/raid1/www/Hosts/bankrupt/TCR_Public/200127.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 27, 2020, Vol. 24, No. 26
Headlines
1934 BEDFORD: 1930 Bedford Avenue Objects to Disclosure Statement
A MERRYLAND OPERATING: PCO Files 1st Report
ABA THERAPY: Wants Ombudsman Appointment Waived
ABSOLUT FACILITIES: Patient Care Ombudsman Files 2nd Report
ADVAXIS INC: Prices $10.5 Million Registered Direct Offering
ALLPRO MANUFACTURING: Exclusivity Period Extended Until Feb. 16
AMAZING ENERGY: Provides Update on Recently Acquired Assets
ARCONIC ROLLED: Fitch Assigns 'BB+(EXP)' Issuer Default Rating
ARCONIC ROLLED: Moody's Assigns Ba2 CFR, Outlook Negative
ARISTA IMAGING: Court Says Ombudsman Unnecessary
ARR INVESTMENTS: Bautista Reo Objects to Amended Disclosure & Plan
ASTRIA HEALTH: PCO Files 3rd Consolidated Report
ATHENAHEALTH INC: Fitch Affirms B+ LongTerm IDR, Outlook Stable
AYTU BIOSCIENCE: All Four Proposals Approved at Special Meeting
BARRE N9NE: U.S. Trustee Objects to Plan & Disclosure Statement
BIOSTAGE INC: Peter Chakoutis Quits as VP of Finance
BLESSED HOLDINGS: Wants Plan & Disclosure Hearing Reset to April 20
BLUE RIDGE: Wants Until Feb. 28, 2020 to File Plan & Disclosures
C.T.W. REALTY: Wilmington Trust Wants Prepayment Premium
CARBUCKS OF CAROLINA: Exclusivity Period Extended Until Jan. 29
CASTLE US: Moody's Lowers CFR to B3, Outlook Stable
CHARIOTS OF HIRE: Wells Fargo Objects to Disclosure Statement
CHS/COMMUNITY HEALTH: Fitch Rates $1.02BB Secured Notes 'B'
CHS/COMMUNITY HEALTH: Moody's Assigns Caa2 Rating to New Sec. Notes
CLEVELAND BIOLABS: James Harpel Has 6.8% Stake as of May 14
CLOVER TECHNOLOGIES: 4L's Prepack Chapter 11 Plan Confirmed
COMMUNITY HEALTH: Commences Tender Offer for 5.125% Senior Notes
COMMUNITY HEALTH: Prices Offering of $1.462 Billion Senior Notes
CREATIVE LIGHTING: Has Until May 19 to File Plan & Disclosures
CYTODYN INC: Appoints Alan Timmins as New Independent Director
DBMP LLC: Voluntary Chapter 11 Case Summary
DIRECTVIEW HOLDINGS: Issues $250,000 Demand Promissory Notes
DXI ENERGY: Issues 4.4 Million Shares to Lenders in Lieu of Cash
EVEREADY SERVICES: Case Summary & 20 Largest Unsecured Creditors
EVOKE PHARMA: Signs Commercial Services Agreement with Eversana
EYEPOINT PHARMACEUTICALS: Expects Q4 Revenues of $7.5M to $8.2M
F5 BUSINESS: Voluntary Chapter 11 Case Summary
FAIRWAY MARKET: Enters Chapter 11; Selling 5 Stores to Village
FAIRWAY MARKET: Says It's Not Liquidating All Its Stores
FANNIE MAE & FREDDIE MAC: Gary Hindes Says Mr. Pinto Gets it Wrong
FENER LLC: Seeks to Hire McNamee Hose as Legal Counsel
FENER LLC: Seeks to Hire Murphy Commercial as Broker
FIREBALL REALTY: Judge Denies Bid to Extend Exclusivity Period
FOSSIL CREEK: Case Summary & 20 Largest Unsecured Creditors
FRONTIER COMMUNICATIONS: Fitch Lowers Issuer Default Rating to CC
FTE NETWORKS: Sells CrossLayer Business to CBFA Corp
FUWEI FILMS: Shandong Haoxin Replaces KSP Group as Auditor
GARDA WORLD: Fitch Assigns BB+ Rating on $400MM Sec. Notes Due 2027
GENCANNA GLOBAL: Involuntary Chapter 11 Case Summary
GEORGE BOULANGER: Unsecureds to Have 24% Recovery Under Plan
GIGAMON INC: Fitch Affirms 'B' LT IDR & Alters Outlook to Stable
GJ SOUTH LLC: Feb. 20, 2020 Disclosure Statement Hearing Set
GYPSUM RESOURCES: Judge Extends Exclusivity Period to May 23
HOGAR LA MISERICORDIA: Taps Norberto Colon Alvarado as Counsel
HOSPITAL ACQUISITION: Taylor County Objects to Disclosures & Plan
HOT SPRINGS TAXI: Unsecureds to Get $250 Monthly Until Paid in Full
HUDSON RIVER TRADING: Moody's Affirms Ba2 on Sr. Sec. Term Loan
INSYS THERAPEUTICS: Exclusivity Period Extended Until April 6
JAGUAR HEALTH: Registers Up to 3.75M Shares for Possible Resale
JAGUAR HEALTH: Sabby Volatility Has 3.69% Stake as of Dec. 31
JOSEPH'S TRANSPORTATION: Court Approves Disclosure Statement
KNOB HILL: Voluntary Chapter 11 Case Summary
LAMAR MEDIA: Moody's Assigns Ba2 Rating on New Sr. Unsec. Notes
LIVEXLIVE MEDIA: John Lemak Reports 4.9% Stake as of Jan. 22
LONG BLOCKCHAIN: Extends LIBC Loans Maturity to April 18, 2020
M & C PARTNERSHIP: Feb. 27 Hearing on Disclosure Statement
MAGNUM CONSTRUCTION: Third Amended Plan Effective Dec. 31, 2019
MCDERMOTT INTERNATIONAL: Creditors Back Restructuring Transaction
MEDICAL DIAGNOSTIC: Committee Seeks to Hire Financial Advisor
MEDICAL DIAGNOSTIC: Committee Taps Perkins Coie as Legal Counsel
MMM HOLDINGS: Moody's Assigns B1 Rating on Sr. Sec. Debt
MOUNTAIN HOME: Feb. 5 Amended Plan & Disclosures Hearing Set
N & G PROPERTIES: Voluntary Chapter 11 Case Summary
NFINITY GROUP: Taps Greeves & Roethler as Legal Counsel
NOVABAY PHARMACEUTICALS: Empery Asset Reports 4.9% Stake
OUTLOOK THERAPEUTICS: Board Sets Annual Meeting for March 19
PG&E CORP: Judge Rules on Dispute with Unsecured Creditors
PITBULL REALTY: Judge Denies Extension of Exclusivity Period
PRECISION HOTEL: Exclusivity Period Extended Until May 4
QUIKRETE HOLDINGS: Moody's Rates Sr. Sec. Bank Credit Facility 'B1'
RENNOVA HEALTH: Sabby Healthcare Has 9.9% Stake as of Dec. 31
ROLLS BROS: Case Summary & 20 Largest Unsecured Creditors
RWP HOMES: Unsecureds Will be Paid in Full in Plan
SARAR USA: Court Confirms Amended Chapter 11 Plan
SCIENTIFIC GAMES: Sylebra Capital et al. Have 9.2% Stake
SEABRAS 1 USA: Seeks to Hire Bracewell as Legal Counsel
SFP FRANCHISE: Case Summary & 30 Largest Unsecured Creditors
SKY FINANCIAL: Sale of Trustee's Litigation Claims Affirmed
SOUTHERN MISSISSIPPI: Feb. 20, 2020 Disclosure Hearing Set
STATION CASINOS: Moody's Rates New $500MM Sr. Unsec. Notes B2
SWEETPEA'S TABLE: Voluntary Chapter 11 Case Summary
TIME DEFINITE: Plan to Pay Claims From Future Income
TMS CONTRACTORS: Jan. 30, 2020 Disclosure Statement Hearing Set
TRANS WORLD: Agrees to Sell FYE Segment for $10 Million
TRC FARMS: Case Summary & 20 Largest Unsecured Creditors
WESTERN HOST: Plan & Disclosures Filing Deadline Extended
WINDSTREAM HOLDINGS: Paul Weiss 3rd Update on First Lien Group
YODEL TECHNOLOGIES: Case Summary & 11 Unsecured Creditors
[*] Carl Marks Advisors Promotes Marye Moran to Vice President
[*] Lisa Price Joins A&M's Restructuring & Turnaround Practice
[*] Portage Point Continues to Expand Restructuring Practice
[^] BOND PRICING: For the Week from January 20 to 24, 2020
*********
1934 BEDFORD: 1930 Bedford Avenue Objects to Disclosure Statement
-----------------------------------------------------------------
1930 Bedford Avenue LLC, the holder of the first mortgage on the
property owned by Debtor 1934 Bedford, LLC at 1930-1934 Bedford
Avenue, Brooklyn, New York 10010, filed its objection to the
Debtor's disclosure statement.
In its objection 1930 Bedford argues that:
* The plan violates sections 1123(a)(1)(2) and (3) and section
1124 of the Code because it misclassifies the Mortgagee Claim as a
Class 3 unimpaired non-voting class even though payment in full
under the Plan is uncertain – payment is contingent upon the
Debtor either refinancing or finding a buyer at a large enough
purchase price.
* The Disclosure Statement does not identify how the Debtor
intends to sell the Property if its refinancing fails, and
therefore Plan feasibility remains guesswork.
* The Disclosure Statement lacks adequate information on
refinancing terms, sale terms, Property income and expenses and
insider claims.
* The Plan is a Trojan horse proffered for the improper purpose
of delaying a sale of the Property indefinitely.
* The Disclosure Statement describes a plan that cannot be
confirmed.
A full-text copy of 1930 Bedford Avenue's objection dated January
2, 2020, is available at https://tinyurl.com/stb54dk from
PacerMonitor.com at no charge.
1930 Bedford Avenue is represented by:
BACKENROTH FRANKEL & KRINSKY, LLP
Mark A. Frankel
800 Third Avenue
New York, New York 10022
Tel: (212) 593-1100
About 1934 Bedford LLC
1934 Bedford LLC operates and develops a multi-unit building in
Brooklyn, New York.
An involuntary petition for relief under Chapter 11 of the
Bankruptcy Code was filed by creditors Simply Brooklyn Realty, HTC
Construction Management, Inc., HTC Plumbing, Inc. against Bedford
(Bankr. E.D.N.Y. Case No. 19-44751) on Aug. 2, 2019. On Sept. 12,
2019, Bedford consented to the entry of an order for relief under
Chapter 11 of the Bankruptcy Code.
The creditors are represented by Rosenberg Musso & Weiner LLP.
Wayne Greenwald, P.C. is the Debtor's counsel.
A MERRYLAND OPERATING: PCO Files 1st Report
-------------------------------------------
Eric M. Huebscher, the patient care ombudsman appointed for A
Merryland Operating LLC dba A Merryland Health Center LLC,
submitted to the U.S. Bankruptcy Court for the Eastern District of
New York his first written Ombudsman Report regarding the quality
of care provided to patients of the Debtor on January 21, 2020.
The PCO reviewed medical records during two of the four visits to
the Debtor's facility. During each of the visits, the PCO toured
the facility. These tours involved inspecting and observing exam
rooms and waiting areas. The PCO spent a considerable amount of
resources working with the Debtor in establishing the framework
under which the Debtor could emerge from this Chapter 11
proceeding, without impacting patient care and the Debtor's
efficient delivery of medical services.
The PCO held that he did not find any issues with regard to patient
care. The PCO did not receive any complaints from any patients,
providers or employees. The PCO was not informed of any existing
regulatory issues and/or deficiencies with regard to
the Debtor's operations.
According to Huebscher, given the modest size the Debtor's
financial operations, the PCO has stressed to the Debtor that it is
in its best interest to create a plan to exit the Chapter 11
proceeding in the shortest time possible. The PCO noted that he has
encouraged the Debtor to work with its counsel and other key
stakeholders in furtherance of this goal. The Debtor expressed a
willingness and desire to meet this goal.
The PCO will continue to monitor the Debtor's operations with both
onsite and offsite monitoring tools, consistent with those
identified. The PCO reserves the right to modify the monitoring
process should facts and circumstances change.
A full-text copy of the PCO report is available at
https://is.gd/TGs5Pg from PacerMonitor.com.
The PCO may be reached at:
Eric M. Huebscher
630 Third Avenue - 21st Floor
New York, NY 10017
Tel: (646) 584-3141
Fax: (212) 202-3503
Email: ehuebscher@huebscherconsulting.com
The PCO is represented by:
Martin G. Bunin, Esq.
Veronique A. Urban, Esq.
FARRELL FRITZ, P.C.
622 Third Avenue, 37th Floor
New York, NY 10017
Tel: (212) 687-1230
Email: mbunin@farrellfritz.com
vurban@farrellfritz.com
About A Merryland Operating
A Merryland Operating LLC is a walk-in primary care medical clinic
located in underserved community of Coney Island.
A Merryland Operating filed a voluntary Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 19-46475) on Oct. 28, 2019, estimating under $1
million in assets and liabilities. The Debtor is represented by
Dawn Kirby, Esq., at Kirby Aisner & Curley LLP.
Eric Huebscher has been appointed as Patient Care Ombudsman and is
represented by Farrell Fritz, P.C.
ABA THERAPY: Wants Ombudsman Appointment Waived
-----------------------------------------------
ABA Therapy Solutions, LLC, has asked the U.S. Bankruptcy Court for
the Southern District of Florida to waive the requirement that a
patient care ombudsman be appointed in its Chapter 11 case.
One day after filing for bankruptcy, the Bankruptcy Court directed
the Office of the United States Trustee to appoint a patient care
ombudsman or file a motion with the Court to show that such
appointment is not necessary for the protection of patients under
the specific circumstances of this case.
The Debtor qualifies as a health care business as that term is
defined in section 101(27A)(B)of the Bankruptcy Code. Under 11
U.S.C. 333(a)(1), if a debtor is a health care business, the Court
must order not later than 30 days after the commencement of the
case, the appointment of an ombudsman to monitor the quality of
patient care and to represent the interests of the patients of the
health care business unless the court finds that the appointment of
an ombudsman is not necessary.
Meanwhile, Bankruptcy Rule 2007.2(a) provides that the court must
order the appointment of a patient care ombudsman under Sec. 333,
unless the court, on motion of the United States trustee or a party
in interest filed no later than 21 days after the commencement of
the case or within another time fixed by the court, finds that the
appointment of a patient care ombudsman is not necessary under the
specific circumstances of the case for the protection of patients.
ABA Therapy Solutions contends, however, that appointment of a
patient care ombudsman is unnecessary and that the Court should
exercise it discretion to waive the requirement that one be
appointed.
Gary Peirce is the Debtor's chief financial officer, responsible
for incoming and outgoing funds, budgets, monthly financials,
negotiating vendor contracts, purchasing and banking needs. Linda
Peirce is the Debtor's executive clinical director, and is a
board-certified behavior analyst, who directs all clinical services
and provides consultation and oversight of all programming for over
100 clients.
The Debtor asserts that the reason for the filing of the Chapter 11
is not related to any patient care issues. The Debtor is not aware
of any pending governmental investigations; nor is the Debtor a
party to any malpractice actions. In this instance, the Debtor did
not file bankruptcy due to any issues related to negligence of
deficiencies in patient care, such as a malpractice lawsuit.
The Debtor says the cause of the bankruptcy filing was related to
the fact that the Debtor's expenses exceeded its revenue and it was
unable to meet its monthly debt service obligations. The Debtor,
however, points out it is making payments each month by way of a
Settlement Agreement to the Agency for Health Care Administration
related to a Medicaid overpayment, not related to patient care
issues. More specifically, this case filing is the result of
several business loan agreements that proved to be overwhelmingly
burdensome to the estate.
The Debtor tells the Court that the Chapter 11 process will allow
opportunity for the business loan agreements to be repaid in an
orderly fashion to allow the Debtor to restructure its debts. It is
expected that cash flow will be improved as a result of the
bankruptcy stay and the Debtor will be able to easily address the
needs of its patients from a financial standpoint.
The Debtor maintains that an ombudsman is not necessary and would
add an additional layer of administrative expense that should be
avoided in this matter. The Debtor is already subject to monitoring
by a number of governmental agencies and has remained in compliance
with all regulations since its inception in 2013. While it is
obviously in the Debtor's financial interests to provide excellent
patient care, various regulatory, licensing and supervising
entities ensure that the care provided by the Debtor's meets
objective standards imposed by international standards.
About ABA Therapy Solutions, LLC
Based in Stuart, Florida, ABA Therapy Solutions, LLC, provides
in-home and clinic services covering language, behavioral,
self-help skills and social skills services for individuals with
autism spectrum disorders, down syndrome and other developmental
disabilities.
ABA Therapy Solutions, founded in 2012 by Linda Peirce, is owned by
the husband and wife team of Gary and Linda Peirce, who each own
50% of the Debtor.
ABA Therapy filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Fla., Case No. 20-10208) on January 7, 2020. The petition was
signed by Linda Peirce, managing member.
Judge Erik P. Kimball presides over the case.
Craig I. Kelley, Esq., at Kelley, Fulton & Kaplan, P.L., serves as
counsel to the Debtor. ABA Therapy listed $157,637 in total assets
and $1,342,155 in total liabilities.
ABSOLUT FACILITIES: Patient Care Ombudsman Files 2nd Report
-----------------------------------------------------------
Joseph J. Tomaino, the patient care ombudsman for Absolut
Facilities Management, LLC, et al., filed his second written report
on Jan. 17, 2020, with the United States Bankruptcy Court for the
Eastern District of New York.
According to the report, on December 10, 2019, the PCO's staff
member Sharon Carlo, RN toured the facilities at:
-- Absolut Center for Nursing and Rehabilitation at Three
Rivers, LLC, and
-- Absolut Center for Nursing and Rehabilitation of
Allegany, LLC.
With respect to the Three Rivers facility, the report notes that:
1. Nursing staff interviewed indicated that staffing issues
were present, but were not new and were not associated
with the September 11, 2019, Chapter 11 filing.
2. There were no reported problems with availability of
supplies and medications.
3. The newly appointed Food Service Director (FSD) stated
firmly that they have had no problems with food,
supplies, or linens (done in-house) since the Chapter 11
filing.
4. The current president and the president-elect of the
Resident Council both denied that there had been any
problems that they felt could be attributed to the
bankruptcy situation that started on the filing date.
Both residents were adamant about food concerns, stating
the "food is worse" but admitted when questioned that a
food committee was in place that is associated with
resident council and that substitutes are always
available upon request.
5. There were no odors and the facility appeared to be
clean.
6. The social worker (SW) stated that there were no reported
problems with resident funds and that the business
manager handles the resident trust fund.
7. Neither the Director of Nursing Services (DNS) nor the
Administrator expressed any concerns about the
availability of supplies or funds to operate the facility
following the bankruptcy filing.
With respect to the Allegany facility, the report notes that:
1. Nursing staff indicated that there have been no changes
in staffing since the bankruptcy was announced. They also
denied any issues with access to supplies needed for
patient care.
2. The site administrator and COO noted that a pungent odor
at the time of the PCO's visit was an anomaly and they
acted immediately to identify the cause of the odor.
Although they were not able to do so while PCO staff was
onsite, the administrator had a plan to address the odor
that included a full stripping of the floor and painting
of walls.
3. Resident rooms were clean.
4. The Director of Maintenance/Purchasing stated that he has
worked at the facility for 13 years and that there are no
vendor/nursing/medication supply problems at this time,
nor have there been any problems since the bankruptcy was
filed.
5. The Food Service Director (FSD) who is responsible for
ordering and managing food and dietary supplies stated
that there have been no problems with food/supplies or
any vendors since the bankruptcy was filed.
6. A resident fell out of bed while PCO staff was there and
the staff (and administrator's) response was immediate
and appropriate.
7. The administrator stated that there are no outstanding
Department of Health (DOH) or Attorney General (AG)
investigations or issues.
In reviewing the weekly reports from the facility administrators,
it was noted that Absolut Center for Nursing and Rehabilitation at
Westfield, LLC, was resurveyed by the New York State Department of
Health on November 11, 2019, and determined to be in substantial
compliance related to citations from a survey completed on October
16, 2019. These citations included not completing a criminal
background check on an employee in a timely manner, lack of proper
maintenance of the emergency generator, improper storage of oxygen
cannisters, failure to report a resident incident in a timely
manner, inadequate assessment and care planning related to resident
falls, dialysis related care issues, inadequate drug regimen
reviews, use of psychotropic drugs, and resident records. None of
these issues were cited at a substandard quality of care (serious)
level and appear to have been addressed to the satisfaction of the
surveyors.
The PCO will conduct visits of the facilities and continue to visit
them once per reporting period and monitor weekly status reports
from the administrators.
For additional information please contact:
Joseph J. Tomaino
Grassi Healthcare Advisors LLC
488 Madison avenue
New York, NY 10022
Telephone:(212)223-5020
Email: jtomaino@grassihealthcareadvisors.com
A full-text copy of PCO Report is available at https://is.gd/d7fwBZ
from PacerMonitor.com at no extra charge.
About Absolut Facilities Management
Absolut Facilities Management, LLC, through its subsidiaries, owns
six skilled nursing facilities and one assisted living facility in
the state of New York.
Absolut Facilities Management, LLC and seven related entities each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-76260) on Sept. 10, 2019, listing between $1 million to $10
million in both assets and liabilities.
Loeb & Loeb LLP is the Debtors' counsel. Prime Clerk LLC is the
claims and noticing agent.
The Office of the U.S. Trustee on Oct. 3, 2019, appointed five
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 cases. The Committee has retained Amini LLC as
counsel.
ADVAXIS INC: Prices $10.5 Million Registered Direct Offering
------------------------------------------------------------
Advaxis, Inc. has entered into a definitive agreement with two
institutional investors for the purchase and sale of 10,000,000
shares of the Company's common stock at an offering price of $1.05
per share, for gross proceeds of $10.5 million before deducting
fees and other estimated offering expenses, pursuant to a
registered direct offering. The Company has also agreed to issue
to those investors, in a concurrent private placement, unregistered
common share purchase warrants to purchase 5,000,000 shares of the
Company's common stock. The warrants will be exercisable on the
six-month anniversary of issuance and will have a five-year term
and an exercise price of $1.25 per share.
The Company expects to use the net proceeds from the Offering to
fund its continued research and development initiatives in
connection with its product pipeline including, but not limited to,
in its ADXS-HOT program and potential new studies for its ADXS-PSA
drug candidate, and for general corporate purposes. The Offering
is expected to close on or about Jan. 23, 2020, subject to the
satisfaction of customary closing conditions.
A.G.P./Alliance Global Partners is acting as sole placement agent
for the Offering.
This offering is being made pursuant to an effective shelf
registration statement on Form S-3 (File No. 333-226988) previously
filed with the U.S. Securities and Exchange Commission, and an
additional registration statement on Form S-3 filed pursuant to
Rule 462(b) under the Securities Act, which became effective upon
filing on Aug. 30, 2018. A prospectus supplement describing the
terms of the proposed offering will be filed with the SEC and will
be available on the SEC's website located at www.sec.gov.
Electronic copies of the prospectus supplement may be obtained,
when available, from A.G.P./Alliance Global Partners, 590 Madison
Avenue, 36th Floor, New York, NY 10022 or via telephone at
212-624-2006 or email: prospectus@allianceg.com. Before investing
in this offering, interested parties should read in their entirety
the prospectus supplement and the accompanying prospectus and the
other documents that the Company has filed with the SEC that are
incorporated by reference in such prospectus supplement and the
accompanying prospectus, which provide more information about the
Company and such offering. Copies of the Supplement, the Base
Shelf Prospectus and the Registration Statement may also be
obtained from A.G.P./Alliance Global Partners, 590 Madison Avenue,
36th Floor, New York, NY 10022 or via telephone at 212-624-2060 or
email: prospectus@allianceg.com.
About Advaxis, Inc.
Headquartered in Princeton, New Jersey, Advaxis, Inc. --
www.advaxis.com -- is a clinical-stage biotechnology company
focused on the discovery, development and commercialization of
proprietary Lm-based antigen delivery products. These
immunotherapies are based on a platform technology that utilizes
live attenuated Listeria monocytogenes (Lm) bioengineered to
secrete antigen/adjuvant fusion proteins. These Lm-based strains
are believed to be a significant advancement in immunotherapy as
they integrate multiple functions into a single immunotherapy and
are designed to access and direct antigen presenting cells to
stimulate anti-tumor T cell immunity, activate the immune system
with the equivalent of multiple adjuvants, and simultaneously
reduce tumor protection in the tumor microenvironment to enable T
cells to eliminate tumors.
Advaxis reported a net loss of $16.61 million for the year ended
Oct. 31, 2019, and a net loss of $66.51 million for the year ended
Oct. 31, 2018. As of Oct. 31, 2019, the Company had $45.26 million
in total assets, $5.72 million in total liabilities, and $39.53
million in total stockholders' equity.
Marcum LLP, in New York, NY, the Company's auditor since 2012,
issued a "going concern" qualification in its report dated Dec. 20,
2019, citing that the Company has incurred significant losses and
needs to raise additional funds to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
ALLPRO MANUFACTURING: Exclusivity Period Extended Until Feb. 16
---------------------------------------------------------------
Bankruptcy Judge Jeffrey Norman extended to Feb. 16 the period
during which only Allpro Manufacturing, Inc. can file a Chapter 11
plan of reorganization and disclosure statement.
Allpro Manufacturing is currently working with Frost Bank, a
secured creditor and lender, to coordinate lien rights regarding
debtor-in-possession financing. Once it is approved, the company
believes that it will be able to formulate a reorganization plan.
About Allpro Manufacturing
Houston-based Allpro Manufacturing, Inc. makes custom lead products
including lead roof fishings, fittings, pipe, castings, shielding
and other specialty products. It conducts business under the name
Lead Products Co.
Allpro Manufacturing filed a voluntary Chapter 11 petition (Bankr.
S.D. Tex. Case No. 19-33368) on June 17, 2019. In the petition
signed by Cary Ostera, president, the Debtor disclosed $760,101 in
assets and $1,136,156 in liabilities. Judge Jeffrey P. Norman
oversees the case. The Law Office of Margaret M. McClure is the
Debtor's counsel.
AMAZING ENERGY: Provides Update on Recently Acquired Assets
-----------------------------------------------------------
Amazing Energy Oil and Gas Co. has sold the first two loads of oil
produced from wells associated to its acquired assets located in
Walthall County, Mississippi known as the Denver Mint Project and
has begun the process of reworking wells described as the first
phase in the Company's acquisition announcement.
Prior to commencing plans to rework and or make up-hole
recompletions in the 9 existing oil wells, expected to achieve
between 150 and 300 bop/d, Amazing required an existing Salt Water
Disposal (SWD) Well be prepared for connection. The SWD passed
inspection last week which will allow the Company to produce the
first phase wells as they are brought online. Reworks are expected
to commence this week and the Company will report results as work
is completed.
"We are excited to be selling production from our Denver Mint
Project and to have entered the first phase of our plan to grow
that profile," said Willard McAndrew, III, Amazing Energy's CEO.
"Passing MIT inspection on our salt water well sets the table for
the significant unrealized production capacity to be brought
online. Over the coming weeks we will be improving wellbore
integrity, perforating new zones and applying mechanical fixes to
access untouched reserves. The addition of associated cash flow
confirms our plan to grow through accretive acquisitions and
organically through the drill bit."
Amazing's Denver Mint Project in Walthall County, Mississippi
consists of 900 acres of leasehold, 9 oil wells and a saltwater
disposal well. The assets include associated production facilities
and infrastructure necessary to significantly increase the asset's
current production profile. Amazing's plan is to rework and or
make up-hole recompletions in the 9 existing oil wells and expects
to achieve associated production of between 150 and over 300 bop/d.
An associate third-party reserve engineering report was completed
by Moyes & Company and identifies an NPV-10 value of over $4.4mm
and future net revenue of over $20 mm on the assets.
The Company has outlined a plan for the project's first nine months
to be split into four phases. Each phase will focus on different
wells and have independent production and economic targets. The
first phase will re-establish the field's existing production
capacity, the second will be a waterflood pilot project in the
Lower Tuscaloosa D Sand, the third phase will test the shallow
Yegua, Cook Mountain, and Sparta objectives above 3,500 feet total
measured depth, and the fourth phase will be to recomplete
behind-pipe Lower Tuscaloosa zones, including sidetracking the
Magee 34-1 well. One of the project's most attractive aspects is
the low cost often associated with shallow and secondary recovery
projects. In this case, minimal capital investment is required to
drill or complete as many existing wellbores will be utilized.
About Amazing Energy
Amazing Energy Oil and Gas, Co. -- http://www.amazingenergy.com/--
is an independent oil and gas exploration and production company
headquartered in Plano, Texas. The Company's primary leasehold is
in the Permian Basin of West Texas. The Company controls over
75,000 acres between their rights in Pecos County, Texas and assets
in Lea County, New Mexico, and Walthall County, Mississippi. The
Company primarily engages in the exploration, development,
production and acquisition of oil and natural gas properties.
Amazing Energy's operations are currently focused in the Permian
Basin and Gulf Coast regions.
Amazing Energy incurred a net loss of $8.05 million during the year
ended July 31, 2019, and a net loss of $6.51 million during the
year ended July 31, 2018. As of Oct. 31, 2019, the Company had
$11.03 million in total assets, $10.59 million in total
liabilities, and $440,116 in total stockholders' equity.
DeCoria, Maichel & Teague, P.S., in Spokane, Washington, the
Company's auditor since 2014, issued a "going concern"
qualification in its report dated Nov. 13, 2019, citing that the
Company has limited financial resources, negative working capital,
recurring losses and an accumulated deficit at July 31, 2019.
These factors raise substantial doubt about its ability to continue
as a going concern.
ARCONIC ROLLED: Fitch Assigns 'BB+(EXP)' Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings assigned Arconic Rolled Products Corp. an Issuer
Default Rating of 'BB+(EXP)'. Fitch has also assigned long-term
ratings to the company's proposed $800 million senior first lien
secured term loan and $1.0 billion senior first lien secured
revolver at 'BBB-(EXP)'/'RR1'. The Rating Outlook is Stable.
ARPC's ratings are supported by the company's strong financial
structure, which is generally in line with companies rated at
investment grade levels. The company's end-markets are also
relatively diversified, and comprised of industries that are
shifting towards lighter weight materials, which ARPC specializes
in. Although the company is exposed to commodity price volatility,
costs are generally passed through to customers.
Fitch believes the company requires a strong financial structure to
offset its limited profitability and moderate exposure to broad
economic cycles, which somewhat constrain the company's rating. The
company will also be required to make material pension
contributions going forward, straining its financial flexibility.
ARPC will also assume the potential liability that could stem from
the Grenfell Towers tragedy in 2017, which will remain an overhang
for the foreseeable future despite its expectation that insurance
coverage may offset potential liabilities. Finally, there is a risk
that the new management team could implement new strategies that
deviate from the credit-positive financial and operational policies
of the previous team, which could change Fitch's assessment of the
company.
KEY RATING DRIVERS
Strong Financial Structure: ARPC's proposed leverage is low and
financial structure is strong for the proposed ratings. Fitch
forecasts 2020 gross debt/EBITDA to remain below 1.5x and FFO
adjusted leverage at or below 3.5x, which are more commensurate
with 'BBB' or 'A' category issuers. Fitch believes the company must
maintain lower leverage than similarly rated peers due to the high
degree of cyclicality, profitability consistent with mid-'BB'
category rated issuers, and substantial required pension
contributions.
Limited Profitability: Fitch views ARPC's profitability as somewhat
weaker than similarly rated companies. Fitch forecasts the company
will generate low double-digit EBITDA margins, mid-single digit FFO
margins, and neutral-to-positive FCF margins over the rating
horizon. Fitch believes the company's anticipated top-line growth
and focus on operational efficiency will likely support management
in maintaining or improving these thresholds over the long-term.
ARPC also has relatively low capital intensity, with capex
representing less than 2.5% of revenue and minimal working capital
requirements. Fitch considers these positive factors are somewhat
offset by the entity's significant annual pension contributions,
expected environmental payments, and potential sensitivity to
end-market cyclicality.
Pension Split: Arconic Inc.'s pension will be split between ARPC
and Howmet (HMT; RemainCo) at the time of the transaction. Fitch
estimates approximately 55% of the pension plan and 73% of the
other post-employment benefit (OPEB) liability will shift to ARPC.
As a result, the company's required cash contribution to the plans
will likely be between $250 million and $325 million per year over
the next few years. Fitch believes this required outflow is
manageable, though it will continue to weigh on the company's
ability to generate FFO over the long term, and could impede
positive rating momentum into investment grade territory.
Adequate Financial Flexibility: Fitch considers ARPC to have
adequate financial flexibility. The company currently plans to
maintain approximately $1.5 billion of liquidity, comprised of a
cash balance of around $500 million and a $1.0 billion revolver.
Fitch projects the company will generate modestly improving FCF
over the next few years. This flexibility projects to be ample
enough to support the company's cash outflows including annual
capex, pension costs, working capital fluctuations, and a modest
dividend. Fitch believes it would also sufficiently support the
company during a secular downturn, particularly if management was
able to efficiently curtail operating costs in such a scenario.
Cyclical, but Diversified End-Markets: ARPC's end markets are
highly cyclical, as its customers operate in the commercial
aerospace, automotive, packaging, diversified industrial, and
building and construction industries. The exposure to economic
cycles and demand fluctuations within these industries could result
in significant top-line volatility for ARPC. Fitch considers this
risk to be moderate, but partially mitigated by the company's
diversified mix of end markets, long production lead time,
long-term contracts and relationships, and innovative offerings.
Strong Market Position: ARPC is the leading global producer of
rolled aluminum sheet. The company is the number one sheet producer
to the global aerospace & defense and industrial & packaging
industries, and a top two producer for the North American building
& construction and auto & transportation markets. No individual
end-market makes up greater than 33% of sales. Fitch believes the
company's market position is somewhat defensible due to the
company's scale and proven ability to innovate with lightweight
materials without substantially sacrificing strength.
Shift to Light-Weight Materials Driving Top-Line: Fitch believes
the company will benefit over the next several years as both auto
and aerospace & defense OEMs shift to lightweight materials in
production. Fitch projects top-line growth in the low-to-mid single
digits for Rolled Products and Extrusions will largely be supported
by this trend. The company regularly invests in technology to
improve its operating capabilities and expand product offerings,
including the Thick Plate Stretcher and proprietary bonding and
alloy technology.
In the aerospace industry, the company's Global Rolled Products
segment produces polished fuselage sheet and wing skins, while
Aluminum Extrusions revenue predominantly supplies to both Boeing
and Airbus. ARPC currently supplies 100% of wings and fuselages for
Boeing's commercial aircraft.
In the automotive industry, there has been an appetite to shift
some content to aluminum and other alloys in recent years,
primarily as a way to reduce vehicle weight, while maintaining
performance. ARPC has been a part of this trend. Fitch believes the
Ford F150 was a prime example, while the company's contracts have
since expanded to include the Lexus RX and Jeep Wrangler. Fitch
believes there is potential for further expansion over the next
four to five years as production costs come down.
Commodity Costs Pass-through: ARPC has minimal commodity exposure.
Aluminum and other materials specifically used in many of the
company's engineered products are typically sold directly to
customers and through distributors, reducing the impact. The
company estimates that 90% of aluminum exposure is passed through
directly to its customers. Where costs cannot be passed through to
customers, they are generally hedged.
Grenfell Liability: Fitch believes the liability related to the
Grenfell Towers fire in 2017 will be spun-off within ARPC along
with Reynobond PE and the Building and Construction Services unit
as part of the proposed transaction. Reynobond supplied cladding
panels that were used in renovating Grenfell Tower in North
Kensington, west London, in 2016. The building suffered a deadly
fire on June 14, 2017. At least 80 people have been confirmed dead
as a result of the fire.
Legal proceedings regarding the incident are in the early stages. A
first phase, fact-identification report was completed in November
2019. The second phase, more detailed report likely won't be
completed until early-2021. Fitch believes it is likely that
potential litigation could last beyond the current rating horizon,
and out of court settlement is possible. Since the tragedy, the
U.K. government has funded a GBP200 million program fund the
removal of non-compliant cladding from housing structures in
Britain. The onus to remove the cladding is on the building owners,
though there is a possibility that the government could petition
suppliers and contractors to contribute to the fund.
New CEO Appointment: Arconic Inc. announced that Timothy Myers will
be appointed as CEO of Arconic Rolled Products Corp. following the
proposed spin-off transaction. Mr. Myers previously held the
position of executive vice president and group president for
Aronic's aluminum rolled products, transportation and construction
products businesses. Fitch views the appointment as
neutral-to-positive, as it likely reduces the risk of operational
disruption related to a leadership change.
Generally, Fitch assumes the company's financial strategy will
remain unchanged after the split and transition of power to the new
CEO. Fitch believes the current Arconic Inc. management team and
board will have stressed the importance of maintaining a consistent
financial and operational strategy post-transaction in their
selection process for a new management team. Although the risk of
operational disruption is reduced, Fitch believes execution risk
will be modest over the 12 to 18 months following the split, while
the company acclimates to acting as separate entities. It is also
possible that a new management team could materially deviate from
current strategy, though its base case assumes continuity.
DERIVATION SUMMARY
Arconic Rolled Products Corp. compares somewhat well to Harsco
Corporation (BB/Stable) and Dana Incorporated (BB+/Stable). In
general the company has weaker profitability than both peers, but a
moderately stronger capital structure. Fitch considers ARPC's end
markets to be more diversified than each Dana and Harsco and expect
the company's cash flow to gradually improve following the initial
assimilation of acting as a standalone entity.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Low-to-mid-single digit revenue growth for Rolled Products
segment from 2020 to 2022; Low single digit revenue growth at
Extrusions and Building & Construction Systems segments;
- EBIT margins trend above 8% over the rating horizon; EBITDA
margins in the low double digits;
- No material operational disruptions related to spin-off;
- Capex between 2% and 3% of revenue per year from 2019 to
2022;
- Annual dividend around $50 million per year;
- Pension contributions between $190 million and $350 million
per year between 2019 and 2022;
- ARPC pays $700 million dividend to HMT;
- Debt issuance of $1.2 billion related to transaction;
- Aggregate voluntary debt paydown in excess of $300 million
between 2020 and 2022;
- The new management team generally follows the financial
and operational strategy that current management team has
laid out.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- FFO fixed charge coverage ratio sustained above 4.5x;
- FFO adjusted leverage sustained below 2.7x;
- Lease adjusted leverage (lease adjusted debt-to-EBITDAR)
sustained below 1.5x;
- EBIT margins sustained above 8%;
- Company publicly commits to obtaining and maintaining an
investment grade credit profile;
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- FFO fixed charge coverage sustained below 3.5x after 12 to 18
months following the transaction;
- FFO adjusted leverage is sustained above 3.5x after 12 to 18
months following the transaction;
- Lease adjusted leverage (lease adjusted debt-to-EBITDAR)
sustained above 2.0x;
- EBIT margins sustained below 7% after 12 to 18 months
following the transaction;
- Contingent legal liabilities, pension contributions, or
environmental liabilities result in significant cash
flow impact.
LIQUIDITY AND DEBT STRUCTURE
Fitch expects the company's liquidity to be adequate over the
rating horizon. Fitch anticipates ARPC will maintain liquidity
between $1.3 billion and $1.6 billion on average over the next
several years, comprised of greater than $450 million of cash and
new (expected) senior first lien secured $1.0 billion revolver,
which could be drawn upon during the year to cover short term
working capital fluctuations, but would likely be subsequently paid
down. Excess cash will likely be deployed towards repayment of the
company's new term loan and a modest dividend. The company could
also deploy cash towards share repurchases after paying down debt
over time.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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.
ARCONIC ROLLED: Moody's Assigns Ba2 CFR, Outlook Negative
---------------------------------------------------------
Moody's Investors Service assigned Arconic Rolled Products
Corporation a Ba2 Corporate Family Rating, a Ba2-PD Probability of
Default rating and a Ba1 rating to the company's $1 billion senior
secured first lien revolving credit facility and $800 million
senior secured first lien Term Loan B. The outlook is negative.
This is the first time Moody's has rated Arconic Rolled Products
Corporation.
Arconic Rolled Products Corporation is the spin off from its
parent, Arconic Inc of the Global Rolled Products, Extrusions, and
Building and Construction businesses. At the time of separation,
Arconic Rolled Products Corporation will pay a distribution to
Arconic Inc. Upon completion of the spin, Arconic Rolled Products
Corporation will be renamed Arconic Corporation and Arconic Inc.
will be renamed Howmet Aerospace Inc.
"The Ba2 CFR reflects Arconic's end market diversity and global
footprint but incorporates softer market conditions in several of
its end markets as well as the expected impact of Boeing's
production suspension of its 737 Max, which will affect all
suppliers to this Boeing platform. ARP's environmental and other
unknown magnitude of liabilities from the Grenfell fire are also
considerations in the CFR rating" said Carol Cowan, Senior Vice
President and lead analyst for Arconic.
Assignments:
Issuer: Arconic Rolled Products Corporation
Probability of Default Rating, Assigned Ba2-PD
Corporate Family Rating, Assigned Ba2
Senior Secured Bank Credit Facility, Assigned Ba1 (LGD2)
Outlook:
Issuer: Arconic Rolled Products Corporation
Outlook, Assigned Negative
RATINGS RATIONALE
The CFR considers Arconic's strong and leading position in the
mid-stream aluminum industry with a broad operating footprint and
diversified end market exposure that provides market and geographic
diversity. Arconic will be a midstream aluminum producer providing
aluminum sheet, plate and other products to a diversity of end
markets. The company operates through 5 market segments: Ground
Transportation (36% of revenues), Aerospace (16%), Building and
Construction (18%), Industrial (16%) and Packaging (14%), all as of
year-end December 31, 2018. Of the revenue dispersion, GRP (Global
Rolled Products) is by far the largest contributor at roughly 78%
and is assumed to be the largest generator of EBITDA. Revenues in
2018 were $7.2 billion and for the nine months ended September 30,
2019 were $5.6 billion, with adjusted EBITDA (unaudited) of roughly
$555 million for the nine months through September 30, 2109
While representing a diverse end market exposure, these markets
remain subject to volatility and economic conditions. In the
transportation industry, representing approximately 36% of sales,
the company has multi-year contracts and provides value added sheet
products to platforms such as the Ford F150 and other platforms
enhancing mix and profitability. In the aerospace industry,
accounting for roughly 16% of revenues, the company has multi-year
contracts and supplies all sheet and plate to all models of the
Boeing Commercial Airlines Company.
Arconic's expansion over the last number of years into aluminum
body sheet to the automotive market has contributed to an improved
product mix and higher value-added sales. However, with the
continued development of high strength and next gen steels, Moody's
believes the pace of changeover could slow. Additionally, from a
light vehicle sales perspective Moody's believes light vehicle
sales have peaked and will be lower year-on-year although still
healthy at in excess of 16 million units in 2019.
