/raid1/www/Hosts/bankrupt/TCR_Public/200221.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, February 21, 2020, Vol. 24, No. 51
Headlines
148 PLEASANTVILLE: Case Summary & 2 Unsecured Creditors
2034 SUNSET PLAZA: Seeks to Hire Abbasi Law as Legal Counsel
344 SOUTH STREET: Further Fine-Tunes Plan Disclosures
3600 ASHE: Court Confirms First Amended Plan of Liquidation
900 CESAR CHAVEZ: Taps McAllister & Associates as Broker
A&V HOLDINGS: S&P Assigns 'B' ICR; Stable Outlook
A.C. FURNITURE: U.S. Trustee Forms 3-Member Committee
ABR BUILDERS: Principals to Pay 10% of Valid Third-Party Claims
AIM INDUSTRIES: Has Until May 4 to File Plan & Disclosures
ALLY FINANCIAL: Moody's Affirms Ba1 Unsec. Rating, Outlook Stable
AMERICANN INC: Posts $1 Million Net Income in First Quarter
API AMERICAS: Seeks to Use Cash Collateral Until April 30
ARCH COAL: Moody's Affirms Ba3 Corp. Family Rating, Outlook Stable
ASTROTECH CORP: Has $2.08-Mil. Net Loss for Quarter Ended Dec. 31
AVIANCA HOLDINGS: Will Release Fourth Quarter Results on Feb. 27
BAMA OAKS: Seeks Permission to Use Bond Trustee Cash Collateral
BANTEK INC: Delays Quarterly Report for Period Ending Dec. 31
BLANCO RIVERWALK: Land Bank Buying Vista's Interests for $2 Million
BOERUM HILL: Kevin Lee Estate Says Stipulation Reached With Debtor
BRAZORIA HYDROCARBON: Court Confirms Reorganization Plan
BRIDGELINE DIGITAL: Management Says Going Concern Doubt Exists
BRIGGS & STRATTON: S&P Lowers ICR to 'CCC' on Debt Maturity Risk
BURNINDAYLIGHT LLC: Unsecureds Unimpaired in Plan
CAH ACQUISITION 11: Seeks Insurance Premium Financing from IPFS
CALAIS REGIONAL: Taps Norman Hanson as Special Counsel
CALCEUS ACQUISITION: S&P Puts 'B' ICR on CreditWatch Positive
CAMBER ENERGY: Incurs $1.83M Net Loss for Quarter Ended Dec. 31
CARESTREAM HEALTH: S&P Cuts ICR to 'B-'; Rating on Watch Negative
CATALENT PHARMA: Moody's Rates Proposed EUR450MM Unsec. Notes B3
CHHATRALA GRAND: Unsecureds Owed $6.6M to Get $25K in Plan
CLICKAWAY CORP: March 19 Disclosure Statement Hearing Set
COASTAL INTERNATIONAL: March 5 Disclosure Hearing Set
COMMUNITY HEALTH: Reports $373 Million Net Loss for Q4 2019
DECO ENTERPRISES: Voluntary Chapter 11 Case Summary
DELOREAN SERVICE: Unsecureds Recover 10% in Plan
DEMO REALTY: Gets Interim OK to Use Cash Collateral
DOUBLE L FARMS: Zions Bank Says Disclosures Has Deficiencies
DOUCE FRANCE: Gets Interim Approval to Use Cash Collateral
ELECTRONIC SERVICE: Gets OK to Use Cash Thru Plan Effective Date
FAMILY RESTAURANTS: Seeks to Hire Spence Custer as Legal Counsel
FF FUND I: Seeks to Hire Genovese Joblove as Legal Counsel
FIREBALL REALTY: Agree with Primary Bank to Amend Third Cash Motion
FIREBALL REALTY: Has Access to Primary Bank Cash Thru April 30
FIREBALL REALTY: May Use Provident Bank Cash Thru April 30
FIREBALL REALTY: Seeks to Use Banks Cash Collateral Thru April 30
FLUX POWER: Reports $3.3-Mil. Net Loss for Quarter Ended Dec. 31
FORESTAR GROUP: S&P Rates New $300MM Sr. Unsecured Notes 'B+'
FOX PROPERTY: Seeks Cash Collateral Access Thru Aug. 31
FREEPORT-MCMORAN INC: Fitch Affirms BB+ IDR, Outlook Stable
FREEPORT-MCMORAN INC: Moody's Rates Unsec. Notes Due 2028/2030 Ba1
GB SCIENCES: Posts $984K Net Income in Third Quarter
HORNBECK OFFSHORE: S&P Affirms 'SD' Issuer Credit Rating
HYGEA HOLDINGS: Enters Chapter 11 With $200MM Debt
LEARFIELD COMMUNICATIONS: S&P Cuts ICR to 'CCC+' on High Leverage
LIFETIME BRANDS: Moody's Lowers CFR to B1, Outlook Negative
LINCOLNWAY ENERGY: Credit Noncompliance Casts Going Concern Doubt
MACY'S INC: S&P Lowers ICR to 'BB+' on Strategy Execution Risks
MCGRAW HILL: Moody's Gives 'B3' Corp. Family Rating, Outlook Stable
MEGHA LLC: Trustee Taps Expotel Hospitality for Post-Sales Services
MONROE COUNTY HCA: Moody's Cuts Ratings on $3.4MM GOLT to Ba3
MOTIF DIAMOND: Seeks Permission to Use Cash Collateral
MOUNTAIN VIEW: Voluntary Chapter 11 Case Summary
NACZA WALNUT: Case Summary & 20 Largest Unsecured Creditors
NATURALSHRIMP INC: Has $541K Net Loss for Quarter Ended Dec. 31
NAVISTAR INT'L: Fitch Affirms 'B' Issuer Default Rating
NEOVASC INC: Will Request Hearing After Delisting Determination
NEUSTAR INC: Moody's Affirms B2 CFR & Alters Outlook to Negative
NORTH AMERICA STEEL: Plan Confirmation Hearing Continued to June 4
NPC INT'L: Moody's Lowers CFR to Ca, Outlook Negative
NPC INTERNATIONAL: Pizza Hut Franchisee Mulls Restructuring
OWENS & MINOR: Enters Into Receivables Securitization Program
PENNYMAC FINANCIAL: S&P Alters Outlook to Stable, Affirms B+ ICR
PIER 1 IMPORTS: S&P Lowers ICR to 'D' on Bankruptcy Filing
PPD INC: Moody's Assigns Ba3 Corp. Family Rating, Outlook Stable
PPD INC: S&P Assigns B+ Rating to $500MM Revolver, $4.1BB Term Loan
PRAIRIE ECI: S&P Affirms 'B+' Issuer Credit Rating; Outlook Stable
PREMIER ON 5TH: Has Until April 27 to File Plan & Disclosure
PROGISTIC CARRIERS: March 25 Plan & Disclosure Hearing Set
RAVAGO HOLDINGS: S&P Raises Sec. Debt Rating to BB+; Outlook Stable
REVOLAR TECHNOLOGY: Taps Klehr Harrison as Special Counsel
REWALK ROBOTICS: Incurs $15.6 Million Net Loss in 2019
RL BROOKS TRUCKING: Unsecureds Owed $2M to Get $25K Over Time
ROLLS BROS: Seeks to Obtain Vehicle Financing from Mack Financial
ROMA USA: Has Final OK to Use Cash Collateral Thru March 30
ROMA USA: May Get Secured Financing from Arcas on Final Basis
RONALD W. YARBOUGH: $126K Vineland Properties Sale to Pro-Spec OK'd
SCIENTIFIC GAMES: Incurs $118 Million Net Loss in 2019
SILGAN HOLDINGS: Moody's Confirms Ba2 CFR, Outlook Stable
STAK DESIGN: Obtains Interim OK to Use Cash Collateral Thru Feb. 21
STEVEN W. DEPASQUALE: Trustee's Objection to Discharge Due March 30
SWINGING TAIL: Unsecureds to Get Paid from Litigation Proceeds
TEL-INSTRUMENT: Has $908K Net Income for Quarter Ended Dec. 31
TRANSOCEAN LTD: Incurs $1.25 Billion Net Loss in 2019
UCOAT IT: Feb. 28 Auction of All Assets Set
VETERINARY CARE: 2 More Creditors Appointed as Committee Members
VIP CINEMA: Files for Chapter 11 With Prepackaged Plan
VIP CINEMA: Unsecureds Who Sign Releases to Get Up to $5K Each
VIRGINIAS RESOURCES: Case Summary & 20 Largest Unsecured Creditors
VISTAGE INT'L: Moody's Raises CFR to B2, Outlook Stable
WC 56 EAST AVENUE: Obtains Interim Approval to Use Cash Collateral
[^] BOOK REVIEW: Bankruptcy and Secured Lending in Cyberspace
*********
148 PLEASANTVILLE: Case Summary & 2 Unsecured Creditors
-------------------------------------------------------
Debtor: 148 Pleasantville Financial Limited Liability Company
148 Pleasantville Road
New Vernon, NJ 07976
Business Description: 148 Pleasantville Financial Limited
Liability Company is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)). The Company owns in
fee simple a single family home located at
148 Pleasantville Road, New Vernon, NJ
having a comparable sale value of $3
million.
Chapter 11 Petition Date: February 20, 2020
Court: United States Bankruptcy
District of New Jersey
Case No.: 20-12845
Debtor's Counsel: Barry S. Miller, Esq.
BARRY S. MILLER, ESQ.
1211 Liberty Avenue
Hillside, NJ 07205
Tel: 9732167030
E-mail: bmiller@barrysmilleresq.com
Total Assets: $3,001,021
Total Liabilities: $0
The petition was signed by Bruce J. Wishnia, member.
A copy of the petition containing, among other items, a list of the
Debtor's two unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/L2GDrY
2034 SUNSET PLAZA: Seeks to Hire Abbasi Law as Legal Counsel
------------------------------------------------------------
2034 Sunset Plaza Drive, LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Abbasi Law Corporation as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
(a) represent the Debtor at the initial interview, Section
341(a) meeting of creditors and court hearings;
(b) prepare legal papers;
(c) advise the Debtor regarding matters of bankruptcy law,
including its rights and remedies with respect to its assets and
claims of its creditors;
(d) represent the Debtor in all contested matters;
(e) negotiate, prepare and implement a plan of
reorganization;
(f) analyze claims that have been filed in the Debtor's
bankruptcy case;
(g) negotiate with the Debtor's secured and unsecured
creditors regarding the amount and payment of their claims;
(h) object to claims if appropriate;
(i) advise the Debtor of its powers and duties in the
continued operation of its business; and
(j) provide advice on general corporate, securities, real
estate, litigation, environmental, state regulatory and other legal
matters, which may arise during the pendency of the Debtor's case.
The Debtor agreed to pay Abbasi Law a retainer deposit of $8,000 to
cover pre-petition legal services; post-petition legal services,
initial case filing fees of $1,717 for this matter, and all other
costs/expenses incurred.
Abbasi Law's discounted hourly rates for its attorneys and
paraprofessionals are:
Matthew Abbasi, Esq. $400
Paralegal $60
Law Clerk $25
Abbasi Law is a disinterested person within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached at:
Matthew Abbasi, Esq.
Abbasi Law Corporation
8889 West Olympic Boulevard, Suite 240
Beverly Hills, CA 90211
Tel: (310)358-9341
Fax: (8880 709-5448
Email: MATTHEW@MALAWGROUP.COM
About 2034 Sunset Plaza Drive
2034 Sunset Plaza Drive, LLC owns in fee simple a real property
located at 2034 Sunset Plaza Drive, Los Angeles, Calif. The
property has a current value of $3 million.
2034 Sunset Plaza Drive filed a voluntary Chapter 11 petition
(Bankr. C.D. Cal. Case No. 19-24652) on Dec. 16, 2019. At the time
of the filing, the Debtor disclosed assets of between $1 million
and $10 million and liabilities of the same range. Judge Sheri
Bluebond oversees the case. The Debtor is represented by Matthew
Abbasi, Esq., at Abbasi Law Corporation.
344 SOUTH STREET: Further Fine-Tunes Plan Disclosures
-----------------------------------------------------
Debtor 344 South Street Corporation filed a Fifth Amended
Disclosure Statement describing the Plan of Reorganization dated
February 2, 2020.
The Plan treats claims as follows:
* Class 1. Tax Claim of the Commonwealth of PA UCTS. The
priority tax claim is to be amended to reflect the adjusted balance
calculated after filing the 2018 returns. Proof of Claim 1 had been
computed based on imputed amounts for 2018. The amount owed as a
priority claim is approximately $2,400.00. This amount will be paid
with the first disbursement after the effective date of the plan.
The secured claim will be paid over 36 months, with a base amount
of $24,000.00 amortized at 4%. The monthly payment will be $709.00
and shall be the total payment of the secured claim.
* Class 2. Pennsylvania Department of Revenue. PA DOR has been
paid in the ordinary disbursement for the month of November 2019.
The Debtor paid the outstanding balance claimed in this proof of
claim while in the process of renewing their business license for
the current year. The Department of Revenue inadvertently claimed
the $9,982.62 and $122.29 secured claim were current liabilities of
the Debtor and these amounts were paid in November 2019. The Debtor
was not aware of the error until the disbursement had been
completed. The payment was inadvertent and the priority and secured
claim were scheduled to have been paid in the first disbursement
after the Effective Date of the Plan. No other creditors were
prejudiced because this disbursement was to have been made in the
initial disbursements after the Effective Date of the Plan. It was
made in error and the amount paid was the correct amount.
* Class 3. The Internal Revenue Service. Payments post-petition
total $49,000.00 and reduce the amount owed under the Amended
Claim. The amortized amount owed is $83,453.91 and will be paid in
33 equal monthly payments at $2,500.00 and a final 34th payment in
the amount of $2,016.38.
* Class 5. Tax Claim of the Commonwealth of PA UCTS. This
priority tax claim is now approximately $2,400.00 after filing the
2018 returns. The proof of claim amount had been imputed. This
Claim shall be amended. The priority tax due will be paid in the
first distribution following the Effective Date of the Plan.
* Class 6. General unsecured Claims. The two unsecured claims --
Gold Medal Environmental's $13,105 claim, and City of
Philadelphia's $33,810 claim -- will be paid at a 25% rate into two
equal installments.
A full-text copy of the Fifth Amended Disclosure Statement dated
February 2, 2020, is available at https://tinyurl.com/svpwa4c from
PacerMonitor at no charge.
Attorney for the Debtor:
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.
3600 ASHE: Court Confirms First Amended Plan of Liquidation
-----------------------------------------------------------
On Jan. 14, 2020, the U.S. Bankruptcy Court for the Central
District of California, Los Angeles Division, convened a
confirmation hearing on the First Amended Plan of Liquidation dated
August 19, 2019, filed by Debtor 3600 Ashe, LLC.
On Jan. 30, 2020, Judge Deborah J. Saltzman ordered that:
* The Plan, including the Plan Supplement, is confirmed.
* The effective date of the Confirmed Plan is February 1, 2020.
* Kyra E. Andrassy of Smiley Wang-Ekvall, LLP is appointed to be
the Plan Administrator under the Confirmed Plan.
* The compensation arrangement for the Plan Administrator as set
forth in the Confirmed Plan is approved.
* Within 90 days after the Effective Date of the Confirmed Plan,
the Plan Administrator must file a post-confirmation status report
explaining what progress has been made toward consummation of the
Confirmed Plan. The initial post-confirmation status report must be
served on the Office of the United States Trustee, the 20 largest
unsecured creditors, and the parties in interest who have requested
special notice.
A copy of the Order Confirming the Plan dated Jan. 30, 2020, is
available at https://tinyurl.com/w7pnl3v from PacerMonitor at no
charge.
Attorneys for 3600 Ashe, LLC:
Dean G. Rallis Jr.
Matthew D. Pham
ANGLIN, FLEWELLING, RASMUSSEN, CAMPBELL & TRYTTEN LLP
301 N. Lake Ave., Suite 1100
Pasadena, CA 91101-4158
Tel: (626) 535-1900
Fax: (626) 577-7764
E-mail: drallis@afrct.com
mpham@afrct.com
About 3600 Ashe LLC
3600 Ashe, LLC, based in Glendale, CA, filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 17-25614) on Dec. 26, 2017. In the
petition signed by Stephen Hall, managing member, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities. The Hon. Deborah J. Saltzman oversees the case. Dean
G. Rallis Jr., Esq., at Anglin Flewelling Rasmussen Campbell &
Trytten LLP, serves as bankruptcy counsel to the Debtor; and DTLA
Real Estate, Inc., as its real estate broker.
900 CESAR CHAVEZ: Taps McAllister & Associates as Broker
--------------------------------------------------------
900 Cesar Chavez, LLC and its affiliates received approval from the
U.S. Bankruptcy Court for the Western District of Texas to employ
McAllister & Associates to assist in the marketing and sale of
their real properties in Austin, Texas.
The properties to be sold include:
a) A 0.60-acre development site located at the intersection of
5th St. and Red River St. in the Central Business District of
Austin, Texas. The property is owned by 5th and Red River, LLC.
b) A 0.56-acre parcel of undeveloped land located at 900 and
904 East Cesar Chavez St., Austin, Texas. The property is owned by
900 Cesar Chavez, LLC.
c) A 0.30-acre parcel of undeveloped land located at 905 and
907 East Cesar Chavez St., Austin, Texas. The property is owned by
905 Cesar Chavez, LLC.
McAllister will get a commission of 1 percent of the sale price of
each property.
Daniel Tristan, a broker employed with McAllister, assures the
court that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Daniel Tristan
McAllister and Associates
201 Barton Springs Road,
Austin, TX 78704
Phone: (512) 472-2100
About 900 Cesar Chavez
900 Cesar Chavez, LLC, a company engaged in renting and leasing
real estate properties, and its affiliates filed Chapter 11
petitions (Bankr. W.D. Tex. Lead Case No. 19-11527) on Nov. 4,
2019. In the petition signed by Brian Elliott, corporate counsel,
900 Cesar Chavez was estimated to have assets of $1 million to $10
million and liabilities of $10 million to $50 million. Judge Tony
M. Davis oversees the cases. The Debtors tapped Waller Lansden
Dortch & Davis LLP as their legal counsel.
A&V HOLDINGS: S&P Assigns 'B' ICR; Stable Outlook
-------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to A&V
Holdings Holdco LLC (AVI) and its 'B' issue-level and '3' recovery
ratings to the company's senior secured credit facility.
AVI is an entity to be formed from the combination of Florida-based
audio visual and video conferencing solutions provider AVI-SPL
Acquisitions, LLC and Audio Fidelity Communications LLC (Whitlock),
a company owned by Marlin Equity Partners, which acquired AVI-SPL.
The combined entity has high starting leverage, with pro forma
adjusted leverage around 5x. S&P expects that pro forma adjusted
debt-to-EBITDA leverage (as defined by its criteria) will be around
4.9x at transaction close with little deleveraging over 2020.
Absent transaction costs in the latest-twelve-month (LTM) period,
leverage would be closer to the mid-4x range. S&P expects EBITDA
margin to decline roughly 100 basis points (bps) in 2020 as the
lower-margin Whitlock business is integrated and roughly $18
million of restructuring costs pressure margins. These costs
consist mostly of severance, information technology (IT)-related
items, and lease breakage fees.
However, AVI should deleverage to below 4x by the end of 2021 as
adjusted EBITDA margins expand by roughly 150-200 bps as the
company realizes the benefits of increased scale, synergies become
more fully realized, and integration costs conclude. S&P expects
about $25 million of cost savings to be realized over the next
12-18 months. Expected cost savings are grouped into rebates,
reduced cost of sales, selling, general, and administrative, and
leases. S&P expects synergies related to rebates will have an
immediate effect given AVI's existing terms, while certain
headcount and lease items may take longer to implement. AVI has
experienced volatility in its ability to capture volume-based
rebates, partly because it uses distributors to source product;
however, S&P has seen rebates as a percentage of gross costs
trending down and expect the company will capture roughly $5
million in additional rebate dollars pro forma for the transaction.
Given the tight labor market for engineering talent, S&P believes
the company could experience some wage pressure that could result
in margin expansion on the lower end of the rating agency's
expected range.
The stable outlook primarily reflects the combined entity's
improved business position and S&P's expectation that it will
maintain consistent near-term profitability with no material
integration issues. It also reflects S&P's expectation the company
will realize roughly $25 million in synergies and improve profit
margins, and continued growth in the company's core and ancillary
services will result in adjusted debt leverage falling to the
high-4x area over the next 12 months.
"We could lower the rating if AVI's operating performance declines
because of higher-than-expected customer attrition, lower
profitability due to increased competition, or difficulty
integrating the two businesses, leading to diminished operating
earnings such that leverage rises and remains above 6x. This could
also result from the company pursuing debt-financed acquisitions,
shareholder returns, or experiencing tightening liquidity," S&P
said.
"Although unlikely given its financial sponsor ownership, we could
raise the rating if EBITDA growth or debt repayment results in
leverage sustained below the mid-4x area. This would likely result
from a significant increase in revenues generated from
higher-margin services, better-than-expected operating performance,
and be contingent on management's commitment to maintain leverage
at or below these levels," the rating agency said.
A.C. FURNITURE: U.S. Trustee Forms 3-Member Committee
-----------------------------------------------------
John Fitzgerald, III, acting U.S. trustee for Region 4, on Feb. 18,
2020, appointed three creditors to serve on the official committee
of unsecured creditors in the Chapter 11 case of A.C. Furniture
Company, Inc.
The committee members are:
(1) Packaging Products, Inc.
Cathy K. Adams, Vice President
200 Little Creek Drive
Bassett, VA 24055
(2) Spradling International, Inc - South
Lisa Richardson, Credit Manager
200 Cahaba Valley Parkway
P.O. Box 1668
Pelham, AL 35124
(3) Truist (f/k/a SunTrust Bank)
Kimberly A. Pierro
Senior VP and Assistant General Counsel
1001 Semmes Ave.
Richmond, VA 23224
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About A.C. Furniture Company
A.C. Furniture Company, Inc. -- https://acfurniture.com/ –-
manufactures seating for the hospitality, healthcare, and food
service industry. It was founded in 1977.
A.C. Furniture Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Va. Case No. 20-60200) on Feb. 3,
2020. At the time of the filing, the Debtor disclosed $23,295,208
in assets and $9,457,063 in liabilities. Judge Paul M. Black
oversees the case. Timothy McGary, Esq., is the Debtor's legal
counsel.
ABR BUILDERS: Principals to Pay 10% of Valid Third-Party Claims
---------------------------------------------------------------
Debtor ABR Builders LLC, by Leo Fox, its attorney, filed its reply
to the objections to the Second Amended Disclosure Statement:
* The Debtor can report that 112th Street creditor has been
resolved through the resignation of the former Managing Partner of
112th Street through a settlement, and therefore 112th Street has
not submitted an objection to the Disclosure Statement.
* With respect to Glen and Alison Kunfosky, the Debtor has
previously indicated that its claims were wildly inflated and
incorrect and Kunfosky's objection lacked merit. Further, the
Debtor addressed in greater detail the objections regarding income,
the Debtor's principal's commitments, liquidation analysis and
third-party releases. The projections have been amended, in great
detail, to reflect the information contended to be lacking from the
prior version of the Disclosure Statement.
* The Debtor's Disclosure Statement incorporates the comments of
this Court and provides additional authority for the Debtor's
belief that limited third-party releases are warranted under the
facts of this case.
* The Debtor's principals are prepared to pay a cash amount equal
to 10% of any valid third-party claims against the Debtor's
principals upon an Order determining the validity of such
third-party claims, in addition to the amounts to be paid to the
holders of such third-party claims under the Chapter 11 Plan.
A full-text copy of the Debtor's reply to the objections dated Jan.
30, 2020, is available at https://tinyurl.com/sbc3f54 from
PacerMonitor at no charge.
The Debtor is represented by:
Leo Fox
630 Third Avenue, 18th Floor
New York, New York 10017
Tel: (212) 867-9595
E-mail: leo@leofoxlaw.com
About ABR Builders
ABR Builders -- http://www.abrbuilders.com/-- is a general
contractor serving New York City and the adjoining areas. Since
its founding in 1995, the Company has constructed high-end
residential houses and commercial projects such as private medical
clinics. ABR manufactures all custom architectural, structural, and
interior components through its in-house resources. At the time of
filing, the estimated assets and debts are $1 million to $10
million.
ABR Builders LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 19-11041) on April 4, 2019. The Debtor was estimated to have
$1 million to $10 million in assets and liabilities as of the
bankruptcy filing. Leo Fox, Esq., in New York, serves as counsel to
the Debtor.
AIM INDUSTRIES: Has Until May 4 to File Plan & Disclosures
----------------------------------------------------------
On Jan. 30, 2020, Judge Caryl E. Delano of the U.S. Bankruptcy
Court for the Middle District of Florida, Tampa Division, ordered
that Debtor AIM Industries, LLC shall file a Plan and Disclosure
Statement on or before May 4, 2020.
The hearing on the approval of the Disclosure Statement shall be
consolidated with the hearing on the confirmation of the Plan.
A copy of the order dated January 30, 2020, is available at
https://tinyurl.com/ud279mr from PacerMonitor at no charge.
About AIM Industries
Based in Riverview, Fla., AIM Industries, LLC, filed for Chapter 11
protection (Bankr. M.D. Fla. Case No. 20-00031) on Jan. 3, 2020,
listing under $1 million in both assets and liabilities. Judge
Caryl E. Delano oversees the case. Buddy D. Ford, P.A., is the
Debtor's legal counsel.
ALLY FINANCIAL: Moody's Affirms Ba1 Unsec. Rating, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba1 senior long-term
unsecured rating of Ally Financial Inc. All other long-term ratings
of Ally Financial and GMAC Capital Trust I were also affirmed. The
outlook remains stable.
The ratings affirmation reflects Moody's unchanged assessment of
the firm's credit profile, following the announcement of the
acquisition of CardWorks, Inc. on 18 February 2020, which the
company expects to close in the third quarter of 2020.
List of affected ratings:
Affirmations:
Issuer: Ally Financial Inc.
Issuer Rating, Affirmed Ba1, Stable
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1, Stable
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba1,
Stable
Commercial Paper, Affirmed NP
Backed Commercial Paper, Affirmed NP
Senior Unsecured Medium-Term Note Program (both domestic and
foreign currency), Affirmed (P)Ba1
Other Short-Term Note Program (both domestic and foreign currency),
Affirmed (P)NP
Issuer: GMAC Capital Trust I
Backed Preferred Stock, Affirmed Ba3 (hyb)
Outlook Actions:
Issuer: Ally Financial Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Moody's affirmation of Ally Financial's ratings follows its
announcement that it had entered into a definitive agreement to
acquire CardWorks. CardWorks is a privately held company with $4.7
billion in assets and $2.9 billion in deposits, as at 31 December
2019. Under the terms of the agreement, Merrick Bank, a wholly
owned subsidiary of CardWorks, Inc. will merge into Ally Bank.
CardWorks is a top-20 US credit card issuer focused on the
non-prime segment with average borrower FICO scores of 630. In
addition, the company provides third-party credit card servicing,
consumer recreational and marine loans, as well as is a top-15 US
merchant acquirer.
The ratings affirmation reflects Moody's overall unchanged
assessment of Ally Financial's credit profile, taking into account
that both continued business diversification and improved
profitability benefits, would be offset by a weakening in Ally's
asset quality. Moody's noted that the acquisition adds a core
consumer banking product to Ally's existing consumer auto finance,
residential finance, deposit, and securities-brokerage and
investment-advisory offerings.
In large part due to its low-risk, dealer floor plan receivables,
Ally's profitability lags its rated US regional bank peers.
Profitability has improved over the last several years, with net
income to average assets of 0.96% for full year 2019, versus 0.7%
in 2018. While the CardWorks acquisition accounting for $4.7
billion in total assets will only increase Ally's balance sheet by
3%, CardWorks' very high, greater than 5% return on assets (ROA)
will likely increase Ally's ROA by 10 basis points, based on the
firm's pro-forma financials. Of note, CardWorks did not have an
annual loss during the 2008-2009 financial crisis.
However, at the same time, CardWorks' very high annual charge-offs
evidence an increase in Ally's asset risk profile. Adding
CardWork's 12% to 14% annual charge-offs will increase Ally's
low-to-mid 80 basis points annual charge-offs by around 35 to 40
basis points, at the closing of the acquisition.
Moody's also considers that Ally Financial has stated its intention
to maintain its 9.0% common equity tier 1 (CET1) capital ratio
target, despite the increase in asset risk.
Overall, Moody's consider auto lenders to face moderate
environmental risks. The most relevant environmental risks for
these companies arise from carbon/air pollution regulations. Any
changes in regulation can affect the value of the vehicle and
therefore the residual value of vehicles (on lease or floorplan) or
the recovery value (on loan transactions). The risks are somewhat
mitigated by the short tenor of most of the transactions, which
would require strong policy shifts in short periods to have a
material impact.
Ally's exposure to social risks is moderate, consistent with its
general assessment for the global banking sector. Moody's does not
have any particular concerns with Ally's governance. The company
shows an appropriate risk management framework commensurate with
its risk appetite.
Moody's has maintained its stable outlook on Ally Financial,
reflecting its expectation that the company's financial
fundamentals will remain broadly unchanged, over the next 12-18
months.
WHAT COULD CHANGE THE RATINGS UP/DOWN
The ratings could be upgraded if the company continues to reduce
its reliance on confidence-sensitive wholesale funding and brokered
deposits and profitability continues to improve, while
demonstrating stress capital resiliency and stable asset quality. A
continued prudent business diversification increase, for example
measured growth of non-auto asset classes, as well as achieving
higher absolute capital levels would also be positive for the
ratings.
The ratings could be downgraded due to a significant decline in the
deposit base, a decline in franchised dealer relationships, which
Moody's views as an important component to the auto franchise, or
if growth in riskier credit quality assets negatively impacts asset
performance without a commensurate strengthening in profitability
and capital. A decline in tangible common equity to risk weighted
assets below 9.0% or a mis-step associated with the integration of
CardWorks that would weaken capital or profitability could also be
negative for the ratings.
The principal methodology used in these ratings was Banks
Methodology published in November 2019.
AMERICANN INC: Posts $1 Million Net Income in First Quarter
-----------------------------------------------------------
Americann, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q reporting net income of $1.02
million on $34,691 of total revenues for the three months ended
Dec. 31, 2019, compared to a net loss of $538,508 on $- of total
revenues for the same period in 2018.
As of Dec. 31, 2019, the Company had $17.06 million in total
assets, $9.82 million in total liabilities, and $7.24 million in
total stockholders' equity.
The Company had an accumulated deficit of $16,995,224 and
$18,013,209 at Dec. 31, 2019 and Sept. 30, 2019, respectively.
While the Company is attempting to increase operations and generate
additional revenues, the Company's cash position may not be
significant enough to support the Company's daily operations.
Management intends to raise additional funds through the sale of
its securities.
"Management believes that the actions presently being taken to
further implement its business plan and generate additional
revenues provide the opportunity for the Company to continue as a
going concern. While the Company believes in the viability of its
strategy to generate additional revenues and in its ability to
raise additional funds, there can be no assurances to that effect.
The ability of the Company to continue as a going concern is
dependent upon the Company's ability to further implement its
business plan and generate additional revenues. The consolidated
financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern,"
Americann said in the filing.
A full-text copy of the Form 10-Q is available for free at the
SEC's website at:
https://is.gd/cEEJfZ
About Americann
Headquartered in Denver, Colorado, AmeriCann is a specialized
cannabis company that is developing cultivation, processing and
manufacturing facilities. AmeriCann uses greenhouse technology
which is superior to the current industry standard of growing
cannabis in warehouse facilities under artificial lights.
AmeriCann is designing GMP Certified cannabis extraction and
product manufacturing infrastructure. Through a wholly-owned
subsidiary, AmeriCann Brands, Inc., the Company intends to secure
licenses to produce cannabis infused products including beverages,
edibles, topicals, vape cartridges and concentrates. AmeriCann
Brands, Inc. plans to operate a Marijuana Product Manufacturing
business at MMCC with over 40,000 square feet of state-of-the art
extraction and product manufacturing infrastructure.
Americann reported a net loss of $4.90 million for the year ended
Sept. 30, 2019, compared to a net loss of $4.43 million for the
year ended Sept. 30, 2018. As of Sept. 30, 2019, the Company had
$11.77 million in total assets, $5.65 million in total liabilities,
and $6.11 million in total stockholders' equity.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
Jan. 14, 2020, citing that the Company has suffered recurring
losses from operations and has an accumulated deficit that raises
substantial doubt about its ability to continue as a going concern.
API AMERICAS: Seeks to Use Cash Collateral Until April 30
---------------------------------------------------------
API Americas Inc., and API (USA) Holdings Limited, ask the
Bankruptcy Court to use cash collateral in order to ensure
liquidity and enable them to continue operating their businesses
during these Chapter 11 cases.
The Debtors seek to use cash collateral until April 30, 2020 or the
occurrence of any termination event, including, among others,
failure to make any payment under the interim order when due, and
failure to obtain entry of final order within 35 days of the
Petition Date, among others. A complete list of the termination
events, as contained in the motion, is available at
https://is.gd/mhNdZH from PacerMonitor.com free of charge.
Before the Petition Date, API Americas, as co-borrower with other
U.S. Borrowers SPH Group Holdings LLC, Steel Excel Inc., Handy &
Harman Group Ltd, iGo, Inc., and U.K borrower Cedar 2015 Limited,
obtained from a syndicate of lenders and PNC Bank, National
Association, as administrative agent, financing under a $700
million credit facility consisting of:
(a) a $500 million revolving credit facility, which includes a
$50 million sub-facility for the issuance of swing loans and a $50
million sub-facility for the issuance of letters of credit, and
(b) a $200 million term loan facility.
As of the close of business on January 29, 2020, the Debtors owe
not less than $44,388,238.42 in aggregate principal amount under
the revolving credit advanced directly to API Americas, plus
$232,202,382 in the aggregate, as a co-obligor and loan party with
respect to the revolving loans and the face amount of issued and
outstanding letters of credit and swing loans advanced to, or
issued for the benefit of, borrowers other than API Americas, as
well as $190,000,000 with respect to the term loan, pursuant to the
credit agreement and other pre-petition loan documents, plus
accrued and unpaid interests, fees, costs and expenses.
As adequate protection for the use of cash collateral, the Debtors
seek to provide the administrative agent, for the benefit of the
pre-petition secured lenders:
* adequate protection liens,
* an allowed super priority administrative expense claim, and
* payment in full, in cash and in immediately available funds,
(as and when said payments would have come due under the credit
agreement had the Debtors' Chapter 11 cases not been commenced) all
interest, fees, and other amounts, other than principal, accruing
solely with respect to the API Americas direct obligation.
The proposed general terms of the Debtors' use of cash collateral
are set forth in the fifth amendment to the credit agreement, a
copy of which is available for free at https://is.gd/XrdwRQ from
PacerMonitor.com.
