/raid1/www/Hosts/bankrupt/TCR_Public/200211.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, February 11, 2020, Vol. 24, No. 41
Headlines
131 MANHATTAN DELI: Taps MahonyLaw as Legal Counsel
2178 ATLANTIC: To Regain Property's Title from Habitat Financing
344 SOUTH STREET: Unsec. Creditors to Get 25% in Plan
53 STANHOPE: Unsecureds Owed $4.79M to Get Cash or Stock in Plan
609 VIRGINIA DR: Seeks to Hire Latham Luna as Legal Counsel
A TOUCH OF BRASS: Case Summary & 20 Largest Unsecured Creditors
ABC PM: Unsecureds Get 5% in 5 Years Under Plan
AC YU CHAN HOLDING: Case Summary & 5 Unsecured Creditors
AL YEGA: Voluntary Chapter 11 Case Summary
ALTIUM PACKAGING: Moody's Rates Secured Loans 'B2', Outlook Stable
ALTIUM PACKAGING: S&P Rates First-Lien Term Loan B+ on Refinancing
ALVOGEN PHARMA: Moody's Rates New Senior Secured Term Loan 'B3'
APPLIED DNA: Bruce Grossman Has 9.9% Stake as of Dec. 31
APPLIED DNA: Incurs $2.66 Million Net Loss in First Quarter 2020
APX GROUP: Moody's Rates New $1.3-Bil. First Lien Term Loan 'B2'
ASC INSULATION: Court Extends Cash Use Authority Thru Feb. 26
BANTEK INC: Incurs $7.1 Million Net Loss in Fiscal 2019
BLUE RIBBON: Moody's Cuts CFR & Senior Secured Ratings to B3
BOERUM HILL: Has Equity Financing, S III Loan for 100% Plan
BSVH LLC: Voluntary Chapter 11 Case Summary
BUCKNER FOODS: March 9 Hearing on Disclosure Statement Set
BUILDERS FIRSTSOURCE: S&P Ups $475MM Sr. Secured Note Rating to BB+
CAPSON CORP: Court Conditionally Approves Disclosure Statement
CHIMNEY HILL: Seeks to Hire Hahn Fife as Accountant
CP#1109 LLC: Seeks Extension to Plan Confirmation Hearing
DAN'S MOBILE V: Seeks to Hire Daniel Berden as Managing Member
DEMERARA HOLDINGS: Has Permission for Continued Cash Access
DENTALCORP HEALTH: S&P Affirms 'B-' ICR on Term Loan Add-On
DRAGON HOPS: Unsecureds to Get 30% Recovery in Plan
DUFF & PHELPS: S&P Puts 'B' ICR on CreditWatch Negative
EARLY LEARNING: Unsecureds Owed $271K to Get $50K in Plan
ESSEQUIBO HOLDINGS: Has OK to Use Cash Thru Termination Date
EUROAMERICAN FOODS: Court OKs Cash Use Thru Feb. 12, Amends Order
EUROAMERICAN FOODS: Seeks to Use Insider Cash Collateral
FGL HOLDINGS: Fitch Puts BB+ Unsec. Rating on Watch Positive
G.D.S. EXPRESS: May Obtain Financing, Access Cash Until Feb. 21
GELTECH SOLUTIONS: Will Transfer All Assets to Former Chairman
GEMSTONE SOLUTIONS: Unsecureds Get Nothing in Plan
GENERAL CANNABIS: Negotiating Maturity Date Extension of $750K Note
GIGA TRONICS: Reports $1.41 Million Net Loss for Third Quarter
GONZALEZ & COLON: Creditor to Get Monthly Payments in Plan
GRABIT INC: March 31 Confirmation Hearing Set
GTN PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
HARSCO CORP: Moody's Alters Outlook on Ba1 CFR to Negative
HENLEY PROPERTIES: Creditors to Get 100% in Sale Plan
HOME BOUND HEALTHCARE: Court Signs 10th Interim Cash Order
IDEANOMICS INC: Issues 10.9 Million Shares of Common Stock
IMPERIAL TOY: May Use Cash For Pre-Closing Administrative Expenses
ION GEOPHYSICAL: Reports $48.2 Million Net Loss for 2019
JLD AUTOMOTIVE: Unsecured Creditors Recover 10% in Plan
JOHNSON'S QUALITY: Taps Professional Management as Accountant
K. HOVNANIAN: Moody's Rates Senior Secured Notes Due 2026 'Caa1'
K3D PROPERTY: Allowed to Use Cash Collateral Through March 14
LA VINAS: Court Approves Disclosure Statement
LBD PLLC: Case Summary & 20 Largest Unsecured Creditors
LEVEL SOLAR: Project Funds Say Plan Unconfirmable
LIQUIDMETAL TECHNOLOGIES: Forms Partnership With Eutectix
LITESTREAM HOLDINGS: May Use Cash Collateral Through Feb. 25
LIVEXLIVE MEDIA: Acquires React Presents for $2 Million
LIVEXLIVE MEDIA: Amends Securities Purchase Agreement with JGB
LIVEXLIVE MEDIA: FMR LLC Has 11.4% Stake as of Feb. 6
LIVEXLIVE MEDIA: Incurs $8.8 Million Net Loss in Third Quarter
LIVEXLIVE MEDIA: Rho Ventures, et al. Report 6.4% Equity Stake
LOOKOUT RIDGE: Seeks to Hire Hajjar Peters as Legal Counsel
MARGARET MIKE: Plan Has 50% for Unsecureds; March 16 Hearing Set
MATCH GROUP: S&P Affirms 'BB' ICR, Alters Outlook to Negative
MESA MARKETPLACE: Voluntary Chapter 11 Case Summary
MICROVISION INC: Receives Extension to Regain Nasdaq Compliance
MILLMAC CORP: Allowed to Use Cash Collateral on Interim Basis
MOUNTAIN HOME: Unable to File Amended Plan, Consents to Dismissal
MYOMO INC: Expects Q4 2019 Revenue of $1.4M to $1.5M
NELLSON NUTRACEUTICAL: Moody's Lowers CFR to B3, Outlook Stable
NOVABAY PHARMACEUTICALS: Registers 1.8M Shares Under 2017 Plan
NOVABAY PHARMACEUTICALS: Signs New Employment Agreement with CEO
NSA INTERNATIONAL: S&P Downgrades ICR to 'CCC'; Outlook Negative
NSK GROUP: Seeks Permission to Use Cash Collateral
NSK GROUP: Wins Interim Permission to Use Cash Collateral
OZARKS RIDGERUNNER: O'Bannon Bank Wants Say in Plan Sale
PANKEY'S TRANSPORTATION: Voluntary Chapter 11 Case Summary
PHARMACEUTICAL PRODUCT: S&P Upgrades ICR to 'B+'; Outlook Positive
PLUS THERAPEUTICS: Appoints Chief Financial Officer
PLUS THERAPEUTICS: Greg Petersen Joins as Director
PUERTO RICO: Bondholders Strike $35-Bil. Debt Restructuring Deal
PVV LLC: Has Authorization to Use Cash Collateral Until Feb. 18
RQW - REAL ESTATE: May Use FMB Cash Collateral through Feb. 12
RUBY'S DINNER: Further Fine-Tunes Disclosure Statement & Plan
RUBY’S DINER: Says Modified Plan Resolves San Diego Issues
SANUWAVE HEALTH: Raises $2.25M in Preferred Shares Offering
SCHMAUS FAMILY: Hires Deschenes & Associates as Legal Counsel
SCORPION FITNESS: Landlord Objects to Cash Collateral Motion
SCORPION FITNESS: Lenders Oppose Cash Collateral Motion
SCORPION FITNESS: Seeks to Use Damage Insurance Proceeds
SETEC ASTRONOMY: Voluntary Chapter 11 Case Summary
SHEA HOMES: S&P Rates New $375MM Senior Unsecured Notes 'BB-'
SUMMIT MIDSTREAM: S&P Lowers ICR to 'B+' on Heightened Leverage
TATUNG COMPANY: Gets Interim Approval to Access Cash Collateral
TERRAFORM POWER: Fitch Affirms IDR at 'BB-', Outlook Stable
THOC PA: Has Final OK on Request to Use Cash Collateral
TIBCO SOFTWARE: Fitch Lowers First Lien Debt to B+ & Affirms B IDR
TIBCO SOFTWARE: Moody's Lowers Rating on First Lien Loans to B2
TRIUMPH GROUP: Incurs $13.8 Million Net Loss in Third Quarter
UNISYS CORP: Moody's Reviews B2 CFR for Upgrade
VALERITAS HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
VALERITAS HOLDINGS: Files for Chapter 11 to Sell to Zealand
VALLEY ECONOMIC: Amends Disclosure to Identify Agencies' Claims
VIDEO CORP: Meeting to Form Creditors' Panel Set for Feb. 18
VILLA TAPIA: Seeks to Hire MahonyLaw as Legal Counsel
VINE OIL: S&P Cuts Senior Unsecured Note Rating to 'CCC-'
VS BUYER: Moody's Assigns B2 CFR Upon Buyout, Outlook Stable
VS HOLDING: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
*********
131 MANHATTAN DELI: Taps MahonyLaw as Legal Counsel
---------------------------------------------------
131 Manhattan Deli Grocery Corp. received approval from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
MahoneyLaw PLLC as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. assist and advise the Debtor relative to the administration
of the case;
b. represent the Debtor before the bankruptcy court and advise
the Debtor on all pending litigations, hearings, motions and the
decisions of the bankruptcy court;
c. review and analyze all applications, orders and motions
filed with the bankruptcy court by third parties;
d. attend all meetings conducted pursuant to Section 341(a) of
the Bankruptcy Code and represent the Debtor at all examinations;
e. communicate with creditors and all other parties in
interest;
f. prepare all necessary applications, motions, orders and
supporting positions taken by the Debtor, prepare witnesses and
review documents in this regard;
g. confer with all other professionals, including accountants
and consultants retained by the Debtor and any other party in
interest;
h. assist the Debtor in its negotiations with creditors or
third parties concerning the terms of any proposed plan of
reorganization; and
i. prepare, draft and prosecute a plan of reorganization and
disclosure statement.
The firm will charge $400 per hour for Phillip Mahony, Esq., and
$100 per hour for his legal assistant.
The Debtor paid the firm a pre-bankruptcy retainer of $5,000.
Mr. Mahony assures the court that the firm is "disinterested" as
such term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Phillip Mahony, Esq.
MahonyLaw PLLC
Steinway Law Offices
21-83 Steinway Street
Astoria, NY 11105
Phone: 917-44-6795
Fax: 844-269-2809
Email: mahonylaw@outlook.com
About 131 Manhattan Deli Grocery Corp.
131 Manhattan Deli Grocery Corp. is a retail food store, which
specializes in a vast array of sandwiches, salads, organic
products, vegetarian and vegan products.
Based in Brooklyn, N.Y., 131 Manhattan Deli Grocery Corp. filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 19-47702) on Dec. 24, 2019, listing
under $1 million in both assets and liabilities. Judge Nancy
Hershey Lord oversees the case. Phillip Mahony Esq. is the
Debtor's legal counsel.
2178 ATLANTIC: To Regain Property's Title from Habitat Financing
----------------------------------------------------------------
Debtor 2178 Atlantic Ave. HDFC filed with the U.S. Bankruptcy Court
for the Eastern District of New York a Plan of Reorganization and a
Disclosure Statement.
The Plan provides for a reorganization of the Debtor's financial
obligations and affairs. Under the Plan, the Debtor will obtain
financing from Habitat for Humanity in an amount sufficient to
exercise its right to regain title to its primary asset, a 16-unit
residential building located at 2178 Atlantic Avenue, Brooklyn, New
York. The Debtor expects that financing from Habitat will be
partially repaid following its exit from bankruptcy with the
proceeds of a substantial tax refund from the City of New York on
account of real estate taxes paid on account of the Property from
2005 to 2020.
The exercise of the Debtor's right to regain title to the Property
will be in full satisfaction of the Debtor's obligations to
Noteworthy Foreclosure LLC, the transferee of the Debtor's
prepetition indebtedness that was secured by a mortgage on the
Property, as well as affiliates of Noteworthy. Pursuant to the
Plan, 2178 Atlantic Realty LLC, the current holder of the deed to
the Property, will execute a deed transferring fee ownership of the
Property to the Debtor.
Class 1 consists of Priority Non-Tax Claims, Class 2 consists of
the Goldstein Secured Claim, and Class 3 consists of the General
Unsecured Claims. Under the Plan, the Debtor will pay each class
in full, in cash.
Confirmation of the Plan will be deemed to constitute approval of
the Habitat Financing. This will authorize the Debtor to enter
into and perform its obligations under the Habitat Financing
Documents. On the Effective Date, the Habitat Financing Documents
shall constitute legal, valid, binding, and authorized obligations
of the Reorganized Debtor, enforceable in accordance with their
terms.
A full-text copy of the Disclosure Statement dated Jan. 21, 2020,
is available at https://tinyurl.com/v57p532 from PacerMonitor.com
at no charge.
The Debtor is represented by:
Douglas H. Mannal
Joseph A. Shifer
Rose Hill Bagley
KRAMER LEVIN NAFTALIS & FRANKEL LLP
1177 Avenue of the Americas
New York, New York 10036
Telephone: (212) 715-9100
Facsimile: (212) 715-8100
About 2178 Atlantic Ave HDFC
Based in Brooklyn, N.Y., 2178 Atlantic Ave HDFC filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 19-47287) on Dec. 4, 2019, estimating under $1 million in
both assets and liabilities.
344 SOUTH STREET: Unsec. Creditors to Get 25% in Plan
-----------------------------------------------------
Debtor 344 South Street Corporation filed on Jan. 21, 2020, a
Fourth Amended Disclosure Statement describing its Plan of
Reorganization.
The Debtor is now managed by Nicholas Ventura, a shareholder and
President, who has over thirty years experience in the industry.
Mr. Ventura is assisted by Joseph Cucolo, a shareholder, who has 40
years experience in the industry. The Officers of the Corporation
are paid as follows: Nicholas Ventura, $875 a week, Joseph Cucolo,
$200.00 a week and William Curry draws no salary.
The Tax Claim of the Commonwealth of PA UCTS in Class 5 will be
paid $200.00 a month for 36 months as full and final payment of
this priority claim. An estimated amount has been claimed for the
4th Quarter of 2018; the Debtor is providing information to resolve
this issue.
There are only two general unsecured claims in Class 6. The
$13,105.35 claim filed by Gold Medal Environmental will be paid at
a 25% rate, in two equal installments. The City of Philadelphia
has a general unsecured claim in the amount of $33,810, which will
be paid at a 25% rate for a total of $8,453.00.
All existing ownership interest in Class 7, by the three individual
shareholders 100%, shall be retained. This class will not receive a
distribution under the plan.
The Debtor's Plan shall be funded by business operations. The
Debtor can sustain the payments from current operations;
post-petition operations demonstrate this is feasible. The Debtor's
operations post-petition are profitable and all taxing authorities,
vendors and employees have been paid on a timely basis.
A full-text copy of the Fourth Amended Disclosure Statement dated
Jan. 21, 2020, is available at https://tinyurl.com/vetdtvr from
PacerMonitor.com at no charge.
The Debtor is represented by:
Michael P. Kutzer, Esquire
1420 Walnut Street, ste 1216
Philadelphia, PA 19102
Tel: (215) 687-6370
Fax: (215) 689-1959
About 344 South Street
344 South Street Corp. has operated as a restaurant, serving
Spanish and Mexican cuisine in Philadelphia's South Street
District.
344 South Street Corp. sought protection under Chapter 11 of the
Bankruptcy Court (Bankr. E.D. Penn. Case No. 15-18278) on Nov. 17,
2015, and is represented by Raheem S. Watson, Esq., at Watson LLC,
in Philadelphia, Pennsylvania. At the time of the filing, the
Debtor was estimated assets and liabilities below $500,000.
53 STANHOPE: Unsecureds Owed $4.79M to Get Cash or Stock in Plan
----------------------------------------------------------------
Debtors 53 Stanhope LLC, 55 Stanhope LLC; 119 Rogers LLC, 127
Rogers LLC, 325 Franklin LLC, 618 Lafayette LLC, C & YSW, LLC,
Natzliach LLC, 92 South 4th St LLC, 834 Metropolitan Avenue LLC,
1125-1133 Greene Ave LLC, APC Holding 1 LLC, D&W Real Estate Spring
LLC, Meserole and Lorimer LLC, 106 Kingston LLC, Eighteen Homes
LLC, 1213 Jefferson LLC, and 167 Hart LLC submitted a joint plan of
reorganization and a disclosure statement.
The Debtors estimate that the aggregate amount of all Class 4
Allowed General Unsecured Claims is approximately $4,785,330.
Payment in Cash on the Effective Date of Allowed Amount of each
such Claim plus interest at the Legal Rate as it accrues from the
Petition Date through the date of payment, provided, that each
Class 4 Creditor shall be entitled to elect to take New Owner
Interests in the New Owner succeeding the Debtor against which the
Claimant holds an Allowed Claim in lieu of Cash payment of its
Class 4 Claim.
On the Effective Date, all Interests will be cancelled and Interest
Holders shall be entitled to New Owner Interests under the same
terms as their exiting Interests in the Debtors.
Effective Date payments under the Plan will be paid from the Exit
Financing. Under the Exit Financing, each Debtor must transfer its
assets including its Property to the New Owners, which will assume
responsibility for repayment of the Exit Financing. The Debtors
will have no separate responsibility for Post-Confirmation debt
service. The New Owners are responsible for repayment of the Exit
Financing.
The New Owners shall be formed as New York or Delaware limited
liability companies with operating agreements that comply with the
terms of the Exit Financing. All New Owner Interests to be
distributed under the Plan will be on the principle of one share,
one vote, with no proportionate voting, class voting or the like,
and otherwise in conformance with New York law.
In the meantime, the Properties' rental income is being used to pay
debt service to Brooklyn Lender and to preserve and protect the
Properties.
A full-text copy of the Disclosure Statement dated January 21,
2020, is available at https://tinyurl.com/vmouv4w from
PacerMonitor.com at no charge.
The Debtors are represented by:
BACKENROTH FRANKEL & KRINSKY, LLP
Mark A. Frankel
800 Third Avenue
New York, New York 10022
Tel: (212) 593-1100
About 53 Stanhope LLC
53 Stanhope LLC and 17 affiliates are primarily engaged in renting
and leasing real estate properties.
53 Stanhope LLC and its affiliates filed voluntary petitions
seeking relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 19-23013) on May 20, 2019. The petitions
were signed by David Goldwasser, authorized signatory of GC Realty
Advisors.
Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP,
represents the Debtors.
Each of the Debtors is an affiliate of 73 Empire Development LLC,
which sought bankruptcy protection (Bankr. S.D.N.Y. Case No.
19-22285) on Feb. 21, 2019. Its case is not jointly administered
with those of the Debtors.
Backenroth Frankel also serves as counsel to 73 Empire Development.
609 VIRGINIA DR: Seeks to Hire Latham Luna as Legal Counsel
-----------------------------------------------------------
609 Virginia Dr LLC seeks authority from the U.S. Bankruptcy Court
for the Middle District of Florida to hire Latham Luna Eden &
Beaudine, LLP as its legal counsel.
Latham Luna will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its rights and duties in its
bankruptcy case;
b. prepare pleadings related to the case, including a
disclosure statement and a plan of reorganization;
c. take other necessary actions incident to the proper
preservation and administration of the Debtor's bankruptcy estate.
The firm will be paid at these hourly rates:
Attorneys $550
Paraprofessionals $160
Daniel Velasquez $300
Justin Luna $425
Frank M. Wolff $550
The firm was paid a fee of $15,000 for post-petition services and
expenses to be incurred in connection with the case.
Justin Luna, Esq., a partner at Latham Luna, assured the court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
Latham Luna can be reached at:
Justin M. Luna, Esq.
Latham Luna Eden & Beaudine, LLP
111 N. Magnolia Avenue, Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathlamluna.com
About 609 Virginia Dr
609 Virginia Dr LLC, a commercial real estate investment company,
based in Orlando, Fla., filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-08234) on Dec.
18, 2019, listing under $1 million in both assets and liabilities.
Judge Karen S. Jennemann oversees the case. Justin M. Luna, Esq.,
at Latham Luna Eden & Beaudine, LLP, is the Debtor's legal counsel.
A TOUCH OF BRASS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: A Touch of Brass, Inc.
13832 Magnolia Avenue
Chino, CA 91710
Business Description: A Touch of Brass, Inc. is a privately held
company based in Chino, California.
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-11036
Debtor's Counsel: Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd.
Suite 1200
Sherman Oaks, CA 91403
Tel: 310-659-5444
Email: jeffrey@shinbrotfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anthony Yu Chan, chief executive
officer.
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/eiETx3
ABC PM: Unsecureds Get 5% in 5 Years Under Plan
-----------------------------------------------
ABC PM 652 S Sunset LLC, filed a Chapter 1 plan that provides a 5%
return to unsecured creditors, with 0% interest, over a 60-month
period.
The Third Amended Chapter 11 Plan of Reorganization proposes to
treat claims and interests as follows:
* Class 1: There is a single secured claim related to the office
property located at 652 S. Sunset in West Covina, California (aka
646 S. Sunset) for the 1st loan with Bayview Financial Services,
LLC. IMPAIRED. Payments to the class will be as follows:
Interest Rate: 8%
Amortization Period: 40 Years
Monthly Payment: $8,135.15
Due Date: 10 Years (120 Monthly Payments)
* Class 2: This General Unsecured Claim consists of the 2nd Loan
held by Dalubhai & Jeliben Patel which is cross-collaterialized on
both the Debtor's West Covina office property and the Cerritos
residential rental property. IMPAIRED.
Total Claim: $245,000
Percent of Repayment of Claims: 5%
Repayment Period: 5 Years
Interest Rate: 0.00%
Quarterly Payment: $612.50
* Class 3: This Class consists of a single general unsecured
claim of ABS Loan Trust IV. IMPAIRED.
Total Claim: (Claim 3-1) $62,972.13
Percent Repayment of Claim: 5%
Repayment Period: 5 Years
Interest Rate: 0.00%
Quarterly Payment: $157.43
The funding of the Plan will be accomplished through "available
cash" on the Effective Date of the Plan, the scheduled "future
monthly disposable income", and up front capitalization and monthly
contributions on an as needed basis.
A hearing on the Disclosure Statement is scheduled for:
Date: March 10, 2020
Time: 10:00 a.m.
Ctrm: 1668
U.S. Bankruptcy Court
255 E. Temple St.
Los Angeles, CA 90012
Hon. Barry Russell
A full-text copy of the THIRD AMENDED CHAPTER 11 PLAN OF
REORGANIZATION dated January 31, 2020, is available
at https://tinyurl.com/stokknu from PacerMonitor.com at no
charge.
Attorney for the Debtor:
John H. Bauer, Esq.
Financial Relief Legal Advocates, Inc.
56925 Yucca Trail, #512
Yucca Valley, CA 92284
Telephone (714) 319-3446
E-mail: johnbhud@aol.com
About ABC PM 652 S Sunset
ABC PM 652 S Sunset LLC is a privately held company that provides
property management services. ABC PM 652 S Sunset, filed a Chapter
11 petition (Bankr. C.D. Cal. Case No. 19-16004) on May 22, 2019.
In the petition signed by Juana M. Roman, managing member, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. Judge Barry Russell oversees the case.
John H. Bauer, Esq., at Financial Relief Legal Advocates, Inc., is
the Debtor's bankruptcy counsel.
AC YU CHAN HOLDING: Case Summary & 5 Unsecured Creditors
--------------------------------------------------------
Debtor: AC Yu Chan Holding, LLC
151 W. Orange Grove Avenue
Sierra Madre, CA 91024
Business Description: AC Yu Chan Holding LLC is a privately held
company whose principal assets are located
at 13832 Magnolia Avenue Chino, CA 91710.
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-11476
Judge: Hon. Sheri Bluebond
Debtor's Counsel: Jeffrey I. Golden, Esq.
WEILAND GOLDEN GOODRICH LLP
650 Town Center Drive
Suite 600
Costa Mesa, CA 92626
Tel: (714) 966-1000
E-mail: jgolden@wgllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anthony Chan, managing member.
A copy of the petition containing, among other items, a list of the
Debtor's five unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/IRtiz6
AL YEGA: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: Al Yega LLC
1001 6th Avenue, Ste 1226
New York, NY 10018
Business Description: Al Yega LLC is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 20-10383
Debtor's Counsel: Robert J. Spence, Esq.
SPENCE LAW OFFICE, P.C.
55 Lumber Road, Suite 5
Roslyn, NY 11576
Tel: 516-336-2060
E-mail: rspence@spencelawpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Albert Yeganeh, member.
The Debtor did not 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/zy7BnJ
ALTIUM PACKAGING: Moody's Rates Secured Loans 'B2', Outlook Stable
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Altium Packaging,
LLC's (Altium, formerly Consolidated Container Company LLC) senior
secured credit facility. The company's B2 Corporate Family Rating
and B2-PD Probability of Default Rating (PDR) are unchanged. The
outlook remains stable. The company's good liquidity profile
remains unchanged.
The action follows the company's announcement that it is seeking to
raise $830 million as a new senior secured term loan due 2026.
Proceeds will be used to repay, in full, the existing senior
secured term loans due 2024 and 2026. The terms and conditions of
the new loan is expected to be the same as the existing. The
ratings on the company's existing credit facilities are unchanged
and will be withdrawn at the close of the transaction. The ratings
on the company's existing credit facilities are unchanged and will
be withdrawn at the close of the transaction.
The B2 rating assigned to the new debt continues to reflect the
senior secured facilities position as the preponderance of debt in
the capital structure. The transaction itself is credit neutral.
Credit metrics will be largely unchanged following the transaction
and total debt will remain about the same.
Assignments:
Issuer: Altium Packaging, LLC
Senior Secured Bank Credit Facility due 2026, Assigned B2 (LGD4)
The ratings are subject to the receipt and review of the final
documentation.
RATINGS RATIONALE
Altium's rating is constrained by its concentration of sales,
significant percentage of commoditized products and percentage of
business that is not under contract. Altium has a high
concentration of sales by both product line and customer. Altium's
rating is also constrained by strong competition in the industry
and fragmented structure that will make it difficult to
meaningfully improve earnings. Approximately 20% of the business by
volume is not under contract and subject to market forces.
The company benefits from on-going cost reduction initiatives,
long-standing relationships with certain well-established
manufacturers and a significant percentage of plants co-located on
the customer's premises. Co-location is important to minimize
packaging and shipping costs. Despite a small revenue base, Altium
has scale relative to many competitors. Approximately 80% of
business by volume is under contract with raw material cost
pass-through provisions, but other costs are not passed through on
all contracts and lags in passing through costs can be
significant.
The ratings could be upgraded if Altium sustainably improved its
credit metrics within the context of a stable competitive and
operating environment. Specifically, the ratings could be upgraded
if debt to EBITDA declines below 5.0 times, EBITDA to interest
expense increases above 3.5 times and funds from operations to debt
increases above 11.0%. In addition, positive ratings movement would
be considered should the company continue to build scale while
operating conditions remain favorable.
The ratings could be downgraded if there is a deterioration in
credit metrics, liquidity or the operating and competitive
environment. The ratings could also be downgraded if financial
policies become more aggressive. Specifically, the ratings could be
downgraded if debt to EBITDA is above 5.5 times, EBITDA to interest
expense declines below 3.0 times or funds from operations to debt
declines below 9.0% which would likely be indicative of weaker
operating conditions.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
May 2018.
Based in Atlanta, Georgia, Altium Packaging, LLC is one of the
leading domestic manufacturers of rigid plastic containers for
mostly branded consumer products and beverage companies and a
supplier of recycled resin. Revenues for the twelve months ended
September 30, 2019 were $905 million which were predominantly
generated domestically. The company is owned by Loews Corporation.
Altium does not publicly disclose financial information.
ALTIUM PACKAGING: S&P Rates First-Lien Term Loan B+ on Refinancing
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' rating to Altium Packaging
LLC's proposed first-lien term loan due 2026. The recovery rating
is '3', indicating meaningful (30%-50%, rounded estimate: 50%)
recovery in the event of a payment default. Upon close of the
refinancing transaction, S&P expects to withdraw its existing
issue-level ratings on the company.
Altium is refinancing its capital structure, issuing a $830 million
senior secured term loan due 2026, in order to improve overall cost
of capital. S&P views this as a leverage-neutral transaction. The
'B+' issuer credit rating on Altium, formerly known as Consolidated
Container Co. LLC, is unchanged because the rebranding and
refinancing plan does not materially affect the entity's existing
cash flows, collateral pledges, or subsidiary guarantees. The
proposed $830 million senior secured term loan issue-level and
recovery ratings are the same as the currently outstanding debt.
ALVOGEN PHARMA: Moody's Rates New Senior Secured Term Loan 'B3'
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Alvogen Pharma
US, Inc. including the B2 Corporate Family Rating and the B2-PD
Probability of Default Rating. Moody's assigned a B3 rating to the
company's new senior secured term loan with maturity extended and
affirmed the B3 rating on the outstanding senior secured term loan.
The outlook remains stable.
The affirmation follows Alvogen's bank amendment, which improves
its debt maturity profile, extending the maturity of 85% of its
$936 million term loan by 18 months to December 31, 2023, and its
$275 million asset-based revolvers by two years to January 29,
2023. In addition, Alvogen Lux Holdings S.a.r.l., the ultimate
parent company of Alvogen, will contribute a recently acquired
product, Gralise, into the US credit group, which is immediately
deleveraging. A parent contribution of $75 million into the US
credit group will support Alvogen's liquidity needs in 2020.
"The stable outlook reflects Moody's expectation that high
financial leverage will be temporary and that recently approved
products and improved liquidity will lead to a significant
improvement in credit metrics over the next 12 to 18 months," said
Morris Borenstein, Moody's Vice President.
The addition of Gralise and Alvogen's exclusive contract supplying
oseltamivir (generic Tamiflu) to the US Centers for Disease Control
and Prevention will add a layer of stable earnings and cash flow to
Alvogen in 2020. That said, it will take a successful earnings ramp
from various recently approved or launched products to bring down
leverage towards 5x debt/EBITDA by the end of 2020. Pending
therapeutic equivalence designations for several key approved
products (teriparatide and levothyroxine sodium) from the FDA will
also be critical for the launch success of these products.
Ratings affirmed:
Alvogen Pharma US, Inc.
Corporate Family Rating, at B2
Probability of Default Rating, at B2-PD
Senior secured term loan, at B3 (LGD4)
Ratings assigned:
Alvogen Pharma US, Inc
Senior secured term loan, at B3 (LGD4)
Outlook action:
The outlook remains stable.
RATINGS RATIONALE
Alvogen's B2 Corporate Family Rating reflects its moderate size and
scale with revenues averaging around $500 million in the highly
competitive generic pharmaceutical industry. The ratings are
constrained by high financial leverage which will extend through
2020, while earnings from newer products will offset declines from
its base of existing products. Alvogen will benefit from a
full-year contribution from its exclusive government contract to
supply generic Tamiflu. As a result of this contract, the
contribution from Gralise, and other near-term product launches,
Moody's expects a meaningful improvement in credit metrics through
2020. Free cash flow will return to positive in 2020 as well,
supported by higher overall revenues and improving gross margins.
Alvogen's ratings benefit from capital support from its parent
while its most valuable pipeline assets fully materialize. ESG
considerations include the limited transparency into operations and
financial performance of related entities and those outside the US
credit group.
Moody's expects Alvogen to maintain good liquidity over the next
year. Alvogen had cash of $48 million on September 30, 2019, not
inclusive of capital contributions of $125 million by its parent
since the end of Q3 2019. Alvogen has a $275 million asset-based
revolver (ABL) that will expire on January 29, 2023. It has $75
million of availability remaining which is subject to certain
minimum liquidity restrictions that Moody's believes Alvogen will
be in compliance with. Alvogen will have modest debt amortization
in 2020 of approximately $8 million on 15% of its senior secured
term loan. Debt amortization of 5% annually on 100% of its term
loan (about $50 million per year) will resume in June 2021. The
term loan does not contain any financial maintenance covenants and
matures in December 2023.
Moody's could upgrade the ratings if Alvogen sustains debt/EBITDA
below 3.0 times and generates consistently positive free cash flow
that remains within the credit group. Moody's could downgrade
Alvogen's ratings if uptake in its growth products is weak
resulting in a failure to reduce leverage below 5.0 times on a
sustained basis. Further, if liquidity were to materially weaken,
Moody's could downgrade the ratings.
Alvogen Pharma US, Inc. is a subsidiary of Alvogen Lux Holdings
S.a.r.l. Alvogen comprises the US generic pharmaceuticals and
contract manufacturing operations of LuxCo, which also has
international operations not included in the US credit group. For
the twelve months ended September 30, 2019, Alvogen reported
revenues of approximately $348 million. Alvogen is owned by a
consortium of private equity firms including CVC Capital and
Temasek. The company's CEO Robert Wessman also owns a significant
stake in the company.
The principal methodology used in these ratings was the
Pharmaceutical Industry published in June 2017.
APPLIED DNA: Bruce Grossman Has 9.9% Stake as of Dec. 31
--------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Bruce Grossman disclosed that as of Dec. 31, 2019 he
beneficially owns 354,400 shares of common stock of Applied DNA
Sciences, Inc., which represents 9.9 percent of the shares
outstanding. The percentage beneficial ownership was calculated
based on 3,485,399 shares of Common Stock outstanding as of Jan.
27, 2020, as reported in the Issuer's quarterly report on Form
10-K/A for the period ended Sept. 30, 2019.
Dillon Hill Capital, LLC, of which Mr. Grossman is the sole member,
directly owns: (i) $1,500,000 principal amount of secured
convertible notes that are convertible into 69,444 shares of Common
Stock of the Issuer, (ii) 185,000 shares of Common Stock of the
Issuer and (iii) warrant to purchase up to 401,000 shares of Common
stock of the Issuer.
Dillon Hill Investment Company LLC, the sole member of which is a
trust of which the Reporting Person's spouse is the co-trustee,
directly owns 100,000 shares of Common Stock and 513,739 Warrants.
The Notes and the Warrants include a provision limiting conversion
of the Notes and exercise of the Warrants to the extent that
conversion or exercise would result in the Reporting Person
beneficially owning more than 9.99% of the Issuer's Common Stock.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/XrvSkP
About Applied DNA
Applied DNA -- http://www.adnas.com/-- is a provider of molecular
technologies that enable supply chain security, anti-counterfeiting
and anti-theft technology, product genotyping, and pre-clinical
nucleic acid-based therapeutic drug candidates. Applied DNA makes
life real and safe by providing innovative, molecular-based
technology solutions and services that can help protect products,
brands, entire supply chains, and intellectual property of
companies, governments and consumers from theft, counterfeiting,
fraud and diversion.
Applied DNA reported a net loss of $11.69 million for the year
ended Sept. 30, 2018, following a net loss of $12.85 million for
the year ended Sept. 30, 2017. As of Dec. 31, 2019, the Company
had $10.87 million in total assets, $3.65 million in total
liabilities, and $7.22 million in total equity.
Marcum LLP, in Melville, NY, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated Dec. 18,
2018, citing that the Company has incurred significant losses and
needs to raise additional funds to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
APPLIED DNA: Incurs $2.66 Million Net Loss in First Quarter 2020
----------------------------------------------------------------
Applied DNA Sciences, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $2.66 million on $633,519 of total revenues for the three months
ended Dec. 31, 2019, compared to a net loss of $3.23 million on
$884,322 of total revenues for the same period in 2018.
As of Dec. 31, 2019, the Company had $10.87 million in total
assets, $3.65 million in total liabilities, and $7.22 million in
total equity.
The Company has recurring net losses, which have resulted in an
accumulated deficit of $259,471,142 as of Dec. 31, 2019. The
Company incurred a net loss of $2,662,741 and generated negative
operating cash flow of $2,731,273 for the three month period ended
Dec. 31, 2019. At Dec. 31, 2019 the Company had cash and cash
equivalents of $8,662,853 and working capital of $8,128,977.
The Company's current capital resources include cash and cash
equivalents, accounts receivable and inventories. The Company
expects to finance its operations primarily through cash received
from the November 2019 underwritten public offering as well as
collection of its accounts receivable. The Company estimates that
it will have sufficient cash and cash equivalents to fund
operations for the next twelve months from the date of filing of
this quarterly report. Historically, the Company has financed its
operations principally from the sale of equity and equity-linked
securities.
On Nov. 15, 2019 the Company closed on an underwritten public
offering of 2,285,000 shares of Common Stock and warrants to
purchase up to an aggregate of 2,285,000 shares of Common Stock.
