19th Floor, New York, New York 10019, or such other place
and time as determined by the Debtor in consultation with the
Consultation Parties.
e. Bid Increments: $1 million
f. Sale Hearing: Feb. 20, 2020 at 11:00 a.m. (EST)
g. Credit Bid: Persons or entities holding a perfected
security interest in the Debtor's assets may submit a credit bid on
such assets, to the extent permitted by applicable law, any
Bankruptcy Court orders and the documentation governing the
Debtor's prepetition or post-petition secured credit facilities.
Within two business days after the entry of the Bidding Procedures
Order, or as soon thereafter as practicable, the Debtor will cause
the Sale Notice upon all Notice Parties.
The Debtor also seeks approval of the procedures for assuming and
assigning executory contracts and unexpired leases to facilitate
the fair and orderly assumption and assignment of certain executory
contracts and unexpired leases in connection with the Sale.
No less than 21 days prior to the Sale Objection Deadline
("Assumption and Assignment Service Deadline'), the Debtor will
serve the Contract Assumption Notice on all counterparties to all
potential Assigned Contracts and provide a copy of the same to the
Consultation Parties.
The Successful Bidder may designate up to three business days
before the Sale Hearing ("Designation Deadline"), additional
executory contracts and/or unexpired leases as agreements to be
assumed by the Debtor and assigned to the Successful Bidder.
Within one business days of notice of the Additional Assigned
Contracts by the Successful Bidder, the Debtor will serve a
Contract Assumption Notice on each of the counterparties to such
Additional Assigned Contracts and their counsel of record.
The Cure Objection Deadline is 14 days after service of the
Contract Assumption Notice.
The Debtor also submits that it is appropriate to sell the Acquired
Assets free and clear of successor liability relating to the
Acquired Assets.
Finally, the Debtor respectfully asks that the Court waives the
14-day stay imposed by Bankruptcy Rule 6004(h), as the exigent
nature of the relief sought herein justifies immediate relief.
A copy of the Bidding Procedures and Notices attached to the Motion
is available for free at:
https://tinyurl.com/v9qmgex
About George Washington Bridge
George Washington Bridge Bus Station Development Venture LLC is the
entity contracted to renovate the George Washington Bridge Bus
Station in New York. The bus station was reopened in 2016 following
a delayed and costly renovation. As part of the deal, the company
was granted a 99-year lease to operate and maintain the retail
portion of the bus station.
George Washington Bridge Bus Station Development Venture LLC sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-13196) on Oct.
7, 2019.
The company's assets are estimated between $50 million and $100
million, and liabilities between $100 million and $500 million,
according to bankruptcy documents.
The Hon. Shelley C. Chapman is the case judge.
Cole Schotz P.C. is the Debtor's counsel. BAK Advisors Inc., is
the Debtor's financial advisor, and BAK's Bernard A. Katz is
presently serving as the Debtor's sole manager.
GRAMERCY GROUP: Subcontractors Object to Disclosure Statement
-------------------------------------------------------------
Subcontractors Bain Mechanical, WHM Plumbing & Heating Contractors,
Hinck Electric Contractor, Residential Fences Corp., Laser
Industries Inc., and Norberto Construction filed an objection to
Gramercy Group's motion for approval of its Disclosure Statement
and motion authorizing the continuation and/or renewal of its
surety bond program.
Subcontractors are collectively owed in excess of $1.7 million, or
approximately 60% of amounts the Debtor alleges are owed on account
of the Clinton G. Martin Park job (the North Hempstead Job) in
which Debtor served as general contractor for the Town of North
Hempstead.
The Debtor has filed a 30-page Amended Adversary Complaint against
the Town in the action styled Gramercy Group Inc. v. Town of North
Hempstead, et al. The Debtor has not disputed the services
provided by, or amounts owed to, Subcontractors. In fact, the
Debtor has brought the Adversary Proceeding on behalf of the
Subcontractors for the amounts owed by the Debtor to the
Subcontractors.
The Debtor, by the Surety Motion, now seeks to re-write the Payment
Bond and deprive the Subcontractors of the very protections the
Subcontractors bargained for when agreeing to provide services to
the Debtor. Specifically, the Debtor seeks authority to have its
surety, Everest Reinsurance Company, withhold all payments required
to be paid under the Payment Bond that the Debtor deems
objectionable in its sole discretion and preclude Everest from
objecting to the Debtor's unilateral determination.
The Motions should be denied, according to the Subcontractors.
About Gramercy Group
Gramercy Group, Inc. -- http://gramercyusa.com/-- began operations
in 1989, offering turnkey solutions in environmental remediation
and demolition. It has expanded to provide more services,
including heavy civil and general contracting services. The
company is headquartered in Wantagh, N.Y.
Gramercy Group sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 19-73622) on May 17, 2019. At the
time of the filing, the Debtor had estimated assets of between $10
million and $50 million and liabilities of between $10 million and
$50 million. The case is assigned to Judge Louis A. Scarcella.
The Debtor is represented by Cullen & Dykman LLP and Otterbourg
P.C.
GREEN FAMILY FUN ZONE: Gets Cash Collateral Access Thru Nov. 30
---------------------------------------------------------------
Judge Alan M. Koschik authorized Green Family Fun Zone to use cash
collateral through November 30, 2019, pursuant to the
Court-approved budget.
The Court ruled that Huntington National Bank be granted a
replacement lien as adequate protection for the Debtor's interim
use of cash collateral, pending final hearing. Moreover, the
Debtor is directed to pay Huntington Bank $5,394.67 monthly for the
period from October 2019 through March 2020. The Debtor is also
directed to timely file monthly Forms 941, timely pay the
corresponding tax liabilities and timely file and pay all
post-petition federal tax obligations.
Final hearing on the Motion is on Nov. 26, 2019 at 10 a.m. in the
Bankruptcy Courtroom, 260 South Main Street, Akron, Ohio.
About Green Family Fun Zone
Green Family Fun Zone, LLC -- https://gotothezone.com/ -- owns and
operates an amusement complex in North Canton, Ohio. The amusement
center features a go-cart track, bumper cars, and a miniature golf
course, and has facilities to accommodate small and large parties.
Green Family Fun Zone filed a Chapter 11 petition (Bankr. N.D. Ohio
Case No. 19-52276) on Sept. 20, 2019, in Akron, Ohio. Judge Alan
M. Koschik is assigned the Debtor's case. In the petition signed
by Scott Plummer, manager, the Debtor disclosed $698,550 in total
assets and $1,699,086 in total liabilities. Michael J. Moran,
Esq., of GIBSON & MORAN, represents the Debtor.
HARD ROCK EXPLORATION: Unsecureds to Get 2.85% in Trustee Plan
--------------------------------------------------------------
Robert W. Leasure, Jr., the plan proponent and Chapter 11 trustee
of debtors Hard Rock Exploration, Inc., Caraline Energy Company,
Blue Jacket Gathering, LLC, Blue Jacket Partnership, and Brothers
Realty, LLC, has filed a disclosure statement explaining his
proposed plan of liquidation for the Debtors.
The Disclosure Statement describes the Debtors and their
businesses, explains the issues that led to the bankruptcy filing,
describes the sale of the Debtors' assets and the assets of the
Limited Partnerships to Pillar Energy, LLC on April 30, 2019, and
sets out the terms of a liquidating plan (the "Plan") - the means
by which the Debtors' assets will be liquidated and the resulting
proceeds will be distributed to creditors.
The Plan provides that:
* The Huntington National Bank, owed $30 million on a secured
claim (Class 1), will receive, in full satisfaction of its secured
claim, payment of $12.9 million
total from the proceeds of surrendering the Life Insurance
Policies, adequate protection payments in exchange for the use of
cash collateral, and the proceeds
of the Sale of the Debtors’ Assets (excluding the Virginia
Assets). The projected recovery is 43%.
* General unsecured creditors owed $8.1 million (Class 2) will
receive a pro rata share of the $200,000 General Unsecured Carve
Out (in which Class 3 will not participate) and (b) a pro rata
share of the $94,893 in proceeds from the sale of the Debtors'
Virginia assets, in which Class 3 will also share pro rata. The
projected recovery is 2.85%.
* HNB, on account of its deficiency claim of $17.1 million (Class
3), will receive, a pro rata share of the $94,893 in proceeds from
the sale of the Debtors' Virginia assets, which will be shared Pro
Rata with Class 2. The projected recovery is 0.4%.
* Shareholders (Class 4) will receive no distributions on account
of their equity interests. Projected recovery is 0%.
A full-text copy of the Disclosure Statement is available at
https://tinyurl.com/y5s7v9t8 from PacerMonitor.com at no charge.
About Hard Rock Exploration
Founded in 2003, Hard Rock Exploration, Inc., and its affiliates
provide oil and gas exploration and production services in Virginia
and West Virginia. Hard Rock focuses on drilling horizontal
wells.
Hard Rock Exploration and its affiliates sought Chapter 11
protection (Bankr. S.D. W.Va. Lead Case No. 17-20459) on Sept. 5,
2017. In the petitions signed by James L. Stephens, the Debtors'
president, Hard Rock estimated assets of $10 million to $50 million
and liabilities of the same range.
The Hon. Frank W. Volk oversees the cases.
The Debtors are represented by Christopher S. Smith, Esq., at
Hoyer, Hoyer & Smith, PLLC, and Taft A. McKinstry, Esq., at Fowler
Bell PLLC.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on October 18, 2017. The committee tapped
Whiteford, Taylor & Preston LLP as its legal counsel.
Robert W. Leasure Jr. was appointed as Chapter 11 trustee for the
Debtors on Jan. 3, 2018. The trustee tapped Jackson Kelly PLLC as
his legal counsel, and LS Associates, LLC as his consultant.
HENRY IRVING LLC: Case Summary & 2 Unsecured Creditors
------------------------------------------------------
Debtor: Henry Irving, LLC
P.O. Box 1000
Woodbury, NY 11797
Business Description: Henry Irving, LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)). The Company owns in fee
simple an unoccupied and unfinished single
family residence located in Smithtown, New
York, having an estimated value of $400,000.
Chapter 11 Petition Date: November 12, 2019
Court: United States Bankruptcy Court
Eastern District of New York (Central Islip)
Case No.: 19-77715
Judge: Hon. Alan S. Trust
Debtor's Counsel: Robert S. Lewis, Esq.
LAW OFFICE OF ROBERT S. LEWIS, PC
53 Burd Street
Nyack, NY 10960
Tel: (845) 358-7100
Fax: (845) 353-6943
E-mail: robert.lewlaw1@gmail.com
Total Assets: $400,000
Total Liabilities: $1,052,115
The petition was signed by Matthew Solof, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at:
http://bankrupt.com/misc/nyeb19-77715.pdf
HOLCOMB ACQUISITIONS: Bankruptcy Administrator to Form Committee
----------------------------------------------------------------
William Miller, U.S. bankruptcy administrator, on Nov. 12, 2019,
filed with the U.S. Bankruptcy Court for the Middle District of
North Carolina a notice of opportunity to serve on the official
committee of unsecured creditors in Holcomb Acquisitions, Inc.'s
Chapter 11 case.
Unsecured creditors willing to serve on the committee are required
to file a response within 10 days from Nov. 12.
An organizational meeting will be scheduled after the committee is
appointed, according to the filing.
Mr. Miller can be reached through:
Susan O. Gattis
Bankruptcy Analyst
101 S. Edgeworth Street
Greensboro, NC 27401
Fax: 336-291-9913
Email: susan_gattis@ncmba.uscourts.gov
About Holcomb Acquisitions
Holcomb Acquisitions, Inc., which operates under the name Toys &
Co., is a retailer of toys, games, hobby and craft kits.
Holcomb Acquisitions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. N.C. Case No. 19-11233) on Nov. 7,
2019. At the time of the filing, the Debtor disclosed $223,359 in
assets and $2,372,587 in liabilities. The case is assigned to
Judge Benjamin A. Kahn. The Debtor tapped Samantha K. Brumbaugh,
Esq., at Ivey, McClellan, Gatton & Siegmund, LLP as its legal
counsel.
HOTEL OXYGEN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Hotel Oxygen Midtown, I, LLC 19-14399
20860 N. Tatum Blvd, Ste 240
Phoenix, AZ 85050
Hotel Oxygen Palm Springs, LLC 19-14400
20860 N. Tatum Blvd, Ste 240
Phoenix, AZ 85050
Oxygen Hospitality Group, Inc. 19-14401
20860 N. Tatum Blvd, Ste 240
Phoenix, AZ 85050
A Great Hotel Company, Arizona, LLC 19-14402
20860 N. Tatum Blvd, Ste 240
Phoenix, AZ 85050
A Great Hotel Company, LLC 19-14403
20860 N. Tatum Blvd, Ste 240
Phoenix, AZ 85050
Business Description: Oxygen Hospitality Group, Inc., is an owner-
operator hospitality company that acquires,
renovates and manages a portfolio of mid-to
upper scale branded and independent hotel
assets in the U.S. Founded in 2017, Oxygen
Hospitality is privately held and is
headquartered in Phoenix, Arizona.
Chapter 11 Petition Date: November 12, 2019
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judges: Hon. Paul Sala (19-14399 and 19-14402)
Hon. Eddward P. Ballinger Jr. (19-14400)
Hon. Daniel P. Collins (19-14401 and 19-14403)
Debtors' Counsel: D. Lamar Hawkins, Esq.
GUIDANT LAW, PLC
402 East Southern Avenue
Tempe, AZ 85282
Tel: 602-888-9229
Fax: 480-725-0087
Email: lamar@guidant.law
cindy@guidant.law
Hotel Oxygen Midtown's
Estimated Assets: $1 million to $10 million
Hotel Oxygen Midtown's
Estimated Liabilities: $100,000 to $500,000
Hotel Oxygen Palm's
Estimated Assets: $10 million to $50 million
Hotel Oxygen Palm's
Estimated Liabilities: $1 million to $10 million
Oxygen Hospitality's
Estimated Assets: $0 to $50,000
Oxygen Hospitality's
Estimated Liabilities: $100,000 to $500,000
A Great Hotel Company, Arizona's
Estimated Assets: $0 to $50,000
A Great Hotel Company, Arizona's
Estimated Liabilities: $100,000 to $500,000
A Great Hotel Company's
Estimated Assets: $0 to $50,000
A Great Hotel Company's
Estimated Liabilities: $50,000 to $100,000
The petitions were signed by David Valade, chief financial
officer.
A full-text copy of Hotel Oxygen Midtown's petition containing,
among other items, a list of the Debtor's 20 largest unsecured
creditors is available for free at:
http://bankrupt.com/misc/azb19-14399.pdf
A full-text copy of Hotel Oxygen Palm's petition containing, among
other items, a list of the Debtor's 17 unsecured creditors is
available for free at:
http://bankrupt.com/misc/azb19-14400.pdf
A full-text copy of Oxygen Hospitality's petition containing, among
other items, a list of the Debtor's 16 unsecured creditors is
available for free at:
http://bankrupt.com/misc/azb19-14401.pdf
A full-text copy of A Great Hotel Company, Arizona's petition
containing, among other items, a list of the Debtor's 20 largest
unsecured creditors is available for free at:
http://bankrupt.com/misc/azb19-14402.pdf
A full-text copy of A Great Hotel Company's petition containing,
among other items, a list of the Debtor's 17 unsecured creditors is
available for free at:
http://bankrupt.com/misc/azb19-14403.pdf
List of Hotel Oxygen Palm's 17 Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Booking.com Business Debt $20,159
P.O. Box 1639, 100 BP
Amsterdam, The Netherlands
2. Commtrack Business Debt $55
17493 Nassua Commons
Lewes, DE 19958
3. Desert Fire Business Debt $352
Extinguisher Company
P.O. Box 1607
Palm Springs, CA 92263
4. Desert Water Business Debt $1,224
1200 S. Gene
Autry Trail
Palm Springs, CA 92263
5. Ecolab Business Debt $786
P.O. Box 100512
Pasadena, CA 91189
6. Expedia Group Business Debt $2,141
333 108th Ave NE
Bellevue, WA 98004
7. Farmer Bros Business Debt $488
P.O. Box 732855
Dallas, TX 75371
8. Frontier Communications Business Debt $1,535
P.O. Box 74407
Cincinnati, OH 45274
9. Guest Supply Business Debt $11,951
P.O. Box 6771
Somerset, NJ
08875-6771
10. Hammer Plumbing and Pumping Business Debt $3,150
P.O. Box 2448
Cathedral, CA 92235
11. HD Supply Business Debt $14,340
P.O. Box 509058
San Diego, CA 92150-9050
12. Riverside County Tax Business Debt $14,404
Assessor
P.O. box 12005
Riverside, CA 92502
13. Socal Gas Business Debt $1,050
P.O. Box C
Monterey Park, CA 91756
14. Sunnyside Landscape Business Debt $1,605
36757 Bankside Drive
Cathedral City, CA 92234
15. Sysco Riverside Business Debt $8,909
15750 Meridian Parkway
March Air Reserve
Base, CA 92518
16. Time Warner Cable Business Debt $3,236
P.O. Box 60074
City of Industry, CA 91716
17. Western State Design Business Debt $949
2331 Tripaldi Way
Hayward, CA 94545
HOUSTON GRANITE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on Nov. 12, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Houston Granite and Marble
Center.
About Houston Granite and Marble Center
Houston Granite and Marble Center LLC, is a family owned and
operated company that supplies granite, marble, and other natural
stone products. The Company previously filed a petition under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
16-31994) on April 16, 2016.
Recently, the Debtor sought Chapter 11 protection (Bankr. S.D.
Texas Case No. 19-35315) on Sept. 24, 2019. In the petition signed
by John Sykoudis, member, the Debtor was estimated to have assets
between $1 million and $10 million, and liabilities of the same
range. Cage, Hill Niehaus LLP is the Debtor's counsel.
HRI HOLDING: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: HRI Holding Corp.
8700 State Line Road, Suite 100
Leawood, KS 66206
Business Description: Formed in September 1992 under the name
"Gilbert/Robinson, Inc.," and headquartered
in Leawood, Kansas, HRI Holding Corp. and
its affiliated debtors own and operate
47 restaurants in 14 states (Connecticut,
Florida, Illinois, Indiana, Kansas,
Michigan, Missouri, Nebraska, New Jersey,
New York, Ohio, Pennsylvania, Texas, and
Virginia). The Debtors own Houlihan's
Restaurant + Bar, J. Gilbert's Wood-Fired
Steak + Seafood, Bristol Seafood Grill, and
Devon Seafood Grill restaurants. As of the
Petition Date, the Debtors have
approximately 3,450 employees.
Chapter 11 Petition Date: November 14, 2019
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Thirty-nine affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
HRI Holding Corp. (Lead Case) 19-12415
Algonquin Houlihan's Restaurant, L.L.C. 19-12424
Darryl's of Overland Park, Inc. 19-12421
Darryl's of St. Louis County, Inc. 19-12420
Geneva Houlihan's Restaurant, L.L.C. 19-12427
Hanley Station Houlihan’s Restaurant, LLC 19-12428
HDJG Corp. 19-12417
HOP Bayonne LLC 19-12443
HOP Brick LLC 19-12440
HOP Bridgewater LLC 19-12446
HOP Cherry Hill LLC 19-12437
HOP Fairfield LLC 19-12444
HOP Farmingdale LLC 19-12436
HOP Heights LLC 19-12442
HOP Holmdel LLC 19-12451
HOP Lawrenceville LLC 19-12439
HOP New Brunswick LLC 19-12450
HOP NJ NY, LLC 19-12435
HOP Paramus LLC 19-12438
HOP Parsippany LLC 19-12447
HOP Ramsey LLC 19-12445
HOP Secaucus LLC 19-12441
HOP Weehawken LLC 19-12449
HOP Westbury LLC 19-12448
HOP Woodbridge LLC 19-12452
Houlihan's of Chesterfield, Inc. 19-12453
Houlihan's of Ohio, Inc. 19-12422
Houlihan's Restaurants of Texas, Inc. 19-12426
Houlihan's Restaurants, Inc. 19-12416
Houlihan's Texas Holdings, Inc. 19-12425
HRI O'Fallon, Inc. 19-12423
JGIL Holding Corp. 19-12433
JGIL Milburn Op LLC 19-12431
JGIL Mill OP LLC 19-12429
JGIL Millburn, LLC 19-12430
JGIL Omaha, LLC 19-12434
JGIL, LLC 19-12432
Red Steer, Inc. 19-12418
Sam Wilson's/Kansas, Inc. 19-12419
Debtors' Counsel: Adam G. Landis, Esq.
Kimberly A. Brown, Esq.
Matthew R. Pierce, Esq.
Nicolas E. Jenner, Esq.
LANDIS RATH & COBB LLP
919 Market Street, Suite 1800
Wilmington, Delaware I 980 I
Tel: (302) 467-4400
Fax: (302) 467-4450
Email: landis@lrclaw.com
brown@lrclaw.com
pierce@lrclaw.com
jenner@lrclaw.com
Debtors'
Investment
Banker: PIPER JAFFRAY & CO.
Debtors'
Real Estate
Advisor: HILCO REAL ESTATE, LLC
Debtors'
Claims &
Noticing
Agent and
Administrative
Agent: KURTZMAN CARSON CONSULTANTS, LLC
http://www.kccllc.net/hri/document/list/5023
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Matthew R. Manning, chief
restructuring officer.
