/raid1/www/Hosts/bankrupt/TCR_Public/200311.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 11, 2020, Vol. 24, No. 70
Headlines
27 PUTNAM AVE LP: Seeks to Hire Belkin Burden as Special Counsel
A.J. MCDONALD: Robert Buying Mini-Excavator for $10K
ADIENT US LLC: Moody's Rates $800MM Term Loan Due 2024 'Ba2'
AK BUILDERS: Unsecured Creditors Recover 0% in Plan
ALL STAR ELECTRICAL: Seeks to Hire Evans & Mullinix as Counsel
APPLETON HOLDINGS: Hires Driftwood Hospitality as Hotel Manager
ART VAN FURNITURE: Selling 44 Wolf/Levin Stores to Levin Founder
ART VAN FURNITURE: To Wind Down 125 Remaining Stores
BAYPORT CORPORATION: Gets Interim Approval to Hire Legal Counsel
BORDEN DAIRY: Hires PJT Partners as Investment Banker
BRADFORD, PA: Moody's Rates 2020A/B Gen. Obligation Bonds 'Ba1'
BRAND BRIGADE: Addresses UST Objection to Disclosure Statement
BUHLER-FREEMAN: Unsecureds to Recover Up to 100% in Plan
CABRERA INVESTMENTS: To Seek Plan Confirmation on April 16
CACHET FINANCIAL: Seeks to Hire Loeb & Loeb as Local Counsel
CELADON GROUP: Hires Jones Lang as Real Estate Broker
CELLA III: April 21 Hearing on Disclosure Statement
CHRISVIC BY THE SEA: Plan & Disclosures Due June 1
CIVITAS HEALTH: Seeks to Hire Christopher Cantara as Accountant
COASTAL HOME: Disclosure Statement Conditionally Approved
COLLEGIATE OF MADISON: Debtor's 100% Plan Rejects CC6 Sale
COLLEGIATE OF MADISON: Unsecureds to Get Full Payment in 4 Years
CORNERSTONE USA: Seeks to Hire Kerkman & Dunn as Legal Counsel
CPI CARD: Reports $2.1 Million Net Loss for Fourth Quarter
CPI CARD: Will be Delisted from Nasdaq
DAVID & SUKI: April 14 Plan Confirmation Hearing Set
DAVID AINSWORTH: $110K Sale of Robstown Property to Burck Approved
DECLARATION BREWING: Seeks to Hire Devon Barclay as Counsel
DIAMOND OFFSHORE: Moody's Lowers CFR to Caa1, Outlook Negative
DIAMOND PERFECTION: Wants Until April 14 to File Plan & Disclosures
DRAGON HOPS: Court Approves Amended Disclosure Statement
DROPCAR INC: Will Appeal Nasdaq's Delisting Determination
EVENTIDE CREDIT: Seeks to Hire Loeb & Loeb as Legal Counsel
EVOLV SOLUTIONS: March 13 Hearing on Disclosure Statement Set
FISHING VESSEL: Unsecured Creditors to Get Full Payment in 4 Years
FORESIGHT ENERGY: Case Summary & 30 Largest Unsecured Creditors
FOREVER 21: Sale of Substantially All Assets to F21 OpCo Approved
FRANK INVESTMENTS: April 2 Disclosure Statement Hearing Set
FRED'S INC: Unsecureds to Have 4.0% to 8.8% Recovery Under Plan
GARBER BROS: Cash Collateral Hearing Continued Through March 31
GENCANNA GLOBAL: Seeks Court Approval to Hire Huron Consulting
GEO-TECH POLYMERS: Seeks to Hire Strip Hoppers as Co-Counsel
GFL ENVIRONMENTAL: Moody's Hikes CFR to B1, Outlook Stable
GODSTONE RANCH: Sale of Harris County Property Approved
GOMEZ GLOBAL: Loyce Street Says Plan Not Feasible
GREENPOINT TACTICAL: Hires Iavarone, Landsman as Special Counsel
GUARDION HEALTH: Receives $3.5 Million from Exercise of Warrants
IRI HOLDINGS: Fitch Puts 'B' IDR on Rating Watch Negative
JAMES CANDY: Plan to be Funded by Cash Flow Operations
JB AND COMPANY: May Continue Using Cash Collateral Until April 30
JILL ACQUISITION: Moody's Cuts CFR to Caa1, Outlook Still Negative
JOHN C. FLEMING: $2.78M Sale of Big Sky Property to Huizenga Okayed
JOHN HOANG TRIEN: Gordon Davis Represents Galaway, Torgerson
JOHN KNOX VILLAGE: Fitch Affirms BB+ on $51.6MM 2018A Bonds
JORDAN CROSSING: Moody's Affirms Ba2 Rating on GOULT Debt
JORTA PROPERTIES: Sseeks to Hire William C. Johnson as Counsel
KIDS TOWN DAY: Has Until May 8 to File Plan & Disclosures
LAKEWAY PUBLISHERS: Wells Fargo Objects to Disclosure Statement
LBD PLLC: Taps Henry & O'Donnell as Legal Counsel
LEVI STRATUS: Moody's Affirms 'Ba1' CFR, Outlook Stable
LICK INDUSTRIES: April 8 Plan & Disclosures Hearing Set
LINDER ENTERPRISES: Hires Bradshaw Fowler as Legal Counsel
LIZAMA CARRIERS: Judge Signs Second Interim Cash Collateral Order
LUCKY'S MARKET: Final Cash Collateral Hearing Adjourned to March 30
MABVAX THERAPEUTICS: Harvey Kesner Objects to Disclosure & Plan
MADISON STOCK: Seeks to Employ Robert Lubin as Accountant
MARGIN HOLDINGS: UST Objects to Disclosure Statement
MARK ALLEN KRIEGER: $215K Sale of Vermilion Property Approved
MEDIQUIRE INC: Hires Shafferman & Feldman as Counsel
MERITOR INC: Fitch Affirms BB- LongTerm IDR, Outlook Positive
MR. MISTER LLC: Allowed to Use Cash Collateral Through March 29
MY KIDZ DENTIST: Hires Black Diamond as Forensic Accountant
NATIONAL QUARRY: Allowed to Use Cash Collateral on Interim Basis
NEW CITIES INVESTMENT: Taps Hayashi Wayland as Accountant
NEWELL BRANDS: Moody's Cuts Sr. Unsec. Ratings to Ba1, Outlook Neg.
NICK'S PIZZA: Taps Newpoint Advisors Corp. as Financial Advisor
OWENS & MINOR: Fitch Affirms CCC+ LT Issuer Default Rating
OWENS PRECISION: Gets Final Approval on Cash Collateral Use
PIER 1 IMPORTS: Russell R. Johnson III Represents Utility Companies
PIER 3 BUILDERS: Proposes $650K Private Sale of Fitchburg Property
PIERCE WILLIAMS: Case Summary & 20 Largest Unsecured Creditors
PROJECT BOOST: Fitch Corrects Jan. 10 Ratings Release
RELIABLE ASSOCIATES: Court Confirms Plan of Reorganization
REMNANT OIL: Lexon Insurance Says Bonds Can't Be Transferred
RICKY TUCKER: $475K Sale of Enigma Property to Pecan Approved
RIDGELINE AT BLOWING: Hires Essex Richards as Bankruptcy Counsel
ROOFTOP GROUP: Committee Fine-Tunes Proposed Plan
RWS CHARTER: Gets Interim Approval to Hire Legal Counsel
SCULPT MEDICAL: Taps Frost Dana Newman as Accountant
SMWS GROUP: Trustee Proposes Auction Sale of Germantown Property
SN TEAM: Seeks to Hire Andersen Law as Legal Counsel
SPECIALTY FOODS OF AL: Allowed to Use ServisFirst Cash Collateral
STAK DESIGN: Seeks to Hire McGuire Craddock as Attorney
STAR CHAIN: Diamond Buying All Checkers Assets in Clayton for $50K
STAR CHAIN: Diamond Buying Checkers Assets in Gainesville for $25K
STORMBREAK RANCH-FW: Seeks to Hire Larry M. Weinstein as Accountant
STRATEGIC MATERIALS: Moody's Lowers CFR to Ca, Outlook Stable
STREBOR SPECIALTIES: Case Summary & 20 Largest Unsecured Creditors
SUMMERBROOK DENTAL: Taps Kutner Brinen as Legal Counsel
TEVOORTWIS LAND: Plan Filing Deadline Extended to March 16
THOC PA: Seeks to Employ Smith Anglin as Accountant
THURSTON MANUFACTURING: Unsecureds to Have 50% in Liquidating Plan
TILDA MARIE B. SUTTON: Birdsong Buying Boykins Property for $575K
TOUGH MUDDER: Trustee Hires Morris Nichols as Counsel
TRUDY'S TEXAS STAR: Seeks Cash Access for Repairs of West 30th
UNISON ENVIRONMENTAL: Bank of Cleveland Wants Chapter 11 Trustee
USA LANDS: Edwards Buying Rapides Parish Property for $15K Cash
USA LANDS: Jeff Porter Buying Deville Property for $25K Cash
VIA AIRLINES: IBERIABANK Questions Treatment of Claim
VIP CINEMA: Morris, Davis Polk Represents 1st Lien Lenders
WILLEX HOLDING: Schenectady to Get Full Payment With 21% Interest
YODEL TECHNOLOGIES: Hires Weinberg Partners as Accountant
*********
27 PUTNAM AVE LP: Seeks to Hire Belkin Burden as Special Counsel
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27 Putnam Ave LP seeks authority from the U.S. Bankruptcy Court for
the Southern District of New York to hire Belkin Burden Goldman,
LLP as its special counsel.
The firm will provide legal services to 27 Putnam and its
affiliates concerning tenancy-related issues.
Scott Loffredo, Esq., the firm's attorney who will represent the
Debtors, charges an hourly fee of $460. Belkin Burden's hourly
rates for other attorneys range from 460 to 680.
Mr. Loffredo assures the court that the members and associates of
his firm neither hold nor represent an interest adverse to the
Debtors' estates.
Belkin Burden can be reached through:
Scott F. Loffredo, Esq.
Belkin Burden Goldman, LLP
270 Madison Ave.
New York, NY 10016
Phone: +1 212-867-4466
About 27 Putnam Ave LP
27 Putnam Ave LP and three affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 19-13412) on Oct. 25, 2019. The petitions were
signed by David Schieble, Clinton Hill GP LLC, authorized
signatory. At the time of the filing, each Debtor disclosed assets
of between $10 million and $50 million and liabilities of the same
range.
Judge Mary Kay Vyskocil oversees the cases. Mark A. Frankel, Esq.,
at Backenroth Frankel & Krinsky, LLP, is the Debtors' legal
counsel.
A.J. MCDONALD: Robert Buying Mini-Excavator for $10K
----------------------------------------------------
A.J. McDonald Co., Inc. asks the U.S. Bankruptcy Court for the
District of Maryland to authorize the private sale of a
mini-excavator described as Kubota K008T4, Serial Number 41593, to
Robert F Beall & Sons, Inc., for $10,000, free and clear of liens.
There is an existing lien with an approximate payoff of $8,062 due
to Kubota Credit Corp. Said lien will be paid in full at
settlement.
The Debtor proposes to sell the subject property for $10,000,
pursuant to an offer letter dated Feb. 3, 2020. It believes that
the proposed purchase price is fair and reasonable in light of the
light of the limited market for such specialized equipment. It has
sought higher offers but has been unable to obtain same.
The Debtor believes that the proposed private sale is in the best
interest of the creditors because it will assist in the funding of
the Chapter 11 Plan and that the property should be sold free and
clear of liens to enable the consummation of the sale.
A copy of the Offer is available at https://tinyurl.com/vzf6obl
from PacerMonitor.com free of charge.
The Purchaser:
ROBERT F BEALL & SONS, INC.
8795 Veteran Highway
Millersville, MD 21108
Telephone: (410) 987-0970
Facsimile: (410) 987-4763
About A.J. McDonald Company
A.J. McDonald Company, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Md. Case No. 18-25670) on Nov. 29,
2018. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $500,000. The case
is assigned to Judge Robert A. Gordon. The Debtor tapped Jeffrey
M. Sirody and Associates, P.A., as its legal counsel.
ADIENT US LLC: Moody's Rates $800MM Term Loan Due 2024 'Ba2'
------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Adient Global
Holdings Ltd. including Corporate Family Rating and Probability of
Default Rating at B2, and B2-PD; senior unsecured ratings at B3;
and Adient US LLC's senior secured ratings at Ba2. The rating
outlook remains negative.
The following ratings were affirmed:
Adient Global Holdings Ltd:
Corporate Family Rating, at B2;
Probability of Default, at B2-PD;
EUR1.0 billion 3.50% unsecured notes due 2024, at
B3 (LGD5);
$900 million 4.875% unsecured notes due 2026, at
B3 (LGD5).
Adient US LLC:
$800 million senior secured term loan due 2024, Ba2 (LGD2);
$800 million 7% senior first lien notes due 2026, Ba2 (LGD2).
Rating outlooks:
Adient Global Holdings Ltd; negative
Adient US LLC: negative
The $1.25 billion asset based revolving credit facility is unrated
by Moody's.
RATINGS RATIONALE
Adient's ratings reflect the company's high financial leverage and
the expected lower profits and cash flow because of declines in
global automotive production through 2020, which is expected to be
exacerbated by the consumer demand and automotive supply chain
disruptions caused by the COVID-19 virus. Debt/EBITDA is estimated
at 7.9x (inclusive of Moody's adjustments and not including equity
income) for last twelve months ending December 31, 2019 and
EBITA/interest at 0.6x. Adient improved EBITA margin performance
for the first fiscal quarter ending December of 1.6% compared to
-0.9% in prior year quarter even as global automotive production
continued to decline. While this result demonstrates the progress
Adient continues to make on its operational turnaround, margins
remain weak and sustained operational improvement needs to
accelerate through fiscal 2020.
The company's pace of performance improvement will be interrupted
by the impact of the COVID-19 virus on manufacturing operations and
demand in Asia in the second fiscal quarter, and broadly lower auto
demand globally. This will result in weakened credit metrics over
the coming quarters. Moody's estimates that negative free cash flow
generation could run as high as $200 million in fiscal 2020.
Positively, Adient's adequate liquidity profile includes $965
million of cash at December 31, 2019, and the company recently
announced agreements to sell certain assets which are expected to
bring in cash proceeds, estimated at $574 million by fiscal
year-end September 30, 2020. These asset sales are strong credit
positives to Adient's liquidity profile, and Moody's believes this
additional cash adds protection to Adient, given current weak
industry conditions.
Adient is expected to maintain its strong competitive position
which includes being a leading global supplier of automotive
seating and related components, strong regional and customer
diversification, longstanding customer relationships and the
earnings from unconsolidated affiliates, albeit weakening. These
positives are balanced with the company's high leverage,
operational challenges, negative free cash flow, and cyclical
automotive end-market demand.
The negative outlook reflects the challenges of ongoing global
automotive production declines exacerbated by the impact of the
COVID-19 virus on automotive demand and supply chain disruptions.
Adient's SGL-3 Speculative Grade Liquidity rating reflects the
expectation of adequate liquidity over the next 12-15 months.
Positively, liquidity is supported by cash on hand of $965 million
and availability of about $1.1 billion under the $1.25 billion
asset based revolving credit facility. The facility matures in May
2024. The financial covenant under the ABL facility is a springing
fixed charge coverage test, triggered when availability falls to
10%. The senior secured term loan does not have financial
maintenance covenants. Given the company's strong cash position,
the ABL covenant is not expected to be triggered because of
drawings over the next 12-15 months. Also positively impacting
Adient's liquidity profile are expected proceeds of $574 million by
fiscal year-end September 2020 from the announced agreements to
sell certain assets.
Offsetting the relatively sizable cash position is the risk is
Moody's estimate that Adient could generate negative free cash flow
as high as $200 million, given the expectation of going declines in
global automotive production in 2020 and additional headwinds from
manufacturing and supply chain disruptions related to the COVID-19
virus. Yet, this estimate is uncertain given the risk of further
spreading of the COVID-19 virus and the uncertainty of the
consumer's return to automotive show rooms.
Adient enters into supply chain financing programs receivable
transfer programs to sell accounts receivable without recourse to
third-party financial institutions. Amounts under these programs
were $165 million as of September 30, 2019. While not expected, if
the company is unable to maintain and extend these receivable
programs, additional borrowings under the revolving credit facility
would be required to meet liquidity needs.
The ratings could be downgraded with the expectation of material
deterioration of automotive demand affecting cash flow, the loss of
or meaningful decline in volume from a major customer, or if the
company is unable to demonstrate progress improving operating
performance over the next 12 months. A deterioration in liquidity
or if Moody's expects weak free cash flow performance to worsen
could also lead to a downgrade.
An upgrade is unlikely over the next 12 months. However, the
ratings could be upgraded if the company demonstrates improved
operating performance that leads to an expectation of positive free
cash flow generation and a reduction in debt-to-EBITDA below 5x
(excluding consideration for equity income from joint ventures).
Progress on improving margins and free cash flow, along with solid
liquidity could lead to a stable rating outlook.
The principal methodology used in these ratings was Automotive
Supplier Methodology published in January 2020.
Adient plc, the publicly-traded parent of Adient Global Holdings
Ltd., is one of the world's largest automotive seating suppliers
with a leading market position in the Americas, Europe and China,
and has longstanding relationships with the largest global original
equipment manufacturers (OEMs) in the automotive space. Adient's
automotive seating solutions include complete seating systems,
frames, mechanisms, foam, head restraints, armrests, trim covers
and fabrics. Adient also participates in the automotive seating and
interiors market through its joint ventures in China. Revenues for
the LTM period ending December 31, 2019 were $16.3 billion.
AK BUILDERS: Unsecured Creditors Recover 0% in Plan
---------------------------------------------------
AK Builders and Coatings, Inc., filed a Chapter 11 plan and a
disclosure statement.
Claims secured by collateral are to be paid in full, over time,
with interest.
General unsecured claims will recover 0%.
The Plan may designate a subclass of small "convenience class"
claims which will be paid in full on the Effective Date, and in
rare situations the Plan may designate additional unsecured
subclasses.
Allowed claims will be paid from proceeds from refinance and or
sale of undeveloped property located in Calaveras County.
A full-text copy of the Disclosure Statement dated February 26,
2020, is available at https://tinyurl.com/u7rrx9q from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Michael M. Noble
2017 5th Street
Sacramento, CA 95818
Tel: (916) 370-7742
E-mail: msntaxbk@aol.com
About AK Builders & Coatings
AK Builders and Coating Inc. is a home building contractor that
provides wine cellar design, custom home design, green construction
and more. The Company previously sought bankruptcy protection on
July 26, 2017 (Bank. E.D. Cal. Case No. 17-24904) and Aug. 23, 2016
(Bankr. E.D. Cal. Case No. 16-25556).
AK Builders and Coating, Inc., based in Sacramento, CA, filed a
Chapter 11 petition (Bankr. E.D. Cal. Case No. CA 95818) on July
29, 2019. In the petition signed by Alifeleti K. Vaituulala,
president, the Debtor was estimated to have $1 million to $10
million in both assets and liabilities. The Hon. Robert S. Bardwil
is the presiding judge. Michael M. Noble, Esq., serves as
bankruptcy counsel to the Debtor.
ALL STAR ELECTRICAL: Seeks to Hire Evans & Mullinix as Counsel
--------------------------------------------------------------
All Star Electrical, LLC seeks authority from the U.S. Bankruptcy
Court for the Western District of Missouri to employ Evans &
Mullinix, P.A. as its legal counsel.
Evans & Mullinix will represent the Debtor in its Chapter 11
bankruptcy proceedings. The hourly rates for the firm's attorneys
and paralegals who will be handling the case are:
Colin N. Gotham $275
Joanne B. Stutz $275
Paralegals $100
The firm received a retainer in the amount of $10,000, plus the
filing fee of $1,717.
Colin Gotham, Esq., at Evans & Mullinix, disclosed in a court
filing that the firm and its members are disinterested as defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Colin N. Gotham, Esq.
Evans & Mullinix, P.A.
7225 Renner Road, Suite 200
Shawnee, KS 66217
Tel: (913) 962-8700
Fax: (913) 962-8701
Email: Cgotham@emlawkc.com
About All Star Electrical
All Star Electrical, LLC, an electrical contractor based in Grain
Valley, Mo., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Mo. Case No. 20-40353) on Feb. 21, 2020. At the
time of the filing, the Debtor had estimated assets of at least
$50,000 and liabilities of between $100,001 and $500,000. Colin
Gotham, Esq., at Evans & Mullinix, P.A., is the Debtor's legal
counsel.
APPLETON HOLDINGS: Hires Driftwood Hospitality as Hotel Manager
---------------------------------------------------------------
Appleton Holdings, LLC seeks authority from the U.S. Bankruptcy
Court for Middle District of Florida to hire Driftwood Hospitality
Management II, LLC to manage its hotel.
Driftwood will oversee the management and operation of the Debtor's
hotel located at 333 W. College Ave., Appleton, Wisc. The firm
will be paid a "base management" fee equal to 3 percent of gross
revenues generated by the hotel.
Driftwood is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
Driftwood can be reached through:
David Buddemeyer
Driftwood Hospitality Management
11770 US Highway 1, East Tower #202
North Palm Beach, FL 33408
Email: info@dhmhotels.com
Phone: 561-207-2700
About Appleton Holdings
Appleton Holdings, LLC operates a Red Lion branded 390-room
convention and business class hotel located at 333 W. College Ave.,
Appleton, Wisc.
Appleton Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-04883) on July 25,
2019. At the time of the filing, the Debtor disclosed assets of
between $10 million and $50 million and liabilities of the same
range. Judge Karen S. Jennemann oversees the case. Kenneth D.
Herron, Jr., Esq., at Herron Hill Law Group, PLLC, is the Debtor's
legal counsel.
ART VAN FURNITURE: Selling 44 Wolf/Levin Stores to Levin Founder
----------------------------------------------------------------
Art Van Furniture, LLC, which has 169 stores, has sought Chapter 11
protection with a deal to sell 44 stores operating under the Wolf
and Levin banners as a going concern and plans to wind down its
remaining store locations and other operations.
The Company's CFO David Ladd said in court filings that in the wake
of extreme market conditions and faced with limited liquidity, the
Company has commenced chapter 11 cases to effectuate a
going-concern sale of approximately 44 stores and two distribution
centers operating under the Wolf and Levin banners and to wind down
its remaining store locations and other operations through a
going-out-of-business sales process.
Pennsylvania-based Levin Furniture and Wolf Furniture were acquired
by Art Van in November 2017 through similar transaction structures.
Both Levin Furniture (including Levin Mattress) and Wolf Furniture
nameplates operate their own standalone stores and operate under
the websites levinfurniture.com and wolffurniture.com,
respectively.
Levin Furniture, including the Levin Mattress nameplate, features a
wide selection of modern and stylish living room, dining room, and
bedroom furniture, including mattresses, with operations in the
greater Pittsburgh and Cleveland area. Wolf Furniture features a
wide selection of eclectic furniture from around the country,
including Amish made furniture, with operations in Pennsylvania,
Maryland and Virginia.
In the days leading up to the Petition Date, the Company, with the
assistance of its advisors, extensively negotiated and reached an
agreement-in-principle with Robert Levin, the former owner of Levin
Furniture, regarding a going-concern sale of certain of the assets
of Sam Levin, Inc. and LF Trucking, Inc.
The key terms of the Levin-Wolf Sale are set forth in a letter of
intent, dated as of March 4, 2020. As set forth in the Levin-Wolf
LOI, the Levin-Wolf Sale will:
* provide for cash and non-cash consideration, including the
assumption of liabilities related to customer deposits, employee
obligations, specified cure costs, and potential claims under
section 503(b)(9) of the Bankruptcy Code;
* preserve nearly 1,000 jobs; and
* provide for the continued operation of approximately 44 retail
store locations under the Wolf and Levin store banners and two
related distribution centers.
The Company expects to move forward with definitive documentation
for, and approval of, the Levin-Wolf Sale on an expedited basis.
The Company believes effectuating the Levin-Wolf Sale on an
expedited basis is critical to avoiding employee attrition and
other potential value leakage related to the simultaneous Wind Down
of the Company's other operations. The Levin-Wolf Sale is
supported by the Company's secured lenders.
The Company maintained a substantial domestic presence. Currently,
the Company operates 169 stores across 9 states. With the
exception of the stores included in the Levin-Wolf Sale, the
Company's other stores, under the Art Van, Pure Sleep, Scott
Shuptrine banner, are winding down.
"After 60 years, Art Van Furniture is winding down its business.
There is no bigger compliment than having a piece of Art Van
furniture in your home," the company said in its web site.
"We want to offer our sincere thanks and appreciation to the scores
of customers, associates, vendors, franchisees, charities and
communities who supported us for decades."
About Art Van Furniture
Art Van is a brick-and-mortar furniture and mattress retailer
headquartered in Warren, Michigan. The Company operates 169
locations, including 92 furniture and mattress showrooms and 77
freestanding mattress and specialty locations. The Company does
business under brand names, including Art Van Furniture, Pure
Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress,
and Wolf Furniture.
The Company was founded in 1959 and was owned by its founder, Art
Van Elslander, until it was sold to funds affiliated with Thomas H.
Lee Partners, L.P. ("THL") in March 2017. As part of this
transaction, THL acquired the operating assets of the Company and
certain real estate investment trusts, who closed the transaction
alongside THL, acquired the owned real estate portfolio of the
Company, and entered into long-term leases with Art Van. The
proceeds from the sale-leaseback transaction were used to fund the
purchase price paid to the selling shareholders.
Art Van Furniture, LLC, and 12 affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8,
2020.
Art Van was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as
counsel. Kurtzman Carson Consultants LLC is the claims agent.
ART VAN FURNITURE: To Wind Down 125 Remaining Stores
----------------------------------------------------
Art Van Furniture, LLC, which has 169 furniture and mattress
stores, has sought Chapter 11 protection with plans to close most
of its locations.
Art Van's late founder, Art Van Elslander, sold the company to
private equity firm Thomas H. Lee Partners LP, in March 2017 in an
estimated $550 million deal.
Art Van said it has reached a an agreement to sell 44 Levin
Furniture and Wolf Furniture stores back to former owner Robert
Levin, pending court approval. Eight of those stores are set to be
liquidated.
Art Van has tapped Hilco Merchant Resources LLC and Gordon Brothers
Retail Partners LLC to conduct the store closing sales at the rest
of the corporate-owned store locations and expects to complete them
in approximately six to eight weeks.
Art Van is a brick-and-mortar furniture and mattress retailer
headquartered in Warren, Michigan. With 3,100 employees, the
Company operates 169 locations, including 92 furniture and mattress
showrooms and 77 freestanding mattress and specialty locations.
The Company does business under brand names, including Art Van
Furniture, Pure Sleep, Scott Shuptrine Interiors, Levin Furniture,
Levin Mattress, and Wolf Furniture.
Road to Bankruptcy
Art Van CFO David Ladd explains that, given continuously declining
profitability and operational challenges over the past three years,
and despite the best efforts of the Company and its advisors to
secure the capital necessary to preserve the entire business as a
going concern, the Company is simply unable to meet its financial
obligations.
According to Mr. Ladd, Art Van's declines in sales, profits, and
cash flow were driven by a combination of several factors.
First, the Company has faced significant macro-related revenue
headwinds, as well as local microeconomic headwinds, that have led
to sustained negative "same-store sales," a key measure of retail
health, during every quarter since June 2016. These macro-related
headwinds include broad-based declining retail foot traffic, market
share losses of brick and mortar furniture outlets to online
sellers such as Wayfair and Amazon.com, and increased fragmentation
and intense competition in mattresses leading to decreased
profitability. On a local level, Art Van has faced increased
retail competition, as key competitors such as Ashley HomeStore,
Bob's Discount Furniture, and Mattress Firm opened at least 30
stores in Michigan and Illinois over the last three years
Second, while Art Van revenues have declined approximately 27%
cumulatively on a same-store basis since fiscal year 2016 through
January 2020, expenses have increased significantly due to, among
other things, over $8 million in tariff costs in fiscal year 2019
(which continued and escalated in fiscal year 2020) and an increase
in marketing expenses intended to stem same-store sales declines.
Third, the business suffered numerous operational challenges in the
course of the Company's effort to grow and navigate a challenging
retail environment. These operational challenges included, among
other things:
* Expansion. The Company began an expansion into Chicago in
fiscal year 2013 that continued through fiscal year 2018, which
ultimately led to market oversaturation as new stores cannibalized
revenues from preexisting locations. Despite spending significant
capital and gaining material revenue share in this market, the
Company was not able to achieve sustained profitability in Chicago.
* Leadership Turnover. The Company lost eight of its top nine
executive leaders in fiscal years 2017 and 2018 through unplanned
and, in many cases, voluntary departures.
* Required Changes to Marketing Strategies. In June 2017, the
Company ceased certain of its historically successful marketing
practices after becoming aware they violated the Telephone Consumer
Protection Act, and in early 2018, the Company settled a
class-action lawsuit on account of an alleged violation of the
TCPA.
* St. Louis Franchise Acquisition. In fiscal year 2018, the
Company entered into an operating agreement with its largest
franchisee, based in St. Louis, Missouri, due to financial distress
being experienced by the franchisee. The Company acquired the
operations of the franchisee in fiscal year 2019 to help stabilize
performance and avoid further deterioration, but Art Van was unable
to stabilize the revenues of the St. Louis stores or generate a
profit in the market after the acquisition.
* Levin/Wolf Integration. In fiscal year 2019, the Company's
management attempted to integrate the operations of Wolf Furniture
into Levin Furniture. The integration involved a significant
overhaul of many fundamental aspects of the Wolf business,
including human capital management, furniture assortments,
distribution/delivery, and technology systems. These actions were
taken in an effort to improve the business and align its operations
with those of Levin, but they created significant strain on the
Wolf business, which led to same-store sales declines of
approximately 22% in Wolf in the second half of fiscal year 2019,
as well as meaningful turnover of tenured sales staff.
* Changes to Inventory Mix and Showroom Layout. In the same year,
the Company turned over approximately 60% of its furniture
assortment and reorganized many of its flagship showroom floors by
"lifestyle" instead of by category of product, which negatively
impacted sales and led to increased markdowns from product that was
not easily saleable.
As a result of these challenges, the Company's Adjusted EBITDA
decreased significantly in each fiscal year since 2016 and dropped
to negative for the twelve months ended Dec. 31, 2019.
Faced with rapidly declining profitability, the Company made key
leadership changes in summer 2019 that it deemed necessary to stem
the downward trajectory and recover sales and profits. In August
2019, the Company's board of directors terminated the Company's
then-current Chief Executive Officer, its Chief Merchant, its Head
of Stores, and several other executives. It promoted a Company
veteran to the role of Chief Merchant in August 2019, and, in
September 2019, the Board hired a mattress industry turnaround
executive as Chief Executive Officer. The Board also named Gary Van
Elslander, the former President of Art Van, as Chairman of the
Board.
In the summer and fall of 2019, the Company took further actions to
create additional liquidity and extend the runway for management to
execute on a sales-led operational turnaround:
* In November 2019, the Company amended its asset-backed loan
("ABL") facility with Wells Fargo Bank, National Association to
increase the size of the facility from $60 million to $82.5
million.
* In summer 2019, the Company engaged Evercore Group L.L.C. as
investment banker and undertook a review of strategic alternatives,
including efforts to identify potential buyers for all or portions
of the business.
* In December 2019, the Company secured an amendment to its term
loan credit facility, which allowed the Company to suspend cash
interest payments and mandatory amortization under the term loan.
* In the fall and winter of 2019, the Company also was
implementing a cost reduction and profit improvement plan, which
was predicated on (a) reducing marketing expenses as a percentage
of sales; (b) increasing gross margin through improved coordination
of the merchandising, marketing, and in-store sales teams; and (c)
decreasing occupancy costs. Throughout this time, the Company also
was focused on optimizing its lease portfolio and reducing rent
expense. With the assistance of its financial advisor, Alvarez &
Marsal North America, LLC, the Company created a store footprint
optimization analysis that supported store closure plan.
* The Company hired real estate restructuring advisers Jones Lang
LaSalle and Newmark Knight Frank to lead discussions with key
landlords to reduce rent expense given the Company's decline in
sales, and to close 49 underperforming locations (including 31
mattress locations), consistent with and supported by the store
closure plan.
* The Company hired an accounting advisory firm in November 2019
to create standardized and reliable schedules of store-level
financials needed for JLL and Newmark Knight Frank to be able to
engage in productive negotiations with the Company's lessors. This
effort was completed in January 2020 and the real estate brokers
began discussions with key lessors shortly thereafter.
In late January 2020, the Company unexpectedly faced further
liquidity constraints due to a reduction in the Company's
"borrowing base," which is required collateral support for
borrowing under the ABL facility. At the same time, certain
financial partners of the Company began to demand additional
collateral and tightened access to credit as a result of the
Company's weak financial results. These financial partners
included credit card processing companies -- such as Bank of
America Merchant Services and PNC Merchant Services, who are
critical to the Company's ability to accept credit cards in stores
and on-line for customer purchases -- and providers of consumer
credit. In total, this group demanded approximately $33 million in
collateral through holdbacks to fund reserves and letters of
credit.
As a result of the impending liquidity crisis created by the
shrinking borrowing base, poor operating cash flow, and the
collateral demands, the Company was unable to issue "clean" audited
financial statements (i.e., without a potential "going concern"
qualification), which led to a default under the Company's ABL
facility, as well as various other contractual arrangements,
including certain leases. Wells Fargo agreed to forbear from
exercising remedies on account of the default until Feb. 28, 2020,
to give the Company time to explore opportunities to raise
additional capital and restructure its debt obligations. As part
of this short forbearance, Wells Fargo required the Company to
comply with cash dominion and begin immediate preparations for a
"going-out-of-business" liquidation in the event ongoing efforts to
raise capital did not materialize before the forbearance period
expired.
Against this backdrop, with the assistance of Evercore and A&M, the
Company held discussions with at least 31 potential buyers and
investors, including its term loan lender, FS KKR Capital Corp. and
affiliates ("KKR"), about potential transactions to recapitalize or
sell all or parts of the business.
Following a short evaluation period, KKR declined to make a new
money investment in Art Van pursuant to any recapitalization
transaction. The most likely and promising alternative that emerged
was an out-of-court recapitalization transaction involving a
consortium of investors that included a new-money investment from
THL, the Van Elslander family, and three important suppliers to the
Art Van business.
The transaction contemplated the Consortium investing significant
new capital into the Company and refinancing the existing ABL
facility. The Consortium also sought and received support for the
transaction from the Company's five largest lessors in which the
Master Lessors agreed to reduce rent obligations on the company and
allow Art Van to close certain underperforming locations. The
Consortium submitted a letter of intent to the Company outlining
the details of its proposal on Feb. 20, 2020, followed by a further
letter of intent on Feb. 26, 2020, discussing the Consortium's
progress in arranging the transaction. Unfortunately, the
Consortium ultimately failed to secure the necessary capital
commitments due to a variety of circumstances, including, but not
limited to, the significant equity market impact of the coronavirus
during the week of Feb. 24, 2020, and the resulting deleterious
effect on Consortium investors' willingness to contribute capital.
Over the weekend of March 1, 2020, the Company, its Board, and the
Company's advisors worked with JLL and the Master Lessors to
attempt to replace the deficit in the Consortium investment with a
new money investment from the Master Lessors in the form of a lease
incentive investment, but on Monday, March 2, 2020, certain Master
Lessors declined to participate in the proposed transaction as
revised.
After the Company's forbearance with Wells Fargo expired on Feb.
28, 2020, the Company went into default under its credit facilities
and focused its attention on launching a going-out-of-business
process to preserve value. Based on the expected timing for
commencing the liquidation process, any delay in a launch of the
going-out-of-business sales could have caused the process to
continue into May and, therefore, necessitate the payment of May
rent at locations still active in the liquidation at that time. The
Company also had not received substantial shipments of new product
since early February given it was no longer making payments to
vendors, and, as such, sales were decreasing and weekly cash burn
was increasing.
Winding Down of Stores
With no actionable alternatives, and given the urgency with which
Wells Fargo was pressing the Company and its advisors to proceed,
the Company began executing on plans for an orderly wind-down of
the Company's operations and a liquidation of its inventory. The
Company and its advisors negotiated extensively with the Company's
secured lenders to ensure that customer deposits, credits, and/or
refunds, as well as payment of certain administrative costs, were
contemplated by the agreed budget for the Wind Down process. In
particular, as a result of these negotiations, the Company has
implemented a process for addressing customer deposits whereby
customers can elect to:
(a) receive the merchandise they purchased if such merchandise is
present in the Art Van warehouses;
(b) receive a credit in an amount equal to their deposits that
can be used to purchase alternative merchandise at discounted
prices during the Wind-Down, if the originally purchased
merchandise is not available; or
(c) cancel their order and submit a request to refund their
deposit, which request would be processed as soon as practicable
depending on the volume of refund requests, required processing
times, and the timing and availability of cash proceeds generated
by the Wind Down.
To facilitate the Wind Down, the Company and its advisors solicited
bids from potential liquidators to conduct store closing sales, and
received bids from various parties, including a proposal from
certain parties to acquire certain of the Company's intellectual
property and other assets. After discussions with several firms,
the Company entered into a consulting agreement with a contractual
joint venture of Hilco Merchant Resources, LLC and Gordon Brothers
Retail Partners, LLC to conduct the store closing sales.
The Consultant Agreement is an expense-based arrangement in which
the Consultant will provide reimbursement of all supervisor costs,
reasonable and documented travel expenses, and general legal fees
subject to the caps set forth in the Consultant Agreement. The
Debtors expect to move swiftly through these chapter 11 cases to
minimize costs, with an expected timeline for completing the store
closing sales of approximately six to eight weeks. To maximize
recoveries and minimize administrative expenses, the Company
announced and initiated a soft launch of the store closing sales on
March 5, 2020, and seeks to expedite the remaining store closure
sales in order to complete them within six to eight weeks.
Sale of Wolf/Levin Segments
In parallel with preparations for the Wind-Down, the Company
continued to engage with interested parties regarding alternative
transactions, which ultimately resulted in a proposal to preserve
the Levin business segment and a portion of the Wolf business
segment as a going-concern.
In the days leading up to the Petition Date, the Company, with the
assistance of its advisors, extensively negotiated and reached an
agreement-in-principle with Robert Levin, the former owner of Levin
Furniture, regarding a going-concern sale of certain of the assets
of Sam Levin, Inc. and LF Trucking, Inc. The key terms of the
Levin-Wolf Sale are set forth in a letter of intent, dated as of
March 4, 2020. The sale provides for the continued operation of
approximately 44 retail store locations under the Wolf and Levin
store banners and two related distribution centers.
The Company expects to move forward with definitive documentation
for, and approval of, the Levin-Wolf Sale on an expedited basis.
The Company believes effectuating the Levin-Wolf Sale on an
expedited basis is critical to avoiding employee attrition and
other potential value leakage related to the simultaneous Wind Down
of the Company's other operations.
About Art Van Furniture
Art Van is a brick-and-mortar furniture and mattress retailer
headquartered in Warren, Michigan. The Company operates 169
locations, including 92 furniture and mattress showrooms and 77
freestanding mattress and specialty locations. The Company does
business under brand names, including Art Van Furniture, Pure
Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress,
and Wolf Furniture.
The Company was founded in 1959 and was owned by its founder, Art
Van Elslander, until it was sold to funds affiliated with Thomas H.
Lee Partners, L.P. in March 2017. As part of this transaction, THL
acquired the operating assets of the Company and certain real
estate investment trusts, who closed the transaction alongside THL,
acquired the owned real estate portfolio of the Company, and
entered into long-term leases with Art Van. The proceeds from the
sale-leaseback transaction were used to fund the purchase price
paid to the selling shareholders.
Art Van Furniture, LLC, and 12 affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8,
2020.
Art Van was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as
counsel. Kurtzman Carson Consultants LLC is the claims agent.
BAYPORT CORPORATION: Gets Interim Approval to Hire Legal Counsel
----------------------------------------------------------------
Bayport Corporation Ltd. received interim approval from the U.S.
Bankruptcy Court for the Northern District of Alabama to employ
Sparkman, Shepard & Morris, P.C., as its legal counsel.
Sparkman Shepard will render these professional services to the
Debtor:
(a) assist the Debtor in drafting a Chapter 11 plan of
reorganization;
(b) file any motions or adversary proceeding complaints
necessary to the proper administration of the Debtor's bankruptcy
estate during its Chapter 11 case;
(c) represent the estate in any resulting trial and the various
hearings through confirmation; and
(d) prepare necessary orders and documents.
Sparkman Shepard will be paid based on these hourly rates of its
professionals:
Tazewell T. Shepard III $375
Kevin M. Morris $350
Tazewell T. Shepard IV $325
Tazewell Shepard III, Esq., an attorney at Sparkman Shepard,
represents that he and his firm have no connection, financial or
otherwise, with the Debtor, the Debtor's creditors or any other
party-in-interest, and that he knows of no conflict or potential
conflict of interest with his proposed appointment as attorney for
the Debtor.
The firm may be reached through:
Tazewell T. Shepard III
Sparkman, Shepard & Morris, P.C.
P.O. Box 19045
Huntsville, AL 35804
Telephone: (256) 512-9924
Fax: (256) 512-9837
About Bayport Corporation Ltd.
Bayport Corporation Ltd. is a privately held company engaged in
activities related to real estate.
Bayport Corporation sought Chapter 11 protection (Bankr. N.D. Ala.
Case No. 20-80471) on Feb. 13, 2020. At the time of the filing,
the Debtor estimated between $1 million and $10 million in both
assets and liabilities. The petition was signed by Rex Rankin,
owner.
Parkman, Shepard & Morris, P.C., is the Debtor's legal counsel.
BORDEN DAIRY: Hires PJT Partners as Investment Banker
-----------------------------------------------------
Borden Dairy Company and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
PJT Partners LP, as investment banker to the Debtor.
Borden Dairy requires PJT Partners to:
a. assist in the evaluation of the Debtors' business and
prospects;
b. assist in the development of the Debtors' long-term
business plan and related financial projections;
c. assist in the development of financial data and
presentations to the Debtors' Board of Directors, various
creditors, and other third parties;
d. analyze the Debtors' financial liquidity and evaluate
alternatives to improve such liquidity;
e. analyze various restructuring scenarios and the potential
impact of these scenarios on the recoveries of those
stakeholders impacted by the Restructuring;
f. provide strategic advice with regard to restructuring or
refinancing the Debtors' Obligations;
g. evaluate the Debtors' debt capacity and alternative capital
structures;
h. participate in negotiations among the Debtors and their
advisors and their creditors, equity holders, potential
investors, suppliers, lessors and other interested parties;
i. value securities offered by the Debtors in connection with
a Restructuring;
j. advise the Debtors and negotiate with lenders with respect
to potential waivers or amendments of various credit
facilities;
k. assist in arranging financing for the Debtors, as
requested;
l. provide expert witness testimony concerning any of the
subjects encompassed by the other investment banking
services;
m. if requested, assist the Debtors in preparing marketing
materials in conjunction with a possible Transaction;
n. assist the Debtors in identifying potential buyers or
parties in interest to a Transaction and assist in the due
diligence process;
o. assist and advise the Debtors concerning the terms,
conditions and impact of any proposed Transaction;
and
p. provide such other advisory services as are customarily
provided in connection with the analysis and negotiation of
a transaction similar to a potential Restructuring, or
Transaction, as requested and mutually agreed.
PJT Partners will be paid as follows:
a. Monthly Fee. The Debtors shall pay PJT Partners a monthly
advisory fee (the "Monthly Fee") of $150,000 per month.
50% of all Monthly Fees paid to PJT Partners after the 6th
Monthly Fee has been paid (i.e., after $900,000 has been
paid) shall be credited, only once and without duplication,
against any Restructuring Fee or Transaction Fee (each as
defined below) payable under the Engagement Letter;
b. Capital Raising Fee. The Debtors shall pay PJT Partners a
capital raising fee (the "Capital Raising Fee") for any
financing arranged by PJT Partners (including, without
limitation, any debtor-in-possession financing), at the
Debtors' request, earned and payable upon consummation of
such financing. The Capital Raising Fee will be calculated
as:
-- Senior Debt. 1% of the total issuance size for
senior debt financing;
-- Junior Debt. 3% of the total issuance size for
junior debt financing; and
-- Equity Financing. 5% of the issuance amount for
equity financing.
