/raid1/www/Hosts/bankrupt/TCR_Public/200320.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, March 20, 2020, Vol. 24, No. 79
Headlines
1130 ORCHARD: Plan & Disclosures Deadline Delayed to Aug. 21
1230 SOUTH ASSOCIATES: To Seek Plan Confirmation March 25
2178 ATLANTIC AVE: Seeks to Hire Neglia Appraisals
24 HOUR FITNESS: S&P Lowers ICR to 'CCC+'; Outlook Negative
3 SC HOLDING: Seeks to Hire Eric A. Liepins as Counsel
4L HOLDINGS: Moody's Assigns Caa1 CFR, Outlook Negative
790 WARWICK: Creditors Unimpaired Under Plan
A TO Z TOTAL: Seeks to Hire Maxwell Dunn as Counsel
A.C. FURNITURE: Committee Seeks to Hire Kutak Rock as Counsel
A.C. FURNITURE: Seeks to Hire SC&H Capital as Investment Banker
A2Z WIRELESS: S&P Places 'B' ICR on CreditWatch Negative
ADAMIS PHARMACEUTICALS: Delays Filing of 2019 Annual Report
AIR CANADA: Moody's Reviews Ba1 CFR for Downgrade Due to COVID-19
ALASKA AIR: S&P Downgrades ICR to 'BB' on Reduced Travel Demand
ALL CARE NOW: May Continue Using Cash Collateral Until April 3
ALLEGIANT TRAVEL: S&P Cuts ICR to B+ on Reduced Air Travel Demand
ALMANOR LAKEFRONT: Judge Seeks Revision to Plan Disclosures
ALPHATEC HOLDINGS: Incurs $57 Million Net Loss in 2019
AMAZING ENERGY: Delays Form 10-Q for Period Ended Jan. 31
AMERICAN AIRLINES: S&P Places 'BB-' ICR on CreditWatch Negative
AMERICAN RENEWABLE: Hires Levene Neale as Bankruptcy Counsel
AMERICORE HOLDINGS: Trustee Hires Baker & Hostetler as Counsel
ARA MACAO: Trustee Taps Cushman & Wakefield as Brokers
ARBOR PHARMACEUTICALS: Moody's Alters Outlook on B3 CFR to Neg.
ARDEN HOLDINGS: April 14 Hearing on Disclosure Statement
ASCENA RETAIL: S&P Upgrades ICR to 'CCC-' After Distressed Exchange
ASPEN CLUB: Seeks to Hire FTI Consulting as Financial Advisor
AUTHENTIC HOSPITALITY: Seeks to Hire Van Horn Law as Attorney
AVIS BUDGET: S&P Puts 'BB' ICR on Watch Negative on Reduced Travel
AVSC HOLDING: S&P Puts 'B-' ICR on CreditWatch Negative
BALTIMORE HOTEL: S&P Cuts Bond Rating to BB+; Rating on Watch Neg.
BANTEC INC: Incurs $667K Net Loss in First Quarter
BREAD & BUTTER: Final Cash Collateral Hearing Scheduled for May 8
BRINKER INTERNATIONAL: S&P Cuts ICR to BB-; Ratings on Watch Neg.
BRISTOL HEALTHCARE: Trustee Hires SLIB II Inc as Broker
BULLARD FENCE: Seeks to Hire Jason A. Burgess as Counsel
BWX TECHNOLOGIES: S&P Cuts ICR to 'BB' on Lower Expected Cash Flow
CALERES INC: S&P Downgrades ICR to 'BB-'; Outlook Negative
CALIFORNIA RESOURCES: Terminates Exchange & Subscription Offers
CARLSON TRAVEL: S&P Puts 'B-' ICR on Watch Negative
CASABLANCA GLOBAL: S&P Downgrades ICR to 'CCC+'; Outlook Negative
CBAC BORROWER: S&P Cuts ICR To 'CCC+' on CreditWatch Negative
CBL & ASSOCIATES: Moody's Lowers Sr. Unsec. Debt to Caa3
CBL & ASSOCIATES: S&P Withdraws 'CCC+ ICR at Issuer Request
CDS US: Moody's Lowers CFR to Ca, Outlook Negative
CEN BIOTECH: Extends SPA Closing Date Until December 2021
CHF COLLEGIATE: S&P Cuts Rev. Bond Rating to 'B'; Outlook Negative
CHICK LUMBER: Committee Hires Rath Young as Local Counsel
CIBT GLOBAL: Moody's Lowers CFR to Caa1, Outlook Negative
CINEMARK HOLDINGS: S&P Places 'BB' ICR on Watch Negative
CLARKE'S TOWING: Seeks to Hire Paul Reece Marr as Attorney
COUNTRY MORNING FARMS: Court Confirms Plan as Amended
CRIDER AVENUE: April 9 Hearing on Disclosure Statement
DEL MONTE FOODS: S&P Lowers ICR to 'CCC' on Current Maturities
DELCATH SYSTEMS: Signs Support & Conversion Pact with Rosalind
DEMO REALTY: May Continue Using Cash Collateral Through April 28
DHM HOSPITALITY: Allowed to Use Cash Collateral on Interim Basis
DIFFUSION PHARMACEUTICALS: Incurs $11.8 Million Net Loss in 2019
DIFFUSION PHARMACEUTICALS: John Gainer Ph.D. Retires as CSO
DIXON PAVING: Seeks to Hire Stubbs & Perdue as Attorney
DOUBLE L FARMS: April 2 Hearing on Disclosure Statement
DTI HOLDCO: Moody's Cuts CFR to Caa2; Ratings Placed Under Review
EMERALD X: S&P Places 'B+' ICR on CreditWatch Negative
ENDEAVOR OPERATING: S&P Puts 'B' ICR on CreditWatch Negative
EXCHANGE AVENUE: Seeks to Hire Energynet.com as Auctioneer
EYEPOINT PHARMACEUTICALS: Incurs $56.8 Million Net Loss in 2019
FAITH APOSTOLIC: Seeks to Hire Jones & Walden as Counsel
FLUSHING AIRPORT: Seeks to Hire Backenroth Frankel as Counsel
FORESIGHT ENERGY: S&P Downgrades ICR to 'D' on Bankruptcy Filing
FREEDOM PLUMBERS: Hires Culbert & Schmitt as Bankruptcy Counsel
FRONTIER COMMUNICATIONS: S&P Cuts ICR to 'SD' on Missed Payment
GENCANNA GLOBAL: Gets Nod on $2.7-Mil DIP Loan, Cash Collateral Use
GETTY IMAGES: S&P Places 'B-' ICR on CreditWatch Negative
GJK FL ENTERPRISES: Seeks Court Approval to Hire A+ Accounting
GNC HOLDINGS: Delays Filing of 2019 Form 10-K
GO WIRELESS: S&P Places 'B' ICR on CreditWatch Negative
GOGO INC: Approves Modifications to Certain Performance Awards
GOGO INC: Lowers Net Loss to $146 Million in 2019
GOGO INC: S&P Puts CCC+ ICR on Watch Neg. on Low Passenger Volume
GOOD NOODLES: Unsecureds to Recover 30% in Plan
GRIMM BROTHERS: Seeks to Hire Real World Law as Counsel
HAWAIIAN HOLDINGS: S&P Places 'BB-' ICR on CreditWatch Negative
HERTZ CORP: Moody's Cuts CFR to B3 & Alters Outlook to Negative
HERTZ GLOBAL: S&P Puts 'B+' ICR on Watch Negative on Reduced Travel
HILL CONCRETE: Deadline for Plan & Disclosures Extended to May 31
HOME MEDICAL: Brightwood Loan to Sell Equity on March 24
HORIZON GLOBAL: Reports $80.7 Million Net Income for 2019
HOYA MIDCO: S&P Places 'B' ICR on CreditWatch Negative
HUDDLESTON VENTURES: Has Until April 6 to File Plan
HUDDLESTON VENTURES: Taps Alliance Realty as Appraisers
IFRESH INC: Signs Deal to Acquire 70% Equity Interests in Xiamen
IMAGEWARE SYSTEMS: Coronavirus Causes Delay in Form 10-K Filing
IMPORT SPECIALTIES: Allowed to Use Charter Bank Cash Collateral
INTERIOR COMMERCIAL: Court Confirms Reorganization Plan
INTERNAP CORP: S&P Downgrades ICR to 'D' After Bankruptcy Filing
INTERNATIONAL GAME TECHNOLOGY: S&P Lowers ICR to 'BB'
ITHRIVE HEALTH: Seeks to Hire Larry Strauss as Accountant
J.T. SHANNON: Seeks to Hire Scott & Pohlman as Accountant
JJE INC: Seeks Continuance of Plan Hearing
KCIBT HOLDINGS: S&P Cuts ICR to 'CCC+' on Reduced Travel Demand
KIMBLE DEVELOPMENT: Seeks to Hire Southeastern Commercial as Broker
KPH CONSTRUCTION: Modifies Plan After Settlement Reached
KRATON CORP: Moody's Alters Outlook on B1 CFR to Stable
KRATOS DEFENSE: S&P Alters Outlook to Negative, Affirms 'B+' ICR
KRYSTAL COMPANY: Committee Taps Arnall Golden Gregory as Co-Counsel
KRYSTAL COMPANY: Committee Taps FTI Consulting as Financial Advisor
LADAN INC: Seeks and Obtains Nod on Interim Use of Cash Collateral
LAS CUMBRES: Seeks to Hire Peoples Law Office as Attorney
LION DIVERSIFIED: Chapter 15 Case Summary
LIVE NATION: S&P Places 'BB-' ICR on CreditWatch Negative
MADAME PAULETTE 65TH: Hires Morrison Tenenbaum as Counsel
MADAME PAULETTE VALET: Hires Morrison Tenenbaum as Counsel
MADAME PAULETTE: Seeks to Hire Morrison Tenenbaum as Counsel
MARIA EUGENIA: Seeks to Hire Eric A. Liepins as Counsel
MCIG INC: Delays Filing of Form 10-Q for Period Ended Jan. 31
MEDIACOM ILLINOIS: Moody's Rates New $2.17BB Secured Loans 'Ba1'
MLK ALBERTA: Case Summary & 2 Unsecured Creditors
MOMENTIVE PERFORMANCE: S&P Lowers ICR to 'B+'; Outlook Negative
MORNINGSTAR MARKETPLACE: Seeks to Hire Mooney Law as Attorney
MOVE OF GOD: Seeks to Hire M. Denise Dotson as Legal Counsel
MRC GLOBAL: S&P Places 'B' ICR on CreditWatch Negative
MY2011 GRAND: Seeks to Hire Backenroth Frankel as Counsel
NATEL ENGINEERING: S&P Downgrades ICR to 'B' on Elevated Leverage
NATIONAL QUARRY: May Continue Using Cash Collateral Until March 30
NEP GROUP: Fitch Lowers IDR to B-; On Rating Watch Negative
NEP/NCP HOLDCO: S&P Places 'B' ICR on CreditWatch Negative
NOVABAY PHARMACEUTICALS: Chief Financial Officer Resigns
NYGARD HOLDINGS: Chapter 15 Case Summary
OCCIDENTAL PETROLEUM: Moody's Lowers Sr. Unsec. Rating to Ba1
OLIN CORP: S&P Downgrades ICR to 'BB'; Outlook Negative
OPTIMAS OE: S&P Downgrades ICR to 'SD' on Distressed Exchange
PHOENIX PRODUCTS: Case Summary & 20 Largest Unsecured Creditors
PIER 1 IMPORTS: Hires Epiq Corporate as Administrative Advisor
PIER 1 IMPORTS: Hires Guggenheim Securities as Investment Banker
PIER 1 IMPORTS: Hires Kirkland & Ellis as Bankruptcy Counsel
PIER 1 IMPORTS: Seeks to Hire A&G Realty as Real Estate Advisor
PIER 1 IMPORTS: Seeks to Hire AP Services, Appoint SVP
PIER 1 IMPORTS: Seeks to Hire Kutak Rock as Counsel
PINNACLE MULTI-ACQUISITION: Hires Crane Simon as Bankruptcy Counsel
POPULUS FINANCIAL: S&P Alters Outlook to Negative, Affirms 'B' ICR
PUGNACIOUS ENDEAVORS: S&P Places 'B' ICR on CreditWatch Negative
RIOT BLOCKCHAIN: Delays Filing of 2019 Annual Report
RR DONNELLEY: Moody's Affirms B3 CFR & Alters Outlook to Negative
SEAWORLD PARKS: S&P Cuts ICR to B-; Ratings Put on Watch Developing
SEVEN STARS: Asks for July 31 Extension for Plan & Disclosures
SIMKAR LLC: Trustee Plan for Neo Lights Has April 13 Hearing
SPIRIT AIRLINES: S&P Cuts ICR to 'B+'; Ratings on Watch Negative
STRUCTURED CABLING: Seeks to Hire Van Horn Law as Counsel
SUNYEAH GROUP: Seeks to Hire Sequoia Group as Accountant
SWEET WOLVERINE: Seeks to Hire Stark & Hammack as Special Counsel
TAYLOR MORRISON: S&P Affirms 'BB' ICR; Ratings Off Watch Negative
THEE TREE HOUSE: Seeks to Hire McIntyre Thanasides as Counsel
TREEHOUSE FOODS: S&P Affirms 'BB-' ICR, Outlook Remains Negative
TRI-POINT OIL: Enters Ch.11 to Liquidate Biz as Buyer Backs Out
TRIDENT TPI: S&P Alters Outlook to Negative, Affirms 'B-' ICR
TUTOR PERINI: S&P Lowers Issuer Credit Rating to 'B'; Outlook Neg.
TWM RACING: Seeks Court Approval to Hire Bankruptcy Attorney
UNIFIED PROTECTIVE: Has Until Aug. 3 to File Plan & Disclosures
UNITED AIRLINES: S&P Alters Outlook to Negative, Affirms 'BB' ICR
UNITI GROUP: Fitch Affirms CCC LongTerm IDR, Outlook Positive
UNIVERSITY OF THE ARTS: Fitch Assigns BB+ LT IDR, Outlook Stable
US FOODS: Moody's Reviews Ba3 CFR for Downgrade on Apollo Deal
US SILICA: S&P Lowers ICR to 'CCC+' on Lower Oil, Gas Prices
USA GYMNASTICS: Survivors' Comm. Taps Gibbins as Financial Advisor
VASCULAR ACCESS: Trustee Hires Walsh Pizzi as Counsel
VELMO USA: April 7 Status Hearing on Non Filing of Plan Set
VERIFONE SYSTEMS: S&P Lowers ICR to 'B-'; Outlook Stable
VERMILLION INC: Extends Term of Quest TSA Until March 2023
VETERINARY CARE: Hires Wick Phillips as Special Corporate Counsel
VIKING CRUISES: S&P Places 'B+' ICR on CreditWatch Negative
VILLAS OF WINDMILL: Trustee Taps Akerman LLP as Special Counsel
W.N.B. INVESTMENTS: Seeks to Hire Bielli & Klauder as Counsel
WELDED CONSTRUCTION: April 8 Hearing on Disclosure Statement
WESTJET AIRLINES: Moody's Reviews Ba3 CFR for Downgrade
WESTJET AIRLINES: S&P Placed 'B+' ICR on CreditWatch Negative
WESTLAKE AUTOMOBILE 2019-1: S&P Affirms B+ (sf) Rating on F Notes
WHEEL PROS: S&P Lowers ICR to 'B-'; Outlook Negative
WIRECO WORLDGROUP: S&P Places 'B' ICR on CreditWatch Negative
WISE ESPRESSO: Unsecureds to Get 4% Dividend in Plan
WORK & SON INC: Trustee Hires Valuation Research Corporation
[^] BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles
*********
1130 ORCHARD: Plan & Disclosures Deadline Delayed to Aug. 21
------------------------------------------------------------
Upon consideration of the motion of 1130 Orchard Park Road, Inc.,
Judge Carl L. Bucki has ordered that the time fixed in 11 U.S.C.
Sec. 1121(e)(2) by which the Debtor will file a plan and disclosure
statement (if any), will be extended to August 21, 2020.
1130 Orchard Park Road, Inc., sought Chapter 11 protection (Bankr.
W.D.N.Y. Case No. 19-11006) on May 17, 2019. Arthur G. Baumeister,
Jr., Esq., at BAUMEISTER DENZ LLP, is the Debtor's counsel.
1230 SOUTH ASSOCIATES: To Seek Plan Confirmation March 25
---------------------------------------------------------
Judge Frank W. Volk has ordered that the Disclosure Statement
explaining the Chapter 11 Plan filed by 1230 SOUTH ASSOCIATES LLC
is conditionally approved.
March 18, 2020 is fixed as the last day to file and serve any
written objection to the Disclosure Statement.
March 18, 2020 is fixed as the last day to file and serve in any
written objection to confirmation of the Chapter 11 Plan.
March 18, 2020 is fixed as the last day to file acceptances or
rejections of the Chapter 11 Plan.
A hearing shall be held at 1:30 p.m. on March 25, 2020, in
Bankruptcy Courtroom A, 6400 Robert C. Byrd United States
Courthouse, 300 Virginia Street East, Charleston, West Virginia, to
consider and act upon:
a. Final approval of the Disclosure Statement and any objection
thereto timely filed with the Court; and
b. Confirmation of the Chapter 11 Plan and any objection thereto
timely filed with the Court.
About 1230 South Associates
1230 South Associates, LLC, a privately held company in
Parkersburg, W.Va., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-60158) on Nov. 6,
2019. At the time of the filing, the Debtor had estimated assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million. The case is assigned to Judge Frank W.
Volk Usdj. Joseph W. Caldwell, Esq., at Caldwell & Riffee, is the
Debtor's legal counsel.
2178 ATLANTIC AVE: Seeks to Hire Neglia Appraisals
--------------------------------------------------
2178 Atlantic Ave HDFC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire Neglia
Appraisals, Inc. as its real estate appraiser.
Neglia Appraisals will conduct an appraisal of the property located
at 2178 Atlantic Avenue, Brooklyn, New York 11233.
Neglia Appraisals is seeking total compensation of $3,500.00 for
the professional services rendered.
In addition, should Neglia Appraisals be asked to testify regarding
the Appraisal, its Expert Witness Fee is as follows:
a. $3,000 for a full day of testimony;
b. $2,000 for a half-day (or less) of testimony; and
c. $400 per hour of conference and/or research time.
The Expert Witness Fee is expected to remain constant during the
pendency of the Debtor's chapter 11 case.
Neglia Appraisals is a "disinterested person" as defined by section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Domenick Neglia
Neglia Appraisals, Inc.
7711 - 13th Avenue
Brooklyn, NY 11228
Tel: 718-331-2122
Fax: 718-331-4311
Email: Dom@neglia.com
About 2178 Atlantic Ave HDFC
Based in Brooklyn, N.Y., 2178 Atlantic Ave HDFC filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 19-47287) on Dec. 4, 2019, listing under $1 million in
both assets and liabilities.
24 HOUR FITNESS: S&P Lowers ICR to 'CCC+'; Outlook Negative
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on 24 Hour
Fitness Worldwide Inc. to 'CCC+' from 'B-'. S&P also lowered its
issue-level rating on the company's senior secured credit facility
to 'B-' from 'B', with a '2' recovery rating.
S&P lowered its issue-level rating on the company's senior
unsecured notes to 'CCC-' from 'CCC', with a '6' recovery rating.
The downgrade reflects heightened economic uncertainty because of
COVID-19, significant exposure to California (which could be under
pressure because of the coronavirus), and material risks related to
the ongoing transformation in the company's sales and operating
model. The company experienced a material decline in financial
performance through the first three quarters of 2019, and S&P
believes there are more risks to the company's ability to improve
operating performance in 2020. In addition, S&P anticipates very
high leverage and negative free cash flow in 2020, increasing the
risk the capital structure is unsustainable and the possible
attractiveness of an exchange offer or restructuring that could be
viewed as an event of default.
The negative outlook reflects the increased likelihood that
heightened economic uncertainty may complicate 24 Hour Fitness'
effort to successfully execute its transformation plan. In this
scenario, the company could experience reduced liquidity because of
its large capital expenditures plan. If 24 Hour Fitness' sales and
operating model transition stops improving guest conversions to
members, then comparable-club revenue, adjusted EBITDA, negative
free cash flow, and liquidity could worsen. Very high anticipated
leverage, combined with possibly reduced liquidity, creates more
risk for an unsustainable capital structure.
"We could lower the rating if EBITDA and liquidity continue to
weaken, cash flow needs are greater than expected, or we believe
the company will complete a distressed exchange," S&P said.
"We could revise the outlook to stable or raise the rating if
comparable-club revenue, EBITDA, free cash flow, and liquidity
sustainably improve in a manner that reduces leverage below 7x,"
the rating agency said.
3 SC HOLDING: Seeks to Hire Eric A. Liepins as Counsel
------------------------------------------------------
3 SC Holding, LLC, seeks authority from the US Bankruptcy Court for
the Northern District of Texas to hire Eric A. Liepins, P.C., as
counsel to the Debtor.
The Debtor requires Eric A. Liepins to provide legal services and
represent the Debtor in the Chapter 11 proceedings.
Eric A. Liepins will be paid at these hourly rates:
Attorneys $275
Paralegals $30 to $50
Eric A. Liepins received from the Debtor a retainer in the amount
of $5,000, plus $1,717 filing fee.
Eric A. Liepins will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Eric A. Liepins, a partner of Eric A. Liepins, 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.
Eric A. Liepins can be reached at:
Eric Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
About 3 SC Holding, LLC
3 SC Holding, LLC, filed its Voluntary Petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
20-30738) on March 2, 2020, listing under $1 million in both assets
and liabilities. Eric A. Liepins, Esq., at partner of Eric A.
Liepins, P.C., serves as bankruptcy counsel.
4L HOLDINGS: Moody's Assigns Caa1 CFR, Outlook Negative
-------------------------------------------------------
Moody's Investors Service assigned to 4L Holdings Corporation a
Caa1 corporate family rating and Caa1-PD probability of default
rating following the company's recent restructuring. At the same
time, Moody's assigned a Caa1 to 4L Tech's $80 million senior
secured term loan due 2024. The outlook is negative.
On February 3, 2020, the company emerged from a prepackaged Chapter
11 bankruptcy filing and implemented a Restructuring Support
Agreement (RSA) with a majority of the secured lenders agreeing to
restructure its balance sheet and reduce the total debt. As part of
the restructuring process, the existing secured lenders agreed to
cancel a meaningful portion of their existing debt and receive 100%
equity in the reorganized company subject to dilution by the
warrants and management incentive plan. The RSA included the
repayment of senior secured debt to lenders using net cash from the
sale of the Imaging business and permitted the acquisition of
Teleplan International N.V. using existing balance sheet cash, both
of which were completed in December 2019.
"We believe that 4L Tech's post-emergence balance sheet remains
highly levered with limited liquidity in consideration of the large
amount of cost-savings and synergies that will need to be achieved
during the next 12 to 18 months," said Andrew MacDonald, Moody's
lead analyst for the company. "With the acquisition of Teleplan,
management has embarked on a new business strategy that is highly
transformative and entails significant integration risk."
Assignments:
Issuer: 4L Holdings Corporation
Probability of Default Rating, Assigned Caa1-PD
Corporate Family Rating, Assigned Caa1
Senior Secured Bank Credit Facility, Assigned Caa1 (LGD3)
Outlook Actions:
Issuer: 4L Holdings Corporation
Outlook, Negative
RATINGS RATIONALE
4L Holdings Corporation's ratings broadly reflect the company's
high financial risk, the ever changing demand and product
lifecycles for aftermarket electronics, elevated customer
concentration, and a highly competitive space. The integration of
Teleplan involves a high degree of execution risk related to the
company's plan to improve operating efficiency in order to achieve
sustained revenue growth and positive free cash flow. The company's
weak operating performance in recent years was the result of a
combination of failure to meet productivity goals and a rapidly
evolving industry that left the company exposed to a large customer
contract loss. While Moody's adjusted debt-to-EBITDA leverage is
expected to improve towards 3x during the next 24 months,
approximately 70% of EBITDA relies on the achievement of cost
savings and one-time add-backs, without which leverage would be in
excess of 7x at 31 December 2019. Additionally, the benefits of
these savings initiatives will be offset by implementation costs
during the next 12 months and will result in modestly negative free
cash flow in 2020 before becoming positive in 2021. Supporting the
rating is the significant reduction in debt associated with the
Chapter 11 bankruptcy restructuring that Moody's estimates reduced
total debt from $695 million to $80 million. The acquisition of
Teleplan also increases the company's product base and global
footprint with new locations in Europe, Asia, and the Americas.