A full-text copy of HRI Holding Corp.'s petition is available for
free at:
http://bankrupt.com/misc/deb19-12415.pdf
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. US Foods, Inc. Trade Debt $959,447
Attn: Lisa Thorne
9399 Higgins Road, Suite 800
Rosemont, IL 60018
Tel: (847) 742-7708
Fax: (847) 720-2345
Email: lisa.thorn@usfoods.com
2. Sysco Food Services, LLC - Trade Debt $630,754
Metro NY
Attn: Steven Harris, VP of Sales
20 Theodore Conrad Drive
Jersey City, NJ 07305-4614
Tel: (201) 433-2000
Email: harris.steven@metrony.sysco.com
3. The Hartz Group, Inc. Trade Debt $365,898
Attn: Gus Milano, President and COO
400 Plaza Drive
P.O. Box 1515
Secaucus, NJ 07096-1515
Tel: (212) 308-3336
Fax: (201) 348-9154
Email: hala.chalet@hartzmountain.com;
gus.milano@hartzmountain.com
4. Edward Don & Company Inc. Trade Debt $332,798
Attn: Roger Mellum
2500 S. Harlem Avenue
North Riverside, IL 60546
Tel: 800-947-6497
Fax: 708-883-8230
Email: rogermellum@don.com
5. M2G Net Lease Funding, Ltd. Trade Debt $196,047
Attn: Renee Alton
c/o HPI Real Estate Services
1020 NE Loop 410, Suite 510
San Antonio, TX 78209
Tel: 210-253-3995
Fax: 201-226-1691
210-340-8921
6. M.F. Foley Inc. Trade Debt $194,309
Peter Ramsden, Co-Owner
77 Wright Street
New Bedford, MA 02740
Tel: (800) 225-8102
Fax: (508) 991-6083
Email: peterr@foleyfish.com
7. Orland Park Investments, LLC Trade Debt $190,061
Attn: Farhan Hanif
9305 S. Madison St.
Burr Ridge, IL 60527
Email: mfmdoc1@gmail.com
8. 747 North Wabash Ave Apts Trade Debt $170,793
Investors LLC
Attn: Dan McCaffery, CEO
c/o McCaffery Interests
737 N Michigan Ave., Ste 2050
Chicago, IL 60611
Tel: 312-944-3777
Fax: 312-944-7107
Email: dmccaffery@mccafferyinterests.com
9. Bayshore Shopping Center Trade Debt $167,433
Property Owner LLC
Attn: Tom Rinka
8343 Doughas Ave, Ste 200
Dallas, TX 75225
Tel: 414-332-4049
Email: trinka@bayshoretowncenter.com
10. Rolf Piller Trade Debt $159,177
Attn: Jay Erens
c/o Jay Erens, Foley & Lardner LLP
321 N Clark St., Ste 2800
Chicago, IL 60654-5313
Tel: 312-832-4500
Fax: 312-832-4700
Email: jerens@foley.com
11. Goodwin Professional $134,585
Attn: Jon Kanter Services
100 Northern Avenue
Boston, MA 02210
Tel: 1 617 570 1044
Fax: 1 617 801 8843
Email: jkanter@goodwinlaw.com
12. Get Fresh Produce Inc. Trade Debt $126,684
Attn: Gino Alinondi
1441 Brewster Creek Blvd.
Bartlett, IL 60103
Tel: (630) 665-9665
Fax: (630) 665-3391
Email: gino@getfreshproduce.com
13. Southpark Mall, LLC Trade Debt $122,817
Attn: Vince Corno
500 Southpark Center
Strongsville, OH 44136
Tel: 440-238-9199
Fax: 440-846-8323
Email: cdoughlas@starwoodretail.com
14. Federal Realty Trade Debt $120,696
Investment Trust
Attn: Judy Maurer
Property #500-1475
PO Box 8500-9320
Philadelphia, PA 19178-930
Tel: 484-419-1200
Email: jmaurer@federalrealty.com
15. Hirschman Realty Trade Debt $114,108
Management LLC
Attn: Robert Morris, President
40 Eisenhower Drive Suite 206
Paramus, NJ 07652
Tel: 201-261-4300
Email: rmorris@equity3re.com
16. Sysco Baltimore LLC Trade Debt $111,909
Attn: Barbara Hartman
800 Dorsey Run Rd.
Jessup, MD 20794
Tel: (410) 799-2455
Email: hartman.barbara@balt.sysco.com
17. C&C Produce Inc. Trade Debt $97,244
Attn: Nick Conforti
1100 Atlantic Ave.
North Kansas City, MO 64116
Tel: (816) 241-4425
Fax: (816) 221-9289
Email: nick@ccproduce.net
18. Phillips Edison-Arc Trade Debt $88,830
Shopping Ctr OP Partnership, LP
Attn: Brad Wick
11501 Northlake Drive
Cincinatti, OH 45249
Tel: 317-410-9329
Fax: 513-618-4445
Email: bwick@phillipsedison.com
19. Allan Domb Real Estate Trade Debt $85,034
Attn: Iryna Patronyk
1845 Walnut St., Ste 2200
Philadelphia, PA 19103
Tel: 215-545-1500
Fax: 215-226-3662
Email: patronyk@allandomb.com
20. Bestar, LLC Trade Debt $83,203
Attn: Raymond Chang
PO Box 410842
Creve Coeur, MO 63141-0842
Tel: 314-275-0750
Fax: 770-234-4114
Email: raymond.chang.12@gmail.com
21. Fortune Fish Company Inc. Trade Debt $81,817
Attn: Sean O'Scannlain, President
8501 Page Boulevad, Suite 7
St. Louis, MO 63114
Tel: (630) 860-7100
Fax: (630) 860-7400
Email: steve@fortunefishco.net;
sean@fortunefisco.net
22. LaSalle Property Trade Debt $78,805
Fund REIT, Inc.
Attn: Jean Cappozzo
One Parkview Plaza, 9th Floor
Oakbrook Terrace, IL 60181
Tel: 630-954-7349
Fax: 630-954-7306
Email: jcappozo@midamericagrp.com
23. Open Table Inc. Trade Debt $76,817
Attn: Louis Ambrose
1 Montgomery Street, Suite 700
San Francisco, CA 94104
Tel: (800) 673-6822
Email: support@opentable.com
24. Customer Asset Trade Debt $75,397
Consulting Group, Inc.
Attn: Cardina Morabito
100 W. Hillcrest Blvd, Ste 406
Schaumburg, IL 60195
Tel: (847) 805-9800
Fax: (847) 805-9801
Email: cmora@cogensia.com
25. Rogers Retail, LLC Trade Debt $72,244
Attn: Chelsea Davenport
Pinnacle Hills Promenade
350 N. Orleans St, Ste 300
Chicago, IL 60654-1607
Tel: 312-960-5000
Email: chelsea.davenport@generalgrowth.com
26. Weingarten Nostat, Inc. Trade Debt $72,047
Attn: Donna Gerken
Property Management Office
8268 Mills Dr.
Miami, FL 33183
Tel: 713-866-6000
Fax: 713-866-6049
Email: dgerken@weingarten.com
27. Country Clean Inc. Trade Debt $59,817
Attn: Frank Pavia, President
1703 Valley Road
Ocean, NJ 07712
Tel: (732) 918-0108
Fax: (732) 918-0113
Email: rrudd@wesellcoffee.com;
fpavia@wesellcoffee.com
28. Bridgewater Realty LLC Trade Debt $59,107
Attn: Susan McNaught
429 Market Street
Saddle Brook, NJ 07663
Tel: 201-845-3001
Email: smcnaught@accountinngdynamics.com
29. Brannan Holdings LLC Trade Debt $58,538
Attn: Lance Elkin
P.O. Box 1968
Lake Ozark, MO 65049
Tel: 573-280-4991
Email: lelkin@lindellbank.com
30. Harmon Meadow Owner LLC Trade Debt $55,964
Attn: Timothy Decola
975 US Hwy 22 W
North Plainfield, NJ 07060
Tel: 1-800-488-0768
Fax: 908-755-8103
Email: salesreporting@levinmgt.com;
tdecola@levinmgt.com
IEA ENERGY: Moody's Raises CFR to B3, Outlook Stable
----------------------------------------------------
Moody's Investors Service upgraded IEA Energy Services, LLC's
Corporate Family Rating to B3 from Caa2, Probability of Default
Rating to Caa1-PD from Caa2-PD, and senior secured first lien bank
credit facilities ratings to B2 from Caa2. The Speculative Grade
Rating remains at SGL-3. The outlook is stable. This concludes the
review for upgrade that was initiated on August 16, 2019, following
the announcement of an equity commitment agreement with funds
managed by Ares Management Corporation on August 14, 2019.
The upgrades reflects the improvement in IEA's credit metrics and
liquidity as a result of $180 million new equity raise during 2019
and the subsequent debt reduction. The upgrades also reflect
Moody's forecasts for IEA to further reduce debt/EBITDA to 5.0x by
the end of 2019 given the expectation for significant growth in
IEA's EBITDA in Q4 2019 as the company continues to recover from
the earnings impact of significant weather conditions in late 2018.
Lastly, the upgrades reflect that IEA's significantly reduced debt
levels will allow it to maintain debt/EBITDA below 5.0x beyond 2020
despite the expectation for an adjustment in demand following the
expiration of tax credits.
Ares has committed to an additional $80 million of preferred B
stock, which is expected to close and fund shortly, following $100
million of equity invested earlier this year. Upon closing of the
preferred equity transaction, IEA will be 31% owned by Oaktree, 20%
owned by Ares, 9% owned by management with the remaining equity
being publicly traded. The proceeds from the $80 million preferred
B stock will be used to repay $80 million of term loan. Pro forma
for the debt reduction (including the further $30 million by 2020),
Moody's adjusted debt/EBITDA will fall to 8.6x as of the last
twelve months ended September 30, 2019 from 11.3x (as of September
2019). Barring any additional weather related events, Moody's
expects earnings to recover and leverage to reduce to below 5.0x by
the end of fiscal 2019. The net leverage reduction will trigger a
step down in the interest rate to L+675 from the current high of
L+825, delivering $11 million of interest expense savings and $30
million of amortization savings on a run rate basis. Oaktree and
Ares has committed to an additional equity financing if the company
is unable to an repay $30 million of term loan by the first half of
2020 from its excess liquidity.
"IEA's equity issuance abates near term financial risk by reducing
leverage and bolstering liquidity, as the company transitions from
the weather related impact and expiry of tax credit this year",
says Shirley Singh, Moody's lead analyst for the company.
Upgrades:
Issuer: IEA Energy Services, LLC
Corporate Family Rating, Upgraded to B3 from Caa2
Probability of Default Rating, Upgraded to Caa1-PD
from Caa2-PD
Gtd Senior Secured First Lien Term Loan, Upgraded to
B2 (LGD2) from Caa2 (LGD3)
Gtd Senior Secured First Lien Revolving Credit Facility,
Upgraded to B2 (LGD2) from Caa2 (LGD3)
Outlook Actions:
Issuer: IEA Energy Services, LLC
Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
IEA's B3 CFR is constrained by the revenue volatility expected from
the expiry of the Renewable Energy Production Tax Credit in 2019.
Moody's forecasts that IEA's EBITDA will increase meaningfully in
the fourth quarter of 2019 and in 2020, while the free cash flow
will turn positive in 2020. However, Moody's believes this trend
will reverse in 2021 resulting in a decline in EBITDA as a result
of the correction in demand levels following the expiration of the
tax credit. However, IEA's relatively low level of funded debt
following the equity raises during 2019 supports its ability to
maintain an appropriate capital structure following more normalized
demand patterns in 2021. The acquisitions of CCS and William
Charter has improved the revenue diversification, but these are
highly competitive and cyclical businesses. Nevertheless, IEA
continues to benefit from a sizeable, and still growing, $2.6
billion backlog and an entrenched position in the wind power
market. Oaktree Capital, Ares and management represent more than
50% of the ownership and board structure, which elevates governance
risk.
The SGL-3 liquidity rating reflects IEA's adequate liquidity
supported by a cash balance of $43.2 million and availability under
its $50 million revolving credit facility (after letters of
credit).
The stable outlook reflects Moody's expectation that IEA's adjusted
debt/EBITDA will improve to below 5.0x and will maintain adequate
liquidity over the next 12-18 months.
The ratings could be downgraded if the project execution and/or PTC
expiry results in weaker than expected earnings and liquidity such
that debt-to-EBITDA is sustained above 5.0x or free cash flow
approach break-even levels.The ratings could be upgraded if the
company's scale and revenue diversity improves or if projected
annual capacity additions post PTC are sustained at or above 7.0
gigawatt (GW), debt/EBITDA is sustained below 3.0x and FCF-to-debt
is sustained above 5%.
The principal methodology used in these ratings was Construction
Industry published in March 2017.
Headquartered in Indianapolis, Indiana, IEA Energy Services, LLC is
an engineering, procurement and construction company that primarily
serves the wind farm construction, transportation and rail end
markets. IEA is a subsidiary of Infrastructure & Energy
Alternatives, Inc., and is majority owned by Oaktree Capital
Management, Ares and management on a fully-diluted basis. Revenue
is estimated to be $1.2 billion as of 12 months to September 2019.
INTEGRATED DYNAMIC: Unsecureds to Get 0.18% If $16M Claim OK'd
--------------------------------------------------------------
Integrated Dynamic Solutions filed a Chapter 11 Plan and a
Disclosure Statement on Oct. 31, 2019.
Before the Petition Date, IDS and owner and president Nasrollah
Gashtili both suffered an adverse judgment in favor of Vitavet
Labs. Vitavet has a judgment lien on all IDS assets which lien is
junior to that securing the claim asserted by Gordon T. Graves.
Depending on a decision yet to be made by Vitavet Labs, Inc., the
Plan provides for all partial or full payment of all claims against
both bankruptcy estates over a period of 108 months from the
Effective Date.
The deadline for non-governmental creditors to file claims was
January 14, 2019. The Plan has one class of general unsecured
claims not entitled to priority under Bankruptcy Code Section
507(a) (Class 3). Holders of Class 3 claims will be paid from IDS
operating revenue as set forth in the Plan Spreadsheet.
According to the Liquidation Analysis, unsecured creditors are
projected to a 0.18% payout under the Plan. The Debtor proposes a
distribution of $30,000 to unsecured claims of more than $16.5
million. Several claims are duplicated between the two estates and
a $16 million claim filed by ASAI is disputed. If the disputed
ASAI claim and duplicate claims are eliminated, the percentage
distribution to unsecured creditors will significantly increase.
Payments due under the Plan will be funded from the following
sources:
a. Cash on hand as of the Effective Date;
b. Income from the operations of IDS;
c. A capital contribution of $15,000 and/or any recovery in the
ASAI Litigation.
Under the Plan, Nasrollah Gashtili will continue to manage the
financial affairs of IDS.
A full-text copy of this Disclosure Statement is available at
https://tinyurl.com/y4omh6cx from PacerMonitor.com at no charge.
About Integrated Dynamic Solutions
Founded in 1995, Integrated Dynamic Solutions, Inc. --
http://www.idspage.com/-- is a Microsoft Certified Partner
specializing in custom software development, database design, and
systems integration. It offers a full range of services from
office automation, database design, e-commerce, custom software
development and prototyping to wireless solutions, web-based
programming, Facilities Management Information Systems, and
simulation modeling.
Integrated Dynamic Solutions sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-11379) on Aug.
22, 2018. On Aug. 24, 2018, the case was transferred from the
Northern Division to the San Fernando Valley Division, and was
assigned Case No. 18-12156.
In the petition signed by CEO Nasrolla Gashtili, the Debtor
estimated assets of less than $50,000 and liabilities of $1 million
to $10 million.
Judge Victoria S. Kaufman oversees the case.
The Debtor tapped The Law Offices of David A. Tilem as its legal
counsel.
The Office of the U.S. Trustee on Sept. 21, 2018, appointed an
official committee of unsecured creditors in the Debtor's case.
IPS WORLDWIDE: Prelim Order Approving Disc. Statement Vacated
-------------------------------------------------------------
Judge Karen S. Jennemann from the U.S. Bankruptcy Court for the
Middle District of Florida vacated the order conditionally
approving the Disclosure Statement of IPS Worldwide on Nov. 5,
2019. The Court ruled that the order, which set a Dec. 4 hearing
to consider final approval of the Disclosure Statement and
confirmation of the Plan, was entered in error.
About IPS Worldwide
IPS Worldwide, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla.
Case No. 19-00511) on Jan. 25, 2019. In the petition signed by
William Davies, president, the Debtor estimated assets of less than
$50,000 and liabilities of $100 million to $500 million. The case
is assigned to Judge Karen S. Jennemann. The Debtor tapped the Law
Offices of Scott W. Spradley, P.A., as its bankruptcy counsel, and
Moglia Advisors, as investment banking advisor.
Judge Karen S. Jennemann approved the appointment of Alex D. Moglia
as the Chapter 11 trustee for IPS Worldwide. The trustee retained
Klayer and Associates, Inc., as counsel and Moglia Advisors, as
investment banking advisor.
The U.S. Trustee for Region 21 on Feb. 15, 2019, appointed three
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 case of IPS Worldwide.
ISS MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: ISS Management, LLC
156 S. Bethlehem Pike
Ambler, PA 19002
Business Description: ISS Management, LLC is a privately held
company whose principal assets are located
at 156 S Bethlehem Pike Ambler, PA 19002.
Chapter 11 Petition Date: November 12, 2019
Court: United States Bankruptcy Court
Middle District of Pennsylvania (Harrisburg)
Case No.: 19-04825
Judge: Hon. Henry W. Van Eck
Debtor's Counsel: Robert E. Chernicoff, Esq.
CUNNINGHAM, CHERNICOFF & WARSHAWSKY, P.C.
2320 North Second Street
Harrisburg, PA 17110
Tel: 717 238-6570
Fax: 717 238-4809
E-mail: rec@cclawpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Corey Wolff, member.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/pamb19-04825_creditors.pdf
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/pamb19-04825.pdf
JARED BROOKS: Proposes Biglron Auctions of Personal Property
------------------------------------------------------------
Jared D. Brooks asks the U.S. Bankruptcy Court for the District of
Nebraska to authorize the Biglron Auctions of any or all of the
items of machinery and equipment free and clear pursuant to 11
U.S.C. Section 363(b).
The items, with their estimated value, are:
Item Est. Value
---- ----------
Hay trailer, homemade, 20' $1,000
Hay trailer, Lufkin, 53' $3,000
Sooner Stock Trailer, 24', 1994 $6,000
1998 Wilson Grain Trailer, 49' Spread Axle $15,000
2009 Wilson Grain Trailer, 43' Tandem $25,000
1978 Peterbilt, 379 EXHD $5,000
1981 Ford Service Truck, F-600 $4,000
2010 Polaris Ranger $8,000
2013 Roadrunner, 1,200-Gallon Fertilizer $4,500
Nose Tank $2,000
Square Baler, New Holland $1,000
4890 John Deere Swather, 16'Head, 1998 $30,000
Vermeer Rake, 12-wheel $2,000
986 lh Tractor, Case IH $8,000
4430 JD Tractor w/Loader $15,000
H90 Pay loader, International, w/Grapple $10,000
16-row 30" Corn Head, Gerhinghoff, 2007 $35,000
1770 Planter, JD, 16-Row 1770 NT, 2010 $60,000
Gopher Machine $1,500
Grinder, Bear Cat, 950 $3,000
Pivot Track Closer, Patriot, Closer $3,000
JD 3pt Blade, 10' $1,000
JD Disk, 25', 1998 $3,500
Sweep Plow, Richardson, 30' $3,000
JD 960 Sweep, 40' $3,000
Donahue Trailer $1,000
Calf Cradle, PowerRiver, 2015 $500
Rake, Rowse, 27-wheel, 2011 $20,000
Proceeds of any sale of the personal property items will be paid to
the secured creditors, First Central Bank, Anchor Acceptance, and S
& P Financial Services.
Pursuant to Rule 6004-1, tax consequences of the sale of the
personal property described are:
A. Tax Cost Basis of Property is $22,154
B. Estimated Projected Costs of Sale:
i. Marketing costs of $2,500; and
ii. Estimated Commission costs of $21,920 (based upon
8% of $274,000)
C. Estimated Anticipated Capital Gain/Loss is $227,426
(computed as follows: $274,000 less tax cost basis of $22,154, less
estimated costs of sale of $24,420).
D. The estimated Anticipated Net Taxable Income from Sale
After Adjustmentsis unknown until December because net taxable
would be determined after the end of taxable year.
The case is In re Jared D. Brooks (Bankr. D. Neb. Case No.
18-40417-TLS).
JWMR PROPERTY: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The Office of the U.S. Trustee on Nov. 12, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of JWMR Property LLC.
About JWMR Property
JWMR Property LLC is a single asset real estate debtor (as defined
in 11 U.S.C. Section 101(51B)). Its principal assets are located
at 26751 Brookpark Road, North Olmsted, Ohio.
JWMR Property sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ohio Case No. 19-16365) on Oct. 15, 2019. At the
time of the filing, the Debtor disclosed $1,012,600 in assets and
$475,000 in liabilities. The case is assigned to Judge Jessica E.