Each share of Common Stock was sold together with one warrant to
purchase one share of Common Stock at a combined effective price to
the public of $5.25 per share and accompanying warrant. Gross
proceeds, before underwriting discounts and commissions and
estimated offering expenses, were approximately $12.0 million.
After deducting underwriting discounts and commissions and other
offering expenses, the total net proceeds were $10.5 million.
The Company said it may require additional funds to complete the
continued development of its products, product manufacturing, and
to fund expected additional losses from operations until revenues
are sufficient to cover its operating expenses. If revenues are
not sufficient to cover the Company's operating expenses, and if
the Company is not successful in obtaining the necessary additional
financing, the Company will most likely be forced to reduce
operations.
Select Recent Operational Highlights:
* On Feb. 5, 2020, Applied DNA entered into an amendment to
its existing joint development agreement with Takis S.R.L
and Evvivax S.R.L.to include pre-clinical development of a
potential linear DNA vaccine against 2019-nCoV, the new
coronavirus;
* On Jan. 27, 2020, Applied DNA bolstered its patent portfolio
when the U.S. Patent and Trademark Office granted it a U.S.
patent that covers methods of tagging man-made cellulosic
fibers or materials during production and later
authenticating the fiber or materials to confirm provenance
and/or authenticity. This newly issued patent extends the
Company's addressable market within textiles to include
cotton, synthetic fibers and materials, and, now, man-made
cellulosic fibers and materials;
* On Jan. 13, 2020, the Company announced a licensing
agreement with LifeSensors, Inc. whereby it will incorporate
LifeSensors' high expression SUMO-fusion technologies into
the Company's linear DNA amplicons designed and produced for
therapeutic applications. The Company believes that the
incorporation of the SUMO-fusion technologies into Applied
DNA's linear amplicons may further optimize protein
expression and deliver yet another strength to linear DNA;
and
* On Dec. 23, 2018, Colorcon, Inc., a world leader in the
development and supply of film coating systems and
excipients for pharmaceuticals, formally launched its On-
Dose Authentication capability utilizing the Company's
technology to provide track and trace functionality for
supply chain security. Applied DNA's molecular taggants are
integrated into Colorcon's Opadry film coating system to
significantly reduce the risks associated with the global
problem of counterfeit and falsified medications entering
the supply chain.
CEO's Comments
"During our fiscal first quarter, we made meaningful progress on
our strategic priorities for fiscal 2020 to position the company
for long-term growth while raising capital to support our growth
strategy. Our revenue performance reflects a difficult comparison
to the year-ago period, which included revenue related to a
Department of Defense contract since completed, as well as our
historical revenue pattern that troughs in the first quarter and
builds over the balance of the year," stated Dr. James A. Hayward,
president and CEO of Applied DNA.
"In our biotherapeutics business that utilizes our proprietary
linear DNA production platform for application in adoptive cell
therapies; DNA vaccines, such as cancer vaccines; CRISPR and other
nucleic acid-based therapies, we continued to build proof points
for a new paradigm in linear DNA production with our patented PCR
processes ahead of traditional plasmids production. During the
quarter, we signed an agreement with Tyme Technologies for our
Vita-AssayTM invasive Circulating Tumor Cell ("iCTC") capture assay
and services that enable Tyme to monitor disease progression in its
pivotal trial for metastatic pancreatic cancer. In our industrials
business that utilizes the same platform to illuminate supply
chains in large commercial ecosystems for authenticity and
traceability, the launch of Colorcon's on-dose authentication
platform powered by our taggant technology demonstrates execution
of our pharmaceutical strategy to partner with Colorcon, who will
be marketing the platform to its expansive customer base.
Strategic progress has continued in this sector into our fiscal
second quarter with our entry into the nutraceuticals market with a
multi-year CertainT contract with Nutrition 21."
Concluded Dr. Hayward, "Looking ahead, we are placing greater
emphasis on positioning our platform for biotherapeutic and
diagnostic applications where there is a growing imperative for our
capabilities while also nurturing key industrials applications to
commercial-scale deployments. Our recently acquired liquid biopsy
technology - the iCTC liquid biopsy platform - we believe allows us
to detect primary cancer tumors often before they are visible to
other diagnostic technologies, when preventive care for impending
cancer may still be an option. Our iCTC platform is potentially
transformative to cancer care, and our relationship with Tyme
establishes a partnering model that is applicable to other
companies pursuing therapies for such cancers as breast,
pancreatic, ovarian, colorectal, among others, that we are actively
pursuing."
A full-text copy of the Form 10-Q is available for free at the
SEC's website at:
https://is.gd/fcvUBb
About Applied DNA
Applied DNA -- http//www.adnas.com/ -- is a provider of molecular
technologies that enable supply chain security, anti-counterfeiting
and anti-theft technology, product genotyping, and pre-clinical
nucleic acid-based therapeutic drug candidates. Applied DNA makes
life real and safe by providing innovative, molecular-based
technology solutions and services that can help protect products,
brands, entire supply chains, and intellectual property of
companies, governments and consumers from theft, counterfeiting,
fraud and diversion.
Applied DNA reported a net loss of $11.69 million for the year
ended Sept. 30, 2018, following a net loss of $12.85 million for
the year ended Sept. 30, 2017.
Marcum LLP, in Melville, NY, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated Dec. 18,
2018, citing that the Company has incurred significant losses and
needs to raise additional funds to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
APX GROUP: Moody's Rates New $1.3-Bil. First Lien Term Loan 'B2'
----------------------------------------------------------------
Moody's Investors Service has confirmed the company's B3 corporate
family rating and its B3-PD probability of default rating of APX
Group, Inc. Moody's confirmed the B2 ratings on the existing
first-lien notes, which have maturities of 2022 and 2024 and which
currently sum to nearly $1.4 billion. Moody's also confirmed the
Caa2 ratings on Vivint's existing $400 million senior unsecured
notes due 2023. This concludes Moody's ratings under review for
upgrade which was initiated on September 18, 2019. The outlook is
positive.
Moody's also assigned B2 ratings to a new, $1.327 billion first
lien term loan, which represents an upsizing (and maturity
extension) of Vivint's existing, $802 million first-lien term loan.
The company plans to use proceeds from the incremental term loan to
pay down the $270 million principal of 8.875% notes due 2022 in its
entirety. Moody's will withdraw ratings on the notes upon their
retirement. Moody's upgraded Vivint's speculative grade liquidity
rating to SGL3, from SGL4. The company plans to use its liquidity,
which includes $465 million of net proceeds from its January 17,
2020-concluded SPAC transaction, to pay down in full its $454
million of senior unsecured notes due 2020. The anticipated
repayment of this near-maturing debt allows the avoidance of
potential springing-maturity provisions on all the company's
existing first-lien debt. The threat of the springing maturity was
the primary reason Moody's has had Vivint's speculative grade
liquidity rating at SGL4. The absence of that threat supports its
upgrade to SGL3.
Assignment:
Issuer: APX Group, Inc.
$1.327 billion Senior Secured 1st lien Term Loan B, assigned B2
(LGD3)
Confirmations:
Issuer: APX Group, Inc.
Corporate Family Rating, confirmed B3
Probability of Default Rating, confirmed B3-PD
Senior Secured 1st lien Notes, confirmed B2 (LGD3)
Senior Secured 1st lien Term Loan B, confirmed B2 (LGD3)
Senior Unsecured Notes, confirmed Caa2 (LGD6 from LGD5)
Upgrade:
Issuer: APX Group, Inc.
Speculative Grade Liquidity Rating, upgraded to SGL3, from SGL4
Outlook Action:
Issuer: APX Group, Inc.
Outlook, Changed to positive from Rating Under Review
RATINGS RATIONALE
The B3 CFR ratings confirmation reflects Vivint's moderately
improved leverage and liquidity positions as a result of the
completion, in mid-January 2020, of its SPAC transaction. It is
using proceeds from transaction to reduce its $3.2 billion debt
burden as of September 30, 2019, by roughly 15%, while freeing up
availability under its revolver. Moody's estimates the company will
save about $35 million in annual interest expense, also freeing up
needed liquidity. The $465 million of net proceeds from the SPAC
transaction fell well short of the company's expectations of $690
million. The amount, nevertheless, is enough to reduce
Moody's-calculated debt to pre-SAC EBITDA to below 5.0 times, from
close to 6.0 times before the SPAC transaction.
Vivint's credit profile also reflects its heretofore heavy reliance
on debt capital markets to support growth, as well as Moody's
expectation that the company will continue to operate at high
leverage. Continued rapid growth, with more new subscribers taking
on a greater number of expensive smart-home devices, will support
revenues. Increasing adoption of Vivint's Flex Pay program, which
provides financing for customers to pay for monitoring equipment,
will ease the company's working capital burden. The Flex Pay
program and, especially, the proposed Mosaic merger, will reduce
Vivint's historic need for large, periodic debt raises. Revenue and
subscriber growth have been consistent and strong -- considerably
higher, in fact, than Vivint's alarm monitoring peers. But the cost
of achieving that growth, with attrition rates above 13%, had kept
Moody's debt-to-pre-SAC EBITDA at near 6.0 times. Operations are
supported by nearly 90% adoption rates (by new subscribers) of its
Smart Home products.
Vivint faces moderate Environmental, Social and Governance (ESG)
risks, primarily in the form of past governance lapses marked by
irregular seasonal sales practices that have been raised by
communities in its sales regions and by regulators and for which
Vivint has had to pay damages. Moody's expects financial policy to
become more conservative and transparent under public company
ownership.
The positive outlook reflects Moody's expectation for continued
strong revenue and ARPU growth. In addition, it expects free cash
flow to grow closer to breakeven.
Moody's would consider an upgrade upon the company addressing its
2022 debt maturities, free cash flow closer to breakeven, and the
maintenance of adequate or improved liquidity.
Moody's would consider a downgrade if revenue growth slows, if
liquidity deteriorates, if it expects the company will be unable to
address its 2022 debt maturities, or if there is higher than
anticipated attrition.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
APX Group, Inc. provides alarm monitoring and home automation
services to approximately 1.5 million residential subscribers in
North America. With 2019 Moody's-anticipated revenue of $1.15
billion (a 10% gain over 2018), Vivint is the second-largest
provider of home security and automation services, well behind The
ADT Security Corporation. As the result of a late 2012 acquisition,
Vivint is majority-owned by The Blackstone Group Inc., while its
management team has maintained a meaningful ownership stake.
ASC INSULATION: Court Extends Cash Use Authority Thru Feb. 26
-------------------------------------------------------------
Judge Timothy A. Barnes authorized ASC Insulation Fireproofing and
Supplies Inc., to use cash collateral of pre-petition lender St.
Charles Bank & Trust Co., pursuant to the budget, through the close
of business on February 26, 2020.
These parties assert a secured interest in the Debtor's assets:
(a) St Charles Bank & Trust, which holds a senior security
interest in all of the Debtor's assets, and asserts no less than
$421,176 on amounts outstanding against the Debtor.
(b) certain Chicago laborers' funds which maintain a junior
security interest for unpaid contributions and dues allegedly owed
amounting to $395,704.05
The Court ruled that the prepetition secured parties will be
secured by a lien to the same extent, priority and validity as
existed before the Petition Date, receiving a replacement lien on
all of the Debtor's property, to the extent actually used and for
the diminution in the value of the prepetition secured parties'
collateral.
In return for the Debtor's continued use of cash collateral, the
Court ruled that the Debtor will pay the prepetition secured lender
$10,650 per month as adequate protection by the 20th of each month
until further Court order. The Debtor is directed to permit the
prepetition secured lender to begin a filed audit on or before Feb.
21, 2020.
A copy of the fifth interim order is available at
https://is.gd/gl4nMu from PacerMonitor.com free of charge.
The interim Court order will remain in effect until Feb. 26, 3030
at 1:30 p.m. at which time a further hearing will take place.
About ASC Insulation Fireproofing
and Supplies Inc.
ASC Insulation Fireproofing and Supplies, Inc. --
http://www.ascfireproofing.com/-- is a family-owned company
specializing in commercial spray-applied fireproofing coatings,
industrial coatings, intumescent coatings, and thermal and
acoustical coatings.
ASC Insulation sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ill. Case No. 19-31687) on Nov. 6, 2019. Judge
Timothy A. Barnes is assigned to the case. In the petition signed
by its president, Mike Castro, the Debtor was estimated to have
assets of less than $50,000 and debt under $10 million. James
Young Law, and Springer Larsen Greene, LLC, serve as the Debtor's
attorneys.
BANTEK INC: Incurs $7.1 Million Net Loss in Fiscal 2019
-------------------------------------------------------
Bantek, Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K reporting a net loss of $7.11 million on
$10.29 million of sales for the year ended Sept. 30, 2019, compared
to a net loss of $5.77 million on $18.39 million of sales for the
year ended Sept. 30, 2018.
As of Sept. 30, 2019, the Company had $1.08 million in total
assets, $15.98 million in total liabilities, and a total
stockholders' deficit of $14.89 million.
Salberg & Company, P.A., in Boca Raton, Florida, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Feb. 6, 2020 citing that the Company has a net loss
and cash used in operations of $7,115,159 and $1,105,330,
respectively, for the year ended Sept. 30, 2019 and has a working
capital deficit, stockholders' deficit and accumulated deficit of
$13,632,338, $14,895,354 and $26,746,451 respectively, at Sept. 30,
2019. The Company is also in default on certain promissory notes.
These matters raise substantial doubt about the Company's ability
to continue as a going concern.
A full-text copy of the Form 10-K is available for free at the
SEC's website at:
https://is.gd/qbHBW8
About Bantek
Headquartered in Little Falls, NJ, Bantek, Inc. is a distributor,
construction, environmental and drone company. Through Howco
Distributing Co, Bantek provides product procurement, distribution,
and logistics services g Co., to the United States Department of
Defense and Defense Logistics Agency. The Company has operations
based in Little Falls, New Jersey and Vancouver, Washington.
BLUE RIBBON: Moody's Cuts CFR & Senior Secured Ratings to B3
------------------------------------------------------------
Moody's Investors Service lowered Blue Ribbon, LLC's CFR and senior
secured ratings to B3 from B2. The Probability of Default rating
was lowered to B3-PD. The outlook remains negative.
The downgrade reflects high debt to EBITDA leverage, an aggressive
financial policy, particularly with respect to back up liquidity,
and challenges to grow volumes in the core business. Leverage,
which was over 7 times as of September 2019, is expected to
moderate only slightly to closer to 7 times by year end.
The negative outlook reflects the fact that Blue Ribbon's revolving
credit facility is current with the expiration set for May 2020.
The absence of a revolving credit facility would weaken the
company's liquidity despite good internal liquidity, including
approximately $15 million of cash on hand at the end of December.
The revolver was reduced from $95 million to $36 million when the
maturity date was last extended. Moody's expects that the company
will generate positive free cash flow in 2020 resulting in minimal
revolver borrowings under the revolver this year. However, the
company relies on the revolver for letters of credit supporting its
brewing arrangement with Molson Coors. Also, the revolver is an
important alternate liquidity source in the event of unexpected
operating challenges. It is Moody's understanding the Company is in
the process of working on an extension of the revolver and expects
to finalize the extension prior to maturity. Its term facility will
mature in November 2021 which will also need to be addressed in the
near term. A longer term refinancing that addresses these upcoming
maturities could result in the stabilization of the outlook.
Blue Ribbon, LLC
Ratings lowered:
Corporate Family Rating to B3 from B2
Probability of Default rating to B3-PD from B2-PD
Senior Secured First lien term loan due 2021 to B3 (LGD3) from
B2 (LGD3)
Rating assigned:
Senior Secured Revolving Credit facility due May 2020 at B3
(LGD3)
Outlook remains negative
RATINGS RATIONALE
Blue Ribbon's B3 Corporate Family Rating reflects its high
financial leverage (Debt to EBITDA in the mid 7 times range
including Moody's adjustments), small scale and its heavy reliance
on its largest brand, Pabst Blue Ribbon (PBR), which accounts for
nearly half of sales and has seen slowing revenue growth and recent
volume declines. The company has seen top line declines for the
last several years as it has downsized its hard soda portfolio and
exited the hard cider business. At the same time, the rating
reflects its portfolio of more than 30 other active brands that are
helping to revitalize and premiumize its portfolio. Moody's expects
that the company will continue to face tough competition from
larger competitors. While operating margins have improved in recent
years, they are still thin relative to larger beer producers. Blue
Ribbon also has more limited geographic diversity and small scale
compared to other beer companies and to other beverage companies in
general. The rating is supported by its well-known, iconic brands,
the strong market position of its largest brand as one of the most
affordable beers in its category, success of certain recent brand
additions and partnerships, minimal need for working capital and
capital investment, and good cash flow. While the beer category has
been in decline in the US for some time, Blue Ribbon has
successfully taken pricing which helps to mitigate the volume
declines.
In November, 2018 the company settled its lawsuit with MillerCoors,
extending the length of the co-packing arrangement through 2024,
and on January 6, 2020, it entered into an agreement with Molson
Coors giving it an option to purchase one of that company's brewing
facilities located in Irwindale, California. In addition, in
November 2019, Blue Ribbon announced that it had reached an
agreement to transition its production to City Brewing. This
removed the uncertainty surrounding the phase out of the Molson
Coors relationship.
The rating could be upgraded if the company demonstrates solid
liquidity, provides visibility into a longer term operating plan,
generates good and predictable cash flows, successfully executes
its growth strategies to support sustained top line and operating
profit expansion, improves its scale and diversification and
reduces leverage. In addition, an upgrade would require that
leverage is reduced such that debt to EBITDA (including Moody's
standard adjustments) is below 6 times.
The rating could be downgraded if the company fails to address
liquidity including its alternate liquidity arrangements, if
operating performance weakens such that EBIT/interest falls below 1
times, debt/EBITDA is sustained above 8 times, or free cash flow
becomes negative. In addition, leveraged acquisitions, or
leveraging transactions including substantial dividend
distributions before debt/EBITDA declines below 5 times, could also
lead to a downgrade.
The principal methodology used in these ratings was Alcoholic
Beverages Methodology published in November 2019.
Headquartered in Los Angeles, California, Blue Ribbon, LLC (parent
company of Pabst Brewing Company) is one of the largest privately
held independent brewers in the US, though well behind market
leaders in scale, with a portfolio of iconic American beer brands.
Major brands in the company's portfolio include Pabst Blue Ribbon,
Lone Star, Rainier, Old Milwaukee, Colt 45, Schlitz and Not Your
Father's hard sodas. The company also has a long-term arrangement
to market and distribute Tsingtao in the US. The company is owned
by a consortium of investors which consists of the Great American
Brewing Company (owned by Eugene Kashper) and TSG Consumer
Partners, a private equity firm with a focus in consumer products.
Annual net sales for 2019 are expected to reach approximately $500
million.
BOERUM HILL: Has Equity Financing, S III Loan for 100% Plan
-----------------------------------------------------------
Debtor Boerum Hill Developers 26 LLC filed with the U.S. Bankruptcy
Court for the Southern District of New York a Plan of
Reorganization that will pay creditors 100 cents on the dollar.
Allowed general unsecured claims will be paid in cash on the
Effective Date of the allowed amount of each claim plus interest at
the Legal Rate as it accrues from the Petition Date through the
date of payment. Of the $307,013 of general unsecured claims,
Shloimie Goldstein, who holds a $200,000 claim, Ben Zahler who
holds a $75,000 claim, and Yehuda Wurzberger, who holds a $25,000
claim, have agreed to allow the post-confirmation New Owner to
assume their obligations. Thus, the General Unsecured Claims to be
paid in Cash under the Plan total $7,013.
On the Effective Date, all interests in Class 5 will be cancelled
and interesthHolders shall be entitled to New Owner interests under
the same terms as their exiting Interests in the Debtor.
Plan payments will be paid from the S III Capital Partners LLC
acquisition loan and the funding by Interest Holders. The Debtor
shall take perform all necessary acts to consummate the terms and
conditions of the Plan including, but not limited to, (a) closing
on the assumption of the 82 Fourth Contract and assignment to the
New Owner, (b) closing on the S III Capital Partners LLC
acquisition loan, (c) closing on the agreement to reject the 80A
Fourth Contract, and (d) and paying Claims under the Plan.
The Debtor has financing sufficient to close on the sale of the 82
Fourth Property and pay creditors in full. S III Capital Partners
LLC has agreed to make a $2,150,000 acquisition loan. Closing
costs and fees are estimated to be $60,000, for a net amount to be
distributed at closing of $2,090,000. Equity holders have
assembled $500,000 of Cash on hand, and the $50,000 80A Fourth down
payment will be available at closing, for a total of $2,640,000 of
available funds.
A full-text copy of the Disclosure Statement dated January 21,
2020, is available at https://tinyurl.com/uaglnzo from
PacerMonitor.com at no charge.
About Boerum Hill
Boerum Hill Developers 26 LLC is a privately held company engaged
in activities related to real estate. Boerum Hill filed Chapter 11
petition (Bankr. S.D.N.Y. Case No. 19-24146) on Dec. 11, 2019. At
the time of filing, the Debtor was estimated to have assets and
liabilities of $1 million to $10 million. The case is assigned to
Hon. Robert D. Drain.
The Debtor is represented by:
Mark Frankel
Backenroth Frankel & Krinsky, LLP
800 Third Avenue, Floor 11
New York, New York 10022
Tel: (212) 593-1100
BSVH LLC: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: BSVH, LLC
109 Roadrunner Point
Hot Springs National, AR 71913
Business Description: BSVH, LLC is a privately held company
primarily engaged in the operation of
dwellings other than apartment buildings.
Chapter 11 Petition Date: February 7, 2020
Court: United States Bankruptcy Court
Western District of Arkansas
Case No.: 20-70365
Debtor's Counsel: Jennifer M. Lancaster, Esq.
THE LANCASTER LAW FIRM
P.O. Box 1295
Benton, AR 72018
Tel: 501-776-2224
Email: jennifer@thelancasterlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Matthew Valentine, president.
The Debtor stated it has no unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/ZGFv7n
BUCKNER FOODS: March 9 Hearing on Disclosure Statement Set
----------------------------------------------------------
A hearing has been set for March 9, 2020 at 1:30 p.m. before the
Honorable Mark X. Mullin, U.S. Bankruptcy Court, 501 W. 10th
Street, Room 128, Fort Worth, Texas, to approve the adequacy of the
information contained in Buckner Foods, Inc.'s Combined Disclosure
Statement and Plan of Reorganization. The deadline for filing
objections to the Disclosure Statement is Feb. 17, 2020 at 5:00
p.m.
The Debtor's Plan provides for creditors to be paid from the sale
of Debtor's real property. Allowed Class 4 unsecured claims will
be paid quarterly and will share pro rata in the funds available
and remaining after payment of Reorganized Debtor's normal
operating expenses and the Priority and Secured Claims. The amount
to be distributed to Class 4 Unsecured Creditors will be paid for
20 quarters after the Effective Date.
A copy of the Combined Plan and Disclosure Statement is available
at https://tinyurl.com/rxpr75j from PacerMonitor.com free of
charge.
Attorney for the Debtor:
MARILYN D. GARNER, ESQ.
2001 E. Lamar Blvd., Suite 200
Arlington, Texas 76006
Tel: (817) 505-1499
Fax: (817) 549-7200
About Buckner Foods
Buckner Foods, Inc., is engaged in ownership and management of a
gas station and convenience store commonly known as Cresson Food
Store, located at 4625 S. Buckner Blvd., Dallas, Dallas County,
Texas. Shares of ownership in Debtor are held by its President,
Nurudin Ismail.
Buckner Foods sought Chapter 11 protection (Bankr. N.D. Tex. Case
No. 19-42307) on June 3, 2019. The LAW OFFICE OF MARILYN D. GARNER
is the Debtor's counsel.
BUILDERS FIRSTSOURCE: S&P Ups $475MM Sr. Secured Note Rating to BB+
-------------------------------------------------------------------
S&P Global Ratings raised its issue-level ratings on Dallas,
Texas-based Builders FirstSource Inc.'s (BFS) $467.6 (original
amount) term loan due 2024 and on its $475 million of senior
secured notes due 2027 to 'BB+' from 'BB-', with a revised recovery
rating of '1' from the previous recovery rating of '3'.
S&P is assigning its 'BB-' issue-level rating to the company's
proposed $500 million senior unsecured notes due 2030 with a
recovery rating of '4'.
Builder's FirstSource 'BB-' issuer credit rating is unchanged and
the outlook remains stable.
S&P raised the issue-level ratings on Builders FirstSource senior
secured obligations based on the proposed redemption of a
significant portion of company's secured debt ($500 million) and
replacing it with unsecured debt of approximately the same amount.
As a result, recovery prospects on the $467.6 (original amount)
term loan due 2024 and on its $475 million of senior secured notes
due 2027 have improved to a recovery rating of '1', indicating that
creditors could expect recovery of 100% (rounded estimate: 95%) in
the event of a default.
At the same time, S&P has assigned its 'BB-' issue-level rating to
the company's proposed $500 million senior unsecured notes due 2030
with a recovery rating of '4', estimating that lenders would
recover 46% (rounded estimate: 45%) of principal in the event of
default.
CAPSON CORP: Court Conditionally Approves Disclosure Statement
--------------------------------------------------------------
Judge H. Christopher Mott has ordered that the Disclosure Statement
explaining the Chapter 11 Plan filed by, CAPSON CORP., CAPSON
PHYSICIANS INSURANCE AGENCY, INC. and CAPSON HEALTHCARE SERVICES,
INC. is conditionally approved.
The deadline to object to final approval of the Disclosure
Statement and/or to confirmation of Plan is March 2, 2020, at 5:00
p.m. (CT). The voting deadline is March 2, 2020, at 5:00 p.m.
(CT).
The hearing consider final approval of the Disclosure Statement and
confirmation of the Plan is March 9, 2020 at 1:00 p.m. (CT). The
hearing will be held before the Honorable H. Christopher Mott,
United States Bankruptcy Court, Homer J. Thornberry Federal
Judicial Bldg. 903 San Jacinto Blvd., Courtroom 2, Austin, Texas
78701.
The Debtors filed a Chapter 11 Plan that says general unsecured
creditors owed $1,400 will recover 100% in cash without interest.
Holders of preferred equity interests, with 25,924,154 shares, will
recover 2.1% to 10.3% from a pro rata share of available cash.
Holders of equity interests will not receive any distributions.
A full-text copy of the Disclosure Statement dated Jan. 31, 2020,
is available at https://tinyurl.com/r3cnco9 from PacerMonitor.com
at no charge.
Attorneys for Debtors:
Morris D. Weiss
Mark C. Taylor
Evan J. Atkinson
WALLER, LANSDEN, DORTCH & DAVIS, LLP
100 Congress Ave., Suite 1800
Austin, Texas 78701
Telephone: (512) 685-6400
Facsimile: (512) 685-6417
E-mail: morris.weiss@wallerlaw.com
mark.taylor@wallerlaw.com
evan.atkinson@wallerlaw.com
- and -
Jonathan M. Fisher
WALLER, LANSDEN, DORTCH & DAVIS, LLP
633 Chestnut St., Suite 1400
Chattanooga, TN 37450
Telephone: (423) 682-6300
Facsimile: (423) 682-6301
Email: jonathan.fisher@wallerlaw.com
About Capson Corp.
Capson Corp., based in Austin, TX, and its affiliates sought
Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 19-10890) on
July 3, 2019.
In the petitions signed by Matthew Downs, president, Capson Corp.
was estimated to have assets of $10 million to $50 million and
liabilities of $1 million to $10 million; affiliate Capson
Physicians was estimated to have assets and liabilities of less
than $50,000; and affiliate Capson Healthcare estimated had assets
of up to $50,000 and liabilities of $1 million to $10 million.
The Hon. Christopher H. Mott oversees the cases.
Morris D. Weiss, Esq., at Waller Lansden Dortch & Davis, LLP,
serves as bankruptcy counsel to the Debtors.
No request for the appointment of a trustee or examiner has been
made in the Chapter 11 cases, and no committees have been appointed
or designated.
CHIMNEY HILL: Seeks to Hire Hahn Fife as Accountant
---------------------------------------------------
Chimney Hill Properties Ltd seeks approval from the U.S. Bankruptcy
Court for the Central District of California to hire Hahn Fife &
Company, LLP as its accountant.
The services to be provided by the firm include the preparation of
monthly operating reports, cash flows and tax returns; review of
financial documents; and assisting the Debtor in the preparation of
a Chapter 11 plan of reorganization.
Hahn Fife will be paid at the hourly rate of $80 for staff to $420
for partners. The firm will also be reimbursed for work-related
expenses incurred.
Donald Fifle, a partner at Hahn Fife, assured the court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
Hahn Fife can be reached at:
Donald T. Fifle
Hahn Fife & Company, LLP
790 E. Colorado Blvd., 9th Floor
Pasadena, CA 91101
Tel: (626) 792-0855
Fax: (626) 792-0879
Email: dfife@hahnfife.com
About Chimney Hill Properties
Chimney Hill Properties, Ltd is a privately held real estate
company based in Beverly Hills, Calif. Its principal asset is a
luxury parcel of real property located at 1013 N. Beverly Drive.
Chimney Hill Properties sought Chapter 11 protection (Bankr. C.D.
Cal. Case No. 19-24257) on Dec. 5, 2019. At the time of the
filing, the Debtor disclosed assets of between $10 million and $50
million and liabilities of the same range.
Judge Vincent P. Zurzolo oversees the case. The Debtors are
represented by Friedman Law Group, P.C. and Shenson Law Group PC.
CP#1109 LLC: Seeks Extension to Plan Confirmation Hearing
---------------------------------------------------------
Debtor CP #1109, LLC, moved for a 30-day continuance of the hearing
set on Jan. 23, 2020, to allow counsel for the Debtor to reserve
the amended plan and disclosure statement and to allow the Debtor
more time to deposit the necessary funds for confirmation and
states as follows:
On Dec. 9, 2019, the Court entered the Order approving the Amended
Disclosure Statement and setting the hearing on confirmation on
Jan. 23, 2020.
On Dec. 12, 2019, counsel for the Debtor served the Order approving
the Disclosure Statement and the Amended Plan but apparently failed
to serve the Amended Disclosure. The failure to serve the amended
disclosure statement under these facts where all interested parties
were emailed the final version and received approval is more form
than substance but counsel for the Debtor request a 30 extension of
the confirmation hearing to properly serve both the Amended Plan
and Amended Disclosure Statement.
Furthermore, the Plan contemplates that affiliates of the Debtor
are to deposit into counsel for the Debtor's trust account a sum
equal to the filed amount of claims, whether or not the claims are
subject to pending objections, plus interest. The confirmation
deposit is estimated not less $85,000. The Debtor needs an
additional 30 days to obtain the funds necessary for confirmation.
This is the first continuance sought of the confirmation hearing
and is made in good faith and not for purposes of delay. Since the
Plan provides for payment of interest on allowed claims, no party
in interest shall be harmed by the requested extension.
A full-text copy of the Motion dated Jan. 21, 2020, is available at
https://tinyurl.com/qnm3h4f from PacerMonitor.com at no charge.
The Debtor is represented by:
AM LAW, LLC
7385 S.W. 87 Avenue, Suite 100
Miami, FL 33173
Tel: 305-441-9530
Fax: 305-595-5086
Gary M. Murphree, Esq.
Brandy Gonzalez-Abreu
About CP#1109 LLC
CP#1109, LLC, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 18-25821) on Dec. 20, 2018. At the
time of the filing, the Debtor was estimated to have assets of less
than $1 million and liabilities of less than $500,000. The case is
assigned to Judge Mindy A. Mora. AM Law, LLC, is the Debtor's
counsel.
DAN'S MOBILE V: Seeks to Hire Daniel Berden as Managing Member
--------------------------------------------------------------
Dan's Mobile V Twin Service, LLC seeks authority from the U.S.
Bankruptcy Court for the Middle District of Florida to employ
Daniel Berden, a principal of the company, to serve as managing
member in connection with its Chapter 11 case.
As managing member, Mr. Berden will monitor the daily
administration and operations of business, maintain all records of
the business, and administer accounts receivable and billing. He
will receive a monthly salary of $5,500 and $400 health benefits
per month for his services.
Mr. Berden assures the court that he has no other corporate
interests that are in conflict with the Debtor.
Mr. Berden can be reached at:
Dan's Mobile V Twin Service, LLC
2001 Cattlemen Rd Unit 100
Sarasota, FL 34232-6248
About Dan's Mobile V Twin Service
Dan's Mobile V Twin Service, LLC filed a Chapter 11 bankruptcy
petition (Bankr. M.D. Fla. Case No. 20-00255) on Jan. 14, 2020. At
the time of the filing, the Debtor had estimated assets of between
$100,001 and $500,000 and liabilities of between $500,001 and $1
million. The Debtor is represented by the Law Offices of Melody D.
Genson.
DEMERARA HOLDINGS: Has Permission for Continued Cash Access
-----------------------------------------------------------
Judge Elizabeth S. Stong authorized Demerara Holdings Incorporated
to use cash collateral for the period from the Petition Date
through the date on which a termination event occurs.
Ponce Bank, fka Ponce De Leon Federal Bank, as pre-petition
assignee of Clearview Holdings LLC, holds a claim against the
Debtor's assets pursuant to a first priority secured mortgage.
Ponce Bank, by itself, thereafter loaned funds to the Debtor
secured by a second priority mortgage on the Debtor's property.
The two mortgages were later consolidated by virtue of a Mortgage
Consolidation Modification and Extension Agreement in a single
first lien in the principal amount of $560,000. As of the Petition
Date, the Debtor owes the secured creditor $621,069.72 in the
aggregate under the Note as of May 31, 2019.
The Court ruled that the Debtor will grant the secured creditor a
replacement lien on all of the Debtor's property to the extent of
the cash collateral used. The replacement lien will be subject to
the U.S. Trustee fees under Section 1930 of Chapter 28 of the U.S.
Code, Chapter 11 professional fees in an amount no to exceed
$10,000, and the fees of a hypothetical Chapter 7 trustee of up to
$10,000. As further adequate protection, the secured creditor
will receive $4,039 in monthly payments on or before the first day
of each month.
A copy of the order is available at https://is.gd/MkeU6c from
PacerMonitor.com free of charge.
About Demerara Holdings
Demerara Holdings Incorporated, a single asset case, owns a
mixed-use building located at 765 Utica Avenue, Brooklyn, New York
11203.
Demerara Holdings sought Chapter 11 protection (Bankr. E.D.N.Y.
Case No. 19-44681) on July 31, 2019. In the petition signed by
Marcanthony W. Atwell, president, the Debtor was estimated to have
assets and liabilities between $500,000 to $1 million. Mark E.
Cohen, Esq., is the Debtor's counsel.
DENTALCORP HEALTH: S&P Affirms 'B-' ICR on Term Loan Add-On
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B-'issuer credit rating on
Dentalcorp Health Services ULC, its 'B-' rating on the first-lien
debt and its 'CCC' rating on the second-lien debt. Recovery ratings
remain '3' for the first-lien debt and '6' for the second-lien
debt.
Dentalcorp is adding an incremental $75 million (approximately
C$100 million) to its first-lien term loan to fund the acquisition
of dental clinics. In addition, shareholders have committed the
same amount of common equity.
The rating affirmation reflects S&P's expectation that Dentalcorp's
leverage will remain very high at about 10x, but that it will
report double-digit percent revenue growth and positive cash flow
in 2020. S&P expects the company will continue to rely on the
capital markets to fund its aggressive acquisition-driven growth.
Dentalcorp must rely on outside financing to fuel its aggressive
acquisition-driven growth strategy, demonstrated by the proposed
transaction. The company plans to raise an additional C$200 million
of debt and common equity. Despite the proposed partially
debt-funded acquisition, S&P affirmed the 'B-' rating since the
proposed transaction does not materially change its view of the
company's financial risk profile, operations, and the competitive
landscape.
Dentalcorp's expansion strategy focuses on acquiring practices
rather than on opening new ones, reflecting the fragmentation of
the Canadian dental support organization (DSO) market that provides
white space for continued consolidation. S&P expects the company to
continue funding its acquisitions with debt, sustaining leverage
above 9x. Such leverage is in line with peer 'B-' rated DSOs. In
addition, the rating agency expects the company to generate about
C$10 million-C$15 million of free operating cash flow in 2020.
S&P's stable outlook reflects its expectation that Dentalcorp will
continue to pursue a debt-funded, acquisition-driven growth
strategy. Revenue continues to increase at a double-digit percent
rate, and the company generates modest discretionary cash flow, but
leverage remains above 9x through 2020.
S&P could lower the rating if the company generates sustained cash
flow deficits with no prospects for improvement and its leverage
becomes potentially unsustainable. This could happen if
same-facility sales decline, planned acquisitions are nonaccretive,
or if the company adopts a more aggressive-than-expected
acquisition strategy.