Notwithstanding the foregoing, (a) no Capital Raising Fee
shall be payable under the Engagement Letter in respect of
the portion of any financing arranged from the Debtors'
existing lenders or equity holders as of January 27, 2020,
and (b) the sum of any Capital Raising Fees payable under
the Engagement Letter (excluding any Capital Raising Fee
payable under the Engagement Letter in respect of any
debtor-in-possession financing) shall not exceed $1.5
million in the aggregate.
c. Restructuring Fee. The Debtors shall pay PJT Partners a
restructuring fee equal to $4,000,000 (the "Restructuring
Fee"), earned and payable upon consummation of a chapter 11
plan or any other Restructuring pursuant to an order of the
Court.
d. Transaction Fee. Upon consummation of a Transaction, the
Debtors shall pay a transaction fee (the "Transaction
Fee"), payable in cash at the closing of such Transaction
directly out of the gross proceeds of the Transaction,
calculated as 1.0% of the Transaction Value. Upon
consummation of a Transaction in which all or substantially
all of the assets of the Debtors are sold, Partners shall
be entitled to the greater of a Transaction Fee in respect
of such Transaction or the Restructuring Fee, but not both.
PJT Partners will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John Singh, partner of PJT Partners LP, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtors and their estates.
PJT Partners can be reached at:
John Singh
PJT PARTNERS LP
280 Park Avenue
New York, NY 10017
Tel: (212) 364-7800
About Borden Dairy Company
Borden Dairy Company -- http://www.bordendairy.com/-- is a
processor and direct-to-store distributor of fresh fluid milk,
dairy case products and other beverages. It produces and
distributes a wide variety of branded and private label
traditional, flavored and specialty milk, buttermilk, dips and sour
cream, juices, tea, and flavored drinks to mass merchandisers,
educational institutions, food service retailers, grocery stores,
drug stores, convenience stores, food and beverage wholesale
distributors, and retail warehouse club stores across the United
States.
Headquartered in Dallas, Borden Dairy operates 12 milk processing
plants and nearly 100 branches across the U.S. It was founded in
1857 by Gail Borden, Jr.
Borden Dairy and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10010) on Jan. 5, 2020.
Judge Christopher S. Sontchi oversees the case.
Borden Dairy was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Debtors tapped Arnold & Porter Kaye Scholer LLP as general
bankruptcy counsel; Young Conaway Stargatt & Taylor LLP as special
counsel; and Donlin Recano as the claims agent.
BRADFORD, PA: Moody's Rates 2020A/B Gen. Obligation Bonds 'Ba1'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to City of
Bradford, PA's $5.595 million General Obligation Bonds, Series A of
2020 and $8.775 million General Obligation Bonds, Series B of 2020
(Federally Taxable). This is an initial rating for the city. The
outlook is stable.
RATINGS RATIONALE
The Ba1 rating reflects the city's very small, limited tax base,
with concentration to top ten taxpayers, weak wealth indicators,
and high poverty. The rating also reflects the city's very negative
financial trend, with inability to achieve structural operating
balance in any of the last 5 fiscal years. The Ba1 also
incorporates the city's very elevated leverage, high fixed costs,
and proposal to achieve balance through a potentially risky pension
obligation bond transaction.
RATING OUTLOOK
The outlook is stable based on its expectation of continued weak
financial and economic performance, commensurate with the current
rating level, in the near term.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Material improvement in fund balance and liquidity
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Any additional debt
- Further deterioration of fund balance or liquidity
- Inability to achieve and maintain structural balance
LEGAL SECURITY
The Series A and B of 2020 bonds are general obligations of the
city, payable from its tax and other general revenues. The city has
irrevocably has pledged its full faith, credit and taxing power,
which taxing power includes the power to levy ad valorem taxes on
all taxable real property within the city, presently unlimited as
to rate or amount for the purpose of providing for debt service.
USE OF PROCEEDS
Proceeds of the 2020 A bonds will be used to currently refund the
city's outstanding general obligation bonds, Series of 2012, and
currently refund the city's outstanding general obligation bonds,
Series of 2013. Proceeds of the 2020 B bonds will be used to fund
the unfunded actuarial accrued liability of the city's pension
fund.
PROFILE
The city is located in the northwestern region of PA, on the NY
border, in McKean County, roughly 100 miles east of Erie. It
encompasses a land area of just 3.45 miles, and supports a
population of roughly 8,440.
METHODOLOGY
The principal methodology used in these ratings was US Local
Government General Obligation Debt published in September 2019.
BRAND BRIGADE: Addresses UST Objection to Disclosure Statement
--------------------------------------------------------------
Brand Brigade, LLC, submitted a reply to the United States
Trustee's objection to approval of the Disclosure Statement
describing the Debtor's Plan.
The Debtor is engaged in discussions with the United States Trustee
to resolve all issues. No other party has objected to the
Disclosure Statement.
The Amended Disclosure Statement clarifies that Jimmy Wang shall
not play a dual role post-confirmation. The revised budget annexed
to the Amended Disclosure Statement clarifies that Jimmy Wang will
be the managing member, being compensated as set forth therein.
The original budget line item labelled "CEO" was incorrect, and has
been changed to COO. Sara Anderson shall be the chief operating
officer going forward. The salaries for these individuals are
extremely modest for the life of the Plan.
The Debtor's intent regarding exculpatory provisions is not to
exceed that which is provided by law; indeed, Section III.E.9. is
prefaced with the express statement that the exculpations are
limited to that which is "permitted by law". Further, in response
to the UST Objection, the Debtor’s proposed Amended Disclosure
Statement carves out "act or omission is not the result of breach
of fiduciary duty, gross negligence, fraud or intentional tort."
No party in interest has objected to Mr. Wang's scheduled claim of
$385,000.
The Debtor's general bankruptcy:
Daniel H. Reiss
Jeffrey S. Kwong
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Blvd., Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
E-mail: dhr@lnbyb.com
jsk@lnbyb.com
About Brand Brigade
Based in Anaheim, Calif., Brand Brigade LLC filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Cal. Case No. 19-16397) on May 31, 2019, listing under $1
million in both assets and liabilities. Jeffrey S. Kwong, sq., at
Levene Neale Bender Yoo & Brill LLP, is the Debtor's bankruptcy
counsel. Shore Law Offices is the special litigation advisory
counsel.
BUHLER-FREEMAN: Unsecureds to Recover Up to 100% in Plan
--------------------------------------------------------
Buhler-Freeman Management, LLC, is proposing a liquidating plan.
The Debtor seeks to accomplish payments under the Plan through the
sale of real property.
Class 3-A Secured claim of Prinsbank with a total claim amount of
$802,205.49, Class 3-A Secured claim of Watson Law Group, PLLC,
with a total claim amount of $11,622, and Class 3-A Secured claim
of TN Department of Revenue are all impaired. The Debtor will sell
the property within twelve months of the Effective Date pursuant to
an 11 U.S.C. Sec. 363 sale of the property or the property will be
surrendered.
Class 4 general unsecured claims with a total amount of claims of
$5,516.55 will be paid out up to 100% out of the claims out of
available net proceeds, if any, from the sale of the real property
owned by the Debtor within 12 months of the Effective Date or the
property will be surrendered. The interest rate is 0%.
The Plan will be funded by the proceeds from the sale of the real
property.
A full-text copy of the First Amended Disclosure Statement dated
Feb. 26, 2020, is available at https://tinyurl.com/sw9rllk from
PacerMonitor.com at no charge.
Counsel to the Debtor:
STEVEN L. LEFKOVITZ
618 Church Street, Suite 410
Nashville, TN 37219
Tel: (615) 256-8300
Fax: (615) 255-4516
E-mail: slefkovitz@lefkovitz.com
About Buhler-Freeman Management
Buhler-Freeman Management, LLC, owns in fee simple a real property
located at 2739 Old Elm Hill Pike, Nashville, Tenn., valued at
$1.30 million.
It first sought bankruptcy protection (Bankr. M.D. Tenn. Case
No.13-09260) on Oct. 24, 2013.
Buhler-Freeman Management again sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 19-07025) on
Oct. 29, 2019. At the time of the filing, the Debtor disclosed
$1.3 million in assets and $775,000 in liabilities. The case is
assigned to Judge Charles M. Walker. The Debtor tapped Steven L.
Lefkovitz, Esq., at Lefkovitz & Lefkovitz, PLLC, as its legal
counsel.
CABRERA INVESTMENTS: To Seek Plan Confirmation on April 16
----------------------------------------------------------
Judge Robert A. Mark has ordered that First Amended Disclosure
Statement filed by Cabrera Investments, LLC, is approved.
The hearing to consider confirmation of the Plan will be on April
16, 2020 at 1:30 p.m. in United States Bankruptcy Court, 301 N.
Miami Ave., Courtroom #4, Miami, FL 33128.
The deadline for serving this order, Disclosure Statement, Plan and
Ballot is on March 7, 2020 (40 days before Confirmation Hearing).
The deadline for objections to claims is on March 7, 2020 (40 days
before Confirmation Hearing).
The deadline for objections to confirmation is on April 2, 2020 (14
days before Confirmation Hearing).
The deadline for filing ballots and accepting rejecting plan is on
April 2, 2020 (14 days before Confirmation Hearing).
About Cabrera Investments
Based in Hialeah, Florida, Cabrera Investments, LLC, filed a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. Case No. 18-19175) on June 30, 2018, estimating
$100,001 to $500,000 in total assets and $500,001 to $1 million in
total liabilities.
Ricardo A. Rodriguez, Esq. of the law firm of Rodriguez Law, P.L.
is the Debtor's counsel. Zach B. Shelomith, Esq. of the law firm
of Leiderman Shelomith Alexander + Somodevilla, PLLC, is the
Debtor's co-counsel.
CACHET FINANCIAL: Seeks to Hire Loeb & Loeb as Local Counsel
------------------------------------------------------------
Cachet Financial Services seeks authority from the U.S. Bankruptcy
Court for the Central District of California to employ Loeb & Loeb
LLP, as local counsel to the Debtor.
Cachet Financial requires Loeb & Loeb to:
-- assist the Debtor's general counsel, Shulman Bastian LLP,
in prosecuting the Estate's interest in a Complaint against
MyPayroll, Mann, Valuewise Corporation, Ross Personnel
Consultants, Inc., Southwestern Payroll Services, Inc.,
Essque, Inc. and Does 1-10 in the United States District
Court for the Northern District of New York, commencing
Case No. 1:19-cv-01181-FJS-CFH ("New York Action")
-- assist the Debtor in the class action case with the United
States District for the Central District of California,
Case No. 2:19-cv-08120-RSWL (JEMx); a class action against
Debtor in the United States District for the Central
District of California, Case No. 8:19-cv-02267; and a class
action was commenced against Debtor in the United States
District for the District of Nevada, commencing Case No.
2:19-cv-01624-KJD-VCF (the "Class Actions")
-- assist the Debtor in connection with an interpleader action
filed by Bancorp Bankon November 5, 2019, in the United
States District Court for the District of Delaware (Case
No. 19-02088-MN, the "Interpleader Action").
Loeb & Loeb will be paid at these hourly rates:
Daniel Platt $840
Donald Miller $755
Matthew Anderson $595
Todd Densen $595
Paralegals $390
Prior to the Petition Date, on Sept. 19, 2019, the Debtor paid Loeb
& Loeb a retainer of $25,000.
On Dec. 24, 2019, Loeb & Loeb received from the Debtor the amount
of $100,000, and on January 17, 2020, the amount of $175,000. As of
the Petition Date, Loeb & Loeb had received a total of $300,000
from the Debtor.
Loeb & Loeb will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Donald Miller, a partner of Loeb & Loeb LLP, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Loeb & Loeb can be reached at:
Donald Miller, Esq.
LOEB & LOEB LLP
10100 Santa Monica Blvd., Suite 2200
Los Angeles, CA 90067
Tel: (310) 282-2110
Fax: (310) 919-3503
About Cachet Financial Services
Cachet Financial Services -- https://www.cachetservices.com/ --
provides Automated Clearing House (ACH) processing services for
payroll-related electronic transactions, including: direct
deposits, tax payments, garnishment payments, benefits payments,
401(k) payments, expense reimbursement payments, agency checks, and
fee collection.
Cachet Financial Services, based in Pasadena, CA, filed a Chapter
11 petition (Bankr. C.D. Cal. Case No. 20-10654) on Jan. 21, 2020.
In the petition was signed by Aberash Asfaw, president, the Debtor
was estimated to have $10 million to $50 million in both assets and
liabilities. The Hon. Vincent P. Zurzolo presides over the case.
James C. Bastian, Esq., at Shulman Bastian LLP, serves as
bankruptcy counsel. Loeb & Loeb LLP, as local counsel.
CELADON GROUP: Hires Jones Lang as Real Estate Broker
-----------------------------------------------------
Celadon Group, Inc., and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Jones Lang LaSalle Brokerage, Inc., as real estate broker to the
Debtor.
On February 4, 2020, the Court entered the Order (I) Approving Sale
Procedures for the Debtors' Remaining Assets and (II) Authorizing
and Approving the Sale of Such Remaining Assets Free and Clear of
Liens, Claims, Interests, and Encumbrances (the "Remaining Assets
Sale Procedures Order"). Pursuant to the Remaining Assets Sale
Procedures Order, the Court approved certain streamlined procedures
for the sale of the Debtors' remaining assets, including certain
real property (the "Remaining Properties").
Celadon Group requires Jones Lang to market and sell the Debtor's
Remaining Properties.
Jones Lang will be paid based upon its normal and usual hourly
billing rates.
Brian T. Seitz, partner of Jones Lang LaSalle Brokerage, Inc.,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
Jones Lang can be reached at:
Brian T. Seitz
JONES LANG LASALLE BROKERAGE, INC.
8343 Douglas Avenue Suite 100
Dallas, TX 75225
Tel: (214) 438-6100
About Celadon Group
Celadon Group, Inc. -- https://celadontrucking.com/ -- is a North
American truckload freight transportation company, primarily
providing point-to-point shipping, warehousing, supply chain
logistics, tractor leasing and other transportation and logistics
services for major customers throughout North America.
Celadon Group and 25 affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12606) on
Dec. 8, 2019. As of Dec. 2, 2019, the Debtors disclosed $427
million in assets and $391 million in liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors tapped DLA Piper LLP (US) as bankruptcy counsel;
Scudder Law Firm, P.C., L.L.O. as special counsel; Alixpartners,
LLP as financial advisor; and Kurtzman Carson Consultants, LLC, as
notice, claims and balloting agent and administrative advisor.
CELLA III: April 21 Hearing on Disclosure Statement
---------------------------------------------------
Debtor Cella III, LLC, filed a motion to reschedule the hearing on
its Disclosure Statement. Girod LoanCo, LLC, and the United States
Trustee have consented to the Motion.
Accordingly, the Court ordered that the hearing on the adequacy of
the disclosure statement filed by CELLA III, LLC, is rescheduled
for April 21, 2020 at 2:00 p.m. before the Honorable Jerry A.
Brown, Bankruptcy Judge, Room B-601, 500 Poydras St., New Orleans,
Louisiana.
The deadline for the Debtor to file its amended disclosure
statement and amended plan is March 16, 2020.
April 14, 2020 is fixed as the last day for filing and serving
written objections to the disclosure statement.
About Cella III LLC
Cella III, LLC, a company based in Metairie, La., filed a Chapter
11 petition (Bankr. E.D. La. Case No. 19-11528) on June 5, 2019.
In the petition signed by George A. Cella, III, member and manager,
the Debtor was estimated to have $10 million to $50 million in
assets and $1 million to $10 million in liabilities.
The Hon. Jerry A. Brown oversees the case.
The Debtor tapped Congeni Law Firm, LLC as bankruptcy counsel;
Sternberg, Naccari & White, LLC as special counsel; and Patrick J.
Gros, CPA, APAC as accountant.
CHRISVIC BY THE SEA: Plan & Disclosures Due June 1
--------------------------------------------------
Judge Mildred Caban Flores has ordered that Chrisvic by the Sea
Corp. to file a Disclosure Statement and Plan on or before June 1,
2020.
The hearing on approval of the Disclosure Statement is scheduled
for July 22, 2020, at 9:00 a.m. A separate order will be issued
once the Disclosure Statement and Plan are filed.
Objections to claims must be filed 45 days prior to the hearing on
confirmation.
About Chrisvic by the Sea
Chrisvic by the Sea, Corp. filed a voluntary Chapter 11 petition
(Bankr. D.P.R. Case No. 19-07109) on Dec. 4, 2019, and is
represented by Enrique M. Almeida Bernal, Esq. and Zelma Davila
Carrasquillo, Esq., at Almeida & Davila, P.S.C. The Debtor was
estimated to have under $500,000 in both assets and liabilities.
CIVITAS HEALTH: Seeks to Hire Christopher Cantara as Accountant
---------------------------------------------------------------
Civitas Health Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to hire
Christopher Cantara CPA, LLC as its accountant.
The services to be provided by the firm include:
(1) interim and annual bookkeeping, accounting and tax
services;
(2) accounting and financial advice relating to the Debtor's
business and financial affairs;
(3) preparation of federal and Virginia corporate income tax
returns;
(4) preparation of monthly reports; and
(5) preparation of financial information and projections for
the Debtor's loan applications and Chapter 11 plan of
reorganization.
Christopher Cantara, the firm's accountant who will be providing
the services, will charge an hourly fee of $200.
Mr. Cantara assures the court that he is disinterested within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Christopher Cantara CPA
Christopher Cantara CPA, LLC
2530 Gaskins Rd.
Richmond, VA 23238
Phone: +1 804-332-6046
About Civitas Health Services
Civitas Health Services, Inc. -- http://www.civitashealth.com/--
is a health care company in Henrico, Va., that specializes in
providing mental health skill building services, therapeutic day
treatment, intensive in-home services, outpatient therapy, ABA
therapy, substance abuse services, and peer recovery services.
Civitas Health Services filed a Chapter 11 petition (Bankr. E.D.
Va. Case No. 19-34993) on Sept. 24, 2019 in Richmond, Va. In the
petition signed by Lemar Allen Bowers, chief executive officer and
president, the Debtor was estimated to have at least $50,000 in
assets and between $1 million and $10 million in liabilities.
Judge Kevin Huennekens oversees the case. The Debtor tapped The
McCreedy Law Group, PLLC as its legal counsel.
COASTAL HOME: Disclosure Statement Conditionally Approved
---------------------------------------------------------
Micheal G. Williamson has ordered that the Disclosure Statement
filed by Coastal Home Care, Inc., is conditionally approved.
Any written objections to the Disclosure Statement will be filed
and served no later than seven days prior to the date of the
hearing on confirmation.
The Court will conduct a hearing on confirmation of the Plan,
including timely filed objections to confirmation, objections to
the Disclosure Statement, motions for cram-down, applications for
compensation, and motions for allowance of administrative claims on
March 25, 2020 at 9:30 a.m. in Tampa, FL − Courtroom 8A, Sam M.
Gibbons United States Courthouse, 801 N. Florida Avenue .
Parties in interest will submit to the Clerk's office their written
ballot accepting or rejecting the Plan no later than eight days
before the date of the Confirmation Hearing.
Objections to confirmation will be filed and served no later than
seven days before the date of the Confirmation Hearing.
The Debtor file a ballot tabulation no later than 96 hours prior to
the time set for the Confirmation Hearing.
About Coastal Home Care
Coastal Home Care, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 19-07259) on July 31, 2019, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Jake C. Blanchard, Esq., at Blanchard Law, P.A.
COLLEGIATE OF MADISON: Debtor's 100% Plan Rejects CC6 Sale
----------------------------------------------------------
Debtor The Collegiate of Madison, LLC, filed an Amended Disclosure
Statement describing its Plan of Reorganization dated February 25,
2020.
CC6 Collegiate, LLC, sought to purchase The Collegiate pursuant to
a $9.7 million commercial offer. CC6 has sued the Debtor in
bankruptcy court and is seeking to force the Debtor to complete the
sale of The Collegiate or, alternatively, to pay CC6's costs,
expenses and reasonable attorneys' fees. The Debtor is defending
that lawsuit.
One of the issues raised in the lawsuit is whether the Offer is an
executory contract that the Debtor can reject. The Debtor's
proposed Chapter 11 Plan of Reorganization provides for the
rejection of the Offer as an executory contract.
The Debtor's Plan of Reorganization provides for payment in full of
allowed secured, priority, and general unsecured claims. All
proposed payments under the Debtor's Plan will be made monthly from
the Debtor's continued management and rental of The Collegiate.
A full-text copy of the Amended Disclosure Statement dated February
25, 2020, is available at https://tinyurl.com/unfx8qo from
PacerMonitor at no charge.
About Collegiate of Madison
The Collegiate of Madison, LLC, manages the apartment complex
rental property located at 513 North Lake Street, Madison,
Wisconsin. The Collegiate is located close to the University of
Wisconsin-Madison campus. It consists of 14 three-bedroom units,
14 four-bedroom units, a commercial space occupied by a dental
office, and a commercial space occupied by Central Properties.
The Collegiate of Madison sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wis. Case No. 19-13930) on Nov. 23,
2019. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Kristin J. Sederholm, Esq., Krekeler Strother, S.C., is the
Debtor's legal counsel.
COLLEGIATE OF MADISON: Unsecureds to Get Full Payment in 4 Years
----------------------------------------------------------------
Debtor The Collegiate of Madison, LLC, filed with the U.S.
Bankruptcy Court for the Western District of Wisconsin a Disclosure
Statement describing its Plan of Reorganization dated February 21,
2020.
The Debtor filed its proposed Chapter 11 Plan of Reorganization for
consideration by its creditors. The Debtor's Plan of
Reorganization provides for payment in full of allowed secured,
priority and general unsecured claims. All proposed payments under
the Debtor's Plan of Reorganization shall be made monthly from the
Debtor's continued management and rental of The Collegiate. The
amortization of some of these obligations are proposed to be
extended to provide for adequate cash flow and debt service.
Class 4 NonPriority Unsecured Claims in the approximate amount of
$93,372 will be paid in full but are impaired in that such
claimants will be paid over a period of four years with interest
accruing at the rate of 5.0 percent per annum by monthly payments
of $2,150. The claimants in this Class shall share pro rata in the
monthly distributions.
The members' contributions are required this year (2020) because
there are certain tenants whose leases expire in February 2020.
These apartments will be difficult to lease during these winter
months; any tenants that may rent these apartments will pay less
rent than normal due to the fact that the term of the lease is
either month to month or short-term. All such apartments have one
year leases beginning August 2020.
The Debtor estimates that liquidation of its assets in Chapter 7
would produce dividends for its unsecured creditors and the
Debtor's Plan of Reorganization proposes to pay its unsecured
creditors in full.
A full-text copy of the Disclosure Statement dated Feb. 21, 2020,
is available at https://tinyurl.com/quredqm from PacerMonitor at no
charge.
About Collegiate of Madison
The Collegiate of Madison, LLC is primarily engaged in renting and
leasing real estate properties.
The Collegiate of Madison sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wis. Case No. 19-13930) on Nov. 23,
2019. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Kristin J. Sederholm, Esq., Krekeler Strother, S.C., is the
Debtor's legal counsel.
CORNERSTONE USA: Seeks to Hire Kerkman & Dunn as Legal Counsel
--------------------------------------------------------------
Cornerstone USA, LLC seeks authority from the U.S. Bankruptcy Court
for the Eastern District of Wisconsin to hire Kerkman & Dunn as its
legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its duties and powers under the
Bankruptcy Code;
b. advise the Debtor on the conduct of its case, including the
legal and administrative requirements of operating in Chapter 11;
c. attend meetings and negotiate with representatives of
creditors and other parties;
d. prosecute actions on behalf of the Debtor, defend actions
commenced against the Debtor, and represent the Debtor's interests
in negotiations concerning litigation in which it is involved;
e. prepare pleadings;
f. advise the Debtor in connection with any potential sale of
its assets;
g. appear before the court;
h. assist the Debtor in preparing, negotiating and
implementing a plan;
i. assist the Debtor in state court actions related to
judgments and collection actions initiated by or against the Debtor
that are necessary for its effective reorganization; and
j. provide other legal services, including analyzing the
Debtor's leases and contracts, analyzing the validity of liens
against the Debtor, and advising the Debtor on transactional and
litigation matters.
Kerkman & Dunn's hourly rates are:
Jerome R. Kerkman $475
Evan P. Schmit $375
Gregory M. Schrieber $350
Nicholas W. Kerkman $225
Non-Attorney Paraprofessionals $125
Kerkman & Dunn is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Jerome R. Kerkman, Esq.
Kerkman & Dunn
839 N. Jefferson St., Suite 400
Milwaukee, WI 53202-3744
Phone: 414.277.8200
Facsimile: 414.277.0100
Email: jkerkman@kerkmandunn.com
About Cornerstone USA
Cornerstone USA, LLC -- https://www.cornerstonepaversusa.com --
owns various batch plants, concrete paving machines, slip form
pavers, curb and gutter machines capable of producing concrete and
performing a wide variety of concrete paving operations including
mainline slipform paving, curb and gutter work, barrier walls, and
econocrete airport pavements.
Cornerstone USA filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis. Case No.
20-21331) on Feb. 21, 2020. The petition was signed by Christopher
C. Cape, managing member. At the time of the filing, the Debtor
disclosed assets of between $1 million and $10 million and
liabilities of the same range.
The Debtor tapped Jerome R. Kerkman, Esq., at Kerkman & Dunn as its
legal counsel.
CPI CARD: Reports $2.1 Million Net Loss for Fourth Quarter
----------------------------------------------------------
CPI Card Group Inc. reported financial results for the fourth
quarter and full year ended Dec. 31, 2019.
"Fourth quarter results were strong, rounding out another year of
crisp execution of our customer-centric strategy," said Scott
Scheirman, president and chief executive officer of CPI. "We
believe we gained market share across all of our business units
during 2019 by leveraging our robust products and solutions. We
delivered our eighth consecutive quarter of year-over-year net
sales growth, highlighted by a 24% increase in net sales from our
U.S. Debit and Credit segment driven by increased demand for our
dual interface EMV products, including our Second Wave card
featuring a core made with recovered ocean-bound plastic. We
generated strong top-line results and continued to leverage our
business model, which delivered significantly improved bottom-line
performance."
Scheirman continued, "We believe we are well-positioned to
capitalize on market opportunities, including continued strong
growth of dual interface card conversions in the U.S. and strong
market demand for innovative and differentiated products, such as
our Second Wave card and Card@Once instant issuance solution. We
remain committed to our customer-centric strategy by continuing to
deliver innovative and diversified products and solutions."
Fourth Quarter and Full Year 2019
Financial Highlights from Continuing Operations
Net sales increased 6% to $72.6 million in the fourth quarter of
2019, bringing full year net sales to $278.1 million, a
year-over-year increase of 9%. Excluding Canada, net sales were up
9% and 12% for the fourth quarter and full year, respectively.
Fourth quarter income from operations was $3.9 million, up from a
loss from operations of $0.4 million in the fourth quarter of 2018.
For the full year, income from operations increased $21.0 million
year over year to $25.5 million, which includes a previously
disclosed $6.0 million cash litigation settlement gain received in
the second quarter of 2019.
Fourth quarter 2019 net loss from continuing operations was $2.1
million, or $0.19 per share, an improvement of 71% from the net
loss of $7.2 million, or $0.65 per share in the fourth quarter of
2018. Full year 2019 net loss from continuing operations improved
to $4.3 million, or $0.39 per share, from the net loss of $14.8
million, or $1.33 per share, in 2018.
Fourth quarter and full year Adjusted EBITDA improved 74% and 39%,
respectively, compared with the year-ago periods to $8.8 million
and $37.6 million, respectively.
Balance Sheet, Liquidity, and Cash
Flow from Continuing Operations
As of Dec. 31, 2019, cash and cash equivalents was $18.7 million.
Total long-term debt principal outstanding, comprised of the
Company's First Lien Term Loan, was $312.5 million at Dec. 31,
2019, unchanged from Dec. 31, 2018. Net of debt issuance costs and
discount, total debt was $307.8 million as of Dec. 31, 2019.
The Company's First Lien Term Loan matures in August 2022.
During 2019, the Company invested more than $10 million in
additional inventory to support the growth of the business, which
led to a reduction in cash flows provided by operating activities
compared to the prior year. Cash provided by operating activities
was $3.0 million for the full year, inclusive of a $6.0 million
cash litigation settlement gain recorded in the second quarter.
Cash outflows for capital expenditures for the year were $4.2
million and adjusted free cash flow was negative $7.2 million.
Fourth quarter 2019 adjusted free cash flow was a positive $5.1
million.
New $30 Million Credit Facility
On March 6, 2020, the Company entered into a new $30 million
floating rate credit facility with two of its First Lien Term Loan
lenders. The new facility provides the Company with approximately
$27 million, net of issuance costs, in additional cash at closing,
which it plans to use towards execution of its strategic plan and
to further capitalize on market opportunities, such as the dual
interface conversion and strong market demand for differentiated
and innovative products and solutions.
The Company's revolving credit facility, which was set to expire in
August of 2020 and had no outstanding borrowings as of
Dec. 31, 2019 or on the closing date of the new facility, was
terminated concurrently with the closing of the new credit
facility. The new facility, which is senior in priority to the
Company's First Lien Term Loan, matures on May 17, 2022 and is
collateralized by substantially all of the Company's assets.
John Lowe, chief financial officer, said, "The success we've had in
driving top-line growth and margin expansion underscores the
operating leverage in our business model and our continued success
in winning new business and market share. We are pleased to see
the confidence demonstrated by our lending partners, who have
provided us a new $30 million credit facility. This facility
provides us greater resources to build upon our success and
continue to execute on our strategic plan."
2020 Strategy and Market Outlook
The Company's vision is to be the partner of choice by providing
market-leading quality products and customer service with a
market-competitive business model. The Company will continue to
execute on its four key strategies:
* Deep customer focus,
* Market-leading quality products and customer service,
* Continuous innovation, and
* Market-competitive business model.
About CPI Card
CPI Card Group -- http://www.cpicardgroup.com/-- is a payment
technology company and provider of credit, debit and prepaid
solutions delivered physically, digitally and on-demand. CPI helps
its customers foster connections and build their brands through
innovative and reliable solutions, including financial payment
cards, personalization and fulfillment, and Software-as-a-Service
(SaaS) instant issuance. CPI has more than 20 years of experience
in the payments market and is a trusted partner to financial
institutions and payments services providers. Serving customers
from locations throughout the United States, CPI has a large
network of high security facilities, each of which is registered as
PCI Card compliant by one or more of the payment brands: Visa,
Mastercard, American Express, and Discover.
CPI Card reported a net loss of $4.45 million for the year ended
Dec. 31, 2019, compared to a net loss of $37.46 million for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$213.49 million in total assets, $365.92 million in total
liabilities, and a total stockholders' deficit of $152.43 million.
In January 2020, the Company's common stock was suspended from the
Nasdaq Capital Market and began being quoted on the OTCQX. While
the Company's stock is still currently listed on the TSX, a
Canadian stock exchange, the Company cannot assure investors that
its common stock will be listed on a United States national
exchange such as NASDAQ or another securities exchange in the
future.
* * *
As reported by the TCR on April 4, 2018, Moody's Investors Service
downgraded its ratings for CPI Card Group Inc., including the
company's Corporate Family Rating (to Caa1, from B3) and
Probability of Default Rating (to Caa1-PD, from B3-PD). Moody's
said the downgrades broadly reflect continued uncertainty about
whether CPI can return to revenue and profit growth over the next
12 to 18 months, and an earnings and cash flow profile that can
adequately support the company's heavy debt burden.
In June 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit
rating on CPI Card. "The affirmation reflects our view that
despite improving trends, CPI's operating performance will remain
weak and the capital structure unsustainable," S&P said.
CPI CARD: Will be Delisted from Nasdaq
--------------------------------------
The Nasdaq Stock Market, LLC, has determined to remove from listing
the common stock of CPI Card Group Inc., effective at the opening
of the trading session on March 16, 2020. Based on review of
information provided by the Company, Nasdaq Staff determined that
the Company no longer qualified for listing on the Exchange
pursuant to Listing Rule 5550(b).
The Company was notified of the Staff determination on Nov. 21,
2019. The Company appealed the determination to a Hearing Panel on
Nov. 29, 2019. On Jan. 15, 2020, the company infomed of its
decision to withdraw its appeal before a decision was rendered by
the Panel. The Listing Council did not call the matter for review.
The Staff determination to delist the Company became final on
March 2, 2020.
About CPI Card
CPI Card Group -- http://www.cpicardgroup.com/-- is a payment
technology company and provider of credit, debit and prepaid
solutions delivered physically, digitally and on-demand. CPI helps
its customers foster connections and build their brands through
innovative and reliable solutions, including financial payment
cards, personalization and fulfillment, and Software-as-a-Service
(SaaS) instant issuance. CPI has more than 20 years of experience
in the payments market and is a trusted partner to financial
institutions and payments services providers. Serving customers
from locations throughout the United States, CPI has a large
network of high security facilities, each of which is registered as
PCI Card compliant by one or more of the payment brands: Visa,
Mastercard, American Express, and Discover.
CPI Card reported a net loss of $4.45 million for the year ended
Dec. 31, 2019, compared to a net loss of $37.46 million for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$213.49 million in total assets, $365.92 million in total
liabilities, and a total stockholders' deficit of $152.43 million.
In January 2020, the Company's common stock was suspended from the
Nasdaq Capital Market and began being quoted on the OTCQX. While
the Company's stock is still currently listed on the TSX, a
Canadian stock exchange, the Company cannot assure investors that
its common stock will be listed on a United States national
exchange such as NASDAQ or another securities exchange in the
future.
* * *
As reported by the TCR on April 4, 2018, Moody's Investors Service
downgraded its ratings for CPI Card Group Inc., including the
company's Corporate Family Rating (to Caa1, from B3) and
Probability of Default Rating (to Caa1-PD, from B3-PD). Moody's
said the downgrades broadly reflect continued uncertainty about
whether CPI can return to revenue and profit growth over the next
12 to 18 months, and an earnings and cash flow profile that can
adequately support the company's heavy debt burden.
In June 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit
rating on CPI Card. "The affirmation reflects our view that
despite improving trends, CPI's operating performance will remain
weak and the capital structure unsustainable," S&P said.
DAVID & SUKI: April 14 Plan Confirmation Hearing Set
----------------------------------------------------
On Feb. 11, 2020, the U.S. Bankruptcy Court for the Eastern
District of Virginia, Alexandria Division, held a hearing on the
Disclosure Statement of Debtor David & Suki, Inc., with respect to
a Plan of Reorganization filed on Jan. 3, 2020.
On Feb. 14, 2020, Judge Klinette H. Kindred approved the Disclosure
Statement and established the following dates and deadlines:
* April 7, 2020, is the deadline to return any ballots accepting
or rejecting the Plan.
* April 13, 2020, at 5:00 p.m. is the deadline for the Debtor's
Counsel to file a Summary of Ballots.
* April 7, 2020, is the deadline to any objection to
confirmation of the Plan.
* April 14, 2020, at 11:00 a.m., is the hearing on the
confirmation of the Plan.
A full-text copy of the order dated Feb. 14, 2020, is available at
https://tinyurl.com/s89l2td from PacerMonitor at no charge.
The Debtor is represented by:
Steven B. Ramsdell
Jack Frankel
David A. Hicks
8655 Oak Chase Circle
Fairfax Station, VA 22039
About David & Suki
David & Suki, Inc. is a privately-held company whose principal
place of business is located at 5863 N. Washington Blvd. Arlington,
Virginia.
David & Suki sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Case No. 18-11631) on May 4, 2018. In the
petition signed by David A. Hicks, president, the Debtor was
estimated to have assets of less than $50,000 and liabilities of $1
million to $10 million. Judge Klinette H. Kindred presides over the
case. The Debtor hired Tyler, Bartl & Ramsdell, PLC as its legal
counsel; and the Law Office of William B. Lawson, P.C., as special
counsel.
DAVID AINSWORTH: $110K Sale of Robstown Property to Burck Approved
------------------------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas authorized David W. Ainsworth, Sr.'s sale of the
real property located on Chaparosa Street, Robstown, Nueces County,
Texas, more specifically described as all of the land consisting of
Lot 3 of Block 2 of the Ainsworth Industrial Park subdivision
outside of the City of Robstown and as recorded on the Map Records
of Nueces County, Texas, to Steve Burck and/or assigns for
$110,000.
The sale is free and clear of all liens, claims, encumbrances and
interests.
Ad valorem tax liens securing payment of the 2020 ad valorem
property taxes to be assessed during the 2020 calendar year, are
hereby expressly retained until said taxes are paid in full.
The Debtor's share of sale expenses and taxes, and the broker's
commission will be paid from sales proceeds at closing. All
remaining sales proceeds will be deposited in a separate cash
collateral account and the liens and claims of Prosperity Bank and
DeBella Tierra, LLC, also known as DeBella Tierra, Ltd., will
attach to any remaining proceeds in the same order and priority as
exist in the Sold Property.
Pursuant to Rule 6004(h) of the Federal Rules of Bankruptcy
Procedure, the Order will be effective immediately upon entry and
the 14-day stays under such rule is waived.
David W. Ainsworth, Sr. sought Chapter 11 protection (Bankr. S.D.
Tex. Case No. 17-20418) on Oct. 2, 2017. The Debtor tapped
Nathaniel Peter Holzer, Esq., at Jordan Hyden Womble Culbreth &
Holzer PC, as counsel.
DECLARATION BREWING: Seeks to Hire Devon Barclay as Counsel
-----------------------------------------------------------
Declaration Brewing Company has filed an amended application with
the U.S. Bankruptcy Court for the District of Colorado seeking
approval to hire Devon Barclay, PC, as counsel to the Debtor.
Declaration Brewing requires Devon Barclay to:
(a) provide legal advice with respect to the powers, rights,
and duties of the Debtor in the continued management and
operation of its business;
(b) provide legal advice and consultation related to the legal
and administrative requirements of operating this Chapter
11 bankruptcy case, including to assist the Debtor in
complying with the procedural requirements of the Office
of the U.S. Trustee;
(c) take all necessary actions to protect and preserve the
Debtor's Estate, including prosecuting actions on the
Debtor's behalf, defending any action commenced against
the Debtor, and representing the Debtor's interests in any
negotiations or litigation in which the Debtor may be
involved, including objections to the claims filed against
the Debtor's Estate;
(d) prepare on behalf of your Applicant any necessary
pleadings including Applications, Motions, Answers,
Orders, Complaints, Reports, or other documents
necessary or otherwise beneficial to the administration of
the Debtor's Estate;
(e) represent the Debtor's interests at the Meeting of
Creditors, pursuant to the Bankruptcy Code, and at any
other hearing scheduled before this Court related to the
Debtor;
(f) assist and advise the Debtor in the formulation,
negotiation, and implementation of a Chapter 11 Plan and
all documents related thereto;
(g) assist and advise the Debtor with respect to negotiation,
documentation, implementation, consummation, and closing
of corporate transactions, including sales of assets, in
this Chapter 11 bankruptcy case;
(h) assist and advise the Debtor with respect to the use of
cash collateral and obtaining Debtor-in-Possession or exit
financing and negotiating, drafting, and seeking approval
of any documents related thereto;
(i) review and analyze all claims filed against the Debtor's
Bankruptcy Estate and to advise and represent the Debtor
in connection with the possible prosecution of objections
to claims;
(j) assist and advise the Debtor concerning any executory
contract and unexpired leases, including assumptions,
assignments, rejections, and renegotiations;
(k) coordinate with other professionals employed in the case
to rehabilitate the Debtor's affairs; and to perform all
other bankruptcy related legal services for the Debtor
that may be or become necessary during the administration
of this case.
The Debtor has paid $400 to Devon Barclay. Devon Barclay, PC
proposes to be paid a flat fee of $20,000 for the bankruptcy case,
in either cash from the Debtor, or equity in any entity emerging
from the Chapter 11 case.
Devon Barclay, partner of Devon Barclay, PC, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Devon Barclay can be reached at:
Devon Barclay, Esq.
DEVON BARCLAY, PC
2590 Welton St., Suite 200
Denver, CO 80205
Tel: (720) 515-9887
About Declaration Brewing Company
Declaration Brewing Company, Inc. is a restaurant and brewery with
significant local distribution and following.
Declaration Brewing Company, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-10221) on
Jan. 13, 2020, listing under $1 million in both assets and
liabilities. Devon Michael Barclay, Esq. at DEVON BARCLAY, PC,
represents the Debtor as counsel.
DIAMOND OFFSHORE: Moody's Lowers CFR to Caa1, Outlook Negative
--------------------------------------------------------------
Moody's Investors Service downgraded Diamond Offshore Drilling,
Inc.'s Corporate Family Rating to Caa1 from B2 and its senior
unsecured notes ratings to Caa2 from B3. The company's Speculative
Grade Liquidity Rating was downgraded to SGL-3 from SGL-2. The
rating outlook remains negative.
"The downgrade of Diamond's ratings reflects lower earnings and
higher negative free cash flow in 2020 than we previously expected,
combined with few signs that offshore drilling fundamentals are
going to greatly improve anytime soon," commented Pete Speer,
Moody's Senior Vice President. "Without a much more robust
improvement in dayrates, Diamond's debt burden will become
untenable."
Downgrades:
Issuer: Diamond Offshore Drilling, Inc.
Probability of Default Rating, Downgraded to Caa1-PD from B2-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Corporate Family Rating, Downgraded to Caa1 from B2
Senior Unsecured Regular Bond/Debenture, Downgraded to
Caa2 (LGD4) from B3 (LDG4)
Outlook Actions:
Issuer: Diamond Offshore Drilling, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
Diamond's Caa1 CFR reflects the continued weak fundamental
conditions for the offshore drilling industry, with its credit
metrics continuing to worsen in 2020 as utilization for the
GreatWhite semisubmersible rig looks to be much lower than Moody's
previously expected. The oversupply of floating rigs continues to
keep current market dayrates restrained, even with increasing
offshore drilling activity. The company has seen higher dayrates
for its moored rigs that benefit from better supply and demand
dynamics, but that is only a portion of its fleet. Absent a much
stronger than expected increase in dayrates in 2021 and beyond,
Diamond's debt levels are unsustainable and Moody's expects the
company to continue to generate negative free cash flow through at
least 2021.
Diamond benefits from adequate liquidity, long-dated debt
maturities, no new rig construction commitments and Loews
Corporation's (A3 stable) controlling ownership interest in
Diamond. Loews has a track record of supporting its subsidiaries
through challenging business conditions, but generally on a
temporary basis. The company does have high rig utilization and
contract coverage for its core fleet that helps keep its fleet
competitive for future rig tenders and to participate in a recovery
in dayrates when market fundamentals eventually improve.
Diamond's senior unsecured notes are rated Caa2, or one notch
beneath the Caa1 CFR. The company's primary $950 million revolving
credit facility is unsecured but has a co-borrower structure that
includes a foreign subsidiary and the facility also benefits from
guarantees from operating subsidiaries that own the substantial
majority of Diamond's drilling rigs. Consequently this revolver has
a structurally superior claim to Diamond's assets over the senior
notes which are unsecured and have no subsidiary guarantees. The
company's other revolving credit facility that matures in October
2020 is unsecured and has no guarantees, so any borrowings under
that facility are pari passu with the senior notes.
Diamond's SGL rating was downgraded since the company will consume
most of its cash and then rely fully on its revolving credit
facility to fund forecasted negative free cash flow. The SGL-3
rating reflects Moody's expectation that the company will still
maintain adequate liquidity well into 2021. The company had $156
million of cash and marketable securities at December 31, 2019 and
it has full borrowing availability on its primary $950 million
committed revolving credit facility that matures in October 2023.
The company also has $225 million of available borrowing capacity
remaining under an older revolver, but that matures in October
2020. The company has no senior note maturities until November 2023
when $250 million of senior notes mature, followed by $500 million
in August 2025, with the remaining $1.25 billion maturing 2039 and
2043.
The $950 million credit facility has covenants limiting debt to
capitalization to 60%; requiring guarantees from subsidiaries that
directly own at least 80% of the consolidated net book value of
Diamond's wholly-owned rig fleet; and requiring a minimum ratio of
the loan parties' global marketed rigs net book value to total
priority debt (as defined in the agreement) of 3x. The company has
good headroom for future compliance with these covenants well into
2021. Meaningful asset sales going forward are not expected given
the challenging industry conditions.