Price Smith. The Debtor tapped Stephen D. Hobt, Esq., as its
bankruptcy attorney.
LAREDO PETROLEUM: Moody's Affirms B1 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service changed Laredo Petroleum, Inc.'s rating
outlook to stable from positive and downgraded the company's senior
unsecured notes rating to B3 from B2. Concurrently, Moody's
affirmed Laredo's B1 Corporate Family Rating and B1-PD Probability
of Default Rating. The Speculative Grade Liquidity Rating remains
SGL-2.
"Laredo's business strategy is in transition as the company strives
to boost oil production in order to improve margins and returns
over time," commented Amol Joshi, Moody's Vice President and Senior
Credit Officer. "Laredo's credit profile benefits from moderate
leverage pro forma for the announced $130 million acreage
acquisition, while its sizeable but less oily legacy asset base has
endured lower margins and cash flow even with a competitive cost
structure."
Downgrades:
Issuer: Laredo Petroleum, Inc.
Senior Unsecured Notes, Downgraded to B3 (LGD5) from B2 (LGD5)
Outlook Actions:
Issuer: Laredo Petroleum, Inc.
Outlook, Changed To Stable From Positive
Affirmations:
Issuer: Laredo Petroleum, Inc.
Probability of Default Rating, Affirmed B1-PD
Corporate Family Rating, Affirmed B1
RATINGS RATIONALE
The change of Laredo's rating outlook to stable reflects Moody's
expectation that the company should maintain sound financial
metrics while managing its capital program and liquidity prudently,
as the company begins executing its strategy to improve margins and
returns.
Following Laredo's acreage acquisition announcement, Moody's
expects the company to focus its 2020 drilling on the new oily
acreage and significantly reduce drilling activity on its legacy
acreage. This should gradually increase oil content in the
company's production mix and improve margins, if capital and
operating costs remain under control.
The B1 CFR is supported by the company's production and reserves
base in the Permian's prolific Midland Basin, a sizeable,
repeatable drilling inventory providing organic growth potential,
high degree of operational control along with retained gathering
assets within its production corridors and track record of hedging
production. Laredo's leverage metrics are healthy reflecting the
company's moderate leverage, allowing some flexibility to execute
its changing strategic goals. However, Laredo's credit profile
remains constrained by its relatively small scale and
geographically concentrated upstream operations, low proportion of
crude oil in its existing production and the significant capital
expenditures required to develop its acreage.
Moody's downgraded Laredo's senior unsecured notes to B3 from B2.
Laredo's notes are rated two notches below the B1 CFR, reflecting
the priority claim of the relatively large borrowing base senior
secured credit facility that has a first lien on most of Laredo's
assets.
Laredo's SGL-2 Speculative Grade Liquidity Rating reflects its good
liquidity profile. At September 30, 2019, the company had $32
million of cash, and $185 million outstanding under its credit
facility. In October 2019, Laredo's borrowing base was reduced to
$1 billion from $1.1 billion. In November, Laredo announced a $130
million acreage acquisition likely to be funded with additional
revolver borrowings. The company will likely limit cash flow
outspend in 2020 if commodity prices remain weak, while existing
2020 hedges should be supportive. Availability under its revolver
should cover funding shortfalls through 2020. Financial covenants
under Laredo's credit facility include a maximum Consolidated Net
Leverage Ratio of 4.25x and a current ratio of at least 1x. Moody's
expects the company to have ample headroom under its covenants
through 2020 based on projected spending and debt levels. Laredo's
nearest notes maturity is January 2022. While Laredo's revolver
maturity is April 2023, it has a springing maturity implying that
the revolver will mature 90-days prior to the January 2022 notes
maturity if the notes are not refinanced by then.
The ratings could be upgraded if Laredo grows its production scale
and oil content while achieving cash flow neutrality, with retained
cash flow to debt ratio maintained above 40% and leveraged full
cycle ratio exceeding 1.5x. Moody's could consider a downgrade if
the RCF/debt ratio falls towards 20% or the company's capital
productivity declines significantly.
Laredo Petroleum, Inc. is a Tulsa, Oklahoma based independent
exploration and production company with primary assets in West
Texas' Midland Basin.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
LEVEL 3 FINANCING: Moody's Rates New Sr. Sec. Notes 'Ba1'
---------------------------------------------------------
Moody's Investors Service assigned a Ba1 to CenturyLink, Inc.'s
proposed senior secured notes which will be issued by Level 3
Financing, Inc., a direct, wholly owned subsidiary of Level 3
Parent, LLC. The net proceeds from the offering are expected to be
used to repay a portion of the $4.611 billion senior secured
Tranche B 2024 term loans under LFI's existing senior secured
credit facility. The Secured Notes, which will be secured by the
same collateral pledged by LFI to secure its existing senior
secured credit facility, will also be fully and unconditionally
guaranteed by Level 3 and certain of its material domestic
subsidiaries. The Ba1 rating is in line with the existing rating
for LFI's senior secured credit facility which ranks pari passu
with the Secured Notes. All other ratings including the company's
Ba3 corporate family rating and stable outlook are unchanged.
Assignments:
Issuer: Level 3 Financing, Inc.
Senior Secured Regular Bond/Debenture, Assigned Ba1 (LGD2)
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 4.7%
for the nine months ended September 30, 2019 compared with the same
period in 2018. 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 synergy targets following its
November 2017 acquisition of Level 3, significantly offsetting the
impact of revenue weakness on operating margins. CenturyLink
increased its company-calculated adjusted EBITDA for the nine
months ended September 30, 2019 by 0.8% compared with the same
period in 2018, and has identified further margin expansion
opportunities over the next few years. Company-calculated adjusted
EBITDA margins have increased steadily since the close of the Level
3 transaction to 40.3% for the third quarter of 2019, up almost 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 September 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 $1.4 billion cash on hand as of September 30, 2019, its
expectation of at least $2.1 billion of after dividend free cash
flow for full year 2020 and approximately $1.7 billion of near term
debt maturities.
CenturyLink also has $1.5 billion of 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 $8.5 billion secured credit facility, $11.1
billion of debt at Level 3, $6.0 billion of debt at Qwest
Corporation (QC), $0.4 billion of debt at QCF, and $1.7 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 September
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 September 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 September 30, 2019. The senior secured debt of Embarq's
operating subsidiary, Embarq Florida, Inc., is rated Baa3.
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
steadily fall to 3.7x by 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 this rating 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, an international communications company with one of
the world's largest long haul communications and optical internet
backbones. The company generated approximately $22.6 billion in
revenue over the last 12 months ended September 30, 2019.
LEVEL HOME: Seeks Extension of Plan Confirmation Period
-------------------------------------------------------
Level Home Foundation Repair, LLC, a small business debtor, is
asking the Court to extend its 45-day plan confirmation period.
The Debtor's Disclosure Statement and Chapter 11 Plan were filed on
October 15, 2019, one day before the filing deadline originally
fixed by the Order to Debtor in Possession. Under Sec. 1121(e), the
Confirmation Period ends on Nov. 29, 2019, which is 45 days after
the date on which the plan was filed.
Section 1125(f) of the Bankruptcy Code requires that a
conditionally approved disclosure statement be mailed not later
than 25 days before the date of the hearing on confirmation of the
plan. Bankruptcy Rule 2002 requires 28 days' notice, to which
Bankruptcy Rule 9006(f) adds 3 days, resulting in 31 days required
notice from date of mailing the notice of the deadline to file
acceptances or rejections of the plan and for objections to final
approval of the conditionally approved disclosure statement.
The Debtor requested an order fixing Friday, Oct. 18, 2018 as the
date for mailing the notice, and the deadline for filing
acceptances or rejections and objections would have been Monday,
November 18, 2019. Thereafter, the next regular hearing date for
chapter 11 matters after the noticing delay would have been
Wednesday, Nov. 20, 2019. Clearly, a one day period between the
deadline for objections and votes and a hearing on plan
confirmation and final approval of the disclosure statement would
have been an insufficient period within which to resolve last
minute objections, negotiate rejections, prepare any plan
modification or address other matters to facilitate a successful
hearing on confirmation. Therefore, to comply with the applicable
and narrow deadlines, debtor requested that the hearing on
confirmation and final approval of the disclosure statement be
fixed for Wednesday, November 27, 2019, before the 45th day, Nov.
29, 2019.
On Wednesday, Oct. 16, 2019, the Debtor learned that court would
not be held on Nov. 27, 2019. The problem was exacerbated by the
fact that on Wednesday afternoon, Oct. 16, 2019, the Judge, the
Court staff, debtor's counsel and most of the local bankruptcy bar
traveled to Baton Rouge, Louisiana to attend the annual Bankruptcy
Law Conference at LSU.
Accordingly, the Debtor requests an extension of the Confirmation
Period to the earliest practical date available on the Court's
docket that will allow timely notice of the deadlines to file
objections to plan confirmation and final approval of the
disclosure statement and to file plan acceptances or rejections.
A full-text copy of the Motion is available at
https://tinyurl.com/y2l7fnzv from PacerMonitor.com at no charge.
Attorney for the Debtor
Robert W. Raley, Bar No. 11082290
Benton Spur Road
Bossier City, Louisiana 71111
Tel: (318) 747-2230
E-mail: bankruptcy@robertraleylaw.com
About Level Foundation Home Repair
Level Foundation Home Repair filed a voluntary Chapter 11 Petition
(Bankr. W.D. La. Case No. 19-10589) on Oct. 22, 2019, and is
represented by Robert W. Raley, Esq., at Robert W. Raley, Esq.
MARINE BUILDERS: Debtor Files Plan, Selling Equity Interests
------------------------------------------------------------
Marine Builders submitted with the U.S. Bankruptcy Court for the
Southern District of Indiana a disclosure statement in support of
its proposed reorganization plan.
Holders of unsecured claims (Class 5) will receive their pro rata
share of the "unsecured creditor contribution." The Disclosure
Statement says that the projected percentage recovery for unsecured
creditors is currently unknown. The document also did not state
the amount of the unsecured creditor contribution.
The Debtors ARE soliciting votes to accept or reject the Plan from
holders of NWSB Secured Claims in Class 1, WesBanco Secured Claims
in Class 2, IRS Claims in Class 3, Indiana Claims in Class 4, as
well as Unsecured Claims in Class 5 because such holders are
Impaired under the Plan and will receive Distributions under the
Plan. The Debtors ARE NOT seeking votes from the holders of the
Equity Interests in Class 6 because such holders will receive no
distribution under the Plan.
The Debtors are filing a motion to establish procedures for the
marketing and sale of the equity interests in the Reorganized
Debtor. David W. Evanczyk, David A. Evanczyk, and Byron Evanczyk
will seek to serve as a stalking horse bidder for the sale of the
equity interests in the Reorganized Debtor, and will contribute:
(1) operation of the Reorganized Debtor so that the entity will
operate and comply with the terms of the Plan; (2) a waiver of the
Insider Claims; (3) assumption of guaranty and related liabilities
for certain of the WesBanco Claims, NWSB Claims, IRS Claims, and
Indiana Claims; and (4) a new money contribution, the amount of
which will be set forth in the Sale Motion. The Sale Motion will
seek entry of an order approving procedures for the sale of the
Equity Interests in the Reorganized Debtor to establish an
appropriate market-test under Bank of America National Trust and
Savings Association v. 203 North LaSalle Street Partnership, 526
U.S. 434 (1999).
A copy of the Disclosure Statement dated Nov. 5, 2019, is available
at https://is.gd/3Vbz31 from PacerMonitor.com free of charge.
About Marine Builders
Marine Builders -- http://www.marinebuilders.net/-- is a
family-owned and operated company in the boat building business.
With 26-acre site and 14,000-square-foot of fabrication shop,
Marine Builders has both new construction and repair capabilities.
Founded in 1972, Marine Builders manufactures custom vessels,
ranging from work boats and barges to dry docks and excursion
vessels. Its subsidiary, Marine Industries Corporation, primarily
operates in the marine supplies business.
Marine Builders and Marine Industries filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bank. S.D. Ind.
Lead Case No. 19-90632) on April 25, 2019. In the petitions signed
by David A. Evanczyk, president and CEO, the Debtors estimated $1
million to $10 million in both assets and liabilities. The cases
are assigned to Judge Basil H. Lorch III. James R. Irving, Esq.,
at Bingham Greenebaum Doll LLP, represents the Debtors as counsel.
MATTHEWS INT'L: Moody's Alters Outlook on Ba3 CFR to Negative
-------------------------------------------------------------
Moody's Investors Service changed Matthews International
Corporation's outlook to negative from stable. At the same time,
Moody's affirmed the company's ratings, including the Ba3 Corporate
Family Rating, Ba3-PD Probability of Default Rating, and B2 rating
on the company's senior unsecured notes.
The change in outlook to negative reflects the company's
significant decline in profitability relative to Moody's previous
expectations, and consequently elevated financial leverage. Moody's
believes operating pressures in the SGK Brands Solutions segment
and the gradual secular decline in the Memorialization segment will
make it difficult to quickly reduce leverage through earnings
growth. Matthews' approaching April 2021 revolver and term loan
maturities also present refinancing risk. However, the facility has
significant unused availability, and Moody's expects the company
will refinance the facility without issue well ahead of it becoming
current.
Moody's nevertheless affirmed the Ba3 CFR because Matthews
continues to generate meaningfully positive free cash flow that
provides some flexibility to reduce debt and address the credit
facility maturities. Matthews' cost reduction initiatives and
repayment of $40 million of debt in the fourth quarter also
demonstrate an effort to reduce leverage.
Matthews reported preliminary fourth quarter and fiscal year end
results and also announced a $78 million goodwill impairment charge
of the Graphics Imaging unit in its SGK Brands Solutions segment.
Matthews reduced its adjusted EBITDA (as defined by the company)
guidance for the fiscal year ended September 30, 2019 to a range of
$219-$221 million from a previous level of $240-$250 million.
Moody's estimates the company's financial leverage on a debt/EBITDA
(Moody's adjusted) basis at around 4.9x for the same period, up
from 4.4x a year ago.
"The announcements highlight the challenging operating environment
in the company's two main segments, and combined with recent
challenges in the company's Industrial Technologies segment, the
company's profitability significantly declined relative to our
expectations," said Moody's lead analyst Oliver Alcantara. "The
recent swift deterioration in profitability suggests that the
challenging business conditions will likely persist into fiscal
2020, which will limit Matthews' ability to strengthen its
financial leverage profile over the next 12 months." added
Alcantara.
Affirmations:
Issuer: Matthews International Corporation
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5)
Outlook Actions:
Issuer: Matthews International Corporation
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Matthews International Corporation's (Ba3 CFR) credit profile
broadly reflects the company's leading position in two unrelated
markets and its consistent free cash flow generation, balanced by
ongoing organic revenue pressures and an acquisitive growth
strategy. Matthews retains market leading positions in the mature
memorialization and brand solutions industries. These markets
continue to face organic growth pressures that incentivize the
company to continue to consolidate the industries to enhance scale
and improve profitability through cost savings. The market
pressures intensified recently, significantly weakening the
company's profitability. Matthews' high 4.9x financial leverage on
a debt/EBITDA basis (Moody's adjusted for the FYE September 2019)
limits capacity to utilize debt to fund growth investments and
acquisitions.
Matthews' 3.0x debt-to-EBITDA target (based on the company's
calculation) is conservative but the company has been running above
this level for a number of years. Recent share repurchases are also
an aggressive use of cash when leverage is above the target level.
Moody's projects free cash flow in the $70 million range in fiscal
year 2020. Because earnings pressure will likely push
company-defined leverage further above the target to around 4.0x at
the end of 2019, Moody's expects the company to prioritize debt
reduction over share repurchases.
The negative outlook reflects the company's high financial leverage
and the uncertainty as to a potential stabilization in business
conditions over the next 12 months.
The ratings could be upgraded if the company demonstrates
consistent organic revenue growth and a strong track record of debt
repayment such that Moody's expects debt/EBITDA to be sustained
below 3.75x, and free cash flow/debt above 10%. The ratings could
be downgraded if the company is unable to stabilize and improve
operating performance because of competitive pressures or
integration challenges. More aggressive financial policies,
deterioration of liquidity or free cash flow, or debt/EBITDA
expected to be sustained above 4.75x could also lead to a
downgrade.
Matthews is a designer, manufacturer and marketer of
memorialization products, brand solutions and industrial automation
solutions based in Pittsburgh, PA. For the twelve months period
ended June 30, 2019, the company reported revenue of over $1.5
billion. The company is publicly traded (NASDAQ: MATW.)
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
MICHAEL D. COHEN: Disclosure Statement Hearing Reset to Dec. 12
---------------------------------------------------------------
Creditor Dawn Richardson filed with the U.S. Bankruptcy Court for
the District of Maryland, at Baltimore, a motion for continuance
and objection to the amended disclosure statement of debtor Michael
D. Cohen, M.D, P.A.
Accordingly, on Oct. 29, 2019, Judge David E. Rice ordered that a
hearing scheduled for Dec. 4, 2019, is continued to Dec. 12, 2019,
at 11:00 a.m. in Courtroom 9D of the U.S. Bankruptcy Court, U.S.
Courthouse, 101 West Lombard Street, Baltimore, Maryland 21201.
About Michael D. Cohen
Based in Maryland, Michael D. Cohen, M.D., P.A., d/b/a Cosmetic
Surgery Center of Maryland, d/b/a Belcara Health, d/b/a Belcara, is
a professional corporation engaged in the business of providing
various physician services to its patients, including but not
limited to services in the areas of plastic surgery, dermatology,
and podiatry. Michael D. Cohen, M.D., is the sole shareholder of
the Debtor. Shari L. Cohen, Dr. Cohen's wife, is responsible for
the business administration of the Debtor's medical practice.
Michael D. Cohen, M.D. and his wife, Shari L. Cohen jointly filed a
joint Chapter 11 petition (Bankr. D. Md. Case No. 16-21513) on Aug.
26, 2016.
The Company filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. D. Md. Case No. 16-22231) on Sept. 12,
2016. The Debtor estimated assets in the range of $100,000 to
$500,000 and liabilities in the range of $1 million to $10 million
as of the bankruptcy filing. The Company's and the Cohens' cases
are jointly administered under Case No. 16-22231.
The Company is represented by Irving Edward Walker, Esq., at Cole
Schotz P.C.
The Cohens are represented by Yumkas, Vidmar, Sweeney & Mulrenin,
LLC.
MILLWASP REALTY: Creditors to Get Payment from Sale of Property
---------------------------------------------------------------
Debtor Millwasp Realty LLC filed with the U.S. Bankruptcy Court for
the Eastern District of New York an amended disclosure statement
describing its Plan of Reorganization dated Oct. 7, 2019.
The mortgage of Antonio and Kim Attanasio in the sum of $300,000
will be impaired. The Attanasios are aware that if this Plan were
not to be confirmed and the sale were not to go forward it is
likely that NYCTL would sell the Properties at a tax lien sale and
the Attanasios will receive nothing. As a result, they have
tentatively agreed to reduce their claim to permit the NYCTL taxes
to be paid in full, administrative expenses to be paid and closing
costs to be paid. They will receive the entire balance. No funds
will be returned to any members of the LLC.
There are two unsecured claims. One of which is filed by the IRS
and one of which is filed by Consolidated Edison Company. The
Debtor has no knowledge in regard to these claims and will try to
work them out informally. If not, a claims objection may be filed.
The sale of the Debtor's real properties will result in the payment
of all Class 1 creditors, and a substantial distribution to the
Class 2 creditors. To the extent there are any Class 3 creditors
remaining, the Debtor shall pay them in full and Class 3 claims
will be withdrawn.
The Plan Proponent asserts that from the sale of the Properties the
Debtor after closing will be able to fund the Plan in full. This
takes into consideration that the Attanasios who hold a mortgage on
the property will accept whatever funds are remaining after the
payment to the NYCTL all closing and all administration expenses.
It is anticipated that the Attanasios will vote in favor of the
plan.
A full-text copy of the Amended Disclosure Statement dated Oct. 29,
2019, is available at https://tinyurl.com/y2y6nctc from
PacerMonitor.com at no charge.
The Debtor is represented by:
Law Offices of Gregory Messer
Gregory Messer, Esq.
26 Court Street, Suite 2400
Brooklyn, New York 11242
Tel: (718) 858-1474
About Millwasp Realty
Millwasp Realty LLC owns in fee simple mixed use buildings located
at 222 Bay Street Staten Island, NY 10301 and 224 Bay Street Staten
Island, NY 10301 having an aggregate current value of $2 million.
Millwasp Realty sought bankruptcy protection (Bankr. E.D.N.Y. Case
No. 18-44034) on July 12, 2018 to avoid a tax lien sale by NYCTL.
In the petition signed by Jill Sorrentino, managing member, the
Debtor disclosed $2 million in assets and $996,807 in liabilities.
The case is assigned to Judge Nancy Hershey Lord. Mark R.
Bernstein, Esq., at the Law Office of Gregory Messer, PLLC, is the
Debtor's counsel.
MILLWASP REALTY: Dec. 3 Disclosure & Plan Confirmation Hearing Set
------------------------------------------------------------------
On Oct. 7, 2019, debtor Millwasp Realty LLC filed with the U.S.