Arconic's business model is a margin on metal construct with the
aluminum price and premiums passed through to the customer or in
some cases hedged. As is typical in the industry there can be a lag
where aluminum price movements impact performance on a quarterly
basis. However, fundamentals for common aluminum alloy products
have improved with the imposition of antidumping and countervailing
duties on imports from China.
Arconic has a strong position within the aerospace industry in
terms of its sales to the major airplane manufacturers and the aero
industry has a strong backlog. However, the situation at Boeing and
stopping of production of the 737 MAX at this point in time will
impact companies in the supply chain, including Arconic. Once
production were to resume, the ramp is expected to be slower than
might be anticipated. Consequently, revenues and earnings from the
aerospace segment are expected to decline in 2020 although the
company's position on other aircraft will help to soften the degree
of impact. Additionally, given slowing economic expectations,
softening in industrial activity is evident as indicated by recent
PMI readings which will contribute to less robust conditions in
other end markets served.
While the CFR reflects Arconic's solid position in markets served,
the quantitative metrics are countered by several factors. These
would include potential liabilities related to the Grenfell Tower
litigation and related class action suits, although this has a long
tail and is not quantifiable at this time, environmental
remediation expenditure requirements that will pass to the spin-co
company, and the fact that the new company does not have an
established track record as to financial discipline, execution on
strategic objectives or ability to achieve anticipated margin and
earnings improvements.
Incorporated in the CFR's however is the liquidity support provided
by the approximately $1 billion secured, cash flow based revolving
credit facility.
The negative outlook reflects the uncertainty surrounding the
duration of the Boeing production suspension and the ultimate
impact on performance of Arconic Rolled Products. The outlook also
captures the slowing economic environment and softening in a number
of markets served by the company, including the transportation
markets including automotive, although contraction here is expected
to be relatively modest. However, the company is expected to be
conservatively capitalized, allowing for some cushion in weakening
in performance and metrics.
Ratings are unlikely to be upgraded in the next 12 -- 18 months
given the uncertainty surrounding Boeing's resumption of production
on the 737 Max and the need for Arconic to demonstrate a
disciplined approach to its financial policy and capital
allocation. Given the volatility in the industry and end markets,
ratings could be upgraded over time should the company achieve
sustainable EBIT margins in excess of 8%, Debt/EBITDA of less than
3x and (Cash Flow from operations less dividends)/debt of at least
30%. Ratings could be downgraded should the EBIT margin be
sustained below 6.5%, leverage be sustained above 3.5x or (cash
flow from operations less dividends/debt) be sustained below 20%.
The Ba1 rating on the first lien revolving credit facility and term
loan B reflects their superior position in the capital structure.
Headquartered in Pittsburgh, PA, Arconic Rolled Products is a
downstream aluminum producer active in a number of diverse end
markets. Revenues in 2018 were $7.2 billion.
The principal methodology used in these ratings was Steel Industry
published in September 2017.
ARISTA IMAGING: Court Says Ombudsman Unnecessary
------------------------------------------------
At the behest of Arista Imaging of N. Miami, LLC., and Presgar
Imaging of CMI North, L.C., Bankruptcy Judge A. Jay Cristol ruled
that the appointment of a Patient Care Ombudsman for the protection
of patients pursuant to 11 U.S.C. Section 333 is unnecessary in the
Debtors' Chapter 11 cases because (i) the Debtors are not a "health
care business" under 11 U.S.C. 101(27A); and (ii) the appointment
is "not necessary for the protection of patients under the specific
facts" of the Debtors' cases under 11 U.S.C. Sec. 333(a)(1).
Tom Santoro of Glass Ratner Advisory & Capital Group, LLC has been
appointed as the Debtors Chief Restructuring Officer. The Debtors
do not believe that their business qualifies as a health care
business under Chapter 11 of the Bankruptcy Code, and as such, the
appointment of a patient care ombudsman is not mandated.
Alternatively, even if the Debtors' business is a health care
business, they argued that the appointment of a patient care
ombudsman is not necessary under the specific circumstances of the
case.
The Debtors argued that they provide no direct patient care, the
protection of patients cannot be controlled or improved by the
appointment of an ombudsman, and such would be a redundancy to the
services that the Debtors already provide, and would be an
unnecessary expense for the Debtors to bear while they are engaged
in defending themselves from frivolous, though contentious,
litigation, and otherwise working to propose a plan to emerge from
chapter 11.
* * *
Nancy J. Gargula, the United States Trustee for Region 21, had
asked the Bankruptcy Court to extend the time to comply with the
Court's Order directing the U.S. Trustee to appoint a patient care
ombudsman for the Debtors.
In their bankruptcy petitions, the Debtors checked the box
describing their business as a Health Care Business as defined in
11 U.S.C. 101(27A). On December 20, 2019, the Court entered its
Order. On January 3, 2020, the Debtors filed their motion for order
determining that a patient care ombudsman is not necessary.
The U.S. Trustee believes it is prudent to wait until the Court
rules on the Debtors' Motion before proceeding with the appointment
of a patient care ombudsman.
About Arista Imaging and Presgar Imaging
Arista Imaging of N. Miami, LLC and Presgar Imaging of CMI North,
L.C. own and operate a medical imaging business in Miami, Florida.
Arista Imaging and Presgar Imaging filed separate Chapter 11
petitions (Bankr. S.D. Fla. Lead Case No. 19-26519) on Dec. 10,
2019, disclosing under $1 million in both assets and liabilities.
Judge A. Jay Cristol oversees the cases. The Debtors tapped Ross &
Smith, PC and Markowitz, Ringel, Trusty, & Hartog, P.A. as their
legal counsel; and Tom Santoro, principal of GlassRatner Advisory &
Capital Group, LLC, as chief restructuring officer.
ARR INVESTMENTS: Bautista Reo Objects to Amended Disclosure & Plan
------------------------------------------------------------------
Creditor Bautista Reo U.S., LLC, filed an objection to debtors ARR
Investments, Inc., et al.'s Amended Plan of Reorganization and
Disclosure Statement.
In the Amended Disclosure Statement, under the treatment of the
Class 1 Claim and Class 2 Claim of Bautista, it merely states that
the Debtors and Bautista will continue to litigate the Class 1
Claim and the Class 2 Claim, Bautista will be granted relief from
stay and relief from any discharge injunction and its contractual
rights will remain unaltered under the Plan.
The Amended Disclosure Statement does not address what will happen
if Bautista prevails in the litigation. It does not address how
any deficiency claim be treated or if there will be sufficient
funds to pay any deficiency claim.
In order for Bautista to be unimpaired, the Debtor must pay to
Bautista, or put in escrow for payment to Bautista, the past due
interest and make payments required by the loan documents.
Otherwise, the contractual rights of Bautista are altered and the
Class 1 Claim and Class 2 Claim are impaired.
Bautista respectfully requests approval of the Amended Disclosure
Statement be denied until such time as the Debtors comply with the
mandate of Section 1125(a) of the Bankruptcy Code, and deny
confirmation of the Amended Plan and for such other and further
relief as is just and proper.
A full-text copy of Bautista Reo's objection dated January 2, 2020,
is available at https://tinyurl.com/scotpqu from PacerMonitor.com
at no charge.
Bautista Reo is represented by:
Denise D. Dell-Powell, Esquire
Dean, Mead, Egerton, Bloodworth, Capouano & Bozarth, P.A.
420 S. Orange Avenue, Suite 700
Orlando, Florida 32801
Tel: (407) 428-5176
Fax: (407) 423-1831
E-mail: ddpowell@deanmead.com
About ARR Investments
ARR Investments, Inc., and its
subsidiaries--http://www.arr-learningcenters.com/-- offer learning
centers for infants, toddlers, preschoolers and Voluntary
Pre-Kindergarten in Orlando, Florida. The Learning Centers provide
computer labs; dance, yoga, music classes; aerobics; foreign
language instruction; before/after school transportation; certified
lifeguard and safety instructor for swim lessons and play; and
mini-camp breaks and summer camp.
ARR Investments and three of its subsidiaries filed voluntary
petitions seeking relief under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Lead Case No. 19-01494) on March 8, 2019. The
petitions were signed by Alejandrino Rodriguez, president. At the
time of filing, the Debtors were estimated to have under $10
million in both assets and liabilities. Jimmy D. Parrish, Esq., at
Baker & Hostetler LLP, serves as the Debtors' counsel.
ASTRIA HEALTH: PCO Files 3rd Consolidated Report
------------------------------------------------
Susan N. Goodman, RN JD, the patient care ombudsman appointed in
the Chapter 11 case of Astria Health and its debtor-affiliates,
filed with the U.S. Bankruptcy Court for the Eastern District of
Washington her third interim report on the status of the Debtors'
facilities.
The United States Trustee appointed the PCO on June 17, 2019, to
monitor the quality of patient care. The PCO is required to report
her findings to the Court no less than every 60 days.
The PCO filed the 3rd Consolidated Interim Report and will continue
to evaluate the benefit of location-specific reports after the
January 2020 status hearing.
In the interim period, the PCO engaged in a fifth site visit,
visiting Astria Regional Medical Center, Astria Sunnyside Hospital,
Astria Toppenish Hospital, and 10 clinics and/or hospital
outpatient departments. Further, the PCO continued to engage
remotely with staff and clinicians throughout the interim period.
PCO Observations:
(A) REGIONAL: The Regional census was reported as fluctuating
between the low twenties to the low fifties during the reporting
period. Episodic staffing coverage challenges consistent with those
described in the PCO's prior reports were reported by clinicians
and staff. At the time of the PCO's site visit, census was 46 with
the ICU, ACU, and 4C units all caring for inpatients. The Emergency
Department was holding two inpatients, down from the hold numbers
as reported in the First
Supplemental Report.
These reductions resulted in interrupted outpatient treatment plans
for some number of patients with one patient complaint reported.
Increased response times to inpatient PT support was also reported.
Elective surgical procedures were reported as being metered
relative to available anesthesia staff
with patient impact denied.
(B) SUNNYSIDE: Due to weather, the PCO had limited site visit
time at this facility. Census at the time of the PCO's visit was
approximately twenty including anticipated post-operative
admissions. The oncology clinic Physician Assistant is departing
for reasons unrelated to the bankruptcy. The PCO will remain
engaged as to the replacement of this key individual is identified
given the increased clinic volume after the absorption of a large
portion of the Yakima-based clinic patients. The Sunnyside COO was
reported as the new CEO at the Toppenish location.
The departure of the previous CEO was reported as unrelated to the
bankruptcy process. The PCO did speak with one Sunnyside
clinic-based physician who was leaving for reasons unrelated to the
bankruptcy.
(C) TOPPENISH: The inpatient census was in the mid-twenties at
the time of the PCO's visit. The radiology department experienced
one staff layoff since the First Supplemental Report, with that
team member reported as awaiting definitive clearance to begin
working at Regional. Further, the surgical director resigned, for
reasons unrelated to the bankruptcy. The Women's Center team
reported that the Chief Nursing Officer was continuing to fill
staffing holes that resulted from the previous departure of the
department director.
The food service team was noted to have three team members in
addition to the manager, with a fourth team member anticipated
(increased from initial site visit reported staffing.
In this case, the PCO spoke to at least 13 clinicians across all
locations during the site visit. The PCO also received unsolicited
clinician and non-clinician/staff concerns including a letter in
the interim reporting period that were consistent with those
previously reported to the Court. Given these various dynamics, the
PCO anticipates another site visit in the next 30-45 days.
The PCO can be reached at:
Susan N. Goodman, RN JD
Pivot Health Law
P.O. Box 69734
Oro Valley, AZ 85737
Tel: (520) 744-7061
Fax: (520) 575-4075
E-mail: sgoodman@pivothealthaz.com
A full-text copy of the PCO Report is available at
https://tinyurl.com/r8mczf8 from PacerMonitor.com at no charge.
About Astria Health
Astria Health and its subsidiaries -- https://www.astria.health --
are a nonprofit health care system providing medical services to
patients who generally reside in Yakima County and Benton County,
Wash., through the operation of Sunnyside, Yakima, and Toppenish
hospitals, as well as several health clinics, home health services,
and other healthcare services.
Astria Health and 12 of its subsidiaries filed for Chapter 11
bankruptcy protection (Bankr. E.D. Wash. Lead Case No. 19-01189) on
May 6, 2019. In the petitions signed by John Gallagher, president
and CEO, the Debtors were each estimated to have assets and
liabilities of $100 million to $500 million.
The Hon. Frank L. Kurtz oversees the cases.
Bush Kornfeld LLP and Dentons US LLP serve as the Debtors' counsel.
Kurtzman Carson Consultants, LLC is the claims and noticing agent.
Gregory Garvin, acting U.S. trustee for Region 18, on May 24, 2019,
appointed seven creditors to serve on an official committee of
unsecured creditors. The Committee retained Sills Cummis & Gross
P.C. as its legal counsel; Polsinelli PC, as co-counsel; and
Berkeley Research Group, LLC as financial advisor.
ATHENAHEALTH INC: Fitch Affirms B+ LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings affirmed athenahealth, Inc., VVC Holding Corp. and
athenahealth Intermediate Holdings LLC's Long-Term Issuer Default
Ratings at 'B+'/Stable Outlook. In addition, Fitch has affirmed the
'BB'/'RR2' senior secured first lien term loan rating and the
'B-'/'RR6' senior secured second lien term loan rating co-issued by
athenahealth, Inc. and VVC Holding Corp. Fitch's actions affect
approximately $4.5 billion of outstanding debt.
KEY RATING DRIVERS
Strong Growth Opportunity: Fitch expects athenahealth to experience
reliable, consistent high mid-single digit organic growth through
the forecast horizon as a result of strong secular trends in U.S.
healthcare spending. The Centers for Medicare and Medicaid Services
(CMS) forecasts national health expenditure growth of 5.6% per
annum through 2026 due to long-standing trends in medical
procedure/drug cost and utilization growth. athenahealth's pricing
model results in strong correlation with the underlying secular
growth in U.S. healthcare spending. In addition, growth prospects
are further supported by strong retention rates resulting from high
switching costs that include staff training, implementation costs,
business interruption risks and reduced productivity when swapping
vendors. Fitch believes that the secular tailwinds and high
switching costs produce a dependable growth trajectory that
benefits the credit profile.
Low Cyclicality: Closely related to the underlying healthcare
expenditure secular growth driver, Fitch expects athenahealth,
which has experienced positive growth in every year since its 2007
IPO, to continue to exhibit low cyclicality for the foreseeable
future. Fitch believes the company's pricing model is likely to
ensure strong correlation to overall U.S. healthcare spend, which
is highly non-discretionary and has experienced uninterrupted
growth since at least 2000 according to CMS. As a result, Fitch
believes athenahealth will demonstrate a stable credit profile with
little sensitivity to macroeconomic cycles.
Margin Improvement Opportunity: Fitch expects the combined
athenahealth-Virence to experience meaningful EBITDA margin
expansion due to a credible synergy and cost reduction plan.
Management has identified synergies that are primarily derived from
headcount reductions through elimination of unnecessary R&D,
duplicative sales efforts, branding, third-party spend and public
company costs, as well as through expanded use of offshore product
development and customer service. As a result, Fitch expects a
strengthening credit profile with a forecast EBITDA margin
expansion of 1250 bps by 2022.
High Leverage: athenahealth was purchased by Veritas Capital and
combined with portfolio holding Virence in a transaction that was
funded in part by $4.5 billion of secured term debt and $600
million of preferred equity. Fitch calculated initial pro forma
leverage is above the 5.6x median for Technology issuers rated 'B+'
and the 4.4x median for rated Healthcare IT issuers. Fitch
forecasts a decline in leverage of approximately two turns by 2021
and notes the company will be in a position to further reduce
leverage by more than half a turn using excess cash on the balance
sheet to prepay debt. Fitch believes the high leverage is supported
by the company's dependable growth prospects, low cyclicality,
strong market share, improving margin profile and deleveraging
capacity.
Target Customer Segment Facing Pressure: athenahealth's target
market may contract over the longer term. athenahealth has
typically targeted smaller, ambulatory practice sizes of less than
20 physicians with particular strength in the less than
10-physician segment. Smaller providers continue to face pressure
as rising regulatory, operating and legal costs have resulted in
increased consolidation, so that providers can operate at the scale
needed to remain profitable. According to CMS, practices of 10
physicians or less have maintained an 89% share of total physician
visits from 2013 to 2015. However, with consolidation expected to
accelerate, the portion of visits served by small ambulatory care
providers may eventually contract, resulting in a potential
headwind for athenahealth's growth prospects. Fitch notes that the
combination with Virence, which typically targets practices with
over 75 physicians, moderates this risk. In addition, Fitch
believes provider consolidation is slow moving, and any impacts are
likely well outside of the ratings horizon.
Evolving Marketplace: athenahealth faces risks from a continually
evolving healthcare marketplace where efforts to slow cost growth
will eventually require all constituents to modify their
strategies. Most importantly, the nascent efforts to shift to
value-based care, in which reimbursements are directed toward
successful outcomes rather than toward volume of procedures, will
require athenahealth to re-examine its current pricing model.
athenahealth will need to develop a pricing strategy that aligns
more closely with the emerging incentives that are based on medical
outcomes. Fitch believes that such a major shift in pricing
strategy introduces a risk of disruption and rejection from the
marketplace that may result in decreased growth. However, Fitch
notes that the transition to value-based case is also slow moving,
and any impacts are outside of the ratings horizon.
DERIVATION SUMMARY
Fitch is evaluating athenahealth following its transaction to be
taken private and combined with Virence Health Technologies by
sponsor, Veritas Capital. Fitch calculated pro forma leverage is
high for the rating compared to 'B+' rated issuers in the
Technology sector, where median leverage is 5.6x. However, Fitch
believes athenahealth's favorable long-term prospects and strong
positioning relative to peers and competitors are indicative of a
stronger credit profile than initial balance sheet metrics suggest.
Fitch believes athenahealth benefits from a clear, reliable growth
path with a pricing and revenue model that creates a close
correlation to the underlying secular growth in U.S. healthcare
expenditures. Furthermore, Fitch expects the correlation to
persist, given strong client retention rates, high switching costs,
robust sales efforts, and history of share gains. As a result,
Fitch expects athenahealth to exhibit minimal cyclicality and
durable resistance to economic cycles. Combining Fitch's growth
expectations with management's highly credible cost reduction plan,
Fitch believes that athenahealth will demonstrate strong
deleveraging capacity with EBITDA growth generating a decline in
leverage of approximately two turns by 2021, with the ability to
use excess cash to prepay debt and reduce leverage further by at
least another half turn. Despite the strength of the underlying
business, attractive growth prospects, low cyclicality, consistent
results, share gains, the rapid deleveraging trajectory and the
attractive margin expansion opportunity, Fitch is recommending a
rating of 'B+' as a result of the high leverage throughout the
rating horizon. No country-ceiling, parent/subsidiary or operating
environment aspects had an impact on the rating.
Recovery Rating (RR) Assumptions: The recovery analysis assumes the
enterprise value (EV) of athenahealth would be maximized in a
going-concern scenario versus liquidation. Fitch contemplates a
scenario in which acquisition integration challenges and salesforce
disruption impair growth, margin expansion and thus debt-servicing
ability. As a result, Fitch expects that athenahealth would likely
be reorganized with reduced debt outstanding, a similar product
strategy and higher-than-planned levels of operating expenses as
the company reinvests to ensure customer retention and defend
against competition.
Under this scenario, Fitch believes revenue growth would slow
significantly to low- to mid-single digits per annum while the
expected EBITDA margin increase would be limited as compared with
Fitch's base case forecast of a 1250 bp improvement. The resulting
going-concern EBITDA is approximately equal to Fitch's forecasted
pro forma 2019 EBITDA, excluding unrealized synergies.
Fitch assumes athenahealth will receive a going-concern recovery
multiple of 7.0x EBITDA under this scenario, which is supported by
the following:
-- Comparable Reorganizations: In Fitch's 13th edition of its
"Bankruptcy Enterprise Values and Creditor Recoveries" case study,
the agency notes seven past reorganizations in the Technology
sector, where the median recovery multiple was 4.9x. Of these
companies, only two were in the Software subsector: Allen Systems
Group, Inc. and Aspect Software Parent, Inc., which received
recovery multiples of 8.4x and 5.5x, respectively. Fitch believes
the Allen Systems Group, Inc. reorganization is highly supportive
of the 7.0x multiple assumed for athenahealth given the mission
critical nature of both company's offerings.
-- M&A Multiples: A study of M&A transactions in the HCIT
industry from 2010-2017, particularly those with capabilities that
overlap with athenahealth, establishes an average EV/EBITDA
transaction multiple of 14x. The completed transaction with
athenahealth represented a 15.2x multiple, not including
synergies.
The recovery model implies a 'BB' and 'RR2' Recovery Rating for the
company's first lien senior secured facilities, reflecting Fitch's
belief that 71%-90% expected recovery is reasonable. The recovery
model also implies a 'B-' rating and 'RR6' Recovery Rating for the
second lien senior secured term loan, reflecting an expected
recovery of 0%-10%.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Revenue: pro forma organic revenue CAGR of 5.7% per annum;
-- Margins: EBITDA margin expansion of 1250 bps over the forecast
horizon;
-- Capex: capital intensity of 7.5% in 2019, increasing to 8.5%
for the remainder of the forecast horizon.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Total Adjusted Debt/Operating EBITDAR leverage sustained below
4.5x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Total Adjusted Debt/Operating EBITDAR leverage sustained above
6.5x;
-- FCF margins excluding transactional costs sustained below
10%.
LIQUIDITY AND DEBT STRUCTURE
Abundant Liquidity: Fitch expects athenahealth to maintain strong
liquidity throughout the forecast horizon given moderate liquidity
requirements that result from a short cash conversion cycle. As of
3Q19, liquidity was comprised of readily available cash and the
revolving credit facility (RCF), which remains undrawn. Fitch
expects rapid growth in liquidity due to its forecasts for strong,
improving FCF through 2021, and for the RCF to remain undrawn.
SUMMARY OF FINANCIAL ADJUSTMENTS
-- Fitch calculated adjusted debt by capitalizing operating lease
expense using an 8x multiple.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
athenahealth has an ESG Relevance Score of 4 for Governance
Structure due to its ownership by private equity sponsor Veritas
Capital, who is assumed to be heavily biased in favour of
shareholder returns.
athenahealth has an ESG Relevance Score of 4 for Financial
Transparency due to its lower quality disclosure and discussion of
financial results.
AYTU BIOSCIENCE: All Four Proposals Approved at Special Meeting
---------------------------------------------------------------
Aytu BioScience, Inc. held a special meeting of stockholders on
Jan. 24, 2020, at which the stockholders:
(1) approved, in accordance with Nasdaq Marketplace Rule
5635(d), the convertibility of the Company's Series F
convertible preferred stock, par value $0.0001 per share,
and (ii) the exercisability of certain warrants, in each
case, issued in a private placement offering that closed
Oct. 16, 2019;
(2) approved, in accordance with Nasdaq Marketplace Rules
5635(a)(2) and 5635(d), the convertibility of the Company's
Series G convertible preferred stock, par value $0.0001 per
share issued to Cerecor Inc., pursuant to that certain
Asset Purchase Agreement between the Company and Cerecor
dated Oct. 10, 2019, pursuant to which Company acquired
from Cerecor the assets and business operations of Cerecor
associated with certain of Cerecor's prescription products
and assumed certain liabilities associated with the
Products Business;
(3) approved an amendment to the Company's Certificate of
Incorporation to increase the number of the Company's
authorized shares of common stock, par value $0.0001 per
share, from 100,000,000 to 200,000,000 shares of common
stock; and
(4) approved the adjournment of the special meeting, if
necessary, to continue to solicit votes for the Nasdaq Rule
5635(d) Proposal, the Conversion Proposal and/or the
Authorized Share Increase Proposal.
About Aytu BioScience
Englewood, Colorado-based Aytu BioScience, Inc. (OTCMKTS:AYTU) --
http://www.aytubio.com/-- is a commercial-stage specialty
pharmaceutical company focused on commercializing novel products
that address significant patient needs. The company currently
markets a portfolio of prescription products addressing large
primary care and pediatric markets. The primary care portfolio
includes (i) Natesto, an FDA-approved nasal formulation of
testosterone for men with hypogonadism, (ii) ZolpiMist, an
FDA-approved oral spray prescription sleep aid, and (iii) Tuzistra
XR, an FDA-approved 12-hour codeine-based antitussive syrup.
Aytu Bioscience reported a net loss of $27.13 million for the year
ended June 30, 2019, compared to a net loss of $10.18 million for
the year ended June 30, 2018. As of Sept. 30, 2019, the Company
had $31.02 million in total assets, $28.70 million in total
liabilities, and $2.32 million in total stockholders' equity.
Plante & Moran, PLLC, in Denver, CO, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
Sept. 26, 2019, on the Company's consolidated financial statements
for the year ended June 30, 2019, citing that the Company has
suffered recurring losses from operations and has an accumulated
deficit that raise substantial doubt about its ability to continue
as a going concern.
BARRE N9NE: U.S. Trustee Objects to Plan & Disclosure Statement
---------------------------------------------------------------
The United States Trustee (UST) states that the proposed Combined
Disclosure Statement dated Dec. 27, 2019, and submitted by debtor
Barre N9NE Studio LLC fails to provide adequate and meaningful
information concerning the proposed Plan of Reorganization of even
date.
In support, the U.S. Trustee says that the Combined Disclosure
Statement and Plan as well as the Exhibit should be amended to:
* provide monthly unbundled historical financial data in the
same format as the proposed projections, but including reference to
non-payment of Somerville rent and any leased equipment, dating
from the Petition Date (September 24, 2019) to the present,
including an accounting of monthly payments made to each classified
claimant during the pendency of the case, D. E. # 35 at 7 and 20 of
30, Exhibit A projections, no Exhibit B historical data;
* state that priority tax claims, if any, shall be paid over a
period ending not later than five years after the date of the order
of relief (and not over 60 months from the Effective Date), the IRS
proof of claim has been withdrawn, and the Debtor has filed all
Federal and state tax returns through 2018, will file all 2019
returns on or before 4/15/20 and promptly pay any liability(ies),
D.E. # 35 at 9 of 30;
* state the amount of the monthly payment owed to Class 6, BMW
Financial Services NA, LLC, D. E. # 35 at 11 or 30; and
* list Class 7 general unsecured creditors (not Class 9
creditor) in discussion of release of funds from disputed claims
reserve, D.E. # 35 at 22 of 30.
A full-text copy of U.S. Trustee's objection dated Jan. 2, 2020, is
available at https://tinyurl.com/yx43ktlx from PacerMonitor.com at
no charge.
About Barre N9ne Studio
Barre N9ne Studio LLC - http://bankrupt.com/misc/mab19-13241.pdf-
filed Chapter 11 Petition (Bankr. D. Mass. Case No. 19-13241) on
September 24, 2019. The Debtor's Counsel is Nina M. Parker, Esq. of
PARKER & LIPTON.
BIOSTAGE INC: Peter Chakoutis Quits as VP of Finance
----------------------------------------------------
Peter Chakoutis, the vice president of finance of Biostage, Inc.
has resigned effective on Jan. 17, 2020. The Company intends to
commence a search for an experienced finance candidate, including
as to the role of chief financial officer (interim or otherwise).
About Biostage
Headquartered in Holliston, Massachusetts, Biostage, Inc., formerly
Harvard Apparatus Regenerative Technology, Inc. --
http://www.biostage.com/-- is a biotechnology company developing
bioengineered organ implants based on its novel Cellframe
technology. The Company's Cellframe technology is comprised of a
biocompatible scaffold that is seeded with the patient's own stem
cells. The Company's Cellspan technology combines a proprietary,
biocompatible scaffold with a patient's own cells to create an
esophageal implant that could potentially be used to treat
pediatric esophageal atresia and other conditions that affect the
esophagus.
Biostage reported a net loss of $7.53 million for the year ended
Dec. 31, 2018, compared to a net loss of $11.92 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had
$2.06 million in total assets, $941,000 in total liabilities, and
$1.12 million in total stockholders' equity.
In its report dated March 29, 2019, RSM US LLP, in Boston,
Massachusetts, the Company's auditor since 2018, issued an opinion
on the Company's consolidated financial statements for the year
ended Dec. 31, 2018, expressing substantial doubt about the
Company's ability to continue as a going concern. The auditor
stated that the Company has suffered recurring losses from
operations, has an accumulated deficit, uses cash flows in
operations, and will require additional financing to continue to
fund operations.
BLESSED HOLDINGS: Wants Plan & Disclosure Hearing Reset to April 20
-------------------------------------------------------------------
Debtor Blessed Holdings Trust, Corp., filed its fourth motion for
an enlargement of time to confirm small business, to continue the
confirmation hearing and all deadlines.
The Debtor is requesting a continuation of the confirmation of the
Chapter 11 Plan and approval of the Disclosure Statement.
The Debtor explains that it is attempting to finalize the loss
mitigation options with the secured creditors. In the case of the
claim of 1Sharpe Income Fund, L.P., it appears the collateral was
devalued through demolition of the structure by the City of Miami.
Additionally, the Debtor is anticipating moving forward with a
short sale contract with the previously approved buyer on the claim
of U.S. Bank, N.A. as Indentured Trustee for Angel Oak Mortgage
Trust 1, LLC 2018-PB1.
The Debtor believes that it is more likely than not that the court
will confirm a plan within a reasonable period of time upon
completion of the short sales of the real property. The Debtor
would request a new deadline be set for ninety (90) days after the
expiration of the existing deadline, which would make the new
deadline April 20, 2020. The Debtor would request this matter be
heard on Jan. 7, 2020, in conjunction with the disclosure statement
and confirmation hearing of the Chapter 11 Plan.
The Debtor requests the Court to enter an order granting an
extension to confirm the Small Business Chapter 11 Plan until April
20, 2020, continuing the confirmation hearing and all deadlines
contained relating to confirmation of the Chapter 11 Plan and
approval of the Disclosure Statement and for any and all other
relief this Court deems appropriate.
A full-text copy of the motion dated Jan. 2, 2020, is available at
https://tinyurl.com/veyy6ur from PacerMonitor.com at no charge.
The Debtor is represented by:
Law Offices of Richard R. Robles, P.A.
RICHARD R. ROBLES, ESQUIRE
905 Brickell Bay Drive
Four Ambassadors
Tower II, Mezzanine, Suite 228
Miami, Florida 33131
Telephone: (305) 755-9200
Primary e-mail: rrobles@roblespa.com
Secondary e-mail: nrossoletti@roblespa.com
E-mail: lmartinez@roblespa.com
About Blessed Holdings
Blessed Holdings Trust Corp., a corporation based in Hialeah,
Florida, is a small business debtor as defined in 11 U.S.C. Section
101(51D).
Blessed Holdings Trust sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-25403) on Dec. 11,
2018. At the time of the filing, the Debtor had estimated assets
of $1 million to $10 million and liabilities of $1 million to $10
million. The case has been assigned to Judge Jay A. Cristol. The
Debtor tapped the Law Offices of Richard R. Robles, P.A., as its
legal counsel.
BLUE RIDGE: Wants Until Feb. 28, 2020 to File Plan & Disclosures
----------------------------------------------------------------
Debtor Blue Ridge Site Development Corporation of NC moves the
Court for an extension of time for 60 days, to file its Plan and
Disclosure Statement.
The Bankruptcy Rules and Court Order established Dec. 30, 2019, as
the deadline for filing a Plan and Disclosure Statement. The
Debtor needs additional time to complete its Meeting of Creditors
and gather financial data sufficient to support its Plan.
The Debtor seeks an additional 60 days to file all the Plan and
Disclosure Statement, through, and including Feb. 28, 2020.
A full-text copy of the Motion dated Jan. 2, 2020, is available at
https://tinyurl.com/ucg4bne from PacerMonitor.com at no charge.
The Debtor is represented by:
Bradford Law Offices
Danny Bradford
455 Swiftside Drive, Suite 106
Cary, NC 27518-7198
Tel: (919) 758-8879
E-mail: Dbradford@bradford-law.com
About Blue Ridge Site
Blue Ridge Site Development Corporation of NC filed Chapter 11
Petition (Bankr. E.D.N.C. Case No. 19-04528) on Oct. 1, 2019. The
Debtor's counsel is Danny Bradford, Esq., of PAUL D. BRADFORD,
PLLC.
C.T.W. REALTY: Wilmington Trust Wants Prepayment Premium
--------------------------------------------------------
Wilmington Trust, N.A., as Trustee for the Benefit of the Holders
of LCCM 2017-LC26 Mortgage Trust Commercial Mortgage Pass-Through
Certificates, Series 2017-LC26 (the Secured Creditor), submitted an
objection to the Second Amended Disclosure Statement for Plan of
Reorganization by C.T.W. Realty Corp.
The Secured Creditor has previously shown that a mortgage under New
York law merges into a judgment of foreclosure of that mortgage and
thus there is nothing to "reinstate," contrary to what the Debtor
Plan proposes.
The Secured Creditor recognizes that in some respects this is a
confirmation objection and reserves its right to renew this
objection in opposition to confirmation of the Debtor Plan and its
right to supplement its presentation of points and authorities.
The Debtor Plan's proposed Reinstatement would, if carried through,
pay off a junior mortgage in full that was placed on the mortgaged
property in breach of the Secured Creditor's mortgage. Under the
Debtor Plan, however, the junior mortgagee is to be paid in full
even though the Secured Creditor is not able to have an immediate
judicial sale of the mortgaged property or be paid the full amount
of the Judgment (including the Prepayment Premium). That reversal
of priority is an additional way in which the Debtor Plan does in
fact "alter the legal, equitable, or contractual rights to which"
the Secured Creditor is entitled.
Under the Debtor Plan, all other creditors are to be paid in full,
while the Secured Creditor is not paid the Prepayment Premium and
is sentenced to forced continuation of a relationship with a debtor
who abused the Secured Creditor prepetition. That is not the
"fortunate" position envisioned by the Senate report.
Since a proposed sale under Track 1 equates to impairment, failure
of the Debtor Plan to provide for the Secured Creditor's class to
be considered impaired is improper. Thus, unless the Secured
Creditor is afforded the opportunity to vote on the Debtor Plan,
the Debtor Disclosure Statement should not be approved.
The Secured Creditor requests that the Court enter an order
conditioning approval of the Debtor Disclosure Statement on
revision to provide that the Secured Creditor is impaired and
entitled to vote.
A full-text copy of Wilmington Trust's objection dated Jan. 2,
2020, is available at https://tinyurl.com/twfl7hl from
PacerMonitor.com at no charge.
Wilmington Trust is represented by:
PERKINS COIE LLP
1155 Avenue of the Americas, 22nd Floor
New York, New York 10036-2711
Tel: (212) 262-6902
E-mail: geisenberg@perkinscoie.com
About C.T.W. Realty Corp.
C.T.W. Realty Corp. is a single asset real estate company which was
formed for the ownership and management of that certain commercial
property located at 55-59 Chrystie Street, New York, NY 10002.
On May 6, 2019, Wilmington Trust, N.A., as Trustee for the Benefit
of the Holders of LCCM2017-LC26 Mortgage Trust Commercial Mortgage
Pass-Through Certificates, Series 2017-LC26, filed Motion To Excuse
Compliance By Receiver With 11 U.S.C. Sec. 543. On June 4, 2019,
the Court entered an order granting the Receiver Motion.
C.T.W. Realty Corp., based in New York, NY, filed a Chapter 11
petition (Bankr. S.D.N.Y. Case No. 19-11425) on May 1, 2019. In
the petition was signed by Gary M. Tse, president, the Debtor was
estimated to have $10 million to $50 million in both assets and
liabilities. Steven B. Smith, Esq., at Herrick Feinstein LLP,
serves as bankruptcy counsel to the Debtor.
CARBUCKS OF CAROLINA: Exclusivity Period Extended Until Jan. 29
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended to Jan. 29 the exclusivity period for Carbucks of
Carolina, Inc. to file a Chapter 11 plan.
The court had earlier approved the company's disclosure statement
and scheduled a hearing to consider confirmation of the plan for
Jan. 29.
About Carbucks of Carolina
Carbucks of Carolina, Inc. -- http://www.carbuckscorp.com/-- is a
car and vehicle title loan company operating in Georgia, S.C., and
Delaware, and nationally with its online title lending service. It
provides financing based on the value of its clients' cars, truck
commercial vehicles, boats and motorcycles.
Carbucks of Carolina filed a voluntary Chapter 11 petition (Bankr.
M.D. Fla. Case No. 19-06503) on July 10, 2019. In the petition
signed by Philip Heitlinger, president, the Debtor was estimated to
have $100,000 to $500,000 in assets and $1 million to $10 million
in liabilities. Alberto F. Gomez Jr., Esq., at Johnson Pope Bokor
Ruppel & Bums, LLP, represents the Debtor.
CASTLE US: Moody's Lowers CFR to B3, Outlook Stable
---------------------------------------------------
Moody's Investors Service downgraded Castle US Holding
Corporation's Corporate Family Rating to B3 from B2 and its
Probability of Default Rating to B3-PD from B2-PD. Concurrently,
Moody's downgraded the ratings on the company's senior secured
first lien bank facility to B3 from B2. The rating action reflects
the overall deterioration in Castle's credit quality following its
announced plans to increase the amount of debt financing associated
with the $2.9 billion purchase (including fees) of Castle's parent
company by an affiliate of Platinum Equity LLC. In addition to the
incremental credit risk associated with the 1x increase in the
borrower's pro forma LTM debt/EBITDA leverage, the rating action
also takes into account the proposed addition of a restricted
payment carveout of $300 million earmarked for a potential special
distribution to Platinum. Collectively, these actions materially
reduce Castle's financial flexibility. The ratings outlook is
stable.
Moody's downgraded the following ratings:
-- Corporate Family Rating, Downgraded to B3 from B2
-- Probability of Default Rating, Downgraded to B3-PD from B2-PD
-- Gtd Sr Sec. 1st Lien Revolving Credit Facility expiring 2025,
Downgraded to B3 (LGD4) from B2 (LGD4)
-- Gtd Sr Sec. 1st Lien Term Loan due 2027, Downgraded to
B3 (LGD4) from B2 (LGD4)
Outlook Action:
Outlook is Stable
RATINGS RATIONALE
Castle's B3 CFR is constrained by the company's high pro forma
debt/EBITDA of approximately 7x (Moody's adjusted for operating
leases) for the last twelve months ending September 30, 2019. Debt
leverage approaches 8x when expensing capitalized software costs.
Additionally, the issuer's credit quality is negatively impacted by
its relatively limited scale and exposure to economic cycles given
Castle's narrow vertical market focus as a provider of software and
related services to communications professionals globally. The
company's concentrated private equity ownership by Platinum
following the completion of the LBO transaction presents material
corporate governance risks with respect to potentially aggressive
financial strategies. In particular, these risks are heightened by
the proposed addition of the $300 million incremental restricted
payment carveout for special distributions which could further
increase debt leverage by approximately 1x to nearly 8x (nearly 9x
when expensing capitalized software costs). Additionally, Castle,
through its predecessor companies, has a history of debt financed
acquisitions and could choose to make additional purchases that
negatively impact credit protection measures. These risks are
partially offset by the company's solid presence as a provider of
solutions within its target market of clients including public
relations agencies, large multinationals, small and medium
businesses, and government entities. Castle's credit quality is
also supported by the company's largely SaaS driven revenue model
and historically strong retention rates that produce high revenue
predictability which, in conjunction with solid profitability
metrics, fuel relatively healthy free cash flow generation and
interest coverage.
Castle's good liquidity is supported by the company's expected pro
forma cash balance of approximately $70 million following the
completion of the proposed financing, as revised. The company's
liquidity is also bolstered by an undrawn $150 million revolving
credit facility and Moody's expectation that the company will
generate free cash flow over the coming year approaching 5% of
total debt. While Castle's proposed term loans are not subject to
financial covenants, the revolving credit facility has a springing
covenant based on a maximum net first lien leverage ratio which the
company should be in compliance with over the next 12-18 months.
The stable outlook reflects Moody's expectation that Castle will
generate mid-single digit organic revenue growth over the next 12
to 18 months. Sales gains should be principally driven by
incremental product purchases by existing clients within the
company's installed base. Despite anticipated top-line growth,
considerable upfront implementation costs related to cost
rationalization programs will constrain profitability improvement
in the near term, resulting in minimal deleveraging towards the mid
6x level by the end of 2020. The stable outlook also considers the
likelihood of a $300 million special distribution over the near
term.
Although not anticipated in the near future, the rating could be
upgraded if Castle sustains healthy revenue growth and
profitability, successfully integrates recent acquisitions, and
adheres to a conservative financial policy such that debt/EBITDA
(Moody's adjusted) approaches 6.5x (7x when expensing capitalized
software costs), and annual free cash flow to debt exceeds 5%.
The rating could be downgraded if Castle were to experience a
weakening competitive position, incurs sustained free cash flow
deficits, or the company maintains aggressive financial policies
that meaningfully constrain financial flexibility.
The principal methodology used in these ratings was Software
Industry published in August 2018.
CHARIOTS OF HIRE: Wells Fargo Objects to Disclosure Statement
-------------------------------------------------------------
Wells Fargo Equipment Finance filed its objection to the Disclosure
Statement of Debtor Chariots of Hire, Inc.
In its objection, Wells Fargo states that:
* The Debtor's Disclosure Statement and Plan proposes to treat
Well Fargo's claim under class 3.4 as an executory contract leasing
a 2016 Provost X-3 Motor Coach. Debtor's Disclosure Statement and
Plan do not provide for any cure of the arrearage, only to perform
all of its post-Confirmations under the Lease. The Debtor's
Disclosure Statement and Plan make no provision for the curing of
the arrearage or payment of default interest. The arrearage owed
on the 2016 Provost Lease is $39,935.
* The Debtor's Disclosure Statement and Plan proposes to treat
Wells Fargo's claim under class 2.2 as a secured claim. Wells
Fargo's claim, however, is in fact a Lease and executory contract
for a 2015 Sprinter Van. Debtor's Disclosure Statement and Plan do
not identify its obligations under the 2015 Sprinter Van Lease as a
lease - rather, Debtor purports its obligations to be that of a
"Note and Security Documents."
Wells Fargo requests that the Court deny approval of the Disclosure
Statement and that Wells Fargo has such other and further relief as
the Court deems just and proper.
A full-text copy of Wells Fargo's objection dated Jan. 2, 2020, is
available at https://tinyurl.com/sev38ec from PacerMonitor.com at
no charge.
Wells Fargo is represented by:
Robert R. Carl
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C.