The negative outlook reflects the risk that Diamond's liquidity
will continue to shrink and that there will not be a sufficient
improvement in dayrates to return Diamond to adequate interest
coverage and free cash flow generation. Diamond's ratings could be
downgraded if it's liquidity becomes weak or its covenant
compliance risk increases. Higher risk of debt transactions that
could be viewed as a distressed exchange could also result in a
ratings downgrade.
If Diamond can achieve sequential increases in EBITDA in an
improving offshore drilling market, generate positive free cash
flow and increase interest coverage above 1.5x then the ratings
could be upgraded.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
DIAMOND PERFECTION: Wants Until April 14 to File Plan & Disclosures
-------------------------------------------------------------------
Debtor Diamond Perfection, Inc., moves the U.S. Bankruptcy Court
for the Eastern District of North Carolina, Raleigh Division, to
extend the deadline by which it must file its chapter 11 plan and
disclosure statement.
There remain issues regarding the claim filed by Zenaida Peralta
and a class of persons similarly situated in Claim No. 9-1,
although the bar date for filing proofs of claim expired on Nov.
11, 2019. The Court recently send a directive to the parties as to
an order to be prepared with respect to the request by Zenaida
Peralta for class certification.
Since the issuance of the directive, counsel for the Debtor has not
had sufficient time to confer with the Debtor regarding the terms
of a possible plan. Counsel believes that it will require another
60 days to assess the claims and formulate a plan.
The Debtor requests additional time to file a plan and disclosure
statement.
The Debtor does not believe an extension will prejudice any
creditors in this case, and an extension of time is in the best
interests of the estate.
Diamond Perfection requests that the deadline for filing a plan and
disclosure statement be extended for 60 days, through and including
April 14, 2020.
A copy of the motion dated Feb. 14, 2020, is available at
https://tinyurl.com/tjrmhm6 from PacerMonitor at no charge.
The Debtor is represented by:
HOWARD, STALLINGS, FROM, ATKINS, ANGELL & DAVIS, P.A.
James B. Angell
P.O. Box 12347
Raleigh, NC 27605
Tel: (919) 821-7700
Fax: (919) 821-7703
Diamond Perfection, Inc., filed a Chapter 11 petition (Bankr.
E.D.N.C. Case No. 19-03270) on July 18, 2019, estimating less than
$500,000 in both assets and liabilities. James B. Angell, Esq., at
HOWARD, STALLINGS, FROM, ATKINS, ANGELL & DAVIS, P.A., is the
Debtor's counsel.
DRAGON HOPS: Court Approves Amended Disclosure Statement
--------------------------------------------------------
Judge Brian F. Kenney has ordered that the Amended Disclosure
Statement filed by DRAGON HOPS BREWING, LLC, is approved.
Ballots accepting or rejecting the plan must be mailed or delivered
to the Debtor's counsel no later than 5:00 p.m. on Tuesday, April
21, 2020.
Objections to confirmation of the Plan must be filed and served no
later than Tuesday, April 21, 2020.
No later than 5:00 p.m. on Monday, April 27, 2020, the Debtor will
file a report of ballots showing, by class, the number and dollar
amount of ballots accepting or rejecting the plan.
The hearing consider confirmation of the Plan will be held on
Tuesday April 28, 2020, at 2:00 p.m. in Courtroom I, Martin V. B.
Bostetter, Jr. United States Courthouse, 200 South Washington
Street, Alexandria, Virginia, and may be continued in open court
without further notice to creditors. The Court requires evidence in
support of confirmation even if no objection has been filed and all
impaired classes have accepted the plan.
About Evolv Solutions
Established in 2001, Evolv Solutions LLC was founded as a document
management and information firm. Today, the company focuses on
providing Managed Print Services (MPS) and outsourced digital print
solutions for a variety of commercial, municipal and federal
clients.
Evolv Solutions filed a voluntary Chapter 11 petition (Bankr. D.
Kan. Case No. 19-21440) on July 12, 2019. In the petition signed
by Ronald Harland Sr., president, the Debtor estimated $1,190,692
in assets and $893,268 in liabilities. The case is assigned to
Judge Dale L. Somers. Colin N. Gotham, Esq., at Evans & Mullinix,
P.A., is the Debtor's counsel.
DROPCAR INC: Will Appeal Nasdaq's Delisting Determination
---------------------------------------------------------
DropCar, Inc., received notification from the Listing Qualification
Department of Nasdaq on March 5, 2020, that it had not regained
compliance with the Listing Rule 5550(a)(2). The notification
indicated that the Company's common stock will be delisted from the
Nasdaq Capital Market unless the Company requests an appeal of this
determination. The Company intends to request a hearing to appeal
the determination with the Nasdaq Hearings Panel, which will stay
the delisting of the Company's securities pending the Panel's
decision.
The Company's appeal to the Panel will include a plan that sets
forth a commitment to consider all available options to regain
compliance with the Listing Rule, including the option to
effectuate a reverse stock split upon receipt of stockholder
approval, which the Company intends to seek in connection with the
joint proxy statement and consent solicitation statement/prospectus
filed with the SEC on Feb. 14, 2020 in connection with the
Company's previously announced proposed merger with Ayro, Inc., in
order to bring its stock price over the $1.00 bid price requirement
and to meet the $4.00 bid price initial listing requirement.
However, there can be no assurance that the Company will be
successful in regaining compliance with the Listing Rule.
The Nasdaq notification has no effect at this time, or during the
appeal period, on the listing of the Company's common stock on
Nasdaq.
As previously disclosed in a Current Report on Form 8-K filed with
the Securities and Exchange Commission on Sept. 12, 2019, on Sept.
6, 2019, DropCar, Inc. received notification from The Nasdaq Stock
Market stating that the Company did not comply with the minimum
$1.00 bid price requirement for continued listing set forth in
Listing Rule 5550(a)(2). In accordance with Nasdaq listing rules,
the Company was afforded 180 calendar days (until March 4, 2020) to
regain compliance with the Listing Rule.
About DropCar
Founded and launched in New York City in 2015, DropCar --
https://drop.car -- is a provider of automotive vehicle support,
fleet logistics, and concierge services for both consumers and
businesses in automotive-related industries.
DropCar reported a net loss attributable to common stockholders of
$20.15 million for the year ended Dec. 31, 2018, compared to a net
loss attributable to common stockholders of $7.64 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had
$3.59 million in total assets, $1.83 million in total current
liabilities, and $1.76 million in total stockholders' equity.
EisnerAmper LLP, in New York, the Company's auditor since 2017,
issued a "going concern" qualification in its report dated April 1,
2019, citing that the Company has an accumulated deficit of
approximately $29.8 million and negative cash flow from operations
of approximately $10.6 million and anticipates additional losses in
fiscal year 2019, that raise substantial doubt about its ability to
continue as a going concern.
EVENTIDE CREDIT: Seeks to Hire Loeb & Loeb as Legal Counsel
-----------------------------------------------------------
Eventide Credit Acquisitions, LLC seeks approval from the
Bankruptcy Court for the Northern District of Texas to retain Loeb
& Loeb LLP as its legal counsel.
Loeb & Loeb will render these services:
a. advising the Debtor of its powers and duties in the continued
management and operation of its business and property;
b. advising and consulting on the conduct of the Debtor's
Chapter 11 case, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties-in-interest;
d. taking all necessary actions to protect and preserve the
Debtor's estate including prosecuting actions on the Debtor's
behalf, defending any action commenced against the Debtor and
representing the Debtor in negotiations concerning litigation in
which the Debtor is involved;
e. preparing pleadings;
f. advising the Debtor in connection with any potential sale of
assets or investment by a third party;
g. appearing before the bankruptcy court and any appellate
courts;
h. advising the Debtor regarding tax matters;
i. taking any necessary action on behalf of the Debtor to
negotiate, prepare and obtain approval of a disclosure statement
and confirmation of a Chapter 11 plan; and
j. providing all other necessary legal services for the Debtor
in connection with the prosecution and administration of its
bankruptcy case, including analyzing the Debtor's leases and
contracts; analyzing the validity of liens against the Debtor; and
advising the Debtor on corporate and litigation matters.
Loeb & Loeb will charge the Debtor $600 per hour for the services
of Bernard Given, Esq., and Bethany Simmons, Esq., who will have
primary responsibility in the engagement. The firm will also be
reimbursed for work-related expenses incurred.
In the five months that Loeb & Loeb was retained prior to the
petition date, the firm was paid a total of $206,809.07. The firm
is currently holding a retainer of $50,000.
Loeb & Loeb is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm may be reached through:
Bernard R. Given II
10100 Santa Monica BIvd., Suite 2200
Los Angeles, CA 90067-4120
Tel: 3 10-282-2000
Fax: 310-282-2200
Email: bgiven@Ioeb.com
About Eventide Credit
Eventide Credit Acquisitions, LLC sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 20-40349) on
Jan. 28, 2020. At the time of the filing, the Debtor estimated
assets of between $50 million and $100 million and liabilities of
between $1 million and $10 million. The petition was signed by
Drew McManigle, manager.
Judge Edward L. Morris oversees the case. Bernard R. Given, II,
Esq., at Loeb & Loeb LLP, is the Debtor's legal counsel.
EVOLV SOLUTIONS: March 13 Hearing on Disclosure Statement Set
-------------------------------------------------------------
Judge Dale L. Somers has ordered that the hearing to consider the
approval of the disclosure statement filed by Evolv Solutions, LLC
will be held at Robert J Dole US Courthouse, 500 State Avenue Room
144, Kansas City, KS 66101 on March 13, 2020 at 10:45 a.m.
Objections to the Disclosure Statement must be filed and served on
or before March 6, 2020.
About Evolv Solutions
Established in 2001, Evolv Solutions LLC was founded as a document
management and information firm. Today, the company focuses on
providing Managed Print Services (MPS) and outsourced digital print
solutions for a variety of commercial, municipal and federal
clients.
Evolv Solutions filed a voluntary Chapter 11 petition (Bankr. D.
Kan. Case No. 19-21440) on July 12, 2019. In the petition signed
by Ronald Harland Sr., president, the Debtor disclosed $1,190,692
in assets and $893,268 in liabilities. The case is assigned to
Judge Dale L. Somers. Colin N. Gotham, Esq., at Evans & Mullinix,
P.A., is the Debtor's counsel.
FISHING VESSEL: Unsecured Creditors to Get Full Payment in 4 Years
------------------------------------------------------------------
Debtors Fishing Vessel Owners Marine Ways, Inc. (FVO), and Seattle
Machine Works, Inc., filed with the U.S. Bankruptcy Court for the
Western District of Washington a Joint Disclosure Statement with
respect to the Debtors' proposed Plan.
In 2011, the Debtors entered into a revolving line of credit
financing arrangement with Mountain Pacific Bank. The Line of
Credit is evidenced by a Promissory Note; (ii) a Commercial
Security Agreement; and (iii) a UCC Financing Statement. The Line
of Credit has been modified from time to time since its inception.
By way of a Change in Terms Agreement, dated July 2, 2019, the
maturity date of the Note was extended to July 20, 2020. As of the
Petition Date, the outstanding balance of the Line of Credit was
approximately $200,000.
FVO is a party to a collective bargaining agreement (CBA) with the
Pacific Northwest Regional Council of Carpenters, Local 1184. The
other CBA is with the Puget Sound Metal Trades Council, which
covers three local bargaining units: the International Brotherhood
of Boilermakers, Local 104; the Laborers Union, Local 252; and the
International Association of Machinists and Aerospace Workers,
Local 160. Both the Carpenters Union CBA and the Metal Trades CBA
are dated July 1, 2018, and are effective through July 1, 2021.
FVO is required under the Carpenters Union CBA to participate in
the Marine Carpenters Pension Fund. FVO is required under the
Metal Trades CBA to participate in two multi-employer defined
benefit pension plans: the Boilermakers-Blacksmith National Pension
Trust; and the Western Metal Industry Pension Fund.
SMW is a party to a collective bargaining agreement with the
International Association of Machinists and Aerospace Workers,
Local 79. Pursuant to the terms of the Machinists CBA, SMW also
participates in the Metal Industry Pension.
Holders of Class 3 Unsecured Claims of the Pension Funds will
receive its Pro Rata share of monthly payments totaling $2,000
each, commencing in the first full month after Confirmation and
continuing through the thirty-sixth (36th) month following
Confirmation.
Class 5 Unsecured Claims will be paid in full in 48 equal monthly
payments. All payments shall be made on or before the 10th day of
each month in which a payment is due. Simple interest will accrue
on the unpaid balance of each Class 5 Claim at the Federal Judgment
Rate.
Holders of Class 6 consists of Equity Interests (all of SMW is held
by debtor FVO) will retain its interests in SMW following
Confirmation, but shall receive no distributions on account of such
interests.
The holders of the Equity Interests in FVO in Class 7 will retain
their interests in FVO following Confirmation, but shall receive no
distributions on account of such interests.
A full-text copy of the Disclosure Statement dated Feb. 25, 2020,
is available at https://tinyurl.com/stgdbn6 from PacerMonitor at no
charge.
The Debtors are represented by:
BUSH KORNFELD LLP
601 Union St., Suite 5000
Seattle, Washington 98101-2373
Telephone (206) 292-2110
Facsimile (206) 292-2104
About Fishing Vessel Owners Marine Ways
and Seattle Machine Works
Fishing Vessel Owners Marine Ways, Inc. --
https://www.fishingvesselowners.com/ -- and affiliate Seattle
Machine Works, Inc., are a full-service shipyard and machine shop
located in the heart of Ballard's Fishermen's Terminal. They
specialize in working with steel and wood fishing vessels,
tugboats, house boats, cruise boats and yachts.
Fishing Vessel Owners Marine Ways, Inc., and affiliate Seattle
Machine Works, Inc., sought Chapter 11 protection (Bankr. W.D.
Wash. Case Nos. 19-13502 and 19-13504) in Seattle, Washington, on
Sept. 23, 2019. In the petitions signed by Dan Payne, president
and CEO, Fishing Vessel reported $1,238,197 in total assets and
$1,459,312 in total liabilities; and Seattle Machine reported
$339,544 in total assets and $238,234 in total liabilities. Judge
Marc Barreca is assigned the Debtors' cases. Bush Kornfeld LLP
represents the Debtors.
FORESIGHT ENERGY: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Foresight Energy LP
Metropolitan Square Building
211 North Broadway, Suite 2600
St. Louis, MO 63102
Business Description: Foresight Energy and its subsidiaries --
http://www.foresight.com/-- are producers
of thermal coal, with four mining complexes
and nearly 2.1 billion tons of proven and
probably coal reserves strategically located
near multiple rail and river transportation
access points in the Illinois Basin. The
Debtors also own a barge-loading river
terminal on the Ohio River. From this
strategic position, the Debtors sell their
coal primarily to electric utility and
industrial companies located in the eastern
half of the United States and across the
international market.
Chapter 11 Petition Date: March 10, 2020
Court: United States Bankruptcy Court
Eastern District of Missouri
Thirty-one affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Foresight Energy LP (Lead Case) 20-41308
Adena Resources, LLC 20-41314
Akin Energy LLC 20-41326
American Century Mineral LLC 20-41330
American Century Transport LLC 20-41322
Coal Field Construction Company LLC 20-41334
Coal Field Repair Services LLC 20-41329
Foresight Coal Sales LLC 20-41323
Foresight Energy Employee Services Corporation 20-41316
Foresight Energy Finance Corporation 20-41333
Foresight Energy GP LLC 20-41309
Foresight Energy Labor LLC 20-41337
Foresight Energy LLC 20-41312
Foresight Energy Services LLC 20-41319
Foresight Receivables LLC 20-41321
Hillsboro Energy LLC 20-41328
Hillsboro Transport LLC 20-41318
LD Labor Company LLC 20-41324
Logan Mining LLC 20-41325
Mach Mining,LLC 20-41338
Macoupin Energy LLC 20-41331
MaRyan Mining LLC 20-41320
M-Class Mining,LLC 20-41335
Oeneus LLC 20-41313
Patton Mining LLC 20-41332
Seneca Rebuild LLC 20-41311
Sitran LLC 20-41310
Sugar Camp Energy, LLC 20-41336
Tanner Energy LLC 20-41317
Viking Mining LLC 20-41325
Williamson Energy, LLC 20-41327
Judge: Hon. Kathy A. Surratt-States
Debtors' Counsel: Richard W. Engel, Jr., Esq.
John G. Willard, Esq.
Kathryn Redmond, Esq.
ARMSTRONG TEASDALE LLP
7700 Forsyth Boulevard, Suite 1800
St. Louis, Missouri 63105
Tel: (314) 621-5070
Fax: (314) 621-5065
Email: rengel@atllp.com
jwillard@atllp.com
kredmond@atllp.com
- and -
Paul M. Basta, Esq.
Alice Belisle Eaton, Esq.
Alexander Woolverton, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, New York 10019
Tel: (212) 373-3000
Fax: (212) 757-3990
E-mail: pbasta@paulweiss.com
aeaton@paulweiss.com
awoolverton@paulweiss.com
Debtors'
Co-Counsel: PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Debtors'
Financial
Advisor: FTI CONSULTING, INC.
Debtors'
Investment
Banker: JEFFERIES LLC
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petition was signed by Robert D. Moore, president.
A full-text copy of Foresight Energy LP's petition is available for
free at PacerMonitor.com at:
https://is.gd/AD1cKd
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Wilmington Trust National Bond Debt $472,121,609
Association
50 South 6th Street, Suite 1290
Minneapolis, MN 55402
Name: Brandon Bonfig
Tel: 612-217-5693
Email: bbonfig@wilmingtontrust.com
2. Joy Global Underground Trade Debt $12,005,510
Mining LLC
P.O. Box 504794
St. Louis, MO 63150-4794
Name: Dan Spears
Tel: 724-779-4536
Email: dan.spears@mining.komatsu.com
3. Jennchem Mid-West Trade Debt $6,734,589
P.O. Box 603800
Charlotte, NC 28260-3800
Name: Tony Calandra
Tel: (412) 559-6085
Email: tcalandra@jennmar.com
4. Jennchem of West Trade Debt $5,917,642
Kentucky Inc.
P.O. Box 603800
Charlotte, NC 28260-3800
Name: Tony Calandra
Tel: (412) 559-6085
Email: tcalandra@jennmar.com
5. Fabick Mining Inc. Trade Debt $4,426,649
P.O. Box 403943
Atlanta, GA 30384-3843
Name: Nick Johnson
Tel: 618-982-9004
Email: nicholas.johnson@fabickmining.com
6. Natural Resource Royalty $3,672,524
Partners LLP
372 Park Lane
Herrin, IL 62948
Name: Greg Wooten
Tel: 304-302-2357
Email: gwooten@wpplp.com
7. International Belt Sales LLC Trade Debt $3,357,347
29425 Chagrin Boulevard,
Suite 300
Pepper Pike, OH 44122
Name: Jeffrey Hurt
Tel: 440-724-1616
Email: jeffreychurt@aol.com
8. BankDirect Capital Insurance $3,211,538
Finance
11191 Illinois Route 185
Hillsboro, IL 62049
Name: Luther J. Grafe
Tel: 877-226-5456
Email: lgrafe@bankdirectcapital.com
9. United Central Industrial Trade Debt $2,546,439
Supply
P.O. Box 71206
Chicago, IL 60694-1206
Name: Henry Looney
Tel: 276-623-5872
Email: henry.Looney@unitedcentral.net
10. Dewind One Pass Trade Debt $2,316,000
Trenching LLC
9150 96th Avenue
Zeeland, MI 49464
Name: Steve McCullick
Tel: 616-875-7580
Email: steve@dewindonepass.com
11. John Fabick Trade Debt $2,283,204
Tractor Company
364 Lisbon Street
P.O. Box 369
Canfield, OH 44406-0369
Name: Nick Johnson
Tel: 618-982-9004
Email: nicholas.johnson@fabickmining.com
12. WPP LLC Royalty $2,243,341
372 Park Lane
Herrin, IL 62948
Name: Greg Wooten
Tel: 304-302-2357
Email: gwooten@wpplp.com
13. Heritage Cooperative Inc. Trade Debt $1,875,855
P.O. Box 71735
Chicago, IL 60694-1735
Name: John Richards
Tel: 330-308-5020
Email: jrichards@heritagecooperative.com
14. R.M. Wilson Inc. Trade Debt $1,806,832
46226 National Road
St. Clairsville, OH 43950
Name: Pat Popicg
Tel: 304-232-5860 (o)
Email: ppopicg@rmwilson.com
15. Mine Supply Company Trade Debt $1,677,073
2853 Ken Gray Boulevard,
Suite 4
West Frankfort, IL 62896
Name: Bob Purvis
Tel: 214-358-5500
Email: bob.purvis@purvisindustries.com
16. State Electric Supply Co. Trade Debt $1,544,700
P.O. Box 603800
Charlotte, NC 28260-3800
Name: John Spoor
Tel: 304-523-7491
Email: john.spoor@stateelectric.com
17. Fuchs Lubricants Co. Trade Debt $1,314,315
P.O. Box 952121
St. Louis, MO 63195-2121
Name: Steve Williams
Tel: 724-216-6143
Email: steve.williams@fuchs.com
18. Jennmar Services Trade Debt $1,305,241
P.O. Box 405655
Atlanta, GA 30384-5655
Name: Tony Calandra
Tel: 412-559-6085
Email: tcalandra@jennmar.com
19. Flanders Electric Trade Debt $1,265,929
Motor Service
654 Main Street
Rockwood, PA 15557
Name: Shawn Collins
Tel: 812-867-7421
Email: scollins@flandersinc.com
20. Joy Global Conveyors Inc. Trade Debt $1,200,406
P.O. Box 504794
St. Louis, MO 63150-4794
Name: Dan Spears
Tel: 724-779-4536
Email: dan.spears@mining.komatsu.com
21. Mt. Olive & Staunton Coal Land Mitigation $1,172,936
Co. Trust
P.O. Box 742784
Atlanta, GA 30374-2784
Name: Patrick D. Cloud
Tel: 618-656-4646
Email: pcloud@heylroyster.com
22. Wallace Industrial LLC Trade Debt $1,160,230
P.O. Box 74008932
Chicago, IL 60674-8932
Name: David Wallace
Tel: 618-937-3440
Email: Dwallace@wallaceelectricalsystems.com
23. Mayo Manufacturing Co. Inc. Trade Debt $1,130,819
P.O. Box 28330
St. Louis, MO 63146
Name: Dave Mayo
Tel: 304-855-5947
Email: david.mayo@mayowv.com
24. RGGS Land & Minerals Royalty $1,129,873
610 Sneed Road
Carbondale, IL 62902
Name: Bill Lawrence
Tel: 205-685-5329
Email: blawrence@sginterests.com
25. Wallace Electrical Trade Debt $1,116,643
Systems LLC
P.O. Box 74008932
Chicago, IL 60674-8932
Name: David Wallace
Tel: 618-937-3440
Email: dwallace@wallaceelectricalsystems.com
26. Jabo Supply Corporation Trade Debt $1,114,059
P.O. Box 465
West Frankfort, IL 62896
Name: Jay Bazemore
Tel: 304-736-8333
Email: jbazemore@jabosupply.com
27. Polydeck Screen Corporation Trade Debt $967,619
P.O. Box 827
Pound, VA 24279
Name: Peter Freissle
Tel: 864-579-4594
Email: p.freissle@polydeck.com
28. Irwin Mine and Tunneling Trade Debt $953,723
Supply
P.O. Box 4835
Evansville, IN 47724
Name: William Baker
Tel: 724-852-1480
Email: wbaker@irwincar.com
29. SNF Mining Inc. Trade Debt $936,288
P.O. Box 890889
Charlotte, NC 28289-0889
Name: Paul Slater
Tel: 606-432-1535
Email: pslater@snfhc.com
30. US United Bulk Terminals Port Unknown
P.O. Box 301749
Dallas, TX 75303-1749
Name: Brian Miles
Tel: 281-457-7900
Email: UBT-AR@unitedbulkterminals.com
FOREVER 21: Sale of Substantially All Assets to F21 OpCo Approved
-----------------------------------------------------------------
Judge Kevin Goss of the U.S. Bankruptcy Court for the District of
Delaware authorized Forever 21, Inc. and its affiliates to sell
substantially all assets to F21 OpCo, LLC.
The Asset Purchase Agreement and the Sale Transaction are approved
and the Debtors are authorized to enter into and perform under the
Asset Purchase Agreement and the other Related Agreements.
Notwithstanding anything to the contrary in the Order or in the
Asset Purchase Agreement, all amounts the Buyer is responsible for
paying pursuant to the Asset Purchase Agreement to the extent
payable to a Designation Counterparty will be paid by the Buyer
directly to such Designation Counterparty. The Buyer will obtain
and maintain insurance coverage as required of the tenant under the
Leases of premises at which the Buyer occupies and/or operates
during the period from and after Closing through the effective date
of assumption and assignment or rejection of the Leases.
During the Designation Rights Period, the Buyer may (i) assume and
assign Designated Contracts and Designated Leases pursuant to
Section 2.7(d) of the Asset Purchase Agreement with the consent of
the Designation Counterparties or (ii) direct the Debtors to file a
motion with the Court to assume and assign Designated Contracts and
Designated Leases to the Buyer in each case pursuant to Section 365
of the Bankruptcy Code.
For any Designated Contract or Designated Lease, which the Buyer
directs the Debtors to assume and assign to the Buyer, the Debtors
will file the Assumption Notice. Upon the filing of an Assumption
Notice, any Contract or Lease identified on the Assumption Notice,
subject to an Assumption Agreement executed by and between the
Buyer and the Designation Counterparty, will be deemed assumed by
the Debtors and assigned to the Buyer in the Assumption Agreement
between the Buyer and Designation Counterparty without further
order of the Court, unless otherwise requested by the Designation
Counterparty.
The Debtors are authorized to assume and assign the Transferred
Contracts and Assumed Leases to the Buyer free and clear of all
Liens.
Should F21 OpCo ask to assign any of its rights, interests or
obligations or exercise its rights to designate under section 9.6
of the Asset Purchase Agreement to any third party that is not its
Affiliate, notice of the same will be filed, and counterparties to
Leases will have 10 days to object to the same.
To the extent the Buyer and its agent determine to conduct GOB
Sales and Store Closings at any of the Stores, the Buyer and its
agent are authorized to conduct such GOB Sales and Store Closings
and will have the benefit of the relief set forth in the Store
Closing Order to conduct the GOB Sales and Store Closings to the
fullest extent such relief is provided to the Debtors and their
Consultant with respect to the following provisions of the Store
Closing Order.
In the event the Buyer and its agent determine to conduct GOB Sales
and Store Closings, the Buyer and its agent may only conduct the
GOB Sales and Store Closings in accordance with the Store Closing
Procedures attached to the Store Closing Order and previously
approved in the Store Closing Order, as such Store Closing
Procedures may be modified by a Side Letter between the Buyer
and/or its agent and any of the landlords at the closing locations.
The Buyer and its agent are authorized and empowered to (a)
transfer Merchandise, Furnishings and Equipment out of, and into,
the Stores that are subject to Store Closings, and (b) sell the
Furnishings and Equipment and abandon the same, in each case, as
provided for and in accordance with the terms of the Store Closing
Order and the Order, including, but not limited to, closing Store
signage.
In accordance with the terms of the Asset Purchase Agreement, all
proceeds from the GOB Sales, Store Closings or liquidation of the
Acquired Assets are property of the Buyer and will not be subject
to any liens or claims except as set forth in the Asset Purchase
Agreement. For the avoidance of doubt, none of the proceeds of the
GOB Sales, Store Closings or liquidation of the Acquired Assets
will be or will be deemed or construed to be property of the
Debtors' estates.
Notwithstanding anything to the contrary contained in the Order,
upon the closing of the Sale, (a) proceeds of the Sale will be used
to make payments and/or provide funding to pay, in full, in cash,
all DIP ABL Obligations; (b) with respect to each outstanding
letter of credit issued pursuant to the DIP ABL Facility the Buyer
will either (i) cause the cancellation and return undrawn of all
outstanding letters of credit issued pursuant to the DIP ABL
Facility, and/or (ii) with respect to the outstanding letters of
credit issued pursuant to the DIP ABL Facility, the furnishing to
the DIP ABL Agent of a cash deposit, or at the discretion of the
DIP ABL Agent a standby letter of credit satisfactory to the DIP
ABL Agent, in an amount equal to 105% of the face amount of all
letters of credit; and (c) the DIP ABL Agent is authorized to issue
non-renewal notices under any outstanding letters of credit issued
pursuant to the DIP ABL Facility without the need for any further
order of the Court.
Notwithstanding anything to the contrary contained in the Order,
upon the closing of the Sale, (a) all proceeds of the Purchase
Price, net only of the Wind Down Amount and the Carve-Out Fee
Amount funded in accordance with the Order will be applied to
reduce the DIP Term Loan Obligations on a dollar-for-dollar basis;
and (b) all then accrued and unpaid professional fees and expenses
incurred by the DIP Term Loan Agent through the anticipated Closing
Date will be paid.
The Carve Out Trigger Notice will be deemed to be delivered on the
Closing Date, and such amount will be reported in writing to the
DIP Agents on the Closing Date. The Carve Out Reserves will be
funded on the Closing Date with the proceeds from the Sale.
Nothing in the Order affects the priorities set forth in the DIP
Order with respect to professional fees and expenses incurred by
the Debtors' retained professionals and the Committee's retained
professionals. The Wind Down Amount will be funded in the amount
of $5 million on the Closing Date; provided, that, $3 million of
such Wind Down Amount will be distributed to the DIP Term Loan
Agent on the Closing Date and will reduce on a dollar-for-dollar
basis the outstanding DIP Term Loan Obligations.
The Designation Rights Period with respect to the licenses with
Infor (US), Inc., SAP Industries, Inc., and Oracle America, Inc.
will terminate on the fourteenth business day following the Closing
Date unless extended by agreement of the Buyer and the Applicable
Designation Counterparty.
Notwithstanding any other provisions of the Sale Order or any final
orders pertaining to post-petition financing, use of cash
collateral, or any agreements validated by any such orders, from
the proceeds of the sale of the Debtors' assets, the amount of
$31,735 will be set aside by the Debtors in a segregated account as
adequate protection for the unpaid secured.
The Order constitutes a final order within the meaning of 28 U.S.C.
Section 158(a). Notwithstanding Bankruptcy Rule 6004(h), the terms
and conditions of the Order are immediately effective and
enforceable upon its entry.
A copy of the Agreements is available at
https://tinyurl.com/sndyuvx from PacerMonitor.com free of charge.
About Forever 21
Founded in 1984, and headquartered in Los Angeles, California,
Forever 21, Inc. -- http://www.forever21.com/-- is a fast fashion
retailer of women's, men's and kids clothing and accessories and is
known for offering the hottest, most current fashion trends at a
great value to consumers. Forever 21 delivers a curated assortment
of new merchandise brought in daily.
As of the bankruptcy filing, the Debtors operated 534 stores under
the Forever 21 brand in the U.S. and 15 stores under beauty and
wellness brand, Riley Rose.
On Sunday, Sept. 29, 2019, Forever 21, Inc. and 7 of its U.S.
subsidiaries each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del.
Lead Case No. 19-12122).
According to the petition, Forever 21 has estimated liabilities on
a consolidated basis of between $1 billion and $10 billion against
assets of the same range.
The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez &
Marsal as restructuring advisor; and Lazard as investment banker;
and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel.
Prime Clerk is the claims agent.
Andrew Vara, acting U.S. trustee for Region 3, on Oct. 11, 2019,
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case of Forever 21, Inc.
Counsel to the administrative agent under the Debtors' prepetition
revolving credit facility and the Debtors' DIP ABL financing
facility are Morgan, Lewis & Bockius LLP and Richards, Layton &
Finger, PA.
Counsel to the administrative agent under the Debtors' DIP term
loan facility is Schulte Roth & Zabel LLP.
FRANK INVESTMENTS: April 2 Disclosure Statement Hearing Set
-----------------------------------------------------------
On Feb. 16, 2020, Debtor Frank Investments, Inc. filed with the
U.S. Bankruptcy Court for the Southern District of Florida, West
Palm Beach Division, a Disclosure Statement and Plan of
Reorganization. On Feb. 25, 2020, Judge Erik P. Kimball ordered
that:
* April 2, 2020, at 10:30 a.m. in the United States Bankruptcy
Court, 1515 North Flagler Drive, Courtroom B, 8th Floor, West Palm
Beach, Florida 33401 is the hearing to consider approval of the
Disclosure Statement.
* March 26, 2020, is the last day for filing and serving
objections to the Disclosure Statement.
* March 3, 2020, is the deadline for service of the order,
disclosure statement and plan.
A copy of the order dated Feb. 25, 2020, is available at
https://tinyurl.com/s9xnwjf from PacerMonitor at no charge.
About Frank Investments
Frank Investments Inc., Frank Theatres Management LLC and Frank
Entertainment Companies, LLC, are affiliates of Rio Mall, LLC,
which sought bankruptcy protection (Bankr. S.D. Fla. Case No.
18-17840) on June 28, 2018. Rio Mall, LLC, owns and operates
commercial real property that comprises the shopping center known
as Rio Mall located at 3801 Route 9 South, Rio Grande, N.J.
Frank Investments and its debtor-affiliates sought Chapter 11
protection (Bankr. S.D. Fla. Lead Case No. 18-20019) on Aug. 17,
2018. At the time of the filing, Frank Investments and Frank
Entertainment had estimated assets of between $10 million and $50
million and liabilities of the same range. Frank Theaters had
estimated assets of between $10 million and $50 million and
liabilities of between $50 million and $100 million.
Bradley S. Shraiberg, Esq., at Shraiberg Landau & Page, P.A., is
the Debtors' bankruptcy counsel.
No official committee of unsecured creditors has been appointed.
FRED'S INC: Unsecureds to Have 4.0% to 8.8% Recovery Under Plan
---------------------------------------------------------------
Debtors Fred's, Inc., Fred's Stores of Tennessee, Inc., National
Pharmaceutical Network, Inc., Reeves-Sain Drug Store, Inc., and 505
N. Main Opp, LLC filed a Joint Plan and a Disclosure Statement on
February 23, 2020.
Class 3 General Unsecured Claims will receive, if substantive
consolidation is granted, its pro rata share of an amount equal to
the distribution proceeds or if substantive consolidation is not
granted, its pro rata share of an amount equal to the distribution
proceeds attributable to the Debtor against which such holder has
an allowed general unsecured Claim, less any amounts that the
liquidating trustee in its reasonable discretion determines to be
necessary to be held to wind up such Debtor's affairs and
administer the Liquidating Trust in respect of such Debtor's
Estate. The Debtors estimate a 4.0% to 8.8% recovery for this
Class. Class 3 General Unsecured Claims will include any
deficiency claim held by a Holder of a Secured Claim.
Class 6 consists of all interests in any Debtor. The Plan provides
that all Interests shall be canceled and extinguished, and will be
of no further force or effect. No holder of interests shall
receive or retain any property under the Plan on account of such
Interests.
The Plan provides for the substantive consolidation of the Chapter
11 Cases of the Debtors into a single Chapter 11 Case after entry
of a Confirmation Order for purposes of the Plan and the
distributions to be made under the Plan.
The Plan provides that a Liquidating Trust will fund distributions
under the Plan with distribution proceeds. After funding of the
professional fee escrow account in accordance with the Plan, any
funds in the distribution account shall be allocated and paid in
the following priority: first, on account of all Other Secured
Claims; second, on account of all Allowed Administrative Claims;
third, on account of the Allowed Priority Claims; and fourth, on
account of all Allowed General Unsecured Claims.
A full-text copy of the Disclosure Statement dated Feb. 23, 2020,
is available at https://tinyurl.com/qjw3y85 from PacerMonitor at no
charge.
The Debtors are represented by:
Adam L. Shiff
Robert M. Novick
Shai Schmidt
KASOWITZ BENSON TORRES LLP
1633 Broadway
New York, New York 10019
Telephone: (212) 506-1700
Facsimile: (212) 506-1800
- and -
Derek C. Abbott
Andrew R. Remming
Joseph C. Barsalona II
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 North Market Street, 16th Floor
P.O. Box 1347
Wilmington, Delaware 19899
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
About Fred's Inc.
Since 1947, Fred's, Inc. (NASDAQ:FRED) -- http://www.fredsinc.com/
-- has been an integral part of the communities it serves
throughout the southeastern United States. Fred's mission is to
make it easy AND exciting to save money. Its unique discount value
store format offers customers a full range of value-priced everyday
items, along with terrific deals on closeout merchandise throughout
the store.
Fred's, Inc., and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 19-11984) on Sept. 9, 2019 in
Delaware. In the petitions signed by Joseph M. Anto, CEO, the
Debtors disclosed $474,774,000 in assets and $380,167,000 in
liabilities as of May 4, 2019.
The Hon. Christopher S. Sontchi oversees the cases.
The Debtors tapped Morris, Nichols, Arsht & Tunnell LLP as counsel;
Kasowitz Benson Torres LLP as general bankruptcy counsel; Akin Gump
Strauss Hauer & Feld LLP as special counsel; Epiq Bankruptcy
Solutions LLC as claims and noticing agent; and Berkeley Research
Group, LLC, as financial advisor.
GARBER BROS: Cash Collateral Hearing Continued Through March 31
---------------------------------------------------------------
Judge Melvin S. Hoffman of the U.S. Bankruptcy Court for the
District of Massachusetts for the District of Massachusetts has
approved Garber Bros., Inc.'s use of cash collateral on an interim
basis through March 31, 2020 in accordance with the Court's prior
orders regarding cash collateral and the budget and under the terms
and conditions of the Cash Collateral Stipulation.
The Debtor has sought authority to use funds and assets
constituting the cash collateral subject to the security interest
claimed by Citizens Bank, N.A., Zurich American Insurance Company,
and Massachusetts Department of Revenue as well as funds received
and other cash collateral that are subject to replacement liens
granted by the Order.
The Debtor will file a budget for further use of cash collateral on
or before March 10, 2020. All objections to the Debtor's further
use of cash collateral will be filed not later than March 24, and a
further cash collateral hearing will be held on March 31, 2020 at
10:15 a.m.
About Garber Bros.
Garber Bros., Inc., is a greater Boston convenience store
distributor. It abruptly closed its doors on April 10, 2017, and
ceased operations.
Alleged creditors signed an involuntary Chapter 7 petition for
Garber Bros. (Bankr. D. Mass. Case No. 17-11802) on May 15, 2017.
The petitioning creditors are BIC USA, Conagra Brands, Inc.,
General Mills, Inc., Mars Financial Services, Mondelez, Nestle USA,
The Coca-Cola Company, and The Hershey Company. The petitioning
creditors are represented by Janet E. Bostwick, at Janet E.
Bostwick, PC.
On June 7, 2017, the Court granted the Debtor's motion to convert
the case to Chapter 11. Murphy & King, PC, is the Debtor's counsel,
and Argus Management Corporation serves as the Debtor's financial
advisor. The Debtors hired Blish & Cavanagh, LLP, as special
litigation counsel.
On June 28, 2017, the U.S. Trustee appointed an official committee
of unsecured creditors. The Committee is represented by Blakeley
LLP.
GENCANNA GLOBAL: Seeks Court Approval to Hire Huron Consulting
--------------------------------------------------------------
GenCanna Global USA, Inc. and affiliates seek approval from the
U.S. Bankruptcy Court for the Eastern District of Kentucky to
employ Huron Consulting Services, LLC and appoint a chief
transformation officer and deputy chief transformation officer in
connection with their Chapter 11 cases.
James Alt, Huron's managing director, and Marc Passalacqua, the
firm's senior director, will serve as chief transformation officer
and deputy chief transformation officer, respectively. Mr.
Passalacqua will also serve as chief administrative officer.
The officers will work closely and collaboratively on an as needed
basis with the Debtors' employees to oversee and complete these key
activities:
i. lead weekly cash management meetings;
ii. oversee the cash disbursement process;
iii. ensure daily cash reporting is maintained;
iv. provide financial oversight and approve key financial
commitments;
v. participate in key strategic initiatives to ensure
completion
vi. maintain a weekly cash-flow model over a rolling
13-week period and measure weekly compliance;
vii. complete a financial model for the period 2020 to
2022;
viii. update the weekly production model and track key work
streams;
ix. manage the purchase order process and other commitments
to ensure compliance with the production plan; and
x. assess initiatives required to maintain operations.
The officers will also assist in the preparation of the Debtors'
bankruptcy schedules, statements of financial affairs and financial
reports.
Huron will be compensated as follows:
a. Current standard hourly rates by position of the Huron
professionals expected to have primary responsibility for providing
services to the Debtors.
b. Out-of-pocket expenses will be billed at the actual amounts
incurred. Travel time during which no work is performed will be
itemized separately and billed at 50 percent of the negotiated
hourly rate.
c. Huron will bill on a weekly basis and its fees and
out-of-pocket expenses shall not exceed $125,000 per week or the
pro-rated portion thereof.
d. Huron shall be entitled to earn a "success fee" to be paid
immediately upon the closing of a sale transaction. The success
fee shall be the greater of:
i. Percentage of "total consideration" as calculated by
1. 0.5 percent of total consideration below $80
million,
2. 1 percent of total consideration above $80 million to
$200 million,
3. 1.5 percent of total consideration above $200
million, or
ii. Cumulative fees incurred calculated at the negotiated
rate less any postpetition amounts paid by the Debtors.
Huron does not represent any interest adverse to the Debtor,
creditors or other "parties in interest," according to court
filings.
The firm can be reached through:
James Alt
Huron Consulting Services LLC
520 Ellicott Street, Suite 320
Buffalo, NY 14203
Phone: (312) 583-8700
Fax: (646) 520-0310
About GenCanna Global USA
GenCanna Global USA, Inc. -- https://gencanna.com/ -- is a
vertically-integrated producer of hemp and hemp-derived CBD
products with a focus on delivering social, economic and
environmental impact through seed-to-scale agricultural
production.
GenCanna Global USA was the subject of an involuntary Chapter 11
proceeding (Bankr. E.D. Ky. Case No. 20-50133) filed on Jan. 24,
2020. The involuntary petition was signed by alleged creditors
Pinnacle, Inc., Crawford Sales, Inc., and Integrity/Architecture,
PLLC.
On Feb. 6, 2020, GenCanna Global USA consented to the involuntary
petition and on Feb. 5, 2020, two affiliates, GenCanna Global Inc.
and Hemp Kentucky LLC, filed their own voluntary Chapter 11
petitions.
Laura Day DelCotto, Esq., at DelCotto Law Group PLLC, represents
the petitioners.
The Debtors tapped Benesch Friedlander Coplan & Aronoff, LLP and
Dentons Bingham Greenebaum, LLP as legal counsel; Huron Consulting
Services, LLC as operational advisor; and Jefferies, LLC as
financial advisor. Epig is the claims agent, which maintains the
page https://dm.epiq11.com/GenCanna.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Feb. 18, 2020. The committee tapped Foley & Lardner
LLP as its bankruptcy counsel, and DelCotto Law Group PLLC as its
local counsel.
GEO-TECH POLYMERS: Seeks to Hire Strip Hoppers as Co-Counsel
------------------------------------------------------------
Geo-Tech Polymers, LLC seeks authority from the U.S. Bankruptcy
Court for the Southern District of Ohio to hire Strip, Hoppers,
Leithart, McGrath & Terlecky Co., LPA.
Strip Hoppers will serve as co-counsel with Tompkins, Selph, &
Associates, Ltd., the other firm handling the Debtor's Chapter 11
case.
The firm's lawyers who will work on the Debtor's case and their
hourly rates are:
Myron Terlecky $350
John Kennedy $300
Strip Hoppers is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Myron N. Terlecky, Esq.
John W. Kennedy, Esq.
Strip, Hoppers, Leithart,
McGrath & Terlecky Co., LPA
575 South Third Street
Columbus, OH 43215-5759
Tel: (614) 228-6345
Fax: (614) 228-6369
Email: mnt@columbuslawyer.net
jwk@columbuslawyer.net
About Geo-Tech Polymers
Geo-Tech Polymers, LLC -- http://www.geo-tech.com-- is a supplier
of solutions that transform low-value plastics waste into
high-quality products for financial and environmental benefit. It
pioneered a mechanical cleaning process that enables companies to
add value to their plastics byproducts by returning a material of
unprecedented quality.
Geo-Tech Polymers, LLC, filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Ohio Case No. 20-50255) on Jan.