District Court for the Eastern District of New York a disclosure
statement and chapter 11 plan. On Oct. 29, 2019, Judge Nancy
Hershey Lord conditionally approved the revised disclosure
statement and ordered that:
* Dec. 3, 2019, at 1:45 p.m., is the hearing to consider final
approval of the conditionally approved disclosure statement and
confirmation of the plan to be held at the Eastern District of New
York at the U.S. Bankruptcy Courthouse located at 271-C Cadman
Plaza East, Courtroom 3577, Brooklyn, New York 11201.
* Nov. 26, 2019, is fixed as the deadline to file responses or
objections to final approval of the Conditionally Approved
Disclosure Statement or confirmation of the Plan.
About Millwasp Realty
Millwasp Realty LLC owns in fee simple mixed use buildings located
at 222 Bay Street Staten Island, NY 10301 and 224 Bay Street Staten
Island, NY 10301 having an aggregate current value of $2 million.
Millwasp Realty sought bankruptcy protection (Bankr. E.D.N.Y. Case
No. 18-44034) on July 12, 2018 to avoid a tax lien sale by NYCTL.
In the petition signed by Jill Sorrentino, managing member, the
Debtor disclosed $2 million in assets and $996,807 in liabilities.
The case is assigned to Judge Nancy Hershey Lord. Mark R.
Bernstein, Esq., at the Law Office of Gregory Messer, PLLC, is the
Debtor's counsel.
MLAC CASTLE ATLANTA: Case Summary & 2 Unsecured Creditors
---------------------------------------------------------
Debtor: The MLAC Castle Atlanta, LLC
1514 NE 105th St.
Miami Shores, FL 33138
Business Description: The MLAC Castle Atlanta, LLC is a Single
Asset Real Estate (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 12, 2019
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Case No.: 19-68220
Debtor's Counsel: Scott B. Riddle, Esq.
LAW OFFICE OF SCOTT B. RIDDLE, LLC
Suite 1800
3340 Peachtree Road, NE
Atlanta, GA 30326
Tel: 404-815-0164
Fax: 404-815-0165
E-mail: scott@scottriddlelaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Bryan Latham, manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at:
http://bankrupt.com/misc/ganb19-68220.pdf
MURPHY OIL: Fitch Rates $550MM Sr. Unsec. Notes 'BB+'
-----------------------------------------------------
Fitch Ratings assigned a 'BB+'/'RR4' rating to Murphy Oil
Corporation's $550 million in senior unsecured notes. Proceeds of
the bonds will be used along with cash on hand to tender for up to
$550 million aggregate principal amount of its outstanding 4.0%
senior notes due 2022 and 3.7% senior notes due 2022 and pay
premiums and other fees in connection with the tender.
Murphy's ratings reflect its balanced portfolio of onshore and
offshore North American assets, high exposure to liquids,
increasing FCF, strong credit metrics and manageable maturity
schedule. Fitch's views Murphy's recent transactions of selling its
Malaysian assets and adding to its North American portfolio as an
example of focusing to develop its core assets while at the same
time being credit accretive.
Although Murphy's leverage profile in terms of credit metrics is
general consistent with investment grade tolerances, the company
has a smaller production profile and reserve base and still needs
to grow and develop its core U.S. onshore and offshore assets.
KEY RATING DRIVERS
Asset Transactions: On March 21, 2019, Murphy announced the sale of
its Malaysian oil and gas assets for $2.127 billion in cash. Murphy
may also receive up to an additional $100 million contingent on
future drilling results prior to October 2020. The transaction
closed in second-quarter 2019 with an effective date of Jan. 1,
2019. Production from the Malaysian assets was expected to range
from 45,000 boepd to 47,000 boepd in 2019 (22% of total midpoint
production guidance) with a 60% oil cut. 2018 Net 1P reserves were
130 MMBoe (16% of total reserves) with 46% proved developed.
In April 2019, the company announced that it was acquiring the
producing assets from LLOG Exploration Offshore, LLC and LLOG
Bluewater Holdings, LLC, which were located in the Gulf of Mexico,
for $1.375 billion. The transaction added approximately 32,000
boepd-35,000 boepd of production and increases Murphy's Gulf of
Mexico production to approximately 85,000 boepd.
Fitch views the transactions as another step in Murphy's strategy
to focus on a few core basins, increase its future oil production
mix, and grow production and reserves while maintaining strong
credit metrics.
Growing Production Profile: Pro forma for the Gulf of Mexico
offshore assets acquisition and the Malaysian assets divestiture,
Fitch expects organic production to grow 7%-10% CAGR over the next
five years. Murphy is using a portion of its incremental cash flow
from the GOM acquisition to develop its Eagle Ford assets.
Production from the Eagle Ford declined to 44,000 boepd from 61,000
boepd in 2015 partly due to capital being allocated to other
assets. Production has since rebounded to 51,000 boepd in
third-quarter 2019. Fitch views the increased development of this
core asset and the potential incremental production as a credit
positive.
FCF Neutral: Fitch anticipates Murphy to become FCF neutral in
fourth-quarter 2019 following deficits from higher capital spending
and the loss of the Malaysian assets. Fitch defines FCF after
common dividends, which is the primary reason for the deficits. As
production increases Fitch expects Murphy to become FCF positive in
the long term at a $55/bbl oil price.
Manageable Maturities Profile: The revolver matures in 2023 and the
next bond maturities are not until 2022 when two bonds come due for
a combined $1.1 billion. The announced bond transaction is expected
to reduce those maturities in half.
Diverse Operations: Murphy has an oil-weighted production profile
with principal positions in the Eagle Ford, Montney, Duvernay as
well as the U.S. Gulf of Mexico, and Canada. In addition, Murphy
has a portfolio of exploratory assets in offshore Mexico, Vietnam,
Australia and Brazil. Murphy is managing its exploratory budget to
be no more than 10% of its capital expenditure budget, although
recent history has been closer to 7%-8%.
Fitch is concerned the company's diverse set of exploration
opportunities may encourage a deviation from its stated 10% target
for exploratory spending. Presently, Fitch believes the pace and
cost of Murphy's exploratory program is manageable.
DERIVATION SUMMARY
Murphy is a mid-sized independent E&P with a diverse, global
resource base in various stages of exploration, development and
growth. Full year average production is approximately 192,000 boepd
as of Sept. 30, 2019. Despite the increase, MUR remains below
Concho Resources (BBB/Stable), Continental Resources (BBB-/Stable)
and Hess Corporation (BBB-/Negative). MUR's netback at $31.6 is
above most of its peers, including Noble Energy Inc.
(BBB-/Positive), Hess, Continental and Concho. Pro forma proved 1P
reserves of approximately 760 mmboe are more in line with high 'BB'
credits and well below its investment-grade pers. MUR's 2018
debt/EBITDA is 1.9x; however, Fitch projects that the divestiture
and organic growth will move the ratio slightly lower, which is
more in line with 'BBB-' issuers, such as Hess, and Continental.
KEY ASSUMPTIONS
- WTI oil price of $57.50 in 2019 and 2020, and long-term price
of $55.00;
- Henry Hub gas price of $2.75 in 2019 and long-term price of
$2.75;
- Production of 175 mboe/d in 2019 and growing at a 7% CAGR
thereafter;
- Liquids mix of 65% in 2019 and beyond;
- Capex of $1.35 billion-$1.45 billion and FCF neutral in 2019
and slightly positive over the forecast period;
- Dividend payments 10% lower than 2018 from a lower share
count.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Increased operational focus on core basins (Eagle Ford, GOM) in
terms of growing production;
- Clear and conservative capital allocation and financial policy
that demonstrates capital spending, shareholder return, and M&A
discipline;
- Adhering to management's stated policy of no more than 10% of
the capital budget in exploratory projects;
- Increasing production above 200mboepd;
- Lease adjusted FFO Gross Leverage below 2.0x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Mid-cycle debt greater than 2.5x or higher;
- Change in financial policy that results in capital allocated
away from core assets;
- Mid-cycle debt/flowing barrel above $20,000/boe or debt/proved
developed reserves of over $6.00/boe on a sustained basis;
- Lease adjusted FFO Gross Leverage above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: Murphy had cash on hand of $435 million as of
Sept. 30, 2019 and full availability under its $1.6 billion credit
facility. The next maturity is in 2022 when two bond issues are due
for a combined $1.1 billion. The proposed bond issuance is expected
to cut that maturity in half to $550 million. The company also
completed its $500 million stock repurchase plan during
fourth-quarter 2019.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material adjustments that are not disclosed
within the company's public filings.
MURPHY OIL: Moody's Rates New Sr. Unsec. Notes Due 2027 'Ba2'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Murphy Oil
Corporation's proposed senior unsecured notes due 2027. The net
proceeds from the new notes offering will be used to fund tender
offers for part of its outstanding 4.0% and 3.7% notes due 2022.
Murphy's existing ratings, including its Ba2 Corporate Family
Rating, Ba2-PD Probability of Default Rating, Ba2 ratings on the
senior unsecured notes and SGL-1 Speculative Grade Liquidity rating
are unchanged. The rating outlook is stable.
"The proposed debt offering, and subsequent tender and repayment of
existing notes will improve Murphy's maturity profile, while not
materially impacting leverage," said James Wilkins, Moody's Vice
President -- Senior Analyst.
Assignments:
Issuer: Murphy Oil Corporation
Gtd. Senior Unsecured Notes, Assigned Ba2 (LGD4)
Senior Unsecured Shelf, Assigned (P)Ba2
RATINGS RATIONALE
Murphy's proposed notes are rated Ba2, the same level as the Ba2
CFR and Ba2 rating on the existing notes. The company's capital
structure is comprised of an unsecured revolving credit facility
and unsecured notes. The revolving facility benefits from upstream
guarantees from the operating companies that make the senior notes
structurally subordinated to the claims under the revolving credit
facility. Moody's does not expect Murphy to actively use the
facility. In addition, the company's asset coverage of debt will
remain strong. Accordingly, Moody's believes that the Ba2 rating is
more appropriate for the notes than the rating suggested by the
Moody's Loss Given Default Methodology. A more active use of the
facility than expected could result in the downgrade of the notes.
The new senior unsecured notes rank pari passu with Murphy's
existing senior unsecured notes.
The Ba2 CFR reflects Murphy's diversified portfolio of onshore and
offshore assets, significant scale, oil-weighted production and
modest leverage for the rating. Its onshore production is sourced
from the Eagle Ford shale and Canada, while its offshore production
is predominately in the US Gulf of Mexico (GOM). Murphy bolstered
its deep water US GOM position with the acquisition of assets from
LLOG in the second quarter 2019 and subsequently divested its
Malaysia assets in July 2019. Approximately two-thirds of
production (adjusted for assets purchased / sold) is liquids.
Following the aforementioned transactions and its US GOM joint
venture with Petrobras America Inc. (PAI) established in the fourth
quarter 2018, Murphy has scale typical of a higher rated entity.
Moody's expects the company to lower its leverage by growing its
production volumes and generating higher earnings. However, the
company has certain execution risks associated with integrating its
acquisitions and growing its operations. Moody's believes there are
higher exploration risks associated with developing its deep water
US GOM assets compared to its onshore Eagle Ford shale and Canadian
onshore assets. The company reduced its negative free cash flow
(after dividends) in 2017-2018, and has turned free cash flow
positive in Q3 2019, since its portfolio realignment.
Murphy's stable outlook reflects Moody's expectation that the
company will grow its production and maintain very good liquidity.
The Ba2 ratings could be upgraded if the company demonstrates
consistent production growth funded within its cash flow, while
sustaining solid leverage profile with retained cash flow to debt
above 40% and a leveraged full-cycle ratio (LFCR) of at least 2x.
Murphy's ratings could be downgraded if retained cash flow to debt
falls towards 25% or the LFCR falls below 1.5x or the company
generates sustained negative free cash flow beyond 2020.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
Murphy Oil Corporation, headquartered in El Dorado, Arkansas, is an
independent E&P company with producing and/or exploration
activities in the US and Canada, as well as in Mexico, Australia,
Brazil and Vietnam. Murphy estimates it had 760 MMboe of proved
reserves following the divestiture of its Malaysian assets.
MURRAY ENERGY: Has Plan Deal WIth Term Lenders and Shareholders
---------------------------------------------------------------
Murray Energy Holdings Company, Murray Energy Corporation, and
certain of their direct and indirect subsidiaries have reached a
Restructuring Support Agreement dated as of October 28, 2019, with
holders of claims under the Superpriority Credit Agreement holders
of Class A Shares and Class B Shares.
The plan term sheet attached to the RSA sets forth the indicative
terms of a proposed restructuring of the Company to be implemented
through a purchase of the Company by a new entity (Murray NewCo) to
be formed at the direction of certain holders of the Superpriority
Term Loan through a chapter 11 plan.
The Plan will provide for the sale of the Purchased Assets to
Murray NewCo, a special purpose vehicle to be formed at the
direction of certain of the Consenting Superpriority Lenders.
The Company will fund the Chapter 11 Cases with (i) cash on hand,
and (ii) a new money debtor in possession term loan facility in an
amount of up to $350 million to be funded by the members of the Ad
Hoc Group of Superpriority Lenders and other Superpriority Lenders
that choose to participate in the DIP Term Facility.
On the Effective Date, in full and final satisfaction and
settlement and in exchange of such claims, each holder of an
allowed Term Loan Claim, 1.5L Notes Claim, 2L Notes Claim, and
General Unsecured Claim will receive its pro-rata share of a
distribution to which it is legally entitled under the Bankruptcy
Code, if any, after payment in full in cash of the DIP Claims and
Superpriority Claims, and the Required Plan Payments.
On the Plan Effective Date, Mr. Robert E. Murray shall be the
Chairman of the New Board with responsibilities to be determined by
the New Board. As part of his compensation for services as Chairman
of the New Board, Mr. Robert E. Murray shall receive equity in
Murray NewCo in an amount to be determined by the New Board and
shall continue to receive the same health benefits he currently
receives from the Company.
A full-text copy of the RSA dated October 29, 2019, is available at
https://tinyurl.com/y4jpkrly from PacerMonitor.com at no charge.
About Murray Energy
Headquartered in St. Clairsville, Ohio, Murray Energy --
http://murrayenergycorp.com/-- is the largest privately owned coal
company in the United States, producing approximately 76 million
tons of high quality bituminous coal each year, and employing
nearly 7,000 people in the United States, Colombia and South
America.
Murray Energy now operates 15 active mines in five regions in the
United States, plus two mines in Colombia, South America. It
operates 12 underground longwall mining systems, 42 continuous
mining units, 10 transloading facilities, and five mining equipment
factory and fabrication facilities.
Murray Energy and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Ohio Lead Case No. 19-56885) on
Oct. 29, 2019.
At the time of the filing, the Debtors disclosed assets of between
$1 billion and $10 billion and liabilities of the same range.
The cases have been assigned to Judge John E. Hoffman Jr.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel; Dinsmore & Shohl
LLP as local counsel; Evercore Group L.L.C. as investment banker;
Alvarez and Marsal L.L.C. as financial advisor; and Prime Clerk LLC
as notice and claims agent.
NEAL ELECTRIC: UCB Seeks to Prohibit Use of Cash Collateral
-----------------------------------------------------------
United Community Bank requests the U.S. Bankruptcy Court for the
Northern District of Georgia to prohibit Neal Electric, Inc., from
any use of collateral and require that all proceeds of the
collateral be segregated and placed in a separate interest bearing
account.
UCB is a holder of that certain promissory note executed by the
Debtor in the principal amount of $84,559, secured by all
inventory, equipment and accounts including deposit accounts, money
or rights to payment, whether of the foregoing is owned nor or
acquired later..
UCB holds a security interest in the Debtor's accounts receivable
and the proceeds thereof, including, but not limited to, payments
made to the Debtor. The Debtor's revenue is subject to potential
dissipation and/or loss of cash collateral without an Order from
the Court providing protection to UCB.
Since the Petition Date, the Debtor is believed to have been using
and/or dissipating the UCB's interest in the cash collateral.
Accordingly, UCB asks the Court to direct the Debtor to identify
and provide an accounting of: (a) cash on hand as of the Petition
Date; (b) accounts receivable, including payments due (or received)
from other parties as of the Petition Date; (c) all proceeds of
inventory held by the Debtor as of the Petition Date; (d) all
inventory in the possession of the Debtor as of the Petition Date
(and to the extent such inventory has been sold post petition, and
all proceeds thereof).
UCB does not consent to the use of cash collateral and demands
turnover. Alternatively, in the event the Court permits the
Debtor's use of cash collateral, UCB requests adequate protection
by the Court to protect its cash collateral. To the extent the
Debtor has used the cash collateral since the Petition Date, UCB
asserts that it is entitled to replacement liens, adequate
protection payments, and administrative claim, and/or sanctions.
About Neal Electric
Based in Mcdonough, Georgia, Neal Electric Inc. filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 19-65232) on Sept. 26, 2019. In the petition signed by
Clifford Mowery, chief financial officer/VP, the Debtor was
estimated to have under $1 million in both assets and liabilities.
Joseph Chad Brannen, Esq., at The Brannen Firm, LLC, is the
Debtor's counsel.
No official committee of unsecured creditors has been appointed in
this case.
NEST EXTENDED: 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
Nest Extended Stay LLC, according to court dockets.
About Nest Extended Stay
Nest Extended Stay LLC owns a hotel property known as Nest Extended
Stay located at 12 E. Main Street Chanute, KS 66720 having a
current value of $1.15 million. Nest Extended Stay filed a Chapter
11 petition (Bankr. M.D. Fla. Case No. 19-09578) on Oct. 9, 2019,
in Tampa, Fla. In the petition signed by Caleb Walsh, authorized
representative, the Debtor listed total assets at $1,293,500 and
total liabilities at $951,372. The case is assigned to Judge Caryl
E. Delano. Tampa Law Advocates, P.A., A Private Law Firm is the
Debtor's counsel.
NEW BEGINNERS: Unsecureds to Recover 100% With Interest in 3 Years
------------------------------------------------------------------
The New Beginners Church Inc. filed a Plan of Reorganization and
Disclosure Statement.
General Unsecured Creditors owed $2,600 (Class X) will receive a
promissory note which provides that each holder shall receive 100%
of its claim, to be paid quarterly over a period of 36 months with
interest to be paid at the Till rate of 7 percent per annum.
Quarterly payments are estimated to be $241, in the aggregate.
The Debtor anticipates that the Reorganized Debtor will have
sufficient funds to pay debt obligations pursuant to the terms
specified in this Plan. The offerings are anticipated to be
sufficient to pay all debt obligations as a result, in part, as the
Church has taken steps to reduce its monthly outgoing expenses.
A copy of the Disclosure Statement is available at
https://is.gd/x88lJg from PacerMonitor.com free of charge.
About The New Beginners Church Inc.
The New Beginners Church was established by Dr. Emma J. Terrell on
April 3, 1988. The first location of the church was in her home.
The church started growing and moved to new locations in order to
accommodate this growth. Dr. Terrell was joined by her son Howard
R. Terrell Jr. who started different outreach programs. In 1996
New Beginners entered into an agreement to purchase 16 acres at
7000 Burlington Road in Whitsett, North Carolina. New Beginners
continued to thrive and soon outgrew the existing building on the
land and in 2000 built a bigger sanctuary. This created another
financial burden but the church was able to maintain the debt
structure. In 2014, Dr. Terrell's husband became ill and this
required a large time commitment and in 2017 he died suddenly.
The New Beginners Church, Inc. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 19-10385) on April
9, 2019. The Debtor tapped the Law Firm of Ivey, McClellan, Gatton
& Siegmund as its bankruptcy counsel.
OAKLEY GRADING: Joseph Oakley to Get Equipment in Trustee Plan
--------------------------------------------------------------
The Chapter 11 Trustee of Oakley Grading and Pipeline filed a
Disclosure Statement for his proposed Second Amended Plan of
Reorganization for the Debtor.
According to the Second Amended Disclosure Statement, the Trustee
is asserting claims of approximately $2,000,000 against Jamie
Hughes (25% membership interest in the Debtor) and Jonathan Hughes
(25% membership interest). The Trustee, and also in his capacity
as the proposed Liquidating Trustee, believes that he has grounds
to recover against the Defendants in the Hughes Adversary
Proceeding, and the Plan is funded, in part, from any such
recoveries. If the Trustee is not successful in his claims against
the Hughes or is unable to collect a judgment(s) entered against
one or more of the Hughes, the distribution to Allowed Claims under
the Plan may be reduced. The Defendants in the Hughes Adversary
Proceeding dispute that the Trustee has grounds to recover against
them. The Trustee disputes the allegations made by the Hughes
against Debtor and/or the Trustee and denies that the Hughes have
grounds to recover from Debtor and/or the Trustee.