About API Americas Inc.
and API (USA) Holdings Limited
API Americas Inc. -- http://www.apigroup.com/-- is a manufacturer
of foils, laminates, and holographic materials. Among other
customers, API Americas provides packaging to companies in the
premium drinks, confectionery, tobacco, perfume, personal care,
cosmetics, and healthcare sectors. API Americas was originally
founded as Dry Print in New Jersey. Re-branded in 1998, API
Americas is currently headquartered in Lawrence, Kansas inside a
56,000 square foot facility with manufacturing capabilities.
API Americas Inc., and holding company API (USA) Holdings Limited,
filed Chapter 11 petitions (Bankr. N.D. Del. Lead Case No.
20-10239) on February 2, 2020. The petitions were signed by
Douglas Woodworth, director.
As of December 31, 2019, API Americas Inc., has $37.3 million in
total assets, $5.8 million in current liabilities and $47.3 million
in long-term liabilities. API (USA) Holdings Limited holds $51.6
million in total assets and $2.9 million in total liabilities.
Saul Ewing Arnstein & Lehr LLP and Eversheds Sutherland (US) LLP
represent the Debtors as general bankruptcy counsel. Ernst & Young
LLP is the Debtors' financial advisor. Bankruptcy Management
Solutions, Inc., d/b/a Stretto serves as the Debtors' claims and
noticing agent.
ARCH COAL: Moody's Affirms Ba3 Corp. Family Rating, Outlook Stable
------------------------------------------------------------------
Moody's Investors Service affirmed Arch Coal, Inc.'s Ba3 Corporate
Family Rating and downgraded the company's Speculative Grade
Liquidity Rating to SGL-2 from SGL-1. The rating outlook is
stable.
"While we expect a very challenging year for the coal industry in
2020, Arch Coal is well-positioned with a strong balance sheet and
plans to expand metallurgical coal production in the early 2020s,"
said Ben Nelson, Moody's Vice President -- Senior Credit Officer
and lead analyst for Arch Coal, Inc.
Downgrades:
Issuer: Arch Coal, Inc.
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1
Affirmations:
Issuer: Arch Coal, Inc.
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD4)
Outlook Actions:
Issuer: Arch Coal, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Moody's expects a very challenging year for the coal industry in
2020. Domestic demand for thermal coal is challenged by a mild
winter season, historically low natural gas prices, and ongoing
reduction of the fleet of coal-fired power plants. A substantive
reduction in export prices has redirected coal back into the
weakened domestic market, further reducing prices in early 2020
following a weak 2019. Likewise, metallurgical coal fell sharply in
the second half of 2019 and, while the met coal market has
evidenced some stability in early 2020, there is no near-term
catalyst for substantive and sustained price improvement. Business
conditions for the global steel industry remain weak, particularly
in Europe. Based on export metallurgical coal pricing anticipated
near the midpoint of its range of $110-170 per ton (CFR Jingtang)
and incorporating adjustments for the quality and location of the
company's coal, Moody's expects that Arch Coal's EBITDA will fall
to about $200-225 million (from $363 million in 2019 and $438
million in 2018). Credit metrics likely will soften but remain
solid for the rating with adjusted financial leverage in the range
of 1.5-2.0x (Debt/EBITDA) in 2020 compared to less than 1.0x in
2019.
Moody's also believes that investor concerns about the coal
industry's ESG profile are intensifying and coal producers will be
increasingly challenged by access to capital issues in the early
2020s. An increasing portion of the global investment community is
reducing or eliminating exposure to the coal industry with greater
emphasis on moving away from thermal coal. The aggregate impact on
the credit quality of the coal industry is that debt capital will
become more expensive over this horizon, particularly in the public
bond markets, and other business requirements, such as surety
bonds, which together will lead to much more focus on individual
coal producers' ability to fund their operations and articulate
clearly their approach to addressing environmental, social, and
governance considerations.
Moody's affirmed Arch Coal's Ba3 CFR based on expectations for: (i)
meaningful discretionary cash flow generation despite a weak market
environment in 2020; (ii) funding the majority of the estimated
$360-390 million of spending for the Leer South metallurgical coal
project using internally-generated free cash flow; and (iii) a very
low net debt position that helps insulate the company from
intensifying access to capital issues in the debt capital markets.
Arch Coal reported $311 million of debt and $289 million of cash at
31 December 2019. The rating affirmation also takes into
consideration Arch Coal's ongoing portfolio transition strategy to
harvest cash from declining thermal coal businesses and invest cash
in more sustainable metallurgical coal businesses.
The Ba3 CFR reflects a diverse platform of eight coal mining assets
in the United States capable of strong cash flow generation, even
during difficult industry conditions, and conservative financial
policies, including low debt levels and good liquidity to help the
company withstand difficult industry conditions. Operational risk
is a constraint with fairly meaningful concentration of earnings
and cash flow at two specific mining sites: Black Thunder thermal
coal mine in the Powder River Basin and Leer mining complex in
Northern Appalachia. Credit quality is constrained more
significantly by the inherent volatility of the global
metallurgical coal industry, ongoing secular decline in the US
thermal coal industry, and ESG factors. The rating also takes into
consideration that some mining assets have less favorable operating
prospects in the coming years and, therefore, could be subject to
more significant reclamation-related spending over the rating
horizon.
While the Leer South project is a credit positive development in
the medium term that management expects will add 3 million tons of
metallurgical coal production to help Arch reach an annual met coal
production capacity of about 9 million tons by 2022, Moody's
downgraded the company's SGL rating to SGL-2 from SGL-1 based on an
expectation that a substantial increase in project-based capital
spending during weaker market conditions will result in negative
free cash flow generation for Arch Coal in 2020. Moody's believes
that Arch Coal will allow available liquidity fall below $400
million, including cash moving below $250 million, in 2020 unless
the company pursues additional financing or market conditions
improve beyond its current expectations.
The SGL-2 reflects its expectation for good liquidity to support
operations over the next 12-18 months. The primary source of
liquidity beyond internally-generated free cash flow is the
company's cash balance combined with modest availability under an
accounts receivables securitization facility and an unrated
inventory-based revolving credit facility. The SGL rating does not
assume market access and, therefore, discounts the facilities based
on the expectation that successful execution of a planned joint
venture with Peabody Energy, which remains subject to regulatory
approvals, will close and transfer collateral currently supporting
these facilities to the new entity. However, the company reported
$123 million of availability under these facilities at 31 December
2019 and, combined with balance sheet cash, more than $400 million
of available liquidity. The SGL rating could be downgraded to SGL-3
if available liquidity falls below $250 million.
Environmental, social, and governance factors are important factors
influencing Arch's credit quality. The company is exposed to ESG
issues typical for a company in the coal mining industry, including
increasing global demand for renewable energy that is detrimental
to demand for thermal coal, especially in the United States and
Western Europe. From an environmental perspective the coal mining
sector is also viewed as: (i) very high risk for air pollution and
carbon regulations; (ii) high risk for soil and water pollution,
land use restrictions, and natural and man-made hazards; and (iii)
moderate risk for water shortages. Social issues include factors
such as community relations, operational track record, and health
and safety issues associated with coal mining, such as black lung
disease. Arch Coal has been reducing exposure to thermal coal,
which carries greater ESG-related risks, and increasing exposure to
metallurgical coal, which carries lower ESG-related risks, through
capital investment in the Leer South project. Arch Coal sold its
last thermal coal mine in Appalachia in December 2019 -- a surface
mine called Coal-Mac -- and announced the intention to put its
thermal coal mines in Colorado and the Powder River Basin region
into a joint venture operated by Peabody Energy in June 2019.
Governance-related risks are representative of a publicly-traded
coal company. However, while Arch returned more than $900 million
of cash to shareholders since late 2017, the company has maintained
a very modest net debt position and a good liquidity position
comprised largely of balance sheet cash.
The stable outlook assumes that Arch Coal will generate around
$200-225 million of EBITDA, maintain net debt below $100 million,
and, despite significant expansionary capital spending, maintain
good liquidity in 2020. An upgrade is not likely given the inherent
volatility in the global metallurgical coal industry, the ongoing
secular decline in demand for US thermal coal, and intensifying ESG
concerns. Moody's could downgrade the rating with expectations for
adjusted financial leverage above 3.0x (Debt/EBITDA), negative free
cash flow in 2021, substantive deterioration in liquidity, or
further intensification of ESG concerns that call into question the
company's ability to handle upcoming debt maturities.
Arch Coal is one of the largest coal producers in the United
States. The company has two mining complexes in the Powder River
Basin, four mining complexes in Appalachia, and two more mines in
Illinois and Colorado. The company generated about $2 billion in
revenue in 2019.
The principal methodology used in these ratings was Mining
published in September 2018.
ASTROTECH CORP: Has $2.08-Mil. Net Loss for Quarter Ended Dec. 31
-----------------------------------------------------------------
Astrotech Corporation filed its quarterly report on Form 10-Q,
disclosing a net loss of $2,083,000 on $205,000 of revenue for the
three months ended Dec. 31, 2019, compared to a net loss of
$2,160,000 on $7,000 of revenue for the same period in 2018.
At Dec. 31, 2019, the Company had total assets of $3,677,000, total
liabilities of $3,430,000, and $247,000 in total stockholders'
equity.
Chief Financial Officer and Principal Accounting Officer Eric
Stober said, "As of December 31, 2019, we had cash and cash
equivalents and restricted cash of $1.0 million, and our working
capital was approximately $(0.7) million. Restricted cash consists
of three letters of credit relating to purchase orders for the
TRACER 1000 product. For the fiscal year 2019, the Company
reported a net loss of $7.5 million and net cash used in operating
activities of $8.5 million. For the six months ended December 31,
2019, the Company reported a net loss of $4.2 million and net cash
used in operating activities of $3.4 million. These factors raise
substantial doubt about the Company's ability to continue as a
going concern."
A copy of the Form 10-Q is available at:
https://is.gd/sb2khZ
Astrotech Corporation operates as a science and technology
development and commercialization company in the United States. It
operates through two segments, Astro Scientific and Astral Images
Corporation. The Astro Scientific segment manufactures chemical
detection and analysis instrumentation that detects and identifies
trace amounts of explosives and narcotics. Its product portfolio
include MMS 1000, a small, low-power desktop mass spectrometer; OEM
1000, a mass spectrometer component; MMS 2000, a gas monitor that
provides precise, real-time measurement of specific chemicals in a
process stream; and TRACER 1000, an explosives trace detector with
a swab-based thermal desorption sample inlet system. The Astral
Images Corporation segment develops film restoration and
enhancement software. This segment offers Astral Black ICE, a
system targeted mainly towards the black-and-white feature film and
television series digitization and restoration markets; Astral
Color ICE, a standalone AI software solution that integrates into
film scanners to enable color image correction and enhancement;
Astral HDR ICE, high dynamic range solution that upgrades digital
and traditional films to the HDR10 standard; and Astral HSDR ICE, a
solution, which automatically converts HDR content to SDR. The
Company was formerly known as SPACEHAB, Inc. and changed its name
to Astrotech Corporation in 2009. Astrotech Corporation was
founded in 1984 is headquartered in Austin, Texas.
AVIANCA HOLDINGS: Will Release Fourth Quarter Results on Feb. 27
----------------------------------------------------------------
Avianca Holdings S.A. will release fourth quarter 2019 financial
results after market closes on Thursday, Feb. 27, 2020. In
addition, the Company will host conference calls in Spanish and
English on Friday, Feb. 28, 2020, at 8:00 a.m. EST. Below is the
information to register for the calls.
Spanish Conference Call
Event Date: February 28, 2020
Event Time: 8:00 A.M. Eastern Standard (8:00 A.M. Bogota Local
Time)
Registration Link:
http://services.incommconferencing.com/DiamondPassRegistration/register?confirmationNumber=13699189&linkSecurityString=9bf54f4b0
US Toll Free Number: 877-737-7051
International Toll Number: 201-689-8878
Toll Free International Numbers:
United Kingdom: 0 800 756 3371 Chile: 123 002 09023
Colombia: 0 1 800 518 3661 Brazil: 0 800 038 0571
Peru: 511 707 5736
Passcode: 0236849
Unique PIN Number Please be reminded that you will be prompted to
enter a unique PIN Number that will only be sent to your e-mail
after you register
English Conference Call
Event Date: February 28, 2020
Event Time: 8:00 A.M. Eastern Standard (8:00 A.M. Bogota Local
Time)
Registration Link:
http://services.incommconferencing.com/DiamondPassRegistration/register?confirmationNumber=13699186&linkSecurityString=9be83c86e
US Toll Free Number: 877-737-7051
International Toll Number: 201-689-8878
Toll Free International Numbers:
United Kingdom: 0 800 756 3371 Chile: 123 002 09023
Colombia: 0 1 800 518 3661 Brazil: 0 800 038 0571
Peru: 511 707 5736
Passcode: 8489892
Unique PIN Number Please be reminded that you will be prompted to
enter a unique PIN Number that will only be sent to your e-mail
after you register
These calls will be broadcast live on the Internet and may be
accessed directly at the following URLs:
Spanish Webcast:
https://www.webcaster4.com/Webcast/Page/1323/33152
English Webcast:
https://www.webcaster4.com/Webcast/Page/1323/33153
A presentation will accompany the conference call and will be
available via the webcast. The presentation will also be available
prior to the conference call start time on our website at
www.aviancaholdings.com under the Investor Relations section
"Financial Information" / "Financial Results". A digital recording
will be available for replay on Feb. 28, 2020 at the same link.
About Avianca Holdings S.A.
Avianca Holdings SA -- http://www.avianca.com/-- is a Panama-based
company engaged, through its subsidiaries, in the provision of air
transportation services for passengers and commercial purposes.
With a fleet of 175 aircraft, Avianca serves 76 destinations in 27
countries within the Americas and Europe.
KPMG S.A.S., in Bogota, Colombia, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated April
26, 2019, on the Company's consolidated financial statements for
the year ended Dec. 31, 2018, citing that the controlling
shareholder of the Company obtained a loan and pledged its shares
in Avianca Holdings S.A. as security for this loan agreement (the
loan agreement), which requires compliance with certain covenants
by the controlling shareholder, including compliance with the
Company financial ratios. Breach of these covenants provides the
lender the right to enforce the security, leading to a change of
control over the Company. A change of control over the Company
would breach covenants included in some loan and financing,
aircraft rental, and other agreements of the Company, which in turn
could trigger early termination or cancelation of these contracts.
On April 10, 2019, the Company was informed by the controlling
shareholder and its lender, that there was a non-compliance with
covenants established in the controlling shareholder's loan
agreement, and no waiver was in place; thus, there is a potential
risk of change of control. The auditors said this circumstance
raises a substantial doubt about the Company's ability to continue
as a going concern.
As of Dec. 31, 2018, Avianca Holdings had US$7.11 billion in total
assets, US$6.12 billion in total liabilities, and US$992.46 million
in total equity.
* * *
As reported by the TCR on Dec. 19, 2019, Fitch Ratings upgraded
Avianca Holdings' Long-Term Foreign and Local Currency Issuer
Default Ratings to 'CCC+' from 'RD'. The upgrades follow Avianca's
announcement that it has completed its debt restructuring,
including receipt of a US$250 million convertible secured
stakeholder facility loan from United Airlines, Inc. (BB/Stable)
and Kingsland Holdings Limited.
BAMA OAKS: Seeks Permission to Use Bond Trustee Cash Collateral
---------------------------------------------------------------
Bama Oaks Retirement, LLC asked the Bankruptcy Court to use cash
collateral to pay operating expenses incurred in order to continue
its business.
Before the Petition Date, the Debtor owes BOKF, N.A., as indenture
trustee, under certain bond obligations, secured by a first
priority mortgage on the Debtor's senior living facility known as
Gordon Oaks Senior Living Center at 3145 Knollwood Drive, in
Mobile, Alabama:
* a First Mortgage Revenue Bonds- Series 2012A dated November
26, 2012 in the original principal amount of $5,110,000,
* a First Mortgage Revenue Bonds- Series 2012B dated November
26, 2012 in the original principal amount of $630,000,
* that certain First Mortgage Revenue Bonds- Series 2012A dated
September 21, 2012 in the original principal amount of $10,850,000,
and
* that certain First Mortgage Revenue BondsSeries 2012B dated
September 21, 2012 in the original principal amount of $850,000.
As adequate protection, the Debtor proposes to grant the lender a
security interest in and lien upon the post-petition accounts
receivable and proceeds to the same extent and priority as the
lender's pre-petition lien and interest in the pre-petition
collateral. The Debtor also proposes to grant the lender a
continuing lien and security interest in the pre-petition
collateral.
A copy of the motion is available for free at https://is.gd/EyxRHh
from PacerMonitor.com.
About Bama Oaks Retirement
Bama Oaks Retirement, LLC, d/b/a Gordon Oaks Assisted Living, owns
and operates an assisted living facility in Mobile, Alabama. The
company filed a Chapter 11 petition (Bankr. N.D. Ga. Case No.
20-61914) on Feb. 1, 2020. In the petition signed by Christopher
F. Brogdon, manager, the Debtor was estimated to have between $10
million and $50 million in both assets and liabilities. Theodore
N. Stapleton, P.C., is the Debtor's counsel.
BANTEK INC: Delays Quarterly Report for Period Ending Dec. 31
-------------------------------------------------------------
Bantek, Inc. filed a Form 12b-25 with the Securities and Exchange
Commission notifying the delay in the filing of its Quarterly
Report on Form 10-Q for the period ended Dec. 31, 2019. The
Company was unable to compile the necessary financial information
required to prepare a complete filing. The Company expects to file
within the extension period.
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.
Bantek reported a net loss of $7.11 million for the year ended
Sept. 30, 2019, compared to a net loss of $5.77 million 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.
BLANCO RIVERWALK: Land Bank Buying Vista's Interests for $2 Million
-------------------------------------------------------------------
Blanco Riverwalk Business Park LLC, filed a First Amended Combined
Disclosure Statement and Plan of Reorganization ahead of the
confirmation hearing scheduled for Feb. 24, 2020.
The First Amended Disclosure Statement and Plan only fine-tunes and
updates the prior iteration of the document.
The First Amended Disclosure Statement and Plan discloses that
currently, professional fees incurred postpetition amount to
$21,101 with costs of $573 as of Feb. 10, 2020 and counsel still
holds $13,112 in its trust account. The Debtor estimates an
additional amount of $3,000 to $5,000 will be incurred through the
Effective Date.
The Debtor also discloses that the administrative claim of Hays
County for 2020 taxes will be paid in the ordinary course of
business.
The Debtor has three creditors: BancorpSouth Bank (secured), Hays
County, and Hays County School District. On February 29, 2020 (the
"Effective Date"), a newly created entity, BR 2020 Land Bank LLC
("Land Bank"), will purchase Vista Del Blanco Ltd.'s membership
interests in the Debtor for $2 million, pay off the BancorpSouth
Bank loan in full, pay all taxes owing for the Debtor, and pay all
administrative expenses and U.S. Trustee fees.
Vista Del Blanco Ltd., 50% owner of Debtor, will receive $2,000,000
from Land Bank in exchange for the transfer to Land Bank of its
equity share and all other claims
BRBP Partners LLC, 50% owner of Debtor, will remain an equity owner
of Debtor pending completion of the re-capitalization of Debtor by
Land Bank. BRBP Partners LLC is owned 50% each by Robert W.
McDonald, III and Charles Cauthorn. Per the terms of the
recapitalization, BRBP Partners LLC's ownership interest in Debtor
will be canceled in exchange for a 5.68% interest in Land Bank.
A full-text copy of the First Amended Disclosure Statement and Plan
dated Feb. 12, 2020, is available at https://tinyurl.com/qllob8v
from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Stephen W. Lemmon
Rhonda Mates
1801 S. MoPac Expressway, Suite 320
Austin, Texas 78746
Tel: (512) 236-9900
Fax: (512) 236-9904
About Blanco Riverwalk Business Park
Blanco Riverwalk Business Park LLC is owned 50% by BRBP Partners
LLC and 50% by Vista Del Blanco Ltd. Blanco Riverwalk owns
approximately 117 acres of land with
significant IH 35 and Blanco River frontage in San Marcos, Hays
County, Texas located along the west side of IH 35 between the
Blanco River Bridge and Yarrington Road, within the City limits of
San Marcos, Texas.
Blanco Riverwalk Business Park, LLC, sought Chapter 11 protection
(W.D. Tex. Case No. 19-11647) on Dec. 2, 2019. The Debtor was
estimated to have assets of $10 million to $50 million and
liabilities of $1 million to $10 million. The Hon. Tony M. Davis
is the case judge. Streusand, Landon, Ozburn & Lemmon, LLP, is the
Debtor's counsel.
BOERUM HILL: Kevin Lee Estate Says Stipulation Reached With Debtor
------------------------------------------------------------------
Joung N. Sohn, Administrator of the Estate of Kevin Lee, objects to
the Disclosure Statement and Plan of Reorganization filed on
January 21, 2020, by debtor Boerum Hill Developers 26 LLC.
The Estate of Lee is the owner of real property located at 82
Fourth Avenue, Brooklyn, New York. On Jan. 18, 2019, Estate of Lee
entered into a pre-printed sale contract (together with the
contract rider and all amendments, the Sale Contract) for the sale
of the Property to the Original Purchaser.
The Debtor asserts that the Sale Contract was assigned to it prior
to the filing of the instant bankruptcy case (an assertion that the
Estate of Lee refutes).
On Jan. 21, 2020, the Estate of Lee moved the bankruptcy court for
an order declaring that the Sale Contract was not property of the
Debtor's bankruptcy estate, thereby validating the Estate of Lee's
termination of the Sale Contract and retention of the Deposit.
On Jan. 21, 2020, the Debtor filed the Plan, which calls for, among
other things, the assumption and consummation of the Sale Contract
with certain modifications, including an increase of the Purchase
Price by $25,000 to cover the Estate of Lee’s fees and expenses
After the Motion, Plan and Disclosure Statement were filed, the
parties have negotiated a settlement of their differences, which is
memorialized in a settlement stipulation.
After the Motion, Plan and Disclosure Statement were filed, the
Parties have negotiated a settlement of their differences, which is
memorialized in a settlement stipulation. The salient terms of the
Stipulation are as follows:
a. The Debtor will be deemed the "Purchaser" for all purposes
under the Sale Contract, which may assign the Sale Contract to
another entity at the closing of the sale of the Property;
b. At the Closing,the Purchaser will pay to or for the benefit
of the Estate of Lee the Purchase Price plus $26,000, (constituting
$1,000.00 for travel costs and$25,000 for fees and expenses), for a
total of 2,801,500, less the Deposit;
c. All transfer taxes, if any, will be the responsibility of,
and paid for by the Purchaser; and
d. The "Time of the Essence" provision will be amended to state
that the Closing must take place on or before Feb. 10, 2020 (the
"Time of the Essence Date"), such that if the Closing does not
occur on or before the Time of the Essence Date, the Estate of Lee
may declare the Sale Contract terminated and, in such case, the
Estate of Lee shall retain the Deposit without the need for further
notice or action.
e. The Estate of Lee will support the approval of the Disclosure
Statement and confirmation of the Plan so long as the Debtor and
Original Purchaser comply with the terms of the Stipulation.
The Estate of Lee recognizes that the Stipulation, like all
settlements outside of a Debtor's ordinary course of business, must
be approved by the Court to be effective as against the Debtor.
The Estate of Lee, therefore, objects to the Disclosure Statement
for the reasons set forth herein (i.e. the Sale Contract is not
property of the Debtor's bankruptcy estate and, therefore, may not
be assumed by the Debtor without the Estate of Lee's consent)
unless and until either (a) the Stipulation is approved and
'so-ordered' by this Court, or (b) each of its material terms are
incorporated into an amended Plan and this Court's order confirming
such amended Plan.
A full-text copy of Estate of Lee's objection to Disclosure
Statement and Plan dated Jan. 30, 2020, is available at
https://tinyurl.com/qkjdaj3 from PacerMonitor at no charge.
Counsel to the Estate of Kevin Lee:
Paul A. Rachmuth
66 North Village Avenue
Rockville Centre, New York 11570
Telephone: (516) 330-0170
Facsimile: (516) 543-0516
E-mail: paul@paresq.com
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
BRAZORIA HYDROCARBON: Court Confirms Reorganization Plan
--------------------------------------------------------
Judge Jeffrey P. Norman has ordered that the Disclosure Statement
filed by Brazoria Hydrocarbon, LLC is APPROVED, and the Plan is
CONFIRMED.
The Confirmation Order also provides that the following claims are
allowed and not subject to dispute, objection, counterclaim,
setoff, or recoupment of any kind:
Claim No. Claim Holder Type Allowed Amount
--------- ------------ ---- --------------
1 Weatherford Artificial Secured $14,852
2 Precision Energy Services Secured $25,200
3 Weatherford U.S., L.P. Secured $309,508
4 Weatherford Laboratories Unsecured $22,800
8 National Oilwell Varco Secured $551,664
9 National Oilwell DHT Secured $44,416
10 Precision Directional Secured $159,636
11 Precision Drilling Co. Secured $1,002,205
11 Precision Drilling Co Unsecured $7,547
The Plan of Reorganization under chapter 11 of the Bankruptcy Code
proposes to pay creditors of Brazoria Hydrocarbon from future
income.
General unsecured claims totaling $796,713 will be paid in full on
a pro rata basis in equal monthly payments after the secured
creditors set out in Class 3 have been paid in full with the
anticipated $150,000 per month. The payments will be due and
payable on the 15th day of the full calendar month after the
allowed secured claims are paid in full. There will be no interest
paid on the allowed general unsecured claims.
A full-text copy of the Order Confirming the Plan dated Feb. 12,
2020, is available at https://tinyurl.com/wmynqkz from
PacerMonitor.com at no charge.
About Brazoria Hydrocarbon
Brazoria Hydrocarbon, LLC, is a private company in Hempstead,
Texas, in the hydrocarbon gases business.
Brazoria Hydrocarbon sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 19-32170) on April 17,
2019. At the time of the filing, the Debtor had estimated assets
of between $1 million and $10 million and liabilities of between $1
million and $10 million. The case has been assigned to Judge
Jeffrey P Norman. The Debtor is represented by The Law Office of
Margaret M. McClure.
No official committee of unsecured creditors has been appointed in
the Debtor's case.
BRIDGELINE DIGITAL: Management Says Going Concern Doubt Exists
--------------------------------------------------------------
Bridgeline Digital, Inc. filed its quarterly report on Form 10-Q,
disclosing a net income of $136,000 on $2,832,000 of total net
revenue for the three months ended Dec. 31, 2019, compared to a net
loss of $4,955,000 on $2,375,000 of total net revenue for the same
period in 2018.
At Dec. 31, 2019, the Company had total assets of $11,573,000,
total liabilities of $7,689,000, and $3,884,000 in total
stockholders' equity.
Bridgeline Digital said, "At December 31, 2019, the Company had no
debt. While the Company believes that future revenues and cash
flows, as we continue to integrate and realize a full year of
operations from acquisitions completed in the fiscal 2019 second
quarter, will supplement its working capital and it has an
appropriate cost structure to support future revenue growth, based
upon its current working capital and projected cash flows in the
next twelve months, the Company will need additional sources of
financing in place in order to ensure its operations are adequately
funded. No definitive agreements for additional financing are in
place as of the date of this Form 10-Q and there can be no
assurances that additional sources of financing could be obtained
on terms that are favorable or acceptable to us and that revenue
growth and improvement in cash flows can be achieved. Accordingly,
management believes there is substantial doubt about the Company's
ability to continue as a going concern for at least twelve months
following the issuance of this Form 10-Q."
A copy of the Form 10-Q is available at:
https://is.gd/cM9ZL4
Burlington, Massachusetts-based Bridgeline Digital, Inc. aims to
help customers maximize the performance of their full digital
experience -- from websites and intranets to online stores and
campaigns. Bridgeline's iAPPS(R) platform integrates Web Content
Management, eCommerce, eMarketing, Social Media management, and Web
Analytics for marketers deliver digital experiences that attract,
engage and convert their customers across all channels.
BRIGGS & STRATTON: S&P Lowers ICR to 'CCC' on Debt Maturity Risk
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
manufacturer of small engines Briggs & Stratton Corp. (BGG) to
'CCC' from 'B-'. The outlook is negative. In addition, S&P lowered
its issue-level rating on BGG's senior unsecured notes due Dec. 15,
2020 to 'CCC-' from 'CCC+'.
S&P believes the company might not be able to use its asset-based
lending (ABL) revolving credit facility availability to repay the
unsecured notes and maintain enough liquidity to meet the working
capital needs of its highly seasonal business.
The company's ABL maturity accelerates to Sept. 15, 2020, if its
$195.5 million unsecured notes are still outstanding on this date.
Although BGG might have enough ABL capacity on Sept. 15 to repay
the notes, S&P believes this could leave the company without enough
liquidity to finance its sizable seasonal working capital
requirements during the first half of fiscal 2021. The rating
agency estimates Briggs & Stratton's intra-period trough to peak
working capital swing to be roughly $200 million to $250 million.
Given S&P's forecast that Briggs & Stratton will have a significant
amount of its revolver drawn at fiscal year-end 2020 (its seasonal
low point of working capital usage), this leaves the $625 million
facility with little to no availability after absorbing both the
notes repayment and seasonal working capital needs.
The negative rating outlook reflects the possibility that S&P could
lower its rating on Briggs & Stratton if it believed the likelihood
of a distressed restructuring or payment default had increased over
the next six months.
"We could lower our ratings on Briggs & Stratton if we believed a
default or distressed restructuring over the next six months were
highly likely. This could occur if the company does not make
meaningful progress toward a refinancing or asset sales or if we
believed the company would encounter a liquidity crunch due to
operational challenges," S&P said.
"We could raise our ratings on Briggs & Stratton if it addresses
its near-term maturities in a way in which debtholders received the
original promise of the securities and if we expect the company
would not face any subsequent liquidity or covenant challenges over
the next 12 months," the rating agency said.
BURNINDAYLIGHT LLC: Unsecureds Unimpaired in Plan
-------------------------------------------------
Burnindaylight LLC filed a Plan of Reorganization and a Disclosure
Statement.
All secured creditors will retain their liens until paid in full.
These liens shall attach to that property in which their respective
debt instruments have given them a security interest. The Debtor
will sell or refinance its real estate within six months of
confirmation of the Plan. All Secured creditors shall be paid in
full. Secured creditors shall provide Debtor with a valid signed
pay-off quote which can be used to refinance the properties within
14 days of confirmation of the Plan along with financial
information verifying the pay-off quote. If a secured creditor
fails to provide the pay-off within this time period, they will be
charged a fine of one-half of one percent per day of their claim as
contempt sanction for violation of the Confirmation Order.
The Debtor will pay in full unsecured claimants in Class U1 from
the sale of refinance or else Debtor or Debtor's Manager (who is a
co-debtor on the debt) shall continue to make payments to the
members so that they stay current on the credit card. Class U1
shall not be paid from Debtor until such time as the properties are
sold or refinanced.
Unsecured claimants who are insiders in Class U2 (Donald Sumpter)
will maintain their interest in Debtor if the properties are
refinanced or shall relinquish his interest in Debtor is the
property is sold. Class U2 is unimpaired.
Estate assets have a total value of $2,835,000.
A full-text copy of the Disclosure Statement dated Feb. 12, 2020,
is available at https://tinyurl.com/smx7fnf from PacerMonitor.com
at no charge.
About Burnindaylight LLC
Burnindaylight, LLC, a privately held company in Renton, Wash.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Wash. Case No. 19-14587) on Dec. 19, 2019. At the time of the
filing, the Debtor disclosed assets of between $1 million and $10
million and liabilities of the same range. Judge Marc Barreca
oversees the case. The Debtor is represented by Darrel B. Carter,
Esq., at CBG Law Group, PLLC.
CAH ACQUISITION 11: Seeks Insurance Premium Financing from IPFS
---------------------------------------------------------------
CAH Acquisition Company 11, LLC, sought permission from the
Bankruptcy Court to enter into a premium finance agreement with
IPFS Corporation.
Pursuant to the agreement, the Debtor is required to pay IPFS a
downpayment of $25,951.93 and monthly payments over a term of seven
months at $7,086.09 each. The annual percentage rate is 8.690% and
the total amount financed under the agreement is $74,148.38. The
Agreement also provides that IPFS is granted a lien and security
interest in any and all unearned or return premiums and dividends
which may become payable under the policies.
The Debtor seeks that IPFS's lien and security interest in said
premiums and dividends will be senior to the rights of the Debtor's
estate in its bankruptcy proceeding and to the rights of any person
claiming a lien or security interest in any assets of the Debtor.
A copy of the motion is available at https://is.gd/rovB5L from
PacerMonitor.com free of charge.
About CAH Acquisition Company 11
CAH Acquisition Company 11, LLC, which conducts business under the
name Lauderdale Community Hospital, is a provider of health care
services including diagnostic and therapeutic services, 24-hour
emergency care, convenient and specialized outpatient resources,
and pharmaceutical services and other services.
CAH Acquisition Company 11 sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 19-22020) on March
8, 2019. At the time of the filing, the Debtor was estimated to
have assets of between $1 million and $10 million and liabilities
of the same range.
The case has been assigned to Judge Paulette J. Delk.
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, is the Debtor's
legal counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
CALAIS REGIONAL: Taps Norman Hanson as Special Counsel
------------------------------------------------------
Calais Regional Hospital received approval from the U.S. Bankruptcy
Court for the District of Maine to hire Norman Hanson Detroy, LLC
as its special counsel.
Norman Hanson will represent the Debtor in state court malpractice
proceedings, including a case captioned Duane D. McLellan and
Crystal L. McLellan, v. Calais Regional Hospital, Michael Kessler,
M.D., and Christopher Scalabrin, FNP, No.: CV-17-016. The firm
will not bill the Debtor for fees or expenses incurred.
Norman Hanson does not represent any interest adverse to the
Debtor, according to court filings.
The firm can be reached through:
Joshua D. Hadiaris, Esq.
Norman Hanson Detroy, LLC
Two Canal Plaza, P.O. Box 4600
Portland, ME 04112-4600
Phone: 207-774-7000
Fax: 207-775-0806
About Calais Regional Hospital
Based in Calais, Maine, Calais Regional Hospital --
https://www.calaishospital.org/ -- operates as a non-profit
organization offering cardiac rehabilitation, emergency, food and
nutrition, home health, inpatient care unit, laboratory, nursing,
radiology, respiratory care and stress testing, surgery, and social
services.
Calais Regional Hospital filed a Chapter 11 petition (Bankr. D.
Maine Case No. 19-10486) on Sept. 17, 2019. At the time of filing,
the Debtor had estimated assets and liabilities of $10 million to
$50 million. Judge Michael A. Fagone oversees the case. The
Debtor is represented by Murray Plumb & Murray.
CALCEUS ACQUISITION: S&P Puts 'B' ICR on CreditWatch Positive
-------------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S.-based Calceus
Acquisition Inc. (Cole Haan), including its 'B' issuer credit
rating, on CreditWatch with positive implications.