16, 2020. In the petition signed by Sanjay Dutta, chief executive
officer and president, the Debtor disclosed assets of between $10
million and $50 million and liabilities of the same range. Judge
C. Kathryn Preston oversees the case.
The Debtor tapped Tompkins, Selph, & Associates, Ltd. and Strip,
Hoppers, Leithart, McGrath & Terlecky Co., LPA as their legal
counsel.
GFL ENVIRONMENTAL: Moody's Hikes CFR to B1, Outlook Stable
----------------------------------------------------------
Moody's Investors Service upgraded GFL Environmental Inc.'s
Corporate Family Rating to B1 from B3, Probability of Default
rating to B1-PD from B3-PD, senior secured bank credit facility
rating to Ba3 from B1 and its senior unsecured notes ratings to B3
from Caa2. Moody's has also assigned a Speculative-Grade Liquidity
Rating at SGL-2. The outlook was changed to stable from rating
under review. This concludes Moody's review of the ratings
initiated on February 25, 2020.
GFL closed its initial public offering on March 3 and raised C$2.9
billion in proceeds, which were used to repay a portion of its
outstanding debt. "The upgrade reflects GFL's stronger financial
profile after the successful closing of its initial public offering
(IPO) which reduced pro forma leverage from 6.7x to 4.3x," said
Louis Ko, Moody's Vice President, Senior Analyst.
Upgrades:
Issuer: GFL Environmental Inc.
Corporate Family Rating, Upgraded to B1 from B3
Probability of Default Rating, Upgraded to B1-PD from B3-PD
Senior Secured Term Loan, Upgraded to Ba3 (LGD3) from B1 (LGD2)
Senior Secured Regular Bond/Debenture, Upgraded to Ba3 (LGD3)
from B1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Upgraded to B3 (LGD5)
from Caa2 (LGD5)
Assignments:
Issuer: GFL Environmental Inc.
Speculative Grade Liquidity Rating, Assigned SGL-2
Outlook Actions:
Issuer: GFL Environmental Inc.
Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
GFL's B1 CFR is constrained by: 1) its history of aggressive
debt-financed acquisition growth strategy; 2) Moody's expectation
that leverage will remain above 4x in the next 12 to 18 months
(about 4.3x pro forma for the IPO transaction and recent
acquisitions); 3) the short time frame between acquisitions which
increases the potential for integration risks and creates opacity
of organic growth; and 4) GFL's majority ownership by private
equity firms, which may continue to hinder deleveraging. However,
GFL benefits from: 1) the company's diversified business model; 2)
high recurring revenue supported by long term contracts; 3) its
good market position in the stable Canadian and US non-hazardous
waste industry; 4) EBITDA margins that compare favorably with those
of its investment grade rated industry peers; and 5) good
liquidity.
GFL has good liquidity (SGL-2). Sources are approximately C$1
billion compared to about C$35 million of term loan amortization
over the next 12 months. After the IPO transaction, GFL is
projected to have no cash on hand as its cash balance was used in
the American Waste acquisition in Q1 2020. GFL will have full
availability under its C$628 million and $40 million revolving
credit facilities, both due August 2023, and Moody's expected free
cash flow of about C$350 million over the next 12 months to
December 2020. GFL's revolver is subject to a net leverage
covenant, which Moody's expects will have at least a 40% cushion
over the next four quarters. GFL has limited flexibility to
generate liquidity from asset sales as its assets are encumbered.
The stable outlook reflects Moody's view that GFL will sustain a
lower leverage profile post-IPO and maintain its stable margins and
good liquidity in the next 12 to 18 months.
The ratings could be upgraded if GFL demonstrates consistent and
visible organic revenue growth, maintains good liquidity and
sustains adjusted debt/EBITDA below 4.0x (4.3x pro forma for the
IPO transaction and recent acquisitions and 4.1x pro forma FY2020E)
and EBIT/Interest above 2.0x (1.6x pro forma FY2020E). The ratings
could be downgraded if liquidity weakens, possibly caused by
negative free cash flow, if there is a material and sustained
decline in margins due to challenges integrating acquisitions or if
adjusted Debt/EBITDA is sustained above 5.0x (4.1x pro forma
FY2020E) and EBIT/Interest falls below 1.5x (1.6x pro forma
FY2020E).
Environmental risks considered material are the various regulations
and requirements that GFL is subjected to for the collection,
treatment and disposal of waste. GFL has a long track record of
adhering to the requirements for the proper handling of the waste
materials encountered.
The governance considerations Moody's makes in GFL's credit profile
include the majority ownership by private equity firms as well as
its history of debt-financed acquisitions and aggressive financial
policies, which may be reversed after the completion of the IPO.
Moody's also considered GFL's track record of successfully
integrating its for the expansion of its business as well as the
management team's experience in the amalgamation of the
businesses.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
GFL Environmental Inc., headquartered in Toronto, provides solid
waste and liquid waste collection, treatment and disposal solutions
and soil remediation services to municipal, industrial and
commercial customers in Canada. The company also provides municipal
and commercial solid waste and recycling collection services in the
US. Pro forma for acquisitions, annual revenue exceeds C$3.9
billion. GFL is publicly traded on the Toronto Stock Exchange and
New York Stock Exchange.
GODSTONE RANCH: Sale of Harris County Property Approved
-------------------------------------------------------
Judge Jeffrey P. Norman of the U.S. Bankruptcy Court for the
Southern District of Texas authorized Godstone Ranch Real Estate,
LLC's sale of the real property described as being a tract or
parcel of land containing 6,840 square feet and being in the
Northwesterly 60 feet of Lots 1 and 2 in Block 9 of the Lockhart
Addition in Harris County, Texas, free and clear of liens.
The lien claims of the taxing authorities, including but not
limited to Harris County and East End District, will be paid in
full from the proceeds of sale and that any remaining sale proceeds
will be paid to Texas Gulf Bank, N.A. to be applied to its secured
claim.
If Texas Gulf Bank, N.A. objects to any item on the closing
statement, the sale will not close without further order of the
Court.
The stay pursuant to B.R. 6004(h) is waived.
About Godstone Ranch Real Estate
Godstone Ranch Real Estate, LLC, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-33153) on June
3, 2019. At the time of the filing, the Debtor was estimated to
assets of between $100,001 and $500,000 and liabilities of the same
range. The case is assigned to Judge Jeffrey P. Norman. Michael
Hardwick, PLLC, is the Debtor's bankruptcy counsel.
GOMEZ GLOBAL: Loyce Street Says Plan Not Feasible
-------------------------------------------------
Loyce Street, LLC, objects to the First Amended Combined Chapter 11
Plan of Reorganization and Disclosure Statement of debtor Gomez
Global LLC, and as grounds states, as follows:
* Under the Plan, the Debtor lists Loyce's secured portion at
$19,611. This seeming conflict causes the Disclosure Statement to
fail to provide adequate information concerning Loyce's treatment
under the Plan.
* The Plan fails to address any ability to relocate the business
if Debtor cannot continue operation of the business enterprise on
the premises after the expiration of the term of the sublease.
This failure to inform as to how Debtor would continue business
causes the Disclosure Statement to fail to provide adequate
information concerning Loyce's treatment under the Plan.
* Loyce believes that, if the Plan is confirmed without all the
payments provided for under the Plan to be made prior to the
expiration of the term of the existing sublease, it is likely to be
followed by the liquidation, or the need for further financial
reorganization of the Debtor. Therefore, the Plan, as presently
proposed, is not capable of being confirmed because it is not
feasible.
* The facial conflict in the period of time over which Loyce's
secured claim is to be paid causes the Disclosure Statement to fail
to provide adequate information concerning Loyce’s treatment
under the Plan.
* The understatement of gross revenues causes the $2,112.95 net
income to be understated by over $12,000 a month. This causes the
Disclosure Statement to fail to provide adequate information
concerning Debtor’s resources under the Plan.
A full-text copy of Loyce Street's objection dated Feb. 21, 2020,
is available at https://tinyurl.com/svju6nl from PacerMonitor at no
charge.
Loyce Street is represented by:
KENT F. BROOKS
Law Office of Kent F. Brooks
8226 Douglas Avenue, Suite 330
Dallas, Texas 75225
Tel: (214) 346-4200
Fax: (214) 346-4201
E-mail: kfbrookslaw@hotmail.com
About Gomez Global LLC
Gomez Global LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-33165) on Sep. 24,
2019. At the time of the filing, the Debtor was estimated to have
assets under $50,000 and liabilities under $500,000. Judge Harlin
Dewayne Hale is assigned to the case. The Debtor is represented by
Joyce W. Lindauer Attorney, PLLC.
GREENPOINT TACTICAL: Hires Iavarone, Landsman as Special Counsel
----------------------------------------------------------------
Greenpoint Tactical Income Fund LLC and GP Rare Earth Trading
Account LLC seek authority from the U.S. Bankruptcy Court for the
Eastern District of Wisconsin to retain Iavarone Law Firm, P.C. and
the Landsman Law Firm, LLC as their special counsel.
The firms will continue to represent the Debtor in the pending
litigation styled Greenpoint Tactical Income Fund, LLC vs. Cigdem
Lule (Case No. 2019L10645) filed in the Circuit Court of Cook
County, Ill. In the litigation, the Debtor is seeking damages of
at least $20 million arising from the respondent's alleged
negligence and fraud in the conduct of an appraisal of the Debtor's
gems and minerals.
Iavarone has agreed to a reduced hourly rate of $435. The other
firm will represent the Debtor at an hourly rate of $400.
Iavarone and Landsman neither hold nor represent any interest
adverse to the Debtor, the bankruptcy estate, creditors and any
other "party in interest," according to court filings.
The firms can be reached through:
Nicholas P. Iavarone, Esq.
The Iavarone Law Firm
33 N LaSalle St #1400
Chicago, IL 60602
Phone: +1 312-637-9466
Laurence M. Landsman, Esq.
Landsman Law Firm, LLC
3 N LaSalle St #1400
Chicago, IL 60602
Phone: +1 312-801-5684
About Greenpoint Tactical Income Fund
Greenpoint Tactical Income Fund LLC is a private investment fund
headquartered in Madison, Wis. GP Rare Earth Trading Account LLC
is a wholly-owned subsidiary of Greenpoint Tactical Income Fund.
Greenpoint Tactical Income Fund and GP Rare Earth sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wis. Lead Case
No. 19-29613) on Oct. 4, 2019. At the time of filing, the Debtors
each had estimated assets of between $100 million and $500 million
and liabilities of between $10 million and $50 million.
The cases have been assigned to Judge G. Michael Halfenger.
The Debtors tapped Steinhilber Swanson LLP as their legal counsel,
and MorrisAnderson & Associates Ltd. as their accountant and
financial advisor.
The Office of the U.S. Trustee appointed a committee of equity
security holders on Dec. 5, 2019. The equity committee is
represented by Freeborn & Peters LLP.
GUARDION HEALTH: Receives $3.5 Million from Exercise of Warrants
----------------------------------------------------------------
Guardion Health Sciences, Inc., has received total gross proceeds
of $3,510,630 during the period from Feb. 28, 2020 through March 3,
2020 from the exercise of 10,265,000 warrants issued in the
Company's October 2019 follow-on offering at an exercise price of
$0.342 per share.
Proceeds from exercise of the warrants are being utilized to fund
Guardion's efforts to develop new products, market and distribute
both existing and new products, and for working capital and general
corporate purposes.
The Company has approximately 85,247,562 common shares currently
issued and outstanding.
"We are pleased with the participation of our shareholders and are
grateful for their continued support," commented Michael Favish,
CEO of Guardion. "Building on this momentum, we expect to increase
awareness of our existing products through a robust marketing
effort, while working to develop new products to add to our growing
portfolio."
About Guardion Health Sciences
Headquartered in San Diego, California, Guardion Health Sciences,
Inc. -- www.guardionhealth.com -- is an ocular health sciences
company that develops, formulates, manufacture and distributes
condition-specific medical foods supported by evidence-based
protocols. Guardion's initial medical food product, Lumega-Z,
addresses a depleted macular protective pigment, a known risk
factor for age-related macular degeneration and a significant
component of functional vision performance. Guardion has also
developed a proprietary medical device, the MapcatSF, which
accurately measures the macular pigment density, therefore
providing the only two-pronged evidence-based protocol for the
treatment of a depleted macular protective pigment.
Guardion reported a net loss of $7.76 million for the year ended
Dec. 31, 2018, compared to a net loss of $5.30 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $8.95
million in total assets, $906,214 in total liabilities, and $8.05
million in total stockholders' equity.
Weinberg & Company, P.A., in Los Angeles, California, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Feb. 14, 2019, citing that the Company has experienced
negative operating cash flows since inception. These matter raises
substantial doubt about the Company's ability to continue as a
going concern.
IRI HOLDINGS: Fitch Puts 'B' IDR on Rating Watch Negative
---------------------------------------------------------
Fitch Ratings placed the ratings of IRI Holdings, Inc., including
the 'B' Issuer Default Rating, on Rating Watch Negative.
The rating action reflects IRI's high Fitch-calculated total
leverage of roughly 8.3x for LTM September 2019 and the company's
slower pace of deleveraging relative to Fitch's initial
expectations at the time of the recapitalization in late 2018.
Fitch notes that the overall growth profile has proved less robust,
in part due to a slower ramp of the retail gateway and weaker
international headwinds. The company also continues to incur
sizeable costs related to investments and new customer wins, which
have weighed on operating EBITDA. However, Fitch believes that the
operating momentum and fundamentals remain solid particularly in
North America as evidenced by the continued low double-digit growth
YTD September 2019, as its data product continues to take share
from competitors (primarily Nielsen Holdings plc). Fitch also
expects international results will benefit from renewed focus and
investment. Fitch views positively management's efforts to control
costs and improve the transparency and quality of earnings. Fitch
expects near-term results will benefit from cost savings and
implemented operational efficiency actions. In addition, the high
one-time costs related to the recapitalization and retail gateway
build-out will trail off and narrow the differential between
adjusted and reported EBITDA going forward.
The Rating Watch incorporates Fitch's belief that the high leverage
weakly positions IRI within the 'B' rating category. The review
will focus on the company's ability to track to expected
performance over the next six months and bring total leverage below
7.5x. It will also focus on management's commitment to operate
within this threshold on a sustained basis. To the extent that
top-line performance is weaker than anticipated or higher costs
weigh on operating EBITDA and this further delays deleveraging,
Fitch would consider a one-notch downgrade to 'B-'.
The ratings are supported by IRI's exclusive ownership of retail
data supported by long-dated contracts, the competitive advantage
presented by its 'Liquid Data' or ILD analytical product, its high
customer retention rate and high proportion of recurring revenue.
Fitch also expects the company to generate positive and improving
FCF over the rating horizon.
KEY RATING DRIVERS
Strong Competitive Position: IRI receives raw sales data for 30
million universal product codes (UPCs) across 200,000 retail
stores. The company is the sole-source provider for purchase
activity data from some of the largest retail chains in the
country. IRI exclusively owns this data through long-term contracts
with retailers. IRI now holds the largest repository of frequent
shopper and loyalty data in the U.S. (3x larger than next closest
competitor).
Further, unlike Nielsen (IRI's largest competitor), IRI stores this
data in its raw form, which allows it to aggregate and run both
standard reports as well as any custom data analytics that its
customers may need. IRI's Liquid Data product offering provides a
technological competitive advantage relative to peer Nielsen's
service. Due to its superior offering, IRI has been gaining market
share relative to Nielsen over the last couple of years.
Diversified and Long-Standing Customer Base: IRI has over 2,450
clients across the consumer packaged goods (CPG), health and retail
sectors with the top 25 customers accounting for less than 30% of
revenues. IRI's largest customer accounts for just 5% of revenues.
Roughly 30% of IRI's revenues are generated internationally (YTD
September 2019), primarily across Europe, UK and Australia.
Stable, Recurring Revenue Base: 85% of IRI's revenues are
contracted through long-term agreements, with an average tenor of
roughly 4.5 years, and a 98% retention rate. IRI's typical
contracts are non-cancellable and are three to five years in
length. IRI has long-standing relationships with its largest
customers, and the company's top 20 clients have been customers for
over 20 years. IRI's proprietary data and insight is crucial to CPG
companies as they design pricing, new product introductions and
promotional activity.
High Leverage: IRI's high leverage and aggressive financial
policies are key constraining factors for the rating.
Fitch-calculated total leverage, as measured as total debt with
equity credit to operating EBITDA, was approximately 8.3x for the
LTM period September 2019. IRI had $200 million in preferred stock
outstanding as of September 2019. Fitch has determined that in
accordance with established criteria that the preferred stock is
not debt of the rated entity and as such is not included in Fitch's
leverage calculations.
Notably, the company's credit agreement has generally less
restrictive covenants and provides flexibility to increase
leverage. IRI has a meaningful amount of cushion relative to its
one financial maintenance covenant, with consolidated first lien
net leverage of 4.49x as of LTM September 2019 relative to the
7.45x covenant level. Notably, covenant EBITDA allows for a number
of add-backs including new client start-up costs, run-rate costs
savings expected to be taken in the next 18 months and pro forma
run-rate contributions from new customers.
Improving FCF: Fitch expects IRI to generate positive FCF in 2019.
Fitch also expects modestly improving FCF over the forecast period
owing to a combination of EBITDA growth and better working capital
management. Additionally, high one-time costs associated with the
recapitalization and cost savings initiatives will trail off going
forward.
End Market Concentration: IRI is more narrowly focused on data
measurement and analytics for the retail, CPG and consumer
healthcare markets. However, Fitch expects retailers to
increasingly rely on the use of data to address growing competitive
threats in the sector (e.g. Amazon, growing e-commerce).
Additionally, CPG companies tend to be countercyclical.
ESG - Governance: IRI has an ESG Relevance Score of 4 for
Governance Structure due to its current ownership structure
including private equity owners controlling the majority of the
board, which has an impact on the credit profile, and is relevant
to the rating in conjunction with other factors.
DERIVATION SUMMARY
Fitch believes that IRI's high leverage positions it more weakly in
the 'B' rating category, but the rating is supported by the
company's high proportion of recurring revenues, diverse and large
customer base and long-term exclusive contracts with retail
customers which provide meaningful defensive moats around the
company's core data analytics business. The ratings also
incorporate IRI's smaller scale and significant end-market
concentration to the retail and consumer product goods sectors.
IRI's Fitch-calculated total leverage of 8.3x for LTM September
2019 is roughly in-line with peers. IRI's EBITDA margins are among
the lowest of the data analytics peer set. IRI's margins have been
impacted by its heavy technology investments in its data analytics
platform. However, Fitch expects that IRI's EBITDA margins will
improve over the forecast period owing to continued penetration of
CPG customer, as well as, growth in retail and media revenues and
the scalability of the business model.
KEY ASSUMPTIONS
-- Total revenue growth in the mid-single digits, driven
primarily by the commercialization of the retail database and
growth in the media segment. Fitch expects North America revenues
to grow in the high-single digits over the near term. This will be
offset by flat to low single-digit growth in international
geographies;
-- Adjusted EBITDA improvements driven by the scalability of the
business model, the run-off of one-time costs and the
implementation of cost saving initiatives;
-- Capex between 3%-4%;
-- Minimal cash taxes;
-- Assumes IRI pays mandatory amortization (approximately $12
million annually) and applies excess FCF to debt reduction (50% ECF
sweep when consolidated first lien net leverage exceeds 4.25x);
-- Total leverage (total debt with equity credit/operating
EBITDA) approaching 7.5x by YE 2020 and modestly improves
thereafter.
-- The recovery analysis assumes that IRI would be considered a
going concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch assumes a 10%
administrative claim;
-- IRI's going-concern EBITDA is based on Fitch's estimated
operating EBITDA of roughly $190 million for LTM September 2019
(including cost savings). The going-concern EBITDA is 20% below LTM
EBITDA to reflect deterioration resulting from major customer
losses and increasing competition for CPG clients and the high
operating leverage of the business.
-- An EV/EBITDA multiple of 8.0x is used to calculate a
post-reorganization valuation, above the 5.5x median TMT emergence
EV/forward EBITDA multiple. The 8.0x multiple is in-line with
recovery assumptions that Fitch employs for other data analytics
companies with high recurring revenue streams. The multiple is
further supported by Fitch's positive view of the data analytics
sector including the high proportion of recurring revenues, the
contractual rights to proprietary data and the inherent leverage in
the business model. Recent acquisitions in the data and analytics
subsector have occurred at attractive multiples in the range of 10x
to 20x+. Current EV multiples of public data analytics companies
trade at the 20x-30x range.
-- Fitch assumes a fully drawn revolver in its recovery analysis
since credit revolvers are tapped as companies approach distress
situations. Fitch assumes a full draw on IRI's $80 million first
lien revolver, which was fully available. IRI had total debt of
approximately $1.6 billion, including a $1.2 billion first lien
term loan and a $390 million second lien term loan. IRI also had
utilized $10.9 million under its $15.0 million asset monetization
program as of September 2019.
-- The recovery analysis results in a 'BB-'/'RR2' issue and
recovery ratings for the first lien credit facilities, implying
expectations for 71%-90% recovery. The recovery analysis results in
'CCC+'/'RR6' issue and recovery ratings for the second lien credit
facility reflecting Fitch's view of limited recovery prospects in a
distress scenario
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- It is unlikely that IRI would be upgraded in the near term.
However, strong organic revenue growth and EBITDA expansion driving
Fitch-calculated total leverage (total debt with equity
credit/operating EBITDA) below 6.0x and interest coverage (FFO
interest coverage) approaching 2.5x or higher for a sustained
period could lead to positive momentum.
-- FCF margins sustained above 5%.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Total leverage above 7.5x and interest coverage approaching
1.5x for a sustained period as a result of adverse operating
performance or material changes to industry dynamics.
-- Inability to generate consistent positive FCF.
LIQUIDITY AND DEBT STRUCTURE
Liquidity: Fitch believes that IRI has adequate liquidity supported
by the $30 million cash on hand as of September 2019 and full
availability under its $80 million revolving credit facility. Fitch
expects positive FCF generation in 2019, improving modestly over
the rating case. Internally generated cash flow will be sufficient
to meet the 1% amortization on the first lien term loan. IRI had
total debt of roughly $1.6 billion as of September 2019, consisting
of a $1.2 billion first lien term loan (75% of total debt), a $390
million second lien term loan (25% of total debt). IRI also had
access to an $80 million revolving credit facility, which was fully
available. In addition, IRI had a $15 million accounts receivable
facility, of which $10.9 million was outstanding as of September
2019. IRI's first lien and second lien credit facilities mature in
2025-2027.
ESG CONSIDERATIONS
IRI has an ESG Relevance Score of 4 for Governance Structure due to
its current ownership structure including private equity owners
controlling the majority of the board, which has an impact on the
credit profile, and is relevant to the rating in conjunction with
other factors.
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
JAMES CANDY: Plan to be Funded by Cash Flow Operations
------------------------------------------------------
Debtor James Candy Company filed with the U.S. Bankruptcy Court for
the District of New Jersey a Chapter 11 Plan of Reorganization and
a Disclosure Statement.
James Candy's current operating expenses, including bank debt,
rent, tax obligations, ordinary operating costs, and administrative
expenses, have been paid from funds realized by ordinary income
generated by retail and wholesale sales without the need for
additional borrowing.
General unsecured claims are uncollateralized claims not entitled
to priority. To enhance the recovery by unsecured creditors, Frank
and Maureen Glaser have agreed to subordinate their claim of
$315,556.31 to the claims of other unsecured creditors and will be
receiving no distribution under this Plan.
Each holder of an allowed unsecured claim shall receive a pro rata
distribution on account of his/her/its claim(s) from a $25,000 fund
to be established by Debtor through ordinary operating revenue.
Distributions on account of allowed unsecured claims shall be made
in a single installment on September 15, 2020, in full satisfaction
of such claims.
Interest holder Frank Glaser shall retain his interest in James
Candy but shall be paid nothing on account of such interest.
The Plan will be funded by cash flow generated by James Candy's
business operated in ordinary course and the possible sale or
refinancing of the Property. Frank Glaser will continue to manage
James Candy's operations and affairs.
Frank Glaser will act as the disbursing agent for the purpose of
making all distributions provided for under the Plan, without
compensation.
A full-text copy of the Disclosure Statement dated Feb. 23, 2020,
is available at https://tinyurl.com/u73blvn from PacerMonitor at no
charge.
The Debtor is represented by:
Ira R. Deiches, Esquire
DEICHES & FERSCHMANN
25 Wilkins Avenue
Haddonfield, NJ 08033
Tel: (856) 428-9696
E-mail: ideiches@deicheslaw.com
About James Candy Company
James Candy Company is a candy company in Atlantic City, New
Jersey, offering a wide selection salt water taffy, fudge, and
macaroons.
James Candy Company, based in Atlantic City, NJ, filed a Chapter 11
petition (Bankr. D.N.J. Case No. 18-32139) on Nov. 7, 2018. In the
petition signed by Frank Glaser, president, the Debtor disclosed
$2,756,944 in assets and $3,048,241 in liabilities. The Hon.
Andrew B. Altenburg Jr. oversees the case. Ira R. Deiches, Esq., at
Deiches & Ferschmann, serves as bankruptcy counsel to the Debtor.
JB AND COMPANY: May Continue Using Cash Collateral Until April 30
-----------------------------------------------------------------
Judge Robert H. Jacobvitz of the U.S. Bankruptcy Court for the
District of New Mexico authorized JB and Company Chevron, LLC to
use cash collateral to defray its projected expenses between March
1 and April 30, 2020.
Centinel Bank and the New Mexico Taxation and Revenue (TRD) will
continue to have a security interest in the Debtor's assets to the
same extent, validity and priority as that held as of the Petition
Date. The Court also grants valid and perfected replacement liens
to Centinel Bank and TRD.
As adequate protection for the use of cash collateral, the Debtor
will:
A. Maintain accurate records of operating revenues and
expenses, and will provide such information to either creditor upon
reasonable written request;
B. Provide replacement liens to the creditors for any use of
cash collateral; and
C. Maintain insurance as required by the U.S. Trustee.
About JB and Company Chevron
JB and Company Chevron, LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.M. Case No. 19-11504) on June 24,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $500,000 and liabilities of less than $1
million. The case is assigned to Judge Robert H. Jacobvitz.
Michael K. Davis, Esq., is counsel to the Debtor.
JILL ACQUISITION: Moody's Cuts CFR to Caa1, Outlook Still Negative
------------------------------------------------------------------
Moody's Investors Service downgraded Jill Acquisition LLC's
corporate family rating to Caa1 from B2 and probability of default
rating to Caa1-PD from B2-PD. At the same time, Moody's downgraded
the company's senior secured first lien term loan rating to Caa1
from B2. The SGL-3 speculative grade liquidity rating remains
unchanged and the outlook is negative.
The downgrades reflect the company's approaching 2022 debt
maturities and high execution risk associated with its operational
turnaround. Although J.Jill's 4Q 2019 results were better than
guidance, the company has significant work ahead to reduce
promotional activity and improve its product assortment during
2020, prior to the debt maturities becoming current.
Moody's took the following rating actions for Jill Acquisition
LLC:
Corporate family rating, downgraded to Caa1 from B2
Probability of default rating, downgraded to Caa1-PD from B2-PD
Senior secured bank credit facility, downgraded to Caa1 from B2
Outlook, remains negative
RATINGS RATIONALE
J.Jill's Caa1 CFR reflects the company's weak sales and earnings
performance and its approaching 2022 debt maturities. In 2019,
J.Jill's EBITDA declined by 37%, driven by product, marketing and
inventory management missteps that started in 1Q 2019 and drove
markdowns throughout the year. As a result, Moody's-adjusted
debt/EBITDA increased to about 4.5 times and EBITA/interest
coverage declined to 1.4 times. There is a potential for credit
metrics to improve in 2020 as the company reduces promotional
activity, but the turnaround is uncertain amid senior executive
turnover and a challenging apparel retail environment. Further,
J.Jill's exposure to discretionary spending and modest size make it
highly vulnerable to declines in consumer sentiment and economic
activity. The company's majority ownership by a private equity
sponsor also constrains the rating, given the history of aggressive
financial strategies including shareholder distributions. In
addition, in order to sustain its brand value, J.Jill needs to
continuously reinvest in technology, stores, marketing and
infrastructure, as well as social factors including robust data
protection and workforce treatment.
J.Jill rating is supported by the company's recognized brand, loyal
customer base and a large e-commerce business that accounts for
about 40% of sales. J.Jill's adequate liquidity over the next 12-18
months also supports the rating, including modestly positive free
cash flow, full availability under the $40 million ABL facility,
adequate covenant cushion, as well as the company's 2022 maturities
and spending required to update its technology capabilities, which
currently lag those of other rated peers.
The negative outlook reflects the risk that the company may not be
able to materially improve its operating performance over the next
12 months, resulting in an increased probability of a debt
restructuring as maturities approach.
The ratings could be downgraded if liquidity deteriorates for any
reason, including weak free cash flow or covenant tightness.
Ratings could also be downgraded if the company fails to turn
around operating performance over the next several quarters, or if
the probability of default otherwise increases.
The ratings could be upgraded if the company proactively and
cost-effectively addresses its debt maturities, demonstrates
consistent revenue and earnings performance, and maintains adequate
liquidity. Quantitatively, an upgrade would require expectations
for EBITA/interest expense to be maintained above 1.5 times
following the debt refinancing.
Headquartered in Quincy, Massachusetts, Jill Acquisition LLC, a
subsidiary of J.Jill, Inc. (J.Jill, NYSE: Jill), is a retailer of
women's apparel, footwear and accessories sold through its
e-commerce website, catalogs and 287 retail stores. The company is
majority-owned by TowerBrook Capital Partners L.P. and generated
revenue of about $691 million for the fiscal year ended February 1,
2020.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
JOHN C. FLEMING: $2.78M Sale of Big Sky Property to Huizenga Okayed
-------------------------------------------------------------------
Judge Scott M. Grossman of the U.S. Bankruptcy Court for the
Southern District of Florida authorized John C. Fleming (i) to sell
the real property located at 170 Nighthawk Fork, Cabin 24, Big Sky,
Montana to Peter H. Huizenga, Jr. or his assigns for $2,735,000,
cash; (ii) to lease back the Real Property until April 12, 2020 for
a $16,800 credit toward the purchase price; and (iii) to sell all
furnishings in the Real Property to Huiznega for the purchase price
of $50,000.
The Debtor's ore tenus request pursuant to Federal Rule of
Bankruptcy Procedure 9906(c) to shorten the notice period for the
hearing on the Motion is approved.
The request in the Motion to authorize the Debtor to cause Spanish
Peaks Cabin 24, LLC to sell the Real Property the Buyer is
approved.
The sale of the Real Property to the Buyer in accordance with the
Contract is approved.
The sale of the household furniture located at the Real Property by
the Debtor to the Buyer in accordance with the Contract is
approved. The Debtor is authorized to execute any documents to
facilitate the closing of the sales of the Real Property and the
household furniture approved.
Upon receipt of the net proceeds from the sales approved, the
Debtor will transfer said sale proceeds into his DIP account.
Following the closing of the sale of the Real Property, any party
in interest may request a copy of the closing statement from the
counsel for the Debtor.
The Limited Objection filed by Town Bank is overruled.
The request in the Motion to waive the 14-day stay of the
effectiveness of the Order pursuant to Federal Rule of Bankruptcy
Procedure 6004(h) is denied.
A hearing on the Motion was held on Feb. 12, 2020.
John C. Fleming sought Chapter 11 protection (Bankr. S.D. Fla. Case
No. 19-22244) on Sept. 13, 2019. The Debtor tapped Bradley S.
Shraiberg, Esq., as counsel.
JOHN HOANG TRIEN: Gordon Davis Represents Galaway, Torgerson
------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Gordon Davis Johnson & Shane, P.C. submitted a
verified statement that it is representing James E. Galaway I, L.P.
and Chad R. Torgerson in the Chapter 11 cases of John Hoang Trien.
Attorney Harrel L. Davis an adult person over twenty-one (21) years
of age. He reside in El Paso County, Texas.
Attorney Harrel L. Davis is a partner in the commercial bankruptcy
practice group of GDJS. He is authorized to make this statement on
behalf of GDJS.
As of March 6, 2020, the listed parties and their disclosable
economic interests are:
James E. Galaway I, L.P.
3308 Sands Ave.
El Paso, Texas 79904
* Nature of Claim: Creditor of Debtor and holder of perfected
liens in certain of the Debtor's real properties
* Principal amount of economic interest: $1,931,863.40
Chad R. Torgerson
418 S Kennicott Ave.
Arlington Heights, IL 60005
* Nature of Claim: Creditor of Debtor and holder of perfected
lien in real property located at 11681 Patrick James, El Paso,
Texas 79936
* Principal amount of economic interest: $66,564.23
Each of these creditors have consented to multiple representation
by GDJS in the above-captioned matter. GDJS does not own a claim
or interest in the Debtor or his estate. None of creditors' claims
have been assigned subsequent to the commencement of this case, and
none have been solicited for purchase by GDJS.
GDJS does not believe that its representation of the interest of
the parties listed above will create a conflict between these
parties, or be adverse to the interests of any of these parties.
GDJS is not representing a committee.
Counsel for James E. Galaway I, L.P. and Chad R. Torgerson can be
reached at:
GORDON DAVIS JOHNSON & SHANE, P.C.
Harrel L. Davis III, Esq.
4695 N. Mesa Street
El Paso, TX 79912
Tel: (915)545-1133
Fax: (915)545-4433
E-mail: hdavis@eplawyers.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/lx5WEI
About John Hoang Trien
The Chapter 11 case in In re John Hoang Trien (Banks. W.D. Tex.
Case No. 19-31300-hcm)
JOHN KNOX VILLAGE: Fitch Affirms BB+ on $51.6MM 2018A Bonds
-----------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating assigned to the
following bonds issued by the Industrial Development Authority of
the City of Lee's Summit, MO, on behalf of John Knox Village
(JKV):
-- $51,625,000 Industrial Development Authority of the City of
Lee's Summit, MO senior living facilities revenue bonds, series
2018A;
-- $41,250,000 Industrial Development Authority of the City of
Lee's Summit, MO senior living facilities revenue bonds, series
2016A;
-- $21,000,000 Industrial Development Authority of the City of
Lee's Summit, MO senior living facilities revenue bonds, series
2014A.
The Rating Outlook is Stable.
SECURITY
Debt payments are secured by a pledge of the unrestricted gross
revenues of the obligated group, a first mortgage lien on all the
real property constituting JKV's core campus (excluding property
south of NW O'Brien Road), and a debt service reserve fund.
KEY RATING DRIVERS
PROJECT STABILIZATION: JKV has completed construction for a campus
transformation project comprising two main components: a
52-independent living unit (ILU) project (the Courtyard) that
opened in January 2016 and a 112-ILU project (the Meadows) that
opened in July 2018. The Courtyard successfully filled and was 98%
occupied as of Dec. 31, 2019, whereas the Meadows posted an 86%
occupancy rate as of Dec. 31, 2019. While move-ins were slower than
expected, particularly at the Meadows, sales velocity started to
gain momentum by the end of fiscal 2019. However, sales still
remain slightly below initial projections. The overall rise in
sales benefitted JKV, allowing it to pay off its bank line of
credit and add cash from entrance fees to its balance sheet.
MODEST FINANCIAL PROFILE: While JKV has shown some improvement in
operating performance, profitability remains light relative to
Fitch's below investment grade (BIG) medians. Net operating margin
adjusted (NOMA) increased from 12.2% in fiscal 2019 to 15.4%
through the nine months ending Dec. 31, 2019. Improved, but modest,
profitability reflects JKV's efforts to address ongoing issues
relating to overtime and nursing agency expenses, increased health
benefit expenses and some operating disruptions as a result of
renovations to their skilled nursing facility, the Village Care
Center (VCC). Liquidity also showed some improvement as of Dec. 31,
2019 as entrance fees from the Meadows cushioned the balance sheet.
As of Dec. 31, 2019, days cash on hand (DCOH) and cash-to-debt
increased to 194 and 33.1%, respectively, but still remain tempered
relative to BIG medians.
MODERATE LONG-TERM LIABILITY PROFILE: JKV's debt metrics are
moderate as maximum annual debt service (MADS) of $8.2 million,
which includes the Meadows Phase I debt service, equated to 11.3%
of fiscal 2019 total revenues, which is favorable to the 16.7% BIG
median. Furthermore, if the cash flow from the Meadows is included,
debt to net available is a solid 6.4x through the nine-month
interim period, which is favorable to the BIG median of 10.9x.
ASYMMETRIC ADDITIVE RISK FACTORS: No asymmetric risk considerations
are relevant to the rating.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action:
-- Improvements in operational performance resulting in NOM and
NOMA exceeding BIG medians.
-- Marked increase in unrestricted liquidity due to continued
improvements in operations and increasing occupancy for the Meadows
project.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action:
-- A downgrade may be considered if there is a reversal in
operational performance resulting in liquidity deterioration.
-- The pace of fill-up at the Meadows slows, causing occupancy to
fall short of management's projections in the near term.
CREDIT PROFILE
JKV is a continuing care retirement community (CCRC) located in
Lee's Summit, MO, with 952 available ILUs, 183 assisted living
units (ALUs) and a 430 licensed bed (266 available) skilled nursing
facility (SNF). Additional operations include a home health agency,
hospice services, a 24-hour ambulance and paramedic service and a
foundation. JKV is one of the largest single-site CCRCs in the
country by both acreage and number of units and is the second
largest single-site not-for-profit CCRC in the 2019 LeadingAge
Ziegler 200. JKV offers both rental and type B entrance fee
contracts.
Fitch's analysis is based on JKV's obligated group (OG). The John
Knox Village Foundation was removed from the OG in October 2017.
Excluding the foundation, the OG accounted for 98.6% of
consolidated total assets and 99.1% of consolidated operating
revenues in fiscal 2019. Total OG operating revenue equaled $70
million in fiscal 2019(YE March 31).
PROJECT STABILIZATION
JKV continues to execute its campus redevelopment plan, resulting
in new entrance fee contracts that have both improved profitability
and liquidity metrics. In addition to the new units, management has
removed smaller ILUs from inventory and converted them to either
larger square foot units or high-demand ALUs and dementia units.
During the last several years, the number of occupied units has
decreased and occupied square footage has increased, driving higher
revenue per unit.
Two main components of the redevelopment plan comprise the
Courtyard and Meadows projects, both of which included the
demolition of existing ILU buildings and cottages. The Courtyard
project was completed in January 2016 and included the construction
of 52 new ILUs, additional parking, new common space and
renovations to existing common spaces. Move-ins at the Courtyard
were slower than expected, but occupancy has steadily grown to 98%
as of Dec. 31, 2019.
The Meadows included the construction of three new ILU buildings
with a total of 112 ILUs, underground parking, a new restaurant and
new wellness facilities with a pool. The project was completed on
time and below budget with the first of the three buildings opening
in July 2017 and the third building opening in January 2018. As of
Jan. 31, 2020, 95% of the Meadows ILUs were sold and 87% were
occupied. Similar to the Courtyard, move-ins were slower than
budgeted, but overall sales remain in line with management's
expectations. However, sales velocity for the new one-bedroom units
remains sluggish since two-bedroom units are generally in higher
demand. Despite the slower fill for one bedrooms, management
expects demand will pick up for these units as they have desirable
amenities and occupancy for the Meadows overall has gained
momentum.
Approximately $7 million of the series 2018A bond proceeds were
used to reposition JKV's Village Care Center (VCC) and construct a
new 25-unit AL building (VAL400), bringing the total number of ALUs
to 183. Both projects were completed in the third quarter of fiscal
2020. Move-ins for VAL400 have been solid and have met management's
projections, but VCC's renovations, while also completed on time,
have caused some disruptions to existing operations. As a result,
the VCC's census levels were well below budget, causing operating
margins to be much weaker than anticipated. Management expected a
more seamless shift of existing residents as JKV transitioned the
VCC's rooms from semi-private to private. Going forward, management
will closely monitor these initial challenges and does not expect
any notable negative impact to operations in the near term.
Despite some service disruptions at the VCC, Fitch views the campus
repositioning strategy as a credit positive as larger ILUs are
typically in higher demand and more profitable than smaller units.
Both the Courtyard and Meadows have generated additional revenues
and entrances fees, allowing JKV to grow into its elevated debt
burden.
MODEST FINANCIAL PROFIILE
Operating profitability has shown some improvement, but remains
modest based on the nine-month interim period, which includes the
Meadows' revenues and expenses incorporated by Fitch. NOMA was a
weak 10.5% and 9.5% in fiscal 2017 and 2018, but improved to 12.2%
in fiscal 2019, then 15.4% as of Dec. 31, 2019. Compressed
profitability from fiscal 2017-2018 was a result of increased
overtime and nursing agency expenses, increased health insurance
costs due to some large claims, and ALU and SNF occupancy below
management's targets. The improvement in operating metrics stems
from management transitioning contracted therapy staff to JKV's
payroll. In addition, management's new international nurse
recruitment initiatives are expected to both lower agency costs and
reduce staff turnover in the near term, generating more savings.
Efforts to replace smaller units with larger units are also
expected to benefit the community's marketability, slow the speed
of attrition, and help stabilize unit turnover.
Unrestricted liquidity metrics are a modest 194 DCOH, 33.1% cash to
debt and 4.7x cushion ratio, which are mixed relative to the BIG
category medians of 312 DCOH, 33.0% cash to debt and 4.3x cushion
ratio. However, through nine months of fiscal 2020, JKV's liquidity
position has improved. The organization continues to accrue cash
from entrance fee receipts, building its balance sheet, after
heightened spending for the campus repositioning project. In
addition, in fiscal 2019, JKV had a realized gain of $2.1 million
from the transfer of assets to an affiliate for the sale of
property to a residential developer. The sale allowed JKV to add
amounts due from affiliates onto its balance sheet and strengthen
its liquidity position.
JKV has considered a Meadows Phase II for its campus repositioning
initiative, which may require additional debt to begin
construction. However, management does not have board approval for
Phase II, as such Fitch does not factor it into the current
rating.
DEBT PROFILE
JKV's debt portfolio consists of 100% fixed-rate bonds and a bank
line of credit. JKV has a $5.1 million variable rate term loan with
First Midwest Bank and is approximately 80% swapped to a synthetic
fixed rate of 2.157%. The swap agreement has an initial notional
amount of $4.08 million and terminates June 1, 2029.
DISCLOSURE
JKV covenants to provide audited financial statements within 180
days of each fiscal year-end and quarterly interim statements
within 60 days of each quarter-end. Disclosure is provided through
the Municipal Securities Rulemaking Board's EMMA system.
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.
JORDAN CROSSING: Moody's Affirms Ba2 Rating on GOULT Debt
---------------------------------------------------------
Moody's Investors Service affirmed the Ba2 rating on Jordan
Crossing Metropolitan District, CO's outstanding general obligation
unlimited tax debt. The outlook is stable.
RATINGS RATIONALE
The Ba2 rating reflects the district's weaker credit quality. The
district's reserve position has materially fallen over the past
five years. Available fund balance totaled just $19,000 at the end
of fiscal 2018, representing about 12% of operating revenues.
Reserves are unlikely to improve over the next several years given
management's plan to maintain the tax levy at a level that covers
debt service and repayment of advances made by the developer to
fund infrastructure without generating any surplus. The fully built
out tax base is very small, comprised of about 107 homes in the
Denver metro area, and will not grow based on additional
development. These weaknesses are mitigated, in part, by the
district's unlimited taxing authority and the area's favorable
location and resident incomes. In addition, the district has a very
limited scope of operations. It largely serves to repay debt and
developer advances, and the current levy provides adequate coverage
for both. The debt burden is manageable.
RATING OUTLOOK
The outlook is stable because the strong local economy will support
the district's moderate assessed values over the near term. The
district's financial position will remain stable given the limited
scope of operations. While developer advances historically
represent the district's largest expenditure, they are subordinate
to debt service and paid subject to the availability of funds at
the end of the fiscal year.
FACTORS THAT COULD LEAD TO AN UPGRADE
- Sustained, material increase in reserves and liquidity
- Significant tax base appreciation and corresponding
reduction in debt to full value ratio
FACTORS THAT COULD LEAD TO A DOWNGRADE
- Further deterioration of reserves
- Tax base contraction
LEGAL SECURITY
The bonds are secured by the district's full faith and credit
supported by its authority to levy ad valorem taxes property within
the district without limited as to rate or amount.
PROFILE
Jordan Crossing Metropolitan District is located in the Town of
Parker about 23 miles southeast of Denver (Aaa stable). The
district was created in 2006 for the purpose of financing and
constructing certain public improvements and for dedicating, when
appropriate, the public improvements to the town or to such other
public entity as appropriate for the use of the district's
residents and property owners.