265 Brookview Centre Way, Suite 600
Knoxville, Tennessee 37919
Telephone: (865) 549-7000
Facsimile: (865) 525-8569
E-mail: rearl@bakerdonelson.com
About Chariots of Hire
Chariots of Hire, Inc., is a transportation company in Louisville,
Tennessee. The Company's fleet includes sedans (Cadillac, Mercedes
& Town Cars), SUVs (Navigators & Escalades), passenger Limousines,
Sprinter vans, passenger mini buses, passenger mid-size buses,
passenger executive bus, and passenger motor coaches.
Chariots of Hire filed a Chapter 11 petition (Bankr. E.D. Tenn.
Case No.19-30281), on Feb. 1, 2019. In the petition signed by John
Mark Parsons, president, the Debtor wes estimated to have $1
million to $10 million in assets and $1 million to $10 million in
liabilities. The case has been assigned to Judge Suzanne H.
Bauknight. The Debtor is represented by C. Dan Scott, Esq., at
Scott Law Group, PC.
CHS/COMMUNITY HEALTH: Fitch Rates $1.02BB Secured Notes 'B'
-----------------------------------------------------------
Fitch Ratings assigned a 'B'/'RR1' rating to CHS/Community Health
Systems, Inc.'s $1.02 billion senior secured notes due 2025.
Proceeds are expected to be used to purchase outstanding amounts of
the company's $1 billion outstanding 5.125% Senior Secured Notes
due 2021 either through CHS's announced tender offer or through
redemption of notes not tendered. The ratings apply to
approximately $14 billion of debt at Sept. 30, 2019.
KEY RATING DRIVERS
Credit Profile Remains Stressed: The refinancing transaction will
incrementally improve CHS's liquidity profile by extending
near-term maturities. In December 2019, CHS exchanged the bulk of
$2.6 billion of 6.875% senior unsecured notes due 2022 for $700
million of 8.0% first lien senior secured notes due 2027 and $1.7
billion of 6.875% senior unsecured notes due 2028. Fitch believes
both of these transactions buy CHS more time to execute an
operational turn-around plan focused on restoring organic growth
and improving profitability of hospitals in certain targeted
markets. However, the 'CCC' Issuer Default Rating (IDR) reflects
the key credit concerns of a high overall debt burden and weak FCF
generation.
Very High Debt Burden: The exchange transaction completed in
December 2019 was neutral to total leverage, but raised CHS's first
lien secured leverage by about 0.8x EBITDA, to nearly 8.5x. The
transaction was also a headwind to FCF due to higher interest
expense on the new notes due 2028. The company's balance sheet has
been highly leveraged since the acquisition of rival hospital
operator Health Management Associates, LLC (HMA) in late 2014
because EBITDA growth has been hampered by difficulties in
integration and secular headwinds to patient volumes in rural and
small suburban hospital markets. Fitch calculated leverage at Sept.
30, 2019 was 10.0x (and 9.2x adjusting for certain one-time items
related to elevated bad expense and professional liability expense
that are not expected to reoccur), versus 5.2x prior to the
acquisition.
Forecast Reflects Hospital Divestitures: Fitch's $1.6 billion
operating EBITDA forecast for CHS in 2019 reflects completed
hospital divestitures. CHS has paid down about $3 billion of term
loans since the beginning of 2016 using the proceeds from the
spinoff of Quorum Health Corp., the sale of a minority interest in
several hospitals in Las Vegas and a series of smaller
divestitures.
The company divested 43 hospitals with $4.5 billion of annualized
revenues during 2017 and 2018, raising about $2.0 billion of cash
proceeds and leaving a footprint of 112 hospitals in 20 states,
which has further decreased to 102 hospitals as of Sept. 30, 2019.
The valuations imply a deleveraging multiple, but with $14.0
billion of debt outstanding, long-term repair of the balance sheet
will require the company to expand EBITDA through a return to
organic growth and expansion of profitability in the group of
remaining hospitals. The strategy of refocusing the operation
around hospitals in markets with better long-term growth potential
makes sense, but the 'CCC' IDR reflects the challenges inherent in
its execution.
Headwinds to Less-Acute Volumes: CHS's legacy hospital portfolio
faces secular headwinds to less-acute patient volumes. Volume
trends are highly susceptible to weak macroeconomic conditions and
the seasonal influences of flu and respiratory cases. Health
insurers and government payors recently increased scrutiny of
short-stay admissions and preventable hospital readmissions. CHS's
same-hospital operating trends were weak in 2017 and 2018, although
quarterly results showed sequential improvement in yoy performance
on various patient volume measures throughout 2018 and 2019. The
operating EBITDA margin also showed signs of stabilization during
2018-2019 after five consecutive quarters of yoy declines in this
metric in 1Q17 to 1Q18.
Repositioning Will Require Investment: A strategy of repositioning
the hospital portfolio around larger, faster-growing markets is
well aligned with secular trends. However, Fitch believes
successful execution of this plan is not without challenges from
both an operational-execution and capital-investment perspective,
particularly as it is occurring at a time when cash flow is
depressed relative to historical levels and there is a certain
amount of management attention consumed by executing the
divestiture program.
DERIVATION SUMMARY
CHS's 'CCC' IDR reflects the company's weak financial flexibility
with high gross debt leverage and stressed FCF generation (cash
flow from operations less capex and dividends). The operating
profile is among the weakest in the investor-owned acute care
hospital category because of a historical focus on rural and small
suburban hospital markets that are facing secular headwinds to
organic growth. Fitch believes that some of the company's hospital
markets may require additional capital investment to improve
organic growth and profit margins, and this is concerning since
cash generation is thin.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Revenue decline of 6% in 2019 reflects completed hospital
divestitures;
- Same-hospital revenue growth of 2% throughout the forecast
period is driven by pricing as patient volumes are assumed to be
flat;
- EBITDA before associate and minority dividends of $1.6 billion
in 2019 assumes an operating EBITDA margin of 11.6%;
- CFFO of about $500 million in 2019, and FCF break-even to
slightly negative throughout the 2019-2022 forecast period assuming
capex of about 3% of revenues;
- Total debt/EBITDA after associate and minority dividends is
around 9.0x through the 2019-2022 forecast period.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
An upgrade to a 'CCC+' IDR could result from:
- The operational turn-around plan gains traction in the next
12-18 months, evidenced by stabilization in the operating EBITDA
margin and building on the recent trend of better growth in organic
patient volumes;
- An expectation that ongoing CFFO generation will be sufficient
to fund investment in the remaining hospital markets to support an
expectation of improved organic growth;
- An expectation that the company will be able to successfully
refinance the note maturities beginning in 2023.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A downgrade to 'CCC-' or below would reflect an expectation
that the company will struggle to refinance upcoming maturities.
This would likely be a result of further deterioration in revenues
and EBITDA, leading Fitch to expect either another DDE or a more
comprehensive restructuring.
LIQUIDITY AND DEBT STRUCTURE
Slim but Adequate Liquidity: Sources of liquidity include $157
million of cash on hand at Sept. 30, 2019 and availability under
the $1 billion asset-based lending (ABL) facility; $673 million was
outstanding under the ABL facility at Sept. 30, 2019, and
availability is subject to a borrowing base calculation, which
allowed for $181 million of additional borrowing capacity as of
Sept. 30, 2019. Fitch forecasts EBITDA/interest paid of 1.4x in
2019.
Debt Issue Notching: Fitch's recovery assumptions result in a
recovery rate for CHS's approximately $8.9 billion of first-lien
senior secured debt, which includes the ABL and senior secured
notes, within the 'RR1' range to generate a three-notch uplift to
the debt issue ratings from the IDR to 'B'/'RR1'. The $3.1 billion
senior secured junior priority notes are notched down by two to
reflect estimated recoveries in the 'RR6' range, to 'CC'/'RR6', and
the $2 billion senior unsecured notes are notched down by three, to
'C'/'RR6' to reflect estimated recoveries in the 'RR6' range and
structural subordination of these notes relative to the prior
ranking junior priority secured notes. Fitch assumes that CHS would
fully draw the $1 billion ABL prior to a bankruptcy scenario and
includes that amount in the claims waterfall.
Fitch estimates an enterprise value (EV) on a going concern basis
of $9.0 billion for CHS, after a deduction of 10% for
administrative claims. The EV assumption is based on
post-reorganization EBITDA after payments to non-controlling
interests of $1.4 billion and a 7.0x multiple. Fitch's post
reorganization EBITDA estimate assuming ongoing deterioration in
the business is offset by corrective measures taken to arrest the
decline in EBITDA after the reorganization. The EBITDA estimate is
7% lower than Fitch's 2019 forecast EBITDA. This differs from
Fitch's typical approach to determining post-reorganization EBITDA
for hospital companies, which implements a 30%-40% decline to LTM
EBITDA based on the operational attributes of the acute care
hospital sector, including a high proportion of revenue generated
by government payors, the legal obligation of hospital providers to
treat uninsured patients, and the highly regulated nature of the
hospital industry. The CHS recovery scenario is different in that
it reflects a reorganization provoked by secular headwinds to
organic growth in rural hospital markets rather than a regulatory
change that leads to lower payments to the industry.
There is a dearth of bankruptcy history in the acute care hospital
segment. In lieu of data on bankruptcy emergence multiples in the
sector, the 7.0x multiple employed for CHS reflects a history of
acquisition multiples for large acute care hospital companies with
similar business profiles as CHS in the range of 7.0x-10.0x since
2006 and the average public trading multiple (EV/EBITDA) of CHS's
peer group (HCA, UHS, LPNT and THC), which has fluctuated between
approximately 6.5x and 9.5x since 2011. CHS has recently sold
hospitals in certain markets for a blended multiple that Fitch
estimates is higher than the 7.0x assumed in the recovery analysis.
However, Fitch believes the higher multiple on recent transactions
is due to strong interest by strategic buyers in markets where they
have an existing footprint and so is not necessarily indicative of
the multiple that the larger CHS entity would command.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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.
CHS has an ESG Relevance Score of 4 for Exposure to Social Impacts
due to societal and regulatory pressures to constrain growth in
healthcare spending in the U.S. This dynamic has a negative impact
on the credit profile, and is relevant to the rating in conjunction
with other factors.
CHS/COMMUNITY HEALTH: Moody's Assigns Caa2 Rating to New Sec. Notes
-------------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to CHS/Community
Health Systems, Inc.'s new senior secured notes. There is no change
to Community's existing ratings, including its Caa3 Corporate
Family Rating. The outlook is stable.
Proceeds from the new $1 billion senior secured note issuance will
be used to repay $1 billion of 5.125% senior secured first lien
notes due August 2021. In conjunction with its new notes issuance,
Community has launched a tender offer to purchase any and all of
the 2021 notes. Moody's views the transaction as being credit
positive because it lengthens Community's maturity profile. In
addition, it could potentially delay the springing expiration of
the ABL facility from May 2021 to December 2022.
Ratings assigned:
CHS/Community Health Systems, Inc.
Senior secured notes due 2025 at Caa2 (LGD3)
RATINGS RATIONALE
Community's Caa3 Corporate Family Rating reflects Moody's
expectation that the company will continue to operate with very
high financial leverage of over 8.0x. The rating is also
constrained by Moody's expectation for negative free cash flow over
the next 12-18 months because of Community's high interest costs
and significant capital requirements of the business. The ratings
are constrained by industry-wide operating headwinds which will
limit operational improvement despite Community's turnaround
initiatives. The rating is supported by Community's large scale,
geographic diversity and divestiture plans. Proceeds from
divestitures are expected to be used to repay debt and reinvest in
the business.
The stable outlook reflects Moody's view that the current ratings
adequately reflect Community's weak operating performance and
elevated probability of default.
The SGL-4 Speculative Grade Liquidity rating reflects Moody's view
that Community will continue to generate negative free cash flow.
Community will also have only limited availability under its ABL
facility over the next year. It also reflects the potential that
access to the ABL will be lost and outstanding balances on the
facility will need to be repaid in December 2022 if the $3.1
billion of 6.25% senior secured notes due March 2023 are not
refinanced/repaid by that juncture. This assumes that Community is
able to refinance the 2021 notes as contemplated.
With respect to governance, Community has been unable to
demonstrate a consistent track record for meeting its own financial
guidance. As a for-profit hospital operator, Community also faces
high social risk. The affordability of hospitals and the practice
of balance billing has garnered substantial social and political
attention. Hospitals are now required to publicly provide the list
price of all of their services, although compliance and practice is
inconsistent across the industry. Further, rising social pressures
are likely to increase price transparency requirements on hospital
operators over the near-to-intermediate term. Given hospitals'
reliance on Medicare and Medicaid for a substantial portion of
reimbursement, any changes to government reimbursement directly
impacts hospital revenue and profitability. In addition, the social
and political push for a single payor system would drastically
change the operating environment. As Community is focused on
non-urban communities, over time slow population growth tempers the
company's capacity to grow admissions. Implementing strategy
changes in a rural hospital is often met with community backlash,
which can make it difficult to sell, close or otherwise reduce
services in order to improve profitability.
Moody's could downgrade the ratings if there is any further
deterioration in Community's earnings, if liquidity weakens or if,
for any other reason, the probability of default rises or recovery
prospects weaken.
Moody's could upgrade the ratings if operational initiatives result
in improved volume growth and margin expansion. If leverage
declines or free cash flow improves materially, such that the
company's ability to refinance future debt maturities and sustain
the current capital structure becomes more assured, the ratings
could be upgraded. An upgrade would also require improved
liquidity.
CHS/Community Health Services, Inc., headquartered in Franklin,
Tennessee, is an operator of general acute care hospitals in
non-urban and mid-sized markets throughout the US. Revenues in the
last twelve months ended September 30, 2019 were approximately $13
billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CLEVELAND BIOLABS: James Harpel Has 6.8% Stake as of May 14
-----------------------------------------------------------
James W. Harpel disclosed in a Schedule 13G filed with the
Securities and Exchange Commission that as of May 14, 2019, he
beneficially owns 773,931 shares of common stock of Cleveland
BioLabs, Inc., which represents 6.8 percent based upon 11,298,239
shares of the Issuer's common stock outstanding on Oct. 31, 2019,
as reported by Cleveland BioLabs in its Quarterly Report on Form
10-Q filed on Nov. 14, 2019.
Mr. Harpel directly owns 592,209 shares of the Issuer's Common
Stock. The 176,722 shares of the Issuer's Common Stock are owned
by six trusts over which Mr. Harpel has power of attorney. As
Power of Attorney, Mr. Harpel shares with the trustees the power to
vote or dispose the shares held by the Trusts. Furthermore, as the
Power of Attorney of the Trusts, Mr. Harpel may be deemed a
beneficial owner, for purposes of Section 13(d) of the Act of any
securities of the Issuer beneficially owned by the Trusts.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/c0rDO8
About Cleveland BioLabs
Cleveland BioLabs, Inc. -- http://www.cbiolabs.com/-- is a
biopharmaceutical company developing novel approaches to activate
the immune system and address serious medical needs. The Company's
proprietary platform of Toll-like immune receptor activators has
applications in radiation mitigation and oncology. The Company's
most advanced product candidate is entolimod, which is being
developed as a medical radiation countermeasure for the prevention
of death from acute radiation syndrome and other indications in
radiation oncology. The Company was incorporated in Delaware in
June 2003 and is headquartered in Buffalo, New York.
Cleveland BioLabs incurred a net loss of $3.70 million during the
year ended Dec. 31, 2018, and a net loss of $9.84 million during
the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company
had $2.23 million in total assets, $565,682 in total liabilities,
and $1.66 million in total stockholders' equity.
Meaden & Moore, Ltd., in Cleveland, Ohio, the Company's auditor
since 2005, issued a "going concern" qualification in its report
dated March 7, 2019, citing that the Company continues to have
negative cash flow from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
CLOVER TECHNOLOGIES: 4L's Prepack Chapter 11 Plan Confirmed
-----------------------------------------------------------
4L Holdings, which operates as Clover Technologies, on Jan. 22
disclosed that it has received Court approval of its prepackaged
Chapter 11 Plan of Reorganization (the "Plan") paving the way for
the reorganized company to successfully emerge from Chapter 11 in
the coming days.
The confirmed Plan will provide 4L a significantly stronger balance
sheet and increased financial flexibility, putting the Company on
strong financial footing as it enters its next chapter. With the
recent acquisition of Teleplan, the Company will now possess the
financial strength and operational capabilities to offer
cost-effective, innovative supply chain solutions for customers
worldwide, reaching over 120 countries across Europe, the Americas
and Asia Pacific. Taken together, these strategic actions position
the Company as a leading global supply chain services and solutions
platform that delivers value to customers through increased asset
monetization opportunities, speed, cost optimization, and a
positive impact on the environment to support its customers'
sustainability targets.
"We appreciate the dedication and support of our extraordinary
employees, customers and partners during this process, as well as
the strong support of our lenders and sponsors," said Dan Perez,
CEO of Teleplan and Clover Wireless. "We are also well on our way
to integrating Clover Wireless and Teleplan to unlock the customer
value promised by the combination. This combination enhances our
ability to deliver seamlessly integrated service to customers
across the globe, wherever and whenever they need it. The combined
organization will serve as a one-stop shop for customers, providing
customized solutions to optimize customers' reverse supply chain
and increase asset values. We are entering 2020 with momentum and
our global team is more excited than ever about the opportunities
ahead."
Kirkland & Ellis LLP is serving as 4L's legal counsel, Jefferies
LLC is serving as its financial advisor and Alvarez & Marsal is
serving as restructuring advisor. Gibson, Dunn & Crutcher LLP is
acting as legal counsel for the ad hoc group of term loan lenders
and Greenhill & Co., LLC is acting as its financial advisor.
About Clover Wireless
Clover Wireless -- http://www.cloverwireless.com-- is the global
leader in delivering cost-effective, innovative supply chain
solutions for wireless carriers, manufacturers, retailers,
insurance providers and enterprise businesses. Clover Wireless
offers a comprehensive services portfolio that includes returns
management, repair and reclamation services, customized trade-in
and buyback programs, and device re-marketing through multiple
sales channels. With two of the largest consumer electronic device
repair centers in North America, Clover Wireless utilizes its
unsurpassed repair services and heavy reclamation capabilities to
restore devices to high quality condition while avoiding waste and
maximizing value for customers.
About Clover Technologies
Clover Technologies Group, LLC, et al. --http://www.clovertech.com/
-- collect and recycle electronic devices and provide aftermarket
management services for mobile device carriers, manufacturers,
retailers, insurance providers and enterprise businesses. Formed
through organic growth and strategic acquisitions, the Debtors and
their non-debtor affiliates operate repair centers in North America
and abroad and provide services in over 120 countries.
Clover Technologies Group, LLC and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 19-12680) on Dec. 16,
2019. Clover Technologies was estimated to have $100 million to
$500 million in assets and liabilities.
The Debtors tapped KIRKLAND & ELLIS LLP as counsel; KLEHR HARRISON
HARVEY BRANZBURG LLP as local bankruptcy counsel; ALVAREZ & MARSAL
NORTH AMERICA, LLC, a restructuring advisor; JEFFERIES LLC as
investment banker; and BANKRUPTCY MANAGEMENT SOLUTIONS, INC., a
claims agent.
About Teleplan
Teleplan International N.V. -- http://www.teleplan.com-- is an
industry leader in life-cycle care and value recovery solutions for
technology products, including IoT, mobile, customer premises
equipment and consumer electronics. Focusing on customer care,
managed logistics, parts management, screening & testing,
repairs/refurbishing and reselling/recycling, Teleplan has 37 years
of proven performance providing value propositions throughout the
supply chain from the point of purchase to the end of life.
Teleplan innovates to consistently keep up with the advances in
interactive connectivity and communication, and its 'Telemade'
approach tailors to each individual customer's needs. As a member
of CE 100, Teleplan is a key player in the transition to a Circular
Economy. Headquartered in Amsterdam/Schiphol, the Netherlands,
Teleplan's service centers have a global reach of over 120
countries and employ almost 5,000 people.
COMMUNITY HEALTH: Commences Tender Offer for 5.125% Senior Notes
----------------------------------------------------------------
Community Health Systems, Inc.'s wholly owned subsidiary,
CHS/Community Health Systems, Inc., has commenced a cash tender
offer for any and all of its outstanding 5.125% Senior Secured
Notes due 2021 on the terms and subject to the conditions set forth
in the Issuer's Offer to Purchase dated Jan. 23, 2020 and the
accompanying Letter of Transmittal dated Jan. 23, 2020.
The Tender Offer will expire at 12:00 midnight, New York City time,
at the end of the day on Feb. 20, 2020, unless extended or earlier
terminated by the Issuer. The Issuer reserves the right to amend,
extend or terminate the Tender Offer at any time subject to
applicable law.
Certain information regarding the 2021 Notes and the terms of the
Tender Offer is summarized below.
CUSIP No.: 12543D AU4
Title of Security: 5.125% Senior Secured Notes due 2021
Aggregate
Principal Amount
Outstanding: $1,000,000,000
Late Tender Offer
Consideration: $971.25
Early Tender
Payment: $30.00
Total Tender Offer
Consideration: $1,001.25
Each holder who validly tenders, and does not validly withdraw, its
2021 Notes on or prior to 5:00 p.m., New York City time, on Feb. 5,
2020, unless extended will be entitled to an early tender payment,
which is included in the total tender offer consideration above, of
$30.00 for each $1,000 principal amount of 2021 Notes validly
tendered by such holder if such 2021 Notes are accepted for
purchase pursuant to the Tender Offer.
Holders validly tendering, and not validly withdrawing, 2021 Notes
after the Early Tender Deadline and on or before the Expiration
Time will be eligible to receive only the late tender offer
consideration, which represents the total tender offer
consideration less the early tender payment.
In addition, holders whose 2021 Notes are accepted for payment in
the Tender Offer will receive accrued and unpaid interest from the
last interest payment date to, but not including, the applicable
settlement date for their 2021 Notes purchased pursuant to the
Tender Offer. The 2021 Notes tendered prior to 5:00 p.m., New York
City time, on Feb. 5, 2020 may be withdrawn at any time prior to
the Withdrawal Deadline. The 2021 Notes tendered after the
Withdrawal Deadline may not be withdrawn.
Subject to the satisfaction or waiver of certain conditions, the
Issuer reserves the right, following the Early Tender Deadline, to
accept for purchase prior to the Expiration Time all Notes validly
tendered on or prior to the Early Tender Deadline. The Issuer will
announce whether it intends to exercise the Early Settlement
Election following the Early Tender Deadline. If the Issuer
exercises the Early Settlement Election, it will pay the total
tender offer consideration promptly following the Early Settlement
Announcement, plus accrued and unpaid interest on the purchased
2021 Notes from the interest payment date for the 2021 Notes
immediately preceding the Early Settlement Date to, but not
including, the Early Settlement Date.
The Issuer's obligation to accept for purchase, and to pay for,
2021 Notes validly tendered and not validly withdrawn pursuant to
the Tender Offer is subject to the satisfaction or waiver of
certain conditions, including, among others, the condition that the
Issuer has completed a debt financing on terms and conditions
satisfactory to it yielding sufficient net cash proceeds to fund
the total tender offer consideration plus accrued and unpaid
interest for all of the currently outstanding 2021 Notes. The
complete terms and conditions of the Tender Offer are set forth in
the Tender Offer documents that are being sent to holders of 2021
Notes. Holders of 2021 Notes are urged to read the Tender Offer
documents carefully.
Concurrently with the commencement of the Tender Offer, the Issuer
has delivered to the trustee for delivery to the holders of the
2021 Notes a conditional notice of redemption to redeem all of the
2021 Notes not purchased by the Issuer in the Tender Offer on Feb.
22, 2020 at a redemption price of 100.000% of the principal amount
of the 2021 Notes plus accrued and unpaid interest to, but
excluding, Feb. 22, 2020. The late tender offer consideration is
less than the redemption price to be paid on the redemption date.
The Issuer's obligation to redeem all of the 2021 Notes not
purchased by the Issuer in the Tender Offer on the redemption date
is subject to the satisfaction of the Financing Condition.
The Issuer has retained Credit Suisse Securities (USA) LLC to act
as dealer manager in connection with the Tender Offer. Questions
about the Tender Offer may be directed to Credit Suisse Securities
(USA) LLC at (800) 820-1653 (toll free) or (212) 538-2147
(collect). Copies of the Tender Offer documents and other related
documents may be obtained from Global Bondholder Services
Corporation, the tender agent and information agent for the Tender
Offer, at (866) 470-3800 (toll free) or (212) 430-3774 (collect) or
email contact@gbsc-usa.com.
About Community Health
Community Health -- http://www.chs.net/-- is a publicly traded
hospital company and an operator of general acute care hospitals in
communities across the country. The Company, through its
subsidiaries, owns, leases or operates 99 affiliated hospitals in
17 states with an aggregate of approximately 16,000 licensed beds.
The Company's headquarters are located in Franklin, Tennessee.
Shares in Community Health Systems, Inc. are traded on the New York
Stock Exchange under the symbol "CYH."
Community Health reported a net loss attributable to the Company's
stockholders of $788 million for the year ended Dec. 31, 2018,
compared to a net loss attributable to the Company's stockholders
of $2.45 billion for the year ended Dec. 31, 2017. As of Sept. 30,
2019, the Company had $15.89 billion in total assets, $17.16
billion in total liabilities, $498 million in redeemable
noncontrolling interests in equity of consolidated subsidiaries,
and a total stockholders' deficit of $1.76 billion.
* * *
As reported by the TCR on Nov. 29, 2019, S&P Global Ratings raised
its issuer credit rating on U.S.-based hospital operator Community
Health Systems Inc. to 'CCC+' from 'SD' (selective default). The
upgrade to 'CCC+' reflects the company's longer-dated debt maturity
schedule, and S&P's view that Community's efforts to rationalize
its hospital portfolio as well as improve financial performance and
cash flow should strengthen credit measures over the next couple of
years.
Also in November 2019, Fitch Ratings downgraded Community Health
Systems, Inc.'s Issuer Default Rating to 'C' from 'CCC' following
the company's announcement of an offer to exchange a series of
senior unsecured notes due 2022. The downgrade results from Fitch
viewing the transaction as a distressed debt exchange.
COMMUNITY HEALTH: Prices Offering of $1.462 Billion Senior Notes
----------------------------------------------------------------
Community Health Systems, Inc.'s wholly owned subsidiary,
CHS/Community Health Systems, Inc. (the "Issuer"), has priced an
offering of $1.462 billion aggregate principal amount of its 6.625%
Senior Secured Notes due 2025. The sale of the Notes is expected
to be consummated on or about Feb. 6, 2020, subject to customary
closing conditions. The size of the offering was increased by
approximately $442 million aggregate principal amount subsequent to
the initial announcement of the offering.
The Issuer intends to use the net proceeds of the offering of Notes
to (i) purchase any and all of its 5.125% Senior Secured Notes due
2021 validly tendered and not validly withdrawn in the cash tender
offer announced on Jan. 23, 2020, (ii) redeem all of the 2021 Notes
that are not purchased pursuant to such tender offer, (iii)
purchase in one or more privately negotiated transactions or redeem
approximately $425.5 million aggregate principal amount of its
6.250% Senior Secured Notes due 2023 and (iv) pay related fees and
expenses.
The Notes are being offered in the United States to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended, and outside the United States pursuant to
Regulation S under the Securities Act. The Notes have not been
registered under the Securities Act and may not be offered or sold
in the United States absent registration or an applicable exemption
from the registration requirements.
About Community Health
Community Health -- http://www.chs.net-- is a publicly traded
hospital company and an operator of general acute care hospitals in
communities across the country. The Company, through its
subsidiaries, owns, leases or operates 99 affiliated hospitals in
17 states with an aggregate of approximately 16,000 licensed beds.
The Company's headquarters are located in Franklin, Tennessee.
Shares in Community Health Systems, Inc. are traded on the New York
Stock Exchange under the symbol "CYH."
Community Health reported a net loss attributable to the Company's
stockholders of $788 million for the year ended Dec. 31, 2018,
compared to a net loss attributable to the Company's stockholders
of $2.45 billion for the year ended Dec. 31, 2017. As of Sept. 30,
2019, the Company had $15.89 billion in total assets, $17.16
billion in total liabilities, $498 million in redeemable
noncontrolling interests in equity of consolidated subsidiaries,
and a total stockholders' deficit of $1.76 billion.
* * *
As reported by the TCR on Nov. 29, 2019, S&P Global Ratings raised
its issuer credit rating on U.S.-based hospital operator Community
Health Systems Inc. to 'CCC+' from 'SD' (selective default). The
upgrade to 'CCC+' reflects the company's longer-dated debt maturity
schedule, and S&P's view that Community's efforts to rationalize
its hospital portfolio as well as improve financial performance and
cash flow should strengthen credit measures over the next couple of
years.
Also in November 2019, Fitch Ratings downgraded Community Health
Systems, Inc.'s Issuer Default Rating to 'C' from 'CCC' following
the company's announcement of an offer to exchange a series of
senior unsecured notes due 2022. The downgrade results from Fitch
viewing the transaction as a distressed debt exchange.
CREATIVE LIGHTING: Has Until May 19 to File Plan & Disclosures
--------------------------------------------------------------
On January 2, 2020, Judge Peter C. McKittrick of the U.S.
Bankruptcy Court for the District of Oregon ordered that the
deadline for debtor Creative Lighting Solutions, Inc., to file a
Disclosure Statement and Plan of Reorganization is May 19, 2020.
The Debtor will provide to the United States Trustee a copy of
Debtor's original and amended 2017 federal tax returns by Dec. 30,
2019.
A full-text copy of the order dated Jan. 2, 2020, is available at
https://tinyurl.com/vdwmfdg from PacerMonitor.com at no charge.
About Creative Lighting Solutions
Creative Lighting Solutions, Inc., filed a voluntary Chapter 11
Petition (Bankr. D. Or. Case No. 19-34296) on Nov. 21, 2019, and is
represented by Nicholas J Henderson, Esq., at Motschenbacher &
Blattner LLP. The Debtor was estimated to have under $500,000 in
assets and under $1 million in liabilities.
CYTODYN INC: Appoints Alan Timmins as New Independent Director
--------------------------------------------------------------
Alan P. Timmins, former president, chief operating officer, and
Board Member of Sarepta Therapeutics, Inc., a Nasdaq-listed
company, has joined the board of directors of CytoDyn Inc. as an
independent director and chair of the Board's Audit Committee.
Mr. Timmins brings a wealth of financial and operations experience
to CytoDyn's board. He previously served 16 years in various
positions including president, executive vice president, chief
operating officer and chief financial officer of Sarepta
Therapeutics, Inc., a publicly traded life sciences technology
company focused on precision genetic medicine. His leadership and
drive contributed to a period of significant growth and he led
several of the company's strategic, financing, M&A and
out-licensing activities. He is currently the vice president for
Financial Affairs at the University of Portland, a position he has
served in for over 8 years, focusing on all financial functions and
on strategic planning and implementation across the organization.
Earlier in his career, Mr. Timmins was a senior manager at
PriceWaterhouseCoopers in the audit practice.
Mr. Timmins has also served as a member of boards of directors and
as a volunteer for several public, private and not-for-profit
companies, providing support in the areas of finance, business
development, strategy, operations management and career planning,
as well as doing guest lectures and seminars for area graduate and
undergraduate students.
"Over the course of his career, Alan has led major growth
initiatives - he was a key member of the team that built Sarepta
Therapeutics into the company is it today, negotiating major
commercial and governmental contracts, raising approximately $250
million, completing a strategic acquisition, and finalizing two
out-licensing transactions," said Scott Kelly, M.D., CytoDyn's
Chairman of the Board. "Alan has accumulated an impressive array
of strategic, financial and commercial achievements and has
demonstrated his ability to be a successful and trusted leader. His
breadth of experience will be instrumental to the Audit Committee
and to CytoDyn as a whole."
"I am pleased to be joining the CytoDyn board of directors at this
important time in the Company's development," said Timmins.
"Helping the Company reach its considerable potential in the
important therapeutic areas of HIV, cancer and immunology will be a
worthy and challenging goal, and I look forward to assisting
management and the board in reaching that goal."
Scott Kelly, M.D. added, "I would like to extend my sincerest
gratitude to Michael Klump for serving on the board of directors of
CytoDyn. Michael provided us with invaluable guidance and vision
at a critical time for our company. Michael remains an ardent
supporter of the science of CytoDyn and a significant investor.
While Michael's increasing business responsibilities drove his
decision to step down from our board, I am thrilled that he will
remain an advisor to both the CEO and Chairman of the Board."
On Jan. 15, 2020, Michael A. Klump resigned as a member of the
Board, effective immediately. CytoDyn said Mr. Klump's resignation
is not related to any known disagreement with the Company on any
matters relating to its operations, policies or practices.
About CytoDyn Inc.
Headquartered in Vancouver, Washington, CytoDyn Inc. --
http://www.cytodyn.com/-- is a biotechnology company developing
innovative treatments for multiple therapeutic indications based on
leronlimab, a novel humanized monoclonal antibody targeting the
CCR5 receptor. CCR5 appears to play a key role in the ability of
HIV to enter and infect healthy T-cells. The CCR5 receptor also
appears to be implicated in tumor metastasis and in immune-mediated
illnesses, such as GvHD and NASH. CytoDyn has successfully
completed a Phase 3 pivotal trial with leronlimab in combination
with standard anti-retroviral therapies in HIV-infected
treatment-experienced patients. CytoDyn plans to seek FDA approval
for leronlimab in combination therapy and plans to complete the
filing of a Biologics License Application (BLA) in the first
quarter of 2020 for that indication. CytoDyn is also conducting a
Phase 3 investigative trial with leronlimab (PRO 140) as a
once-weekly monotherapy for HIV-infected patients and, plans to
initiate a registration-directed study of leronlimab monotherapy
indication, which if successful, could support a label extension.
Cytodyn reported a net loss of $56.18 million for the year ended
May 31, 2019, compared to a net loss of $50.14 million for the year
ended May 31, 2018. As of Nov. 30, 2019, CytoDyn had $17.92
million in total assets, $31.55 million in total liabilities, and a
total stockholders' deficit of $13.63 million.
Warren Averett, LLC, in Birmingham, Alabama, the Company's auditor
since 2007, issued a "going concern" qualification in its report
dated Aug. 14, 2019, on the Company's consolidated financial
statements for the year ended May 31, 2019, citing that the Company
incurred a net loss of approximately $56,187,000 for the year ended
May 31, 2019 and has an accumulated deficit of approximately
$229,363,000 through May 31, 2019, which raises substantial doubt
about its ability to continue as a going concern.
DBMP LLC: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: DBMP LLC
20 Moores Road
Malvern, PA 19355
Business Description: DBMP LLC is a North Carolina limited
liability company and the direct parent
company of Millwork & Panel LLC, which
manufactures vinyl siding and polyvinyl
chloride (PVC) trim products for the
construction market at facilities it owns in
Claremont, North Carolina and Social Circle,
Georgia. As of the Petition Date, the
Debtor was a defendant in tens of thousands
of asbestos-related lawsuits pending in
courts throughout the United States.
Chapter 11 Petition Date: January 23, 2020
Court: United States Bankruptcy Court
Western District of North Carolina
Case No.: 20-30080
Judge: Hon. Laura T. Beyer
Debtor's Counsel: Gregory M. Gordon, Esq.
JONES DAY
2727 North Harwood Street, Suite 500
Dallas, TX 75201
Tel: (214) 220-3939
Email: gmgordon@jonesday.com
Debtor's
Special Counsel
for Asbestos
Claims Estimation
Matters and Local
Bankruptcy Counsel: ROBINSON, BRADSHAW & HINSON, P.A.
Debtor's
Asbestos
Consultants: BATES WHITE, LLC
Debtor's
Special
Counsel: SCHIFF HARDIN LLP
Debtor's
Claims,
Noticing, &
Balloting
Agent: EPIQ CORPORATE RESTRUCTURING, LLC
https://dm.epiq11.com/case/DBMP/dockets
Estimated Assets: $500 million to $1 billion
Estimated Liabilities: $500 million to $1 billion
The petition was signed by Michael T. Starczewski, chief legal
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://is.gd/59zErl
List of 25 Law Firms With the Most Significant Representations of
Asbestos Claimants:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Baron & Budd, PC Asbestos Unliquidated
3102 Oak Lawn Ave., #1100 Personal
Dallas, TX 75219 Injury
Tel: (214) 521-3605
Attn: Steve Baron
2. Belluck & Fox, L.L.P. Asbestos Unliquidated
546 Fifth Avenue, 5th Floor Personal
New York, NY 10036 Injury
Tel: (212) 681-1575
Attn: Joeseph Belluck
3. Brookman, Rosenberg, Asbestos Unliquidated
Brown & Sandler Personal
30 South 15th Street Injury
Philadelphia, PA 19102
Tel: (215) 569-4000
Attn: Laurence H. Brown
4. Cooney & Conway Asbestos Unliquidated
120 N. LaSalle Street Personal
Suite 3000 Injury
Chicago, IL 60602
Tel: (312) 236-6166
Attn: John D. Cooney
5. Early, Lucarelli, Sweeney & Asbestos Unliquidated
Meisenkothen Personal
360 Lexington Avenue Injury
20th Floor
New York, NY 10017
Tel: (212) 986-2233
Attn: Brian Early
6. Flint Law Firm LLC Asbestos Unliquidated
222 E. Park Street, Suite 500 Personal
Edwardsville, IL 62025 Injury
Tel: (618) 288-4777
Attn: Ethan A. Flint
7. George & Farinas, LLP Asbestos Unliquidated
151 N. Delaware Street Personal
Suite 1700 Injury
Indianapolis, IN 46204
Tel: (855) 641-7406
Attn: Kathy Farinas
8. Goldberg Persky White, P.C. Asbestos Unliquidated
11 Stanwix Street, Suite 1800 Personal
Pittsburgh, PA 15222 Injury
Tel: (412) 471-3980
Attn: Bruce E. Mattock
9. Goldenberg Heller & Asbestos Unliquidated
Antognoli, P.C. Personal
2227 South State Route 157 Injury
Edwardsville, IL 62025
Tel: (618) 656-5150
Attn: Mark Goldenberg
10. The Gori Law Firm Asbestos Unliquidated
156 North Main Street Personal
Edwardsville, IL 62025 Injury
Tel: (618) 307-4085
Attn: Sara Salger
11. James F. Humphreys & Asbestos Unliquidated
Associates, L.C. Personal
112 Capitol Street, 2nd Floor Injury
Charleston, WV 25301
Tel: (877) 341-2595
Attn: Jim Humphreys
12. Kazan, McClain, Satterly & Asbestos Unliquidated
Greenwood PLC Personal
55 Harrison Street, Suite 400 Injury
Oakland, CA 94607
Tel: (510) 302-1000
Attn: Steven Kazan
13. Kelley & Ferraro, LLP Asbestos Unliquidated
950 Main Avenue, Suite 1300 Personal
Cleveland, OH 44113 Injury
Tel: (216) 202-3450
Attn: James L. Ferraro
14. Law Offices of Peter G. Asbestos Unliquidated
Angelos, P.C. Personal
100 N. Charles Street Injury
22nd Floor
Baltimore, MD 21201
Tel: (410) 649-2000
Attn: Armand J. Volta, Jr.
15. Maune Raichle Hartley Asbestos Unliquidated
French & Mudd, LLC Personal
1015 Locust St., Ste. 1200 Injury
St. Louis, MO 63101
Tel: (800) 259-9249
Attn: Marcus E. Raichle, Jr.
16. Motley Rice LLC Asbestos Unliquidated
28 Bridgeside Boulevard Personal
Mount Pleasant, SC 29464 Injury
Tel: (800) 768-4026
Attn: John A. Baden, IV
17. O'Brien Law Firm, P.C. Asbestos Unliquidated
815 Geyer Avenue Personal
St. Louis, MO 63104 Injury
Tel: (314) 588-0558
Attn: Andrew O'Brien
18. Richardson, Patrick, Asbestos Unliquidated
Westbrook & Brickman LLC Personal
623 Richland Ave. W. Injury
P.O. Box 3088 Aiken, SC 29802
Tel: (803) 541-7850
Attn: Kenneth J. Wilson
19. Shrader & Associates, L.L.P. Asbestos Unliquidated
9 Greenway Plaza, Suite 390 Personal
Houston, TX 77046 Injury
Tel: (713) 782-0000
Attn: Ross D. Stomel
20. Simmons Hanley Conroy LLC Asbestos Unliquidated
ne Court Street Personal
Alton, IL 62002 Injury
Tel: (866) 467-6245
Attn: Perry J. Browder
21. SWMW Law, LLC Asbestos Unliquidated
701 Market Street, Personal
Suite 1000 St. Louis, MO 63101 Injury
Tel: (314) 480-5180
Attn: Ben Schmickle
22. The Ferraro Law Firm Asbestos Unliquidated
600 Brickell Ave., Suite 3800 Personal
Miami, FL 33131 Injury
Tel: (305) 547-9800
Attn: James L. Ferraro
23. The Law Offices of Asbestos Unliquidated
Peter T. Nicholl Personal
36 South Charles Street Injury
Suite 1700
Baltimore, MD 21201
Tel: (410) 244-7005
Attn: Peter T. Nicholl
24. Weitz & Luxenberg, P.C. Asbestos Unliquidated
700 Broadway Personal
New York, NY 10003 Injury
Tel: (212) 558-5500
Attn: Perry Weitz
25. Wilentz, Goldman & Asbestos Unliquidated
Spitzer, P.A. Personal
14 Wall Street, Suite 6B Injury
New York, NY 10005
Tel: (646) 746-8914
Attn: Kevin M. Berry
DIRECTVIEW HOLDINGS: Issues $250,000 Demand Promissory Notes
------------------------------------------------------------
DirectView Holdings, Inc., issued on Jan. 17, 2020, two demand
promissory notes to certain debt holders, with an aggregate
principal amount of $250,000. The Notes accrue interest at the
rate of 18% per annum, payable in cash on the earlier of Dec. 17,
2020, together with accrued interest. A minimum of six-months of
interest is guaranteed. Each holder of the Notes may demand
repayment of its Note at any time, in whole or in part, upon three
business days prior written notice, without penalty.
If a Note is repaid (i) prior to 91 calendar days from the date of
issuance, the Company is required to repay 109% of the aggregate
principal balance and interest due on the Note outstanding as of
the date of repayment (ii) between 91-120 calendar days from the
date of issuance, the Company is required to repay 115% of the
aggregate principal balance and interest due on the Note
outstanding as of the date of repayment (iii) 121 calendar days or
more from the date of issuance, the Company is required to repay
124% of the aggregate principal balance and interest due on the
Note outstanding as of the date of repayment.
In addition, the Notes provide that all accrued and unpaid interest
thereon may be converted into the Company's next equity or debt
securities offering on a dollar-for-dollar basis on such
subscription terms and conditions as provided for in such
offering.
Upon the occurrence of an event of default under the Notes, the
Company must repay to the Note holders a default penalty equal to
two percent of the face amount of such Notes per month during the
period of default, in addition to the payment of all other amounts,
costs, fees and expenses due in respect of the Notes.