4L Tech will have weak liquidity based on Moody's expectation for
negative free cash flow in 2020. At close, the company will not
have access to a revolving credit facility, although it is possible
the company will enter into such a facility as it is permitted by
the senior lender agreement. Consequently, liquidity will be weak
and limited to the company's cash on hand, which management states
is in the low $20 million range as of early March 2020. The senior
secured term loan agreement contains no financial maintenance
covenants.
4L Tech governance risk is considerable given the company's lack of
a long term credit facility and Moody's expectation of negative
free cash flow during the next 12 months.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. More specifically,
the weaknesses in 4L Tech credit profile, including its limited
liquidity provisions have left it vulnerable to shifts in market
sentiment in these unprecedented operating conditions and the
company remains vulnerable to the outbreak continuing to spread.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. The action reflects the impact on the breadth and
severity of the shock, and the broad deterioration in credit
quality it has triggered.
The negative outlook reflects weak liquidity provisions including
Moody's expectation of modestly negative free cash flow during the
next 12 months and the absence of a long term revolving credit
facility. A weakening global macroeconomic environment and
increased likelihood of a recession also adds uncertainty at a time
when the business is attempting to undergo a significant
transformation.
Moody's could consider a rating upgrade if free cash flow
approaches 5% of total debt while maintaining adequate liquidity.
Downward rating pressure could develop if revenue growth is weak or
liquidity becomes constrained with less than $10 million of total
liquidity available.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Privately held by a lender group comprised of the company's
previous secured creditors, 4L Holdings Corporation is a world
leading aftermarket services company offering a full range of
product services to leading companies powering the digital economy.
4L collects, repairs, remanufactures, remarkets and distributes
electronic devices through manufacturing facilities in the United
States, Mexico, Latin America, Europe, and Asia regions. For the
twelve months ended 31 December 2019, the company's unaudited
reported revenue was $517 million.
790 WARWICK: Creditors Unimpaired Under Plan
--------------------------------------------
790 Warwick LLC filed a Plan of Reorganization and a Disclosure
Statement.
The Debtor owns real property located at 1124 Gipson Street (Lot
78, Block 15714). The Property does not generate any income. The
Debtor's business generally involves purchasing real property,
satisfying mortgages and notes with respect to those properties,
and developing the properties to obtain the projected future
value.
In order to provide the Court with evidence of the value of the
Property, the Debtor obtained the Appraisal, which values the
Property at $260,000 as of Dec. 17, 2019. That amount is
insufficient to repay the full amount owed to the secured
creditors.
But the Plan says that secured creditors and unsecured creditors
are unimpaired under the Plan. At closing secured creditors BN and
TCM will be paid the amounts of their respective claims to which
they are entitled under the Plan. Class III unsecured claims will
be paid in full, in cash, on the Effective Date of the Plan or as
soon thereafter as is practicable, plus interest at the federal
funds rate on the Petition Date.
The funds necessary for implementation of the Plan will be provided
from Yakubov, llcor one of its affiliates, divisions or
subsidiaries.
A full-text copy of the Disclosure Statement dated March 9, 2020,
is available at https://tinyurl.com/qnzx8b8 from PacerMonitor.com
at no charge.
Proposed counsel for the Debtor:
Ilevu Yakubov, Esq.
Law Office of Ilevu Yakubov
8002 Kew Gardens Rd., Suite 300
Kew Gardens, NY 11415
Phone: (718) 772-8704
E-mail: leo@yakubovlaw.com
About 790 Warwick
790 Warwick LLC, filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 19-47439) on Dec. 11, 2019, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Ilevu Yakubov, partner of the Law Office of Ilevu Yakubov.
A TO Z TOTAL: Seeks to Hire Maxwell Dunn as Counsel
---------------------------------------------------
A to Z Total Appliance Repair, Inc. seeks authority from the United
States Bankruptcy Court for the Eastern District of Michigan to
hire Maxwell Dunn, PLC, as its counsel.
Services Maxwell will render are:
a. prepare petition, schedules and statements and any
amendments;
b. prepare client for duties while in a Chapter 11
bankruptcy;
c. attend Initial Debtor Interview scheduled by the Office of
the United States Trustee and facilitation of Debtor's requirements
for the IDI meeting, attendance at any initial status conference as
directed by the court, and attendance at the Sec. 341 meeting of
creditors;
d. draft and prepare first day motions, employment
applications, and other related pleadings;
e. attend the 60 day status conference and all other hearing
appurtenant to Subchapter V of Chapter 11;
f. manage the receipt, review, and filing of Monthly Operating
Reports and any other documents, reports, or filings that Debtor is
required to submit;
g. prepare applications for compensation of Maxwell and any
other professionals that may be employed by the estate;
h. prepare pleadings related to sale applications or valuation
motions, if any;
i. attend hearings and meetings;
j. negotiate with creditors regarding critical aspects of the
Chapter 11 proceeding and the confirmation process;
k. consult with the Debtor regarding the Chapter 11 proceeding
and advising the responsible party regarding various aspects of the
matter;
l. consult with professionals who the estate may need to hire;
m. prepare the Combined Plan and Disclosure Statement and
ballots and service upon creditors; and
n. file and represent during any adversary proceedings that
may arise; and
o. provide all other responsibilities and duties of counsel.
Maxwell received an initial retainer of $5,000 and as of the filing
date there was a balance of $1,668 remaining on hand.
Maxwell does not hold or represent any interest adverse to the
estate and are "disinterested persons" within the meaning of the
Bankruptcy Code, according to court filings.
The firm can be reached through:
Ethan D. Dunn, Esq.
Maxwell Dunn, PLC
24725 W. 12 Mile Rd., Ste. 306
Southfield, MI 48034
Phone: (248) 246-1166
About A to Z Total Appliance Repair, Inc.
A to Z Total Appliance Repair, Inc. (https://www.atozheating.com)
is a family owned company that services furnaces, water heaters and
air conditioners. Its technicians service and repair all models of
residential and commercial heating and air conditioning.
A to Z Total Appliance Repair, Inc. sought protection under Chapter
11 of the Bankruptcy Court (Bankr. E.D. Mich. Case No. 20-42714) on
Feb. 26, 2020. In the petition signed by Colleen Connor, vice
president, the Debtor estimated $141,008 in assets and $1,034,762
in liabilities.
Ethan D. Dunn, Esq. at MAXWELL DUNN, PLC, represents the Debtor as
counsel.
A.C. FURNITURE: Committee Seeks to Hire Kutak Rock as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of A.C. Furniture
Company, Inc. seeks authority from the U.S. Bankruptcy Court for
the Western District of Virginia to hire Kutak Rock LLP as its
counsel.
The Committee requires Kutak to:
i. advise the Committee with respect to its powers and duties
with regard to this bankruptcy case;
ii. advise and consult on issues raised during the pendency of
the chapter 11 case;
iii. take all necessary action including negotiation, preparing
appropriate pleadings, motions, applications, orders, reports and
papers necessary or otherwise beneficial to the interests of the
Committee; and
iv. perform all other necessary or otherwise beneficial legal
services for the Committee in connection with this chapter 11 case.
The attorneys and staff designated to represent the committee are:
Peter J. Barrett Partner $495
Brian H. Richardson Associate $330
Lynda M. Wood Paralegal $190
Charisse C. Matthews Paralegal $170
Peter J. Barrett, Esq., at Kutak Rock, disclosed in a court filing
that his firm is "disinterested" as defined in Section 101(14) of
the Bankruptcy Code.
Kutak Rock can be reached through:
Peter J. Barrett, Esq.
Brian H. Richardson, Esq.
KUTAK ROCK LLP
901 East Byrd Street, Suite 1000
Richmond, VA 23219
Tel: (804) 644-1700
Email: peter.barrett@kutakrock.com
brian.richardson@kutakrock.com
About A.C. Furniture Company
A.C. Furniture Company, Inc. -- https://acfurniture.com/ --
manufactures seating for the hospitality, healthcare, and food
service industry. It was founded in 1977.
A.C. Furniture Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Va. Case No. 20-60200) on Feb. 3,
2020. At the time of the filing, the Debtor disclosed $23,295,208
in assets and $9,457,063 in liabilities. Judge Paul M. Black
oversees the case. Timothy McGary, Esq., is the Debtor's legal
counsel.
A.C. FURNITURE: Seeks to Hire SC&H Capital as Investment Banker
---------------------------------------------------------------
A.C. Furniture Company, Inc. seeks authority from the U.S.
Bankruptcy Court for the Western District of Virginia to hire an
investment banker.
SC&H Capital will assist the Debtor the potential marketing and
sale of the Debtor's assets.
The Debtor requires SC&H to:
a. undertake a study in order to better understand the
business and inspect the assets of the business to determine their
physical condition;
b. identify potential buyers based on information to be
provided by the Debtor and make recommendations to prepare the
assets and the business for proper investigation by potential
buyers;
c. prepare an information memorandum or other materials about
the assets and the business for consideration by prospective buyers
and prepare advertising letters, fliers and /or similar sales
materials, which would include information regarding the assets, in
each case, based on information provided by the Debtor;
d. prepare a program which may include marketing a potential
transaction through newspapers, magazines, journals, letters,
fliers, signs, telephone solicitations the Internet and /or such
other methods;
e. contact potential buyers for your consideration and
evaluation and require potential buyers to execute Confidentiality
Agreements in favor of the Debtor;
f. facilitate the development of a Virtual Data Room with
detailed information including financial statements, marketing
materials, customer and supplier lists, management CVs, facilities
and other information the Debtor seems relevant;
g. circulate any information memorandum and marketing
materials, provide access to the Room or send materials to
interested parties regarding the assets, after completing
confidentiality documents;
h. respond, provide information to, coordinate site visits,
communicate and negotiate with and obtain offers from interested
parties; advise the Debtor in structuring a transaction and make
recommendations as to whether or not a particular transaction offer
should be accepted.
i. in connection with a bankruptcy proceeding governing a
potential transaction, assist with the submission of bid procedures
to the court and conduct the auction that may result therefrom;
j. negotiate with various stakeholders of the Debtor, including
but not limited to, secured and unsecured creditors and equity
shareholders, in regards to the possible financial restructuring of
the existing claims of the creditors and/or equity stakeholders of
the Debtor; and
k. provide assistance in transaction structuring and pricing
discussion with potential buyers, on an as-needed, in an effort to
guide the transaction to a satisfactory conclusion and perform
related services necessary to maximize the proceeds to be realized
in any transaction.
The firm's compensation includes an initial fee of $20,000 and a
transaction fee. The transaction fee shall be equal to $150,000
plus 3 percent of transactions up to $10 million; plus 2 percent
transactions greater than $10 million.
The investment banker, other than the proposed employment in this
matter, has no connection with the Debtors, creditors, Office of
the United States Trustee, or any other party in interest in this
matter, according to court filings.
The firm can be reached through:
Kenneth W. Mann
SC&H Capital
7900 Westpark Drive, Suite A150
Tysons Corner, VA 22102
Phone: 703-287-5959
About A.C. Furniture Company
A.C. Furniture Company, Inc. -- https://acfurniture.com/ --
manufactures seating for the hospitality, healthcare, and food
service industry. It was founded in 1977.
A.C. Furniture Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Va. Case No. 20-60200) on Feb. 3,
2020. At the time of the filing, the Debtor disclosed $23,295,208
in assets and $9,457,063 in liabilities. Judge Paul M. Black
oversees the case. Timothy McGary, Esq., is the Debtor's legal
counsel.
A2Z WIRELESS: S&P Places 'B' ICR on CreditWatch Negative
--------------------------------------------------------
S&P Global Ratings placed all its ratings on U.S.-based
independent, exclusive Verizon retailer A2Z Wireless Holdings Inc.,
including its 'B' issuer credit rating, on CreditWatch with
negative implications.
"The CreditWatch placement follows our view that a sharp drop in
U.S. consumer spending from an intense and widespread coronavirus
outbreak could further weaken A2Z Wireless' store traffic and
sales, adding to top-line headwinds the company is already dealing
with. These include a continued elongation in the upgrade cycle and
the decision by customers to delay cell phone upgrades in
anticipation of the 5G roll-out. We also believe the company's
operations could be adversely impacted by supply chain disruptions.
Production issues at the OEMs', including Apple and Samsung,
manufacturing facilities in the Asia Pacific region are hurting the
supply of cell phones. We believe the rapidly evolving challenges
presented by the coronavirus pandemic increases the headwinds A2Z
Wireless faces, and we think that cushion in the company's credit
metrics could erode meaningfully in the near term," S&P said.
"We expect to resolve the CreditWatch within the next three months
as more information becomes available, including the company's next
earnings release. We believe there is an at least 50% chance that
we could lower the ratings at least one notch as we evaluate the
company's liquidity and financial position," S&P said.
ADAMIS PHARMACEUTICALS: Delays Filing of 2019 Annual Report
-----------------------------------------------------------
Adamis Pharmaceuticals Corporation filed a Form 10b-25 with the
Securities and Exchange Commission notifying the delay in the
filing of its Annual Report on Form 10-K for the year ended Dec.
31, 2019. Adamis filed this notification because it needs
additional time to prepare and review certain information and
complete its review of its financial statements and other
disclosures in the Form 10-K, including without limitation
regarding assessing the impact of the recent coronavirus outbreak
and declared national emergency, and related state actions, on the
financial statements and other disclosures in the Form 10-K in
light of, among other things, recent statements from the Securities
and Exchange Commission and the Public Company Accounting Oversight
Board, and the annual assessment of the impairment of its goodwill
and indefinite-lived intangible assets, which could not be
completed by the date required without incurring unreasonable
effort and expense. The Company anticipates that it will file its
Form 10-K as soon as reasonably possible and within the 15-day
grace period provided by Rule 12b-25 of the Securities Exchange Act
of 1934, as amended.
About Adamis
San Diego, Calif.-based Adamis Pharmaceuticals Corporation
(OTCQB:ADMP) -- http://www.adamispharmaceuticals.com-- is a
specialty biopharmaceutical company primarily focused on developing
and commercializing products in various therapeutic areas,
including respiratory disease and allergy. The Company's Symjepi
(epinephrine) Injections 0.3mg and 0.15mg were approved for use in
the emergency treatment of acute allergic reactions, including
anaphylaxis. Adamis recently announced a distribution and
commercialization agreement with Sandoz, a division of Novartis
Group, to market Symjepi in the U.S. Adamis is developing
additional products, including the company's ZIMHI naloxone
injection product candidate for the treatment of opioid overdose,
and a metered dose inhaler and dry powder inhaler product
candidates for the treatment of asthma and COPD. The company's
subsidiary, U.S. Compounding, Inc., compounds sterile prescription
drugs and certain nonsterile drugs for human and veterinary use, to
patients, physician clinics, hospitals, surgery centers and other
clients throughout most of the United States.
Adamis incurred a net loss of $39 million in 2018, following a net
loss of $25.53 million in 2017. As of Sept. 30, 2019, the Company
had $52.84 million in total assets, $12.54 million in total
liabilities, and total stockholders' equity of $40.30 million.
Mayer Hoffman McCann P.C., in San Diego, California, the Company's
auditor since 2007, issued a "going concern" qualification in its
report on the Company's consolidated financial statements for the
year ended Dec. 31, 2018. The auditors noted that the Company has
incurred recurring losses from operations, and is dependent on
additional financing to fund operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
AIR CANADA: Moody's Reviews Ba1 CFR for Downgrade Due to COVID-19
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Air Canada and its
Pass Through Trust Certificates under review for downgrade,
including its Ba1 Corporate Family Rating, Ba1- PD Probability of
Default rating, Baa3 first lien senior secured rating and Ba2
senior unsecured rating. The company's Speculative Grade Liquidity
rating remains unchanged at SGL-2. Moody's rates eight tranches of
enhanced equipment trust certificates across three Air Canada EETC
transactions, Series 2013-1, Series 2015-2 and Series 2017-1.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The passenger
airline sector has been one of the sectors most significantly
affected by the shock given its exposure to travel restrictions and
sensitivity to consumer demand and sentiment. The action reflects
the impact on Air Canada of the breadth and severity of the shock,
and the broad deterioration in credit quality it has triggered.
In its review, Moody's will consider (i) the sufficiency of the
company's liquidity profile, which is substantial with about CAD6
billion of cash and short-term investments currently on hand; (ii)
Air Canada's ability to aggressively reduce expenses and capital
investments to reduce cash outflows as new booking levels recede;
(iii) evolving market conditions, including demand patterns and
responsive additional capacity cuts; (iv) the potential for and
types of support the Canadian government might provide; and (v) the
potential to restore its credit metrics and a stronger cash buffer
in a timely manner following the coronavirus.
On Review for Downgrade:
Issuer: Air Canada
Corporate Family Rating, Placed on Review for Downgrade, currently
Ba1
Probability of Default Rating, Placed on Review for Downgrade,
currently Ba1-PD
Senior Secured First Lien Term Loan, Placed on Review for
Downgrade, currently Baa3 (LGD2)
Senior Secured First Lien Revolving Credit Facility, Placed on
Review for Downgrade, currently Baa3 (LGD2)
Senior Secured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Baa3 (LGD2)
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba2 (LGD5)
Issuer: Air Canada 2013-1 Pass Through Trusts
Senior Secured Enhanced Equipment Trust Series 2013-1 Class A,
Placed on Review for Downgrade, currently A3
Senior Secured Enhanced Equipment Trust Series 2013-1 Class B,
Placed on Review for Downgrade, currently Baa2
Issuer: Air Canada Series 2015-2 Pass Through Trusts
Senior Secured Enhanced Equipment Trust Series 2015-2 Class A,
Placed on Review for Downgrade, currently A1
Senior Secured Enhanced Equipment Trust Series 2015-2 Class AA,
Placed on Review for Downgrade, currently Aa2
Senior Secured Enhanced Equipment Trust Series 2015-2 Class B,
Placed on Review for Downgrade, currently Baa1
Issuer: Air Canada Series 2017-1 Pass Through Trusts
Senior Secured Enhanced Equipment Trust Series 2017-1 Class A,
Placed on Review for Downgrade, currently A1
Senior Secured Enhanced Equipment Trust Series 2017-1 Class AA,
Placed on Review for Downgrade, currently Aa2
Senior Secured Enhanced Equipment Trust Series 2017-1 Class B,
Placed on Review for Downgrade, currently Baa1
Outlook Actions:
Issuer: Air Canada
Outlook, Changed To Rating Under Review From Stable
Issuer: Air Canada 2013-1 Pass Through Trusts
Outlook, Changed To Rating Under Review From Stable
Issuer: Air Canada Series 2015-2 Pass Through Trusts
Outlook, Changed To Rating Under Review From Stable
Issuer: Air Canada Series 2017-1 Pass Through Trusts
Outlook, Changed To Rating Under Review From Stable
LIQUIDITY
Air Canada has good liquidity, supported by CAD6.0 billion of cash
and short-term investments and an undrawn CAD200 million committed
revolver. These sources are sufficient to fund its expectation at
this time of about CAD500 million of negative free cash flow and
mandatory annual debt and lease repayments of CAD 1.2 billion in
2020. Air Canada also has 89 unencumbered aircraft (almost half of
its fleet) which could be used to raise capital should the need
arise.
RATINGS RATIONALE
The rating action was prompted by the very sharp decline in
passenger traffic since the outbreak of coronavirus started during
January 2020, which will result in a significant negative free cash
flow in 2020, a weakening liquidity profile and a significantly
higher leverage. From a regionally contained outbreak the virus has
rapidly spread to many different regions severely denting air
travel. The International Air Travel Association's (IATA) latest
scenario analysis forecasts a decline in passenger numbers of
between 11% and 19% for the full year 2020.
Moody's base case assumptions are that the coronavirus pandemic
will lead to a period of severe cuts in passenger traffic over at
least the next three months with partial or full flight
cancellations and aircraft groundings, with all regions affected
globally. The base case assumes there is a gradual recovery in
passenger volumes starting in the third quarter. However there are
high risks of more challenging downside scenarios and the severity
and duration of the pandemic and travel restrictions is uncertain.
Air Canada has cut capacity, postponed launches and extended the
temporary suspension of numerous routes. For the second quarter of
2020, Air Canada expects, on average, system ASM capacity to
decline by approximately 50% versus the comparable period in 2019.
Air Canada is currently focusing on managing its way through this
very volatile market environment by reducing costs as much as
possible and by shoring up its liquidity profile. Air Canada
believes that, excluding fuel and depreciation and amortization
expenses, approximately 50 percent of its operating expenses are
variable in nature and has no current outstanding fuel hedge
positions.
Air Canada's (Ba1 RUR down) credit benefits from its leading
position in the duopolistic Canadian market, falling fuel costs and
liquidity Moody's deems supportive through this difficult market.
It is constrained by the severe drop in passenger demand and
uncertainty regarding the length and impact of current market
conditions.
The airline sector currently accounts for about 2% of global carbon
emissions with 65% of its emissions coming from international
flights. Canada (and as a result Air Canada) is one of the 70
countries that have voluntarily elected to early adopt the
International Civil Aviation Organization's Carbon Offsetting and
Reduction Scheme for International Aviation, which targets capping
carbon emissions at 2020 levels and requires purchases of offsets
for airlines' that exceed their targets. Moody's expects that fuel
expense will increase for carbon offset costs incurred from 2021.
The review of the EETC ratings accompanies the placement on review
for downgrade of the corporate family rating. Moody's assigns
ratings to EETCs by notching above an airline's corporate family
rating, based on certain legal protections, its opinion of the
importance of the aircraft collateral to the airline's network,
whether there is a liquidity facility, its estimates of the size of
the projected equity cushion, and each Classes' position in the
waterfall. Moody's estimates the peak LTVs of the Class AA tranches
at about 42%, at about 60% for the Class As and about 74% and 80%
for the Class Cs across the three outstanding transactions.
Changes in the EETC ratings can result from any combination of
changes in the underlying credit quality or ratings of the company,
Moody's opinion of the importance of the aircraft collateral to the
operations and/or its estimates of current and projected aircraft
market values, which will affect estimates of loan-to-value.
The principal methodology used in rating Air Canada was Passenger
Airline Industry published in April 2018. The principal
methodologies used in rating Air Canada 2013-1 Pass Through Trusts,
Air Canada Series 2015-2 Pass Through Trusts and Air Canada Series
2017-1 Pass Through Trusts were Passenger Airline Industry
published in April 2018 and Enhanced Equipment Trust and Equipment
Trust Certificates published in July 2018.
Air Canada is the largest provider of scheduled airline passenger
services within, and to and from Canada. Revenue in 2019 was
CAD19.1 billion. The company is headquartered in Saint-Laurent,
Quebec, Canada.
ALASKA AIR: S&P Downgrades ICR to 'BB' on Reduced Travel Demand
---------------------------------------------------------------
S&P Global Ratings downgraded Alaska Air Group Inc. to 'BB' from
'BB+'. At the same time, S&P placed all of its ratings on the
company on CreditWatch with negative implications.
"We believe Alaska's capacity reductions, along with sharply lower
oil prices, will be insufficient to offset the decline in travel
demand. Alaska announced it is adjusting network capacity by around
15%, freezing nonessential spending, and reducing capital
expenditure (capex). Although the company should also benefit from
sharply lower oil prices, we do not believe this will be adequate
to offset sharply lower traffic as lower bookings and cancellations
dramatically reduce demand," S&P said.
"We expect to resolve the CreditWatch as we learn more about the
impact of the coronavirus on Alaska's financial position. We would
likely lower ratings if we expect funds from operations to debt to
average below 30%, with little prospect of improvement over the
2020-2021 period," S&P said.
ALL CARE NOW: May Continue Using Cash Collateral Until April 3
--------------------------------------------------------------
Judge Deborah L. Thorne of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized All Care Now, LLC ("ACN")
and Home Health and Infusion Options, Inc. ("HHIO") to use cash
collateral to pay post-petition expenses to third parties during
the period through April 3, 2020.