Joseph Oakley (50% membership interest) will have an allowed
claim against the Estate in the amount of $211,067.69 on account of
its unsecured claim. In exchange payment of the "Purchase Price",
pursuant to 11 U.S.C. Sec. 363, of Oakley will purchase and the
Trustee shall transfer and assign to Oakley (collectively, the
"Purchased Assets"): (a) all equipment owned by Debtor and listed
on Schedule II (the "Purchased Equipment") and (b) all executory
contracts and agreements to which Debtor is a party, but excluding
contracts with Prestwick Construction Company, LLC and/or Cablik
Enterprises LLC (the "Assigned Contracts"). The Allowed Oakley
Unsecured Claim will be expunged on the Effective Date and Oakley
will receive no distribution on account of the Allowed Oakley
Unsecured Claim. The "Purchase Price" means (a) an amount equal to
the greater of (x) 25% of the gross proceeds of the Assigned
Contracts and (y) $100,000 plus (b) Oakley's waiver, discharge and
release of the Allowed Oakley Unsecured Claim. The Purchase Price
will be due and payable in full on the date that is five years
after the Petition Date; provided, however, that within 10 business
days of Oakley's receipt of any funds, cash or other property on
account of work performed in connection with the Assigned
Contracts, Oakley will pay the Trustee 25% of the gross proceeds
received by Oakley on account of the Assigned Contracts. Oakley
shall provide the Trustee with such documents and other information
as the Trustee reasonably requests, including without limitation
accounts receivable reports and bank account information, to verify
the status of the Assigned Contracts and Oakley'[s receipt of
proceeds relating to same. Oakley's payment obligation shall be
evidenced by a promissory note payable to the Trustee and secured
by the Purchased Assets (together with all products, proceeds and
income relating thereto). Oakley will execute a promissory note
and security agreement in a form satisfactory to the Trustee.
A black-lined copy of the Trustee's Second Amended Disclosure
Statement is available at https://tinyurl.com/yydkq6e5 from
PacerMonitor.com at no charge.
Special Counsel to Theo D. Mann, Chapter 11 Trustee
for the bankruptcy estate of Oakley Grading and Pipeline, LLC
Lisa Wolgast
Talia Wagner
MORRIS, MANNING & MARTIN, LLP
3343 Peachtree Road, N.E.
Suite 1600
Atlanta, Georgia 30326
Tel: (404) 233-7000
About Oakley Grading and Pipeline
Oakley Grading and Pipeline LLC is a privately held grading
contractor in Newnan, Georgia.
Oakley Grading and Pipeline, through its receiver, filed a Chapter
11 petition (Bankr. N.D. Ga. Case No. 18-10743) on April 9, 2018.
In the petition signed by Vic Hartman, receiver, the Debtor
disclosed $305,729 in total assets and $2.56 million in total
liabilities. Kathleen G. Furr, Esq., and Kevin A. Stine, Esq., at
Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., serve as the
Debtor's counsel.
On April 3, 2018, the U.S. Trustee filed a notice appointing Theo
D. Mann as Chapter 11 trustee for Debtor. The Chapter 11 Trustee
hired Mann & Wooldridge, P.C., as counsel, and Morris Manning &
Martin, LLP, as special counsel.
OFFICE BARGAIN CENTER: Must File 2nd Amended Plan by Nov. 15
------------------------------------------------------------
Judge Robert A. Mark from the U.S. Bankruptcy Court for the
Southern District of Florida held a status conference Oct. 29,
2019, and ordered Office Bargain Center 2011 to file a Second
Amended Plan and Second Amended Disclosure Statement by Nov. 15,
2019.
The Court will renotice a hearing on SunTrust's Expedited Motion
for Relief from Stay or, in the Alternative, for Dismissal or
Conversion of Chapter 11 Case for the same date and time as the
disclosure hearing on the Second Amended Disclosure Statement.
If the Debtor fails to file a Second Amended Plan and Disclosure
Statement by Nov. 15, 2019, SunTrust may file a motion to set the
SunTrust Motion for hearing.
About Office Bargain Center 2011
Office Bargain Center 2011, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. S.D. Fla. Case No. 19-10226-RAM) on Jan. 7, 2019.
At the time of the filing, the Debtor had estimated assets of less
than $50,000 and liabilities of less than $1 million. The case has
been assigned to Judge Robert A. Mark. The Debtor hired Weiss
Serota Helfman Cole & Bierman, P.L., as its legal counsel.
OLMA XXI INC: Seeks to Hire Wisdom Professional as Accountant
-------------------------------------------------------------
Olma XXI, Inc., seeks authority from the U.S. Bankruptcy Court for
the Eastern District of New York to employ Wisdom Professional
Services, Inc., as accountant to the Debtor.
Olma XXI, Inc., requires Wisdom Professional to:
a. gather and verify all pertinent information required to
compile and prepare monthly operating reports; and
b. prepare monthly operating reports for the Debtor.
Wisdom Professional will be paid $300 per report.
Wisdom Professional received an initial retainer of $2,000 on July
30, 2019.
Wisdom Professional will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Michael Shtarkman, a partner at Wisdom Professional Services,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Wisdom Professional can be reached at:
Michael Shtarkman
WISDOM PROFESSIONAL SERVICES, INC.
2546 E 17th St.
Brooklyn, NY 11235
Tel: (718) 554-6672
About Olma XXI, Inc.
Olma-XXI, Inc., based in Brooklyn, NY, filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 19-44731) on Aug. 1, 2019. In the
petition signed by Valeri Eliachov, president, the Debtor disclosed
$246,471 in assets and $1,965,500 in liabilities.
The Hon. Nancy Hershey Lord oversees the case. Alla Kachan, Esq.,
at the Law Offices of Alla Kachan, P.C., serves as bankruptcy
counsel to the Debtor.
OWENS PRECISION: Case Summary & 2 Unsecured Creditors
-----------------------------------------------------
Debtor: Owens Precision, Inc.
5966 Morgan Mill Road
Carson City, NV 89701
Business Description: Owens Precision, Inc. --
http://owensprecision.com/-- is a Carson
City, Nevada-based CNC machining shop that
providescontract manufacturing services to
the aerospace, defense, semiconductor, and
process control industries.
Chapter 11 Petition Date: November 12, 2019
Court: United States Bankruptcy Court
District of Nevada (Reno)
Case No.: 19-51323
Judge: Hon. Bruce T. Beesley
Debtor's Counsel: Brittany Marie Woodman, Esq.
THE VERSTANDIG LAW FIRM, LLC
261 Whitewater Village Court
Henderson, NV 89012
Tel: 301 444-4600
Email: BRITT@MBVESQ.COM
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James Mayfield, president and director
of Owens Precision, Inc.
A copy of the Debtor's list of two unsecured creditors is available
for free at:
http://bankrupt.com/misc/nvb19-51323_creditors.pdf
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nvb19-51323.pdf
PARK MONROE: Northeast Brooklyn Has 6% for Unsecureds
-----------------------------------------------------
Northeast Brooklyn Partnership, a debtor-affiliate of Park Monroe
Housing Development Fund Corporation, has filed a Chapter 11 plan
and disclosure statement.
The Disclosure Statement, as amended, provides that general
unsecured claims will be paid by the Debtor, in Cash, on a
pro-rata basis. The Debtor projects an estimated distribution of
approximately 6 cents on the dollar on General Unsecured Claims,
which include certain claims of affiliates of the Debtor.
The Plan provides for the Debtor to sell its key assets, the
Debtor's five residential buildings in Brooklyn, New York, roperty,
and pay creditors from the proceeds of sale, the "Implementation
Funds." The sale is contemplated to achieve proceeds sufficient to
pay all allowed administrative, priority and secured claims in
full, and otherwise provide a return to unsecured claims.
The proposed purchaser is 27 BED STUY LLC, a special purpose entity
organized by ELH Mgmt, LLC. The principal of ELH Mgmt. LLC asserts
that it is a sophisticated real estate investor that directly or
indirectly owns multiple properties throughout New York City and
elsewhere. The principal further asserts that the Purchaser will
have the financial resources to consummate the transaction once the
necessary Court approvals are obtained.
The Debtor and the Purchaser will close on the Sale of the Property
on the terms set forth and according to the Sale Contract. The
Purchase Price is $4,300,000 plus the assumption and assignment,
and cure, of all tenant leases as set forth in the Sale Contract.
The Sale Proceeds are the source of the Implementation Funds and
therefore, all distributions depend upon the closing and funding of
the Sale.
The Purchaser was located with the assistance of CPEX Real Estate
as real estate broker for the Debtor. CPEX Real Estate is entitled
to a broker fee of 2% for its services.
A full-text copy of the Amended Disclosure Statement dated Oct. 29,
2019, is available at https://tinyurl.com/yxgmubas from
PacerMonitor.com at no charge.
On Oct. 23, 2019, the U.S. Bankruptcy Court for the Eastern
District of New York approved the Disclosure Statement and
scheduled a hearing to consider confirmation of the Plan starting
on Nov. 13, 2019.
Northeast Brooklyn is represented by:
ARCHER & GREINER, P.C.
Allen G. Kadish
Harrison H.D. Breakstone
630 Third Avenue
New York, New York 10017
Tel: (212) 682-4940
E-mail: akadish@archerlaw.com
hbreakstone@archerlaw.com
About Park Monroe Housing Development
Park Monroe Housing Development Fund Corporation is a
not-for-profit and tax-exempt corporation that develops a housing
project for persons of low income, pursuant to Section 573 of
Article XI of the New York Private Housing Finance Law. The
Company's primary tangible assets are located at 477 Saratoga
Avenue a/k/a 1352-1354 East New York Avenue, Brooklyn, N.Y.; 1350
Park Place, Brooklyn, N.Y.; 180 Grafton Street, Brooklyn, N.Y.; 257
Mother Gaston Boulevard, Brooklyn, N.Y.; and 249-251 Mother Gaston
Boulevard, Brooklyn, N.Y.
984-988 Greene Avenue Housing Development Fund is a not-for-profit
corporation whose tangible assets are properties located at 984-988
Greene Avenue, Brooklyn, N.Y. Its assets are used consistent with
its charitable purposes of providing affordable housing units for
families of low income in the central sections of Brooklyn, N.Y.
Northeast Brooklyn Partnership is a for-profit partnership whose
primary tangible assets are properties located at 409 Kosciuszko
Street, Brooklyn, N.Y.; 403 Kosciuszko Street, Brooklyn, N.Y.; 399
Kosciuszko Street, Brooklyn, N.Y.; 397 Kosciuszko Street, Brooklyn,
N.Y.; 675 Halsey Street, Brooklyn, N.Y.; and 671 Halsey Street,
Brooklyn, N.Y.
Park Monroe and its affiliates sought Chapter 11 protection
(Bankr.E.D.N.Y. Case Nos. 19-40820 to 19-40823) on Feb. 11, 2019.
The petitions were signed by Jeffrey E. Dunston, president and CEO.
At the time of filing, the Debtors were each estimated to have
assets and liabilities under $10 million. The Debtors are
represented by Allen G. Kadish, Esq., of Archer & Greiner, P.C.
PGX HOLDINGS: Moody's Lowers CFR to Caa2, Outlook Negative
----------------------------------------------------------
Moody's Investors Service downgraded PGX Holdings, Inc.'s Corporate
Family Rating to Caa2 from Caa1 and its Probability of Default
Rating to Caa2-PD from Caa1-PD. Concurrently, Moody's downgraded
Progrexion's first lien senior secured term loan to Caa1 from B3
and affirmed its second lien senior secured term loan at Caa3. The
outlook remains negative.
The downgrade to Caa2 and negative outlook reflects the heightened
near-term default risk due to rising uncertainty in completing the
refinancing of its bank debt, ongoing legal challenges and concerns
on the company's liquidity given tight financial covenants and lack
of revolver. The downgrade also reflects the company's persistently
weak operating performance and elevated execution risk due to
business repositioning.
Moody's expects that the company will face even greater challenges
in 2020 stemming from Google's newest policy ban on credit repair
services paid ads on its platform, which could materially impair
Progrexion's ability to generate new leads through this marketing
channel. Management estimates that approximately 15-18% of the
company's new leads have come from paid advertising on Google. The
new policy will take effect in November. As such, Progrexion's
refinancing plans are currently on hold until management determines
the financial impact on the company. Furthermore, uncertainty
surrounding potential obligations stemming from ongoing CFPB
investigation continues to also weigh on the refinancing risk.
Given these concerns, Moody's believes that Progrexion will be
challenged to improve its revenue and earnings, and the potential
for covenant breach or a default event is high over the next 6-12
months.
Moody's took the following rating actions on PGX Holdings, Inc.:
Affirmations:
Issuer: PGX Holdings, Inc.
Senior Secured 2nd lien Term Loan, Affirmed Caa3 (LGD5)
Downgrades:
Issuer: PGX Holdings, Inc.
Corporate Family Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD
Senior Secured 1st lien Term Loan B, Downgraded to Caa1 (LGD3) from
B3 (LGD3)
Outlook Actions:
Issuer: PGX Holdings, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
The Caa2 CFR reflects the heightened probability of near-term
default risk due to approaching debt maturities, challenges of
turning around the company's negative operating trend, a
deteriorating liquidity profile, ongoing overhang from the CFPB
investigation, as well as Moody's expectation that a material
near-term reversal in the negative trends is unlikely. Moody's
expects earnings and cash flows to decline in 2020, which will lead
to increased debt leverage and a potential financial covenant
breach over the next 6 months. Progrexion's first lien term loan
matures in September 2020 and its second lien term loan matures in
September 2021. The company had $38.3 million of cash at the end of
September 30, 2019 but does not have a revolving credit facility.
Positively, the company's leading position in the niche credit
repair services industry through its well-recognized brands,
Lexington Law and CreditRepair.com, provide credit support.
Progrexion benefits from its direct relationships with the
principal consumer credit reporting agencies and ongoing support of
the agencies is critical to the company's operations.
The negative outlook reflects Progrexion's weak liquidity,
refinancing risk, and weak operating performance.
The ratings could be downgraded if Moody's believes that: (i)
Progrexion's liquidity will deteriorate further because of delays
in refinancing upcoming debt maturities, (ii) free cash flow turns
negative, or (iii) probability of default increases.
The ratings could be upgraded if (i) Progrexion successfully
refinances its upcoming debt maturities at a manageable interest
cost, (ii) sustains profitable revenue growth and expanding margin,
and (iii) maintains adequate liquidity.
Social and governance considerations are material to Progrexion's
credit profile. Progrexion is exposed to social risks arising from
potential changes in customer relations and regulatory violations.
The consumer credit reporting industry has attracted heightened
scrutiny from the federal and state government and agencies, which
give rise to potential consumer and/or government litigation. Over
the last three years Progrexion has been under a civil
investigation by the CFPB, which alleges the company has engaged in
unlawful advertising and marketing practices of its credit repair
services to consumers. In addition, Google recently introduced new
restrictions that prohibit paid advertising of credit repair
services on its platform. Among governance considerations, PGX's
financial policies are aggressive driven by high financial
leverage, weak operational execution, and poor track record of
meeting its financial forecasts.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Progrexion is a leading provider of credit report repair services
in the United States. The company helps consumers access and
understand information contained in their credit reports to correct
errors and address other factors that may negatively impact their
credit scores. Additional product offerings include services
focused on credit monitoring, identity protection, credit reports
and scores. Progrexion's services are offered on a subscription
basis through CreditRepair.com, its wholly-owned subsidiary, and
Lexington Law, an independently-owned law firm. The company has
been majority owned by private equity firm H.I.G. Capital since
2010. Progrexion reported approximately $357 million of net
revenues for the twelve months ended September 30, 2019.
PLAYTIKA HOLDING: Moody's Assigns Ba3 CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service assigned a Ba3 Corporate Family Rating
and Ba3-PD Probability of Default Rating (PDR) to Playtika Holding
Corp. in connection with the company's proposed debt
recapitalization. Playtika's proposed $250 million first lien
revolving credit facility and $2.5 billion first lien term loan B
were assigned ratings of Ba3, in line with the CFR. The rating
outlook is stable.
Proceeds from the proposed debt issuance in addition to about $118
million of balance sheet cash will be used to refinance existing
indebtedness as well as pay associated transaction fees and
expenses.
Assignments:
Issuer: Playtika Holding Corp.
Corporate Family Rating, Assigned Ba3
Probability of Default Rating, Assigned Ba3-PD
Senior Secured 1st lien Term Loan B, Assigned Ba3 (LGD4)
Senior Secured 1st lien Revolving Credit Facility, Assigned Ba3
(LGD4)
Outlook Actions:
Issuer: Playtika Holding Corp.
Outlook, Assigned Stable
The assignment of ratings remains subject to Moody's review of the
final terms and conditions of the proposed financing that is
expected to close by the end of 2019.
RATINGS RATIONALE
The Ba3 CFR reflects Playtika's relatively high initial leverage
pro forma for the proposed refinancing, its limited track record of
performance as a standalone entity, and limited history of
performance through various economic cycles. For the LTM period
ended June 30, 2019, Moody's adjusted leverage was about 4.5x.
Moody's forecasts adjusted leverage to decline to approximately 4x
in the next 12-18 months.
The rating also considers both Playtika's limited end-market
diversification, as the company offers various mobile gaming
applications via various mobile and internet application platforms
with the vast majority of revenues generated through in-app
purchases. Playtika is also expected to be highly acquisitive as
the company's strengths lie primarily in keeping casual users
engaged with its products and converting them into paying
customers. Rather than developing regular major game releases, the
company is expected to acquire less profitable game studios with
existing customer bases which can be converted into paying
customers over time by adding features and content personalized to
users and increasing engagement.
Moreover, Playtika is smaller in scale relative to competitors such
as Tencent Holdings Limited, Activision Blizzard, Inc. and
Electronic Arts, Inc., which also have more flexible capital
structures and more diversified revenue streams. There is potential
for competitors to pivot toward Playtika's strategy of acquiring
existing game studios with substantial user bases which could drive
up M&A valuations over time.
The rating is supported by Playtika's leading market position
within the category of casino-themed and casual mobile gaming
market sub-segments which have experienced rapid growth over the
past 5-10 years with the proliferation of social networking and
smart phone ubiquity. The rating is also supported by Playtika's
high profitability, with EBITDA margins in the mid to high 30%
range, robust free cash flow generation capabilities and prospects
for rapid deleveraging which result from its strong capabilities in
content personalization and monetization.
Though leverage is currently considered high, Moody's expects that
Playtika will maintain a moderate financial strategy over time. The
company is 100% controlled by Giant Network Group and, Giant's
chairman Yuzhu Shi, is also a significant investor in Playtika
Holding Corp's indirect holding company parent Alpha Frontier.
The stable outlook reflects Moody's expectation that Playtika will
generate low double-digit percentage revenue and EBITDA growth over
the next 12-18 months which will support deleveraging and strong
cash flow generation. The stable outlook also reflects the
company's strong interest coverage levels.
Ratings could be downgraded if Playtika were expected to have more
aggressive financial policies over time which could be evidenced by
large debt-funded acquisitions or further shareholder returns.
Ratings could also face downward pressure if the company were to
experience material diminution of earnings growth or cash flow
generation due to end-market declines or competitive pressures.
Playtika's ratings could be upgraded if the company were to reduce
leverage materially such that Moody's adjusted debt to EBITDA was
sustained below 3x while also maintaining strong profit and revenue
growth profiles.
Playtika's liquidity is considered very good, supported by an
expected closing cash balance of about $221 million, expectations
for annualized free cash flow generation of at least $150 million
over the next 12-18 months, and a $250 million revolving credit
facility which will be undrawn at the close of the transaction but
could be used for letters of credit or acquisition activity.
The Ba3 rating for Playtika's proposed bank credit facilities
reflects a Ba3-PD PDR and the company's covenant-lite, single-class
debt structure. The first lien credit facilities are guaranteed by
existing and subsequently acquired direct or indirect material
wholly-owned restricted subsidiaries of Playtika Holding Corp
located in the US, UK and Israel subject to certain limitations and
exceptions and will require, after closing, 80% of adjusted EBITDA
to be generated by, and material IP to be owned by Playtika Holding
Corp. and subsidiary guarantors.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Playtika Holding Corp, headquartered in Nevada, USA with major
operations in Tel Aviv, IL, is a provider of casino-themed and
casual mobile gaming applications offered through a variety of
social network and mobile application platforms. The company
generated gross revenues of approximately $1.7 billion, primarily
through in-app purchases, in the LTM period ended June 30, 2019.
POSITECH INTERNATIONAL: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------------------
The Office of the U.S. Trustee on Nov. 12, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Positech International
Inc.
About Positech International
PosiTech International, Inc. -- http://positechheattransfer.com/--
designs, manufactures, remanufactures and distributes new oil
coolers for aviation, OEM modular packages and industrial
applications. It was founded by Bill Blair in 1985.
Positech International sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. W.Va. Case No. 19-00866) on Oct. 3,
2019. At the time of the filing, the Debtor disclosed $1,392,922
in assets and $1,580,743 in liabilities. The case is assigned to
Judge Patrick M. Flatley. The Debtor tapped Martin P. Sheehan,
Esq., at Sheehan & Associates, PLLC, as its legal counsel.
R44 LENDING: Says It Has Obtained Financing for Plan
----------------------------------------------------
On Sept. 26, 2019, the Court entered its order denying the Third
Amended Plan of Reorganization of Debtor R44 Lending Group, LLC.
The Debtor made diligent efforts to obtain alternative financing
that could be the basis of a new restructuring plan. Fortunately,
the Debtor has obtained conditional approval of financing that
shall form the basis of its Fourth Amended Plan. The Debtor is
filing a Disclosure Statement describing its Fourth Amended Plan
and the Fourth Amended Plan.
Based on the foregoing, the Debtor requests that the Court:
* Set a hearing on the adequacy of the Debtor's Fourth Amended
Disclosure Statement.