JORTA PROPERTIES: Sseeks to Hire William C. Johnson as Counsel
--------------------------------------------------------------
Jorta Properties, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Maryland to hire the Law offices of William C.
Johnson, Jr. as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor concerning compliance with the
requirements of Chapter 11;
b. prepare any necessary amendments to the Debtor's schedules
of assets and liabilities, statement of financial affairs and
related documents;
c. represent the Debtor in all contested matters;
d. advise the Debtor concerning the structure of its
bankruptcy plan;
e. advise the Debtor concerning the feasibility of its plan
and represent the Debtor in connection with the plan confirmation
process;
f. liaise, consult and negotiate with creditors and other
parties;
g. review financial information;
h. review claims and prosecute claims objections as
appropriate; and
i. represent the Debtor at the Section 341 meeting of
creditors, court hearings and status conferences.
The Debtor will compensate the firm an hourly fee of $405. As of
Feb. 21, the Debtor has paid $1,283 of the initial retainer fee.
William Johnson Jr., Esq., assured the court that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm may be reached at:
William C. Johnson, Jr., Esq.
Law Offices of William C. Johnson, Jr.
6305 Ivy Lane, Suite 630
Greenbelt, MD 20770
Phone: (301) 477-3450
Phone: (202) 525-2958
Fax: (301) 477-4813
Email: wcjjatty@yahoo.com
About Jorta Properties
Based in Clinton, Md., Jorta Properties, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
20-12243) on Feb 21, 2020. At the time of the filing, the Debtor
disclosed assets of between $100,001 and $500,000 and liabilities
of the same range. William C. Johnson, Jr., Esq. is the Debtor's
legal counsel.
KIDS TOWN DAY: Has Until May 8 to File Plan & Disclosures
---------------------------------------------------------
On Feb. 6, 2020, the U.S. Bankruptcy Court for the District of New
Jersey held a status conference for Debtor Kids Town Day Care,
Inc.
On Feb. 21, 2020, Judge Michael B. Kaplan ordered that:
* The Debtor will file a Plan and Disclosure Statement by May 8,
2020.
* The case will automatically convert to a chapter 7 case without
further notice if the Debtor fails to file a Plan and Disclosure
Statement by May 8, 2020.
* The Debtor will comply with the Operating Guidelines for
Chapter 11 Debtors issued by the Office of the United States
Trustee, including with regards to the filing of monthly operating
reports and payment of the required quarterly fees to the United
States Trustee.
A copy of the order dated Feb. 21, 2020, is available at
https://tinyurl.com/skp5km6 from PacerMonitor at no charge.
About Kids Town Day Care
Kids Town Day Care, Inc. filed Chapter 11 Petition (Bankr. D.N.J.
Case No. 19-25950) on Aug. 19, 2019. Kids Town is represented by
Ellen M. McDowell, Esq. of MCDOWELL LAW, PC.
LAKEWAY PUBLISHERS: Wells Fargo Objects to Disclosure Statement
---------------------------------------------------------------
Wells Fargo Financial Services, LLC, filed an objection to the
Disclosure Statement of Lakeway Publishers, Inc., and Lakeway
Publishers of Missouri, Inc.
Wells Fargo points out that under 11 U.S.C. Sec. 365(b)(1)(a), the
Debtor's plan is required to cure any arrearage and bring the lease
current. The Debtor's Disclosure Statement and Plan do not provide
for any cure of the arrearage. Under 11 U.S.C. Sec. 1123(d), the
Debtor is required to pay the default rate of interest of 4% per
annum pursuant to 12 of the Lease. Debtor's Disclosure Statement
and Plan make no provision for the curing of the arrearage, payment
of default interest, or payment of the monthly Lease obligation.
Attorneys for Wells Fargo Vendor Financial Services:
Robert R. Carl
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C.
265 Brookview Centre Way, Suite 600
Knoxville, Tennessee 37919
Telephone: (865) 549-7000
Facsimile: (865) 525-8569
rcarl@bakerdonelson.com
About Lakeway Publishers
Lakeway Publishers, Inc., is a multi-state publisher of newspapers,
magazines and special publications. Lakeway owns and operates
community newspapers and magazines in Tennessee, Missouri,
Virginia, and Florida. Lakeway Publishers was incorporated in 1966
and is based in Morristown, Tenn.
Lakeway Publishers, Inc., and affiliate Lakeway Publishers of
Missouri, Inc. each filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Tenn. Lead Case No. 19-51163) on
May 31, 2019. In the petitions signed by Jack R. Fishman,
president, Lakeway Publishers, Inc., disclosed $20,884,027 in
assets and $9,245,645 in liabilities while Lakeway Publishers of
Missouri listed $7,047,972 in assets and $9,206,193 in liabilities.
The Debtors tapped Quist, Fitzpatrick & Jarrard, PLLC, led by Ryan
E. Jarrard, as bankruptcy counsel; and Burnette Dobson & Pinchak,
as special counsel.
LBD PLLC: Taps Henry & O'Donnell as Legal Counsel
-------------------------------------------------
LBD, PLLC received approval from the U.S. Bankruptcy Court for the
Eastern District of Virginia to hire Henry & O'Donnell, P.C. as its
legal counsel.
The firm will represent the Debtor in its bankruptcy proceedings.
The hourly rates for the firm's attorneys range from $450 to $525.
The firm received a $22,388 retainer from the Debtor.
Henry & O'Donnell does not represent any interest adverse to the
Debtor and its bankruptcy estate, according to court filings.
The firm can be reached through:
Jeffery T. Martin, Jr., Esq.
Henry & O’Donnell, P.C.
300 N. Washington St., Suite 204
Alexandria, VA 22314
Tel: 703-548-2100
About LBD PLLC
LBD, PLLC -- https://www.dipietropllc.com -- is a law firm
specializing in divorce, family law, estate planning and business
law. The firm has several office locations throughout Northern
Virginia, Maryland and the Washington, D.C. Metro areas.
LBD, PLLC filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Va. Case No. 20-10414) on Feb. 9,
2020. In the petition signed by Joseph J. DiPietro, member and
manager, the Debtor estimated $50,000 to $100,000 in assets and $1
million to $10 million in liabilities. Jeffery T. Martin, Jr., Esq.
at Henry & O,Donnell, P.C., is the Debtor's legal counsel.
LEVI STRATUS: Moody's Affirms 'Ba1' CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service affirmed Levi Strauss & Co.'s ratings,
including its Ba1 corporate family rating, Ba1-PD probability of
default rating, and Ba2 senior unsecured notes rating. The
company's SGL-1 speculative grade liquidity rating is unchanged.
The ratings outlook remains stable.
"LS&Co continues to execute on its strategic initiatives in a very
challenging global apparel environment, making progress toward
becoming a broader lifestyle brand, with broad based growth across
geographies, channels and product categories," said Mike Zuccaro,
Moody's Vice President. "When combined with solid credit metrics
and a very good liquidity position, the company is strongly
positioned in the Ba1 rating category."
The following ratings actions were taken:
Affirmations:
Issuer: Levi Strauss & Co.
Probability of Default Rating, Affirmed Ba1-PD
Corporate Family Rating, Affirmed Ba1
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD4)
Outlook Actions:
Issuer: Levi Strauss & Co.
Outlook, Remains Stable
RATINGS RATIONALE
LS&Co's Ba1 rating reflects its solid credit metrics, with
lease-adjusted debt/EBITDA near 2.4 times and EBITA/Interest near
5.3 times for the company's latest fiscal year ended November 24,
2019, and good profitability with EBITDA margins in the mid-teens.
Moody's expects the company to maintain solid profitability and
credit metrics over the intermediate term, assuming any pressures
that may arise from COVID-19 are limited to the first half of 2020.
The ratings reflect the iconic nature of the Levi's brand, its
global reach with sales in over 110 countries and meaningful scale
with net revenues approaching $5.8 billion. Liquidity is very good,
supported by over $1 billion of balance sheet cash, ample excess
revolver capacity, and solid positive free cash flow.
The rating is constrained by the company's limited, but improving,
brand and product diversification, with Levi's brand men's slacks
accounting for the significant majority of net revenues, and
exposure to fashion risk and volatile input costs which can have a
meaningful impact on earnings and cash flows.
With respect to ESG, consumers are increasingly mindful of
sustainability issues, the treatment of work-force, data protection
and the source of the products. While these various initiatives may
not essentially translate into direct credit implications, over
time these factors can impact brand image, and companies will have
to work towards sourcing transparency and investments in
sustainable supply chains. LS&Co has a well-established history of
civic engagement and community involvement, responsible labor and
workplace practices, philanthropy, ethical conduct, environmental
stewardship and transparency. As for governance, descendants of the
family of Levi Strauss continue to hold the substantial majority of
voting power through the company's dual share structure. Moody's
expects the company to maintain a balanced financial policy going
forward, with capital allocation priorities being to first,
reinvest in the business, second, return capital to shareholders
through increased dividends and share repurchases that offset
dilution related to employee stock grants, and lastly,
opportunistically pursue acquisitions.
The stable rating outlook reflects Moody's expectation that,
despite near term challenges in the global apparel market, LS&Co
will continue to maintain solid market position given the iconic
nature of its brand, strong credit metrics and very good
liquidity.
The ratings could be upgraded if the company demonstrates a
commitment to maintaining an investment grade profile and capital
structure, including credit metrics that are stronger than the
quantitative upgrade triggers, with sustained constant-currency
revenue growth, which would evidence that it is at least
maintaining market share, and continued expansion into other
product areas, such as tops, outerwear and accessories. Metrics
include debt/EBITDA sustained below 2.75 times and EBITA/interest
expense sustained above 4.25 times, and maintaining a very good
liquidity profile.
Ratings could be downgraded if the company were to experience
sustained negative revenue trends or margin erosion, or if
financial policies were to become more aggressive such as utilizing
debt to fund shareholder returns or large acquisitions. Credit
metrics include debt/EBITDA sustained above 3.25 times or interest
coverage sustained below 3.25 times.
Headquartered in San Francisco, California, Levi Strauss & Co.
designs and markets jeans, casual and dress wear and related
accessories under the "Levi's", "Dockers", "Signature by Levi
Strauss & Co." and "Denizen" brands. The company sells product in
more than 110 countries through chain retailers, department stores,
online sites and franchised and company-owned stores. Levi Strauss
& Co.'s fiscal 2019 net revenue was nearly $5.8 billion.
The principal methodology used in these ratings was Apparel
Methodology published in October 2019.
LICK INDUSTRIES: April 8 Plan & Disclosures Hearing Set
-------------------------------------------------------
On Feb. 18, 2020, debtor Lick Industries, LLC, filed with the U.S.
Bankruptcy Court for the Eastern District of Michigan, Southern
Division, a plan and disclosure statement.
On Feb. 21, 2020, Judge Thomas J. Tucker ordered that:
* The Disclosure Statement is granted preliminary approval,
subject to any timely objections to final approval.
* March 30, 2020, is the deadline to return ballots on the Third
Amended Plan, as well as to file objections to final approval of
the Disclosure Statement and objections to confirmation of the
Third Amended Plan.
* April 8, 2020, at 11:00 a.m., in Room 1925, 211 W. Fort Street,
Detroit, Michigan is the hearing on objections to final approval of
the Disclosure Statement and confirmation of the Third Amended
Plan.
A full-text copy of the order dated Feb. 21, 2020, is available at
https://tinyurl.com/v9aad7e from PacerMonitor at no charge.
About Lick Industries
Lick Industries, LLC, is a Michigan Limited Liability Company in
the business of purchasing residential real estate in need of
repairs, completing such repairs, and subsequently selling the
rehabilitated real estate for a profit.
Lick Industries filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-51017) on July 30,
2019, estimating under $1 million in both assets and liabilities.
Yuliy Osipov, Esq., at Osipov Bigelman, P.C., represents the
Debtor.
LINDER ENTERPRISES: Hires Bradshaw Fowler as Legal Counsel
----------------------------------------------------------
Linder Enterprises, Inc. received approval from the U.S. Bankruptcy
Court for the Southern District of Iowa to hire Bradshaw, Fowler,
Proctor & Fairgrave, P.C. as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
(a) advise and assist the Debtor with respect to compliance
with the requirements of the United States Trustee;
(b) advise the Debtor regarding matters of bankruptcy law,
including the rights and remedies of the Debtor with regard to its
assets and with respect to the claims of creditors;
(c) represent the Debtor in bankruptcy court proceedings or
hearings and in legal actions initiated in other courts where its
rights under the Bankruptcy Code may be litigated or affected;
(d) conduct examinations of witnesses, claimants or adverse
parties, and prepare reports, accounts and pleadings related to the
case;
(e) advise the Debtor concerning the requirements of the
Bankruptcy Code and applicable rules;
(f) assist the Debtor in the negotiation, formulation,
confirmation, and implementation of a Chapter 11 plan; and
(g) make court appearances.
The firm received the sum of $42,500 as retainer.
Jeffrey Goetz, Esq., at Bradshaw, attests that his firm is a
disinterested person as that term is defined in Bankruptcy Code
Section 101(14).
Bradshaw can be reached through:
Jeffrey D. Goetz, Esq.
Bradshaw Fowler Proctor & Fairgrave P.C.
801 Grand Avenue, Suite 3700
Des Moines, IA 50309-8004
Phone: 515/246-5817
Fax: 515/246-5808
Email: goetz.jeffrey@bradshawlaw.com
About Linder Enterprises
Linder Enterprises, Inc., a manufacturer of sports T-shirt and
apparel, filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Iowa Case No. 20-00319) on Feb. 21,
2020. In the petition signed by Jon D. Linder, owner and
president, the Debtor disclosed $286,891 in assets and $1,190,944
in liabilities. Judge Anita L. Shodeen oversees the case. Jeffrey
D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., is
the Debtor's legal counsel.
LIZAMA CARRIERS: Judge Signs Second Interim Cash Collateral Order
-----------------------------------------------------------------
Judge Edward L. Morris of the U.S. Bankruptcy Court for the
Northern District of Texas signed a second interim order
authorizing Lizama Carriers, LLC to use cash collateral on an
interim basis to pay its expenses pursuant to the budget.
The approved 12-week budget provides for $1,412,574 in total
expenses through the week-ending April 30, 2020.
As adequate protection, Pearl Delta Funding, LLC and Commercial
Credit Group Inc. are granted a first-priority replacement lien on
the Debtors' post-petition accounts receivable and proceeds of
collection of Debtor's accounts receivable, to the extent the use
of Pearl Delta's and CCG's cash collateral results in a decrease in
the value of its interest in said property upon which Pearl Delta
and CCG hold a validly perfected and unavoidable lien on property
of Debtor's bankruptcy estate.
A final hearing on the Cash Collateral Motion will be held on March
12, 2020 at 9:30 a.m. CST.
About Lizama Carriers
Lizama Carriers, LLC -- https://www.lizamacarriers.com/ -- is a
privately held company in the general freight trucking industry.
Lizama Carriers, based in Irving, TX, filed a Chapter 11 petition
(Bankr. N.D. Tex. Case No. 20-40283) on Jan. 22, 2020. In the
petition signed by Nelson Lizama, manager, the Debtor disclosed
$3,267,357 in assets and $4,870,039 in liabilities. Joseph H.
Acosta, Esq., at FisherBroyles, LLP, serves as bankruptcy counsel.
LUCKY'S MARKET: Final Cash Collateral Hearing Adjourned to March 30
-------------------------------------------------------------------
Judge John T. Dorsey of the U.S. Bankruptcy Court for the District
of Delaware issued a second interim order authorizing Lucky's
Market Parent Company, LLC and debtor affiliates to use cash
collateral.
Judge Dorsey ordered that the First Interim Order is amended as
follows:
(a) The Final Hearing is adjourned to March 30, 2020 at 3:00
p.m.
(b) The Termination Events set forth in Sections 14(ii) and
14(ix) of the First Interim Order are waived.
(c) The Termination Event forth in Section 14(iv) of the First
Interim Order is extended to March 30, 2020.
(d) The Termination Event forth in Section 14(xi) of the First
Interim Order is extended to March 28, 2020.
(e) The Challenge Period Termination Date for the Committee is
extended to ninety (90) days from the date of the entry of the
First Interim Order.
The interim order is available at https://is.gd/CC00UK from
PacerMonitor.com free of charge.
About Lucky's Market
Lucky's Market Parent Company, LLC -- https://www.luckysmarket.com/
-- together with its owned direct and indirect subsidiaries, is a
specialty grocery store chain offering a broad range of grocery
items through the Company's "L" private label. Each of the
company's stores has full-service departments, which include
produce, meat, seafood, culinary, apothecary, beer and wine, and
grocery. In addition to the stores, the company operates a produce
warehouse in Orlando, Fla., to supply nearly all produce for its
Florida and Georgia stores.
Lucky's Market Parent and 21 of its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. Del., Lead Case No.
20-10166) on Jan. 27, 2020. At the time of the filing, the Debtors
were estimated to have $100 million to $500 million in assets and
$500 million to $1 billion in liabilities. The petitions were
signed by Andrew T. Pillari, chief financial officer. Judge John
T. Dorsey presides over the cases.
Christopher A. Ward, Esq. and Liz Boydston, Esq., of Polsinelli PC,
serve as counsel to the Debtors. Alvarez & Marsal acts as
financial advisor; PJ Solomon as investment banker; and Omni Agent
Solutions as notice and claims agent.
MABVAX THERAPEUTICS: Harvey Kesner Objects to Disclosure & Plan
---------------------------------------------------------------
Harvey Kesner, a shareholder, objects to the adequacy of the
Disclosure Statement for Chapter 11 Plan of Reorganization of
Debtors Mabvax Therapeutics Holdings, Inc., et al., and
respectfully states as follows:
* The Disclosure Statement fails to describe the investigation by
the SEC against Mabvax into alleged violations of federal
securities laws by David Hansen (and other members of management)
for allegedly making false and misleading disclosures and filings
with the SEC since July 2014.
* The Disclosure Statement fails to disclose that an attorney
currently representing the Debtor, Jonathan Shapiro, Esq., and/or
the law firm Baker Botts, LLP, engaged by Mabvax and the Debtor,
also represents its senior officer David Hansen.
* The Disclosure Statement fails to disclose that prior or
concurrent representation as counsel of a member of management
(David Hansen) under SEC investigation while simultaneously
representing Mabvax for an internal investigation in order to
report to the board of directors or special committee creates grave
conflicts of interest and the appearance of conflicts of interest
that were either not knowingly waived or which are un-waivable as a
matter of law.
* The Disclosure Statement should not be approved because the
Plan it describes does not provide for potential recoveries from
David Hansen, Mintz Levin, Jonathan Shapiro or Baker Botts,
insurance claims and potential recoveries, is inaccurate or
incomplete, and is therefore unconfirmable as a matter of law.
A full-text copy of Harvey Kesner's objection dated Feb. 21, 2020,
is available at https://tinyurl.com/un6xl59 from PacerMonitor at no
charge.
About MabVax Therapeutics
MabVax Therapeutics -- https://www.mabvax.com/ -- is a
clinical-stage biotechnology company with a fully human antibody
discovery platform focused on the rapid translation into clinical
development of products to address unmet medical needs in the
treatment of cancer.
MabVax Therapeutics Holdings, Inc. and MabVax Therapeutics, Inc.
each filed a voluntary Chapter 11 petition (Bankr. D. Del. Case
No.19-10603 and 19-10604, respectively) on March 21, 2019. At the
time of filing, MabVax Therapeutics Holdings was estimated to have
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. MabVax Therapeutics, Inc., was estimated to have up to
$50,000 in assets and liabilities.
Jason A. Gibson, Esq., at the Rosner Law Group LLC, is the Debtors'
bankruptcy counsel.
MADISON STOCK: Seeks to Employ Robert Lubin as Accountant
---------------------------------------------------------
Madison Stock Transfer Inc. seeks permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ ,
a certified public accountant, to prepare financial statements and
tax documents.
The Debtor will pay Mr. Lubin a monthly fee of $200 for accounting
services and an additional fee for the preparation of its year-end
tax return. The accountant received payment of $1,750.
Mr. Lubin disclosed in court filings that he is "sufficiently
disinterested" to provide accounting services to the Debtor.
Mr. Lubin holds office at:
Robert Lubin, CPA
3603 Quentin Road
Brooklyn, N.Y. 11234-4203
Phone: (718)787-0364
About Madison Stock Transfer
Madison Stock Transfer Inc., a stock broker in Spring Valley, N.Y.,
filed a Chapter 11 petition (Bankr. S. D. N.Y. Case No. 19-23364)
on July 24, 2019. At the time of the filing, the Debtor disclosed
$156,251 in total assets and $1,537,962 in total liabilities. The
petition was signed by Michael B. Ajzenman, president.
Sykes Law Firm PC is the Debtor's legal counsel. Judge Robert D.
Drain oversees the case.
MARGIN HOLDINGS: UST Objects to Disclosure Statement
----------------------------------------------------
Andrew R. Vara, the United States Trustee for Regions 3 & 9,
objects to the adequacy of the Original Disclosure Statement
describing Chapter 11 Plan of Reorganization proposed by Debtor
Margin Holdings Ltd., Inc.
In its objection, the U.S. Trustee points out that:
* The Debtor sets forth that the secured creditors will be paid
in full within 60 days of the Effective Date from a capital
infusion from investors. However, the Debtor has not provided any
information about the capital infusion including the investors and
their ability to fund the capital infusion. The Debtor has also
failed to provide what would happen if the investors are unable or
unwilling to provide the capital infusion.
* The Debtor sets forth in section IIID2 of the Disclosure
Statement that general unsecured claims will be paid in full, at an
estimated total of $42,204, to be paid a total of $8,500 over 60
months at 4.5% interest, being $158.47 per month for 60 months.
With total estimated unsecured non-priority claims of $42,204, this
will result in an estimated payment of 20.1% to the Class 6
creditors.
* Section IIID2 should be revised to reflect that the Debtor is
not paying general unsecured creditors in full. In addition, that
section should reflect the correct amount to be paid to general
unsecured creditors. Further, IIID4 should be revised to reflect
that all creditors are not being paid 100%.
* The financial projections should include at least one year's
worth of projections considering that the Debtor intends to pay
general unsecured creditors over 60 months.
A full-text copy of the U.S. Trustee's objection dated Feb. 21,
2020, is available at https://tinyurl.com/wjjr3qw from PacerMonitor
at no charge.
About Margin Holdings Ltd.
Margin Holdings Ltd, LLC, operates as an investment holding
company. On July 15, 2019, Margin Holdings sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No.
19-23707). At the time of the filing, the Debtor was estimated to
have assets of between $1 million and $10 million and liabilities
of less than $1 million. The case is assigned to Judge Kathryn C.
Ferguson. Maciag Law, LLC, is the Debtor's legal counsel.
MARK ALLEN KRIEGER: $215K Sale of Vermilion Property Approved
-------------------------------------------------------------
Judge Scott W. Dales of the U.S. Bankruptcy Court for the Western
District of Michigan authorized Mark Allen Krieger and Jame Sue
Secondino Krieger to sell the property known as Parcel 33 in
Vermillion County, Indiana, to the Board of Trustees of
International Union of Operating Engineers Local 841 Apprenticeship
and Training Trust for approximately $215,000 or $1,822.06 per
acre, on the terms and conditions as set forth in the Purchase
Agreement.
Any objections or concerns of BMO and First Financial as set forth
in their responses to the Motion are resolved as evidenced by the
approval of the Order for entry by their counsel. No other
objections to the Motion have been filed.
Notwithstanding the foregoing, the sale of the Property
contemplated by the Motion is approved only on the following
terms:
A. The sale price will be $1,822.06 per acre. The actual sale
price will be determined after completion of the survey provided
for in the Purchase Agreement. Currently it is estimated the
Property will include +/- 118 acres of land. Based on the estimate
of +/-1 18 acres, the sale price will be approximately $215,000.
B. The Debtors will pay from the sale proceeds all real estate
taxes, special assessments and annual fees for prior years and a
pro-rated amount for 2020 through the date of closing.
C. The Debtors will pay from the sale proceeds the premium for
an owners' title insurance policy to be issued in the name of the
Buyer. The Buyer has paid $1,093 for advanced fees for the title
work. The Buyer will be credited the $1,093 toward the purchase
price.
D. The Debtors will pay from the sale proceeds closing fees,
recording fees, and other customary sale expenses from the sale
proceeds.
E. The Buyer will have a survey prepared for the Property to
be sold. The Buyer will pay for the cost of the survey.
F. The sum of $2,500 for the Debtors' attorney's fees incurred
in connection with the Motion and sale will be escrowed and held in
the Debtors' attorney's trust account pending further order ofthis
Court on a determination of the extent such fees are properly
chargeable against the Net Sale Proceeds. The United States
Trustee, BMO and First Financial reserve all rights to object to
the Debtors' attorney fees.
G. The Property to be sold will be Parcel 33 referenced in the
Motion, which consists of approximately 118 acres. The actual
legal description for the property to be sold will be established
after the survey contemplated by the Motion is completed.
H. At the closing, after payment of the items set forth,
including escrow of the amount for attorney fees, the title company
conducting the closing will remit the balance of the sale proceeds
to BMO to be applied to its secured claim in the Bankruptcy case.
The Property subject to the Motion will be sold free and clear of
all liens and interests to the extent relating to the Property,
with such liens and encumbrances will remain in full force and
effect with respect to the property(ies) other than the Property to
be sold pursuant to the Order.
Pursuant to the Court's Dec. 18, 2019 Memorandum of Decision and
Order, the Receiver has exclusive authority to market and/or sell
property of the receivership estate and the Debtors do not have the
right or ability to market and/or sell property of the receivership
estate, except for the authority reserved. Nonetheless, by
agreement of the parties only, and without establishing any
precedent for future transactions, the Court approves the sale of
the Property to the Buyer.
If the sale of the Property to the Buyer does not close by March 1,
2020, the Debtors' authority under the Order is rescinded and the
Receiver will thereafter have exclusive authority to market and
sell the Property, and the estate will have no Section 506(0) claim
against BMO relating to the Property. Notwithstanding this
provision, BMO may extend the March 1, 2020 deadline to close by
Stipulation filed with Court.
The Debtors will sign a state court stipulated order that clarifies
for the state court judge administering the receivership estate
that this is a one-time exception and, that, therefore, the Debtors
have no authority to market and/or sell any other receivership
property.
The 14-day stay period imposed by Bankruptcy Rule 6004(h) is waived
so that the sale contemplated by the Motion may be conducted
promptly after entry of the Order.
Mark Allen Krieger and Jame Sue Secondino Krieger sought Chapter 11
protection (Bankr. W.D. Mich. Case No. 19-02148) on May 15, 2019.
The Debtors tapped Perry G. Pastula, Esq., at Dunn Schouten & Snoap
PC, as counsel.
MEDIQUIRE INC: Hires Shafferman & Feldman as Counsel
----------------------------------------------------
Mediquire, Inc., seeks authority from the U.S. Bankruptcy Court for
the Southern District of New York to employ Shafferman & Feldman
LLP, as counsel to the Debtor.
Mediquire, Inc. requires Shafferman & Feldman to:
a. provide advice to the Debtor with respect to its powers and
duties under the Bankruptcy Code in the continued operation
of its business and the management of its property;
b. negotiate with creditors of the Debtor, prepare a plan of
reorganization and take the necessary legal steps to
consummate a plan, including negotiations with respect to
financing a plan;
c. appear before the various taxing authorities to work out a
plan to pay taxes owing in installments;
d. prepare on the Debtor's behalf, necessary applications,
motions, answers, replies, discovery requests, forms of
orders, reports and other pleadings and legal documents;
e. appear before the Bankruptcy Court to protect the interests
of the Debtor and its estate, and represent the Debtor in
all matters pending before the Bankruptcy Court; and
f. perform all other legal services to the Debtor that may be
necessary herein.
Shafferman & Feldman will be paid based upon its normal and usual
hourly billing rates. The firm will also be reimbursed for
reasonable out-of-pocket expenses incurred.
Joel Shafferman, partner of Shafferman & Feldman LLP, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Shafferman & Feldman can be reached at:
Joel Shafferman, Esq.
SHAFFERMAN & FELDMAN LLP
137 Fifth Avenue, 9th Floor
New York, NY 10010
Tel: (212) 509-1802
Fax: 212 509-1831
E-mail: joel@shafeldlaw.com
About Mediquire Inc.
Mediquire, Inc. -- https://mediquire.com/ -- is a data analytics
company dedicated to accelerating the adoption of value-based
payment methodologies. Its mission is to accelerate the transition
to value-based care using a suite of advanced analytics solutions
that help payers and providers design, negotiate, and track
value-based contracts, as well as provide insights to aid providers
in closing gaps at the point-of-care.
Mediquire, Inc., based in New York, NY, filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 20-10284) on Jan. 30, 2020. In the
petition signed by CFO Rhonda Rosen, the Debtor disclosed
$2,178,510 in assets and $1,780,713 in liabilities. Joel
Shafferman, Esq., at Shafferman & Feldman LLP, serves as bankruptcy
counsel.
MERITOR INC: Fitch Affirms BB- LongTerm IDR, Outlook Positive
-------------------------------------------------------------
Fitch Ratings affirmed Meritor, Inc.'s Long-Term Issuer Default
Rating at 'BB-'. In addition, Fitch has affirmed the ratings on
MTOR's senior unsecured notes, including its convertible notes, at
'BB-'/'RR4' and the ratings on MTOR's secured revolving credit
facility and term loan at 'BB+'/'RR1'.
MTOR's ratings apply to a $625 million secured ABL revolving credit
facility, $172 million in term loan borrowings and $798 million in
senior unsecured notes.
The Rating Outlook is Positive.
KEY RATING DRIVERS
Ratings Overview: The Positive Outlook on MTOR's long-term IDR is
driven by the significant improvement seen in the company's
fundamental credit profile over the past several years, which Fitch
expects will be sustained going forward. Much of this improvement
is the result of significant increases in MTOR's operational and
financial flexibility, which has allowed it to produce consistently
positive annual FCF and solid FCF margins, despite significant
swings in North American Class 8 truck demand over that time.
Although Fitch expects the North American Class 8 market to be down
significantly in FY2020, Fitch expects MTOR's margins and FCF to
remain solid and its leverage to remain well below the levels seen
a few years ago. In addition, Fitch expects the macroeconomic
environment to be challenging during FY2020. A solid performance by
the company during this period, including maintaining credit
metrics consistent with Fitch's upgrade sensitivities, could
further support an upgrade to the ratings.
Also supporting the Outlook is the increased diversification of
MTOR's business, which has helped to reduce its reliance on the
cyclical North American Class 8 truck market. Recent business wins
continue to expand and diversify the company's global customer
base, with the company making progress on expanding its on-road
presence in China and increasing its exposure to the North American
medium duty truck segment. Although not yet a significant part of
its business, MTOR has also grown its expertise in hybrid and
electric commercial vehicle drivetrains through its acquisition
Transportation Power, Inc. (TransPower), as well as other
investments in electrification technology. Several recent business
wins with large commercial vehicle original equipment manufacturers
(OEMs) bode well for its electrification prospects. The increased
diversification of MTOR's business model has given Fitch further
confidence that the company will be able to grow its revenue in
excess of the rate of global truck production over the intermediate
term, while helping to protect the business during regional
downturns. Although there is currently an elevated level of
uncertainty regarding the economic trajectory of MTOR's major North
American and European markets, Fitch could upgrade the company's
IDR once the condition of the economic environment becomes
clearer.
Rating Concerns: Despite the improvements to MTOR's operational
performance and credit profile, Fitch continues to have several
significant rating concerns. Chief among these remains the extreme
cyclicality of the global commercial truck and off-highway vehicle
markets. North American Class 8 truck production in FY2019 was up
about 17% after increasing by about 30% in FY2018. Production in
FY2017 was down about 6% from FY2016 and about 28% the most recent
cyclical peak reached only two years before in FY2015, illustrating
the extreme shifts that can take place in this end market from one
year to the next.
These heavy shifts in demand heighten the importance of MTOR
maintaining relatively conservative mid-cycle credit metrics.
However, MTOR has demonstrated its ability over the past several
years to both grow margins and generate positive FCF through both
the peaks and troughs of the Class 8 cycle. This represents an
important improvement from previous cycles, when the company's
margins and FCF were heavily pressured at both the top and the
bottom of the cycle.
Other rating concerns include heavy competition in the commercial
truck driveline sector, particularly in North America, as well as
volatile raw material costs, which can pressure margins despite
pass-through mechanisms in many customer contracts. MTOR's
heightened interest in potential acquisition opportunities and an
emphasis on share repurchases are also concerns, although Fitch
expects acquisitions will mostly be smaller small bolt-on
transactions, rather than large transformative acquisitions. In
terms of share repurchases, Fitch expects MTOR to utilize proceeds
from the terminated distribution agreement with WABCO to fund
repurchases, although the company remains focused on keeping
leverage in-line with its M2019 strategic plan, mitigating the
likelihood of any significant debt-funded repurchase activity.
Improved Profitability: Fitch expects MTOR's EBITDA margin (based
on Fitch's calculations) to run in the 10% to 12% range over the
intermediate term, even with the expected slowing of the North
American Class 8 market in the near term. This will be driven, in
part, by a combination of pricing and new product introductions as
well as cost flexibility achieved through its M2016 and M2019
strategic plans. MTOR's actual EBITDA margin (based on Fitch's
calculation) in the LTM ended Dec. 31, 2019 was 10.1%.
Moderate Leverage: Fitch expects MTOR's gross EBITDA leverage
(gross debt/EBITDA as calculated by Fitch) to run in the 2x-3x
range over the intermediate term, with debt (including off-balance
sheet factoring) about flat at roughly $1.1 billion now that the
company has achieved the 1.5x net leverage target. Actual EBITDA
leverage (according to Fitch's calculations) was 3.0x at Dec. 31,
2019, and included $65 million in revolver borrowings that Fitch
views as temporary. Fitch expects FFO-adjusted leverage to run in
the 3x to 4x range over the intermediate term, with it running
closer to the high end of that range over the next couple of years
as the North American truck cycle turns. Actual FFO-adjusted
leverage was 3.9x at Dec. 31, 2019 and included the effect of a $48
million contribution that MTOR made to the Maremont 524(g) trust as
part of Maremont's plan of reorganization.
Solid FCF: Fitch expects MTOR to produce positive FCF over the
intermediate term, with FCF margins generally running in the
mid-single-digit range (based on Fitch's calculations). In FY2020,
Fitch expects MTOR's FCF to margin to run at about 4.5%, slightly
higher than the level in FY2019, despite the expected cyclical
downturn in industry production as the effects of Maremont's
reorganization were concentrated in FY2019 and the company benefits
from improved cost flexibility. Fitch expects capex as a percentage
of revenue to run in the 2.5% to 3% range over the intermediate
term. According to Fitch's calculations, FCF in the LTM ended Dec.
31, 2019 was $179 million, equal to a 4.2% FCF margin.
Well-Funded Pensions: MTOR's pension plans remain well funded. At
year-end FY2019, the company's global plans were 93% funded on a
GAAP projected benefit obligation (PBO) basis, with an unfunded
status of only $122 million. However, the company's U.S. plans were
only 74% funded, with an underfunded status of $265 million, while
its non-U.S. plans were overfunded by $143 million on a GAAP basis.
The company contributed $5 million to its global pension plans in
FY2019, and it expects to contribute $6 million to its plans in
FY2020. Given MTOR's liquidity and FCF prospects, Fitch does not
currently view the company's pension plans as a meaningful credit
risk.
DERIVATION SUMMARY
MTOR is a capital goods supplier with product lines focused
primarily on driveline components and brakes for commercial
vehicles, off-highway equipment and trailers. Compared with its
primary competitor, Dana Incorporated (BB+/Stable), MTOR is smaller
and fully focused on the capital goods industry, without any
meaningful light vehicle exposure. That said, MTOR generally
retains a top-three market position in most of the product segments
where it competes.
Compared with other capital goods and automotive suppliers rated in
the 'BB' category, such as Delphi Technologies PLC (BB/Rating Watch
Positive), The Goodyear Tire and Rubber Company (BB/Stable),
Allison Transmission Holdings, Inc. (BB/Stable) or Tenneco Inc.
(BB-/Stable), MTOR's margins, FCF generation and leverage have
trended toward levels more commensurate with issuers in the middle
of the category, while a couple years ago, its metrics were more in
line with issuers at the lower end of the category. MTOR's EBITDA
leverage has trended down toward the mid-2x range from the high-3x
range a few years ago, while EBITDA margins have risen above 10%.
FCF margins have improved, and the company has consistently
generated positive annual FCF through the mid-cycle.
No country-ceiling, parent/subsidiary or operating environment
aspects impact the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Global commercial truck production declines in FY2020 and
stabilizes at a lower level in FY2021 and FY2022 before
growing in FY2023;
-- Revenue declines in the mid-teens range in FY2020 before in
the low single digits in FY2021 and FY2022 on a combination
of pricing and new product wins;
-- FCF margins run in the mid-single-digit range over the next
several years;
-- Capex run at around 3% of revenue over the next several
years as the company invests in new technologies and to
accommodate new business wins;
-- The company maintains a solid cash liquidity position,
with excess cash primarily used for share repurchases.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Maintaining mid-cycle debt/EBITDA leverage below 3.0x;
-- Maintaining mid-cycle FFO-adjusted leverage below 4.5x;
-- Maintaining a positive mid-cycle FCF margin;
-- Maintaining a mid-cycle EBITDA margin above 10%.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- A material deterioration in the global commercial truck or
industrial equipment markets for a prolonged period;
-- An increase in mid-cycle debt/EBITDA leverage to above 4.0x
for an extended period;
-- An increase in mid-cycle FFO-adjusted leverage to above
5.0x for an extended period;
-- A decline in the mid-cycle FCF margin to below 1.0% for
an extended period;
-- A decline in the mid-cycle EBITDA margin to below 8.5%
for an extended period.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects MTOR's liquidity to remain
adequate over the intermediate term. The company had $108 million
in cash and cash equivalents at Dec. 31, 2019. In addition to its
cash, MTOR has access to a $625 million secured ABL revolving
credit facility that matures in 2024 (although it will mature on
Nov. 15, 2023 if $75 million of its 6.25% notes remains
outstanding). As of Dec. 31, 2019, $560 million was available, with
$65 million in temporary borrowings outstanding on it and no
letters of credit issued against it.
Based on its criteria, Fitch has estimated the amount of cash that
it believes MTOR needs to keep on hand to cover seasonal changes in
cash flows without any incremental borrowing, and it treats this
cash as not readily available for purposes of calculating net
metrics. Based on the company's recent performance, as of Dec. 31,
2019, Fitch has treated $10 million of MTOR's cash as not readily
available.
Debt Structure: As of Dec. 31, 2019, the principal value of MTOR's
long-term debt, including off-balance sheet factoring, was $1.4
billion. MTOR's debt consists of $450 million in senior unsecured
notes, $348 million in convertible notes, $152 million in capital
leases and other debt, and $240 million in off-balance sheet
factoring. The company also had $65 million in borrowings
outstanding on its secured revolver at Dec. 31, 2019.
The convertible notes contain put and call features that allow for
earlier redemption. The $23 million in 7.875% notes due 2026 may be
redeemed in FY2020 and the $319 million in 3.25% notes due 2037 may
be redeemed in FY2025.
ESG CONSIDERATIONS
ESG issues are credit neutral or have only a minimal credit impact
on the entity(ies), either due to their nature or the way in which
they are being managed by the entity(ies).
MR. MISTER LLC: Allowed to Use Cash Collateral Through March 29
---------------------------------------------------------------
Judge Michelle M. Harner of the U.S. Bankruptcy Court for the
District of Maryland authorized Mr. Mister, LLC to use the cash
collateral, through and including March 29, 2020 for ordinary
course purposes in accordance with the terms and conditions of the
Interim Consent Order.
A final hearing to consider the Debtor's use of cash collateral is
scheduled for April 2, 2020 at 11:00 a.m.
Fulton Bank, N.A. asserts secured claims against the Debtor
pursuant to two Promissory Notes in the original principal amount
of $200,000 and $50,000, respectively. The Notes are secured by a
duly perfected security interest in and lien upon, among other
things, all of Debtor's inventory, equipment, accounts, chattel
paper, instruments, general intangibles, and all products and
proceeds thereof.
In its Motion, Fulton Bank asked the Court to prohibit or restrict
Debtor's use of cash collateral and require Debtor to provide
adequate protection and a replacement lien as to any use of cash
collateral, which the Debtor opposed.
Consequently, Judge Harner directed the Debtor to make an immediate
payment in good funds to Fulton Bank in the amount of $20,000, and
required the Debtor to make adequate protection payments to Fulton
Bank in the amount of $6,000.
To the extent cash collateral is used by Debtor and such use
results in a diminution of the value of the cash collateral, Fulton
Bank will also be entitled to a replacement lien in and to all
post-petition assets of the Debtor, of any kind or nature
whatsoever, real or personal, whether now existing or hereafter
acquired, and the proceeds of the foregoing, to the same extent and
with the same priority as Fulton Bank's interest in the
Collateral.
About Mr. Mister LLC
Mr. Mister, LLC, filed a voluntary Chapter 11 petition (Bankr. D.
Md. Case No. 19-27075) on Dec. 27, 2019, and is represented by
Robert N. Grossbart, Esq., at Grossbart, Portney and Rosenberg,
P.A. In the petition signed by Parampreet Singh, sole member, the
Debtor was estimated to have under $1 million in both assets and
liabilities.
MY KIDZ DENTIST: Hires Black Diamond as Forensic Accountant
-----------------------------------------------------------
My Kidz Dentist, PC, and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Northern District of Georgia to
employ Black Diamond Consulting, LLC, as forensic accountant to the
Debtors.
My Kidz Dentist requires Black Diamond to render forensic
accounting, taxation, valuation and related financial services.
Black Diamond will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
David T. Sawyer, a partner at Black Diamond Consulting, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Black Diamond can be reached at:
David T. Sawyer
BLACK DIAMOND CONSULTING, LLC
12600 Deerfield Parkway, Suite 100
Alpharetta, GA 30004
Tel: (678) 524-3283
About My Kidz Dentist
Pediatric dental clinics My Kidz Dentist PC, My Kidz Dentist of
Carrollton and My Kidz Dentist of Fayetteville LLC filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ga. Case Numbers 19-12506, 19-12507 and 19-12508,
respectively) on Dec. 13, 2019.
In the petitions signed by Dr. Lona Bibbs-Walker, authorized
representative, My Kidz Dentist PC disclosed $6,266,597 in assets
and $2,789,640 in liabilities; My Kidz Dentist of Carrollton
dislcosed $3,202,708 in assets and $1,407,183 in liabilities; and
My Kidz Dentist of Fayetteville disclosed $6,106,233 in assets and
$902,443 in liabilities.
Ian M. Falcone, Esq., at The Falcon Law Firm, P.C., is the Debtors'
legal counsel.
NATIONAL QUARRY: Allowed to Use Cash Collateral on Interim Basis
----------------------------------------------------------------
Judge Benjamin A Kahn of the U.S. Bankruptcy Court for the Middle
District of North Carolina authorized National Quarry Services,
Inc., to use cash collateral, on an interim basis, for the actual
and necessary expenses of operating its business pursuant to the
Budget.
NewBridge Bank, the predecessor-in-interest to First National Bank
of Pennsylvania ("FNB"), loaned the Debtor’s affiliate, NQS
Equipment Leasing Company ("NQSEL"), $1,267,500 in order to
purchase certain drilling equipment. FNB asserts as well, among
other things, a security interest in the accounts of the Debtor.
The Debtor currently owes FNB $584,043.04 pursuant to the FNB Loan
Modification. As part of the Loan Modification, FNB asserts a
security interest in all the Debtor's business assets, including,
among other things all equipment, inventory, accounts, chattel
paper, and instruments.
Before the Petition Date, Pinnacle Bank loaned NQSEL $650,000 in
order to refinance certain existing equipment loans made by Wells
Fargo Bank. The Debtor currently owes Pinnacle Bank $201,705.13 on
the Pinnacle Equipment Loan as of the Petition Date.
In addition, Pinnacle Bank loaned a total amount of $1,250,000,
consisting of two notes, to NQSEL and the Debtor in order to allow
them to refinance their owner-occupied commercial real estate. The
Debtor currently owes Pinnacle $1,188,841.70 on the Pinnacle Real
Estate Loans as of the Petition Date. The Debtor also owes Pinnacle
$692,804.36 pursuant to that certain Pinnacle Line of Credit.