Amendments to Articles of Incorporation
On Jan. 24, 2020, the Company filed its Amended and Restated
Certificate of Designation of Preferences, Rights and Limitations
of Series B 10% Convertible Preferred Stock with the Secretary of
State of the State of Nevada, establishing the rights, preferences,
privileges, qualifications, restrictions and limitations relating
to its Series B 10% Convertible Preferred Stock.
The Company received an investment of $50,000 from its chief
executive officer in connection with the issuance of the Preferred
Stock.
About Directview Holdings
DirectView Holdings, Inc., (DIRV) together with its subsidiaries,
provides video surveillance solutions and teleconferencing products
and services to businesses and organizations. Based in Boca Raton,
Florida, the company operates in two divisions, Security (Video
Surveillance) and Video Conferencing. The Security division offers
technologies in surveillance systems providing onsite and remote
video and audio surveillance, digital video recording, and
services. It also sells and installs surveillance systems; and
sells maintenance agreements. The company sells its products and
services in the United States and internationally through direct
sales force, referrals, and its websites. The Video Conferencing
division offers teleconferencing products and services that enable
clients to conduct remote meetings by linking participants in
geographically dispersed locations. It is involved in the sale of
conferencing services based upon usage, the sale and installation
of video equipment, and the sale of maintenance agreements. This
division primarily provides conferencing products and services to
numerous organizations ranging from law firms, banks, high tech
companies and government organizations. DirectView Holdings
maintains two websites at http://www.directview.com/and
http://www.directviewsecurity.com
Directview reported a net loss of $10.05 million for the year ended
Dec. 31, 2018, compared to a net loss of $1.54 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, DirectView Holdings had
$2.70 million in total assets, $33.72 million in total liabilities,
and a total stockholders' deficit of $31.01 million.
Assurance Dimensions, the Company's auditor since 2017, issued a
"going concern" qualification in its report dated April 12, 2019,
on the Company's consolidated financial statements for the year
ended Dec. 31, 2018, stating that the Company had a net loss and
cash used from operations of approximately $10,058,000 and
$1,854,000, respectively for the year ended of Dec. 31, 2018 and a
working capital deficit of approximately $21,351,000 as of Dec. 31,
2018. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
DXI ENERGY: Issues 4.4 Million Shares to Lenders in Lieu of Cash
----------------------------------------------------------------
DXI Energy Inc. has issued 2,215,068 shares to each of Hodgkinson
Equities Corporation and Hodgkinson Ventures Inc., for a total of
4,430,136 shares following receipt of all final private placement
approvals from the appropriate Canadian regulatory authorities. HEC
and HVI are the Company's secured lenders and the issuance of the
shares is in lieu of cash payment of interest owing on the
$4,000,000 in secured loans of $132,904 for the period from May 1,
2019 to Dec. 31, 2019. HEC is a related party to the Company owned
100% by Company Director Robert L. Hodgkinson. Accordingly, Mr.
Hodgkinson abstained from voting when the issuance of the shares
was approved by the Company's Board of Directors.
About DXI Energy
DXI Energy Inc. -- www.dxienergy.com/ -- is in the business of
acquiring, exploring and developing energy projects with a focus on
oil and gas exploration in Canada and the United States. The
Company maintains offices in Calgary and Vancouver, Canada and has
been producing commercial quantities of oil and gas since 2008.
As of Sept. 30, 2019, DXI Energy had C$4.41 million in total
assets, C$9.07 million in total liabilities, and a total
shareholders' deficit of C$4.65 million.
BDO Canada LLP, in Vancouver, British of Columbia, issued a "going
concern" qualification in its report dated April 18, 2019, citing
that the Company incurred a net loss of C$11.6 million during the
year ended Dec. 31, 2018 and, as of that date, the Company's
current liabilities exceeded its total assets by C$3.4 million.
These events or conditions, along with other matters, indicate that
a material uncertainty exists that may cast substantaial doubt
about its ability to continue as a going concern.
EVEREADY SERVICES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Eveready Services, Inc.
310 W. Mockingbird Lane
Dallas, TX 75247-6612
Business Description: Eveready Services, Inc. provides specialized
logistics services to interior designers,
their craftspeople and suppliers, and their
discerning clientele. Services offered
include delivery, installation, art handling
& installation, receiving, storage, shipping
and household transfer.
Chapter 11 Petition Date: January 23, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 20-30225
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS
12770 Coit Road
Suite 100
Dallas, TX 75251
Tel: 972-991-5591
Email: eric@ealpc.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Allan Hayslip, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://is.gd/gKCb7G
EVOKE PHARMA: Signs Commercial Services Agreement with Eversana
---------------------------------------------------------------
Evoke Pharma, Inc., entered into a commercial services agreement on
Jan. 21, 2020, with Eversana Life Science Services, LLC for the
commercialization of Gimoti, the Company's nasal spray product
candidate for the relief of symptoms in adult women with acute and
recurrent diabetic gastroparesis. Pursuant to the Commercial
Services Agreement, Eversana will commercialize and distribute
Gimoti in the United States if approved by the U.S. Food and Drug
Administration. Eversana will manage the marketing of Gimoti to
gastroenterologists and other targeted health care providers as
well as the sales and distribution of Gimoti to wholesalers,
pharmacies and other customers within the United States.
Under the terms of the Commercial Services Agreement, the Company
maintains ownership of the Gimoti New Drug Application, as well as
legal, regulatory, and manufacturing responsibilities for Gimoti.
Eversana will utilize its internal sales organization along with
other commercial functions for market access, marketing,
distribution and patient support services. The Company will record
sales for Gimoti to Eversana's third party logistics division and
retain more than 80% of product profits. Eversana will receive
reimbursement of its commercialization costs pursuant to an agreed
upon budget and a percentage of product profits in the mid-to-high
teens. Product profits are the net sales (as defined in the
agreement) of Gimoti, less (i) reimbursed commercialization costs,
(ii) manufacturing and administrative costs set at a fixed
percentage of net sales, and (iii) third party royalties. During
the term of the agreement, Eversana agreed to not market, promote,
or sell a competing product in the United States. The Company
granted Eversana the co-exclusive right (with the Company) to
commercialize Gimoti in the United States upon termination of the
Company's existing commercial services agreement with Novos Growth,
LLC.
In addition, in connection with the Commercial Services Agreement,
Eversana and the Company have entered into a loan agreement, dated
Jan. 21, 2020, pursuant to which Eversana has agreed to provide a
revolving credit facility of up to $5.0 million to the Company
conditioned upon FDA approval of the Gimoti NDA, if any, as well as
certain other customary conditions. The Credit Facility is secured
by all of the Company's personal property other than our
intellectual property. Under the terms of the Credit Facility, the
Company cannot grant an interest in the Company's intellectual
property to any other person. Each loan under the Credit Facility
will bear interest at an annual rate equal to 10.0%.
The Company may prepay any amounts borrowed under the Credit
Facility at any time without penalty or premium. The maturity date
of all amounts, including interest, borrowed under the Credit
Facility will be 90 days after the expiration or earlier
termination of the Commercial Services Agreement. The Credit
Facility also includes events of default, the occurrence and
continuation of which provide Eversana with the right to exercise
remedies against the Company and the collateral securing the loans
under the Credit Facility, including the Company's cash. These
events of default include, among other things, the Company's
failure to pay any amounts due under the Credit Facility, an
uncured material breach of the representations, warranties and
other obligations under the Credit Facility, the occurrence of
insolvency events and the occurrence of a change in control.
The term of the Commercial Services Agreement is from Jan. 21, 2020
until five years from the date, if any, that the FDA approves the
Gimoti NDA. Upon expiration or termination of the agreement, the
Company will retain all profits from product sales and assume all
corresponding commercialization responsibilities. Within 30 days
after each of the first three annual anniversaries of commercial
launch, either party may terminate the agreement if net sales of
Gimoti do not meet certain annual thresholds. Either party may
terminate the agreement: for the material breach of the other
party, subject to a 60-day cure period; in the event an insolvency,
petition of the other party is pending for more than 60 days; upon
30 days written notice to the other party if Gimoti is subject to a
safety recall; the other party is in breach of certain regulatory
compliance representations under the agreement; the Company
discontinues the development or production of Gimoti; Gimoti is not
commercially launched with nine months of FDA approval, if any, or
the net profit is negative for any two consecutive calendar
quarters beginning with the first full calendar quarter 24 months
following commercial launch; or if there is a change in applicable
laws that makes operation of the services as contemplated under the
agreement illegal or commercially impractical. Either party may
also terminate the Commercial Services Agreement upon a change of
control of the Company, subject, in the event that the Company
initiates such termination, to a one-time payment equal to between
two times and one times annualized service fees paid by the Company
under the Commercial Services Agreement, with such amount based on
which year after commercial launch the change of control occurs.
In addition, Eversana may terminate the Commercial Services
Agreement if Gimoti is not approved by FDA by Dec. 31, 2020
(provided Eversana gives the Company notice of such termination no
later than March 1, 2021), or if the Company withdraws Gimoti from
the market for more than 90 days. The Company may also terminate
the agreement if Eversana fails to submit a commercialization plan
and budget within 45 days of the date of the agreement, or if the
parties are unable to agree to a commercialization plan and budget
within 75 days of the date of the agreement.
Termination of NGP Agreement
On Jan. 23, 2020, the Company and Novos Growth, LLC mutually agreed
to terminate, effective immediately, the Commercial Services
Agreement, dated as of Jan. 5, 2019, by and between the Company and
NGP related to the commercialization of Gimoti. The Company will
not incur any early termination fees due to the termination of the
NGP Agreement.
About Evoke Pharma
Evoke -- http://www.EvokePharma.com/-- is a specialty
pharmaceutical company focused primarily on the development of
drugs to treat GI disorders and diseases. The Company is
developing Gimoti, a nasal spray formulation of metoclopramide, for
the relief of symptoms associated with acute and recurrent diabetic
gastroparesis in adult women.
Evoke incurred a net loss of $7.56 million during the year ended
Dec. 31, 2018, following a net loss of $12.23 million during the
year ended Dec. 31, 2017. As of Sept. 30, 2019, Evoke had $7.33
million in total assets, $2.15 million in total current
liabilities, and $5.17 million in total stockholders' equity.
BDO USA, LLP, in San Diego, California, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
March 6, 2019, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
EYEPOINT PHARMACEUTICALS: Expects Q4 Revenues of $7.5M to $8.2M
---------------------------------------------------------------
EyePoint Pharmaceuticals, Inc., reported preliminary, unaudited,
total and net product revenue for the fourth quarter and full-year
2019. For the fourth quarter ended Dec. 31, 2019, total revenues
are estimated to be between $7.5 million and $8.2 million and net
product revenues are estimated to be between $6.9 million and $7.6
million, a significant acceleration from net product revenues of
$1.0 million reported for the third quarter ended Sept. 30, 2019.
For the full-year 2019, total revenues are estimated to be between
$19.3 million and $20.0 million and net product revenues are
estimated to be between $15.8 million and $16.5 million. The net
product revenues acceleration in the fourth quarter of 2019 was
driven by strong customer demand for both DEXYCU and YUTIQ.
"2019 was a year marked by significant achievement as evidenced by
two successful commercial product launches, DEXYCU and YUTIQ," said
Nancy Lurker, president & chief executive officer of EyePoint. "We
are very pleased by the sales acceleration in the fourth quarter
for both products which positions the Company well for a strong
2020. Customer demand is building, physician acceptance continues
to grow, and we will continue to execute on additional agreements
with payors to expand access to our products. In parallel, we
remain focused on advancing and enhancing our pipeline for areas of
unmet need in ocular disease."
Customer demand, represented as units purchased by physicians and
ambulatory surgical centers (ASCs) from the Company's distributors,
showed continued strong unit growth for both products with
estimated increases of 43% and 86% for YUTIQ and DEXYCU,
respectively, in the fourth quarter of 2019 versus the third
quarter of 2019. This growth was supported by the permanent and
specific J-Code for YUTIQ in place as of Oct. 1, 2019 and the
execution of key agreements with payors and large ASCs during the
period.
The difference between reported GAAP net product revenues and
customer demand is due to the timing of distributor purchases from
the Company based upon customer demand and distributor inventory
levels from quarter to quarter. The Company also moved from a
single distributor title model to a more traditional
multi-distributor structure during the fourth quarter.
Net product revenue for YUTIQ is estimated to be between $4.1
million and $4.5 million and between $11.4 million and $11.8
million for the fourth quarter and full-year ended Dec. 31, 2019,
respectively.
Net product revenue for DEXYCU is estimated to be between $2.8
million and $3.1 million and between $4.4 million and $4.7 million
for the fourth quarter and full-year ended Dec. 31, 2019,
respectively.
The Company estimates that it had cash and cash equivalents of
approximately $22 million at Dec. 31, 2019.
The preliminary fourth quarter and full-year 2019 revenue results
included in this release were calculated prior to the completion of
a review by the Company's independent registered public accounting
firm and are therefore subject to adjustment.
Conference Call
Eyepoint Pharmaceuticals will host a conference call and webcast to
discuss fourth quarter and full-year 2019 financial results on
Thursday, March 5, 2020 at 8:30 a.m. ET. To access the conference
call, please dial (877) 312-7507 from the U.S. and Canada or (631)
813-4828 (international) at least 10 minutes prior to the start
time and refer to conference ID 7314529. A live webcast will be
available on the Investor Relations section of the corporate
website at http://www.eyepointpharma.com. A replay of the webcast
will also be available on the corporate website.
About EyePoint Pharmaceuticals
EyePoint Pharmaceuticals, formerly pSivida Corp. --
http://www.eyepointpharma.com/-- headquartered in Watertown, MA,
is a specialty biopharmaceutical company committed to developing
and commercializing innovative ophthalmic products in indications
with high unmet medical need to help improve the lives of patients
with serious eye disorders. The Company currently has two
commercial products: DEXYCU, the first approved intraocular product
for the treatment of postoperative inflammation, and YUTIQ, a
three-year treatment of chronic non-infectious uveitis affecting
the posterior segment of the eye.
The Company reported a net loss of $44.72 million for the six
months ended Dec. 31, 2018. For the year ended June 30, 2018, the
Company reported a net loss of $53.17 million, compared to a net
loss of $18.48 million for the year ended June 30, 2017. As of
Sept. 30, 2019, the Company had $79.07 million in total assets,
$63.13 million in total liabilities, and $15.94 million in total
stockholders' equity.
Deloitte & Touche LLP, in Boston, Massachusetts, the Company's
auditor since 2008, issued a "going concern" opinion in its report
on the consolidated financial statements for the year ended Dec.
31, 2018, citing that the Company's limited currently available
cash, cash equivalents and available borrowings, together with its
history of losses, and the uncertainty in timing of cash receipts
from its newly launched products raise substantial doubt about the
Company's ability to continue as a going concern.
F5 BUSINESS: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: F5 Business Investment Partners, LLC
c/o Soneet R. Kapila, CRO
1000 S. Federal Highway, Suite 200
Fort Lauderdale, FL 33316
Business Description: F5 Business Investment Partners is an
investment company affiliated with FF Fund
I, L.P., its sole member.
Chapter 11 Petition Date: January 24, 2020
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 20-10996
Judge: Hon. Scott M. Grossman
Debtor's
General
Bankruptcy
Counsel: Paul J. Battista, Esq.
GENOVESE JOBLOVE & BATTISTA, P.A.
100 SE 2nd St.
44th Floor
Miami, FL 33131
Tel: 305-349-2300
E-mail: pbattista@gjb-law.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Soneet R. Kapila, chief restructuring
officer.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/ATA469
FAIRWAY MARKET: Enters Chapter 11; Selling 5 Stores to Village
--------------------------------------------------------------
Fairway Market, together with certain of its affiliates, on Jan.
23, 2020, disclosed that it has filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
for the Southern District of New York to complete its strategic
sale process.
The Company has entered into a stalking horse asset purchase
agreement with Village Super Market, Inc. (NASDAQ: VLGEA) to sell
up to 5 New York City Fairway stores and its Distribution Center
for approximately $70 million. In addition, the Company will
execute a Court supervised sale process to continue to negotiate
for the sale of its remaining store locations. An Ad Hoc Group of
the Company's senior lenders are supportive of the sale process and
have agreed to provide the Company with up to $25 million in debtor
in possession financing.
Fairway Market will continue to conduct business and serve
customers at its stores across the tri-state area and expects no
interruption in service during the Court-supervised process.
Fairway Market stores will continue to offer a complete range of
high quality, specialty food products, and all existing customer
promotional and loyalty programs will stay in place during this
process.
"We would like to extend gratitude to our employees, vendors,
distributors and customers for their support, dedication and
loyalty over the years. It has always been Fairway's priority to
ensure our patrons are provided with the most optimal grocery
experience, with the freshest foods and best quality products, and
our employees feel appreciated," said Abel Porter, Chief Executive
Officer at Fairway Market. "After careful consideration of all
alternatives, we have concluded that a Court-supervised sale
process is the best way to meet our objectives of preserving as
many jobs as possible, maximizing value for our stakeholders, and
positioning Fairway for long term success under new ownership."
Village Super Market, Inc., operates a chain of supermarkets and
specialty markets in the Northeast under the ShopRite and Gourmet
Garage banners. "Perry and Nick Sumas opened the first Village
Market in 1937, and our family continues to believe deeply in the
importance of neighborhood grocery stores. We appreciate that
Fairway's loyal customers are concerned about the future, and if we
are successful in our bid, we are committed to keeping Fairway,
including its name, unique product selection and value, a part of
this community," said Robert Sumas, CEO of Village Super Market,
Inc.
Fairway Market is a unique food retailer offering customers a
differentiated one-stop shopping experience as "The Place To Go
Fooding." Fairway has established itself as a leading food retail
destination in the Greater New York City metropolitan area,
recently expanding with the opening of The Cooking Place in June
2019, a cooking school that brings the same passion and philosophy
about fooding to its customers. Fairway Market offers an extensive
selection of fresh, natural and organic products, prepared foods
and hard-to-find specialty and gourmet offerings, along with a full
assortment of conventional groceries.
Fairway Market's legal counsel is Weil, Gotshal & Manges, LLP, its
M&A investment banker is PJ Solomon and its financial advisors are
Mackinac Partners.
The Ad Hoc Group of senior lenders are represented by King &
Spalding, LLP.
For more information about Fairway Market's bankruptcy protection,
please visit: http://www.omniagentsolutions.com/fairway
FAIRWAY MARKET: Says It's Not Liquidating All Its Stores
--------------------------------------------------------
Despite reports, Fairway Market on Jan. 22 disclosed that it has no
intention to file for chapter 7 or liquidate all of its stores.
Such statements are categorically untrue and disappointing.
Fairway has been engaged in a strategic process and expects to soon
announce a value maximizing transaction that will provide for the
ongoing operations of stores. The company's lenders remain
extremely supportive of our efforts. All 14 stores remain open for
business, offering a complete range of high quality, specialty food
products, and we look forward to seeing our customers and
employees.
FANNIE MAE & FREDDIE MAC: Gary Hindes Says Mr. Pinto Gets it Wrong
------------------------------------------------------------------
Mr. Pinto Gets it Wrong: It wasn't a Bailout; it was a Stick-Up.
By Gary Hindes
In "Taxpayers are the GSEs' true stockholders," Ed Pinto continues
to promote the shibboleth that Fannie Mae and Freddie Mac required
a government bailout in September of 2008. However,
contemporaneous evidence obtained via shareholder lawsuits clearly
refutes this shopworn lie.
A brief history lesson is in order.
Under GAAP accounting rules in effect at the time, there is no
question that both Fannie and Freddie were in full compliance with
capital requirements when they were forced into conservatorship.
True, they had been incurring losses due to the then-raging housing
finance crisis, but still, they had the highest capital cushions in
their histories and were flush with cash. It was only after the
government obtained control that it was able to fire the directors,
replace management, and order the companies to start booking
billions of one-time, non-cash charges. These 'cookie jar'
accounting entries ultimately required Fannie and Freddie to accept
$191.5 billion from the Treasury Department (and issue it an
equivalent amount of preferred stock bearing a 10 percent
dividend), in order to maintain a positive book net worth. Flash
forward to the summer of 2012 (by which time the housing market had
turned around): under the same GAAP accounting rules, the
write-downs had to be written back up. Alarmed that the GSEs'
unexpected return to profitability would end up resulting in their
being released from conservatorship, Treasury changed the terms of
its preferred stock -- retroactively. The 10 percent dividend was
replaced with a new one equal to 100 percent of their net worths
(minus a de minimis reserve) -- payable in perpetuity. More akin
to a concrete life preserver than a rescue, the new arrangement is
not unlike the restaurant owner who accepted cash from the Mob:
Fannie and Freddie will be in hock to Uncle Sam for the rest of
their corporate lives. Indeed, a top White House official
confessed as much in an August 18, 2012 email in which he disclosed
that the real reason for changing the terms was to ensure that the
GSEs would not be allowed to "repay their debt and escape. . . ."
And thereby, the government has already collected $115 billion more
than it advanced. Nonetheless, Mr. Pinto appears to believe that
'nationalizing' Fannie Mae and Freddie Mac without compensating
their shareholders was appropriate; the shareholders deserve
nothing.
Finally, it bears noting that just three days prior to their
seizures, Fannie and Freddie were able to tap the capital markets
for $6 billion of unsecured debt in an oversubscribed offering. It
was underwritten by a Who's Who of Wall Street investment banks and
was rated AA+/AAA-. Does that sound like companies which Mr. Pinto
claims were "on the ropes" . . . with "no easy way out?" He is
peddling a false narrative. To the contrary, the record is clear
that the government's seizure of Fannie Mae and Freddie Mac wasn't
the 'bailout' the government claimed at the time; it was a
'stick-up.'
* * *
Gary Hindes is chairman of The Delaware Bay Company, LLC and a
shareholder of Fannie Mae and Freddie Mac.
(The foregoing commentary, slightly edited, was published in
American Banker on August 28, 2019)
FENER LLC: Seeks to Hire McNamee Hose as Legal Counsel
------------------------------------------------------
Fener, LLC and Kuru, Inc., seek approval from the U.S. Bankruptcy
Court for the District of Maryland to hire McNamee, Hosea,
Jernigan, Kim, Greenan & Lynch, P.A. as their legal counsel.
The firm will provide these services in connection with the
Debtors' Chapter 11 cases:
(a) prepare schedules, statement of affairs and other
documents required by the court;
(b) represent the Debtor at the initial interview and meeting
of creditors;
(c) assist in the formulation, negotiation and promulgation of
a plan of reorganization;
(d) assist in the negotiation and documentation of financing
agreements, debt restructurings and related transactions;
(e) review the validity of liens asserted against the property
of the Debtor and advise the Debtor concerning the enforceability
of such liens; and
(f) prepare legal documents and review all financial reports
to be filed in the Debtors' cases.
McNamee will be paid at these rates:
Partners $350 per hour
Associates $325 per hour
Paralegal $105 per hour
McNamee is "disinterested" within the meaning of Section 101(14) of
the Bankruptcy Code, according to court filings.
The firm can be reached through:
Steven L. Goldberg, Esq.
McNamee, Hosea, Jernigan, Kim
Greenan & Lynch, P.A.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Telephone: (301) 441-2420
Facsimile: (301) 982-9450
Email: sgoldberg@mhlawyers.com
About Fener LLC and Kuru Inc.
Fener, LLC, is a Maryland limited liability company with its
principal place of business in Baltimore City. It owns the real
property and improvements located at 801 S. Broadway, Baltimore,
Md.
Kuru, Inc., operates Jimmy's Restaurant of Fells Point from the
property.
Fener, LLC and Kuru, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Md. Lead Case No. 20-10720) on Jan.
20, 2020.
At the time of the filing, Fener, LLC, disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Kuru, Inc. had estimated assets of between $50,000 and $100,000 and
liabilities of between $1 million and $10 million.
The Debtors tapped McNamee, Hosea, Jernigan, Kim, Greenan & Lynch,
P.A. as their legal counsel.
FENER LLC: Seeks to Hire Murphy Commercial as Broker
----------------------------------------------------
Fener, LLC and Kuru, Inc. seek approval from the U.S. Bankruptcy
Court for the District of Maryland to hire Murphy Commercial Real
Estate Services, Inc., as real estate broker.
The firm will assist in the marketing and sale of the Debtors'
property located at 801 S. Broadway, Baltimore, Md.
Murphy Commercial will get up to 6 percent of the purchase price as
commission depending on whether or not a cooperating broker is
involved in the transaction.
Dennis Murphy, president of Murphy Commercial, disclosed in court
filings that his firm is "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Dennis Murphy
Murphy Commercial Real Estate Services, Inc.
635 North Bestgate Road, Suite 100
Annapolis, MD 21401
Phone: 410-266-1113 X101
E-mail: dmurphy@murphycre.com
About Fener LLC and Kuru Inc.
Fener, LLC is a Maryland limited liability company with its
principal place of business in Baltimore City. It owns the real
property and improvements located at 801 S. Broadway, Baltimore,
Md.
Kuru, Inc. operates Jimmy's Restaurant of Fells Point from the
property.
Fener, LLC and Kuru, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Md. Lead Case No. 20-10720) on Jan. 20,
2020.
At the time of the filing, Fener, LLC, disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Kuru, Inc. had estimated assets of between $50,000 and $100,000 and
liabilities of between $1 million and $10 million.
The Debtors tapped McNamee, Hosea, Jernigan, Kim, Greenan & Lynch,
P.A. as their legal counsel.
FIREBALL REALTY: Judge Denies Bid to Extend Exclusivity Period
--------------------------------------------------------------
Bankruptcy Judge Michael Fagone denied Fireball Realty, LLC's
motion to extend its exclusivity period to Jan. 30.
About Fireball Realty
Fireball Realty LLC, a real estate agency in Manchester, N.H.,
sought Chapter 11 protection (Bankr. D.N.H. Case No. 19-10922) on
June 28, 2019. In the petition signed by Charles R. Sargent Jr.,
member, the Debtor was estimated to have assets and liabilities in
the range of $1 million to $10 million. Judge Michael A. Fagone
oversees the case. The Debtor tapped William S. Gannon, Esq., at
William S. Gannon PLLC, as counsel.
FOSSIL CREEK: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Fossil Creek Partners, LLC
dba Holiday Inn Fossil Creek
4635 Gemini Place
Forth Worth, TX 76106
Business Description: Fossil Creek Partners, LLC is a privately
held company in the traveler accommodation
industry.
Chapter 11 Petition Date: January 23, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No. 20-40297
Judge: Hon. Mark X. Mullin
Debtor's Counsel: Joyce Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
12720 Hillcrest Road, Suite 625
Dallas, TX 75230
Tel: (972) 503-4033
Email: joyce@joycelindauer.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Larry D. Williams, VP of Operations.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://is.gd/nCL2Vf
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Intercontinental Hotels Group Business Debt $25,937
3 Ravinia Drive, Suite 100
Atlanta, GA 30346-2149
2. Conner Strong & Buckelew Business Debt $13,341
Attn: General Counsel
2 Cooper Street
Camden, NJ 08102
3. FCTX Associates, LLC Business Debt $7,054
c/o Scott Crunk, Receiver
4635 Gemini Place
Fort Worth, TX 76106
4. Tara Energy Business Debt $6,302
5251 Westheimer Rd.,
Suite 1000
Houston, TX 77056
5. Sysco North Texas, Inc. Business Debt $3,909
800 Trinity Drive
The Colony, TX 75056
6. BSTX Assocites, LLC Business Debt $3,495
4408 Spicewood Springs Rd.
Austin, TX 78759
7. United Healthcare Insurance Co. Business Debt $3,127
Attn: General Counsel
5901 Lincoln Drive
Minneapolis, MN 55436
8. City of Fort Worth Water Dept. Business Debt $3,066
PO Box 870
Fort Worth, TX 7610
9. Ascentium Capital LLC Business Debt $2,234
23970 Highway 59 North
Kingwood, TX 77339
10. National Purchasing Network Business Debt $2,071
3314 Market Street,
Suite 301A
Camp Hill, PA 17011
11. SNTX Associates, LLC Business Debt $1,553
4408 Spicewood Springs Rd.
Austin, TX 78759
12. Rentokil Business Debt $1,542
1125 Berkshire Blvd.,
Suite 150
Reading, PA 19610
13. Vistar Business Debt $1,533
188 Inverness West Drive,
Suite 800
Englewood, CO 80112
14. Urbano Associates, LLC Business Debt $1,512
8 Penn Center, 23rd Floor
Philadelphia, PA 19103
15. Guest Supply Business Debt $1,160
Attn: General Counsel
300 Davidson Avenue
Somerset, NJ 08873
16. Great Dane Construction LLC Business Debt $1,100
8880 Ringgold Fairfield Rd
Circleville, OH 43113
17. HD Supply Facilities Business Debt $961
Maintenance, Ltd.
Attn: General Counsel
PO Box 509055
San Diego, CA 92150
18. Revmaxx, LLC Business Debt $950
120 East Main Street,
Suite 1917
Lexington, KY 40507
19. Plant Care Co. Business Debt $933
12520 Schroeder Road,
Suite 103
Dallas, TX 75243
20. Grande Comm Business Debt $792
500 Tittle Road, Suite 400
Lewisville, TX 75056
FRONTIER COMMUNICATIONS: Fitch Lowers Issuer Default Rating to CC
-----------------------------------------------------------------
Fitch Ratings downgraded the Issuer Default Rating of Frontier
Communications Corporation and its subsidiaries to 'CC' from 'CCC'.
Fitch has also downgraded the ratings of the company's debt issues.
The downgrade incorporates a material level of market information
regarding the hiring of financial advisors and law firms, as well
as various lenders hiring financial advisors, suggesting a probable
restructuring.
News sources over the last two months have reported that Frontier
has been getting advice from Kirkland & Ellis LLP and Evercore Inc.
News sources have also reported certain creditors have hired
telecom consulting firm Altman Vilandrie & Co. to develop a
post-reorganization business plan. A creditor group including
Elliott Management Corp. and Franklin Resources Inc. have organized
with law firm Akin Gump Strauss Hauer & Feld LLP and investment
bank Ducera Partners LLC. A separate group of creditors including
GoldenTree Asset Management LP organized with Houlihan Lokey Inc.
and Milbank LLP.
The downgrade of Frontier and its subsidiaries IDRs to 'CC'
reflects a default of some kind appears probable. In Fitch's
opinion, Frontier has limited options with respect to $2.7 billion
in maturities in 2022 and nearly $900 million in 2023. Fitch
expects FCF to exceed maturities through 2021, lowering the
possibility of an imminent payment default, but increasing the
probability that a restructuring or a distressed debt exchange
(DDE) is attempted to address upcoming maturities and to lower debt
overall.
KEY RATING DRIVERS
Challenging Operating Environment: Frontier's rating incorporates a
challenging operating environment for wireline operators. Fitch
expects Frontier to report negative revenue trends in 2019 (results
have not yet been released), with the decline slightly less than
the nearly 6% decline in 2018, and to show a modest improvement in
EBITDA margins. To maintain or improve margins, the company has
implemented a business transformation program. Fitch expects modest
improvements in the rate of decline in revenue in 2020 and
thereafter.
Frontier revised its estimates for its business-transformation
program in August 2019. Savings estimates were revised up for 2019,
as the company now expects EBITDA benefits up to $110 million-$150
million, compared with a prior target of $50 million-$100 million.
The company continued to expect run-rate benefits of $200 million
exiting 2019. However, expectations for 2020 were lowered, as
Frontier has run into some challenges improving revenue and
customer trends, and revised its EBITDA benefit targets exiting
2020 to a range of $200 million-$250 million, down from the
previous estimate of up to a $500 million run rate. The degree of
execution risk Frontier faces in achieving its goals for improving
revenue performance was previously highlighted by Fitch.
FCF and Debt: Fitch is estimating FCF in the $300 million to $400
million range over 2019-2020, including the effects of the sale of
the Northwest operations. Frontier generated $513 million of FCF on
a Fitch-calculated basis in 2018 — $620 million pro forma, which
adds back $107 million in preferred dividends following the
conversion of the mandatory convertible preferred to common in
mid-2018. Pro forma for the sale of Northwest operations and
related debt reduction, Fitch estimates FCF in 2018 would have been
around $550 million annually.
Pending Asset Sale: Frontier has a definitive agreement to sell its
operations in Washington, Oregon, Idaho and Montana (the Northwest
operations) to WaveDivision Capital, LLC (WDC) for $1.352 billion
in cash, subject to closing adjustments, and plans to use the
proceeds to repay debt. The transaction is expected close in 1H20.
Fitch estimates the transaction multiple is approximately 5.3x
based on 2019 estimated EBITDA (Fitch-calculated EBITDA is before
restructuring and other charges and a goodwill impairment) for the
operations — 5% below 2018 EBITDA. The transaction is generally
leverage-neutral given Frontier's LTM Fitch-calculated gross debt
leverage of 5.2x at Sept. 30, 2019.
Parent-Subsidiary Relationship: Fitch linked the IDRs of Frontier
and its operating subsidiaries based on their strong operational
ties.
Recovery: The recovery analysis assumes Frontier would be
considered a going concern in a bankruptcy and the company would be
reorganized rather than liquidated. Fitch assumed a 10%
administrative claim.
Frontier's going concern (GC) EBITDA estimate reflects Fitch's view
of a sustainable, post-reorganization EBITDA level. The GC EBITDA
incorporated in the analysis is well below LTM EBITDA for Sept. 30,
2019 to reflect the industry's intense competitive dynamics,
resulting in customer losses and pricing pressures stressing
profitability. In addition, the analysis excludes EBITDA from the
Northwest operations, which are expected to be sold in 2020. In
sum, the GC EBITDA is approximately 20% lower than LTM actual
results.
An enterprise value (EV) multiple of 4.8x is used to calculate a
post-reorganization valuation. There are two bankruptcy cases of
similar businesses analyzed in Fitch's Telecom, Media & Technology
bankruptcy case study report — FairPoint Communications, Inc. and
Hawaiian Telcom Holdco, Inc. — both of which filed bankruptcy in
2008 and emerged with multiplies of 4.6x and 3.7x, respectively.
Both were also sold in recent acquisitions for 5.9x and 5.6x,
respectively. The median multiple for the nine telecom companies in
Fitch's report was 5.2x. Frontier's announced sale of its Northwest
operations was in the low 5x range, taking into account the modest
decline in EBITDA expected by the time the sale closes. In late
2019, the sale of Cincinnati Bell was announced at a multiple of
6.3x. The slightly lower recovery multiple for Frontier takes into
account its weaker competitive position in the industry and the
company's exposure to legacy assets. Fitch notes the company
benefits from a strong fiber-to-the-home network and the potential
for broadband customer growth through the CAF II program.
The revolving credit facility (RCF) is assumed to be fully drawn
upon default. The waterfall analysis results in an 'RR1' Recovery
Rating for the secured debt, including the first-lien debt and RCF,
and the second-lien senior secured notes. The waterfall also
indicates an 'RR4' recovery for senior unsecured notes.
The 'RR2' assigned to the approximately $450 million of outstanding
subsidiary unsecured debt, excluding Frontier Florida LLC, reflects
its structural seniority to all of the parent debt. The 'RR5'
assigned to Frontier Florida's unsecured debt reflects Frontier
Florida as a guarantor of Frontier's secured credit facility. The
guarantee results in a lower estimated recovery value, 'RR5', for
Frontier Florida's unsecured debt, as it ranks pari passu with the
secured credit facility.
DERIVATION SUMMARY
Frontier has a higher exposure to the more volatile residential
market compared with CenturyLink, Inc. (BB/Stable), one of its
wireline peers, and to some extent, Windstream Services, LLC.
Incumbent wireline operators within the residential market face
wireless substitution and competition from cable operators with
facilities-based triple-play offerings, including Comcast Corp.
(A-/Stable) and Charter Communications Inc. (Fitch rates Charter's
indirect subsidiary, CCO Holdings, LLC BB+/Stable.) Cheaper
alternative offerings, such as voiceover internet protocol and
over-the-top (OTT) video services provide additional challenges.
Incumbent wireline operators had modest success with bundling
broadband and satellite video service offerings in response to
these threats.
Frontier has a relatively weak competitive position based on the
scale and size of its operations in the higher margin enterprise
market. In this market, Frontier is smaller than AT&T Inc.
(A-/Stable), Verizon Communications Inc. (A-/Stable) and
CenturyLink. All three companies have an advantage with national or
multinational companies given their extensive footprints in the
U.S. and abroad. Frontier also has a slightly smaller enterprise
business than its wireline peer Windstream.
Compared with Frontier, AT&T and Verizon maintain lower financial
leverage, generate higher EBITDA margins and FCF, and have wireless
offerings that provide more service diversification.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Organic revenues are estimated to have declined in the high 4%
range in 2019, and in the forecast the organic rate of decline
reaches slightly less than 4% by 2022.
-- The EBITDA margin is expected to improve about 60 bps by 2020
relative to the Fitch-calculated EBITDA margin of 40.4% in 2018.
-- Capital spending reflects company guidance of approximately
$1.2 billion in 2019. During the 2020-2022 forecast period, Fitch
estimated capital intensity in the 13.8% to 13.9% range, with the
absolute amount declining with the sale of the operations in the
Northwest.
-- Cash taxes are expected to be nominal in 2019-2022. Fitch
assumes that the company is able to use NOLs to offset taxes that
may be due on the asset sale.
-- The forecast does not include an assumption regarding a
restructuring, and reflects scheduled debt repayments through cash
flow and the application of the asset sale proceeds from the sale
of the Northwest operations. Proceeds of approximately $1.3 billion
are used to reduce debt on an assumed close date of July 1, 2020.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- A positive rating action could occur if the company can
successfully address the significant level of unsecured maturities
in 2022, without entering bankruptcy or conducting a DDE, while
maintaining a sufficient level of liquidity to meet its ongoing
debt obligations.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A negative rating action could result from a DDE or a more
comprehensive restructuring.
LIQUIDITY AND DEBT STRUCTURE
Refinancing Plans and Activities: Frontier's liquidity position was
adequate as of Sept. 30, 2019, supported by $683 million of cash;
Frontier has drawn $749 million on its $850 million RCF, and LOCs
use the remainder of the RCF's capacity. Fitch expects FCF will be
positive, in the mid-single-digit percentage of revenue in the
forecast period.
An excess cash flow (ECF) sweep is in effect on the term loan,
requiring mandatory prepayments of 25% and 50% of ECF if YE net
debt/EBITDA is above 5.00x and 5.25x, respectively. No payment in
2019 under the ECF sweep was required based on YE 2018 net
debt/EBITDA.
In March 2019, Frontier issued $1.65 billion of 8.0% first-lien
senior secured notes due 2027. Proceeds were used to entirely repay
the $1.4 billion in outstanding borrowings on its term loan A
facility (balance as of Dec. 31, 2018) and its $239 million CoBank
ACB facility (balance as of Dec. 31), which both would have matured
in 2021. The remaining proceeds were used to pay related fees and
expenses. Frontier amended its credit agreement following the
transaction's close to extend the maturity of the $850 million
revolver to February 2024 from February 2022, subject to certain
springing maturity dates to any tranche of existing debt in excess
of $500 million. Pricing on the revolver also increased by 0.25%,
and certain amendments were made to the debt and restricted
payments covenants.
The springing maturities on the revolver and term loan B occur if
more than $500 million in principal remains outstanding on any
series 91 days before the maturity of senior unsecured notes in
2020, 2023 and 2024, or if more than $500 million remains
outstanding in aggregate 91 days before the maturity of notes
maturing in 2021 or 2022 on the two series of notes maturing in
those years. As of Sept. 30, 2019, $227 million is outstanding on
the two series of notes maturing in 2020 and $309 million on the
two series of notes maturing in 2021.
Based on the current principal amounts outstanding, the springing
maturities would first come into play for $500 million of notes due
in April 2022 and $2.2 billion of notes due in September 2022.
There is also a single series of notes exceeding $500 million in
each of 2023 and 2024, in the amounts of $850 million and $750
million, respectively.
Frontier borrowed an incremental $240 million on its senior secured
term loan B facility in July 2018. Proceeds were used to repay all
borrowings under its CoBank credit facility due in October 2019 and
to pay down a small portion of the CoBank facility due in 2021.
Frontier also obtained technical amendments to its credit
agreements with JPMorgan Chase Bank, N.A. and CoBank to replace
certain operating subsidiary equity pledges — with negative
pledges provided to the former pledge subsidiaries — with equity
pledges of direct, intermediate holding company subsidiaries of
Frontier not previously pledged. The change increases the
percentage of revenue, EBITDA and assets in the security package
for the facilities.
SUMMARY OF FINANCIAL ADJUSTMENTS
No material adjustments have been made that have not been disclosed
in public filings of this issuer.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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.
Frontier has an ESG Relevance Score of 4 for Management Strategy
due operational challenges following the close of the Verizon
transaction that resulted in elevated subscriber churn and weaker
than expected revenue, which had a negative impact on the credit
profile, and is relevant to the rating in conjunction with other
factors.
FTE NETWORKS: Sells CrossLayer Business to CBFA Corp
----------------------------------------------------
FTE Networks, Inc. has completed the sale of CrossLayer, Inc., to
Wyoming-based special management company CBFA Corporation. The
transaction closed on January 16th and marks a reaffirming step
forward in FTE's strategic plans to stimulate revenue growth and
shareholder value in 2020.
As outlined in an FTE shareholder letter and release distributed
earlier this month, a new board of directors and management team
has been in place since October 2019. They have been tasked with
exploring strategic alternatives that will improve the Company's
long-term financial health and operational effectiveness. This
team determined that this transaction enables leadership to create
value for all shareholders, improve business operations, and
promote sustainable growth in revenues and profitability.
About FTE Networks
Formerly known as Beacon Enterprise Solutions Group, FTE Networks,
Inc. -- http://www.ftenet.com/-- through its subsidiary US Home
Rentals, owns, operates and invests in affordable rental housing in
tier 3 and 4 markets. FTE has portfolio of more than 3,000
affordable rental homes across several states.
FTE Networks reported a net loss attributable to common
shareholders of $20.11 million for the year ended Dec. 31, 2017,
following a net loss attributable to common shareholders of $6.31
million for the year ended Dec. 31, 2016. As of Sept. 30, 2018,
the Company had $158.88 million in total assets, $164.44 million in
total liabilities, and a total stockholders' deficit of $5.56
million.
FTE Networks received on Oct. 14, 2019 a notice of non-compliance
from the NYSE Regulation staff of the New York Stock Exchange
advising the Company that it was no longer in compliance with
NYSE's continued listing requirements set forth in Part 8 of the
NYSE American Company guide as a result of the board resignations
that were disclosed in the Company's Form 8-K filed on Oct. 11,
2019.
FUWEI FILMS: Shandong Haoxin Replaces KSP Group as Auditor
----------------------------------------------------------
Fuwei Films (Holdings) Co., Ltd., ended the engagement of KSP
Group, Inc. as its independent certified public accountants, and
appointed Shandong Haoxin Certified Public Accountants Co., Ltd. as
its independent auditor effective Jan. 19, 2020. The decision was
approved by the Board of Directors and the audit committee of the
Board of Directors of the Company.