* Schedule hearings and deadlines in connection with confirmation
of the Plan as the Court deems appropriate.
* Continue the instant status conference to track next hearing on
the Debtor’s matter.
The Debtor is represented by:
Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 1200
Sherman Oaks, CA 91403
Tel: (310) 659-5444
Fax: (310) 878-8304
About R44 Lending Group
R44 Lending Group, LLC, owns in fee simple a real property located
at 218 West Carson Street Carson CA 90746 valued by the company at
$650,000. R44 Lending Group filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 18-15559) on May 15, 2018. In the petition
signed by Leo Starflinger, managing member, the Debtor disclosed
$663,000 in total assets and $3.02 million in total liabilities.
The case is assigned to Judge Neil W. Bason. Jeffrey S. Shinbrot,
APLC, is the Debtor's general insolvency counsel.
R44 LENDING: Unsecureds to Have At Least 10% Recovery Under Plan
----------------------------------------------------------------
Debtor R44 Lending Group, LLC, filed with the U.S. Bankruptcy Court
for the Central District of California, Los Angeles Division, a
Fourth Amended Disclosure Statement on Oct. 25, 2019.
The Disclosure Statement describes a Plan which provides that
unsecured creditors will be paid 10% of their claims from Debtor's
cash on hand as reflected in the Debtor's Monthly Operating Reports
and may be paid in full (100% of their allowed claims) with
interest within 24 months of the Effective Date.
The Debtor has obtained a conditional commitment from a lender to
contribute $195,000 to pay occupants of the Park with valid
tenancies $15,000 relocation fee when each removes his mobile home
from the Park. The loan is contingent upon Court approval of a
super-priority priming lien for the lender for the amount owed, up
to $195,000.00, concurrent with Confirmation of the Debtor's Fourth
Amended Plan.
The Debtor has attempted unsuccessfully to obtain alternative
financing. However, if the Court approves the Fourth Amended Plan,
the Debtor is likely to be able to sell the Park for a higher
price, potentially sufficient to pay secured creditors in full.
The Debtor shall attempt for 24 months after the Effective Date to
sell the Park or refinance the secured debt. If the sale or
refinance is successful, secured and unsecured creditors will be
paid the full amount of their allowed claims, with interest at
their respective contract rates. If unsuccessful, the Debtor will
distribute 100% of the equity in the Park to the secured creditors
on a pro rata basis on or before 25 months after the Effective
Date.
A full-text copy of the Amended Disclosure Statement dated Oct. 29,
2019, is available at https://tinyurl.com/y338hhdo from
PacerMonitor.com at no charge.
The Debtor is represented by:
Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 1200
Sherman Oaks, CA 91403
Tel: (310) 659-5444
Fax: (310) 878-8304
About R44 Lending Group
R44 Lending Group, LLC, owns in fee simple a real property located
at 218 West Carson Street Carson CA 90746 valued by the company at
$650,000. R44 Lending Group filed a Chapter 11 petition (Bankr.
C.D. Cal. Case No. 18-15559) on May 15, 2018. In the petition
signed by Leo Starflinger, managing member, the Debtor disclosed
$663,000 in total assets and $3.02 million in total liabilities.
The case is assigned to Judge Neil W. Bason. Jeffrey S. Shinbrot,
APLC, is the Debtor's general insolvency counsel.
REGIONAL MEDICAL: Plan & Disclosures Due March 4, 2020
------------------------------------------------------
The U.S. Trustee is required to attempt to develop an agreed
scheduling order with debtor Regional Medical Transportation, Inc.
in small business cases. The Debtor and the U.S. Trustee have
agreed to the within provisions, which the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania adopts.
On Oct. 29, 2019, Judge Ashely M. Chan ordered that the Debtor will
file a plan of reorganization/liquidation and disclosure statement
by March 4, 2020.
About Regional Medical Transportation
Regional Medical Transportation, Inc. sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
19-15513) on Sept. 4, 2019. At the time of the filing, the Debtor
was estimated to have assets of between $100,001 and $500,000 and
liabilities of the same range. The case is assigned to Judge Ashely
M. Chan. Wetzel Gagliardi Fetter & Lavin LLC is the Debtor's
counsel.
REGIONAL SITE: Bankr. Administrator Unable to Appoint Committee
---------------------------------------------------------------
The U.S. bankruptcy administrator on Nov. 12, 2019, disclosed in a
filing with the U.S. Bankruptcy Court for the Middle District of
North Carolina that no official committee of unsecured creditors
has been appointed in the Chapter 11 case of Regional Site
Solutions, Inc.
About Regional Site Solutions
Regional Site Solutions, Inc., is a privately held company that
operates in the surfacing and paving business. Regional Site
Solutions sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D.N.C. Case No. 19-11191) on Oct. 28, 2019. At the time
of the filing, the Debtor was estimated to have assets of between
$500,000 and $1 million and liabilities of between $1 million and
$10 million. The case is assigned to Judge Lena M. James. Dirk W.
Siegmund, Esq., at Ivey, McClellan, Gatton & Siegmund, LLP, is the
Debtor's legal counsel.
REIHNER ENTERPRISES: Unsecureds to Get 25% Over 5 Years
-------------------------------------------------------
Debtor Reihner Enterprises, Inc., on Oct. 29, 2019, filed with the
U.S. Bankruptcy Court for the Northern District of Ohio a Joint
Disclosure Statement and Plan.
Administrative Claims (Class 2) will be paid in the ordinary course
of business except with respect to claims for professional fees
which will be paid pursuant to order of the bankruptcy court.
General Unsecured Claims (Class 4) will be paid at the rate of 25%
over five years as shown in Debtor's projections.
The Debtors propose that the order confirming the Plan set forth
that Jason A. Reihner be appointed to act as the Debtor's
disbursing agent. As the disbursing agent, Reihner will open the
distribution account. Monies deposited into this special account
shall be used only for distributions required under the Plan.
After all claims have been paid pursuant to the Plan, any remaining
Plan Funds will automatically become property of the Debtor and
shall be paid to the Debtor.
A full-text copy of the Joint Disclosure Statement and Plan dated
Oct. 29, 2019, is available at https://tinyurl.com/yyw7f68g from
PacerMonitor.com at no charge.
About Reihner Enterprises
Reihner Enterprises, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-16436) on Oct.
25, 2018. At the time of the filing, the Debtor was estimated to
have assets of less than $50,000 and liabilities of less than
$500,000. Judge Arthur I. Harris oversees the case. The Debtor
tapped Forbes Law LLC as its legal counsel.
ROC-IT DRYWALL: Combined Plan & Disclosures Due Nov. 22
-------------------------------------------------------
Judge Phillip J. Shefferly of the U.S. Bankruptcy Court for the
Eastern District of Michigan, Southern Division - Detroit, granted
Debtor Roc-It Drywall, Inc. an extension until Nov. 22, 2019, of
the deadline to file a combined plan of reorganization and
disclosure statement.
About Roc-It Drywall Inc.
Roc-It Drywall, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-43051) on March 4,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $500,000 and liabilities of less than $1
million. The case is assigned to Judge Phillip J. Shefferly.
David R. Shook, Attorney at Law, PLLC, is the Debtor's bankruptcy
counsel.
SEALED AIR: S&P Rates $425MM Senior Unsecured Notes 'BB+'
---------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '4'
recovery rating to Charlotte, N.C.-based food packaging and parcel
protection designer and producer Sealed Air Corp.'s proposed $425
million senior unsecured notes due 2027. The '4' recovery rating
indicates S&P's expectation for average (30%-50%; rounded estimate:
35%) recovery in the event of a payment default. The company will
use the proceeds from these notes to fully redeem its $425 million
senior unsecured notes due December 2020 and to pay related
transaction fees.
Recovery Analysis
Key analytical factors
-- S&P's simulated default scenario contemplates severe cash flow
stress resulting in a payment default in 2024. It assumes that
resin costs are very high for a prolonged period and the company
cannot fully pass these increases through to customers because of
weak recessionary economic conditions and decreased demand.
-- S&P valued Sealed Air on a going-concern basis, since S&P
believes company creditors would realize greater recovery through
reorganization rather than liquidation.
-- S&P estimates a $3 billion gross recovery value based on an
emergence EBITDA of $503 million and a 6x EBITDA multiple.
-- S&P assumes the $1 billion revolver is 85% drawn at default
because availability would likely be limited by financial covenant
restrictions.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA at emergence: $503 million
-- EBITDA multiple: 6x
-- Gross enterprise value: $3 billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $2.8
billion
-- Valuation split in % (obligors/non-obligors): 70/30
-- Priority claims: $55 million
-- Value available to first-lien debt claims: $2.4 billion
-- Secured first-lien debt claims: $1.5 billion
-- Recovery expectations: (90%-100%: rounded estimate: 95%)
-- Value available to unsecured claims: $1.1 billion
-- Total unsecured claims: $3 billion
-- Recovery expectations: (30%-50%: rounded estimate: 35%)
SERVICE PAINTING: Sees Feb. 1 Exit From Chapter 11
--------------------------------------------------
Debtor Service Painting, Inc., filed with the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania an amended disclosure
statement describing its reorganization chapter 11 plan.
The Plan, which contemplates a Feb. 1, 2020 effective date,
provides that holders of general unsecured claims owed $393,803.75
will receive payments semi-annually in equal installments of an
amount not less than $25,000.00, commencing on Feb. 1, 2023, and
concluding two years from that date. The percentage dividend to be
received by the class of Allowed Unsecured Claims shall be
approximately 25%.
Interest holder Nikitas Garavelas will retain his interest in the
Debtor. Interest holder Christo Garavelas will not retain his
interest in the Debtor which will be deemed to be cancelled and
extinguished on the effective date.
The Plan will be funded by the continued operations of the Debtor
and contributions to be made by Nikitas Garavelas. The $50,000
contribution of Mr. Garavelas will be in the form of cash or cash
equivalent paid to the Debtor on the effective date.
A black-lined copy of the Disclosure Statement dated Oct. 24, 2019,
is available at https://tinyurl.com/y36ekhst from PacerMonitor.com
at no charge.
About Service Painting
Service Painting, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case No. 18-16843) on Oct. 13,
2018. At the time of the filing, the Debtor estimated assets of
less than $1 million and liabilities of less than $1 million. Judge
Eric L. Frank oversees the case. The Debtor tapped Kurtzman
Steady, LLC, as its legal counsel.
SILVER STATE: Creditors' Recovery to Depend on TUFTA Outcome
------------------------------------------------------------
Silver State Holdings Assignee – 7901 Boulevard 26 submitted a
Disclosure Statement in support of its Chapter 11 Plan.
The Plan is a plan of liquidation, under which the assets of the
Debtor and the Estate will be liquidated and the proceeds used to
pay creditors. It is difficult for the Debtor to estimate what the
recovery to creditors under the Plan will be, primarily because of
ongoing litigation in the form of the TUFTA Action which will
decide whether the largest alleged creditors of the Debtor have
valid claims and will be paid from the Registry Funds. The Debtor
believes that all creditors are better off under the Plan than
under a liquidation to Chapter 7, because the fees and costs of
Chapter 7 would be avoided and because an insider contributes the
Plan Funding towards the Plan, which would not happen in Chapter
7.
Trustee Aurzada has filed an unsecured proof of claim for
approximately $630,000, predicated on TUFTA. If she prevails, then
her recovery will depend on whether Valley Ridge directly recovers
or must share in her recovery, since their claims overlap. If she
does not prevail and Valley Ridge does not prevail, then other
unsecured claims will be paid in full in their estimated Allowed
amounts.
The projected recoveries under the Plan are:
Estimated Estimated
Category Class Impaired Amount Recovery
-------- ----- -------- ------ --------
Administrative
Claims Unclassified No $75,000 100%
Priority
Claims 1 No $0 100%
Secured Claim
of Valley Ridge 2 No $540,000 0% to 100%
Secured Claim
of Prime Lawn
Care 3 Yes $31,000 50%
Unsecured
Claims 4 No $650,000 0% to 100%
Equity
Interests 5 Yes N/A cancel
A full-text copy of the Disclosure Statement is available at
https://tinyurl.com/y2fw4m46 from PacerMonitor.com at no charge.
About Silver State Holdings
Silver State Holdings Assignee - 7901 Boulevard 26, LLC sought
Chapter 11 protection (Bankr. N.D. Tex. Case No. 19-41579) on April
18, 2019. The case is assigned to Judge Mark X. Mullin. In the
petition signed by Richard Morash, authorized signatory, the Debtor
estimated assets and liabilities in the range of $1 million to $10
million. The Debtor tapped Davor Rukavina, Esq., at Munsch, Hardt,
Kopf & Harr, P.C., as counsel.
SOTERA HEALTH: S&P Affirms 'B' ICR on Recapitalization Plan
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
U.S.-based Sotera Health Holdings LLC. The outlook remains stable.
S&P also assigned a preliminary 'B' issue-level rating to the
proposed first-lien credit facility, which includes a $173 million
revolver, $2.12 billion term loan, and $150 million delayed-draw
term loan (which the rating agency assumes will be drawn upon). The
preliminary recovery rating on the first-lien is '3', indicating
its expectation for meaningful recovery (rounded estimate: 55%) in
the event of payment default.
At the same time, S&P is assigning preliminary 'B-' issue-level
ratings to the proposed $770 million second-lien term loan and $50
million second-lien delayed-draw term loan (which the rating agency
assumes will be drawn upon). The preliminary recovery rating on
this debt is '5', indicating S&P's expectation for modest recovery
(rounded estimate: 10%) in the event of payment default.
S&P believes Sotera's strong EBITDA growth trajectory will reduce
leverage below 8x within 18 months despite the increase in
projected 2019 leverage. It projects the company's ratio of free
operating cash flow (FOCF) to debt will remain above 1.5% for the
next two years, with free cash flows of about $50 million in 2020
and $100 million in 2021.
S&P views Sotera's leading position in the medical device
sterilization market as a key strength, given the company's strong
market position, relatively high barriers to entry, relatively
steady demand, and given the critical nature of these services in
the supply chain of medical equipment in the U.S. and globally.
Notwithstanding small scale, and the ability of original equipment
manufacturers (OEMs) to insource this process, S&P believes OEMs
prefer to outsource this. The rating agency believes the company
maintains good negotiating power as evidenced by its ability to
raise prices more quickly than inflation, above-average EBITDA
margins, and strong FOCF.
Though it expects Sotera to incur a temporary increase in growth
capital spending over the next 12 months to expand capacity and
service offerings, S&P expects the company to generate about $50
million of positive free operating cash flows in 2020, increasing
to about $100 million in 2021.
The stable outlook reflects S&P's expectation that the integration
will be successful and the company will grow revenue at a
high-single-digit rate, maintain margins, and generate significant
free cash flow, despite recent headlines about environmental
emission issues.
"We could lower the rating if Sotera's operating performance
deteriorates such that leverage rises to above 9x and the ratio of
FOCF to debt falls below 1.5%. Such credit measure deterioration
could result from a revenue shortfall coupled with an EBITDA margin
contraction of at least 600 basis points relative to our
expectations for 2021," S&P said. This could occur if significant
supply problems arise with raw materials, an unfavorable shift in
demand for Sotera's services, or significant impact to operations
and customer retention stemming from environmental or litigation
risk, according to the rating agency.
"While unlikely over the next 12 months, we could upgrade Sotera if
adjusted leverage declines below 6x and funds from operations (FFO)
to debt exceeds 12%. Importantly, we would need to see a clear
commitment to maintaining credit measures in the improved range,"
S&P said.
"Given Sotera's high leverage and its sponsor's willingness to take
shareholder-friendly actions, we view this as highly unlikely over
the next year," the rating agency said.
STEARNS HOLDING: Plan Effective Date Occurred Nov. 5
----------------------------------------------------
The effective date of the Chapter 11 plan of reorganization of
Stearns Holdings LLC and its debtor-affiliates occurred on Nov. 5,
2019. As a result, the Company has completed its restructuring
process and successfully emerged from Chapter 11 bankruptcy
As reported by the Troubled Company Reporter on Oct. 29, 2019,
Stearns Holdings, LLC, the parent company of Stearns Lending, LLC,
a leading provider of residential mortgage lending services in
Wholesale, Retail and Strategic Alliances sectors, on Oct. 24,
2019, disclosed that the U.S. Bankruptcy Court for the Southern
District of New York has confirmed the Company's Plan of
Reorganization.
Stearns reduced its debt by more than $150 million and Blackstone
("Blackstone"), as the owner of the reorganized Company, will
contribute substantial new capital to fund payments to creditors
made on the effective date of the Plan. Blackstone's contribution
includes $65 million to be paid to holders of Stearns' prepetition
notes and additional funds to satisfy certain unsecured claims.
About Stearns Holdings
Stearns Lending, LLC is a provider of mortgage lending services in
Wholesale, Retail, Strategic Alliances, Non-Delegated Correspondent
and Financial Institutions sectors throughout the United States.
Stearns Lending is an equal housing lender and is licensed to
conduct business in 49 states and the District of Columbia.
Additionally, Stearns Lending is an approved HUD (United States
Department of Housing and Urban Development) lender; a Single
Family Issuer for Ginnie Mae (Government National Mortgage
Association); an approved Seller/Servicer for Fannie Mae (Federal
National Mortgage Association); and an approved Seller/Servicer for
Freddie Mac (Federal Home Loan Mortgage Corporation). Stearns
Lending is also approved as a VA (United States Department of
Veterans Affairs) lender, a USDA (United States Department of
Agriculture) lender, and is an approved lending institution with
FHA (Federal Housing Administration). Stearns Lending is located
at 4 Hutton Centre Drive, 10th Floor, Santa Ana, CA 92707.
Stearns Holdings, LLC and six subsidiaries, including Stearns
Lending, LLC, each filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-12226) on July 9, 2019.
Stearns estimated assets of $1 billion to $10 billion and
liabilities of the same range as of the bankruptcy filing.
Stearns' cases have been assigned to the Honorable Shelley C.
Chapman.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
advisor to Stearns, PJT Partners is serving as its financial
advisor and Alvarez & Marsal is serving as its restructuring
advisor. Prime Clerk LLC is the claims and noticing agent,
maintaining the sites https://cases.primeclerk.com/stearns and
http://www.stearnsrestructuring.com/
STONEGATE LANDING: Dec. 18 Plan Confirmation Hearing Set
--------------------------------------------------------
On Oct. 29, 2019, the U.S. Bankruptcy Court for the District of
Massachusetts conducted a hearing on the disclosure statement filed
by debtor Stonegate Landing LLC.
Judge Melvin S. Hoffman approved the disclosure statement and
ordered that:
* Dec. 10, 2019, at 4:30 p.m. is the deadline to serve ballots.
* Dec. 10, 2019, at 4:30 p.m. is the deadline to file objections
to confirmation of the Plan.
* Dec. 10, 2019, at 4:30 p.m. is the deadline to file objections
to any fee applications.
* Dec. 18, 2019, at 10:30 a.m. is the hearing on confirmation of
the Plan to be held at the J.W. McCormack Post Office and Court
House, 5 Post Office Square, Suite 1000, Boston, MA 02109.
About Stonegate Landing
Stonegate Landing LLC is in the business of developing real estate
for residential home buyers. Its Chapter 11 case was precipitated
by an impending foreclosure sale of the property by Mechanics
Cooperative Bank which was predicated, in part, by the delay in
obtaining the requisite permits for the construction of the sewer
pump station.
Stonegate Landing sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mass. Case No. 18-14383) on Nov. 27,
2018. At the time of the filing, the Debtor was estimated assets of
less than $1 million and liabilities of less than $1 million.
Judge Melvin S. Hoffman is the case judge. Parker & Associates is
the Debtor's legal counsel.
STV GROUP: S&P Assigns 'B+' Issuer Credit Rating; Outlook Stable
----------------------------------------------------------------
S&P Global Ratings assigned a 'B+' issuer credit rating to
U.S.-based architecture and engineering services firm, STV Group
Inc.
At the same time, S&P assigned a 'B+' issue-level rating to the
$225 million senior secured first-lien term loan due 2026 proposed
by STV to partly fund Pritzker Family Business Interests'
acquisition of the company. S&P's '3' recovery rating indicates
its expectation for meaningful recovery (50%-70%; rounded estimate:
55%) in the event of payment default.
The rating on STV reflects S&P's view of the company's modest size
and market share and relatively narrow geographic scope in the
broader engineering and construction (E&C) services sector.
While the company has a high percentage of projects in backlog from
public sector clients, S&P believes overall demand from the
company's end markets depends on general U.S. economic conditions.
Further, the rating agency's view of the company's financial risk
reflects its aggressive debt leverage pro forma for the proposed
transaction.
S&P's stable outlook on STV reflects its expectation that the
company will generate increasing revenues based on demand for
infrastructure projects and a stable, growing backlog. The rating
agency assumes funds from operations (FFO) to debt will remain in
the mid-teens percent area this year, while debt to EBITDA will be
above 4.5x.
"We could lower our ratings over the next 12 months if EBITDA
margins decline significantly due to, for example, unexpected
execution issues on several large projects, such that debt to
EBITDA increases above 5x or free operating cash flow to debt falls
below 5%," S&P said.