In return for the Debtors' continued interim use of cash
collateral, Bank of America, N.A. ("BofA") is granted adequate
protection for its asserted secured interests in Debtors' assets,
which includes:
(a) The Debtors will permit BofA to inspect, upon reasonable
notice, within reasonable business hours, the Debtors' books and
records.
(b) The Debtors must maintain and pay premiums for insurance
to cover any insurable collateral from fire, theft and water
damage.
(c) Upon reasonable request, the Debtors must make available
to BofA evidence of that which constitutes its collateral or
proceeds thereof.
(d) BofA is granted replacement liens in assets that the
Debtors acquire after the Petition Date, but only to the extent of
the diminution in value of the assets in which it had pre-petition
liens.
A final hearing on the Cash Collateral Motion is scheduled to take
place on March 31, 2020 at 10:00 a.m.
A copy of the Third Interim Order is available for free at
https://is.gd/td35As from PacerMonitor.com.
About All Care Now LLC and HHIO
All Care Now, LLC ("ACN") is a health care provider in Chicago,
Illinois. ACN is in the business of coordinating necessary clinical
care and healthcare services between providers and patients
including administrative functions, insurance authorizations,
pharmaceutical services, and nursing and physical therapy
management. ACN's primary customers are home-health agencies. It
does not contract directly with hospitals or doctors.
Home Health and Infusion Options, Inc. also known as HHIO --
https://www.hhio.net/ -- provides management services to ACN,
including the services of Christopher Kujawski and Devin Barrett as
managers, use of facilities and equipment, marketing support, and
the use of numerous software licenses used in the operation of
ACN's business.
ACN and HHIO sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ill. Lead Case No. 19-33490) on Nov. 25, 2019.
The petition was signed by Christopher Kujawski, manager/chief
financial officer. At the time of the filing, ACN was estimated to
have $1 million to $10 million in both assets and liabilities,
while HHIO was estimated to have $100,000 to $500,000 in assets and
$1 million to $10 million in debt. The Hon. Deborah L. Thorne is
the case judge. HHIO is represented by FREEBORN & PETERS LLP.
ALLEGIANT TRAVEL: S&P Cuts ICR to B+ on Reduced Air Travel Demand
------------------------------------------------------------------
S&P Global Ratings downgrades Allegiant Travel Co. to 'B+' from
'BB-', though its 'BB-' issue-level rating on the company's $550
million term loan remains unchanged. At the same time, S&P placed
all of its ratings on the company on CreditWatch with negative
implications.
"We believe Allegiant's low-cost structure and capacity reductions,
along with sharply lower oil prices, will be insufficient to offset
the decline in its travel demand. While the company has yet to
announce any changes to its flight schedules, we expect it to
reduce its capacity over time as domestic demand continues to
decline. We expect Allegiant to benefit from declining fuel prices
and its low-cost structure relative to those of other industry
participants. However, we do not believe that the company's
capacity reductions and cost-savings initiative or sharply lower
oil prices will be enough to offset the steep reduction in its
passenger traffic," S&P said.
CreditWatch
S&P expects to resolve the CreditWatch when it learns more about
the effect of the coronavirus on Allegiant's financial position.
ALMANOR LAKEFRONT: Judge Seeks Revision to Plan Disclosures
-----------------------------------------------------------
Almanor Lakefront LLC filed a Combined Chapter 11 Plan of
Reorganization and Disclosure Statement on Feb. 12, 2020, and
noticed a hearing for March 20, 2020. The Court held that the
Disclosure Statement hearing set for March 5, 2020 will be
continued to April 2, 2020, because the notice of the hearing is
not proper so it should not be on the calendar.
In the interests of advancing this case, the court makes the
following observations on the Disclosure Statement. It would be
advisable to address these points in any revised document set for
hearing:
1. Page 2 lines 11-12: It says the Debtor will be discharged from
all pre-confirmation debts (with certain exceptions) if Debtor
makes all Plan payments. However, in Part 5(a) on page 8, it says
"Debtor shall not receive a discharge of debts under this plan."
Debtor is aware of this error per its Errata Notice.
2. Class 1(b): These are claims of subtenants who will not get
any distribution under the plan and are presumed to reject the
plan, without the ability to vote. There is no explanation as to
the nature of these subtenant claims and why they are not getting
any distribution.
3. Page 5 lines 2-3: This section may be garbled. It indicates
that all membership interests will be terminated, and Debtor may
dissolve the LLC. If there are no members, how could the LLC
continue?
4. Part 4(b) page 7: Debtor here rejects executory contracts of
the subtenants and states that “Claims arising from rejection of
executory contracts have been included in Class 2 (general
unsecured claims).” These parties are not found in Class 2. Does
Debtor mean Class 1(b)?
Judge Stephen L. Johnson has orderered that the time for hearing on
a revised Disclosure Statement is shortened. The Debtor should
file a revised Disclosure Statement by March 13, 2020. The Debtor
may set that revised document for hearing on April 2, 2020, at 1:30
p.m. The Debtor should give notice of that hearing no later than
the date the revised documents are filed, March 13, 2020.
A full-text copy of the order dated March 4, 2020, is available
at https://tinyurl.com/yx7nqka7 from PacerMonitor.com at no
charge.
About Almanor Lakefront
Almanor Lakefront L.L.C. operates a recreational park, which stands
on a 1.45-acre leased real property in County of Plumas,
California. It, in turn, sublets divisions of the property to 19
subtenants.
Almanor Lakefront sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 19-51578) on Aug. 5,
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. MacDonald Fernandez LLP is the Debtor's legal counsel.
ALPHATEC HOLDINGS: Incurs $57 Million Net Loss in 2019
------------------------------------------------------
Alphatec Holdings, Inc., filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$57 million on $113.43 million of total revenues for the year ended
Dec. 31, 2019, compared to a net loss of $28.97 million on $91.69
million of total revenues for the year ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $169.95 million in total
assets, $36.39 million in total current liabilities, $53.45 million
in long-term debt, $925,000 in operating lease liability, $11.95
million in other long-term liabilities, $23.60 million in
redeemable preferred stock, and $43.63 million in total
stockholders' equity.
The Company used net cash of $33.1 million from operating
activities for the year ended Dec. 31, 2019. During this period,
net cash used in operating activities consisted of the Company's
net loss adjusted for non-cash adjustments including amortization,
depreciation, stock-based compensation, amortization of its ASC 842
assets, provision for doubtful accounts, provision for excess and
obsolete inventory, interest expense related to amortization of
debt discount and issuance costs, beneficial conversion feature
related to its Convertible Notes, and contingent consideration fair
market value adjustment of $24.7 million and working capital and
other assets used cash of $8.4 million.
The Company used cash of $13.0 million in investing activities for
the year ended Dec. 31, 2019, primarily for the purchase of
surgical instruments to support the commercial launch of new
products.
Financing activities provided net cash of $64.2 million for the
year ended Dec. 31, 2019, primarily attributable to the net
proceeds of $53.8 million from the Offering, $9.7 million net draw
under its Squadron expanded credit facility, $1.9 million from
warrant and stock option exercises and purchase of common stock
under its employee stock purchase plan, and net borrowings under
the lines of credit of $1.8 million, partially offset by principal
payments on our term loan totaling $3.0 million.
Alphatec said, "We have experienced negative operating cash flows
for all historical periods presented and we expect these losses to
continue into the foreseeable future as we continue to incur costs
related to the execution of our operating plan and introduction of
new products. Our annual operating plan projects that existing
working capital at December 31, 2019 of $71.9 million (including
cash of $47.1 million), along with available draws on our working
capital credit line with MidCap and an additional $20 million in
available borrowings under our credit facility with Squadron
Medical Finance Solutions LLC ("Squadron"), allows us to fund our
operations through at least one year subsequent to the date the
financial statements are issued."
A full-text copy of the Form 10-K is available for free at:
https://is.gd/IMgOFw
About Alphatec Holdings, Inc.
Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, Inc., is a medical device company dedicated to
revolutionizing the approach to spine surgery through clinical
distinction. ATEC architects and commercializes approach-based
technology that integrates seamlessly with the SafeOp Neural
InformatiX System to provide real-time, objective nerve information
that can enhance the safety and reproducibility of spine surgery.
AMAZING ENERGY: Delays Form 10-Q for Period Ended Jan. 31
---------------------------------------------------------
Amazing Energy Oil & Gas, Co., filed a Form 12b-25 with the
Securities and Exchange Commission notifying the delay in the
filing of its Quarterly Report on Form 10-Q for the period ended
Jan. 31, 2020.
Amazing Energy was unable, without unreasonable effort or expense,
to file its Quarterly Report by the March 16, 2020 filing date
applicable to smaller reporting companies due to a delay
experienced by the Registrant in finalizing the presentation of the
financial statements in the Quarterly Report. As a result, the
Registrant is still in the process of compiling required
information to complete the Quarterly Report and its independent
registered public accounting firm requires additional time to
complete its review of the financial statements for the quarter
ended Jan. 31, 2020 to be incorporated in the Quarterly Report.
The Registrant anticipates that it will file the Quarterly Report
no later than the fifth calendar day following the prescribed
filing date.
About Amazing Energy
Amazing Energy Oil and Gas, Co. -- http://www.amazingenergy.com/--
is an independent oil and gas exploration and production company
headquartered in Plano, Texas. The Company's primary leasehold is
in the Permian Basin of West Texas. The Company controls over
75,000 acres between their rights in Pecos County, Texas and assets
in Lea County, New Mexico, and Walthall County, Mississippi. The
Company primarily engages in the exploration, development,
production and acquisition of oil and natural gas properties.
Amazing Energy's operations are currently focused in the Permian
Basin and Gulf Coast regions.
Amazing Energy reported a net loss of $8.05 million for the year
ended July 31, 2019, compared to a net loss of $6.52 million for
the year ended July 31, 2018. As of Oct. 31, 2019, the Company had
$11.03 million in total assets, $10.59 million in total
liabilities, and $440,116 in total stockholders' equity.
DeCoria, Maichel & Teague, P.S., in Spokane, Washington, the
Company's auditor since 2014, issued a "going concern"
qualification in its report dated Nov. 13, 2019, citing that the
Company has limited financial resources, negative working capital,
recurring losses and an accumulated deficit at July 31, 2019.
These factors raise substantial doubt about its ability to continue
as a going concern.
AMERICAN AIRLINES: S&P Places 'BB-' ICR on CreditWatch Negative
---------------------------------------------------------------
S&P Global Ratings placed its 'BB-' ratings on American Airlines
Group Inc. and its subsidiary American Airlines Inc. on CreditWatch
with negative implications.
With the steep decline in airline bookings due to the coronavirus
outbreak, American Airlines Group Inc.'s revenues and cash flow
will result in significantly weaker credit metrics in 2020 relative
to 2019 results and S&P's previous expectations.
While the company is reducing capacity with some associated costs
and it estimates that lower oil costs will reduce operating
expenses by around $3 billion in 2020, S&P expects these to be more
than offset by sharply weaker traffic levels. S&P now expects funds
from operations (FFO) to debt to decline to the high-single-digit
percent area in 2020, compared with the rating agency's previous
expectation of the high-teens-percent area, assuming passenger
traffic begins to recover later this year. As of March 13, 2020,
the company has $7.8 billion of liquidity composed of close to $4
billion of cash, and revolver capacity. It recently paid off $500
million of debt that matured March 1 and raised $500 million of
unsecured notes in late February with proceeds earmarked for a
pension contribution. It also has $10 billion of unencumbered
assets, no large near-term debt maturities (other than amortizing
equipment debt) until 2022, and has suspended share repurchases,"
S&P said.
CreditWatch
S&P expects to resolve the CreditWatch when it has more information
regarding the degree and timing of the return of passenger travel.
If it expects that FFO/debt is likely to average below 12% over the
2020-2021 period, S&P would likely lower ratings. While S&P
currently doesn't see liquidity as a near-term risk, American is
hurt more by its higher debt load relative to other U.S. network
airlines.
AMERICAN RENEWABLE: Hires Levene Neale as Bankruptcy Counsel
------------------------------------------------------------
American Renewable Power LLC seeks authority from the U.S.
Bankruptcy Court for the Central District of California to employ
Levene Neale Bender Yoo & Brill L.L.P., as bankruptcy counsel to
the Debtor.
American Renewable requires Levene Neale to:
a. advise the Debtor regarding the requirements of the
Bankruptcy Court, Bankruptcy Code, Bankruptcy Rules and the Office
of the U.S. Trustee;
b. advise the Debtor regarding the rights and remedies of its
bankruptcy estate and the rights, claims and interests of
creditors;
c. represent the Debtor in any proceeding or hearing in the
bankruptcy court involving its estate unless it is represented in
such proceeding or hearing by a special counsel;
d. conduct examinations of witnesses, claimants or adverse
parties and represent the Debtor in adversary proceedings except
those outside of the firm's expertise or beyond its staffing
capabilities;
e. prepare and assist the Debtor in the preparation of
documents with respect to the use, sale or lease of property
outside the ordinary course of business;
f. help the Debtor obtain approval to use cash collateral or
get financing; and
g. assist the Debtor in the negotiation, formulation,
preparation and confirmation of a plan of reorganization.
Levene Neale will be paid at these hourly rates:
Attorneys $495 to $635
Paralegals $250
Todd M. Arnold, Esq. and David B. Golubchik, Esq. will be the
primary attorneys at Levene Neale responsible for the
representation of the Debtors during their Chapter 11 cases. Their
current hourly billing rates are $595 and $635 and, respectively.
LNBYB received a total of $53,434 from the Debtors, inclusive of a
$50,000 retainer and the $3,434 Chapter 11 filing fees.
Levene Neale will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mr. Golubchik, partner of Levene Neale Bender Yoo & Brill L.L.P.,
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.
Levene Neale can be reached at:
David B. Golubchik, Esq.
LEVENE NEALE BENDER YOO & BRILL L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
About American Renewable Power LLC
American Renewable Power LLC -- https://www.amerpower.com/ -- is a
California-based company that acquires, owns and operates renewable
energy power facilities in the US. ARP acquires and operates
large-scale biomass, wind and solar generation assets to provide a
renewable electricity source to large corporate and institutional
customers.
American Renewable Power LLC filed a voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
20-10533) on Feb. 18, 2020. At the time of filing, the Debtor
estimated $1 million to $10 million in both assets and liabilities.
Levene, Neale, Bender, Yoo & Brill L.L.P. is the Debtor's
bankruptcy counsel.
AMERICORE HOLDINGS: Trustee Hires Baker & Hostetler as Counsel
--------------------------------------------------------------
Carol L. Fox, Chapter 11 Trustee of Americore Holdings, LLC and its
debtor-affiliates seek approval from the US Bankruptcy Court for
the Eastern District of Kentucky to retain Baker & Hostetler LLP as
her lead counsel.
The Trustee requires the counsel to:
(a) advise the Trustee with respect to the powers and duties
of the Debtors in the continued management and operation of their
business and properties;
(b) advise and consult on the conduct of these chapter 11
cases, including all of the legal and administrative requirements
of operating in chapter 11;
(c) attend meetings and negotiating with representatives of
creditors and other parties in interest;
(d) take necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending actions commenced against the Debtors and
representing the Debtors' interests in negotiations concerning
litigation in which the Debtors are involved, including objections
to claims filed against the Debtors' estates;
(e) preparing, on behalf of the Trustee, pleadings, including
motions, applications, answers, orders, reports and papers
necessary or otherwise beneficial to the administration of the
Debtors' estates, including the Debtors' Chapter 11 plan;
(f) advise the Trustee in connection with obtaining
post-petition financing;
(g) advise the Trustee in connection with any sale of the
Debtors' assets;
(h) consult with the Trustee regarding employment, tax and
pension matters;
(i) advise the Trustee regarding healthcare matters;
(j) appear before the Bankruptcy Court and any appellate
courts to represent the interests of the Trustee for the Debtors'
estates before those courts;
(k) perform all other necessary or otherwise beneficial legal
services and provide legal advice to the Trustee in these chapter
11 cases; and
(l) represent the Trustee as may be necessary in courts of
appeal and in administrative tribunals.
Baker is a "disinterested person" as that term is defined in
section 101(14) of the Bankruptcy Code, according to court
filings.
Baker will reduce the hourly rates of two partners, Jimmy D.
Parrish ($615) and Elizabeth A. Green ($720) to $550 per hour as a
courtesy to the Trustee and the Debtors' estates.
The Firm's standard hourly rates are:
Bankruptcy Partners $430– $550
Associates $340- $490
Paraprofessionals $200- $300
Travel Time 50% of the foregoing rates
The firm can be reached through:
Elizabeth A. Green, Esq.
Baker & Hostetler LLP
200 South Orange Avenue, Suite 2300
Orlando, FL 32801-3432
Tel: +1 407-649-4000
Fax: +1 407-841-0168
About Americore Holdings
Americore Holdings, LLC and its affiliates, including Americore
Health LLC, own and operate the Ellwood City Medical Center in
Pennsylvania, Southeastern Kentucky Medical Center (formerly
Pineville Community Hospital), Izard County Medical Center in
Arkansas; and St. Alexius Hospital in St. Louis.
Americore Holdings and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No.
19-61608) on Dec. 31, 2019. At the time of the filing, the Debtor
had estimated assets of less than $50,000 and liabilities of less
than $50,000. Judge Gregory R. Schaaf oversees the case. Bingham
Greenebaum Doll, LLP is the Debtor's legal counsel.
ARA MACAO: Trustee Taps Cushman & Wakefield as Brokers
------------------------------------------------------
S. Cary Forrester, the Chapter 11 trustee of Ara Macao Holdings,
L.P., seeks authority from the U.S. Bankruptcy Court for the
District of Arizona to retain Cushman & Wakefield Iowa Commercial
Advisors as his real estate broker.
The estate owns approximately 615 acres of undeveloped real
property situated just north of the Placencia Peninsula in Belize.
The Trustee requires the services of a real estate broker to assist
him in marketing and selling the property.
The individual with primary responsibility for the engagement will
be John Viggers.
Cushman will extensively and aggressively market the property at
its own expense, with the following exceptions:
i. The estate will reimburse Mr. Viggers' airfare and hotel
accommodations for an initial tour of the Property;
ii. The estate will provide Cushman with a $25,000 deposit to
be used for marketing and technology expenses; and,
iii. The foregoing amounts will be deducted from any commission
ultimately paid to Cushman.
In the event of a sale, Cushman will receive a commission equal to
4% of the sales price, contingent upon the sale actually closing.
If the buyer is not represented by a broker, the commission will be
reduced to 3%; and, in the event of a sale within twelve months
after the one-year term ends to a prospect introduced to the
property by Cushman during the one-year term, Cushman will be
entitled to a 3% commission, provided that it submitted the name
and address of the prospect before the end of the one-year term.
Mr. Viggers 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.
The firm can be reached through:
John Viggers
Cushman & Wakefield
Iowa Commercial Advisors
3737 Woodland Ave #100
West Des Moines, IA 50266
Phone: +1 515-309-4002
About Ara Macao Holdings
Ara Macao Holdings, L.P., provides real estate development
services.
On April 6, 2018, an involuntary Chapter 11 petition was filed
against Ara Macao Holdings, L.P. (Bankr. D. Ariz. Case No.
18-03615). On May 8, 2018, the involuntary proceeding was
converted to a voluntary Chapter 11 proceeding (Bankr. D. Ariz.
Case No. 18-03615).
The case is assigned to Judge Paul Sala.
The petitioning creditors are KB Partners, Inc., Christopher de
Sibert, Gary Nitsche, Daniel Dorgan, Richard Umbach and Edgewater
Resources, LLC. They are represented by Patrick A Clisham, Esq., at
Engelman Berger, P.C.
The Debtor hired Burch & Cracchiolo, P.A. as bankruptcy counsel.
S. Cary Forrester was appointed as the Chapter 11 trustee for Ara
Macao Holdings. The trustee hired Forrester & Worth, PLLC as
counsel.
ARBOR PHARMACEUTICALS: Moody's Alters Outlook on B3 CFR to Neg.
---------------------------------------------------------------
Moody's Investors Service affirmed Arbor Pharmaceuticals, LLC's
ratings, including its B3 Corporate Family Rating, B3-PD
Probability of Default Rating, and B3 rating on its senior secured
credit facilities. Moody's also revised the outlook to negative
from stable.
The negative outlook reflects the risk that Arbor will be unable to
reverse negative earnings trends across its product portfolio and
refinance its $75 million revolver that expires in July 2021. It
also reflects the risk that Arbor is unable to gain FDA approval
for, and transition patients to, a reformulated version of a
hospital product, prior to its May 2020 orphan exclusivity
expiration. The hospital product in question, represents
approximately 10% of Arbor's total revenue.
The affirmation of the B3 CFR primarily reflects the company's good
liquidity, with cash expected to remain over $100 million and
positive free cash flow, even under a scenario in which several of
its products faces pressure due to generic competition.
Ratings affirmed:
Arbor Pharmaceuticals, LLC
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
Senior secured credit facilities at B3 (LGD3)
Outlook Action:
Outlook changed to negative from stable.
RATINGS RATIONALE
The B3 Corporate Family Rating reflects Arbor's modest size with
revenues of less than $300 million. The rating also reflects
Moody's view that debt/EBITDA will be very high, increasing to over
8 times in 2020. This is due to price and volume pressures on
Arbor's product portfolio that will make it difficult to reverse
earnings declines in 2020. Further, Arbor has faced setbacks in
several life-cycle development projects for a hospital product and
BiDil, both of which face losses of exclusivity in 2020, exposing
Arbor to generic competition. Failure to get FDA approval of a
reformulation of the Orphan hospital product would further pressure
Arbor's ratings. Arbor's ratings continue to be supported by high
gross margins and minimal capital expenditures as well as cash
balances in excess of $100 million.
Social risks include Arbor's exposure to payor reimbursement and
concerns over high drug pricing in the US, which has contributed to
the company's challenges with commercial coverage and price and
volume declines. Moody's regards the coronavirus outbreak as a
social risk under Moody's ESG framework, given the substantial
implications for public health and safety. The rapid and widening
spread of the coronavirus outbreak, deteriorating global economic
outlook, falling oil prices, and asset price declines are creating
a severe and extensive credit shock across many sectors, regions
and markets. The combined credit effects of these developments are
unprecedented. Although the pharmaceutical sector is less exposed
from a consumer demand standpoint than other sectors, the diversion
of healthcare resources to treating the outbreak will reduce demand
for some pharmaceutical products.
Arbor's liquidity remains good, supported by cash balances in
excess of $130 million and Moody's expectation that the company
will generate around $20 million in free cash flow in 2020. Moody's
believes cash balances will decline modestly after $25 million in
annual mandatory term loan amortization. Arbor's $75 million
revolver is undrawn, expiring in July 2021. Arbor's term loan
matures in 2023. The credit agreement has no financial maintenance
covenants. The revolver has a springing first lien net leverage
covenant that is tested only when the revolver is more than 30%
drawn, which Moody's does not anticipate.
Arbor's ratings could be downgraded if it is unable to reverse
earnings declines, specifically, averting declines from generic
competition on the hospital product before the orphan exclusivity
expires in May 2020. Failure to proactively refinance its revolver
could also lead to a downgrade.
The ratings could be upgraded if Arbor returns to sustainable
growth such that debt/EBITDA is maintained below 5.0 times. The
ratings could also be upgraded if Arbor is able to successfully
execute new product launches from its branded pipeline, while
increasing size and scale.
Arbor is a US-based specialty pharmaceutical company that sells a
portfolio of branded drugs in the cardiology, hospital, and
pediatric areas. Arbor also sells antibiotic products and has a
small generic drug division. The company is owned primarily by KKR,
Chairman Jason Wild and his funds, management, and ARCH Healthcare
Fund. The company's financials are not publicly disclosed.
The principal methodology used in these ratings was Pharmaceutical
Industry published in June 2017.
ARDEN HOLDINGS: April 14 Hearing on Disclosure Statement
--------------------------------------------------------
Arden Holdings, LLC, filed a Plan of Reorganization and a
Disclosure Statement on March 2, 2020.
The hearing on the Disclosure Statement will be held in U.S.
Bankruptcy Court, Courtroom 1404, 75 Ted Turner Drive, S.W.,
Atlanta, Georgia 30303, at 1:30 P.M. on April 14, 2020.