The CreditWatch placement follows the company's S-1 filing, which
indicates it could undertake an IPO in the next 90 days. Cole
Haan's financial-sponsor owner, Apax Partners, is selling its
shares to reduce its ownership following the IPO. S&P believes that
Apax will continue to sell down its stake in the company if the IPO
is successful. S&P does not expect Cole Haan to issue any new
primary shares and the company will not receive any proceeds from
the transaction. It believes that the company's financial policy
could become less aggressive as a publicly traded entity and as
Apax reduces its ownership stake.
"We will seek to resolve the CreditWatch listing in the next 90
days pending the completion of the IPO and discussions with
management regarding the company's long-term financial policy and
governance practices," S&P said.
"In resolving the CreditWatch, we could affirm our ratings on the
company or raise them by up to one notch. Specifically, we could
raise our rating on Cole Haan if it successfully completes the IPO,
generates a continued solid operating performance supported by
organic revenue growth and stable margins, and we believe
management's financial policies will allow it to sustain leverage
of less than 5x over the long term," the rating agency said.
CAMBER ENERGY: Incurs $1.83M Net Loss for Quarter Ended Dec. 31
---------------------------------------------------------------
Camber Energy, Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $1,833,678 on $94,115 of total revenues
for the three months ended Dec. 31, 2019, compared to a net loss of
$1,586,084 on $127,937 of total revenues for the same period in
2018.
At Dec. 31, 2019, the Company had total assets of $5,101,015, total
liabilities of $2,018,169, and $3,082,846 in total stockholders'
equity.
The Company said, "At December 31, 2019, the Company's total
current assets of $2.4 million exceeded its total current
liabilities of approximately $2.0 million, resulting in working
capital of $0.4 million, while at March 31, 2019, the Company's
total current assets of $8.2 million exceeded its total current
liabilities of approximately $2.1 million, resulting in working
capital of $6.1 million. The reduction from $6.1 million to $0.4
million is due to losses from continuing operations and costs
incurred with the merger and ultimate divestiture of Lineal,
including funds loaned to Lineal in connection with such
divestiture.
"The factors above raise substantial doubt about the Company's
ability to continue to operate as a going concern for the twelve
months following the issuance of these financial statements. The
Company believes that it will not have sufficient liquidity to meet
its operating costs unless it can raise new funding, which may be
through the sale of debt or equity or unless it closes the Viking
Merger, which is scheduled to be closed by June 30, 2020,
extendable up to December 31, 2020 under certain circumstances, the
completion of which is the Company's current plan. There is no
guarantee though that the Viking merger will be completed or other
sources of funding be available. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
"The Company has no secured debt outstanding as of December 31,
2019.
"During the three and nine months ended December 31, 2019 and 2018,
the Company sold 0 shares and 632 shares and 0 shares and 1,577
shares, respectively, of Series C Preferred Stock pursuant to the
terms of an October 2017, October 2018 and November 2018 Stock
Purchase Agreement, for total consideration of $0 and $6 million
and $0 and $15 million, respectively."
A copy of the Form 10-Q is available at:
https://is.gd/JiqyP3
Camber Energy, Inc., an independent oil and gas company, engages in
the acquisition, development, and sale of crude oil, natural gas,
and natural gas liquids (NGL) in Texas and Oklahoma. The company
holds interests in approximately 13,000 net acres of producing
fields located primarily in the Hunton formation in Lincoln, Logan
and Payne, and Okfuskee Counties, in central Oklahoma; the Cline
shale and upper Wolfberry shale in Glasscock County, Texas; and
Panhandle situated in Hutchinson County, Texas. It also owns 3,000
leasehold acres in Okfuskee County, Oklahoma, which includes 8
producing wells and 3 salt water disposal wells; and owns 555 net
leasehold acres in Hutchinson County, Texas, which includes 48
gross non-producing well bores and 5 salt water disposal wells. The
company was formerly known as Lucas Energy Inc. and changed its
name to Camber Energy, Inc. in January 2017. Camber Energy, Inc.
was incorporated in 2003 and is headquartered in Houston, Texas.
CARESTREAM HEALTH: S&P Cuts ICR to 'B-'; Rating on Watch Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Carestream
Health Inc. to 'B-' from 'B' and placed it on CreditWatch with
negative implications. S&P also lowered its issue-level ratings on
the company's first-lien facilities to 'B-' from 'B' and its
second-lien facilities to 'CCC+' from 'B-' and placed them on
CreditWatch with negative implications.
Carestream Health Inc.'s liquidity position has weakened as it
faces significant debt maturities over the next 18 months. S&P also
notes that absent refinancing, the company may face covenant
pressure stemming from significant step-downs in its financial
covenants over 2020.
In addition, in 2019 the company's revenue performance was weaker
than S&P's previous forecast, especially in the medical digital
segment. Although the decline was mainly offset by cost reductions,
S&P now anticipates market headwinds may continue in 2020 and put
pressure on the company's plan to improve profitability and cash
generation.
However, S&P views the company's leverage of below 5x as
sustainable, and believes the progress the company made in cost
restructuring combined with debt reduction in 2019 should support
its ability to refinance upcoming debt maturities.
Carestream has yet to address the large upcoming maturities within
18 months, liquidity is now weak. The downgrade and CreditWatch
placement partially reflect S&P's view that the liquidity position
has materially weakened given the approaching maturities, of which
$581 million become current by Feb. 28, 2020. In addition, S&P
notes that absent refinancing, the company may face covenant
pressure stemming from significant step-downs in its financial
covenants over 2020.
"We expect to resolve the CreditWatch within the coming months. If
Carestream does not address its upcoming maturities through an
amendment or a refinancing transaction, we may lower our issuer
credit rating by multiple notches. We may lower the ratings to 'SD'
or 'D' if we consider refinancing terms to be a distressed exchange
offer, should the revised terms deliver significantly less than the
original promise to lenders," S&P said.
"If Carestream addresses its approaching maturities within the next
few months, and we do not consider the refinancing terms to be a
distressed exchange, we expect to affirm the ratings," the rating
agency said.
CATALENT PHARMA: Moody's Rates Proposed EUR450MM Unsec. Notes B3
----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Catalent Pharma
Solutions, Inc. proposed EUR450 million senior unsecured notes due
2028. There are no changes to Catalent's existing ratings including
the B1 Corporate Family Rating, B1-PD Probability of Default
Rating, Ba3 senior secured bank credit facility and SGL-1
Speculative Grade Liquidity rating. The outlook remains stable.
Proceeds of the offering will be primarily used to refinance its
existing EUR 2024 notes, pay fees and expenses, and for general
corporate purposes. Moody's views the transaction as a credit
positive as it will lower interest costs and extend Catalent's debt
maturity profile. The transaction will only slightly increase
leverage which Moody's estimates at 4.7x on a pro forma basis
including the recent $315 million acquisition of Mastercell Global
Inc..
Assignments:
Issuer: Catalent Pharma Solutions, Inc.
Gtd Senior Unsecured Global Notes, Assigned B3 (LGD5)
RATINGS RATIONALE
Catalent's B1 Corporate Family rating reflects its relatively high
financial leverage and modest free cash flow relative to debt. The
rating is also constrained by volatility inherent in the
pharmaceutical contract manufacturing industry. Lost revenue when
customers' drugs become generic, pricing pressure is exerted by
large clients, and high fixed costs can create volatility in profit
and cash flows. The rating is supported by Moody's expectation that
Catalent will benefit over the next 2-3 years as more drugs coming
to market require more complex dosage solutions. Catalent will also
benefit from its push into more stable, albeit lower margin,
businesses such as consumer and animal health. The rating is also
supported by Catalent's good scale and leading market position in
the development and manufacturing of softgels and other oral drug
delivery technologies. The company also maintains a diversified
customer base and commands a large library of patents, know-how,
and other intellectual property that raise barriers to entry and
enhance margins.
The Speculative Grade Liquidity Rating of SGL-1 reflects Moody's
expectation that Catalent's liquidity will remain very good over
the next 12 to 18 months. Catalent's liquidity will be supported by
free cash flow in excess of $150 million over the next year, a
strong cash balance ($189 million as of December 31, 2019) and
access to a substantially undrawn $550 million revolving credit
facility.
Social and governance considerations are material to Catalent's
credit profile. Like other providers of services for the
pharmaceutical industry, Catalent faces - albeit indirectly -
rising exposure to regulatory and legislative efforts aimed at
reducing healthcare costs and in particular drug prices and
reimbursement rates. These are fueled in part by demographic and
societal trends that are pressuring government budgets because of
rising healthcare spending. Turning to governance, Catalent has
pursued a financial policy and capital allocation policies that
balances both creditor and shareholder interests since its IPO in
2014. While it has increased debt to fund acquisitions, it has also
issued equity to repay debt, which is credit positive. For example,
Catalent also issued equity to repay debt in 2018 several months
after the Cook acquisition, and more recently funded the
acquisition of MaSTherCell through equity.
The stable outlook reflects Moody's expectation that leverage will
improve over the next 12 to 18 months following the Paragon
acquisition, however Catalent is likely to remain acquisitive.
Moody's also expects strong demand for Catalent's biologics
services will be partially offset by near-term headwinds in its
softgels business.
The ratings could be upgraded if Catalent reduces financial
leverage such that its debt to EBITDA approaches 4.0 times.
Successful integration of acquisitions and organic growth that
results in increased scale and improved business line diversity,
including reduced concentration in softgels, would also support an
upgrade.
The ratings could be downgraded if Moody's expects Catalent's
financial leverage to be sustained above 5.5 times. The ratings
could also be downgraded if Catalent's earnings deteriorate or if
the company adopts a more aggressive acquisition strategy.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Catalent Pharma Solutions, Inc. is a leading provider of
development solutions and advanced delivery technologies for drugs,
biologics and consumer health products. These include the company's
formulation, development and manufacturing of softgels and other
products for the prescription drug and consumer health industries.
The company reported revenue of approximately $2.7 billion for the
twelve months ended December 31, 2019.
CHHATRALA GRAND: Unsecureds Owed $6.6M to Get $25K in Plan
----------------------------------------------------------
Chhatrala Grand Rapids, LLC, and Bhogal Enterprises LLC filed a
First Amended Disclosure Statement explaining their Chapter 11 Plan
of Liquidation.
It is proposed that all assets of the Debtors other than excluded
assets such as avoidance actions will be sold to Access Point or a
designee pursuant to a credit bidcin the amount of $11,000,000
which will preserve the going concern value of the hotel and
preserve jobs for the hotel workers. Access will also pay $25,000
to be distributed to general unsecured creditors, $153,000 which
will be set forth in the APA for a professional fee escrow, and
$50,000 which will be set forth in the APA to Bhavneet Bhogal for
her work in preserving the going concern value for the hotel while
her husband, Surinder Bhogal, has had significant medical issues.
The Debtors believe that there are general unsecured claims in the
amount of
approximately $6,600,000 which includes deficiency claims. Shiva
Management has an undersecured claim for approximately $2,100,000
(all of which is unsecured), based upon seller financing where it
took back a note to allow the sale of the equity to occur to
Debtors' principal.
A full-text copy of the Disclosure Statement dated Feb. 12, 2020,
is available at https://tinyurl.com/qpvtdoq from PacerMonitor.com
at no charge.
Attorney for Debtors:
Mark H. Shapiro
STEINBERG SHAPIRO & CLARK
25925 Telegraph Road, Suite 203
Southfield, MI 48033
Tel: 248-352-4700
E-mail: shapiro@steinbergshapiro.com
Co-counsel for Debtors:
Robert N. Bassel
P.O. Box T
Clinton, MI 49236
Tel: (248) 677-1234
E-mail: bbassel@gmail.com
About Chhatrala Grand Rapids and
Bhogal Enterprises
Chhatrala Grand Rapids, LLC, and its affiliate Bhogal Enterprises,
LLC, operate hotels and motels.
Chhatrala Grand and Bhogal Enterprises sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Lead Case No.
19-03908) on Sept. 16, 2019.
At the time of the filing, Chhatrala Grand had estimated assets of
less than $50,000 and liabilities of between $10 million and $50
million while Bhogal Enterprises had estimated assets of less than
$50,000 and liabilities of between $100,000 and $500,000.
The case is assigned to Judge John T. Gregg.
The Debtor is represented by Mark H. Shapiro, Esq., at Steinberg
Shapiro & Clark.
CLICKAWAY CORP: March 19 Disclosure Statement Hearing Set
---------------------------------------------------------
On March 19, 2020 at 10:00 a.m. at the U.S. Bankruptcy Court
located 280 South First Street, San Jose, California , in Courtroom
11, before Bankruptcy Judge M. Elaine Hammond, a hearing will be
held to consider whether to approved the Debtor's Disclosure
Statement for Debtor's Plan of Reorganization.
Any party who objects to the approval of the proposed Disclosure
Statement must file and serve objection no later than March 12,
2020.
The Debtor is proposing a Reorganization Plan that provides:
* Class 1 Holders of allowed claims for unpaid wages and PTO
entitled to priority under Section 507(a)(4) of the Bankruptcy
Code. IMPAIRED. The Debtor will pay 100% of allowed amounts of
claims in cash without interest 60 days after confirmation.
* Class 2A Thomas Hexner. IMPAIRED. Mr. Hexner will retain his
lien against all Debtor's assets and receive a single payment five
years after the Effective Date equal to his allowed claim of
$75,000 along with accrued interest. Mr. Hexner will have the
option to accept, in lieu of payment on his secured and unsecured
claims, a 20% share of the equity in the Reorganized Debtor.
* Class 2C Rick Sutherland. IMPAIRED. Mr. Sutherland shall
retain his lien against his collateral but receive no distribution
under the Plan until all other allowed claims have been paid in
full.
* Class 3A Non-Insider General Unsecured Claims. IMPAIRED. The
Debtor will pay 100% of allowed amounts of claims with statutory
interest in cash 60 days after confirmation.
* Class 3B Insider General Unsecured Claims. IMPAIRED. Holders
of allowed claims in this class will receive payment of 100% of
their allowed claims without interest on the Effective Date except
as they may otherwise agree.
* Class 3C Thomas Hexner. IMPAIRED. Mr. Hexner will receive a
single payment five years after the Effective Date equal to his
allowed claim of $757,200 along with accrued interest. Mr. Hexner
will have the option to accept, in lieu of payment on his secured
and unsecured claims, a 20% share of the equity in the Reorganized
Debtor.
The cash in the DIP account of $4,178.009 is available for
distribution on the Effective Date.
A full-text copy of the Disclosure Statement dated February 12,
2020, is available at https://tinyurl.com/sdqza5a from
PacerMonitor.com at no charge.
About Clickaway Corporation
Clickaway Corporation, a computer repair, service, sales and
networking company, has been headquartered in Campbell and serving
more than 50,000 customers in Bay Area since 2002.
Clickaway filed a voluntary Chapter 11 petition (Bankr. N.D. Cal.
Case No. 18-51662) on July 27, 2018, estimating $1 million to $10
million in
assets and liabilities. The Debtor tapped The Law Offices of
Binder and Malter as its bankruptcy counsel; Willoughby Stuart
Bening & Cook as special counsel; and Crawford Pimentel Corporation
as accountant.
COASTAL INTERNATIONAL: March 5 Disclosure Hearing Set
-----------------------------------------------------
Debtor Coastal International, Inc., filed with the U.S. Bankruptcy
Court for the Northern District of California, San Francisco
Division, the First Amended Disclosure Statement and the First
Amended Plan on January 30, 2020. The Court ordered that:
* March 5, 2020, at 10:00 a.m. in Courtroom 19 of the United
State Bankruptcy Court located at 450 Golden Gate Avenue, San
Francisco, California 94102, is the hearing to consider approval of
Debtor’s First Amended Disclosure Statement Describing First
Amended Chapter 11 Plan of Reorganization filed by the Debtor.
* Feb. 27, 2020, is the last day for filing and serving written
objections to the disclosure statement.
* Any objections not filed and served may be deemed waived.
A copy of the order dated Jan. 30, 2020, is available at
https://tinyurl.com/upfrdww from PacerMonitor at no charge.
Attorneys for Debtor:
Jeffrey I. Golden
Reem J. Bello
WEILAND GOLDEN GOODRICH LLP
650 Town Center Drive, Suite 600
Costa Mesa, California 92626
Telephone 714-966-1000
Facsimile 714-966-1002
E-mail: jgolden@wgllp.com
rbello@wgllp.com
About Coastal International
Coastal International, Inc., is a Nevada corporation formed in
1984, which provides trade show installation and dismantling
services in the exhibit and event industry. Its operations extend
into major cities across the United States, and the Company
maintains a staff of trained, full-time employees to handle most
any installation and dismantling project from start to finish.
Coastal generated approximately $24 million in revenues during
2018.
Coastal International sought creditor protection under Chapter 11
of the Bankruptcy Code (Bankr. C.D. Cal. Case No.19-13584) on Sept.
15, 2019. At the time of the filing, the Debtor was estimated to
have assets of between $1 million and $10 million and liabilities
of between $10 million and $50 million. The case has been assigned
to Judge Theodor Albert. The Debtor tapped Weiland Golden Goodrich
LLP as counsel; and Finestone Hayes LLP, as co-counsel.
COMMUNITY HEALTH: Reports $373 Million Net Loss for Q4 2019
-----------------------------------------------------------
Community Health Systems, Inc., reported net operating revenues for
the three months ended Dec. 31, 2019, of $3.286 billion, a 4.8
percent decrease, compared with $3.453 billion for the same period
in 2018.
Net loss attributable to Community Health Systems, Inc. common
stockholders was $(373) million, or $(3.27) per share (diluted),
for the three months ended Dec. 31, 2019, compared with $(328)
million, or $(2.91) per share (diluted), for the same period in
2018. Excluding certain adjusting items, net income attributable
to Community Health Systems, Inc. common stockholders was $0.40 per
share (diluted), for the three months ended Dec. 31, 2019, compared
to net loss of $(0.42) per share (diluted) for the same period in
2018. Weighted-average shares outstanding (diluted) were 114
million for the three months ended Dec. 31, 2019, and 113 million
for the three months ended Dec. 31, 2018.
Adjusted EBITDA for the three months ended Dec. 31, 2019, was $447
million compared with $419 million for the same period in 2018,
representing a 6.7 percent increase.
The consolidated operating results for the three months ended Dec.
31, 2019, reflect a 9.9 percent decrease in admissions and an 8.6
percent decrease in adjusted admissions, compared with the same
period in 2018. On a same-store basis, admissions increased 0.1
percent and adjusted admissions increased 1.8 percent for the three
months ended Dec. 31, 2019, compared with the same period in 2018.
On a same-store basis, net operating revenues increased 3.7 percent
for the three months ended Dec. 31, 2019, compared with the same
period in 2018.
Net operating revenues for the year ended Dec. 31, 2019, totaled
$13.210 billion, a 6.7 percent decrease, compared with $14.155
billion for the same period in 2018.
Net loss attributable to Community Health Systems, Inc. common
stockholders was $(675) million, or $(5.93) per share (diluted),
for the year ended Dec. 31, 2019, compared with $(788) million, or
$(6.99) per share (diluted), for the same period in 2018.
Excluding the adjusting items, net loss attributable to Community
Health Systems, Inc. common stockholders was $(0.89) per share
(diluted), for the year ended Dec. 31, 2019, compared with $(1.94)
per share (diluted) for the same period in 2018. Weighted-average
shares outstanding (diluted) were 114 million for the year ended
Dec. 31, 2019, and 113 million for the year ended Dec. 31, 2018.
Adjusted EBITDA for the year ended Dec. 31, 2019, was $1.628
billion compared with $1.642 billion for the same period in 2018,
representing a 0.9 percent decrease.
The consolidated operating results for the year ended Dec. 31,
2019, reflect an 11.1 percent decrease in admissions and a 10.6
percent decrease in adjusted admissions, compared with the same
period in 2018. On a same-store basis, admissions increased 1.3
percent and adjusted admissions increased 2.2 percent for the year
ended Dec. 31, 2019, compared with the same period in 2018. On a
same-store basis, net operating revenues increased 4.2 percent for
the year ended Dec. 31, 2019, compared with the same period in
2018.
Commenting on the results, Wayne T. Smith, chairman and chief
executive officer of Community Health Systems, Inc., said, "We
concluded 2019 with a strong finish to the year. Our successful
divestiture program, along with strategic growth initiatives in our
core portfolio of markets, has driven better results, including
improved same-store volume and net revenue growth in 2019. As we
enter 2020, we expect to deliver incremental growth, driven by a
combination of continued same-store net revenue performance and
execution across our strategic margin improvement programs."
The Company completed 12 hospital divestitures during the year
ended Dec. 31, 2019 (including two divestitures that closed on Jan.
1, 2019, in respect of which the Company received proceeds at a
preliminary closing on Dec. 31, 2018). On Jan. 1, 2020, the
Company completed the divestiture of three additional hospitals (in
respect of which the Company received proceeds at a preliminary
closing on Dec. 31, 2019). On Jan. 30, 2020, the Company entered
into definitive agreements to sell two additional hospitals, which
divestitures have not yet been completed. The Company intends to
continue its portfolio rationalization strategy through at least
mid-2020 and is pursuing additional interests for sale
transactions, which are currently in various stages of negotiation
with potential buyers. There can be no assurance that these
potential divestitures (or the potential divestitures subject to
definitive agreements) will be completed, or if they are completed,
the ultimate timing of the completion of these divestitures. The
Company continues to receive interest from potential acquirers for
certain of its hospitals.
A full-text copy of the press release is available for free at:
https://is.gd/dUus0x
About Community Health
Community Health -- http://www.chs.net/-- is a publicly traded
hospital company and an operator of general acute care hospitals in
communities across the country. The Company, through its
subsidiaries, owns, leases or operates 99 affiliated hospitals in
17 states with an aggregate of approximately 16,000 licensed beds.
The Company's headquarters are located in Franklin, Tennessee, a
suburb south of Nashville. Shares in Community Health Systems,
Inc. are traded on the New York Stock Exchange under the symbol
"CYH."
Community Health reported a net loss attributable to the Company's
stockholders of $788 million for the year ended Dec. 31, 2018,
compared to a net loss attributable to the Company's stockholders
of $2.45 billion for the year ended Dec. 31, 2017. As of Sept. 30,
2019, the Company had $15.89 billion in total assets, $17.16
billion in total liabilities, $498 million in redeemable
noncontrolling interests in equity of consolidated subsidiaries,
and a total stockholders' deficit of $1.76 billion.
* * *
In July 2018, S&P Global Ratings raised its corporate credit rating
on Franklin, Tenn.-based hospital operator Community Health Systems
Inc. to 'CCC+' from 'SD' (selective default). The outlook is
negative. "The upgrade of Community to 'CCC+' reflects the
company's longer-dated debt maturity schedule, and our view that
its efforts to rationalize its hospital portfolio as well as
improve financial performance and cash flow should strengthen
credit measures over the next 12 to 18 months."
In November, 2019, Fitch Ratings downgraded Community Health
Systems, Inc.'s Issuer Default Rating to 'C' from 'CCC' following
the company's announcement of an offer to exchange a series of
senior unsecured notes due 2022.
DECO ENTERPRISES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Deco Enterprises, Inc.
DBA Deco Lighting
2917 South Vail Avenue
Commerce, CA 90040
Business Description: Deco Enterprises, Inc. manufactures lighting
fixtures and systems. The Company offers
architectural, fluorescent, induction,
indoor, outdoor, emergency lighting, as well
as sensors and controls, exit signs, poles,
and accessories.
Chapter 11 Petition Date: February 20, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-11846
Judge: Hon. Sheri Bluebond
Debtor's Counsel: Raymond H. Aver, Esq.
LAW OFFICES OF RAYMOND H. AVER,
A PROFESSIONAL CORPORATION
10801 National Boulevard, Suite 100
Los Angeles, CA 90064
Tel: (310) 571-3511
E-mail: ray@averlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Babak Sinai, president/chief executive
officer.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/jUZIFL
DELOREAN SERVICE: Unsecureds Recover 10% in Plan
------------------------------------------------
DeLorean Service Northwest, LLC, filed a 1st Amended Disclosure
Statement explaining its proposed Plan of Reorganization.
The 1st Amended Disclosure Statement does not provide for
significant changes to the prior iteration of the Disclosure
Statement.
There are no secured prepetition claims.
Holders of Class 1 General Unsecured Claims, including creditors
who are also insiders of the Debtor, will recover 10 percent of
their claims. Unsecured creditors will receive their pro rata
monthly distributions beginning March 15, 2020, or 15th day of the
first full month following the effective date of the Plan,
whichever occurs latest. No interest will attach to these claims.
Those creditors whose total payout under this Plan of less than
$500 shall receive a one-time full payment of the dividend within
90 days of the effective date of the Plan. The estimated total to
be distributed will be $18,243.
Equity holders in Class 2 (Peter "Toby" and Maura Peterson) are not
impaired. The
The membership of this limited liability will not be affected by
this Plan.
The funding for the Plan is coming from the ongoing revenue
generated by the Debtor through the restoration, service,
consignment, support, and maintenance of DeLorean Motor Cars and
other classic exotic cars.
A full-text copy of the Disclosure Statement dated February 12,
2020, is available at https://tinyurl.com/vlqzb8r from
PacerMonitor.com at no charge.
About DeLorean Service Northwest
Based in Redmond, Washington, DeLorean Service Northwest, LLC, is a
small business specializing in the restoration, service, support,
and maintenance of DeLorean Motor Cars and other classic exotic
cars. In recent years, the company has also facilitated the sale
of DeLoreans to members of the community. The company was founded
by Peter "Toby" and Maura Peterson in 2007.
DeLorean Service Northwest sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Wash. Case No. 19-11211) on April
2, 2019. At the time of the filing, the Debtor was estimated to
have assets of less than $100,000 and liabilities of less than
$500,000. The case has been assigned to Judge Christopher M.
Alston. Vortman & Feinstein is serving as the Debtor's legal
counsel.
DEMO REALTY: Gets Interim OK to Use Cash Collateral
---------------------------------------------------
Pursuant to a proceeding memorandum, the Bankruptcy Court
authorized Demo Realty Co., to continue using cash collateral on an
interim basis through March 4, 2020, on which date (at 12:30 p.m.)
the Court will consider the Debtor's further use of the cash
collateral. A copy of the proceeding memorandum is available at
https://is.gd/rmg3cs from PacerMonitor.com.
Previously, the Court granted the Debtor interim cash collateral
access through Feb. 14, 2020.
Demo Realty has sought approval from the Court to use cash
collateral in which Rockland Lease Funding Corp., has an interest
on account of a prepetition loan Rockland extended to the Debtor
and affiliate company, Patriots Environmental Corp.
A copy of the motion is available for free at https://is.gd/nrS6Cb
from PacerMonitor.com.
About Demo Realty Co.
Demo Realty Co., Inc., is an affiliate of Patriots Environmental
Corp., a company engaged in site development and remediation,
asbestos abatement, and general demolition.
The company filed a Chapter 11 petition (Bankr. D. Mass. Case No.
20-40159) on Jan. 31, 2020. In the petition signed by Ronald H.
Bussiere, president, the Debtor was estimated to have up to $50,000
in assets, and between $1 million and $10 million in liabilities.
Law Office of Vladimir Von Timroth represents the Debtor.
DOUBLE L FARMS: Zions Bank Says Disclosures Has Deficiencies
------------------------------------------------------------
Zions Bancorporation, N.A. d/b/a Zions First National Bank, filed a
limited objection to Double L Farms, Inc.'s First Amended
Disclosure Statement.
Zions Bank believes that some, but not all, of the deficiencies of
the Disclosure Statement, as currently drafted, include the
following: (i) the Disclosure Statement lacks sufficient detail
regarding key aspects of the Debtor's liquidation plans
(collectively, the "Liquidating Plan"); (ii) the Disclosure
Statement appears to contain incorrect or conflicting information
both within the Disclosure Statement itself and as it relates to
the Liquidating Plan; (iii) the Disclosure Statement lacks
sufficient detail regarding the Debtor's assets and the specific
claims and/or interests asserted against or otherwise encumbering
those assets; and (iv) the Disclosure Statement is missing critical
information referenced in the Disclosure Statement including, but
not limited to, Schedule G and Schedule H.
Attorneys for Zions Bancorporation:
Richard H. Madsen, II, Esq.
David H. Leigh, Esq.
RAY QUINNEY & NEBEKER P.C.
36 South State Street, 14th Floor
P.O. Box 45385
Salt Lake City, Utah 84145-0385
Telephone: (801) 532-1500
Facsimile: (801) 532-7543
E-mail: rmadsen@rqn.comdleigh@rqn.com
About Double L Farms
Double L Farms, Inc.'s farm operation consists of 3,200 acres in
Eastern Idaho. It owns approximately 1,777 acres and leases the
difference. The farm ground is located primarily in Roberts and
Rigby, Idaho. Double L operates a dairy, raises beef cattle, and
grows potatoes, barley, wheat, corn and hay.
Double L Farms sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Idaho Case No. 18-40910) on Oct. 9, 2018. In the
petition signed by Jared Keith Lewis, president, the Debtor was
estimated to have assets of $1 million to $10 million and
liabilities of $10 million to $50 million. Judge Joseph M. Meier
is the presiding judge. The Debtor tapped Maynes Taggart PLLC as
its legal counsel.
DOUCE FRANCE: Gets Interim Approval to Use Cash Collateral
----------------------------------------------------------
Douce France asks the Bankruptcy Court to authorize use of cash
collateral to continue operating its business. The Debtor seeks to
spend $216,000 in cost of goods sold and $157,148 in expenses, or a
total proposed spending of $373,148.
The Debtor owes Heritage Bank of Commerce approximately $388,264,
which amount is secured by the Debtor's monies and receivables
having a value of approximately $129,699.75. Heritage Bank has
filed a financing statement on its interest against the Debtor's
assets. Other creditors which have filed a financing statement
with respect to their claims against the Debtor are Susquehanna
Salt Lake, LLC (owed approximately $23,543) and Channel Partners
Capital, LLC (owed about $83,000).
The Debtor proposes that Heritage be granted a replacement lien to
the extent its prepetition lien attached to the Debtor's
prepetition property with the same validity, priority, and
description of collateral. The Debtor intends to file a plan of
reorganization.
A copy of the motion is available for free at https://is.gd/r6oW02
from PacerMonitor.com.
Judge Hannah L. Blumenstiel approved the motion on an interim
basis. A copy of the interim order is available free of charge at
https://is.gd/CFjLAy from PacerMonitor.com.
About Douce France
Douce France creates bakery products using a traditional French
European baking style, and sells its products wholesale to stores,
hotels and markets. The company filed a Chapter 11 petition
(Bankr. N.D. Cal. Case No. 20-30095) on Jan. 29, 2020. The Fox Law
Corporation, Inc., represents the Debtor.
ELECTRONIC SERVICE: Gets OK to Use Cash Thru Plan Effective Date
----------------------------------------------------------------
Electronic Service Products Corporation asks the Bankruptcy Court
to authorize use of cash collateral in the ordinary course of
business until the effective date of the plan on March 1, 2020.
The Debtor disclosed that PNL Asset Management LP and CTCIC
(representing the United States SBA) may have liens against the
cash collateral. A copy of the motion is available for free at
https://is.gd/OY1pmC from PacerMonitor.com.
Judge Ann M. Nevins approved the Debtor's request.
Accordingly, the secured creditor is granted, nunc pro tunc to the
Petition Date, a continuing post-petition lien and security
interest in all pre-petition property of the Debtor as it existed
on the Petition Date, as well as a continuing post-petition lien in
all property acquired by the Debtor after the Petition Date.
The Debtor's authority to use cash collateral will remain in effect
until March 1, 2020, or until otherwise ordered by the Court,
whichever comes sooner. A copy of the order is available for free
at https://is.gd/itsgBO from PacerMonitor.com.
About Electronic Service Products
Founded in 1992, Electronic Service Products Corporation is engaged
in the wholesale distribution of electronic parts and electronic
communications equipment.
Electronic Service Products filed a Chapter 11 petition (Bankr. D.
Conn. Case No. 17-30704) on May 12, 2017. In the petition signed
by William Hrubiec, its president, the Debtor was estimated to have
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. The case is assigned to Judge Ann M. Nevins. The
Debtor tapped William E. Carter, Esq., at the Law Office of William
E. Carter, LLC, as counsel.
FAMILY RESTAURANTS: Seeks to Hire Spence Custer as Legal Counsel
----------------------------------------------------------------
Family Restaurants of Cambria, Inc. seeks authority from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to hire
Spence, Custer, Saylor, Wolfe & Rose, LLC as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; assist in the preparation of a bankruptcy plan;
and provide other legal services related to its Chapter 11 case.
Spence will charge an hourly fee of $300 for its services.
Kevin Petak, Esq., at Spence, disclosed in a court filing that the
firm and its attorneys do not hold any interest adverse to the
Debtor's estate.
The firm can be reached through:
Kevin J. Petak, Esq.
1067 Menoher Boulevard
Johnstown, PA 15905
Tel: 814.536.0735
Fax: 814.539.1245
Email: kpetak@spencecuster.com
About Family Restaurants of Cambria
Family Restaurants of Cambria, Inc. filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa.
Case No. 20-70047) on Jan. 31, 2020, listing under $1 million in
both assets and liabilities. Kevin J. Petak, Esq., at Spence,
Custer, Saylor, Wolfe & Rose, LLC, is the Debtor's legal counsel.
FF FUND I: Seeks to Hire Genovese Joblove as Legal Counsel
----------------------------------------------------------
FF Fund I L.P. seeks authority from the U.S. Bankruptcy Court for
the Southern District of Florida to hire Genovese Joblove &
Battista, P.A. as its legal counsel.
Genovese will provide these services in connection with the
Debtor's Chapter 11 case:
(a) advise the Debtor of its powers and duties in the
continued management and operation of its business and properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest, and advise the Debtor on
the conduct of the case, including all of the legal and
administrative requirements of operating in Chapter 11;
(c) advise the Debtor on matters related to its subsidiaries
and their assets and liabilities, including potentially filing and
prosecuting separate or consolidated Chapter 11 cases for them;
(d) advise the Debtor on any contemplated sales of assets or
business combinations;
(e) advise the Debtor on post-petition financing, cash
collateral arrangements, pre-bankruptcy financing arrangements, and
exit financing and capital structure;
(f) advise the Debtor on matters related to the assumption,
rejection or assignment of unexpired leases and executory
contracts;
(g) provide advice on legal issues related to the Debtor's
ordinary course of business;
(h) take all necessary actions to protect and preserve the
Debtor's estate, including the prosecution of actions on its
behalf, the defense of any actions commenced against the estate,
negotiations concerning all litigation in which the Debtor may be
involved and objections to claims filed against the estate;
(i) prepare legal papers;
(j) negotiate and prepare a plan of reorganization, disclosure
statement and all related agreements or documents;
(k) attend meetings with third parties and participate in
negotiations; and
(l) appear before the court, any appellate courts and the U.S.
trustee.