"Although unlikely, we could raise the ratings in the next 12
months if the company improves debt to EBITDA to well below 4x and
FFO to debt well above 20% on a sustained basis. This could occur
if, for example, further cost control and productivity initiatives
increase profitability significantly and revenue growth greatly
outpaces projected growth in the overall transportation and
infrastructure end markets," the rating agency said.
SUNCOAST INTERNAL: Valley Nat'l Bank Seeks Plan Compliance
----------------------------------------------------------
Valley National Bank filed a motion to compel debtor Suncoast
Internal Medicine Consultants, PA's compliance with the order
confirming the Plan.
Pursuant to the Plan of Reorganization, the Debtor was required to
pay certain taxes on the collateral of Valley National Bank which
were the subject of many discussions and hearings before the Court
as part of the Bankruptcy Plan.
The amount due and outstanding on the taxes exceeds $10,000.
Notwithstanding the Bank's repeated attempts to get the Debtor's
cooperation in resolving the deficiencies in the payments on the
tax certificates, the Debtor has failed and refused to comply with
the Plan.
Counsel for Valley National Bank certifies that prior to filing
this Motion to Compel that it has made numerous attempts orally, in
writing and in person to resolve the issues prior to filing this
Motion.
Attorney for Valley National Bank
Richard T. Heiden, Esq.
Brian C. Guenther, Esq.
2723 State Road 580
Clearwater, Florida 33761
Tel: (727) 771-7888
Fax: (727) 771-7899
E-mail: service@rthlaw.com
richardheiden@rthlaw.com
brianguenther@rthlaw.com
About Suncoast Internal Medicine Consultants
Based in Largo, Florida, Suncoast Internal Medicine Consultants, PA
-- http://suncoastinternalmedicine.com/-- provides medical care to
Pinellas County and the Greater Tampa Bay area. Its staff is
composed of board-certified physicians focusing in the specialties
of internal medicine, gastroenterology, and rheumatology. Suncoast
was founded in 1965 by Dr. George Kotsch.
Suncoast Internal Medicine Consultants sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
18-00399) on Jan. 19, 2018. In the petition signed by Robert L.
DiGiovanni, DO, president, the Debtor estimated assets and
liabilities of $1 million to $10 million.
Judge Catherine Peek McEwen oversees the case.
The Debtor hired Johnson, Pope, Bokor, Ruppel & Burns LLP as its
bankruptcy counsel; and Appelt & Associates, CPAS, PA as its
accountant.
TARGA RESOURCES: Moody's Rates New $750MM Unsec. Notes 'Ba3'
------------------------------------------------------------
Moody's Investors assigned a Ba3 rating to Targa Resources Partners
LP's proposed $750 million notes due 2030. TRP is wholly owned by
Targa Resources Corp. Targa and TRP's other ratings and Targa's
stable outlook remained unchanged. The notes proceeds are expected
to be primarily used to reduce borrowings under TRP's revolving
credit facility, and therefore, the transaction will be debt
neutral.
Assignments:
Issuer: Targa Resources Partners LP
Senior Unsecured Notes, Assigned Ba3 (LGD4)
RATINGS RATIONALE
TRP's proposed and existing senior notes are unsecured and the
creditors have a subordinated claim to TRP's assets behind the
senior secured revolving credit facility and the accounts
receivable securitization facility. The Ba3 rating on TRP's
unsecured notes reflects the substantial amount of priority-claim
secured debt in the capital structure as well as the likelihood of
increased revolver use. Accordingly, Moody's believes the Ba3
rating is more appropriate than that suggested by the Moody's Loss
Given Default methodology.
Targa's Ba2 Corporate Family Rating is supported by its sole
ownership of TRP, its scale and EBITDA generation which has
remained sizeable despite the volatile commodity prices, its track
record of strong execution of growth projects, and the meaningful
and growing proportion of fee-based margin contribution. These
positive attributes are tempered by its material exposure to the
gathering and processing business, escalated leverage from partial
debt funding of growth projects related capex, volatility in
natural gas liquids prices that makes earnings on its commodity
sensitive contracts less predictable, its historically aggressive
distribution policies, and volume risk.
Targa's CFR could be upgraded to Ba1 if consolidated leverage is
sustained below 4.5x, dividend coverage remains above 1.1x, and its
business mix becomes less exposed to commodity price risk. The
ratings could be downgraded if consolidated leverage is over 5.5x
beyond 2020. Significant delays or cost overruns on growth projects
could also pressure the ratings.
Targa Resources Corp., through its wholly-owned subsidiary Targa
Resources Partners LP, operates a portfolio of midstream energy
assets that include, gathering pipelines, gas processing plants,
NGL pipeline, NGL fractionation units, and a marine import/export
facility on the Gulf Coast.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
TARRANT COUNTY: Stayton Seeks Access to UMB Bank Cash Collateral
----------------------------------------------------------------
Tarrant County Senior Living Center, Inc., doing business as The
Stayton at Museum Way, seeks authority from the U.S. Bankruptcy
Court for the Northern District of Texas to use the cash collateral
of UMB Bank, N.A., as bond trustee.
Stayton's primary liabilities are related to the long-term
municipal bonds totaling approximately $109.7 million, inclusive of
outstanding principal and interest. Specifically, Tarrant County
Cultural Education Facilities Finance Corporation (the "Issuer")
and UMB Bank, N.A., in its capacity as successor trustee (the "Bond
Trustee"), are parties to an Indenture of Trust, pursuant to which
the Issuer issued retirement facility revenue bonds in the initial
principal amount of $166,575,000.
Accordingly, the Bond Trustee has a security interest, lien, and
mortgage on substantially all of Stayton's assets. As of the
Petition Date, the Bond Trustee-Held Funds totaled approximately
$7.86 million.
The Bond Trustee has consented to Stayton's use of cash collateral
in accordance with the following terms and conditions:
(A) The Stayton is authorized to use cash collateral upon the
terms and conditions set forth in the Proposed Orders from the
Petition Date until the earlier of (i) Stayton's ability to use
cash collateral terminates as the result of the occurrence of a
Termination Event or (ii) Feb. 29, 2020.
(B) Stayton will pay to the Bond Trustee for deposit into the
Bond Fund, with respect to the immediately preceding month, amounts
representing the lesser of (i) the monthly debt service payment due
for such month with respect to the Series 2009 Notes as set forth
in the Original Bond Documents and (ii) an amount equal to 75% of
any positive Forbearance Net Cash Flow for the preceding month.
(C) The Bond Trustee will have a valid, perfected, and
enforceable replacement lien and security interest in (i) all
assets of Stayton existing on or after the Petition Date of the
same type as the Prepetition Collateral, together with the
proceeds, rents, products, and profits thereof, whether acquired or
arising before or after the Petition Date, to the same extent,
validity, perfection, enforceability, and priority of the liens and
security interests of the Bond Trustee as of the Petition Date; and
(ii) all other assets of Stayton of any kind or nature whatsoever
within the meaning of section 541 of the Bankruptcy Code, whether
acquired or arising prepetition or postpetition, together with all
proceeds, rents, products, and profits thereof.
(D) The Bond Trustee will have a superpriority administrative
expense claim with recourse to and payable from any and all assets
of Stayton's estate, including but not limited to rights of Stayton
in, choses in action, or claims of any kind whatsoever, choate or
inchoate, present or residual that for any reason cannot be made
the subject of the Replacement Lien.
(E) The Bond Trustee consents to Stayton's use of cash
collateral to pay the fees, costs and expenses that constitute the
Carve Out: (a) the statutory fees of the U.S. Trustee pursuant to
28 U.S.C. Section 1930 and the fees of the Clerk of the Court; and
(b) for professionals retained by Stayton or its estate and any
statutory committee appointed in the Chapter 11 Case pursuant to
section 1103 of the Bankruptcy Code, the fees and expenses of such
professionals solely to the extent such fees and expenses that have
actually been incurred by the corresponding professional between
the Petition Date and the Termination Date, and have been allowed
by the Court -- subject to a cap in the amount of $75,000 per
week.
A copy of the Cash Collateral Motion is available for free at
http://bankrupt.com/misc/txnb19-33756-14.pdf
About Tarrant County Senior Living Center
Incorporated in 2006, Tarrant County Senior Living Center, Inc.,
doing business as The Stayton at Museum Way --
https://www.thestayton.com/ -- is a not-for-profit corporation that
has built a senior living retirement community in Fort Worth,
Texas. Stayton operates a continuing care retirement community
that offers its senior residents a continuum of care in a
campus-style setting, providing living accommodations and related
health care and support services to a target market of individuals
aged 62 and older.
Stayton sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Tex. Case No. 19-33756) on Nov. 5, 2019. In the
petition signed by CRO Louis E. Robichaux IV, the Debtor was
estimated to have assets ranging between $100 million to $500
million and liabilities of the same range.
The Hon. Stacey G. Jernigan is the case judge.
The Debtor tapped DLA Piper LLP (US), as bankruptcy counsel;
Gilmore Bell, Esq., as bond counsel; Louis E. Robichaux IV at
Ankura Consulting Group, LLC as chief restructuring officer; and
EPIQ Corporate Restructuring, LLC, as claims and solicitation
agent.
TATUNG COMPANY: May Continue Using Cash Collateral Until Dec. 10
----------------------------------------------------------------
Judge Neil W. Bason of the U.S. Bankruptcy Court for the Central
District of California authorized Tatung Company of America, Inc.,
to use cash collateral on an interim basis pursuant to the terms
and conditions of the Tentative Decision and the Interim Order.
The Debtor may use cash collateral to and through the conclusion of
the continued interim hearing on the Cash Collateral Motion which
will be held on Dec. 10, 2019 at 1:00 p.m. Objections are due by
Nov. 26.
East West Bank is granted a replacement lien on certain of the
Debtor's postpetition assets as provided for in the Cash Collateral
Motion and as modified by the Tentative Ruling.
Pursuant to an agreement reached by the Debtor and East West Bank,
the maturity date for the Debtor's Irrevocable Stand-By Letter of
Credit No. 180SL0425 with East West Bank, is extended for a period
of one year to and including Nov. 1, 2020.
A copy of the Third Interim Order is available for free at
http://bankrupt.com/misc/cacb19-21521-103.pdf
About Tatung Company of America
Tatung Company of America, Inc., distributes technology products
for computers and electronics original equipment manufacturers. The
Company manufactures personal computer monitors, home appliances,
point-of-sale equipment, air conditioners, coolers, and purifiers.
Tatung Company of America sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-21521) on Sept. 30,
2019. In the petition signed by CRO Jason Chen, the Debtor was
estimated to have assets ranging between $10 million to $50 million
and liabilities of the same range. Judge Neil W. Bason is assigned
to the case. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P serves as
the Debtor's counsel.
UNDER ARMOUR: S&P Affirms 'BB' Issuer Credit Rating; Outlook Stable
-------------------------------------------------------------------
S&P Global Ratings affirmed the 'BB' issuer credit rating on
U.S.-based Under Armour Inc. The 'BB' issue-level rating on the
company's unsecured notes is also being affirmed, the '3' recovery
rating is unchanged.
The impact of the ongoing Securities and Exchange Commission (SEC)
and Department of Justice (DOJ) accounting investigation is
uncertain.
The investigation, ongoing since July 2017, concerns its accounting
practices and disclosures. The company stated that its accounting
practices and related disclosures were appropriate, but the
investigation raises the possibility that the company could be
subject to financial penalties or required to materially restate
its financial results. As such, future rating actions would be
contingent on the outcome of the investigation and the magnitude of
possible negative impacts to the company.
The stable outlook reflects S&P's expectation that the company will
gradually stem declines in its North American segment and continue
expanding in international markets, while maintaining current
margins. This should keep leverage below 2x. In addition, the
stable outlook incorporates S&P's expectation that the ongoing SEC
and DOJ investigation will not have material negative impact on the
company's credit measures.
"We could raise the ratings if we believe the company can
sequentially improve sales trends, including stabilization in its
North American segment, such that it can maintain leverage below
3x. A positive rating action would also be contingent on the
outcome of the ongoing SEC and DOJ investigation in which there is
no negative impact to cash flows from possible penalties or
significant restatement of operating results," S&P said.
"We could lower the rating if materially negative information about
the company's accounting practices or governance standards which
damages its brand name or reputation," the rating agency said,
adding that it could also lower the rating if the company cannot
improve negative sales trends in North America, combined with
slower growth in its international segments and weaker margins,
such that leverage increases above 4x.
UNIT CORP: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
------------------------------------------------------------
Moody's Investors Service downgraded Unit Corporation's Probability
of Default Rating to Ca-PD from B3-PD, Corporate Family Rating to
Caa1 from B3, and senior subordinated notes to Caa2 from Caa1. The
Speculative Grade Liquidity rating remained unchanged at SGL-4. The
rating outlook was revised to negative. This concludes Moody's
review of Unit's ratings that was initiated on October 21, 2019.
These actions follow Unit's announcement on November 13, 2019 that
it has commenced an offer to exchange any and all of its
outstanding 6.625% senior subordinated notes due 2021 for newly
issued 10% senior secured second-lien notes and 7% senior secured
third-lien notes. The exchange offer is conditioned upon Unit
obtaining an amendment from its secured first-lien revolver
lenders, or a refinancing or replacement of the revolver. The
exchange offer will expire on December 13, 2019, unless extended by
the company.
Downgrades:
Issuer: Unit Corporation
Probability of Default Rating, Downgraded to Ca-PD from B3-PD
Corporate Family Rating, Downgraded to Caa1 from B3
Senior Subordinated Notes, Downgraded to Caa2 (LGD2) from Caa1
(LGD5)
Outlook Actions:
Issuer: Unit Corporation
Outlook, Changed To Negative From Rating Under Review
RATINGS RATIONALE
The downgrade of the PDR reflects Unit's proposed debt exchange
offer, which Moody's views to be a distressed exchange. A
distressed exchange is equivalent to a default under Moody's
definitions. The proposed exchange, if successful, will result in a
significant loss of principal as well as an extended maturity for
existing noteholders in relation to the original note agreement.
The Caa1 CFR and Caa2 rating on the 2021 notes reflect Moody's view
on expected recovery, which is likely to be in the 80%-90% range.
Prior to the exchange offer, Unit was contending with depressed
commodity prices, looming maturities in a challenged refinancing
environment and declining cash flow.
Unit has weak liquidity, which is captured in the SGL-4 rating. The
company needs to successfully execute the debt exchange to
eliminate near term refinancing risk. Unit had less than $1 million
in cash and $134 million drawn on its $275 million revolving credit
facility as of September 30, 2019. The revolver has a scheduled
termination date of October 18, 2023, but it will mature on
November 16, 2020 if the company is unable to refinance the 2021
notes before that date.
The negative outlook reflects the high likelihood that the proposed
distressed exchange will be completed in the near future. Moody's
will append a "limited default" designation to the PDR upon
consummation of the exchange offer and will likely upgrade the PDR
to the CFR level at that point. The CFR could be upgraded if Unit
eliminates its maturity risks while maintaining a substantial
liquidity buffer under its revolving credit facility.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
Unit Corporation is a Tulsa, Oklahoma based exploration and
production company with significant contract drilling and midstream
gathering and processing operations.
UNIVAR SOLUTIONS: Moody's Rates $400MM Sec. Term Loan 'Ba3'
-----------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Univar Solution
Inc.'s new 7-year $400 million senior secured Term Loan B-5 and B2
to the new $400 million senior unsecured notes due 2026 and 2027,
respectively. Proceeds from the new loan and notes will be used to
refinance the existing EUR term loan and 6.75% senior notes due
2023, both in similar amounts to the new issues. The SGL-2
Speculative Grade Liquidity Rating is maintained and the outlook
for the ratings is stable.
"Univar's credit profile benefits from leading market share in
North America, large market share in Europe and the rest of the
world, operational diversity and scale that provide a strong
competitive position," according to Joseph Princiotta, SVP at
Moody's. "Operational synergies and self-help measures following
the Nexeo transaction have edged adjusted EBITDA margins higher
despite the lower EBITDA guidance resulting from lackluster
industrial demand," Princiotta added.
Assignments:
Issuer: Univar Solutions Inc.
Senior Secured Term Loan, Assigned Ba3 (LGD4)
Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD5)
RATINGS RATIONALE
The credit profile also reflects the strategic fit and business
profile benefits from the Nexeo combination, which improved the
operational scale and footprint, market positions in specialty
chemicals and ingredients, and provides acquisition synergies and
planned IT upgrades, which was among Nexeo's strengths. These
benefits, plus the reduction in debt from divestiture proceeds of
Nexeo's plastics business, prompted a one notch upgrade to the CFR
to Ba3 at the time of the acquisition earlier this year.
The Nexeo transaction targets $120 million (up from the initial
estimate of $100 million) in annual run-rate cost synergies within
three years and includes warehouse closures, corporate overhead and
employee severance. Moody's believes the company's synergy targets
are achievable. One-time costs to achieve the synergies are
estimated at $225 million (up from the initial estimate of $150
million), which the company expects to be largely offset by the
sale of surplus real estate after facility closures and working
capital improvements.
Offsetting factors in the credit include modest margins and still
moderately high leverage, challenges to organic topline and margin
growth, and a historically active bolt-on acquisition strategy that
may occasionally stress leverage. Distributors tend to have modest
but relatively stable margins compared to most companies in the
chemical industry, while the asset-lite model allows for modest
maintenance and capital expenditure requirements.
In the recent third quarter call the company reported progress in
the first wave of ERP systems migration, site consolidation and
sales force re-design, and said it will strive to accelerate the
digital transformation. However, this is against a backdrop of a
lackluster demand environment with customers concerned about the
outlook and industrial, energy and agricultural end markets
weighing on near term performance. Consequently, EBITDA has been
guided down to the $700-$725 range for 2019, while Moody's believes
the growth trajectory is likely to be flatter next year given the
uncertain environment.
Deleveraging remains a top priority and the company reports net
unadjusted leverage of 3.9x at September 30, 2019. Moody's gross
adjusted leverage is roughly 4.7x and is expected to be in the mid
4x range by year end, compared to Moody's upgrade trigger for this
metric which is in the mid 3x range.
Univar's EBITDA has been relatively stable compared to chemical
companies in general due to exposure to relatively stable end
markets such as food, water treatment, pharmaceuticals, coatings,
adhesives, cleaning, and personal care end markets, which combined
account for nearly half of total revenues. No end market accounted
for more than 20% of sales.
Univar's SGL-2 speculative grade liquidity rating reflects its good
liquidity as of 30 September 2019, supported by $135 million of
balance sheet cash and about $1.4 billion of availability under the
company's $1.7 billion ABL credit facility. Univar will have
positive free cash flow for 2019 and is expected to apply
additional cash to further debt reduction. The ABL and term loans
do not contain financial maintenance covenants; the ABL has a debt
incurrence test if availability falls below 10%. The new term loans
are secured by a first priority lien on all tangible and intangible
assets and a second priority lien on working capital.
The stable outlook anticipates operational and leverage
improvements associated with the transaction, and that Univar
maintains leverage in the stated targeted range of 3.0x-3.5x (on a
net, unadjusted basis, which currently corresponds to about
3.7-4.2x on a Moody's gross adjusted basis).
Moody's would be unlikely to consider an upgrade until good synergy
progress from the Nexeo transaction is achieved and the company
successfully integrates Nexeo's business and realizes operational,
capex and IT improvements. Moody's would consider an upgrade if
gross adjusted leverage were to decline below the high 3.0x range
and retained cash flow to debt were to rise above 15%, both on a
sustained basis. Moody's would consider a downgrade if EBITDA
margins were to trend negatively or if leverage were to rise above
4.5x on a sustained basis, or if free cash flow or liquidity were
to materially decline.
Univar Inc. is one of the largest global chemical and ingredient
distributors and providers of related services, operating hundreds
of distribution facilities to service a diverse set of customers
end markets in the US, Canada, Europe, the Middle East, Latin
America and the Asia Pacific region. Univar's top 10 customers
account for roughly 10% of sales, while its top 10 suppliers
represent roughly 30% of its total chemical expenditures. For the
12 months ended September 30, 2019, the publicly-traded company
generated approximately $9.1 billion in revenue.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
URBAN OAKS: Wants Amended Plan Hearing Reset to March 2020
----------------------------------------------------------
Debtor Urban Oaks Builders LLC filed with U.S. Bankruptcy Court for
the Southern District of Texas a second emergency motion requesting
to extend the deadline to file an amended plan of reorganization,
continue the scheduled hearing to consider conditional approval of
the disclosure statement, and continue the scheduled hearing on
confirmation of a plan of reorganization.
The Debtor asks the Court to extend the relevant deadlines, and
reschedule the Jan. 22, 2020 confirmation hearing until the week of
March 23, 2020. In accordance with this extension, the Debtor
requests that its deadline to file an amended plan be set
approximately 45 days before the rescheduled confirmation hearing,
and that a hearing on conditional approval of a disclosure
statement be set approximately one week thereafter.
The Debtor believes that extension of these deadlines until after
the hearing on the Claim Objection will not only afford the Court
additional time to consider the Claim Objection, but also allow the
parties additional time to continue substantive settlement
discussions. Specifically, the Debtor, Southstar Plaintiffs,
Insurance Carriers, and Hines Entities may be better able to engage
in negotiations if they are not embroiled in yet more disputes
regarding an amended plan of reorganization that is filed prior to
the Claim Objection hearing.