Attorney for the Debtor:
Will B. Geer
Wiggam & Geer, LLC
50 Hurt Plaza, SE, Suite 1150
Atlanta, Georgia 30303
Tel: (404) 233-9800
Fax: (404) 287-2767
E-mail: wgeer@wiggamgeer.com
About Arden Holdings
Arden Holdings, LLC, based in Atlanta, GA, filed a Chapter 11
petition (Bankr. W.D. Ga. Case No. 19-69373) on Dec. 2, 2019. In
the petition signed by Sean Boyd, managing member, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities. Will B. Geer, Esq., at Wiggam & Geer, LLC, serves as
bankruptcy counsel to the Debtor.
ASCENA RETAIL: S&P Upgrades ICR to 'CCC-' After Distressed Exchange
-------------------------------------------------------------------
S&P Global Ratings raised its issuer rating on Ascena Retail Group
Inc. to 'CCC-' from 'SD' and maintained the 'D' rating on the term
loan due August 2022.
"The rating action reflects our view of the likelihood of a
conventional default or a broad-based restructuring of Ascena's
capital structure in the next six months. Our opinion considers the
company's unsustainable capital structure, its still significant
debt burden following the repurchases, and our expectation for weak
performance amid a highly challenging operating environment. The
rating also reflects our view that the recent coronavirus outbreak
in the U.S. will further pressure store traffic and limit
conventional refinancing prospects," S&P said.
The negative outlook reflects S&P's view that the company will
likely pursue a restructuring in the next six months. The outlook
also incorporates the challenges the company faces in turning
around its weak operating performance amid an intensively
competitive environment.
"We could lower our rating on Ascena to 'CC' if the company
announces a broad-based restructuring of its capital structure. We
could also lower the rating to 'D' or 'SD' if we believed a default
was inevitable," S&P said.
"We would raise our rating to 'CCC' if we believe it is unlikely
that the company will restructure its debt within the next six
months," the rating agency said.
ASPEN CLUB: Seeks to Hire FTI Consulting as Financial Advisor
-------------------------------------------------------------
The Aspen Club & Spa, LLC and Aspen Club Redevelopment Company, LLC
seek approval from the U.S. Bankruptcy Court for the District of
Colorado to hire FTI Consulting, Inc. as their financial advisor
and consultant.
FTI Consulting will assist the Debtors in relation to confirmation
of their modified joint second amended chapter 11 plan and
reorganization efforts. FTI will provide advisory and consulting
services with respect to the Debtors' business and operations
related to the bankruptcy cases and Debtors' chapter 11 plan.
Hourly rates charged by FTI are:
Senior Managing Directors $920-$1,295
Directors, Senior Directors
and Managing Directors $690-$905
Consultants and Senior Consultants $370-$660
Administrative and Paraprofessionals $150-$280
Alan Tantleff, senior managing director of FTI, attests that the
firm is a "disinterested person," as defined under 11 U.S.C. Sec.
101(14) and as required for employment under 11 U.S.C. Sec.
327(a).
The firm can be reached through:
Alan Tantleff
FTI Consulting, Inc.
Three Times Square, 9th Floor
New York, NY, 10036
Tel: +1 212 499 3613
Fax: +1 212 841 9350
Email: alan.tantleff@fticonsulting.com
About The Aspen Club & Spa
The Aspen Club & Spa, LLC owns and operates a private membership
club that offers high intensity interval training (HI2T), cardio,
and yoga classes.
Aspen Club & Spa sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 19-14158) on May 16,
2019. At the time of the filing, Aspen Club & Spa had estimated
assets of less than $50,000 and liabilities of between $100 million
and $500 million.
On May 17, 2019, Aspen Club Redevelopment Company, LLC filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Colo. Case No. 19-bk-14200). Aspen Club
Redevelopment is a wholly-owned subsidiary of Aspen Club & Spa.
Judge Joseph G. Rosania Jr. oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker LLC as their
legal counsel.
AUTHENTIC HOSPITALITY: Seeks to Hire Van Horn Law as Attorney
-------------------------------------------------------------
Authentic Hospitality Group Inc. seeks approval from the US
Bankruptcy Court for the Southern District of Florida to hire Chad
T. Van Horn, Esq. and Van Horn Law Group Inc. as its attorneys.
The professional services Van Horn Law will render are:
a) give advice to the Debtor with respect to its powers and
duties as a debtor in possession and the continued management of
its business operations;
b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
c) prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d) protect the interest of the Debtor in all matters pending
before the court;
e) represent the Debtor in negotiation with its creditors in
the preparation of a plan.
Van Horn Law Group will undertake this engagement on an hourly
basis at these rates:
Chad Van Horn, Esq. $450
Associates $350
Jay Molluso $300
Law Clerks $175
Paralegals $175
Van Horn Law Group received $11,717 as retainer.
Chad Van Horn, Esq., attests neither the professionals nor the law
firm has any connection with the creditors or other
parties-in-interest or their respective attorneys. Neither the
attorney nor the law firm represent any interest adverse to the
Debtor.
Van Horn Law can be reached at:
Chad T. Van Horn, Esq.
VAN HORN LAW GROUP, INC.
330 N. Andrews Ave., Suite 450
Fort Lauderdale, FL 33301
Tel: (954) 765-3166
E-mail: Chad@cvhlawgroup.com
About Authentic Hospitality Group Inc.
Authentic Hospitality Group Inc. is a privately held company in the
restaurant industry. I Love Tacos
(https://ilovetacosrestaurant.com) serves authentic Mexican cuisine
in all of South Florida. The Debtor previously sought bankruptcy
protection on Dec. 2, 2019 (Bankr. S.D. Fla. Case No. 19-26119).
Authentic Hospitality Group Inc. filed its voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
20-12883) on March 2, 2020. The petition was signed by Monica
Angulo, president. At the time of filing, the Debtor estimated
$2,875,207 in assets and $3,270,967 in liabilities. Chad T. Van
Horn, Esq. represents the Debtor as counsel.
AVIS BUDGET: S&P Puts 'BB' ICR on Watch Negative on Reduced Travel
------------------------------------------------------------------
S&P Global Ratings placed all ratings on Avis Budget Group Inc.,
including its 'BB' issuer credit rating, on CreditWatch with
negative implications.
The sharp decline in air travel due to the coronavirus pandemic
will hurt demand for car rentals at airports, the largest part of
Avis Budget's business. Further, the pandemic and government
actions to combat it will hurt economic activity, an effect likely
to linger after cases of the virus decline. Car renters have some
flexibility to respond to sharp demand shocks and have done so in
the past. During the period following the Sept. 11, 2001, attacks,
the U.S. car rental industry was able to downsize its fleet by
around 20% in the following month by returning cars to the auto
manufacturers under agreements that allowed such returns as long as
certain conditions were met. However, most of Avis Budget's
vehicles today are not covered under these agreements, which could
cause oversupply and thus pressure on used car prices.
Car renters can also reduce capital spending on new vehicles by
keeping their cars for longer periods. During the 2008-2009
financial crisis, Avis Budget had a substantial amount of near-term
maturities. Yet, it was able to refinance those through
asset-backed fleet financings, albeit at higher prices.
"We expect Avis Budget to be able to refinance its upcoming
maturities in a similar fashion this time as well. We will be
watching how Avis Budget reduces its fleet to meet lower demand and
refinances its maturities to have a better idea of how it responds
to the current situation," S&P said.
S&P expects to resolve the CreditWatch as it learns more about the
severity of the coronavirus impact and timing of the recovery on
Avis Budget's financial position.
AVSC HOLDING: S&P Puts 'B-' ICR on CreditWatch Negative
-------------------------------------------------------
S&P Global Ratings placed all its ratings on AVSC Holding Corp.,
including its 'B-' issuer credit rating, on CreditWatch with
negative implications.
The COVID-19 outbreak has led to an increasing number of corporate
event cancellations and lower hotel occupancy rates. S&P expects
this to impair AVSC, an audio-visual technology provider that
primarily services corporate events in hotel-based venues.
The CreditWatch placement reflects AVSC's direct exposure to
corporate events and business travel affected by COVID-19. These
disruptions could hinder operating performance such that liquidity
becomes constrained by minimal to no cash flow generation. S&P
expects to resolve the CreditWatch once it assesses the breadth and
depth of the reduction of corporate events and business travel,
which directly reduces the services hotels need from AVSC. S&P
will determine to what extent fewer events hurts operating
performance and cash flow generation, and how steep a decline in
revenue, EBITDA, and cash flow generation AVSC faces over the next
12 months.
BALTIMORE HOTEL: S&P Cuts Bond Rating to BB+; Rating on Watch Neg.
------------------------------------------------------------------
S&P Global Ratings lowered the ratings on Baltimore Hotel Corp.'s
(BHC) senior secured revenue refunding bonds to 'BB+' from 'BBB-',
and placed the ratings on CreditWatch with negative implications.
"The downgrade reflects our view that BHC will not be able to
maintain our currently anticipated DSCR levels, which are under
significant pressure given the evolving impact of COVID-19 on BHC's
performance in 2020. The downgrade also reflects the risk that BHC
will face tremendous difficulties recovering from the impact of
COVID-19 in the next one to two years," S&P said.
"The placement of BHC's senior secured bond rating on CreditWatch
with negative implications reflects our concern of increasing
pressure on Baltimore's logging market due to the impact of
COVID-19 pandemic. As we monitor BHC's performance throughout the
next quarter, we could lower our ratings by one notch on BHC if a
9% or more decline in annual RevPAR is expected to occur in 2020
(equivalent to around 20,000 less room nights sold in 2020, all
else equal), which causes minimum DSCR to drop below 1.52x for the
debt term, unless mitigated by significant reduction in operating
expenses. We plan to resolve the CreditWatch placement within 90
days," S&P said.
BANTEC INC: Incurs $667K Net Loss in First Quarter
--------------------------------------------------
Bantec, Inc., filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q reporting a net loss of $666,843 on
$1.42 million of sales for the three months ended Dec. 31, 2019,
compared to a net loss of $1.06 million on $3.75 million of sales
for the three months ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $1.01 million in total assets,
$16.45 million in total liabilities, and a total stockholders'
deficit of $15.44 million.
As of Dec. 31, 2019, the Company had $995,062 in current assets,
including $162,708 in cash, compared to $1,064,665 in current
assets, including $149,832 in cash, at Sept. 30, 2019. Current
liabilities at Dec. 31, 2019, totaled $15,192,104, compared to
$14,697,003, at Sept. 30, 2019. The slight decrease in current
assets from Sept. 30, 2019 to Dec. 31, 2019 is primarily due to
decreases in accounts receivable of $202,046, partially offset by
an increase in inventory of $120,614, and an increase in cash of
approximately $12,876. The increase in current liabilities from
Sept. 30, 2019 to Dec. 31, 2019, of $495,101, is primarily due to
the increases in: accounts payable of $181,479, notes payable of
$119,187, and accrued expenses of $538,001; partially offset by
decreases in convertible notes payable of approximately $235,881,
(primarily due to restructuring of convertible notes to
non-convertible notes) and settlements payable of $131,724.
Bantec said, "While we have revenues from UAV sales as of this
date, no significant UAV revenues are anticipated until we have
implemented our full plan of operations, specifically, initiating
sales campaigns for our UAV internet and social media platforms. We
must raise cash to implement our strategy to grow and expand per
our business plan. We anticipate over the next 12 months the cost
of being a reporting public company will be approximately
$250,000.
"If we cannot raise additional proceeds via a private placement of
our equity or debt securities, or secure more loans, we would be
required to cease business operations. As a result, investors
would lose all of their investment. Under the terms of our credit
agreement with TCA, all potential new investments must first be
reviewed and approved by TCA, which may constrain our options for
new fundraising."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/Lm5Hmq
About Bantec
Bantec, Inc., f/k/a Bantek, Inc., is an Unmanned Aerial Vehicles
(UAV) and related services and technology company that intends to
engage in, testing and distribution, of advanced low altitude UAV
systems, services and products. Bantec, Inc. also provides product
procurement, distribution, and logistics services through its
wholly-owned subsidiary, Howco Distributing Co., to the United
States Department of Defense and Defense Logistics Agency. The
Company has operations Vancouver, Washington. The Company
continues to seek strategic acquisitions and partnerships with UAV
firms that offer superior technologies in high-growth markets, as
well as acquisitions and partnerships with firms that have
complementary technologies and infrastructure.
Salberg & Company, P.A., in Boca Raton, Florida, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Feb. 6, 2020 citing that the Company has a net loss
and cash used in operations of $7,115,159 and $1,105,330,
respectively, for the year ended Sept. 30, 2019 and has a working
capital deficit, stockholders' deficit and accumulated deficit of
$13,632,338, $14,895,354 and $26,746,451 respectively, at Sept. 30,
2019. The Company is also in default on certain promissory notes.
These matters raise substantial doubt about the Company's ability
to continue as a going concern.
BREAD & BUTTER: Final Cash Collateral Hearing Scheduled for May 8
-----------------------------------------------------------------
Judge Dale L. Somers of the U.S. Bankruptcy Court for the District
of Kansas authorized Bread & Butter Concepts, LLC and its
debtor-affiliates to use cash collateral pursuant to the terms of
the Third Interim Order.
The final hearing is scheduled for May 8, 2020 at 10:45 a.m.
Objections are due by no later than 4:00 p.m. on April 29.
Prior to the commencement of the Chapter 11 Cases, Core Bank,
Commercial Capital Company (or NBKC Bank, as assignee to Commercial
Capital Company), and US Foods, Inc. made certain loans and other
financial accommodations to the Debtors. The Debtors' obligations
to these Secured Creditors are secured by a security interest in
all Debtors' personal property.
Core Bank, US Foods and Commercial Capital will be provided
adequate protection as follows:
(a) Core Bank will be granted a validly perfected security
interest in the Core Bank post-petition depository accounts up to
the value as of the Petition Date and a validly perfected security
interest in Debtor Urban Table's post-petition Cash Collateral up
to the value as of the Petition Date.
(b) Commercial Capital Company, LLC, or NBKC Bank, as assignee
to Commercial Capital Company, will be granted a validly perfected
security interest in the Debtors' post-petition Cash Collateral up
to the value as of the Petition Date.
(c) US Foods will be granted a validly perfected security
interest in the Debtors' post-petition Cash Collateral up to the
value as of the Petition Date.
(d) The rights, liens and interests granted to the Secured
Creditors will be based on their relative rights, liens and
interests in the Debtors' Cash Collateral pre-petition. Said
post-petition security interests and liens will be valid, perfected
and enforceable and will be deemed effective and automatically
perfected as of the Petition Date without the necessity of the
Secured Creditors taking any further action.
(e) All Collateral will be insured to its full value and
Debtors will otherwise comply with the terms and conditions of the
Secured Creditors.
(f) The Debtors will establish or maintain
Debtor-in-Possession accounts at Mobank, a division of BOKF, NA,
and/or Core Bank and segregate deposits of each Debtor.
A copy of the Third Interim Order is available for free at
https://is.gd/OjYGWZ from PacerMonitor.com.
About Bread & Butter Concepts
Bread & Butter Concepts, LLC -- http://breadnbutterconcepts.com/--
was founded in 2011, and owns and operates multiple upscale
restaurants in the Kansas City metropolitan area.
Bread & Butter Concepts and its affiliates Texaz Crossroads LLC,
Texaz Table Restaurant of KS LLC, Texaz South Plaza LLC and Texaz
Plaza Restaurant LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Kan. Lead Case No. 19-22400) on Nov. 9,
2019. At the time of the filing, Bread & Butter disclosed
$4,121,754 in assets and $5,079,795 in liabilities. The cases have
been assigned to Judge Dale L. Somers. Sandberg Phoenix & von
Gontard P.C. is the Debtor's counsel.
BRINKER INTERNATIONAL: S&P Cuts ICR to BB-; Ratings on Watch Neg.
-----------------------------------------------------------------
S&P Global Ratings downgraded Brinker International Inc. to 'BB-'
from 'BB+' and placed all of its ratings on the company on
CreditWatch with negative implications.
The downgrade reflects S&P's expectation that Brinker's adjusted
leverage will exceed its downside trigger of 4.5x for fiscal year
2020 because S&P believes the company's operating results will
underperform the rating agency's previous base-case assumptions.
Mounting concerns over the spread of the coronavirus have led
states and local governments to take drastic actions, including to
cut restaurant seating capacity, limit dine-in options, and impose
curfews.
"We expect these restrictions, coupled with elevated consumer
concerns, to have a materially negative effect on restaurant sales.
While the virus' ultimate effect on Brinker's results is difficult
to forecast, given the unknown duration and severity of the
pandemic, we expect the company's revenue, profit, cash flow, and
credit metrics to be weaker than we previously forecast. Because of
this, we revised our assessment of Brinker's financial risk to
aggressive from significant," S&P said.
The CreditWatch placement reflects the possibility that the
company's liquidity will become less than adequate, which will
increase the downside pressure on our ratings, especially if
Brinker's operating results deteriorate and it is unable to amend
its revolving credit agreement at reasonable terms and with
adequate cushion for the covenants.
S&P plans to resolve the CreditWatch after the company provides
details on its efforts to secure an amendment and the rating agency
learns more about the effect of the coronavirus on the company's
financial results.
BRISTOL HEALTHCARE: Trustee Hires SLIB II Inc as Broker
-------------------------------------------------------
Elisabeth B. Donnovin, Chapter 11 trustee of Bristol Healthcare
Investors, L.P., seeks authority from the U.S. Bankruptcy Court for
the Eastern District of Tennessee to retain SLIB II, Inc. d/b/a
Senior Living Investment Brokerage as broker to sell debtor's real
property and other assets.
SLIB II will be paid a commission of 2% of the gross purchase
price.
Ryan Saul, managing director of SLIB II, 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 Debtor and its estates.
SLIB II can be reached at:
Toby Siefert
SLIB II, INC. D/B/A SENIOR
LIVING INVESTMENT BROKERAGE
490 Pennsylvania Avenue
Glen Ellyn, IL 60137
Tel: (630) 858-2501
About Bristol Healthcare Investors
Bristol Healthcare Investors, L.P., a Single Asset Real Estate
company (as defined in 11 U.S.C. Section 101(51B)), filed a
voluntary petition for relief under Chapter 11 of Title 11 of the
United States Code (Bankr. E.D. Tenn. Case No. 18-15713) on Dec.
20, 2018. In the petition signed by Douglas K. Mittleider,
president of general partner, the Debtor estimated $1 million to
$10 million in assets and $10 million to $50 million in
liabilities. Scarborough & Fulton, led by name partner David J.
Fulton, is serving as the Debtor's counsel.
BULLARD FENCE: Seeks to Hire Jason A. Burgess as Counsel
--------------------------------------------------------
Bullard Fence, Inc. seeks authority from the US Bankruptcy Court
for the Middle District of Florida to hire the Law Office of Jason
A. Burgess as its counsel.
Bullard can be reached through:
a. give advice to the Debtor with respect to its powers and
duties as debtor-in-possession and the continued management of its
business;
b. advise the Debtor with respect to its responsibilities in
complying with the US Trustee’s Operating Guidelines and
Reporting Requirements and with the Local Rules of this Court;
c. prepare motions, pleadings, orders, applications,
disclosure statements, plans of reorganization, commence adversary
proceedings, and prepare other such legal documents necessary in
the administration of this case;
d. protect the interest of the Debtor in all matters pending
before the Court; and
e. represent the Debtor in negotiations with their creditors
and in preparation of the disclosure statement and plan of
reorganization.
Jason A. Burgess agreed to a minimum fee of $7,500.
Jason A. Burgess does not hold or represent an interest adverse to
the estate, and is disinterested within the meaning of 11 U.S.C.
101(14), according to court filings.
The firm can be reached through:
Jason A. Burgess, Esq.
The Law Offices of Jason A. Burgess, LLC
1855 Mayport Road
Atlantic Beach, FL 32233
Phone: (904) 372-4791
Fax: (904) 372-4994
About Bullard Fence, Inc.
Bullard Fence, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-00723) on Feb. 28,
2020, listing under $1 million in both assets and liabilities.
Jason A. Burgess, Esq. at THE LAW OFFICES OF JASON A. BURGESS, LLC,
represents the Debtor as counsel.
BWX TECHNOLOGIES: S&P Cuts ICR to 'BB' on Lower Expected Cash Flow
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on BWX
Technologies Inc. (BWXT) to 'BB' from 'BB+' with stable outlook. At
the same time, S&P lowered its rating on the company's unsecured
notes due 2026 to 'BB' from 'BB+'. The recovery remains '4'.
Higher capex and working capital outflows will likely result in a
free cash outflow and higher debt in 2020. Higher investment to
support new programs in the Navy business and the Moly-99 project
are likely to result in much higher capex and working capital
investment than S&P had previously forecast. Capex are now likely
to be $280 million in 2020 compared to S&P's previous forecast of
$145 million. This higher capital spending as well as increased
working capital needs will result in free cash flow being a use of
around $70 million in 2020 and only improving to about a $100
million inflow in 2021, compared to S&P's previous expectations of
$160 million and $240 million. This will result in debt levels
increasing to fund the shortfall. S&P continues to believe that the
Moly-99 product line within the medical radioisotopes business
should lead to increased revenues and profitability, although there
are still some risks in completing the development of the product
as this is a competitive market where they have less experience.
The stable outlook on BWXT reflects S&P's expectations that weaker
credit metrics over the next two years will remain stable, as
revenue growth is offset by higher revolver borrowings to fund a
cash shortfall in 2020.
"We could lower the ratings if FFO to debt falls below 20% or debt
to EBITDA rises above 4x. This could occur if there are
significantly higher costs and additional delays to the launch of
Moly-99, if there is a significant decline in funding for nuclear
warships, or lower demand in nondefense markets. It could also
occur if there are large debt-financed acquisitions or share
repurchases, but we view this as unlikely under management's
historically conservative financial policy," S&P said.
"Although unlikely in the next 12 months, we could raise the rating
if FOCF to debt increases above 10% and FFO to debt increases to
above 30% on a sustained basis. This could occur if cash generation
is stronger than we expect, due to lower working capital outflows
or capex," the rating agency said.
CALERES INC: S&P Downgrades ICR to 'BB-'; Outlook Negative
----------------------------------------------------------
S&P Global Ratings lowered all ratings on Caleres Inc., including
its issuer credit rating to 'BB-' from 'BB'.
Despite moderate debt reduction, Caleres' credit metrics failed to
improve in line with S&P's previous expectations due to
underperformance at the Brand Portfolio segment. During fiscal
2019, Caleres reported decent (comparable store sales grew 200
basis points {bps}) revenue growth at its Famous Footwear segment
(representing about 55% of total sales), driven by good performance
in the back half of the year on compelling product assortment and
marketing initiatives. Still, consolidated sales and EBITDA growth
was dampened by soft performance at its Brand Portfolio segment
(about 45%), particularly during the last holiday season (fourth
quarter fiscal 2019 sales declined 9.4%) on challenging sales
within the value channel. Despite disciplined SG&A cost management
(leveraging about 30 bps) and balance sheet debt reduction by about
$60 million, credit metrics were meaningfully below S&P's
expectation because of sales and EBITDA shortfalls. As a result,
the already limited headroom in the credit metrics (following the
primarily debt-funded Vionic acquisition in October 2018), was
eroded. At the end of fiscal 2019, S&P estimates funds from
operations (FFO) to debt of just above 20% compared with its
previous expectation of the mid-20% area. S&P has revised its
comparable rating analysis modifier to neutral from positive,
reflecting its holistic view of Caleres' credit profile as
generally comparable to similarly rated peers.
The negative outlook reflects S&P's expectation that operating
performance will remain pressured over the next several quarters.
S&P bases its view on its forecast for decelerating economic growth
and consumer spending in the U.S. and potential supply chain
challenges because of the coronavirus pandemic.
"We could lower the rating if the company meaningfully
underperforms our expectations, such that we expected adjusted FFO
to debt to decline below 20%. This scenario could be driven by
macroeconomic factors, such as a prolonged coronavirus outbreak
resulting in a steep decline in discretionary consumer spending, or
meaningful merchandise missteps. The subsequent erosion in sales
and EBITDA would lead to adjusted EBITDA margin declining 100 bps
or more beyond our base-case projection. We could also lower the
rating if financial policy becomes more aggressive, resulting in
persistently higher debt and weaker credit metrics," S&P said.