Pinnacle and FNB are each granted a post- petition replacement lien
in Debtor's post-petition property of the same type which secured
the indebtedness of Pinnacle and FNB pre-petition, with such liens
having the same validity, priority, and enforceability as Pinnacle
and FNB had against the same type of such collateral as of the
Petition Date, but is limited in the diminution in value of the
Cash Collateral. The lien of Pinnacle and FNB in postpetition
collateral will be deemed perfected to the extent the prepetition
liens and security interests were valid, perfected, enforceable,
and non-avoidable as of the Petition Date.
The security interests and liens herein granted to Pinnacle and
FNB: (i) will be in addition to all security interests, liens and
rights of set-off existing in favor of Pinnacle and FNB on the
Petition Date, if any; and (ii) will secure the payment of the
indebtedness owing to Pinnacle and FNB in an amount equal to the
aggregate cash collateral used or consumed by the Debtor.
The Debtor will pay Pinnacle an adequate protection payment of
$7,500 to compensate Pinnacle for the possible diminution in value
of its collateral.
About National Quarry Services and
National Quarry Services
National Quarry Services, Inc. -- https://nationalquarryservice.com
-- is a full-service rock drilling and blasting company.
National Quarry Services and its affiliate NQS Equipment Leasing
Company sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. N.C. Lead Case No. 20-50070) on Jan. 23, 2020. At the
time of the filing, the Debtors each had estimated assets of
between $1 million and $10 million and liabilities of between $10
million and $50 million.
Judge Benjamin A. Kahn oversees the cases.
The Debtors tapped James C. Lanik, Esq., at Waldrep, LLP, as their
legal counsel.
William Miller, the U.S. bankruptcy administrator for the Middle
District of North Carolina, appointed three creditors to serve on
the official committee of unsecured creditors in the Debtor's
Chapter 11 case.
NEW CITIES INVESTMENT: Taps Hayashi Wayland as Accountant
---------------------------------------------------------
New Cities Investment Partners, LLC received approval from the U.S.
Bankruptcy Court for the Northern District of California to hire
Hayashi Wayland Accounting & Consulting, LLP as its accountant.
Hayashi Wayland will assist in the preparation of the Debtor's
monthly operating reports, financial statements, and budgets and
projections for its Chapter 11 plan of reorganization.
The firm's hourly rates are:
Partners $315 - $360
Directors $265 - $340
Senior Managers $235 - $300
Managers $210 - $230
Supervisors $165 - $190
Senior Associates $135 - $175
Junior Associates $110 – $130
Hayashi Wayland is a "disinterested person" within the meaning of
Bankruptcy Code Section 101(14), according to court filings.
The firm can be reached through:
Rob Lee, CPA
Hayashi Wayland Accounting &
Consulting, LLP
26515 Carmel Rancho Boulevard, Suite 100
Carmel, CA 93923 (Map)
Phone: (831) 624-5333
Fax: (831) 626-9113
About New Cities Investment Partners
New Cities Investment Partners, LLC is engaged in activities
related to real estate. The company owns a vacant real property
located in Palm Desert, Calif.
New Cities Investment Partners sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 19-52584) on Dec.
23, 2019. The petition was signed by Lee E. Newell, chief
executive officer of New Cities Land Company, Inc., the Debtor's
manager. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range.
Judge M. Elaine Hammond oversees the case. Macdonald Fernandez LLP
is the Debtor's legal counsel.
NEWELL BRANDS: Moody's Cuts Sr. Unsec. Ratings to Ba1, Outlook Neg.
-------------------------------------------------------------------
Moody's Investors Service downgraded Newell Brands Inc.'s senior
unsecured ratings to Ba1 from Baa3. Concurrently, Moody's assigned
Newell a Ba1 Corporate Family Rating, a Ba1-PD Probability of
Default rating and a SGL-3 speculative grade liquidity rating.
Moody's also downgraded the company's Commercial Paper rating to
Not Prime from Prime-3. The rating outlook is negative.
The downgrade reflects Moody's view that weak operating
performance, a rising dividend payout ratio and Newell's decision
to retain a collection of commercial products businesses will
sustain high financial leverage. Newell's sales continue to decline
and the reinvestment necessary to restore revenue growth and
improve market share will make it challenging to meaningfully
reduce leverage through earnings growth. Competitive pressures from
factors such as private label offerings and changing consumer
buying habits, as well as the economic drag from the coronavirus
fallout also limit earnings growth potential over the next year.
Moody's views maintaining the dividend despite divestitures that
reduce the earnings base as aggressive financial management that is
increasing the dividend payout ratio, weakening free cash flow and
further impeding deleveraging.
The negative outlook reflects uncertainty about Newell's ability
and willingness to steadily reduce leverage over the next 12
months. This uncertainty reflects the evolving nature of Newell's
strategic priorities and restructuring plans, competitive
pressures, and management turnover.
Moody's took the following actions on Newell Brands Inc.:
Ratings downgraded:
Senior Unsecured rating to Ba1 (LGD4) from Baa3;
Senior Unsecured Medium Term Note Program to (P)Ba1 from (P)Baa3
Commercial Paper rating to Not Prime from Prime-3
Ratings assigned:
Corporate Family Rating at Ba1
Probability of Default Rating at Ba1-PD
Speculative Grade Liquidity Rating at SGL-3
Outlook Actions:
Outlook remains negative
RATINGS RATIONALE
Newell's Ba1 CFR reflects the slow pace at which the company is
reducing high financial leverage and corporate governance
challenges that contribute to evolving strategic priorities. The
company's large scale, well recognized brands, strong product and
geographic diversity, and good free cash flow only partially
mitigate these risks. Moody's projects debt repayment from free
cash flow will reduce debt to EBITDA leverage from about 4.8x in
2019 (incorporating Moody's standard adjustments) to a 4.5x-4.6x
range in 2020. Social factors such as changing consumer preferences
toward digital shopping, and intense competition require continual
investment in product development, distribution, and sales to
maintain market share. Many of Newell's products are discretionary
and demand is negatively affected by economic slowdowns. The
company will have to navigate in a challenging operating
environment to delever over the next year given the potential
negative effects of tariffs and the coronavirus on the global
economy and the company's supply chain. Corporate governance
challenges include turnover in the board amid shareholder concerns
in 2018, and in senior management that has contributed to changing
strategic priorities.
The SGL-3 liquidity rating is supported by $349 million of cash (as
of December 31, 2019), an undrawn $1.25 billion unsecured revolving
credit facility expiring in December 2023 and an undrawn accounts
receivable securitization facility expiring in October 2022 ("short
term liquidity facilities") and about $200-$250 million of free
cash flow (defined as operating cash flow less capital expenditures
less dividends) over the next year. Moody's free cash flow
assumptions were adjusted from recent 2020 guidance provided by
Newell on February 14, 2020, and largely reflect Moody's more
conservative working capital assumptions. As a result, Moody's
expects internal cash sources provide adequate coverage of the $400
million of debt maturities through April 2021. Newell would likely
be potentially reliant on its short term liquidity facilities to
fund the approximate $340 million note maturity in October 2021 if
the notes are not refinanced.
Newell's ratings could be downgraded if the company's operating
performance deteriorates, including if sales continue to decline or
cost pressures weaken EBITDA. In addition, the ratings could be
downgraded if Newell is not making steady progress toward reducing
debt/EBITDA (including Moody's adjustments) to 4.5x or less by the
end of 2020, or if free cash flow to debt is below 10%. The ratings
could also be downgraded if the company's liquidity deteriorates.
Given the negative outlook, an upgrade is unlikely. However,
Moody's could upgrade the ratings if Newell substantially improves
its operating performance, while maintaining a financial policy
that results in debt/EBITDA leverage sustained below 3.75x (with
Moody's adjustments). Newell would also need to maintain stronger
liquidity, solid free cash flow relative to debt, and a consistent
strategic direction to be considered for an upgrade.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Newell Brands Inc. is a global marketer of consumer and commercial
products utilized in the home, office and commercial segments. Key
brands include Rubbermaid, Sharpie, Mr. Coffee and Yankee Candle.
The publicly-traded company generated $9.7 billion of revenue in
2019.
NICK'S PIZZA: Taps Newpoint Advisors Corp. as Financial Advisor
---------------------------------------------------------------
Nick's Pizza & Pub, Ltd. received approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire Newpoint
Advisors Corporation as its financial advisor.
Newpoint Advisors will assist in the preparation of the Debtor's
bankruptcy schedules, monthly operating reports and Chapter 11 plan
of reorganization. The firm will also assist in the marketing and
sale of the Debtor's assets if requested.
Newpoint's hourly rates are:
Matthew Brash $295
Cairn Sorvik, CPA, CIRA $275
Bethany Meservey $250
Other Personnel $75 - $275
The firm received a retainer of $30,000.
Newpoint is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Matthew Brash
Newpoint Advisors Corporation
1320 Tower Road
Schaumburg, IL 60173
Tel: (312) 656-9750
About Nick's Pizza & Pub
Nick's Pizza & Pub, Ltd. operates a family restaurant in Crystal
Lake, Ill., which opened in 1995, and in Elgin, Ill., which opened
in 2005.
Nick's Pizza & Pub sought Chapter 11 petition (Bankr. N.D. Ill.
Case No. 20-00551) on Jan. 7, 2020. At the time of the filing, the
Debtor disclosed assets of between $1 million and $10 million and
liabilities of the same range.
Judge Lashonda A. Hunt oversees the case. Gensburg Calandriello &
Kanter, P.C. is the Debtor's legal counsel.
OWENS & MINOR: Fitch Affirms CCC+ LT Issuer Default Rating
----------------------------------------------------------
Fitch Ratings affirmed Owens & Minor, Inc.'s (OMI) Long-Term Issuer
Default Rating at 'CCC+' and OMI's senior secured debt and recovery
rating at 'B-'/'RR3'.
The rating affirmation reflects OMI's limited financial flexibility
as a result of customer losses, heightened competition,
accelerating pricing pressure, and significantly reduced earnings
relative to debt levels.
Fitch is encouraged by senior management's improved customer
engagement as well as focus on customer service and retention. In
addition, the anticipated sale of Movianto and proceeds from a
receivables securitization facility are expected to provide OMI
with additional resources and time to improve its financial
position.
Future rating actions are expected to depend principally on
customer wins and retention, maintenance of key supplier
relationships on favorable terms and improved generation of FCF.
The rating action applies to approximately $1.6 billion of debt as
of Dec. 31, 2019.
KEY RATING DRIVERS
Fifth Amendment to Credit Agreement: The recent amendments to OMI's
credit agreement provide additional liquidity and flexibility to
deal with its significant operational and financial risks; the
amendments will provide incremental headroom under a key leverage
covenant and the flexibility to address a springing maturity
related to senior secured notes due in 2021. The amendment provides
senior management with the additional time it needs to pursue a
turnaround of OMI's core business, which is focused on improving
customer retention levels.
Weak Operating Performance in Legacy Business: Fitch believes that
OMI will experience weaker FCF over the medium term because of a
continuation of accelerating pricing pressure and the potential for
continued customer churn. The company's operating performance in
its domestic distribution business is expected to show weaker cash
generation in 2020 as prior years' contract losses take effect.
Improving and maintaining customer relationships and service are
expected to remain key drivers of whether OMI can reinvigorate
revenue growth and erase the concerns about the company's financial
position. Fitch believes that overcoming past service failures may
remain a challenge over the near term, but the new management
appears to be highly focused on customer engagement.
Competitive Environment: The med-surg supply distribution industry
in the U.S. is highly competitive and characterized by pricing
pressure. Fitch expects margin pressure to continue over the coming
years. OMI competes with other national distributors (e.g. Cardinal
Health, and Medline, Inc.) and a number of regional and local
distributors, as well as customer self-distribution models and, to
a lesser extent, certain third-party logistics companies. OMI's
success depends on its ability to compete on price, product
availability, delivery times and ease of doing business, while
managing internal costs and expenses.
Customer Concentration: OMI's 2019 10-K stated that its top-10
customers in the U.S. represented approximately 25% of its
consolidated net revenue. Additionally, in 2019, approximately 72%
of its consolidated net revenue was from sales to member hospitals
under contract with its largest Group Purchasing Organizations
(GPOs): Vizient, Premier and HPG. As a result of this
concentration, OMI could lose a significant amount of revenue due
to the termination of a key customer or GPO relationship. The
termination of a relationship with a given GPO would not
necessarily result in the loss of all of the member hospitals as
customers, but the termination of a GPO relationship, or a
significant individual healthcare provider customer relationship
could adversely affect OMI's debt-servicing capabilities.
Supplier Concentration: For 2019, OMI reported that sales of
products of its 10 largest domestic suppliers accounted for
approximately 45% of consolidated net revenue; however, no sales of
product in its Global Solutions segment of any individual suppliers
exceeded 10%. OMI's ability to sustain adequate operating earnings
will continue to depend on its ability to obtain favorable terms
and incentives from suppliers, timely shipments, as well as
suppliers' continuing use of third-party distributors to sell and
deliver their products.
ESG Relevance Scores: OMI has an ESG Relevance Score of 4 for
Management Strategy because of the challenge of restructuring and
optimizing the organization as a result of its substantial level of
debt and lower levels of cash flows.
DERIVATION SUMMARY
OMI's Long-Term IDR of 'CCC+' reflects the company's significant
increase in financial risk following the leveraged acquisitions of
Byram Healthcare and the S&IP business of Halyard Health, as well
as heightened competition and accelerating pricing pressure in its
core business. These risks are somewhat offset by OMI's established
position as a leading healthcare distribution company, albeit at
low absolute margins.
In the recent past, OMI has completed two acquisitions for
approximately $1.1 billion -- Byram Healthcare and the Surgical and
Infection Prevention business of Halyard Health, Inc. The result is
that Fitch's estimate of OMI's leverage (without the benefit of
credit agreement adjustments) is expected to remain above 7x
through YE 2020. The material increase in financial risk along with
continued pressure on liquidity, revenue and margins supports an
IDR of 'CCC+'. OMI's smaller scale in an industry with high fixed
costs, where scale influences leverage with suppliers and
customers, and significantly higher leverage all lead Fitch to rate
the company well below AmerisourceBergen Corp. (A-/Stable),
Cardinal Health, Inc. (BBB/Stable) and McKesson Corp.
(BBB+/Stable). OMI competes with other regional and local
distributors, as well as customer self-distribution models and, to
a lesser extent, certain third-party logistics companies. In
contrast to other larger distributors, Fitch considers OMI to be
less diversified by customer, revenues and suppliers. The debt
ratings are the same across the entire capital structure reflecting
both its pari passu status and the strong legal and operational
ties between parent and subsidiaries.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Total revenues decline in 2020 reflecting customer losses from
2019; business growth returns in 2021 principally with better
customer retention and continued growth from Byram;
-- Operating EBITDA margins return to 2.50%-2.60%, which is
consistent with the contributions from recent acquisitions as well
as a lower base of revenues;
-- Sale of Manufacturer Solutions-Europe operations is completed
in the second-quarter of 2020 for approximately $133 million;
proceeds from the sale and new funds from a Receivables
Securitization Program are used to pay $150 million on two term
Loans and approximately $236 million outstanding on the 2021
notes;
-- Total interest expense following the fourth amendment to the
credit agreement remains in the range of $90 million-$100 million
through 2022 compared with approximately $30 million in 2017;
-- Fitch's estimates sustainable FCF remains modest despite low
levels of common stock dividends, but benefits from intensive
working capital management;
-- Fitch assumes OMI spends approximately $60 million per year
on Capex through the forecast period and ceases all share
repurchase activity.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
Positive rating momentum is possible over the near term if OMI can
improve its customer retention levels and reinvigorate its legacy
business. In addition, if revenue and EBITDA growth resulting in
debt/EBITDA approaching 6.0x, the ratings could be upgraded. In
addition, Fitch will be evaluating whether OMI can reduce its
dependence on short-term borrowing and improve its cash conversion
and EBITDA.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
A downgrade is possible if Fitch believes OMI will be unable to
maintain sufficient sources of liquidity to service its debt. Fitch
will monitor whether OMI can improve its customer retention levels
and reinvigorate its legacy business. Also, if consolidated EBITDA
and cash generation are not expected to improve sufficiently to
offset the weakness in OMI's core business by YE 2020, such that
debt/EBITDA is expected to exceed 7.5x, the rating could be
downgraded.
LIQUIDITY AND DEBT STRUCTURE
Weak Liquidity: OMI has weak liquidity; sources are comprised
principally of a $400 million revolving credit facility and a
recently established $325 million receivable securitization
program. As of Dec 31, 2019, there was approximately $178 million
of borrowings under the revolving credit facility. The continued
reliance on the revolving credit facility and the receivables
securitization program are expected to be key sources of liquidity
over the near term until OMI is able to improve its generation of
FCF.
Laddered Maturities: The maturities of long-term debt are
manageable for the near term, but the amortization of such debt
along with interest expense will become an increasing challenge
unless revenues and earnings can be reinvigorated. The company's
decision to cut dividends will provide additional funding to
service debt, but the key to OMI's future rests in its ability to
retain and win new customers.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA are adjusted to add back certain
charges for non-recurring expenses, LIFO provisions, and
stock-based compensation.
Rating Recovery
For issuers with IDRs at 'B+' and below, Fitch performs a recovery
analysis for each class of obligations of the issuer. The issue
ratings are derived from the IDR and the relevant Recovery Rating
(RR) and notching.
The recovery analysis uses a liquidation approach due to the large
amounts of the company's receivables and inventory, which results
in the total liquidation value available to creditors to be higher
than the estimated EV on a going-concern basis.
Receivables under OMI's Receivables Securitization Program have
been assigned a super-senior priority of claim above the existing
senior secured debt obligations; Fitch assumes full use of the $325
million Accounts Receivable Securitization. Fitch assumes $1.3
billion of senior secured debt.
Fitch assumes advance rates on remaining accounts receivable, net
of maximum securitized receivables, inventory and net property and
equipment of 75%, 50% and 50%, respectively.
The general assumption is that cash on the balance sheet dissipates
during or before a bankruptcy that would be replaced by other
lending facilities. In addition, for purposes of the recovery
analysis, Fitch assumes an orderly liquidation of assets and
distribution of value according to priority of claims. Also, Fitch
has assumed 10% for administrative claims.
Fitch assumes the revolving credit facility is drawn up to $340
million.
The secured credit facility and senior notes are secured by the
assets of the guarantors, which consist of substantially all
wholly-owned domestic subsidiaries, and a pledge of 65% of the
voting equity of foreign subsidiaries. The credit agreement and
senior notes rank pari passu on a senior secured basis and contain
cross-default provisions, which could result in the acceleration of
payments due in the event of default of either agreements.
ESG CONSIDERATIONS
OMI has an ESG Relevance Score of 4 for Exposure to Management
Strategy due to the risks associated with the company's past
below-average service levels, which has contributed to customer
retention challenges and ultimately the stability of revenues and
cash flows. These risks have a negative impact on the credit
profile, and are relevant to the rating in conjunction with other
factors.
OWENS PRECISION: Gets Final Approval on Cash Collateral Use
-----------------------------------------------------------
Judge Bruce T. Beesley of the U.S. Bankruptcy Court of the District
of Nevada authorized Owens Precision, Inc. to use cash collateral
solely in accordance with and pursuant to the terms and provisions
of the Final Order.
The Debtor may use the cash collateral of its pre-petition lender,
Marquette Business Credit SPE 1, LLC for, among other things, (i)
working capital, (ii) general corporate purposes, and (iii) to pay
the costs and expenses of administering the Chapter 11 case,
including payment of the allowed fees and expenses of counsel.
As of the Petition Date, the amount of Prepetition Lender's claim
is (a) $948,480.28 in principal, and (b) $4,623.85 in accrued
interest, plus (c) $21,145.21 in reimbursable attorneys' fees, plus
(d) other fees, costs, indemnities.
The Prepetition Lender is granted additional and replacement valid,
binding, enforceable, non-avoidable, and automatically perfected
post-petition liens on, and security interests in, all property
and assets of the Debtor that were subject to the prepetition
liens, to the extent of any diminution in value, including such
diminution resulting from use of cash collateral.
As further adequate protection to the Prepetition Lender, the
pre-petition loan obligations will be paid interest at the default
contract rate, for accrued interest from the Petition Date through
January 2, 2020, and thereafter on the first business day of each
month.
As additional adequate protection to preserve Prepetition Lender's
equity cushion, the Debtor must comply with the post-petition cash
flow covenant and the minimum eligible accounts covenant:
* the Debtor's cumulative net income calculated in the same
manner as the budget (i.e. without deducting the adequate
protection payments) measured from the Petition Date through the
last day of each week, must not be less than $0.
* the Debtor's eligible accounts plus cash on hand must not
be less than $400,000 at any time.
Each of these events, among others, constitutes a termination event
unless waived by the Prepetition Lender:
* the failure to file an acceptable plan on or before Feb.
10, 2020. "Acceptable Plan" means a plan of reorganization of the
Debtor which is reasonably acceptable to prepetition lender and
which provides for the following treatment of the Prepetition
Lender allowed claim: (i) the Prepetition Lender's allowed claim
will be fully allowed with interest only payments continuing on the
first business day of each month at the default contract rate of
interest and the entire amount of the Prepetition Lender's allowed
claim will be immediately due and payable on June 15, 2020, and
(ii) the Debtor will comply with all of the covenants set forth in
the prepetition credit agreement except (A) the total fixed charge
coverage ratio will be measured on a trailing 3-month basis, (B)
the tangible net worth ratio shall be replaced with the minimum
eligible accounts covenant.
* the failure to confirm an acceptable plan on or before
March 11, 2020, or to notice for hearing a motion to confirm such
an acceptable plan as soon thereafter as may be practical in light
of the Court's schedule.
About Owens Precision
Owens Precision, Inc. -- http://owensprecision.com/-- is a Carson
City, Nevada-based CNC machining shop that provides contract
manufacturing services to the aerospace, defense, semiconductor,
and process control industries.
Owens Precision filed a Chapter 11 petition (Bankr. D. Nev. Case
No. 19-51323) on Nov. 12, 2019 in Reno, Nevada. In the petition
signed by James Mayfield, president and director of Owens
Precision, Inc., the Debtor was estimated with assets $1 million to
$10 million, and liabilities within the same range. Judge Bruce T.
Beesley oversees the case. The Verstandig Law Firm, LLC, is the
Debtor's counsel.
PIER 1 IMPORTS: Russell R. Johnson III Represents Utility Companies
-------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Russell R. Johnson III, PLC submitted a verified
statement to disclose that it is representing the utility companies
in the Chapter 11 cases of Pier 1 Imports, Inc., et al.
The names and addresses of the Utilities represented by the Firm
are:
American Electric Power
Attn. Dwight C. Snowden
American Electric Power
1 Riverside Plaza, 13th Floor
Columbus, Ohio 43215
AEP Energy Inc.
Attn: Peter M. Kolch, Esq.
Associate General Counsel
225 West Wacker Drive, Suite 600
Chicago, IL 60606
Arizona Public Service Company
Attn: Sandra Rosales
2043 W. Cheryl Dr., Bldg. M
Mail Station 3209
Phoenix, AZ 85021-1915
Constellation NewEnergy, Inc.
Attn: C. Bradley Burton
Credit Analyst
Constellation Energy
1310 Point Street, 12th Floor
Baltimore, MD 21231
Florida Power & Light Company
Attn: Gloria Lopez
Law Department
700 Universe Blvd.
Juno Beach, FL 33408
Georgia Power Company
Attn: Daundra Fletcher
2500 Patrick Henry Parkway
McDonough, GA 30253
The Connecticut Light and Power Company
Yankee Gas Services Company
NStar Electric Company, Western Massachusetts
NStar Electric Company, Eastern Massachusetts
Public Service Company of New Hampshire
Attn: Honor S. Heath, Esq.
Eversource Energy
107 Selden Street
Berlin, CT 06037
Consolidated Edison Company of New York, Inc.
Attn: Rosalie Zuckerman, Esq.
4 Irving Place-Room 1875S
New York, NY 10003
Orange and Rockland Utilities, Inc.
Attn: Jennifer Woehrle
390 W. Route 59
Spring Valley, New York 10977
Rochester Gas and Electric Corporation - $4,883
Attn: Patricia Cotton
89 East Avenue
Rochester, NY 14649
Salt River Project
Attn: Diana Greer/ISB 232
2727 E. Washington St.
Phoenix, AZ 85034-1403
Virginia Electric and Power Company
d/b/a Dominion Energy Virginia
Attn: Sherry Ward
600 East Canal Street, 10th floor
Richmond, VA 23219
San Diego Gas & Electric Company
Attn: Tasha Davis CP61F, Bankruptcy Specialist
8326 Century Park Court
San Diego, CA 92123
Commonwealth Edison Company
Attn: Erin Buechler
Claims & Collection Counsel
3 Lincoln Centre
Oakbrook Terrace, IL 60181
New York State Electric and Gas Corporation
Attn: Kelly Potter
James A. Carrigg Center
Bankruptcy Department
18 Link Drive
Binghamton, NY 13904
PECO Energy Company
The Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Attn: Lynn R. Zack, Esq.
Assistant General Counsel
Exelon Corporation
2301 Market Street, S23-1
Philadelphia, PA 19103
Orlando Utilities Commission
Attn: Zoila P. Easterling, Esq.
Deputy General Counsel
P.O. Box 3193
Orlando, Florida 32801
The Cleveland Electric Illuminating Company
Ohio Edison Company
Pennsylvania Power Company
West Penn Power Company
Monongahela Power Company
Potomac Edison Company
Toledo Edison Company
Metropolitan Edison Company
Jersey Central Power & Light Company
Pennsylvania Electric Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
The nature and the amount of claims (interests) of the Utilities,
and the times of acquisition thereof are as follows:
a. The following Utilities have unsecured claims against the
above-referenced Debtors arising from prepetition utility usage:
American Electric Power, AEP Energy Inc., Constellation NewEnergy
Inc., Connecticut Light & Power Company, Yankee Gas Services
Company, NStar Electric Company, Western Massachusetts, NStar
Electric Company, Eastern Massachusetts, Public Service Company of
New Hampshire, Consolidated Edison Company of New York, Inc. Orange
and Rockland Utilities, Inc. New York State Electric and Gas
Corporation, Rochester Gas & Electric Corporation, PECO Energy
Company, The Potomac Electric Power Company, Delmarva Power & Light
Company, Atlantic City Electric Company, Orlando Utilities
Commission, The Cleveland Electric Illuminating Company, Ohio
Edison Company, Pennsylvania Power Company, West Penn Power
Company, Monongahela Power Company, Potomac Edison Company, Toledo
Edison Company, Metropolitan Edison Company, Jersey Central Power &
Light Company and Pennsylvania Electric Company.
b. Arizona Public Service Company, Florida Power & Light
Company, Georgia Power Company, Salt River Project, Virginia
Electric and Power Company d/b/a Dominion Energy Virginia,
Commonwealth Edison Company and San Diego Gas and Electric Company
hold surety bonds that they will make claims upon for payment of
the prepetition debt that the Debtors owe to those Utilities.
c. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Objection of Certain Utility Companies To The Debtors' Motion For
Entry of Interim and Final Orders (I) Approving the Debtors'
Proposed Adequate Assurance of Payment For Future Utility Services,
(II) Prohibiting Utility Companies From Altering, Refusing, or
Discontinuing Services, (III) Approving the Debtor's Proposed
Procedures For Resolving Additional Assurance Requests, and (IV)
Granting Related Relief (Docket No. 212) filed in the
above-captioned, jointly-administered, bankruptcy cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in February 2020. The
circumstances and terms and conditions of employment of the Firm by
the Companies is protected by the attorney-client privilege and
attorney work product doctrine.
The Firm can be reached at:
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
Russell R. Johnson III, Esq.
2258 Wheatlands Drive
Manakin-Sabot, VA 23103
Telephone: (804)749-8861
Facsimile: (804)749-8862
E-mail: russell@russelljohnsonlawfirm.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/k1x0aY
About Pier 1 Imports
Founded with a single store in 1962, Pier 1 Imports, Inc. --
http://www.pier1.com/-- is a leading omni-channel retailer of
unique home decor and accessories. Its products are available
through approximately 930 Pier 1 stores in the U.S. and online at
pier1.com.
Pier 1 Imports and seven affiliates sought Chapter 11 protection
(Bankr. E.D. Va. Lead Case No. 20-30805) on Feb. 17, 2020, to
pursue a sale of the assets.
Pier 1 Imports disclosed $426.6 million in assets and $258.3
million in debt as of Jan. 2, 2020.
Judge Kevin R. Huennekens oversees the cases.
A&G Realty Partners is assisting Pier 1 Imports with its previously
announced store closures and lease modifications. Pier 1 Imports
landlords are encouraged to contact A&G Realty Partners through its
website, http://www.agrep.com/
Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP serve as
legal advisors to Pier 1 Imports and its affiliated debtors in the
U.S. and Canada, respectively. The Debtors tapped AlixPartners LLP
as restructuring advisor; Guggenheim Securities, LLC as investment
banker; and Epiq Bankruptcy Solutions as claims agent.
PIER 3 BUILDERS: Proposes $650K Private Sale of Fitchburg Property
------------------------------------------------------------------
Pier 3 Builders, LLC, filed with the U.S. Bankruptcy Court for the
District of Massachusetts a notice of its private sale of the real
property located at 151 Tibbett Circle, Fitchburg, Massachusetts to
Smit Patel for $650,000, plus assumption and payment at closing of
$65,509, subject to higher and better offers.
A hearing on the Motion is set for March 18, 2020 at 12:00 p.m.
The objection deadline is March 9, 2020 at 4:00 p.m.
The sale will take place immediately after the Court's approval of
the Motion.
The Property will be sold free and clear of liens, claims and
encumbrances, excepting a forty-foot-wide Buffer and Conservation
restriction. Any perfected, enforceable, valid liens will attach to
the proceeds of the sale.
About Pier 3 Builders
Pier 3 Builders, LLC, is a privately held company in the
residential building construction business. The Company offers
construction and remodeling services such as custom home building,
additions, basement remodeling, and more.
Pier 3 Builders, LLC, sought Chapter 11 protection (Bankr. D. Mass
Case No. 19-41022) on June 24, 2019. In the petition signed by
Brian Campanale, manager, the Debtor was estimated to have assets
and liabilities in the range of $1 million to $10 million. Judge
Elizabeth D. Katz is assigned to the case. The Debtor tapped David
M. Nickless, Esq., at Nickless, Phillips and O'Connor as counsel.
PIERCE WILLIAMS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Pierce Williams & Read, Inc.
DBA PWR Construction Co
1116 W 15th Street
Hopkinsville, KY 42240
Business Description: Pierce Williams & Read is a general
contractor in Hopkinsville, Kentucky.
Chapter 11 Petition Date: March 9, 2020
Court: United States Bankruptcy Court
Western District of Kentucky
Case No.: 20-50128
Debtor's Counsel: Jason E. Holland, Esq.
JASON E. HOLLAND ATTORNEY AT LAW
905 South Main Street
P.O. Box 540
Hopkinsville, KY 42241-0540
Tel: 270-886-9794
E-mail: k.downs@hollandlaw.org
Total Assets: $681,074
Total Liabilities: $2,460,395
The petition was signed by Marcellus Thomas, owner.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/5wVaFz
PROJECT BOOST: Fitch Corrects Jan. 10 Ratings Release
-----------------------------------------------------
Fitch Ratings replaced a ratings release on Project Boost Purchaser
LLC published on January 10, 2020 to correct the name of the
obligor for the bonds.
The amended ratings release is as follows:
Fitch Ratings has affirmed the Long-Term Issuer Default Rating for
Project Boost Purchaser, LLC at 'B'. The Rating Outlook remains at
Stable. This follows the company's recently closed acquisitions of
J.D. Power & Associates, Inc. and Trilogy Automotive in December
2019. In addition, Fitch upgrades the company's $1.3 billion of
first lien secured debt, including an $80 million revolver and term
loans, to 'BB'/'RR1' from 'BB-'/'RR2'. The upgrade to the first
lien facility reflects incremental debt from the Trilogy
acquisition and a modestly higher recovery multiple assumption that
Fitch believes better reflects the recurring nature of the business
model.
Autodata and J.D. Power are leading providers of data and analytics
solutions for the automotive industry. The combined company serves
a range of industry participants including automotive OEMs, dealers
and suppliers. The December 2019 merger scaled the company
materially, broadened its offerings, and provided Autodata with
exposure to certain non-auto related verticals including financial
institutions, utilities and TMT. Importantly, financial leverage
will likely remain high under private equity ownership, while the
company seeks both organic and acquisitive growth.
Fitch also withdraws the Issuer Default Rating (IDR) and
issue-level ratings for J.D. Power & Associates, Inc. and its
co-borrower Jefferson Holdco Inc., as the former is now an
operating subsidiary of Project Boost Purchaser, LLC and no longer
has debt outstanding either on its own or on a co-borrowed basis.
The ratings were withdrawn with the following reason:
Bonds Were Prefunded/Called/Redeemed/Exchanged/Cancelled/Repaid
Early
KEY RATING DRIVERS
Merger Provides Additional Scale: Fitch believes the December 2019
merger between J.D. Power and Autodata significantly enhances each
company's scale and provides a strong platform of data/analytics
capabilities within the automotive segment. The combined entity,
including the December 2019 acquisition of Trilogy Automotive, will
generate annual revenue near $500 million (a more than 1.5x and
3.0x increase from J.D. Power's and Autodata's respective
run-rates) and EBITDA of more than $220 million including
synergies. Fitch believes the company's solutions and data sets are
complementary and could help strengthen the overall competitive
position. Also, the combination significantly improves Autodata's
customer concentration risk as the top ten customers will now
comprise only 49% of revenue versus more than 70% pre-deal.
High Leverage Post Deal: High leverage is a limiting factor for the
IDR. Fitch estimates gross leverage at December 2019 (pro forma for
the J.D. Power merger and Trilogy acquisition) to be 8.4x and will
remain at least in the 6.0x-7.0x range over the next few years.
This leverage is high for the rating category but supported by a
highly recurring business model that provides significant cash flow
predictability. Fitch believes leverage will remain high as the
company seeks additional M&A and/or redistributes cash to
shareholders via dividends. Further, the credit agreement provides
significant flexibility to increase leverage, as the only
maintenance covenant is for First Lien Net Leverage to remain below
8.25x when the revolver is 35%+ drawn.
Critical, Industry Embedded Data Sets: Fitch believes both
Autodata's and J.D. Power's data sets are critical to their
customers' workflows and are difficult to replicate. This is likely
evidenced by more than 75% of its customers having tenure of 10+
years and customer revenue retention of 109%. The company's
products are highly embedded in the decision making processes with
multiple customer touch points across the value chain. J.D. Power's
offerings outside of auto to industries such as financial services
and utilities are less embedded in the industry but provide some
diversification.
Highly Recurring Business Model: Subscription-based revenue
comprises nearly 90% of pro forma combined revenue as of June 2019,
which Fitch believes provides significant visibility and stability
to FCF generation. A meaningful portion of customers operate under
annual or multi-year contracts and net revenue retention has been
high historically and more than 100%. The company also has limited
working capital and capex requirements, which translates into
strong FCF conversion metrics that Fitch projects will be 30%-40%
of EBITDA in the coming years.
Concentrated Exposure to Cyclical Market: The company is heavily
reliant on the health of the auto industry with nearly 85% of
revenue from auto related companies including OEMs (Ford, GM,
Toyota and others), dealers, and auto suppliers. During the
2008-2009 recession, J.D. Power experienced a roughly 13% revenue
decline and adjusted EBITDA margin contracted to 10% from 12% while
legacy Autodata sales fell in the high-single digit percentage
range. Notably, this was much better than the 50%+ U.S. SAAR
(seasonally-adjusted annual rate) decline from its 2005 peak to
early 2009 trough. The combined Autodata now has greater exposure
to contractual, data and analytics businesses which should mitigate
some industry cyclicality, but Fitch believes the business would
still be hurt in an economic slowdown.
M&A Remains a Focus: Fitch expects Autodata could prioritize the
use of cash flows to grow its services in the coming years via
additional acquisitions, with a particular focus expected in
further enhancing its higher margin data and analytics
capabilities. This was evident in the December 2019 acquisition of
Trilogy Automotive for a purchase price of $70 million (7x LTM
EBITDA pre-synergies). PE owner Thoma Bravo's May 2019 purchase of
Autodata, December 2019 purchase of J.D. Power and Trilogy are
clear reflections of its willingness to aggressively use its
balance sheet to consolidate industry players, in its view. Fitch
has not explicitly modelled incremental M&A into its ratings case
although acknowledge strong CF generation could support inorganic
investment spending.
DERIVATION SUMMARY
The combined J.D. Power/Autodata has many positive attributes that
influence the overall IDR. The company is a leading provider of
data and analytics solutions to the automotive industry, with
strong market share and high brand awareness among industry
participants. Further, the company, on a pro forma combined basis,
has a growing top line that is largely comprised of recurring
revenues, strong EBITDA margins in the mid-40% range and a solid
FCF generation profile. Each of these attributes positions it well
versus other data/analytics companies Fitch reviews. However, these
factors are partially offset by lack of end market diversification
(majority of business exposed to auto), cyclicality inherent in the
auto industry, customer concentration (top 10 customers comprise
nearly 50% of revenue) and high leverage. Pro forma leverage,
excluding synergies, of more than 8x is particularly high relative
to other business services companies Fitch rates, partially owed to
the company's acquisition by private equity sponsor, Thoma Bravo.
High leverage and lack of diversification are key limiting factors
that Fitch believes positions the IDR in the 'B' rating category.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Revenue - mid-single-digit percentage growth over the ratings
horizon, driven by faster growth in the Data and Analytics
segment;
-- EBITDA - margins improve from 38% pro forma combined in 2018
to mid-40% over the ratings horizon. This assumes cost
synergies and faster growth in the higher margin data and
analytics segment;
-- Cash Flow and Debt - early uses of CF go toward modest debt
reduction before the PE owner takes out capital via an
assumed dividend distribution.
-- M&A - Fitch has not forecast incremental acquisitions, but
acknowledges the company may seek additional deals adjacent
to its business, particularly ones that deepen its data and
analytics capabilities.
RECOVERY ANALYSIS:
For entities rated 'B+' and below - where default is closer and
recovery prospects are more meaningful to investors - Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from 'RR1' to
'RR6'), and is notched from the Issuer Default Rating accordingly.
In this analysis, there are three steps: (i) estimating the
distressed enterprise value (EV); (ii) estimating creditor claims;
and (iii) distribution of value.
Fitch assumed Autodata would emerge from a default scenario under
the going concern (GC) approach versus liquidation. Key assumptions
used in the recovery analysis are as follows:
-- GC EBITDA - Fitch assumes a $175 million GC EBITDA, including
synergies from the JD Power acquisition combined with
meaningful revenue loss from its largest customers. A
meaningful customer loss, while unlikely, is always a risk
factor for a business with meaningful concentration.
-- EV Multiple - Fitch assumes a 8.0x multiple, in-line with
recovery assumptions used for other highly recurring
companies rated by Fitch including software, business
services and payments companies. This multiple is further
validated based upon multiples of: comparable public
companies, historic industry M&A and comparable
reorganization multiples Fitch has seen historically in the
TMT sector.
-- Other assumptions - Fully drawn revolver and concession
payments for second lien debt holders.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- It is unlikely Autodata would be upgraded in the near term.
However, Fitch-defined adjusted gross leverage, total
adjusted debt/operating EBITDAR, expected to be sustained
below 6.0x and/or interest coverage approaching 2.5x or
higher over a multi-year horizon could lead us to reassess
the rating.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Adjusted gross leverage expected to remain above 7.5x for a
sustained period.
-- Adverse operating performance, material changes to industry
dynamics and/or the loss of a key customer that meaningfully
alters the overall operating profile.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: Project Boost has sufficient liquidity to operate
its business and execute on its growth strategy in the coming
years, although the pace of M&A will likely be a determining factor
in the level of liquidity over time. Pro forma for the December
2019 J.D. Power merger and Trilogy acquisition, the company had
approximately $59 million of cash on its balance sheet.
Additionally, liquidity is supported by: (i) an $80 million
revolver that will be unused following the incremental TL financing
for Trilogy, and (ii) strong FCF generation that management
forecasts will approach $400 million on a levered cumulative basis
by 2022.
Debt Profile: Pro forma for the $75 million of incremental term
loans to support the recent Trilogy acquisition, the company's debt
structure consists of a mix of first lien secured term loans ($1.23
billion, or 75% of debt) and second lien term loans ($415 million,
or 25% of debt). The company also has an $80 million secured
revolver in place that is projected to be undrawn upon close. All
of its debt is floating rate and matures in 2024-2027.
RELIABLE ASSOCIATES: Court Confirms Plan of Reorganization
----------------------------------------------------------
On Feb. 10, 2020, the U.S. Bankruptcy Court for the Middle District
of Florida, Tampa Division, held a hearing to consider final
approval of Disclosure Statement and confirmation of the Plan of
Reorganization of Debtor Reliable Associates, Inc., d/b/a MTM
Staffing.
On Feb. 21, 2020, Judge Catherine Peek McEwen ordered that:
* The Disclosure Statement is approved as containing adequate
information.
* The Plan is confirmed.
* The Plan's assumption of identified unexpired leases and
executory contracts pursuant is approved.
* The Debtor is authorized to execute, deliver, file, or record
any documents, contracts, instruments, and other agreements and
take all other actions as may be necessary to implement and
effectuate the Plan.
* The amount of the pro-rata distributions in the Payment
Schedule will be deemed finalized and binding as to the creditors
30 days after the entry of the instant order, absent any pending
objections.
According to the Payment Schedule for Unsecured Claims in Class 1,
the Internal Revenue Service, which has a claim amount of $7,438,
will receive a total repayment of $3,719, in the form of annual
payments of $743.76. Bank of America, with a claim amount of
$13,295, will receive a payment of $6,647, in the form of annual
payments of $1,329.
Class 1 voted to accept the Plan.
A status conference will be held in Courtroom 8B, Sam M. Gibbons
United States Courthouse, 801 N. Florida Avenue, Tampa, FL 33602 on
March 30, 2020, at 10:00 a. m. before the Honorable Catherine
PeekMcEwen, United States Bankruptcy Judge.
A full-text copy of the order dated Feb. 21, 2020, is available at
https://tinyurl.com/qt76qez from PacerMonitor at no charge.
About Reliable Associates
Reliable Associates, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-06476) on July 10,
2019. At the time of the filing, the Debtor had estimated assets
of less than $50,000 and liabilities of less than $500,000. The
case is assigned to Judge Catherine Peek Mcewen. The Debtor is
represented by David W. Steen, P.A.
REMNANT OIL: Lexon Insurance Says Bonds Can't Be Transferred
------------------------------------------------------------
Lexon Insurance Co. submitted an Objection and Reservation of
Rights with respect to the Disclosure Statement for Plan of
Reorganization of Debtors Remnant Oil Company, LLC and Remnant Oil
Operating, LLC.
Lexon shows to the Court as follows:
* The lack of the Purchase and Sale Agreement related to the
Circle Ridge Property, and the lack of identification of any
potential purchasers for the Remaining Assets, does not permit the
creditors, and in particular, Lexon, to make an informed
determination on the sale of the Debtors' aforementioned assets.
* The Disclosure Statement fails to provide any discussion of
the environmental liabilities in relation to the sale of the Circle
Ridge Property or the abandonment of the Remaining Assets to the
Liquidating Trustee.
* The Disclosure Statement and Plan fail to discuss the
requirement that Circle Ridge, the Reorganized Debtors, and any
potential purchaser of the Remaining Assets must demonstrate an
ability to obtain government, licensing or regulatory approval, as
well as an ability to replace the Lexon Bonds.
* As the Lexon Bonds are specific to the individual Debtor named
as principal on each bond and are financial accommodations, they
cannot be transferred to the extent any such transfer may be
contemplated under the Disclosure Statement and Plan.
* Lexon's Bonds cannot simply be transferred. A transfer to any
entity, whether it be the Reorganized Debtors, Circle Ridge, or
prospective purchasers of the Remaining Assets from the Liquidating
Trustee, does not create any rights to acquire or assume any of
Lexon's Bonds without the consent of Lexon.
A full-text copy of Lexon's objection to disclosure statement dated
February 21, 2020, is available at https://tinyurl.com/v9254oj from
PacerMonitor at no charge.