The Debtor requests the Court to (i) extend the Debtor's deadline
to file an amended plan until at least Feb. 7, 2020, (ii) continue
the Nov. 15, 2019 hearing to consider the Debtor's disclosure
statement until at least Feb. 10, 2020, and (iii) reschedule the
Confirmation Hearing until at least March 23, 2020.
A full-text copy of the Motion dated Oct. 27, 2019, is available at
https://tinyurl.com/y64tbvnd from PacerMonitor.com at no charge.
The Debtor is represented by:
OKIN ADAMS LLP
Matthew S. Okin
David L. Curry, Jr.
Ryan A. O'Connor
E-mail: mokin@okinadams.com
dcurry@okinadams.com
roconnor@okinadams.com
1113 Vine St., Suite 240
Houston, Texas 77002
Tel: 713.228.4100
Fax: 888.865.2118
About Urban Oaks Builders
Urban Oaks Builders LLC is a privately-held company that provides
residential building construction services.
Urban Oaks Builders sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 18-34892) on Aug. 31,
2018. In the petition signed by Todd Hagood, vice-president, the
Debtor was estimated to have assets of $10 million to $50 million
and liabilities of $50 million to $100 million. Judge Marvin Isgur
oversees the case. The Debtor tapped Okin Adams LLP as its
bankruptcy counsel; Baker Botts LLP as special litigation counsel;
and Stout Risius Ross, LLC as financial advisor.
USI INC: S&P Assigns 'B' Rating to New $550MM Term Loan Due 2024
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' debt rating to USI Inc.'s
proposed $550 million term loan due 2024. The rating agency also
assigned a '3' recovery rating, indicating its expectation of
meaningful recovery (50%) in the event of payment default.
The ratings on USI, including S&P's 'B' long-term issuer credit
rating and 'B' first-lien credit facility debt ratings are
unaffected by the new term loan issuance. S&P's 'B' long-term
issuer credit rating on USI continues to reflect its fair business
risk profile and highly leveraged financial risk profile."
The new financing will have similar terms to the existing
first-lien term loan, with the proceeds from the add-on expected to
pay off the revolver, and purchase a portion of outstanding
preferred stock (which S&P treats as debt). Although having a
relatively immaterial impact on leverage and coverage metrics in
the short-term, S&P views the issuance as an action to simplify the
overall capital structure, which should improve financial metrics
in the long run. The preferred stock being repurchased contained a
payment-in-kind (PIK) characteristic with a high coupon rate,
adding around $60 million to S&P's leverage calculation each year
and representing a drag on interest coverage. By reducing the
preferred stock and repaying the revolver, USI's interest expense
will likely be lower given the high dividend rate it was paying,
which will slightly improve S&P's expectations of interest coverage
to 2.2-2.4x from 2x-2.2x through the rating agency's forecast
period.
S&P expects pro-forma leverage (debt-to-EBITDA ratio including
operating leases) for both the incremental debt and the earnings
from acquisitions to remain about 7.5-8x as of Sept. 30, 2019, with
interest coverage at about 2.2x. With a full year of effects from
the transaction in 2020, the rating agency expects leverage of
7x-7.5x and coverage in the 2.2x-2.4x range by year end. The
company's overall financial risk profile therefore remains
appropriate for the rating.
VASCULAR ACCESS: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Vascular Access Centers, L.P.
2929 Arch Street, Suite 1705
Philadelphia, PA 19104
Business Description: Vascular Access Centers --
https://www.vascularaccesscenters.com --
provides comprehensive dialysis access
maintenance including
thrombectomy/thrombolysis, fistulagrams,
fistula maturation procedures, vessel
mapping, central venous occlusion
treatment and complete catheter
services. Its centers offer an
alternative setting for a wide spectrum
of vascular interventional procedures,
including central venous access for
oncology, nutritional and medication
delivery, venous insufficiency
(including venous ulcer/non-healing
ulcer
treatments), peripheral arterial disease
(PAD), limb salvage, uterine fibroid
embolization and pain management.
Involuntary Chapter 11
Petition Date: November 12, 2019
Court: United States Bankruptcy Court
Eastern District of Pennsylvania
(Philadelphia)
Case Number: 19-17117
Judge: Hon. Ashely M. Chan
Petitioners' Counsel: David Smith, Esq.
SMITH KANE HOLMAN, LLC
112 Moores Road, Suite 300
Malvern, PA 19355-0000
Tel: 610-407-7215
E-mail: dsmith@skhlaw.com
List of Petitioning Creditors:
Name Nature of Claim Claim Amount
---- --------------- ------------
Philadelphia Vascular Secured Loans $1,202,120
Institute, LLC
585 County Line Road
Radnor, PA 19087
Metter & Company Accounting Services $11,911
831 DeKalb Pike
Blue Bell, PA 19422
Crestwood Associates, LLC Vendor $6,090
240 East Lincoln Street
Mount Prospect, IL 60056
A full-text copy of the Involuntary Petition is available for free
at:
http://bankrupt.com/misc/paeb19-17117.pdf
VECTOR GROUP: Moody's Affirms B2 CFR & Alters Outlook to Stable
---------------------------------------------------------------
Moody's Investors Service downgraded to Caa1 from B2 Vector Group
Ltd.'s existing $325 million unsecured notes due 2026 which it
plans to increase to $555 million ("10.5% Notes"). The incremental
$230MM (to be rated subsequently) of newly issued unsecured notes
will be used to refinance the company's existing 5.5% $232 million
convertible notes due 2020. At the same time Moody's affirmed
Vector's existing ratings, including its B2 Corporate Family
Rating, its B2-PD Probability of Default Rating and the Ba3 rating
on its existing $850 million senior secured notes due 2025 ("6.125%
Notes"). The rating outlook was changed to stable from negative.
The downgrade of the 10.5% Notes reflects changes the company has
made to its capital structure. This includes the addition of more
unsecured debt and the elimination of lower priority debt which had
previously provided a loss absorption cushion to the unsecured debt
in the event of a default. The downgrade does not, however, reflect
any deterioration in the company's fundamental credit profile. In
fact, Moody's changing its rating outlook to stable reflects that
it is more comfortable with Vector's credit profile at its current
rating. That said, if for any reason Vector does not issue the
incremental unsecured notes and repay the convertible notes due
2020 as planned, then Vector's refinancing risk will not have been
addressed, and Moody's will need to reevaluate the company's
ratings and outlook.
The affirmation of the CFR reflects Vector's continued good
operating performance within the discount cigarette business. It
also reflects the company's continuing negative free cash flow and
high financial leverage.
The change in the rating outlook to stable reflects Vector's change
in financial strategy, which reduces cash dividends by
approximately 50% from existing levels of approximately $230
million to about $120 million going forward. It also reflects the
expected reduction in refinancing risk given the proposed repayment
of the $232 million in convertible notes that are due in 2020. The
stable outlook also reflects Moody's expectation that leverage will
remain high at near 6 times over the next 12 to 18 months due to
continued challenges in the cigarette business. Also Moody's
expects the company's real estate brokerage business to show
marginal improvement in sales, though add little lift to overall
operating profits given it is a very low margin business.
Moody's took the following rating actions on Vector Group Ltd.
Ratings downgraded:
$325 million senior unsecured notes due 2026 to Caa1 (LGD5) from B2
(LGD4)
Ratings affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
$850 million senior secured notes due 2025 at Ba3 (LGD2)
The rating outlook was changed to stable from negative.
The company's Speculative Grade Liquidity Rating is SGL-2.
RATINGS RATIONALE
Vector's B2 CFR reflects its relatively small scale compared to
other tobacco companies and limited pricing flexibility in the deep
discount segment of the highly regulated and declining U.S.
domestic cigarette industry. The rating is also constrained by
Vector's negative free cash flow (though moderating with the
reduction in its cash dividend) and high financial leverage, and
the ongoing threat of adverse tobacco litigation and regulation.
Vector's ratings are supported by its sustainable cost advantage
based on the terms of the Master Settlement Agreement, its track
record of gaining share in the retail distribution channel, and
good profitability metrics. Vector's real estate investments are
conservatively managed and provide an additional, albeit
potentially volatile, source of earnings diversification and cash
flow with modest capital requirements. In recent years, the
company's investment in its various non-guarantor and unrestricted
real estate investments has grown significantly.
The stable outlook reflects Moody's expectation that Vector will
continue to experience modest revenue decline of approximately 1%
over the next 12 to 18 months due to declining cigarette volumes,
though remain highly profitable with good cash flow. Financial
leverage will remain high with debt to EBITDA at around 5.9 times
(including Moody's adjustments). The outlook also reflects Moody's
expectation that Vector will have negative free cash flow of about
$20 million per year after taking into account annual dividend
payout of approximately $120 million. Vector has ample cash on hand
to cover this shortfall. The real estate brokerage business will
have marginal top line improvement, though add little lift to
overall operating profits.
The rating also reflects the following environmental, social and
governance (ESG) factors.
First, Vector is exposed to increasing social risks in the tobacco
industry related to lifestyle changes, regulation and litigation.
Over the past three decades volume decline in traditional
cigarettes is a direct consequence of a social shift away from
cigarette smoking. Vector could be negatively impacted if US
regulators decide to implement a ban of flavored cigarettes as
another means to discourage smoking. Currently, menthol cigarettes
make up 20% of Vector's sales.
Second, Vector has an aggressive financial policy. To date,
dividends are aggressive at around $230 million per annum with
around 40 percent funded with debt. Although the company plans to
curtail dividends to approximately $120MM annually, it will still
not have the ability to reduce leverage over the next 12 to 18
months based on this curtailed dividend level.
Ratings could be upgraded if litigation risk diminishes and the
company's profitability and credit metrics improve with no adverse
impact on volume growth and/or market share. An upgrade would also
require debt to EBITDA to remain below 4.5 times with sustained
positive free cash flow after dividends.
Ratings could be downgraded if pricing flexibility trends or growth
prospects for the discount cigarette industry deteriorate, or if
there is an unexpected material increase in litigation or
regulation risk. A decline in liquidity, including diminished cash
and marketable securities, or an inability to make progress toward
positive free cash flow could also lead to a downgrade.
Additionally, a failure to refinance near term debt maturities well
in advance could result in a downgrade. Vector's ratings could also
be downgraded if financial leverage exceeds 6.0 times.
The principal methodology used in these ratings was Tobacco
Industry published in February 2017.
Vector Group Ltd. is a publicly-traded holding company with
subsidiaries engaged in domestic cigarettes manufacturing, real
estate development and real estate brokerage, Douglas Elliman.
Vector generates roughly $1.9 billion in annual revenue.
VERITY HEALTH: Wants Disclosure Statement Hearing Reset to Nov. 20
------------------------------------------------------------------
Verity Health System of California, Inc. and the affiliated debtors
request that the Court approve a continuance of the hearing on
their motion for an order approving proposed Disclosure Statement
to November 20, 2019, at 10:00 a.m.
The Debtors request another short continuance of the hearing on the
Motion to continue to address matters related to the sale to
Strategic Global Management, Inc. and related conditions. The
Debtors anticipate that the continuance will allow them time to
resolve various open issues related to the SGM Sale, the resolution
of which will advance the closing of the SGM Sale and the
disclosure and confirmation process.
In the SGM Statement, SGM indicated that it will not close the Sale
unless the Debtors timely obtain a Free and Clear order from the
Court. The SGM APA further provides that such order must be final
and non-appealable, that is, an order which has been affirmed or
the appeal of which has been dismissed by any appellate court and
for which the relevant appeal period has expired.
Given their limited resources, the Debtors seek to avoid the
unnecessary expenses associated with multiple amendments to their
Disclosure Statement and Plan. Accordingly, the Debtors requested a
two-week continuance of the Hearing.
A full-text copy of the Motion dated Oct. 29, 2019, is available at
https://tinyurl.com/y5ltp5ze from PacerMonitor.com at no charge.
The Debtors are represented by:
Samuel R. Maizel
Tania M. Moyron
Nicholas A. Koffroth
DENTONS US LLP
601 South Figueroa Street, Suite 2500
Los Angeles, California 90017-5704
Tel: (213) 623-9300
Fax: (213) 623-9924
E-mail: samuel.maizel@dentons.com
tania.moyron@dentons.com
nicholas.koffroth@dentons.com
About Verity Health System
Verity Health System -- https://www.verity.org/ -- operates as a
non-profit health care system in the state of California, with
approximately 1,680 inpatient beds, six active emergency rooms, a
trauma center, and a host of medical specialties, including
tertiary and quaternary care. Verity's two Southern California
hospitals are St. Francis Medical Center in Lynwood and St. Vincent
Medical Center in Los Angeles. In Northern California, O'Connor
Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton
Medical Center in Daly City and Seton Coastside in Moss Beach are
part of Verity Health. Verity Health also includes Verity Medical
Foundation.
With more than 100 primary care and specialty physicians, VMF
offers medical, surgical and related healthcare services for people
of all ages at community-based, multi-specialty clinics
conveniently located in areas served by the Verity hospitals.
Verity Health System was created in a transaction approved by
California Attorney General Kamala Harris and completed in December
2015.
Verity Health System of California, Inc., and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition
signed by CEO Richard Adcock, Verity Health estimated assets of
$500 million to $1 billion and liabilities of $500 million to $1
billion.
Judge Ernest M. Robles oversees the cases.
The Debtors tapped Dentons US LLP as their bankruptcy counsel;
Berkeley Research Group, LLC, as financial advisor; Cain Brothers
as investment banker; and Kurtzman Carson Consultants as claims
agent.
The official committee of unsecured creditors formed in the casen
retained Milbank, Tweed, Hadley & McCloy LLP as counsel.
WHITE STAR: J. Patrick Mensching Advises Bostick, Winn Analytical
-----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of J. Patrick Mensching submitted a verified statement
to disclose that it is representing Bostick Services, Corp. and
Winn Analytical LLC in the Chapter 11 cases of White Star Petroleum
Holdings, LLC.
As of Nov. 7, 2019, the following parties and their disclosable
economic interests are:
(1) Bostic Services Corp.
P.O.Box 113
Crescent, OK 73028
* Bostic currently holds an unsecured claim against the
Debtors' estate in the approximate amount of $631,000.00
related to a series of transactions whereby it provided well
services to the Debtors. Bostic reserves its right to file
a mineral lien against the Debtors in connection with wells
on which it performed work and has not yet been paid. In
the event that it files a mineral lien, its claim will be
classified as secured.
* Principal amount of claim: $631,000.00
(2) Winn Analytical LLC
44 South 122nd E. Ave.
Tulsa, OK 74128
* Winn currently holds an unsecured claim against the Debtors'
estate in the approximate amount of &6,622.00 related to a
series of transactions whereby it provided services to the
Debtors.
* Principal amount of claim: $6,622.00
JPM represents each of these clients individually; they do not
constitute a committee of any kind.
Each of the parties listed on Exhibit A has consented to multiple
representation by JPM in the above-captioned matter.
JPM reserves the right to amend this Verified Statement as
necessary.
Counsel for Bostick Services Corp. and Winn Analytical LLC can be
reached at:
Doerner, Saunders, Daniel & Anderson, L.L.P.
J. Patrick Mensching, Esq.
Williams Center Tower II
Two West Second St., Suite700
Tulsa, OK 74103
Telephone: (918)591-5240
Facsimile: (918)925-5240
E-mail: pmensching@dsda.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/BYpBBN
About White Star Petroleum
White Star Petroleum Holdings, LLC and its subsidiaries --
http://www.wstr.com/-- are engaged in the acquisition,
development, exploration and production of oil, natural gas and
natural gas liquids located in the Mid-Continent region in the
United States. The Debtors are headquartered in Oklahoma City and
employ 169 people. As of December 2018, the Debtors owned 315,000
net leasehold acres, primarily in Creek, Dewey, Garfield, Lincoln,
Logan, Noble, and Payne counties of Oklahoma.
White Star Petroleum Holdings, LLC and its subsidiaries sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 19-11179) on May 28, 2019. The cases were
transferred to the U.S. Bankruptcy Court for the Western District
of Oklahoma on June 21, 2019. White Star Petroleum Holdings' case
was assigned a new case number (Case No. 19-12521).
At the time of the filing, the Debtors estimated assets of between
$500 million and $1 billion and liabilities of between $100 million
and $500 million.
Judge Janice D. Loyd oversees the cases.
The Debtors tapped Sullivan & Cromwell LLP as bankruptcy counsel;
Morris, Nichols, Arsht & Tunnell LLP as Sullivan's co-counsel;
Guggenheim Securities, LLC as investment banker; Alvarez & Marsal
North America, LLC as restructuring advisor; and Kurtzman Carson
Consultants LLC as claims and noticing agent.
WILWOOD ANTIQUE: Seeks Authorization to Use Cash Collateral
-----------------------------------------------------------
Wildwood Antique Malls LLC seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to use cash collateral to
fund its operation and meet its daily expenses.
The cash collateral which the Debtor seeks to use is comprised of
funds located in its bank accounts and receivables. Such funds are
the proceeds of sales of consigned dealer products as well as
rental income from dealers.
The Debtor's counsel Stephen Biggie, Esq. at Arcadier, Biggie, and
Wood PLLC, anticipates that the Debtor will require the use of
between $200,000 to $300,000 of cash collateral per month to
continue and maintain operations throughout the life of the
reorganization.
The following creditors have a secured claim against Debtors cash
and receivable: BB&T; Channel Partners Capital LLC; Yes Funding
LLC; Business Advance Team LLC; and WG Fund LLC. Mr. Biggie
estimates that the Debtor owes the secured creditors approximately
$457,254, as of the Petition date.
A copy of the Motion is available for free at
https://tinyurl.com/yemcp7lg from Pacermonitor.com
About Wildwood Antique Malls
Wildwood Antique Malls offers the largest selection of antique,
vintage and collectible finds in the state of Florida.
Wildwood Antique Malls filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03363) on Aug.
30, 2019. In the petition signed by Manny Pesco, manager, the
Debtor was estimated to have under $50,000 in both assets and
liabilities. Stephen J. Biggie, Esq., at Arcadier Biggie & Wood,
PLLC, is the Debtor's legal counsel.
[*] BOOK REVIEW: BIG BOARD: A History of the New York Stock Market
------------------------------------------------------------------
Author: Robert Sobel
Publisher: Beard Books
Soft cover: 395 pages
List Price: $34.95
Order your personal copy today at
https://ecommerce.beardbooks.com/beardbooks/the_big_board.html
First published in 1965, The Big Board was the first history of the
New York stock market. It's a story of people: their foibles and
strengths, earnestness and avarice, triumphs and crash-and-burns.
It's full of entertaining anecdotes, cocktail-party trivia, and
tales of love and hate between companies and investors.
Early investments in North America consisted almost exclusively of
land. The few securities holders lived in cities, where informal
markets grew, with most trading carried out in the street and in
coffeehouses. Banking, insurance, and manufacturing activity
increased only after the Revolution. In 1792, 24 prominent New
York businessmen, for whom stock- and bond-trading was only a side
business, met under a buttonwood tree on Wall Street and agreed to
trade securities on a common commission basis. Five securities
were traded: three government bonds and two bank stocks. Trading
was carried out at the Tontine Coffee-House in a call market, with
the president reading out a list of stocks as brokers traded each
in turn.
The first half of the 19th century was heady for security trading
in New York. In 1817, the Tontine gave way to the New York Stock
and Exchange Board, with a more organized and regulated system.
Canal mania, which peaked in the late 1820s, attracted European
funds to New York and volume soared to 100 shares a day. Soon, the
railroads competed with canals for funding. In the frenzy, reckless
investors bought shares in "sheer fabrications of imaginative and
dishonest men," leading an economist of the day to lament that
"every monied corporation is prima facia injurious to the national
wealth, and ought to be looked upon by those who have no money with
jealousy and suspicion."
Colorful figures of Wall Street included Jay Gould and Jim Fisk,
who in 1869 precipitated one of the worst panics in American
financial history by trying to corner the gold market. Almost
lynched, the two were hauled into court, where Fisk whined, "A
fellow can't have a little innocent fun without everybody raising a
halloo and going wild." Then there was Jay Cooke, who invented the
national bond drive and, practically unaided, financed the Union
effort in the Civil War. In 1873, however, faulty judgement on
railroad investments led to the failure of Cooke & Co. and a panic
on Wall Street. The NYSE closed for ten days. A journalist wrote:
"An hour before its doors were closed, the Bank of England was not
more trusted."
Despite J. P. Morgan's virtual single-handed role in stemming the
Knickerbocker Trust panic of 1907, on his death in 1913, someone
wrote "We verily believe that J. Pierpont Morgan has done more harm
in the world than any man who ever lived in it." In the 1950s,
Charles Merrill was instrumental in changing this attitude toward
Wall Streeters. His firm, Merrill Lynch, derisively known in some
quarters as "We, the People" and "The Thundering Herd," brought
Wall Street to small investors, traditionally not worth the effort
for brokers.
The Big Board closes with this story. Asked by a much younger man
what he thought stocks would do next, J.P. Morgan "never hesitated
for a moment. He transfixed the neophyte with his sharp glance and
replied 'They will fluctuate, young man, they will fluctuate.' And
so they will."
Robert Sobel died in 1999 at the age of 68. A professor at Hofstra
University for 43 years, he was a prolific historian of American
business, writing or editing more than 50 books.
*********
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 ***