Paul Battista, Esq., and Heather Hamon, Esq., the attorneys who
will be handling the case, will charge $745 per hour and $525 per
hour, respectively.
Mr. Battista attests that he and his firm are "disinterested
persons" as that term is defined in Section 101 (14) of the
Bankruptcy Code.
The firm can be reached through:
Paul J. Battista, Esq.
Genovese Joblove & Battista, P.A.
100 SE 2 St #4400
Miami, FL 33131
Tel: (305) 349-2300
Fax: (305) 349-2310
Email: pbattista@gjb-law.com
About FF Fund I L.P.
FF Fund I L.P., an investment company based in Miami, Fla., filed a
voluntary petition for relief under Chapter 11 of Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the
petition signed by Soneet R. Kapila, chief restructuring officer,
the Debtor estimated $50 million to $100 million in assets and $1
million to $10 million in liabilities. Judge Laurel M. Isicoff
oversees the case. Paul J. Battista, Esq., at Genovese Joblove &
Battista, P.A., represents the Debtor as legal counsel.
FIREBALL REALTY: Agree with Primary Bank to Amend Third Cash Motion
-------------------------------------------------------------------
Fireball Realty, LLC, in agreement with Primary Bank, sought and
obtained approval from the Bankruptcy Court to amend the January
31, 2020 order granting the Debtor's third motion for continued use
of cash collateral and granting adequate protection to Primary
Bank.
The Debtor and Primary Bank realized, upon closer reading, that the
language in the order entered by the Court did not allow the Debtor
to continue its mortgage payments to Primary Bank upon the sale of
the property at Woodland Drive. A copy of the motion is
available for free at https://is.gd/b8XVXE from PacerMonitor.com.
As a result, the Debtor and Primary Bank have agreed to and are
seeking to amend the proposed order and add language that allows
the Debtor to continue to make monthly payments to Primary Bank in
the amount of $862.86 as adequate protection payments to Primary
Bank once the Woodland Drive property is sold. A copy of the
order is available at https://is.gd/YIAiBf from PacerMonitor.com
free of charge.
A copy of the amended order is available for free at
https://is.gd/pjpxw6 from PacerMonitor.com.
About Fireball Realty
Fireball Realty LLC, a real estate agency in Manchester, N.H.,
sought Chapter 11 protection (Bankr. D.N.H. Case No. 19-10922) on
June 28, 2019. In the petition signed by Charles R. Sargent Jr.,
member, the Debtor was estimated to have assets and liabilities in
the range of $1 million to $10 million. Judge Michael A. Fagone
oversees the case. The Debtor tapped William S. Gannon, Esq., at
William S. Gannon PLLC, as counsel.
FIREBALL REALTY: Has Access to Primary Bank Cash Thru April 30
--------------------------------------------------------------
Judge Michael A. Fagone authorized Fireball Realty, LLC to use the
proceeds of cash collateral through April 30, 2020 to pay costs and
expenses incurred by the Debtor in the ordinary course of business,
and to provide adequate protection to Primary Bank.
The Court authorized the Debtor to continue to collect $4,000 of
Primary Bank cash collateral generated from the rents currently
being received from the South Willow Street property pending
further Court orders, and to use said cash collateral and any
additional cash collateral derived from the Primary Bank
properties.
Primary Bank may collect and distribute the above-mentioned cash
collateral during the use period as follows:
* $1,929.71 to Primary Bank as an adequate protection payment
for South Willow Street,
* $862.86 to Primary Bank as adequate protection payment for
Woodland Drive, and
* $1,027.43 to be paid towards real estate taxes due on the
Primary properties as they become due.
A copy of the interim order is available free of charge at
https://is.gd/pZJOUm from PacerMonitor.com.
Further hearing on the motion is scheduled on April 7, 2020 at 10
a.m. Objections must be filed by April 2, 2020.
About Fireball Realty
Fireball Realty LLC, a real estate agency in Manchester, N.H.,
sought Chapter 11 protection (Bankr. D.N.H. Case No. 19-10922) on
June 28, 2019. In the petition signed by Charles R. Sargent Jr.,
member, the Debtor was estimated to have assets and liabilities in
the range of $1 million to $10 million. Judge Michael A. Fagone
oversees the case. The Debtor tapped William S. Gannon, Esq., at
William S. Gannon PLLC, as counsel.
FIREBALL REALTY: May Use Provident Bank Cash Thru April 30
----------------------------------------------------------
Judge Michael A. Fagone authorized Fireball Realty, LLC to use cash
collateral, through April 30, 2020, arising from rental revenues
from properties Fireball Realty, LLC mortgaged to Provident Bank.
The Court directed the Debtor to immediately deposit into a
separate DIP bank account all of the rent received from the
Provident properties.
Provident will not contest entry of an order granting the Debtor
permission to enter into a working capital loan with Charles
Sargent, Sr., in an amount of not more than $10,000 so long as the
interest rate on said loan does not exceed the New Hampshire
judgment interest rate, plus 1%, and provided that the said loan is
made on an unsecured basis with the benefit of an administrative
claim and does not impair Provident's secured claim.
A copy of the Provident interim cash collateral order is available
free of charge at https://is.gd/iXdZkY from PacerMonitor.com.
Further hearing on the motion is set for April 7, 2020 at 10 a.m.
Objections are due by April 2, 2020.
About Fireball Realty
Fireball Realty LLC, a real estate agency in Manchester, N.H.,
sought Chapter 11 protection (Bankr. D.N.H. Case No. 19-10922) on
June 28, 2019. In the petition signed by Charles R. Sargent Jr.,
member, the Debtor was estimated to have assets and liabilities in
the range of $1 million to $10 million. Judge Michael A. Fagone
oversees the case. The Debtor tapped William S. Gannon, Esq., at
William S. Gannon PLLC, as counsel.
FIREBALL REALTY: Seeks to Use Banks Cash Collateral Thru April 30
-----------------------------------------------------------------
Fireball Realty LLC asked the Bankruptcy Court to use no more than
$6,646.91of Primary Bank cash collateral or more than $8,970.64 of
the Provident Bank cash collateral during the period between Feb.
1, 2020 through and including April 30, 2020.
The cash collateral will be used solely and exclusively for the
purpose of paying the costs and expenses incurred by the Debtor in
the ordinary course of business pursuant to the budgets.
A copy of the Provident Bank cash collateral budget at
https://is.gd/os1wG9 and of the Primary Bank cash collateral budget
at https://is.gd/AoI5L0 may be accessed free of charge from
PacerMonitor.com.
As adequate protection, the Debtor proposed to pay (i) Primary Bank
$1,929.71 and $826.86 per month and (ii) Provident Bank $876.25 per
month, beginning August 1, 2019 and monthly thereafter during the
cash collateral period.
A copy of the motion is available for free at https://is.gd/Hov4Fc
from PacerMonitor.com.
About Fireball Realty
Fireball Realty LLC, a real estate agency in Manchester, N.H.,
sought Chapter 11 protection (Bankr. D.N.H. Case No. 19-10922) on
June 28, 2019. In the petition signed by Charles R. Sargent Jr.,
member, the Debtor was estimated to have assets and liabilities in
the range of $1 million to $10 million. Judge Michael A. Fagone
oversees the case. The Debtor tapped William S. Gannon, Esq., at
William S. Gannon PLLC, as counsel.
FLUX POWER: Reports $3.3-Mil. Net Loss for Quarter Ended Dec. 31
----------------------------------------------------------------
Flux Power Holdings, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $3,307,000 on $3,615,000 of net revenue
for the three months ended Dec. 31, 2019, compared to a net loss of
$2,924,000 on $2,711,000 of net revenue for the same period in
2018.
At Dec. 31, 2019, the Company had total assets of $11,331,000,
total liabilities of $20,691,000, and $9,360,000 in total
stockholders' deficit.
The Company has incurred an accumulated deficit of $46,197,000
through December 31, 2019 and a net loss of $3,307,000 and
$7,121,000 for the three and six month ended December 31, 2019,
respectively. To date, the Company's revenues and operating cash
flows have not been sufficient to sustain its operations and the
Company has relied on debt and equity financing to fund its
operations. The Company stated that these factors raise
substantial doubt about the Company's ability to continue as a
going concern for the twelve months following the filing date of
this Quarterly Report on Form 10-Q, February 11, 2020.
As of December 31, 2019, the Company had a cash balance of $136,000
and will need to raise additional capital in the near future. The
Company's ability to continue as a going concern is dependent upon
its ability to raise additional capital on a timely basis until
such time as revenues and related cash flows are sufficient to fund
its operations.
A copy of the Form 10-Q is available at:
https://is.gd/yfIRF8
Headquartered in Vista, Calif., Flux Power Holdings, Inc., designs,
develops and sells rechargeable advanced lithium-ion batteries for
industrial uses, including UL 2771 Listed lithium-ion LiFT Pack
forklift batteries. The Company offers a high power battery cell
management system (BMS).
FORESTAR GROUP: S&P Rates New $300MM Sr. Unsecured Notes 'B+'
-------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '2'
recovery rating to Forestar Group Inc.'s proposed $300 million
senior unsecured notes due 2028. The '2' recovery rating indicates
S&P's expectation for significant (70%-90%; rounded estimate: 70%)
recovery in the event of a payment default. The rating agency
anticipates that the company will use the proceeds from this
offering to repay its existing 3.75% convertible senior notes due
2020 at maturity on March 1, 2020, and for other general corporate
purposes, including to fund its land acquisition and development
activities.
FOX PROPERTY: Seeks Cash Collateral Access Thru Aug. 31
-------------------------------------------------------
Fox Property Holdings, LLC, asks the Bankruptcy Court to use cash
collateral through and including August 31, 2020 to pay the
expenses of maintaining and operating a certain commercial real
property (consisting of various buildings utilized as a school and
dormitory campus) located at 340, 392 and 398 West Fourth Street,
and 399 North D Street, in San Bernardino, California. The Debtor
also seeks permission to use cash collateral to pay all quarterly
fees owing to the Office of the United States Trustee and all
expenses owing to the Clerk of the Bankruptcy Court.
The Debtor purchased the property pre-petition from Dayco Funding
Corporation and Luxor Properties for $9,700,000, of which amount
Dayco and Luxor provided $7,700,000 of financing on a secured
basis. Dayco and Luxor, as lender, asserts liens against the
property, the fixtures and personal property located at or on the
property, as well as the Debtor's cash, which is derived primarily
from rent received by the Debtor from its tenants. As of December
31, 2019, the Debtor owes the lender $9,487,346.37 under the loan.
In addition, the Debtor owes the County of San Bernardino secured
property taxes on the property in the approximate sum of
$463,475.74 (inclusive of the property taxes), which must be paid
by April 10, 2020.
The Debtor proposes to grant Dayco Funding Corporation and Luxor
Properties and any other secured creditor with an interest in the
Debtor's cash a valid, enforceable, non-avoidable and fully
perfected replacement lien on, and security interest in, the
Debtor's cash and rent revenue generated by the property, to the
extent of any diminution in value of the creditors' interests in
the pre-petition collateral, and to the same extent, validity,
scope and priority of the creditor's pre-petition lien.
A copy of the motion is available for free at https://is.gd/rDeYT9
from PacerMonitor.com.
About Fox Property Holdings
Fox Property Holdings, LLC, owns a commercial real property in San
Bernardino, California. The property consists of various buildings
utilized as a school and dormitory campus and is located on
approximately 4.66 acres of land. The company's headquarter is
located at 12803 Schabarum Avenue, Irwindale, California. Dr. Ji
Li is the managing member and 100% equity holder of the company.
Fox Property Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-10524) on Jan. 17,
2018. In the petition signed by Ji Li, managing member, the Debtor
was estimated to have assets of $10 million to $50 million and
liabilities of $1 million to $10 million.
Judge Robert N. Kwan oversees the case.
The Debtor tapped Levene, Neale, Bender, Yoo & Brill LLP as its
legal counsel; and Park & Lim as special litigation counsel.
FREEPORT-MCMORAN INC: Fitch Affirms BB+ IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings affirmed Freeport-McMoRan Inc.'s and Freeport
Minerals Corporation's Issuer Default Ratings at 'BB+'. The Rating
Outlook is Stable. In addition, Fitch has assigned 'BB+'/'RR4'
ratings to the new $1 billion senior unsecured note issuance.
Proceeds of the new senior unsecured notes are to be used to repay
near term maturities pursuant to a tender offer made on Feb. 19,
2020.
The ratings reflect Freeport-McMoRan Inc.'s high-quality assets,
strong liquidity and improved capital structure. While FFO-adjusted
leverage was above 5.0x in 2019 as the Grasberg deposit transitions
to underground mining, substantial cash on hand will allow
development capital spending and debt repayment through the
transition. Fitch expects FFO-adjusted leverage in 2020 to be about
5x and below 3.0x thereafter including debt raised to fund the
construction of the smelter in Indonesia. Visibility into
successful completion of the transition to underground mining at
Grasberg would provide positive momentum to the rating.
KEY RATING DRIVERS
High Near-Term Leverage: A combination of low production in
Indonesia before the underground production at Grasberg (Indonesia)
ramps up, below trend copper prices, and future borrowing to fund
smelter construction has resulted its expectation that total
debt/EBITDA will remain above the ratings guidelines of 2.3x-3.0x
through 2020. Fitch expects total debt/EBITDA to be about 4.3x at
the end of 2020 and 2.0x at the end of 2021 compared with Fitch's
calculation of 4.7x based on 2019 preliminary figures and 1.8x in
2018.
Balance Sheet Repair Track record: The company had about $8.8
billion more debt leading up to the commodity price slump of
2015/2016 than at Dec. 31, 2019. The company de-leveraged and
improved liquidity through a combination of asset sales ($7.7
billion), equity sales ($3.4 billion) and through the March 2015
cut of its regular quarterly cash dividend from $0.3125/share to
$0.05/share and suspension of dividends altogether from December
2015 through February 2018. Freeport also suspended dividends
beginning in December 2008 through October 2009 and raised $740
million from the sale of equity in response to the commodity price
slump associated with the global financial crisis.
Transition Years at Grasberg: Mining at the Grasberg deposit is
transitioning to underground, which has reduced copper sales
volumes at the mine by about 50% in 2019. Copper sales volume is
expected to increase by about 15% in 2020 before increasing nearly
80% in 2021 and a further 25% in 2022. The company reports good
progress and has left its Indonesian copper sales guidance for
2020-2023 virtually unchanged from that provided on Jan. 24, 2019.
Fitch calculates operating EBITDA at about $2.1 billion in 2019 and
expects operating EBITDA to be about $2.4 billion in 2020 compared
with $6.4 billion in 2018 under its rating case. Fitch calculates
the preliminary 2019 FCF drain before contributions from PT
Indonesia Asahan Aluminium's (Persero) (Inalum) at $1.5 billion and
expects the 2020 FCF drain before contributions from Inalum to be
as much as $2 billion after the $500 million Indonesian smelter
capital spending. Fitch expects FCF before Indonesian smelter
capital spending to eclipse 2018 levels on average thereafter. The
company had available cash of $1.7 billion as of Dec. 31, 2019,
which should support current dividends and capex before smelter
spending in 2020. Fitch expects modest revolver utilization in 2020
under its rating case.
Smelter Debt/Capex: PT Freeport Indonesia (PT-FI) committed to
construct a new smelter in Indonesia by Dec. 21, 2023. The
preliminary capital cost for the project is estimated at $3 billion
and is expected to be financed with bank loans at the PT-FI level
and consolidated at FCX although Inalum's share of the capital/debt
service is roughly 51%. Spending for the smelter is expected to be
$0.5 billion in 2020 and the bulk of the remaining spending spread
between 2021 and 2022.
Exposure to Copper: Copper accounted for 79% of consolidated
revenues in 2019. Freeport estimates that a $0.10/pound change in
the price of copper would change operating cash flow by $305
million in 2020. Freeport's average realized price per pound of
copper was $2.73 in 2019 compared with $2.91 in 2018.
Copper prices started trading below $2.72/pound in the second
quarter of 2019 as a result of lower growth expectations in China
with the escalation of trade tensions between the U.S. and China
given that China accounts for about half of global copper
consumption. Prices began trading above $2.72/pound with the
announcement of the phase one trade deal peaking at about
$2.86/pound prior to awareness of the coronavirus (COVID-19) after
which, copper prices fell precipitously to below $2.54/pound.
Current spot prices are around $2.60/pound, which compares with
Fitch's assumptions of $2.68/pound in 2020, $2.81/pound in 2021 and
$2.86/pound in 2022. These assumptions are $0.27/pound lower than
Fitch's assumptions prior to the Nov. 6, 2019 update.
As of Jan. 30, 2020, CRU forecasts the LME 3-month copper price
will average $6,103/tonne ($2.77/pound) in 2020, which is almost
$800/tonne above cash costs net of by-products for the 90th
percentile mine. CRU expects the market will remain balanced over
the next five years, declining toward a deficit, which will cause
prices to increase to $6,475/tonne ($2.94/pound) in 2022, and
$7,150/tonne ($3.24/pound) in 2024.
Lone Star Project Advancing: The project utilizes infrastructure at
Safford mine (in Arizona) and is expected to cost $850 million
($655 million spent through Dec. 31, 2019). FCX began pre-stripping
in first-quarter 2018 with first copper expected during 2020. The
company reports that the project is on schedule, about 75% complete
and within budget. Annual production is expected to average 200
million pounds of copper per year and the mine life is estimated at
20 years. The Safford mine is expected to cease production in 2025
but there are sulfide ores that could be exploited if market
conditions allow.
Productivity Initiatives: The company initiated a pilot program at
the Bagdad mine (Arizona) in late 2018 to use data science, machine
learning, and integrated functional teams to address bottlenecks,
provide cost benefits, and drive improved overall performance.
Given the pilot's success, the program is being implemented across
the company's operations in North America and South America.
Freeport expects incremental production of about 100 million pounds
of copper in 2021 and about 200 million pounds in 2022. The company
estimates the capital cost for the initiatives to be about $200
million.
Competitive Cost Profile: The company's assets are large-scale,
long-lived mines with competitive costs in North America, average
costs in South America and low first-quartile costs in Indonesia,
except for 2019 and 2020 given that the company is transitioning to
underground mining at Grasberg. Freeport expects 2021 copper cash
costs net of by-product credits to be about $1.30/pound
representing a 25% reduction from copper cash costs net of
by-product credits of $1.74/pound in 2019 assuming a $1,400/ounce
gold price and $13/pound molybdenum price in 2021 compared with
2019 realizations of $1,415/ounce of gold and $12.61/pound of
molybdenum.
DERIVATION SUMMARY
Freeport's closest operational peer is Southern Copper Corporation
(SCC; BBB+/Stable), given the spread of its copper assets. Freeport
is less profitable than SCC and is expected to have higher leverage
in 2019 and 2020 as underground mining at Grasberg ramps up but
would generally have a financial profile consistent with SCC's.
Freeport's financial profile beginning in 2021 is expected to be
broadly in line with peers rated 'BBB-', including Teck Resources
Ltd., Kinross Gold Corporation and Yamana Gold Inc.
The bulk of debt is at the Freeport level or benefits from Freeport
guarantees, with the exception of the $830 million Cerro Verde loan
(not rated) and future smelter loan at PT Freeport Indonesia.
Freeport Minerals Corporation does not provide upstream guarantees,
its notes have no cross-default to FCX debt, and it is lightly
levered, with minimal debt (Cerro Verde consolidated at Freeport
Minerals).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- 2019 results as announced on Jan. 23, 2020;
- Copper production at 3.6 billion, 4.4 billion and 4.7 billion
pounds in 2020, 2021 and 2022, respectively;
- Unit site cost before by-product credits at $1.86/pound on
average in 2020-2022;
- Fitch's commodity price assumptions: gold at $1,350/ounce in
2020 and $1,200/ounce thereafter; LME spot copper at $5,900/tonne
in 2020, $6,500/tonne in 2020, $6,200/tonne in 2021 and
$6,300/tonne in 2022;
- Capex at guidance including color on cadence of Indonesia
smelter spending;
- No change in dividend policy.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action -Expectations of FFO-adjusted leverage below
2.8x on a sustained basis; -Total debt/EBITDA sustained below 2.3x;
-Visibility into successful completion of the transition to
underground mining at Grasberg; -The $3 billion loan to PT-FI to
finance the smelter is not guaranteed by Freeport. Developments
That May, Individually or Collectively, Lead to Negative Rating
Action -Failure to maintain approval to export concentrate on
reasonable terms from Indonesia; -FFO-adjusted leverage above 3.5x
on a sustained basis; -Total debt/EBITDA sustained above 3.0x;
-Expectations of negative FCF on average.
LIQUIDITY AND DEBT STRUCTURE
Robust Liquidity: Fitch expects roughly $2 billion of FCF burn in
2020 before contributions from Inalum. Available cash on hand was
$1.7 billion, and $3.5 billion was available under the revolving
credit facility ($13 million utilization for LOCs) at Dec. 31,
2019. Fitch expects the $3 billion smelter loan to be in place in
the first quarter of 2020.
Of the $3.5 billion revolver commitment, $3.26 billion matures in
April 2024 and the remaining $240 million matures in April 2023.
Financial covenants under the revolver include a maximum net
debt/EBITDA ratio of 5.25x for quarters ending Dec. 31, 2019
through and including June 30, 2021 and 3.75x thereafter. There is
also a minimum interest coverage ratio of 2.25x. Fitch does not
anticipate a breach at copper prices above $2.60/pound in 2020
under its rating case.
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.
FREEPORT-MCMORAN INC: Moody's Rates Unsec. Notes Due 2028/2030 Ba1
------------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Freeport-McMoRan
Inc's new guaranteed senior unsecured notes due in 2028 and 2030.
The notes will be issued under the company's well-known seasoned
issuer shelf registration, rated (P)Ba1 for senior unsecured debt
securities. All other FCX ratings remain unchanged, including the
SGL-1 speculative grade liquidity rating as do the ratings for
Freeport Minerals Corporation.
Net proceeds will be used to fund the purchase of the tender offers
for the 4% senior unsecured notes due 2021, the 3.55% senior
unsecured notes due 2022, the 3.875% senior unsecured notes due
2023 and the 4.55% senior unsecured notes due 2024. Tto the extent
all of the 4% notes due 2021 are not tendered and puchased in the
tender offers, FCX may use a portion of the remaining net proceeds
to redeem all or a portion of the remaining 4% notes due 2021 in
accordance with the provisions of the indenture governing the
notes.
"This transaction will contribute to refinancing near term
maturities and improve the debt maturity towers, particularly in
2022 and 2023" said Carol Cowan, Senior Vice President and lead
analyst for FCX.
Assignments:
Issuer: Freeport-McMoRan Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Ba1 (LGD4)
RATINGS RATIONALE
FCX's Ba1 Corporate Family Rating (CFR) incorporates the company's
leading position in the global copper market as a low-cost producer
with a diversified operating footprint in the US, South America and
Indonesia. The rating also acknowledges FCX's continued focus on
costs, and debt reduction undertaken since 2015. Actions taken by
the company in recent years have provided a better cushion to
tolerate a level of downward movement in copper prices, as seen in
2019 as well as the production volume and cost impact of
transitioning to underground mining at the Indonesian operations
given the depletion of the open pit mine.
Factored into the CFR is the reduced gold and copper production and
resulting higher costs at Grasberg in 2019 and 2020 as the Grasberg
Block Cave and Deep Mill Level Zone (DMLZ) underground mine
developments continue. Initial production at the Grasberg Block
Cave commenced during 2019 with continued production increases
expected in 2020 and beyond. Similarly, production at the DMLZ
continues to ramp with production increasing in each of 2020 and
2021, with full production expected in 2022. Particularly impactful
to FCX's performance in 2019, in addition to lower copper prices,
was the significant reduction in gold production at Grasberg to
863,000 ounces (2.4mm ounces in 2018) and resultant increase in
costs given the absence of significant by-product credits. Unit net
cash costs at the Indonesian mining operations were $1.28/lb. in
2019 as compared with a net credit of $0.58/lb. in2018. Copper
production is expected to modestly increase in 2020 while gold
production will be slightly down, with the strong jump in
production seen in 2021. Production in 2020 will also reflect the
start-up of the Lone Star Leach project in Arizona, which when
fully ramped will produce around 200 MM lbs. per year.
With lower EBITDA in 2019 (around $2 billion adjusted) attributable
to lower price realizations, lower production, particularly gold,
and higher costs, leverage increased to around 5.5x on an adjusted
basis. Although this is high for the rating, leverage is expected
to improve as production ramps up and costs decrease on the higher
output levels. Given the lower cash flow generation and higher
capital expenditures, free cash flow was negative in 2019, which is
also anticipated for 2020 but can be comfortably accommodated
within FCX's overall liquidity profile.
By the nature of its business, FCX faces a number of ESG risks
typical for a company in the mining industry including but not
limited to wastewater discharges, site remediation and mine
closure, waste rock and tailings management, air emissions, and
social responsibility given its often fairly remote operating
locations. The company is subject to many environmental laws and
regulations in the areas in which it operates all of which vary
significantly. The mining sector overall is viewed as a very
high-risk sector for soil/water pollution and land use restrictions
and a high risk sector for water shortages and natural and man-made
hazards. In 2018 approximately 81% of FCX's water usage
requirements were from recycled and reused sources. The company has
spent between $400 million and $500 million on environmental
capital expenditures and other environmental costs in each of the
last several years.
The SGL-1 speculative grade liquidity rating considers FCX's very
good liquidity including its $2 billion cash position at December
31, 2019 and borrowing availability of approximately $3.5 billion
($13 million in letters of credit issued) under its $3.5 billion
unsecured revolving credit facility (RCF - $3.26 billion matures
April 20, 2024 with the balance maturing April 20, 2023).
Financial covenants in the RCF include a total leverage ratio
(total debt - as defined/EBITDA) of no more than 5.25x (through
June 30, 2021 and reverting to 3.75x thereafter per November 2019
amendment) and an interest coverage ratio (EBITDA/cash interest
expense) of no less than 2.25x. The amendment to the RCF in
November 2019 also adjusted the amount of restricted cash that
could be applied to the leverage covenant calculation.
The stable outlook reflects expectations that FCX will continue to
progress its transition to underground mining at the Grasberg
complex in accordance with its plans described to date and
gradually achieve increasing production volumes over the 2020 and
2021 timeframe. The outlook also incorporates its view that
leverage will reduce to approximately 4x over the next twelve to
fifteen months.
An upgrade to the ratings is unlikely until such time as the
underground expansion at Grasberg is completed and the production
profile at this mining site returns to higher copper and gold
levels. Additionally, an upgrade would require better clarity on
the company's financial policy and strategic growth objectives. An
upgrade would be considered if the company can sustain
EBIT/interest of at least 5x, debt/EBITDA under 2.5x and
(CFO-dividends)/debt of at least 40% through various price points.
A downgrade would result should liquidity materially contract,
(CFO-dividends)/debt be sustained below 20% or leverage increase
and be sustained above 3.5x.
The Ba1 rating on the FCX unsecured notes, at the same level as the
CFR, reflects the absence of secured debt in the capital structure
and the parity of instruments.
FCX, a Phoenix, Arizona based mining company, is predominately
involved in copper mining and related by-product credits from the
mining operations (principally gold and molybdenum). The company's
global footprint includes copper mining operations in Indonesia,
the United States, Chile, and Peru. Revenues for the 12 months
ended December 31, 2019 were $14.4 billion.
The principal methodology used in this rating was Mining published
in September 2018.
GB SCIENCES: Posts $984K Net Income in Third Quarter
----------------------------------------------------
GB Sciences, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting net income
of $984,147 on $254,131 of sales revenue for the three months ended
Dec. 31, 2019, compared to a net loss of $4.05 million on $695,764
of sales revenue for the three months ended Dec. 31, 2018.
For the nine months ended Dec. 31, 2019, the Company reported a net
loss of $4.48 million on $2.34 million of sales revenue compared to
a net loss of $19.43 million on $2.73 million of sales revenue for
the same period during the prior year.
As of Dec. 31, 2019, the Company had $20.90 million in total
assets, $12.60 million in total liabilities, and $8.30 million in
total equity.
GB Sciences said, "The Company will need additional capital to
implement its strategies. There is no assurance that it will be
able to raise the amount of capital needed for future growth plans.
Even if financing is available, it may not be on terms that are
acceptable. If unable to raise the necessary capital at the times
required, the Company may have to materially change the business
plan, including delaying implementation of aspects of the business
plan or curtailing or abandoning the business plan. The Company
represents a speculative investment and investors may lose all of
their investment. In order to be able to achieve the strategic
goals, the Company needs to further expand its business and
financing activities. Based on the Company's cash position, it is
necessary to raise additional capital by the end of the next
quarter in order to continue to fund current operations. These
factors raise substantial doubt about the ability to continue as a
going concern. The Company is pursuing several alternatives to
address this situation, including the raising of additional funding
through equity or debt financings. In order to finance existing
operations and pay current liabilities over the next twelve months,
the Company will need to raise additional capital. No assurance
can be given that the Company will be able to operate profitably on
a consistent basis, or at all, in the future."
The principal sources of liquidity to date have been cash generated
from sales of debt and equity securities and loans.
At Dec. 31, 2019, cash was $37,300, other current assets excluding
cash were $3,088,766, and the Company's working capital deficit was
$(5,795,395). At the same time, current liabilities were
$8,921,461 and consisted principally of $1,998,994 in accounts
payable, $1,087,837 in accrued liabilities, $4,860,221 in notes
payable, net of $(1,008,086) in discounts, $506,145 in income tax
payable, and $134,239 in current finance lease obligations. At
March 31, 2019, the Company had a cash balance of $182,055, other
current assets excluding cash were $3,284,716 including $1,000,387
from discontinued operations, and the Compay's working capital
deficit was $(3,245,409), including $(1,133,890) from discontinued
operations. Current liabilities were $6,712,180, which consisted
principally of $1,374,771 in accounts payable, $387,043 in accrued
liabilities, $2,229,812 in notes payable, $506,145 in income taxes
payable, and $2,134,277 of current liabilities from discontinued
operations.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/D4eR1P
About GB Sciences
Las Vegas, Nevada-based GB Sciences, Inc., formerly Growblox
Sciences, Inc., is developing and utilizing state of the art
technologies in plant biology, cultivation and extraction
techniques, combined with biotechnology, and plans to produce
consistent and measurable medical-grade cannabis, cannabis
concentrates and cannabinoid therapies. The Company seeks to be an
innovative technology and solution company that converts the
cannabis plant into medicines, therapies and treatments for a
variety of ailments.
GB Sciences incurred net loss of $24.68 million for the 12 months
ended March 31, 2019, compared to a net loss of $23.15 million for
the 12 months ended March 31, 2018.
Soles, Heyn & Company, LLP, in West Palm Beach, Florida, the
Company's auditor since the year ended March 31, 2014, issued a
"going concern" qualification in its report dated July 15, 2019, on
the Company's consolidated financial statements for the year ended
March 31, 2019, citing that the Company had accumulated losses of
approximately $84.7 million, has generated limited revenue, and may
experience losses in the near term. These factors and the need for
additional financing in order for the Company to meet its business
plan, raise substantial doubt about its ability to continue as a
going concern.
HORNBECK OFFSHORE: S&P Affirms 'SD' Issuer Credit Rating
--------------------------------------------------------
S&P Global Ratings affirmed its 'SD' (selective default) issuer
credit rating on U.S.-based offshore vessel provider Hornbeck
Offshore Services Inc. after the company announced a debt exchange
proposal ahead of its April bond maturity.
At the same time, S&P lowered its issue-level rating on the
company's senior unsecured notes due 2021 to 'CC' from 'CCC' and
affirmed its 'D' issue-level rating on the 2020 notes. In
addition, S&P revised its recovery ratings on both issues to '3'
from '2' to indicate its expectation for meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of a payment default.
The affirmation follows Hornbeck's latest debt exchange offer,
which contemplates a swap of the company's existing senior
unsecured notes due 2020 and 2021 for new senior unsecured notes
due 2023 and 2025 that will be secured by equity in a new
unrestricted subsidiary. The company is also making a simultaneous
private cash tender offer to repurchase up to $67 million of both
existing tranches at up to 30 cents on the dollar. Per the exchange
offers, holders of the existing notes could swap into 10% senior
notes due 2023 and 5.5% payment-in-kind (PIK) senior notes due 2025
at 55.6% and 44.4% of par, respectively (the consideration
decreases after the Feb. 28, 2020, early tender deadline).
Accordingly, Hornbeck may issue up to $375 million of 2023 notes
and $299 million of 2025 notes. The offers expire on March 23,
2020.
HYGEA HOLDINGS: Enters Chapter 11 With $200MM Debt
--------------------------------------------------
Primary health care conglomerate Hygea Holdings Corp. and 32
affiliates sought Chapter 11 bankruptcy protection after reaching
terms with its primary lender on a debt-for-equity swap to
restructure roughly $200 million in debt or a possible sale of its
assets.
Hygea and a number of affiliates entered Chapter 11 bankruptcy with
a restructuring support agreement in place with its prepetition
secured lender Bridging Income Fund LP.
Keith Collins, M.D., the Debtors' CEO, explains that given the
Debtors' dire financial situation and the lack of any other viable
alternatives, contemporaneous with entry into forbearance
agreements, the Debtors and Bridging began discussing the framework
of a chapter 11 Plan. After months of negotiating, the Debtors and
Bridging entered into a Restructuring Support Agreement, dated as
of Feb. 7, 2020, pursuant to which, among other things, the Debtors
agreed to commence the Chapter 11 Cases and pursue a consensual
restructuring to be implemented through a chapter 11 plan, if
possible, or a sale under section 363 of the Bankruptcy Code.
Within 20 days, the Debtors will file the proposed Plan that
provides for, among other things,
(i) the transfer of the Debtors' equity to the Lender on
account of its prepetition secured claim,
(ii) the creation of a liquidating trust for the benefit of the
Debtors' unsecured creditors and
(iii) the payment of priority tax claims pursuant to section
1129(a)(9)(C) of the Bankruptcy Code including the outstanding
payroll tax liability.
Pursuant to the RSA, Bridging has agreed to provide the Debtors
with debtor-in-possession financing to support the administrative
and operational expenses of these Chapter 11 Cases. Pursuant to
the DIP Financing Motion, the Debtors request authority to enter
into a postpetition financing arrangement, in an aggregate
principal amount of $9.98 million.
The Debtors believe the restructuring contemplated by the RSA
provides a clear path to emergence from the Chapter 11 cases and
will allow the Debtors to succeed as restructured companies after
emergence.
$212 Million of Debt
As of the Petition Date, the Debtors have assets on a consolidated
basis of approximately $77.3 million and liabilities of roughly
$212.2 million, consisting of $76.3 million in current liabilities
and $135.9 million in long-term liabilities.