An upgrade is unlikely over the next year, given Dentalcorp's high
leverage from its debt-funded acquisition strategy. Over the longer
term, S&P could consider an upgrade if its financial policy shifts
to focus on permanent debt reduction, such that it sustains
leverage below 6x.
DRAGON HOPS: Unsecureds to Get 30% Recovery in Plan
---------------------------------------------------
Dragon Hops Brewing, LLC, a restaurant and brewery, is proposing a
reorganization plan that will be funded from cash on hand, future
revenues of the Debtor and sale of the Debtor's assets not being
utilized in the business operations.
The Debtor's assets are comprised of:
(a) Restaurant furniture and equipment is valued at $65,000.
(b) Brewing and related Equipment is valued at $130,000.
(c) Inventory, consisting of finished product and beer products
which are in the brewing process have a value of $20,000.
(d) Cash on Hand: The amount of cash on hand changes daily. It is
anticipated that there will be sufficient funds on hand on the
Effective Date to provide for the scheduled plan payments.
Under the Plan, the Class 3 secured claim of Will and Alexa Warthen
in the principal amount of $70,000 will be paid interest only on a
monthly basis for the first year following the Effective Date.
Thereafter, the Class 3 Creditor Claim will be amortized over a
10-year period, with an annual interest rate of five percent. In
the event equipment which is subject to the lien of the Class 3
Creditor is sold, any sale proceeds shall be applied against this
debt.
Class 4 General Unsecured Creditors will receive a pro rata
distribution of $100,000, payable quarterly over a period of five
years, commencing on May 15, 2020. The Debtor estimates this will
result in a 30% recovery to creditors in this class.
Class 5 members of the Debtor will retain their ownership interest
in the Debtor in the same proportion as existed on the Petition
Date.
A full-text copy of the Amended Disclosure Statement dated Jan. 31,
2020, is available at https://tinyurl.com/wh24apk from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Ann E. Schmitt, VSB No. 22030
Culbert & Schmitt, PLLC
40834 Graydon Manor, SE
Leesburg, VA 20175
Tel: (703) 737-7797
(703)439-2859
E-mail: aschmitt@culbert-schmitt.com
About Dragon Hops Brewing
Dragon Hops Brewing LLC, a brewery and restaurant based in
Purcellville, Virginia, filed a voluntary Chapter 11 petition
(Bankr. E.D. Va. Case No. 19-10426) on Feb. 9, 2019, listing under
$1 million in both assets and liabilities. The case has been
assigned to Judge Brian F. Kenney. Ann E. Schmitt, Esq., at
Culbert & Schmitt, PLLC, is serving as the Debtor's counsel.
DUFF & PHELPS: S&P Puts 'B' ICR on CreditWatch Negative
-------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S.-based business
consulting firm Duff & Phelps Holdings Corp., including the 'B'
issuer credit rating, on CreditWatch with negative implications.
The CreditWatch placement reflects Duff & Phelps' announcement that
it entered into a definitive agreement to be acquired by a
consortium of investors led by Stone Point Capital and Further
Global for $4.2 billion. Given the size of the transaction, S&P
believes additional debt is likely to weaken Duff and Phelps'
credit metrics, resulting in leverage meaningfully above the rating
agency's 6.5x threshold for the 'B' rating.
"We will resolve the CreditWatch once we have additional details on
the final capital structure, review the potential impact on the
company's credit metrics, and assess its ability and willingness to
lower and maintain adjusted leverage below 6.5x. We could lower the
rating to 'B-' if the transaction is funded with incremental debt
that increases leverage further, preventing Duff and Phelps from
reaching our 6.5x threshold for the rating in the first half of
2020," S&P said.
EARLY LEARNING: Unsecureds Owed $271K to Get $50K in Plan
---------------------------------------------------------
Early Learning Language Academies, LLC, d/b/a Whole Kids Academy,
filed a Chapter 11 Plan and a Disclosure Statement on Jan. 31,
2020.
As to Class 6 Priority Claims of Former Employees, two former
employees, Cintya Castro and Marcela Latorre have filed claims
asserting priority claims for unpaid wages in the amounts of
$158.40 and $5,733.09, respectively. The Debtor will pay the
allowed claims in this class in eight equal quarterly installments,
including 5% interest, until paid. This class is impaired.
As to Class 7 Disputed/Unliquidated Non-Priority Unsecured Claims
of Former Employees in Litigation with Debtor, the Debtor will make
payment to the allowed claims in this class a total sum of $50,000
in eight equal quarterly payments in the amount of $6,250,
commencing three years from the Effective Date of the Plan. The
allowed claims in this class will receive a pro rata share of the
distribution hereunder. This class is impaired.
As to Class 8 General Unsecured Claims, the claims total $271,406:
Comptroller of the Treasury, MD(estimated) $1,498
Conn Maciel Carey $46,340
Denise Hiner(insider) $39,457
Direct Capital $9,784
M&T Bank $0
Marstudio (disputed) $20,563
Internal Revenue Service $142,897
U.S. Bank Nat'l Assoc. dba Elan Fin. Serv. $10,867
==========
$271,406
The Debtor will make payment to the allowed unsecured claims a
total sum of $50,000 in eight equal quarterly payments in the
amount of $6,250, commencing three years from the Effective Date of
the Plan. The allowed claims in this class will receive a pro rata
share of the distribution hereunder. This class is impaired.
As to Class 9 Shareholders, all outstanding shares/membership
interests in Debtor belonged to Duke Esler. In exchange for a
contribution of new capital in the sum of $20,000, new shares
constituting 100% of the issued and outstanding shares of the
reorganized Debtor shall be issued to Duke Esler, or his assignee.
Since the filing of this case, Debtor has generated more than $1.33
million dollars of revenue which has resulted in excess of $311,000
of profit through December 31, 2019. With Debtor's current and
projected revenues through the continuation of it business,
notwithstanding any new capital contribution, the Debtor believes
it is adequately capitalized to continue its operations and fund
the obligations set for the under the Chapter 11 Plan.
A full-text copy of the Disclosure Statement dated January 31,
2020, is available at https://tinyurl.com/wfjv3rf from
PacerMonitor.com at no charge.
The Debtor's counsel:
Richard L. Gilman
Gilman & Edwards, LLC
8401 Corporate Drive, Suite 450
Landover, Maryland 20785
Tel: 301-731-3301
Fax: 301-731-3072
E-mail: rgilman@gilmanedwards.com
About Early Learning Language Academies
Debtor, Early Learning Language Academies, LLC is a for-profit
Maryland limited liability company, d/b/a as Whole Kids Academy
("WKA") with its principal place of business in Rockville,
Maryland. WKA is a Spanish immersion preschool dedicated to
providing care, education and enrichment to children from birth
through pre-kindergarten. The company is wholly owned by John
("Duke") Esler, who along with his wife Crystal, handle all facets
of the operations.
Early Learning Language Academics sought Chapter 11 protection
(Bankr. D. Md. Case No. 19-20397) on Aug. 2, 2019. Richard L.
Gilman, Esq., at GILMAN & EDWARDS, LLC, is the Debtor's counsel.
ESSEQUIBO HOLDINGS: Has OK to Use Cash Thru Termination Date
------------------------------------------------------------
Judge Elizabeth S. Stong authorized Essequibo Holdings Inc., to use
cash collateral for the period from the Petition Date through the
date on which a termination event occurs.
Ponce Bank, f/k/a Ponce De Leon Federal Bank, is assignee of
Clearview Holdings LLC with respect to a first loan mortgage, and
is holder, for itself, of an interest in a third loan note. By
virtue of a Mortgage Consolidation Modification and Extension
Agreement (of the first loan note and the third loan note) the
secured creditor holds a single lien in the principal amount of
$542,500. The Debtor agrees and acknowledges that it owes the
secured creditor the outstanding aggregate amounts under the Note
of $597,627.53 of May 31, 2019.
The Court ruled that the Debtor will grant the secured creditor a
replacement lien in all of the Debtor's pre-petition and
post-petition real and personal property, to the extent that the
secured creditor had as of the Petition Date a valid, allowable and
unavoidable claim and security interest in the Debtor's
pre-petition assets (in the order of priority continuing with its
liens) to the extent of cash collateral used. The replacement lien
will be subject to U.S. Trustee fees, Chapter 11 professional fees
of up to $10,000, and fees of a hypothetical Chapter 7 trustee in
an amount not to exceed $10,000. As further adequate protection,
secured creditor shall receive monthly payments of $3,871.10 on or
before the first day of each month.
The secured creditor holds a valid, perfected and enforceable first
priority blanket lien on and security interest in all or
substantially all the Debtor’s assets and proceeds therefrom.
A copy of the order is available at https://is.gd/fPbMW3 from
PacerMonitor.com at no charge.
About Essequibo Holdings
Essequibo Holdings Inc., operates a commercial and residential
property for rent, at 763 Utica Avenue, Brooklyn, New York. It
filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 19-44679) on
July 31, 2019. Judge Elizabeth S. Stong administers the case.
Mark E. Cohen, Esq., is counsel to the Debtor.
EUROAMERICAN FOODS: Court OKs Cash Use Thru Feb. 12, Amends Order
-----------------------------------------------------------------
Judge Donald R. Cassling authorized Euroamerican Foods, Inc., to
use cash collateral for the period from Jan. 6, 2020 through Feb.
12, 2020 to pay post-petition expenses owed to third parties.
In return for the Debtor's use of cash collateral, Wells Street
Management LLC and Hispanic Hospitality Group, LLC are granted,
among others, with replacement liens to the extent of their
pre-petition lien. The Court authorized and directed Wintrust Bank
to release any hold on the Debtor's bank account (account ending in
2576), and Wells Street is accordingly directed to immediately
dismiss the citation proceeding filed in the Circuit Court of Cook
County.
A copy of the interim order is available at https://is.gd/scJNwV
from PacerMonitor.com at no charge.
Final hearing on the motion is set for Feb. 11, 2020 at 10:30 a.m.
Subsequent to the entry of the order, the Bankruptcy Court issued
an amended order which struck the provision (a) authorizing
Wintrust Bank to release hold of the Debtor's bank account and
directing Wells Street to dismiss the citation pending in the Cook
County Circuit Court.
A copy of the amended interim order is available free of charge at
https://is.gd/F8iZA9 from PacerMonitor.com.
About Euroamerican Foods
Euroamerican Foods, Inc., sought Chapter 11 protection (Bankr. N.D.
Ill. Case No. 20-00305) on Jan. 6, 2020. Judge Donald R. Cassling
is assigned to the case. Crane, Simon, Clar & Dan represents the
Debtor.
EUROAMERICAN FOODS: Seeks to Use Insider Cash Collateral
--------------------------------------------------------
Euroamerican Foods, Inc., seeks the Bankruptcy Court's approval to
use cash collateral (in which Well Street Management LLC and
Hispanic Hospitality Group, LLC assert an interest) in order to
sustain the Debtor's business operations and reorganize its
financial affairs through the implementation of a successful
reorganization plan.
Wells Street obtained a judgment against the Debtor in the Circuit
Court of Cook County in October 2019 for $83,153.53. Shortly
thereafter, Wells Street issued a third party citation to Wintrust
Bank, which lien is avoidable as a preference pursuant to Section
547 of the Bankruptcy Code.
HHG, owned by insiders of the Debtor, claims a senior security
position as to all of the Debtor's assets. The Debtor owes HHG
approximately $100,000, according to the dockets.
As adequate protection, the Debtor proposes to grant replacement
liens to Wells Street and HHG to the extent of their pre-petition
lien. A copy of the motion is available for free at
https://is.gd/sFUXmb from PacerMonitor.com.
Hearing on the motion is scheduled for Feb. 11, 2020 at 10:30 a.m.
About Euroamerican Foods
Euroamerican Foods, Inc., sought Chapter 11 protection (Bankr. N.D.
Ill. Case No. 20-00305) on Jan. 6, 2020. Judge Donald R. Cassling
is assigned to the case. Crane, Simon, Clar & Dan is the Debtor's
counsel.
FGL HOLDINGS: Fitch Puts BB+ Unsec. Rating on Watch Positive
------------------------------------------------------------
Fitch Ratings placed all ratings for FGL Holdings and its
subsidiaries, which include the 'BBB+' Insurer Financial Strength
Ratings for the U.S. life insurance subsidiaries, Fidelity &
Guaranty Life Insurance Company and Fidelity & Guaranty Life
Insurance Company of New York, (referred to collectively as F&G
Life) on Rating Watch Positive.
KEY RATING DRIVERS
The rating action follows the company's announcement that it has
reached an agreement to be acquired by Fidelity National Financial,
Inc. (FNF) for approximately $2.7 billion. FNF intends to fund the
acquisition of F&G Life through a combination of cash on hand,
proceeds from the issuance of additional debt, and issuance of
common stock. The transaction is expected to close, subject to
customary closing conditions and regulatory approvals, in the
second or third quarter of 2020.
At close, F&G Life is expected to retain its senior management
team, organizational structure, and to maintain its current
financial profile.
Fitch expects F&G Life's ratings will be upgraded one notch
following the close of the transaction based on group support from
FNF, which is higher rated (IFS ratings A, senior debt BBB).
F&G Life's credit profile is expected to benefit from FNF ownership
as a material subsidiary of a larger, more diversified insurance
group. F&G Life is expected to comprise roughly one-third of the
pro forma consolidated shareholder's equity, and offers material
earnings and risk diversification to FNF's core title insurance
business. Fitch expects integration risk to be limited.
Additionally, Fitch views favorably FNF's familiarity with F&G
Life's business, having already been a common and preferred equity
investor in F&G Life since 2017.
Fitch's ratings for F&G Life reflect the company's consistent and
strong operating performance, strong statutory capitalization, and
improvement in the company's business profile. The ratings also
consider F&G Life's above-average exposure to structured securities
and risky assets relative to the industry, which is partially
mitigated by investment manager Blackstone Insurance Solutions
Group Advisors' strong expertise in structured securities and
alternative assets.
RATING SENSITIVITIES
The following could result in an upgrade of F&G Life's ratings:
-- Successful close of the F&G Life acquisition by FNF as
planned.
Failure to close the F&G Life acquisition by FNF would result in
removal of the Rating Watch Positive.
The following sensitivities could result in an upgrade to F&G
Life's ratings should the F&G Life acquisition fail to close:
-- The company maintains operating ROEs above 10% on a consistent
basis;
-- A Prism capital model score well into the 'Strong' category on
a sustained basis;
-- Continued stable investment performance;
-- Financial leverage below 25%.
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.
Fidelity & Guaranty Life Holdings, Inc.
- LT IDR BBB- on Rating Watch Positive
- Senior unsecured; LT BB+ on Rating Watch Positive
Fidelity & Guaranty Life Insurance Company
- Insurer Financial Strength Ratings BBB+ on Rating Watch
Positive
Fidelity & Guaranty Life Insurance Company of New York
- Insurer Financial Strength Ratings BBB+ on Rating Watch
Positive
FGL Holdings
- LT IDR BBB- on Rating Watch Positive
F&G Life Re Ltd
- Insurer Financial Strength Ratings BBB- on Rating Watch
Positive
F&G Reinsurance Ltd
- Insurer Financial Strength Ratings BBB- on Rating Watch
Positive
CF Bermuda Holdings Limited
- LT IDR BBB- on Rating Watch Positive
G.D.S. EXPRESS: May Obtain Financing, Access Cash Until Feb. 21
---------------------------------------------------------------
Judge Alan M. Koschik of the U.S. Bankruptcy Court for the Northern
District of Ohio authorized G.D.S. Express, Inc. and its affiliates
to obtain revolving loans from Northwest Bank and to use cash
collateral on an interim basis until the close of Feb. 21, 2020.
Northwest Bank is granted adequate protection against the
diminution in the value or amount of the prepetition collateral,
replacement liens and a superpriority administrative expense claims
under sections 503 and 507(b) of the Bankruptcy Code. Such
replacement liens and superpriority administrative expense claims
are subject to the carve-out and the liens, security interests and
superpriority treatment granted to Northwest Bank.
As precondition to the continuance of funding by Northwest Bank and
the continued use of cash collateral, the Debtors agree to observe
the following milestones in the orderly liquidation of the Debtor's
estate:
(a) By Jan. 31, 2020, the Debtor will provide written reports
to Northwest Bank and the Committee of the locations, vehicle
mileage and status of all trucks, trailers and all containers
(including a specific list of all trucks that cannot be located
after diligent inquiry) and any cash collateral.
(b) By Feb. 5, 2020, the Debtor will provide written reports
to Northwest Bank and the Committee of the disposition of any
hazardous cargo contained in rolling stock or containers.
(c) By Jan. 27, 2020, the Debtor will provide Northwest Bank
and the Committee an updated aging for all accounts receivable,
with all previous collections noted to be updated weekly in
addition to the requirements as provided for in the budget process
set for in the Order.
(d) By Feb. 14, 2020, the Debtor will provide Northwest Bank
and the Committee a comprehensive plan for the methodology of the
sale, return or liquidation of all tractors, trailers and
containers.
(e) By Feb. 24, 2020, the Debtor will seek court approval for
the sale and/or disposition of the trucks, trailers and
containers.
(f) By March 15, 2020, the Debtors will use their best
efforts (i) to reduce to cash 80% of accounts receivable existing
on the Petition Date or billed after the Petition Date; and (ii)
for an identification of all account payors that have refused to
pay with a plan provided for the accounts which are paying.
Further, any discount of more than 5% from the invoice amount will
require the written approval of Northwest Bank.
A copy of the Order is available at PacerMonitor.com at
https://is.gd/vnZB9p at no charge.
About G.D.S. Express
G.D.S. Express, Inc. -- http://www.gdsexpress.com/-- is a
family-owned trucking company that provides services in 48 states,
with general freight and garment-on-hangers service in both the
U.S. and Mexico. It operates with 75 owner operators and 60 company
trucks. Headquartered in Akron, Ohio, GDS Express was founded in
1990 by Jack Delaney, a former Roadway Express executive.
G.D.S. Express and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 19-53034)
on Dec. 27, 2019. At the time of the filing, G.D.S. Express had
estimated assets of less than $50,000 and liabilities of between $1
million and $10 million. Judge Alan M. Koschik oversees the cases.
Brouse McDowell, LPA is the Debtors' legal counsel.
GELTECH SOLUTIONS: Will Transfer All Assets to Former Chairman
--------------------------------------------------------------
GelTech Solutions, Inc. entered into a settlement and assignment
agreement between the Company and Mr. Michael Reger, the Company's
secured lender and former chairman of the Board and chief executive
officer, pursuant to which the Company agreed to assign and
transfer all of its assets, including its intellectual property, to
Mr. Reger in consideration for Mr. Reger releasing the Company from
any liability related to approximately $7.0 million of secured
convertible debt owed by the Company to Mr. Reger.
On Jan. 31, 2020 through Feb. 5, 2020, the following directors and
executive officers resigned from their respective positions:
* Phillip O'Connell, director
* Leonard Mass, director
* Victor Trotter, director
* Dave Gutmann, director
* Michael Hull, chief financial officer, treasurer and
secretary
* Gerry Kaiser, VP
* Matthew Struzziero, VP
On Jan. 31, 2020, Mr. Warren Mosler was appointed as chairman of
the Board, chief executive officer, chief financial officer,
president, treasurer and secretary of the Company. Mr. Mosler is
an American economist and theorist. Presently, in addition to his
new role with the Company, Mr. Mosler owns and operates Valance
Co., Inc. He is founder of Mosler Automotive and a co-founder of
the Center for Full Employment and Price Stability at the
University of Missouri-Kansas City. The founder of what has been
popularized as Modern Monetary Theory, in 2014 he was appointed
Visiting Professor at the University of Bergamo, Italy. He also
co-founded AVM, L.P., a broker-dealer providing financial services
to institutional investors, and the Illinois Income Investors
family of investment funds, which he remained involved with until
1997.
About Geltech Solutions
GelTech Solutions, Inc., generates revenue primarily from marketing
products based around the following four product categories (1)
FireIce, a water enhancing powder that can be utilized both as a
fire suppressant in wildland and urban firefighting, including
fires in underground utility structures, and in wildland
firefighting as a medium-term fire retardant to protect wildlands,
structures and firefighters; (2) FireIce Shield, a line of products
used in a variety of industries to protect assets from heat and
fire; (3) Soil2O "Dust Control", its application which is used for
dust mitigation in the aggregate, road construction, mining, as
well as, other industries that deal with daily dust control issues
and (4) Soil2O, a product which reduces the use of water and is
primarily marketed to golf courses and commercial landscapers.
Geltech reported a net loss of $4.01 million for the year ended
Dec. 31, 2018, following a net loss of $4.16 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $2.58
million in total assets, $5.98 million in total liabilities, and a
total stockholders' deficit of $3.40 million.
Salberg & Company, P.A., in Boca Raton, Florida, the Company's
auditor since 2008, issued a "going concern" qualification in its
report dated March 28, 2019, citing that the Company has a net loss
and cash used in operations of $4,013,957 and $3,043,727,
respectively, in 2018 and a stockholders' deficit and accumulated
deficit of $2,129,358 and $56,133,648, respectively, at Dec. 31,
2018. These matters raise substantial doubt about the Company's
ability to continue as a going concern.
GEMSTONE SOLUTIONS: Unsecureds Get Nothing in Plan
--------------------------------------------------
Gemstone Solutions Group, Inc. f/k/a Gymboree Group, Inc., has a
Chapter 11 plan that contemplates the entry into an exit financing
facility to fund the Debtor's exit from bankruptcy.
The Exit Facility will fund the payment of certain Administrative
Claims and Priority Claims, fund the Reorganized Debtors' general
corporate expenses and fund the Reorganized Debtors' purchase of a
controlling interest in Certified Art and Collectibles.
The Plan provides:
* Class 1 Prepetition ABL Claims. IMPAIRED. Projected recovery
99% to 100%. The Holders of Prepetition ABL Claims shall seek any
contingent indemnification, reimbursement, or similar obligations
only from the Prepetition ABL Indemnity Reserve, and shall not seek
payment on account of any such obligations from the Debtors or the
Reorganized Debtors.
* Class 3a General Unsecured Claims. IMPAIRED. Projected recovery
0%. Total claim $186,785,597.01 to $824,803,208.60. The Holders of
General Unsecured Claims shall neither receive nor retain any
property hereunder on account of such Claims.
* Class 3b. Deficiency Claims. IMPAIRED. Projected recovery 0%.
Total claim $0 to 14,197,595. In consideration for a full release
of the Holders of Deficiency Claims by the Debtors and their
estates, the Deficiency Claims shall be disallowed and expunged.
* Class 4. Intercompany Claims. IMPAIRED. On the Effective Date,
at the election of the DIP Agent, Intercompany Claims will either
be reinstated or released, canceled and discharged.
* Class 5. Interests in Gemstone Solutions. IMPAIRED. On the
Effective Date, all Interests will be cancelled. No Distribution
account of any Interests in Gemstone Solutions.
* Class 6. Interests in Subsidiary Debtors. Either (i) Unimpaired
or (ii) Impaired. On the Effective Date, all Interests in the
Subsidiary Debtors will either be (i) reinstated solely to maintain
the Debtors’ corporate structure or (ii) cancelled, as determined
by the Debtors with the consent of the Plan Sponsor.
The Plan Confirmation Hearing will commence on April 21, 2020, at
11:00 a.m. (prevailing Eastern Time), before the Honorable Keith L.
Phillips, United States Bankruptcy Judge, at the United States
Bankruptcy Court for the Eastern District of Virginia, 701 East
Broad Street, Courtroom 5100, Richmond, Virginia 23219. The
deadline to file objections to Confirmation of the Plan is [April
13, 2020, at 5:00 p.m. (prevailing Eastern Time)]4 (the “Plan
Objection Deadline”). Parties wishing to reply to any objection
to Confirmation of the Plan shall have until [5:00 p.m. on April
17, 2020] to file a reply.
As of the Petition Date, the Debtors had outstanding funded debt in
the aggregate principal amount of approximately $289 million under
two financing arrangements
A full-text copy of the Disclosure Statement dated January 31,
2020, is available at https://tinyurl.com/wst5z2s from
PacerMonitor.com at no charge.
Co-Counsel to the Debtors:
Dennis F. Dunne, Esq.
Evan R. Fleck, Esq.
Michael W. Price, Esq.
MILBANK LLP
55 Hudson Yards
New York, New York 10001
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
- and -
Michael A. Condyles, Esq.
Peter J. Barrett, Esq.
Jeremy S. Williams, Esq.
Brian H. Richardson, Esq.
KUTAK ROCK LLP
901 East Byrd Street, Suite 1000
Richmond, Virginia 23219-4071
Telephone: (804) 644-1700
Facsimile: (804) 783-6192
About Gemstone Solutions Group
Gemstone Solutions Group, Inc., filed a Chapter 11 bankruptcy
petition (Bankr. E.D. Va. Lead Case No. 19-30258) on Jan. 16, 2019,
estimating under $1 million in both assets and liabilities. The
Debtor tapped Milbank LLP as counsel, Kutak Rock LLP as co-counsel,
and O'Hagan Meyer PLLC, as conflict counsel.
GENERAL CANNABIS: Negotiating Maturity Date Extension of $750K Note
-------------------------------------------------------------------
General Cannabis Corp previously issued that certain Promissory
Note, dated July 18, 2019, as amended, to SBI Investments LLC,
2014-1, for the principal amount of $750,000, which has a maturity
date of Jan. 31, 2020. The Company and the Purchaser are currently
negotiating the terms of an extension of the maturity date of the
Promissory Note and expect to enter into a new agreement. Absent
such extension, the Purchaser has the right to exercise its
remedies under the terms of the Promissory Note.
About General Cannabis Corp
Headquartered in Denver, Colorado, General Cannabis Corp --
http://www.generalcann.com/-- provides products, services and
capital to the regulated cannabis industry and non-cannabis
customers. General Cannabis operates through its four wholly-owned
subsidiaries: (a) 6565 E. Evans Owner LLC, a Colorado limited
liability company formed in 2014; (b) General Cannabis Capital
Corporation, a Colorado corporation formed in 2015; (c) GC Security
LLC, a Colorado limited liability company formed in 2015; and (d)
GC Corp., a Colorado corporation, originally formed in 2013 under
ACS Corp.
General Cannabis reported a net loss of $16.97 million for the year
ended Dec. 31, 2019, following a net loss of $8.22 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had
$4.61 million in total assets, $5.70 million in total liabilities,
and a total stockholders' deficit of $1.09 million.
Hall & Company, in Irvine, California, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
March 8, 2019, on the consolidated financial statements for the
year ended Dec. 31, 2018, citing that the Company's cash balance of
approximately $8.0 million is not sufficient to absorb the
Company's operating losses and retire their debt of $6,849,000 due
May 1, 2019. Accordingly, there is substantial doubt about the
Company's ability to continue as a going concern.
GIGA TRONICS: Reports $1.41 Million Net Loss for Third Quarter
--------------------------------------------------------------
Giga-Tronics Incorporated filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
attributable to common shareholders of $1.41 million on $2.63
million of total revenue for the three months ended Dec. 28, 2019,
compared to a net loss attributable to common shareholders of
$517,000 on $1.89 million of total revenue for the three months
ended Dec. 29, 2018.
For the nine months ended Dec. 28, 2019, the Company reported a net
loss attributable to common shareholders of $1.36 million on $9.16
million of total revenue compared to a net loss attributable to
common shareholders of $1.08 million on $7.62 million of total
revenue for the nine months ended Dec. 29, 2018.
As of Dec. 28, 2019, the Company had $9.18 million in total assets,
$4.80 million in total liabilities, and $4.38 million in total
shareholders' equity.
As of Dec. 28, 2019, the Company had $1.2 million in cash and cash
equivalents, compared to $878,000 as of March 30, 2019. The
Company had working capital of $3.8 million at Dec. 28, 2019
compared to $1.6 million at March 30, 2019. The current ratio
(current assets divided by current liabilities) at Dec. 28, 2019
was 2.10 compared to 1.41 at March 30, 2019. The increase in
working capital was primarily due to an increase in prepaids and
other current assets of $629,000 and an increase in inventories of
$852,000, all of which resulted from the adoption of ASC 606 during
the first nine months of fiscal 2020. In addition, the right of
use asset increased by $1.2 million and loans payable decreased by
$643,000.
John Regazzi, chief executive officer of the Company, said, "Our
revenue growth and sustained gross margin performance in the third
quarter was primarily driven by our RADAR filter business which
performed well in the quarter. On the RADAR/EW testing side of our
business, a delay at one of our suppliers unfortunately delayed
revenue that we expected to receive in the third quarter fiscal
2020. We are working closely with our supplier to resolve the
issue and expect to realize these revenues in subsequent quarters.
Our sales funnel is robust, particularly given demand we are seeing
for the new multi-channel capture product we launched earlier this
week."
Lutz Henckels, executive vice president and chief financial
officer, stated, "We remain focused on capitalizing on the
opportunities we're seeing for our RADAR/EW test solution business,
which we believe will be our growth engine moving forward,
particularly with the introduction of our unique multi-channel
capture product. Likewise, our sole-source RADAR filter business
continues to provide a solid platform for our continued growth."
"As part of our growth strategy, during the third quarter we
enhanced our balance sheet with a small capital raise and also
converted approximately 90% of our Series E preferred shares to
common stock. During the quarter we also completed a reverse split
of our common stock to better position Giga-tronics for a potential
future uplisting to a national exchange. Our pipeline is robust,
and we're gaining increased market recognition for the unique and
exceptional technology that comprises our critical testing
solutions. We are energized by the opportunities ahead and believe
we are well positioned to drive continued revenue growth and
profitability as we move forward into fiscal 2021."
A full-text copy of the Form 10-Q is available for free at the
SEC's website at:
https://is.gd/NOrBQJ
About Giga-Tronics
Headquartered in Dublin, California, Giga-Tronics Incorporated
produces RADAR filters and Microwave Integrated Components for use
in military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics reported a net loss of $1.04 million for the year
ended March 30, 2019, a net loss of $3.10 million for the year
ended March 31, 2018, and a net loss of $1.54 million for the year
ended March 25, 2017. As of Sept. 28, 2019, the Company had $8.75
million in total assets, $6.34 million in total liabilities, and
$2.41 million in total shareholders' equity.
GONZALEZ & COLON: Creditor to Get Monthly Payments in Plan
----------------------------------------------------------
Gonzalez & Colon Investment Group Inc. filed a plan of
reorganization.
Class 1 Secured Claim pertains to Banco Santander Puerto Rico's
Claim No. 1, in the total amount of $105,361.22. The claim will
receive a lump sum payment of $23,000 as first payment and will be
paid in full thru 55 monthly payments of $1,500 commencing on the
1st month after the effective date of the plan. The amount of the
Payments to be made to Banco Santander totals $105, 361.
There are no general unsecured claims.
The source of payments under the proposed plan shall come from the
operation of Debtor's business.
A full-text copy of the Disclosure Statement dated January 31,
2020, is available at https://tinyurl.com/v85qtnk from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Miriam A. Murphy-Lightbourn
PO Box 372519
Cayey, Puerto Rico 00737
Tel: 787-263-2377
Email: mamurphyli82@gmail.com
About Gonzalez & Colon Investment Group
Gonzalez & Colon Investment Group Inc., is authorized by Puerto
Rico Department of State to operate as a privately owned
corporation. It Debtor classifies as single asset property,
constituting a single property with 4 commercial units, that
generates substantially all of the gross income of the debtor.
Gonzalez & Colon Investment Group sought Chapter 11 protection
(Bankr. D.P.R. Case No. 19-05905) on Oct. 11, 2019. Miriam A.
Murphy-Lightbourn, Esq., at MIRIAM A. MURPHY & ASSOCIATES PSC, is
the Debtor's counsel.
GRABIT INC: March 31 Confirmation Hearing Set
---------------------------------------------
Grabit, Inc. filed its Chapter 11 Plan of Reorganization with the
United States Bankruptcy Court for the District of Delaware.
The Bankruptcy Court has scheduled a hearing to consider
confirmation of the Plan for March 31, 2020 at 2:00 p.m. (ET) in
the Bankruptcy Court, 824 North Market Street, 6th Floor, Courtroom
#2, Wilmington, Delaware 19801. The Bankruptcy Court has directed
that objections, if any, to confirmation of the Plan be served and
Filed on or before February 28, 2020 at 4:00 p.m. (ET).
Under the Plan, holders of general unsecured claims in Class 4,
owed $106,000, will recover 100 percent of their claims. The class
is unimpaired.
A black-lined copy of the solicitation version of the Disclosure
Statement dated January 31, 2020, is available
at https://tinyurl.com/txrydx8 from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
G. David Dean (6403)
COLE SCHOTZ P.C.
500 Delaware Ave., Suite 1410
Wilmington, DE 19801
Telephone: (302) 652-3131
Email: ddean@coleschotz.com
About Grabit(TM) Inc.
Grabit(TM) -- https://grabitinc.com/ -- is a robotic and machine
learning company leveraging proprietary electro-adhesion technology
to revolutionize consumer and industrial products manufacturing and
warehouse logistics. Grabit's current investors include Formation
8, Draper Nexus, Danhua Capital, Nike, Samsung, Brother Industries,
ABB, Shanghai Electric, Flex, NTT Docomo and the Esquel Group.
Grabit, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No.
19-12703) on Dec. 18, 2019. The Debtor was estimated to have
$100,000 to $500,000 in assets and $10 million to $50 million as of
the bankruptcy filing. COLE SCHOTZ P.C., led by G. David Dean,
Esq., is the Debtor's counsel.
GTN PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: GTN Properties, LLC
1815 NW 51 Place
Fort Lauderdale, FL 33309
Business Description: GTN Properties, LLC owns a leashold interest
in the following property: Parcel 2-A Fort
Lauderdale Executive Airport, Broward
County, FL. The current value of the
Debtor's interest of such Property is
$14,300,000.
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 20-11743
Judge: Hon. Scott M. Grossman
Debtor's Counsel: Susan D. Lasky, Esq.
SUE LASKY, PA
320 SE 18 Street
Fort Lauderdale, FL 33316
Tel: 954-400-7474
Email: Jessica@SueLasky.com
Total Assets: $14,360,000
Total Liabilities: $11,747,729
The petition was signed by Ignacio Martinez, managing member.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/CXOaAz
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. AOGMX LLC $24,460
29 Upland Ave
West Harrison, NY
10604
2. ARINC Direct $30,996
POB 951273
Dallas, TX 75395-1273
3. CAE SimuFlite Inc. $31,752
14613 Collection
Center Dr
Chicago, IL 60693
4. Clero Enterprises $52,774
3881 NW 125 Street
Opa Locka, FL 33054
5. Corporate Jet Support $35,321
1801 NE 21 Street
Fort Lauderdale, FL 33305
6. Eurocontrol Central Route $59,288
Charges Office
Rue de la Fusee
96 B 1130 Brussels(Belgium)
7. Gogo Business Aviation LLC $61,288
Department 1371
Denver, CO 80256-0001
8. ICCS Mexico $28,962
Av Santa Fe 505
Piso 20
Co Cruz Manca
Santa Fe 05349
Mexico D F
9. Jeppesen Sanderson Inc. $35,382
POB 840864
Dallas, TX 75284
10. Jetex Flight Support $132,542
Dubai International Airport
POB 54698
Dubai, UAE
11. Jetex Fueling $46,967
Services Limited
Dubai International Airport
POB 54698
Dubai, UAE
12. NEFPASS LLC $167,463
501 Merritt Seven,
6th Floor
Norwalk, CT 06851
13. Rice Pugatch $22,848
Robinso, et al
101 NE Third Ave
Suite 1800
Fort Lauderdale, FL 33301
14. S.E.A.L. Aviation LLC $60,388
1011 NW 51 St, Suite 5
Fort Lauderdale, FL 33309
15. Social Jet Services $22,839
3355 E Spring Street
Suite 100
Long Beach, CA90806
16. Suntrust Bank Fuel $970,406
c/o Holland and Knight LLP
200 S Orange Ave
Suite 2600
Orlando, FL 32801
17. Textron Aviation Company $23,176
23260 Network Place
Chicago, IL 60673-12
18. The Port of Authority Of $113,583
New York and New Jersey
POB 95000
Philadelphia, PA 19195
19. Uvair European $42,246
Fueling Services Limited
POB 301667
Dallas, TX 75303-1667
20. World Fuel Services $113,782
2458 Paysphere
Circle Chicago, IL 60674
HARSCO CORP: Moody's Alters Outlook on Ba1 CFR to Negative
----------------------------------------------------------
Moody's Investors Service affirmed Harsco Corporation's ratings,
including the Ba1 Corporate Family Rating and Ba2 rating on the
company's senior unsecured notes and revised the outlook to
negative from stable. This action follows the company's
announcement that it has entered into a definitive agreement to
acquire Stericycle, Inc.'s Environmental Solutions Business (ESOL)
for $462.5 million. ESOL is a hazardous waste transportation and
processing solutions provider. The acquisition is expected to be
debt financed and is expected to close by the end of Q1 2020. The
acquisition is conditioned upon customary closing conditions,
including regulatory approval.