The reports of KSP on the Company's consolidated financial
statements for each of the fiscal years ended Dec. 31, 2018 and
2017 did not contain an adverse opinion or a disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope
or accounting principles. During the Company's two most recent
fiscal years ended Dec. 31, 2018 and 2017, and the subsequent
interim period through Jan. 19, 2020, there were:
* no "disagreements" (as that term is defined in Item 16F(a)
(1)(iv) of Form 20-F and the instructions to Item 16F)
between the Company and KSP on any matters of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not
resolved to KSP's satisfaction would have caused KSP to make
reference to the subject matter of the disagreements in
connection with its report, and
* no "reportable events" (as that term is defined in Item
16F(a)(1)(v) of Form 20-F), except for: (i) the material
weakness in the Company's internal control over financial
reporting related to the inadequate technical accounting
staff with knowledge of and experience with US generally
accepted accounting principles, pursuant to which the
Company prepares its consolidated financial statements, to
support stand-alone external financial reporting under
public company or SEC requirements, and (ii) KSP's report
for each of the fiscal years ended Dec. 31, 2018 and 2017
noted that there was substantial doubt about the Company's
ability to continue as a going concern.
During the Company's two most recent fiscal years ended Dec. 31,
2018 and 2017 and the subsequent interim period through Jan. 19,
2020, neither the Company nor anyone on the Company's behalf
consulted with Haoxin regarding any of the matters or events set
forth in Item 16F(a)(2)(i) and (ii) of Form 20-F.
About Fuwei Films
Fuwei Films conducts its business through its wholly owned
subsidiary, Fuwei Films (Shandong) Co., Ltd. Shandong Fuwei
develops, manufactures and distributes plastic films using the
biaxial oriented stretch technique, otherwise known as BOPET film
(biaxially oriented polyethylene terephthalate). Fuwei's BOPET
film is widely used to package food, medicine, cosmetics, tobacco,
and alcohol, as well as in the imaging, electronics, and magnetic
products industries.
KSP Group, Inc., in Los Angeles, California, issued a "going
concern" qualification in its report dated April 29, 2019, citing
that the Company has a working capital deficit of RMB153,156,000 or
US$22,275,616 as of Dec. 31, 2018. The Company has incurred a net
loss of RMB22,172,000 or US$3,224,000, and the Company may not have
sufficient working capital to meet its planned operating activities
over the next twelve months. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
GARDA WORLD: Fitch Assigns BB+ Rating on $400MM Sec. Notes Due 2027
-------------------------------------------------------------------
Fitch Ratings assigned a rating of 'BB+'/'RR1' to Garda World
Security Corporation's new offering of USD$400 million Senior
Secured Notes due 2027.
GW intends to use the proceeds of the Senior Secured Notes to
prepay USD$400 million of the existing USD$1.438 billion Senior
Secured Term Loan B. The Senior Secured Notes will rank pari passu
with the TLB, with congruent guarantee and collateral packages. The
transaction will be leverage neutral on a net secured and total
leverage basis. The company expects to reduce its interest costs by
~USD$7 million annually through this transaction.
KEY RATING DRIVERS
BC Partners Investment: In October 2019, BC Partners completed its
purchase of a 51% interest in GW, valuing the company at C$5.2
billion. The management team (including founder & CEO Stephan
Cretier) holds the remaining 49%. BC Partners is an established
firm that has raised over EUR25 billion in capital. BC Partners'
investment in GW is predicated on buying into an entrepreneurial
management team, which operates in an industry with favorable
tailwinds. Management has increased its share of ownership from 26%
when it was taken private in 2012 to 49% currently. Fitch views
this alignment of interests between the two ownership groups
positively.
Highly Leveraged Financial Structure: Following the Whelan and UAS
acquisitions, as well as several tuck-ins in the Security Services
segment, GW's pro forma net debt/EBITDA increased to a peak of 6.7x
during 2019. Fitch expects management to achieve its 6.0x net
leverage target by 2021 through debt repayments, pricing actions,
and the impact of the UAS and Whelan acquisitions. On a gross
basis, Fitch expects total debt/EBITDA to reduce from 6.7x
currently to 6.2x at January 20 due to acquisition-led improvements
in EBITDA.
Opportunistic M&A Approach: GW operates under an opportunistic
financial policy that includes pursuing debt-funded acquisitions at
already high leverage levels. Although the company has stated its
near-term priority on bringing down leverage, Fitch believes this
could take longer than the company is forecasting given its recent
history of acquisitions and acquisitive nature. The company has
completed 19 M&A transactions over the past three years, adding
C$710 million in revenue and C$90 million in EBITDA. The April 2019
Whelan acquisition is largely integrated. The company dropped its
intent to acquire larger European rival G4S PLC in May 2019, which
would have been a transformative transaction for the company.
U.S. Security Services Entry: Starting with the UAS and Whelan
acquisitions in 2018-2019, GW has begun to ramp up its footprint in
the $25 billion U.S. Security sector. This market has three large
players (AlliedUniversal with a 28% share, Securitas with 18%, and
G4S at 8%) and is otherwise fragmented. Management believes it can
build scale quickly noting its U.S. customer retention rates are
much higher than competitors, and that Garda is already the top
player in the C$2.5 billion Canadian Security market.
Profitability Improvements: GW has grown its EBITDA margins
consistently through a time of expansion, from 11.0% in 2016 to an
estimated 12.4% currently, indicating its expertise in acquiring at
reasonable multiples and integrating acquisitions effectively.
Margin improvements through 3Q20 are driven by recent pricing
increases as well as slight synergies from recent acquisitions.
This reverses some slight margin pressure in fiscal 2019 when GW
experienced higher operating and labor costs. Fitch notes that
margin improvement has further upside given strong organic growth
in both Security Services and Cash Services.
Stable and Growing Markets: The security services market has been
growing at a healthy rate and Fitch expects further growth at least
through the medium term. Organic growth within GW's North American
Security Services segment was 5% the past two years and 4% for the
first quarter of this year; growth in MEA was stronger at 13%.
Management believes the Canadian, U.S., and MEA security services
markets will continue to grow at 3%-4%, 4%-5%, and 6%-7% annually.
The smaller Cash Services segment grew 3.5% organically. GW has
cited significant sales from the cannabis industry in Canada that
is expected to provide growth through the medium term.
Good Competitive and Market Position: GW is a leading provider of
cash management and Security services, and its industry leading
retention rates position it well to defend and grow its share.
Although the company faces strong competition from several other
large multinational competitors, GW's annual revenue of
approximately C$1 billion in its Security Services segment and C$1
billion its Cash Services segment gives it scale to compete
effectively against its peers.
Solid Diversification: GW has good diversification given its large
market positions in both Security and Cash Services segments.
Additionally, within each segment, the company's end market
exposure is diverse including exposure to natural resources,
property management, retail, restaurants, financial institutions,
healthcare, government agencies, and special events.
Moderate FX Risk: GW generates a significant amount of cashflow in
Canada and international markets, although the majority of its debt
is U.S. dollar denominated, exposing it to moderate FX risk when
repaying debt. However, GW's strong market position within the U.S.
cash services market and its growing market position within the
U.S. Security services market should allow the company to generate
adequate cash flow within the U.S. so as to negate any potential FX
movements.
DERIVATION SUMMARY
GW's ratings are driven by the company's relatively high leverage
and opportunistic financial policy, which is partly offset by the
company's good competitive and market positions, solid
diversification, and exposure to growing end markets. Fitch expects
GW's leverage to reduce in 2020 via debt repayments and EBITDA
growth. EBITDA margins have rebounded after a period of mild cost
pressure, and Fitch expects further improvement as the company
benefits from pricing improvements and slight synergies from recent
acquisitions.
GW is comparable to The Brink's Company (BB+/Stable), a direct
competitor within GW's Cash Services segment. Compared to Brink's,
GW has significantly higher leverage with pro forma net debt/EBITDA
of ~6.7x compared to net debt/EBITDA in the mid-to low-2x range at
BCO. Additionally, GW's EBITDA margin is lower and its FCF
generation is comparatively weaker and less consistent. GW shows
superior diversification and a stronger organic growth outlook due
to its presence in the Security Services segment.
KEY ASSUMPTIONS
Key Assumptions of the Fitch Base Case include:
Revenue: Revenue growth of 7% is modelled for the projection
period, reflecting the CPS and Whelan acquisitions as well as
continued M&A. Organic growth is forecast at 2% in Cash Services
and 6% in Security Services.
M&A: From 2020, the company is forecast to spend C$80 million
yearly on acquisitions assuming a 6x multiple and a 12% margin.
EBITDA Margins: Forecast to improve by 90 bps in fiscal 2020 due to
integration synergies and pricing improvements (in line with
improvements already seen to 1Q20). Going forward, margins are
forecast to improve slightly due to increased fixed cost leverage.
FCF: The company maintains positive FFO & FCF through the period,
as working capital needs are limited. FCF improvement will be
driven by EBITDA margin growth and lower one-time costs associated
with the heavy fiscal 2020 acquisition year.
Capex: Estimated to hold steady at ~2.5% of revenue per year given
acquisitions.
Total Net Debt/EBITDA is expected to decrease to below 6.0x in
fiscal 2020 as GW integrates acquisitions and begins to repay some
of the debt taken on to fund the BC Partners transaction.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- An upgrade is unlikely in near-term without a significant and
sustained decrease in debt/EBITDA, and a more coherent financial
policy;
-- Total Debt/EBITDA sustained below 5.0x;
-- FFO Adjusted Leverage sustained below 5.5x;
-- Maintaining a FCF margin above 4%;
-- Maintaining an EBITDA margin above 13%.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Proforma total debt/EBITDA sustained above 6.5x;
-- FFO Adjusted Leverage sustained above 7.0x;
-- Debt funded shareholder-friendly activity, or a significant
acquisition which weighs upon credit metrics
-- Sustained decline in EBITDA margin to below 10%;
-- FFO Fixed Charge Coverage sustained below 1.5x.
LIQUIDITY AND DEBT STRUCTURE
Fitch expects GW to continue to hold relatively small cash balances
and to fund short-term needs with operating cash flows and draws
from its newly upsized USD$335 million Senior Secured revolving
facility. The company has adequate liquidity with a C$30 million
cash balance and full availability under the revolver at PF close.
The company's funding needs are manageable given GW's low capital
intensity. The majority of new fixed assets are funded through
finance (capital) leases, which decreases annual costs, especially
for Cash Services' new armored vehicles. The Security Services
segment is an asset-light business and needs minimal capital
expenditures as well.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material adjustments that are not disclosed
within the company's public filings.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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.
GENCANNA GLOBAL: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: GenCanna Global USA, Inc.
321 Venable Rd, Ste. 2
Wincester, KY 40391
Business Description: GenCanna Global USA, Inc. --
https://gencanna.com/ -- is a vertically-
integrated producer of hemp and hemp-derived
CBD products with a focus on delivering
social, economic, and environmental impact
through seed-to-scale agricultural
production.
Involuntary Chapter 11 Petition Date: January 24, 2020
Court: United States Bankruptcy Court
Eastern District of Kentucky
Case Number: 20-50133
Judge: Hon. Gregory R. Schaaf
Petitioners' Counsel: Laura Day DelCotto, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper Street
Lexington, KY 40507
Tel: 859-231-5800
E-mail: ldelcotto@dlgfirm.com
List of Petitioners:
Name Nature of Claim Claim Amount
---- --------------- ------------
Pinnacle, Inc. Undersecured >$16,750
P.O. Box 352
Benton, KY 42025
Crawford Sales, Inc. Undersecured >$16,750
c/o One Main Street, Suite 201
Evansville, IN 47708
Integrity/Architecture, PLLC Undersecured/ >$16,750
2414 Palumbo Drive, Suite 125 Partially
Lexington, KY 40509 Waived
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://is.gd/Q0KDPG
GEORGE BOULANGER: Unsecureds to Have 24% Recovery Under Plan
------------------------------------------------------------
George Boulanger Construction Incorporated filed a Third Amended
Disclosure Statement and Plan of Reorganization that says that
unsecured creditors will recover 24 cents on the dollar.
In chapter 11, under Debtor's proposed Plan, Class I Unsecured
creditors would receive $35,000 on account of their allowed claims
which amounts to 24% of the total allowed claims.
Class II Coopersmith Claims are the claims of the plaintiffs in
Bryan Coopersmith, et al. v. George Boulanger Construction, Inc.,
et al. (LASC Case No. BC655128). These claims are separately
classified from other general unsecured claims because the claims
are subject to a settlement agreement that provides for specific
treatment. On the Effective Date, the Debtor will pay $10,000 to
Class II claimants.
All payments to creditors (aside from LPP) are made on the
Effective Date. Therefore, the Debtor is relying on its current
cash position, Mr. George Boulanger's promise to contribute $15,000
in new equity, and postpetition historical operations to establish
feasibility. In its most recent monthly operating report, the
Debtor reported $4,659.60 in cash on hand.
George Boulanger, President, will continue in his same positions
with the reorganized debtor with his same compensation. Mr.
Boulanger's salary is $89,440 annually. Ms. Muriel Meyers has
resigned as a full-time employee but has agreed to continue
part-time until the Plan is implemented.
A full-text copy of the Third Amended Disclosure Statement dated
Jan. 2, 2020, is available at https://tinyurl.com/yegs62ya from
PacerMonitor.com at no charge.
The Debtor is represented by:
CHRISTOPHER E. PRINCE
DEBRA E. CARDARELLI
LESNICK PRINCE & PAPPAS LLP
315 W. Ninth St., Suite 705
Los Angeles, California 90015
Telephone: (213) 493-6496
Facsimile: (213) 493-6596
E-mail: cprince@lesnickprince.com
dcardarelli@lesnickprince.com
- and -
MATTHEW A. LESNICK
LESNICK PRINCE & PAPPAS LLP
185 Pier Avenue, Suite 103
Santa Monica, California 90405
Telephone: (310) 396-0964
Facsimile: (310) 396-0963
E-mail: matt@lesnickprince.com
About George Boulanger Construction
Based in in Culver City, California, George Boulanger Construction
Incorporated has been in the business of residential building
construction for more than 30 years. It provides carpentry, tile
installation, painting, framing, plumbing and electrical services.
George Boulanger Construction sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 17-24897) on Dec. 5,
2017. George Boulanger, its president, signed the petition. At
the time of the filing, the Debtor was estimated to have assets of
less than $500,000 and liabilities of $1 million to $10 million.
Judge Sandra R. Klein is the presiding judge. The Debtor hired
Lesnick Prince & Pappas LLP as its legal counsel.
GIGAMON INC: Fitch Affirms 'B' LT IDR & Alters Outlook to Stable
----------------------------------------------------------------
Fitch Ratings affirmed Gigamon Inc.'s Long-Term Issuer Default
Rating at 'B'. The Rating Outlook has been revised to Stable from
Negative. Fitch has also downgraded the rating for Gigamon's $50
million first-lien secured revolver and the upsized $542 million
first-lien secured term loan to 'B+'/'RR3' from 'BB-'/'RR2'. The
downgrade of Gigamon's first-lien term loan reflects the lower
recovery of the upsized loan. The stabilization of the Rating
Outlook reflects Gigamon's progress in its efforts to accelerate
revenue growth through increased investments in product development
and go-to-market enabling the company to reduce leverage through
EBITDA growth that is stronger than previous estimates.
On Jan. 22, 2020, Gigamon announced plans to upsize its first-lien
term loan by $150 million. The proceeds will be used to repay the
existing $150 million second-lien term loan. The transaction is
leverage neutral. However, the recovery prospect for the upsized
first-lien term loan would decrease, resulting in the recovery
rating being downgraded to 'RR3' from 'RR2' and the first-lien
rating downgraded to 'B+' from 'BB-'.
KEY RATING DRIVERS
Market Leader: Gigamon is a market leader in the Network Packet
Broker segment as a result of its niche focus and expertise in the
segment.
Limited Revenue Scale: Given the niche nature of NPB, Gigamon's
revenue scale is small relative to other IT networking and security
peers; this could lead to greater volatility in revenues and
profits. Furthermore, given the niche nature of the segment, Fitch
does not anticipate meaningful increase in scale through its
forecast period. Despite the small revenue scale, Gigamon has
historically maintained high renewal rates, which should provide
greater revenue visibility for the company.
Rising network complexity supports secular growth: Increasing
enterprise network complexity and data speeds are driving demand
for capabilities that enable full network traffic visibility.
Enterprise migration to hybrid cloud is adding additional
complexity in full visibility into the end-to-end network.
Gigamon's ability to provide visibility across both on-premise
networks and cloud infrastructure offers the capabilities required
by its enterprise customers. The company partners with network
infrastructure providers including network equipment, cloud
services, and network monitoring tools; the broad set of
partnerships offer compatibilities in wide-ranging enterprise
network environments.
Susceptible to Industry Cyclicality: Gigamon is susceptible to IT
security industry cycles as demonstrated by the deceleration in
revenue growth since 2016. Fitch believes the weakness may have
been a result of extraordinarily strong growth in the previous two
years coinciding with heightened IT security awareness that
propelled overall industry growth. Fitch views the current industry
environment as normal and a more realistic base for assessing
future growth potential. Nevertheless, Gigamon's narrowly focused
product expertise will continue to expose the company to industry
cyclicality.
High Leverage: Pro forma for cost savings and the LBO by Evergreen
Coast Capital Corp., Fitch estimated gross leverage of 6.8x in
2018. In 2019, Gigamon increased its operating expenses in an
effort to broaden product offerings and market reach; this resulted
in 2019 gross leverage rising near the 7.0x negative sensitivity
previously established. The company has since benefited from the
expanded market footprint and Fitch estimates its gross leverage to
approach 6x in 2020 driven by higher revenue and EBITDA. The
company's capital structure consists of over 50% equity owned by
affiliates of Evergreen. Fitch believes this demonstrates
Evergreen's commitment and confidence in the industry and Gigamon's
business plan. Fitch expects Gigamon's gross leverage to remain
above 5.5x, consistent with the 'B' rating category, given the
private equity ownership that likely optimizes the capital
structure for ROE.
DERIVATION SUMMARY
Gigamon is a market leader in the NPB segment; NPB's provide
network traffic visibility for enterprises for management of IT
networks and security. While Fitch expects the increasing
complexity of enterprise networks will serve as the underlying
demand driver for the segment, the niche nature of the NPB segment
limits upside for Gigamon's revenue scale within the existing
market segments. Gigamon's focus on NPB technologies and products,
and the relatively small revenue scale expose the company to the
industry cyclicality that is inherent to the IT security industry.
Gigamon was acquired by Evergreen Coast Capital Corp., an affiliate
of Elliot Management, in 2017 for $1.6 billion funded with $550
million in term loans, equity contribution from affiliates of
Evergreen, and cash on the balance sheet. Fitch estimates Gigamon's
gross leverage in 2019 to be near the negative leverage sensitivity
of 7.0x, and approaching 6.0x by 2020. Gigamon's industry
leadership, revenue scale, and leverage profile are consistent with
the 'B' rating category.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Revenue growth in high-single-digits supported by organic
growth and modest acquisitions;
-- EBITDA margins are projected to improve and return to
historical levels;
-- Acquisition spending of $40 million annually from fiscal
2020 onwards.
Recovery analysis assumes a going-concern EBITDA that is
approximately 30% lower relative to pro forma LTM EBITDA assuming a
combination of revenue decline and margin compression in a distress
scenario when enterprise customers may elect to move to an
alternate supplier due to the uncertainties surrounding a
distressed supplier; the reduced scale would result in weaker
margins. Fitch applies a 6.5x multiple to arrive at an enterprise
value (EV) of $391 million. The multiple is higher than the median
Telecom, Media and Technology EV multiple but is in line with other
similar companies that exhibit strong FCF characteristics. In the
21st edition of Fitch's Bankruptcy Enterprise Values and Creditor
Recoveries case studies, Fitch noted nine past reorganizations in
the Technology sector with recovery multiples ranging from 2.6x to
10.8x. Of these companies, only three were in the Software sector:
Allen Systems Group, Inc.; Avaya, Inc.; and Aspect Software Parent,
Inc., which received recovery multiples of 8.4x, 8.1x and 5.5x,
respectively. Gigamon's operating profile is supportive of a
recovery multiple in the middle of this range.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Gross leverage sustained below 5.5x;
-- FFO adjusted leverage sustained below 5x;
-- FCF margins sustained above 10%;
-- Organic revenue growth sustained in the high-single-digits.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Gross leverage sustained above 7x;
-- FFO adjusted leverage sustained above 6.5x;
-- FCF margins sustained below 5%;
-- Organic revenue growth sustained near or below 5% implying
failure to stimulate growth with the heightened levels of
investments in operations.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: Fitch expects the company's liquidity to remain
solid over the forecast period. Gigamon had approximately $36
million of cash and cash equivalents at the end of 3Q19, in
addition to $50 million available under its revolver. Fitch expects
Gigamon's FCF to be slightly positive in 2019 due to one-time
expenses related to the go-to-market ramp up, but to normalize at
over $50 million or 12%-14% of revenue over the rating horizon.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material financial adjustments.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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.
GJ SOUTH LLC: Feb. 20, 2020 Disclosure Statement Hearing Set
------------------------------------------------------------
Debtor GJ South, LLC filed with the U.S. Bankruptcy Court for the
District of Colorado a Disclosure Statement on Dec. 31, 2019,
relating to its Chapter 11 Plan of Liquidation filed on Oct. 29,
2019.
On Jan. 2, 2020, Judge Elizabeth E. Brown ordered that Feb. 20,
2020, at 11:00 a.m., in Courtroom F, United States Bankruptcy Court
for the District of Colorado, United States Custom House, 721 19th
Street, Denver, Colorado is the hearing to consider the adequacy of
and to approve the Disclosure Statement.
A full-text copy of the order dated January 2, 2020, is available
at https://tinyurl.com/yhw98kvo from PacerMonitor.com at no
charge.
About GJ South LLC
GJ South LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.
Colo. Case No. 19-16511) on July 30, 2019. At the time of the
filing, the Debtor had estimated assets of between $100,001 and
$500,000 and liabilities of between $500,001 and $1 million. Judge
Elizabeth E. Brown oversees the case. The Debtor is represented by
Guy B. Humphries, at Guy Humphries, Attorney At Law.
GYPSUM RESOURCES: Judge Extends Exclusivity Period to May 23
------------------------------------------------------------
Judge Mike Nakagawa of the U.S. Bankruptcy Court for the District
of Nevada extended the periods during which only Gypsum Resources
Materials, LLC and Gypsum Resources, LLC can file a Chapter 11 plan
and solicit acceptances for the plan to May 23 and July 22,
respectively.
About Gypsum Resources Materials
Based in Las Vegas, Gypsum Resources Materials, LLC, a privately
held company in the gypsum mining business, and its affiliate
Gypsum Resources, LLC filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Lead Case No.
19-14799) on July 26, 2019. The petitions were signed by James M.
Rhodes, president of Truckee Springs Holdings, LLC, manager of
Gypsum Resources, LLC.
At the time of the filing, Gypsum Resources Materials was estimated
to have $10 million to $50 million in both assets and liabilities.
Gypsum Resources, LLC was estimated to have $50 million to $100
million in both assets and liabilities.
The Debtors tapped Fox Rothschild LLP as bankruptcy counsel; Hill
Farrer & Burrill LLP as special counsel; and Conway MacKenzie, Inc.
as financial advisor.
The U.S. Trustee for Region 17 appointed creditors to serve on the
official committee of unsecured creditors on Aug. 30, 2019. The
committee is represented by Goldstein & McClintoc, LLLP.
HOGAR LA MISERICORDIA: Taps Norberto Colon Alvarado as Counsel
--------------------------------------------------------------
Hogar La Misericordia, Inc., seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire Norberto
Colon Alvarado Law Office as its legal counsel.
Norberto Colon Alvarado will represent the Debtor in connection
with its Chapter 11 case. The firm will bill $8,000 for its legal
services.
The firm is "disinterested" within the meaning of Section 101(14)
of the Bankruptcy Code, according to court filings.
Norberto Colon Alvarado can be reached through:
Norberto Colon Alvarado, Esq.
Norberto Colon Alvarado Law Office
46 Calle Castillo
Ponce, PR 00730
Phone: 787-843-4272
E-mail: norbertocolonalvarado@yahoo.com
About Hogar La Misericordia
Hogar La Misericordia, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.P.R. Case No. 19-07107) on Dec. 4,
2019. At the time of the filing, the Debtor disclosed assets of
between $100,001 and $500,000 and liabilities of the same range.
Judge Edward A. Godoy oversees the case. The Debtor tapped
Norberto Colon Alvarado Law Office as its legal counsel.
HOSPITAL ACQUISITION: Taylor County Objects to Disclosures & Plan
-----------------------------------------------------------------
Taylor County Central Appraisal District, Texas (Taylor County
CAD), filed an objection to the Combined Disclosure Statement and
Joint Chapter 11 Plan of Liquidation of Hospital Acquisition LLC
and its Affiliated Debtors.
Taylor County CAD is a holder of claims for prepetition ad valorem
business personal property taxes for 2019 against the property of
the Debtors in the aggregate amount of $1,714.
Taylor County CAD points out that the Plan provisions which deal
with the secured claim of Taylor County CAD fails to provide fair
and equitable treatment to this secured claim as required by
1129(b)(1) and (2)(A).
Taylor County CAD objects to the confirmation of the Plan because
the treatment of Other Secured Claims provides the option of the
Debtors returning the collateral that secures the claim of a member
of this class. To the extent that the holder of an Other Secured
Claim asserts a security interest in or lien against assets that
secure a claim of Taylor County CAD, Taylor County CAD objects to
the preferential treatment of creditors who are junior to them.
Taylor County CAD requests the Court to order appropriate
provisions to assure the protection of the position of their
secured tax claims and further request other such relief as is just
and proper.
A full-text copy of Taylor County CAD's objection dated January 2,
2020, is available at https://tinyurl.com/ye3erpce from
PacerMonitor.com at no charge.
Taylor County CAD is represented by:
McCREARY, VESELKA, BRAGG & ALLEN, P.C.
Tara LeDay
P.O. Box 1269
Round Rock, TX 78680-1269
Tel: (512) 323-3200
Fax: (512) 323-3500
E-mail: tleday@mvbalaw.com
About Hospital Acquisition
Headquartered in Plano, Texas, and founded in 1992, Hospital
Acquisition LLC and its subsidiaries are operators of long-term
acute care hospitals. Through their operating subsidiaries, the
Debtors provide a full range of clinical services to patients with
serious and complicated illnesses or injuries requiring extended
hospitalization. They operate a 49-bed behavioral health hospital
in Pittsburgh, Pennsylvania as well as three out-patient wound care
centers located within its Plano, Texas, Fort Worth, Texas and
Dallas Texas hospitals. As of the petition date, the Debtors
operate 17 facilities in nine states.
Hospital Acquisition LLC and its subsidiaries, including LifeCare
Holdings, LLC, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 19-10998) on May 6, 2019.
Hospital Acquisition was estimated to have assets of $100 million
to $500 million and liabilities of $100 million to $500 million.
The Debtors tapped Akin Gump Strauss Hauer & Feld LLP and Young
Conaway Stargatt & Taylor, LLP as counsel; Houlihan Lokey, Inc., as
financial advisor; BRG Capital Advisors LLC as investment banker;
Prime Clerk LLC as claims and noticing agent; and Crowe LLP as its
audit and tax advisor.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 17, 2019. Greenberg Traurig, LLP, is the
committee's legal counsel.
Jerry Seelig of Seelig + Cussigh HCO LLC was appointed as the
patient care ombudsman in the Debtors' cases. Perkins Coie LLP and
Morris James LLP represent the PCO as legal counsel.
HOT SPRINGS TAXI: Unsecureds to Get $250 Monthly Until Paid in Full
-------------------------------------------------------------------
Debtor Hot Springs Taxi, Inc., filed with the U.S. Bankruptcy Court
for the Western District of Arkansas, Hot Springs Division, a
disclosure statement describing its plan of reorganization dated
Jan. 5, 2020.
The claim of McKenzie Capital LLC is disputed. McKenzie alleges
that it has purchased unspecified future receipts. The UCC-1
Financing Statement filed by McKenzie was filed post-petition.
McKenzie's Claim may be treated as a general unsecured claim. If
McKenzie timely file an election to be treated under Class 3, the
claim shall be treated as follows: McKenzie will be allowed an
unsecured claim in the amount of $16,069 as of the date of filing
the petition. The Debtor will make yearly payments in the amount
of $1,606.90 for 10 years.
Stephanie Wilborn has a claim in the estimated amount of $20,000 as
of the date of filing the petition. This claim is the result of a
judgment against the Debtor due to an automobile accident. The
Debtor will make monthly payments in the amount of $1,000 for 20
months. Payment under this subclass shall first be made to Blue
Cross Blue Shield until their subrogation claim in the approximate
amount of $2,916.21 is satisfied, after which time payment will be
made to Wilborn, until the remaining balance of $17,084 is paid in
full.
Wendell Taylor has a claim in the estimated amount of $5,000 as of
the date of filing the petition. The claim results from an alleged
automobile accident with no personal injury, only minor property
damage. The Debtor will make monthly payments in the amount of
$1,000 per month for five months.
The claimants in class 6 are those creditors who hold allowed
general unsecured claims, but excluding any allowed general
unsecured claims treated under any other class. The Debtor will
make payment to general unsecured claims in the total amount of
$250 per month, which shall be distributed pro rata the claimants
of this class each month. Payment will begin on the first day of
the 50th month after the effective date, and on the first day of
each month thereafter, until the unsecured claims are paid in full.
Class 8 Equity Security Holder is Darrian Conner, who holds 100% of
the equitable interest in the Debtor. Darrian Conner will retain
his equitable interest in the Debtor.
The Debtor will complete the terms of the Plan by continuing its
taxi and transportation business.
A full-text copy of the Disclosure Statement dated Jan. 5, 2020, is
available at https://tinyurl.com/spkpwnl from PacerMonitor.com at
no charge.
The Debtor is represented by:
LAX, VAUGHAN, FORTSON, ROWE & THREET, P.A.
Branch T. Fields
Cantrell West Building
11300 Cantrell Road, Suite 201
Little Rock, AR 72212
Tel: (501) 376-6565
Fax: (501) 376-6666
About Hot Springs Taxi
Hot Springs Taxi, Inc., operates a taxi and non-emergency medical
transport business in Arkansas. The taxi service operates
primarily in Garland County, Arkansas. The medical transport
business operates statewide. Darrian Conner purchased Hot Springs
Taxi, Inc., from Derek Johnson in July 2013.
Based in Hot Springs, Arkansas, Hot Springs Taxi filed a Chapter 11
bankruptcy petition (Bankr. W.D. Ark. Case No. 19-70648) on March
11, 2019, listing under $1 million in both assets and liabilities.
Branch T. Fields, Esq., at Lax, Vaughan, Fortson, Rowe & Threet,
PA, represents the Debtor.
HUDSON RIVER TRADING: Moody's Affirms Ba2 on Sr. Sec. Term Loan
---------------------------------------------------------------
Moody's Investors Service affirmed Hudson River Trading LLC's Ba2
issuer and senior secured first lien term loan ratings. Moody's
said HRT plans to upsize its existing $520 million senior secured
first lien term loan by $150 million and will use the net proceeds
to support its growing operations, increase its trading capital and
for general corporate purposes. HRT's outlook remains stable.
Affirmations:
Issuer: Hudson River Trading LLC
Issuer Rating, Affirmed Ba2
Senior Secured 1st Lien Term Loan, Affirmed Ba2
Outlook Actions:
Issuer: Hudson River Trading LLC
Outlook, Remains Stable
RATINGS RATIONALE
Moody's said HRT's Ba2 issuer and senior secured first lien term
loan ratings are driven by its track record of strong
profitability, substantial liquidity and partnership-based
corporate culture that helps sustain a highly effective risk
management framework. HRT has demonstrated the ability to generate
healthy earnings even in low volatility environments, which can be
challenging for some other market-making firms.
Moody's said HRT's operations carry an inherently high level of
market and operational risk, similar to other algorithmic trading
firms, which could result in quick and severe losses in the event
of a risk management failure. However, HRT trades in relatively
small and liquid positions that are held for a short period of
time, which coupled with its effective risk management framework
and advanced IT infrastructure helps mitigate its risks, said
Moody's.
The stable outlook reflects Moody's assessment that HRT will
continue to generate strong profits and cash flows and that HRT's
management will continue to place a high emphasis on maintaining an
effective risk management and controls framework. The stable
outlook also reflects Moody's expectation that the increase in debt
will not result in any significant deterioration in the firm's
leverage, risk appetite or liquidity profile.
Moody's does not have any particular governance concerns for Hudson
River Trading, and does not apply any corporate behavior adjustment
in its standalone assessment of the firm's creditworthiness.
FACTORS THAT COULD LEAD TO AN UPGRADE
-- Improved quality and diversity of profitability and cash flows
from the development of substantial and lower-risk ancillary
business activities
-- Further improvements in retained capital and liquidity that
lead to a reduced reliance on key prime brokerage relationships
outside of US equities trading
FACTORS THAT COULD LEAD TO A DOWNGRADE
-- Reduced profitability from changes in market or regulatory
environment
-- Increased risk appetite or failure in managing and controlling
operational risks
-- Adverse changes in corporate culture or management quality or
a shift towards a more aggressive strategic policy (such as an
acquisition of another entity on terms that would result in
significantly worsened key credit metrics)
-- Significant reduction in retained capital or change in cash
retention policy
The principal methodology used in these ratings was Securities
Industry Market Makers Methodology published in November 2019.
INSYS THERAPEUTICS: Exclusivity Period Extended Until April 6
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended the
exclusive period for Insys Therapeutics, Inc. and its affiliates to
file a Chapter 11 plan to April 6 and the period to solicit
acceptances for the plan to April 27.
About Insys Therapeutics
Headquartered in Chandler, Ariz., Insys Therapeutics, Inc. --
http://www.insysrx.com/-- is a specialty pharmaceutical company
that develops and commercializes innovative drugs and novel drug
delivery systems of therapeutic molecules that improve patients'
quality of life. Using proprietary spray technology and
capabilities to develop pharmaceutical cannabinoids, Insys is
developing a pipeline of products intended to address unmet medical
needs and the clinical shortcomings of existing commercial
products. Insys is committed to developing medications for
potentially treating anaphylaxis, epilepsy, Prader-Willi syndrome,
opioid addiction and overdose, and other disease areas with a
significant unmet need.
As of March 31, 2019, Insys had $172.6 million in total assets,
$336.3 million in total liabilities, and a total stockholders'
deficit of $163.7 million.
On June 10, 2019, Insys Therapeutics and six affiliated companies
filed petitions seeking relief under Chapter 11 of the Bankruptcy
Code (D. Del. Lead Case No. 19-11292). Judge Kevin Gross oversees
the cases.
The Debtors tapped Weil, Gotshal & Manges LLP and Richards, Layton
& Finger, P.A., as legal counsel; Lazard Freres & Co. LLC as
investment banker; FTI Consulting, Inc. as financial advisor; and
Epiq Corporate Restructuring, LLC as claims agent.
The Office of the U.S. Trustee appointed creditors to serve on an
official committee of unsecured creditors on June 20, 2019. The
committee tapped Akin Gump Strauss Hauer & Feld LLP, and Bayard,
P.A. as its legal counsel; and Province, Inc. as its financial
advisor.
JAGUAR HEALTH: Registers Up to 3.75M Shares for Possible Resale
---------------------------------------------------------------
Jaguar Health, Inc. filed a Form S-1 registration statement with
the Securities and Exchange Commission to register up to 3,750,000
shares of voting common stock, par value $0.0001 per share of the
Company to be offered by certain selling stockholders. Of these
shares (i) 2,500,000 shares are outstanding and (ii) 1,250,000 are
shares of Common Stock issuable upon exercise of certain warrants.
The Company is not selling any shares of Common Stock under this
prospectus and will not receive any of the proceeds from the sale
by the Selling Stockholders of the Common Stock. The Company will,
however, receive the net proceeds of any warrants exercised for
cash.
The Selling Stockholders or their pledgees, assignees or successors
in interest may sell or otherwise dispose of the Common Stock
covered by this prospectus in a number of different ways and at
varying prices.
The Company's common stock is listed on the NASDAQ Capital Market,
under the symbol "JAGX." On Jan. 17, 2020, the last reported sale
price of the Company's Common Stock on the NASDAQ Capital Market
was $0.88 per share.
The Selling Stockholders are:
Jon D. and Linda W. Gruber Trust
Rogers Family Trust, UTD 01/21/1981
Karl L. Matthies Trust
Howard Miller
Potter Family Trust
Pensco Trust Company Custodian FBO Brian Swift Roth IRA
Joseph W. & Patricia G. Abrams Family Trust DTD 3/15/95
Krueger Family Living Trust
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/ZdG0WA
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health/-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
Its wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on
developing and commercializing proprietary human gastrointestinal
pharmaceuticals for the global marketplace from plants used
traditionally in rainforest areas. Jaguar Health's principal
executive offices are located in San Francisco, California.
Jaguar Health reported a net loss of $32.14 million for the year
ended Dec. 31, 2018, compared to a net loss of $21.96 million for
the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company
had $35.63 million in total assets, $15.25 million in total
liabilities, $9 million in series A convertible preferred stock,
and total stockholders' equity of $11.38 million.
BDO USA, LLP, in San Francisco, California, the Company's auditor
since 2013, issued a "going concern" opinion in its report dated
April 10, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company has
suffered recurring losses from operations and an accumulated
deficit that raise substantial doubt about its ability to continue
as a going concern.
JAGUAR HEALTH: Sabby Volatility Has 3.69% Stake as of Dec. 31
-------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Sabby Volatility Warrant Master Fund, Ltd., Sabby
Management, LLC, and Hal Mintz disclosed that as of Dec. 31, 2019,
they beneficially own 400,000 shares of common stock of Jaguar
Health, Inc., which represents 3.69% of the shares outstanding.
Sabby Management, LLC and Hal Mintz do not directly own any shares
of Common Stock, but each indirectly owns 400,000 shares of Common
Stock. Sabby Management, LLC, a Delaware limited liability
company, indirectly owns 400,000 shares of Common Stock because it
serves as the investment manager of Sabby Volatility Warrant Master
Fund, Ltd. Mr. Mintz indirectly owns 400,000 shares of Common
Stock in his capacity as manager of Sabby Management, LLC.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/nV1LTC
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health/-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
Its wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on
developing and commercializing proprietary human gastrointestinal
pharmaceuticals for the global marketplace from plants used
traditionally in rainforest areas. Jaguar Health's principal
executive offices are located in San Francisco, California.
Jaguar Health reported a net loss of $32.14 million for the year
ended Dec. 31, 2018, compared to a net loss of $21.96 million for
the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company
had $35.63 million in total assets, $15.25 million in total
liabilities, $9 million in series A convertible preferred stock,
and total stockholders' equity of $11.38 million.
BDO USA, LLP, in San Francisco, California, the Company's auditor
since 2013, issued a "going concern" opinion in its report dated
April 10, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company has
suffered recurring losses from operations and an accumulated
deficit that raise substantial doubt about its ability to continue
as a going concern.
JOSEPH'S TRANSPORTATION: Court Approves Disclosure Statement
------------------------------------------------------------
Judge Frank J. Bailey has ordered that the Disclosure Statement is
approved.
The hearing on confirmation of the Plan of Joseph's Transportation,
Inc., and on Applications for Compensation is scheduled for Feb.
26, 2020, at 11:00 a.m. The hearing will take place in the Court
Room 1, 12th Floor, McCormack Post Office and Courthouse Building,
5 Post Office Square, Boston, Massachusetts 02109.
Any party objecting to the classification provided in the Plan or
objecting to confirmation of the Plan must be filed and served on
or before Feb. 14, 2020, at 4:30 p.m.
The ballots indicating written acceptance or rejection of the Plan
must be delivered to counsel to the debtor on or before Feb. 14,
2020, at 4:00 p.m.
Applications for compensation are to be filed on or before Jan. 24,
2020, by 4:30 P.M.
Any and all objections to Application for Compensation are to be
filed on or before Feb. 14, 2020, by 4:30 P.M
Counsel for the Debtor:
Gary W. Cruickshank
21 Custom House Street,
Suite 920, Boston, Massachusetts 02110
E-mail: gwc@cruickshank-law.com
About Joseph's Transportation
Joseph's Transportation is a family-owned and operated full
transportation company that has been serving the New England area
for more than 40 years. Joseph's Transportation filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Mass. Case No. 18-14282) on Nov. 11, 2018. In the petition
signed by Joseph Albano III, president, the Debtor was estimated to
have assets of $500,001 to $1 million and liabilities of the same
range. The Law Office of Gary W. Cruickshank serves as counsel to
the Debtor.
KNOB HILL: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Knob Hill Limited Partnership
14108 Saint Paul Road
Clear Spring, MD 21772-1124
Business Description: Knob Hill Limited Partnership is primarily
engaged in renting and leasing real estate
properties.
Chapter 11 Petition Date: January 24, 2020
Case No.: 20-10961
Court: United States Bankruptcy Court
District of Maryland
Debtor's Counsel: Philip McNutt, Esq.
LAW OFFICE OF PHILIP J. MCNUTT
11921 Freedom Drive Ste. 584
Reston, VA 20190
Tel: 703-904-4380
E-mail: pmcnutt@mcnuttlawllc.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Richard Seibert, managing partner.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/rgoJoy
LAMAR MEDIA: Moody's Assigns Ba2 Rating on New Sr. Unsec. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Lamar Media
Corporation's proposed senior unsecured notes (consisting of 8 year
and 10 year notes). The existing ratings, including the Baa3 rating
for the previously announced senior secured credit facility
(consisting of a $750 million revolver and $600 million term loan
B) and Ba3 rating for the existing senior subordinated notes are
unchanged. The Ba2 corporate family rating issued at the parent
company, Lamar Advertising Company, and the stable outlook are also
unchanged.
The net proceeds of the expected $1 billion in notes will be used
to refinance the existing $510 million senior unsecured notes due
2024 and repay the existing senior secured term loan A and a
portion of the revolver, which is expected to have approximately
$140 million drawn pro forma for the transaction.
Pro forma leverage is expected to remain at 4.1x as of Q3 2019
(excluding Moody's standard adjustments for lease expenses). The
new notes and credit facility extend a substantial portion of the
Lamar's debt structure, lowers interest expense, and increases the
size of the revolver to $750 million from $550 million. The
transaction also reduces the amount of required amortization
payments following the repayment of the term loan A and the lack of
a required amortization payment on the new term loan B. The nearest
debt maturity will be the senior subordinated note due 2023 going
forward. The ratings on the existing senior unsecured note due 2024
will be withdrawn after repayment.