"We could revise the outlook to stable if operating trends
significantly improve, such that we expected FFO to debt to remain
above 20% on a sustained basis. Under this scenario, the company
would report stable top-line and margin trends at both business
segments. In addition, we would have to believe that macroeconomic
conditions are more stable and the threat of the coronavirus
pandemic has subsided," S&P said.
CALIFORNIA RESOURCES: Terminates Exchange & Subscription Offers
---------------------------------------------------------------
California Resources Corporation has terminated its private
exchange and subscription offers and consent solicitation relating
to its outstanding 8% Senior Secured Second Lien Notes due 2022, 5
1/2% Senior Notes due 2021, and 6% Senior Notes due 2024. The
Company has also terminated the private subscription agreements it
entered into with certain significant holders of the Notes because
the obligations of the Supporting Holders under the Supporting
Subscription Agreements were conditioned upon the consummation of
the Offers.
The Company is terminating the Offers as a result of recent
developments in the commodity and financial markets that render the
Offers inadvisable and impractical. The Offers were subject to
conditions in the Offering Memorandum and Solicitation Statement,
dated Feb. 20, 2020, that will not be satisfied given current
market conditions. The Company has determined not to extend or
amend the Offers but rather to pursue other alternatives, which
could include a similar but modified exchange, to delever its
balance sheet and protect the value of its business during this
market dislocation.
The Offers were due to expire at 11:59 p.m., New York City time, on
March 18, 2020. As a result of this termination, no Notes will be
exchanged in the Offers, all Notes previously tendered and not
withdrawn will be promptly returned to tendering holders and no
consideration will be paid to holders who have tendered their
Notes.
About California Resources
California Resources Corporation -- http://www.crc.com/-- is an
oil and natural gas exploration and production company
headquartered in Los Angeles, California. CRC operates its
resource base exclusively within the State of California, applying
complementary and integrated infrastructure to gather, process and
market its production.
California Resources reported a net loss attributable to common
stock of $28 million for the year ended Dec. 31, 2019, compared to
net income attributable to common stock of $328 million for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$6.96 billion in total assets, $709 million in total current
liabilities, $4.87 billion in long-term debt, $146 million in
deferred gain and issuance costs, $720 million in other long-term
liabilities, $802 million in redeemable noncontrolling interests,
and total deficit of $296 million.
* * *
In March 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit
rating on California Resources Corp. The affirmation reflects
S&P's expectation that CRC will continue to support its liquidity
by balancing its spending with its cash flow, selling non-core
assets, and potential for joint ventures in 2019 as mentioned in
the Company's fourth quarter conference call.
In November 2017, Moody's Investors Service upgraded California
Resources' Corporate Family Rating (CFR) to 'Caa1' from 'Caa2' and
Probability of Default Rating (PDR) to 'Caa1-PD' from 'Caa2-PD'.
Moody's said the upgrade of CRC's CFR to 'Caa1' reflects CRC's
improved liquidity and the likelihood that it will have sufficient
liquidity to support its operations for at least the next two years
at current commodity prices.
CARLSON TRAVEL: S&P Puts 'B-' ICR on Watch Negative
---------------------------------------------------
S&P Global Ratings placed all its ratings, including its 'B-'
issuer credit rating on Carlson Travel Inc. (CTI), its 'B-'
issue-level rating on the company's senior secured notes, and its
'CCC' issue-level rating on its senior unsecured notes, on
CreditWatch with negative implications.
The CreditWatch placement reflects Carlson Travel's vulnerability
to declining demand for air travel and hotels due to the COVID-19
pandemic and the limited information on how widespread and drawn
out the impact will be. Companies have increasingly imposed
restrictions on their employees' nonessential travel over the
course of February and March, which has led to the cancellation or
postponement of numerous conferences in the first quarter of 2020.
Further, the impact on economic activity and subsequent return to
normalcy is also uncertain. Travel management companies such as CTI
are affected not only by the overall decline in travel volumes, but
also the loss of top-tier incentive payments from global
distribution systems due to the inability to deliver sufficient
volumes.
In resolving the CreditWatch, S&P will evaluate new information
regarding the spread of COVID-19 and its impact on CTI's operating
performance, liquidity, and cash flows.
"We could affirm the 'B-' ratings once we have more certainty
regarding the duration and severity of COVID-19's impact on global
travel and CTI's operating performance, liquidity, and cash flow.
An affirmation would likely entail our belief that global travel
would rebound by the end of 2020 and evidence that the company's
efforts to reduce costs and maintain positive free operating cash
flow and adequate liquidity are likely to succeed," S&P said.
"We could lower the rating to 'CCC+' or lower if we believed the
impact of COVID-19 would cause liquidity to significantly weaken in
2020 or if any resulting economic weakness would extend through
2020 into 2021, causing free operating cash flow to turn negative
for an extended period," S&P said.
CASABLANCA GLOBAL: S&P Downgrades ICR to 'CCC+'; Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings downgraded Casablanca Global Intermediate
Holdings L.P. (ALG) to 'CCC+' from 'B-'. At the same time, S&P
lowered its issue-level rating on the company's senior secured
credit facility (comprising a $175 million revolver due 2022 and a
$950 million term loan due 2024) to 'CCC+' from 'B-'.
S&P believes ALG's cash flow generation and liquidity position face
significant risks in 2020 following the company's negative reported
cash flow in 2019. ALG faced a number of challenges in 2019 that
led it to report significantly negative cash flow from operations
(CFO). These challenges included a slower-than-expected pace of
vacation bookings in the Dominican Republic, softness in the Cancun
market, lower vacation bookings from Thomas Cook following its
bankruptcy and liquidation, a change in the company's customer
payment terms, management's decision to reduce its air charter
capacity, and higher-than-expected integration costs and other
expenses. These headwinds negatively affected ALG's revenue and
profitability and caused it to generate substantially negative CFO.
S&P expects the company will continue to face significant
challenges in generating positive CFO in 2020 because the
coronavirus outbreak will likely discourage travel for some time.
While the situation is highly fluid and rapidly evolving, fears of
the virus have led to significant cancellations and a much slower
pace of new bookings. Depending on the timeline for the virus'
containment, ALG may experience weeks, or even months, of severely
diminished traveler volume. Although the company has the ability to
reduce some variable expenses, it is increasingly likely that the
reduction in its revenue will strain its liquidity and capital
structure.
The negative outlook on ALG reflects S&P's expectation that the
prolonged disruption to its business conditions from the
coronavirus may further compress its margin, challenge its cash
flows, and--potentially--threaten its liquidity.
"We would lower our rating on ALG if we believe that a
deterioration in its performance will lead to a liquidity shortfall
over the next 12 months," S&P said.
"We would consider raising our rating on ALG if we become confident
the company will be positioned to sustainably generate a
CFO-to-debt ratio above the mid-single digit percent area. We would
also need to see a normalization of the conditions in the global
leisure travel market following the containment of the coronavirus
before we would raise our rating," S&P said.
CBAC BORROWER: S&P Cuts ICR To 'CCC+' on CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating and issue level
rating on CBAC Borrower LLC's secured debt to 'CCC+' from 'B-' and
placing all ratings on CreditWatch with negative implications.
The downgrade reflects heightened liquidity risk in the light of
the governor's emergency order to close all casinos to prevent the
spread of COVID-19, as well as uncertainty regarding how long the
closures will last. Furthermore, S&P believes there is a rising
chance of a recession resulting from the COVID-19 pandemic that
could pressure consumer discretionary spending and further hurt
CBAC's operating performance in 2020 even after Horseshoe Baltimore
re-opens.
"In resolving the CreditWatch listing, we plan to assess the
company's cash burn rate during the closure and steps it might take
to reduce operating expenses while closed, evaluate the company's
liquidity positon in light of the uncertain duration of the closure
and monitor the steps the company is taking to secure covenant
relief under its revolving credit facility. In addition, we plan to
assess how the macroeconomic environment once the property reopens
might affect EBITDA and discretionary cash flow generation and
whether the company will be able to rebuild cash balances that may
have been depleted during the closure," S&P said.
CBL & ASSOCIATES: Moody's Lowers Sr. Unsec. Debt to Caa3
--------------------------------------------------------
Moody's Investors Service downgraded the ratings of CBL &
Associates Limited Partnership, including the senior unsecured debt
rating to Caa3 from Caa1, the corporate family rating to Caa1 from
B2 and the speculative grade liquidity rating to SGL-4 from SGL-3.
The rating outlook remains negative.
The rating downgrade reflects Moody's expectation that the secured
financing available for CBL's less productive malls has weakened
materially, limiting the alternative liquidity provided by CBL's
remaining low quality unencumbered asset pool. This was evidenced
by CBL's failure to successfully secure the refinancing for two of
its mortgage loans that matured at year-end 2019. The lack of
contingent liquidity challenges CBL's ability to meet the growing
near-term capital needs to redevelop the vacated space in its
malls, including the potential Forever 21 stores and Macy's stores
closures in the next four quarters. The current more challenging
operating environment facing mall REITs also suggests an increasing
probability of a distressed debt exchange for a weak mall REIT such
as CBL when its unsecured debt requires refinancing beginning in
2023.
The following ratings were downgraded:
Issuer: CBL & Associates Limited Partnership
-- Senior unsecured debt rating to Caa3 from Caa1
-- Corporate family rating to Caa1 from B2
-- Speculative grade liquidity rating to SGL-4 from SGL-3
Outlook Action:
Issuer: CBL & Associates Limited Partnership
-- Rating outlook remains negative
RATINGS RATIONALE
CBL's access to the contingent liquidity necessitated by the
growing pool of assets that require redevelopment capital
expenditures continues to be significantly constraint while net
operating income (NOI) growth is projected to be more negative in
2020 than 2019. CBL projects same-center NOI growth for 2020 to be
between -8% and -9.5%, substantially worse than the -6.5% for 2019.
Moody's expects CBL to be most vulnerable to Macy's announced
three-year strategic initiative that includes a plan to close 125
of its least productive stores. The greatest risk to CBL who has 31
Macy's stores is the prospect of additional vacancies as most of
these Macy's stores are in locations that are also suffering from
other anchor and in-line tenant vacancies including Forever 21,
Sears and Bon-Ton. Thus far, CBL announced one Macy's closure in
its portfolio, at the Hanes Mall in Winston-Salem, North Carolina.
The REIT said it expects another six or seven closures beginning in
2021. CBL has reported negative net operating income growth since
2017, which is due in part to the continued shift to online
shopping trend and the constant change in consumer preferences that
continues to strain the operating performance of class B malls.
Moody's expects CBL's ongoing operating challenges will escalate in
the coming months as the rapid and widening spread of the
coronavirus outbreak, deteriorating global economic outlook,
falling oil prices, and asset price declines are creating a severe
and extensive credit shock across many sectors, regions and
markets. The combined credit effects of these developments are
unprecedented as the spreading of the coronavirus and deteriorating
macro climate leading to more tenant bankruptcies and store
closures. Moody's regards the coronavirus outbreak as a social risk
under its ESG framework, given the substantial implications for
public health and safety. Moreover, CBL's weak financial position
makes it very vulnerable to the operating risks given its weak
liquidity. CBL's increasing difficulty with mortgage refinancing
has caused Moody's to be more concerned about CBL's ability to
obtain any secured financing on its lower quality pool of
unencumbered assets. The REIT also faces significant refinancing
hurdles with a large pool of mortgage loans maturing in the next
eighteen months, some of which have material loan balances.
While CBL's $1.2 billion senior secured credit facility, maturing
in July 2023, which includes a fully-funded $500 million term loan
and a $685 million revolving line of credit, removed CBL's
near-term financing risk, its unsecured bonds are currently trading
at yields ranging between approximately 27% and 34%, which suggests
an increasing likelihood that CBL will need to explore some form of
distressed debt exchange as the REIT gets closer to their
maturities beginning in 2023. CBL has $450 million in unsecured
bonds due in 2023, $300 million due in 2024 and $625 million due in
2026.
CBL's cushion on its bond covenant compliance remains modest,
particularly the debt service test, which requires consolidated
income to annual debt service charge to be greater than 1.50x. The
ratio has declined to 2.3x at year end 2019 from 2.5x at year-end
2018 due principally to declining operating income during this
period.
Positively, CBL's dividend reduction to conserve liquidity
beginning in early 2018 reflected a prudent financial policy. The
REIT's management quality is supported by its stable management
team and its robust public financial disclosures. Nonetheless, the
private equity ownership in the REIT by Exeter Capital Investors,
LP beginning in Q3 2019 is credit negative. Exeter appointed two
members to CBL's board of director. It also formed a Capital
Allocation Committee to serve as an advisory committee to the
board. Exeter Capital Investors, L.P. is a single purpose entity
controlled by Michael Ashner to acquire common shares in CBL.
The SGL-4 speculative grade liquidity rating incorporates the
REIT's weak liquidity profile, which is constrained by the small
size and the low availability under its secured revolving credit
facility at December 31, 2019 of approximately $374.1 million.
Additionally, CBL maintains only a modest cushion for the required
debt yield and debt service ratios. Furthermore, a majority of
CBL's higher quality assets, including its Tier 1 and Tier 2 malls,
are encumbered and/or pledged as collateral to the facility.
The negative rating outlook captures the potential for further
deterioration in CBL's operating performance and financial metrics,
which could challenge its ability to remain in compliance with the
covenants under its bond and secured credit facility.
CBL's senior unsecured notes at Caa3 are rated two notches below
the corporate family rating reflecting Moody's expectation that the
unencumbered assets quality will deteriorate more rapidly in the
next four quarters relative to the higher quality assets that are
mortgaged or pledged to the senior secured credit facility. For the
year ended December 31, 2019, the consolidated unencumbered
properties generated approximately 27.4% of total consolidated NOI,
compared with 58.2% for year-end 2018, which reflects CBL's senior
secured credit facility that replaced its unsecured credit
facility, resulting in a significant reduction of its unencumbered
pool of assets begining in early 2019.
An upgrade is very unlikely in the near to medium term given the
negative outlook and would require positive trends in CBL's fixed
charge coverage, same-store NOI growth, rent growth and occupancy
rate. Upward rating movement will also require the sustained
improvements in CBL's net debt to EBITDA to a level that is
commensurate with higher rated retail peers.
Ratings could be downgraded if credit metrics were to weaken
further such that the REIT's adequate liquidity profile were to
erode.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.
CBL & Associates Limited Partnership is the operating partnership
of CBL & Associates Properties, Inc. [NYSE: CBL], which is a retail
REIT headquartered in Chattanooga, Tennessee. CBL's portfolio is
comprised of 108 properties, including 59 malls, 29 associated and
community centers. The properties are located in 26 states as of
December 31, 2019.
CBL & ASSOCIATES: S&P Withdraws 'CCC+ ICR at Issuer Request
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on the
U.S.-based mall CBL & Associates Properties Inc. to 'CCC+' from
'B', with negative outlook, and lowered its issue-level ratings on
the company's unsecured debt to 'B-' from 'B+'. The '2' recovery
rating remains unchanged.
"The downgrade reflects our view that CBL's capital structure is
unsustainable as we believe refinancing prospects for the company
will remain difficult as it becomes more likely that mall traffic
and tenant bankruptcies because of the COVID-19 pandemic will place
additional pressure on the company's business prospects and
financial metrics. We previously forecast that operating conditions
could improve in 2021; however, we believe the near-term
complications from the coronavirus could result in longer term
consequences such as increased bankruptcies and store closures that
further weaken the company's already fragile economic state," S&P
said.
S&P subsequently withdrew all of its ratings on CBL at the issuer's
request.
CDS US: Moody's Lowers CFR to Ca, Outlook Negative
--------------------------------------------------
Moody's Investors Service downgraded CDS U.S. Intermediate
Holdings, Inc.'s corporate family rating to Ca from B3, probability
of default rating to Ca-PD from B3-PD, first lien secured term loan
rating to Caa3 from B2 and second lien secured term loan to C from
Caa2. The outlook was changed to negative from stable.
Issuer: CDS U.S. Intermediate Holdings, Inc.
Corporate Family Rating, downgraded to Ca from B3
Probability of Default Rating, downgraded to Ca-PD from B3-PD
Senior Secured First-Lien Revolving Credit Facility due 2022,
downgraded to Caa3 (LGD3) from B2 (LGD3)
Senior Secured First-Lien Term Loan due 2022, downgraded to
Caa3 (LGD3) from B2 (LGD3)
Senior Secured Second-Lien Term Loan due 2023, downgraded to
C (LGD5) from Caa2 (LGD5)
Outlook Action:
Issuer: CDS U.S. Intermediate Holdings, Inc.
Outlook, changed to Negative from Stable
RATINGS RATIONALE
The rating action reflects Moody's view of a high risk of default
and follows the announcement of the temporary suspension of all
Cirque du Soleil touring and Las Vegas residential shows due to the
coronavirus outbreak. Revenue loss in 2020 will drive a steep
decline in EBITDA generation with limited prospects for a tenable
capital structure thereafter. Weak liquidity, soft show demand and
challenging economic conditions will further pressure Cirque du
Soleil's operating flexibility and capacity for growth capital
investments once shows resume.
Cirque du Soleil (Ca CFR) is constrained by: (1) weak liquidity and
deteriorating cash flows; (2) excessively high leverage expected in
2020; (3) substantial concentration in the Las Vegas market via a
partnership with MGM Resorts (about 35% of revenues); and (4)
execution risk around the development of new shows and limited
capacity for investments in 2020. Cirque du Soleil benefits from:
(1) unique brand recognition with a touring business (about 65% of
revenues) providing broad geographic diversification; (2) a good
track record acquiring, developing and operating new shows; and (3)
a partnership operating model for resident shows that supports
operating stability.
The negative outlook reflects a high risk of default and
challenging operating environment in 2020.
The ratings could be downgraded if there is an event of default.
The ratings could be upgraded if the company's liquidity becomes
adequate and leverage declines towards 6.5x and the operating
environment improves.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The entertainment
sector has been one of the sectors most significantly affected by
the shock given its sensitivity to consumer demand and sentiment.
More specifically, the weaknesses in Cirque du Soleil's credit
profile, including its exposure to Las Vegas as well as locations
globally have left it vulnerable to shifts in market sentiment in
these unprecedented operating conditions and the company remains
vulnerable to the outbreak continuing to spread. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
The action reflects the impact on Cirque du Soleil, of the breadth
and severity of the shock, and the broad deterioration in credit
quality it has triggered.
Cirque du Soleil has weak liquidity. As of December 2019, Moody's
estimates sources totaled around $105 million, consisting of cash
on hand of about $20 million and close to $85 million available
(after letters of credit) under its committed $120 million revolver
due June 2022. Moody's expects uses over the next twelve months to
total nearly $165 million, consisting of negative free cash flow of
$155 million and $8 million in term loan amortizations. Additional
uses may include potential ticket reimbursements. Moody's expects
Cirque du Soleil to breach the revolver's springing maximum net
first lien leverage covenant of 5.25x. The company may exercise the
option to cure the breach with an incremental cash contribution
(equity cure) for up to two instances over four consecutive
quarters. Cirque du Soleil has limited ability to generate
alternate liquidity from asset sales.
Governance considerations include Cirque du Soleil's majority
ownership by private equity sponsors and lack of formal financial
policies combined with high leverage and event risk related with
shareholder distributions and acquisitions.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CEN BIOTECH: Extends SPA Closing Date Until December 2021
---------------------------------------------------------
On March 16, 2020, CEN Biotech, Inc. entered into an amendment to
the Share Purchase Agreement executed on Sept. 12, 2016 and dated
Aug. 31, 2016, which was amended on March 29, 2018, Oct. 4, 2018
and April 3, 2019 by and between the Company and Stevan Pokrajac,
Tesla Digital Inc. and Tesla Digital Global Group Inc. to extend
the closing date under the Agreement from Dec. 31, 2019, to Dec.
31, 2021. No other changes to any of the terms of the Agreement
were made by the Amendment.
About CEN Biotech
CEN Biotech, Inc. is a global holding company dedicated to
identifying and developing alternative approaches to business
opportunities in diversified, yet related industries. With core
operations focused on North America, Eastern Europe and China, CEN
Biotech is continually looking to develop its dynamic and unique
businesses, by seeking to leverage exclusive relationships with
governments and private enterprises, around the world. In addition
to CEN's focus on improving the health and wellness of people, CEN
also has proprietary technologies, which it believes has widespread
commercial application in the Industrial, Automotive, and
Agriculture sectors.
CEN Biotech reported a net loss of $7.53 million for the year ended
Dec. 31, 2018, compared to a net loss of $14.08 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had
$7.38 million in total assets, $31.97 million in total liabilities,
and a total shareholders' deficit of $24.59 million.
Mazars USA LLP, in New York, New York, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
April 16, 2019, citing that the Company has incurred significant
operating losses and negative cash flows from operations since
inception. The Company also had an accumulated deficit of
$35,655,053 at Dec. 31, 2018. The Company is dependent on
obtaining necessary funding from outside sources, including
obtaining additional funding from the sale of securities in order
to continue their operations. These conditions raise substantial
doubt about its ability to continue as a going concern.
CHF COLLEGIATE: S&P Cuts Rev. Bond Rating to 'B'; Outlook Negative
------------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'B' from 'BB' on
New Hope Cultural Education Finance Corp., Texas' series 2016A and
taxable series 2016B student housing revenue bonds, issued for CHF
Collegiate Housing Corpus Christi II LLC, Ala. (CHF-Corpus Christi
II or the project). The outlook is negative.
"The three-notch downgrade reflects our opinion of the project's
deteriorated occupancy levels and the necessity by management to
use approximately $600,000 in excess bond proceeds to meet its debt
service coverage covenant requirement for fiscal 2020," said S&P
Global Ratings credit analyst Ruchika Radhakrishnan. "The downgrade
further reflects our view of the similar demand pressure faced by
other housing projects on campus, and the inter-dependency between
the demands for all on-campus housing," Ms. Radhakrishnan added.
The negative outlook reflects S&P's expectation of continued
pressure on occupancy at the project as a result of recent declines
in undergraduate enrollment at Texas A&M University-Corpus Christi
(the university) and the competitive landscape with other on-campus
and off-campus housing options for students in the area; which will
continue to challenge debt service coverage.
The bonds are nonrecourse obligations of CHF-Corpus Christi II, and
are secured by net revenues of the Momentum Village II housing
facilities constructed with the bond proceeds. These facilities,
which opened in August 2017, are located on the university's
Momentum Campus and have a capacity of 560 beds. A leasehold
mortgage and security agreement provide additional bondholder
security. Approximately $35 million in bonds were outstanding as of
fiscal year-end 2019.
The university has only three on-campus housing options, including
two other projects rated by S&P Global Ratings (CHF-Collegiate
Housing Corpus Christi I LLC and CHF-Collegiate Housing Island
Campus LLC). Collectively, the three projects provide 2,832 total
beds to Texas A&M University-Corpus Christi students, which totaled
9,300 full-time equivalents (FTE) in fall 2019.
CHICK LUMBER: Committee Hires Rath Young as Local Counsel
---------------------------------------------------------
The official committee of unsecured creditors of Chick Lumber, Inc.
seeks authority from the U.S. Bankruptcy Court for the District of
New Hampshire to retain the law firm of Rath Young & Pignatelli,
P.C. as its local counsel.
The Committee requires Rath Young to:
(a) advise the Committee on all legal issues as they arise;
(b) represent and advise the Committee regarding the terms of
any sales of assets or plans of reorganization or liquidation, and
assisting the Committee in negotiations with the Debtor and other
parties;
(c) investigate the Debtor's assets and pre-bankruptcy
conduct;
(d) investigate the validity, priority and extent of the
claims, liens and security interests of any secured creditors of
the Debtor;
(e) investigate, and where appropriate prosecuting or
assisting in the prosecution of, estate claims and causes of action
against the Debtor, its officers, directors and shareholders, and
other parties-in-interest;
(f) prepare, on behalf of the Committee, all necessary
pleadings, reports, and other papers;
(g) represent and advise the Committee in all proceedings in
this case;
(h) assist and advise the Committee in its administration;
(i) provide advice with respect to all of the foregoing in
light of applicable local rules and laws; and
(j) provide such other services as are customarily provided by
local counsel to a creditors' committee in cases of this kind.