The negative rating outlook considers Moody's expectation of
increased debt leverage following the close of the acquisition with
proforma debt-to-EBITDA rising to 3.9x from 2.9x at September 30,
2019. The negative outlook also considers the risk associated with
integrating two transformational acquisitions (Clean Earth in 2019
and ESOL in 2020).
The affirmation of Harsco's ratings reflects Moody's view that the
acquisition of ESOL will enhance Harsco's scale and growth
potential while further diversifying its environmental services
segment. Harsco's environmental segment will increase to 80% of
total revenues from 60% of total revenues, which considers the
company's recent exit of its industrial business. Moody's views
Harsco's business shift to environmental services as credit
positive given the stable source revenue streams and high barriers
to entry, compared to the legacy industrial businesses which were
highly cyclical.
Affirmations:
Issuer: Harsco Corporation
Probability of Default Rating, Affirmed Ba1-PD
Corporate Family Rating, Affirmed Ba1
Senior Secured Bank Credit Facility, Affirmed Baa3 (LGD3
from LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD5)
Outlook Actions:
Issuer: Harsco Corporation
Outlook, Revised to Negative from Stable
RATINGS RATIONALE
The Ba1 CFR is supported by Harsco's diversified revenue stream,
and attractive market fundamentals of its environmental services
business. These factors are offset by the cyclical economic demand
of commodities within it's environmental segment, particularly
steel, although Moody's notes that the exposure is limited to 5% of
revenues.
Harsco's liquidity is good and takes into consideration $75 million
of cash and considerable revolver availability. Harsco
Environmental, the company's largest business segment, is subject
to various laws and regulations related to the protection of the
environment, including air and water, handling and disposal
practices for solid and hazardous byproducts and the remediation of
contaminated sites. As a result, the company could incur
significant compliance costs and be imposed to substantial monetary
fines and/or criminal sanctions for violations. Moody's views
Harsco's financial strategy as conservative and expects the company
will continue to successfully balance shareholder and creditor
interests.
The Ba2 rating on the company's senior unsecured notes is
positioned one notch below the Ba1 CFR and reflects the notes
structural subordination to the secured bank credit facility (rated
Baa3).
A rating upgrade is unlikely, given the negative outlook, however
longer-term would reflect EBIT to interest expense above 3.0x,
adjusted debt to EBITDA is sustained below 3.0x and improvement in
the company's liquidity profile. The rating could be downgraded if
adjusted EBIT to interest expense is sustained at or below 2.5
times, adjusted debt to EBITDA remains above 3.5 times or there is
a significant deterioration in the liquidity profile.
Harsco Corporation, headquartered in Camp Hill, PA, is a
diversified industrial service company focused on global markets
for outsourced services to metal industries, metal recovery &
mineral-based products, railway track maintenance and certain
industrial equipment. Revenues for the 12 months ended September
30, 2019 totaled approximately $1.8 billion.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
HENLEY PROPERTIES: Creditors to Get 100% in Sale Plan
-----------------------------------------------------
Debtor Henley Properties, LLC filed a First Amended Combined
Liquidating Plan and Disclosure Statement dated January 21, 2020.
This Plan is filed under chapter 11 of the Bankruptcy Code and
proposes to pay creditors of the Debtor from the sale of assets.
The Debtor is in the process of obtaining contracts for sale of
individual parcels of real estate. Although no purchase price has
been established, the Debtor anticipates that the sale will yield
proceeds sufficient to pay the balance owed both classes of secured
creditors in full. Unsecured creditors, if any, holding allowed
claims will receive distributions, which the proponent of the Plan
will pay in full.
Class 2 Secured Claim of Simmons Bank of $585,958.30 is unimpaired.
It will be paid from the sale of the properties securing the
indebtedness on or before June 30, 2020. Prior to Confirmation,
Debtors will continue to pay Simmons Bank the monthly interest only
payment of $1,865.00 until the sale of all properties securing
Simmons’ secured claim is complete.
If the sale of the Twin Springs properties is not closed on or
before March 30, 2020, Debtor will retain Bob Lasswell to auction
the Twin Springs lots. If the remainder of the Simmons Collateral
is not sold by May 30, 2020, Debtor will retain an auctioneer
licensed in the appropriate jurisdiction to auction the Simmons
Collateral prior to June 30, 2020. Net auction proceeds will be
paid to Simmons Bank. To the extent a deficiency balance remains
after the sale of these properties, the remaining balance will be
satisfied from loan proceeds from a refinance of the First
Community Bank loan, said refinance to be completed on or before
December 30, 2020.
The Class 3 Secured Claim of First Community Bank is also
unimpaired. First Community Bank is owed a fully secured debt in
the approximate amount of $325,928.10, with a per diem of $37.27.
First Community Bank will continue to receive contractual loan
payments. The Debtor will sell the lots in the Goodman-Eagle Acres
by June 30, 2020, with proceeds to be paid to First Community
Bank, with excess proceeds above the lien amount to be paid to
Class 1 and 2 claim.
Unsecured claims allowed under Sec. 502 in Class 5 will be paid as
follows: The unsecured claims of the Internal Revenue Service and
the Missouri Department of Revenue will be paid in monthly payments
over fifty-five months.
A full-text copy of the First Amended Combined Liquidating Plan and
Disclosure Statement dated January 21, 2020, is available at
https://tinyurl.com/qpamm6v from PacerMonitor.com at no charge.
The Debtor is represented by:
MARIANN MORGAN
CHECKETT & PAULY, P.C.
Missouri Bar No. 50083
517 South Main Street
Carthage, Missouri 64836
Tel: (417) 358-4049
About Henley Properties
Henley Properties, LLC, owns and operates weddings and events
venue.
Henley Properties sought Chapter 11 protection (Bankr. W.D. Mo.
Case No. 19-30422) on Aug. 6, 2019. In the petition signed by Floyd
W. Henley and Rebecca L. Henley, members, the Debtor disclosed
total assets at $2,973,329 and $1,192,562 in debt. The case is
assigned to Judge Brian T. Fenimore. The Debtor tapped Mariann
Morgan, Esq., at Checkett & Pauly as counsel.
HOME BOUND HEALTHCARE: Court Signs 10th Interim Cash Order
----------------------------------------------------------
Judge Janet Baer authorized Home Bound Healthcare, Inc., to use
cash collateral for the period from January 9 to February 8, 2020
to pay the expense pursuant to the budget. The Internal Revenue
Service, the Illinois Department of Revenue and CadleRock Joint
Venture, LP assert interest in the cash collateral.
As adequate protection, each of IRS, IDOR and CadleRock is granted
replacement lien on the property of the Debtor's estate, plus
$5,000 to the IRS and $1,000 to IDOR, as adequate protection
payments due on January 15, 2020.
A copy of the order is available for free at https://is.gd/VaEMvT
from PacerMonitor.com.
The Court order remains in effect until Feb. 12, 2020 and the
matter is set for status on Feb. 11, 2020 at 10 a.m.
About Home Bound Healthcare
Home Bound Healthcare, Inc., is a home health care company that
offers outpatient therapy, nursing, occupational, and
rehabilitation services.
Home Bound Healthcare, based in Flossmoor, IL, filed a Chapter 11
petition (Bankr. N.D. Ill. Case No. 19-05760) on March 5, 2019. In
the petition signed by Julieta Mitra, president, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities. The Hon. Janet S. Baer oversees the
case. John D. Ioakimidis, Esq., at John D. Ioakimidis, Attorney at
Law, serves as bankruptcy counsel to the Debtor.
IDEANOMICS INC: Issues 10.9 Million Shares of Common Stock
----------------------------------------------------------
Ideanomics, Inc., on Jan. 31, 2020, issued 10,883,668 shares of the
company's common stock pursuant to the terms of the True-Up
provisions of the securities purchase agreement for the Company's
acquisition of the Delaware Board of Trade (DBOT). The securities
purchase agreements required the Company to issue additional shares
of the Company's common stock in the event the stock price of the
common stock was below $2.11 at the close of trading on Jan. 30,
2020, the day immediately preceding the lock-up date. The common
stock issuance is subject to the restrictions of Rule 144A of the
Securities Act of 1933.
As previously disclosed publicly, Ideanomics entered into a
securities purchase agreement to acquire 6,918,547 shares in DBOT
in exchange for 4,427,870 shares of the Company's common stock at
$2.11 per share. In July 2019, the Company entered into another
securities purchase agreement to acquire an additional 2,224,937
shares in DBOT in exchange for 1,423,960 shares of the Company's
common stock at $2.11 per share. The two transactions, which
increased the Company's ownership in DBOT to 99.04%, were completed
in July 2019. The securities purchase agreements required the
Company to issue additional shares of the Company's common stock in
the event the stock price of the common stock fall below $2.11 at
the close of trading on the date immediately preceding the lock-up
date, which is 9 months from the closing date.
The Company accounted for the additional True-Up Common Stock
consideration as a liability in accordance with ASC 480. The
Company recorded this liability at fair value of $2,217,034 on the
date of acquisition. As of Sept. 30, 2019, the Company remeasured
this liability to $2,327,919 and the remeasurement loss of
$(110,885) was recorded in the other income/(expense) of the income
statement.
About Ideanomics
Ideanomics, formerly known as Seven Stars Cloud Group, Inc., is a
global fintech advisory and Platform-as-a-Service company.
Ideanomics combines deal origination and enablement with the
application of blockchain and artificial intelligence technologies
as part of the next-generation of financial services. The company
is headquartered in New York, NY, and has offices in Beijing,
China. It also has a planned global center for technology and
innovation in West Hartford, CT, named Fintech Village.
Ideanomics reported a net loss of $28.42 million for the year ended
Dec. 31, 2018, compared to a net loss of $10.86 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, Ideanomics had
$164.76 million in total assets, $47.26 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, and $116.24 million in total equity.
B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor
since 2018, issued a "going concern" opinion in its report dated
April 1, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company incurred
recurring losses from operations, has net current liabilities and
an accumulated deficit that raise substantial doubt about its
ability to continue as a going concern.
Ideanomics received a letter from the Listing Qualifications Staff
of The Nasdaq Stock Market LLC on Jan. 10, 2020, indicating that
the bid price for the Company's common stock for the last 30
consecutive business days had closed below the minimum $1.00 per
share required for continued listing under Nasdaq Listing Rule
5550(a)(2). Under Nasdaq Listing Rule 5810(c)(3)(A), the Company
has been granted a 180 calendar day grace period, or until July 8,
2020, to regain compliance with the minimum bid price requirement.
IMPERIAL TOY: May Use Cash For Pre-Closing Administrative Expenses
------------------------------------------------------------------
Imperial Toy, LLC, sought and obtained approval from the U.S.
Bankruptcy Court for the Northern California to use cash collateral
as stated within the Cash Collateral Motion and pursuant to the
terms of the Stipulation, effective as of Jan. 8, 2020.
The Debtor has recently sold substantially all of its operating
assets to Ja-Ru, Inc., but needs the bankruptcy estate to remain
open until the end of January (and possibly February) in order to
allow the Official Committee of Unsecured Creditors time to conduct
an investigation of possible claims and to facilitate the payment
of pre-closing administrative expenses associated with the sale of
substantially all of the Debtor's operating assets.
Accordingly, the Stipulation between Great Rock Capital Partners
Management, LLC, the Committee, and the Debtor paves the way for
this investigation by authorizing the use of up to $75,000 by the
Committee and up to an additional $140,000 by the Debtor during the
period covered by the Budget. Additionally, the Budget authorizes
the use of $382,000 of cash collateral for various pre-closing
administrative expenses that were necessary in order to achieve the
closing of the Sale.
The Debtor will be authorized and directed, without further order
of the Court, to promptly pay or cause to be paid any and all
Post-Closing Cash Collateral in excess of the amounts set forth in
the then-operative Approved Wind-Down Budget to the Pre-Petition
ABL Agent, for the benefit of the PrePetition ABL Secured Parties,
to be applied to the Pre-Petition ABL Debt in accordance with the
terms of the Pre-Petition ABL Loan Documents and the Final DIP
Order.
Any amounts paid to the Pre-Petition ABL Agent and distributed to
the Pre-Petition ABL Secured Parties will be subject to
disgorgement to the extent any interested party other than the
Committee timely seeks and obtains standing to pursue, and
successfully pursues, a Challenge that is sustained by a final
order of the Court.
About Imperial Toy
Imperial Toy LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Calif. Case No. 19-52335) on Nov. 18,
2019. The case was filed in order to facilitate a going concern
sale of the Debtor's assets.
At the time of the filing, the Debtor was estimated to have assets
of between $10 million and $50 million and liabilities of the same
range.
The Debtor tapped Sheppard, Mullin, Richter & Hampton LLP as its
legal counsel, and Arch & Beam Global, LLC as its financial
advisor.
ION GEOPHYSICAL: Reports $48.2 Million Net Loss for 2019
--------------------------------------------------------
ION Geophysical Corporation filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss
attributable to the Company of $48.20 million on $174.68 million of
total net revenues for the year ended Dec. 31, 2019, compared to a
net loss attributable to the Company of $71.17 million on $180.04
million of total net revenues for the year ended Dec. 31, 2018.
ION Geophysical reported revenues of $42.7 million in the fourth
quarter 2019 compared to fourth quarter revenues of $74.6 million
one year ago. ION's net loss for the fourth quarter 2019 was $14.5
million, or a loss of $1.02 per share, compared to a net loss of
$19.3 million, or a loss of $1.38 per share in the fourth quarter
2018. Excluding special items in both periods, the Company
reported an Adjusted net loss of $5.7 million, or a loss of $0.40
per share, compared to an Adjusted net income of $15.3 million, or
$1.07 per diluted share in the fourth quarter 2018.
As of Dec. 31, 2019, the Company had $233.19 million in total
assets, $267.83 million in total liabilities, and a total deficit
of $34.63 million.
Chris Usher, the Company's president and chief executive officer,
commented, "Our fourth quarter financial results were quite
disappointing, primarily because we were not able to launch
multiple new acquisition multi-client programs and close several
data library deals in our pipeline. As a result, our full year
results were down slightly, rather than the upward trajectory we
had been building towards for 2019, with timing of fourth quarter
multi-client deals countering the annual improvements in all our
other businesses. Tighter E&P budgetary controls and lower oil
prices subdued year-end spending such that several material deals,
on the order of tens of millions of dollars, were not completed
prior to year-end.
"We are focused on fundamentals and working areas we directly
control. We reorganized the business in two ways to improve our
execution and accountability; we restructured our E&P Technology &
Services segment to reflect our shift in multi-client strategy to
include new 3D acquisition, and implemented a significant cost
reduction program to lower our operating expenses. We reorganized
our new ventures sales organization to accelerate our entry into
the 3D new acquisition multi-client market, bringing our projects
closer to the reservoir, where capital investment tends to be more
consistent and programs have larger scale revenue and earnings
potential. ION has rapidly grown our 3D library from almost
nothing to 350,000 sq km of seamlessly integrated reimaged data
over the last few years, which has given us credibility and
experience in the space and led to a pipeline of opportunities for
new 3D towed streamer or seabed programs we have not seen before.
On the cost side of the equation, we recognize the need to reduce
our corporate cost structure. In January 2020, we executed a
program that will improve focus and execution on strategic
initiatives while delivering annualized savings of over $20
million.
"With that work behind us, I am still as excited about ION and our
business as when I took the CEO role. We are aligned around select
initiatives that can uniquely position ION in the new industry
landscape with the potential for more satisfying results. Offshore
is picking up and we see material activity among our client base to
rebalance portfolios and maximize value, which drives related data
sales opportunities to fill customer knowledge gaps. Our E&P
Technology & Services team has new focus on 3D new acquisition
program opportunities, aligned with our leading imaging
capabilities. Our Operations Optimization business is growing
steadily and we just secured another Marlin SmartPort customer
after ramping up our port business development capacity."
The Company reported Adjusted EBITDA of $9.2 million for the fourth
quarter 2019, a decrease from the Adjusted EBITDA of $36.5 million
one year ago. Adjusted EBITDA was $31.9 million in 2019, compared
to $41.7 million in 2018.
Net cash flows from operations were $14.8 million during the fourth
quarter 2019, compared to $14.4 million in the fourth quarter 2018.
Total net cash flows, including investing and financing
activities, were $4.9 million, compared to $3.4 million one year
ago.
Net cash flows from operations were $34.2 million during 2019,
compared to $7.1 million in 2018. Total net cash flows, including
investing and financing activities, were $(0.7) million in 2019,
compared to $(18.6) million in 2018.
At Dec. 31, 2019, the Company had total liquidity of $72.4 million,
consisting of $33.1 million of cash on hand, and $39.3 million of
available borrowing capacity under its maximum $50.0 million
revolving credit facility. There were no outstanding amounts under
the credit facility at year-end.
A full-text copy of the Form 10-K is available for free at the
SEC's website at:
https://is.gd/HDL9NY
About ION
Headquartered in Houston, Texas, ION Geophysical Corporation --
iongeo.com -- develops and leverages innovative technologies,
creating value through data capture, analysis and optimization to
enhance critical decision-making, enabling superior returns. While
the traditional focus of its cutting-edge technology has been on
the exploration and production industry, the Company is now
broadening and diversifying its business into relevant adjacent
markets such as offshore logistics, military and marine robotics.
* * *
As reported by the TCR on Feb. 15, 2019, S&P Global Ratings
affirmed its 'CCC+' issuer credit rating on ION and revised the
outlook to stable from negative. The 'CCC+' issuer credit rating
reflects the company's exposure to the E&P industry's volatile
capital spending; reliance on licensing rounds, which could be
further delayed; and a debt maturity in December 2021.
JLD AUTOMOTIVE: Unsecured Creditors Recover 10% in Plan
-------------------------------------------------------
According to its Disclosure Statement, JLD Automotive Services,
Inc., has a Plan of Reorganization that provides for payment of
$49,325.01 to general unsecured creditors, to be divided among
general unsecured creditors pro rata, to pay each general unsecured
creditor a 10% dividend on its claim. This amount will be paid
over a five-year period, with quarterly payments of $2,466.25 per
quarter.
BMO Harris Bank, N.A., filed a claim in the amount of
$1,107,542.89. The Debtor scheduled the claim in the amount of
$975,142.38. BMO Harris is secured by real estate owned by the
Debtor and valued at $640,000. BMO Harris has an unsecured claim
in the balance of $467,542.89. There are two other general
unsecured creditors whose combined claims total $25,707.19.
The Plan provides for the deposit of a $822.09 monthly payment to a
distribution account, for payment of the $2,466.25 per quarter
payment to general unsecured creditors. The Debtor will pay the
quarterly payment, divided pro rata among holders of allowed
secured claims, each quarter, until the end of the five-year term
of the Plan. The Debtor will distribute the amount in the
distribution account each quarter immediately upon availability of
the funds in the distribution account.
The Debtor will pay the secured claim of BMO Harris Bank, N.A., in
the amount of $640,000.00, secured by real estate owned by the
Debtor, with interest at 5% per annum, in equal monthly payments
over a five year period. The monthly payment will be $3,435.66 per
month. If BMO Harris makes an election to have its claim treated
differently, under a "Section 1111(b) election," its claim will be
treated differently.
The Internal Revenue Service filed a priority claim in the amount
of $106.13, as an estimated amount for FUTA taxes for 2019. The
Debtor has filed all returns and paid all taxes on a current basis,
and expects that this claim will be withdrawn. If there is
liability for the $106.13 claim, the Debtor will pay it in full
upon the Effective Date of the Plan.
All funds for the payment of the all claims paid under this Plan
shall be obtained from the business income of the Debtor over a
period of five years (or thirty years, for mortgage payments to BMO
Harris Bank, N.A.).
A full-text copy of the Disclosure Statement dated Jan. 31, 2020,
is available at https://tinyurl.com/ukfxu69 from PacerMonitor.com
at no charge.
The Debtor's attorney:
David P. Lloyd
615B S. LaGrange Rd.
LaGrange IL 60525
Tel: 708-937-1264
Fax: 708-937-1265
About JLD Automotive Services
Founded in 1997, JLD Automotive Services, Inc., operates a car wash
and automotive repair center at its current location at 970 Route
22, Fox River Grove, Ill.
JLD previously sought bankruptcy protection (Bankr. N.D. Ill. Case
No. 18-24948) on Sept. 4, 2018.
JLD Automotive Services again sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-27408) on Sept.
27, 2019. At the time of the filing, the Debtor disclosed $761,731
in assets and $1,051,767 in liabilities. The case is assigned to
Judge Deborah L. Thorne. The Debtor tapped David P. Lloyd, Ltd.,
as its legal counsel.
JOHNSON'S QUALITY: Taps Professional Management as Accountant
-------------------------------------------------------------
Johnson's Quality Lawncare, Inc. received approval from the U.S.
Bankruptcy Court for the Northern District of Florida to hire
Professional Management Systems, Inc. as its accountant.
The firm will provide these services:
a. give the Debtor financial and accounting advice with
respect to its powers and duties in the continued management of its
property;
b. prepare operating reports and financial projections; and
c. take necessary actions to preserve and administer the
Debtor's bankruptcy estate.
Georgia Evans, member of Professional Management and the accountant
who will be providing the services, charges an hourly fee of $65.
Ms. Evans disclosed in a court filing that she and her firm neither
hold nor represent any interest adverse to the interest of the
Debtor.
The firm can be reached through:
Georgia Evans
Professional Management Systems, Inc.
9900 Franklin Square Drive, Suite B
Baltimore, MD 21236
Phone: 410-931-0400
Toll Free: 855-764-2455
Fax: 410-931-1009
Email: info@pmi-web.com
About Johnson's Quality Lawncare
Johnson's Quality Lawncare, Inc. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 19-50171) on Dec.
11, 2019. At the time of the filing, the Debtor had estimated
assets of less than $50,000 and liabilities of between $500,001 and
$1 million. Judge Karen K. Specie oversees the case. Charles Wynn
Law Offices, P.A. is the Debtor's legal counsel.
K. HOVNANIAN: Moody's Rates Senior Secured Notes Due 2026 'Caa1'
----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to K. Hovnanian
Enterprises, Inc.'s 7.75% 1.125 lien senior secured notes due 2026
and 10.5% 1.25 lien senior secured notes due 2026. At the same time
Moody's affirmed Hovnanian Enterprises, Inc.'s Corporate Family
Rating at Caa2, Probability of Default Rating at Caa2-PD, the
rating on its preferred stock at Ca, and ratings on K. Hovnanian
Enterprises, Inc.'s second lien senior secured notes at Caa3, and
senior unsecured debt at Caa3. The SGL-3 Speculative Grade
Liquidity Rating is maintained. The outlook is stable.
The company's 1.125 lien and 1.25 lien senior secured notes are
rated Caa1, reflecting these notes' priority position in the
capital structure compared to notes secured by further liens and
unsecured debt. The notes are secured by substantially all assets
of K. Hovnanian Enterprises, Inc. and the note guarantors. Note
guarantors include Hovnanian Enterprises, Inc. and its
subsidiaries. The affirmation of Corporate Family Rating at Caa2
reflects Moody's expectation that the company will need to engage
in ongoing restructuring activity given its highly levered capital
structure.
The following rating actions were taken:
Assignments:
Issuer: K. Hovnanian Enterprises, Inc.
Gtd Senior Secured Regular Bond/Debenture, Assigned Caa1 (LGD3)
Affirmations:
Issuer: Hovnanian Enterprises, Inc.
Probability of Default Rating, Affirmed Caa2-PD
Corporate Family Rating, Affirmed Caa2
Pref. Stock Preferred Stock, Affirmed Ca (LGD6)
Issuer: K. Hovnanian Enterprises, Inc.
Senior Secured Regular Bond/Debenture, Affirmed Caa3 (LGD5 from
LGD4)
Senior Unsecured Bank Credit Facility, Affirmed Caa3 (LGD5)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa3 (LGD5)
Outlook Actions:
Issuer: Hovnanian Enterprises, Inc.
Outlook, Remains Stable
Issuer: K. Hovnanian Enterprises, Inc.
Outlook, Remains Stable
Hovnanian's Caa2 Corporate Family Rating reflects: 1) Moody's
expectation of the need for ongoing restructuring activity; 2) the
company's high homebuilding debt to capitalization of over 140%; 3)
weak homebuilding EBIT interest coverage of below 1.0x; 4) gross
margin of 15.3%, which is significantly below the peer group
average of 20% due to a high level of speculative building, the
need to offer incentives, and cost pressures related to land,
building materials, and wage growth impact on labor costs; and 5)
the exposure to potential litigation and regulatory risks; and 6)
governance considerations of aggressive financial policies,
including restructuring activity and distressed exchange
transactions.
However, the credit profile is supported by: 1) Moody's expectation
of an adequate liquidity profile in the next 12 to 15 months and
lack of debt maturities until 2022; 2) a growing community count
and increasing new orders and backlog position, which will
contribute to modest revenue growth over the next 12 to 18 months;
3) an option-focused land strategy with 60% of total lots optioned
and good inventory turns; and 4) Moody's expectation that
underlying fundamentals will remain healthy in 2020, in line with
Moody's stable outlook for the homebuilding industry.
The SGL-3 Speculative Grade Liquidity Rating reflects Moody's view
that Hovnanian will maintain an adequate liquidity profile over the
next 12 to 15 months.
The stable outlook reflects the extended debt maturity profile of
the company following recent refinancing and exchange transactions
and adequate liquidity.
Although not anticipated in the intermediate term, the company's
ratings could be upgraded if risks of potential restructuring and
distressed exchanges subside and leverage declines significantly.
The rating could be downgraded if further restructuring risks loom,
the company is not successful extending its maturities, or its
liquidity profile weakens such that it cannot meet its debt service
obligations.
The principal methodology used in these ratings was Homebuilding
and Property Development Industry published in January 2018.
Established in 1959 and headquartered in Red Bank, New Jersey,
Hovnanian Enterprises, Inc. designs, constructs and markets single
family detached homes and attached condominium apartments and
townhouses. The company operates in 24 markets in 14 states,
including New Jersey, Pennsylvania, Delaware, Maryland, Virginia,
West Virginia, Illinois, Ohio, Florida, Georgia, South Carolina,
Arizona, Texas, California, and Washington D.C. In the fiscal year
ended October 31, 2019, Hovnanian's total revenues and consolidated
net losses were $1.96 billion and $42 million, respectively.
K3D PROPERTY: Allowed to Use Cash Collateral Through March 14
-------------------------------------------------------------
Judge Shelley D. Rucker of the U.S. Bankruptcy Court for the
Eastern District of Tennessee authorized K3D Property Services,
LLC, to use cash collateral through March 14, 2020, for actual and
necessary expenses as reflected in the budget, with the exception
of the management fee which shall not be paid.
A final hearing on the use of cash collateral will be conducted on
March 12, 2020, at 10:00 a.m. Any modifications to the cash
collateral order must be filed by March 2. Objections are due by
March 10.
The Debtor has 6 secured lenders asserting interests in cash
collateral. Those lenders are: Cohutta Banking Co., a division of
Synovus Bank; Suntrust Bank; Synovus Bank; First National Community
Bank; CHTD Company; and Financial Services Agent.
The Secured Lenders are granted valid, perfected and enforceable
continuing replacement liens and security interests, to the extent
that the Secured Lenders hold valid, perfected and enforceable
security interests in the Debtor's prepetition assets. Said
replacement liens will not extend to the proceeds of any avoidance
actions received by the Debtor or the estate pursuant to Sections
544, 547, 548, 549 or 550 of the Bankruptcy Code.
In addition, the Debtor will pay $3,500 to SunTrust Bank on or
before February 15, 2020, and $3,500 on or before March 15, 2020.
The Debtor must insure its property, including the prepetition and
post-petition collateral against all risk to which it is exposed,
including loss, damages, fire, theft and all other risk, in an
amount not less than the fair market value of such collateral.
The Debtor will also (a) segregate and account for all cash
collateral that comes into its possession, custody or control, (b)
keep and provide upon request records reasonably sufficient for the
Secured Lenders to determine the status of Cash Collateral
collections and expenditures, and (c) provide to the Secured
Lenders, through the Court's electronic filing system or by any
other reasonable means, Bank copies of the monthly operating
reports filed with the Court
A copy of the Order is available at PacerMonitor.com at
https://is.gd/1JTJ7f at no charge.
About K3D Property Services
K3D Property Services, LLC, offers a variety of services, including
home remodeling, basement finishing, drywall installation and
finishing, tile installation, carpet installation, wall framing,
bathroom remodeling, kitchen remodeling, deck installation and
maintenance, interior and exterior painting, commercial painting,
wallpaper and popcorn ceiling removal, deck staining, concrete
floor coatings, and metal roof painting.
K3D Property Services filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Case No.
19-15361) on Dec. 23, 2019. The petition was signed by Kenneth
Morris, managing member. At the time of the filing, the Debtor had
estimated $1 million to $10 million in both assets and liabilities.
Judge Shelley D. Rucker oversees the case.
The Debtor tapped Farinash & Stofan and The Fox Law Corporation,
Inc. as bankruptcy counsel; The Law Offices of Stephan Wright PLLC
as special counsel; and Lucove, Say & Co. as accountant.
Paul Randolph, acting U.S. trustee for Region 8, on Jan. 31, 2020,
appointed four creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case of K3D Property
Services, LLC.
LA VINAS: Court Approves Disclosure Statement
---------------------------------------------
Judge Erik P. Kimball has ordered that the Disclosure Statement
explaining the Chapter 11 Plan filed by L.A. Vinas, M.D., P.A., is
approved.
The confirmation hearing and hearing on fee applications will be on
March 12, 2020 at 10:30 a.m. in United States Bankruptcy Court,
Courtroom B, 8th Floor, 1515 North Flagler Drive, West Palm Beach,
Florida 33401.
The deadline for filing objections to claims will be on Feb., 27,
2020.
The deadline for filing ballots accepting or rejecting the Plan
will be on March 5, 2020.
The deadline for filing objections to confirmation will be on March
9, 2020.
About L.A. Vinas
Based in West Palm Beach, Florida, L.A. Vinas, M.D., P.A., owns
plastic surgery, med spa & skincare centers. It offers breast
augmentation, body contouring, liposuction, breast lift, facelift,
gynecomastia, tummy tuck, facial, and butt lift services.
The Company previously sought bankruptcy protection on April 17,
2017 (Bankr. S.D. Fla. Case No. 17-14765).
L.A. Vinas, M.D., P.A., again filed a Chapter 11 petition (Bankr.
S.D. Tex. Case No. 19-17065) on May 29, 2019. At the time of the
filing, the Debtor was estimated to have up to $50,000 in assets
and $1 million to $10 million in liabilities. Judge Erik P.
Kimball oversees the case. Kelley, Fulton & Kaplan, P.L., is the
Debtor's legal counsel.
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case.
LBD PLLC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: LBD, PLLC
FKA DiPietro Law Group, PLLC
DBA DiPietro Law Group
FKA DiPietro, PLLC
FKA DiPietro Family Law Group, PLLC
4157 Chain Bridge Rd.
Fairfax, VA 22030
Business Description: LBD, PLLC -- https://www.dipietropllc.com --
is a law firm specializing in divorce,
family law, estate planning, and business
law. The firm has several office locations
throughout Northern Virginia, Maryland, and
the Washington, D.C. Metro areas.
Chapter 11 Petition Date: February 9, 2020
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 20-10414
Debtor's Counsel: Jeffery T. Martin, Jr., Esq.
HENRY & O'DONNELL, PC
300 N. Washington Street
Suite 204
Alexandria, VA 22314
Tel: (703) 548-2100
E-mail: jtm@henrylaw.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joseph J. DiPietro, member/manager.
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/bl3IEi
LEVEL SOLAR: Project Funds Say Plan Unconfirmable
-------------------------------------------------
Level Solar Fund III LLC and Level Solar Fund IV LLC (the "Project
Funds"), by and through their undersigned counsel, filed an amended
objection to the motion of the Chapter 11 Trustee and Pell-QED
Proponents for Entry of an Order approving Adequacy of the
Disclosure Statement for the First Amended Joint Chapter 11 Plan of
Reorganization.
The Project Funds point out that the Disclosure Statement must
contain adequate information. The Project Funds further point out
that the Court should not approve a Disclosure Statement for a Plan
that cannot be confirmed.
"The Plan violates the absolute priority rule because while general
unsecured creditors are not being paid in full, it appears that the
Pell-QED Proponents —who together own a majority (52%)of the
Debtor's stock and are insiders -- were given the exclusive
opportunity to provide a $400,000 "contribution" based on their
existing equity interests to acquire all the equity of the
Reorganized Debtor. There is no indication that the proposed
$400,000 contributionis the highest and best offer the Debtor could
have received for all its equity when it appears there has been no
attempt to market the assets. This is especially concerning in
light of the sworn bankruptcy testimony of William Frey -- the
President and CEO of the Debtor and Managing Member of Plan
Proponent QED -- that the Debtor's ownership interests in its
subsidiaries entitle the Debtor to receive approximately $32
million in future payments from those subsidiaries on a present
value basis," the Project Funds told the Court.
The Project Funds added that the Plan is unconfirmable on several
other grounds.
"By way of example, the Cooper Electric Secured Claim (filed in the
amount of $4,840,947.18) is placed in Class 2B and will receive a
$820,000 payment on the Effective Date and will be allowed as a
General Unsecured Claim in the amount of $1,530,000. No
information is provided on whether Cooper Electric’ssecured claim
is valid and whyitis entitled to share in the distribution to
unsecured creditors. Without an explanation that Cooper Electric
holds a fullrecourse claim against the Estate and why that claim
has not been satisfied by its recovery on the collateral that
secured its claim, the proposed treatment of thatclaim as a Class 4
General Unsecured Claim violates, at a minimum,sections 1122(a) and
1129(b)(1)."
Counsel to Level Solar Fund III LLC and Level Solar Fund IV LLC:
NIXON PEABODY LLP
Victor Milione
Christopher J. Fong
55 West 46th Street
New York, NY 10036
Telephone: (212) 940-3000
vmilione@nixonpeabody.com
cfong@nixonpeabody.com
About Level Solar Inc.
Based in New York, Level Solar Inc. operates under the solar-energy
installation industry. Incorporated in 2013, the company has
operations in Long Island, New York City and Massachusetts.
Level Solar filed for bankruptcy protection (Bankr. S.D.N.Y. Case
No. 17-13469) on Dec. 4, 2017. At the time of the filing, the
Debtor was estimated to have assets of between $50 million and $100
million and debt of between $1 million and $10 million.
Michael Conway, Esq., at Shipman & Goodwin LLP, is the Debtor's
bankruptcy counsel. Akin Gump Strauss Hauer & Feld LLP serves as
corporate counsel.
Ronald J. Friedman, Esq., was appointed Chapter 11 trustee for the
Debtor. The Trustee tapped SilvermanAcampora LLP as his legal
counsel.
LIQUIDMETAL TECHNOLOGIES: Forms Partnership With Eutectix
---------------------------------------------------------
Liquidmetal Technologies, Inc. has joined with Eutectix, an
American producer of bulk metallic glasses (BMGs), to form a
manufacturing partnership. The partnership combines licensed IP,
specialized equipment, and facilities to support manufacturing
performed by Eutectix in Tolleson, AZ. The operation supports a
broader range of alloys, including high performing
beryllium-containing formulations, produced using Liquidmetal's
latest technology. US-based customers can expect continuity, as
legacy applications will be supported.
Eutectix is uniquely able to provide US-based, high-volume alloy
fabrication and recycling operations, which are essential for
managing trade restrictions and production costs. Moreover,
Eutectix's expertise and customer base provide access to new
markets for BMGs. Liquidmetal Technologies will continue to work
closely with its Chinese manufacturing partner, Yihao Metals,
leveraging rapid advances in BMG manufacturing capabilities and
low-cost offshore production.
"I have worked closely with the Eutectix team throughout my tenure
with Liquidmetal. They have been a top-tier, trusted supplier,"
said Dr. Bruce Bromage, Liquidmetal's chief operating officer. "We
are excited to announce our new manufacturing partnership. It is a
key element of Liquidmetal's growth plan, providing an efficient,
domestic option that is valued by US customers."
Dr. Nicholas Hutchinson, Eutectix's research & development
director, said, "Liquidmetal clearly provides the best technology
available for commercial BMG production. Our partnership
significantly expands Eutectix's market reach, allowing us to
leverage our deep BMG expertise to develop high value customer
solutions. This is a major step in our company's growth."
About Liquidmetal Technologies
Lake Forest, California-based Liquidmetal Technologies, Inc. --
http://www.liquidmetal.com/-- is a developer of parts made with
amorphous alloys, also known scientifically as Bulk Metallic
Glasses or BMGs. The non-crystalline atomic structure of these
materials allows for unique performance properties, including the
ability to injection-mold with micron-level precision, lustrous
finishes, high strength, hardness and corrosion resistance, and
remarkable elasticity.