The Debtors' long-term liabilities relate to in excess of
approximately CA$160 million (US$121 million) under that certain
Amended and Restated Credit Agreement, dated as of January 31,
2017, by and among HHC, certain of the other Debtors, as obligors,
Bridging Income Fund LP (formerly known as Sprott Bridging Income
Fund LP) (the "Lender") and Bridging Finance Inc.
As of the Petition Date, the Debtors had unsecured debt in the form
of accounts payable, accrued liabilities and other liabilities.
The liabilities consist of, among other things, contingent,
unliquidated and disputed litigation claims in excess of $50
million and payroll tax liabilities in excess of $10 million,
including interest and penalties.
Events Leading to Chapter 11 Filings
Since 2017, the Debtors have confronted liquidity challenges and
operational issues that threaten their ability to continue as a
going concern. The Debtors' financial situation has been
deteriorating over time due to a variety of reasons.
Over the last several years, the Debtors pursued an aggressive
growth strategy, expanding their acquisition of Physician Practices
and other healthcare businesses. In some cases, the Debtors
purchased certain Physician Practices with minimal net profit. At
the time of acquisition, the Debtors projected increased
profitability for those practices as a result of performance
improvements. The Debtors, however, failed to properly integrate
the underperforming acquisitions.
Consequently, the Debtors have been burdened with supporting a
number of losing operations, that even with performance
improvements will never be profitable.
The operating losses of those practices, along with the associated
acquisition costs, have caused a substantial drain on the Debtors'
liquidity.
The Debtors' failed acquisition of certain MSOs similarly
contributed to the current liquidity constraints. The Debtors
purchased certain MSOs that, at the time of acquisition, had
sufficient infrastructure to generate profit. The Debtors,
however, were unable to maintain the investment required to support
those MSOs and the MSOs performance dropped significantly and below
acceptable levels for the HMOs. As a result, the HMOs terminated
their contracts with those MSOs. Those terminations resulted in
several large acquisitions becoming worthless while the Debtors
remained obligated for the costs associated with such
acquisitions.
The Debtors' acquisition of the Palm Network similarly proved to be
unsuccessful in terms of generating direct profits. Nonetheless,
the Palm Network still provides certain value to the Debtors in
terms of helping the Debtors maintain and develop new business
relationships with physicians and HMOs.
In addition to failed acquisitions, the Debtors' historical
financial reporting was inadequate, causing deficiencies in their
financial forecasting as well as cash management. Those
inadequacies caused the Debtors to overspend in the face of an
already unsustainable debt load.
Given these operational challenges, the Debtors were never
profitable on a cash basis and, therefore, were dependent on
constant debt and equity fundraising activities to cover losses.
The Debtors have been unable to raise additional capital to fund
those losses due to, in part, pending litigation stemming from
shareholder and contractual disputes. The Debtors do not have the
liquidity to defend or settle these lawsuits.
As a result of the foregoing issues, the Debtors have been unable
to service their debt obligations to the Lender and certain events
of default occurred under the Credit Agreement. Accordingly, in or
around January 2018, the Debtors hired 4Front Capital Partners
Inc., an investment banking firm, to assist the Debtors in
evaluating strategic alternatives and commencing a formal marketing
process for the sale and/or refinancing of Hygea. Although Hygea
and 4Front contacted almost 100 parties with respect to a potential
transaction, only 15 executed a non-disclosure agreement. These
parties were provided access to a dataroom containing confidential
information regarding the Debtors, their businesses and their
assets. Of these 15 parties who had access to the dataroom, only
one expressed further interest in participating in a transaction
and had further discussions with the Debtors and 4Front regarding
potential transactions. Ultimately, the last party declined to move
forward with a transaction.
Following the unsuccessful sale process and continued operating
losses of approximately $327,000 per week, in late October 2019 the
Debtors engaged Alvarez & Marsal North America, LLC to assist the
Debtors with, among other things, financial and operational support
and strategic advice relating to a corporate reorganization. On or
about Oct. 31, 2019, the Debtors and Bridging entered into a
Forbearance Agreement, as subsequently amended, pursuant to which,
among other things, Bridging agreed to forbear from exercising its
rights and remedies under the Credit Agreement and provided in
excess of $6 million of emergency funding to the Debtors, which
enabled the Debtors to satisfy critical expenses such as payroll.
Given the Debtors' dire financial situation and the lack of any
other viable alternatives, contemporaneous with entry into the
Forbearance Agreements, the Debtors and Bridging began discussing
the framework of a chapter 11 Plan. After months of negotiating,
the parties agreed upon the material terms of a Chapter 11 plan,
and embodied those terms in a restructuring term sheet.
Thereafter, the Debtors and Bridging engaged in significant
arms'-length negotiations that led to them entering into a
Restructuring Support Agreement dated Feb. 7, 2020.
Debt-for-Equity Plan or Sale
The Debtors seek entry of an order authorizing the Debtors to
assume the RSA pursuant to sections 105(a), 362 and 365(a) of the
Bankruptcy Code. Although the Debtors filed the RSA Motion on the
Petition Date, the Debtors are not seeking first day relief with
respect to the RSA Motion. Rather, the Debtors will seek to have
the RSA Motion heard at the "second-day" hearing in the Chapter 11
Cases.
Given the Debtors' dire financial situation and the lack of any
other viable alternatives, in or about October 2019 the Debtors and
Bridging began discussing the framework of a chapter 11 Plan. After
months of negotiating, the parties entered into the Restructuring
Term Agreement, which is incorporated in the RSA. The RSA and the
Restructuring Term Sheet are by-products of good faith,
arm's-length negotiations between the Debtors and Bridging.
As set forth in the Restructuring Term Sheet, the Plan contemplates
a reorganization of the Debtors pursuant to which, among other
things, (i) Bridging's existing secured debt would be reinstated in
an amount equal to the debt capacity of the Reorganized Debtors;
(ii) all of the Reorganized Debtors' equity would be transferred to
Bridging on account of its claim; (iii) a liquidating trust would
be created for the benefit of the Debtors' unsecured creditors; and
(iv) prepetition payroll tax claims entitled to payment under
section 1129(a)(9)(c) of the Bankruptcy Code would be satisfied in
full.
The RSA is necessary to preserve the value of the Debtors'
businesses. One of the most profitable aspects of the Debtors'
businesses are their MSOs. The viability of the Debtors' MSO
business depends on: (a) the ability of the Debtors to continue to
perform under their HMO payor and Provider contracts; (b) the
Debtors maintaining goodwill and a strong working relationship with
the HMOs and Providers; and (c) the Debtors ensuring that there MSO
businesses remain in compliance with the numerous contractual and
regulatory requirements imposed by the Payor agreements.
The Debtors believe that the Debtors' MSO business likely would
suffer a significant loss in value in a contentious and drawn-out
chapter 11 process because the HMOs could attempt to direct their
insureds (enrollees) to other MSOs or providers absent immediate
assurance of the Debtors' ability to continue to perform and to
exit these cases. Therefore, the only realistic way to preserve
value for the Debtors' estates is to emerge quickly from chapter 11
with a viable business plan. To that end, the Debtors undertook
significant efforts to negotiate a restructuring process and case
timeline that would protect the value of the Debtors' businesses
and enable a timely and seamless transition of such businesses to
Bridging through the Plan.
Accordingly, strict compliance with the process and milestones set
forth in the RSA and the Restructuring Term Sheet is critical.
To the extent the Plan process is unsuccessful, the Restructuring
Term Sheet provides for a sale of substantially all of the Debtors'
assets pursuant to section 363 of the Bankruptcy Code at which
Bridging would credit bid all or a portion of its secured debt.
Both the Plan process and Sale process would be subject to higher
and better offers and Bridging would have no obligation to ensure
that it is the successful bidder.
Bridging also has agreed to provide critical DIP financing to the
Debtors and a working capital loan to fund the Reorganized Debtors'
post-effective date working capital needs.
Importantly, the RSA contains a "fiduciary out" provision. This
provision ensures that, although the Debtors are contractually
bound to comply with the RSA, the Debtors retain the right to
pursue an alternative restructuring path in compliance with their
fiduciary duties.
About Hygea Holdings
Hygea Holdings Corp. and 32 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10361) on Feb. 19, 2020.
Founded in 2007, Hygea Holdings -- http://www.hygeaholdings.com/--
is a consolidated enterprise of several companies aggregated
through a series of acquisitions that focus on the delivery of
primary-care-based health care to commercial, Medicare, and
Medicaid patients. Hygea currently provides health care related
services to 190,000 patients in the southeast United States through
two platforms: (i) individual physician practices and physician
group practices with a primary care physician focus and (ii)
management services organizations. The physician practices consist
of 17 active brick and mortar locations throughout South and
Central Florida and Georgia. Hygea is headquartered in Miami,
Florida and employed more than 150 individuals at the time of
filing.
The Debtors tapped COLE SCHOTZ P.C. as counsel; and ALVAREZ &
MARSAL NORTH AMERICA, LLC, as financial advisor. EPIQ CORPORATE
RESTRUCTURING, LLC, is the claims agent.
LEARFIELD COMMUNICATIONS: S&P Cuts ICR to 'CCC+' on High Leverage
-----------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Learfield
Communications LLC to 'CCC+' from 'B-', and removed the rating from
CreditWatch, where it was placed with negative implications. In
addition, S&P lowered the issue-level ratings on the first-lien
credit facilities to 'CCC+' from 'B-' and on the second-lien term
loan to 'CCC-' from 'CCC'.
The downgrade reflects Learfield's very high leverage, thin
liquidity, and thin covenant cushion. S&P expects Learfield's
EBITDA will decline significantly and reported total debt to EBITDA
will be about 9x in fiscal 2020, improving to the mid-8x area in
fiscal 2021. Very high anticipated leverage makes the company
vulnerable to any currently unanticipated operating missteps or an
unexpected downturn in the economy. Learfield will also likely have
very thin cushion in its 7.5x first-lien net leverage covenant
ratio and could be at risk of violating this covenant by the end of
fiscal 2020 in June. S&P believes the company would be able to
amend the covenant, if necessary, but this could also increase
interest costs or result in one-time fees. S&P's base case forecast
for negative free cash flow through fiscal 2021 also anticipates
substantial use of the revolving credit facility. The primary
drivers of higher leverage through fiscal 2021 are lower multimedia
rights (MMR) revenue due to the loss of two large advertising
sponsors, higher contracted payments to university clients, and
personnel investments that will pressure gross margin. S&P believes
some of these drivers could be non-recurring, such as temporarily
lost sales due to the extended, 14-month Learfield-IMG College
merger process that misaligned both companies from ad sponsors'
typical budgeting calendars. Other drivers are likely to have a
longer-term impact, including the loss of two significant ad
sponsors and higher university payments.
The negative outlook reflects the possibility of another downgrade
if Learfield cannot generate incremental revenue in fiscal 2021 to
begin replacing lost revenue during the company's recent merger
process with IMG College, as well as the company's vulnerability to
potential unfavorable changes in the economy that would have an
adverse impact on advertising demand. S&P's negative outlook also
reflects the risk that the first-lien net leverage covenant could
be violated if the company underperformed its current budget.
"We could lower the rating if we lose confidence that Learfield
could secure external financing to overcome short-term liquidity
needs in fiscals 2020 and 2021. We could also lower the rating if
external financing were obtained on unfavorable terms or based on a
timeline that puts additional pressure on the company's financial
position. We could also lower the rating if we believed Learfield
could not refinance its revolver, which matures in December 2021,"
S&P said.
"We could consider raising the rating if Learfield's operating
performance improved more than our base case forecast, resulting in
leverage sustained below 7.5x." Raising the rating also requires
that potential external financing improves the company's liquidity
and would incorporate a belief that the company can return to
positive free cash flow, probably by fiscal 2022," the rating
agency said.
LIFETIME BRANDS: Moody's Lowers CFR to B1, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service downgraded Lifetime Brands, Inc.'s
Corporate Family Rating to B1 from Ba3, Probability of Default
Rating to B1-PD from Ba3-PD, and senior secured term loan rating to
B2 from B1. The outlook is negative, and the Speculative Grade
Liquidity is unchanged at SGL-2.
"T[he] ratings downgrade and outlook change to negative reflect the
company's subdued pace of deleveraging versus its expectations
because of ongoing operating and execution challenges. The
challenges include margin pressure due to tariffs and operational
issues Lifetime experienced with consolidating its UK operations,
resulting in still elevated financial leverage" said Moody's lead
analyst Oliver Alcantara. "Considering our expectation for only
modest earnings growth over the next 12 months, credit metrics will
remain weak with debt-to-EBITDA leverage at around 5.0x" added
Alcantara.
Downgrades:
Issuer: Lifetime Brands, Inc.
Corporate Family Rating, Downgraded to B1 from Ba3
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Gtd Senior Secured Term Loan B, Downgraded to B2(LGD4) from
B1(LGD4)
Outlook Actions:
Issuer: Lifetime Brands, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Lifetime's B1 CFR broadly reflects its relatively small scale with
annual revenue under $1.0 billion, and its weak credit metrics
profile with elevated debt/EBITDA leverage that Moody's estimates
at around 5.4x at fiscal year-end December 31, 2019. Moody's
projects leverage will fall over the next year due to modest
earnings growth and debt repayment, but debt/EBITDA will remain
high at around 5.0x at the end of fiscal 2020. The credit profile
also reflects Lifetime's relatively low mid-single digits operating
profit margins, and its geographic and customer concentration. The
company's concentration in the homeware product category and
susceptibility to discretionary consumer spending also constrain
the rating. In addition, Lifetime competes with significantly
larger, global, and well-known manufacturers in mature product
categories with limited growth prospects.
However, the credit profile is broadly supported by the company's
strong market position in the homewares industry with many leading
brands in narrowly defined product categories, and its good brand
and product diversification. Lifetime's well-diversified retail
distribution channel, which includes e-commerce, positions the
company well to benefit from the continued shift of consumer
spending to online. Lifetime's good liquidity is supported by
access to a $150 million ABL revolving facility due March 2023,
Moody's expectation for positive free cash flow of around $30
million in fiscal 2020, and lack of near term debt maturities until
its revolver is due. The extended maturity of the approximately
$270 million first lien term loan due February 2025 provides
flexibility to execute on the growth initiatives the company
outlined at its January 2020 investor day. The company also has a
reasonably conservative 3.0x net debt-to-EBITDA target (based on
the company's calculation).
The negative outlook reflects the company's elevated financial
leverage and the uncertainty regarding the company's ability to
materially grow revenue and earnings such that debt/EBITDA leverage
is below 5.0x over the next 12 months.
Ratings could be downgraded if the company's operating results do
not improve or if the company does not reduce debt/EBITDA leverage
below 5.0x by fiscal 2020. Additional factors that could lead to a
downgrade include a deterioration of liquidity, or if the company's
financial policies become more aggressive, in particular regarding
a material debt-funded acquisition or shareholder returns.
Ratings could be upgraded if Lifetime materially increases its
revenue scale and generates consistent organic revenue growth with
a stable to higher EBITDA margin. Debt/EBITDA sustained below 4.0x
and free cash flow/debt above 10% would also be necessary for an
upgrade.
Lifetime Brands, Inc. designs, sources and sells branded
kitchenware, tableware and other products used in the home.
Lifetime Brands is publicly traded, with annual revenue of
approximately $736 million for the twelve months period ended
September 30, 2019.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
LINCOLNWAY ENERGY: Credit Noncompliance Casts Going Concern Doubt
-----------------------------------------------------------------
Lincolnway Energy, LLC filed its quarterly report on Form 10-Q,
disclosing a net loss of $24,218 on $29,002,735 of revenues for the
three months ended Dec. 31, 2019, compared to a net loss of
$1,836,126 on $20,371,692 of revenues for the same period in 2018.
At Dec. 31, 2019, the Company had total assets of $58,412,847,
total liabilities of $33,686,673, and $24,726,174 in total members'
equity.
The Company said, "The ethanol industry has experienced an extended
period of depressed margins which has impacted the Company and
resulted in a significant decrease in our working capital and cash.
As a result, the Company was in noncompliance with certain
financial covenants in its credit agreement as of September 30,
2019 and remains in noncompliance as of December 31, 2019.
Compliance with these covenants has not been waived by our lender.
Our continued noncompliance has raised substantial doubt as to the
Company's ability to continue as a going concern for the next 12
months, Management has determined that the due to the lack of
liquidity and uncertainty regarding the Company's ability to meet
its financial obligations without additional financing or an equity
infusion, covenant compliance over the next 12 month period is not
reasonably possible. As a result, the Company has presented all
debt as current on its balance sheet as of December 31, 2019. The
Company believes it will be able to work with its lender on future
covenant waivers if needed, or get additional equity or financing,
however, these results cannot be assured."
A copy of the Form 10-Q is available at:
https://is.gd/fS67C5
Lincolnway Energy, LLC, produces fuel grade ethanol. The Company
processes corn into fuel grade ethanol and distiller's grains, as
well as sells ethanol to refiners, blenders, swine, dairy, and beef
industries. Lincolnway Energy operates in the State of Iowa.
MACY'S INC: S&P Lowers ICR to 'BB+' on Strategy Execution Risks
---------------------------------------------------------------
S&P Global Ratings lowered its long- and short-term issuer credit
ratings on New York-based department store operator Macy's Inc.'s
to 'BB+' and 'B' from 'BBB-' and 'A-3', respectively, and its
rating on the company's senior unsecured debt to 'BB+' from 'BBB-'
while assigning a '3' recovery rating.
The rating actions follow the company's recent unveiling of its
three-year Polaris strategic plan, which includes a significant
reduction of the store network, focus on growth in private label
brands and off-price stores, as well as cost-cutting.
The downgrade reflects S&P's view that Macy's improvement
trajectory is weaker than the rating agency's prior expectations
and execution risks are elevated as the company pursues its Polaris
strategic plan against an ongoing difficult industry backdrop.
Macy's faces unique challenges among the large national department
stores. A long history of acquisitions and expansion has saddled it
with excess stores as shoppers' shifting preferences move away from
mall-based locations and toward more value oriented offerings.
"While we believe management's strategic plan is a necessary step
toward rightsizing the enterprise, it demonstrates to us that the
company's competitive advantage has diminished more than we
expected, and to a point that we no longer believe is consistent
with an investment-grade rating. We now project operating
performance will deteriorate over the next several quarters, with
declines in comparable same-store sales. However, we recognize the
company's ability to manage credit metrics by reducing debt with
still good free cash flow generation, supplemented by asset-sale
proceeds," S&P said.
The stable outlook reflects S&P's view that cost-savings
initiatives should offset sales declines, contributing to
S&P-adjusted EBITDA margins of slightly above 10% for Macy's in
2020. The rating agency expects the company to maintain leverage of
3x or lower in the next year and believes it will continue to
reduce debt using free cash flow and the proceeds of asset sales.
"We could lower the rating if Macy's is unable to track reasonably
close to its Polaris plan, or the decline in revenues is greater
than we expect because of secular headwinds and competitive
pressures. That would lead us to believe that business
stabilization is more difficult than anticipated, resulting in
larger sales declines and margin erosion. We could also lower the
rating if we expect leverage to be sustained above 3x," S&P said.
"We view an upgrade as unlikely over the next year because we
believe the new strategy will take several years to implement and
bear fruit. In the longer term, we could consider raising the
ratings if we believe Macy's performance has stabilized and the
company is on a path to generate consistently positive same-store
sales growth and margin improvement, while keeping leverage below
3x," the rating agency said.
MCGRAW HILL: Moody's Gives 'B3' Corp. Family Rating, Outlook Stable
-------------------------------------------------------------------
Moody's Investors Service assigned B3 corporate family rating and
B3-PD probability of default rating to McGraw Hill LLC following
the Company's change in its organizational structure. The rating
outlook is Stable. There is no change to existing instrument
ratings. Moody's also withdrew corporate family rating, probability
of default rating and rating outlook for McGraw-Hill Global
Education Holdings, LLC.
As part of the change in the organizational structure, the initial
debt issuer, McGraw-Hill Global Education Holdings, LLC, was merged
into McGraw-Hill School Education LLC, which was renamed to McGraw
Hill LLC. The new entity has assumed all debts and liabilities of
McGraw-Hill Global Education Holdings, LLC. McGraw-Hill Global
Education Intermediate Holdings, LLC remains a Guarantor under the
first lien credit agreement.
Issuer: McGraw Hill LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Outlook, Assigned Stable
Issuer: McGraw-Hill Global Education Holdings, LLC
Corporate Family Rating, Withdrawn at B3
Probability of Default Rating, Withdrawn at B3-PD
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
McGraw Hill LLC B3 CFR reflects the company's strong market
position in K-12 and higher education markets, high financial
leverage, exposure to pricing pressure and adoption cycles of its
end markets, good cash flow generation and good liquidity. The
company continued to target institutional sales through its
Inclusive Access distribution in higher education, while
successfully selling through the 2019 adoption cycle in K-12
market. McGraw Hill LLC continues to transition its product mix
towards digital, while reducing circulation of front list print
volumes and addressing pricing concerns through various
affordability initiatives. The company benefited from a strong
adoption market in 2019, with key wins including CA Social Studies,
CA Science, TN and WV Social Studies programs and a predominately
digital Social Studies win in Chicago. The company undertook cost
management actions in 2019, contributing to further EBITDA
improvement as it enters a cyclically smaller 2020 adoption
market.
Moody's views governance considerations for McGraw Hill LLC as
moderate risk due to the aggressive financial strategy employed by
its financial sponsor. The company has historically raised debt to
fund shareholder returns, while increasing leverage in a highly
cyclical industry. Given an ongoing merger approval process,
Moody's does not anticipate further near-term equity
distributions.
The stable outlook reflects Moody's expectations that McGraw Hill
LLC will generate slightly lower revenue in 2020 due to cyclically
smaller adoption market opportunity in K-12 and partially offset by
anticipated improvement in higher education performance as its
rental and Inclusive Access distribution models expand. Moody's
anticipates improved operating income as cost reduction actions
taken in 2019 to flow through to the bottom line. Moody's expects
underlying secular challenges to remain, and anticipate some
de-levering through execution of cost saving initiatives. The
current rating and outlook do not incorporate any share repurchases
or debt funded distributions, which if executed, may result in a
negative rating action. The outlook incorporates Moody's
expectation that McGraw Hill LLC will maintain good liquidity with
no significant drawdowns under the revolver over the next 12 months
providing the company some flexibility to execute its operating
strategies.
Given the secular trends within the higher education market,
anticipated weaker K-12 adoption year compared to 2019, uncertainty
regarding the completion of the company's announced merger with
Cengage (B3) and high leverage, upgrade is unlikely. Improved
higher education enrollment levels, demonstrated strong organic
growth in K-12 segment and stronger competitive position against
peers, rental and used-book providers and open educational
resources could position the company for an upgrade if financial
performance is improved. The company would also need to demonstrate
organic revenue and EBITDA growth resulting in debt-to-cash EBITDA
being sustained comfortably below 5x, and Moody's would need to
expect that liquidity will remain good with cash balances being
more than sufficient to cover outflows including seasonal working
capital swings. The company would also need to demonstrate its
ability to maintain good free cash flow.
Ratings could be downgraded if market conditions or competitive
pressures lead to ongoing revenue or EBITDA declines over the next
12 months or if liquidity deteriorates. In addition, ratings could
be subject to a negative action in the event that DOJ review and
approval of the merger with Cengage results in onerous terms for
the combined entity upon consummation of the proposed transaction.
Ratings could also be downgraded if debt funded distributions lead
to increased leverage.
The principal methodology used in these ratings was Media Industry
published in June 2017.
McGraw Hill LLC is a global provider of educational materials and
learning services targeting the higher education, K-12,
professional learning and information markets with content, tools
and services delivered via digital, print and hybrid offerings.
McGraw Hill LLC revenue for last twelve months ended September 2019
was $1.6 billion.
MEGHA LLC: Trustee Taps Expotel Hospitality for Post-Sales Services
-------------------------------------------------------------------
Lucy Sikes, the Chapter 11 trustee for Megha, LLC, seeks authority
from the U.S. Bankruptcy Court for the Western District of
Louisiana to hire Expotel Hospitality to provide post-sales
services.
The Debtor requires assistance from a property management company
to finalize all post-petition and pre-closing expenses related to
the sale of its assets, prepare post-sale monthly operating
reports, and compile information required by its accountant to
prepare and file its 2019 tax returns.
The trustee proposes to remit a nominal flat fee of $5,000 to
Expotel.
Expotel can be reached at:
Expotel Hospitality
401 Veterans Memorial Blvd Ste 102
Metairie, LA 70005
Phone: +1 504-212-1492
About Megha LLC
Megha, LLC, a single asset real estate (as defined in 11 U.S.C.
Sec. 101(51B)) has full ownership of Lots 4 and 5 of Spanish Town
Center known as the Hampton Inn and Suites New Iberia, with an
appraisal value of $6.6 million.
Megha filed a Chapter 11 petition (Bankr. W.D. La. Case No.
18-51147) on Sept. 11, 2018. In the petition signed by Jay
Sachania, manager, the Debtor disclosed $8,137,429 in assets and
$6,529,035 in liabilities. Judge John W. Kolwe oversees the case.
Bradley L. Drell, Esq., at Gold, Weems, Bruser, Sues & Rundell, is
the Debtor's legal counsel.
MONROE COUNTY HCA: Moody's Cuts Ratings on $3.4MM GOLT to Ba3
-------------------------------------------------------------
Moody's Investors Service downgraded Monroe County Health Care
Authority, AL's issuer and general obligation limited tax (GOLT)
ratings to Ba3 from Ba1, affecting $3.4 million in rated debt
outstanding. The outlook is negative.
The pledge supporting the authority's debt is limited based upon
Alabama's constitutional property tax limits. The issuer rating
represents Moody's assessment of hypothetical debt of the authority
supported by a general obligation unlimited (GOULT) pledge. There
is no debt associated with this rating.
RATINGS RATIONALE
The authority's Ba3 issuer and GOLT ratings reflect the further
weakening of hospital finances, legal covenant violations, along
with satisfactory legal protections for bondholders.
The absence of distinction between the issuer and GOLT ratings
reflects the ample taxing headroom between current pledged revenue
and maximum annual debt service.
RATING OUTLOOK
The negative outlook reflects its expectation that hospital
financial operations will remain pressured over the near to medium
term. The negative outlook also reflects the authority's continued
violations of its reporting covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Significant improvement hospital financial operations
- Material and sustained increase in liquidity levels
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Future debt covenant violations
- Any additional narrowing of hospital liquidity or inability to
meet financial obligations
- Sustained tax base contractions, narrowing debt service
coverage
LEGAL SECURITY
The authority's rated debt is secured by a senior lien on 75% of a
4-mill ad valorem tax levied countywide without time limit.
PROFILE
The Monroe County Health Care Authority is a public corporation
that owns and operates Monroe County Hospital. The majority of the
authority's board members are appointed by the Monroe County
Commission, however the County Commission is not financially
accountable for the authority. Monroe County Health Care Authority
is a related organization of Monroe County but there is no flow of
funds between the two entities and the county has no financial
accountability for the authority.
Monroe County Health Care Authority services a population of 22,000
in south western Alabama. The hospital is a 94-bed facility within
the county, and provides in and outpatient medical services, home
health care, and various physical practices.
METHODOLOGY
The principal methodology used in this rating was US Local
Government General Obligation Debt published in September 2019. An
additional methodology used in this rating was Not-For-Profit
Healthcare published in December 2018.
MOTIF DIAMOND: Seeks Permission to Use Cash Collateral
------------------------------------------------------
Motif Diamond Designs, Inc., asked the Bankruptcy Court to
authorize use of cash collateral in the approximate amount of
$461,200 plus $4,875 for United States Trustee quarterly fees.
The Debtor proposed to grant PNC Bank with replacement liens on all
post petition assets and a continuing lien on prepetition assets,
as adequate protection, plus adequate protection payments of $600
per month based upon the regular monthly interest payments due
under the security agreement. PNC Bank holds a non-voidable lien
on all of Debtor's assets by virtue of a commercial security
agreement the parties executed before the Petition Date.
A copy of the motion is available free of charge at
https://is.gd/5KcpoJ From PacerMonitor.com.
About Motif Diamond Designs
Motif Diamond Designs, Inc., based in Taylor, MI, filed a Chapter
11 petition (Bankr. E.D. Mich. Case No. 20-40285) on Jan. 8, 2020.
In the petition signed by Toros Chopjian, vice president, the
Debtor was estimated to have up to $50,000 in assets and $1 million
to $10 million in liabilities. Yuliy Osipov, Esq. at Osipov
Bigelman, P.C., serves as bankruptcy counsel to the Debtor.
MOUNTAIN VIEW: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Mountain View Sports Center, Inc.
dba Adventure Apparel;
aka Mountain View Sports Center, Seward;
aka Adventure Apparel, Carmel
11124 Old Seward Highway #600
Anchorage, AK 99515
Business Description: Mountain View Sports Center, Inc. --
https://www.mtviewsports.com -- is a
full service fly shop and outdoor outfitter
carrying a unique combination of high end
brands catered to Alaska including Simms,
Patagonia, Arcteryx, Filson, Pendleton, Sage
Fly Rods, Hatch Reels, and many more.
Chapter 11 Petition Date: February 19, 2020
Court: United States Bankruptcy Court
District of Alaska
Case No.: 20-00053
Judge: Hon. Gary Spraker
Debtor's Counsel: Cabot Christianson, Esq.
LAW OFFICES OF CABOT CHRISTIANSON
911 West 8th Avenue, Suite 201
Anchorage, AK 99501
E-mail: cabot@cclawyers.net
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by John R. Staser, secretary.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/I7ixrx
NACZA WALNUT: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Nacza Walnut Hill, LLC
8041 Walnut Hill Lane
Suite 854
Dallas, TX 75231
Business Description: Nacza Walnut Hill, LLC is a privately held
company based in Texas.
Chapter 11 Petition Date: February 19, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 20-30565
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS
12770 Coit Road
Suite 100
Dallas, TX 75251
Tel: 972-991-5591
E-mail: eric@ealpc.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Walter C. Vick, managing member.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available at
PacerMonitor.com at:
https://is.gd/OUoAPM
NATURALSHRIMP INC: Has $541K Net Loss for Quarter Ended Dec. 31
---------------------------------------------------------------
NaturalShrimp Incorporated filed its quarterly report on Form 10-Q,
disclosing a net loss of $540,846 on $0 of sales for the three
months ended Dec. 31, 2019, compared to a net loss of $964,274 on
$0 of sales for the same period in 2018.
At Dec. 31, 2019, the Company had total assets of $3,656,689, total
liabilities of $4,982,505, and $1,325,816 in total stockholders'
deficit.
The Company has accumulated losses through the period to December
31, 2019 of approximately $43,745,000 as well as negative cash
flows from operating activities of approximately $1,153,000.
Presently, the Company does not have sufficient cash resources to
meet its plans in the twelve months following December 31, 2019.
The Company said, "These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management is in
the process of evaluating various financing alternatives in order
to finance the continued build-out of our equipment and for general
and administrative expenses. These alternatives include raising
funds through public or private equity markets and either through
institutional or retail investors. Although there is no assurance
that the Company will be successful with our fund raising
initiatives, management believes that the Company will be able to
secure the necessary financing as a result of ongoing financing
discussions with third party investors and existing shareholders."
A copy of the Form 10-Q is available at:
https://is.gd/qubOlk
NaturalShrimp Incorporated produces naturally-grown shrimps in the
United States and internationally. The company was founded in 2001
and is based in Addison, Texas.
NAVISTAR INT'L: Fitch Affirms 'B' Issuer Default Rating
-------------------------------------------------------
Fitch Ratings affirmed the Issuer Default Ratings for Navistar
International Corporation, Navistar, Inc., and Navistar Financial
Corporation at 'B'. The Rating Outlook is Stable. Fitch has also
affirmed the company's long-term debt ratings.
KEY RATING DRIVERS
The ratings for NAV incorporate the company's progress toward
regaining market share and building higher margins, effective
product development, and benefits from the alliance with Traton SE
(Traton). Debt declined modestly in 2019 and leverage is lower than
in the past although FCF remains weak. NAV continues to streamline
operations and invest in the business, and its financial services
business maintains low leverage, reducing the risk of potential
support needed from NAV. These positive considerations are partly
offset by weaker results anticipated in 2020 associated with an
industry downturn which can be expected to slow the improvement in
NAV's credit profile temporarily.
Traton Alliance: Traton SE recently submitted a proposal to acquire
all of NAV's shares for approximately $2.9 billion which NAV is
currently reviewing. Fitch believes Traton's proposal, if
completed, could lead to further integration between the two
companies and possibly provide NAV with access to additional
financial resources and ultimately to a reduction in debt and
leverage. It would also provide broader opportunities to
participate in the global heavy duty truck market. These
developments would support a stronger credit profile and
potentially an upgrade of NAV's ratings.
If no transaction occurs, Fitch assumes NAV's alliance with Traton
will be maintained as currently organized. The alliance involves
collaboration on reducing costs and on powertrain and other
technologies. It also is contributing to a gradual recovery in
NAV's share of proprietary engines in its trucks and strengthening
its competitive position. Traton owns 16.8% of NAV's shares and,
with four other stockholders, collectively held 66% of NAV's shares
at the end of fiscal 2019.
Operating Results: NAV's ongoing restructuring has contributed to a
solid improvement in results including sales growth in fiscal 2019
of nearly 10% and a higher EBITDA margin of 8.5% as calculated by
Fitch. NAV's share of its traditional markets for heavy and medium
duty trucks and buses in the U.S. and Canada increased to 18.8% in
fiscal 2019 compared with 17.5% in 2018, although it remains below
historical levels. The negative impact of an industry downturn on
margins could be mitigated by NAV's improved cost structure.
Lower FCF in 2020: Fitch believes manufacturing FCF in 2020 could
be meaningfully lower, compared with $260 million in 2019 and could
even be negative depending on operating requirements and one-time
items. A portion of a $135 million settlement for engine emission
litigation could involve cash payments, and working capital
requirements in 2020 could increase as NAV adjusts to lower
volumes. Other cash uses include an increase in capex to invest in
new or upgraded facilities, product development costs and ongoing
pension contributions. Fitch believes NAV will generate stronger
FCF over the long term, but the pace of improvement will partly
depend on the heavy-duty truck cycle.
Adequate Liquidity: NAV reported unrestricted manufacturing cash of
approximately $1.3 billion at Oct. 31, 2019. Fitch believes this
level is sufficient to fund normal operating requirements,
including high seasonal cash requirements early in the year, as
well as one-time litigation costs. NAV could potentially be
required to support the financial services business, but this
concern is mitigated by leverage in the financial services
business, which has lower leverage than some other captive finance
businesses and has a receivables portfolio centered on lower-risk
dealer financing.
Leverage: At the end of fiscal 2019 debt/EBITDA declined to 3.4x,
which included the impact from repaying approximately $400 million
of debt that matured during the year. Fitch expects leverage to
rise in 2020 as industry demand and earnings decline, although it
would remain below peak levels. FFO-adjusted leverage was down
slightly to 5.6x compared with 5.8x one year earlier, and may not
improve significantly before NAV generates consistently stronger
cash flow.