Assignments:
Issuer: Lamar Media Corporation
senior unsecured notes due 2028, Assigned Ba2 (LGD4)
senior unsecured notes due 2030, Assigned Ba2 (LGD4)
RATINGS RATIONALE
Lamar's Ba2 CFR reflects its market presence as one of the largest
outdoor advertising companies in the US, the high-margin business
model, and strong free cash flow generation prior to dividend
payments. The ability to convert traditional static billboards to
digital provides growth opportunities as well as the potential for
higher EBITDA margins. As a pure play outdoor advertising company,
Lamar provides mainly local advertising and derives revenues from a
diversified customer base, with no single advertiser accounting for
more than 2% of the company's billboard advertising revenue.
Compared to other traditional media outlets, the outdoor
advertising industry is not expected to lose share of advertising
dollars to digital mobile or social media companies. The outdoor
industry also benefits from restrictions on the supply of
billboards which help support advertising rates and high asset
valuations.
Pro forma leverage is 4.1x which leaves little room at the existing
ratings for additional leveraging transactions or weakness in
operating results. While Lamar operates as a REIT and is expected
to distribute to shareholders the vast majority of its cash flow,
Moody's projects Lamar will pursue a relatively moderate financial
policy and seek to maintain leverage levels in the existing range.
The company has a long history of acquisitions and Moody's expects
Lamar will continue to make acquisitions going forward that could
be funded with additional debt or equity. As Lamar converts static
boards to digital, the company will be more sensitive to changes in
advertising demand given the shorter term contract period compared
to static boards. Moody's expects more volatility in earnings
during periods of economic weakness than what was experienced
historically when its assets were more likely to be subject to
longer term contracts.
The speculative grade liquidity rating of SGL-2 reflects Moody's
expectation that Lamar will maintain a good liquidity position over
the next year. The pro forma cash balance is expected to be
approximately $22 million and the company will have access to the
upsized $750 million revolver due in 2025, which is projected to
have approximately $140 million drawn at closing. Lamar also has a
$175 million A/R securitization facility that was used to help fund
an acquisition in 2018. Moody's projects that the company will
spend about $128 million in capex in 2019, up modestly from the
$118 million spent in 2018, and payout approximately $385 million
in dividends in 2019. Free cash flow as a percentage of debt was 3%
LTM as of Q3 2019, which Moody's anticipates being about the same
over the next year. Moody's expects limited debt repayment going
forward as there is no required amortization payment on the term
loan B and operating cash flow is expected to be used for
dividends, capex, or additional acquisitions. Lamar has an
At-the-Market (ATM) offering program which sold $21 million in
equity YTD as of Q3 2019. The ATM program could be used to boost
liquidity or help finance acquisitions. Assets sales of outdoor
billboards that typically trade at very high valuations could also
be a source of liquidity if needed.
The required secured debt covenant ratio is expected to be 4.5x
applicable to the revolving credit facility only. The term loan B
will be covenant lite. Moody's projects that Lamar will maintain a
significant cushion of compliance. Lamar also has the ability to
issue unlimited incremental term loan or revolver debt subject to
compliance with the 4.5x secured debt covenant.
The stable outlook reflects Moody's expectation of organic revenue
and EBITDA growth in the low to mid single digit percentage range
over the next 12 months. Moody's also anticipates that Lamar's
operating cash flow will be directed to dividends, capex, or
additional acquisitions. While leverage is expected to decline
modestly from current levels, it has the potential to be negatively
impacted by additional debt funded acquisitions.
The required distribution of 90% of taxable income from a REIT
qualified subsidiary and elevated leverage levels for the rating
limit upward rating pressure. However, an upgrade could occur if
leverage was maintained below 2.5x on a sustained basis (excluding
Moody's standard lease adjustments) with confidence that the board
of directors intended to maintain leverage below this level. Also
required would be a balanced financial policy between debt and
equity holders, free cash flow after distributions of 10% of debt,
and a good liquidity position.
A ratings downgrade would occur if leverage was sustained above 4x
(excluding Moody's standard lease adjustment) over the next year
due to a debt financed acquisition or a material decline in
advertising spend. Failure to maintain an adequate liquidity
position or elevated risk of a covenant violation could also lead
to negative rating pressure. A refinancing of the existing $535
million senior subordinated notes due 2023 (callable as of May
2018) with additional secured or senior unsecured debt could also
result in a downgrade of the existing senior secured or senior
unsecured debt ratings.
Lamar Advertising Company (Lamar), with its headquarters in Baton
Rouge, Louisiana, is one of the leading owner and operators of
advertising structures in the U.S. and Canada. Lamar is publicly
traded, but the Reilly family has voting control of the company.
Lamar generated revenues of approximately $1.7 billion in the LTM
period ending Q3 2019.
The principal methodology used in these ratings was Media Industry
published in June 2017.
LIVEXLIVE MEDIA: John Lemak Reports 4.9% Stake as of Jan. 22
------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, these entities and individual reported beneficial
ownership of shares of common stock of LiveXLive Media, Inc., as of
Jan. 22, 2020:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ -------
John Lemak 2,879,025 4.96%
Sandor Capital Master Fund 2,704,084 4.65%
John S Lemak IRA Rollover
Texas Capital Bank Trust 33,334 0.05%
JSL Kids Partners 70,954 0.12%
The percentages are based upon 58,040,170 shares of the Issuer's
common stock issued and outstanding as of Nov. 4, 2019, as reported
in the Issuer's Quarterly Report on Form 10-Q, filed with the SEC
on Nov. 8, 2019.
Mr. Lemak is the general partner of each of Sandor and JSL and is
the Trustee of Lemak IRA. As such, (i) Mr. Lemak has the power to
direct the voting and disposition of the shares owned by Sandor and
may be deemed to have indirect beneficial ownership of the shares
held by Sandor, (ii) Mr. Lemak has the power to direct the voting
and disposition of the shares owned by Lemak IRA and may be deemed
to have indirect beneficial ownership of the shares held by Lemak
IRA, and (iii) Lemak has the power to direct the voting and
disposition of the shares owned by JSL and may be deemed to have
indirect beneficial ownership of the shares held by JSL. Mr. Lemak
has direct beneficial ownership of the shares owned by him
personally.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/iuMyLA
About LiveXLive Media
Headquartered in West Hollywood, CA, LiveXLive --
http://www.livexlive.com/-- is a global digital media company
focused on live entertainment. The Company operates LiveXLive, a
live music video streaming platform; and Slacker Radio, a streaming
music pioneer; and also produces original music-related content.
LiveXLive is the first 'live social music network', delivering
premium livestreams, digital audio and on-demand music experiences
from the world's top music festivals and concerts, including Rock
in Rio, EDC Las Vegas, Hangout Music Festival, and many more.
LiveXLive also gives audiences access to premium original content,
artist exclusives and industry interviews. Through its owned and
operated Internet radio service, Slacker Radio (www.slacker.com),
LiveXLive delivers its users access to millions of songs and
hundreds of expert-curated stations.
LiveXLive reported a net loss of $37.76 million for the year ended
March 31, 2019, compared to a net loss of $23.33 million for the
year ended March 31, 2018. As of Sept. 30, 209, LiveXLive had
$58.72 million in total assets, $54.47 million in total
liabilities, and $4.25 million in total stockholders' equity.
BDO USA, LLP, in Los Angeles, California, the Company's auditor
since 2018, issued a "going concern" opinion in its report dated
June 21, 2019, on the Company's consolidated financial statements
for the year ended March 31, 2019, citing that the Company has
suffered recurring losses from operations and has a working capital
deficiency. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
LONG BLOCKCHAIN: Extends LIBC Loans Maturity to April 18, 2020
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Long Blockchain Corp. and Long Island Brand Beverages LLC (LIBB), a
wholly owned subsidiary of the Company, entered into an amendment
to the loan agreement by and among LIBB, the Company and Long
Island Beverage Corp. ("LIBC"), and the promissory note issued by
LIBB to LIBC thereunder, each dated as of Jan. 31, 2019 and amended
as of June 25, 2019 and Aug. 30, 2019. Pursuant to the Loan
Documents, LIBC previously advanced CA$383,205 (or approximately
$287,404) to LIBB.
The Amendment extends the maturity date of the Loans to April 18,
2020 and increases the maximum principal amount of the Loans to
CA$500,000. All remaining terms of the Loan Documents remain
unchanged. In connection with the Amendment, LIBB received an
additional advance of approximately CA$19,586 (or approximately
$15,000) from LIBC.
About Long Blockchain Corp.
Headquartered in Hicksville, New York, Long Blockchain Corp. --
http://www.longblockchain.com/-- is the holding company for its
wholly-owned subsidiaries Stran Loyalty Group and Long Island Brand
Beverages. Stran Loyalty Group is a collaboration with Stran
Promotional Solutions that began in 2018 and is focused on
providing loyalty, incentive, reward and gift card programs to
corporate and consumer brands. Long Island Brand Beverages
operates in the non-alcohol ready-to-drink segment of the beverage
industry under its flagship brand 'The Original Long Island Brand
Iced Tea'. LBCC has entered into a definitive agreement for the
sale of its beverage subsidiary, expected to close in the fourth
quarter of 2019.
Long Blockchain incurred a net loss of $15.21 million in 2017 and
net loss of $10.44 million in 2016. As of Sept. 30, 2018, the
Company had $12.96 million in total assets, $4.14 million in total
liabilities, and $8.81 million in total stockholders' equity.
Marcum LLP, the Company's auditor since 2014, issued a "going
concern" opinion in its report on the consolidated financial
statements for the year ended Dec. 31, 2017, citing that the
Company has a significant working capital deficiency, has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
M & C PARTNERSHIP: Feb. 27 Hearing on Disclosure Statement
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The hearing to consider approval of the disclosure statement of M&C
Partnership, LLC will be held before Jerry A. Brown, Bankruptcy
Judge, in: Courtroom B-705 Hale Boggs Federal Building 500 Poydras
Street New Orleans, Louisiana on Thursday, Feb. 27, 2020 at 2:00
P.M.
Feb. 20, 2020, is fixed as the last day for filing written
objections to the disclosure statement.
Counsel for the Debtor:
Leo D. Congeni
The Congeni Law Firm
650 Poydras Street, Suite 2750
New Orleans, LA 70130
Tel: (504) 522-4848
As reported in the Troubled Company Reporter, debtor M & C
Partnership, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of Louisiana a plan of reorganization. The
allowed secured claim of Girod LoanCo, LLC, will be reinstated and
rendered unimpaired in accordance with Section 1124 of the
Bankruptcy Code. The holder of each allowed unsecured claim will
be paid the full amount of their allowed claim no later than six
months after the Effective Date. George A. Cella, III, shall
retain his existing equity interests in the Debtor.
A full-text copy of the Disclosure Statement dated Dec. 31, 2019,
is available at https://tinyurl.com/rddlmzs from PacerMonitor.com
at no charge.
The Debtor is represented by:
THE CONGENI LAW FIRM, L.L.C.
Leo D. Congeni
650 Poydras St., Suite 2750
New Orleans, LA 70130
Telephone: 504-522-4848
Facsimile: 504-910-3055
E-mail: leo@congenilawfirm.com
About M & C Partnership
M & C Partnership, LLC, a company based in Metairie, La., filed a
Chapter 11 petition (Bankr. E.D. La. Case No. 19-11529) on June 5,
2019. In the petition signed by George A. Cella, III, member and
manager, the Debtor was estimated to have $500,000 to $1 million in
assets and $1 million to $10 million in liabilities. The Hon.
Elizabeth W. Magner oversees the case. Leo D. Congeni, Esq., at
Congeni Law Firm, LLC, serves as the Debtor's bankruptcy counsel.
Patrick J. Gros, CPA, APAC, is the Debtor's accountant.
MAGNUM CONSTRUCTION: Third Amended Plan Effective Dec. 31, 2019
---------------------------------------------------------------
The Effective Date of the Third Amended Chapter 11 Plan of
Reorganization proposed by debtor Magnum Construction Management,
LLC, f/k/a Munilla Construction Management, LLC, is Dec. 31, 2019.
Any and all provisions of the Plan and the order approving on a
final basis the Disclosure Statement pursuant to Section 1125 of
the Bankruptcy Code, and confirming Third Amended Chapter 11 Plan
of Reorganization proposed by Magnum Construction related to a
period on or after the Effective Date of the Plan are in full force
and effect.
As reported in the Troubled Company Reporter, Judge A. Jay Christol
on Dec. 13, 2019, entered an order confirming the Third Amended
Chapter 11 Plan of Reorganization.
Under the Plan, general unsecured creditors in Class 6 are slated
to recover 2.4% to 15.4%. Each holder of an allowed general
unsecured claim will receive its pro rata share of the Class 6
Fund.
A copy of the Plan Confirmation Order is available at
PacerMonitor.com free of charge at https://is.gd/Ah1cSy
A full-text copy of the Third Amended Plan is available at
https://is.gd/1dIbGK from PacerMonitor.com at no charge.
A copy of the notice dated Dec. 31, 2019, is available at
https://tinyurl.com/yjv5j64p from PacerMonitor.com at no charge.
The Debtor is represented by:
BERGER SINGERMAN LLP
1450 Brickell Avenue, Suite 1900
Miami, FL 33131
Telephone: (305) 755-9500
Facsimile: (305) 714-4340
Jordi Guso
Paul A. Avron
E-mail: jguso@bergersingerman.com
pavron@bergersingerman.com
About Magnum Construction Management
Magnum Construction Management LLC -- https://www.mcm-us.com/ --
formerly known as Munilla Construction Management, LLC, is a
construction company specializing in heavy civil construction in
the areas of transportation, airport infrastructure, roads,
bridges, government buildings and schools. It is headquartered in
South Miami, Florida, but also has offices in (i) Broward County,
Florida, and (ii) Irving, Texas. As of the Petition Date, MCM
employs a total of 292 people.
Magnum Construction Management filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code (Bankr S.D. Fla. Case
No.19-12821) on March 1, 2019. In the petition signed by CFO
Gilberto Ruizcalderon, the Debtor estimated $50 million to $100
million in assets and $10 million to $50 million in liabilities.
The Debtor is represented by Paul A. Avron, Esq., at Berger
Singerman LLP.
The U.S. Trustee for Region 21 on March 14, 2019, appointed three
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 case. The Committee retained Wargo & French,
LLP, as its legal counsel.
MCDERMOTT INTERNATIONAL: Creditors Back Restructuring Transaction
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McDermott International, Inc., on Jan. 21, 2020 disclosed that it
has the support of more than two-thirds of all its funded debt
creditors for a restructuring transaction that will equitize nearly
all the Company's funded debt, eliminating over $4.6 billion of
debt.
The restructuring transaction will be implemented through a
prepackaged Chapter 11 process that will be financed by a
debtor-in-possession ("DIP") financing facility of $2.81 billion.
Subject to court approval, McDermott expects the DIP financing,
combined with cash generated by McDermott, to enable the Company to
stabilize its cash flows, continue operating in the normal course
and fulfill its commitments to key stakeholders, including
customers, suppliers, joint-venture partners, business partners and
employees.
The Company also has secured committed exit financing of over $2.4
billion in letter of credit facility capacity and will emerge from
Chapter 11 with approximately $500 million in funded debt. The
restructuring transaction will strengthen the Company's balance
sheet, normalize its trade debt and position the Company for
long-term growth.
All of McDermott's businesses are expected to continue to operate
as normal for the duration of the restructuring. McDermott expects
to continue to pay employee wages and health and welfare benefits,
and to pay all suppliers in full. All customer projects are
expected to continue uninterrupted on a global basis.
On Jan. 21, the Company commenced solicitation of votes from its
lenders and bondholders in support of a prepackaged Chapter 11 Plan
of Reorganization ("the Plan"). The Company intended to commence
the prepackaged Chapter 11 filing in the U.S. Bankruptcy Court for
the Southern District of Texas ("the Court") on Jan. 21. The
Company's support from all of its creditor constituencies is
memorialized in a Restructuring Support Agreement. The Company
plans to move swiftly toward Court approval of the Plan, with
confirmation expected within approximately two months from filing.
As part of the restructuring transaction, subsidiaries of McDermott
have entered into a share and asset purchase agreement (the
"Agreement") with a joint partnership between The Chatterjee Group
and Rhone Group (the "Joint Partnership") pursuant to which the
Joint Partnership will serve as the "stalking-horse bidder" in a
court-supervised sale process for Lummus Technology.
Under the terms of the Agreement, the Joint Partnership has agreed,
and is committed, to acquire Lummus Technology for a base purchase
price of $2.725 billion. McDermott will have the option to retain
or purchase, as applicable, a 10 percent common equity ownership
interest in the entity purchasing Lummus Technology. McDermott
expects to hold an auction in approximately 45 days to solicit
higher or better bids for the Lummus Technology business. Either
the Joint Partnership or the winning bidder at the auction will
purchase Lummus Technology as part of the Chapter 11 process,
subject to regulatory and court approval.
Proceeds from the sale of Lummus Technology are expected to repay
the DIP financing in full, as well as fund emergence costs and
provide cash to the balance sheet for long-term liquidity.
"The restructuring transaction, which has the full support from all
of our funded creditors, including our unsecured bondholders, is
further recognition of McDermott's fundamentally solid operating
business and proven strategy," said David Dickson, President and
Chief Executive Officer of McDermott. "Our record backlog, the
majority of which has been booked in the last two years, and high
rate of new project awards demonstrates our customers' continued
confidence in our business, the demand for our skills and our
long-term opportunities ahead."
Mr. Dickson continued, "This financial restructuring will create a
sustainable capital structure that matches the strength of our
operating business. As a result of the transaction, we are
eliminating over $4.6 billion in debt from our balance sheet and we
will emerge with robust liquidity and significant financing to
execute on customer projects in our backlog. Throughout this
process, which we expect to complete expeditiously, McDermott will
continue all business operations as normal and deliver on our
commitments to our customers. I would like to thank our customers,
employees, suppliers and partners for their ongoing dedication, and
our lenders for their continued collaboration in reaching this
comprehensive and definitive balance sheet solution. McDermott will
emerge a stronger, more competitive company with a solid financial
foundation, and we will build upon our reputation as a premier,
fully integrated provider of technology, engineering and
construction solutions to the energy industry."
As a result of the upcoming Chapter 11 filing, McDermott expects to
be delisted from the New York Stock Exchange within the next 10
days. McDermott common stock will continue to trade in the
over-the-counter marketplace throughout the pendency of the Chapter
11 process. The shares are proposed to be cancelled as part of
McDermott's restructuring.
Upon the Chapter 11 filing, more information about McDermott's
restructuring, including access to Court documents, will be
available at https://cases.primeclerk.com/McDermott or contact
Prime Clerk, the Company's noticing and claims agent, at +1
877-426-7705 (for toll-free U.S. domestic calls) and +1
917-994-8380 (for tolled international calls), or email
McDermottInfo@primeclerk.com.
Kirkland & Ellis LLP is serving as legal counsel to McDermott,
Evercore Group L.L.C. is serving as the Company's financial advisor
and AP Services, LLC, an affiliate of AlixPartners, is serving as
operational advisor. Jackson Walker L.L.P. is serving as local
legal counsel, Baker Botts L.L.P. is serving as corporate legal
counsel, Arias, Fabrega & Fabrega is serving as Panamanian legal
counsel and Prime Clerk is serving as administrative agent.
Davis Polk & Wardwell LLP is serving as legal counsel to the Term
Loan Lenders, Centerview Partners LLC is serving as financial
advisor to the Term Loan Lenders, Barclays is serving as agent to
the Term Loan Lenders and Latham & Watkins LLP is serving as legal
counsel to the agent to the Term Loan Lenders.
Linklaters LLP is serving as legal counsel to the Revolving
Lenders, Credit Agricole Corporate and Investment Bank is serving
as agent to the Revolving Lenders, Bracewell LLP is serving as
legal counsel to the agent to the Revolving Lenders and FTI
Consulting is serving as financial advisor to the agent to the
Revolving Lenders.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Brown Rudnick LLP
are serving as legal counsel to the bondholders. Houlihan Lokey,
Inc. is serving as financial advisor to the bondholders.
About McDermott
Headquartered in Houston, Texas, McDermott (NYSE: MDR) --
http://www.mcdermott.com/-- is a provider of engineering,
procurement, construction and installation and technology solutions
to the energy industry. Its common stock is listed on the New York
Stock Exchange under the trading symbol MDR.
McDermott reported a net loss attributable to common stockholders
of $2.69 billion for the year ended Dec. 31, 2019, following net
income attributable to common stockholders of $179 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, McDermott had
$8.75 billion in total assets, $9.86 billion in total liabilities,
$271 million in redeemable preferred stock, and a total
stockholders' deficit of $1.38 billion.
* * *
As reported by the TCR on Jan. 24, 2020, S&P Global Ratings lowered
its issuer credit rating and issue-level ratings on the McDermott
International Inc.'s senior secured debt and senior unsecured notes
to 'D' (default).
The downgrade to 'D' follows McDermott's announcement of its
intention to commence the prepackaged Chapter 11 bankruptcy filing.
The company entered into a restructuring support agreement with
debtholders, under which nearly all of its debt balances will be
exchanged for equity.
MEDICAL DIAGNOSTIC: Committee Seeks to Hire Financial Advisor
-------------------------------------------------------------
The official committee of unsecured creditors of The Medical
Diagnostic Imaging Group, Ltd. seeks approval from the U.S.
Bankruptcy Court for the District of Arizona to hire Resolute
Commercial Services as its financial advisor.
Resolute Commercial will provide these financial advisory services
in connection with the Debtor's Chapter 11 case:
a. review and analyze the Debtor's business plans and
financial projections, including testing assumptions and comparing
those assumptions to historical and industry trends;
b. assist the committee in determining a range of values for
the Debtor's assets;
c. assist the committee in analyzing any potential sale or
disposition of estate assets or any business merger;
d. analyze the assumption, rejection or assignment of
unexpired leases and executory contracts and the impact on the
remaining business;
e. help prepare a Chapter 11 plan, disclosure statement and
all related documents;
f. assist the committee in evaluating potential financings by
the Debtor;
g. assist the committee in identifying, analyzing and
prosecuting avoidance actions or other causes of action;
h. attend meetings and negotiate with representatives of the
Debtor, creditors and other parties; and
i. provide testimony.
Jeremiah Foster and Nicole Manos, the firm's professionals
primarily responsible for providing the services, will charge $395
per hour and $345 per hour, respectively. If appropriate, the firm
will use staff and other professionals with lower rates ranging
from $185 to $345.
Resolute Commercial is "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Jeremiah Foster
Nicole Manos
Resolute Commercial Services
7201 E. Camelback Road, Suite 250
Scottsdale, AZ 85251
Phone: (480) 947-3321
Fax: (480) 946-3556
Email: jfoster@resolutecommercial.com
nmanos@resolutecommercial.com
About Medical Diagnostic
The Medical Diagnostic Imaging Group, Ltd., a provider of
diagnostic radiology services, and its affiliate MDIG of Arizona,
LLC sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Ariz. Case Nos. 19-15722 and 19-15726) on Dec. 16,
2019.
On Dec. 23, 2019, MDIG of Pennsylvania, LLC and MDIG of Washington,
PLLC filed voluntary Chapter 11 petitions (Bankr. D. Ariz. Case
Nos. 19-16025 and 19-16026). At the time of the filing, the
Debtors each disclosed assets of between $1 million and $10 million
and liabilities of the same range.
Medical Diagnostic, MDIG of Pennsylvania and MDIG of Washington are
represented by Michael W. Carmel, Ltd. while MDIG of Arizona is
represented by Stinson LLP.
On Jan. 13, 2020,tThe Office of the U.S. Trustee appointed
creditors to serve on the official committee of unsecured creditors
in Medical Diagnostic's Chapter 11 case. The committee is
represented by Perkins Coie LLP.
Susan Goodman of JD Pivot Health Law was appointed as patient care
and consumer privacy ombudsman.
MEDICAL DIAGNOSTIC: Committee Taps Perkins Coie as Legal Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of The Medical
Diagnostic Imaging Group, Ltd. received approval from the U.S.
Bankruptcy Court for the District of Arizona to hire Perkins Coie
LLP as its legal counsel.
Perkins Coie will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise and consult the committee with respect to the
Debtor's administration of its Chapter 11 case;
b. attend meetings and negotiate with representatives of the
Debtor, creditors and other parties;
c. advise the committee in connection with any contemplated
sales of assets, disposition of assets or business combinations;
d. advise the committee on matters relating to the assumption,
rejection or assignment of unexpired leases and executory
contracts;
e. assist the committee in its examination and analysis of the
conduct of the Debtor's affairs;
f. assist the committee in the review, analysis and
negotiation of any financing or funding agreements;
g. take all necessary actions to protect and preserve the
interests of the committee, including the prosecution of actions on
its behalf, negotiations concerning all litigation in which the
Debtor is involved, and a review of all claims filed against the
Debtor's estate;
h. prepare on the committee's behalf a Chapter 11 plan and
take necessary actions with respect to any proposed plan; and
i. appear before the bankruptcy court, appellate courts, and
the U.S. trustee, and prepare legal papers in support of positions
taken by the committee.
The hourly rates range from $300 to $1,300 for lawyers, and $150 to
$450 for paralegals. Brad Cosman, Esq., and Jordan Kroop, Esq.,
the firm's attorneys who will be primarily responsible for
representing the committee, will charge $615 per hour and $725 per
hour, respectively.
Perkins Coie is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Bradley A. Cosman, Esq.
Jordan A. Kroop, Esq.
Benjamin C. Calleros, Esq.
Perkins Coie LLP
2901 N. Central Ave., Suite 2000
Phoenix, AZ 85012-2788
Phone: +1.602.351.8205/1.602.351.8017/1.602.351.8174
Fax: +1.602.648.7000
E-mail: BCosman@perkinscoie.com
JKroop@perkinscoie.com
BCalleros@perkinscoie.com
About Medical Diagnostic
The Medical Diagnostic Imaging Group, Ltd., a provider of
diagnostic radiology services, and its affiliate MDIG of Arizona,
LLC sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Ariz. Case Nos. 19-15722 and 19-15726) on Dec. 16,
2019.
On Dec. 23, 2019, MDIG of Pennsylvania, LLC and MDIG of Washington,
PLLC filed voluntary Chapter 11 petitions (Bankr. D. Ariz. Case
Nos. 19-16025 and 19-16026).
At the time of the filing, the Debtors each disclosed assets of
between $1 million and $10 million and liabilities of the same
range.
Medical Diagnostic, MDIG of Pennsylvania and MDIG of Washington are
represented by Michael W. Carmel, Ltd. while MDIG of Arizona is
represented by Stinson LLP.
On Jan. 13, 2020,tThe Office of the U.S. Trustee appointed
creditors to serve on the official committee of unsecured creditors
in Medical Diagnostic's Chapter 11 case. The committee is
represented by Perkins Coie LLP.
Susan Goodman of JD Pivot Health Law was appointed as patient care
and consumer privacy ombudsman.
MMM HOLDINGS: Moody's Assigns B1 Rating on Sr. Sec. Debt
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Moody's Investors Service assigned definitive B1 senior secured
debt ratings to MMM Holdings, LLC in connection with Summit
Partners' acquisition on December 26 of MMM's ultimate parent,
InnovaCare, Inc. The acquisition was financed with new equity, a
$550 million 7-year senior, secured term loan and an $80 million
5-year senior, secured revolving credit facility. Moody's has also
assigned a Ba1 insurance financial strength rating to MMM's
operating company and affirmed MMM's B1 corporate family rating.
The outlooks on MMM and MMM Healthcare, LLC are stable. The
definitive debt ratings replace the provisional (P)B1 senior
secured debt ratings, which Moody's assigned on October 1, 2019,
pending the closing of the acquisition.
RATINGS RATIONALE
The ratings on MMM and its operating subsidiary reflect MMM
Healthcare, LLC's solid profitability, leading market share in the
Puerto Rico Medicare Advantage (MA) market, and solid MA membership
growth of 25% since 2017 amidst favorable reimbursement rate trends
after six years (2011 – 2017) of severe MA reimbursement rate
cuts (21%) pursuant to the Affordable Care Act. Another credit
positive is MMM's vertical integration, including ownership of an
independent physician's network, a medical service organization,
chronic care clinics and a network of multi-payor primary care
clinics in the Orlando, Florida market (Orlando Family Physicians).
These capabilities support MMM's leading medical loss ratio in
Puerto Rico. Despite a significant increase in debt, projected 2019
year-end debt-to-EBITDA with Moody's adjustments remains well under
3.0x on a pro-forma basis.
Credit challenges include MMM's small scale, geographic
concentration in Puerto Rico and the lowest RBC capital ratio among
Moody's rated peers. In addition, the significant goodwill from the
acquisition adversely impacts the quality of capital. With
approximately 523 thousand members, MMM is the smallest health
insurer in Moody's rated universe.
Approximately half of MMM's members are enrolled in Medicare
Advantage and the other half in Medicaid, which is a significant
concentration in government business. Furthermore, almost its
entire business is located in the Commonwealth of Puerto Rico (Ca
negative), which remains under severe financial stress. Medicaid
typically is a shared responsibility between the US federal
government and the "state." The Medicaid risks, however, are
somewhat mitigated because for two reasons: 1) Medicaid contributes
only about 5% of earnings, and; 2) the US will continue to cover
the vast majority of Puerto Rico's Medicaid costs through June 30,
2021. Finally, MMM's RBC capital ratio at the company action level
(CAL) was only 109% as of year-end 2018. While the company is
planning to boost RBC to 125% going forward, it would still be well
below peer levels.
The stable outlook reflects the positive MA reimbursement
environment and solid claims and expense controls which Moody's
believes will continue, along with favorable MA demographic trends
on Puerto Rico as well as south Florida, where MMM has started up a
new MA plan.
RATINGS DRIVERS
Moody's could upgrade MMM (and its operating subsidiary) if the
company meets the following drivers: 1) risk-based capital ratio at
company action level at or above 150% of company action level; 2)
MA membership growth continues in general and the Florida plan
achieves 15-20% or more of total MA members; 3) Meaningful
percentage of earnings is from outside Puerto Rico on a sustained
basis while sustaining current profitability metrics.
Conversely, Moody's could downgrade MMM (and its operating
subsidiary) under the following conditions: 1) risk-based capital
ratio at company action remains below 115%; 2) MA membership drops
10% or more from current levels, and; 3) debt-to-EBITDA exceeds
3.0x on a sustained basis.
Affirmations:
Issuer: MMM Holdings, LLC:
Corporate family rating, Affirmed B1;
Assignments:
Issuer: MMM Healthcare, LLC
Insurance Financial Strength Rating, Assigned Ba1
Issuer: MMM Holdings, LLC
Backed senior secured term loan due 2026: Assigned B1 from (P)B1
Backed senior secured revolving credit facility due 2024: Assigned
B1 from (P)B1
Outlook Actions:
Issuer: MMM Holdings, LLC
Outlook, Remains Stable
Issuer: MMM Healthcare, LLC
Outlook, Assigned stable
ICH US Intermediate Holdings II, Inc. and ICH Flow-Through LLC are
co-borrowers on the term loan and revolving credit facility.
The principal methodology used in these ratings was US Health
Insurance Companies Methodology published in November 2019.
InnovaCare, Inc., the parent company of MMM Holdings, is a
privately-owned company incorporated in Puerto Rico and
headquartered in Fort Lee, New Jersey.
MOUNTAIN HOME: Feb. 5 Amended Plan & Disclosures Hearing Set
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Montana convened a
hearing to review the motion of Debtor Mountain Home-Montana
Vacation Rentals LLC to vacate final hearing on Disclosure
Statement and Plan Confirmation filed Dec. 31, 2019.
On Jan. 2, 2020, Judge Benjamin P. Hursh ordered that:
* The motion filed by the Debtor is granted and the hearing on
confirmation of Debtor's Plan and on final approval of Debtor's
Disclosure Statement scheduled for January 6, 2020, is vacated.
* The Debtor is granted through Jan. 17, 2020, to file an amended
Plan of Reorganization for Small Business Under Chapter 11 and an
amended Disclosure Statement for Small Business Under Chapter 11.
The Debtor's amended Disclosure Statement is, by this Order,
conditionally approved.
* Feb. 5, 2020, at 9:00 a.m., is the hearing on confirmation of
Debtor's Amended Plan and on final approval of Debtor's Amended
Disclosure Statement in the 2nd Floor Courtroom, Federal Building,
400 N. Main, Butte, Montana.
* Jan. 24, 2020, is fixed as the last day for filing and serving
written objections to confirmation of Debtor's Amended Plan, and
for filing written acceptances or rejections of said Amended Plan.
A full-text copy of the order dated Jan. 2, 2020, is available at
https://tinyurl.com/t4kh2w6 from PacerMonitor.com at no charge.
About Mountain Home-Montana Vacation Rentals
Mountain Home - Montana Vacation Rentals LLC vacation home rental
agency in Bozeman, Mont. It is the 100 percent owner of Mountain
Home Montana Vacation Rentals Inc., which has a fair market value
of $1.37 million.
Mountain Home - Montana Vacation Rentals sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Mont. Case
No.19-60900) on Sept. 5, 2019. At the time of the filing, the
Debtor disclosed $1,382,740 in assets and $1,829,435 in
liabilities. Patten, Peterman, Bekkedahl & Green PLLC is the
Debtor's legal counsel.
N & G PROPERTIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: N & G Properties, LLC
1572 Sussex Tpke
Unit C
Randolph, NJ 07869-1822
Business Description: N & G Properties, LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: January 24, 2020
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 20-11146
Debtor's Counsel: Steven D. Pertuz, Esq.
THE LAW OFFICE OF STEVEN D. PERTUZ, LLC
111 Northfield Ave Ste 304
West Orange, NJ 07052-4703
Tel: (973) 669-8600
E-mail: pertuzlaw@verizon.net
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joon Tae Yi, managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/sxzwfR
NFINITY GROUP: Taps Greeves & Roethler as Legal Counsel
-------------------------------------------------------
Nfinity Group, Inc., received approval from the U.S. Bankruptcy
Court for the District of Arizona to hire Greeves & Roethler, PLC
as its legal counsel.
Greeves & Roethler will assist the Debtor in all matters associated
with its Chapter 11 bankruptcy proceeding.
The firm will be paid at these rates:
Partners $350 per hour
Paralegal $195 per hour
Greeves & Roethler neither holds nor represents any interest
adverse to the Debtor's banruptcy estate, according to court
filings.
The firm can be reached through:
Glenn Roethler, Esq.
Greeves & Roethler, PLC
2151 E. Broadway Rd., Suite 115
Tempe, AZ 85282
Phone: (480) 422-1850
Fax: (480) 696-5522
E-mail: glenn@grattorneys.com
contact@grattorneys.com
About Nfinity Group
Nfinity Group, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 20-00376) on Jan. 12,
2020. At the time of the filing, the Debtor was estimated to have
assets of less than $50,000 and liabilities of less than $50,000.
Judge Brenda K. Martin oversees the case. The Debtor tapped
Greeves & Roethler, PLC, as its legal counsel.
NOVABAY PHARMACEUTICALS: Empery Asset Reports 4.9% Stake
--------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, these entities and individuals reported beneficial
ownership of shares of common stock issuable upon exercise of
warrants of NovaBay Pharmaceuticals, Inc. as of Dec. 31, 2019:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ -------
Empery Tax Efficient II, LP 1,293,487 4.43%
Empery Asset Management, LP 2,098,566 4.99%
Ryan M. Lane 2,098,566 4.99%
Martin D. Hoe 2,098,566 4.99%
The percentage is based on 27,901,850 shares of Common Stock issued
and outstanding as of Nov. 5, 2019, as represented in the Company's
Quarterly Report on Form 10-Q filed with the SEC on Nov. 7, 2019
and assumes the exercise of the Company's reported warrants subject
to the Blockers.
Pursuant to the terms of the Reported Warrants, the Reporting
Persons cannot exercise the Reported Warrants to the extent the
Reporting Persons would beneficially own, after any such exercise,
more than 4.99% of the outstanding shares of Common Stock, and the
percentage for each Reporting Person gives effect to the Blockers.
Consequently, as of Dec. 31, 2019, the Reporting Persons were not
able to exercise any of the Reported Warrants due to the Blockers.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/DiYqBt
About NovaBay Pharmaceuticals
Based in Emeryville, California, NovaBay Pharmaceuticals --
http://www.novabay.com/-- is a biopharmaceutical company focusing
on commercializing and developing its non-antibiotic anti-infective
products to address the unmet therapeutic needs of the global,
topical anti-infective market with its two distinct product
categories: the NEUTROX family of products and the AGANOCIDE
compounds. The Neutrox family of products includes AVENOVA for the
eye care market, NEUTROPHASE for wound care market, and CELLERX for
the aesthetic dermatology market. The Aganocide compounds, still
under development, have target applications in the dermatology and
urology markets.
Novabay reported a net loss and comprehensive loss of $6.54 million
for the year ended Dec. 31, 2018, compared to a net loss and
comprehensive loss of $7.40 million for the year ended Dec. 31,
2017. As of Sept. 30, 2019, the Company had $14.60 million in
total assets, $11.09 million in total liabilities, $584,000 in
series A non-voting convertible preferred stock, and total
stockholders' equity of $2.92 million.
OUM & CO. LLP, in San Francisco, California, the Company's auditor
since 2010, issued a "going concern" opinion in its report dated
March 29, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company has
experienced operating losses for most of its history and expects
expenses to exceed revenues in 2019. The Company also has
recurring negative cash flows from operations and an accumulated
deficit. All of these matters raise substantial doubt about its
ability to continue as a going concern.
OUTLOOK THERAPEUTICS: Board Sets Annual Meeting for March 19
------------------------------------------------------------
The Board of Directors of Outlook Therapeutics, Inc., has
established that the Company's 2020 Annual Meeting of Stockholders
will be held on Thursday, March 19, 2020. The record date for the
determination of stockholders of the Company entitled to receive
notice of and to vote at the 2020 Annual Meeting will be the close
of business on Friday, Feb. 7, 2020. Because the date of the 2020
Annual Meeting differs by more than 30 days from the anniversary
date of the 2019 Annual Meeting of Stockholders, which was held on
Sept. 12, 2019, the deadlines for any stockholder proposals
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
as amended and for any stockholder nomination or proposal outside
of Rule 14a-8, as listed in the Company's 2019 Proxy Statement on
Schedule 14A, as filed with the Securities and Exchange Commission
on Aug. 1, 2019, are no longer applicable.
To be considered for inclusion in this year's proxy materials for
the 2020 Annual Meeting, stockholder proposals must be submitted in
writing by Feb. 2, 2020, to the Company's Corporate Secretary at 7
Clarke Drive, Cranbury, New Jersey 08512. In addition to complying
with this deadline, stockholder proposals intended to be considered
for inclusion in the Company's proxy materials for the 2020 Annual
Meeting must also comply with the Bylaws and all applicable rules
and regulations promulgated by the SEC under the Exchange Act.
Additionally, any stockholder who intends to submit a proposal
regarding a director nomination or who intends to submit a proposal
regarding any other matter of business at the 2020 Annual Meeting
not to be included in the Company's proxy materials for the 2020
Annual Meeting, must also ensure that notice of any such nomination
or proposal (including any additional information specified in the
Bylaws) is received by the Corporate Secretary at the Company's
principal executive offices on or before the close of business on
Feb. 2, 2020.
About Outlook Therapeutics
Outlook Therapeutics, Inc., formerly known as Oncobiologics, Inc.
-- http://www.outlooktherapeutics.com/-- is a late clinical-stage
biopharmaceutical company working to develop the first FDA-approved
ophthalmic formulation of bevacizumab for use in retinal
indications, including wet AMD, DME and BRVO. If ONS-5010, its
investigational ophthalmic formulation of bevacizumab, is approved,
Outlook Therapeutics expects to commercialize it as the first and
only on-label approved ophthalmic formulation of bevacizumab for
use in treating retinal diseases in the United States, Europe,
Japan and other markets.
Outlook Therapeutics reported a net loss attributable to common
stockholders of $36.04 million for the year ended Sept. 30, 2019,
compared to a net loss attributable to common stockholders of
$48.02 million for the year ended Sept. 30, 2018. As of Sept. 30,
2019, the Company had $17.13 million in total assets, $27.90
million in total liabilities, $5.36 million in total convertible
preferred stock, and a total stockholders' deficit of $16.13
million.
KPMG LLP, in Philadelphia, Pennsylvania, the Company's auditor
since 2015, issued a "going concern" qualification in its report
dated Dec. 19, 2019, on the consolidated financial statements for
the year ended Sept. 30, 2019, citing that the Company has incurred
recurring losses and negative cash flows from operations and has a
stockholders' deficit of $16.1 million, $6.7 million of convertible
senior secured notes that become due on Dec. 22, 2019, $3.6 million
of unsecured indebtedness due on demand and $1.0 million of
unsecured indebtedness also due on demand, but subject to a
forbearance agreement through March 2020, that raise substantial
doubt about its ability to continue as a going concern.
PG&E CORP: Judge Rules on Dispute with Unsecured Creditors
----------------------------------------------------------
Ron E. Meisler, Esq., Christopher M. Dressel, Esq., and Zahed A.
Haseeb, Esq., of Skadden, Arps, Slate, Meagher & Flom LLP,
disclosed that on December 30, 2019, Judge Dennis Montali of the
United States Bankruptcy Court for the Northern District of
California, presiding over the PG&E bankruptcy case, issued a
memorandum decision regarding a dispute between the debtors (the
PG&E Debtors) and certain of their unsecured creditors -- including
the Official Committee of Unsecured Creditors, the Ad Hoc Committee
of Senior Unsecured Noteholders and the Ad Hoc Committee of Holders
of Trade Claims (together, the Unsecured Creditors) -- over the
applicable postpetition rate of interest for unsecured claims
against a solvent debtor. Judge Montali found that the Ninth
Circuit's decision in In re Cardelucci was binding on the
bankruptcy court and required the court to hold that postpetition
interest accrues at the federal judgment rate, not a contractual or
other rate of interest. In his decision, Judge Montali cited the
recent decision in In re Ultra Petroleum, in which the Fifth
Circuit examined the disallowance of claims for postpetition
interest and make-whole premiums. While remanding on certain
threshold issues, the Fifth Circuit held that the Bankruptcy Code's
disallowance of such claims would not constitute impairment under a
chapter 11 plan because the disallowance is imposed by statute, not
the plan. Judge Montali discussed this same principle -- that
statutory curtailment of rights is not plan impairment -- as an
independent basis for ruling in favor of the PG&E Debtors. Subject
to any appeals of this ruling, Judge Montali's decision results in
approximately $500 million less postpetition interest payable to
the holders of the relevant claims.
The PG&E Debtors' Plan and Supporting Argument
The PG&E Debtors filed a version of their chapter 11 plan of
reorganization on November 4, 2019 (the Plan), which listed
unsecured funded debt claims and general unsecured claims as
unimpaired, providing that they would be paid in full, in cash,
including postpetition interest at the federal judgment rate
provided in 28 U.S.C. Sec. 1961(a) (the Federal Judgment Rate). In
support of this treatment, the PG&E Debtors filed a brief
presenting the basis for using the Federal Judgment Rate
(calculated to be 2.59%) rather than contractual or state law
interest rates. The PG&E Debtors' argument relied heavily on the
Ninth Circuit's decision in In re Cardelucci, which they described
as unequivocally holding that, per Bankruptcy Code Section
726(a)(5), postpetition interest is payable to unsecured creditors
of a solvent debtor at the "legal rate," i.e. the Federal Judgment
Rate.