Liquidmetal reported a net loss and comprehensive loss of $7.43
million in 2018, a net loss and comprehensive loss of $8.69 million
in 2017, and a net loss and comprehensive loss of $18.75 million in
2016. As of Sept. 30, 2019, the Company had $41.97 million in
total assets, $1.49 million in total liabilities, and $40.48
million in total shareholders' equity.
In July 2019, the Company adopted a restructuring plan pursuant to
which the Company elected to wind down its prior manufacturing
operations at the Company's Lake Forest, CA facility and seek to
outsource the manufacture of parts utilizing the Company's
technology through domestic and international manufacturing
partners. In connection with the 2019 Restructuring Plan, the
Company shifted its business strategy from internal manufacture of
parts and products for customers toward the use and reliance of
outsourced manufacturers, which will initially be Dongguan Yihao
Metals Materials Technology Co., Ltd., a China-based company that
is an affiliate of the Company's largest beneficial stockholder its
CEO and Chairman, Professor Lugee Li.
LITESTREAM HOLDINGS: May Use Cash Collateral Through Feb. 25
------------------------------------------------------------
Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern
District of Florida authorized Litestream Holdings, LLC to use the
cash collateral of Bank United, N.A. up to the amounts shown in
the budget through and including Feb. 25.
A final hearing on the use of cash collateral will be held on on
Feb. 25, 2020 at 1:30 p.m.
As a condition the Debtor's authorization to use cash collateral as
provided, the Debtor must operate strictly in accordance with the
Budget and spend cash collateral not to exceed 10% above the amount
shown in the Budget. However, the quarterly U.S. Trustee fees will
be paid and are permitted to exceed the budgeted amount, and in
such an event, will not be considered an event of default.
Bank United is granted a valid, binding, enforceable, non-avoidable
and perfected post-petition security interest and lien in, to and
against all of the Debtor's assets to the same extent that Bank
United held a properly perfected prepetition security interest in
such assets, which are or have been acquired, generated or received
by the Debtor subsequent to the Petition Date. The replacement
liens will be in addition to any security interest, liens or rights
of setoff existing in favor of Bank United on the Petition Date and
will secure all amounts due to the Bank.
A copy of the Order is available at PacerMonitor.com at
https://is.gd/n6KOqJ at no charge.
About Litestream Holdings
Litestream Holdings, LLC, a Florida-based provider of video,
broadband and phone services, filed a Chapter 11 petition (Bankr.
S.D. Fla. Case No. 19-26043) on Nov. 27, 2019 in West Palm Beach,
Fla., listing between $1 million and $10 million in both assets and
liabilities. The petition was signed by Paul Rhodes, managing
member. Judge Mindy A. Mora oversees the case. FurrCohen P.A., is
the Debtor's legal counsel.
The U.S. Trustee for Region 21 appointed three creditors to serve
on the official committee of unsecured creditors in the
Litestream's Chapter 11 case.
LIVEXLIVE MEDIA: Acquires React Presents for $2 Million
-------------------------------------------------------
LiveXLive Media, Inc., has acquired React Presents, LLC, a producer
and promoter of 250+ electronic dance music events, festivals,
clubs, concerts and venues, including the Spring Awakening Festival
held in Chicago, IL. During the calendar year ended Dec. 31, 2019,
RP generated approximately $15.0 million in revenue through ticket
sales, sponsorship, merchandising, and other ancillary revenue.
"This is a transformative moment in the evolution of LiveXLive. We
have quickly become a leading livestreaming and original music
content platform with a large global audience and more than 820,000
paid subscribers. By acquiring this key asset in the EDM space, we
added $15 million in revenues, expanded our audience reach with the
addition of more than 250 programs and events, and continued to
fill in our flywheel with event ownership and management. We have
now increased the number of years that we own events and the hours
of live content we're distributing. Most importantly, we are
partnering directly with artists to turn superfans into
subscribers, effectively providing brand new revenue streams for
managers, bands, and labels by converting ticket sales into
subscriptions," said Robert Ellin, CEO and Chairman of LiveXLive.
The acquisition will make LiveXLive one of the leading promoters of
EDM festivals, concerts and events in the Midwest, including
marquee EDM music festivals such as Spring Awakening, and Sunset
Music Festival, as well as more than 250 club and venue shows per
year.
"LiveXLive is creating a new music stack combining audio, video,
social and live events into one end-to-end experience. This
acquisition will create powerful cross-marketing opportunities
based on direct access to a new pool of active music fans.
Leveraging the built-in synergy of event and festival ownership, we
anticipate significant growth in audience, subscribers, and
original content offerings through expanded audience reach and
tighter artist relationships," added Ellin.
Transaction Summary
LiveXLive acquired React Presents for a purchase price of $2.0
million funded with subordinated convertible note with a two-year
term, 8% interest rate, and conversion price of $4.50 per share.
For the fiscal year ended March 31, 2020, the acquisition is not
expected to add significant revenue or be dilutive to contribution
margin.
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 Dec. 31, 2019, the Company had
$55 million in total assets, $56.89 million in total liabilities,
and a total stockholders' deficit of $1.90 million.
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.
LIVEXLIVE MEDIA: Amends Securities Purchase Agreement with JGB
--------------------------------------------------------------
LiveXLive Media, Inc., entered into an Amendment Agreement with JGB
Capital, LP, JGB Capital Partners, LP and JGB (Cayman) Finlaggan
Ltd., and JGB Collateral LLC, as agent for the Holders with respect
to that certain Securities Purchase Agreement, dated as of June 29,
2018, as amended on Feb. 11, 2019 and July 25, 2019, whereby the
Company issued to the Holders, and the Holders acquired from the
Company, on June 29, 2018 12.75% Original Issue Discount Senior
Secured Debentures due June 29, 2021, in the aggregate original
principal amount of $10,640,000 and on Feb. 11, 2019 12.75%
Original Issue Discount Senior Secured Debentures due June 29,
2021, in the aggregate original principal amount of $3,192,000.
Pursuant to the Agreement, the Holders and the Company agreed to
amend and restate (retroactive to Dec. 31, 2019) Schedule E to each
Debenture with respect to certain EBITDA and revenue targets as
follows:
Calendar Qtr. EBITDA Target Revenue Target LTM Revenue Target
------------- ------------- -------------- ------------------
Dec. 31, 2018 ($2,600,000) $6,645,595
March 31, 2019 ($1,970,550) $6,463,884
June 30, 2019 ($6,565,217) $9,300,000
Sept. 30, 2019 ($6,927,397) $9,300,000
Dec. 31, 2019 ($7,401,139) $9,000,000
March 31, 2020 ($6,649,303) $9,000,000* $36,600,000
June 30, 2020 ($6,658,498) $10,000,000* $37,300,000
Sept. 30, 2020 ($7,673,350) $11,000,000* $39,000,000
Dec. 31, 2020 ($8,395,590) $10,000,000* $40,000,000
March 31, 2021 ($8,414,084) $10,000,000* $41,000,000
* Subject to the use of the "LTM Revenue Target" as set forth in
the Agreement.
As of Jan. 31, 2020, the Company informed the Holders that it would
miss the quarterly revenue covenant of $15 million for the quarter
ended Dec. 31, 2019 under the Purchase Agreement then in effect.
Accordingly, and after giving effect to the foregoing amendment to
Schedule E to each Debenture, the Holders and the Company agreed
that no event of default has occurred or is continuing and that the
Company and each guarantor have complied in all material respects
with their respective obligations under the Debentures and the
Purchase Agreement. In addition, the Company issued 400,000 shares
of its common stock to the Holders in exchange for the Debentures
in the principal amount of $10,000, originally issued by the
Company on June 29, 2018, as sole consideration for the shares,
sufficient to qualify for an exemption under Section 5 of the
Securities Act of 1933, as amended, pursuant to Section 3(a)(9)
thereof and accompanying removal of applicable restrictions under
the Securities Act pursuant to Rule 144. Any sale of such shares
will be subject to a percentage limitation of the daily trading
volume.
As a result of the Amendment, as of Dec. 31, 2019, the Company was
in compliance with its financial covenants, and a significant
portion of the Debentures will be classified as long-term
liabilities in accordance with ASC 470-10, Debt.
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 Dec. 31, 2019, the Company had
$55 million in total assets, $56.89 million in total liabilities,
and a total stockholders' deficit of $1.90 million.
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.
LIVEXLIVE MEDIA: FMR LLC Has 11.4% Stake as of Feb. 6
-----------------------------------------------------
FMR LLC and Abigail P. Johnson disclosed in an amended Schedule 13G
filed with the Securities and Exchange Commission on Feb. 6, 2020
that they beneficially own 6,603,524 shares of common stock of
LiveXLive Media, Inc., which represents 11.377% of the shares
outstanding. Fidelity Puritan Fund also reported beneficial
ownership of 6,573,448 Common Shares. Members of the Johnson
family, including Abigail P. Johnson, are the predominant owners,
directly or through trusts, of Series B voting common shares of FMR
LLC, representing 49% of the voting power of FMR LLC. A full-text
copy of the regulatory filing is available for free at the SEC's
website at:
https://is.gd/ahMq5X
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 Dec. 31, 2019, the Company had
$55 million in total assets, $56.89 million in total liabilities,
and a total stockholders' deficit of $1.90 million.
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.
LIVEXLIVE MEDIA: Incurs $8.8 Million Net Loss in Third Quarter
--------------------------------------------------------------
LiveXLive Media, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $8.81 million on $9.70 million of revenue for the three months
ended Dec. 31, 2019, compared to a net loss of $6.56 million on
$8.96 million of revenue for the same period in 2018.
For the nine months ended Dec. 31, 2019, the Company reported a net
loss of $30.39 million on $28.78 million of revenue compared to a
net loss of $27.65 million on $24.52 million of revenue for the
nine months ended Dec. 31, 2018.
"Our quarterly results were on target, highlighted by strong
subscriber growth," said Michael Zemetra, CFO of LiveXLive.
"Today's acquisition announcement is important in LiveXLive's
evolution, opening up significant monetization opportunities,
future revenue and cost synergies and providing a springboard to
accelerate our business beyond fiscal 2020," concluded Zemetra.
In the third quarter of 2020, LiveXLive livestreamed nine major
festivals and events. Third quarter 2020 festival and event
livestreams included iHeartRadio Fiesta Latina (Miami, Florida) and
iHeartCountry Veteran's Day (Nashville, Tennessee) and featured
leading artists including Brantley Gilbert, Judah and the Lion,
Lady Antebellum, Jason Aldean, Luke Combs, Holiday Showcase and
SAINt JHN. In addition, LiveXLive livestreamed the second weekend
of Rock in Rio (Rio de Janeiro, Brazil).
As of Dec. 31, 2019, the Company had $55 million in total assets,
$56.89 million in total liabilities, and a total stockholders'
deficit of $1.90 million.
The Company has a history of losses, utilized cash of $5.4 million
in operating activities for the nine months ended
Dec. 31, 2019, and had a working capital deficiency of $21.9
million as of Dec. 31, 2019. The Company filed a universal shelf
Registration Statement on Form S-3 which became effective in
February 2019 to raise up to $150.0 million in cash from the sale
of equity, debt and/or other financial instruments. During the
nine months ended Dec. 31, 2019, the Company sold 5,000,000 shares
of its common stock to certain institutional investors for gross
proceeds of $10.5 million.
LiveXLive said, "While management believes it has sufficient
sources of liquidity to fund its operations over the next twelve
months, these factors, among others, raise substantial doubt about
the Company's ability to continue as a going concern within one
year from the date that these financial statements are filed. The
Company's condensed consolidated financial statements do not
include any adjustments related to the recoverability and
classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.
"The Company's long-term ability to continue as a going concern is
dependent upon its ability to increase revenue, reduce costs,
achieve a satisfactory level of profitable operations, and obtain
additional sources of suitable and adequate financing. The
Company's ability to continue as a going concern is also dependent
on its ability to further develop and execute on its business plan.
The Company may also have to reduce certain overhead costs through
the reduction of salaries and other means and settle liabilities
through negotiation. There can be no assurance that management's
attempts at any or all of these endeavors will be successful.
"The Company's ability to continue as a going concern is dependent
on its ability to execute its strategy and on its ability to raise
additional funds and/or to consummate a public offering.
Management is currently seeking additional funds, primarily through
the issuance of equity and/or debt securities for cash to operate
the Company's business. No assurance can be given that any future
financing will be available or, if available, that it will be on
terms that are satisfactory to it. Even if the Company is able to
obtain additional financing, it may contain terms that result in
undue restrictions on its operations, in the case of debt financing
or cause substantial dilution for its stockholders, in case of
equity and/or convertible debt financing. Furthermore, no
assurance can be given that a public offering of the Company's
securities for cash will be successful or consummated."
Recent and Q3 2020 Highlights
* Acquired React Presents, LLC from LifeStyle, Inc. in exchange
for $2.0 million in two-year, 8% convertible debt at $4.50
per share. RP is a full-service, club, concert and festival
promotion company, promoting over 250 live events per year
including the Spring Awakening music festival in Chicago,
Illinois.
* Q3 fiscal 2020 achieved over 63 million livestreams, 230
artist streams on the Company's platform, and over 275 hours
of live music content streamed.
* Ended Q3 fiscal 2020 with paid subscribers of 820,000, growth
over 28% year-over-year.
* Partnered with Samsung to produce and distribute up to ten
live music events via Samsung's XR platform, including AR
mobile, VR 360, volumetric video and holograms that will
connect fans to their favorite artists and music festivals.
* Partnered with ReachTV to showcase LiveXLive's original
content and events across ReachTV's global entertainment
platform, reaching over 100 million monthly travelers in over
750 airport venue and terminal locations across 90 airports
in the U.S. and Canada.
* Delivered over 1 million livestreams in one night during
Selena Gomez's album release party.
* Entered into an amendment agreement with the Company's senior
secured debentures holders pursuant to which the Company
updated certain financial covenants for the December 31, 2019
through June 30, 2021 fiscal quarters. As a result of the
amendment, as of Dec. 31, 2019, LiveXLive was in compliance
with its financial covenants, and a significant portion of
the debentures will be classified as long-term liabilities in
accordance with ASC 470-10, Debt.
* Named Garrett English as chief creative officer to develop
and oversee all content creation, including the launch of
LiveZone Weekly, a weekly news program focusing on lifestyle
and music and the Live Music Awards. Mr. English most
recently served as executive vice president of Live Event
Programming, Specials & News at MTV, VH1, MTV2 & LOGO, and
was executive producer of the MTV Video Music Awards and MTV
Movie & TV Awards.
* Named Jackie Stone chief marketing officer to oversee all
marketing efforts across the Company's music platform. Ms.
Stone was recently the CMO of MiMedia, one of the fastest
growing consumer cloud platforms, and held past executive
level marketing positions with the Spanfeller Media Group,
WebMD, Digitas and AOL.
Business Outlook
The Company is reiterating its full-year fiscal 2020 guidance as
follows (which does not include any contribution from the announced
acquisition):
* Revenue of $38-40 million
* Adjusted Operating Loss of $12-14 million
* Capital expenditures in the range of $2-3 million
* Expectation to livestream up to 40 music festivals and
events
A full-text copy of the Form 10-Q is available for free at the
SEC's website at:
https://is.gd/NeW5I0
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.
LIVEXLIVE MEDIA: Rho Ventures, et al. Report 6.4% Equity Stake
--------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, these entities and individuals reported beneficial
ownership of 3,724,138 shares of common stock of LiveXLive Media,
Inc., which represents 6.4 percent of the shares outstanding:
* Rho Ventures VI, L.P.
* Rho Ventures V, L.P.
* Rho Ventures V Affiliates, L.L.C
* RMV VI, L.L.C.
* RMV V, L.L.C.
* Rho Capital Partners LLC
* Joshua Ruch
* Mark Leschly
* Habib Kairouz
The percentage was calculated based on 58,040,170 shares of Common
Stock reported to be outstanding as of Nov. 4, 2019 as set forth in
the Issuer's Form 10-Q for the period ended Sept. 30, 2019 as filed
with the SEC on Nov. 8, 2019.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/KCDr8K
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 Dec. 31, 2019, the Company had
$55 million in total assets, $56.89 million in total liabilities,
and a total stockholders' deficit of $1.90 million.
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.
LOOKOUT RIDGE: Seeks to Hire Hajjar Peters as Legal Counsel
-----------------------------------------------------------
Lookout Ridge, LLC seeks authority from the U.S. Bankruptcy Court
for the Western District of Texas to hire Hajjar Peters LLP as its
legal counsel.
The services that Hajjar Peters will render are:
a. advise the Debtor of its powers and duties in the continued
operation of its business and management of its property;
b. advise the Debtor of its responsibilities under the
Bankruptcy Code;
c. assist the Debtor in preparing and filing the required
schedules, statement of affairs, monthly financial reports, the
initial debtor report and other documents;
d. represent the Debtor in adversary proceedings and other
matters in the bankruptcy court and other courts of competent
jurisdiction related to its bankruptcy case and financial affairs;
e. represent the Debtor in the negotiation and documentation
of any sale or refinancing of its property and in obtaining the
necessary court approval of such sale or refinancing; and
f. assist the Debtor in the formulation of a plan of
reorganization and in taking the necessary steps to obtain
confirmation of the plan.
The firm's hourly rates are:
Ron Satija $425
Other attorneys $200 - $400
Paralegal $150
Hajjar Peters has no connections with the Debtor's creditors, the
U.S. trustee and its employees or any other "party in interest,"
according to court filings.
The firm can be reached at:
Ron Satija, Esq.
Hajjar Peters LLP
3144 Bee Caves Rd
Austin, TX 78746
Tel: 512-637-4956
Fax: 512-637-4958
Email: rsatija@legalstrategy.com
About Lookout Ridge
Lookout Ridge, LLC is primarily engaged in renting and leasing real
estate properties.
Lookout Ridge filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-10039) on Jan. 7,
2020. In the petition signed by Drew Hall, company representative,
the Debtor estimated $10 million to $50 million in assets and $1
million to $10 million in liabilities. Ron Satija, Esq., at Hajjar
Peters LLP, is the Debtor's legal counsel.
MARGARET MIKE: Plan Has 50% for Unsecureds; March 16 Hearing Set
----------------------------------------------------------------
Judge BRENDA T. RHOADES has ordered that the Disclosure Statement
explaining Margaret Mike MD, PLLC's Chapter 11 plan is
CONDITIONALLY APPROVED.
March 10, 2020 is fixed as the last day for filing and serving
written
objections.
The hearing to consider final approval of the Debtor's Disclosure
Statement (if a written objection has been timely filed) and to
consider the confirmation of the Debtor's proposed Chapter 11 Plan
is fixed and will be held on March 16, 2020 at 10:00 a.m. in the
Plano Bankruptcy Courtroom, 660 N. Central Expressway, Third Floor,
Plano, Texas 75074.
Under the Debtor's Plan, Class 5 Allowed Unsecured Creditors are
impaired and will be satisfied as follows: All allowed unsecured
creditors shall share pro rata in the unsecured creditors pool.
The Debtor will make monthly payments commencing on the Effective
Date of $1,000 into the unsecured creditors' pool. The Debtor shall
make distributions to the Class 6 creditors every 90 days
commencing 90 days after the Effective Date. The Debtor shall make
a total of 60 payments into the unsecured creditors pool with the
first payment being made on the Effective Date. Based upon the
Proof of Claims filed in the case the Class 5 creditor should
receive approximately 50% of their Allowed Claims. Debtor may
prepay any Class 5 Claim at any time without penalty.
The Debtor anticipates the continued operations of the business to
fund the Plan.
A full-text copy of the Disclosure Statement dated Jan. 31, 2020,
is available at https://tinyurl.com/tgfq7xh from PacerMonitor.com
at no charge.
The Debtor's attorneys:
Eric A. Liepins
ERIC A. LIEPINS, P.C.
12770 Coit Road
Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
About Margaret Mike MD
Margaret Mike MD, PLLC, filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Tex. Case No. 19-42428) on Sept. 4, 2019, estimating
under $1 million in both assets and liabilities. The Debtor is
represented by Eric A. Liepins, Esq., at Eric A. Liepins, P.C.
MATCH GROUP: S&P Affirms 'BB' ICR, Alters Outlook to Negative
-------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issuer credit rating on
Dallas-based Match Group Inc. and removed all of its ratings
(including issue-level ratings) from CreditWatch with negative
implications, where they were placed on Dec. 20, 2019.
S&P also assigned a 'BBB-' issue-level rating and '1' recovery
rating to Match's proposed $425 million term loan B due 2027. It
expects to withdraw ratings on the existing $425 million term loan
upon close of this transaction.
Additionally, S&P assigned a 'BB' issue-level rating and '3'
recovery rating to Match's proposed $500 million senior notes, the
same as its existing senior unsecured notes.
Match has announced a $500 million senior unsecured notes offering,
the proceeds of which it plans to use along with cash on the
balance sheet to fund a distribution to IAC. Additionally, Match
will assume all of the exchangeable debt at IAC as part of the
separation aggreement.
Although S&P expects the pro forma leverage at the close of the
transaction to be high for the 'BB' rating, at about 4.7x, the
separation also alleviates its financial policy concerns stemming
from IAC's majority ownership of Match.
Furthermore, the company has committed to lower leverage by
utilizing its sizable free cash flows to prioritize debt repayment
ahead future dividends and share repurchases over the next 18
months.
Debt repayment through solid free cash flow generation and EBITDA
growth will enable the company to reduce its debt leverage. The
rating affirmation reflects S&P's expectation that while Match's
pro forma leverage of about 4.7x following the split from IAC will
temporarily rise above its revised 4x downgrade trigger for the
rating, Match will prioritize debt repayment from its discretionary
cash flows to bring leverage below 4x within 12 months following
the spin-off. However, the negative outlook reflects the company's
dependence on continued revenue growth and cash flow generation
within the next 12 months; as a result, the pace of deleveraging is
somewhat vulnerable to increased competition, operating missteps,
and increased legal costs.
Match has a good record of generating steady free cash flows due to
the company's high EBITDA margin and low working capital and
capital expenditure needs. In 2018 and 2019, Match achieved
significant EBITDA growth and cash flow generation, enabling the
company to reduce its net debt leverage while returning over $1.1
billion to shareholders. S&P expects that in 2020 and 2021, the
company's performance will continue to be healthy, and free
operating cash flow generation will exceed $650 million annually,
facilitating debt reduction and small acquisitions to support
growth.
S&P believes the company will maintain a prudent financial policy.
S&P views the spin-off by IAC as a positive factor for Match's
financial policy, which the rating agency expects will exhibit a
greater level of stability and predictability given the absence of
a controlling shareholder. Previously, Match used most of its free
operating cash flow for investments, acquisitions, cash
distributions, and share repurchases. While S&P expects investments
and acquisitions will continue to be part of the company's future
capital allocation, the rating agency expects cash distribution and
share repurchases will be minimal until the company approaches its
leverage target of approximately 3.0x. As a result of the change in
the company's ownership and S&P's view of the company's future
financial policy, the rating agency has revised its downside
leverage threshold for the rating to 4x from 3x.
Significant litigation expenses over the next 12 months. Match is a
party to several lawsuits that S&P expects will weaken the
company's financials over the next two years. The Federal Trade
Commission (FTC) filed a lawsuit against Match, alleging the
company's marketing, billing, and cancellation practices at
Match.com are unfair and misleading. Tinder's founders have also
filed a lawsuit against Match, claiming IAC hid Tinder's potential
for growth to avoid paying billions of dollars to the co-founder
and others. A loss could require Match to pay a substantial amount,
which could increase its financial leverage. Match has also sued
its competitor Bumble for infringement of its swipe patents and
design of their apps.
The negative outlook reflects the risk that Match would be unable
to lower leverage below 4x in line with S&P's expectations,
possibly due to unexpected operating challenges, such as increased
competition from other dating services, or operating missteps that
cause its revenue growth to slow or costs to increase (likely due
to higher-than-expected litigation costs) above the rating agency's
expectation.
"We could lower the rating if leverage remains above 4x by
year-end. Additionally, we could also downgrade the company if,
contrary to our expectations, Match prioritizes a more aggressive
financial policy and pursues significant debt-funded acquisitions
or share repurchases in contrast to debt reduction over the next 12
months," S&P said.
"We could revise the outlook to stable once the company makes
meaningful progress in reducing its leverage towards 4x by 2020,
with free operating cash flow to debt over 15%, through a
combination of debt reduction and EBITDA growth with minimal
operating challenges," the rating agency said.
Match is the category leader in online dating services, with brands
including Tinder, Match.com, Meetic, Ourtime, PlentyOfFish,
OkCupid, and Hinge. The company has users in more than 190
countries.
MESA MARKETPLACE: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Mesa Marketplace Center, LLC
1440 S. Country Club Dr. Ste 20
Mesa, AZ 85210
Business Description: Mesa Marketplace Center is a Single Asset
Real Estate debtor (as defined in 11 U.S.C.
Section 101(51B)). The Debtor previously
sought bankruptcy protection on Aug. 31,
2016 (Bankr. D. Ariz. Case No. 16-10094).
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
District of Arizona
Case No.: 20-01335
Debtor's Counsel: James Portman Webster, Esq.
JAMES PORTMAN WEBSTER LAW OFFICE, PLC
1845 S. Dobson Rd., Suite 201
Mesa, AZ 85202
Tel: (480) 464-4667
E-mail: Help@JPWLegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kenny Eng, member.
The Debtor stated it has no unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/SftylH
MICROVISION INC: Receives Extension to Regain Nasdaq Compliance
---------------------------------------------------------------
MicroVision, Inc. received formal notification from the Nasdaq
Hearings Panel granting the Company an extension through June 9,
2020 to evidence compliance with the minimum $1.00 bid price
requirement. In order to evidence compliance with the bid price
requirement, the Company must evidence a closing bid price of at
least $1.00 per share for a minimum of 10 consecutive business
days. The Company plans to take steps to timely evidence
compliance; however, there can be no assurance that it will be able
to do so.
On Dec. 12, 2019, the Company received written notice from the
Nasdaq Listing Qualifications Staff indicating that, due to the
Company's continued non-compliance with Nasdaq Listing Rule
5450(a), the Staff had determined to delist the Company's
securities from Nasdaq unless the Company timely requested a
hearing before the Panel. The Panel's decision, dated Feb. 4,
2020, follows the Company's hearing before the Panel on Jan. 23,
2020.
About MicroVision
Based in Redmond, Washington, MicroVision, Inc. --
http://www.microvision.com/-- is the creator of PicoP scanning
technology, an ultra-miniature laser projection and sensing
solution for mobile consumer electronics, automotive head-up
displays and other applications. The Company's PicoP scanning
technology is based on its patented expertise in systems that
include micro-electrical mechanical systems (MEMS), laser diodes,
opto-mechanics, and electronics and how those elements are packaged
into a small form factor, low power scanning engine that can
display, interact and sense, depending on the needs of the
application.
MicroVision reported a net loss of $27.25 million for the year
ended Dec. 31, 2018, compared to a net loss of $25.48 million for
the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company
had $12.39 million in total assets, $17.36 million in total
liabilities, and a total shareholders' deficit of $4.97 million.
Moss Adams LLP, in Seattle, Washington, the Company's auditor since
2012, issued a "going concern" qualification in its report on the
Company's consolidated financial statements for the year ended Dec.
31, 2018. The auditors noted that the Company has suffered
recurring losses from operations and has an accumulated deficit
that raise substantial doubt about its ability to continue as a
going concern.
MILLMAC CORP: Allowed to Use Cash Collateral on Interim Basis
-------------------------------------------------------------
Judge Michael G. Williamson of the U.S. Bankruptcy Court for the
Middle District of Florida authorized Millmac Corp. to use cash
collateral in accordance with the budget so long as the aggregate
of all expenses for each week do not exceed by more than 10% for
any such week on a cumulative basis.
JPMorgan Chase Bank, NA is granted a replacement lien in and upon
all of the categories and types of collateral in which they held a
security interest and lien as of the Petition Date to the same
extent, validity and priority that JPMorgan held as of the Petition
Date.
The Debtor will maintain insurance coverage for the collateral in
accordance with any of its obligations under any loan and security
documents.
About Millmac Corporation
Millmac Corporation is a provider of specialized marine labor, ship
repair and dredging for industrial and residential uses.
Based in Bartow, Fla., Millmac Corporation filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 19-11877) on Dec.
18, 2019. In the petition signed by Michael J. Miller, president,
the Debtor disclosed $1,308,639 in assets and $1,619,039 in
liabilities. Susan Heath Sharp, Esq., at Stichter, Riedel, Blain &
Postler, P.A., is the Debtor's legal counsel.
The U.S. Trustee did not appoint an official committee of unsecured
creditors in the Chapter 11 case.
MOUNTAIN HOME: Unable to File Amended Plan, Consents to Dismissal
-----------------------------------------------------------------
On January 17, 2020, debtor Mountain Home - Montana Vacation
Rentals LLC filed with the U.S. Bankruptcy Court for the District
of Montana a motion requesting additional time within which to file
an amended disclosure statement and to file a response to the
pending motion to dismiss or convert filed by Suzanne Hall
Hoberecht.
On Jan. 21, 2020, Judge Benjamin P. Hursh granted the Debtor's
request and set a Jan. 31 deadline for the Debtor to file an
amended plan and an amended disclosure statement.
On Jan. 31, 2020, the Debtor filed another motion, seeking another
extension, until Feb. 7, 2020, of the deadline to file an amended
plan and and amended disclosure statement, as well as the deadline
to respond to the conversion/dismissal motion. The Debtor's motion
was granted.
On Feb. 7, 2020, the Debtor's counsel informed the Court that the
Debtor is consenting to dismissal of the case.
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.
MYOMO INC: Expects Q4 2019 Revenue of $1.4M to $1.5M
----------------------------------------------------
Myomo, Inc. announced preliminary financial and operational results
for the fourth quarter and fiscal year ended Dec. 31, 2019.
Key Preliminary Results for Q4 and 2019
* Revenue for the fourth quarter is expected to be in a range
of $1.4M-$1.5M, representing an increase of between 57% and
69% over the prior year fourth quarter revenue of
approximately $890,000 and compared to third quarter revenue
of approximately $607,000. For the full year, revenue is
expected to be in the range of $3.7M-$3.8M, an increase of
between 52% and 55% compared to the prior year's revenue of
approximately $2.4M.
* The Company's reimbursement pipeline grew to 594 MyoPro
units at Dec. 31, 2019, including 193 new additions to the
pipeline during the fourth quarter resulting from the
Company's digital marketing activity and larger distributor
base in Europe. The number of MyoPro units in the
reimbursement pipeline at the end of the third quarter 2019
was 528.
* As of Dec. 31, 2019, the Company had 331 direct billing
candidates, accounting for 56%, of the MyoPro pipeline, with
81% of the new candidates entering the pipeline in the
fourth quarter to be billed directly to the payers by Myomo.
* As of Dec. 31, 2019, the backlog of authorized MyoPro units
in the process of being delivered and awaiting insurance
payments stood at 53 units, reflecting a higher number of
revenue units in the fourth quarter compared to each of the
prior three quarters of 2019.
* Cash on hand as of Dec. 31, 2019 was approximately $4.5M.
Cash burn in the fourth quarter was approximately $2.7M.
Cash burn in the fourth quarter was affected by advance
payments made to a subcontracted manufacturing partner for
subassemblies needed to fulfill expected orders in calendar
year 2020.
This financial data as of and for the quarter and year ended Dec.
31, 2019 is preliminary and may change, and is based on information
available to management as of the date hereof and is subject to
completion by management of our financial statements as of and for
the quarter and year ended Dec. 31, 2019. There can be no
assurance that our final results of operations for these periods or
cash position as of December 31, 2019 will not differ from these
estimates, including as a result of review adjustments and any such
changes could be material. The Company's independent registered
public accountants have not audited, reviewed or performed any
procedures with respect to such preliminary financial data and
accordingly do not express an opinion or any other form of
assurance with respect thereto. These results could change as a
result of further review. Complete quarterly results and annual
results will be included in our Annual Report on Form 10-K for the
year ended Dec. 31, 2019.
About Myomo
Headquartered in Cambridge, Massachusetts, Myomo, Inc. --
http://www.myomo.com/-- is a wearable medical robotics company
that offers expanded mobility for those suffering from neurological
disorders and upper limb paralysis. Myomo develops and markets the
MyoPro product line. MyoPro is a powered upper limb orthosis
designed to support the arm and restore function to the weakened or
paralyzed arms of patients suffering from CVA stroke, brachial
plexus injury, traumatic brain or spinal cord injury, ALS or other
neuromuscular disease or injury.
Myomo reported a net loss of $10.32 million for the year ended Dec.
31, 2018, compared to a net loss of $12.10 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $6.08
million in total assets, $1.66 million in total liabilities, and
$4.42 million in total stockholders' equity.
Marcum LLP, in New York, NY, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
12, 2019, citing that the Company has incurred significant losses,
used cash from operations, has an accumulated deficit 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.
NELLSON NUTRACEUTICAL: Moody's Lowers CFR to B3, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service downgraded Nellson Nutraceutical, LLC's
Corporate Family Rating to B3 from B2 and its Probability of
Default Rating to B3-PD from B2-PD. At the same time, Moody's
affirmed Nellson's B2 first lien debt ratings. The ratings outlook
is stable.
The downgrade reflects the continued weak operating performance of
Nellson's functional powders business, slower than anticipated
ramp-up of its new nutritional bar's facility in Ontario, CA, and
weak operating cash flows. Moody's expects the powders business to
remain weak throughout 2020. Moreover, financial leverage,
currently at 6.7x debt/EBITDA (Moody's adjusted) as of September
30, 2019, is expected to remain high and above 6.0x debt/EBITDA
over the next 12 to 18 months. The downgrade also reflects that
operating weakness is occurring at a time when the approaching 2021
maturity of the revolver and first lien term loan create
refinancing and liquidity risk.
Moody's took the following rating actions on Nellson Nutraceutical,
LLC
Ratings Downgraded:
Corporate Family Rating to B3 from B2
Probability of Default Rating to B3-PD from B2-PD
Ratings affirmed:
$65 million first lien revolving credit facility expiring 2021 at
B2 (LGD 3)
First lien term loan maturing 2021 at B2 (LGD 3)
Moody's affirmed the following ratings for Les Aliments Multibar
Inc.
First lien term loan maturing 2021 at B2 (LGD 3)
The outlook is stable.
RATINGS RATIONALE
Nellson's B3 CFR reflects the company's moderate scale, limited
product diversity, weakening demand in its powders business, high
financial leverage and event risks from private equity ownership
and aggressive financial strategies. At the same time, the rating
reflects the company's low exposure to changes in raw material
costs through the use of pass-through provisions in customer
contracts. The company benefits from its participation in the
nutritional bars category that is experiencing positive social
trends towards products that are nutritional and convenient.
Moody's also assumes that Nellson will turn free cash flow positive
in 2020 and proactively address its upcoming maturities at a
manageable cost.
The stable outlook reflects Moody's view that Nellson will continue
to grow its bars business to offset continued weakness in its
powders business and that there will be some marginal improvement
in operating performance as the volume of bars increases and the
company capitalizes from the much greater capacity at its lower
cost Ontario production facility.
Ratings could be upgraded if operating performance improves
materially, product diversity increases into adjacent categories,
and debt to EBITDA is sustained below 6.0x. Nellson would also need
to refinance the upcoming debt maturities while also generating
comfortably positive free cash flow.
Ratings could be downgraded if operating performance weakens
further, liquidity deteriorates, or if debt/EBITDA is sustained
above 7.0x. A downgrade would likely also ensue if the company does
not refinance its debt maturities prior to mid-2020, or restore
sufficient positive free cash flow to provide greater refinancing
flexibility.
The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.
Nellson Nutraceutical, LLC, headquartered in Anaheim, CA, provides
outsourced manufacturing capacity and technical expertise primarily
to U.S. consumer packaged food companies that sell nutritional bars
and functional powders. It focuses on bars and powders that serve
the energy/sports nutrition, diet/weight loss, body building and
fortified/medical food markets. Nellson is owned by private equity
sponsor Kohlberg & Company and does not publicly disclose financial
information. The company generates about $900 million in annual
revenues.
NOVABAY PHARMACEUTICALS: Registers 1.8M Shares Under 2017 Plan
--------------------------------------------------------------
NovaBay Pharmaceuticals, Inc., filed a Form S-8 registration
statement with the Securities and Exchange Commission to register
1,801,074 shares of common stock of the Company for issuance under
the NovaBay Pharmaceuticals, Inc. 2017 Omnibus Incentive Plan.