Rating Concerns: Rating concerns include the cyclical commercial
truck market; NAV's weaker financial position and scale compared
with large global peers; and a low share of proprietary engines in
NAV trucks although Fitch expects the share to increase over time.
NAV continues to address litigation around legacy engines,
emissions compliance, retiree benefits and other items. Among these
cases are two claims by the U.S. Department of Justice that total
up to $555 million and a False Claims Act case claiming more than
$5 billion pertaining to Navistar Defense, LLC.
Captive Support: Under its criteria for rating non-financial
corporates, Fitch calculates an appropriate debt/equity ratio of 3x
at Financial Services based on asset quality as well as funding and
liquidity. Actual debt/equity at Financial Services as measured by
Fitch, including intangible assets, was 3.4x as of Oct. 31, 2019.
As a result, Fitch calculates a pro forma equity injection of
approximately $64 million would be needed to reduce debt/equity to
3x at Financial Services. Fitch assumes NAV would fund its equity
injection through the use of available cash or debt.
Navistar Financial Corporation
Fitch believes NFC is core to NAV's overall franchise, thus the IDR
of the finance subsidiary is equalized with, and directly linked to
that of its ultimate parent. The view that the subsidiary is core
is supported by shared branding and the close operating
relationship with and importance to NAV, as substantially all of
NFC's business is connected to the financing of dealer inventory
and trucks sold by NAV's dealers. The relationship is formally
governed by the Master Intercompany Agreement, as well as a
provision referenced within NFC's credit agreement requiring NAV to
own 100% of NFC's equity at all times.
Beyond these support-driven considerations, Fitch also considers
NFC's improved operating performance and solid asset quality, which
are counterbalanced by elevated leverage levels relative to
stand-alone finance companies, although leverage is consistent with
other captive finance companies.
Asset quality metrics at NFC continue to be strong, with negligible
net charge offs and provision expenses. NFC continues to focus on
growing its wholesale portfolio, which has historically experienced
lower loss rates compared to the retail portfolio. At Oct. 31, 2019
(FYE19) delinquencies greater than 90 days past due as a percentage
of total finance receivables increased to 0.28% from 0.04% at
FYE18. The increase was primarily related to one delinquent
customer, although NFC has subsequently received significant
payments from the customer and expects to receive all amounts due.
Fitch expects NFC's credit metrics to remain stable over the near
term and for loss reserves, which amounted to 1.8x of impaired
loans at FYE19, to be sufficient to cover potential losses on
receivables.
NFC's profitability metrics improved in 2019, with revenue
increasing 30% compared with the prior year, while expenses rose
22% over the same period. Financing revenue increased primarily as
a result of higher average portfolio balances, partially offset by
a reduction in interest and fee revenue charged to NAV. Pretax
returns on average assets increased to 3.5% in FY19 from 3.0% in
FY18. Fitch expects operating performance to remain relatively
stable in 2020.
NFC's leverage (debt to tangible equity) increased to 4.4x at FYE19
from 4.1x at FYE18 as incremental borrowings were used to finance
portfolio growth. If NFC's loan to its parent were classified as a
dividend, thus reducing NFC equity, leverage would have been 9.1x
at FYE19. Fitch believes that the company's leverage, adjusted for
the intercompany loan, is in-line with that of other captive
finance peers in Fitch's rated universe. Fitch expects adjusted
leverage to remain at-or-near current levels as NAV continues to
use NFC's balance sheet to enhance liquidity at the parent
company.
In May 2019, NFC fully repaid $400 million of term loans
outstanding using capacity on its revolving bank credit facility
after upsizing the facility to $747.5 million from $269.2 million.
The rating assigned to the senior secured bank credit facility is
one-notch above the long-term IDR and reflects Fitch's view that
recovery prospects under a stress scenario for the facility are
good. The credit facility's collateral coverage covenant of 1.25x
mitigates Fitch's concerns that NFC could securitize all its
remaining unencumbered assets, leaving other senior secured lenders
in a subordinate collateral position to the company's
securitizations.
DERIVATION SUMMARY
NAV has a weaker financial profile including lower margins, FCF and
liquidity than other global heavy duty truck OEMs. These factors
are important with respect to investing in the business and
managing the business through industry cycles. Several OEMs are
larger than NAV or are affiliates of global vehicle manufacturing
companies, giving them greater access to financial and operational
resources and markets. Peers include Daimler Trucks North America
LLC (DTNA), a subsidiary of Daimler AG (A-/Stable); AB Volvo
(BBB+/Stable); PACCAR Inc. (NPR); and MAN SE and Scania AB, which
are part of Volkswagen AG's (BBB+/Stable) Traton Group. NAV's
alliance with Traton mitigates concerns about NAV's smaller scale
and weaker financial position compared with its global peers.
Eighty-nine percent of NAV's consolidated revenue was located in
the U.S. and Canada in 2019, which makes it more sensitive to
industry cycles compared with competing OEMs that have greater
geographic diversification.
KEY ASSUMPTIONS
-- NAV's manufacturing revenue declines in 2020 due to lower
industry demand;
-- NAV's market share increases further but remains below
historical levels in the near term;
-- FCF declines in 2020 due to lower revenue, litigation
expenditures, higher working capital requirements and higher
spending to support the Traton alliance;
-- EBITDA margins are down slightly in 2020;
-- Fitch's base case for NAV assumes the current alliance with
Traton is unchanged and that cost efficiencies and product
development are executed as planned.
Recovery Analysis:
-- The recovery analysis for NAV reflects Fitch's expectation
that the enterprise value of the company, and recovery rates for
creditors, would be maximized as a going concern rather than
through liquidation. Fitch has assumed a 10% administrative claim;
-- The going concern EBITDA represents Fitch's estimated
post-emergence stabilized EBITDA following an industry downturn;
-- An EBITDA multiple of 5x is used to calculate a
post-reorganization valuation, below the 6.7x median for the
industrial and manufacturing sector. The multiple incorporates
cyclicality in the heavy duty truck market, the highly competitive
nature of the heavy duty truck market and NAV's smaller size
compared with large global OEMs;
-- Fitch assumes a fully used ABL facility, excluding a liquidity
block, primarily for standby letters of credit that could be
utilized during a distress scenario;
-- The secured term loan is rated 'BB'/'RR1', three levels above
NAV's IDR, as Fitch expects the loan would see a full recovery in a
distressed scenario based on a strong collateral position. The
recovery zone bonds have a junior lien position behind the term
loan but are rated 'BB' as they would also be expected to see a
full recovery. The 'RR3' for senior unsecured debt reflects good
recovery prospects in a distressed scenario.
RATING SENSITIVITIES
Developments that may, individually or collectively, lead to
positive rating action include:
-- FCF/total adjusted debt is in the high single digits on a
sustained basis;
-- EBIT margins as calculated by Fitch are sustained above 6%;
-- NAV's retail market share continues to improve;
-- Litigation with the DOJ and other contingent liabilities are
resolved with little financial impact to NAV.
Developments that may, individually or collectively, lead to a
negative rating action include:
-- FCF/total adjusted debt is consistently negative;
-- Manufacturing EBIT margins decline below 4%;
-- There is a material adverse outcome from litigation;
-- The alliance with Traton is terminated;
-- Material support is required for Financial Services.
Navistar Financial Corporation
NFC's ratings are expected to move in tandem with its parent.
Therefore, positive rating momentum will be limited by Fitch's view
of NAV's credit profile. However, negative rating actions could be
driven by a change in the perceived relationship between NFC and
its parent, particularly if Fitch no longer considers NFC to be a
core subsidiary. Additionally, a change in profitability leading to
operating losses, and/or deterioration in the company's liquidity
profile could also yield negative rating actions.
The ratings on the senior secured bank credit facility are
sensitive to changes in NFC's IDR, as well as the level of
unencumbered balance sheet assets available in a stress scenario,
relative to outstanding debt.
Fitch does not envision a scenario where NFC would be rated higher
than the parent.
LIQUIDITY AND DEBT STRUCTURE
Liquidity at NAV's manufacturing business as of Oct. 31, 2019
included cash and marketable securities totaling $1.3 billion,
excluding restricted cash. Liquidity includes availability under a
$125 million asset-backed lending (ABL) facility. Borrowing
capacity under the ABL is reduced by a $13 million liquidity block
and letters of credit issued under the facility. Liquidity was
offset by current maturities of manufacturing long-term debt of $32
million. There are no large debt maturities before November 2024.
NAV had intercompany loans totaling $281 million from Financial
Services which are included by Fitch in manufacturing debt. The net
pension obligation was $1.3 billion (60% funded) at Oct. 31, 2019.
Navistar Financial Corporation
Fitch deems NFC's current liquidity as adequate given available
resources and the company's continued ability to securitize
originated assets, but notes that liquidity may become constrained
if the parent materially increases its reliance on NFC to finance
its sales or if NFC is unable to refinance maturing debt on
economic terms.
At FYE19, NFC had $29.4 million of unrestricted cash, approximately
$25 million of availability under its wholesale note funding
facility (subject to collateral requirements) and $124.5 million
available on the senior secured bank revolving facility. The
maturity date for the revolver portion of the borrowing, which had
an outstanding balance of $623 million at FYE19, is May 2024.
As of Oct. 31, 2019, debt at NAV's manufacturing business totaled
$3.2 billion as calculated by Fitch including intercompany debt,
unamortized discount and debt issuance costs. Debt was nearly $2.3
billion at the Financial Services segment, the majority of which is
at NFC. Consolidated debt totaled $5.2 billion.
NEOVASC INC: Will Request Hearing After Delisting Determination
---------------------------------------------------------------
Neovasc, Inc. will request a hearing before the Nasdaq Hearings
Panel as the next step in the process in seeking an extension to
satisfy the US$35 million minimum market value of listed securities
requirement for continued listing on The Nasdaq Capital Market. On
Feb. 19, 2020, the Company received the expected notice from the
Listing Qualifications Staff of The Nasdaq Stock Market LLC
indicating that the Staff had determined to delist the Company's
common shares from Nasdaq unless the Company requests a hearing
before the Panel by Feb. 26, 2020, which the Company will do. This
request will ordinarily stay any further action by the Staff and
the Company's securities are expected to continue to be eligible to
trade on Nasdaq at least pending the ultimate conclusion of the
hearing process.
"We are focused on presenting a robust plan to regain compliance
with the MVLS Requirement to the Panel in support of our request
for continued listing on Nasdaq and we look forward to the
opportunity to present before them," commented Fred Colen,
president and chief executive officer of Neovasc. "We are hopeful
that the Panel will grant the Company an extension through to
approximately the end of July to execute our plan to regain
compliance."
On Aug. 21, 2019, the Staff notified the Company that it did not
satisfy the MVLS Requirement for the prior 30-consecutive business
day period and, pursuant to Nasdaq Listing Rule 5810(c)(3)(C), had
been provided a 180-day cure period, through Feb. 17, 2020, to
regain compliance. In order to evidence full compliance with the
MVLS Requirement, the Company must evidence a market value of
listed securities of at least $35 million for ten consecutive
business days. The Company did not satisfy the MVLS Requirement
during the initial compliance period and will begin the hearing
process.
At the hearing, the Company will request an extension and present
its plan to regain compliance with the MVLS Requirement during that
extension, which the Company believes is in the best interests of
the Company and its stakeholders. The Board and management have
developed a plan to regain compliance with the MVLS Requirement
that the Company believes provides strong support for its request
for an extension and therefore increases the likelihood that the
Panel will grant the requested extension; however, there can be no
assurance that the Company's appeal before the Panel will be
successful nor that the Company will be able to successfully
implement the above plan.
Should the Company evidence a market value of listed securities of
at least $35 million for ten consecutive business days at any point
prior to the hearing before the Panel, or during the extension
period, the Company can notify the Staff and request that the
breach of the MVLS Requirement has been cured, although Nasdaq has
the discretion to require satisfaction of the MVLS Requirement for
a period in excess of ten consecutive trading days.
The Company is also listed on the Toronto Stock Exchange and the
Company's noncompliance with the Nasdaq US$35 million minimum MVLS
requirement does not affect the Company's compliance status with
the TSX.
About Neovasc Inc.
Based in Richmond, British Columbia, Neovasc Inc. --
http://www.neovasc.com-- is a specialty medical device company
that develops, manufactures and markets products for the rapidly
growing cardiovascular marketplace. Its products include the
Neovasc Reducer, for the treatment of refractory angina, which is
not currently available in the United States and has been available
in Europe since 2015, and the Tiara, for the transcatheter
treatment of mitral valve disease, which is currently under
clinical investigation in the United States, Canada and Europe.
Neovasc reported a net loss of US$108.04 for the year ended Dec.
31, 2018, compared to a net loss of US$22.90 million for the year
ended Dec. 31, 2017. As of March 31, 2019, Neovasc had US$16.09
million in total assets, US$18.89 million in total liabilities, and
a total deficit of US$2.80 million.
Grant Thornton LLP, in Vancouver, BC, the Company's auditor since
2002, issued a "going concern" opinion in its report on the
Company's consolidated financial statements for the year ended Dec.
31, 2018, stating that the Company incurred a net loss of US$108.04
million during the year ended Dec. 31, 2018, and as of that date,
the Company's liabilities exceeded its assets by US$9.67 million.
These conditions, along other matters, raise substantial doubt
about the Company's ability to continue as a going concern.
NEUSTAR INC: Moody's Affirms B2 CFR & Alters Outlook to Negative
----------------------------------------------------------------
Moody's Investors Service affirmed Neustar, Inc.'s B2 corporate
family rating, B2-PD probability of default rating, the B1 ratings
on the company's existing first-lien bank facility, and the Caa1
ratings on Neustar's second-lien term loan. The outlook was revised
to negative from stable principally reflecting the deterioration in
the issuer's credit quality stemming from weak free cash flow
trends in recent quarters that are unlikely to improve meaningfully
over the coming year.
Moody's affirmed the following ratings:
-- Corporate Family Rating -- B2
-- Probability of Default Rating -- B2-PD
-- Senior Secured 1st Lien Term Loan B -- B1 (LGD3)
-- Senior Secured 1st Lien Revolving Credit Facility -- B1
(LGD3)
-- Senior Secured 2nd Lien Term Loan -- Caa1 (LGD6)
Outlook Action:
Outlook revised to Negative from Stable
RATINGS RATIONALE
Neustar's B2 CFR is constrained by the company's high pro forma
debt/EBITDA of approximately 6x (Moody's adjusted for operating
leases and reflecting add backs for certain non-recurring items and
cost savings) for the last twelve months ending September 30, 2019.
Debt leverage approaches 7x when expensing capitalized software
costs. Additionally, the issuer's credit quality is negatively
impacted by weak cash flow trends, relatively limited scale, and
competitive challenges in its Marketing and Risk Solutions and
Security Solutions segments. Neustar's concentrated private equity
ownership by Golden Gate Private Equity, Inc. and GIC Special
Investments Pte Ltd. presents material corporate governance risks
with respect to potentially aggressive financial strategies,
particularly with respect to debt financed acquisitions and
dividends. These risks are partially offset by Neustar's largely
recurring revenue driven business model that is mainly contractual
in nature with high customer retention rates that provide relative
revenue predictability. Additionally, the low capital intensity
associated with the company's operations provide improved free cash
flow generation potential over the longer term from currently
depressed levels.
Despite Moody's expectations that Neustar will not generate
meaningful free cash flow over the coming year, the company's
adequate liquidity is supported by an unrestricted cash balance of
approximately $96 million as of September 30, 2019. Neustar's
liquidity is also bolstered by an undrawn $100 million revolving
credit facility. While the company's term loans are not subject to
financial covenants, the revolving credit facility has a springing
covenant based on a maximum net first lien leverage ratio of 5.5x
that the company should be in compliance with over the next 12-18
months.
The negative outlook reflects Moody's expectation for nominal
organic revenue growth and flattish adjusted EBITDA over the next
12 to 18 months. Significant adjustments to derive Adjusted EBITDA
should decline as cost savings are realized and non-recurring costs
trend down. Accordingly, debt leverage is expected to hover around
the 6x level ( nearly 7x when expensing capitalized software costs)
and free cash flow is not expected to be meaningful with potential
for modest deficits. The outlook could be revised to stable if
Neustar demonstrates meaningful improvement in free cash flow
trends, resulting in a stronger liquidity profile.
Although not anticipated in the near future, the rating could be
upgraded if Neustar generates healthy revenue growth and
profitability while adhering to a conservative financial policy
such that debt/EBITDA (Moody's adjusted) is sustained below 4.5x
(below 5.5x when expensing capitalized software costs), and annual
free cash flow to debt exceeds 5%.
The rating could be downgraded if Neustar's free cash flow trends
do not demonstrate meaningful improvement, liquidity weakens, debt
leverage approaches 6.5x, or the company maintains aggressive
financial policies that meaningfully constrain financial
flexibility.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Neustar, acquired by Golden Gate and GIC in 2017 through a
leveraged buyout, is a leading global provider of real-time
information services and analytics, which enable clients to make
actionable, data-driven decisions. Moody's forecasts that the
company will generate pro forma sales of approximately $735 million
in 2019.
NORTH AMERICA STEEL: Plan Confirmation Hearing Continued to June 4
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On Jan. 28, 2020, the U.S. Bankruptcy Court for the Western
District of Pennsylvania convened a hearing on the Amended Chapter
11 Plan of Reorganization of debtor North American Steel & Wire,
Inc.
On Jan. 30, 2020, Judge Thomas P. Agresti ordered that:
* The hearing on confirmation of the Debtor's Amended Chapter 11
Plan of Reorganization is continued to June 4, 2020, at 10:00 a.m.
in Courtroom "C," U.S. Steel Tower, 54th Floor, 600 Grant Street,
Pittsburgh, P.A. 15219.
* The Debtor will commence making payments pursuant to the
Amended Chapter 11 Plan of Reorganization and continue timely
filing Monthly Operating Reports.
A full-text copy of the order dated January 30, 2020, is available
at https://tinyurl.com/uvubyfo from PacerMonitor at no charge.
About North America Steel
North America Steel & Wire Inc. is a manufacturer of copper and
zinc coated wires and is located in Butler, Pennsylvania.
North America Steel & Wire sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Pa. Case No. 18-20718) on Feb. 27,
2018. In its petition signed by Maroune Farah, president, the
Debtor was estimated to have assets of less than $50,000 and
liabilities of $1 million to $10 million. The Hon. Thomas P.
Agresti is the case judge. Donald R. Calaiaro, Esq., David Z.
Valencik, Esq., and Michael Kaminski, Esq., at Calaiaro Valencik
serve as the Debtor's bankruptcy counsel.
NPC INT'L: Moody's Lowers CFR to Ca, Outlook Negative
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Moody's Investors Service downgraded NPC International, Inc.'s
Corporate Family Rating to Ca from Caa1 and Probability of Default
Rating to Ca-PD/LD from Caa1-PD. In addition, Moody's downgraded
NPC's 1st lien senior secured revolver to Ca from B3, 1st lien
senior secured term loan to Ca from B3 and 2nd lien senior secured
term loan to C from Caa3. In addition, Moody's assigned a B3 to
NPC's $35 million super -priority 1st lien term loan. The rating
outlook is negative.
"The downgrade reflects NPC's decision not to pay interest due to
1st lien and 2nd lien term loan lenders on January 31, 2019 as well
as its intention not to make future debt service payments on these
debt instruments," stated Bill Fahy, Moody's Senior Credit Officer.
NPC entered into a forbearance agreement with its 1st lien TL
lenders covering the failure to pay principal or interest, however,
the company is subject to ongoing compliance with the terms of the
new Super Priority TL. "Moody's views the non-payment of interest
and principal as an event of default regardless of the existence of
a forbearance agreement since required payments as well as future
payments will not be made within the contractual terms of the
respective credit agreements " stated Fahy. NPC is restricted from
paying debt service to the 2nd lien lenders pursuant to the Super
Priority TL agreement. Additionally, 2nd lien lenders are subject
to a 180-day standstill (which expires on July 31, 2020) before
they can exercise available remedies.
RATINGS RATIONALE
Downgrades:
Issuer: NPC International, Inc.
Probability of Default Rating, Downgraded to Ca-PD /LD from
Caa1-PD
Corporate Family Rating (Local Currency), Downgraded to Ca from
Caa1
Senior Secured 1st Lien Term Loan, Downgraded to Ca (LGD3) from B3
(LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Downgraded to Ca
(LGD3) from B3 (LGD3)
Senior Secured 2nd Lien Term Loan, Downgraded to C (LGD5) from Caa3
(LGD5)
Assignments:
Issuer: NPC International, Inc.
Super Priority 1st Lien Guaranteed Senior Secured Delayed Draw Term
Loan, Assigned B3 (LGD1)
Outlook Actions:
Issuer: NPC International, Inc.
Outlook, Remains Negative
NPC's credit profile reflects its need to right size its balance
sheet as cost inflation related in part to labor and commodities,
and pricing have led to declining operating results principally at
its Pizza Hut units, weak liquidity, high leverage and low interest
coverage. Given NPC's high capital investment needs, including
relocations, new units, and remodel initiatives, it is expected
that free cash flow will remain negative and liquidity to be weak.
The rating also considers NPC's limited product offering,
concentrated day-part in lunch and dinner and limited geographic
diversity. The rating is supported by NPC's multiple brands,
meaningful scale within the Pizza Hut and Wendy's franchise system,
new advertising partnerships, and dedicated brand management.
NPC is owned by Delaware Holdings, LLC and Eldridge Investment
Holdings. NPC's financial sponsor ownership is a rating factor
given the potential implications from both a capital structure and
operating perspective. Financial policies are always a key concern
of sponsor-owned companies with regards to the potential for higher
leverage, extractions of cash flow via dividends, or more
aggressive growth strategies.
The negative outlook reflects its view that the need to optimize
its capital structure and strengthen cash flows significantly
increases the risk of NPC's need to restructure its capital
structure.
Ratings could be upgraded if NPC reaches agreement to right-size
its capital structure to a level that can be supported by current
operating levels.
Ratings could be downgraded should liquidity deteriorate or if free
cash flow becomes meaningfully negative.
The principal methodology used in these ratings was the Restaurant
Industry published in January 2018.
NPC is the largest Pizza Hut and Wendy's franchisee, operating
1,231 Pizza Hut restaurants and delivery units and 392 Wendy's
restaurants. Annual revenue is approximately $1.6 billion. NPC is
owned by Delaware Holdings, LLC and Eldridge Investment Holdings.
NPC INTERNATIONAL: Pizza Hut Franchisee Mulls Restructuring
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NPC International, Pizza Hut's largest U.S. franchisee, is weighing
restructuring options, including bankruptcy, Bloomberg News
reported Feb. 19.
NPC International, which has about $1 billion in debt, is one of
the largest restaurant operators in the U.S., with more than 1,225
Pizza Hut units in 27 states and 384 Wendy's restaurants in 7
states and Washington D.C., the company said on its Web site. NPC
has more than 37,000 employees.
NPC, which first opened its first Pizza Hut restaurant in 1962, is
in talks with lenders, people familiar with the matter told
Bloomberg.
The franchisee is trying to keep the restructuring out of court but
is considering the possibility of filing for bankruptcy with a
pre-negotiated plan in place, according to Bloomberg.
NPC, backed by private investment firm Eldridge Industries LLC, is
working with restructuring advisers at law firm Weil Gotshal &
Manges as well as investment bank Greenhill & Co. and operational
advisor AlixPartners LLP, according to Bloomberg's sources.
In 2019, the franchisee saw its debt slide further and further into
junk territory after credit downgrades from S&P Global Ratings and
Moody's. Both ratings agencies downgraded NPC's debt this week
after it missed Jan. 31, 2020, interest payments on the $655
million ($640 million outstanding) first-lien term loan and $160
million second-lien term loan.
The company reached a forbearance agreement and will not make
principal or interest payments required under the first-lien credit
agreement. Under the new priority term loan credit agreement, it is
also restricted from paying debt service to second-lien lenders
The franchisor, Yum! Brands, Inc. (NYSE:YUM), has 50,000 KFC, Pizza
Hut and Taco Bell restaurants in 150 countries. As of Dec. 31,
2019, it had 18,703 Pizza Hut restaurants, 99% of which are
operated by franchisees.
Pizza Hut is the largest restaurant chain in the world specializing
in the sale of ready-to-eat pizza products. But Pizza Hut,
historically known as a dine-in restaurant, has struggled because
more consumers want their food delivered. Franchisees saw U.S.
same-store sales at U.S. restaurants decline 1% in 2019, including
4% in the fourth quarter of 2019.
"We continue to believe that the move of the Pizza Hut U.S. system
to a more delivery-focused and modern estate will optimize our
ability to grow the Pizza Hut U.S. system going forward. However,
we could see impacts to our near-term results as we work through
transitions of the estate and of certain franchise stores to new
franchisees. These impacts could include expense related to
further bad debts and payments we may be required to make with
regard to franchisee lease obligations for which we remain
secondarily liable. Additionally, Pizza Hut U.S. system sales
could be negatively impacted by decreased system advertising spend
due to lower franchisee contributions and closures of
underperforming units, including certain units that are largely
dine-in focused. Given the fluid nature of issues surrounding our
Pizza Hut U.S. franchisees, in particular surrounding our largest
Pizza Hut U.S. franchisee who owns approximately 1,225 units or 17%
of the Pizza Hut U.S. system as of December 31, 2019, the potential
impact to the Company’s 2020 results is difficult to forecast,"
Yum said in its annual report filed Feb. 19, 2020.
OWENS & MINOR: Enters Into Receivables Securitization Program
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Owens & Minor Distribution, Inc. (the "Originator"), Owens & Minor
Medical, Inc. (the "Servicer"), both wholly owned subsidiaries of
Owens & Minor, Inc., and O&M Funding LLC, a special purpose entity
wholly owned by the Originator, entered into an accounts receivable
securitization program. Pursuant to the Receivables Securitization
Program, (i) the Servicer, O&M Funding, as borrower, the financial
institutions from time to time party thereto and listed therein as
lenders, PNC Bank, National Association, as administrative agent,
and PNC Capital Markets LLC, as structuring agent entered into a
Receivables Financing Agreement and (ii) the Originator, the
Servicer and O&M Funding, as buyer, entered into a Purchase and
Sale Agreement. Under the Receivables Securitization Program, the
Originator, pursuant to the Purchase and Sale Agreement, will sell
certain of its trade receivables and certain related rights to
payment and obligations of Originator with respect to such
receivables and certain related rights to Funding, which, in turn,
obtains loans secured by the Receivables from the Lenders.
Pursuant to the Receivables Securitization Program, the aggregate
principal amount of the loans made by the Lenders will not exceed
$325 million outstanding at any time. The Lenders under the
Receivables Securitization Program receive interest based on a
spread over LIBOR dependent on the tranche period thereto and any
breakage fees accrued. The Receivables Financing Agreement
contains customary LIBOR benchmark replacement language giving PNC
Bank, with consent from O&M Funding as to the successor rate, the
right to determine such successor rate. Additionally, PNC Bank and
PNC Markets receive certain fees as agents.
The Receivables Securitization Program contains certain customary
representations and warranties and affirmative and negative
covenants, including as to the eligibility of the Receivables being
sold by the Originator and securing the loans made by the Lenders,
as well as customary reserve requirements, Receivables
Securitization Program termination events, Originator termination
events and servicer defaults. The Receivables Securitization
Program termination events permit the Lenders to terminate the
Receivables Financing Agreement upon the occurrence of certain
specified events, including failure by Funding to pay amounts when
due, certain defaults on indebtedness under the Company's credit
facility, certain judgments, a change of control, certain events
negatively affecting the overall credit quality of transferred
Receivables and bankruptcy and insolvency events.
The Servicer will receive a fee as servicer of the Receivables. The
Company has entered into a performance guaranty in favor of PNC
Bank pursuant to which it has agreed to guarantee the performance
of O&M Fundings' obligations under the Receivables Financing
Agreement and Servicer's obligations as servicer under the
Receivables Financing Agreement.
The Receivables Securitization Program matures on Feb. 17, 2023.
The proceeds from the sale of Receivables pursuant to the
Receivables Securitization Program may be used to repay higher
interest indebtedness and for other general corporate purposes.
PNC Bank, PNC Markets and several of the Lenders and their
affiliates have various relationships with the Company and its
subsidiaries involving the provision of financial services,
including investment banking, commercial banking, advisory, cash
management, custody and trust services, for which they have
received customary fees, and may do so again in the future.
About Owens & Minor
Headquartered in Mechanicsville, Virginia, Owens & Minor, Inc. --
http://www.owens-minor.com/-- is a global healthcare solutions
company with integrated technologies, products, and services
aligned to deliver significant and sustained value for healthcare
providers and manufacturers across the continuum of care. Owens &
Minor helps to reduce total costs across the supply chain by
optimizing episode and point-of-care performance, freeing up
capital and clinical resources, and managing contracts to optimize
financial performance. Owens & Minor was founded in 1882 in
Richmond, Virginia, where it remains headquartered today.
Owens & Minor incurred a net loss of $437.01 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2019, the Company had $3.69
billion in total assets, $3.19 billion in total liabilities, and
$491.28 million in total equity.
* * *
As reported by the TCR on May 16, 2019, Fitch Ratings downgraded
Owens & Minor, Inc.'s Long-Term Issuer Default Rating to 'CCC+'
from 'B-'. Fitch said the rating downgrade reflects the rising
level of uncertainty surrounding customer retention levels and
revenue stability, the cash conversion cycle and the increasing
dependence on the company's revolving credit facility for
liquidity.
PENNYMAC FINANCIAL: S&P Alters Outlook to Stable, Affirms B+ ICR
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S&P Global Ratings said it revised the outlook on PennyMac
Financial Services Inc. (PFSI) to stable from negative and affirmed
the 'B+' issuer credit rating.
As mortgage rates fell, PFSI significantly improved its operating
performance in 2019 with record loan production of $117.6 billion
in UPB, a 74% increase from the prior year. The company also
increased direct origination production in 2019, with $9.8 billion
of consumer production, a 209% increase from the year before. The
company generated approximately $800 million in EBITDA in 2019
(excluding fair value losses and associated hedges), which is over
100% higher than the $365 million EBITDA generated in 2018. As a
result, S&P now expects the company to operate with leverage, as
measured by debt to adjusted EBITDA, of 2.5x-3.5x over the next 12
months.
Amid industry difficulties related to mortgage-servicing rights
(MSR) revaluations after three rate cuts in 2019, PFSI's hedging
strategies proved successful. The company recorded a $559 million
fair value decline in its MSR portfolio in 2019, which was offset
by a net gain of $405 million from its associated interest rate
hedges. The cash flow provided by the company's growing servicing
portfolio, and its associated hedges, provides the company with
stability, helping to largely offset the company's more volatile
mortgage production net revenue.
The stable outlook on PFSI reflects S&P's expectation that the
company will operate with debt to EBITDA of 2.5x-3.5x over the next
12 months. S&P's rating incorporates the expectation that EBITDA
will remain somewhat volatile, which is partly offset by the strong
cash flow from the company's servicing business and the company's
associated hedging strategies.
"We could lower the rating over the next 12 months if earnings
deteriorate, if we expect the company to operate with leverage
above 4.5x on a sustained basis, or if debt to tangible equity
increases above 1.5x," S&P said.
"We view an upgrade as unlikely at this time. We could raise the
rating if we expect the company to operate with leverage below 2.5x
on a sustained basis while maintaining its strong market position,"
the rating agency said.
PIER 1 IMPORTS: S&P Lowers ICR to 'D' on Bankruptcy Filing
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S&P Global Ratings lowered its issuer credit rating on U.S. home
decor and furniture retailer Pier 1 Imports Inc. to 'D' from 'CCC-'
and its issue-level rating on the company's term loan to 'D' from
'CCC-'. S&P's recovery ratings are unchanged.
The downgrade follows Pier 1's announcement on Feb. 17, 2020, that
it filed for voluntary reorganization under Chapter 11 of the U.S.
Bankruptcy Code.
PPD INC: Moody's Assigns Ba3 Corp. Family Rating, Outlook Stable
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Moody's Investors Service assigned Ba3 ratings to PPD, Inc.'s new
senior secured credit facilities (revolver and term loan B).
Moody's also assigned PPD a Ba3 Corporate Family Rating, Ba3-PD
Probability of Default Rating, SGL-1 Speculative Grade Liquidity
Rating, and a stable outlook. These ratings had previously resided
at Eagle Holding Company II, LLC but are now being withdrawn.
PPD will use proceeds from its new credit facilities and cash to
refinance all of its existing debt, including the secured term loan
and guaranteed senior unsecured notes of Jaguar Holding Company II.
Once all of the existing debt is repaid with proceeds from PPD's
refinancing transaction, Moody's will withdraw all of the ratings
at Jaguar Holding Company II.
PPD, Inc.
Ratings assigned:
Corporate Family Rating, assigned Ba3
Probability of Default Rating, assigned Ba3-PD
Senior secured term loan, assigned Ba3 (LGD3)
Senior secured revolving credit facility, assigned Ba3 (LGD3)
Speculative Grade Liquidity Rating, Assigned SGL-1
Ratings withdrawn:
Eagle Holding Company II, LLC:
Corporate Family Rating, withdrawn, previously Ba3
Probability of Default Rating, withdrawn, previously Ba3-PD
Speculative Grade Liquidity Rating, withdrawn, previously SGL-1
Outlook actions:
PPD, Inc.
Assigned, Stable Outlook
Eagle Holding Company II, LLC:
Changed to Rating Withdrawn, from Stable
RATINGS RATIONALE
PPD's Ba3 CFR is supported by its significant scale, breadth of
services and strong reputation as one of the largest contract
research organizations (CROs) globally. Strong demand for its
services and a significant revenue backlog of nearly $7 billion,
support Moody's expectation for high single-digit earnings growth
and cash flow over the next several years. In Moody's view, PPD
will exhibit a more conservative financial policy and leverage
tolerance following the IPO, paving a path for debt/EBITDA to
improve towards 4x in 2021. The rating also reflects the risks
inherent in the CRO industry, which is highly competitive, has high
reliance on the pharmaceutical industry, and is subject to
cancellation risk.
ESG risk considerations include a still high sponsor ownership of
PPD's public equity, at around 70%, which could lead PPD to favor
shareholder-friendly initiatives. At present, sponsors, The Carlyle
Group and Hellman & Friedman, also represent a majority of seats on
the board of directors.
PPD's SGL-1 Speculative Grade Liquidity Rating is supported by
Moody's expectation for strong free cash flow in excess of $400
million annually. Mandatory debt amortization will be modest at
around $41 million on the term loan. PPD will have a $500 million
undrawn revolver that expires in 2025. There are no financial
maintenance covenants on the term loan, with a springing senior
secured net leverage covenant on the revolver (when more than 30%
is drawn).
The stable outlook reflects Moody's expectation that PPD's leverage
will remain moderately high but that earnings growth rates will
continue to be solid, despite strong competition from peers.