Rath Young's hourly rates are:
Senior Partners $500
Associates $250
Paraprofessionals $150 to $200
Michael O'Neil, Esq., is the billing professional presently
expected to have primary responsibility for providing services to
the Committee. Attorney O'Neil's billing rate for this matter in
2020 is $320 per hour.
Mr. O'Neil assures the court that the firm is a "disinterested
person," as that phrase is defined in 11 U.S.C. Sec. 101(14).
The firm can be reached through:
Michael O'Neil, Esq.
Rath Young & Pignatelli, P.C.
One Capital Plaza
Concord, NH 03302
Tel: 603-226-2600
Fax: 603-226-2700
About Chick Lumber
Chick Lumber, Inc. -- https://www.chicklumber.com/ -- is a dealer
of lumber, plywood, steel beams, engineered wood, trusses, steel
and asphalt roofing, windows, doors, siding, trim, stair parts, and
finish materials. It also offers drafting and design,
installation, delivery, outside sales, and plan reading and
estimating services.
Chick Lumber sought Chapter 11 protection (Bankr. D.N.H. Case No.
19-11252) on Sept. 9, 2019, in Concord, N.H. In the petition
signed by Salvatore Massa, president, the Debtor disclosed between
$1 million and $10 million in both assets and liabilities. Judge
Bruce A. Harwood oversees the case. William S. Gannon PLLC is the
Debtor's legal counsel.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Oct. 3, 2019. The committee is represented by
Goldstein & McClintock, LLLP as its legal counsel.
CIBT GLOBAL: Moody's Lowers CFR to Caa1, Outlook Negative
---------------------------------------------------------
Moody's Investors Service downgraded CIBT Global, Inc.'s Corporate
Family Rating to Caa1 from B3 and its Probability of Default Rating
to Caa1-PD from B3-PD. Concurrently, Moody's downgraded the
instrument rating on CIBT's senior secured first lien rating to B3
from B2 and senior secured second lien rating to Caa3 from Caa2. In
addition, Moody's changed the rating outlook to negative.
The ratings downgrade and negative outlook reflect Moody's
expectation that CIBT's earnings and cash flow will weaken over the
next 12 months amidst the rising COVID-19 risk and uncertainties
around the global economic outlook. Demand for corporate travel is
expected to decline in 2020, exacerbating pressure on the company's
already weak credit metrics. Moody's believes the company's high
adjusted debt/EBITDA (leverage) of 7.6x (as of December 2019) and
weak cash flow provides limited capacity to absorb meaningful
earnings erosion, increasing the risk of default. Moody's also
notes the risk of a distressed exchange given the impact of the
current environment on the company's debt capital structure, a
default under Moody's definition.
Nonetheless, Moody's expects CIBT to maintain adequate liquidity,
supported by its $13 million of cash and close to $40 million of
availability under its $65 million revolving credit facility. The
ratings also reflect Moody's expectations that CIBT's financial
sponsor, Kohlberg & Company, is willing to invest additional equity
to support the liquidity in a stress scenario.
The negative outlook reflects the risk that CIBT's earnings and
free cash flow could erode beyond current expectations due to the
adverse impact from COVID-19 and uncertain economic conditions.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The travel sector
has been one of the sectors most significantly affected by the
shock given its sensitivity to consumer demand and sentiment. More
specifically, the weaknesses in CIBT's credit profile, including
its exposure to travel and the immigration sector, have left it
vulnerable to shifts in market sentiment in these unprecedented
operating conditions and CIBT remains vulnerable to the outbreak
continuing to spread. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial
implications for public health and safety. The actions reflect the
impact on CIBT of the breadth and severity of the shock, and the
broad deterioration in credit quality it has triggered.
Downgrades:
Issuer: CIBT Global, Inc.
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD
Corporate Family Rating, Downgraded to Caa1 from B3
Senior Secured 1st Lien Bank Credit Facility, Downgraded to B3
(LGD3) from B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Caa3
(LGD5) from Caa2 (LGD5)
Outlook Actions:
Issuer: CIBT Global, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
CIBT's Caa1 CFR reflects its elevated leverage of 7.6x as of
December 2019, limited scale and acquisitive growth strategy in the
highly competitive and fragmented market for travel and immigration
services. The rating is constrained by the risks related to CIBT's
exposure to the cyclicality of the global business travel market
which has been susceptible to economic downturns, disease outbreak
and geopolitical disruptions. CIBT's governance risk is viewed as
high characterized by its history of high leverage and debt
financed acquisitions, though the commitment of the sponsor to
contribute additional equity somewhat mitigates near-term risk of
further downward pressure.
Nonetheless, CIBT's ratings are supported by its solid market
position and demonstrated expertise in managing complex document
application and procurement processes for international travel.
This has enabled the company to maintain longstanding customer
relationships with retention rates in excess of 95%. CIBT's modest
capital needs and high variable cost structure provide an ability
to adjust operations to changes in client spending levels.
The ratings could be downgraded if the company's revenue and
earnings decline precipitously, causing further weakening in
liquidity including continued negative free cash flow and increased
revolver usage. A downgrade is also likely if a distressed exchange
is expected.
The ratings could be upgraded if the sector outlook or economic
conditions stabilize; earnings and free cash flow turn positive;
adjusted debt/EBITDA is sustained below 7.0x; and EBITA/interest
remains above 1.0x.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in McLean, Virginia, CIBT is a leading provider of
third-party travel visa, passport, and immigration logistics
services for corporate clients worldwide. The company was acquired
by Kohlberg & Company in June 2017. CIBT generated $242 million in
net revenue for the twelve months ended December 31, 2019.
CINEMARK HOLDINGS: S&P Places 'BB' ICR on Watch Negative
--------------------------------------------------------
S&P Global Ratings placing all its ratings on Cinemark Holdings
Inc., including its 'BB' issuer credit rating on CreditWatch with
negative implications.
"The CreditWatch placement reflects our expectation that the spread
of coronavirus will negatively affect theater attendance over the
next few months and result in significantly lower EBITDA and cash
flow for exhibitors in 2020. As a result, Cinemark's leverage could
potentially increase above our previously established downgrade
threshold for the current 'BB' rating. In addition, if the virus
impact is prolonged, it could require the company to shift capital
spending and expenses to later in the year to preserve liquidity,
which could lead to an extended period of reduced profitability,"
S&P said.
S&P intends to resolve the CreditWatch as it gets additional
information on near-term box office attendance trends and potential
updates to the film release slate and impact on financial
performance due to the spread of coronavirus. The rating agency
also plans to continue discussions with management to determine
what levers it plans to use to offset the negative impact of the
virus, such as cost reductions or delayed capital spending.
"While we believe a potential rating action would likely be limited
to one notch, we could potentially lower the rating by more than
one notch if we believed the company would experience a liquidity
shortfall that could not be addressed using cash on hand and
availability under its revolver," S&P said.
"Alternatively, we could affirm the current rating if we believed
that the impact to leverage and cash flow would be limited to 2020
and that leverage would return beneath our downgrade threshold in
2021," the rating agency said.
CLARKE'S TOWING: Seeks to Hire Paul Reece Marr as Attorney
----------------------------------------------------------
Clarke's Towing & Transportation Service seeks authority from the
US Bankruptcy Court for the Northern District of Georgia to hire
the law firm of Paul Reece Marr, P.C. as its bankruptcy attorneys.
Professional services the firm will render are:
(a) provide the Debtor with legal advice regarding its powers
and duties as debtor in possession in the
continued operation and management of its affairs;
(b) prepare on behalf of the Debtor the necessary
applications, statements, schedules, lists, answers, orders and
other legal papers pursuant to the Bankruptcy Code; and
(c) perform all other legal services in the Chapter 11
bankruptcy proceeding for the Debtor which may be reasonably
necessary.
The Debtor received a $10,000 attorney fee and expense retainer.
Paul Reece Marr represents no interest adverse to the estate with
the respect to any matter on which it is to be employed, according
to court filings.
The firm can be reached through:
Paul Reece Marr, Esq.
THE LAW FIRM OF PAUL REECE MARR, P.C.
300 Galleria Pkwy SE # 960
Atlanta, GA 30339
Phone: +1 770-984-2255
About Clarke's Towing & Transportation Service
Clarke's Towing & Transportation Service, Inc. sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
19-57186) on May 6, 2019. At the time of the filing, the Debtor
had estimated assets of less than $500,000 and liabilities of less
than $1 million.
The case has been assigned to Judge Sage M. Sigler. The Debtor is
represented by Paul Reece Marr, P.C.
COUNTRY MORNING FARMS: Court Confirms Plan as Amended
-----------------------------------------------------
Judge Frederick P. Corbit has ordered that that that the Second
Amended Chapter 11 Plan of Reorganization as amended filed by
COUNTRY MORNING FARMS, INC. and COUNTRY MORNING FARMS CATTLE, LLC,
is confirmed.
The Plan Amendments are incorporated into Debtors' Second Amended
Plan as though fully set forth therein.
The Plan treatment of the U.S. Small Business Administration, Class
13, as set forth in Debtors' Second Amended Plan shall be stricken
and replaced with the following paragraphs:
"The Small Business Administration has a security interest in
equipment and real estate commonly known as 225 North Country Rd.
Warden WA (along with the rents therefrom) that is owned by Debtors
and a secured claim in the amount of $306,338. It is anticipated
adequate protection payments will be made to the SBA in the amount
of $5,221 prior to the Effective Date.
"Thereafter, monthly payments for this loan shall be calculated
based on a 219-month amortization at 3.0% interest. Monthly
payments of principle and interest will be made in the amount of
$1,819.49. A balloon payment constituting the then remaining
principal and accrued interest shall be due the 120th month
following the Effective Date.
"In addition to the remedies set forth in Article VIII of the
Amendments to the Second Amended Plan, in the event of default to
the SBA pursuant to Article VIII of the plan, the interest rate on
the balance of the SBA obligation at time of default shall revert
to 5.19%."
A full-text copy of the Order Confirming the Plan, which order was
signed March 4, 2020, is available at https://tinyurl.com/wtx6f57
from PacerMonitor.com at no charge.
Attorneys for the Debtors:
HAMES, ANDERSON, WHITLOW & O’LEARY, P.S.
601 W. KENNEWICK AVENUE
P.O. BOX 5498
KENNEWICK, WA 99336-0498
Tel: (509) 586-7797
Fax: (509) 586-3674
About Country Morning Farms
Country Morning Farms, Inc., is a privately held company in the
cattle ranching and farming business. Country Morning Farms grows
its own feeds, milk its own cows, and delivers fresh dairy products
to its customers.
Country Morning Farms filed a Chapter 11 petition (Bankr. E.D.
Wash. Case No. 19-00478) on March 1, 2019. The petition was signed
by Robert Gilbert, vice president. The case is assigned to Judge
Frederick P. Corbit. The Debtor is represented by Siam L. Hames,
Esq. at Hames, Anderson, Whitlow & O'Leary. At the time of filing,
the Debtor disclosed $6,421,269 in assets and $10,586,970 in
liabilities.
CRIDER AVENUE: April 9 Hearing on Disclosure Statement
------------------------------------------------------
The Bankruptcy Court has ordered that the hearing on the adequacy
of the Disclosure Statement filed by Crider Avenue Properties, LLC,
will be held before the Honorable Andrew B. Altenburg Jr on April
9, 2020, at 10:00 a.m. in Courtroom 4B, Mitchell H. Cohen US
Courthouse, 400 Cooper Street, 4th Floor, Camden, New Jersey
08101.
Crider Avenue Properties has filed a plan of liquidation.
The Debtor realized its only option was to sell the real property
to the individual or purchaser willing to pay the most for the
property. The property was originally sold for $2,650,000, but this
Court approved purchaser refused to close. The Debtor was
obligated, under sever time pressures to find an alternative
purchaser. The Debtor was successful, but unfortunately for
$400,000 less. The sale price of $2,250,000 enabled to the Debtor
to pay off Noble, pay all real estate taxes and lien municipal lien
charges affecting the property and gain the release of the Super G
Funding Subordinated Mortgage in consideration of a payment in the
amount of $199,762. The remaining net proceeds from the sale in
the amount of $99,880 was earmarked to pay $50,000 to NAI Mertz for
its real estate commission, approximately $24,000 for projected
quarterly fees on the disbursements from the sale and some monies
on account of Debtor’s attorney fees.
All allowed unsecured claims qill be paid on a pro-rata basis from
available liquidated estate proceeds after the payment of 11 U.S.C.
Section 503(b)(2) approved claims. Unsecured creditors' claims are
impaired under this Plan of Liquidation. It is anticipate that
general unsecured creditors will not be paid in full, and as a
result no payment will be made to any membership equity interest.
Equity Security interests are impaired under this Plan of
Liquidation.
The Plan of liquidation will be funded from the balance of monies
held from the closing on the sale of the real estate and from the
collection of the three remaining outstanding claims held by the
Bankruptcy Estate. Approximately $25,000 remains from the closing
and the Debtor projects an additional $150,150 remains to be
collected on the three outstanding claims. If all projected
professional fees are approved by the Court, after the payment of
U.S. Trustee fees it is projected that a fund of approximately
$25,000 will be available to be distributed to remaining unsecured
claims.
A full-text copy of the Disclosure Statement dated March 4, 2020,
is available at https://tinyurl.com/wzyzjbr from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Paul J. Winterhalter, Esquire
OFFIT KURMAN, P.A.
1801 Market Street, Suite 2300
Philadelphia, PA 19103
Telephone: (267) 338-1370
Facsimile: (267) 338-1335
E-mail: pwinterhalter@offitkurman.com
About Crider Avenue Properties
Crider Avenue Properties, LLC, a Single Asset Real Estate Debtor,
sought Chapter 11 protection (Bankr. D.N.J. Case No. 19-18343) on
April 25, 2019. In the petition signed by Ronald Brodie, managing
member, the Debtor was estimated to have assets of less than
$50,000, and $1 million to $10 million in debt. The case is
assigned to Judge Andrew B. Altenburg Jr. The Debtor tapped Paul
J. Winterhalter, Esq., at Offit Kurman, P.A., as counsel.
DEL MONTE FOODS: S&P Lowers ICR to 'CCC' on Current Maturities
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.–based
Del Monte Foods Inc. (DMFI) to 'CCC' from 'CCC+' and revised the
outlook to negative.
The downgrade reflects heightened refinancing risk for DMFI and its
parent group, DMPL because of their substantial near-term
maturities and current market volatility.
DMFI's $710 million first-lien term loan became a current
obligation on February 18, 2020. The $442.5 million ABL facility
became current in November of 2019. Its parent, DMPL and the group
has an additional $187 million of debt maturities in 2020 that also
need to be addressed in the near-term.
DMFI had launched a $575 million bond refinancing transaction, but
will postpone the offering due to the volatility in the markets
driven by the coronavirus. S&P believes that it will take longer
than previously expected to complete a refinancing with reasonable
terms given the company's current standing in the credit markets
and uncertain market conditions.
Concurrent with lowering the issuer credit rating, S&P lowered its
issue-level rating on the company's first lien term loan to 'CCC'
from 'CCC+'. The recovery rating remains '3'. S&P also lowered its
issue-level rating on the company's second lien term loan to 'CC'
from 'CCC-'. The recovery rating remains '6'."
S&P also withdrew the 'CCC+' issue-level rating and '3' recovery
rating assigned to the proposed $575 million notes.
"We can envision default scenarios such as a balance sheet
restructuring or a bankruptcy filing if the company is unable to
refinance in the medium-term. We had expected the company to
refinance its capital structure before the ABL and first lien term
loan become current in November 2019 and February 2020,
respectively. The second lien will become current in August 2020.
Additionally, the group has three debt instruments with maturities
in August and October 2020 totaling $187 million that need to be
addressed. Currently, the company has not been able to complete the
transaction in a timely basis. We believe the delays in refinancing
is indicative of challenges to completing a refinancing with
reasonable terms. Recent market volatility driven by the
coronavirus has made it increasingly difficult for companies to
issue debt and it is uncertain when that trend will reverse. We
believe that support of the parent, DMPL, and confidence in
management's ability to improve profitability will drive the
ability to complete the refinancing," S&P said.
The negative outlook on Del Monte reflects the risk of a lower
rating driven by a belief that a default is inevitable within the
next few months.
"We could lower the ratings if we believe that the company will not
be able to refinance on a timely basis with reasonable terms
leading to a balance sheet restructuring," S&P said.
"We could raise the ratings if the company successfully launches a
complete refinancing at DMFI with reasonable terms and has a plan
to address the near-term maturities at the group level," the rating
agency said.
DELCATH SYSTEMS: Signs Support & Conversion Pact with Rosalind
--------------------------------------------------------------
In connection with the proposed public offering by Delcath Systems,
Inc. of its securities pursuant to the Company's registration
statement on Form S-1 (File No. 333-235904), and the potential
listing of the Company's common stock, par value $0.01 per share on
the Nasdaq Capital Market in connection therewith, on March 11,
2020, the Company entered into a support and conversion agreement
with Rosalind Master Fund L.P. and Rosalind Opportunities Fund I
L.P. and the Company's executive officers. The Support and
Conversion Agreement provides that, among other things, the
executive officers have agreed to receive payment of the net
after-tax amount of their 2019 annual incentive bonuses aggregating
$221,000 in unregistered shares of Common Stock, valued at the
public offering price of the securities sold in the Proposed
Offering, upon the consummation of the Proposed Offering. In
addition, following the consummation of the Proposed Offering, (i)
Rosalind has agreed that from time to time the Company may require
them to convert all or a portion of their 8% senior secured
promissory notes in the aggregate principal amount of $2 million
into shares of the Company's Series E convertible preferred stock
and Series E warrants at the contractual conversion price of $1,500
per share of Series E Preferred Stock in certain circumstances, and
(ii) the Company's executive officers have agreed to receive
payment of the net after-tax amounts of back pay and deferred
bonuses aggregating $765,000 in unregistered shares of Common
Stock. The shares of Common Stock issuable in an Equitization
Transaction would have a value equal to the greater of (x) the last
reported sale price per share as of the trading day immediately
preceding the Equity Infusion Date and (y) the volume-weighted
average price of the Common Stock for the five trading days
immediately preceding the Equity Infusion Date.
Pursuant to the Support and Conversion Agreement, the Company can
only effect an Equity Infusion in the event the Company's Board of
Directors reasonably determines that an Equity Infusion is
reasonably necessary for the Company to meet Nasdaq's continued
listing requirement that the Company maintain stockholders' equity
of at least $2.5 million unless an Equity Infusion would not avoid
the delisting of the Common Stock from Nasdaq as a result of the
Company's failure to meet Nasdaq's other continued listing
requirements. In the event of an Equity Infusion Determination,
the Company will deliver written notice thereof to Rosalind and
each executive officer, which Equity Infusion Notice will specify
the Company's calculation of the amount of the required Equity
Infusion required to satisfy the Minimum Stockholders' Equity
Requirement. Any Equity Infusion Notice will specify the date,
which will not be less than the third business day after the date
of such Equity Infusion Notice or more than five business days
after the date of such Equity Infusion Notice, on which the Equity
Infusion will occur. The Equity Infusion will be allocated among
Rosalind and the executive officers so that 50% of the Equity
Infusion takes the form of a Rosalind Conversion and the remaining
50% of the Equity Infusion takes the form of an Equitization
Transaction, subject to certain conditions, until all of the back
pay and deferred bonus amounts have been paid pursuant to an
Equitization Transaction, and thereafter solely by a Rosalind
Conversion.
In the Support and Conversion Agreement, the Company has agreed to
provide Rosalind with the right to participate in future financing
until the second anniversary of the closing of the Proposed
Offering. The Support and Conversion Agreement will expire on the
earlier of (i) the date on which all of the Notes have been
converted or paid in full, or (ii) June 30, 2021, and will
terminate prior thereto (x) with respect to an executive officer,
upon the effective date of the termination of the executive
officer's employment by the Company, (y) if the Company does not
receive Nasdaq approval for the listing of the Common Stock on or
before March 31, 2020; or (z) if the Proposed Offering does not
occur on or prior to the outside date, if any, specified in
Nasdaq's listing approval. Rosalind's participation rights will
survive any such expiration and or termination.
About Delcath Systems
Headquartered in New York, Delcath Systems, Inc. --
http://www.delcath.com-- is an interventional oncology company
focused on the treatment of primary and metastatic liver cancers.
The Company's investigational product -- Melphalan Hydrochloride
for Injection for use with the Delcath Hepatic Delivery System
(Melphalan/HDS) -- is designed to administer high-dose chemotherapy
to the liver while controlling systemic exposure and associated
side effects. The Company has been enrolling a global Registration
clinical trial for Patients with Hepatic Dominant Ocular Melanoma
(OM) called The FOCUS Trial and have initiated a global Phase 3
clinical trial for intrahepatic cholangiocarcinoma (ICC) called The
ALIGN Trial. Melphalan/HDS has not been approved by the U.S. Food
& Drug Administration (FDA) for sale in the U.S. In Europe, its
system is marketed under the trade name Delcath Hepatic CHEMOSAT
Delivery System for Melphalan (CHEMOSAT) and has been used at major
medical centers to treat a wide range of cancers of the liver.
Since January 2019 CHEMOSAT is marketed under an exclusive
licensing agreement with medac, a privately held multi-national
pharmaceutical company headquartered in Germany and specializing in
the treatment and diagnosis of oncological, urological and
autoimmune diseases.
Delcath reported a net loss of $19.22 million for the year ended
Dec. 31, 2018, following a net loss of $45.12 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $18.89
million in total assets, $37.72 million in total liabilities, and a
total stockholders' deficit of $18.82 million.
Marcum LLP, in New York, New York, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
June 14, 2019, on the consolidated financial statements for the
year ended Dec. 31, 2018, citing that the Company has a working
capital deficiency, has incurred losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
DEMO REALTY: May Continue Using Cash Collateral Through April 28
----------------------------------------------------------------
Judge Elizabeth D Katz of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Demo Realty Co., to continue
using cash collateral on an interim basis through April 28, 2020,
under the same terms and conditions of the previous order and in
accordance with the Debtor's budget filed on March 4.
A hearing on Debtor's further use of cash collateral is set for
April 28 at 12:00 p.m.
On or before April 21, the Debtor must file a reconciliation of
accounts through March 31, as well as a projection budget for
April, May and June 2020 that details taxes, U.S. Trustee Fees and
Professional Fees.
In addition, the Debtor will make adequate protection payments to
Rockland Lease Funding Corporation in the amount of $7,000 per
month.
A copy of the Order is available for free at https://is.gd/V0wuDY
from PacerMonitor.com.
About Demo Realty Co.
Demo Realty Co., Inc., is an affiliate of Patriots Environmental
Corp., a company engaged in site development and remediation,
asbestos abatement, and general demolition.
The company filed a Chapter 11 petition (Bankr. D. Mass. Case No.
20-40159) on Jan. 31, 2020. In the petition signed by Ronald H.
Bussiere, president, the Debtor was estimated to have up to $50,000
in assets, and between $1 million and $10 million in liabilities.
Law Office of Vladimir Von Timroth represents the Debtor.
DHM HOSPITALITY: Allowed to Use Cash Collateral on Interim Basis
----------------------------------------------------------------
Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the
Eastern District of Texas has issued a second interim order
authorizing DHM Hospitality, LLC, to use the cash collateral and
proceeds, in which Bank of Hope asserts a lien position, for any
budgeted item that is due and payable before the final hearing.
A hearing will be held on March 24, 2020 at 9:30 to determine if
the Second Interim Order should be continued, modified or
terminated.
About DHM Hospitality
DHM Hospitality, LLC, is a privately held company in the hotels and
motels business. Its principal assets are located at 910 Corn
Products Road, Corpus Christi, Texas.
DHM Hospitality sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Texas Case No. 20-40312) on Feb. 3,
2020. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Eric A. Liepins, P.C., is the Debtor's legal counsel.
DIFFUSION PHARMACEUTICALS: Incurs $11.8 Million Net Loss in 2019
----------------------------------------------------------------
Diffusion Pharmaceuticals Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K reporting a net
loss of $11.80 million for the year ended Dec. 31, 2019, compared
to a net loss of $18.37 million for the year ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $24.11 million in total
assets, $3.97 million in total liabilities, and $20.13 million in
total stockholders' equity.