The number of shares of Common Stock available for issuance under
the shareholder-approved Plan is subject to an automatic annual
increase on the first day of each of the Company's fiscal years
beginning on Jan. 1, 2018 and ending on Jan. 1, 2027 by an amount
equal to (i) four percent of the number of shares of Common Stock
outstanding on the last day of the immediately preceding fiscal
year or (ii) such lesser number of shares of Common Stock as
determined by the Board of Directors. The Board affirmed the
automatic increase of 1,801,074 shares of the Company's Common
Stock under the Plan, consisting of the full four percent automatic
annual increase allowed pursuant to the Plan's evergreen provision
for 2019 and 2020 (with 683,572 shares of Common Stock from the
2019 annual increase and 1,117,502 shares of Common Stock from the
2020 annual increase). These shares are in addition to the
2,318,486 shares of Common Stock registered on the Company's Form
S-8 filed on June 2, 2017 (File No. 333-218469), and the 615,392
shares of Common Stock registered on the Company's Form S-8 filed
on Jan. 19, 2018 (File No. 333-222625) pursuant to the annual
increase in 2018 according to the Plan's evergreen provision.
Since the Plan provides that the annual increase in the aggregate
number of shares that may be issued pursuant to the Plan's
evergreen provision begins for fiscal years commencing Jan. 1,
2018, this Registration Statement accounts for the second and third
share increases under the evergreen provision.
A full-text copy of the regulatory filing is available for free at
the SEC's website at:
https://is.gd/R50lvd
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.
NOVABAY PHARMACEUTICALS: Signs New Employment Agreement with CEO
----------------------------------------------------------------
NovaBay Pharmaceuticals, Inc., entered into a new employment
agreement with each of Mr. Justin Hall, the Company's chief
executive officer, president and general counsel, in connection
with the expiration of Mr. Hall's current employment agreement
dated as of Dec. 19, 2017, which expired on Dec. 31, 2019, and Mr.
Jason Raleigh, who did not previously have an employment agreement
in place.
Both Mr. Hall's and Mr. Raleigh's new employment agreements provide
for a term commencing on Jan. 31, 2020 and ending on Dec. 31, 2021.
Mr. Hall's employment agreement provides for an annual base salary
of $286,000 and Mr. Raleigh's employment agreement provides for an
annual base salary of $225,000, which was subsequently increased to
$240,000, both subject to at least annual review. Both Mr. Hall's
and Mr. Raleigh's salary may be adjusted by action of the Board of
Directors, based on the applicable executive's performance, the
financial performance of the Company and the compensation paid to a
chief executive officer or chief financial officer, as applicable,
in comparable positions. Such adjustments shall not reduce either
executive's then-current annual base salary unless he provides
written consent.
In addition, both Mr. Hall and Mr. Raleigh will be eligible for any
bonus plan that is deemed appropriate by the Board. The bonus
amount shall be determined by the Board, in its sole discretion,
based upon, among others, the following factors: (i) the
fulfillment, during the relevant year, of specific milestones and
tasks delegated, for such year, to the executive as set by the
executive and the Company's Board (and/or in Mr. Raleigh's case,
the Company's president), before the end of the first calendar
quarter; (ii) the evaluation of the executive by the Company's
Board (and/or in Mr. Raleigh's case, the Company's President);
(iii) the Company's financial, product and expected progress and
(iv) other pertinent matters relating to the Company's business and
valuation. Any bonus will be payable within two and a half months
following the end of the year for which the bonus was earned. The
Compensation Committee of the Board of Directors will have the sole
discretion to pay any or all of the annual bonus in the form of
equity compensation. Any such equity compensation will be issued
from the Company's Omnibus Incentive Plan, and will be fully vested
upon payment.
In the event the Company terminates Mr. Hall or Mr. Raleigh for
cause (as defined in the employment agreements), he will be
entitled to any earned but unpaid wages or other compensation
(including reimbursements of his outstanding expenses and unused
vacation) earned through the termination date. In the event the
Company terminates Mr. Hall or Mr. Raleigh without cause (including
death, disability or for constructive termination) (each as defined
in the employment agreements) which is not in connection with a
change of control, he will be entitled to an amount equal to the
executive's annualized Base Salary in effect on the date of
separation from service plus the full target annual bonus
percentage for the current fiscal year. The Severance Amount will
be paid in 12 equal consecutive monthly installments at the monthly
Base Salary rate in effect at the time of the executive's
termination, with such installments commencing within 60 days
following the executive's separation from service. The Severance
Amount will be in addition to Mr. Hall's or Mr. Raleigh's earned
wages and other compensation (including reimbursements of his
outstanding expenses and unused vacation) through the date his
employment is terminated from the Company.
In the event the Company terminates Mr. Hall or Mr. Raleigh without
cause in connection with a change of control, he will be entitled
to a Change of Control Severance in place of the Severance Amount.
The CoC Severance Amount will be: (i) an amount equal to twice the
executive's Base Salary and (ii) an amount equal to the cash
portion of the executive's target Annual Bonus for the fiscal year
in which the termination occurs (with it deemed that all
performance goals have been met at 100% of budget or plan)
multiplied by 150%. For a period of 18 months, the executive may
elect coverage for, and the Company shall reimburse the executive
for, the amount of his premium payments for group health coverage,
if any, elected by the executive pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended; provided,
however, that the executive shall be solely responsible for all
matters relating to his continuation of coverage pursuant to COBRA,
including (without limitation) his election of such coverage and
his timely payment of premiums.
Moreover, all outstanding equity awards held by Mr. Hall or Mr.
Raleigh will be subject to full accelerated vesting on the date of
termination without cause, in both the standard Severance Amount
and the CoC Severance Amount, and the exercise period shall be
extended to three years from the date of termination. In order to
terminate Mr. Hall or Mr. Raleigh for cause (or for Mr. Hall or Mr.
Raleigh to resign for constructive termination), the acting party
shall give notice to the other party specifying the reason for
termination and providing a period of 30 days to cure the reason
specified. If there is no cure within 30 days or the notified
party earlier refuses to effect the cure, the termination shall
then be deemed effective.
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.
NSA INTERNATIONAL: S&P Downgrades ICR to 'CCC'; Outlook Negative
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
NSA International LLC (Juice Plus) to 'CCC' from 'B-'. At the same
time, S&P lowered its issue-level rating on the company's senior
secured credit facility to 'CCC' from 'B'. S&P revised the recovery
rating to '3' from '2', indicating its expectation for meaningful
(50% - 70%, rounded estimate 65%) recovery in the event of
default.
The downgrade reflects S&P's expectation that operating performance
will continue to deteriorate in 2020, resulting in declining EBITDA
interest coverage and a potential for financial covenant violation
absent relief from its lenders. Juice Plus' net sales and EBITDA
were both down by double-digit percentages over the 12 months ended
Oct. 31, 2019, primarily driven by continued challenges and
softness across U.S. and Europe, leading to declining distributor
and customer base. Adjusted leverage for the 12 months ended
October 31, 2019 increased to the high-7x area and EBITDA interest
coverage approached the mid-1x area. S&P expects the competitive
environment will continue to pressure the company's topline and
profits in 2020. Despite the company's focus on marketing, product
innovation, technology, and cost reduction initiatives, S&P has not
yet seen the business turn around. As a result, S&P has further
revised down its sales and EBITDA forecast. The rating agency
expects EBITDA interest coverage to weaken to the mid-1x area by
the end of fiscal 2020 and the low-1x area by the end of fiscal
2021.
The negative outlook reflects the potential for a lower rating if a
default, distressed exchange, or redemption appears to be
inevitable within six months.
"We could lower our ratings if volume softness in key markets
worsen, or greater competitive pressures hinder the company's
efforts to stabilize its operating performance, leading to
continued performance shortfalls. We could also lower our rating if
a covenant violation it becomes more likely," S&P said.
"We could take a positive rating action if Juice Plus improves its
operating performance and makes favorable amendments to its credit
agreement that permits the company to strengthen the business while
maintaining forecasted covenant cushion above 10% and improving
credit metrics including EBITDA interest coverage approaching 2x.
This could occur if the company is able to increase its customer
and distributor base, successfully introduce new products and
expand to new markets, and begins to benefit from its digital
initiatives," the rating agency said.
NSK GROUP: Seeks Permission to Use Cash Collateral
--------------------------------------------------
NSK Group, Inc., asked the Bankruptcy Court to authorize use of
cash collateral in order to continue operating its business until
the issuance of a further Court order or the confirmation of a
reorganization plan.
The Debtor relates that Mitra Babaei, a secured creditor has filed
a UCC financing statement on the Debtor’s assets, including all
cash funds, deposit accounts and other rights and evidence of
rights to cash. The Debtor believes that approximately $70,000 is
owed to the secured creditor as of the Petition Date, secured by
substantially all, if not all, assets of its estate.
The Debtor's current monthly operating expenses total approximately
$55,000.
The Debtor assures the Court that, to the extent that the secured
creditor's interest is not adequately protected, the Debtor can
provide a replacement lien on after acquired assets to the extent
of the diminution in the value of the secured creditor's interest
in the property. The Debtor, however, believes that the secured
creditor is adequately protected on account of its positive monthly
income projection, as well as insurance on the property.
A copy of the motion is available free of charge at
https://is.gd/zK3AMf from PacerMonitor.com.
About NSK Group
NSK Group, Inc., which operates franchise restaurants in Ventura,
California and West Hills, California, filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 20-10014) on Jan. 3, 2020. Judge
Deborah J. Saltzman is assigned to the case. Bilenka Law Firm
represents the Debtor.
NSK GROUP: Wins Interim Permission to Use Cash Collateral
---------------------------------------------------------
Judge Deborah J. Saltzman authorized NSK Group, Inc., to use, on an
interim basis, cash collateral in which the secured creditor claims
or may claim to have a lien, pending the final hearing of the
motion. The Debtor will use the cash collateral to pay ordinary
and necessary operating and administrative business expenses. The
secured creditor was identified in the motion as Mitra Babaei.
The Court ruled that the secured creditor has a replacement lien in
the Debtor's post=petition cash collateral, to the same extent,
value, and priority existing as of the Petition Date.
A copy of the interim order is available at https://is.gd/TIyTFw
from PacerMonitor.com free of charge.
Final hearing on the motion is set on February 20, 2020 at 1:30
p.m. Objections are due by February 18, 2020.
About NSK Group Inc.
NSK Group, Inc., which operates franchise restaurants in Ventura,
California and West Hills, California, filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 20-10014) on Jan. 3, 2020. Judge
Deborah J. Saltzman is assigned to the case. Bilenka Law Firm
represents the Debtor.
OZARKS RIDGERUNNER: O'Bannon Bank Wants Say in Plan Sale
--------------------------------------------------------
O'Bannon Bank filed its limited objection to the Amended Joint
Combined Plan and Disclosure Statement of debtor Ozarks Ridgerunner
IV, LLC.
The Debtor's Amended Joint Plan provides that the real property
should be sold the sale proceeds paid to O'Bannon and at a price
determined by the court and the Debtor. O'Bannon Bank's limited
objection is that O'Bannon Bank should likewise have some say in
the ultimate sales prices in exchange for a release of its deed of
trust as the sale of that property will impact the collateral
position O'Bannon Bank has on its loan.
O'Bannon Bank has enjoyed a good relationship with the principal to
the debtor LLC and anticipates no problems coming to an agreement
regarding the ultimate sales price, but believes it should have
some input in order to ensure that O'Bannon Bank is not prejudiced
with a sales price that is too low.
A copy of O'Bannon Bank's Objection to the Plan and Disclosure
Statement dated Jan. 21, 2020, is available at
https://tinyurl.com/wnq5xcc from PacerMonitor.com at no charge.
O'Bannon Bank is represented by:
NEALE & NEWMAN, L.L.P.
Brian K. Asberry
American National Center
1949 East Sunshine, Suite 1-130
P.O. Box 10327
Springfield, Missouri 65808
Telephone: (417)882-9090
Facsimile: (417)882-2529
E-mail:basberry@nnlaw.com
About Ozarks Ridgerunner
Ozarks Ridgerunner IV, LLC, originally formed in April of 2009, was
formed for investment purposes and had previously acquired
approximately 41 acres in Polk County, Missouri, outside the city
limits of Bolivar. Bidgerunner I, LLC originally was capitalized
with farm acreage in Dallas County, Missouri, which Chris Thompson
inherited. Ridgerunner II, LLC, owns a commercial building within
the city limits of Buffalo, Missouri. Chris R. Thompson is the
sole managing member of each entity.
Ozarks Ridgerunner IV, et al., the Debtors sought Chapter 11
protection (Bankr. W.D. Mo. Case Nos. 19-60794 and 19-60795) on
July 9, 2019. Ozarks Ridgerunner IV was estimated to have assets
and liabilities of $1 million to $10 million. Ozarks Ridgerunner
II was estimated to have assets of $100,000 to $500,000 and
liabilities of $1 million to $10 million.
The cases are assigned to Hon. Cynthia A. Norton.
The Debtors are represented by:
DAVID SCHROEDER LAW OFFICES, P.C.
1524 East Primrose, Suite A
Springfield, Missouri, 65804
Tel: (417) 890-1000
Fax: (417) 886-8563
E-mail: bk1@dschroederlaw.com
PANKEY'S TRANSPORTATION: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Pankey's Transportation, Inc.
335 Evesham Drive
Lawnside, NJ 08045
Business Description: Pankey's Transportation, Inc. is a provider
of transportation and logistics services.
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 20-12184
Debtor's Counsel: Dimitri L. Karapelou, Esq.
LAW OFFICES OF DIMITRI L. KARAPELOU, LLC
Two Penn Center, Suite 920
1500 John F. Kennedy Boulevard
Philadelphia, PA 19102
Tel: (215) 391-4312
E-mail: dkarapelou@karapeloulaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Georgette Miller, president.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/gI5j1Q
PHARMACEUTICAL PRODUCT: S&P Upgrades ICR to 'B+'; Outlook Positive
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on
Pharmaceutical Product Development LLC (PPD) to 'B+' and removed
the ratings from CreditWatch, where S&P placed them with positive
implications on Feb. 4, 2020.
The upgrade comes after Pharmaceutical Product completed an IPO on
Feb. 5, 2020, issuing about $1.6 billion in common equity. The
company plans to use the proceeds to repay $1.45 billion of holdco
notes.
The upgrade follows PPD's IPO and assumes it will fully repay the
$1.45 billion holdco notes and its financial policy will be less
aggressive. S&P estimates that on a pro forma basis, the S&P Global
Ratings'-adjusted leverage is around 5.7x as of Sept. 30, 2019,
which it expects will decline to 5.1x at the end of 2020 and 4.8x
at the end of 2021. This compares with its expectation that
leverage would remain above 6x before the IPO.
The positive outlook reflects the potential for an upgrade if PPD
financial policy becomes less aggressive and S&P becomes convinced
that the company will maintain its leverage below 5.5x on a
sustained basis.
S&P could revise the outlook to stable if it thinks PPD's adjusted
leverage will stay above 5.5x over the long term.
S&P may consider a higher rating if it gains confidence that the
company will maintain its leverage below 5.5x on a sustained basis.
PLUS THERAPEUTICS: Appoints Chief Financial Officer
---------------------------------------------------
Andrew J. Sims has been appointed as Plus Therapeutics, Inc.'s
chief financial officer, effective Feb. 6, 2020.
A seasoned financial executive with two decades of leadership
experience in North America, Europe and Asia, Mr. Sims has held
senior management positions in numerous growth companies. In his
new role at Plus Therapeutics, Mr. Sims will oversee the Company's
financial management and strategy, and will report to Dr. Marc
Hedrick, the Company's president and chief executive officer.
Mr. Sims arrives at Plus Therapeutics having previously held chief
financial officer roles at several private equity-backed companies.
His focus has been on mergers and acquisitions, integrations,
corporate capitalization, and building out and managing teams to
support global growth. Previously, Mr. Sims was Partner at Mazars,
a global accounting, advisory, audit, tax and consulting firm.
Working from both the Oxford, England and New York offices, Mr.
Sims audited and advised global public clients, including a variety
of healthcare companies, with average annual revenues in excess of
$1 billion. Further, he was the lead partner on over 50
acquisitions ranging from $5 million to $4 billion in purchase
price. Mr. Sims is a native of the United Kingdom and is now a
U.S. citizen. He is a Certified Public Accountant in the U.S. and
a Chartered Accountant in England and Wales. He is a graduate of
Buckingham University in the United Kingdom.
"All of us at Plus Therapeutics are extremely excited to have
Andrew join the team," said Dr. Hedrick. "As we enter our next
stage of expansion, Andrew's proven ability in enabling growth and
scale is a significant asset for us."
"I am delighted to join Plus Therapeutics as we enter an exciting
new phase for the company," said Mr. Sims. "I am very confident in
the company's strategy, business model, and pipeline and believe
Plus is well-positioned for growth."
Mr. Sims will receive an initial annual base salary of $260,000 and
will be eligible to participate in the Company's benefit and
compensation plans. Mr. Sims has been assigned an initial annual
target bonus of 30% of his base salary. Further, in an effort to
induce Mr. Sims to accept the offer, Mr. Sims will also receive
options to purchase up to 40,000 shares of common stock of the
Company, which will have an exercise price per share equal to the
fair market value of the common stock on the date of grant and
which are expected to vest and become exercisable in monthly
installments over the next four years, subject to a one-year cliff.
It is also expected that Mr. Sims will enter into the Form
Indemnification Agreement.
About Plus Therapeutics
Plus Therapeutics, formerly known as Cytori Therapeutics, Inc., is
a clinical-stage pharmaceutical company focused on the discovery,
development, and manufacturing scale up of complex and innovative
treatments for patients battling cancer and other life-threatening
diseases. The Company is headquartered in located in Austin,
Texas, with a manufacturing facility in San Antonio, TX and a
satellite office in San Diego, CA.
Cytori reported a net loss of $12.63 million for the year ended
Dec. 31, 2018 compared to a net loss of $22.68 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2019, the Company had $25.71
million in total assets, $25.55 million in total liabilities, and
$160,000 in total stockholders' equity.
BDO USA, LLP, in San Diego, California, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
March 29, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that Cytori has suffered
recurring losses from operations that raise substantial doubt about
its ability to continue as a going concern.
PLUS THERAPEUTICS: Greg Petersen Joins as Director
--------------------------------------------------
Greg B. Petersen has joined Plus Therapeutics, Inc.'s Board of
Directors to serve as an independent director, effective Feb. 14,
2020. Greg will serve on the both the Audit and Compensation
Committees. In addition, on Jan. 31, 2020, Gregg Lapointe,
submitted his resignation from the board of directors.
Mr. Petersen is an accomplished executive and Board member with
more than 25 years of strategy, operations, finance and compliance
leadership experience. His 10 years of Board of Directors
experience includes his current roles as Compensation Committee
Chair and Audit Committee member of PROS Holdings and as Audit
Committee Chair of Mohawk Group Holdings.
Mr. Petersen has served as executive vice chairman of Diligent
Corporation and as chief financial officer of Lombardi Software and
Activant Solutions (now part of Epicor). He has also held
executive positions at American Airlines and other corporations.
Mr. Petersen has a BA from Boston College and an MBA from Duke
University's Fuqua School of Business.
"We are happy that Greg Petersen has agreed to join our Board of
Directors," said Dr. Marc Hedrick, president and CEO of Plus
Therapeutics. "Greg is a seasoned public company Chief Financial
Officer and board member having served those positions for a number
of high growth companies over his career. More specifically, Greg
has extensive experience in both audit and compensation matters and
will serve on both of these committees on our Board of Directors."
Mr. Petersen will receive an annual retainer of $40,000 for his
service on the Board, and an additional $5,000 for each committee
on which he serves. In connection with his appointment to the
Board, Mr. Petersen will also receive an initial grant of options
to purchase up to 40,000 shares of common stock of the Company,
which will have an exercise price per share equal to the fair
market value of the common stock on the date of grant and which are
expected to vest and become exercisable in monthly installments
over the next two years, subject to a one-year cliff. Mr. Petersen
will be eligible for ongoing compensation for his service on the
Board and any committees thereof on which he serves in accordance
with the Company's standard non-employee director compensation
program. In addition, it is expected that Mr. Petersen will enter
into the Company's standard form of indemnification agreement which
provides for the Company to indemnify directors and officers, as
applicable, against certain expenses and liabilities incurred by a
director or officer and arising out of such individual's service.
About Plus Therapeutics
Plus Therapeutics, formerly known as Cytori Therapeutics, Inc., is
a clinical-stage pharmaceutical company focused on the discovery,
development, and manufacturing scale up of complex and innovative
treatments for patients battling cancer and other life-threatening
diseases. The Company is headquartered in located in Austin,
Texas, with a manufacturing facility in San Antonio, TX and a
satellite office in San Diego, CA.
Cytori reported a net loss of $12.63 million for the year ended
Dec. 31, 2018 compared to a net loss of $22.68 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2019, the Company had $25.71
million in total assets, $25.55 million in total liabilities, and
$160,000 in total stockholders' equity.
BDO USA, LLP, in San Diego, California, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
March 29, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that Cytori has suffered
recurring losses from operations that raise substantial doubt about
its ability to continue as a going concern.
PUERTO RICO: Bondholders Strike $35-Bil. Debt Restructuring Deal
----------------------------------------------------------------
The Financial Oversight and Management Board for Puerto Rico
announced Feb. 9, 2020, that it reached an agreement with certain
bondholders of the Commonwealth of Puerto Rico on a substantially
enhanced framework for a Plan of Adjustment to resolve $35 billion
of debt and non-debt claims.
The new agreement reduces the Commonwealth's debt service
(including principal and interest from the COFINA Senior Lien
bonds) by 56% -- to $39.7 billion from $90.4 billion. Relative to
the previous Plan Support Agreement the Oversight Board reached
with a smaller group of bondholders last year, this agreement
reduces total debt service by an additional $5 billion. Under the
new agreement, Puerto Rico would completely resolve its legacy debt
in 20 years, 10 years sooner than under the previous agreement.
"The new and more favorable agreement is a win for Puerto Rico,"
said the Oversight Board's Chairman Jose Carrion. "It lowers total
debt payments relative to the agreement we reached last year, pays
off Commonwealth debt sooner, and has significantly more support
from bondholders, further facilitating Puerto Rico's exit from the
bankruptcy that has stretched over three years."
The new agreement reduces $35 billion of debt and other liabilities
by 70%, or $24 billion, to less than $11 billion, an additional $1
billion reduction relative to the previous agreement. Holders of $8
billion of bonds support the agreement, including Puerto Rican
credit unions and traditional municipal investors. This support
increases the Oversight Board's ability to move forward towards
exiting bankruptcy this year. The previous agreement was
terminated.
"The new agreement is another step forward for Puerto Rico, one
that gets the island much closer to ending bankruptcy and to the
beginning of a true economic recovery," said the Oversight Board's
Executive Director Natalie Jaresko. "Bankruptcy is holding Puerto
Rico back. We need to resolve it and with this agreement, Puerto
Rico will resolve it faster, protecting the pensions of retirees
and the government services the people of Puerto Rico need and
deserve as specified in the Oversight Board's certified Fiscal Plan
and budget."
The new agreement provides a 29% average reduction for general
obligation (GO) bondholders and a 23% average reduction for holders
of Puerto Rico Public Buildings Authority (PBA) bonds.
Commonwealth creditors would receive $10.7 billion in new debt,
half in GO bonds and half in COFINA Junior Lien bonds, as well as
$3.8 billion in cash. The new agreement, which was approved by the
majority of the members of the Oversight Board, reduces the
Commonwealth's maximum annual debt service payable in any future
year, including COFINA Senior Lien bonds, by more than 70%, from
$4.2 billion annually to a sustainable level of below $1.5 billion
a year.
The Oversight Board agreed to settle its challenge of $6 billion of
bonds that the Oversight Board contends exceeded the Commonwealth
debt limit. The settlement allows the Oversight Board to eliminate
the risk of a costly and time-consuming legal battle. The Oversight
Board will continue to challenge other bond issuances, including
bonds issued by the Employee Retirement System, as well as seek
recovery of fees earned by the banks, law firms and other parties
earned when they helped issue bonds in excess of Puerto Rico's
constitutional debt limit.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection to
restructure its massive $74 billion debt-load and $49 billion in
pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera
& Sifre, P.S.C. and serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc., and
the First Puerto Rico Family of Funds, which collectively hold over
$4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by
Puerto Rico and other instrumentalities.
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP, Autonomy
Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative
Capital LP.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ Management
II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed an official committee of retirees and an
official committee of unsecured creditors of the Commonwealth. The
Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia &
Milian, C.S.P., as its attorneys. The Creditors Committee tapped
Paul Hastings LLP and O'Neill & Gilmore LLC as counsel.
PVV LLC: Has Authorization to Use Cash Collateral Until Feb. 18
---------------------------------------------------------------
Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the
Eastern District of Texas authorized PVV, LLC, to use cash
collateral to pay expenses and/or disbursements that are expressly
permitted and as shown on the Budget.
Prosperity Bank and Madco CDC have agreed to the Debtor's use of
cash collateral to pay the ordinary and necessary operating
expenses of the Estate's business and assets, for the interim
period through Feb. 18, 2020, pursuant to and in accordance with
the terms of the Interim Order.
Prosperity Bank and Madco CDC assert that substantially all of the
Debtor's assets are subject to their Prepetition Liens, including
liens on rents.
The Secured Lenders are granted valid, binding, enforceable, and
automatically perfected liens co-extensive with their respective
pre-petition liens in all currently owned or hereafter acquired
property and assets of the Debtor, of any kind or nature, whether
real or personal, tangible or intangible, wherever located, now
owned or hereafter acquired or arising and all proceeds and
products, including, without limitation, all accounts receivable,
general intangibles, inventory, and deposit accounts which are the
Secured Lender's Collateral, coextensive with their pre-petition
liens.
The Secured Lenders are granted replacement liens and security
interests, in accordance with Bankruptcy Code Sections 361, 363,
364(c)(2), 364(e), and 552, co-extensive with their respective
pre-petition liens. In addition, during the pendency of the interim
order, the Debtor will maintain insurance on the Secured Lenders'
collateral and pay taxes when due.
The Debtor must account to Secured Lenders for all cash collateral:
(i) the Estate now possesses; (ii) that has been transferred into
the possession of others, if any, since the Petition Date; (iii)
being held by any party in privity with the Estate; or (iv) that
the Debtor might hereafter obtain;
About PVV LLC
PVV LLC, is a privately held company whose principal assets are
located at 2509 W. Grant Ave., Pauls Valley, Okla. PVV LLC filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Tex. Case No. 19-43432) on Dec. 24, 2019. In the petition
signed by Ketan Patel, managing member, the Debtor was estimated to
have $1 million to $10 million in both assets and liabilities.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC,
serves as the Debtor's counsel.
RQW - REAL ESTATE: May Use FMB Cash Collateral through Feb. 12
--------------------------------------------------------------
RQW Real Estate Holdings, LLC and RQW Automobile Services, LLC,
sought and obtained authority from the U.S. Bankruptcy Court for
the Northern District of Illinois to use post-petition expenses to
third parties through Feb. 12, 2020, only for necessary expenses
consistent with the expenses set forth in the Budget.
First Midwest Bank asserts a security interest in cash and cash
equivalents, including the rent collected by RQW Real Estate from
RQW Automobile. FMB also claims a blanket lien on the assets of RQW
Automobile as collateral.
As adequate protection for the Debtor's continued interim use of
cash collateral, FMB is granted the following:
(1) The Debtor will permit FMB to inspect its books and
records;
(2) The Debtor will maintain and pay premiums for insurance to
cover the collateral from fire, theft and water damage;
(3) The Debtor will make available to FMB evidence of that
which constitutes their collateral or proceeds;
(4) The Debtor will properly maintain the collateral in good
repair and properly manage the collateral; and
(5) FMB is granted replacement liens, attaching to the
collateral, but only to the extent of their prepetition liens, and
attaching to the same assets of the Debtor in which FMB asserted
prepetition liens.
A copy of the Order is available at PacerMonitor.com at
https://is.gd/lCmstH at no charge.
About RQW Real Estate Holdings and
RQW Automotive Services
RQW Real Estate Holdings LLC is a single asset real estate debtor
(as defined in 11 U.S.C. Section 101(51B)).
RQW Real Estate Holdings and its affiliate, RQW Automotive Services
LLC, filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead
Case No. 19-35576) on Dec. 18, 2019.
At the time of the filing, RQW Real Estate Holdings disclosed
assets of between $1,000,001 and $10 million and liabilities of the
same range. RQW Automotive had estimated assets of between
$1,000,001 and $10 million and liabilities of less than $50,000.
Judge Deborah L. Thorne oversees the cases. Crane, Simon, Clar and
Dan is the Debtors' legal counsel.
RUBY'S DINNER: Further Fine-Tunes Disclosure Statement & Plan
-------------------------------------------------------------
Debtors Ruby's Diner, Inc., et al., and Ruby's Franchise Systems,
Inc. filed a Third Amended Joint Disclosure Statement describing
Third Amended Joint Chapter 11 Plan of Reorganization, as modified
January 21, 2020. The recent filings contain minor modifications
to the prior iteration of the Disclosure Statement.
The Debtors now project a Plan effective date of April 6, 2020
instead of March 8, 2020.
For the period following July 30, 2019 though the Effective Date
(estimated to be February 29, 2020), with respect to both the
Post-Petition Netdown and, following the Effective Date,
implementation with respect to the Pre-Petition amounts owed among
RDI, RFS and the Franchisees, as reflected in the Cash Flow
Projections, the implementation of the Netdown Process as to these
obligations is projected to generate cash to RFS in the estimated
total amount of $811,492 in Franchise Royalties, $475,420 in Ad
Fund Obligations and miscellaneous charges for a total sum of
$91,286,912. These amounts include the amount of $920,672 in
unpaid Franchise Royalties and Ad Fund Obligations owed by Eureka
Food Enterprises, LLC to be paid on the Effective Date, and the
balance from other Franchisees (to be paid on the Effective Date
and during the year following the Effective Date), as reflected in
the Cash Flow Projections. Pursuant to the implementation of this
Netdown Process, RDI is projected to receive the amount of $202,873
as the RDI License Fee. As a result of the Netdown Process, RFS
Franchisee receivables will be offset against RDI gift card
payables, and a projected intercompany receivable owed by RDI to
RFS in the approximate amount of $984,620 will be booked.
As reported in the Troubled Company Reporter, the Plan treats
unsecured claims as follows:
* Class 11(c)(i) - The Allowed General Unsecured Claims against
Ruby's Huntington Beach are designated as Class 11(c)(i). The
Allowed General Unsecured Claims against Ruby's Huntington Beach
will be paid the total amount of $113,118.78 (the "Huntington Beach
Unsecured Distribution Amount"), on a pro rata basis, on the
Effective Date of the Plan. Allowed General Unsecured Claims
against Ruby's Huntington Beach shall also be entitled to a pro
rata share of any distributions to which Ruby's Huntington Beach is
entitled to on account of its Allowed Class 11(a) Claim against
RDI. Class 11(c)(i) includes the Allowed US Foods Unsecured Claims
against Ruby's Huntington Beach as provided by the US Foods
Settlement. and the Allowed Unsecured Claim of Pillsbury as
provided by the Pillsbury Settlement.
Based on Ruby's Huntington Beach's estimate as to the ultimate
allowability of the Class 11(c)(i) Claims, the percentage
distribution to the holders of Allowed Class 11(c)(i) Claims is
estimated to be approximately 9%, plus any pro rata share of any
distributions that may be made to the holders of Allowed Class
11(a) Claims.
* Class 11(c)(ii) - The Allowed General Unsecured Claims against
Ruby's Oceanside are designated as Class 11(c)(ii). The Allowed
General Unsecured Claims against Ruby's Oceanside will be paid the
total amount of $62,397.43 (the "Oceanside Unsecured Distribution
Amount") on a pro rata basis, on the Effective Date of the Plan.
Allowed General Unsecured Claims against Ruby's Oceanside shall
also be entitled to a pro rata share of any distributions to which
Ruby's Oceanside is entitled to on account of its Allowed Class
11(a) Claim against RDI. Class 11(c)(ii) includes the Allowed US
Foods Unsecured Claims against Ruby's Oceanside as provided by the
US Foods Settlement and the Allowed Unsecured Claim of Pillsbury
as
provided by the Pillsbury Settlement.
Based on Ruby's Oceanside's estimate as to the ultimate
allowability of the Class 11(c)(ii) Claims, the percentage
distribution to the holders of Allowed Class 11(c)(ii) Claims is
estimated to be approximately 5.2%, plus any pro rata share of any
distributions that may be made to the holders of Allowed Class
11(a) Claims.
* Class 11(c)(iii) - The Allowed General Unsecured Claims
against Ruby's Palm Springs are designated as Class 11(c)(iii).
The Allowed General Unsecured Claims against Ruby's Palm Springs
will be paid the total amount of $24,413.78 (the "Palm Springs
Unsecured Distribution Amount"), on a pro rata basis, on the
Effective Date of the Plan. Allowed General Unsecured Claims
against Ruby's Palm Springs shall also be entitled to a pro rata
share of any distributions to which Ruby's Palm Springs is entitled
to on account of its Allowed Class 11(a) Claim against RDI. Class
11(c)(iii) includes the Allowed US Foods Unsecured Claims against
Ruby's Palm Springs as provided by the US Foods Settlement and the
Allowed Unsecured Claim of Pillsbury as provided by the Pillsbury
Settlement.
Based on Ruby's Palm Spring's estimate as to the ultimate
allowability of the Class 11(c)(iii) Claims, the percentage
distribution to the holders of Allowed Class 11(c)(iii) Claims is
estimated to be approximately 2.2%, plus any pro rata share of any
distributions that may be made to the holders of Allowed Class
11(a) Claims.
A full-text copy of the Third Amended Disclosure Statement and plan
dated Jan. 21, 2020, is available at https://tinyurl.com/w93jp2k
from PacerMonitor.com at no charge.
The Debtors are represented by:
William N. Lobel
PACHULSKI STANG ZIEHL & JONES LLP
650 Town Center Drive, Suite 1500
Costa Mesa, California 92626
Telephone: (714) 384-4740
Facsimile: (714) 384-4741
E-mail: wlobel@pszjlaw.com
About Ruby's Diner
Ruby's Diner, Inc. -- https://www.rubys.com/ -- is a restaurant
chain headquartered in Irvine, California. Founded by Doug
Cavanaugh and Ralph Kosmides in 1982, it also has locations in
California, Nevada, Arizona, Texas, Pennsylvania and New Jersey.
Ruby's Diner, Inc., along with its affiliates, sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case
No.18-13311) on Sept. 5, 2018. In the petition signed by CEO
Douglas S. Cavanaugh, RDI was estimated to have assets of $1
million to $10 million and liabilities of $1 million to $10
million. Judge Catherine E. Bauer oversees the case.
Ruby's Franchise Systems, Inc., the creator of Ruby's Diner, sought
Chapter 11 protection (Bankr. C.D. Cal. Case No. 18-13324) on Sept.
6, 2018, estimating less than $50,000 in assets and $1 million to
$10 million in liabilities.
The RDI Debtors tapped Pachulski Stang Ziehl & Jones LLP as legal
counsel, and GlassRatner Advisory & Capital Group LLC as financial
advisor. The RDI Debtors retained Donlin Recano & Company, Inc., as
their claims, noticing and balloting agent.
RFS tapped Theodora Oringher PC as general insolvency counsel and
Armory Consulting Co. as its financial advisor.
On Sept. 19, 2018, the U.S. Trustee appointed an Official Committee
of Unsecured Creditors in the RDI Chapter 11 Case. The Committee is
represented by Winthrop Golubow Hollander, LLP as its insolvency
counsel and Force 10 Partners as its financial advisor. No official
committee was appointed in the RFS Chapter 11 case.
RUBY’S DINER: Says Modified Plan Resolves San Diego Issues
------------------------------------------------------------
Debtors Ruby’s Diner, Inc., et al., filed a reply to the
objection filed by County of San Diego Treasurer-Tax Collector to
the Third Amended Joint Chapter 11 Plan of Reorganization and
Disclosure Statement.
The Debtors generally agree with the issues raised by the San Diego
Treasurer-Tax Collector in its Objection, with the exception of the
requested deemed allowance of its claim -- relief to which it is
not entitled as the Debtors should not be compelled to waive any
rights with respect to any possible valid objections to claims at
this juncture. The Debtors are in the process of reviewing the
claims filed in the chapter 11 cases (including the tax claims)
and, to the extent any valid objections exist, will bring such
objections prior to the Claims Objection Deadline, if not sooner.
The Debtors have made modifications to the Plan and Disclosure
Statement to address the San Diego Treasurer-Tax Collector's other
objections as reflected in the modified Plan and Disclosure
Statement filed Jan. 21. With these modifications, the Debtors are
hopeful that the issues raised by the San Diego TreasurerTax
Collector in the Objection will be fully resolved.