Section 502(b)(2), Section 726(a)(5) and Cardelucci
Bankruptcy Code Section 502(b)(2) disallowance of claims for
"unmatured interest" operates as a general prohibition of claims
for postpetition interest on unsecured claims.6 Courts, such as the
Ninth Circuit in Cardelucci, have found that Section 726(a)(5) of
the Bankruptcy Code -- which permits the "payment of interest at
the legal rate from the date of the filing of the petition" on any
claim against a solvent chapter 7 debtor -- provides an avenue for
the payment of postpetition interest even in the chapter 11
context.
Regarding the question of how much interest should be paid, the
PG&E Debtors insisted that the Cardelucci decision was dispositive.
In Cardelucci, the Ninth Circuit considered an objection from
unsecured creditors to the confirmation of a plan of reorganization
that proposed to pay postpetition interest on the objecting
creditors' litigation claim at the Federal Judgment Rate rather
than the much higher California statutory interest rate. The Ninth
Circuit ruled in favor of the debtor, finding that Section
726(a)(5)'s use of the phrase "interest at the legal rate"
demonstrates a Congressional intent to apply a single statutory
rate of interest -- namely, the Federal Judgment Rate -- when
calculating postpetition interest on unsecured claims against
solvent debtors. Moreover, the Ninth Circuit reasoned, the use of
the Federal Judgment Rate promotes uniformity across different
parts of federal law and ensures the equitable treatment of
creditors. Finally, while acknowledging that using the Federal
Judgment Rate could give debtors a windfall, the Ninth Circuit
rejected the objectors' appeal to equitable principles, finding the
phrase "interest at the legal rate" to be a "statutory term with a
definitive meaning that cannot shift depending on the interests
invoked by the specific factual circumstances before the court."
The Unsecured Creditors' Response
The Unsecured Creditors argued that their claims could not be
treated as unimpaired unless they received postpetition interest
according to the rates mandated by the applicable contracts or
state laws.8 In support of their position, the Unsecured Creditors
relied on Bankruptcy Code Section 1124(1), which states that a
claim is impaired unless "the plan . . . leaves unaltered the
legal, equitable, and contractual rights to which such claim . . .
entitles the holder of such claim." Relying on courts'
interpretation of the phrase "legal, equitable, or contractual
rights" in Section 1124(2), the Unsecured Creditors argued that the
analogous phrase in Section 1124(1) referred to state law rights,
concluding that their claims were impaired unless they received the
treatment they were entitled to under state law, which would
include payment of postpetition interest at the contractual rate,
if applicable.
According to the Unsecured Creditors, by paying postpetition
interest at the Federal Judgment Rate rather than the contractual
or state law (i.e. non-bankruptcy) rates, the Plan altered the
Unsecured Creditors rights and thus could not treat them as
unimpaired. In the Unsecured Creditors' view, because the Plan
impaired their claims, the PG&E Debtors were subject to Bankruptcy
Code Section 1129(b)'s requirement that a plan be "fair and
equitable" with respect to each impaired, non-accepting class of
claims. Under Section 1129(b), where an impaired class of
claimholders rejected a chapter 11 plan, junior classes --
including equity holders -- may not receive any plan recoveries on
account of their claims or interests. The PG&E Debtors' Plan
proposed to reinstate all equity interests, subject to dilution in
the case of one out of the four equity classes. To grant such
recoveries to equity holders and be "fair and equitable," the
Unsecured Creditors argued, the Plan needed to pay the Unsecured
Creditors' claims in full, including postpetition interest at
contractual rates. Whether through Section 1124(1) or 1129(b), the
Unsecured Creditors' position relied on the fact that the PG&E
Debtors cannot provide a recovery to equity holders while impairing
the claims of the Unsecured Creditors, unless the Unsecured
Creditors agreed to such a treatment and accepted the Plan.
The Unsecured Creditors argued that Cardelucci's holding should be
limited to the narrow issue of interpreting Section 726(a)(5).
Because the Ninth Circuit in Cardelucci did not address Section
1124 or 1129(b), the Unsecured Creditors argued that the decision
had "no bearing on the question of which postpetition interest rate
should be paid to make a class of unsecured claims unimpaired or
[whether] a plan [is] fair and equitable with respect to such
class." Ultimately the Unsecured Creditors relied on the notion
that the Bankruptcy Code's requirements for the non-impairment of
claims under a chapter 11 plan -- not Section 726(a)(5) -- were
determinative of the correct postpetition interest rate.
Judge Montali Finds Cardelucci Is Binding
Following briefing and oral argument on the issue, Judge Montali
ruled in favor of the PG&E Debtors, finding that Cardelucci was
binding. Contrary to the Unsecured Creditors' assertion that
Cardelucci was applicable only to the narrow issue of how to define
"legal rate," Judge Montali found that the Ninth Circuit's
unequivocal holding was that "unsecured creditors of a solvent
debtor will be paid the Federal Interest Rate whether their
prepetition contracts call for higher or lower rates, or applicable
state law judgment rates are higher, or there are no other
applicable rates to consider." He rejected the Unsecured
Creditors' argument that Cardelucci was inapplicable to the
question of how to render a claim unimpaired, finding that,
"[w]hile the [Ninth Circuit in Cardelucci] pinpointed a narrow but
important issue, it did not narrow the application of its holding,
which must be applied broadly given the structure of the Bankruptcy
Code and the clear and plain meaning of its applicable
provisions."10
Judge Montali's Independent Basis for Ruling
Although he could have reached his decision purely based on stare
decisis, Judge Montali noted that he would have reached the same
decision even if Cardelucci were inapplicable. In reaching an
independent basis for holding in favor of the PG&E Debtors, Judge
Montali relied on a "holistic" interpretation of the relevant
statutory provisions. Specifically, he found that Section 1124(1)
could not be the source of the right to postpetition interest in
light of Section 502(b)(2)'s general disallowance of claims for
unmatured interest. To find otherwise, Judge Montali reasoned,
"would require the court to ignore not only the plain words of the
statute but also the holistic notion of treating them as part of a
combined comprehensive instrument of definitions, applicability and
implementation."
Where Section 1124(1) specifically discusses impairment in the
context of rights being altered by a plan, the disallowance of
claims for postpetition interest is a function of Section
502(b)(2). "[T]he Unsecured Creditors' complaint is with Congress
and the Bankruptcy Code, not the drafters of a Plan. The Bankruptcy
Code, not the Plan, limits them to the Federal Interest Rate." As
such, Judge Montali found that Section 1124(1) is satisfied; the
Plan "leaves unaltered the legal, equitable, and contractual
rights" of the Unsecured Creditors to the extent permitted by the
Bankruptcy Code, rendering the Unsecured Creditors unimpaired.
Judge Montali also found considerations of whether a plan is "fair
and equitable" to be inapplicable, since Section 1129(b)
specifically refers to impaired, non-accepting classes of
claimholders. If, as Judge Montali determined, the Unsecured
Creditors are unimpaired classes, they are deemed to accept the
Plan.
To reinforce the view that statutory curtailment of rights does not
constitute impairment for the purposes of the Bankruptcy Code,
Judge Montali's decision refers to the two circuit courts that have
analyzed the issue previously. The Third Circuit in In re PPI
Enterprises considered the question of whether a landlord whose
lease termination claim was not paid in full due to the Bankruptcy
Code's limitation on landlord damages was impaired on account of
this limitation. More recently, the Fifth Circuit in In re Ultra
Petroleum considered the question of whether limitations on
make-whole payments and postpetition interest under Section
502(b)(2)'s disallowance of unmatured interest constituted
impairment. In both cases, the courts found that claims are not
rendered impaired by a plan when the plan in question limits the
claim only to the extent required to comply with the Bankruptcy
Code's disallowance provisions. Stated differently, "[w]here a
plan refuses to pay funds disallowed by the Code, the Code -- not
the plan -- is doing the impairing."
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered by
collective bargaining agreements with local chapters of three labor
unions: (i) the International Brotherhood of Electrical Workers;
(ii) the Engineers and Scientists of California; and (iii) the
Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities. Morrison &
Foerster LLP, as special regulatory counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PITBULL REALTY: Judge Denies Extension of Exclusivity Period
------------------------------------------------------------
Bankruptcy Judge Michael Fagone denied Pitbull Realty Group, Inc.'s
motion to extend its exclusivity period to Jan. 30.
About Pitbull Realty Group
Pitbull Realty Group, Inc. is a limited liability company engaged
in single asset real estate with principal place of business at 373
South Willow Street, Manchester, N.H. Pitbull Realty Group sought
Chapter 11 protection (Bankr. D.N.H. Case No. 19-10923) on June 28,
2019. The Debtor was estimated to have less than $1 million in
assets and liabilities. Judge Michael A. Fagone oversees the case.
Victor W. Dahar, P.A. is the Debtor's legal counsel.
PRECISION HOTEL: Exclusivity Period Extended Until May 4
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
extended to May 4 the period during which only Precision Hotel
Management Company can file a Chapter 11 plan.
Precision Hotel needs additional time to finalize its
reorganization plan and disclosure statement. The company and its
largest secured creditor, Centennial Bank, have been working
towards consensual plan treatment for the bank's claim. Centennial
Bank, however, has not yet been able to complete the appraisal of
its collateral.
About Precision Hotel Management Company
Precision Hotel Management Company is a privately held enterprise
that operates in the hospitality industry. Precision Hotel sought
Chapter 11 protection (Bankr. M.D. Fla. Case No. 19-08449) on Sept.
5, 2019. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Michael G. Williamson oversees the case. Blanchard
Law, P.A. is the Debtor's legal counsel.
QUIKRETE HOLDINGS: Moody's Rates Sr. Sec. Bank Credit Facility 'B1'
-------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Quikrete
Holdings, Inc's amended senior secured bank credit facility. The
proposed amendment will extend the company's term loan maturity
date to January 2027 from November 2023 and will reduce its
applicable LIBOR margin by 25bps. Upon closing of the proposed
transaction, the B1 rating assigned to the existing senior secured
bank credit facility will be withdrawn.
"With the proposed amendement, Quikrete will increase its financial
flexibility by extending its debt maturity by four years and
lowering its interest expense by 25bps," said Emile El Nems, a
Moody's VP-Senior Analyst. Following the closing of the
transaction, Quikrete will have no significant maturities due until
2027. Therefore Moody's believes the proposed amendment is credit
positive.
The B1 rating assigned to the amended senior secured credit
facility is on par with Quikrete's corporate family rating
reflecting its position as the preponderance of debt in Quikrete's
capital structure. The credit facility has a first lien on
substantially all of the non-ABL revolver (unrated) collateral of
Quikrete's assets and a second priority lien on collateral pledged
to the ABL revolver. The term loan amortizes 1% per year with a
bullet payment at maturity. Quikrete's subsidiaries will provide
lenders with upstream guarantees.
Assignments:
Issuer: Quikrete Holdings, Inc.
Senior Secured Bank Credit Facility, Assigned B1 (LGD4)
RATINGS RATIONALE
Quikrete's B1 corporate family rating reflects its solid operating
fundamentals driven by good profitability, free cash flow
generation and a stable construction industry. At the same time,
the rating takes into consideration the company's elevated
leverage, exposure to cyclical end markets, dependence on national
retail chains for distribution and its acquisitive nature. However,
the company's inorganic initiatives have added scale, increased
revenue diversification and improved profitability. At year-end
December 31, 2020, Moody's forecasts adjusted debt-to-EBITDA to be
at 4.0x. Governance aspects considered by Moody's include risks
associated with a company that is privately held and has grown
through a series of acquisitions. This risk is somewhat mitigated
by the controlling family's focus on execution, growing the
business through successful acquisitions and re-investing most of
the free cash flow back in the business, limiting themselves to
small dividend distributions.
The stable outlook reflects Moody's expectations that Quikrete will
grow its revenues organically, expand its profitability, and
generate free cash to de-lever its balance sheet. This is largely
driven by Moody's views that the US economy and US construction
industry will remain stable (growing slower for longer) and
supportive of the company's underlying growth drivers.
The rating could be upgraded if (all ratios include Moody's
standard adjustments):
-- Adjusted Debt-to-EBITDA is sustained below 4.0x
-- Permanent balance sheet debt reduction
-- Sustained organic growth
-- Ongoing positive trends in end markets
The rating could be downgraded if:
-- Adjusted Debt-to-EBITDA is sustained above 5.0x
-- Adjusted EBITA-to-Interest expense is sustained below 2.5x
-- The company's liquidity profile deteriorates
-- A sizeable debt financed acquisition is completed
The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.
Headquartered in Atlanta, Georgia, Quikrete is a North American
manufacturer and distributor of packaged concrete, cement mixes,
segmental concrete and ceramic tile installation products. In
addition, Quikrete is a leading designer, manufacturer and
distributor of engineered water infrastructure solutions for
domestic construction. The company is privately owned by the
Winchester family.
RENNOVA HEALTH: Sabby Healthcare Has 9.9% Stake as of Dec. 31
-------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Sabby Healthcare Master Fund, Ltd., Sabby Volatility
Warrant Master Fund, Ltd., Sabby Management, LLC, and Hal Mintz
disclosed that as of Dec. 31, 2019, they beneficially own
963,928,784 shares of common stock of Rennova Health, Inc., which
represents 9.99% of the shares outstanding.
Sabby Management, LLC and Hal Mintz do not directly own any shares
of Common Stock, but each indirectly owns 963,928,784 shares of
Common Stock. Sabby Management, LLC, a Delaware limited liability
company, indirectly owns 963,928,784 shares of Common Stock because
it serves as the investment manager of Sabby Healthcare Master
Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd., Cayman
Islands companies. Mr. Mintz indirectly owns 963,928,784 shares of
Common Stock in his capacity as manager of Sabby Management, LLC.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/TDmom5
About Rennova Health
Rennova Health, Inc. -- http://www.rennovahealth.com/-- operates
three rural hospitals in Tennessee and provides diagnostics and
supportive software solutions to healthcare providers.
Rennova Health reported a net loss to common shareholders of $245.9
million for the year ended Dec. 31, 2018, compared to a net loss to
common shareholders of $108.53 million for the year ended Dec. 31,
2017. As of Sept. 30, 2019, the Company had $16.57 million in
total assets, $76.46 million in total liabilities, $5.83 million in
redeemable preferred stock - Series I-1, $1.94 million in
redeemable preferred stock - Series I-2, and a total stockholders'
deficit of $67.66 million.
Haynie & Company, in Salt Lake City, Utah, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated Oct. 18, 2019, on the consolidated financial statements for
the year ended Dec. 31, 2018, citing that the Company has
significant net losses, cash flow deficiencies, negative working
capital and an accumulated deficit. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
ROLLS BROS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Rolls Bros Logistics Inc.
1107 Centennial Ave.
Albany, GA 31707
Business Description: Rolls Bros Logistics Inc. is a logistics
provider offering trucking and third-party
logistics management to provide long haul
and regional highway load transport,
domestic ports and international drayage
intermodal, less-than-truckload,
specialized, and flatbed services.
Chapter 11 Petition Date: January 24, 2020
Case No.: 20-10098
Court: United States Bankruptcy Court
Middle District of Georgia
Debtor's Counsel: Kenneth W. Revell, Esq.
ZALKIN REVELL, PLLC
2410 Westgate Dr., Suite 100
Albany, GA 31707
Tel: (229) 435-1611
E-mail: krevell@zalkinrevell.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by James Patrick Rolls, CEO.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/KqzqhC
RWP HOMES: Unsecureds Will be Paid in Full in Plan
--------------------------------------------------
RWP Homes, LLC, filed a First Amended Plan of Reorganization and a
Disclosure Statement.
The Plan provides for the treatment of claims against RWP under
three possible scenarios: lease of the Presidio Building (Section
II.C); refinance of RWP's debt (Section II.D); and sale of the
Presidio Building through the normal commercial sale or an auction
of the Presidio Building (Section II.E). If none of the
alternatives occur by May 5, 2020, then RWP will transfer the
Property to the current lender on or before May 15, 2020, or allow
the property (both the building and the one acre of land) to be
posted for foreclosure.
As to General Unsecured Claims in Class 7, RWP is only aware of one
general unsecured claim: the claim of Paschal Insurance Agency, LLC
for $19,033.00, as disclosed on Schedule E/F of RWP's bankruptcy
schedules. At this time, no proofs of claim have been filed
against RWP for unsecured debts. RWP will pay 100% of the amount
owed to Class 7, including any allowed, non-priority, unsecured
claims filed with the Bankruptcy Court before the bar date of Oct.
21, 2019. RWP will pay the total amount owed in 30 equal monthly
payments to Class 7 beginning on Sept. 15, 2020. Each monthly
payment will be divided among the creditors in Class 7 in
proportion to the amount of their respective claims.
RWP believes that the proposed Plan is feasible. Even if RWP is
unable to lease the Presidio Building, refinance its debt in the
next several months, or sell the building, the Plan provides for
auction of the Presidio Building as an ultimate solution. The
February appraisal of the Presidio Building valuing it at $6
million leaves little doubt that the building should sell at a high
enough auction price for RWP to pay its total liabilities of
approximately $3,650,000.
A full-text copy of the First Amended Disclosure Statement dated
Jan. 6, 2020, is available at https://tinyurl.com/yj8t82wb from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Reese Baker
Baker & Associates
950 Echo Lane, #300
Houston, Texas 77024
Tel: (713) 979-2279
Fax: (713) 869-9100
About RWP Homes LLC
RWP Homes, LLC, classified its business as Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
RWP Homes, LLC, filed a voluntary petition for relief on June 4,
2019, under Chapter 11 of Title 11, United States Bankruptcy Code
(Bankr. S.D. Tex. Case No. 19-33178). In the petition signed by
Kirk Paschal, president, the Debtor estimated $1 million to $10
million in both assets and liabilities. The case is assigned to
Judge Jeffrey P. Norman.
Reese W. Baker, Esq. at Baker & Associates LLP, is the Debtor's
counsel.
SARAR USA: Court Confirms Amended Chapter 11 Plan
-------------------------------------------------
Debtor Sarar USA, Inc. filed with the U.S. Bankruptcy Court for the
District of New Jersey the Amended Chapter 11 Plan of
Reorganization for Sarar USA, Inc. dated Nov. 22, 2019. On January
2, 2020, Judge John K. Sherwood confirmed the Plan.
The Plan is hereby modified as follows:
* "the Shareholders, Sarar Turkey," and "affiliates" will be
deleted from the first sentence of Section 9.04; “the Committee
and its members (in their capacity as such)," shall be deleted from
Section 9.05(a); "the affiliates," "principals, members,
professionals, advisors, accountants, attorneys, investment
bankers, consultants" and "agents, and other representatives" will
be deleted from Section 9.05(b).
* The unsecured claim of 50 Broad Street Inc. will be classified
as a Class 3 Claim and shall be Allowed in the amount of
$386,084.06.
* The definition of General Unsecured Claim Fund in Section 1.38
is amended to replace "$267,500" with "$275,000".
* The definition of Litigation Claim Fund in Section 1.45 is
amended to replace "$82,500" with "$75,000".
Consideration of the Macerich Cure Objection will be adjourned to a
later date to the extent it is not withdrawn, waived or settled.
All other objections that have not been withdrawn, waived or
settled, and all reservations of rights pertaining to confirmation
of the Plan included therein, are overruled on the merits for the
reasons set forth herein or stated on the record of the
Confirmation Hearing.
The Debtor and Reorganized Sarar may take all actions as may be
necessary or appropriate to effect any transaction described in,
approved by, contemplated by, or necessary to effectuate the Plan.
A full-text copy of the order dated Jan. 2, 2020, is available at
https://tinyurl.com/sds7ncv from PacerMonitor.com at no charge.
The Debtor is represented by:
LOEB & LOEB LLP
Schuyler G. Carroll
Daniel B. Besikof
Lindsay S. Feuer
345 Park Avenue
New York, NY 10154
Tel: (212) 407-4000
E-mail: scarroll@loeb.com
dbesikof@loeb.com
lfeuer@loeb.com
About Sarar USA Inc.
Sarar USA, Inc. -- https://www.sararonline.com/ -- is a retailer of
high-end men's apparel selling suits, tuxedos, shirts, jackets,
trousers, shoes, polo shirts, outerwear, knitwear and accessories.
The company is an affiliate of a company based in EskiSehir,
Turkey. Sarar USA was founded in 2001 and is headquartered in
Little Falls, New Jersey.
Sarar USA, Inc., d/b/a Sarar USA, sought Chapter 11 protection
(Bankr. D.N.J. Lead Case No. 18-24538) on July 20, 2018. In the
petition signed by CEO Emre Duru, Sarar USA estimated assets of $1
million to $10 million and liabilities of $10 million to $50
million.
The Hon. John K. Sherwood is the case judge.
The Debtor tapped Schuyler G. Carroll, Esq., and Jeffrey Vanacore,
Esq., of Perkins Coie LLP as counsel. Prime Clerk LLC is the
Debtor's claims agent.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors in the Debtor's Chapter 11 case. The Committee
selected Kelley Drye & Warren LLP as its legal counsel.
SCIENTIFIC GAMES: Sylebra Capital et al. Have 9.2% Stake
--------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Sylebra Capital Limited, Sylebra Capital Management
Limited, and Daniel Patrick Gibson disclosed that as of Dec. 31,
2019, they beneficially own 8,619,044 shares of common stock of
Scientific Games Corporation, which represents 9.2 percent of the
shares outstanding.
Sylebra HK may be deemed to beneficially own the Shares by virtue
of its position as the investment advisor to Sylebra Cayman in
relation to Sylebra Capital Partners Master Fund, Ltd and other
advisory clients. Sylebra Cayman serves as the investment manager
to Sylebra Capital Partners Master Fund, Ltd and is the parent of
Sylebra HK. Mr. Gibson owns 100% of the shares of Sylebra HK and
Sylebra Cayman. In such capacities, Sylebra HK, Sylebra Cayman,
and Mr. Gibson may be deemed to share voting and dispositive power
over the Shares held for the Sylebra Capital Partners Master Fund
Ltd and other advisory clients.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/sutBtE
About Scientific Games
Based in Las Vegas, Nevada, Scientific Games Corporation
(NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer
of technology-based products and services and associated content
for the worldwide gaming, lottery, social and digital gaming
industries. Its portfolio of revenue-generating activities
primarily includes supplying gaming machines and game content,
casino-management systems and table game products and services to
licensed gaming entities; providing instant and draw-based lottery
products, lottery systems and lottery content and services to
lottery operators; providing social casino solutions to retail
consumers and regulated gaming entities, as applicable; and
providing a comprehensive suite of digital RMG and sports wagering
solutions, distribution platforms, content, products and services.
Scientific Games reported a net loss of $352.4 million for the year
ended Dec. 31, 2018, compared to a net loss of $242.3 million for
the year ended Dec. 31, 2017. As of Sept. 30, 2019, Scientific
Games had $7.91 billion in total assets, $10.03 billion in total
liabilities, and a total stockholders' deficit of $2.12 billion.
SEABRAS 1 USA: Seeks to Hire Bracewell as Legal Counsel
-------------------------------------------------------
Seabras 1 USA, LLC, and Seabras 1 Bermuda Ltd. seek approval from
the U.S. Bankruptcy Court for the Southern District of New York to
hire Bracewell LLP as their legal counsel.
Bracewell will provide these services in connection with the
Debtors' Chapter 11 cases:
(a) advise the Debtors of their rights, powers and duties
under the Bankruptcy Code;
(b) perform legal services to administer the Debtors'
businesses;
(c) assist in the negotiation and documentation of financing
agreements and debt restructurings;
(d) advise the Debtors in the operation of their businesses to
ensure compliance with both the Bankruptcy Code and applicable laws
and regulations;
(e) counsel the Debtors, if necessary, in connection with the
formulation, negotiation and consummation of a sale of their
assets;
(f) review the nature and validity of agreements relating to
the Debtors' interests in real and personal property and advise the
Debtors of their corresponding rights and obligations;
(g) advise the Debtors in understanding their rights under the
Bankruptcy Code with respect to their ownership or participation in
foreign investments, partnerships and joint ventures;
(h) advise the Debtors concerning preference, avoidance,
recovery or other actions that they may take to collect and to
recover property for the benefit of the estates and their
creditors;
(i) prepare legal documents and review all financial reports
to be filed in the Debtors' bankruptcy cases;
(j) prepare responses to legal papers that may be filed and
served in the Debtors' bankruptcy cases;
(k) counsel the Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization;
(l) work with and coordinate efforts among other professionals
to avoid duplication of effort and guide them in the overall
framework of the Debtors' reorganization; and
(m) work with professionals retained by other parties to
structure a consensual plan of reorganization or other resolution
for the Debtors.
The hourly rates range from $685 to $1,225 for partners, $550 to
$1,200 for of counsel, $425 to $900 for associates, and $230 to
$375 for paralegals.
The primary bankruptcy attorneys anticipated to handle the cases
are:
Robert Burns, Esq. $1,193 per hour
Mark Dendinger, Esq. $1,100 per hour
Joshua Neifeld, Esq. $770 per hour
Finney Abraham, Esq. $565 per hour
The primary attorneys anticipated to work on litigation matters
are:
Rachel Goldman, Esq. $1,000 per hour
Keith Blackman, Esq. $925 per hour
Russell Gallaro, Esq. $845 per hour
Mark Wulfe, Esq. $815 per hour
Grace Condro, Esq. $675 per hour
Galen Stump, Esq. $515 per hour
Oliver Irwin, Esq., and Benjamin Pridgeon, Esq., attorneys at
Bracewell UK, will also provide assistance in matters related to
the Debtors' bankruptcy cases. Messrs. Irwin and Pridgeon will
charge $795 per hour and $675 per hour, respectively.
During the 90 days prior to the petition date, Bracewell and
Bracewell UK received total payments of $271,727. As of the
petition date, Bracewell held a retainer of $100,000.
Robert Burns, Esq., a partner at Bracewell, disclosed in court
filings that his firm is "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, the
attorney made the following disclosures:
(1) Bracewell and the Debtors have agreed to reduce Mr. Burns'
standard rate by 10 percent, and to reduce Mr. Irwin's and Mr.
Pridgeon's rate by approximately 23 percent.
Bracewell and the Debtors have not agreed to any variations from,
or alternatives to, the firm's standard billing arrangements. The
rate structure provided by the firm is appropriate and is not
significantly different from the rates that it charges for other
non-bankruptcy representations or the rates for other comparably
skilled professionals.
(2) No Bracewell professional has varied his rate based on the
geographic location of the Debtors' bankruptcy cases. The hourly
rates charged by the firm for representing the Debtors are
consistent with the rates that it charges other comparable Chapter
11 clients regardless of the location of the case.
(3) Bracewell represented the Debtors in the 12 months prior
to the petition date. During that representation, the firm raised
its billing rates as it does customarily from time to time. The
material financial terms for the pre-bankruptcy engagement remained
the same as the engagement was on an hourly basis.
(4) Bracewell will coordinate with the Debtors to develop a
prospective budget and staffing plan for the period beginning
December 2019 and ending January 2020.
Bracewell can be reached through:
Robert G. Burns, Esq.
Mark E. Dendinger, Esq.
Josh Neifeld, Esq.
Bracewell LLP
1251 Avenue of the Americas, 49th Floor
New York, NY 10020
Tel: (212) 508-6100
Fax: (212) 508-6101
E-mail: Bob.Burns@Bracewell.com
mark.dendinger@bracewell.com
josh.neifeld@bracewell.com
About Seabras 1 USA
Seabras 1 Bermuda LLC and its wholly-owned subsidiary Seabras 1 USA
LLC own a fiber optic cable system between New York USA and Sao
Paulo Brazil known as Seabras-1. Seabras-1 itself is fully operated
by Seaborn Networks, a developer-owner-operator of submarine fiber
optic cable systems.
Seabras 1 Bermuda and Seabras 1 USA filed Chapter 11 petitions
(Bankr. S.D.N.Y. Lead Case No. 19-14006) on Dec. 22, 2019. In the
petitions signed by CEO Larry W. Schwartz, the Debtors were
estimated to have $50 million to $100 million in assets and $100
million to $500 million in liabilities.
The Debtors tapped Bracewell LLP as bankruptcy counsel; Barbosa
Mussnich Aragao as local counsel; and Stretto as claims agent.
SFP FRANCHISE: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Two affiliates that simultaneously filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
SFP Franchise Corporation (Lead Case) 20-10134
300 Oak Bluff Lane
Goodlettsville, TN 37072
Schurman Fine Papers 20-10135
300 Oak Bluff Lane
Goodlettsville, TN 37072
Business Description: Schurman Retail Group --
http://www.srgretail.com-- was founded
in 1950 as an importer and wholesaler
of fine greeting cards offering its
products through wholesale, franchise,
retail, and online channels. The first
Papyrus store was opened in 1973 in
Berkeley, Califomia. Today, the company
operates Papyrus, Paper Destiny, and
American Greetings/Carlton Cards retail
stores. As of the Petition Date, the
Company owns and operates 254 retail stores
in the United States and Canada and is
headquartered in Goodlettsville, Tennessee.
Chapter 11 Petition Date: January 23, 2020
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. John T Dorsey
Debtor's Counsel: Adam G. Landis, Esq.
Matthew B. McGuire, Esq.
Nicolas E. Jenner, Esq.
LANDIS RATH & COBB LLP
919 Market Street, Suite 1800
Wilmington, Delaware 19801
Tel: (302) 467-4400
Fax: (302) 467-4450
E-mail: landis@lrclaw.com
mcguire@lrclaw.com
jenner@lrclaw.com
Debtors'
Claims &
Noticing
Agent: OMNI AGENT SOLUTIONS
https://is.gd/nlGoI8
Schurman Fine Papers'
Estimated Assets: $10 million to $50 million
Schurman Fine Papers'
Estimated Liabilities: $50 million to $100 million
SFP Franchise's
Estimated Assets: $10 million to $50 million
SFP Franchise's
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Craig M. Boucher, chief restructuring
officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://is.gd/d8Buo8
https://is.gd/ZJPcz2
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Jean Cultural & Trade Debts $1,674,721
Creative Co. LTD
Attn: Judy Chi
1F, No.95-6
Pao-Chung Rd.
Hsin Tien Dist,
New Taipei City,
Taiwan, R.O.C.
Tel: (866) 2-2917-1700 Ext. 1218
Fax: (866) 2-2917-2152
Email: Judy.Chi@JeanCo.com.tw
2. Crane & Co. lnc. Trade Debts $930,022
Attn: Paula Kordana
P.O. Box 258
Dalton, MA01227-0258
Tel: (413) 684-6258
Email: PMKordana@crane.com
3. UPS Trade Debts $447,366
Attn: Brad Thelen;
William Stonecipher
P.O. Box 894820
Los Angeles, CA 90189-4820
Tel: (713) 321-0431
Email: BThelen@UPS.com;
WStonecipher@UPS com
4. CMPCO lnc. Trade Debts $311,128
Attn: Pamela Duwe
6049 Hi-Tek Ct.
Mason, OH 45040
Tel: (800) 852-7677 Ext. 2128
Email: PDuwe@cmpaula.com
5. Cavallini Trade Debts $276,277
Attn: Jessica Tang
401 Forbes Blvd.
S. San Francisco, CA 94080
Tel: (850) 616-4500
Fax: (850) 616-4501
Email: JTang@cavallini.com
6. Rifle Paper Co. Trade Debts $184,087
Attn: Valerie Reynolds, Controller
558 W New England Ave.
Suite 150
Winter Park, FL327Bg
Tel: (407) 622-7679
Email: Valerie. Reynolds@riflepaperco.com
7. Five Star Carting Trade Debts $173,020
Attn: Anthony Tristani
5835 47th Street
Maspeth, NY 11378
Tel: (718) 886-4210
Email: sales@fivestarcarting.com
8. Leo Paper USA Trade Debts $163,539
Attn: Behzad Pakzad
1180 NW Maple St
Suite 102
Issaquah, WA 98027
Tel: (425) 646-8801
Fax: (425) 646-8805
Email: info@leousa.com
9. Preserve Brands Trade Debts $151,312
Attn: Susan Hickey, CEO
4 Nonvood St.
Winchester, MA 01890
Tel: (781) 218-2680
Fax: (781) 218-2728
Email: Shickey@preservebrands.com
10. Portico Designs LTD Trade Debts $135,275
Attn: Simon Harrison
7-9 North Parade Buildings
Bath, BA1 1NS
Tel: (44) 1225-329494
Fax: (44) 1225-329442
Email: sales@porticodesignscom
11. IG Design Group Americas lnc. Trade Debts $125,837
Attn: Serviss Scuozo
338 Industrial Rd
Midway, GA 31320
Tel: (912) 884-9702
Fax: (912) 884-5270
Email: sscuorzo@igdesigngroup-americas.com
12. Shishi US LLC Trade Debts $124,887
Attn: Iiris Haggi
240 Peachtree St.
NW#16-E-4
Atlanta, GA 30303
Tel: (310) 254-6684
Email: iiris@shishi.ee
13. Thoughtful Human lnc. Trade Debts $119,053
Attn: Ali O'Grady
1408 Bernard Way
Martinez, CA 94553
Tel: (925) 879-0906
Email: sales@thoughtfulhuman.co
14. Hartley & Marks-Paper Blanks Trade Debts $118,564
Attn. Vic Marks;
Helen Yen, Accountant
P.O. Box 84332
Seattle, WA 98124-5632
Tel: (800) 277-5887
Fax: (800) 707-5887
Email: Hyen@hartleyandmarks.com
15. Banyan Paper LLC Trade Debts $116,487
Attn: Eun Sun Cho
1250 Missouri St.
Unit 303
San Francisco, ÇA94107
Tel: (415) 683-6894
Email: Jimmy@goodpaper.com
16. Decor-Ware lnternational lnc. Trade Debts $114,598
Attn: Jennie Dao
10220 Fourth St.
Rancho Cucamonga, CA
Tel: (909) 614-1651 Ext. 216
Email: Jennie.Dao@decorwareinc.com
17. Bens Garden Trade Debts $114,332
Attn: Ben Busko
95 Audrey Ave.
Oyster Bay, NY 11711
Tel: (888) 922-7646
Fax: (887) 922-5002
Email: hello@bensgarden.com
18. Time Factory Publishing Trade Debts $111,336
Attn: Sarah M. Combs,
Office Manager
6355 Morenci Trail
Indianapolis, IN 46268
Tel: (317) 290-1333 Ext. 2728
Fax: (317) 290-1223
Email: Scombs@tfpublishing.com
19. Ray's Wrap Inc. Trade Debts $110,912
Attn: Kat Neufeld
3300 West Caster St.
Santa Ana, CA 92704
Tel: (800) 233-0070 Ext. 316
Fax: (800) 240-1666
Email: kat. neufeld@jilsonroberts.com
20. CBC Group Trade Debts $107,813
Attn: Cynthia Stevens
1013 Veterans Dr.
Lewisburgh, TN 37091
Tel: (800) 525-6986
Fax: (800) 525-7959
Email: Cstevenson@cbcgroup.com
21. lllume Trade Debts $101,721
Attn: Ellen Stathes
2000 W 94th st.
Bloomington, MN 55431
Tel: (866) 480-4551
Email: customers@illumecandles.com
22. Jamil Packaging Corp. Trade Debts $91,810
Attn: Joe Cavallo
1420 Industrial Dr.
Mishowaka, lN 46544
Tel: (574) 256-2600
Email: jcavallo@jamilpkg.com
23. Union Paper Box & Trade Debts $81,061
Printing Press
Attn: Phylis Wong;
Miu Tong
5-6/F Union lndustrial Building
27 KO Fai Rd,Yau Tong, Knowloon
Hong Kong
Tel: +852 2-772-8200
Fax: (852) 2-772-7683
Email: MiuTong@unionpaper.com.hk;
Phylis@Unionpaper.com.hk
24. Pictura, Inc. Trade Debts $78,147
Attn: Kathy McGovern,
Accounting Manager
4 Andrews Dr.
Woodland Park, NJ 07424
Tel: (973) 692-5448
Fax: (800) 453-3319
Email: Kathy.McGovern@picturausa.com
25. Grass Mountain Trade Debts $76,902
International Co LTD
Attn: Erica; Ken; Vickie
l0F-28, No. 6,
Lane 180, Sec 6
Mincyuan E. Rd,
Neihu Dist.
Taipei City 114
Tel: 866-2-2790-1896
Fax: 886-2-2790-1685
Email: UPHILL-A3@umail.hinet.net;
UPHILL-A2@humail.hinet.net
26. American Accessories Trade Debts $76,617
Attn: Tanya Ulloa
11100 Hope St.
Cypress, CA 90630
Tel: (949) 900-5910
Email: tvaughn@americanaccessoriesinc.com
27. Hachette Book Company (US) Trade Debts $73,907
Attn: Edward Dooley
P.O. Box 8828
JFK Station
Boston, M402114
Tel: (617) 263-1809
Fax: (617) 263-2867
Email: Edward. Dooley@hbgusa.com
28. Saroj Aimera Dba In Things Trade Debts $72,899
Attn: Roma Keniya Ajmera
56 Lafayette Ave.
Suite 210
White Plans, NY 10603
Tel: (914) 934-9006 Ext. 2011
Fax: (914) 934-9850
Email: roma@inthingscorp.com
29. D.M. Merchandising Inc. Trade Debts $72,847
Attn: David Redman,
Director of Operations
835 N. Church Ct.
Elmhurst, lL 60126
Tel: (800) 548-6784 Ext. 222
Fax: (630) 833-1230
Email: Dredman@dmmerch.com
30. La Bonne Vie Studio Trade Debts $69,159
Attn: Jenny Gregoire
648 Gould Ave.
Hermosa Beach, CA 90254
Tel: (310) 889-5320
Fax: (310) 889-5320
Email: LBVSTUDIO@verizon.com
SKY FINANCIAL: Sale of Trustee's Litigation Claims Affirmed
-----------------------------------------------------------
Michael L. Cook, Esq., of Schulte Roth & Zabel, on Jan. 22, 2020,
disclosed that a bankruptcy trustee may sell "avoidance powers to a
self-interested party that will abandon those claims, so long as
the overall value obtained for the transfer is appropriate," held
the U.S. Court of Appeals for the Ninth Circuit on Jan. 15, 2020.
Silverman v. Birdsell, 2020 WL 236777, *1 (9th Cir. Jan. 15, 2020).
Affirming the lower courts, the Ninth Circuit reaffirmed its prior
holding that "a bankruptcy trustee may sell an estate's avoidance
claims to a creditor when 'the creditor is pursuing interests
common to all creditors' and 'allowing the creditor to exercise
those powers will benefit the remaining creditors.'" Id., quoting
In re PRTC, Inc., 177 F.3d 774, 782 (9th Cir. 1999) and Briggs v.
Kent, 955 F.2d 623, 626 (9th Cir. 1992) ("If a creditor is pursuing
interests common to all creditors . . ., he may exercise the
trustee's avoiding powers."). In Silverman, the court-approved
sale was "expected to result in abandonment of the claims by
transferring them to the would-be defendant." Id.
Relevance
Courts and commentators have questioned the propriety of granting
Chapter 11 debtor in possession ("DIP") financing lenders a lien on
avoidance recovery actions (e.g., preferences, fraudulent
transfers), another form of "transfer" under Bankruptcy Code
("Code") Sec.101(54)(A) (". . . 'transfer' means . . . the creation
of a lien."). See In re Qualitech Steel Corp., 276 F.3d 245, 248
(7th Cir. 2001) ("courts do not favor using [Code] Sec.364 to give
pre-petition lenders security interests in the proceeds of
avoidance actions."); See also U.S. Bankruptcy Court Southern
District of New York Rule 4001-2(a), (g)(9) (movant must
"prominently highlight …" any provision in financing order for
liens on proceeds of avoidance action and any such provision will
be "deemed denied" unless "expressly and separately addressed by
the court"; Del. Bankr. L. R. 4001-2(a)(i)(D) (provisions that
grant immediately to the prepetition secured creditor liens on "the
debtor's claims and causes of action under [Code] Sec.Sec. 544,
545, 547, 548 and 549" must be "highlighted" and recite "whether
the proposed form of order and/or underlying cash collateral
stipulation or loan agreement contains any [such] provision . . .,
identify the location of any such provision in the proposed form of
order, cash collateral stipulation and/or loan agreement, and . . .
justify the inclusion of such provision"; "[i]n the absence of
extraordinary circumstances, the Court shall not approve interim
financing orders that include" liens on avoidance action
provisions); 3 Collier, Bankruptcy ¶364.06[6] at 364-31, 364-32
(16th ed. 2019) (". . . such liens encumber potentially significant
assets that would otherwise be available for the benefit of all
unsecured creditors" -- "can be controversial".).
Facts
The bankruptcy court had granted the motion of the trustee to sell
to K certain of his "avoidance claims and related litigation claims
held by" the debtor. Silverman, 2020 WL 236777, at *1. After the
district court affirmed, certain creditors appealed, arguing that
the sale was improper because K "is not pursing interests common to
all stakeholders and its use of those powers will not benefit all
stakeholders; . . . even if the sale was not improper on this
ground, the bankruptcy court abused its discretion because it
failed to fully evaluate [a] competing proposal . . ." Id.
Ninth Circuit Analysis
The Ninth Circuit reaffirmed its prior holding in PRTC but, said
the court, nothing in that decision "suggests that the analysis is
the same when, as here, the sale is expected to result in
abandonment of the claims by transferring them to the would-be
defendant." Id. Still, reasoned the court, "nothing in . . . PRTC
precludes transferring the trustee's avoidance powers to a
self-interested party that will abandon those claims, so long as
the overall value obtained for the transfer is appropriate." Id.
As the Bankruptcy Appellate Panel in another case recognized, "PRTC
stands for the simple proposition that a trustee's 'avoiding powers
may be transferred for a sum certain.'" In re Lahijani, 325B.R.282,
288 (BAP 9th Cir. 2005).
The Ninth Circuit stressed that it had "never categorically
prohibited the type of sale approved by the Bankruptcy Court here."
Silverman 2020 WL 236777 at *1. Nevertheless, when a bankruptcy
court "authorizes the sale of the estate's litigation claims to the
would be defendant of those claims, . . . [it] must analyze the
sale under both [Code] Sec.363(b)(1) and Fed. R. Bankr. P. Rule
9019." Id. at *2, citing Lahijani, 325B.R. at 288-91. When
applying Sec.363, the court must "assure that optimal value is
realized by the estate under the circumstances." Id. In comparing
K's cash bid for the claims to the objecting parties' motion, the
bankruptcy court had questioned whether any person "would succeed
in litigating the estate's claims," reflecting the conclusion that
the cash bid was superior. Id. According to the court, the
bankruptcy court had been familiar "with the extended litigation
history between the parties" and had carefully considered "the
relevant factors." Id.