Moody's could upgrade the ratings if PPD's debt to EBITDA is
expected to be sustained below 4x and if the company refrains from
large debt-financed shareholder initiatives.
Moody's could downgrade the ratings if debt/EBITDA is expected to
be sustained above 5x or if backlog and new business awards are
weak on a sustained basis.
PPD is a leading global contract research organization. The company
provides Phase I through Phase IV clinical development,
post-approval services as well as laboratory services to
pharmaceutical, biotechnology and academic customers, among others.
PPD is a public company although sponsors, The Carlyle Group and
Hellman & Friedman, Blue Spectrum, and GIC, own approximately 70%
of the public float. Reported revenue for the twelve months ended
September 30, 2019 approximated $3.8 billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
PPD INC: S&P Assigns B+ Rating to $500MM Revolver, $4.1BB Term Loan
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S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to PPD Inc.'s proposed $500 million revolver and
$4.1 billion term loan B. The '3' recovery rating indicates its
expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default.
"Our 'B+' issuer credit rating on PPD reflects the company's recent
IPO and repayment of its holdco notes. It also reflects our
expectation that PPD's financial policy will be less aggressive now
that it is a public company, which compares with our expectation
for leverage of more than 6x before the IPO. In addition, the
rating continues to reflect the company's size and scale as a
top-three contract research organization (CRO) with $2.8 billion in
total revenue in 2018," S&P said.
PRAIRIE ECI: S&P Affirms 'B+' Issuer Credit Rating; Outlook Stable
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S&P Global Ratings affirmed its 'B+' issuer credit rating on
Prairie ECI Acquiror L.P. and lowered the issue-level rating on the
company's debt to 'B' from 'B+'. It also removed the debt ratings
from CreditWatch, where they were placed with negative implications
on Jan. 29, 2020. In addition, S&P revised its recovery rating on
the debt to '5' from '4'.
The rating actions come after Tallgrass Energy Partners L.P.
(Tallgrass) and co-issuer Tallgrass Energy Finance Corp. proposed
issuing $500 million of senior unsecured notes to partially repay
outstanding borrowings on Tallgrass' revolving credit facility. The
additional capacity on the revolver may in turn be used to pay a
portion of the consideration related to Prairie ECI Acquiror L.P.'s
take-private offer for Tallgrass Energy L.P. (TGE).
Meanwhile, S&P affirmed the 'B+' issuer credit rating on Tallgrass
and its 'BB-' issue-level rating on the company's debt. The
recovery rating on the debt is '2'. S&P also assigned a 'BB-'
issue-level rating and '2' recovery rating to the proposed notes.
Pro forma for the offering, the company now has sufficient capital
to fund Tallgrass' take-private offer, which S&P expects to close
in the second quarter of 2020. S&P forecasts Prairie's adjusted
consolidated leverage to between 6.5x and 7.0x over the next two
years. The owners of Tallgrass are ultimately owners of the general
partner (GP) with the same board members that Blackstone and its
affiliates control. Despite not having the ability to directly
influence the GP's decision making, S&P considers having material
public unit holders as supporting insulation because it can
indirectly affect the GP's behavior and limits the potential for an
aggressive financial strategy. Though certain separateness
provisions exist at the Tallgrass level, including debt incurrence
covenants and dividend blockers, the lack of public ownership at
Tallgrass leads S&P to not consider Tallgrass as separate and the
rating agency now consolidates it with Prairie. Tallgrass' 'bb-'
stand-alone credit profile (SACP), is constrained by Prairie's
consolidated creditworthiness. For Prairie, S&P forecasts adjusted
consolidated leverage in the 6.5x-7.0x range for the next two
years. Whereas, for Tallgrass, S&P forecasts adjusted leverage
(proportionally consolidating its ownership in Rockies Express
Pipeline LLC [REX]) of approximately 5.5x over that same time
frame.
The stable outlook on both entities reflects S&P's expectation that
Prairie will maintain consolidated adjusted leverage in the
6.75x-7.00x range over the next two years. The rating agency
believes the company will use its excess cash flow to partially
finance Tallgrass' capital spending needs and pay distributions to
its sponsors. At the same time, S&P expects Tallgrass to maintain
adjusted leverage of approximately 5.5x.
"We could consider lowering our ratings if the partnership's
consolidated adjusted leverage remained consistently above 7.5x.
This could occur if it pursued a more aggressive financial policy.
We could also lower our SACP on Tallgrass if it maintained adjusted
leverage of more than 6.5x, but this would not cause us to lower
our issuer credit rating on the company because we consider it to
be a core subsidiary of Prairie," S&P said.
"We could raise our ratings on both entities if the partnership
maintained consolidated adjusted leverage of less than 6x going
forward. This could occur if it used its distributable cash flow to
reduce its outstanding leverage. In addition, we could raise our
SACP on Tallgrass if the partnership maintained adjusted leverage
of less than 5.5x. However, raising our SACP would not lead us to
raise our issuer credit rating on Tallgrass because our rating on
the company is capped by our rating on Prairie unless we come to
consider Tallgrass as an insulated subsidiary of Prairie," the
rating agency said.
PREMIER ON 5TH: Has Until April 27 to File Plan & Disclosure
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On Jan. 30, 2020, Judge Caryl E. Delano of the U.S. Bankruptcy
Court for the Middle District of Florida, Tampa Division, ordered
that Debtor Premier on 5th, LLC shall file a Plan and Disclosure
Statement on or before April 27, 2020.
The hearing on the approval of the Disclosure Statement shall be
consolidated with the hearing on the confirmation of the Plan.
A copy of the order dated January 30, 2020, is available at
https://tinyurl.com/u7psnsy from PacerMonitor at no charge.
About Premier on 5th
Premier on 5th, LLC, owns in fee simple a real property in
Sarasota, Fla.
Premier on 5th sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 19-12098) on Dec. 27, 2019. At the
time of the filing, the Debtor disclosed $1,195,000 in assets and
$494,132 in liabilities. Timothy W. Gensmer, P.A., is the Debtor's
legal counsel.
PROGISTIC CARRIERS: March 25 Plan & Disclosure Hearing Set
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On Jan. 30, 2020, Judge Eduardo V. Rodriguez of the U.S. Bankruptcy
Court for the Southern District of Texas, McAllen Division,
conditionally approved the Disclosure Statement filed by debtor
Progistic Carriers, LLC, and established these dates and
deadlines:
* March 25, 2020, at 11:00 a.m., in the United States
Courthouse, 10th Floor Courtroom, 1701 W. Business Hwy 83, McAllen,
Texas 78501 is the hearing for final approval of the Disclosure
Statement.
* March 18, 2020, is the last day for filing and serving written
objections to final approval of the Disclosure Statement.
* March 25, 2020, at 11:00 a.m. in the United States Courthouse,
10th Floor Courtroom, 1701 W. Business Hwy 83, McAllen, Texas 78501
is the confirmation hearing.
* March 18, 2020, is the last day for filing and serving written
objections or written acceptances or rejections of the Plan.
A full-text copy of the notice and order dated Jan. 30, 2020, is
available at https://tinyurl.com/umazyo5 from PacerMonitor at no
charge.
The Debtor is represented by:
JS WHITWORTH LAW FIRM, PLLC
Jana Smith Whitworth
P.O. Box 2831
McAllen, Texas 78502
Tel: (956) 371-1933
Fax: (956) 265-1753
E-mail: jana@jswhitworthlaw.com
About Progistic Carriers
Progistic Carriers is a privately held company in the general
freight trucking business.
Progistic Carriers filed a voluntary petition for relief under
Chapter 11 of Title 11 of the United States Code (Bankr. S.D. Tex.
Case No. 19-70327) on August 16, 2019. In the petition signed by
Benjamin Cavazos, member, the Debtor estimated $3,322,681 in assets
and $7,302,264 in liabilities.
The case is assigned to Judge Eduardo V Rodriguez.
Jana Smith Whitworth, Esq. at JS Whitworth Law Firm, PLLC, is the
Debtor's counsel.
RAVAGO HOLDINGS: S&P Raises Sec. Debt Rating to BB+; Outlook Stable
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S&P Global Ratings raised its issue-level rating on Ravago Holdings
America Inc.'s secured debt to 'BB+' from 'BB-' and revised its
recovery rating on the debt to '1' from '3' to reflect the
reduction in the company's outstanding balance on its secured term
loan.
At the same time, S&P affirmed its 'BB-' issuer credit rating on
the company.
"We raised our issue-level rating on Ravago's secured debt because
we believe the company's reduction of its total amount of
outstanding secured debt, which occurred in the second half of
2019, will more than offset the recent weakness in its earnings. We
also revised our recovery rating to reflect that the debt reduction
improved the recovery prospects for the company's secured lenders.
In 2019, Ravago benefitted from a significant release of working
capital primarily due to management's inventory management
initiatives and declining sales due to a soft pricing environment.
The company used a significant portion of this cash for debt
reduction, including approximately $170 million to reduce its
outstanding secured term loan debt," S&P said.
The outlook remains stable. Despite the recent debt reduction, S&P
believes that the company's credit measures will stay appropriate
for the current rating due to profitability declines in recent
quarters due to lower pricing and elevated operating expenses. S&P
continues to expect Ravago to have a weighted average funds from
operations-to-debt ratio of between 12% and 20% at the current
rating.
REVOLAR TECHNOLOGY: Taps Klehr Harrison as Special Counsel
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Revolar Technology, Inc. received approval from the U.S. Bankruptcy
Court for the District of Colorado to hire Klehr Harrison Harvey
Branzburg, LLP as its special counsel.
Klehr Harrison will represent the Debtor in a lawsuit it filed
against React Mobile, Inc., a Delaware corporation, in the U.S.
District Court for the District of Delaware.
Raymond Lemisch, Esq., the firm's attorney who will be handling the
case, charges $495 per hour. The hourly rates for associates who
might also work on the case range from $375 to $405. Paralegals
charge an hourly fee of $275.
Mr. Lemisch disclosed in court filings that the firm is
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
Klehr Harrison can be reached through:
Raymond Lemisch, Esq.
Klehr Harrison Harvey Branzburg, LLP
919 N. Market Street, Suite 1000
Wilmington, DE 19801-3062
Tel: 302-426-1189
Fax: 302-426-9193
About Revolar Technology Inc.
Creditors Nicole Bagley, Praful Shah and Julianna Evans Caplan
filed an involuntary Chapter 7 petition against Revolar Technology
Inc. (Bankr. D. Colo. Case No. 18-17812 ) on Sept. 5, 2018. The
case was converted to one under Chapter 11 on Oct. 30, 2018, and
was assigned to Judge Michael E. Romero.
The Debtor hired Kutner Brinen, P.C. as bankruptcy counsel;
Sheridan Ross PC as special counsel; and TaxOps, LLC as accountant.
REWALK ROBOTICS: Incurs $15.6 Million Net Loss in 2019
------------------------------------------------------
ReWalk Robotics Ltd. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$15.55 million on $4.87 million of revenues for the year ended Dec.
31, 2019, compared to a net loss of $21.67 million on $6.54 million
of revenues for the year ended Dec. 31, 2018.
"In 2019, the company made substantial progress in entering the
stroke market segment by completing successful clinical studies,
gaining FDA and CE clearances and in early commercialization with a
unique game changing technology. The spinal cord injury line moved
forward on key contracts for broad coverage in Germany. In Q4, we
completed the submission of a Medicare/Medicaid application for
exoskeletal walking; observed the VA trial nearing completion and
expanded the size of our field organization by over 33%. We feel
that we have put in place the required building blocks to allow us
to grow and improve our financial standing in 2020," stated Larry
Jasinski, chief executive officer of ReWalk.
As of Dec. 31, 2019, the Company had $24.37 million in total
assets, $13.59 million in total liabilities, and $10.78 million in
total shareholders' equity.
Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, in
Haifa, Israel, the Company's auditor since 2014, issued a "going
concern" qualification in its report dated Feb. 20, 2020, citing
that the Company has suffered recurring losses from operations has
a working capital deficiency and has stated that substantial doubt
exists about the Company's ability to continue as a going concern.
Fourth Quarter Results
Total revenue was $1.2 million for the fourth quarter of 2019,
compared to $1.6 million during the prior year quarter. Fifteen
ReWalk and 10 ReStore systems were placed during the fourth quarter
of 2019, compared to 19 ReWalk systems in the prior year period.
Gross margin was 61% during the fourth quarter of 2019, compared to
39% in the fourth quarter of 2018 and our full year 2019 gross
margin was 56%, compared to 43% in 2018, primarily attributable to
an increase in the Company's average selling price and an inventory
write-off expense in 2018.
Total operating expenses in the fourth quarter of 2019 were $3.9
million, compared to $4.6 million in the prior year period.
Net loss was $3.6 million for the fourth quarter of 2019, compared
to a net loss of $5.0 million in the fourth quarter of 2018.
As of Dec. 31, 2019, ReWalk had $16.2 million in cash on its
balance sheet and $7.0 million in short- and long-term debt.
A full-text copy of the Form 10-K is available for free at:
https://is.gd/HFYcZh
About ReWalk Robotics
ReWalk Robotics Ltd. -- http://www.rewalk.com/-- develops,
manufactures, and markets wearable robotic exoskeletons for
individuals with lower limb disabilities as a result of spinal cord
injury or stroke. ReWalk's mission is to fundamentally change the
quality of life for individuals with lower limb disability through
the creation and development of market leading robotic
technologies. Founded in 2001, ReWalk has headquarters in the
U.S., Israel and Germany.
RL BROOKS TRUCKING: Unsecureds Owed $2M to Get $25K Over Time
-------------------------------------------------------------
Debtor RL Brooks Trucking, LLC filed with the U.S. Bankruptcy Court
for the Western District of Pennsylvania a Disclosure Statement in
Support of the Plan of Reorganization dated January 30, 2020.
The total scheduled amount of all unsecured claims which are not
entitled to priority against the Debtor was $2,006,157. This
amount includes any claims the Debtor averred at the time of the
filing of the voluntary petition for relief were not secured and
any claims bifurcated.
The Debtor is proposing to fund its distribution to creditors,
administrative, priority and general unsecured creditors from
ongoing operations. The sources of Plan funding are as follows:
* Continued operations with the Debtor remitting a monthly
payment of $350 per month to the Plan Disbursement Fund/Agent for
payments to general unsecured creditors. General unsecured
creditors will receive $25,000 over time.
* The Debtor used the proceeds from a Court approved sale of two
assets to reduced its obligation to Northwest, the lien holder on
the assets sold. In addition to reducing its secured debt
obligation through the sale, the Debtor, through counsel was able
to negotiate a carve-out of $5,000 from the sale proceeds which
will be utilized for plan funding.
* As of the filing of the Disclosure Statement and related Plan,
the Debtor continues investigating and, if appropriate will make
demand and/or commence suit seeking the recovery of various
preference payments made to creditors during the applicable look
back periods. Per the books and records of the Debtor, payments
totaling approximately $117,671 are subject to scrutiny and
potential claw back for the benefit of creditors.
A full-text copy of the Disclosure Statement dated Jan. 30, 2020,
is available at https://tinyurl.com/whhc7fa from PacerMonitor at no
charge.
The Debtor is represented by:
Spence, Custer, Saylor, Wolfe & Rose, LLC
Kevin J. Petak, Esquire
1067 Menoher Boulevard
Johnstown, Pennsylvania 15905
Tel: (814) 536-0735
Fax: (814) 539-1423
E-mail: kpetak@spencecuster.com
About RL Brooks Trucking
RL Brooks Trucking, LLC, operates an over-the-road trucking
business focusing on the oil and gas industry owning numerous
semi-trucks and trailers which are utilized to provide hauling
services to its company.
RL Brooks Trucking sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 19-70617) on Oct. 2,
2019. At the time of the filing, the Debtor was estimated to have
assets of between $1 million and $10 million and liabilities of the
same range. Judge Jeffery A. Deller oversees the case. Kevin J.
Petak, Esq., at Spence, Custer, Saylor, Wolfe & Rose, LLC, is the
Debtor's legal counsel.
ROLLS BROS: Seeks to Obtain Vehicle Financing from Mack Financial
-----------------------------------------------------------------
Rolls Bros Logistics Inc., asked permission from the Bankruptcy
Court to obtain post-petition financing from Mack Financial to buy
two new trucks through Transpower Incorporated.
Pursuant to the buyer's orders, each vehicle is being purchased for
$111,060, to be financed at 5.99% interest over six years. No
down-payment is required for the purchase and monthly payment on
each vehicle will be $2,061.70. A copy of the loan amortization,
as contained in the motion, is available at https://is.gd/vDiwTV
from PacerMonitor.com at no charge.
The Debtor believes the purchase of the vehicles will provide
additional net revenue to its operations.
About Rolls Bros Logistics Inc.
Rolls Bros Logistics Inc., is a logistics provider offering
trucking and third-party logistics management to provide long haul
and regional highway load transport, domestic ports and
international drayage intermodal, less-than-truckload, specialized,
and flatbed services.
The company filed a Chapter 11 petition (Bankr. M.D. Ga. Case No.
20-10098) on Jan. 24, 2020. In the petition signed by James
Patrick Rolls, CEO, the Debtor was estimated to have up to $50,000
in assets, and between $1 million and $10 million in liabilities.
Zalkin Revell, PLLC, is the Debtor's counsel.
ROMA USA: Has Final OK to Use Cash Collateral Thru March 30
-----------------------------------------------------------
Judge James R. Sacca authorized Roma USA, LLC to use cash
collateral on a final basis from the date of the final hearing
until March 30, 2020 to fund ordinary course expenses in operating
the Debtor’s business, and pay expenses in administering the
Debtor's Chapter 11 case.
Renasant Bank asserts a senior secured claim against the Debtor on
account of a $500,000 term loan evidenced by a promissory note and
a related commercial security agreement securing repayment of the
term loan. Renasant Bank and CDA Investment Holdings entered into
a loan purchase and payoff agreement on January 24, 2020, pursuant
to which Renasant Bank sold and transferred to CDA Investment all
documents relating to the term loan. Under the LPP agreement,
Renasant Bank continues to hold on deposit in suspense funds
collected under the business agreement prior to Jan. 24, 2020,
amount in excess of $187,000, subject to CDA's security interest
asserted under the pre-petition term loan documents.
As of the Petition Date, the Debtor owes amount in excess of
$470,000 under the term loan documents, secured by substantially
all of the Debtor's interest in personal property and operations.
Arcas International, LLC asserts a junior secured lien against the
Debtor under a secured note in the original principal amount of
$191,717.
As adequate protection, the pre-petition lenders are granted valid,
binding, enforceable and automatically perfected liens on and
security interests in all of the Debtor's personal property. As
additional adequate protection for the interest of CDA Investment
Holdings, LLC in the pre-petition term loan collateral, Renasant
Bank will disburse promptly the suspense account funds as follows:
(a) the first $186,419.87 of said funds will be released to CDA
and applied to the pre-petition term loan debt, and
(b) any remaining portion of the suspense account funds in
excess of $186,419.87 will be released to the Debtor and may be
released pursuant to the terms of the final order.
Renasant Bank will promptly turn over to the Debtor any additional
funds from the Debtor's accounts receivable (which come into
possession of Renasant Bank) to be used by the Debtor pursuant to
the final order.
A copy of the final order is available for free at
https://is.gd/VnfIaU from PacerMonitor.com.
About Roma USA LLC
Founded in 2009 and headquartered in Atlanta, Georgia, Roma USA,
LLC is a manufacturer and distributor of mineral-based paint. The
company sought Chapter 11 protection (Bankr. N.D. Ga. Case No.
19-70378) on December 20, 2019. Judge James R. Sacca oversees the
case. Scroggins & Williamson, P.C., is the Debtor's counsel.
ROMA USA: May Get Secured Financing from Arcas on Final Basis
-------------------------------------------------------------
Judge James Sacca authorized Roma USA LLC to obtain secured
financing from Arcas International, LLC pursuant to the terms of
the DIP loan agreement and the final order.
Pursuant to the final order:
(a) Arcas is authorized to provide the Debtor post-petition
loans up to a total amount of $591,171, inclusive of amounts
advanced under the interim DIP order, to be used to fund operating
and Chapter 11 administrative expenses pursuant to the budgets
approved by CDA Investment Holdings, LLC.
(b) The amount of $191,717 of the DIP loans may be used to pay
the outstanding balance of the pre-petition loan payable to Arcas,
and provide adequate protection to Arcas with respect thereto.
(c) The total outstanding principal balance of the Debtor’s
indebtedness to Arcas on the DIP loans will bear interest at a
fixed rate of 9% per annum on the total unpaid principal balance.
The default interest rate will be 14% per annum.
(d) The outstanding principal balance on the DIP loans and any
accrued and unpaid interest will be due on or before March 30,
2020.
Arcas, a newly created entity formed by a minority investor in the
Debtor and unrelated business partners, extended credit to the
Debtor on a junior, secured basis, to enhance the Debtor's
possibility for an effective reorganization.
A copy of the final DIP order is available for free at
https://is.gd/HajJw5 from PacerMonitor.com.
About Roma USA LLC
Founded in 2009 and headquartered in Atlanta, Georgia, Roma USA,
LLC is a manufacturer and distributor of mineral-based paint. The
company sought Chapter 11 protection (Bankr. N.D. Ga. Case No.
19-70378) on December 20, 2019. Judge James R. Sacca oversees the
case. Scroggins & Williamson, P.C., is the Debtor's counsel.
RONALD W. YARBOUGH: $126K Vineland Properties Sale to Pro-Spec OK'd
-------------------------------------------------------------------
Judge Jerrold N. Poslusny, Jr. of the U.S. Bankruptcy Court for the
District of New Jersey authorized Ronald W. Yarbrough's private
sale of the real properties located (i) at 1819 Cedar Ave.,
Vineland, New Jersey, and (ii) 1794 Cedar Ave. Vineland, New
Jersey, to Pro-Spec Property Services, LLC for $126,000.
A hearing on the Motion was held on Jan. 30, 2020.
From the proceeds of sale, the Debtor will pay the following
creditors' claims in the following amounts, which have been agreed
to by those creditors as payment in full of all pre-petition
obligations: (i) OceanFirst Bank - $45,000; (ii) IFIC - $40,000;
(iii) Litwack & Kernan - $6,000; and (iv) Lake Centerton
Homeowners' Association - $15,000.
The sale is subject to the existing judgment lien of Pamela Joy
Yarbrough.
The 14-day stay imposed by Rule 6004(h) of the Bankruptcy Rules is
waived.
The sale of the property is a sale pursuant to Section 363 of the
Bankruptcy Code and pursuant to order of the Court, there is no
transfer tax due with respect to the sale of the property.
The remainder of the proceeds of sale will be held in the trust
account of Kasen & Kasen, P.C. to await further order of the Court.
Ronald W. Yarbrough sought Chapter 11 protection (Bankr. D. N.J.
Case No. 18-26057) on Aug. 10, 2018. The Debtor tapped Jenny R.
Kasen, Esq., at Kasen & Kasen as counsel.
SCIENTIFIC GAMES: Incurs $118 Million Net Loss in 2019
------------------------------------------------------
Scientific Games Corporation filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$118 million on $3.40 billion of total revenue for the year ended
Dec. 31, 2019, compared to a net loss attributable to the Company
of $352 million on $3.36 billion of total revenue for the year
ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $7.81 billion in total assets,
$9.91 billion in total liabilities, and a total stockholders'
deficit of $2.11 billion.
Fourth quarter revenue was $863 million compared to $886 million in
the prior year period. This was largely driven by lower Gaming
revenue primarily due to fewer systems launches in Canada compared
to last year and lower machine unit sales.
Fourth quarter net loss was $37 million compared to net income of
$207 million in the prior year period. This quarter included a $40
million loss on a debt financing transaction related to the notes
offering and a $12 million loss on remeasurement of Euro
denominated debt. The prior year included a $183 million reversal
of a reserve related to resolving the Shuffle Tech legal matter and
a $14 million gain on remeasurement of Euro denominated debt.
Barry Cottle, CEO and president of Scientific Games, said, "This
past year, we made great strides in developing the best games,
attracting industry leading talent, and improving our capital
structure. I'm confident we have the right team in place to reach
our goal to be the market leader across land-based gaming, lottery,
sports and digital gaming driven by leading content and the
platforms that enable play anywhere and anytime. Our recent
contract and deal wins across our businesses, and the globe,
highlight that we are on the right path."
Michael Quartieri, chief financial officer of Scientific Games,
added, "We reduced our net debt by over $460 million in 2019, while
successfully completing two refinancing transactions that will
significantly reduce our cash interest costs going forward and
extended our maturities. Our overarching commitment remains
delevering through organic growth, new market opportunities, and
driving further enhancements to our free cash flow."
A full-text copy of the Form 10-K is available for free at the
SEC's website at:
https://is.gd/kfCpsU
About Scientific Games
Based in Las Vegas, Nevada, Scientific Games Corporation
(NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer
of technology-based products and services and associated content
for the worldwide gaming, lottery, social and digital gaming
industries. Its portfolio of revenue-generating activities
primarily includes supplying gaming machines and game content,
casino-management systems and table game products and services to
licensed gaming entities; providing instant and draw-based lottery
products, lottery systems and lottery content and services to
lottery operators; providing social casino solutions to retail
consumers and regulated gaming entities, as applicable; and
providing a comprehensive suite of digital RMG and sports wagering
solutions, distribution platforms, content, products and services.
SILGAN HOLDINGS: Moody's Confirms Ba2 CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service confirmed its ratings for Silgan Holdings
Inc.'s, including the Ba2 Corporate Family Rating, Ba2-PD
Probability of Default Rating, Ba1 senior secured bank credit
facility rating, and Ba3 senior unsecured rating. The Speculative
Grade Liquidity Rating remains unchanged at SGL-2. The new $550 USD
equivalent Euro senior unsecured notes offering due 2028 was
assigned a Ba3 rating and the 4.125% senior unsecured notes due
2028 were confirmed at a Ba3 rating after the $200 million add-on
offering (total outstanding $600 million including the add-on).
Proceeds from the new notes and add-on will be used to repay
existing US dollar term loan A and pay fees and expenses. The
outlook was revised to stable.
The rating action concludes Moody's review of the ratings that was
prompted by the announcement that Silgan Holdings Inc. had entered
into an agreement to acquire Albea's dispensing business for $900
million.
"The confirmation of the Ba2 Corporate Family Rating and stable
outlook reflect the strategic value of the Albea dispensing
business acquisition, projected free cash flow of the combined
entity and management's pledge to direct free cash flow to debt
reduction until metrics are restored to a comfortable level within
the rating triggers" said Ed Schmidt, VP-Senior Analyst at Moody's
Investors Service. The acquisition brings higher margin business
and new technologies to Silgan. Additionally, it also increases
geographic diversity and exposure to attractive segments of the
closures and dispensing market to which Silgan currently has little
exposure. Pro forma leverage is approximately 4.7 times, but is
expected to decrease to approximately 4.3 times within the next 18
months.
Confirmations:
Issuer: Silgan Holdings Inc.
Probability of Default Rating, Confirmed at Ba2-PD
Corporate Family Rating, Confirmed at Ba2
Senior Secured Bank Credit Facility, Confirmed at Ba1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3 (LGD5)
Assignments:
Issuer: Silgan Holdings Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5)
Outlook Actions:
Issuer: Silgan Holdings Inc.
Outlook, Changed To Stable From Rating Under Review
The ratings are subject to the deal and acquisition closing as
proposed and the receipt and review of the final documentation.
Changes to the projected capital structure or the proposed
acquisitions could result in a change to the instrument ratings.
RATINGS RATIONALE
Strengths in Silgan's credit profile include the consolidated
industry structure in the company's metals products (food cans and
metal closures) and strong market shares and contract structures in
food cans. The company has a significant onsite presence with
customers in the food can segment and a significant percentage of
custom products in the plastics and closures segments. Silgan
remains focused on cost cutting, innovation and productivity as
well as maintaining good liquidity.
Weaknesses in the credit profile include the company's
acquisitiveness, high percentage of commodity products and
concentration of sales. The low growth in the food can market and
the company's acquisition strategy also increase the overall
business and credit risk. Most of the company's food cans and some
of the closures and plastic containers are commodity products.
Silgan has a both a customer and product concentration of sales.
Contracts in the closures and plastics segments have relatively
weaker terms than the food can segment and the raw materials used
in those segments are more volatile. Additionally, the industry
structure for the plastic and closures segments is fragmented with
significant competition.
The rating could be upgraded if Silgan sustainably improves credit
metrics within the context of stability in the operating and
competitive environment while continuing to maintain good
liquidity. Specifically the ratings could be upgraded if:
-- Debt to EBITDA improves to below 3.8 times
-- EBITDA to interest expense improves to over 5.5 times
-- Funds from operation to debt improves to over 18.0%
The rating could be downgraded if there is any deterioration in
credit metrics, liquidity or the operating and competitive
environment. Additionally, acquisitions that alter the company's
business and operating profile or significant debt financed
acquisitions may also prompt a downgrade. Specifically, the ratings
could be downgraded if:
-- Adjusted debt to EBITDA remains above 4.3 times
-- Funds from operation to debt declines below 15.5%
-- EBITDA to interest expense declines to below 5.0 times.
Governance risks are less than most other companies in the sector
due to the lack of PE ownership (Silgan is a public company).
Silgan's SGL-2 Speculative Grade Liquidity Rating reflects the
company's good liquidity characterized by good availability on the
company's revolver and adequate cash balances. The company usually
draws extensively on its revolver during the second and third
quarters to finance working capital due to the seasonality of its
production. Draws on the revolver can remain high into the fourth
quarter, as Silgan carries accounts receivable for some customers
beyond the end of the packing season. Seasonal working capital
requirements have historically been approximately $250-$500 million
and funded through a combination of revolver draws and cash on
hand. Cash is primarily held domestically in high quality
instruments and easily accessed. The multi-currency revolver
including $1.19 billion USD revolver and a $15 million CAD
revolver, expires in May 2025. Annual amortization for the term
loans started December 2019 and is 5% annually the first year and
then 10% annually thereafter a bullet at maturity on May 30, 2026.
There are no other significant debt maturities until the
approximately $1 billion of senior unsecured notes mature March 15,
2025. The financial covenants for the credit facilities include a
minimum interest coverage ratio of 3.0 times and maximum total net
leverage ratio of 4.25 times. The covenant limits increase upon a
permitted acquisition for a period of four quarters following the
close. The cushion under the covenants is adequate. Moody's expects
Silgan to continue to maintain sufficient cushion under its
financial covenants.
Headquartered in Stamford, Connecticut, Silgan Holdings Inc.
(Silgan) is a manufacturer of metal and plastic consumer goods
packaging products. The company reports in three segments including
metal containers (primarily human and pet food cans), closures
(primarily plastic but also metal) and plastic containers. Products
the company manufactures include human and pet food cans; closures
for food, beverage, health care, garden, personal care, home and
beauty products (both metal and plastic); and plastic containers
for shelf-stable food, pharmaceuticals, personal care products, and
industrial chemicals. Consolidated net revenue for the 12 months
ended December 31, 2019 was approximately $4.5 billion ($4.9
billion pro forma for the Albea dispensing systems acquisition).
Approximately 79% of sales are generated in the United States and
21% from outside the US (primarily Europe). Silgan is a public
company, but approximately 30% of the outstanding stock is owned by
the two founders of the company.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
May 2018.
STAK DESIGN: Obtains Interim OK to Use Cash Collateral Thru Feb. 21
-------------------------------------------------------------------
STAK Design, Inc., asked the Bankruptcy Court to authorize use of
cash collateral in order to operate its business in the ordinary
course and pay costs in administering its Chapter 11 case.
The Debtor has a revolving line of credit with Valliance Bank with
a current principal balance of approximately $195,000, secured by a
first priority lien in all of the Debtor's assets, including its
accounts. The Debtor is working with Valliance to reach an
agreement regarding a budget for the cash collateral for the period
of February 4, 2020 to March 6, 2020. A copy of the motion is
available for free at https://is.gd/Zq08rv from PacerMonitor.com.
Judge Harlin Dewayne Hale granted the Debtor's motion on an interim
basis through February 21, 2020. Valliance is granted a valid,
perfected, dollar-for-dollar replacement lien in all property of
the Debtor's estate, except for causes of action under Chapter 5 of
the Bankruptcy Code.
A copy of the interim order is available for free at
https://is.gd/3DnLKE from PacerMonitor.com.
The Court entered an amended interim order a copy of which is
available at https://is.gd/akIRDE from PacerMonitor.com at no
charge.
About STAK Design, Inc.
STAK Design, Inc. -- http://www.stakdesign.com/-- is a custom
design, engineering, and manufacturing firm. The Company works
directly with architects, designers, developers, and general
contractors for custom millwork, retail displays, kiosks, RMUs,
specialty environments, and custom tradeshow exhibits.
The Debtor filed a Chapter 11 petition (Bankr. N.D. Tex. Case No.
20-30424) on Feb. 4, 2020. In the petition signed by Stanley
Zalenski, president, the Debtor was estimated to have between
$500,000 and $1 million in assets and $1 million and $10 million in
liabilities. Judge Harlin Dewayne Hale is assigned to the case.
Mcguire, Craddock & Strother, P.C., represents the Debtor.
STEVEN W. DEPASQUALE: Trustee's Objection to Discharge Due March 30
-------------------------------------------------------------------
Judge Diane Finkle of the U.S. Bankruptcy Court for the District of
Rhode Island granted the request of Stacy B. Ferrara, the Trustee
for Steven W. DePasquale, to extend the deadline in which to object
to the Debtor's discharge for a period of 60 days from Jan. 30,
2020 until March 30, 2020.
The Trustee needed time to conduct and conclude the Meeting of
Creditors, and review the missing and amended tax returns not yet
filed before she can make a determination as to dischargeability.
The Trustee:
Stacy B. Ferrara, Esq.
NOLAN, BRUNERO, CRONIN & FERRARA, LTD
1070 Main Street
Coventry, RI 02816
Telephone: (401) 828-5800
(401)823-3230
The case is In re Steven W. DePasquale, (Bankr. D.R.I. Case No.
19-10189).
SWINGING TAIL: Unsecureds to Get Paid from Litigation Proceeds
--------------------------------------------------------------
Debtor Swinging Tail Cattle, Inc., filed with the U.S. Bankruptcy
Court for the Eastern District of North Carolina, Wilmington
Division, a Plan of Liquidation and a Disclosure Statement.
The Debtor's Plan calls for (i) the surrender of the Debtor's
business property and assets to the court, (ii) the pursuit of
pending litigation concerning the Debtor's row crop operations, and
(iii) payment of administrative, priority tax claims, and general
unsecured claims in accordance with statutory requirements.
The Debtor will pay its administrative costs in full within 30 days
of the Effective Date or by such other mutually agreed terms as the
parties may agree. If sufficient funds do not exist for payment of
administrative claims in Class I, the proceeds from unencumbered
net sales will be used to pay this class prior to any distribution
to the unsecured creditors.