Counsel for Lexon Insurance:
W. Steven Bryant
LOCKE LORD LLP
600 Congress Ave., Suite 2200
Austin, Texas 78701
Tel: (512) 305-4726
Fax: (512) 305 4800
E-mail: sbryant@lockelord.com
- and -
Philip G. Eisenberg
LOCKE LORD LLP
600 Travis Street, Suite 2800
Houston, Texas 77002
Tel: (713) 226-1304
Fax: (713) 229-2536
E-mail: peisenberg@lockelord.com
- and -
Lee E. Woodard
HARRIS BEACH PLLC
333 W. Washington Street, Ste. 200
Syracuse, New York 13202
Tel: (315) 423-7100
Fax: (315) 422-9331
E-mail: LWoodard@HarrisBeach.com
About Remnant Oil Company
Remnant Oil Company, LLC -- https://www.remnantoil.com/ -- was
formed specifically to acquire and exploit conventional oil and gas
assets within the Permian Basin. Remnant Oil Operating currently
owns and operates 480 wells and a leasehold portfolio of 47,162
gross acres in Eddy, Lea, and Chaves counties, New Mexico. Remnant
subdivides this leasehold into two groups of properties: the
Caprock properties and the non-Caprock properties.
Remnant Oil Company and Remnant Oil Operating filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Tex. Lead Case No. 19-70106) on July 16, 2019. The
petitions were signed by CEO E. Will Gray II.
At the time of the filing, Remnant Oil Company was estimated to
have $10 million to $50 million in both assets and liabilities
while Remnant Oil Operating was estimated to have $100,000 to
$500,000 in assets and $1 million to $10 million in liabilities.
Bernard R. Given, II, Esq., at Loeb & Loeb LLP, serves as the
Debtors' bankruptcy bankruptcy counsel; and Modrall Sperling, LLP,
is special counsel.
RICKY TUCKER: $475K Sale of Enigma Property to Pecan Approved
-------------------------------------------------------------
Judge John T. Laney of the U.S. Bankruptcy Court for the Middle
District of Georgia authorized Ricky Clay Tucker and Ricky Wayne
Tucker to sell approximately 58.94 acres of real property located
on Whitley Tucker Road, Enigma, Berrien County, Georgia, together
with all equipment and fixtures located thereon and used in
connection with poultry production, including four poultry houses
and associated equipment, to Pecan Hill Land & Cattle, LLC for a
gross purchase price of $475,000, as set forth in their Contract.
Except for the Summit Security interes , the sale will free and
clear of all liens, claims, and interests, which will attach to the
proceeds of the sale.
From the proceeds of the sale authorized, the Debtor will (a) pay
any ad valorem taxes assessed against the Property; and (b) pay to
Respondent SummitBridge National Investments VI, LLC the remaining
net remaining proceeds, as will be more definitively set out on the
final closing statement.
The Order will be effective upon its entry. The Court waived the
14-day stay in Bankruptcy Rule 6004(h).
Within seven business days of the entry of the Order, the Debtor
will serve a copy of the Order upon (a) the Office of the United
States Trustee; (b) the named Respondents; (c) other parties who
have requested notice or copies of such matters in the Bankruptcy
Case; and (d) all other creditors and parties-in-interest in the
Bankruptcy Case.
A copy of the Contract is available at https://tinyurl.com/wnmmpt5
from PacerMonitor.com free of charge.
Ricky Wayne Tucker and Ricky Clay Tucker sought Chapter 11
protection (Bankr. M.D. Ga. Case No. 18-70448) on April 19, 2018.
The Debtor tapped Christopher W. Terry, Esq., at Stone and Baxter,
LLP as counsel.
RIDGELINE AT BLOWING: Hires Essex Richards as Bankruptcy Counsel
----------------------------------------------------------------
The Ridgeline at Blowing Rock, Inc., seeks authority from the U.S.
Bankruptcy Court for the Western District of North Carolina to
employ Essex Richards, P.A., as bankruptcy counsel to the Debtor.
Ridgeline at Blowing requires Essex Richards to:
a. provide legal advice concerning the responsibilities as a
Chapter 11 debtor-in-possession and the continued
management of its business;
b. negotiate, prepare, and pursue confirmation of a Chapter 11
plan and approval of disclosure statement, and all related
reorganization agreements and documents;
c. prepare all necessary motions, applications, reports,
orders, objections and the like associated with prosecuting
the Chapter 11 case;
d. prepare and the appearance in Bankruptcy Court to protect
the Debtor's best interests;
e. perform all other legal services for the Debtor which may
become necessary in the Chapter 11 case; and
f. prosecute and defend the Debtor in all adversary
proceedings related to the base case.
Essex Richards will be paid at these hourly rates:
John C. Woodman, Esq. $300
Paralegals $175
Staffs $65
Essex Richards will be paid a retainer in the amount of $10,000.
Essex Richards will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John C. Woodman, partner of Essex Richards, P.A., assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Essex Richards can be reached at:
John C. Woodman, Esq.
ESSEX RICHARDS, P.A.
1701 South Bldv.
Charlotte, NC 28203
Tel: (704) 377-4300
About The Ridgeline at Blowing Rock
The Ridgeline at Blowing Rock, Inc., filed a Chapter 11 bankruptcy
petition (Bankr. W.D.N.C. Case No. 20-50037) on Jan. 29, 2020,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by John C. Woodman, Esq., at Essex Richards,
P.A.
ROOFTOP GROUP: Committee Fine-Tunes Proposed Plan
-------------------------------------------------
The Official Committee of Unsecured Creditors filed a First Amended
Plan of Reorganization/Liquidation and a Disclosure Statement for
Rooftop Group International Pte. Ltd. on Feb. 25, 2020.
The Committee seeks to consummate the Restructuring on the
Effective Date of the Plan. In the event all conditions precedent
to the Effective Date for the Plan necessary to consummate the
Restructuring are not timely satisfied or waived by the Committee,
the Committee shall then seek to consummate the Liquidation on the
Effective Date of the Plan. The Committee believes that the value
of Rooftop Group's Assets can be best maximized through a
Restructuring whereby Rooftop Group will be reorganized as a going
concern.
If a Restructuring cannot be consummated, then alternatively the
Committee believes the value of Rooftop Group's Assets can be best
maximized through an orderly liquidation as opposed to an immediate
sale of the Assets by a Chapter 7 Trustee.
Under either a Restructuring or a Liquidation, a Litigation Trust
shall be established and a Litigation Trustee appointed. Subject
to Bankruptcy Court approval, the Litigation Trustee shall be KRyS
Global USA, Inc., and any successor trustee appointed pursuant to
the Litigation Trust Agreement. Pursuant to Section 5.3 of the
Plan, the Litigation Trustee shall, among other things, commence
and pursue Causes of Action. Under either a Restructuring or a
Liquidation, pursuant to Section 8.7 of the Plan, the Litigation
Trustee will, among other things, prosecute objections to Claims
and compromise or settle any Claims (disputed or otherwise). Under
a Restructuring, the Post-Confirmation Debtor shall, among other
things, (i) implement the Restructuring Transactions as
described in Section 6.2 of the Plan; (ii) create a
holding company (“Rooftop Holding Company”) as its
immediate parent; (iii) enter into New Secured Financing, as
necessary; and Rooftop Holding Company shall issue or reserve for
issuance New Common Stock for distribution in accordance with the
terms of the Plan. Under a Liquidation, the Plan Administrator
shall, among other things, supervise the orderly liquidation of
Rooftop Group’s Assets. Subject to Bankruptcy Court approval,
the Plan Administrator shall be KRyS Global USA, Inc., and
any successor plan administrator duly appointed. B.
Under the Plan, secured creditors will receive, at the election of
the Committee, (i) deferred cash payments having a present value
equal to the amount of its Allowed Class 2 Claim and retention of
the liens securing such Claim to the extent of the allowed amount
of such Claim; (ii) the indubitable equivalent of such Allowed
Class 2 Claim; (iii) the distribution of the collateral securing
such Allowed Class 2 Claim; or (iv) other mutually agreeable
treatment on account of such Claim.
On the Effective Date, the Debtor will consummate either a
Restructuring or a Liquidation in accordance with the terms of the
Plan. If all of the conditions enumerated in Sections 10.2 and 10.3
of the Plan are timely satisfied or waived, then on the Effective
Date the Debtor shall consummate the Restructuring, including all
the terms of Article VI of the Plan. If only the conditions
enumerated in Section 10.2 of the Plan are timely satisfied or duly
waived, then on the Effective Date the Debtor shall consummate the
Liquidation, including all the terms of Article VII of the Plan.
A full-text copy of the first amended disclosure and plan dated
February 25, 2020, is available at https://tinyurl.com/tl8gsea from
PacerMonitor at no charge.
Counsel for the Creditors' Committee:
Judith W. Ross
Rachael L. Smiley
ROSS & SMITH, PC
700 North Pearl Street, Suite 1610
Dallas, Texas 75201
Telephone: 214-377-7879
Facsimile: 214-377-9409
E-mail: judith.ross@judithwross.com
rachael.smiley@judithwross.com
- and -
James E. Van Horn
BARNES & THORNBURG LLP
1717 Pennsylvania Avenue NW, Suite 500
Washington, D.C. 20006-4623
Telephone: 202-371-6351
Facsimile: 202-289-1330
E-mail: jvanhorn@btlaw.com
About Rooftop Group Int'l
Rooftop Group International Pte. Ltd. is a private limited company
organized under the laws of Singapore. It was formed to hold
certain intellectual property assets, including registered
trademarks and patents, relating to the manufacture and sale of
hobby-grade drones under the name Propel RC(R). At present, it has
no operations and has no employees, and its remaining assets are
composed almost entirely of certain patents, trademarks, and other
intellectual property. In addition, it licenses certain of its
trademarks to Amax Industrial Group China Co, Ltd., under a
nonexclusive license agreement.
Certain of Rooftop Group's prepetition secured creditors commenced
collection actions against the Debtor in Singapore courts
pertaining to prepetition debt obligations under which the Debtor
was either a primary obligor or guarantor. The Debtor's
intellectual property assets are not encumbered by any lien or
security interest; however, a portion of the outstanding equity in
the Debtor is pledged to secure repayment of certain of the
Debtor's prepetition obligations and certain prepetition creditors
assert liens on certain asset classes other than intellectual
property.
To preserve the value of its intellectual property assets for the
benefit of all its unsecured creditors, on April 30, 2019, the
Debtor filed a voluntary petition for relief under chapter 11 of
the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-31443). In the
petition signed by Darren Matloff, director, the Debtor was
estimated to have $1 million to $10 million in assets and $50
million to $100 million in liabilities.
The Hon. Harlin DeWayne Hale oversees the case.
The Debtor is represented by Reed Smith LLP.
The Office of the U.S. Trustee on June 13, 2019, appointed three
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 case. The Committee tapped Barnes & Thornburg
LLP as counsel; and KRyS Global USA, Inc. as financial advisor for
the Committee.
RWS CHARTER: Gets Interim Approval to Hire Legal Counsel
--------------------------------------------------------
RWS Charter, LLC received interim approval from the U.S. Bankruptcy
Court for the Northern District of Alabama to employ Sparkman,
Shepard & Morris, P.C. to handle its Chapter 11 case.
As the Debtor's legal counsel, Sparkman Shepard will:
(a) assist the Debtor in drafting a plan of reorganization;
(b) file motions and adversary proceeding complaints;
(c) represent the Debtor's bankruptcy estate in any resulting
trial and the various hearings through confirmation; and
(d) prepare the necessary orders and documents.
The firm will be paid based on these hourly rates of professionals
responsible under the engagement:
Tazewell T. Shepard III $375
Kevin M. Morris $350
Tazewell T. Shepard IV $325
Tazewell Shepard III, Esq., an attorney at Sparkman, represents
that he and his firm have no connection, financial or otherwise,
with the Debtor, the Debtor's creditors or any other
party-in-interest, and that he knows of no conflict or potential
conflict of interest with his proposed appointment as attorney for
the Debtor.
The firm may be reached through:
Tazewell T. Shepard III
Sparkman, Shepard & Morris, P.C.
P.O. Box 19045
Huntsville, AL 35804
Telephone: (256) 512-9924
Fax: (256) 512-9837
Email: taze@ssmattorneys.com
About RWS Charter LLC
RWS Charter LLC, a privately held company in the scheduled air
transportation business, filed a Chapter 11 petition (Bankr. N.D.
Ala. Case No. 20-80470) on Feb. 13, 2020.
In the petition signed by Rex Rankin, owner, the Debtor estimated
between $1 million and $10 million in both assets and liabilities.
The Debtor tapped Sparkman, Shepard & Morris, P.C. as its legal
counsel, and Richardson Maples, PC, as its special counsel.
SCULPT MEDICAL: Taps Frost Dana Newman as Accountant
----------------------------------------------------
Sculpt Medical, LLC received approval from the U.S. Bankruptcy
Court for the District of Colorado to employ Frost Dana Newman, LLP
to provide accounting services.
Frost Dana will be paid a flat fee of $1,500 for its services. The
retainer fee is $1,500.
Frost Dana neither holds nor represents interests materially
adverse to the Debtor's bankruptcy estate, according to court
filings.
The firm can be reached through:
Jared Frost, CPA
Frost Dana Newman CPA
8906 Spanish Ridge Ave., Suite 100
Las Vegas, NV 89148
Phone: 702-878-4809
About Sculpt Medical LLC
Sculpt Medical, LLC, a company that provides laser treatments,
cosmetic care and body contouring services, sought Chapter 11
protection (Bankr. D. Colo. Case No. 19-19577) on Nov. 5, 2019. In
the petition signed by Robert Kilpatrick, member, the Debtor
disclosed total assets of $145,233 and total liabilities of
$1,821,114. Judge Kimberley H. Tyson oversees the case. Kutner
Brinen, P.C., led by Jenny M.F. Fujii, Esq., is the Debtor's legal
counsel.
SMWS GROUP: Trustee Proposes Auction Sale of Germantown Property
----------------------------------------------------------------
Gary Rosen, the Chapter 11 trustee for SMWS Group, LLC, asks U.S.
Bankruptcy Court for the District of Maryland to authorize the
auction sale of the improved real property located at 14121 and
14125 Seneca Road, Germantown, Maryland.
Among the assets the Debtors listed in their bankruptcy petition is
the Property.
The Trustee asks authority to sell the Property at auction, and to
apply the proceeds of the sale toward the satisfaction of the
claims filed in the bankruptcy.
Based upon information provided by Eileen Zilvetti, the Mortgage
Holder, has a balance due at settlement on the first trust of
approximately $450,000. Zilvetti's Claim will be paid at
settlement.
A title search has confirmed the deed of trust. The Trustee's
title search has confirmed that there are no other liens against
the Property. Pursuant to the provisions of Bankruptcy Rules 6004
and 2002, a copy of the Notice of Auction Sale and Application to
Compensate Auctioneer has been forwarded to all parties in interest
as appears by reference to that Certificate of Service filed
contemporaneously with the Notice.
The Trustee asks authorization to pay the auctioneer Tranzon Fox
according the Order Granting Application to Employ Auctioneer
entered Dec. 27, 2019.
About SMWS Group
SMWS Group LLC is a lessor of real estate based in Germantown,
Maryland.
The Company previously sought bankruptcy protection on Dec. 13,
2018 (Bankr. D. Md. Case No. 18-26379).
The company again filed for chapter 11 bankruptcy protection
(Bankr. D. Md. Case No. 19-12941) on March 6, 2019, estimating
assets of $1 million to $10 million and estimated liabilities at
$500,000 to $1 million. The petition was signed by Asia Shah,
managing member.
Gary A. Rosen was appointed as Chapter 11 Trustee on Oct. 16, 2019.
SN TEAM: Seeks to Hire Andersen Law as Legal Counsel
----------------------------------------------------
SN Team LLC seeks permission from the U.S. Bankruptcy Court for the
District of Nevada to employ Andersen Law Firm, Ltd., as its legal
counsel.
Andersen Law will provide these legal services:
a) advise the Debtor of its powers and duties in the continued
management and operation of its business and property;
b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and advise the Debtor on
the conduct of its Chapter 11 case, including the legal and
administrative requirements of operating in Chapter 11;
c) take all necessary action to protect and preserve the
bankruptcy 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;
d) prepare legal papers;
e) negotiate and prepare on the Debtor's behalf a plan of
reorganization, disclosure statement, and all related agreements
and documents and take any necessary action on behalf of the Debtor
to obtain confirmation of the plan;
f) advise the Debtor in connection with any sale of its assets;
g) appear before the bankruptcy court, any appellate courts and
the U.S. trustee; and
h) provide all other necessary legal services in connection with
the Debtor's case.
The firm will be paid based on the hourly rates of its
professionals, which are subject to annual adjustment:
Ryan A. Andersen $425
Ani Biesiada $320
Paralegals $145
Andersen Law will also be reimbursed for out-of-pocket expenses.
Before the petition date, the Debtor paid the firm a retainer of
$10,000 of which $4,415.50 remains and is held in the firm's trust
account.
The Debtor disclosed that Andersen Law is a "disinterested person"
as such term is defined by Section 101(14) of the Bankruptcy Code.
The firm may be reached through:
Ryan A. Andersen, Esq.
Ani Biesiada, Esq.
101 Convention Center, Drive Suite 600
Las Vegas, Nevada 89109
About SN Team LLC
SN Team LLC is a Nevada limited liability company with principal
place of business in Clark County, Las Vegas.
SN Team filed a Chapter 11 petition (Bankr. D. Nev. Case No.
20-10812) on Feb. 13, 2020. On the petition date, the Debtor
estimated between $500,000 and $1,000,000 in assets, and between
$100,000 and $500,000 in liabilities. The petition was signed by
Wendy J. Merrill, managing member.
Andersen Law Firm, Ltd., represents the Debtor as counsel. Judge
August B. Landis oversees the case.
SPECIALTY FOODS OF AL: Allowed to Use ServisFirst Cash Collateral
-----------------------------------------------------------------
Judge D. Sims Crawford of the U.S. Bankruptcy Court for the
Northern District of Alabama inked his approval to a Consent Order
authorizing Specialty Foods of Alabama, Inc. to use cash collateral
for up to 90 days..
At the Feb. 26 Final Hearing, counsel for the Debtor and
ServisFirst Bank jointly informed the Court that they had reached
an agreement to resolve the issues raised in the Cash Collateral
Motion.
Based on the agreement of the parties:
1. The Objection of ServisFirst Bank is moot. However,
ServisFirst Bank's rights to object to the use of its cash
collateral are preserved and may be asserted again in the event
that ServisFirst discovers that the Debtor has provided materially
false or misleading information or if the Debtor violates any of
the provisions of the Order.
2. The Debtor is conditionally authorized to use any cash on
hand and its revenues which constitute cash collateral to pay
postpetition payroll, ordinary course expenses and critical vendor
balances, provided, however, that the Debtor's proposed monthly
budget as modified herein, which is approved, is complied with.
Further, the Debtor is authorized to resume and continue to sell
its inventory in the ordinary course of Debtor's business.
3. By agreement of the parties, the Debtor's budget item for
legal fees, which include attorney's fees to C. Taylor Crockett,
P.C., is increased to $6,000 per month and the Debtor will add a
budget item delineated Quarterly Fee Escrow in the amount of
$2,000.
4. ServisFirst Bank is granted replacement liens on the
Debtor's post-petition accounts, inventory, equipment, and the
proceeds thereof, with superpriority as allowed under the
Bankruptcy Code. The Replacement Liens will only secure the
Debtor's outstanding obligations to ServisFirst to the extent of
the amount by which the Debtor’s use of the ServisFirst Cash
Collateral causes a diminution in the value thereof. The Debtor is
authorized and directed to make monthly adequate protection
payments due by the 15th of each month beginning in the month of
March 2020 to ServisFirst in the amounts of $22,000 and $6,211,
respectively, representing the monthly mortgage payment obligation
of Dorothy Ann Beasley-Schniper to ServisFirst on the commercial
building located at 501 32nd Street South, Birmingham, Alabama
35233.
5. The Debtor will provide monthly reports to ServisFirst
Bank, to include copies of its Chapter 11 Operating Reports,
updated accounts receivable agings, customer transaction reports,
inventory valuations, and bank statements.
6. The Debtor has acknowledged that ServisFirst Bank has a
valid, first priority security interest in certain property of the
Debtor's estate, including, the Debtor's accounts, inventory, cash,
and cash equivalents. Additionally, the Debtor and co-debtor,
Dorothy Ann Beasley-Schniper (who is a debtor in Case No.
20-00074-DSC11), have acknowledged that ServisFirst Bank has valid
first mortgage liens on certain real estate owned by Ms. Schniper's
estate, including the commercial building occupied by the Debtor at
501 32nd Street South, Birmingham, Alabama 35233, the residence at
1301 South 31st Street, Birmingham, Alabama 35205, and properties
at 3233 and 3291 Flat Springs Rd, Elk Park, NC 28622. As of the
Petition Date, the outstanding indebtedness due and owing by the
Debtor and the co-debtor, Ms. Schniper, to ServisFirst Bank totaled
approximately $5,578,358.30.
7. If the Debtor does not obtain and produce a signed,
written contract (with all due diligence having been completed and
subject to no contingencies other than obtaining financing) for the
sale of the Debtor's assets in an amount sufficient to satisfy its
total indebtedness to ServisFirst Bank (after payment of all
expenses associated with the sale) on or before April 27, 2020,
then its authorization to use cash collateral will automatically
terminate as of April 27.
8. If the Debtor does not obtain the Court's approval of such
proposed sale and close such sale on or before May 26, 2020, then
its authorization to use cash collateral as provided in the Order
will automatically terminate as of said date, and the automatic
stay will be lifted, modified and abrogated, without further order
of the Court in this case to allow ServisFirst Bank to recover,
foreclose, sell, and/or otherwise liquidate its collateral and to
exercise all rights and remedies available under the Loan Documents
and applicable non-bankruptcy law.
About Specialty Foods
Specialty Foods of Alabama, Inc., sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No. 20-00279) on
January 22, 2020. The Petition was signed by Dorothy Ann
Beasley-Schniper, president/owner. The Debtor is represented by
Gina H. McDonald & Associates, LLC. At the time of filing, the
Debtor had estimated assets and liabilities of less than $50,000
each.
STAK DESIGN: Seeks to Hire McGuire Craddock as Attorney
-------------------------------------------------------
Stak Design, Inc., seeks authority from the U.S. Bankruptcy Court
for the Northern District of Texas to employ McGuire Craddock &
Strother, P.C., as attorney to the Debtor.
Stak Design requires McGuire Craddock to:
a. render legal advice to the Debtor with respect to its
duties herein;
b. appear in Court and protecting the interests of the Debtor;
c. prepare the Debtor's schedules, negotiating with the
Debtor's creditors and parties in interest;
d. formulate a plan of reorganization;
e. draft and respond to pleadings; and
f. perform such other legal services as may be necessary and
appropriate in the Debtor's case.
McGuire Craddock will be paid at these hourly rates:
Partners $390 to $650
Associates $240
Prior to filing the case, the Firm was paid $15,000 for prepetition
work preparing the bankruptcy case for filing and received the
$1,717 amount needed to pay the filing fee.
McGuire Craddock will also be reimbursed for reasonable
out-of-pocket expenses incurred.
J. Mark Chevallier, partner of McGuire Craddock & Strother, P.C.,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
McGuire Craddock can be reached at:
J. Mark Chevallier, Esq.
MCGUIRE CRADDOCK & STROTHER, P.C.
2501 N. Harwood, 1800
Dallas, TX 75201
Tel: (214) 954-6800
E-mail: mchevallier@mcslaw.com
About Stak Design
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.
STAR CHAIN: Diamond Buying All Checkers Assets in Clayton for $50K
------------------------------------------------------------------
US Star 30, LLC, an affiliate of Star Chain, Inc., asks the U.S.
Bankruptcy Court for the Northern District of Georgia to authorize
private sale of substantially all of the assets associated with the
Checkers Drive-in Restaurant, Inc. franchise located at 12 Bo James
St., Clayton, Georgia, associated with Star 30, to Diamond Jim's,
LLC for $50,000.
The Debtor operates the Clayton Checkers. It is managed and
operated by jointly administered co-Debtor Star Chain with various
other Checkers locations.
Pursuant to the Asset Purchase Agreement, the Debtor is selling
substantially all of the assets associated with the store
associated with it, and assuming and assigning the associated
franchise agreement with Checkers. In exchange, Diamond is paying
the Debtor $50,000.
Given that the Debtor is an underperforming store, the Debtor
believes that its decision to enter into the Asset Purchase
Agreement there is a sound business justification for granting the
Motion would be in best interests of creditors and the Debtor's
estate.
Upon information and belief, Wallis State Bank has a first priority
security interest in the assets of the Debtor, including the FF&E.
Wallis State Bank, to the Debtor's knowledge, does not have a lien
on the Lease or the Franchise Agreement. Dallas Growth Capital and
Funding, LLC, doing business as Sprout Funding, holds a second
priority lien on the Debtor's FF&E.
General Order No. 26-2019 ("Court Procedures Order") promulgates
certain procedures for use in complex chapter 11 cases the Court
Procedures Order requires that sale motions must highlight the
following provisions, identify the location of any such provision
in the proposed order, and justify such inclusion:
a. Sale to Insider - The Purchaser is not an insider of the
Debtor. The Purchaser's principal and the Debtor's Landlord hold
common ownership.
b. Agreements with Management - Although the Purchaser is
interested in hiring store-level employees (it is under no legal
obligation to do so however), it does not intend to have any
agreements with the Debtor's management or their key employees.
c. Releases - The Debtor, the Purchaser, and Star Chain are
entering into mutual releases.
d. Private Sale/No Competitive Bidding - The Debtor
contemplates a private sale pursuant to Rule 6004(e) of the
Bankruptcy Rules, but have not agreed to limit its solicitations of
competitive offers or otherwise limit the shopping of the assets to
be sold. As a practical matter, given the time limitations and the
potential of Debtor running out of funds within 4-6 weeks, the
Debtor does not intend to pursue other bidders.
e. Closing and Other Deadlines - There is one right to
terminate deadline in section 9 of Asset Purchase Agreement. The
Right to Terminate Deadlines include the following: (a) April 1,
2020: closing deadline; and (b) within three days of the entry of
the Sale Hearing, the Sale Order must be entered.
f. Good Faith Deposit. $5,000, which is currently being held
in the Purchaser's counsel's escrow account.
g. Interim Arrangements with Proposed Buyer - No interim
arrangements prior to the closing are contemplated.
Pursuant to sections 105, 363, and 365 of the Bankruptcy Code and
Rules 2002, 6004, 6006, 9006, and 9008 of the Bankruptcy Rules, for
entry of orders, which shall, among other things, (a) approve the
sale of substantially all of the Debtor's assets free and clear of
Liens, (b) authorize the assumption and assignment or rejection of
certain executory contracts, and (c) direct that the sale proceeds
be escrowed.
The Debtor has determined that a sale of the Purchased Assets
pursuant to the Asset Purchase Agreement will be the most effective
way to maximize the value of its bankruptcy estate for the benefit
of its creditors in view of the limitation in time authoring to
sell the Purchase Asset. Indeed, absent approval of a prompt sale
of the Acquired Assets to the Purchaser, the Debtor may not be able
to continue to pay rent or maintain payroll and could face store
closure. As such, the Debtor believes that it has demonstrated a
sound business justification for the relief requested in the
Motion.
The Debtor asks the Court to authorize it to assume and assign
executory contracts and unexpired leases as set forth in the Asset
Purchase Agreement.
Wallis State Bank has a lien on FF&E that is worth less than the
Purchase Price. The Debtor asserts that Wallis has no lien in the
real value of the business, which is the Franchise Agreement and
the Lease. As such ,the purchase price exceeds the "value" of the
liens on the assets. Moreover, Sprout's lien has no equity to
attach to and is completely unsecured. Regardless, it is the
Debtor's understanding that Wallis Bank, the Committee, Checkers,
and the Landlord consent to the Sale. The sale will be free and
clear of all liens, claims, interests, and encumbrances, with any
such liens, claims, interests, and encumbrances attaching to the
net proceeds of the sale.
The Debtor asks the Court to approve the Asset Purchase Agreement
as a private sale pursuant to Rule 6004(e) of the Bankruptcy Rules.
Given the exigencies of time and the Debtor's questionable ability
to sell the Purchased Assets to another bidder, the Debtor believes
that a private sale is prudent.
The Debtor asks that the Sale Order be effective immediately by
providing that the 14-day stays applicable under Rules 6004(h) and
6006(d) of the Bankruptcy Rules be waived.
The Debtor is in communication with Checkers and the Landlord to
determine appropriate cure costs.
The Debtors asks an expedited hearing on its requested relief
because it could be irreparably harmed if the sale is not
consummated prior to March, 1, 2020. There are limited interested
parties to thes transaction and time is of the essence to
consummate the sale. The Buyer expects the full use of the Premises
by March 1, 2020. The Debtors respectfully ask that the Court
shortens the notice period from 21 days to the appropriate amount
of time to hear the Motion on Feb. 24, 2020.
A copy of the Agreement is available at https://tinyurl.com/wzn32qm
from PacerMonitor.com free of charge.
The Purchaser:
DIAMOND JIM'S, LLC
9315 Saint Georgen Common
Johns Creek, GA 30097
Attn: Jim Campbell
The Purchaser is represented by:
Beth Hilscher, Esq.
BETH S. HILSCHER, P.C.
671 Main Street, Ste. 200
Suwanee, GA 30024
About Star Chain
Star Chain, Inc., is a Georgia-based company that operates as the
management company for all affiliated "US Star" debtors. The
affiliated "US Star" debtors operate approximately four dozen
restaurants with franchisors Captain D's, Checkers, Newk's, and
Yogli Mogli. The Debtors' membership interests are owned by the
same person, Omer Casurluk. The Debtors have common secured
creditors and are part of one business operation.
On Oct. 2, 2019, Star Chain, Inc., as Lead Debtor, and 26 other
affiliates sought Chatper 11 protection (Bankr. N.D. Ga. Lead Case
No. 19-65768) in Atlanta, Georgia. In the petition signed by Omer
Casurluk, manager, Star Chain, Inc., was estimated to have assets
at $1 million to $10 million, and liabilities at $10 million to $50
million. The Hon. Wendy L. Hagenau is the case judge. Wiggam &
Geer, LLC is counsel to the Debtors. Rountree Leitman & Klein,
LLC, is Wiggam & Geer's co-counsel.
STAR CHAIN: Diamond Buying Checkers Assets in Gainesville for $25K
------------------------------------------------------------------
US Star 1, LLC, an affiliate of Star Chain, Inc., asks the U.S.
Bankruptcy Court for the Northern District of Georgia to authorize
private sale of substantially all of the assets associated with the
Checkers Drive-in Restaurant, Inc. franchise located at 943 Jessee
Jewel Pkwy, Gainesville, Georgia, associated with Star 1, to
Diamond Jim's, LLC for $25,000.
The Debtor operates the Gainesville Checkers. It is managed and
operated by jointly administered co-Debtor Star Chain with various
other Checkers locations.
Pursuant to the Asset Purchase Agreement, the Debtor is selling
substantially all of the assets associated with the store
associated with it, and assuming and assigning the associated
franchise agreement with Checkers. In exchange, Diamond is paying
the Debtor $25,000.
Given that the Debtor is an underperforming store, the Debtor
believes that its decision to enter into the Asset Purchase
Agreement there is a sound business justification for granting the
Motion would be in best interests of creditors and the Debtor's
estate.
Upon information and belief, Wallis State Bank has a first priority
security interest in the assets of the Debtor, including the FF&E.
Wallis State Bank, to the Debtor's knowledge, does not have a lien
on the Lease or the Franchise Agreement. CIT Bank, N.A holds a
second priority lien on the Debtor's FF&E.
General Order No. 26-2019 ("Court Procedures Order") promulgates
certain procedures for use in complex chapter 11 cases the Court
Procedures Order requires that sale motions must highlight the
following provisions, identify the location of any such provision
in the proposed order, and justify such inclusion:
a. Sale to Insider - The Purchaser is not an insider of the
Debtor and has no pre-petition connections to Debtor.
b. Agreements with Management - Although the Purchaser is
interested in hiring store-level employees (it is under no legal
obligation to do so however), it does not intend to have any
agreements with the Debtor's management or their key employees.
c. Releases - The Debtor, Star Chain, and the Purchaser are
entering into mutual releases under the APA providing for a release
of all claims against each other.
d. Private Sale/No Competitive Bidding - The Debtor
contemplates a private sale pursuant to Rule 6004(e) of the
Bankruptcy Rules, but have not agreed to limit its solicitations of
competitive offers or otherwise limit the shopping of the assets to
be sold. As a practical matter, given the time limitations and the
potential of Debtor running out of funds within 4-6 weeks, the
Debtor does not intend to pursue other bidders.
e. Closing and Other Deadlines - There is one right to
terminate deadline in section 9 of Asset Purchase Agreement. The
Right to Terminate Deadlines include the following: (a) Feb. 29,
2020: closing deadline; and (b) within three days of the entry of
the Sale Hearing, the Sale Order must be entered.
f. Good Faith Deposit. $5,000, which is currently being held
in the Purchaser's counsel's escrow account.
g. Interim Arrangements with Proposed Buyer - No interim
arrangements prior to the closing are contemplated.
Pursuant to sections 105, 363, and 365 of the Bankruptcy Code and
Rules 2002, 6004, 6006, 9006, and 9008 of the Bankruptcy Rules, for
entry of orders, which shall, among other things, (a) approve the
sale of substantially all of the Debtor's assets free and clear of
Liens, (b) authorize the assumption and assignment or rejection of
certain executory contracts, and (c) direct that the sale proceeds
be escrowed.
The Debtor has determined that a sale of the Purchased Assets
pursuant to the Asset Purchase Agreement will be the most effective
way to maximize the value of its bankruptcy estate for the benefit
of its creditors in view of the limitation in time authoring to
sell the Purchase Asset. Indeed, absent approval of a prompt sale
of the Acquired Assets to the Purchaser, the Debtor may not be able
to continue to pay rent or maintain payroll and could face store
closure. As such, the Debtor believes that it has demonstrated a
sound business justification for the relief requested in the
Motion.
The Debtor asks the Court to authorize it to assume and assign
executory contracts and unexpired leases as set forth in the Asset
Purchase Agreement.
Wallis State Bank has a lien on FF&E that is worth less than the
Purchase Price. The Debtor asserts that Wallis has no lien in the
real value of the business, which is the Franchise Agreement and
the Lease. As such ,the purchase price exceeds the "value" of the
liens on the assets. Moreover, Sprout's lien has no equity to
attach to and is completely unsecured. Regardless, it is the
Debtor's understanding that Wallis Bank, the Committee, Checkers,
and the Landlord consent to the Sale. The sale will be free and
clear of all liens, claims, interests, and encumbrances, with any
such liens, claims, interests, and encumbrances attaching to the
net proceeds of the sale.
The Debtor asks the Court to approve the Asset Purchase Agreement
as a private sale pursuant to Rule 6004(e) of the Bankruptcy Rules.
Given the exigencies of time and the Debtor's questionable ability
to sell the Purchased Assets to another bidder, the Debtor believes
that a private sale is prudent.
The Debtor asks that the Sale Order be effective immediately by
providing that the 14-day stays applicable under Rules 6004(h) and
6006(d) of the Bankruptcy Rules be waived.
The Debtor is in communication with Checkers and the Landlord to
determine appropriate cure costs.
The Debtors asks an expedited hearing on its requested relief
because it could be irreparably harmed if the sale is not
consummated prior to March, 1, 2020. There are limited interested
parties to thes transaction and time is of the essence to
consummate the sale. The Buyer expects the full use of the Premises
by March 1, 2020. The Debtors respectfully ask that the Court
shortens the notice period from 21 days to the appropriate amount
of time to hear the Motion on Feb. 24, 2020.
A copy of the Agreement is available at https://tinyurl.com/r5op87u
from PacerMonitor.com free of charge.
The Purchaser:
DIAMOND JIM'S, LLC
9315 Saint Georgen Common
Johns Creek, GA 30097
Attn: Jim Campbell
The Purchaser is represented by:
Beth Hilscher, Esq.
BETH S. HILSCHER, P.C.
671 Main Street, Ste. 200
Suwanee, GA 30024
About Star Chain
Star Chain, Inc., is a Georgia-based company that operates as the
management company for all affiliated "US Star" debtors. The
affiliated "US Star" debtors operate approximately four dozen
restaurants with franchisors Captain D's, Checkers, Newk's, and
Yogli Mogli. The Debtors' membership interests are owned by the
same person, Omer Casurluk. The Debtors have common secured
creditors and are part of one business operation.
On Oct. 2, 2019, Star Chain, Inc., as Lead Debtor, and 26 other
affiliates sought Chatper 11 protection (Bankr. N.D. Ga. Lead Case
No. 19-65768) in Atlanta, Georgia. In the petition signed by Omer
Casurluk, manager, Star Chain, Inc., was estimated to have assets
at $1 million to $10 million, and liabilities at $10 million to $50
million. The Hon. Wendy L. Hagenau is the case judge. Wiggam &
Geer, LLC is counsel to the Debtors. Rountree Leitman & Klein,
LLC, is Wiggam & Geer's co-counsel.
STORMBREAK RANCH-FW: Seeks to Hire Larry M. Weinstein as Accountant
-------------------------------------------------------------------
Stormbreak Ranch-FW, LP seeks authority from the U.S. Bankruptcy
Court for the Western District of Texas to employ Larry M.
Weinstein, CPA as its accountant.
The services to be provided by the firm include:
(a) the preparation of the Debtor's tax returns;
(b) general accounting services;
(c) the preparation of monthly operating reports pursuant to
requirements provided by the Office of the U.S. Trustee;
(d) business and asset valuations and feasibility analysis for
the Debtor's Chapter 11 plan of reorganization; and
(e) preparation of the Debtor's schedules.
The firm's hourly rates are:
Principal $225
Staff $95
Weinstein requires a retainer in the amount of $3,000.
Larry Weinstein, a certified public accountant and principal of the
firm, assures the court that his firm is a disinterested person
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Larry M. Weinstein, CPA
Larry M. Weinstein, CPA
9660 Hillcroft St #120a
Houston, TX 77096
Phone: +1 713-726-1603
About Stormbreak Ranch-FW
Stormbreak Ranch-FW, LP, a company based in Houston, filed a
Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-10040) on Jan. 7,
2020. In the petition signed by Daniel J. Parish, manager, the
Debtor disclosed $4,475,905 in assets and $4,508,267 in
liabilities. Judge Christopher oversees the case. Ryan Lott,
Esq., at The Lott Firm, is the Debtor's bankruptcy counsel.
STRATEGIC MATERIALS: Moody's Lowers CFR to Ca, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service downgraded Strategic Materials Holding
Corp.'s ratings, including the corporate family rating to Ca from
Caa1, the Probability of Default Rating to Ca-PD from Caa1-PD, the
first-lien senior secured rating to Caa3 from B3 and the
second-lien rating to C from Caa3. The rating outlook is stable.
RATINGS RATIONALE
The ratings reflect expectations of continued deterioration in
operating results after a period of significant underperformance
relative to Moody's expectations, along with a weak liquidity
position, debt-to-EBITDA near 8x and significantly negative free
cash flow extending into 2021.
In Moody's view, the current highly leveraged capital structure
appears to be unsustainable given the business prospects,
expectations for increasingly more challenging dynamics of glass
recycling and very weak liquidity. Accordingly, Moody's believes
the prospects for recovery for the first-lien debt are in the 60% -
80% range. Lower volumes from weakness in the glass container
segment, uneven demand for fiberglass insulation for the
construction industry and higher costs to acquire supply are
pressuring margins and generating negative free cash flow. The
average supply cost has risen modestly due to a decrease in inbound
single-stream volumes and an increase in cleaner, less contaminated
supplies, resulting in lower tipping fees paid to Strategic
Materials. Waste companies, a key supply source for Strategic
Materials, are investing more in recycling equipment and
technologies, enabling them to deliver higher quality scrap glass.
Annual rate increases will offset some pressure on earnings, but
Moody's expects lingering end market softness in the mass beer
container market, a stretched balance sheet and weak liquidity will
constrict financial flexibility and sustain weak credit metrics
through 2020.
Moody's took the following rating actions on Strategic Materials
Holding Corp.:
- Corporate Family Rating downgraded to Ca from Caa1
- Probability of Default Rating downgraded to Ca-PD from Caa1-PD
- First-Lien Senior Secured Revolving Credit Facility downgraded
to Caa3 (LGD3) from B3 (LGD3)
- First-Lien Senior Secured Term Loan downgraded to Caa3 (LGD3)
from B3 (LGD3)
- Second-Lien Senior Secured Term Loan downgraded to C (LGD5)
from Caa3 (LGD5)
- Outlook, Stable
The ratings reflect high leverage and small scale (net revenues of
$250 million), highlighting what had been, until more recently, a
modest-growth operating model that has produced negative-to-flat
free cash flow (cash flow from operations less capital
expenditures). The company maintains significant supplier and
customer concentration as well as heavy reliance on the State of
California in generating revenues and earnings. Favorably,
Strategic Materials' supply of glass benefits from recycling
regulations/mandates, particularly those with weight requirements
or targets. Contracted demand for recycled glass/cullet provides a
degree of top-line stability as key end markets, containers and
fiberglass, are expected to resume moderate growth trajectories.
Strategic Materials is a North American leader in glass recycling
and within its niche focus has the footprint from which to further
expand into Mexico and Latin America where glass container usage is
significantly higher than in the US. Differentiated processing
capabilities, such as fine grind technology, are expected to boost
growth in higher-margin product lines such as abrasives and flat
glass but these opportunities have been relatively slow to develop.
A largely variable cost structure provides flexibility to adjust to
changes in market conditions, lessening the potential impact from a
sharp drop in demand.
Weighing heavily on the ratings is Strategic Materials' weak
liquidity profile. A modest cash balance, Moody's expectation for
negative free cash flow over the next twelve months and limited
funds available under the revolving credit facility create the
possibility that the company will need additional liquidity over
the near-to-intermediate term. Availability under the $40 million
revolving credit facility due 2022 was about $13 million at
September 30, 2019 with access subject to a springing total net
leverage ratio tested if the aggregate amount of outstanding
borrowings exceeds 35% of the facility. Moody's expects that the
covenant will continue to be tested, and that covenant headroom
will be tight through 2020. The term loans do not have financial
maintenance covenants. There are no near-term debt maturities and
less than $3 million of annual amortization payments required on
the first-lien term loan. With the credit facilities secured on a
first and second-lien basis, there are limited sources of alternate
liquidity as substantially all assets are pledged.
The stable rating outlook reflects expectations for modest
improvement in the liquidity position with the benefit of recent
pricing initiatives and continued restraint on capital spending.
Growth in higher-margin abrasives and highway bead could help
offset higher costs to obtain scrap glass supply. Free cash flow
generation will remain challenged but should show improvement,
again benefiting from the curtailment of capital expenditures.
From an environmental perspective, Strategic Materials' glass
recycling abilities conserve raw materials that would be needed for
virgin production (sand, soda ash, limestone). Additionally, cullet
in the glass manufacturing process makes it less corrosive to the
equipment, lowers the melting temperature and shortens the melt
cycle. Benefits include lower energy costs, extended furnace life
and a reduction in greenhouse gases.
The ratings could be downgraded if the liquidity position
deteriorates further, highlighted by increasingly negative free
cash flow and/or covenant compliance issues. Lower or negative
revenue growth, possibly due to weaker demand in the non-container
end markets or unfavorable developments on glass recycling
initiatives, could also negatively impact the ratings.
Moody's could upgrade Strategic Materials' ratings with an
improving liquidity profile highlighted by a higher cash balance,
reduced reliance on the revolving credit facility and improving
prospects for positive free cash flow generation. Growth in
revenues and margins, buoyed by lower costs to acquire and process
recyclable glass and/or sharply stronger demand for cullet would be
viewed favorably. Debt-to-EBITDA below 7x with a trajectory to go
lower would also be necessary for an upgrade.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
Strategic Materials, Inc. is an environmental services company
focused on recycling and processing scrap glass (over 90% of
revenues), known as cullet, as well as processing post-industrial
scrap plastic (nearly 10% of revenues). Cullet is a necessary input
to the glass manufacturing process and utilized across multiple end
markets and product categories such as containers, fiberglass,
abrasives, flat glass and a range of other industrial applications.
Latest twelve month net revenues for the period ending September
30, 2019 were approximately $250 million.