A full-text copy of the Debtors' reply to objection dated January
21, 2020, is available at https://tinyurl.com/r49nonx from
PacerMonitor.com at no charge.
About Ruby's Diner
Ruby's Diner, Inc. -- https://www.rubys.com/ -- is a restaurant
chain headquartered in Irvine, California. Founded by Doug
Cavanaugh and Ralph Kosmides in 1982, it also has locations in
California, Nevada, Arizona, Texas, Pennsylvania and New Jersey.
Ruby's Diner, Inc., along with its affiliates, sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case
No.18-13311) on Sept. 5, 2018. In the petition signed by CEO
Douglas S. Cavanaugh, RDI was estimated to have assets of $1
million to $10 million and liabilities of $1 million to $10
million. Judge Catherine E. Bauer oversees the case.
Ruby's Franchise Systems, Inc., the creator of Ruby's Diner, sought
Chapter 11 protection (Bankr. C.D. Cal. Case No. 18-13324) on Sept.
6, 2018, estimating less than $50,000 in assets and $1 million to
$10 million in liabilities.
The RDI Debtors tapped Pachulski Stang Ziehl & Jones LLP as legal
counsel, and GlassRatner Advisory & Capital Group LLC as financial
advisor. The RDI Debtors retained Donlin Recano & Company, Inc., as
their claims, noticing and balloting agent.
RFS tapped Theodora Oringher PC as general insolvency counsel and
Armory Consulting Co. as its financial advisor.
On Sept. 19, 2018, the U.S. Trustee appointed an Official Committee
of Unsecured Creditors in the RDI Chapter 11 Case. The Committee is
represented by Winthrop Golubow Hollander, LLP as its insolvency
counsel and Force 10 Partners as its financial advisor. No official
committee was appointed in the RFS Chapter 11 case.
SANUWAVE HEALTH: Raises $2.25M in Preferred Shares Offering
-----------------------------------------------------------
SANUWAVE Health, Inc., entered into a Series C Preferred Stock
Purchase Agreement with certain accredited investors for the sale
by the Company in a private placement of an aggregate of 90 shares
of the Company's Series C Convertible Preferred Stock, par value
$0.001 per share at a stated value equal to $25,000 per share, for
an aggregate total purchase price of $2,250,000. The closing of
the private placement occurred on Feb. 6, 2020.
Amendments to the Articles of Incorporation
On Jan. 31, 2020, the Company filed a Certificate of Designation of
Series C Preferred Stock with the Secretary of State of the State
of Delaware creating a new series of 90 shares of Series C
Preferred Stock of the Company.
Subject to the terms of the Certificate of Designation, each share
of Series C Preferred Stock is convertible into shares of Common
Stock of the Company at a rate equal to the stated value of such
share of Series C Preferred Stock of $25,000, divided by the
conversion price of $0.14 per share (subject to adjustment from
time to time upon the occurrence of certain events as described in
the Certificate of Designation). The Certificate of Designation
became effective upon filing with the Secretary of State of the
State of Nevada. If all outstanding shares of Series C Preferred
Stock were converted into Common Stock at the original conversion
rate, such shares would convert into an aggregate of 16,071,428
shares of Common Stock.
Notwithstanding the foregoing, the Series C Preferred Stock is not
currently convertible into shares of Common Stock because the
Company does not currently have sufficient authorized and unissued
shares of its Common Stock to permit conversion in full of all
issued and outstanding shares of Series C Preferred Stock.
Accordingly, the Certificate of Designation provides that the
Series C Preferred Stock is only convertible into Common Stock once
the Company amends its Articles of Incorporation to increase its
authorized and unissued Common Stock to an amount sufficient to
permit such conversion of the Series C Preferred Stock. Each
investor has agreed in the Purchase Agreement that such investor
will, within five business days following such amendment to the
Articles of Incorporation, convert all of such investor's shares of
Series C Preferred Stock into shares of Common Stock.
The Certificate of Designation provides that if the Company has not
obtained the approval of its shareholders to amend the Company's
Articles of Incorporation to increase the authorized shares of
Common Stock sufficient to permit such conversion, or if such
amendment has not otherwise been filed with the Nevada Secretary of
State on or before Dec. 31, 2020, then the Company will be required
to redeem all outstanding shares of Series C Preferred Stock for a
per-share redemption price, payable in cash in a single installment
not later than 30 days following the date of such Authorization
Failure, equal to the greater of (a) 200% of the stated value of
such share, and (b)(i) the volume-weighted average sale price of a
share of Common Stock reported on the trading market on which the
Common Stock is then traded for the 30 consecutive trading days
immediately preceding the date of such Authorization Failure,
multiplied by (ii) the number of shares of Common Stock such share
of Series C Preferred Stock would otherwise be convertible into as
of such date had such Authorization Failure not occurred.
About SANUWAVE Health, Inc.
SANUWAVE Health, Inc. (www.SANUWAVE.com) is a shockwave technology
company initially focused on the development and commercialization
of patented noninvasive, biological response activating devices for
the repair and regeneration of skin, musculoskeletal tissue and
vascular structures. SANUWAVE's portfolio of regenerative medicine
products and product candidates activate biologic signaling and
angiogenic responses, producing new vascularization and
microcirculatory improvement, which helps restore the body's normal
healing processes and regeneration. SANUWAVE applies its patented
PACE technology in wound healing, orthopedic/spine,
plastic/cosmetic and cardiac conditions. Its lead product
candidate for the global wound care market, dermaPACE, is US FDA
cleared for the treatment of Diabetic Foot Ulcers.
SANUWAVE reported a net loss of $11.63 million for the year ended
Dec. 31, 2018, compared to a net loss of $5.54 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $1.64
million in total assets, $14.96 million in total liabilities, and a
total stockholders' deficit of $13.32 million.
Marcum LLP, in New York, NY, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated April 1,
2019, citing that the Company has a significant capital 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.
SCHMAUS FAMILY: Hires Deschenes & Associates as Legal Counsel
-------------------------------------------------------------
Schmaus Family Properties, LLC received approval from the U.S.
Bankruptcy Court for the District of Montana to employ Deschenes &
Associates Law Offices as its legal counsel.
Deschenes & Associates will advise the Debtor of its powers and
duties in the continued operation of its business and management of
its property, and will provide other legal services in connection
with its Chapter 11 case.
The firm will be paid at these hourly rates:
Attorneys $345
Paralegals $175
The firm will be paid a retainer in the amount of $6,522.50 and
will be reimbursed for work-related expenses incurred.
Gary Deschenes, Esq., a partner at Deschenes & Associates, assured
the court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
Deschenes & Associates can be reached at:
Gary S. Deschenes, Esq.
Deschenes & Associates Law Offices
309 First Avenue North
Great Falls MT 59403-3466
Tel: (406) 761-6112
Fax: (406) 761-6784
Email: gsd@dalawmt.com
About Schmaus Family Properties
Based in Helena, Montana, Schmaus Family Properties, LLC filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
D. Mont. Case No. 20-60002) on Jan. 3, 2020. On Jan. 6, 2020, the
case was transferred from the Butte Division to the Great Falls
Division and was assigned Case No. 20-40002.
At the time of the filing, the Debtor had estimated assets of
between $500,001 and $1 million and liabilities of between $100,001
and $500,000.
Judge Benjamin P. Hursh oversees the case. Gary S. Deschenes,
Esq., at Deschenes & Associates, is the Debtor's legal counsel.
SCORPION FITNESS: Landlord Objects to Cash Collateral Motion
------------------------------------------------------------
220 5th Realty LLC, a/k/a 220 Fifth Realty LLC, landlord to
Scorpion Fitness, Inc. and Scorpion Club Ventures, LLC with respect
to the Debtors' business premises, oppose the Debtors' motion to
use cash collateral.
Fred Stevens, Esq., counsel to the landlord at Klestadt Winters
Jureller Southard & Stevens, LLP, contends that the cash collateral
motion is "improper in what it seeks and the way that it seeks it",
pointing out that the Debtors are seeking to spend $200,000 of
creditors' money to improve leased space that they will likely
lose. While the Landlord agrees that the Debtors would require an
order to use cash, it does not make any sense why the Debtors made
this doctrinal change now, eight months into the case, Mr. Stevens,
adds.
Accordingly, the landlords ask the Court to deny the motion and
convert the Debtor's Chapter 11 case to a case under Chapter 7 of
the Bankruptcy Code.
A copy of the objection is available for free at
https://is.gd/wRFfDe from PacerMonitor.com.
About Scorpion Fitness
Scorpion Fitness Inc., own a high-end boutique gym located at 220
Fifth Avenue, New York, NY. Scorpion Fitness filed a Chapter 11
bankruptcy petition (Bankr. S.D.N.Y. Case No. 19-11231) on April
22, 2019, disclosing under $1 million in both assets and
liabilities. The Debtor hired Kevin J. Nash, Esq., at Goldberg
Weprin Finkel Goldstein LLP, as bankruptcy counsel, and Kushnick
Pallaci PLLC, as special construction law counsel.
SCORPION FITNESS: Lenders Oppose Cash Collateral Motion
-------------------------------------------------------
New York Business Development Corporation (NYBDC) and NYBDC Local
Development Corporation d/b/a The Excelsior Growth Fund (EGF)
object to the motion to use cash collateral filed by Scorpion
Fitness, Inc. and Scorpion Club Ventures, LLC with respect to an
insurance check received on account of damages sustained from a
water casualty that occurred pre-petition in the Debtors' business
premises.
Meghan M. Breen, Esq., counsel to the lenders at Lemery Greisler
LLC, disclosed that NYBDC is a secured creditor of the Debtors with
respect to a $700,000 note issued by Debtor Scorpion Club, on
account of which NYBDC filed a secured claim for $718,967.77 on
June 28, 2019. Ms. Breen further disclosed that EGF is a secured
creditor of the Debtors under a pre-petition note and security
agreement in the principal amount of $100,000. As of the Petition
Date, NYBDC was owed $718,967.77 and EGF was owed $103,903.27.
NYBDC filed a motion to lift the stay seeking to take possession of
both the damage insurance proceeds (being held in a segregated
account), and whatever remained of a business insurance proceeds.
Ms. Breen asserted that the lenders are entitled to be heard on
their properly filed and noticed Stay Motion prior to allowing the
Debtors access to the damage insurance proceeds. Debtors' feigned
emergency, she said, should not trump the orderly consideration of
pending matters.
A copy of the objection is available at https://is.gd/KKjm4n from
PacerMonitor.com at no charge.
About Scorpion Fitness
Scorpion Fitness Inc., own a high-end boutique gym located at 220
Fifth Avenue, New York, NY. Scorpion Fitness filed a Chapter 11
bankruptcy petition (Bankr. S.D.N.Y. Case No. 19-11231) on April
22, 2019, disclosing under $1 million in both assets and
liabilities. The Debtor hired Kevin J. Nash, Esq., at Goldberg
Weprin Finkel Goldstein LLP, as bankruptcy counsel, and Kushnick
Pallaci PLLC, as special construction law counsel.
SCORPION FITNESS: Seeks to Use Damage Insurance Proceeds
--------------------------------------------------------
Scorpion Fitness, Inc. and Scorpion Club Ventures, LLC ask the
Bankruptcy Court to authorize use of cash collateral - in which
lenders New York Business Development Corporation (NYBDC) and NYBDC
Local Development Corporation d/b/a The Excelsior Growth Fund may
have an interest - in order to repair and restore the water damaged
property and to fund the operation of its business in accordance
with the budget.
Specifically, the Debtors seek authority to use the proceeds of a
property insurance check so that they can finish the restoration of
its flagship boutique gym which was damaged on account of a
prepetition water casualty. The Debtors have received a
post-petition settlement for $321,261.64 to cover the property
loss. The lenders contend they have a perfected interest on these
proceeds.
The Debtors also seek to use the insurance check to pay other
overhead expenses.
As adequate protection for any diminution in the collateral, the
Debtors propose to provide the lenders valid, perfected and
enforceable security interests to the same extent that they existed
as of the Petition Date. The pre-petition liens and the adequate
protection liens, will be subject to (i) fees payable to the
United States Trustee, including any fees and applicable interest
thereon, and (ii) any cost and fees of a Chapter 7 Trustee, should
one be appointed, in an amount up to $10,000.
A copy of the motion is available at https://is.gd/ZIhFtd from
PacerMonitor.com free of charge.
The budget provides for a total of $199,736 in restoration costs,
working capital and operating expenses. A copy of the budget can
be accessed at https://is.gd/ETrE4U from PacerMonitor.com free of
charge.
About Scorpion Fitness
Scorpion Fitness Inc., own a high-end boutique gym located at 220
Fifth Avenue, New York, NY. Scorpion Fitness filed a Chapter 11
bankruptcy petition (Bankr. S.D.N.Y. Case No. 19-11231) on April
22, 2019, disclosing under $1 million in both assets and
liabilities. The Debtor hired Kevin J. Nash, Esq., at Goldberg
Weprin Finkel Goldstein LLP, as bankruptcy counsel, and Kushnick
Pallaci PLLC, as special construction law counsel.
SETEC ASTRONOMY: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Setec Astronomy, Inc.
aka Setec Midstream, Inc.
19025 Valley Drive
Flint, TX 75762
Business Description: Setec Astronomy, Inc. --
www.setecmidstream.com -- is a boutique
EPC(M) services firm specializing in Total
Project Execution. The company offers
a wide range of practicable and flexible
business management disciplines, consulting
services, total project management services,
EPC(M) requirements, efficient engineering
services, and QA/QC management. SETEC
MidStream was founded in 1993 by Mr. James
E. Carter (deceased) and Mr. Stephen P.
Carter and has been wholly owned and
operated by Stephen since Mr. Carter's
passing in 2007.
Chapter 11 Petition Date: February 10, 2020
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 20-60079
Debtor's Counsel: James Andrew Carter, Esq.
LAW OFFICE OF JAMES ANDREW CARTER, PC
P.O. Box 10050
Tyler, TX 75711
Tel: 903-509-4777
E-mail: info@carterlawoffice.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Stephen P. Carter, president.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/4YomMq
SHEA HOMES: S&P Rates New $375MM Senior Unsecured Notes 'BB-'
-------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '2'
recovery rating to Shea Homes L.P.'s proposed $375 million senior
unsecured notes due in early 2028. The '2' recovery rating
indicates its expectation for substantial (70%-90%; rounded
estimate: 80%) recovery in the event of a payment default.
S&P expects the company to use the proceeds from this offering,
together with available cash, to fund the purchase or redemption of
its outstanding 5.875% senior notes due 2023 and pay related
expenses.
SUMMIT MIDSTREAM: S&P Lowers ICR to 'B+' on Heightened Leverage
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Summit
Midstream Partners L.P. (SMLP) to 'B+'. The outlook is stable.
At the same time, S&P lowered its issue-level ratings on Summit
Midstream Holdings LLC senior unsecured debt to 'B+', reflecting
its expectation of '4' average (30%-50%; rounded estimate: 30%)
recovery in the event of default. S&P also lowered the preferred
stock rating to 'CCC+' from 'B-'." The 'B-' issuer and issue-level
credit ratings on Summit Midstream Partners Holdings LLC (SMP
Holdings) are unchanged.
On Jan. 29, 2020, the partnership announced a quarterly cash
distribution cut to $0.125 per unit on all of its outstanding
common units for the quarter end Dec. 31, 2019, or $0.50 per unit
on an annualized basis. This represents a 56.5% reduction from the
previous quarter. This will allow the partnership to retain an
incremental approximately $60 million of annualized cash flow to
partially finance its capital spending initiatives and improve its
leverage metrics. While S&P views the distribution cut as
supportive of credit quality, SMLP continues to have looming debt
repayments, the deferred purchase price obligation (DPPO)
repayment, and material costs related to the Double E Pipeline
(Double E) project. This will keep adjusted leverage metrics above
5.0x through 2021. Beginning the quarter ending June 30, 2020, SMLP
will be required to pay 8% interest per annum on any outstanding
DPPO balance until its final repayment.
The stable rating outlook on SMLP reflects S&P's expectation that
the partnership will maintain adequate liquidity and stable
operations over the next 12 months, resulting in an adjusted
debt-to-EBITDA ratio in the 5.0x-5.5x range over the next 24
months.
"We could consider a negative rating action if SMLP's assets
experience further operational underperformance, or if SMLP
sustains adjusted debt to EBITDA above 5.5x. We could also consider
a negative action if the partnership's liquidity deteriorates or it
does not refinance its upcoming debt maturities within the next
12-18 months," S&P said.
"Though unlikely over the next 12 months, we could consider a
positive rating action if operations improve across its core
businesses and it successfully decreases its debt balance
maintaining an adjusted debt-to-EBITDA ratio below 5.0x," the
rating agency said.
TATUNG COMPANY: Gets Interim Approval to Access Cash Collateral
---------------------------------------------------------------
Judge Neil W. Bason authorized Tatung Company of America, Inc., to
use cash collateral on an interim basis, pursuant to the budget,
through the conclusion of the next interim hearing, which is set on
February 18, 2020 at 1 p.m.
The Court directed opposing parties to file their objections on or
before February 11, 2020 with respect to the Debtor's further use
of cash collateral. The Court also ruled that as adequate
protection to East West Bank, EWB is granted a replacement lien on
certain of the Debtor's post-petition assets.
A copy of the fifth interim order is available free of charge at
https://is.gd/ypqIGE from PacerMonitor.com.
About Tatung Company of America
Tatung Company of America, Inc., distributes technology products
for computers and electronics original equipment manufacturers. The
Company manufactures personal computer monitors, home appliances,
point-of-sale equipment, air conditioners, coolers, and purifiers.
Tatung Company of America sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-21521) on Sept. 30,
2019. In the petition signed by CRO Jason Chen, the Debtor was
estimated to have assets ranging between $10 million to $50 million
and liabilities of the same range. Judge Neil W. Bason is assigned
to the case. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P serves as
the Debtor's counsel. RSR Consulting, LLC, as financial advisor.
TERRAFORM POWER: Fitch Affirms IDR at 'BB-', Outlook Stable
-----------------------------------------------------------
Fitch Ratings affirmed TerraForm Power Operating LLC's Issuer
Default Rating at 'BB-' with a Stable Rating Outlook. Fitch
calculates TERPO's credit metrics on a deconsolidated basis as its
operating assets are largely financed with nonrecourse project
debt. The rating affirmation considers TERPO's relatively stable
long-term contracted and regulated cash flows from a diversified
portfolio of renewable projects, continuation of cost reduction and
growth strategies, and sponsorship from Brookfield Asset Management
(Brookfield). Wind resource variability and production shortfall
are key credit risks. Fitch expects the holdco-only FFO-adjusted
leverage to average near 6x over the next two years. TERPO is the
operating subsidiary of TerraForm Power, Inc. (TERP). The
unsolicited, non-binding proposal from Brookfield Energy Partners
(BEP) to acquire all of TERP's outstanding shares, if executed, is
credit positive. It will provide greater growth prospects and
access to capital and liquidity. However, barring material change
to capital structure and rating linkage, the transaction alone is
not sufficient to warrant a rating change at TERPO, in Fitch's
view.
KEY RATING DRIVERS
Contracted and Regulated Portfolio: TERPO owns and operates 4.1 GW
of diversified wind and solar assets located primarily in the U.S.
and Spain. 59% of total cash flows are long-term contracted with
93% investment-grade offtakers, and 35% is regulated under a fixed
return on investment regime in Spain. TERPO's long-term contracts
have a 13-year average remaining life, relatively shorter than its
peers.
Acquisitions Enhance Diversity: Recent acquisitions have improved
TERPO's operating scale and geographic diversification. TERP
acquired Saeta Yield (Saeta) in June 2018. Over 80% of Saeta's
revenues are regulated under Spain's renewable power framework and
the remaining 20% are under long-term contracts, mostly with
investment grade counterparties in Portugal and Uruguay. In
September 2019, TERP acquired AltaGas's U.S. distributed generation
assets portfolio consisting of 322 MW contracted distributed
generation (DG) assets located in 20 states and in the District of
Columbia. The acquisition expanded TERP's DG platform to 750 MW.
The portfolio includes 291 MW of distributed solar, 80% of which
serves utilities, municipalities and schools. Other assets include
10 MW of fuel cells and 21 MW of residential solar assets.
Besides opportunistic acquisitions, Fitch expects TERPO to continue
to focus on organic growth through asset repowering and site
expansions and margin enhancements. TERPO has access to 3,500 MW of
Brookfield's right of first offer (ROFO) pipeline and could
leverage Brookfield properties for solar installations. TERPO has
also identified access to approximately 500 MW of ROFO
opportunities with a third party.
Positive Development in Spain: In November 2019, the Spanish
legislature ratified a Royal Decree Law which maintained regulated
rate of return for Saeta's existing wind and CSP plants at 7.4% for
12 years (two regulatory periods). This rate of return was better
than market expectations. The newly acquired solar PV and CSP
portfolios will be allowed a 7.1% return for six years. Generally,
the regulatory framework in Spain provides earnings and cash flow
visibility by setting allowed regulatory return every six years,
limiting exposure to market and volumetric risk. However, Fitch
views Spain's energy market regulation as less stable and
transparent than that of U.S.. The regulatory regime is relatively
new and continues to evolve after a hard-landing for renewables in
2013.
Wind Portfolio a Key Risk: As measured by capacity, TERPO's fleet
is comprised of 59% wind and 41% solar. Solar resource availability
is typically stable and predictable, while wind resources are
volatile. In 2019, Fitch estimated that TERPO's wind generation was
approximately 10% lower than projected. This is a result of low
resource, production shortfall and one-time maintenance.
Geographical diversity of TERPO's wind projects partially mitigates
variability, and the new service agreement with GE helps improve
performance. TERPO's Spanish portfolio is concentrated in wind.
Wind project's regulated revenue profile in Spain is less favorable
as return on investment accounts for a smaller share of regulated
revenue and there is no return on operations element for wind.
Conservative Management Strategy: TERPO's rating and Outlook
incorporate Fitch's expectation that the company will continue to
execute a credit-supportive approach when executing its growth plan
while improving operational and financial performance. TERPO's
publicly announced five-year dividend growth target of 5%-8% is
relatively conservative among yieldocs. TERPO has been able to meet
the target through cost reductions, organic growth and
acquisitions. TERPO expects the wind O&M to achieve approximately
$20 million run-rate savings following the implementation of the
Full-Service Agreement with GE. TERP has also executed O&M
agreements for European wind and North American solar projects
which could achieve $9 million savings annually. Additionally,
TERPO financed the Saeta and AltaGas acquisitions conservatively,
resulting in no incremental recourse debt. Fitch expects TERPO to
continue to utilize equity issuance, capital recycling, project
financing and retained cash for future acquisitions.
Credit Metrics: Fitch expects TERPO's credit metrics to continue to
improve to a level that is consistent with the 'BB-' rating. Fitch
estimates that TERPO's 2019 holdco-only FFO-adjusted leverage ratio
is approximately 6.6x. In the next two years, Fitch projects that
holdco-only FFO-adjusted leverage will improve to be near 6x over
next two years which will incorporate full-year contribution from
the AltaGas acquisition completed in September 2019. TERPO's
publicly stated long-term target is net holdco debt/cash flow
available for debt service (CFADS) of 4.0x-5.0x. Management's
calculations do not include the management fee paid to Brookfield,
which Fitch subtracts from the holdco FFO. In addition, Fitch uses
gross debt instead of net debt in its calculations.
Strong Sponsorship: Fitch views Brookfield's 62% ownership
positively given its large operating scale and strong track record
as an experienced long-term strategic investor. Brookfield brings
to TERPO its expertise of managing $500 billion of investments,
including renewables. Brookfield owns $50 billion of power assets
and has 18GW of renewable capacity. TERPO serves as Brookfield's
primary owner and operator of renewable assets in North America and
Western Europe. Since 2017, Brookfield has committed to support
TERPO through key agreements, including management services
agreement, a $500 million sponsor line of secured revolving credit
facility for acquisitions and access to 3.5GW of renewable ROFO
pipelines. TERPO could also expand its solar footprint by
installing solar generation within Brookfield's real estate
portfolio. Brookfield also provides a management team to TERPO. The
support will continue to enable TERPO to execute its growth
strategy under various capital market conditions.
Investment Grade Projects: TERPO structures its non-recourse
projects to be investment-grade. Most TERPO projects have a
required debt service coverage ratio (DSCR) of 1.15-1.20x. Projects
typically post DSCRs well in excess of the minimum. The
conservative project level financing is mitigating factor in the
high parent level leverage.
Rating Linkage: Fitch rates TERPO on a stand-alone basis. Separate
management and Board, three independent Board members, separate
liquidity access and absence of guarantees and cross-defaults,
among other factors render weak ties between TERPO, Brookfield and
BEP. The proposed acquisition by BEP, if executed, will further
enhance TERPO's ability to leverage BEP's scale and capital access,
and eliminate the burden associated with being a publicly listed
company. In the event of any meaningful change in capital structure
at TERPO and/or change of governance structure as a result of the
proposal, Fitch will reassess the rating linkages between TERPO and
BEP.
DERIVATION SUMMARY
TERPO's ratings are assigned based on a deconsolidated approach.
TERPO's subsidiaries are project subsidiaries that have been
largely funded by nonrecourse debt. Fitch applies similar approach
to NextEra Energy Partners (NEP; BB+/Stable) and Atlantica Yield
plc (AY; BB/Stable), both of which own and operate portfolios of
nonrecourse projects.
TERPO is similar in terms of generation capacity to NEP but is
larger than AY. TERPO's long-term contracted fleet has a remaining
contract life of 13 years, lower than NEP's 16 years and AY's 18
years. TERPO's growth target range of 5%-8% is conservative while
NEP and AY are targeting 12%-15% and 8%-10%, respectively. AY's
renewable portfolio benefits from a large proportion of solar
generation assets (63%) that exhibit less resource variability,
versus NEP's 14% and TERPO's 41%. Fitch considers NEP better
positioned than TERPO owing to NEP's primary presence in the U.S.,
stronger credit metrics and its association with NextEra Energy
Inc. (A-/Stable). Similar to AY, TERPO is exposed to Spanish
regulatory uncertainties. TERPO's credit metrics are weaker than
those of AY, but TERPO's sponsorship from Brookfield is stronger
than AY, providing stability and expertise in executing its
business strategies.
KEY ASSUMPTIONS
- Wind O&M to achieve $20 million run-rate savings following
the implementation of FSA with GE in 2019;
- Executed O&M agreements for European wind and North American
solar platforms to achieve $6 million run-rate savings;
- 7.4% regulatory return on the Spanish existing regulated
portfolio; 7.1% return for the two newly acquired CSP assets;
- Funded through combination of equity issuance, capital
recycling, project finance capitalizations and retained
cash.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Holdco-only FFO-adjusted leverage ratio below 5.0x on a
sustainable basis;
- A track record of conservative and consistent approach in
executing the business plan and managing growth from a
credit perspective.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Holdco-only FFO-adjusted leverage exceeding 6.5x on a
sustainable basis;
- Underperformance in the underlying assets that lends material
variability or shortfall to expected project distributions
on a sustained basis;
- Aggressive dividend growth target that is disproportionate
to the growth of earnings and cash flow;
- Growth strategy underpinned by aggressive acquisitions
and/or addition of assets in the portfolio that bear
material volumetric, commodity, counterparty or interest
rate risks;
- Lack of access to funding that may lead TERPO to deviate
from its target capital structure.
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.
THOC PA: Has Final OK on Request to Use Cash Collateral
-------------------------------------------------------
Judge Stacey G.C. Jernigan authorized Thoc, PA to use, on a final
basis, cash collateral in which the Internal Revenue Service
asserts a lien.
As adequate protection the IRS is granted replacement liens
co-existent with its pre-petition liens under Section 552 of the
Bankruptcy Code in after acquired property of the estate. A copy
of the final order is available for free at https://is.gd/p5njnf
from PacerMonitor.com.
Prior to entry of the final order, the Debtor has obtained interim
permission to use cash collateral pursuant to an order dated Jan.
7, 2020, a copy of which is available at https://is.gd/kqx39i from
PacerMonitor.com at no charge.
About THOC, PA
THOC, PA, which operates a medical practice in Dallas under the
name Texas Hemotology Oncology Centers, filed a voluntary Chapter
11 petition (Bankr. N.D. Tex. Case No. 19-34237) on Dec. 30, 2019.
The case is assigned to Judge Stacey G.C. Jernigan. The Debtor is
represented by Eric A. Liepins, Esq., at Eric A. Liepins, P.C.
TIBCO SOFTWARE: Fitch Lowers First Lien Debt to B+ & Affirms B IDR
------------------------------------------------------------------
Fitch Ratings affirmed the Long-Term Issuer Default Rating of 'B'
for TIBCO Software Inc. and Balboa Intermediate Holdings, LLC. The
Rating Outlook is Stable. Fitch believes the proposed transaction
is credit positive as it reduces interest expense and addresses any
near-term refinancing risk associated with the 2021 maturity of the
senior unsecured notes. TIBCO's sizable installed base of legacy
technologies, the recurring, high margin maintenance revenue
streams and the continued growth in subscription revenues provide a
strong base of profitability and FCF generation to support the high
leverage.
Fitch has also downgraded the ratings for the $125 million
first-lien secured revolver and the upsized $2.18 billion first
lien secured term loan to 'B+'/'RR3' from 'BB-'/' 'RR2'. Fitch has
assigned an issue rating of 'B-'/ 'RR5' to the new $650 million
second lien secured term loan. The downgrade of TIBCO's first lien
secured facilities reflects the lower recovery prospects of the
upsized first-lien tranche. On Feb. 4, 2020, TIBCO announced plans
to upsize its first lien term loan by $360 million and issue a $650
million seven-year Second Lien Term Loan. The proceeds will be used
to refinance the existing $950 million Senior Unsecured Notes.
KEY RATING DRIVERS
Market Leader in Legacy Integration Technology: As the inventor of
the "information bus", TIBCO has led the industry in developing on
premise middleware for 20+ years, with a specific focus on large,
greater than $500 million revenue companies. With the shift to
hybrid cloud environments, TIBCO middleware and APIs will remain an
integral part of the technology infrastructure as they support and
bridge on-premise and cloud applications. TIBCO's recent
acquisitions have strengthened its cloud-based and analytics
offerings and are driving double digit subscription growth.
Recurring Revenues Complemented by High Renewal Rates: 67% of
TIBCO's revenues are recurring in nature, and Fitch projects they
will represent over 75% of revenues by FY 2023. The company
generates 50% of its revenue from maintenance services, which are
highly stable and more resilient than license fees, growing at
low-single-digit rate. With a 95%+ renewal rate across 10,000+
customers, these maintenance revenues are expected to account for
the majority of TIBCO's revenues over the rating horizon. The
subscription segment (17% of revenues) has contracts that typically
range from one to three years in length with 94% renewal rates.
Migration to Subscriptions Enhances Quality of Revenues: TIBCO is
past the inflection point where decline in license revenues are
offset by the growth in subscription revenues and total revenues
have grown consistently since FY 2015. Fitch believes the company
will invest in R&D and acquisitions to drive growth in its
subscription-based product suite, while License and Maintenance
revenues will decline at a slower pace.
High Leverage: TIBCO's 'B' rating is reflective of its leverage
profile despite having the scale and recurring revenue
characteristics consistent with software companies in the 'BB'
range. With $2.8 billion of total debt representing pro forma FY
2019 gross leverage of 7.1x, Fitch believes TIBCO's financial
flexibility is constrained. However, Fitch expects this transaction
will result in lower interest expense and mitigates any near-term
refinancing risk. Fitch expects TIBCO to delever through mandatory
debt repayments under its credit facility and continued growth in
EBITDA.
Solid FCF; Stable Profitability: Fitch expects FCF margins to reach
the mid-teens over the rating horizon. EBITDA margins are projected
to expand to the high-30s range as a result of the ongoing
transition away from lower margin staff augmentation projects to
subscription revenues and recent cost saving measures.
Secular Tailwinds: Unprecedented growth in mobile technologies, big
data, cloud services and the connected devices that comprise the
Internet of Things (IoT) has changed consumer behavior and
transformed the dynamics of business. According to research by
Gartner, worldwide growth from 2016-2022 for TIBCO's focus sectors
is expected to range from 7% (app infrastructure/middleware and
analytics) to 18% for cloud services.
DERIVATION SUMMARY
Fitch's ratings for TIBCO are supported by the company's mature
technology platforms that result in a stable customer base, highly
recurring revenues and strong FCF generation. However, the
transition from legacy middleware licenses to subscription-based
Interconnect/Augment products is likely to limit overall revenue
growth in the near term. Fitch views this transition positively,
while recognizing the stability afforded by the high margin,
recurring maintenance revenue stream. TIBCO's strong market
position in on premise and cloud-based middleware/API solutions is
demonstrated by its sizable revenue and strong margins, which far
exceed those of its peers like Software AG, Mulesoft (SalesForce)
and Apigee (Google).
TIBCO's high leverage of 7.1x for fiscal 2019 (Fitch calculated
gross adjusted leverage) and the expectation for minimal debt
reduction constrain the rating.
KEY ASSUMPTIONS
- Revenue growth in the low-single digit range annually, with
growth in the subscription business outpacing the declines
in the license and maintenance business;
- Fitch expects TIBCO will make tuck-in acquisitions to
enhance its digital product offerings;
- Adjusted EBITDA improvements of over 100 bps over the rating
horizon driven by the scalability of the business model;
- The company is expected to generate FCF margins in excess
of 10% annually over the rating horizon.
The recovery analysis assumes a going concern EBITDA that is
approximately 30% lower relative to pro forma FY2019 EBITDA,
assuming a combination of revenue decline and margin compression in
a distress scenario. Fitch applies a 6.5x multiple to arrive at an
enterprise value (EV) of $1.8 billion. 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. The 6.5x
multiple reflects Fitch's positive view of the stability of TIBCO's
platform and recent public company transactions in this sector have
occurred at attractive multiples of up to 10x revenue (Apigee,
Mulesoft).
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Fitch's expectation for continued strength in subscription
revenue growth, outpacing declines in license/service
revenues;
- FFO-adjusted leverage sustaining under 6.0x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Fitch's expectation for sustained negative organic revenue
growth driving FCF margins below 3% on a sustained basis;
- Total debt/equity or FFO-adjusted leverage sustained above
7.5x;
- FFO interest coverage sustained under 1.3x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Fitch believes TIBCO has strong liquidity
supported by $265 million of cash on hand as of Nov. 30, 2019, and
full availability under its $125 million revolving credit facility.
Over the rating horizon, the company is projected to generate FCF
margins in excess of 10%. TIBCO also benefits from modest capex,
deferred revenue growth and low working capital requirements. The
proposed refinancing also gives the company more financial
flexibility, with no material maturities till fiscal 2026, when the
senior secured term loans come due.
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.
TIBCO SOFTWARE: Moody's Lowers Rating on First Lien Loans to B2
---------------------------------------------------------------
Moody's Investors Service affirmed TIBCO Software Inc.'s B3
Corporate Family Rating, downgraded the rating for the 1st lien
credit facilities to B2, from B1, and assigned a Caa2 rating to
TIBCO's proposed $650 million of 2nd lien term loans. TIBCO will
use proceeds from $360 million of the incremental 1st lien term
loans and the new 2nd lien loans to redeem the $950 million of
senior notes and pay fees and a premium. The ratings outlook is
stable. Moody's will withdraw the ratings for the senior notes upon
the completion of the refinancing.
RATINGS RATIONALE
The proposed transactions will modestly increase TIBCO's leverage
but result in over $25 million of annual interest savings. Moody's
estimates that pro forma for the refinancing, TIBCO's leverage will
be slightly over 8x (incorporating Moody's standard analytical
adjustments, based upon preliminary financial results for 2019 and
not adding-back restructuring and business optimization expenses).
The affirmation of the B3 CFR reflects Moody's expectations that
TIBCO will generate flat-to-modestly positive revenue growth and
generate free cash flow of about 4% of adjusted debt over the next
12 to 18 months.
The B3 CFR reflects TIBCO's track record of weak organic revenue
growth and persistently very high leverage near 8x. Despite
significant business restructuring since the leveraged buyout, free
cash flow has averaged in the low single digit percentages. The
company is in the midst of accelerating the transition from license
to subscription based software sales, which will strengthen the
business profile over time but will pressure cash generation and
reported profitability, at least over the next 12 to 18 months.
TIBCO plans to mitigate the impact through additional cost
restructuring actions. The B3 CFR additionally reflects the highly
competitive infrastructure and analytics software markets in which
TIBCO operates, and challenges in pivoting the business from
mature, legacy on-premise infrastructure software sales toward
solutions for hybrid IT environments. TIBCO's credit profile is
supported by its good operating scale, strong adjusted EBITDA
margins, a large installed base of customers and growing recurring
revenues under subscription and software maintenance agreements.