KPMG LLP, in McLean, Virginia, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated March
17, 2020 citing that the Company has suffered recurring losses from
operations, has limited resources available to fund current
research and development activities, and will require substantial
additional financing to continue to fund its research and
development activities that raise substantial doubt about its
ability to continue as a going concern.
Research and development expenses were $6.6 million for 2019,
compared with $5.8 million for 2018. The increase was attributable
to a $1.9 million increase in expenses related to the Company's
Phase 2 stroke trial and a $0.3 million increase in manufacturing
expense, partially offset by a $1.3 million decrease in expense
related to its Phase 3 GBM trial. The lead-in portion of this
trial was completed in the fourth quarter of 2019. The Company
expects higher R&D expenses during 2020 compared with 2019, which
will consist primarily of expenses associated with PHAST-TSC.
General and administrative expenses were $4.8 million for 2019,
compared with $6.2 million for 2018. The decrease was primarily
due to a $0.7 million decrease in stock-based compensation expense,
a $0.4 million decrease in salaries and wages, and a $0.2 million
decrease in professional fees and other expenses.
Diffusion had cash and cash equivalents of $14.2 million as of Dec.
31, 2019, compared with $8.0 million at Dec. 31, 2018. Net cash
used in operating activities during 2019 was $9.9 million, compared
with $10.8 million used during 2018. During 2019, the Company
raised $16.2 million in gross proceeds via three separate offerings
of stock and warrants. The Company believes it has adequate cash
resources to continue operations into January of 2021.
Recent business highlights include the following:
* Commenced enrollment in its on-ambulance Phase 2 clinical
trial testing TSC for the treatment of acute stroke, with
patients treated at sites affiliated with the University of
Virginia (UVA) and the University of California Los Angeles
(UCLA). This 160-patient trial, named PHAST-TSC (Pre-
Hospital Administration of Stroke Therapy-TSC), will involve
23 hospitals across urban, suburban and rural areas in Los
Angeles County and Central Virginia. The Company is
continuing the process of qualifying sites in Los Angeles in
cooperation with researchers at UCLA and is rapidly ramping
up for increased patient enrollment.
* Completed the 19-patient open-label, dose-escalation lead-in
portion of its Phase 3 INTACT (INvestigating Tsc Against
Cancerous Tumors) trial with Trans Sodium Crocetinate (TSC)
plus standard of care (SOC) for patients with inoperable
glioblastoma multiforme (GBM), and announced encouraging
results from patients who completed the study per protocol.
In addition, favorable safety data in the dose-escalation
run-in study supported the Data Safety Monitoring Board's
recommendation to continue the Phase 3 study.
* Bolstered its global intellectual property position with the
issuance of two patents in Europe during the year, for a
total of 50 issued patents outside the U.S. and 16 patents
issued in the U.S. These patents protect composition of
matter and uses of TSC in multiple indications, including in
combination with tissue plasminogen activator (tPA) to treat
ischemic stroke. tPA is the only treatment approved by the
U.S. Food and Drug Administration for the treatment of
stroke.
* Strengthened the Company's board of directors with the
appointment of Robert Cobuzzi, Jr., Ph.D. Dr. Cobuzzi is an
accomplished life sciences professional with 25 years of
cross-functional leadership experience including more than a
decade with Endo International, Plc.
"We achieved multiple important milestones throughout 2019 and in
particular during the fourth quarter, with the start of enrollment
in our PHAST-TSC Phase 2 study," said David Kalergis, chairman and
chief executive officer of Diffusion. "This trial start followed
detailed preparations during the course of the year to train the
ambulance first responders and to certify each site. Our
UVA-affiliated site is up and enrolling, and enrollment has also
now begun at UCLA-affiliated sites. We expect to complete the
study and report topline data during 2022, subject to receipt of
adequate funding.
"A recent presentation of early data from our Phase 3 GBM study was
well received by conference attendees. We presented data
suggesting that adding 18 injections of TSC during the
post-radiation chemotherapy phase at doses up to six-times higher
than those received during radiation, per the INTACT protocol, may
be having a positive effect on survival without adding increased
safety risks. We are encouraged by this data, and believe it
enhances the prospects of attracting a partner to continue
advancing this much-needed option for patients. Commencement of
enrollment in the randomization portion of the INTACT trial is
contingent upon entering into a strategic partnership," Mr.
Kalergis added.
"We look forward to achieving additional milestones in 2020,"
continued Mr. Kalergis. "We anticipate enrollment in PHAST-TSC
will continue during the year, with the expectation of completing
this study before mid-2021. We have many patent applications
pending worldwide and expect to further solidify our global TSC
intellectual property estate. Given the early data from our GBM
run-in study, we are hopeful we will secure a partner to continue
the trial."
A full-text copy of the Form 10-K is available for free at:
https://is.gd/qz2OCR
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is an innovative biotechnology
company developing new treatments that improve the body's ability
to bring oxygen to the areas where it is needed most, offering new
hope for the treatment of life-threatening medical conditions.
Diffusion's lead drug TSC was originally developed in conjunction
with the Office of Naval Research, which was seeking a way to treat
hemorrhagic shock caused by massive blood loss on the battlefield.
DIFFUSION PHARMACEUTICALS: John Gainer Ph.D. Retires as CSO
-----------------------------------------------------------
Professor John L. Gainer, Ph.D., has retired as Diffusion
Pharmaceuticals Inc.'s chief science officer. Dr. Gainer will
continue to serve as both an advisor to the Company and as a member
of the board of directors. In recognition of the advancement of
the TSC technology into the clinic, the Company has begun a search
for a chief medical officer as a replacement for the former chief
science officer position.
Professor Gainer is the inventor of the trans bipolar carotenoid
family of molecules from which the Company's lead compound Trans
Sodium Crocetinate, or TSC, was derived. He co-founded Diffusion
Pharmaceuticals in 2001 with David Kalergis, the company's chairman
and chief executive officer, serving on the board of directors. He
was named chief science officer in 2005 after his retirement as
Professor Emeritus at the University of Virginia Department of
Chemical Engineering, where he had served as a faculty member since
1966.
"On behalf of everyone at Diffusion Pharmaceuticals, we want to
wish Professor Gainer the best with his well-deserved retirement,"
said Mr. Kalergis. "We are pleased that we will have the benefit
of John's wisdom as both an advisor to the Company and as a board
member, while we search for a new Chief Medical Officer to advance
his work to offer treatment to patients suffering from diseases
associated with a lack of oxygen."
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is an innovative biotechnology
company developing new treatments that improve the body's ability
to bring oxygen to the areas where it is needed most, offering new
hope for the treatment of life-threatening medical conditions.
Diffusion's lead drug TSC was originally developed in conjunction
with the Office of Naval Research, which was seeking a way to treat
hemorrhagic shock caused by massive blood loss on the battlefield.
Diffusion reported a net loss of $11.80 million for the year ended
Dec. 31, 2019, compared to a net loss of $18.37 million for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$24.11 million in total assets, $3.97 million in total liabilities,
and $20.13 million in total stockholders' equity.
KPMG LLP, in McLean, Virginia, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated March
17, 2020 citing that the Company has suffered recurring losses from
operations, has limited resources available to fund current
research and development activities, and will require substantial
additional financing to continue to fund its research and
development activities that raise substantial doubt about its
ability to continue as a going concern.
DIXON PAVING: Seeks to Hire Stubbs & Perdue as Attorney
-------------------------------------------------------
Dixon Paving, Inc. seeks authority from the US Bankruptcy Court for
the Eastern District of North Carolina to hire Stubbs & Perdue,
P.A., as its attorneys.
Services to be rendered by the attorneys are:
a. undertake any and all steps and actions necessary to
authorize the use of cash collateral pursuant to Sec. 363 of the
Bankruptcy Code, if applicable;
b. advise the Debtor with respect to its powers and duties as
debtor-in-possession in the continued management, operation and
reorganization of its business;
c. review any and all claims asserted against the Debtor by
its creditors, equity holders, and parties in interest;
d. represent the Debtor's interests at the Meeting of
Creditors under Sec. 341 of the Bankruptcy Code;
e. attend any meetings, conferences, and negotiations with
representatives of creditors and other parties in interest;
f. review and examine, if necessary, any and all transfers
which may be avoided a preferential or fraudulent transfers under
the appropriate provisions of the Bankruptcy Code;
g. take all necessary actions to protect and preserve the
Debtor's estate;
h. prepare all motions, applications, answers, orders,
reports, and pleadings necessary to the administration of the
bankruptcy estate;
i. prepare any plan of reorganization, disclosure state, and
all related agreements and/or documents, and take any necessary
actions on behalf of the debtor to obtain confirmation of such plan
of reorganization and approval of such disclosure statement;
j. represent the debtor in connection with any potential
post-petition financing;
k. advise the debtor in connection with the sale or liquidation
of any assets and property to third parties;
l. appear before the court, or any such appellate court, and
the Office of the Bankruptcy Administrator to protect the interests
of the Debtor and the bankruptcy estate;
m. represent the Debtor with respect to any general, corporate,
or transnational matters that arise during the course of the
administration of the Bankruptcy Case; and
n. assist and advise the Debtor with respect to negotiation,
documentation, implementation, consummation, and closing of any
corporate transactions, including sales of assets, in the
bankruptcy case.
The attorneys received a retainer in the amount of $26,171.
Trawick H. Stubbs, Jr., Esq. of Stubbs & Perdue 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.
Stubbs & Perdue can be reached at:
Trawick H. Stubbs, Jr., Esq.
STUBBS & PERDUE, P.A.
310 Craven Street
P.O. Box 1654
New Bern, NC 28563-1654
Tel: (252) 633-2700
Fax: (252) 633-9600
E-mail: tstubbs@stubssperdue.com
About Dixon Paving
Based in Raleigh, North Carolina, Dixon Paving, Inc. is a
commercial paving and milling company. Dixon Paving filed a Chapter
11 bankruptcy petition (Bankr. E.D.N.C. Case No. 20-00656) on Feb.
14, 2020. At the time of the filing, the Debtor was estimated to
have $1 million to $10 million in liabilities. The Debtor's
counsel is Trawick H. Stubbs, Jr., Esq. of STUBB & PERDUE, P.A.
DOUBLE L FARMS: April 2 Hearing on Disclosure Statement
-------------------------------------------------------
Judge Joseph M. Meier has ordered that the hearing on DOUBLE L
FARMS, INC.'s Second Amended Disclosure Statement will be on April
2, 2020 at 9:30 a.m.
A full-text copy of the Order dated March 4, 2020, is available
at https://tinyurl.com/yxxafdh6 from PacerMonitor.com at no
charge.
About Double L Farms
Double L Farms, Inc.'s farm operation consists of 3,200 acres in
Eastern Idaho. It owns approximately 1,777 acres and leases the
difference. The farm ground is located primarily in Roberts and
Rigby, Idaho. Double L operates a dairy, raises beef cattle, and
grows potatoes, barley, wheat, corn and hay.
Double L Farms sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Idaho Case No. 18-40910) on Oct. 9, 2018. In the
petition signed by Jared Keith Lewis, president, the Debtor was
estimated to have assets of $1 million to $10 million and
liabilities of $10 million to $50 million. Judge Joseph M. Meier
is the presiding judge. The Debtor tapped Maynes Taggart PLLC as
its legal counsel.
DTI HOLDCO: Moody's Cuts CFR to Caa2; Ratings Placed Under Review
-----------------------------------------------------------------
Moody's Investors Service downgraded DTI Holdco, Inc. Corporate
Family Rating to Caa2 from B3, Probability of Default Rating to
Caa2-PD from B3-PD and its senior secured first lien credit
facility rating (including revolving credit facility and term loan)
to Caa2 from B3. The ratings have also been placed under review for
further downgrade.
The downgrade and the review reflects Moody's view of an elevated
default risk, stemming from materially lower earnings prospects in
2020 due to challenging industry conditions stemming from the
coronavirus pandemic, liquidity tightening and the uncertainty
around financial ramifications from the recent ransomware attack,
including a potential for client losses and/or reduced processing
volumes.
RATINGS RATIONALE
The review for downgrade will focus on management's ability to
restore service to all global systems and verify a clean operating
environment, improve its liquidity, adjust its cost structure in
response to weakening global macro-economic conditions, and receive
insurance recoveries that would cover losses from the ransomware
attack while also minimizing any customer losses.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. Moody's expects
that credit quality around the world will continue to deteriorate,
especially for those companies in the most vulnerable sectors that
are most affected by prospectively reduced revenues, margins and
disrupted supply chains.
Moody's downgraded and placed the following ratings of DTI Holdco,
Inc. on review for further downgrade:
-- Corporate Family Rating, downgraded to Caa2 from B3
-- Probability of Default Rating, downgraded to Caa2-PD from
B3-PD
-- $100 million first lien senior secured revolving credit
facility due 2021, downgraded to Caa2 (LGD3) from B3 (LGD3)
-- $1.195 billion first lien senior secured term loan B due
2023, downgraded to Caa2 (LGD3) from B3 (LGD3)
Outlook Actions:
-- Outlook, changed to rating under review from negative
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in New York, NY, DTI is a global provider of legal
service solutions, namely litigation and administrative support
services for corporations and law firms in North America, Europe
and Australia. DTI is majority owned by an investor group
controlled by OMERS Private Equity, Inc., Harvest Partners, L.P.,
and management. The company generated revenue of $1.03 billion in
2019.
EMERALD X: S&P Places 'B+' ICR on CreditWatch Negative
------------------------------------------------------
S&P Global Ratings placed its ratings on Emerald X, Inc. on
CreditWatch, including its 'B+' issuer credit rating and its 'B+'
rating on the company's senior credit facility.
The CreditWatch placement on Emerald X, Inc. reflects its
vulnerability to event cancellations stemming from the COVID-19
pandemic and the limited visibility into how widespread and
drawn-out the impact will be. Companies have increasingly imposed
restrictions on their employees' nonessential travel through
February and March, which has led to the cancellation or
postponement of numerous conferences worldwide in the first quarter
of 2020. Further, the economic impact and subsequent return to
normalcy are also uncertain. Trade show management companies such
as Emerald can be significantly impaired because most of its shows
take place only once a year, and a postponement or cancellation
until 2021 could have a substantial impact. Although Emerald has
cancellation insurance, the size and timing of the payments may be
lumpy.
"In resolving the CreditWatch placement, we will evaluate new
information regarding the spread of COVID-19 and its impact on
Emerald's operating performance, liquidity, and cash flows. We
could lower the rating if we believe the impact of COVID-19 will
cause leverage to increase, derail the company's turnaround effort,
or lead to a material liquidity decline," S&P said.
"We could affirm the 'B+' rating once we have more confidence
regarding the duration and severity of COVID-19's effect on trade
shows and Emerald's operating performance, liquidity, and cash
flow. An affirmation would likely entail confidence that trade
shows will take place as scheduled, and attendance will be
substantial, leading debt leverage remaining below 5x," the rating
agency said.
ENDEAVOR OPERATING: S&P Puts 'B' ICR on CreditWatch Negative
------------------------------------------------------------
S&P Global Ratings placed all ratings on Endeavor Operating Co.
LLC, including the 'B' issuer credit rating, on CreditWatch with
negative implications.
S&P also placed all ratings on Endeavor's subsidiary UFC Holdings
LLC, including the 'B' issuer credit rating, on CreditWatch with
negative implications.
The CreditWatch placements with negative implications reflect
pressure on Endeavor's and UFC's various revenue streams due to the
spread of the coronavirus. S&P preliminarily expects Endeavor to be
very highly leveraged with adjusted debt to EBITDA of about 7x in
2020, incorporating a preliminary estimate of a mid-teens percent
drop in events, media, and services revenue, as well as a
substantial decline in UFC's live ticketing revenue. Extended
government and private voluntary restrictions on travel and
out-of-home entertainment could put additional pressure on S&P's
cash flow estimate and raise leverage higher this year.
"We plan to resolve the CreditWatch placements once we can assess
and quantify the effects of event cancellations and halted content
production on Endeavor's EBITDA and liquidity. We could lower the
issuer credit ratings if we believe leverage will stay above the
mid-7x area or if we lose confidence the companies can maintain
adequate near-term liquidity," S&P said.
EXCHANGE AVENUE: Seeks to Hire Energynet.com as Auctioneer
----------------------------------------------------------
Exchange Avenue Production Co. filed an amended application seeking
approval from the U.S. Bankruptcy Court for the Northern District
of Texas to hire Energynet.com, Inc.
The amended application clarifies the property the Debtor is asking
Energy net to sell and revises the terms of the Agreement with
EnergyNet.
At the time of the application to employ EnergyNet.com, Inc. as
auctioneer filed on Dec. 13, 2018, the Debtor understood that it
shared the working interest in the Motin Wells with Vince Johnson,
and thatthe Debtor and Mr. Johnson each were entitled to 37.5
percent of the profits of production from the Motion Wells.
Since the original application, the Debtor has learned that
Johnson's interest in the Morton Wells was never recorded. The
Debtor asserted that the unrecorded assignment of the working
interest to Johnson is avoidable under sections 544(a)(3) and 550
of the Bankruptcy Code. Johnson disputed that the assertion and has
asserted equitable and legal defense. The parties have reached a
settlement, subject to Court approval, under which Johnson waives
any ownership of the working interests in the Morton Wells in
exchange for 10 percent of the sales proceeds after deduction for
commissions to EnergyNet. Accordingly, instead of marketing a
partial working interest in the Morton Wells through EnergyNet, the
Debtor now seeks to market the full working interest.
The professional services that EnergyNet will render are:
a. intake and prepare for auction;
b. advertise through electronic media; and
c. conduct the online auction.
Energynet.com's commission ranges from 10% for property sold for
$100,000 or less, to 2.25% for property sold for more than $5
million. The firm would be entitled to a minimum listing fee of
$300 in the event an item does not sell in the online auction.
Chris Atherton, president of Energynet.com, disclosed in a court
filing that the firm does not have any interest adverse to the
Debtor's bankruptcy estate.
The firm can be reached through:
Chris Atherton
Energynet.com, Inc.
7201 I-40 West, Suite 319
Amarillo, TX 79106
Toll Free: 1-877-351-4488
Phone: (806) 351-2953
Fax: (806) 354-2835
Email: energy@energynet.com
About Exchange Avenue Production
Exchange Avenue Production Co. is a privately held company in
Weatherford, Texas, engaged in oil and gas extraction business. The
Debtor sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Tex. Case No. 17-44107) on Oct. 4, 2017. In the
petition signed by Linda Hunt, partner, the Debtor estimated assets
of $1 million to $10 million and liabilities of less than $1
million. Judge Mark X. Mullin presides over the case. The Debtor
hired Forshey & Prostok, LLP, as its legal counsel; Kelly Hart &
Hallman LLP, as special counsel; and Freemon, Shapard & Story as
its accountant.
EYEPOINT PHARMACEUTICALS: Incurs $56.8 Million Net Loss in 2019
---------------------------------------------------------------
Eyepoint Pharmaceuticals, Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K reporting a net
loss of $56.79 million on $20.36 million of total revenues for the
year ended Dec. 31, 2019. For the six months ended Dec. 31, 2018,
the Company reported a net loss of $44.72 million on $2.93 million
of total revenues.
As of Dec. 31, 2019, the Company had $72.97 million in total
assets, $64.64 million in total liabilities, and $8.33 million in
total stockholders' equity.
Deloitte & Touche LLP, in Boston, Massachusetts, the Company's
auditor since 2008, issued a "going concern" qualification in its
report dated March 13, 2020, citing that the combination of the
Company's limited currently available cash, cash equivalents and
available borrowings, together with its history of losses, and the
uncertainty in timing of cash receipts from its newly launched
products raises substantial doubt about the Company's ability to
continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://is.gd/vGUvvj
About EyePoint Pharmaceuticals
EyePoint Pharmaceuticals, formerly pSivida Corp. --
http://www.eyepointpharma.com/-- headquartered in Watertown, MA,
is a specialty biopharmaceutical company committed to developing
and commercializing innovative ophthalmic products in indications
with high unmet medical need to help improve the lives of patients
with serious eye disorders. The Company currently has two
commercial products: DEXYCU, the first approved intraocular product
for the treatment of postoperative inflammation, and YUTIQ, a
three-year treatment of chronic non-infectious uveitis affecting
the posterior segment of the eye.
FAITH APOSTOLIC: Seeks to Hire Jones & Walden as Counsel
--------------------------------------------------------
Faith Apostolic Deliverance Church, Inc. seeks authority from the
US Bankruptcy Court for the Northern District of Georgia to hire
Jones & Walden, LLC, as its legal counsel.
Faith Apostolic requires Jones & Walden to:
(a) prepare pleadings and applications;
(b) conduct examination;
(c) advise the Debtor of its rights, duties and obligations;
(d) consult and represent the Debtor with respect to a Chapter
11 plan;
(e) perform those legal services incidental and necessary to
the day-to-day operations of the Debtor's business, including the
institution and prosecution of necessary legal proceedings, and
general business legal advice;
(f) take any and all other actions incident to the proper
preservation and administration of the Debtor's estate and
business.
Jones & Walden has stated present fee rates of $225 to $375 per
hour for attorneys and $100 per hour for legal assistants.
Cameron McCord, Esq., a partner at Jones & Walden, attests that
neither he nor the firm has or represents any interest adverse to
the Debtor and its estate.
The firm can be reached through:
Cameron M. McCord, Esq.
Jones & Walden, LLC
21 Eighth Street, NE
Atlanta, GA 30309
Phone: (404) 564-9300
Email: cmccord@joneswalden.com
About Faith Apostolic Deliverance Church, Inc.
Faith Apostolic Deliverance Church, Inc. filed its voluntary
petition under Chapter 11 of the Bankruptcy Court (Bankr. N.D. Ga.
Case No. 20-63879) on March 3, 2020, listing under $1 million in
both assets and liabilities. Cameron M. McCord, Esq., at Jones &
Walden, LLC, represents the Debtor as counsel.
FLUSHING AIRPORT: Seeks to Hire Backenroth Frankel as Counsel
-------------------------------------------------------------
Flushing Airport Holdings LLC seeks authority from the United
States Bankruptcy Court for the Eastern District of New York to
hire Backenroth Frankel & Krinsky, LLP, as its counsel.
Services Backenroth Frankel will render are:
a. provide the Debtor with legal counsel regarding powers and
duties as a debtor-in-possession in the continued operation of
business and management of property during the Chapter 11 case;
b. prepare on behalf of the Debtor all necessary applications,
answers, orders, reports, and other legal documents which may be
required with the Chapter 11 case;
c. provide the Debtor with legal services regarding
formulating and negotiating a plan of reorganization with
creditors; and
d. perform such other legal services for the Debtor as
required during the Chapter 11 case.
The Debtor paid the counsel $25,000 as its initial retainer before
the petition was filed.
Backenroth Frankel's hourly rates are:
Paralegal $125
Scott A. Krinsky $575
Mark A. Frankel $615
Abraham J. Backenroth $650
Mark A. Frankel, member of the firm, assures the court that the
members and associates of Backenroth Frankel and are disinterested
parties within the meaning of Sec. 101(14) of the Bankruptcy Code
and have no interest adverse to the Debtor's estate.
The firm can be reached through:
Mark Frankel, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
800 Third Avenue
New York, NY 10022
Tel: (212) 593-1100
About Flushing Airport Holdings LLC
Flushing Airport Holdings LLC is a Single Asset Real Estate debtor
(as defined in 11 U.S.C. Section 101(51B)). It is the fee simple
owner of a property located at 131-05 23rd Avenue College Point NY,
11356 having a comparable sale value of $3 million.
Flushing Airport Holdings LLC filed a voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-40864) on Feb. 26, 2020. In the petition signed by Maurizio
Oppedisano, managing member, the Debtor estimated $3,000,000 in
assets and $8,302,724 in liabilities. Mark Frankel, Esq. at
Backenroth Frankel & Krinsky, LLP, serves as the Debtor's counsel.
FORESIGHT ENERGY: S&P Downgrades ICR to 'D' on Bankruptcy Filing
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Foresight Energy L.P. to 'D' from 'SD'. S&P also lowered its
issue-level ratings on Foresight's first-lien debt (the term loan
due in 2022) to 'D' from 'CCC'.