STREBOR SPECIALTIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Strebor Specialties LLC
108 Coulter Rd
Dupo, IL 62239
Case No.: 20-30262
Business Description: Strebor Specialties LLC Chemical is a small
to medium liquid filler with capabilities to
do aerosol, liquid, and oil filling.
Chapter 11 Petition Date: March 10, 2020
Court: United States Bankruptcy Court
Southern District of Illinois
Debtor's Counsel: Steven M. Wallace, Esq.
SILVER LAKE GROUP, LTD
6 Ginger Creek Village Drive
Glen Carbon, IL 62034
Tel: 618-692-5275
E-mail: steve@silverlakelaw.com
Total Assets: $1,031,229
Total Liabilities: $6,285,898
The petition was signed by Otto D. Roberts, Jr., manager.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/XOBKsK
SUMMERBROOK DENTAL: Taps Kutner Brinen as Legal Counsel
-------------------------------------------------------
Summerbrook Dental Group, PLLC received approval from the U.S.
Bankruptcy Court for the District of Colorado to hire Kutner
Brinen, P.C. as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its powers and duties;
b. aid the Debtor in the development of a Chapter 11 plan of
reorganization;
c. file legal papers required in the continued administration
of the Debtor's property under Chapter 11; and
d. take necessary action to enjoin and stay until a final
decree the continuation of pending proceedings and to enjoin and
stay until a final decree the commencement of lien foreclosure
proceedings.
The firm will be paid at these rates:
Lee M. Kutner $580
Jeffrey Brinen $500
Jenny Fujii $410
Keri Riley $350
Law Clerk $175
Kutner Brinen holds a retainer in the amount of $11,053 for payment
of post-petition fees and costs.
Jeffrey Brinen, Esq., a partner at Kutner Brinen, assured the court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
Kutner Brinen can be reached at:
Jeffrey S. Brinen, Esq.
Kutner Brinen, P.C.
1660 Lincoln Street, Suite 1850
Denver, CO 80264
Tel: (303) 832-2400
Fax: (303) 832-1510
About Summerbrook Dental Group
Summerbrook Dental Group, PLLC, is a provider of dental and
orthodontic services. It specializes in orthodontics, emergency
dentistry, cosmetic dentistry, sedation dentistry, dental implants,
dentures, general dentistry, and TMJ.
Summerbrook Dental Group filed a voluntary petition under Chapter
11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 20-11168) on
Feb. 21, 2020. In the petition signed by James Craig, president,
the Debtor disclosed $857,002 in assets and $2,318,656 in
liabilities. Judge Joseph G. Rosania Jr. oversees the case.
Jeffrey S. Brinen, Esq., at Kutner Brinen, P.C., is the Debtor's
legal counsel.
TEVOORTWIS LAND: Plan Filing Deadline Extended to March 16
----------------------------------------------------------
Debtor TeVoortwis Land Company, LLC, filed with the U.S. Bankruptcy
Court for the Eastern District of Michigan, Northern Division-Bay
City, a motion to extend deadline to file a Plan and Disclosure
Statement.
On Feb. 14, 2020, Judge Daniel S. Opperman granted the Motion to
Extend and ordered that:
* The deadline for the Debtor to file a combined plan and
disclosure statement is extended from Feb. 25, 2020, to March 16,
2020.
* The Debtor's exclusive right to file a plan and disclosure
statement and solicit votes on a plan are extended until March 16,
2020.
A copy of the order dated Feb. 14, 2020, is available at
https://tinyurl.com/sxduu27 from PacerMonitor at no charge.
About TeVoortwis Land Company
Based in Bad Axe, Mich., TeVoortwis Land Company, LLC is a Single
Asset Real Estate debtor (as defined in 11 U.S.C. Section
101(51B)). The Company owns in fee simple a real property located
in Huron County having an appraised value of $8.99 million.
TeVoortwis Land Company filed for Chapter 11 bankruptcy petition
(Banrk. E.D. Mich. Case No. 19-22090) on Oct. 28, 2019. In the
petition signed by Cindy TeVoortwis, member and authorized agent,
the Debtor listed total assets of $8,992,000 and total liabilities
of $22,323,580.
The Hon. Daniel S. Opperman presides over the case.
The Debtor is represented by:
Scott A. Wolfson, Esq.
Anthony J. Kochis, Esq.
WOLFSON BOLTON PLLC
3150 Livernois, Suite 275
Troy, MI 48083
Tel: (248) 247-7103
Fax: (248) 247-7099
E-mail: swolfson@wolfsonbolton.com
THOC PA: Seeks to Employ Smith Anglin as Accountant
---------------------------------------------------
Thoc, PA seeks authority from the U.S. Bankruptcy Court for the
Northern District of Texas to employ Steven Anglin and his firm
Smith Anglin & Co. as its accountant.
Mr. Anglin and his firm will assist the Debtor in a variety of
accounting matters relating to the assets and liabilities of the
bankruptcy estate.
The firm will be paid based on these hourly rates:
Steve Anglin $330
Curtis Grantham $230
Ronnie McMillan $230
Tamara Brown $165
Elena Galindo $90
The firm will be reimbursed for out-of-pocket expenses.
Steven Anglin, a partner at Smith Anglin & Co., disclosed in court
filings that the firm is disinterested within the meaning of
Section 101(13) of the Bankruptcy Code.
The firm can be reached through:
Steven Anglin
Smith Anglin & Co.
17738 Preston Road
Dallas, TX
Phone: (972) 267-1244
About THOC PA
THOC, PA, which operates a medical practice in Dallas under the
name Texas Hemotology Oncology Centers, filed a voluntary Chapter
11 petition (Bankr. N.D. Tex. Case No. 19-34237) on Dec. 30, 2019.
The case is assigned to Judge Stacey G.C. Jernigan. The Debtor is
represented by Eric A. Liepins, Esq., at Eric A. Liepins, P.C.
THURSTON MANUFACTURING: Unsecureds to Have 50% in Liquidating Plan
------------------------------------------------------------------
Debtor Thurston Manufacturing Company filed with the U.S.
Bankruptcy Court for the District of Nebraska a Chapter 11 Plan of
Liquidation and a Disclosure Statement on Feb. 21, 2020.
The Debtor's Chapter 11 Plan proposes an orderly liquidation
process that will wind down the business and provide maximum value
to the bankruptcy estate's creditors.
During the course of the bankruptcy, the Debtor marketed its assets
to maximize the proceeds from the sale of the assets for its
creditors. Of significance, the Debtor has sold the following
assets: Intellectual Property & Related Assets, Equipment in
Spencer, IA, Thurston Office, and Real Property. The Debtor
currently has various pending motions to sell before the Court for
the Debtor's Equipment in Thurston, NE and Farmland.
Under the Plan, general unsecured claims are to be discharged and
an estimated 50% distribution is proposed for general unsecured
claims. Liquidation of the Debtor and termination of its business
operations allows for no additional distributions to the general
unsecured claim beyond the one-time distribution to general
unsecured claims under the Plan.
Class 3 consists of creditors holding executory contract claims
under which Debtor owes prepetition invoices for purchase of
products and services, namely: 3C Property, LLC; Executive
Technologies; HYG Financial Services; Iowa Lakes Community College;
Jensen Holdings; Matheson Trigas; Sentry Insurance; Wells Fargo
Financial Services; and GreatAmerica Financial Services. The Plan
provides that such executory contracts to be rejected upon plan
confirmation.
The Plan provides that, upon confirmation, all ownership interest
in the Debtor are cancelled. This class consists of insiders and
are deemed to have voted in favor of the Plan even if their claims
are impaired.
The Debtor's cash on hand and the remaining sale proceeds from the
sales outlined in the various sale motions will be used to fund the
distributions to holders of allowed claims against the Debtor in
accordance with the treatment of such claims provided in the Plan.
A full-text copy of the Disclosure Statement dated Feb. 21, 2020,
is available at https://tinyurl.com/v38cm5d from PacerMonitor at no
charge.
The Debtor is represented by:
Elizabeth M. Lally
Warren J. Ford III
GOOSMANN LAW FIRM
17838 Burke Street, Suite 250
Omaha, NE 68118
Telephone: (402) 280-7648
E-mail: lallye@goosmannlaw.com
About Thurston Manufacturing Co
Thurston Manufacturing Co., a company based in Thurston, Neb.,
filed a Chapter 11 petition (Bankr. D. Neb. Case No. 19-80108) on
Jan. 23, 2019. In the petition signed by CEO Ryan J. Jensen, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. The Hon. Shon Hastings oversees the case.
Elizabeth M. Lally, Esq., at Goosman Law Firm PLC, serves as
bankruptcy counsel to the Debtor.
TILDA MARIE B. SUTTON: Birdsong Buying Boykins Property for $575K
-----------------------------------------------------------------
Tilda Marie Brisson Sutton asks the U.S. Bankruptcy Court for the
Eastern District of North Carolina to authorize the sale of the
real property located at 31282 Powells Hill Road, Boykins,
Southampton County, Virginia to Birdsong Corp. for $575,000.
On Jan. 1, 2009, the Debtor entered into a settlement agreement
with various parties, resolving matters related to her late
parents' estates. As a result, the Debtor inherited the Property.
A deed of distribution conveyed the Property to H & I, a Virginia
limited liability company. Following the resolution of the estate
issues, the Debtor was the sole member and manager of H & I and
remained so until the dissolution of the entity described.
As part of the resolution of the estate issues, the Debtor granted
the Internal Revenue Service liens on her membership interest in H
& I and White Lake Market Place, LLC, to secure repayment of a
portion of the federal estate taxes owed by the Estate of Houston
Nile Brisson. No liens were granted to the IRS on the actual real
estate owned by H & I.
On Feb. 29, 2012, the Virginia State Corporation Commission
cancelled H & I's certificate of organization.
At the time she filed her chapter 11 petition on August 30, 2017,
the Debtor remained the sole member and manager of H & I and its
attempted successor entity H & I of Bladen County, LLC.
As part of the Debtor's confirmed Plan of Reorganization, the
Debtor proposed to sell certain real property, including the
Property. The Plan proposed that the sales proceeds of the
Property would be distributed pro rata to the Class 4 and Class 5
estate taxes owed to the IRS and North Carolina Department of
Revenue.
The Property has been leased to Birdsong Corporation though a
series of written leases. The Debtor has now received an offer to
purchase the Property from Birdsong for a purchase price of
$575,000.
Upon information and belief, under Virginia law, the cancellation
of the certificate of organization resulted in the Debtor becoming
the trustee in liquidation of the limited liability company and its
assets. Upon information and belief, under Virginia law, the
Debtor holds title to the Property as the liquidating trustee
instead of the limited liability company.
As of the petition date, the Property was not encumbered by any
liens, other than liens for ad valorem taxes.
On Feb. 18, 2018, the IRS filed a federal tax lien on the Property
in the amount of $2,331,483, file number 18-60, and refiled that
federal tax lien on March 13, 2018 in the amount of $1,063,079,
file number 18-103. The Debtor is not aware of any other liens on
the Property.
Based on state of ownership of the Property, the Debtor as
liquidating trustee, asks approval for the sale of the Property,
free and clear of any and all liens, encumbrances, claims, rights,
and other interests, including the following:
a. Any and all property taxes due and owing to any City,
County, or municipal corporation, including the Southampton County
Tax Collector;
b. The federal tax lien filed by the IRS on Feb. 18, 2018 on
the Property, file number 18-60 and refiled on March 13, 2018, file
number 18-103; and
c. Any and all remaining interests, liens, encumbrances,
rights and claims asserted against the Property, which relate to or
arise as a result of a sale of the Property, or which may be
asserted against the buyer of the Property, including, but limited
to, those liens, encumbrances, interests, rights and claims,
whether fixed and liquidated or contingent and unliquidated, that
have or may be asserted against the Property or the buyer of the
Property by the North Carolina Department of Revenue, the Internal
Revenue Service, and any and all other taxing and government
authorities. The described liens will attach to the proceeds of
sale, if any, subject to the Orders of Distribution that may be
entered by the Court.
The Debtor asks the Court for an Order (i) allowing the sale of the
Property to Birdsong for $575,000, free and clear of the liens,
claims, encumbrances, rights and interests, with such liens to
attach to the proceeds of sale; and (ii) approving the distribution
of the net proceeds of sale according to the distribution
percentages set forth.
A copy of the Purchase Agreement is available at
https://tinyurl.com/v32ookm from PacerMonitor.com free of charge.
Tilda Marie Brisson Sutton sought Chapter 11 protection (Bankr.
E.D. N.C. Case No. 17-04225) on Aug. 30, 2017. The Debtor tapped
Trawick H Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. as counsel.
On May 10, 2018, the Court entered an Order Confirming Plan of
Reorganization.
TOUGH MUDDER: Trustee Hires Morris Nichols as Counsel
-----------------------------------------------------
Derek C. Abbott, the Chapter 11 Trustee of Tough Mudder Inc., and
its debtor-affiliates, seeks authority from the U.S. Bankruptcy
Court for the District of Delaware to employ Morris Nichols Arsht &
Tunnell LLP, as counsel to the Trustee.
The Trustee requires Morris Nichols to:
a. perform all necessary services as the Trustee's counsel,
including, without limitation, providing the Trustee with
advice, representing the Trustee, and preparing
necessary documents on behalf of the Trustee in the
areas of restructuring and bankruptcy;
b. take all necessary actions to protect and preserve the
Debtors' estates during the Chapter 11 Cases, including
the prosecution of actions by the Trustee, the defense of
any actions commenced against the Trustee, negotiations
concerning litigation in which the Debtors and/or the
Trustee is involved, and objecting to claims filed against
the estates;
c. prepare or coordinate preparation on behalf of the
Trustee any necessary motions, applications, answers,
orders, reports, and papers in connection with the
administration of the Chapter 11 Cases;
d. counsel the Trustee with regard to his rights and
obligations as chapter 11 trustee;
e. coordinate with the Trustee's other professionals in
representing the Trustee in connection with these cases;
and
f. perform all other necessary or requested legal services.
Morris Nichols will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Matthew B. Harvey, partner of Tough Mudder Inc., assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Morris Nichols can be reached at:
Matthew B. Harvey, Esq.
MORRIS NICHOLS ARSHT & TUNNELL LLP
1201 North Market Street, 16th Floor
Wilmington, DE 19899-1347
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
E-mail: mharvey@mnat.com
About Tough Mudder
Tough Mudder, Inc. and Tough Mudder Event Production, Inc. host and
produce bstacle course race events across the United States and
internationally, selling tickets to race competitors and
contracting with vendors and venue sponsors to hold the events.
Tough Mudder, Inc. (Bankr. D. Del. Case No. 20-10036) and Tough
Mudder Event Production, Inc. (Bankr. D. Del. Case No. 20-10037)
sought Chapter 11 protection on Jan. 7, 2020.
The Debtors tapped David W. Carickhoff, Esq., at Archer & Greiner,
P.C. as counsel.
On Jan. 30, 2020, the Court appointed Derek C. Abbott as the
Chapter 11 Trustee.
TRUDY'S TEXAS STAR: Seeks Cash Access for Repairs of West 30th
--------------------------------------------------------------
Trudy's Texas Star, Inc., filed an amended motion asking the
Bankruptcy Court to authorize the use of cash collateral, and allow
its insurer to make direct payments to its repair contactor, Cotton
Commercial USA, Inc. for the repair of its restaurant located at
409 W. 30th.
The Trudy's location at West 30th Street had closed due to a fire
on Nov. 9, 2019. The Debtor's insurance carrier, Cincinnati
Financial, estimated a total of $66,910.25 for the building
repairs. The Debtor wishes to engage Cotton Commercial to perform
the repairs.
Horizon Bank holds the first lien upon the W. 30th property, while
the SBA holds a second lien. The Debtor contends that repairing the
structure is the best method to adequately protect the collateral
of Horizon Bank and the SBA. Further, an income-producing property
is more valuable than one which is shuttered. The Lenders are also
adequately protected by a sizeable equity cushion in the property.
Accordingly, the Debtor requests that Cincinnati Financial be
allowed to make direct payments to Cotton Commercial in order to
avoid the necessity to have the Debtor and Horizon Bank endorse the
checks each time they are received and will facilitate the prompt
repair of the property.
A copy of the motion is available at https://is.gd/qpTu62 from
PacerMonitor.com at no charge.
About Trudy's Texas Star
Trudy's Texas Star, Inc., operates a chain of restaurants.
Trudy's Texas Star, Inc., based in Austin, TX, filed a Chapter 11
petition (Bankr. W.D. Tex. Case No. 20-10108) on Jan. 22, 2020. In
the petition signed by Stephen Truesdel, authorized representative,
the Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. The Hon. Tony M. Davis oversees the case.
Stephen W. Sather, Esq., at Barron & Newburger, PC, serves as
bankruptcy counsel.
UNISON ENVIRONMENTAL: Bank of Cleveland Wants Chapter 11 Trustee
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee has
continued to April 2 the hearing to consider the request of Bank of
Cleveland for appointment of a Chapter 11 trustee for Unison
Environmental Services, LLC, or in the alternative, for conversion
of the case to Chapter 7 liquidation pursuant to 11 U.S.C. Section
1104 and Article 12 of the Debtor's confirmed Corrected Fourth
Amended Chapter 11 Plan.
On November 8, 2019, the Court entered an order confirming the
Debtor's Corrected Fourth Amended Chapter 11 Plan. During the
hearing on the Confirmation of the Debtor's Plan, there was a
discussion between Counsel regarding the payment of the November
2019, adequate protection payment to Bank of Cleveland as well as
the beginning of payments under the terms of the Plan to Bank of
Cleveland to begin in December 2019.
However, the Debtor is in material default of the terms of its
Chapter 11 Plan from the date of Confirmation in an amount of at
least $86,858.68. Under Article 12 of the Debtor's Confirmed Plan,
the Court retains jurisdiction to enforce any provision of the Plan
and the Court retains jurisdiction to enter any Orders as are
necessary or appropriate regarding the enforcement of the Plan or
any provision thereof.
While 11 U.S.C. Section 1104 provides for the appointment of
trustee prior to confirmation of Plan, Bank of Cleveland believes
the Court can still appoint a Trustee because of the retained
jurisdictional provisions of the Confirmed Plan. Bank of Cleveland
believes that the Debtor has sufficient value that it should be
able to pay all of its creditors in full, however, current
management under Knox Horner is resulting in the substantial
deterioration of the Debtor.
Attorneys for Bank of Cleveland:
JERROLD D. FARINASH, Esq.
100 West M L King Blvd, Ste. 816
Chattanooga, TN 37402
Tel: (423) 805-3100
E-mail: jdf@8053100.com
About Unison Environmental Services
Unison Environmental Services, LLC, provides waste treatment and
disposal services. The company's principal assets are located at
6315 12th Ave East Tuscaloosa, AL 35405.
Unison Environmental Services filed a Chapter 11 (Bankr. E.D. Tenn.
Case No. 18-10113) on Jan. 11, 2018. In the petition signed by
Jefferson Knox Horner, chief manager, the Debtor estimated $1
million to $10 million in total assets and liabilities. Judge
Shelley D. Rucker presides over the case. David J. Fulton, Esq.,
at Scarborough & Fulton, is the Debtor's counsel. The Richardson
Law Firm, is the special counsel.
USA LANDS: Edwards Buying Rapides Parish Property for $15K Cash
---------------------------------------------------------------
USA Lands, LLC, asks the U.S. Bankruptcy Court for the Western
District of Louisiana to authorize the sale of the unencumbered
tract of immovable property described as tract and/or parcel of
land, with improvements thereon containing 0.96 Acre, more or less
situated in the SW ¼ of the NW ¼ of Section 12, T3N-R1E, Rapides
Parish, Louisiana, together with all buildings and improvements, to
George C. Edwards and Mathilda R. Edwards for $15,000, cash.
Among the assets of the estate is the Debtor's interest in and to
the following described immovable property, together with all
buildings and improvements, more particularly described as follows,
to-wit: Begin at the northwest corner of that certain forty acre
tract of land described as the Southwest Quarter of the Northwest
Quarter (SW 1/4 of NW 1/4) of said Section 12, and then run East
along the north section line of said 40-acre tract a distance of
200 feet to the point of beginning of the herein described
property; from the point of beginning thus established, continue
East along the north section line of said forty acre tract a
distance of 321.75 feet; thence turn at a right angel and run South
a distance of 151.7 feet; thence turn at a right angle and run West
321.75 feet; thence turn at a right angle and run North 157.1 feet
back to the point of beginning, containing 1.13 acres, more or
less, and being the same property acquired by Dana Dyer Purvis and
John R. Purvis, Jr. from Mary Snodgras Dyer by deed dated Sept. 10,
2002, recorded at COB 1645, Page 715, records of Rapides Parish,
Louisiana, and being a portion of that property acquired by Frank
H. Snodgrass from Alberta G. Lewis by deed dated Aug. 25, 1945,
recorded at Conveyance Book 301, Page 233, records of Rapides
Parish, Louisiana, also described at Conveyance Book 1931, Page
967, of the records of Rapides Parish, Louisiana.
The Debtor has received an offer to purchase the same for $15,000,
from the Buyers, 5A Ben Craig Road, Pineville, Louisiana, which it
believes is fair and reasonable. The terms of the sale provide
that the price is to be paid in cash or cash equivalent at the time
of closing.
The offer made is fair and the Debtor recommends approval of the
same as being in the best interest of the estate. In the event the
prospective purchaser so identified does not comply with the offer
so made, teh Debtor asks authority to sell the subject property for
the same price and under the terms stated herein to any other
purchaser willing to pay the same.
The mortgage records of Rapides Parish, Louisiana, reflect that the
property is not encumbered by a lien or mortgage.
Tyler Farms, L.L.C. claims a 6/7 ownership interest in the subject
property. Tyler Farms is an "insider" as its ownership includes
the sole owner of the Debtor. The property should be sold free of
liens with the liens and encumbrances to attach to the proceeds of
the sale. Tyler Farms consents to the sale with the reservation of
its claim to the proceeds to attach to the proceeds of the sale.
The Debtor desires to accept the offer made, or any other which may
be in an amount in excess of it.
The Purchaser will buy the Property "as is, where is." The sale
will be without any warranty or recourse whatsoever, even as to
return of the purchase price, but with full substitution and
subrogation to all rights and actions of warranty against all
preceding owners.
The property remains largely vacant and is not producing income for
the estate. It is subject to being vandalized and being occupied
by vagrants. The Debtor has no insurance on the property and
therefore continued possession of the property by the estate is not
in the best interest of the Debtor's estate or any party in
interest.
The realtor retained by Debtor and approved by the Court has not
been involved in the sale of the property so no commission is due
to be paid from the proceeds. The Debtor therefore recommends the
sale to the prospective Purchaser as being in the best interests of
the estate.
The Debtor knows of no liens on the property but suggest that ad
valorem taxes may be owed on the same.
The Debtor asks that the Court authorizes and directs the Clerk and
Recorder of Mortgages or Clerk of Court of Rapides Parish or other
public officials to cancel and release the Property from the effect
of all liens and encumbrances shown in the public records only
insofar as they attach to the Property.
The Debtor also asks an order of the Court allowing for payment of
the fees and expenses of its attorney in the sum of $1,500, plus
costs of court, and cost of mortgage certificate, incurred in
presenting the matter to the court, without further proceedings, as
an expense of the sale as described, to be deducted from the sales
price and paid at the time of closing.
The Debtor further asks authority to pay the costs and expenses of
the clerk of the Court and the attorney for the Debtor in
connection with the Motion should be paid, prior to the mortgage
holder. The above carve out should be paid at the time of the
closing of the sale. It asks authority to pay all the usual and
customary charges incurred as well as the closing costs described
and paid at closing should be authorized to be paid, including pro
rata ad valorem taxes, the Seller's portion of closing costs, and
the costs of redemption, if necessary.
Finally, the Debtor asks that any order issued granting this sale
should be determined to be a final order and implemented forthwith
in accordance with the provisions of Federal Rule of Bankruptcy
Procedure 6004.
About USA Lands
USA Lands, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. La. Case No. 19-80784) on Aug. 20,
2019. At the time of the filing, the Debtor was estimated assets
of less than $50,000, and liabilities of between $100,001 and
$500,000. The case is assigned to Judge Stephen D. Wheelis.
Thomas R. Willson, Esq., is the Debtor's legal counsel.
USA LANDS: Jeff Porter Buying Deville Property for $25K Cash
------------------------------------------------------------
USA Lands, LLC, asks the U.S. Bankruptcy Court for the Western
District of Louisiana to authorize the sale of the real property
bearing a municipal address of 1866 Hwy 115, Deville, Louisiana,
together with all buildings and improvements, to Jeff Porter
Investments, L.L.C. for $25,000, cash.
Among the assets of the estate is the Debtor's interest in and to
the following described immovable property, together with all
buildings and improvements, more particularly described as follows,
to-wit: That certain piece, parcel or tract of land constituting
0.91 acres together with all improvements thereon and all rights
thereto appertaining situated in part of the SE ¼ of the SE ¼ of
Section 16, T4N, R3E, Rapides Parish, Louisiana, and being more
particularly described as follows, to-wit: Commence at a point
common to Sections 15, 16, 21, and 22, T4N, R3E, Rapides Parish,
Louisiana, and thence proceed North 89 degrees 44 minutes West
488.6 feet to the point of beginning; From said point of beginning
thus established, continue North 89 degrees 44 minutes West 294.0
feet to a point; thence turn North 12 degrees 08 minutes East and
proceed 93.2 feet; thence turn North 49 degrees 55 East and proceed
212.0 feet to the westerly right of way line of La. Hwy. 115;
thence proceed along said right of way line South 26 degrees 06
minutes 255.0 feet back to the point of beginning, all as more
particularly shown on survey plat of Daniel D. Sandefur dated Oct.
3, 1980, a copy of which is recorded at COB 1549, Page 555, records
of Rapides Parish, Louisiana, to which reference is made herein for
greater certainty of description.
The Debtor has received an offer to purchase the same for $25,000,
from the Buyer, 42 Philadelphia Road, Pineville, Louisiana, which
it believes is fair and reasonable. The terms of the sale provide
that the price is to be paid in cash or cash equivalent at the time
of closing. Additional terms provide that the Purchaser will
accept the property subject to easements and restrictions of
record, provided they do not conflict with the present or intended
specific improvements or use of the property, and have not been
violated unless their enforcement is barred by law and provided
that buildings and other improvements on the property are not on
the easements.
The offer made is fair and the Debtor recommends approval of the
same as being in the best interest of the estate. In the event the
prospective purchaser so identified does not comply with the offer
so made, the Debtor asks authority to sell the subject property for
the same price and under the terms stated herein to any other
purchaser willing to pay the same.
The mortgage records of Rapides Parish, Louisiana, reflect that the
property is encumbered by a mortgage in favor of BancorpSouth Bank
dated Nov. 3, 2015, and filed and recorded November 4, 2015, at
Mortgage Book 2904, Page 934, instrument number 1563856, in an
amount not to exceed $50 billion.
The property should be sold free of liens with the liens and
encumbrances to attach to the proceeds of the sale, in order to be
able to deliver a good, valid and merchantable title to the
purchaser of the Property. The offer is being made to purchase the
Property, free and clear of all liens, interests, and encumbrances,
with the same to attach to the proceeds of the sale.
The sale should be allowed conditioned upon the Debtor paying its
proportionate share of the normal and customary closing costs,
including its pro rata share of ad valorem taxes, real estate
commission and costs for redemption, if required. The Debtor
desires to accept the offer made, or any other which may be in an
amount in excess of it.
The Purchaser will buy the Property "as is, where is." The sale
will be without any warranty or recourse whatsoever, even as to
return of the purchase price, but with full substitution and
subrogation to all rights and actions of warranty against all
preceding owners.
The property remains largely vacant and is not producing income for
the estate. It is subject to being vandalized and being occupied
by vagrants. The Debtor has no insurance on the property and the
mortgage holder has therefore been required to obtain its own
insurance. Continued possession of the property by the estate is
not in the best interest of the Debtor's estate or any party in
interest. It has received no other offers for the property despite
diligent search and therefore recommends the sale as being in the
best interests of the estate.
The price offered is not sufficient to pay the claim of the
mortgage holder in full but the mortgage holder will retain its
lien against other properties on which it holds a mortgage that, if
properly liquidated, should generate sufficient funds to pay the
same in full. The property will be sold free of liens and
encumbrances with the liens and encumbrances to attach to the
proceeds of the sale.
The Debtor knows of no other liens other than that of BancorpSouth
Bank. The property will be released from the mortgage of
BancorpSouth Bank, only insofar as it affects the above described
Property to be sold, and such claim of BancorpSouth Bank will be
referred to the proceeds of the sale and paid at the time of
closing.
The Debtor asks that the Court authorizes and directs the Clerk and
Recorder of Mortgages or Clerk of Court of Rapides Parish or other
public officials to cancel and release the Property from the effect
of all liens and encumbrances shown in the public records only
insofar as they attach to the Property.
The Debtor also asks an order of the Court allowing for payment of
the fees and expenses of its attorney in the sum of $1,500, plus
costs of court, and cost of mortgage certificate, incurred in
presenting the matter to the Court, without further proceedings, as
an expense of the sale as described herein, to be deducted from the
sales price and paid at the time of closing.
The proceeds received from the sale should be paid to satisfy the
secured claim of BancorpSouth Bank and the Debtor asks authority to
pay the same as soon as is practical, specifically being at the
closing of the sale. It also asks authority to pay the costs and
expenses of the clerk of the court and the attorney for the Debtor
in connection with the Motion should be paid, prior to the mortgage
holder. The described "carve out" should be paid at the time of
the closing of the sale. All the usual and customary charges
incurred as well as the closing costs described and paid at closing
should be authorized to be paid, including pro rata ad valorem
taxes, the the Seller's portion of closing costs, and the costs of
redemption, if necessary.
Finally, the Debtor asks the any order issued granting the sale
should be determined to be a final order and implemented forthwith
in accordance with the provisions of Federal Rule of Bankruptcy
Procedure 6004.
A copy of the Purchase Agreement is available at
https://tinyurl.com/v5mhxvk from PacerMonitor.com free of charge.
About USA Lands
USA Lands, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. La. Case No. 19-80784) on Aug. 20,
2019. At the time of the filing, the Debtor was estimated assets
of less than $50,000, and liabilities of between $100,001 and
$500,000. The case is assigned to Judge Stephen D. Wheelis.
Thomas R. Willson, Esq., is the Debtor's legal counsel.
VIA AIRLINES: IBERIABANK Questions Treatment of Claim
-----------------------------------------------------
IBERIABANK, a Louisiana state bank and a secured creditor, objects
to approval of the Disclosure Statement and confirmation of the
Chapter 11 Plan of Reorganization of debtor Via Airlines, Inc.
In its objection, IBERIABANK points out that:
* The Disclosure Statement does not provide adequate information
and IBERIABANK is unable to evaluate its distribution or risks it
will face. It fails to discuss any of the Debtor's ongoing
discussions with the FAA or remedial measures in relation to having
the Air Carrier Certificates re-instated as they are currently
suspended.
* Section III of the Disclosure Statement is inadequate as it
does not properly characterize the nature of the Debtor's business
operations leading up to this bankruptcy filing. It completely
overlooks the fact the business has never earned a profit and
continually required capital calls, further institutional loans,
and investor groups to fund its daily operations.
* The Plan proposes to treat IBERIABANK as a secured obligation
of the Debtor inappropriately and not in compliance with the
Bankruptcy Code. Per the Plan, IBERIABANK has been availed two
options neither of which provides a specific remedy to deal with
the Claim, only conjecture.
* The Plan is not being proposed in good faith and does not
comply with Section 1129 of the Code. There is nothing about this
Plan that is in the best interests of the Debtor's creditors and
payment seems to hinge on whether or not the Litigation Trust
yields any results.
A full-text copy of IBERIABANK's objection dated Feb. 21, 2020, is
available at https://tinyurl.com/vgv8bp4 from PacerMonitor at no
charge.
Attorneys for IBERIABANK:
Burr & Forman LLP
Michael S. Waskiewicz
50 N. Laura Street, Suite 3000
Jacksonville, Florida 32202
Tel: (904)232-7200
Fax: (904)232-7201
E-mail: mwaskiewicz@burr.com
About Via Airlines
Via Airlines, Inc., is a domestic regional airline offering
scheduled service across the United States.
Via Airlines sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 19-06589) on Oct. 8, 2019. The Debtor was estimated to have $10
million to $50 million in assets and liabilities as of the
bankruptcy filing. Judge Karen S. Jennemann oversees the case.
Latham, Luna, Eden & Beaudine, LLP, is the Debtor's legal counsel.
VIP CINEMA: Morris, Davis Polk Represents 1st Lien Lenders
----------------------------------------------------------
In the Chapter 11 cases of VIP Cinema Holdings, Inc., et al., the
law firms of Davis Polk & Wardwell LLP and Morris, Nichols, Arsht &
Tunnell LLP submitted a verified statement under Rule 2019 of the
Federal Rules of Bankruptcy Procedure, to disclose that they are
representing the Ad Hoc Group of First Lien Lenders.
In or around April 2019, a group formed by certain lenders under
that certain First Lien Credit Agreement, dated as of March 1, 2017
formally engaged Davis Polk to represent it in connection with a
potential restructuring of the Debtors. In or around February 2020,
the Ad Hoc Group of First Lien Lenders engaged Morris Nichols to
represent it as Delaware bankruptcy counsel.
Davis Polk represents only the Ad Hoc Group of First Lien Lenders.
Davis Polk does not represent or purport to represent any entities
other than the Ad Hoc Group of First Lien Lenders in connection
with the Chapter 11 Cases. In addition to the Ad Hoc Group of First
Lien Lenders, Morris Nichols also separately represents Wilmington
Savings Fund Society, FSB in its capacity as First Lien Agent and
DIP Agent in the Chapter 11 Cases. Morris Nichols does not
represent or purport to represent any entities other than the Ad
Hoc Group of First Lien Lenders and the First Lien Agent in
connection with the Chapter 11 Cases.
The Members of the Ad Hoc Group of First Lien Lenders,
collectively, beneficially own, or are the investment advisors or
managers for funds that beneficially own:
a. $132,871,163.35 in aggregate principal amount of the loans
under that Prepetition First Lien Credit Agreement,
consisting of (i) $124,871,163.35 in aggregate principal
amount of Prepetition Term Loans2 and (ii) $8,000,000.00 in
aggregate principal amount of Prepetition Revolving Loans;
b. $7,617,625.42 in aggregate principal amount of the loans
under that certain Senior Secured Superpriority Debtor-In-
Possession Term Loan Credit Agreement, dated as of February
20, 2020 and $1,962,522.23 in commitments for future funding
under the DIP Credit Agreement.
As of March 6, 2020, members of the Ad Hoc Group of First Lien
Lenders and their disclosable economic interests are:
ABRY PARTNERS, LLC
888 Boylston St., Suite 1600
Boston, MA 02199
* $6,562,500.00 in aggregate principal amount of Prepetition Term
Loans
* $337,818.08 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $101,345.42 in commitments for future funding under the DIP
Credit Agreement
AXA INVESTMENT MANAGERS
Clifton House, 75 Fort St.
George Town
Grand Cayman KY1-1108
Cayman Islands
* $3,062,500.00 in aggregate principal amount of Prepetition Term
Loans
* $23,422.05 in commitments for future funding under the DIP
Credit Agreement
BANK OF LABOR
756 Minnesota Ave.
Kansas City, KS 66101
* $2,625,000.00 in aggregate principal amount of Prepetition Term
Loans
* $1,000,000.00 in aggregate principal amount of Prepetition
Revolving Loans
* $186,604.27 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $55,981.28 in commitments for future funding under the DIP
Credit Agreement
BC PARTNERS
Great Lakes KCAP F3C Senior, LLC
c/o BC Partners
650 Madison Ave. Floor 23
New York, NY
* $1,750,000.00 in aggregate principal amount of Prepetition Term
Loans
* $90,084.82 in aggregate principal amount of the loans under the
DIP Credit Agreement
* $27,025.45 in commitments for future funding under the DIP
Credit Agreement
BIRCH GROVE CAPITAL LP
660 Madison Ave. 15th Floor
New York, NY 10065
* $8,877,750.00 in aggregate principal amount of Prepetition Term
Loans
* $473,553.99 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $142,066.19 in commitments for future funding under the DIP
Credit Agreement
CADENCE BANK, N.A.
2100 3rd Ave. North
Birmingham, AL 35203
* $5,250,000.00 in aggregate principal amount of Prepetition Term
Loans
* $6,000,000.00 in aggregate principal amount of Prepetition
Revolving Loans
* $579,116.70 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $173,735.01 in commitments for future funding under the DIP
Credit Agreement
CIBC BANK USA
120 S. LaSalle St.
Chicago, IL 60603
* $3,062,500.00 in aggregate principal amount of Prepetition Term
Loans
* $1,000,000.00 in aggregate principal amount of Prepetition
Revolving Loans
CRESTLINE DENALI CAPITAL, L.P
2001 Spring Rd#220
Oak Brook, IL 60523
* $3,500,000.00 in aggregate principal amount of Prepetition Term
Loans
FIVE ARROWS MANAGERS NORTH
633 West 5th St., Suite 6700
Los Angeles, CA 90071
* $5,592,117.15 in aggregate principal amount of Prepetition Term
Loans
* $287,865.64 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $86,359.69 in commitments for future funding under the DIP
Credit Agreement
GARRISON INVESTMENT GROUP LP
1290 Avenue of the Americas, Suite 914
New York, NY 10104
* $12,013,513.50 in aggregate principal amount of Prepetition
Term Loans
* $618,420.11 in aggregate principal amount of the loans under
the DIP Credit Agreement
KILIMANJARO ADVISORS LLC
c/o Virtus Group LP
1301 Fannin St. Suite 1700
Houston, TX 77002
* $4,825,676.23 in aggregate principal amount of Prepetition Term
Loans
* $248,411.53 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $74,523.46 in commitments for future funding under the DIP
Credit Agreement
MACKENZIE INVESTMENTS
180 Queen St W
Toronto, ON
M5V 3K1, Canada
* $10,190,142.12 in aggregate principal amount of Prepetition
Term Loans
* $681,925.86 in commitments for future funding under the DIP
Credit Agreement
MAIN STREET CAPITAL CORPORATION
1300 Oak Boulevard, 8th Floor
Houston, TX 77056
* $23,187,500.00 in aggregate principal amount of Prepetition
Term Loans
* $2,914,791.74 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $874,437.52 in commitments for future funding under the DIP
Credit Agreement
MJX ASSET MANAGEMENT
12 E. 49th St., 38th Floor
New York, NY 10017
* $4,516,891.89 in aggregate principal amount of Prepetition Term
Loans
PGIM, INC
655 Broad St.
Newark, NJ 07102
* $7,602,292.22 in aggregate principal amount of Prepetition Term
Loans
* $391,343.49 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $117,403.05 in commitments for future funding under the DIP
Credit Agreement
SOUND POINT CAPITAL MANAGEMENT, LP
375 Park Ave. 33rd Floor
New York, NY 10152
* $14,328,326.61 in aggregate principal amount of Prepetition
Term Loans
* $737,579.85 in aggregate principal amount of the loans under
the DIP Credit Agreement
* $221,273.96 in commitments for future funding under the DIP
Credit Agreement
SUMITOMO MITSUI BANKING CORPORATION
277 Park Ave.
New York, NY 10172
* $5,906,250.00 in aggregate principal amount of Prepetition Term
Loans
WEBBANK
215 South State St.
Suite 1000
Salt Lake City, UT 84111
* $656,250.00 in aggregate principal amount of Prepetition Term
Loans
* $43,916.35 in commitments for future funding under the DIP
Credit Agreement
Z CAPITAL PARTNERS, L.L.C
1330 Avenue of the Americas 16th Floor
New York, NY 10019
* $1,361,953.63 in aggregate principal amount of Prepetition Term
Loans
* $70,109.34 in aggregate principal amount of the loans under the
DIP Credit Agreement
* $21,032.80 in commitments for future funding under the DIP
Credit Agreement
Counsel to the Ad Hoc Group of First Lien Lenders can be reached
at:
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
Robert J. Dehney, Esq.
Tamara K. Mann, Esq.
Andrew R. Workman, Esq.
1201 N. Market St., 16th Floor
Wilmington, DE 19899-1347
Telephone: (302) 658-9200
Email: rdehney@mnat.com
tmann@mnat.com
aworkman@mnat.com
- and -
DAVIS POLK & WARDWELL LLP
Damian S. Schaible, Esq.
Adam L. Shpeen, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: 212-450-4169
Facsimile: 212-701-5800
Email: damian.schaible@davispolk.com
adam.shpeen@davispolk.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/yxIC0q and https://is.gd/yFtI9x
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.
WILLEX HOLDING: Schenectady to Get Full Payment With 21% Interest
-----------------------------------------------------------------
Debtor Willex Holding, Inc. filed with the U.S. Bankruptcy Court
for the Northern District of New York a Plan of Reorganization and
a Disclosure Statement on Feb. 25, 2020.
The purpose of the plan proposed by the debtor is to pay the
outstanding property tax to the City of Schenectady.
As of the date of this Disclosure, the only claim that has been
filed is a claim in the amount of $24,539.54 filed by the City of
Schenectady. This claim will be paid in full along with interest
at the rate of 21% as required by local law. The Debtor will make
53 payments commencing March 15, 2020, and continuing with payment
made on the 15th day of each month thereafter so that the entire
debt is satisfied. The monthly payment required by the Plan
against this debt is $770.94 and is comprised of $24,539.54
amortized over 53 months at 21% interest and $3,006.10, the
interest that has accrued since commencement, paid in 53 equal
payments.
William Ford and Alexandra Ford are the shareholders of the Debtor.
The shareholders will take no dividends from the Debtor during the
life of the Plan.
Payments and distributions under the Plan will be funded by rental
payments made by the tenants of the Debtor. If the rental income
is insufficient to pay the operating costs of the Debtor and the
plan payments, the shareholders will make contributions as
necessary to cover the shortfall.
A full-text copy of the Disclosure Statement dated Feb. 25, 2020,
is available at https://tinyurl.com/s29vyov from PacerMonitor at no
charge.
The Debtor is represented by:
LAW OFFICE OF JEFFREY L. ZIMRING
Jeffrey L. Zimring
1735 Central Avenue, Suite 200
Albany, New York 12205
Tel: (518) 218-0307
E-mail: jeff@zimringlaw.com
About Willex Holdings
Willex Holdings Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 19-11249) on July 3,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $100,000 and liabilities of less than $50,000.
The case is assigned to Judge Robert E. Littlefield Jr. The Law
Office of Jeffrey L. Zimring is the Debtor's counsel.
YODEL TECHNOLOGIES: Hires Weinberg Partners as Accountant
---------------------------------------------------------
Yodel Technologies, LLC, seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Weinberg
Partners, Ltd, as accountant to the Debtor.
Yodel Technologies requires Weinberg Partners to:
a. prepare and file tax returns and conduct tax research
including contacting the Internal Revenue Service;
b. perform normal accounting and other accounting services as
required by the Debtor; and
c. prepare and assist the Debtor in preparing Court ordered
reports, including the U.S. Reports (i.e., Monthly
Operating Reports and a 12 month actual/historical income &
expense report with a five year projection (the "Pro
Forma"), if necessary) and any documents necessary for the
Debtor's disclosure statement.
Weinberg Partners will be paid at these hourly rates:
Accountant $400
Accounting Staff $150
Weinberg Partners will be paid a retainer in the amount of
$16,000.
Weinberg Partners will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Paul D. Weinberg, partner of Weinberg Partners, Ltd, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Weinberg Partners can be reached at:
Paul D. Weinberg
WEINBERG PARTNERS, LTD
9205 W. Russell Road, Suite 240
Las Vegas, NV 89148
Tel: (702)-793-4500
E-mail: paul@weinbergpartners.com
About Yodel Technologies
Technologies, LLC -- https://www.yodelvoice.com/ -- is a Florida-
based telemarketing company that develops and uses soundboard
technology in combination with live agents to enhance interactions
with prospective clients or customers.
Yodel Technologies, LLC, based in Palm Harbor, FL, filed a Chapter
11 petition (Bankr. M.D. Fla. Case No. 20-00540) on Jan. 23, 2020.
In the petition signed by Robert Pulsipher, managing member & COO,
the Debtor disclosed $3,126,219 in assets and $6,027,981 in
liabilities. Buddy D. Ford, Esq., at Buddy D. Ford, P.A., serves
as bankruptcy counsel to the Debtor.
*********
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