TIBCO has good liquidity primarily comprising access to an undrawn
$125 million revolving credit facility and free cash flow. The B3
CFR additionally reflects TIBCO's high financial risk tolerance and
Moody's expectations for shareholder-friendly financial policies.
Moody's downgraded TIBCO's existing 1st lien credit facility to B2,
from B1, as a result of a significant increase in the proportion of
1st lien debt in the capital structure upon the refinancing.
The stable outlook is based on Moody's expectation that TIBCO will
maintain good liquidity, generate free cash flow of approximately
4% of total debt to EBITDA, and gradually improve total debt to
EBITDA over the next 12 to 18 months.
Given TIBCO's very high leverage and weak organic growth prospects,
Moody's does not expect a ratings upgrade in the next 12 to 18
months. TIBCO's ratings could be upgraded over time if the company
generates revenue growth of about mid-single digits and free cash
flow of more than 5% of total debt and total debt to EBITDA
declines to below 7x on a sustained basis. The ratings could be
downgraded if liquidity becomes weak or free cash flow is expected
to remain negative.
Downgrades:
Issuer: TIBCO Software Inc.
Senior Secured 1st Lien Bank Credit Facility, Downgraded to
B2 (LGD3) from B1 (LGD3)
Assignments:
Issuer: TIBCO Software Inc.
Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: TIBCO Software Inc.
Outlook, Remains Stable
Affirmations:
Issuer: TIBCO Software Inc.
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
TIBCO Software Inc. is a leading provider of business integration
and analytics software. The company is owned by affiliates of Vista
Equity Partners since December 2014.
The principal methodology used in these ratings was Software
Industry published in August 2018.
TRIUMPH GROUP: Incurs $13.8 Million Net Loss in Third Quarter
-------------------------------------------------------------
Triumph Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $13.85 million on $704.67 million of net sales for the three
months ended Dec. 31, 2019, compared to a net loss of $30.94
million on $807.89 million of net sales for the three months ended
Dec. 31, 2018.
For the nine months ended Dec. 31, 2019, the Company reported net
income of $46.94 million on $2.21 billion of net sales compared to
a net loss of $122.15 million on $2.49 billion of net sales for the
same period in 2018.
As of Dec. 31, 2019, the Company had $2.62 billion in total assets,
$883.31 million in total current liabilities, $1.40 billion in
long-term debt (less current portion), $496.28 million in accrued
pension and other postretirement benefits, $16.71 million in
deferred income taxes, $361.08 million in other noncurrent
liabilities, and a total stockholders' deficit of $532.90 million.
"Triumph Group delivered strong third quarter results, in line with
our expectations," stated Daniel J. Crowley, Triumph's president
and chief executive officer. "Organic revenue was up
year-over-year across all three of our business segments, driven by
increased volume on Airbus commercial programs and aftermarket
demand for military rotorcraft components and engine mounted
accessories. Integrated Systems margins were driven by increases
in MRO and spares sales, as well as improved operational
efficiencies and cost reduction initiatives. Aerospace Structures
continued to execute its plan, divesting the Nashville large
structures business and exiting legacy programs. We expect these
actions to benefit margins in future quarters."
Mr. Crowley continued, "Free cash flow was positive for the quarter
and year to date, and we remain on track to deliver positive free
cash flow for fiscal year 2020 as we guided. Triumph is a more
predictable business as we de-risk our portfolio and backlog and
stabilize our cash flows."
Mr. Crowley concluded, "We are focused on our core and I remain
confident in Triumph's ability to compete, win and create value
over the long term for our stakeholders."
Outlook
The Boeing 737 MAX program historically has contributed a
single-digit percentage of annual revenue. The Company now expects
the FY20 revenue impact from the reduction in rates from the
beginning of the year to be less than 3% of sales with similar
impacts to operating income and cash.
Based on anticipated aircraft production rates and including the
timing of pending program transfers, the Company continues to
expect that net sales for fiscal year 2020 will be approximately
$2.8 billion to $2.9 billion.
The Company has narrowed its expected GAAP fiscal year 2020
earnings per diluted share from a range of $1.34 to $2.35 to a
range of $1.28 to $1.48 and adjusted earning per diluted share from
a range of $2.35 to $2.95 to a range of $2.35 to $2.55.
The Company has updated is expected fiscal year 2020 cash provided
from operations from a range of $50.0 million to $110.0 million to
a range of $40.0 million to $100.0 million. The Company continues
to expect positive free cash flow of $0 to $50.0 million in fiscal
year 2020.
The Company's current outlook reflects the divestiture of its
Nashville business, planned 737MAX production rates and adjustments
detailed in the attached tables but excludes the impact of any
potential future divestitures.
A full-text copy of the Form 10-Q is available for free at the
SEC's website at:
https://is.gd/CVYKnn
About Triumph
Triumph Group, Inc. (www.triumphgroup.com), headquartered in
Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and
overhauls a broad portfolio of aerospace and defense systems,
components and structures. The company serves the global aviation
industry, including original equipment manufacturers and the full
spectrum of military and commercial aircraft operators.
Triumph Group reported a net loss of $321.77 million for the year
ended March 31, 2019, following a net loss of $425.39 million for
the year ended March 31, 2018.
* * *
As reported by the TCR on Sept. 12, 2019, Moody's Investors Service
affirmed its Caa1 Corporate Family Rating on Triumph Group. The
Caa1 Corporate Family Rating balances Triumph's high financial
leverage and expectations of weak cash generation against its
considerable scale and well-established presence as an aerospace
supplier.
UNISYS CORP: Moody's Reviews B2 CFR for Upgrade
-----------------------------------------------
Moody's Investors Service placed Unisys Corporation's B2 Corporate
Family Rating, B2-PD Probability of Default rating, and B3 senior
unsecured rating on review for upgrade.
This rating action follows Unisys's announcement that the company
has agreed to sell its US Federal business to Science Applications
International Corp. ("SAIC") for $1.2 billion in an all-cash
transaction (the "Divestiture"). Unisys plans to use the net
proceeds for the principal and premium required to redeem all of
its $440 million of 10.75% Senior Secured Notes and to make a
pension contribution of $600 million. The Divestiture, which is
subject to regulatory approval, is expected to close during the
first half of calendar year 2020. Unisys also announced the
creation of a shareholder rights plan, the Tax Asset Protection
Plan, which is intended to assure the availability of Unisys's
existing tax assets to offset any tax liability that would
otherwise be payable on the Divestiture proceeds.
On Review for Upgrade:
Issuer: Unisys Corporation
Corporate Family Rating, Placed on Review for Upgrade,
currently B2
Probability of Default Rating, Placed on Review for Upgrade,
currently B2-PD
Senior Unsecured Conv. Bond, Placed on Review for Upgrade,
currently B3 (LGD5)
Outlook Actions:
Issuer: Unisys Corporation
Outlook, Changed To Rating Under Review From Negative
Unchanged:
Issuer: Unisys Corporation
Speculative Grade Liquidity Rating, Unchanged SGL-3
The senior secured rating will be withdrawn following repayment of
the Senior Secured Notes.
The SGL-3 Speculative Grade Liquidity Rating ("SGL") remains
unchanged. The SGL will be reevaluated upon completion of the
review.
RATINGS RATIONALE
Following closing, the proceeds of the Divestiture will be used to
eliminate both high interest debt and to make a pension
contribution. The resulting reduction in interest expense and
elimination of US pension funding payments in 2020, 2021, and 2022
will remove a key source of near term liquidity pressure. The debt
repayment and pension contribution will materially improve
financial leverage, reducing leverage by about 1.5 turns, from 5x
debt to EBITDA (latest twelve months ended September 30, 2019) to
about 3.5x (proforma, Moody's adjusted).
Still, the Divestiture will remove $689 million of revenue (latest
twelve months ended September 30, 2019) generated by the US Federal
business. Since Moody's views Unisys's US Federal business, which
has many long standing customers providing a consistent revenue
stream, the Divestiture does present Unisys with execution risks,
due to both separation of assets and the strategic plan for the
remaining Unisys businesses.
Its review will focus on: (1) Unisys's tax assets and the
effectiveness of the planned Tax Asset Protection Plan to maximize
net proceeds from the Divestiture; (2) the execution steps required
to separate assets and personnel supporting both the US Federal
business and other Unisys businesses; (3) review of strategic plans
and competitive position of Unisys's remaining businesses; (4)
plans to address the remaining pension obligations and pension
funding contingency plans should the Divestiture fail to close
within the next six months; and (5) regulatory approvals.
At conclusion of the review, Moody's expects that Unisys's CFR
could be upgraded by one notch. Subsequent rating upgrades would
depend on resolution of the remaining pension obligations, evidence
of a successful execution of the separation of US Federal business,
and continued revenue and free cash flow growth.
Unisys Corporation ("Unisys"), based in Blue Bell, Pennsylvania,
provides information technology (I/T) services and enterprise
server hardware worldwide. Unisys competes against similar-sized
peers as well as much larger I/T services and hardware vendors
including IBM, Accenture, Hewlett Packard Enterprise, and a number
of services providers located in India, including Infosys and Tata
Consultancy Services.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
VALERITAS HOLDINGS: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Valeritas Holdings, Inc.
750 Route 202 South, Suite 600
Bridgewater, NJ 08807
Business Description: Valeritas Holdings, Inc. --
https://www.valeritas.com/ -- is a
commercial-stage medical technology company
focused on improving health and simplifying
life for people with diabetes by developing
and commercializing innovative technologies.
Valeritas Holdings, Inc.'s flagship product,
the V-Go Wearable Insulin Delivery device,
is a simple, affordable, all-in-one basal
bolus insulin delivery option for patients
with type 2 diabetes that is worn like
a patch and can eliminate the need for
taking multiple daily shots.
Chapter 11 Petition Date: February 9, 2020
Court: United States Bankruptcy Court
District of Delaware
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Valeritas Holdings, Inc. (Lead Case) 20-10290
Valeritas, Inc. 20-10291
Valeritas Security Corporation 20-10292
Valeritas US, LLC 20-10293
Judge: Hon. Laurie Selber Silverstein
Debtors'
General
Bankruptcy
Counsel: Maris J. Kandestin, Esq.
DLA PIPER LLP (US)
1201 North Market Street
Suite 2100
Wilmington, Delaware 19801
Tel: (302) 468-5700
Fax: (302) 394-2341
Email: maris.kandestin@us.dlapiper.com
- and -
Rachel Ehrlich Albanese, Esq.
DLA PIPER LLP (US)
1251 Avenue of the Americas
New York, New York 10020
Tel: (212) 335-4500
Fax: (212) 335-4501
Email: rachel.albanese@us.dlapiper.com
Debtors'
Investment
Banker: LINCOLN INTERNATIONAL
Debtors'
Financial
Advisory
Services: PRICEWATERHOUSECOOPERS, LLP
Debtors'
Claims
Agent: KURTZMAN CARSON CONSULTANTS LLC
https://www.kccllc.net/valeritas
Valeritas Holdings' Total Assets
as of September 30, 2019: $49.2 million
Valeritas Holdings' Total Debts
As of September 30, 2019: $38.2 million
The petitions were signed by John E. Timberlake, president and
chief executive officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://is.gd/m3bVeN
https://is.gd/NBhqJ0
https://is.gd/Uu8tli
https://is.gd/zyFlVQ
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. WCAS Capital Partners IV, L.P. Subordinated $1,608,497
Sean M. Taylor Note
Welsh, Carson, Anderson & Stowe
599 Lexington Ave., Suite 1800
New York, NY 10022
Tel: (212) 893-9500
2. OptumRx Trade $1,352,121
2300 Main St.
Irvine, CA 92614
Tel: (800) 788-4863
3. Aquilo Partners, L.P. Termination Fee $600,000
601 California St., Suite 500
San Francisco, CA 94108
Tel: (617) 401-2483
Email: info@aquilopartners.com
4. Humana Pharmacy Solutions Trade $481,884
Attn: Treasury Dept
500 West Main St. 7th Floor
Louisville, KY 40202
Email: rxrebateadministration@humana.com
5. Roche Diabetes Care, Inc. Settlement $400,000
9115 Hague Rd.
Indianapolis, IN 46250
Tel: (317) 521-2000
6. Trialcard Trade $349,866
6501 Weston Parkway
Suite #370
Cary, NC 27513
Tel: (919) 845-0774
Email: ar@trialcard.com
7. Dapro Rubber Inc. Trade $342,400
PO Box 470175
Tulsa, OK 74147-0175
Tel: (918) 258-9386
Email: tmason@daprorubber.com
8. CVS Caremark Trade $329,614
1 CVS Dr.
Woonsocket, RI 02895
Tel: (401) 765-1500
9. Express Scripts Trade $314,513
1 Express Way
St. Louis, MO 63121
Tel: (800) 282-2881
Email: dod.customer.relations@
express-scripts.com
10. MedThink Communications, Inc. Trade $235,641
P.O. Box 746492
Atlanta, GA 30374
Tel: (919) 786-4918
Email: accountsreceivable@medthink.com
11. Source Healthcare Analytics Trade $213,320
PO Box 2057578
Dallas, TX 75320-7578
Tel: (650) 935-9500
Email: info@stgpartners.com;
jill.boian@symphonyhealth.com
12. Boyd Precision Die Cut Trade $159,390
(Wuxi), Co.
Xikun Rd. No. 7
Wuxi
Jiangsu, 214124
China
Tel: (86) 510 85283211
Email: zhang.zheng@boydcorp.com
13. Boston Analytical Inc. Trade $128,097
8 Industrial Way
Salem, NH 03079
Tel: (603) 893-3758
Email: wlanguirand@bostonanalytical.com
14. Viant Medical Suzhou Epz Co. Trade $125,150
288 Shengpu Road
Suzhou Industrial Park
Suzhou
Jiangsu, 215126
China
Tel: (011-86) 512-62601288
Email: gjin@medplastgroup.com
15. FIT4D Trade $117,080
1601 Third St - Suite 11J
New York, NY 10128
Tel: (917) 617-3169
Email: acecchini@fit4d.com
16. Modern Marketing Concepts Inc. Trade $115,088
29 Industrial Park Drive
Binghamton, NY 13904
Tel: (607) 744-3322
Email: accounting@mmcweb.com
17. Cheyney Design & Development, Trade $111,000
Ltd.
New Cambridge House
Bassingbourn Rd
Litlington
Cambridgeshire, SG8 0SS
Tel: (44)0-1763-85-35-35
18. Toll Global Forwarding Trade $104,549
(USA) Inc.
15013 183rd Street
New York, NY 11413
Tel: (718) 723-2333
Email: devan.appadu@tollgroup.com
19. Synergistix Inc. Trade $99,923
480 Sawgrass Corporate Pky.
Sunrise, FL 33325
Tel: (954) 707-4200
Email: karel.rodriquez@synergistix.com
20. Enercon Technologies Trade $78,297
25 Northbrook Drive
Gray, ME 04039
Tel: (207) 657-7007
Email: lbell@enercontechnologies.com
21. Salesforce.com Inc. Trade $68,075
The Landmark @ One Market Street
San Francisco, CA 94105
Tel: (415) 901-7000
Email: billing@salesforce.com
22. The Lockwood Group Trade $64,648
1055 Washington Boulevard
Stamford, CT 06901
Tel: (203) 883-8747
Email: po@thelockwoodgrp.com
23. BPR 293 Equity Partner, LLC Trade $61,322
485 Madison Avenue 11th Floor
New York, NY 10022
Tel: (987) 560-0565
Email: shartford@kspartnersllc.com
24. Morgan, Lewis & Bockius LLP Trade $50,652
PO Box 8500 S-6050
Philadelphia, PA 19178-6050
Tel: (908) 927-9920
Email: kchayko@morganlewis.com
25. Softworld Trade $50,398
281 Winter St.
Waltham, MA 02451
Tel: (781) 373-8427
Email: payments@softworldinc.com
26. Prent Shanghai Trade $48,767
No. 29 Lane 399, Shenyu Rd
Shanghai, 201818
China
Tel: (86) 21-69169798
Email: frankche@prent.com
27. Parker-Hannifin Corporation Trade $48,510
6035 Parkland Boulevard
Cleveland, OH 44124-4141
Tel: (216) 896-3000
28. HS Design Trade $46,743
17 Mendham Road
Gladstone, NJ 07934
Tel: (908) 2331 Ext 17
Email: jenna@hs-design.com
29. Winthrop Resources Corp Trade $42,817
11100 Wayzata Blvd
Minnetonka, MN 55305
Tel: (215) 633-9999
Email: jcarroll@winthropresources.com
30. Cardinal Health 105, Inc. Trade $42,637
7000 Cardinal Place
Dublin, OH 43017
Tel: (866) 739-4762
Email: candace.bowman@cardinalhealth.com
VALERITAS HOLDINGS: Files for Chapter 11 to Sell to Zealand
-----------------------------------------------------------
Valeritas Holdings, Inc. (NASDAQ: VLRX), a medical technology
company and maker of the V-Go Wearable Insulin Delivery device, on
Feb. 9, 2020, announced an agreement to sell substantially all of
the business to Zealand Pharma A/S (NASDAQ:ZEAL), a Denmark-based
biotechnology company.
The transaction contemplates the retention of nearly the entirety
of the Valeritas workforce. To accomplish the sale in the most
efficient manner, Valeritas and its subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware.
Concurrently, the Company filed a motion requesting approval of a
stalking horse asset purchase agreement with Zealand and to
initiate a competitive bidding process under Section 363 of the
Bankruptcy Code designed to achieve the highest or otherwise best
offer for the business.
Valeritas expects to continue operating its business as usual and
has obtained a commitment for debtor-in-possession ("DIP")
financing from HB Fund LLC. Subject to Court approval, this DIP
financing will provide sufficient liquidity to support ongoing
operations during the process, including the continued production
and sale of V-Go.
"After a thoughtful and thorough review of strategic alternatives,
we determined that a process to sell our business is the best path
forward to maximize value for all stakeholders," said John
Timberlake, President and Chief Executive Officer. "During this
process, we will remain focused on successfully serving our
patients and healthcare providers as we continue to work hard to
improve the health of and simplify the lives of people with
diabetes."
"We believe that entering the process with an agreed offer from
Zealand, whose stated goal is to work with our highly-talented
workforce to build a successful commercial competitor in the U.S.
diabetes market, is the most advantageous option for Valeritas. We
thank our employees for their continued hard work and commitment
towards fulfilling our vision of making V-Go the future standard of
care for how patients with type 2 diabetes deliver their insulin,"
Mr. Timberlake added.
The agreement with Zealand, which was reached following a robust
and extensive marketing process, provides total cash consideration
of $23 million and includes the assumption of certain liabilities
related to the ongoing business. It contemplates that Zealand, at
close, would continue the Company's commercially-focused operations
and retain nearly all Valeritas employees.
To ensure a smooth transition into Chapter 11, the Company filed
with the Court a series of customary motions seeking to uphold its
commitments to its valued employees and other stakeholders during
the process. These "first day" motions include requests to
continue to pay wages and provide benefits to employees in the
normal course, offer essential customer programs, and otherwise
operate the business as usual to facilitate the delivery of product
to patients, without interruption.
About Valeritas Holdings
Valeritas Holdings, Inc., -- https://www.valeritas.com/ -- is a
commercial-stage medical technology company focused on improving
health and simplifying life for people with diabetes by developing
and commercializing innovative technologies.
Valeritas' flagship product, V-Go Wearable Insulin Delivery device,
is a simple, affordable, all-in-one basal-bolus insulin delivery
option for adult patients requiring insulin that is worn like a
patch and can eliminate the need for taking multiple daily shots.
V-Go administers a continuous preset basal rate of insulin over 24
hours, and it provides discreet on-demand bolus dosing at
mealtimes. It is the only basal-bolus insulin delivery device on
the market today specifically designed keeping in mind the needs of
type 2 diabetes patients.
Headquartered in Bridgewater, New Jersey, Valeritas operates its
R&D functions in Marlborough, Massachusetts.
Valeritas Holdings, Inc., and three affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-10290) on Feb. 9,
2020.
Valeritas Holdings disclosed $49.2 million in total assets and
$38.2 million in total debt as of Sept. 30, 2019.
The Hon. Laurie Selber Silverstein is the case judge.
DLA Piper LLP (US) is serving as legal counsel to Valeritas,
Lincoln International is serving as investment banker, and
PricewaterhouseCoopers LLP is serving as financial advisor.
Kurtzman Carson Consultants LLC is the claims agent.
VALLEY ECONOMIC: Amends Disclosure to Identify Agencies' Claims
---------------------------------------------------------------
Debtor Valley Economic Development Center, Inc., filed its reply to
the objection to the Disclosure Statement filed by the United
States, on behalf of its Departments of Agriculture (USDA),
Commerce (USDC), Health and Human Services (HHS) the Small Business
Administration (SBA) and the Treasury (collectively the Agencies).
The Debtor claims that that the disclosures regarding the United
States' claims and property interests are adequately described, and
the Debtor has sufficiently described to the Agencies what property
will be returned to the Agencies -- any property in which the
Agencies have a perfected security or ownership interest, subject
to the Debtor's ownership rights that it is entitled to retain
under applicable law, if any, in such property.
The Debtor believes that the Disclosure Statement adequately
describes the general unsecured claim pool, the manner in which
general unsecured claims are treated under the Plan, the source of
recoveries for general unsecured creditors, the contingencies
involved, and the timing of payments to general unsecured
creditors. The Debtor should not be required to include
unsubstantiated percentage recoveries for general unsecured
creditors in the Disclosure Statement.
The Debtor submits that in the context of a liquidating plan
pursuant to which the Debtor is not proposing to retain any assets,
and all assets will be liquidated for the benefit of creditors, it
is axiomatic that creditors will receive at least as much under
such a plan as they would in a chapter 7 liquidation. Indeed,
notably absent from the Objection is any argument, or evidence,
that this would not be the case.
The Disclosure Statement describes and lists in detail every single
claim scheduled by the Debtor and every single claim filed by
creditors, including, whether the claim has been asserted or
scheduled as a secured, priority, or general unsecured claim, and
the scheduled and filed amount of each claim.
The United States and its Agencies did not file their proofs of
claim until immediately prior to the deadline to do so; thus, when
the Debtor filed its disclosure statement on Dec. 17, 2019, the
Debtor did not have the Agencies' asserted claim amounts. However,
this issue has been mooted by the fact that the Amended Disclosure
Statement includes an identification of each claim filed by the
Agencies, the nature of such claims, and claim amounts.
A full-text copy of the Debtor's reply to objection dated Jan. 21,
2020, is available at https://tinyurl.com/r728jrk from
PacerMonitor.com at no charge.
The Debtor is represented by:
RON BENDER
EVE H. KARASIK
KRIKOR J. MESHEFEJIAN
JEFFREY S. KWONG
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, California 90067
Telephone: (310) 229-1234
Facsimile: (310) 229-1244
E-mail: RB@LNBYB.COM
EHK@LNBYB.COM
JSK@LNBYB.COM
KJM@LNBYB.COM
About Valley Economic Development Center
Valley Economic Development Center, Inc., a certified Community
Development Financial Institution, is a California tax-exempt
non-profit corporation whose mission is to provide financing
assistance, management consulting, and training to entrepreneurs
and small business owners in and around Los Angeles County and
throughout California. Those services include business training
for start-up and fledgling small businesses as well as services to
more established existing small businesses.
Valley Economic Development Center sought protection under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-11629) on
July 2, 2019. At the time of the filing, the Debtor was estimated
to have assets between $10 million and $50 million and liabilities
of the same range. The case has been assigned to Judge Deborah J.
Saltzman. Levene, Neale, Bender, Yoo & Brill L.L.P. is the
Debtor's bankruptcy counsel.
VIDEO CORP: Meeting to Form Creditors' Panel Set for Feb. 18
------------------------------------------------------------
Andrew R. Vara, United States Trustee for Region 3, will hold an
organizational meeting on Feb. 18, 2020, in the bankruptcy case of
Video Corporation of America.
The meeting will was held at:
United States Trustee's Office
One Newark Center, 1085 Raymond Blvd.
21st Floor, Room 2106
Newark, NJ 07102
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors pursuant
to Section 341 of the Bankruptcy Code. A representative of the
Debtor, however, may attend the Organizational Meeting, and provide
background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States Trustee
appoint a committee of unsecured creditors as soon as practicable.
The Committee ordinarily consists of the persons, willing to serve,
that hold the seven largest unsecured claims against the debtor of
the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee may
consult with the debtor, investigate the debtor and its business
operations and participate in the formulation of a plan of
reorganization. The Committee may also perform other services as
are in the interests of the unsecured creditors whom it
represents.
About Video Corporation
Video Corporation of America offers full-scale design, engineering,
project management, fabrication, installation and support services
for AV, broadcast and post-production applications.
Video Corporation of America sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. NJ Case No. 20-11768) on February 3,
2020. At the time of the filing, the Debtor estimated assets of
$8,107,684 and liabilities of $11,158,360. The petition was signed
by David Berlin, president.
Hon. Christine M. Gravelle presides over the case.
Daniel M. Stolz, Esq. of Wasserman, Jurista & Stolz, P.C. is the
Debtor's counsel.
VILLA TAPIA: Seeks to Hire MahonyLaw as Legal Counsel
-----------------------------------------------------
Villa Tapia Citi Fresh Supermarket Corp. seeks authority from the
U.S. Bankruptcy Court for the Eastern District of New York to
employ MahoneyLaw PLLC as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor regarding the administration of the
case;
b. represent the Debtor before the bankruptcy court and advise
the Debtor on all pending litigations, hearings, motions and the
decisions of the bankruptcy court;
c. review and analyze all applications, orders and motions
filed with the bankruptcy court by third parties;
d. attend all meetings conducted pursuant to Section 341(a) of
the Bankruptcy Code and represent the Debtor at all examinations;
e. communicate with creditors and all other parties in
interest;
f. prepare all necessary applications, motions, orders and
supporting positions taken by the Debtor, prepare witnesses and
review documents in this regard;
g. confer with all other professionals, including accountants
and consultants retained by the Debtor and by any other party in
interest;
h. assist the Debtor in its negotiations with creditors or
third parties concerning the terms of any proposed plan of
reorganization; and
i. prepare, draft and prosecute a plan of reorganization and
disclosure statement.
MahoneyLaw will charge $400 per hour for Phillip Mahony, Esq., and
$100 per hour for his legal assistant. The Debtor paid the firm a
pre-bankruptcy retainer of $5,000.
Mr. Mahony assures the court that the firm is "disinterested" as
such term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Phillip Mahony, Esq.
MahonyLaw PLLC
Steinway Law Offices
21-83 Steinway Street
Astoria, NY 11105
Phone: 917-44-6795
Fax: 844-269-2809
Email: mahonylaw@outlook.com
About Villa Tapia Citi Fresh
Supermarket Corp.
Based in Brooklyn, N.Y., Villa Tapia Citi Fresh Supermarket Corp.
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-40357) on Jan. 20,
2020, listing under $1 million in both assets and liabilities.
Judge Elizabeth S. Stong oversees the case. Phillip Mahony Esq. is
the Debtor's legal counsel.
VINE OIL: S&P Cuts Senior Unsecured Note Rating to 'CCC-'
---------------------------------------------------------
S&P Global Ratings lowered the issue-level ratings on Plano,
Tx.-based oil and gas exploration and production company Vine Oil &
Gas LP’s senior unsecured notes to 'CCC-' from 'CCC'. At the same
time S&P revised its recovery rating on the notes to '6' from '5'.
The '6' recovery rating indicates its expectation of negligible
(0%-10%; rounded estimate: 0%) recovery for creditors in the event
of a payment default. This is down from its prior recovery
expectations of 15%.
The recovery and issue-level ratings revision reflects the new $280
million second-lien secured revolving credit facility (not rated)
launched on Dec. 30, 2019. The new second-lien takes precedent over
the senior unsecured notes in the event of default.
S&P's 'CCC+' issuer credit rating and negative outlook are
unchanged.
VS BUYER: Moody's Assigns B2 CFR Upon Buyout, Outlook Stable
------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating to
VS Buyer, LLC, an entity set up to acquire backup software provider
Veeam Software. Moody's also assigned a B2-PD Probability of
Default Rating and a B1 rating on Veeam's proposed senior secured
debt term loan and revolver. The new secured debt and unrated
holding company seller notes will be used to finance private equity
group Insight Partners' acquisition of a controlling position in
Veeam. The ratings outlook is stable.
Ratings Rationale
Veeam's B2 CFR primarily reflects the high leverage offset by the
company's leading market position in the backup and recovery
software market and strong growth profile. Pro forma leverage at
closing of the transaction is estimated at 10x pro forma for
certain one-time costs, but approximately 6.6x on a cash EBITDA
basis based on trailing twelve month results as of September 30,
2019. Free cash flow to debt pro forma for proposed interest
expense was 10% based on September 30, 2019 trailing results. Cash
flow benefits from the PIK nature of the seller notes. Moody's
treats the seller notes as debt in leverage calculations. Given the
high coupon on the PIK notes, deleveraging is limited due to the
increasing debt levels despite strong revenue growth. Moody's
expects that Veeam will attempt to refinance the seller notes over
the next several years. The company is expected to have an
aggressive financial policy but moderated by founders continued
investment in the debt and equity of the company and likelihood of
continued strong cash levels.
Veeam is a leading provider of backup and recovery software with a
particularly strong position in virtualized environments. Veeam has
grown annually at double-digit rates over the past decade although
the pace of growth has slowed in recent periods. Moody's expects
the company will grow at high single-digit rates driven by
customers continued growth in data as well as the ongoing migration
to virtualized and cloud environments. Veeam's early success was in
virtualized environments in EMEA for small and mid-market customers
but has expanded rapidly in North America and Asia, as well as in
the enterprise market.
The stable outlook reflects Moody's expectation of continued strong
growth but limited deleveraging given the rapid growth in PIK debt.
The ratings could be upgraded if Veeam maintains its strong growth
profile, leverage falls below 7x (or 4.5x on a cash EBITDA basis)
and free cash flow to debt exceeds 12.5%. The ratings could be
downgraded if performance slows materially, market share
deteriorates, leverage is not on track to fall below 8.5x (and 6.5x
on a cash EBITDA basis) or free cash flow debt falls below 7.5%,
Liquidity is very good based on an expected $246 million of cash on
hand at closing, an undrawn $150 million revolver and expectations
of $200 million of annual free cash flow. The secured debt
facilities are rated B1, one notch above the corporate family
rating, reflecting its senior most position in the capital
structure and the substantial amount of structurally subordinated
seller notes.
The proposed secured debt facilities have flexibility that could be
detrimental to lenders, including a provision for incremental
secured facilities up to the greater of $335 million or 1x EBITDA.
Asset sale proceeds are required to pay down debt based on a
leverage-based test with 180-day reinvestment provisions but
subject to exclusion baskets that have not been disclosed. The debt
facilities limit upstream payments for tax related cash interest
payments on the seller notes to $15 million per year.
Assignments:
Issuer: VS Buyer, LLC (Veeam)
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Senior Secured Bank Credit Facility, Assigned B1 (LGD3)
Outlook Actions:
Issuer: VS Buyer, LLC (Veeam)
Outlook, Stable
The principal methodology used in these ratings was Software
Industry published in August 2018.
Veeam is a leading provider of backup and recovery software. VS
Buyer LLC, the owner of Veeam, is a Delaware corporation. Veeam
will be headquartered in the United States post-closing.
VS HOLDING: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
Baar-Switzerland-based VS Holding I Inc. (dba Veeam Software
Holding Ltd.) and its 'B-' issue-level rating and '3' recovery
rating to the company's $1.25 billion senior secured first-lien
term loan due in 2027 and $150 million revolving credit facility
(RCF) due in 2025. The '3' recovery indicates S&P's expectation of
meaningful (50%-70%; rounded estimate: 55%) recovery in the event
of default.
The rating on Veeam primarily reflects the company's aggressive pro
forma leverage, which S&P estimates will be over 10x at the end of
fiscal 2020 and over 9x by the end of fiscal 2021. Other risk
factors include a historically narrow focus on small to midsize
businesses (SMB) and limited scale compared to incumbent
competitors. Credit strengths include the Veeam's above-industry
growth trajectory, significant recent share gains against incumbent
competitors, a revenue model that provides for significant cash
generation due to strong upfront collections on subscriptions, and
high customer retention rates. The rating also reflects S&P's
expectation that Veeam will maintain adequate liquidity and
sufficient cash on its balance sheet.
Key risks include its narrow focus, small scale, competition
against much larger and capitalized players like Dell Inc. and
International Business Machines Corp. Furthermore, the data backup
and recovery market is very fragmented with fierce competition from
smaller, rapidly expanding competitors such as Datto, Inc.,
Commvault, and Carbonite, Inc. Veeam made strong market share gains
over the past few years, achieving a diverse customer base (more
than 286,000 customers), high customer retention (over 100% net
rate), and low customer concentration. All of these factors will
help mitigate risk in operating and financial performance in spite
of a narrow product scope on backup and recovery.
Initial leverage will be very high at over 10x at the end of fiscal
2020, which S&P expects to compress to approximately 9x by the end
of 2021, although a high proportion of payment-in-kind (PIK) debt
reduces cash interest burden. S&P expects leverage to decline
further primarily due to continued strong revenue growth and modest
margin expansion. Veeam's highly leveraged capital structure weighs
on the rating, despite its robust cash flow generation capability,
such that S&P Global Ratings' free operating cash flow (FOCF) to
debt is expected to remain over 10% over the next 24 months.
Relatively low capital spending needs and low cash interest expense
should enable the firm to increase FOCF as profitability improves
over the next few years, and S&P expects cash generation to exceed
$250 million in 2020.
Veeam's debt capital structure will consist of a $1.25 billion
secured term loan and an $850 million unsecured PIK seller note.
The relatively high proportion of PIK debt in the firm's capital
structure further supports S&P's forecast of strong cash
generation, as cash interest expense will be substantially lower
than the rating agency would typically expect for a firm leveraged
over 9x, however, the rating agency believes that the eventual cash
claim from this note at maturity in 2030 will be substantial. With
PIK interest of 11% (increasing to 13%) after four years, the
principal value of this instrument will eventually rise to over $2
billion.
Veeam's compelling cloud-native product portfolio and ease of
implementation has driven strong organic revenue growth and
substantial share gains against larger incumbents. S&P believes
that the addressable backup and recovery software market represents
about $7 billion, which has historically been dominated by a number
of large, incumbent competitors including IBM, Dell, and Veritas
Software Corp. S&P expects the market for backup software to
outgrow the broader enterprise software universe as increasing
business digitization leads to exponentially growing data storage
requirements and the threat of ransomware and other cyberthreats
grows commensurately. Veeam has taken considerable share over the
past four years because of ease of implementation and native
support of modern cloud environments, while offerings from legacy
competitors are often substantially more difficult and complex to
manage. Most of this share gain has come from middle-market
customers who value the simplicity of managing Veeam's offerings
and do not have longstanding relationships with existing
providers.
"Veeam has recently grown its presence with larger enterprises, and
while we think that the upcoming launch of the 10th generation of
its core offerings will increase appeal in the enterprise market,
we believe that switching providers for existing data sets is often
difficult and costly, and further share gains may slow,
particularly if incumbents are able to modernize their offerings,"
S&P said.
A strong recurring revenue base, upfront billings for multiyear
contracts, and high renewal rates support highly visible cash
generation. Veeam's cash collections have considerably outpaced
revenue recognition due to strong billings growth and upfront cash
collection for frequently multiyear contracts. Moreover, S&P
expects the ongoing transition to a subscription revenue model to
provide additional revenue visibility. Although S&P expects cash
generation to gradually converge with EBITDA levels as growth slows
over time, strong near-term growth prospects should enable Veeam to
continue to generate considerable free cash flow and ample
liquidity over at least the next 24 months.
The stable outlook reflects S&P's expectation that Veeam will
maintain an elevated leverage profile, despite its significant cash
flow generation capabilities. The rating agency anticipate Veeam
will maintain its strong recurring revenue growth profile, which
represents approximately 80% of revenue, and that it will continue
to carry significant cash on its balance sheet, despite relatively
low cash flow needs.
"Given Veeam's leverage of over 10x, it is unlikely that we would
upgrade the firm over the next 12 months. Longer-term, we
anticipate sustained double-digit percentage revenue growth and
EBITDA margin expansion and modest leverage compression over the
next 24 months. We could consider an upgrade if Veeam reduces
leverage to approximately 8x, while maintaining FOCF to debt above
10%, or if revenue growth is stronger than expected," S&P said.
"We could lower the rating if FOCF is persistently negative or
revenue significantly deteriorates. We could also downgrade Veeam
if sources of cash are not sufficient to cover uses and we view
liquidity as less than adequate," the rating agency said.
*********
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