The aggregate sum of non-insider General Unsecured Claims is
estimated to be $169,465, exclusive of any deficiency asserted by
the Debtor's creditors. The Debtor shall pay these classes the net
proceeds of the recovery of damages, if any, from pending
litigation claims initiated during the bankruptcy, following
payment of administrative claims, tax claims, and court-approved
costs and expenses associated with the litigation.
The Debtor has proposed a sale of certain of its personal property
assets, including equipment and vehicles. Proceeds of this sale
will be allocated in accordance with the priority of existing
security interests, subject to future orders of the Bankruptcy
Court. Proceeds derived from additional assets, such as the
Debtor's herd of cattle, causes of action, will be allocated to
creditors in accordance with the priority of liens, if any, and to
other creditors in accordance with the priorities.
A full-text copy of the Disclosure Statement dated Jan. 30, 2020,
is available at https://tinyurl.com/tqxcw65 from PacerMonitor at no
charge.
The Debtor is represented by:
DAVID J. HAIDT
AYERS & HAIDT, P.A.
P.O. Box 1544
New Bern, NC 28563
Tel: (252) 638-2955
About Swinging Tail Cattle Co.
Swinging Tail Cattle Co., Inc., a privately held company in the
agricultural production, farms and livestock industry, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C.
Case No. 19-05701) on Dec. 12, 2019. In the petition signed by
Jacqueline W. Lennon, president, the Debtor was estimated to have
$500,000 to $1 million in assets and $1 million to $10 million in
liabilities. Judge Joseph N. Callaway oversees the case. David J.
Haidt, Esq., at Ayers & Haidt, PA, is the Debtor's legal counsel.
TEL-INSTRUMENT: Has $908K Net Income for Quarter Ended Dec. 31
--------------------------------------------------------------
Tel-Instrument Electronics Corp. filed its quarterly report on Form
10-Q, disclosing a net income of $907,577 on $4,733,135 of net
sales for the three months ended Dec. 31, 2019, compared to a net
income of $639,453 on $3,975,736 of net sales for the same period
in 2018.
At Dec. 31, 2019, the Company had total assets of $10,640,100,
total liabilities of $9,004,803, and $1,635,297 in total
stockholders' equity.
Tel-Instrument Electronics said, "The Company has recorded
estimated damages to date of $5.6 million, including interest, as a
result of a jury verdict associated with the Aeroflex litigation.
The Company has filed for an appeal. In June 2019, Bank of America
agreed to extend the Company's line of credit until March 31, 2020.
While the Company's operations and profitability have
significantly improved, and the Company believes it has sufficient
cash and financing in place to fund its plans for the next twelve
months, exclusive of any determination that may result from the
Aeroflex litigation, due in part to recent large orders it has
received that has returned the Company to profitability, the
Company may not have sufficient resources to satisfy the judgment
if we are not successful in our appeal. We have no commitment from
any party to provide additional working capital and there is no
assurance that any funding will be available as required, or if
available, that its terms will be favorable or acceptable to the
Company. This factor raises substantial doubt about the Company's
ability to continue as a going concern within one year of the date
that the financial statements are issued."
A copy of the Form 10-Q is available at:
https://is.gd/lt1XYW
Tel-Instrument Electronics Corp. designs, manufactures, and sells
avionics test and measurement solutions for the commercial air
transport, general aviation, and government/military aerospace and
defense markets in the United States and internationally. It
operates in two segments, Avionics Government and Avionics
Commercial. It sells its products directly or through distributors.
The company was founded in 1947 and is headquartered in East
Rutherford, New Jersey.
TRANSOCEAN LTD: Incurs $1.25 Billion Net Loss in 2019
-----------------------------------------------------
Transocean Ltd. filed with the Securities and Exchange Commission
its Annual Report on Form 10-K reporting a net loss of $1.25
billion on $3.08 billion of contract drilling revenues for the year
ended Dec. 31, 2019, compared to a net loss of $2 billion on $3.02
billion of contract drilling revenues for the year ended Dec. 31,
2018.
As of Dec. 31, 2019, the Company had $24.10 billion in total
assets, $1.72 billion in total current liabilities, $10.51 billion
in total long-term liabilities, and $11.86 billion in total
equity.
At Dec. 31, 2019, the Company had $1.8 billion in unrestricted cash
and cash equivalents and $558 million in restricted cash and cash
equivalents. In the year ended Dec. 31, 2019, the Company's
primary sources of cash were as follows: (1) net cash proceeds from
the issuance of debt, (2) net cash provided by operating activities
and (3) proceeds from maturities of short-term investments. The
Company's primary uses of cash were as follows: (a) repayments of
debt, (b) capital expenditures and (c) investments in
unconsolidated affiliates.
Transocean said, "We expect to use existing unrestricted cash
balances, internally generated cash flows, borrowings under the
Secured Credit Facility, proceeds from the disposal of assets or
proceeds from the issuance of additional debt to fulfill
anticipated obligations, which may include capital expenditures,
working capital and other operational requirements, scheduled debt
maturities or other payments. We may also consider establishing
additional financing arrangements with banks or other capital
providers. Subject to market conditions and other factors, we may
also be required to provide collateral for future financing
arrangements. In each case subject to then existing market
conditions and to our then expected liquidity needs, among other
factors, we may continue to use a portion of our internally
generated cash flows and proceeds from asset sales to reduce debt
prior to scheduled maturities through debt repurchases, either in
the open market or in privately negotiated transactions, or through
debt redemptions or tender offers."
A full-text copy of the Form 10-K is available for free at the
SEC's website at:
https://is.gd/8Q48H2
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. As of Feb. 12, 2020, the
Company owned or had partial ownership interests in and operated 45
mobile offshore drilling units, including 28 ultra-deepwater
floaters, 14 harsh environment floaters and three midwater
floaters. The Company provides contract drilling services in a
single, global operating segment, which involves contracting its
mobile offshore drilling fleet, related equipment and work crews
primarily on a dayrate basis to drill oil and gas wells. It
specializes in technically demanding regions of the offshore
drilling business with a particular focus on ultra- deepwater and
harsh environment drilling services.
* * *
As reported by the TCR on Oct. 2, 2019, S&P Global Ratings lowered
its issuer credit rating on Switzerland-based offshore drilling
contractor Transocean Ltd. to 'CCC+' from 'B-'. The downgrade
reflects S&P's view that Transocean Ltd.'s operating margins have
weakened and will remain low for the next one to two years as
utilization and day rates for offshore drilling rigs remain
subdued.
UCOAT IT: Feb. 28 Auction of All Assets Set
-------------------------------------------
Judge Maria L. Oxholm of the U.S. Bankruptcy Court for the District
of Michigan authorized UCoat It America, LLCs' bidding procedures
in connection with the auction sale of substantially all assets.
The Asset Purchase Agreement is approved for purposes of allowing
Debtor to use it in the sale process, and is appropriate and
reasonably calculated to enable the Debtor and other parties in
interest to easily compare and contrast the differing terms of the
bids presented at the Auction.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: February 25, 2020 at 5:00 p.m. (ET)
b. Initial Bid: An amount equal to or greater than the sum of
the Purchase Price as set forth in the Asset Purchase Agreement and
not be subject to any contingencies
c. Deposit: $15,000
d. Auction: The Auction is scheduled for Feb. 28, 2020 at 1:00
p.m. (ET) at the offices of the Debtor's attorney Don Darnell, 8080
Grand St., Dexter, Michigan 48130.
e. Bid Increments: $1,000
f. Sale Hearing: March 5, 2020 at 11:00 a.m.
g. Objection Deadline: Jan. 31, 2020
The Auction and Sale Notice, and service of the Auction and Sale
Notice on the Notice Parties, and advertising in Crain's Detroit
Business and Detroit Free Press, as set forth in the Motion, are
approved.
Nothing in the Order approving Sale will be construed to alter the
statutory authority of the State of Michigan, Unemployment
Insurance Agency to determine successor tax liability including tax
rate under the Michigan Employment Security Act ("MESA"). The Sale
Order, including any of its terms, provisions and exhibits, will
not waive or discharge any liability or obligations that the Debtor
or any purchaser may have to the State of Michigan under the MESA.
The Oakland County Treasurer will be paid in full from sale
proceeds upon closing in the amount of $5,422 if paid in February
2020, or $5,465 if paid in March 2020.
The State of Michigan, Department of Treasury will be paid the full
amount of its secured claim of $32,153 from sale proceeds in the
amount remaining after the Oakland County Treasurer is paid, and
then the prevailing bidder will pay the $1,000 monthly thereafter,
with interest to accrue at the statutory rate, until fully paid.
Notwithstanding the possible applicability of Bankruptcy Rules
6004(h) and 6006(d) or otherwise, the terms and conditions of the
Order will be immediately effective and enforceable upon its entry.
About UCoat It America
UCoat It America, LLC is a privately-owned company based in Royal
Oak, Michigan. It was founded in 1999 with the primary goal of
providing a true, commercial-grade epoxy floor coating system that
was widely available to the do-it-yourself customer.
UCoat It America filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No.
19-40388) on Jan. 11, 2019, listing under $1 million in assets and
liabilities. The case is assigned to Judge Maria L. Oxholm. Donald
C. Darnell, Esq., at Darnell, PLLC, is the Debtor's bankruptcy
counsel.
VETERINARY CARE: 2 More Creditors Appointed as Committee Members
----------------------------------------------------------------
The Office of the U.S. Trustee on Feb. 18, 2020, appointed two more
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 cases of Veterinary Care, Inc. and TVET
Management, LLC.
The two unsecured creditors are:
(1) MWI Animal Health
3041 W. Pasadena Dr.
Boise, ID 83707
(208) 955-8930
RBehm@mwianimalhealth.com
(2) Steve Peterman, DVM
613 Newcastle Ln
Grand Prairie, TX 75052
(214) 801-2845
Peterman4@sbcglobal.net
The bankruptcy watchdog had earlier appointed James Kelly, Lynn
Stucky, Beshoy Rafla, Boehringer Ingelheim and Robert Foley, court
filings show.
About Veterinary Care
Veterinary Care Inc., which conducts business under the name,
Vitalpet, offers pet care services.
Petitioning creditors Dr. Warren Resell, Dr. James H. Kelly, Dr.
Larry D. Wood, filed an involuntary Chapter 11 petition (Bankr.
S.D. Tex. Case No. 19-35736) against Veterinary Care, Inc. on Oct.
10, 2019. The petitioners are represented by Richard L. Fuqua,
Esq., at Fuqua & Associates, P.C., in Houston.
On Nov. 18, 2019, TVET Management LLC filed a voluntary Chapter 11
petition (Bankr. S.D. Tex. Case No. 19-36430).
On Nov. 19, 2019, the court ordered the joint administration of
Veterinary Care's and TVET's bankruptcy cases. The cases are
jointly administered under Case No. 19-35736.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Okin Adams LLP as their legal counsel, and The
Claro Group, LLC as their financial advisor. Douglas Brickley,
managing director of Claro Group, is the chief restructuring
officer.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Jan. 31, 2020. The committee is represented by
Richard L. Fuqua, Esq.
VIP CINEMA: Files for Chapter 11 With Prepackaged Plan
------------------------------------------------------
VIP Cinema, which makes luxury movie-theater seating, filed for
bankruptcy with a prepackaged plan that would cut $209 million in
funded debt in half.
In filings with the U.S. Bankruptcy Court for the District of
Delaware, VIP Cinema said its Chapter 11 reorganization would give
control to its lenders and private equity firm H.I.G. Capital,
which would take a 51% equity stake, provide access to $20 million
in fresh capital, and eliminate $178 million of long-term debt.
Pursuant to the RSA, the Plan is currently supported by the
Debtors, holders of more than 66.6% of the amount of first lien
claims, and the holder of 100% of the amount of Second Lien Claims.
H.I.G. Capital, LLC and H.I.G. Middle Market LBO Fund II, L.P have
also executed the Restructuring Support Agreement and, therefore,
supports the Debtors' Plan.
The Plan would maintain the Company as a going concern, preserving
373 jobs globally.
As of the Petition Date, the Debtors have approximately $209
million of funded debt obligations:
* $144.4 million outstanding under a $165 million term loan
commitment due March 1, 2023 and secured on a first lien basis by
substantially all of the Company's assets, equity interests of
each subsidiary of Holdings, and real property.
* $20 million outstanding under a revolving credit facility due
March 1, 2022 and secured on a first lien basis by substantially
all of the Company's assets, equity interests of each subsidiary
of Holdings, and real property.
* $45 million outstanding under a term loan facility due March
1, 2024, and secured on a second lien basis by substantially all of
the Company's assets, equity interests of each subsidiary of
Holdings, and real property.
The anticipated benefits of the Plan include, without limitation:
(a) Conversion of approximately $164 million of First Lien
Claims to equity and an exit facility;
(b) Discharge of approximately $45 million of Second Lien
Claims;
(c) A $13 million new money debtor in possession financing
facility from the Consenting First Lien Lenders and the Second Lien
Lenders;
(d) Prompt emergence from chapter 11; and
(e) A $7 million new money capital infusion upon emergence from
the Investor.
The Plan provides for a comprehensive restructuring of the Debtors'
prepetition obligations, preserves the going-concern value of the
Debtors' business, maximizes all creditor recoveries, and protects
the jobs of the Debtors' invaluable employees, including the
management team.
VIP was founded in 2008 in New Albany, Mississippi, as a
residential furniture maker, and moved its corporate offices to St.
Louis last year. It said it has a 70% share of the U.S. market for
luxury movie theater seating.
Chief Restructuring Officer Stephen Spitzer said the premium
recliner market had by 2017 "reached a near saturation point"
following theater upgrades by chains such as AMC, Cinemark and
Cineplex, and the number of new screens has since remained
"relatively flat."
"Continued proliferation of online streaming services and
alternative viewing experiences, which has led to declining movie
attendance, a poor outlook sentiment for the overall U.S. movie
theatre industry and particularly put significant pressure on the
stock price of AMC, a key customer for the Company," he said.
He noted that after a record box office of $11.9 billion in the
U.S. in 2018, attendance and box office declined approximately 5
percent, despite a high profile content lineup. This has led AMC
and other exhibitors to pull-back on investment due to the
long-term uncertainty of the industry.
Financing Arranged
The Debtors will obtain a new senior secured superpriority
debtor-in-possession term loan financing facility in an aggregate
principal amount of $33 million, which certain First Lien Lenders
have agreed to backstop, consisting of:
(a) $13 million in principal amount of new money term loans
provided by (i) the Participating First Lien Lenders in a principal
amount of $11 million (the "DIP New Money 1L Loans") and (ii) the
Second Lien Lender in a principal amount of $2 million (the "DIP
New Money 2L Loans"); and
(b) $20 million in principal amount of loans under the Existing
First Lien Credit Agreement held by each Participating First Lien
Lender that roll-up into loans under the DIP Facility, which
Roll-Up Loans will be junior in right of security and payment to
the New Money DIP Loans.
The Reorganized Debtors will obtain exit financing consisting of:
(a) a senior secured first lien term loan facility in an
aggregate principal amount of up to $11 million comprised of DIP
New Money 1L Loans converted into loans under the First Lien Exit
Facility on a dollar-for-dollar basis;
(b) a second lien exit term loan facility comprised of converted
Roll-Up Loans;
(c) $2 million of DIP New Money 2L Loans that shall convert into
preferred equity and common equity; and
(d) the Investor or some affiliate thereof making a $7 million
new money investment in the Reorganized Debtors on the Effective
Date and providing management services for a period of four years
following the Effective Date for no fee.
The Plan also contemplates a CEO incentive plan comprised of 1% of
Common Equity, and a management incentive plan comprised of (i) 8%
of the Common Equity which vests on time-basis and (ii) 15% of
performance vested equity subject to certain MOIC targets, on a
fully-diluted basis to ensure a seamless transition out of chapter
11.
About VIP Cinema
VIP Cinema is the largest manufacturer of luxury movie-theatre
seating in the U.S. with 70% of the domestic market share. Steve
Simons started VIP in 2008 as a residential furniture manufacturer
based in New Albany, Mississippi. VIP was later amongst the first
in the U.S. to introduce and sell to exhibitors a premium,
reclining movie theatre chair, to replace and upgrade existing
low-profile, metal chairs. VIP began ramping up production and
created a "first-mover advantage" by working closely with and
becoming a key supplier to AMC Theatres.
VIP Cinema Holdings and 4 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10344) on Feb. 18, 2020.
VIP Cinema was estimated to have at least $100 million in assets
and liabilities as of the filing.
VIP tapped the law firm of Ropes & Gray LLP, as the Company's
counsel; UBS Securities LLC, as the Company's investment banker;
and AP Services LLC as financial advisor. Omni Agent Solutions is
the claims agent.
VIP CINEMA: Unsecureds Who Sign Releases to Get Up to $5K Each
--------------------------------------------------------------
VIP Cinema's prepackaged plan of reorganization projects that
holders of general unsecured claims are slated to have a 0%
recovery under the Plan. Notwithstanding, each holder of an
allowed general unsecured claim will receive the lesser of (A) the
allowed amount of its general unsecured claim and (b) $5,000, if
such holder elects to "opt in" and agrees to the releases in the
Plan.
Holders of first lien claims are slated to have a 42.6% recovery.
Holders of second lien claims won't receive any distribution on
account of those claims.
HIG Capital, the investor, will receive 51% of the common stock of
the reorganized debtor and preferred stock with value of $7 million
in exchange for the $7 million of new money commitment and the new
MSA. Holders of first lien claims will receive 10% of the common
stock and $50 million of the preferred stock of the reorganized
Debtor. Holders of DIP New Money 2L Claims will receive 25% of the
reorganized common stock and up to $2 million of reorganized
preferred stock.
The Plan provides for the treatment of Claims against and Equity
Interests in the Debtors through, among other things:
* Each Holder of an Allowed Administrative Claim will receive in
full and final satisfaction of its Allowed Administrative Claim an
amount of Cash equal to the unpaid portion of such Allowed
Administrative Claim;
* Each Holder of an Allowed Priority Tax Claim will be treated
in accordance with the terms set forth in section 1129(a)(9)(C) of
the Bankruptcy Code;
* Each Holder of an Allowed Other Priority Claim, in full and
final satisfaction, settlement, release, and discharge and in
exchange for each Other Priority Claim, shall (i) be paid in full
in Cash, or (ii) receive such other recovery as is necessary to
satisfy section 1129 of the Bankruptcy Code;
* DIP New Money 1L Claims, in full and final satisfaction,
settlement, release and discharge of and in exchange for release of
all Roll-Up DIP Claims, shall convert on a dollar-for-dollar basis
into first lien loans under the First Lien Exit Facility pursuant
to the First Lien Exit Facility Documents in the Exit Conversion
Amount;
* Roll-Up DIP Claims, in full and final satisfaction,
settlement, release and discharge of and in exchange for release of
all Roll-Up DIP Claims, shall convert on a dollar-for-dollar basis
into second lien loans under the Second Lien Exit Facility pursuant
to the Second Lien Exit Facility Documents;
* DIP New Money 2L Claims, in full and final satisfaction,
settlement, release and discharge of and in exchange for release of
all DIP New Money 2L Claims, shall be exchanged for (i) 25% of the
Reorganized Common Stock prior to dilution for the Management
Incentive Plan, and (ii); Reorganized Preferred Stock with an
initial stated value equal to the aggregate principal amount of DIP
New Money 2L Loans outstanding immediately prior to the Effective
Date (which in no event shall exceed $2.0 million);
* Each Holder of an Other Secured Claim shall receive, in full
and final satisfaction, compromise, settlement, release, and
discharge of and in exchange for each Allowed Other Secured Claim:
(i) payment in full in Cash; (ii) delivery of the collateral
securing any such Claim and payment of any interest required under
section 506(b) of the Bankruptcy Code; (iii) Reinstatement of such
Claim; or (iv) other treatment rendering such Claim Unimpaired in
accordance with section 1124 of the Bankruptcy Code;
* Each Holder of an Allowed First Lien Claim shall receive, in
full and final satisfaction, compromise, settlement, release, and
discharge of and in exchange for each Allowed First Lien Claim, its
Pro-Rata Share of (i) $60 million of Reorganized Preferred Stock,
and (ii) 10% of the Reorganized Common Stock prior to dilution from
the Management Incentive Plan;
* All of the Second Lien Claims shall be discharged and will
receive no distribution on account of such Claims;
* All of the General Unsecured Claims shall be discharged and
will receive no distribution on account of such Claims; provided
that if a Holder of an Allowed General Unsecured Claim elects to
opt in and be bound by the Releases set forth in section 9.3 of the
Plan by executing an Opt-In Form on or before the 30th day
following the Effective Date, such Holder shall receive the lesser
of (i) the Allowed amount of its General Unsecured Claim and (ii)
$5,000.
* Each Intercompany Claim shall, at the option of the Debtors, the
Requisite Consenting First Lien Lenders, and the Second Lien
Lenders, be (i) Reinstated or (ii) cancelled, released and
discharged without any distribution on account of such Claims;
* All Subordinated Claims will be cancelled, released, and
discharged as of the Effective Date, and shall be of no further
force or effect;
* All Equity Interests in Holdings will be cancelled, released and
discharged without any distribution on account of such Equity
Interests; and
* The Intercompany Equity Interests shall be cancelled, released
and discharged without any distribution on account of such Equity
Interests; provided, however, that at the option of the Debtors,
the Requisite Consenting First Lien Lenders, the Second Lien
Lenders, and the Investor, the Intercompany Equity Interests may be
Reinstated for administrative convenience.
A copy of the Disclosure Statement explaining the terms of the
Prepackaged Plan is available free of charge at
https://tinyurl.com/u95ekhf from PacerMonitor.com.
H.I.G. Capital's attorneys:
Brooks Gruemmer, Esq.
Jay Kapp, Esq.
McDermott Will & Emery LLP
444 West Lake Street
Chicago, IL 60606
E-mail: bgruemmer@mwe.com
jkapp@mwe.com
First Lien Lenders' attorneys:
Damian S. Schaible, Esq.
Adam L. Shpeen, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
E-mail: damian.schaible@davispolk.com
adam.shpeen@davispolk.com
Second Lien Lenders' Attorneys:
Jayme T. Goldstein, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
E-mail: jgoldstein@stroock.com
About VIP Cinema
VIP Cinema is the largest manufacturer of luxury movie-theatre
seating in the U.S. with 70% of the domestic market share. Steve
Simons started VIP in 2008 as a residential furniture manufacturer
based in New Albany, Mississippi. VIP was later amongst the first
in the U.S. to introduce and sell to exhibitors a premium,
reclining movie theatre chair, to replace and upgrade existing
low-profile, metal chairs. VIP began ramping up production and
created a "first-mover advantage" by working closely with and
becoming a key supplier to AMC Theatres.
VIP Cinema Holdings and 4 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10344) on Feb. 18, 2020 with a
prepackaged plan that would cut $200 million of funded debt in
half.
VIP Cinema was estimated to have at least $100 million in assets
and liabilities as of the filing.
VIP tapped the law firm of Ropes & Gray LLP, as the Company's
counsel; UBS Securities LLC, as the Company's investment banker;
and AP Services LLC as financial advisor. Omni Agent Solutions is
the claims agent.
VIRGINIAS RESOURCES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Virginias Resources Recycled, LLC 20-30888
101 Dry Bridge Road
Midlothian, VA 23114
Watkins-Amelia, L.L.C. 20-30889
101 Drybridge Road
Midlothian, VA 23114
Watkins Nurseries, Inc. 20-30890
101 Dry Bridge Road
Midlothian, VA 23114
Business Description: Virginias Resources Recycled, LLC --
http://www.vrrllc.com-- is a commercial &
residential land clearing, grinding,
grubbing, and logging company located in
Central, Virginia.
Watkins-Amelia is engaged in activities
related to real estate.
Watkins Nurseries --
http://www.watkinsnurseries.com--
is a wholesale and retail tree nursery,
plant center, and landscape design firm
established in 1876. The Company
specializes in field-grown trees and shrubs
that it produces on over 500 acres of farm
land.
Chapter 11 Petition Date: February 19, 2020
Court: United States Bankruptcy Court
Eastern District of Virginia
Debtors' Counsel: Paula S. Beran, Esq.
TAVENNER & BERAN, PLC
20 North 8th Street
Second Floor
Richmond, VA 23219
Tel: (804) 783-8300
Fax: (804) 783-0178
Virginias Resources'
Estimated Assets: $1 million to $10 million
Virginias Resources'
Estimated Liabilities: $1 million to $10 million
Watkins-Amelia's
Estimated Assets: $1 million to $10 million
Watkins-Amelia's
Estimated Liabilities: $1 million to $10 million
Watkins Nurseries'
Estimated Assets: $1 million to $10 million
Watkins Nurseries'
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Robert S. Watkins, managing member.
A copy of Virginias Resources' 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/jA7IJJ
Watkins-Amelia stated it has no unsecured creditors. A full-text
copy of the Debtor's petition is available for free at
PacerMonitor.com at:
https://is.gd/4xGvzR
A copy of Watkins Nurseries' 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/SzDoGs
VISTAGE INT'L: Moody's Raises CFR to B2, Outlook Stable
-------------------------------------------------------
Moody's Investors Service upgraded its ratings for Vistage
International, Inc. including the company's corporate family rating
to B2 from B3 and probability of default rating (PDR) to B2-PD from
B3-PD. At the same time, Moody's affirmed the company's existing
senior secured first lien credit facilities at B2 including the
proposed $50 million first lien term loan add-on. Moody's upgraded
the company's existing senior secured second lien term loan to Caa1
from Caa2. The outlook is stable.
Proceeds from the incremental debt issuance will be used to prepay
$50 million of Vistage's existing second lien term loan. The
company is also upsizing its first lien revolving credit facility
to $40 million from $25 million. The affirmation of the first lien
credit facilities at B2 brings it in line with the CFR to reflect
the sizable amount of first lien debt in the capital structure and
related reduction in loss absorption offered by the second lien
term loan.
"The one-notch upgrade of the CFR reflects Vistage's improved
credit profile since its LBO in January 2018 over which time
leverage has improved to 5.5x from 7.4x from steady earnings growth
and debt repayment," said Moody's lead analyst Andrew MacDonald.
"Going forward, we believe that the company's leverage will remain
below 6x and will benefit from improved free cash flow following
the repayment of second lien debt."
Upgrades:
Issuer: Vistage International, Inc.
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Corporate Family Rating, Upgraded to B2 from B3
Senior Secured 2nd Lien Term Loan, Upgraded to Caa1 (LGD6) from
Caa2 (LGD5)
Outlook Actions:
Issuer: Vistage International, Inc.
Outlook, Remains Stable
Affirmations:
Issuer: Vistage International, Inc.
Senior Secured 1st Lien Revolving Credit Facility, Affirmed B2
(LGD3)
Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3)
RATINGS RATIONALE
Vistage's B2 CFR reflects the company's high leverage (Moody's
adjusted debt-to-EBITDA) of 5.5x for the twelve months ended 31
December 2019, small scale and narrow albeit leading market
position as an executive coaching organization for small and
mid-sized businesses. The company's ratings are also constrained by
its small size as measured by revenues relative to similarly rated
companies. However, the company has an established profitable
position in a niche end market and benefits from consistent sales
growth with a visible recurring subscription-based revenue model
supported by a growing member count. Vistage has good liquidity
with modestly positive free cash flow and good access to external
liquidity under its proposed upsized $40 million revolving credit
facility that expires in 2023.
The stable outlook reflects Moody's expectations of continued
revenue growth and profitability that results in a modest decrease
in leverage, with solid liquidity provisions maintained at all
times.
Moody's considers financial strategies as a governance risk given
the company's private equity ownership, mitigated to an extent by
the company's preference for early debt repayment over debt funded
acquisitions or shareholder returns. The company does not exhibit
material or unusual environmental or social risks.
Moody's anticipates that Vistage will maintain good liquidity over
the next 12 to 18 months, supported by positive free cash flow and
revolver availability. Free cash flow benefits from minimal capital
expenditures and negative working capital dynamics. Vistage will
have roughly $7.4 million of cash on the balance sheet pro forma
for the transaction, and an undrawn $40 million revolver due 2023.
The cash sources provide good coverage of the 1% annual first-lien
term loan amortization, or about $3.1 million.
Factors that could result in a downgrade include debt-to-EBITDA
rising above 6.0x, free cash flow-to-total debt sustained below 5%,
a contraction in revenue, debt-financed dividends, or a
deterioration in liquidity.
While unlikely in the near term, factors that could warrant
consideration of an upgrade include financial policies supportive
of debt-to-EBITDA sustained below 4.5x, free cash flow-to-total
debt sustained above 10%, and increased scale and service offerings
while maintaining solid margins and good liquidity.
Vistage, headquartered in San Diego, California, provides CEOs,
other senior executives and business owners with peer advisory
boards and coaching services. The company is majority-owned by
affiliates of Providence Equity Partners.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
WC 56 EAST AVENUE: Obtains Interim Approval to Use Cash Collateral
------------------------------------------------------------------
Judge Tony M. Davis, pursuant to a second interim order, authorized
WC 56 East Avenue LLC to use cash collateral in accordance with the
budget to meet ordinary cash needs to continue operating its
business. The Debtor's authority to use cash collateral will
terminate on the earlier to occur of:
(a) the entry of a Court order terminating the use of cash
collateral, or
(b) June 30, 2020, unless otherwise extended by consent of the
parties or a Court order.
The Court further ruled, among others, that:
* the Debtor, with the consent of lender 56 East Avenue, L.P.,
will file a budget for the succeeding month which, upon filing will
automatically extend the budget period for the time period covered
by said subsequent budget,
* each budget will provide for the Debtor to remit excess cash
flow to the lender on a monthly basis in the amount of (i)
$19,887.57 to be used to fund the tax escrow for 2020 real estate
taxes, and (ii) $237.17 to be used to fund the insurance escrow.
Any cash flow in excess of these amounts will be retained by the
Debtor. All cash collateral, whether on hand as of the Petition
Date or received post-petition by the Debtor, will be collected,
received, and maintained by the Debtor in a DIP account.
* lender is granted replacement security interests and liens of
the same extent, validity, and priority as the prepetition liens in
the prepetition collateral (including the cash collateral) on all
the Debtor's assets and property.
Lender acknowledges that, as of the Petition Date, it was holding a
tax reserve of $207,812.89 in respect of the 2019 ad valorem real
property taxes, and an insurance reserve of $10,500.31.
The Court directed the Debtor to remit to the lender, by January
24, 2020, the amount of $23,887.01, to be maintained in the tax
reserve which amount, along with the balance of the tax reserve as
of the Petition Date, is sufficient to satisfy the 2019 ad valorem
real property taxes in full.
A copy of the second interim order is available at
https://is.gd/a1CnQA from PacerMonitor.com free of charge.
The Court, prior to entry of this order, has granted the Debtor
interim access to cash collateral pursuant to an order, a copy of
which is available for free at https://is.gd/WxuWD9 from
PacerMonitor.com.
About WC 56 East Avenue
WC 56 East Avenue, LLC, is a single asset real estate debtor, as
defined in Section 101(51B) of the Bankruptcy Code.
WC 56 East Avenue sought Chapter 11 protection (Bankr. W.D. Tex.
Case No. 19-11649) on Dec. 2, 2019, in Austin, Texas. In the
petition signed by Brian Elliott, the Debtor's corporate counsel,
the Debtor was estimated to have between $10 million and $50
million in both assets and liabilities. Judge Tony M. Davis is
assigned to the case. The Debtor tapped Waller Lansden Dortch &
Davis, LLP as its legal counsel, and its Lain, Faulkner & Co., P.C.
as its accountant.
[^] BOOK REVIEW: Bankruptcy and Secured Lending in Cyberspace
-------------------------------------------------------------
Author: Warren E. Agin
Publisher: Bowne Publishing Co.
List price: $225.00
Review by Gail Owens Hoelscher
Red Hat Inc. finds itself with a high of 151 5/8 and low of 20 over
the last 12 months! Microstrategy Inc. has roller-coasted from a
high of 333 to a low of 7 over the same period! Just when the IPO
boom is imploding and high-technology companies are running out of
cash, Warren Agin comes out with a guide to the legal issues of the
cyberage.
The word "cyberspace" did not appear in the Merriam-Webster
Dictionary until 1986, defined as "the on-line world of computer
networks." The word "Internet" showed up that year as well, as "an
electronic communications network that connects computer networks
and organizational computer facilities around the world."
Cyberspace has been leading a kaleidoscopic parade ever since, with
the legal profession striding smartly in rhythm. There is no
definition for the word "cyberassets" in the current
Merriam-Webster. Fortunately, Bankruptcy and Secured Lending in
Cyberspace tells us what cyberassets are and lays out in meticulous
detail how to address them, not only for troubled technology
companies, but for all companies with websites and domain names.
Cyberassets are primarily websites and domain names, but also
include technology contracts and licenses. There are four types of
assets embodied in a website: content, hardware, the Internet
connection, and software. The website's content is its fundamental
asset and may include databases, text, pictures, and video and
sound clips. The value of a website depends largely on the traffic
it generates.
A domain name provides the mechanism to reach the information
provided by a company on its website, or find the products or
services the company is selling over the Internet. Examples are
Amazon.com, bankrupt.com, and "swiggartagin.com." Determining the
value of a domain name is comparable to valuing trademark rights.
Domain names can come at a high price! Compaq Computer Corp. paid
Alta Vista Technology Inc. more than $3 million for "Altavista.com"
when it developed its AltaVista search engine.
The subject matter covered in this book falls into three groups:
the Internet's effect on the practice of bankruptcy law; the ways
substantive bankruptcy law handles the impact of cyberspace on
basic concepts and procedures; and issues related to cyberassets as
secured lending collateral.
The book includes point-by-point treatment of the effect of
cyberassets on venue and jurisdiction in bankruptcy proceedings;
electronic filing and access to official records and pleadings in
bankruptcy cases; using the Internet for communications and
noticing in bankruptcy cases; administration of bankruptcy estates
with cyberassets; selling bankruptcy estate assets over the
Internet; trading in bankruptcy claims over the Internet; and
technology contracts and licenses under the bankruptcy codes. The
chapters on secured lending detail technology escrow agreements for
cyberassets; obtaining and perfecting security interests for
cyberassets; enforcing rights against collateral for cyberassets;
and bankruptcy concerns for the secured lender with regard to
cyberassets.
The book concludes with chapters on Y2K and bankruptcy; revisions
in the Uniform Commercial Code in the electronic age; and a
compendium of bankruptcy and secured lending resources on the
Internet. The appendix consists of a comprehensive set of forms for
cyberspace-related bankruptcy issues and cyberasset lending
transactions. The forms include bankruptcy orders authorizing a
domain name sale; forms for electronic filing of documents;
bankruptcy motions related to domain names; and security agreements
for Web sites.
Bankruptcy and Secured Lending in Cyberspace is a well-written,
succinct, and comprehensive reference for lending against
cyberassets and treating cyberassets in bankruptcy cases.
*********
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*********
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Copyright 2020. All rights reserved. ISSN: 1520-9474.
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