The bankruptcy court had also considered all the relevant criteria
when applying Bankruptcy Rule 9019 for approval of a settlement. It
considered "(a) the probability of success in the litigation; (b)
the difficulties, if any, to be encountered in the matter of
collection; (c) the complexity of litigation involved, and the
expense, inconvenience and delay necessarily attending it; and (d)
the paramount interest of the creditors and a proper deference to
their reasonable views . . ." Id., quoting and citing In re Mickey
Thompson Entm't Grp., Inc., 292 B.R. 415, 420 (BAP 9th Cir. 2003)
and In re A&C Props., 784 F.2d 1377, 1382 (9th Cir. 1986).
Liens on Avoiding Power Actions
Silverman dealt with the outright sale of avoidance power claims.
Because granting a DIP lender a lien on these claims is also a
transfer under Code Sec.101(54)(A), Silverman is most relevant.
As noted, the Seventh Circuit had addressed the propriety of
granting a DIP lender lien on avoidance actions in Qualitech. In
that case, undersecured creditors received a replacement lien on
avoidance actions over the opposition of certain creditors. When
the debtor had filed its Chapter 11 Petition in March 1999, secured
lenders had liens on all the debtor's assets, securing about $265
million in claims. 276 F.3d at 246. Management estimated the value
of the debtor's assets at $225 million as of the bankruptcy filing.
Id. Although the lenders were undersecured and the debtor was
losing $10 million a month, certain of the lenders agreed to keep
the debtor operating with a $30 million super priority DIP
financing, which "required demoting the [preexisting] secured
lender's positon and substituting new security under [Code]
Sec.364(d)(1). The only other assets in sight were the proceeds of
preference recovery actions . . . [T]he bankruptcy court approved .
. . financing of $30 million, with super security and an award of
replacement security to the [primed] senior lenders, to the extent
that this was necessary to maintain their financial positon. No
one appealed or sought a stay." Id. at 247.
The debtor's assets were sold five months after the financing for
approximately $180 million. Id. The first $30 million went to the
DIP lenders, "leaving $150 million for the old secured creditors,"
who relied on the provision in the financing order giving them
"extra security -- first dibs in the preference recovery kitty,
which would make up some but far from all the loss." Id.
The creditors' committee in Qualitech argued, of course, that
pre-bankruptcy lenders should not receive security interests in the
proceeds of avoidance actions and that the secured lenders had
improved their positon as a result of the DIP financing. Id. at
248. "But the bankruptcy judge concluded that good money had been
thrown after bad, the secured lenders' position had been eroded by
at least the value of the anticipated preference recoveries, and
that they therefore were entitled to a substitute security interest
in that collateral." Id. at 247.
The district court and the court of appeals affirmed. The Seventh
Circuit held that it was "too late to tell" the primed lenders
"that they, rather than the unsecured creditors, must swallow" any
loss resulting from the DIP financing. Id. at 248. According to
the Seventh Circuit, "the secured creditors suffered a loss as a
result of the DIP financing," which "entitled [them] to" the
preference recoveries under Code Sec. 364(d)(1). Id. at 247. The
court's reasoning is significant:
. . . [At the beginning of the case] in March 1999 the secured
creditors had interests worth $225 million, yet . . . in August
1999 these interests were worth, at most, $197 million after paying
off the DIP lenders . . . [T]he secured lenders lost more than the
value of the avoidance actions on any calculation.
Id. at 248.
Comment
The Ninth Circuit took a sensible, pragmatic approach in Silverman.
Following general maxims to bar the transfer of litigation claims
-- whether by sale or by granting a lien -- would cause a debtor's
estate to lose value. So long as the court, after notice and a
hearing, is able to evaluate the business justification for the
proposed transfer, the "optimal" value of avoiding power actions
can be realized.
SOUTHERN MISSISSIPPI: Feb. 20, 2020 Disclosure Hearing Set
----------------------------------------------------------
On Dec. 31, 2019, debtor Southern Mississippi Funeral Service, LLC,
filed with the U.S. Bankruptcy Court for the Southern District of
Mississippi a disclosure statement and a plan.
On Jan. 2, 2020, Judge Katharine M. Samson ordered that:
* Feb. 20, 2020, at 1:30 p.m. is the hearing to consider the
approval of the disclosure statement to be held in the U.S.
Bankruptcy Court for the Southern District of Mississippi,
Bankruptcy Courtroom, 7th Floor, Dan M. Russell, Jr. Courthouse,
2012 15th Street, Gulfport, Mississippi.
* Feb. 13, 2020, is fixed as the last day for filing and serving
written objections to the disclosure statement in accordance with
Fed. R. Bankr. P. 3017(a).
A full-text copy of the order dated Jan. 2, 2020, is available at
https://tinyurl.com/yxxhbwtk from PacerMonitor.com at no charge.
About Southern Mississippi Funeral Service
Southern Mississippi Funeral Service, LLC -- https://www.smfs.us/
-- offers burial or graveside services, cremation services,
memorial services and specialty funeral services.
Southern Mississippi Funeral Service filed a voluntary petition
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case
No.18-51483) on July 31, 2018. In the petition signed by Stephen
A. Hilton, president, the Debtor was estimated to have $1 million
to $10 million in both assets and liabilities. Judge Katharine M.
Samson is the presiding judge. The Debtor tapped Sheehan Law Firm
as bankruptcy counsel; The Dummer Law Group as special counsel; and
Howell CPA, PA as accountant.
STATION CASINOS: Moody's Rates New $500MM Sr. Unsec. Notes B2
-------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Station Casinos
LLC's new proposed $500 million senior unsecured notes due 2028.
Station's B1 Corporate Family Rating, B1-PD Probability of Default
rating, Ba3 ratings on the company's revolver, term loan A and term
loan B, as well as the B3 rating on the company's existing $550
million 5% senior unsecured notes remain unchanged. The SGL-1
Speculative Grade Liquidity and stable outlook remain unchanged.
Proceeds from Station's new $500 million senior unsecured notes
will be used to repay a portion of amounts outstanding on the
company's senior secured credit facilities and pay related fees and
expenses.
Although the transaction is neutral from a leverage perspective,
the notes issuance supports Station's very good liquidity profile
by increasing availability under the company's revolving credit
facility.
Assignments:
Issuer: Station Casinos LLC
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
LGD Adjustments:
Issuer: Station Casinos LLC
Senior Unsecured Regular Bond/Debenture, Adjusted to (LGD5) from
(LGD6)
RATINGS RATIONALE
Station's B1 CFR is supported by stable operating results, limited
supply growth, solid margins, positive free cash flow before growth
capex and very good liquidity. Additionally, the solid economic
environment in the Las Vegas region bodes well for continued demand
in the locals market. Station is constrained by the slower than
expected ramp-up of the redeveloped Palms and Palace Station during
2019, its limited geographic diversification and earnings
vulnerability to changes in the general economic environment given
the highly discretionary nature of consumer spending on casino
gaming. As a casino operator, social risk is elevated, as evolving
consumer preferences related to entertainment choices and
population demographics may drive a change in demand away from
traditional casino-style gaming.
The company's financial policy targets to maintain lease-adjusted
debt/EBITDA between 4.5x-5.0x over the long term. Over the past two
years, significant investment spending on Palace Station and Palms
required revolver borrowings while construction disruption and a
slow ramp-up has been a drag on EBITDA. As a result, adjusted gross
debt/EBITDA will peak in FY19 at around 6.2x (low 6 times range).
Moody's estimates that adjusted gross debt-to-EBITDA leverage will
decline to between 5.3x - 5.5x in 2020 due to same store EBITDA
growth, contributions from Palace Station and Palms and repayment
of debt from free cash flow. The ratings take into account the
renewal risk related to the company's profitable Native American
management agreement with Graton Casino that expires in November
2020. This management agreement represents about 15% of EBITDAM
(EBITDA before management fees) and is not expected to be renewed.
Moody's expects the loss of this EBITDAM will be largely offset by
EBITDA growth given the solid operating environment and
contributions from Palms and Palace Station.
The stable rating outlook reflects favorable market and economic
conditions in the Las Vegas area that will support modest EBITDA
growth over the next year. Due to significant investment spending
and the ramp-up at both Palace Station and Palms, adjusted
debt/EBITDA will peak at in the low 6x range before declining
toward 5.3x in 2020 as free cash flow is applied to debt reduction
and EBITDA increase from completed projects.
Ratings could be upgraded if adjusted debt/EBITDA could be
sustained below 4.5x taking into account the potential loss of
EBITDA from existing management agreements with Native American
tribes. An upgrade would also require the company to have solid
liquidity and EBIT/interest coverage of at least 3.0x.
Ratings could be downgraded if monthly gaming revenue trends or
economic conditions in the Las Vegas metropolitan area were to show
signs of sustained deterioration. Additionally, ratings could be
lowered if adjusted debt/EBITDA is sustained above its peak
estimate of 6.2x or liquidity deteriorates.
Station Casinos LLC owns and operates ten major hotel/casino
properties and ten smaller casino properties (three of which are
50% owned) in the Las Vegas metropolitan area. Station manages the
Graton Resort & Casino located in Sonoma County, CA on behalf of
The Federated Indians of Graton Rancheria. The Graton contract has
a seven-year term and expires in November 2020. Station's net
revenue for the LTM period ended September 30, 2019 was $1.8
billion. Station is owned by Red Rock Resorts, Inc., a publicly
traded holding company whose principal asset is Station. Red Rock
Resorts owns Station Casinos LLC; The Fertitta family controls
approximately 86% of the voting rights and 40% of the economic
interest in Red Rock Resorts.
The principal methodology used in these ratings was Gaming Industry
published in December 2017.
SWEETPEA'S TABLE: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: SweetPea's Table, LLC
4646 Highway 305 North
Olive Branch, MS 38654
Business Description: SweetPea's Table, LLC is a privately held
company in Olive Branch, Mississippi.
Chapter 11 Petition Date: January 24, 2020
Court: United States Bankruptcy Court
Northern District of Mississippi
Case No.: 20-10326
Judge: Hon. Jason D. Woodard
Debtor's Counsel: Hugh H. Armistead, Esq.
ARMISTEAD LAW, PLLC
8925 Goodman Road
Olive Branch, MS 38654
Tel: 662-895-4844
- and -
Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: 601-427-0048
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Teresa A. Hughes, manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/KSuF1o
TIME DEFINITE: Plan to Pay Claims From Future Income
----------------------------------------------------
Time Definite Services, Inc. ("TDS") and Time Definite Leasing, LLC
("TDL") have proposed a Chapter 11 Plan.
Pursuant to the Plan, each Allowed Secured Claim, at the election
of the Debtor, may (i) remain secured by a Lien in property of the
Debtor retained by such Holder, (ii) paid in full in cash
(including allowable interest) over time or through a refinancing
or a sale of the respective Asset securing such Allowed Secured
Claim, (iii) offset against, and to the extent of, the Debtor’s
claims against the Holder, or (iv) otherwise rendered unimpaired as
provided under the Bankruptcy Code.
To the extent that the Holder of an Allowed Priority Claim receives
a Distribution under the Plan, such Holder should recognize such
Distribution as ordinary income and submit the appropriate
withholdings based on that Holder’s particular circumstances.
Pursuant to the Plan, each Holder of an Allowed Unsecured Claim
shall receive, on account of such Allowed Claim, a Pro Rata
Distribution of Cash from the Plan Trust.
The Debtor's Plan will be funded by the current and future income
generated by its regular operations.
A full-text copy of the Joint Disclosure Statement dated January 6,
2020, is available at https://tinyurl.com/yz43no9s from
PacerMonitor.com at no charge.
Attorney for Debtor:
Buddy D. Ford
Jonathan A. Semach
Heather M. Reel
9301 West Hillsborough Avenue
Tampa, Florida 33615-3008
Telephone #: (813) 877-4669
Office Email: All@tampaesq.com
E-mail: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
About Time Definite Services
Time Definite Services, Inc., is a provider of refrigerated
trucking and individualized logistics. Its affiliate Time Definite
Leasing LLC provides truck renting and leasing services.
Time Definite Services and Time Definite Leasing filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Lead Case No. 19-06564) on July 12, 2019. In the
petition signed by Michael Suarez, president, Time Definite
Services disclosed $21,898,781 in assets and $22,555,177 in
liabilities. Buddy D. Ford, P.A. is the Debtors' counsel.
TMS CONTRACTORS: Jan. 30, 2020 Disclosure Statement Hearing Set
---------------------------------------------------------------
A hearing to consider the approval of the Disclosure Statement
filed by Debtor TMS Contractors, LLC, will be held on Jan. 30,
2020, at 9:00 a.m., before the Honorable Judge Marvin Isgur at
Courtroom No. 404, 515 Rusk, Houston, TX 77002.
A full-text copy of the notice dated Jan. 2, 2020, is available at
https://tinyurl.com/yh2tgcu3 from PacerMonitor.com at no charge.
The Debtor is represented by:
Donald Wyatt, PC
Donald L. Wyatt, Jr.
26418 Oak Ridge Dr.
The Woodlands, TX 77380
Tel: 281-419-8733
Fax: 281-419-8703
E-mail: don.wyatt@wyattpc.com
About TMS Contractors
and TMSC Properties
TMS Contractors, LLC -- https://www.tmsbuilds.com/ -- is a general
contractor specializing in residential, commercial, and industrial
buildings. It can supply pre-engineered, conventional or hybrid
steel solutions for all building needs from complete design,
engineered and fabricated building systems to conventional steel
for building structure.
TMSC Properties, an affiliate of TMS Contractors, is primarily
engaged in leasing real estate properties.
TMS Contractors and TMSC Properties sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos. 19-33555 and
19-33556) on June 27, 2019. At the time of the filing, TMS
Contractors disclosed $6,031,517 in assets and $2,958,214 in
liabilities; and TMSC Properties disclosed $5,559,541 in assets and
$1,783,866 in liabilities.
The case has been assigned to Judge David R. Jones.
Attorney Donald Wyatt, PC is the Debtor's bankruptcy counsel.
TRANS WORLD: Agrees to Sell FYE Segment for $10 Million
-------------------------------------------------------
Trans World Entertainment has entered into a definitive asset
purchase agreement with a subsidiary of Sunrise Records and
Entertainment Ltd., the parent of Sunrise Records in Canada and HMV
Records in the United Kingdom, to sell substantially all of the
assets of the Company's wholly owned subsidiary, Record Town, Inc.
(the retail, music, film, video and popular business constituting
the For Your Entertainment segment of the Company's business), for
$10 million in cash, subject to a net inventory and other
adjustments, plus the assumption of certain liabilities.
The Transaction follows a process in which the Company's board of
directors explored strategic alternatives available to the Company.
The Transaction was unanimously approved by the Company's board of
directors.
The Transaction is expected to close in the first quarter of 2020,
subject to the satisfaction or waiver of customary closing
conditions set forth in the purchase agreement, including the
receipt of certain third party consents and the approval by at
least two-thirds of the Company's stockholders. The Company will
call and hold a stockholders' meeting seeking to obtain this
approval. The Company will use all of the proceeds from the
Transaction to repay outstanding indebtedness and satisfy other
unassumed liabilities.
The Company will continue to operate its business in the ordinary
course until the Transaction closes, and thereafter Sunrise
anticipates keeping substantially all of the current FTE employees.
Following the closing, the Company plans to focus on the operation
of its wholly owned subsidiary, etailz, Inc.
About Trans World
Headquartered in Albany, New York, Trans World Entertainment is a
multi-channel retailer, blending a 40-year history of entertainment
retail experience with digital marketplace expertise. Its brands
seamlessly connect customers with the most comprehensive selection
of music, movies, and pop culture products on the channel of their
choice. The Company has operated as a specialty retailer of
entertainment and pop culture merchandise with stores in the United
States and Puerto Rico, primarily under the name fye, for your
entertainment, and on the web at www.fye.com and
www.secondspin.com. Trans World Entertainment, which established
itself as a public company in 1986, is traded on the Nasdaq
National Market under the symbol "TWMC".
Trans World reported a net loss of $97.38 million for the year
ended Feb. 2, 2019, following a net loss of $42.55 million for the
year ended Feb. 3, 2018. As of Nov. 2, 2019, Trans World had
$141.48 million in total assets, $116.60 million in total
liabilities, and $24.87 million in total shareholders' equity.
The Company incurred net losses of $39.1 million and $31.7 million
for the thirty-nine weeks ended Nov. 2, 2019 and Nov. 3, 2018,
respectively, and has an accumulated deficit of $89.3 million at
Nov. 2, 2019. In addition, net cash used in operating activities
for the thirty-nine weeks ended Nov. 2, 2019 was $30.8 million.
Net cash used in operating activities for the thirty-nine weeks
ended Nov. 3, 2018 was $53.3 million. The Company also experienced
negative cash flows from operations during fiscal 2018 and 2017,
and expects to incur net losses in the foreseeable future. Based
on its recurring losses from operations, expectation of continuing
operating losses for the foreseeable future, and uncertainty with
respect to any available future funding, as well as the completion
of other strategic alternatives, the Company has concluded that
there is substantial doubt about its ability to continue as a going
concern for a period of one year after the date of filing of this
Quarterly Report on Form 10-Q (Dec. 23, 2019).
TRC FARMS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: TRC Farms, Inc.
DBA TRC Hog Farms
DBA TCR Hog Farms, Inc.
403 Loop Road
Cove City, NC 28523
Business Description: TRC Farms, Inc. is a privately held company
in the livestock farming industry.
Chapter 11 Petition Date: January 23, 2020
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 20-00309
Judge: Hon. Joseph N. Callaway
Debtor's Counsel: David J. Haidt, Esq.
AYERS & HAIDT, PA
PO Box 1544
307 Metcalf Street
New Bern, NC 28563
Tel: 252-638-2955
Email: davidhaidt@embarqmail.com
Total Assets: $3,846,275
Total Liabilities: $5,412,282
The petition was signed by Timmy R. Cox, president.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/UVEJ0W
WESTERN HOST: Plan & Disclosures Filing Deadline Extended
---------------------------------------------------------
On Jan. 2, 2020, Judge Brian K. Tester granted the motion filed by
Debtor Western Host Associates, Inc. d/b/a Plaza De Armas Hotel
requesting extension of time of 46 days to file the Disclosure
Statement and Plan of Reorganization.
A full-text copy of the order dated Jan. 2, 2020, is available at
https://tinyurl.com/tpsn24v from PacerMonitor.com at no charge.
About Western Host Associates
Western Host Associates, Inc., owns a four-story commercial hotel
building located at 202 San Jose Street, Old San Juan, Puerto Rico.
The hotel is currently non-operational and is valued by the company
at $1.35 million.
The company previously sought bankruptcy protection on Nov. 14,
2012 (Bankr. D.P.R. Case No. 12-09093) and on May 19, 2011 (Bankr.
D.P.R. Case No. 11-04152).
Western Host Associates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 18-02696) on May 15, 2018.
In the petition signed by Luis Alvarez, president, the Debtor
disclosed $1.36 million in assets and $4.82 million in
liabilities.
Judge Brian K. Tester oversees the case.
The Debtor tapped Gratacos Law Firm, PSC, as its legal counsel and
the Law Offices of Jose R. Olmo-Rodriguez, as special counsel.
WINDSTREAM HOLDINGS: Paul Weiss 3rd Update on First Lien Group
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP
submitted a third amended verified statement to update the members
of the First Lien Ad Hoc Group in the Chapter 11 cases of
Windstream Holdings, Inc., et al.
The ad hoc committee of certain unaffiliated holders of loans or
other indebtedness issued under:
(i) that certain Sixth Amended and Restated Credit Agreement,
originally dated as of July 17, 2006, amended and restated as of
April 24, 2015 and subsequently amended, among Windstream Services,
LLC, the other loan parties party thereto, the lenders from time to
time party thereto, J.P. Morgan Chase Bank, N.A., as administrative
agent and collateral agent and the other parties thereto; and
(ii) that certain Indenture for certain 8.625% notes due 2025
dated as of November 6, 2017, by and among Windstream Services, LLC
and Windstream Finance Corp., the guarantor party thereto, Delaware
Trust Company, as trustee and notes collateral agent and the
holders thereunder.
In February 2019, certain members of the First Lien Ad Hoc Group
retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent
them in connection with a potential restructuring involving the
above-captioned debtors and debtors-in-possession. From time to
time thereafter, certain additional holders of First Lien
Obligations joined the First Lien Ad Hoc Group.
On April 8, 2019, Paul, Weiss filed the Verified Statement of the
First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019. On July
12, 2019, Paul, Weiss filed the Amended Verified Statement of the
First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019. On Nov.
19, 2019, Paul, Weiss filed the Second Amended Verified Statement
of the First Lien Ad Hoc Group Pursuant to Bankruptcy Rule 2019.
Since then, the members of the First Lien Ad Hoc Group and the
disclosable economic interests in relation to the Debtors that such
members hold or manage have changed. Accordingly, pursuant to
Bankruptcy Rule 2019, Paul, Weiss submits this Third Amended
Statement.
As of the date of this Third Amended Statement, Paul, Weiss
represents only the members of the First Lien Ad Hoc Group in their
respective capacities as holders of First Lien Obligations, and
does not represent or purport to represent any other entities with
respect to the Debtor's chapter 11 cases. In addition, each member
of the First Lien Ad Hoc Group does not purport to act, represent
or speak on behalf of any other entity in connection with the
Debtor's chapter 11 cases.
As of Jan. 21, 2020, members of the First Lien Ad Hoc Group and
their disclosable economic interests are:
(1) CarVal Investors
461 Fifth Avenue
New York, NY 10017
* Revolving Credit Facility Obligations: $19,950,000
* DIP Obligations: $9,000,000
(2) Franklin Mutual Advisers, LLC
101 John F. Kennedy Parkway
Short Hills, NJ 07078
* Term Loan Obligations: 43,089,000
* Revolving Credit Facility Obligations: $192,449,530
(3) HBK Master Fund L.P.
2300 North Field Street, Suite 2200
Dallas, Texas 75201
* Term Loan Obligations: $49,179,336
* First Lien Note Obligations: $84,897,000
(4) Oaktree Capital Management, L.P.
333 South Grand Avenue, 28th Floor
Los Angeles, CA 90071
* Term Loan Obligations: $188,107,039
* Revolving Credit Facility Obligations: $90,495,596
* First Lien Note Obligations: $6,126,000
(5) Pacific Investment Management Company LLC
650 Newport Center Drive
Newport Beach, CA 92660
* Term Loan Obligations: $375,018,676
Counsel to the First Lien Ad Hoc Group can be reached at:
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Andrew N. Rosenberg, Esq.
Brian S. Hermann, Esq.
Samuel E. Lovett, Esq.
1285 Avenue of the Americas
New York, NY 10019-6064
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
E-mail: arosenberg@paulweiss.com
bhermann@paulweiss.com
slovett@paulweiss.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/JS6Zrv
About Windstream Holdings
Windstream Holdings, Inc., and its subsidiaries provide advanced
network communications and technology solutions for businesses
across the United States. They also offer broadband, entertainment
and security solutions to consumers and small businesses primarily
in rural areas in 18 states.
Windstream Holding Inc. and its subsidiaries filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25,
2019.
The Debtors had total assets of $13,126,435,000 and total debt of
$11,199,070,000 as of Jan. 31, 2019.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as counsel; PJT Partners LP as financial advisor
and investment banker; Alvarez & Marsal North America LLC as
restructuring advisor; and Kurtzman Carson Consultants as notice
and claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on March 12, 2019. The committee tapped
Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP as
its financial advisor, and Perella Weinberg Partners LP as
investment banker.
YODEL TECHNOLOGIES: Case Summary & 11 Unsecured Creditors
---------------------------------------------------------
Debtor: Yodel Technologies, LLC
989 Georgia Ave., 1st Floor
Palm Harbor, FL 34683
Business Description: Yodel Technologies, LLC --
https://www.yodelvoice.com -- is a Florida-
based telemarketing company that develops
and uses soundboard technology in
combination with live agents to enhance
interactions with prospective clients or
customers.
Chapter 11 Petition Date: January 23, 2020
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 20-00540
Debtor's Counsel: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
E-mail: All@tampaesq.com
Total Assets: $3,126,219
Total Liabilities: $6,027,981
The petition was signed by Robert Pulsipher, managing member &
COO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://is.gd/GwzLRa
[*] Carl Marks Advisors Promotes Marye Moran to Vice President
--------------------------------------------------------------
Carl Marks Advisors, a leading investment bank providing financial
and operational advisory services to middle market companies, on
Jan. 15 announced the promotion of Marye Moran to Vice President.
Ms. Moran has held roles of increasing responsibility within Carl
Marks Advisors since joining in 2015. She has provided operational
consulting and investment banking services with a number of client
engagements, including work with Healthcare, Retail, Construction
Services, and Education clients. In her new role, she will be
advising management teams and company owners to develop financial
forecasts, design and execute on profit-improvement plans, and
advise on liquidity planning. She will also be a valuable team
leader on strategic capital raises, debt refinancing, and corporate
restructurings.
"Marye has truly grown into and beyond her role here at Carl Marks
Advisors," commented Duff Meyercord, Managing Partner at Carl Marks
Advisors. "Her smart, detail-oriented approach to every
challenging scenario she has encountered has served her well. We
are thrilled to help her grow her career, and look forward to much
more excellent attention to all our clients under her team
leadership."
Prior to joining Carl Marks Advisors, Ms. Moran served as an
Associate at Morgan Stanley working in leveraged loan underwriting
and portfolio management. Ms. Moran graduated cum laude from
Boston College. She is a FINRA General Securities Representative
and a Chartered Financial Analyst.
About Carl Marks Advisors
Carl Marks Advisory Group LLC (Carl Marks Advisors) is a New
York-based investment bank that provides financial and operational
advisory services. Its integrated client service teams unite
industry, operations, and transaction expertise to create effective
solutions in complex situations.
Securities are offered through Carl Marks Securities LLC, member
FINRA and SIPC. Additional information about Carl Marks Advisory
Group LLC and Carl Marks Securities LLC is available at
http://www.carlmarksadvisors.com/and
http://www.carlmarkssecurities.com/
[*] Lisa Price Joins A&M's Restructuring & Turnaround Practice
--------------------------------------------------------------
Leading global professional services firm Alvarez & Marsal (A&M) on
Dec. 9 disclosed Lisa Price has joined A&M as Managing Director in
Atlanta in its Restructuring & Turnaround practice.
Ms. Price will leverage her wealth of global restructuring and
leadership experience to strengthen the firm's turnaround and
restructuring service offerings.
For over two decades, Ms. Price has led and executed business
development initiatives across the globe, specializing in mergers
and acquisitions across the industrial, energy, and oil and gas
industries. She also has deep experience and expertise in strategy
and business operations.
"Lisa has a track record of demonstrated success in spearheading
transformational business growth in the United States and abroad,"
said Jeff Stegenga, Managing Director and leader of A&M's North
American Restructuring practice. "The experience and skillset she
brings to us as a seasoned leader will be instrumental in expanding
and strengthening our restructuring and turnaround service
capabilities."
Prior to joining A&M, Ms. Price worked at General Electric Company
(GE), where she held several leadership roles in the U.S. and
China. Most recently, as General Manager of Business Development,
she was responsible for driving global business development
activities across a portfolio of businesses, including the Power
Conversion, Grid, Industrial Solutions, Automation & Controls
Steam, Nuclear and Gas franchises. She was instrumental in closing
many dispositions and acquisitions while at GE, including recent
transactions valued well over $3 billion.
"Lisa's appointment helps us build a more diverse team of industry
leaders who have the expertise and experience needed to respond to
the evolving dynamics and changing demands of the industry. Her
vast energy sector experience and distinguished reputation as a
leader aligns with A&M's heritage of operational excellence and
commitment to creating value for clients," added
Tony Alvarez, co-founder of Alvarez & Marsal.
Ms. Price began her career at Freeport-McMoran Inc., where she
served in several operating roles in power plant, maintenance and
environmental management. She then joined Goldman Sachs & Co. in
the Mergers & Acquisitions group and later the Natural Resources
Group, advancing to Vice President before joining Deutsche Bank
Securities Inc. as Director in the Mergers & Acquisitions Group
focused on energy, utilities and chemicals. In her nearly 10 years
in investment banking, Ms. Price executed acquisitions,
divestitures, debt, equity and restructuring transactions for
clients across industries, with an increasing focus on the energy
sector over time.
Ms. Price earned a bachelor's degree in chemical engineering from
Virginia Polytechnic Institute and State University and an MBA from
Tulane University. She serves on the Virginia Tech College of
Engineering International Programs Alumni Planning Board, the
Virginia Tech Department of Chemical Engineering Advisory Board and
received the 2017 Virginia Tech College of Engineering
Distinguished Alumni award.
About Alvarez & Marsal
Companies, investors and government entities around the world turn
to Alvarez & Marsal (A&M) when conventional approaches are not
enough to drive change and achieve results. Privately held since
its founding in 1983, A&M is a leading global professional services
firm that provides advisory, business performance improvement and
turnaround management services.
With over 4,000 people across four continents, we deliver tangible
results for corporates, boards, private equity firms, law firms and
government agencies facing complex challenges. Its senior leaders,
and their teams, help organizations transform operations, catapult
growth and accelerate results through decisive action. Comprised
of experienced operators, world-class consultants, former
regulators and industry authorities, A&M leverages its
restructuring heritage to turn change into a strategic business
asset, manage risk and unlock value at every stage of growth. To
learn more, visit: AlvarezandMarsal.com.
[*] Portage Point Continues to Expand Restructuring Practice
------------------------------------------------------------
Portage Point Partners, LLC, a business advisory and interim
management firm that partners with companies and their stakeholders
to navigate complexity, transition and underperformance, on Jan. 21
disclosed that it has recently added Jeff Gasbarra and Alyssa
Lozynski. These additions provide further depth to support Portage
Point's growing client base and closely follow the hiring of Joseph
Shannon and Charles Wiltgen.
Mr. Gasbarra brings to the team over 10 years of operational,
financial and strategic expertise, advising both distressed and
healthy businesses through performance improvement and
transformational change. Jeff joins Portage Point from
AlixPartners where he advised clients both in interim management
roles and as a financial advisor. Prior to AlixPartners, he served
as an advisor to companies in need of operational improvements,
balance sheet restructuring, dispute advisory and turnaround
management at Development Specialists, Inc and FTI Consulting. Mr.
Gasbarra received a Masters in Accounting and a Minor in Finance
from the Gies College of Business at University of Illinois and is
a Certified Public Accountant and Certified Insolvency and
Restructuring Advisor.
Mrs. Lozynski joins Portage Point from Alvarez & Marsal's
Transaction Advisory Group where she provided financial due
diligence support for private equity and strategic parties during
the pre-close diligence stages. Prior to joining Alvarez & Marsal,
Alyssa was a Senior Associate at Deloitte & Touche within the M&A
Transaction Services Group. She has worked on over 100
transactions primarily in the Chemical, Retail, Services,
Automotive, Life Sciences / Pharmaceutical, Aerospace and Defense,
and other Consumer Product industries with purchase prices ranging
from $50 million to over $4 billion. Mrs. Lozynski graduated from
the Gies College of Business at the University of Illinois with a
Masters in Accounting and a Minor in Finance and is a Certified
Public Accountant.
"We are excited to welcome Jeff, Alyssa, Joe and Charlie to the
Portage Point team and remain encouraged by our continued ability
to attract talent at the highest level," said Matthew Ray, Founder
& Managing Partner of Portage Point. "These additions add
considerable depth to our platform and further evidence the highly
selective talent criteria that underpins our commitment to deliver
market leading transformation and restructuring services."
About Portage Point Partners
Portage Point -- http://www.portagepointpartners.com/-- is a
business advisory and interim management firm that partners with
companies and their stakeholders navigating complexity, transition
and underperformance. The firm is comprised of an operationally
oriented team encompassing a broad range of expertise built to
maximize value and align stakeholder interests while guiding
businesses through the most urgent and complex challenges ranging
from performance improvement to accelerated transformation to
complex financial restructuring.
Since its founding in 2016, industry-leading organizations have
honored Portage Point with numerous transaction and individual
awards.
[^] BOND PRICING: For the Week from January 20 to 24, 2020
----------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
24 Hour Fitness
Worldwide Inc HRFITW 8.000 46.339 6/1/2022
24 Hour Fitness
Worldwide Inc HRFITW 8.000 46.798 6/1/2022
Alta Mesa Holdings LP /
Alta Mesa Finance
Services Corp ALTMES 7.875 1.500 12/15/2024
American Campus Communities
Operating Partnership LP ACC 3.350 100.908 10/1/2020
Approach Resources Inc AREX 7.000 1.863 6/15/2021
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bon-Ton Department
Stores Inc/The BONT 8.000 8.547 6/15/2021
Bristow Group Inc BRS 6.250 5.999 10/15/2022
Bristow Group Inc BRS 4.500 18.142 6/1/2023
California Resources Corp CRC 8.000 36.767 12/15/2022
California Resources Corp CRC 5.500 45.607 9/15/2021
California Resources Corp CRC 8.000 38.220 12/15/2022
Chaparral Energy Inc CHAP 8.750 39.967 7/15/2023
Chaparral Energy Inc CHAP 8.750 39.857 7/15/2023
Chukchansi Economic
Development Authority CHUKCH 9.750 49.990 5/30/2020
Chukchansi Economic
Development Authority CHUKCH 10.250 50.000 5/30/2020
DFC Finance Corp DLLR 10.500 67.125 6/15/2020
DFC Finance Corp DLLR 10.500 67.125 6/15/2020
Dean Foods Co DF 6.500 19.000 3/15/2023
Dean Foods Co DF 6.500 19.750 3/15/2023
Delphi Financial Group Inc TOMARI 7.875 99.775 1/31/2020
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 2.750 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 1.750 2/15/2025
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 6.375 0.500 6/15/2023
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 3.215 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 2.952 2/15/2025
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 47.283 7/15/2023
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 47.436 7/15/2023
Federal Farm Credit
Banks Funding Corp FFCB 2.520 99.901 6/24/2026
Federal Home Loan Banks FHLB 1.940 99.560 4/27/2022
Federal Home Loan Banks FHLB 1.800 99.410 4/20/2022
Federal Home Loan Banks FHLB 2.500 99.652 4/27/2026
Federal Home Loan Banks FHLB 2.730 98.934 6/16/2028
Federal Home Loan Banks FHLB 2.040 99.474 1/27/2023
Federal Home Loan Banks FHLB 2.100 99.625 10/26/2023
Federal Home Loan
Mortgage Corp FHLMC 2.000 99.620 7/27/2021
Federal Home Loan
Mortgage Corp FHLMC 2.000 99.659 7/26/2021
Federal Home Loan
Mortgage Corp FHLMC 2.000 99.558 10/27/2021
Federal Home Loan
Mortgage Corp FHLMC 2.000 99.564 10/26/2021
Federal Home Loan
Mortgage Corp FHLMC 2.000 99.616 7/27/2021
Federal Home Loan
Mortgage Corp FHLMC 2.125 99.561 4/27/2022
Federal Home Loan
Mortgage Corp FHLMC 2.150 99.544 7/27/2022
Federal Home Loan
Mortgage Corp FHLMC 2.050 99.088 7/26/2022
Federal Home Loan
Mortgage Corp FHLMC 1.750 99.707 10/26/2020
Federal Home Loan
Mortgage Corp FHLMC 2.000 99.530 4/27/2021
Federal Home Loan
Mortgage Corp FHLMC 1.875 99.529 4/26/2021
Federal Home Loan
Mortgage Corp FHLMC 2.070 99.533 7/26/2022
Ferrellgas Partners LP /
Ferrellgas Partners
Finance Corp FGP 8.625 47.376 6/15/2020
Ferrellgas Partners LP /
Ferrellgas Partners
Finance Corp FGP 8.625 54.086 6/15/2020
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Foresight Energy LLC /
Foresight Energy
Finance Corp FELP 11.500 2.362 4/1/2023
Foresight Energy LLC /
Foresight Energy
Finance Corp FELP 11.500 2.960 4/1/2023
Frontier
Communications Corp FTR 8.500 46.872 4/15/2020
Frontier
Communications Corp FTR 10.500 45.110 9/15/2022
Frontier
Communications Corp FTR 7.125 46.801 1/15/2023
Frontier
Communications Corp FTR 8.750 45.041 4/15/2022
Frontier
Communications Corp FTR 6.250 44.985 9/15/2021
Frontier
Communications Corp FTR 9.250 45.554 7/1/2021
Frontier
Communications Corp FTR 8.875 44.093 9/15/2020
Frontier
Communications Corp FTR 10.500 45.104 9/15/2022
Frontier
Communications Corp FTR 10.500 45.104 9/15/2022
Global Eagle
Entertainment Inc ENT 2.750 43.523 2/15/2035
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
High Ridge Brands Co HIRIDG 8.875 0.314 3/15/2025
Hornbeck Offshore
Services Inc HOSS 5.000 25.085 3/1/2021
Jonah Energy LLC / Jonah
Energy Finance Corp JONAHE 7.250 28.000 10/15/2025
Jonah Energy LLC / Jonah
Energy Finance Corp JONAHE 7.250 27.833 10/15/2025
Lehman Brothers
Holdings Inc LEH 6.000 0.404 7/20/2029
MAI Holdings Inc MAIHLD 9.500 21.000 6/1/2023
MAI Holdings Inc MAIHLD 9.500 20.305 6/1/2023
MAI Holdings Inc MAIHLD 9.500 20.300 6/1/2023
MF Global Holdings Ltd MF 6.750 15.625 8/8/2016
MF Global Holdings Ltd MF 9.000 15.607 6/20/2038
Mashantucket Western
Pequot Tribe MASHTU 7.350 16.000 7/1/2026
McDermott Technology
Americas Inc / McDermott
Technology US Inc MDR 10.625 12.661 5/1/2024
McDermott Technology
Americas Inc / McDermott
Technology US Inc MDR 10.625 12.678 5/1/2024
Murray Energy Corp MURREN 12.000 0.001 4/15/2024
Murray Energy Corp MURREN 12.000 0.901 4/15/2024
NVA Holdings Inc NATVET 6.875 108.293 4/1/2026
NVA Holdings Inc NATVET 6.875 108.356 4/1/2026
NWH Escrow Corp HARDWD 7.500 51.752 8/1/2021
NWH Escrow Corp HARDWD 7.500 51.752 8/1/2021
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.000 32.959 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.750 33.005 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.000 32.767 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.750 32.633 10/25/2024
New Gulf Resources LLC/
NGR Finance Corp NGREFN 12.250 3.928 5/15/2019
Northwest Hardwoods Inc HARDWD 7.500 45.000 8/1/2021
Northwest Hardwoods Inc HARDWD 7.500 50.281 8/1/2021
Optimas OE Solutions
Holding LLC / Optimas
OE Solutions Inc OPTOES 8.625 60.250 6/1/2021
Optimas OE Solutions
Holding LLC / Optimas
OE Solutions Inc OPTOES 8.625 60.004 6/1/2021
Partners Healthcare
System Inc PARHC 3.443 102.043 7/1/2021
Pioneer Energy Services Corp PESX 6.125 23.807 3/15/2022
Powerwave Technologies Inc PWAV 3.875 0.019 10/1/2027
Powerwave Technologies Inc PWAV 3.875 0.019 10/1/2027
Pyxus International Inc PYX 9.875 65.126 7/15/2021
Pyxus International Inc PYX 9.875 54.000 7/15/2021
Pyxus International Inc PYX 9.875 65.831 7/15/2021
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rolta LLC RLTAIN 10.750 10.384 5/16/2018
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.125 16.906 11/1/2020
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.375 17.000 11/1/2021
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.125 16.906 11/1/2020
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.375 17.000 11/1/2021
Sanchez Energy Corp SNEC 7.750 4.750 6/15/2021
Sanchez Energy Corp SNEC 6.125 4.750 1/15/2023
Sears Holdings Corp SHLD 8.000 1.300 12/15/2019
Sears Holdings Corp SHLD 6.625 11.875 10/15/2018
Sears Holdings Corp SHLD 6.625 12.187 10/15/2018
Sears Roebuck
Acceptance Corp SHLD 7.500 1.088 10/15/2027
Sears Roebuck
Acceptance Corp SHLD 7.000 0.833 6/1/2032
Sears Roebuck
Acceptance Corp SHLD 6.500 0.787 12/1/2028
Sears Roebuck
Acceptance Corp SHLD 6.750 0.656 1/15/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
Stearns Holdings LLC STELND 9.375 45.412 8/15/2020
Stearns Holdings LLC STELND 9.375 45.412 8/15/2020
Summit Midstream
Partners LP SMLP 9.500 51.000 N/A
Tapstone Energy LLC /
Tapstone Energy
Finance Corp TAPENE 9.750 0.690 6/1/2022
Tapstone Energy LLC /
Tapstone Energy
Finance Corp TAPENE 9.750 0.595 6/1/2022
Techniplas LLC TECPLS 10.000 85.625 5/1/2020
Techniplas LLC TECPLS 10.000 84.770 5/1/2020
Teligent Inc/NJ TLGT 4.750 34.750 5/1/2023
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
TerraVia Holdings Inc TVIA 6.000 4.644 2/1/2018
Tesla Energy
Operations Inc/DE TSLAEN 3.600 89.886 3/26/2020
Tesla Energy
Operations Inc/DE TSLAEN 3.600 89.886 4/23/2020
Tesla Energy
Operations Inc/DE TSLAEN 3.600 89.886 5/14/2020
Tesla Energy
Operations Inc/DE TSLAEN 3.600 89.886 5/21/2020
Transworld Systems Inc TSIACQ 9.500 25.770 8/15/2021
Transworld Systems Inc TSIACQ 9.500 25.770 8/15/2021
UCI International LLC UCII 8.625 4.780 2/15/2019
Ultra Resources Inc/US UPL 7.125 7.419 4/15/2025
Ultra Resources Inc/US UPL 6.875 11.490 4/15/2022
Ultra Resources Inc/US UPL 6.875 11.659 4/15/2022
Ultra Resources Inc/US UPL 7.125 7.181 4/15/2025
Unit Corp UNTUS 6.625 42.929 5/15/2021
VIVUS Inc VVUS 4.500 85.439 5/1/2020
Windstream Services LLC /
Windstream Finance Corp WIN 7.500 15.000 6/1/2022
Windstream Services LLC /
Windstream Finance Corp WIN 6.375 12.388 8/1/2023
Windstream Services LLC /
Windstream Finance Corp WIN 8.750 12.857 12/15/2024
Windstream Services LLC /
Windstream Finance Corp WIN 6.375 13.625 8/1/2023
Windstream Services LLC /
Windstream Finance Corp WIN 7.750 12.655 10/1/2021
Windstream Services LLC /
Windstream Finance Corp WIN 7.750 13.159 10/15/2020
Windstream Services LLC /
Windstream Finance Corp WIN 8.750 12.857 12/15/2024
rue21 inc RUE 9.000 1.456 10/15/2021
*********
Monday's edition of the TCR delivers a list of indicative prices
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*********
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