Foresight Energy L.P. has filed for bankruptcy to implement a
restructuring support agreement. The rating action follows
Foresight's announcement that it filed voluntary petitions for
restructuring under Chapter 11 of the U.S. Bankruptcy Code.
FREEDOM PLUMBERS: Hires Culbert & Schmitt as Bankruptcy Counsel
---------------------------------------------------------------
Freedom Plumbers Corporation seeks authority from the US Bankruptcy
Court for the Eastern District of Virginia to hire Culbert &
Schmitt, PLLC, as its bankruptcy counsel.
Freedom Plumbers requires Culbert & Schmitt to:
(a) assist in the administrative aspects of the Chapter 11
case;
(b) prepare and file pleadings as necessary to use the assets
of the estate, to reject or assume leases and to otherwise comply
with the provisions of Title 11, to the extent this task is not
performed by primary counsel;
(c) attend court hearings and meetings related to the Office
of the United States Trustee;
(d) perform such other services as are necessary for the
efficient and effective administration of this case.
Culbert & Schmitt is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code, and does not
hold or represent any interest adverse to the estates.
The Debtor paid Culbert & Schmitt a retainer of $12,000.
Ann Schmitt, primary counsel in the case, will charge an hourly
rate of $375.
The firm can be reached through:
Ann E. Schmitt, Esq.
Culbert & Schmitt, PLLC
40834 Graydon Manor Lane
Leesburg, VA 20175
Phone: 703-737-7797
About Freedom Plumbers Corporation
Freedom Plumbers Corporation sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Va. Case No. 20-10534) on Feb. 20,
2020, listing under $1 million on both assets and liabilities. Ann
E. Schmitt, Esq. at Culbert & Schmitt, PLLC, represents the Debtor
as counsel.
FRONTIER COMMUNICATIONS: S&P Cuts ICR to 'SD' on Missed Payment
---------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on U.S.-based
telecommunications service provider Frontier Communications Corp.
to 'SD' (selective default) from 'CCC-'.
At the same time, S&P lowered the issue-level ratings on the
affected notes to 'D' from 'CCC-' to reflect the expected payment
default. The 'CCC-' issue-level ratings on the company's unaffected
senior unsecured notes are unchanged.
The downgrade follows Frontier's election to not make about $322
million of interest payments on its unsecured California, Texas,
and Florida (CTF) notes and legacy unsecured notes (including the
8.875% senior notes due 2020, 10.5% senior notes due 2022, 11.0%
senior notes due 2025, and 6.25% senior notes due 2021) and to
enter a 60-day grace period while it weighs options to address its
capital structure. A payment default has not yet occurred under the
indenture governing the notes, which provide a 60-day grace period.
However, S&P does not believe payments will be made within the
stated grace period (which constitutes an event of default under
S&P Global Ratings' Timeliness of Payments criteria) given that the
company is in negotiations with lenders to restructure this debt.
Furthermore, Frontier has little ability to meet its financial
commitments longer term, which could result in the company filing
for Chapter 11 bankruptcy protection. Frontier had approximately
$17.5 billion of debt outstanding as of Sept. 30, 2019.
S&P will reevaluate its ratings upon completion of a restructuring
or if the company announces its intention to file for bankruptcy.
GENCANNA GLOBAL: Gets Nod on $2.7-Mil DIP Loan, Cash Collateral Use
-------------------------------------------------------------------
Judge Gregory R. Schaaf of the U.S. Bankruptcy Court for the
Eastern District of Kentucky issued an interim order authorizing
GenCanna Global USA, Inc. and affiliates to obtain up to
$2,750,000 in senior secured post-petition financing from MGG
Investment Group LP, as agent, and the lenders from time to time
party thereto.
The Debtors are also authorized to use cash collateral solely to
meet payroll obligations and pay expenses critical to the
administration of theri estates, strictly in accordance with the
approved budget. As set forth in the approved budget, the Debtors
will have total operating disbursements of approximately $2,636,000
through May 1, 2020.
To secure performance and payment of all DIP Obligations, the DIP
Agent, for the benefit of itself and the DIP Lenders, is granted
continuing, valid, binding, enforceable, non-avoidable, and
automatically and properly perfected security interests in and
liens upon all DIP Collateral. Said DIP Liens will be:
(a) first and senior in priority to all other interests in
(including security interests) and liens on DIP Collateral that was
not encumbered by a valid, enforceable, properly perfected and
non-avoidable lien as of the Order for Relief Date; and
(b) priming liens on and security interests in all other DIP
Collateral, which liens and security interests will be junior only
to the pre-existing liens on and security interests in such DIP
Collateral and senior to all other liens on and security interests
in the DIP Collateral, including the Adequate Protection Liens and
Prepetition Liens.
The DIP Agent, for the benefit of itself and the DIP Lenders, is
granted an allowed superpriority administrative expense claim
against each of the Debtors (jointly and severally), with priority
over any and all obligations, liabilities and indebtedness of the
Debtors, and over any and all administrative expenses and other
claims against the Debtors, subject to the Carve-Out.
The bankruptcy judge also granted the Prepetition Secured Parties
are granted valid and perfected postpetition replacement security
interests in and liens upon the DIP Collateral, which liens will
be: (i) subject and subordinate to the Carve-Out, the DIP Liens,
DIP Obligations and the Permitted Prior Liens; and (ii) senior to
all other security interests in and liens upon the DIP Collateral,
whether now existing or hereafter arising or acquired, including
the Prepetition Liens. In addition, the Prepetition Secured Parties
are granted allowed superpriority administrative expense claims
pursuant to sections 503(b), 507(a), and 507(b) of the Bankruptcy
Code -- an allowed claim against each of the Debtors (jointly and
severally), with priority over any and all administrative expenses
and all other claims against the Debtors, subject and subordinate
to the Carve-Out, the DIP Obligations and the DIP Superpriority
Claim.
Carve-Out will mean the sum of:
(i) all fees required to be paid to the Clerk of the Court
and to the U.S. Trustee;
(ii) all reasonable fees and expenses up to $25,000 incurred
by a trustee under section 726(b) of the Bankruptcy Code; and
(iii) allowed professional fees of professional persons in an
aggregate amount not to exceed $250,000.
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.
GETTY IMAGES: S&P Places 'B-' ICR on CreditWatch Negative
---------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S.-based global
digital media company Getty Images Inc., including its 'B-' issuer
credit rating, on CreditWatch with negative implications.
The CreditWatch placements reflect the high level of uncertainty
regarding the duration and extent of the impact from the COVID-19
outbreak and the related cancelled events and reduction in economic
activity on Getty Images Inc.'s performance. S&P believes that
event cancellations and continued weakness in economic conditions
could cause Getty's 2020 leverage to remain above 9x, compared to
its previous forecast of about 7.5x, and free operating cash flow
will likely decline below its previous forecast of $60 million-$70
million.
"In resolving our CreditWatch, we will determine to what extent the
COVID-19 outbreak affects the company's revenue and earnings,
including the potential for further delays and disruptions of major
events later in the year, including the Olympics. We could lower
the rating by one notch if we believe the impact from COVID-19 and
a prolonged reduction in economic activity will derail the
company's turnaround efforts, causing leverage to remain elevated
and limiting free operating cash generation, which would lead us to
consider the capital structure unsustainable. We could affirm the
ratings if we believe the company will be able to achieve
sustainable healthy growth," S&P said.
GJK FL ENTERPRISES: Seeks Court Approval to Hire A+ Accounting
--------------------------------------------------------------
GJK FL Enterprises, LLC, seeks authority from the US Bankruptcy
Court for the Middle District of Florida to hire A+
Accounting and Tax as its accountant.
The professional services the accountant shall render are:
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/or Assist the Debtor in preparing Court ordered
reports, including the United States Trustee 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.
Compensation for the Accountant is a follows:
a. A $1,500.00 initial retainer to be billed against at:
i. An hourly rate of $175.00 for services rendered by the
Accountant;
ii. a range of $100.00-$50.00 per hour for services rendered
by accounting staff; and
iii. reimbursement of out of pocket costs such as computer
charges, copies and postage for the accounting services.
The accountant neither represents nor holds any interest adverse to
the Debtor as Debtor-In-Possession, to its Estate, or to the
Debtor’s creditors in the matters upon which it is to be engaged,
according to court filings.
The accountant can be reached through:
Akshay Dave, CPA
A+ Accounting & Tax
Post Office Box 372
Brandon, FL 33509-0372
Tel: (813) 381-3809
Email: tax4002@gmail.com
About GJK FL Enterprises, LLC
GJK FL Enterprises, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-01341) on Feb. 18,
2020, listing under $1 million in both assets and liabilities. The
Debtor is represented by Buddy D. Ford, Esq. at BUDDY D. FORD, P.A.
GNC HOLDINGS: Delays Filing of 2019 Form 10-K
---------------------------------------------
GNC Holdings, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its Annual
Report on Form 10-K for the period ended Dec. 31, 2019.
As of the prescribed time for filing its Annual Report on Form 10-K
for the fiscal year ended Dec. 31, 2019, the Company is in the
process of finalizing its Annual Report with respect to the certain
matters. Accordingly, the Company requires additional time in
order to finalize its consolidated financial statements and Annual
Report filing, including completion of audit procedures by the
Company's independent registered public accounting firm with
respect to the Company's consolidated financial statements. As a
result, the Company's consolidated financial statements as of Dec.
31, 2019 are being prepared on a going concern basis which
contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. The
Company intends to file the Annual Report on or before the
fifteenth calendar day following the prescribed due date, in
accordance with Rule 12b-25.
At Dec. 31, 2019, the Company has substantial indebtedness
including $154.7 million of outstanding indebtedness under the
1.50% Convertible Senior Notes issued under that certain Indenture
dated as of Aug. 10, 2015, among the Company, certain of its
subsidiaries, and The Bank of New York Mellon Trust Company, N.A.,
as trustee, maturing on Aug. 15, 2020, and $441.5 million of
outstanding indebtedness under the Amended and Restated Term Loan
Credit Agreement, dated as of Feb. 28, 2018, among GNC Corporation,
GNC Nutrition Centers, Inc., as Borrower, the lenders and agents
parties thereto, and JPMorgan Chase Bank, N.A., as administrative
agent, with a springing maturity date of May 2020 under certain
circumstances.
Management does not expect to have sufficient cash flows from
operations to repay the indebtedness under the Notes or the Tranche
B-2 Term Loan when they become due. Since the Company has not
refinanced the Tranche B-2 Term Loan and it will mature less than
twelve months after the expected issuance date of these
consolidated financial statements, management has concluded there
is substantial doubt regarding the Company's ability to continue as
a going concern within one year from the expected issuance date of
the Company's consolidated financial statements.
Reporting requirements under both the Tranche B-2 Term Loan and the
Credit Agreement, dated as of Feb. 28, 2018, among GNC Corporation,
GNC Nutrition Centers, Inc., as Administrative Borrower, certain of
its subsidiaries, as subsidiary borrowers, the lenders and agents
parties thereto, and JPMorgan Chase Bank, N.A., as administrative
agent require the Company to provide annual audited financial
statements accompanied by an opinion of an independent public
accountant without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit
(other than a "going concern" statement, explanatory note or like
qualification or exception resulting solely from an upcoming
maturity date under the Tranche B-2 Term Loan or the Notes).
Management believes the Company will satisfy this requirement. If
the lenders take a contrary position, (a) they could decide to
instruct the administrative agent under the Senior Credit
Agreements to deliver a written notice thereof to the borrower, and
if the alleged default continued uncured for 30 days thereafter it
would become an alleged event of default (unless waived by the
lenders) and (b) the Company intends to contest such position and
any action the lenders may attempt to take as a result thereof. If
the lenders were to prevail in any such dispute, the required
lenders could instruct the administrative agent to exercise
remedies under the Senior Credit Agreements, including accelerating
the maturity of the loans, terminating commitments under the
revolving credit facility under the ABL Credit Agreement and
requiring the posting of cash collateral in respect of outstanding
letters of credit issued under the Revolving Credit Facility ($4.9
million at Dec. 31, 2019).
In addition, the Company expects its revenues for the fiscal year
ended Dec. 31, 2019 to decline by approximately $280 to $290
million, largely due to the transfer of its Nutra manufacturing and
China businesses to the Company's joint ventures formed in the
first quarter of 2019, the closure of Company-owned stores under
its store portfolio optimization strategy, a decrease in U.S. and
Canada Company-owned same store sales, and lower sales to its
wholesale partners primarily due to the termination of its
consignment agreement with Rite Aid in the fourth quarter of 2018.
This reduction in revenues contributed to a reduction in gross
profit, which was partially offset by an improvement in the gross
margin rate, due to the transfer of the Company's Nutra
manufacturing business to the joint venture arrangement the Company
entered into with Harbin and International Vitamin Corporation in
the first quarter of 2019, and the lower occupancy expense as a
result of the Company's adoption of its new lease standard, store
closures and rent reductions associated with its store portfolio
optimization strategy. The Company also expects the Company's
selling, general and administrative expenses to decline by
approximately $45 to $55 million for the fiscal year ended Dec. 31,
2019, as a result of its store portfolio and cost savings
initiatives, cost reductions realized in connection with the
formation of the strategic joint ventures and other activities.
The Company expects to show a net loss for the fourth quarter and
the fiscal year ended Dec. 31, 2019. Contributing to this net loss
is the previously disclosed loss on the net asset exchange for the
formulation of the joint ventures and the loss on forward contracts
for the issuance of convertible stock. Additionally, as previously
disclosed, the Company's tax expense increased significantly as
joint venture transactions resulted in gains for tax purposes.
Further, as a result of management's conclusion that there is
substantial doubt regarding the Company's ability to continue as a
going concern within one year from the expected issuance date of
its consolidated financial statements, the Company expects to
record a valuation allowance of $27.1 million on the Company's
deferred tax assets as of Dec. 31, 2019. The Company expects its
income tax expense for the fiscal year ended Dec. 31, 2019 to be
approximately $40 to $50 million.
About GNC Holdings
GNC Holdings, Inc., headquartered in Pittsburgh, PA, is a global
health and wellness brand with a diversified, multi-channel
business. The Company's assortment of performance and nutritional
supplements, vitamins, herbs and greens, health and beauty, food
and drink and other general merchandise features innovative
private-label products as well as nationally recognized third-party
brands, many of which are exclusive to GNC. The Company serves
consumers worldwide through company-owned retail locations,
domestic and international franchise activities, and e-commerce.
As of Sept. 30, 2019, GNC had approximately 7,800 locations, of
which approximately 5,700 retail locations are in the United States
(including approximately 1,900 Rite Aid licensed
store-within-a-store locations) and the remainder are locations in
approximately 50 countries.
GNC Holdings reported net income of $69.78 million for the year
ended Dec. 31, 2018, compared to a net loss of $150.26 million for
the year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company
had $1.68 billion in total assets, $1.64 billion in total
liabilities, $211.39 million in convertible preferred stock, and a
total stockholders' deficit of $175.66 million.
* * *
As reported by the TCR on Nov. 15, 2018, S&P Global Ratings
affirmed its 'CCC+' issuer credit rating on Pittsburgh-based
vitamin and supplement retailer GNC Holdings Inc. and removed all
of its ratings on the company from CreditWatch, where S&P placed
them with negative implications on Feb. 14, 2018. "The affirmation
reflects our belief that GNC's capital structure remains
unsustainable over the long term in light of its current operating
performance, including its cash flow generation, because of
increased competitive threats amid the ongoing secular changes in
the retail industry," S&P said.
GO WIRELESS: S&P Places 'B' ICR on CreditWatch Negative
-------------------------------------------------------
S&P Global Ratings placed all its ratings on U.S.-based
independent, exclusive Verizon retailer Go Wireless Holdings Inc.,
including its 'B' issuer credit rating, on CreditWatch with
negative implications.
"The CreditWatch placement follows our view that a sharp drop in
U.S. consumer spending from the coronavirus pandemic could further
weaken Go Wireless' store traffic and sales, adding to headwinds
the company is already dealing with. These include a continued
elongation in the upgrade cycle and the decision by customers to
delay upgrades in anticipation of the 5G rollout. We also believe
supply chain disruptions could adversely affect the company's
operations. Production issues at the OEMs, including Apple and
Samsung, manufacturing facilities in the Asia-Pacific region are
hurting the supply of cell phones. We believe the rapidly evolving
challenges presented by the coronavirus pandemic increases the
headwinds Go Wireless faces, and we think the company's already
weakened covenant cushion could tighten further," S&P said.
"We expect to resolve the CreditWatch within the next three months
as more information becomes available, including the company's next
earnings release. We believe there is at least a 50% chance that we
could lower the ratings at least one notch as we evaluate the
company's liquidity profile and covenant cushion," S&P said.
GOGO INC: Approves Modifications to Certain Performance Awards
--------------------------------------------------------------
Gogo Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that in furtherance of the key strategic
objective of retaining and motivating key talent, the Compensation
Committee of the Board of Directors of the Company has approved a
modification to the performance-vesting conditions of certain
performance awards held by the Company's currently employed
employees (including its named executive officers). The Committee
took this action after concluding that this modification is in the
best interests of the Company and its stockholders, would better
retain and motivate its key talent, and would better align the
Company's employees' interests with the Company's short- and
long-term strategic goals.
The performance awards subject to the modification consist of
performance-vesting stock option awards and performance-vesting
restricted stock unit awards that were granted in 2017, 2018, and
2019. Prior to the modification, the performance-vesting criteria
for the Performance Awards required the per share closing price of
the Company's common stock on the Nasdaq market to equal or exceed
$25, $12 or $6.50 (depending on the award) for a period of thirty
consecutive trading days within four years from the applicable
grant date. If this target was not met as to any grant within four
years from the applicable grant date, the grant would be forfeited.
In light of a sustained drop in trading prices for the Company's
common stock over the last several years, the Committee determined
that the performance-vesting criteria were no longer motivating
performance and increasing retention. Consequently, the Committee
determined that these performance-vesting conditions for all
outstanding Performance Awards that were granted in 2017, 2018, and
2019 would be eliminated effective as of March 17, 2020. The
modification will result in the immediate issuance of 186,139
shares of common stock, corresponding to the portion of the awards
for which service-vesting dates had previously elapsed. In
addition, 172,746 shares of common stock will vest on future dates
subject to the continued service of the holders through the future
vesting dates in 2020 through 2023.
About Gogo Inc.
Gogo Inc. -- http://www.gogoair.com/-- is an inflight internet
company. Gogo is a global provider of broadband connectivity
products and services for aviation. It designs and sources
innovative network solutions that connect aircraft to the Internet,
and develop software and platforms that enable customizable
solutions for and by its aviation partners. Gogo's products and
services are installed on thousands of aircraft operated by the
leading global commercial airlines and thousands of private
aircraft, including those of the largest fractional ownership
operators. Gogo is headquartered in Chicago, IL, with additional
facilities in Broomfield, CO, and locations across the globe.
Gogo Inc. reported a net loss of $146 million on $835.73 million of
total revenue for the year ended Dec. 31, 2019, compared to a net
loss of $162.03 million on $893.76 million of total revenue for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$1.21 billion in total assets, $1.61 billion in total liabilities,
and a total stockholders' deficit of $398.89 million.
* * *
As reported by the TCR on April 18, 2019, Moody's Investors Service
changed the outlook on Gogo Inc. to stable from negative.
Concurrently, Moody's affirmed Gogo's corporate family rating at
Caa1. Moody's said that despite the improvement in liquidity,
Gogo's Caa1 CFR remains warranted given the company's high leverage
which Moody's expects at around 9.9x (Moody's adjusted debt/EBITDA)
by end 2019 along with the continued need for Gogo to invest
heavily in technology and equipment installs to pursue its growth
ambitions outside of North America. Gogo's Caa1 also reflects the
company's small scale relative to other players in the wider
telecommunications industry as well as the highly competitive
environment it operates in.
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Gogo
Inc., according to a TCR report dated April 19, 2019. S&P said the
company's proposed refinancing of the Company's capital structure
will boost its short-term liquidity by extending the maturity
profile of its obligations but the rating agency expects the
company to burn cash over the next year. The rating agency said it
affirmed its 'CCC+' issuer credit rating because it does not
envision a default within the next year.
GOGO INC: Lowers Net Loss to $146 Million in 2019
-------------------------------------------------
Gogo Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K reporting a net loss of $146 million on
$835.7 million of total revenue for the year ended Dec. 31, 2019,
compared to a net loss of $162.03 million on $893.8 million of
total revenue for the year ended Dec. 31, 2018.
The decrease in net loss is primarily related to the performance
improvement in CA-ROW and CA-NA. Excluding the loss on
extinguishment of debt from both 2019 and 2018, net loss would have
improved by 38% from 2018.
Full-year 2019 service revenue increased to $664.4 million, up 5%
from 2018, due to BA and CA-ROW service revenue growth, partially
offset by a decline in CA-NA service revenue.
Equipment revenue decreased to $171.4 million, down 35% from 2018,
primarily due to fewer 2Ku installations, a shift in mix from
airline-directed to turnkey installations and the transition to the
airline-directed model by one airline in January 2018, as
previously reported. This shift to the airline-directed model
increased equipment revenue by approximately $45.4 million for the
year ended Dec. 31, 2018.
Free cash flow improved by $162.6 million in 2019 as compared with
2018, substantially exceeding previously released guidance of an
improvement of at least $100 million.
As of Dec. 31, 2019, the Company had $1.21 billion in total assets,
$1.61 billion in total liabilities, and a total stockholders'
deficit of $398.89 million.
Fourth Quarter 2019 Consolidated Financial Results
* Consolidated revenue increased to $221.3 million, up 2% from
$217.2 million in Q4 2018
* Service revenue of $167.2 million increased 4% from $160.0
million in Q4 2018, due to BA and CA-ROW service revenue
growth
* Equipment revenue of $54.1 million declined 5% from $57.2
million in Q4 2018, primarily due to lower CA-ROW and CA-NA
equipment revenue
* Net loss of $22.4 million improved from a net loss of $59.7
million in Q4 2018 due to a loss on debt extinguishment in
2018 and improved operating performance in 2019
* Adjusted EBITDA increased to $34.4 million, up 78% from $19.4
million in Q4 2018, primarily driven by strong BA results and
reduced reportable segment loss in CA-ROW
* Cash and cash equivalents were $170.0 million as of Dec. 31,
2019.
COVID-19 (Coronavirus) Update
Given the uncertain impact that the quickly evolving COVID-19
(Coronavirus) pandemic will have on the Company's business, Gogo is
not providing 2020 financial guidance in this release. Gogo is
closely tracking the impact of COVID-19 on global travel and its
airline partners specifically and will provide a further update as
appropriate.
"Our efforts are currently centered on managing the effects of the
Coronavirus outbreak on our customers and employees," said Oakleigh
Thorne, Gogo's president and CEO. "Gogo finished 2019 strongly as
the Company benefitted from continued execution and a sharp uptick
in our BA results in the fourth quarter. We are focused on
positioning the Company for ultimate value creation as our industry
rapidly evolves."
"Our operational and financial discipline produced Free Cash Flow
well ahead of our projections for the year and record Adjusted
EBITDA," said Barry Rowan, Gogo's executive vice president and CFO.
"Our Free Cash Flow improvement of $163 million in 2019 versus
2018 significantly exceeded our guidance of an improvement of $100
million."
A full-text copy of the Form 10-K is available for free at:
https://is.gd/LZmgao
About Gogo Inc.
Gogo Inc. -- http://www.gogoair.com/-- is an inflight internet
company. Gogo is a global provider of broadband connectivity
products and services for aviation. It designs and sources
innovative network solutions that connect aircraft to the Internet,
and develop software and platforms that enable customizable
solutions for and by its aviation partners. Gogo's products and
services are installed on thousands of aircraft operated by the
leading global commercial airlines and thousands of private
aircraft, including those of the largest fractional ownership
operators. Gogo is headquartered in Chicago, IL, with additional
facilities in Broomfield, CO, and locations across the globe.
* * *
As reported by the TCR on April 18, 2019, Moody's Investors Service
changed the outlook on Gogo Inc. to stable from negative.
Concurrently, Moody's affirmed Gogo's corporate family rating at
Caa1. Moody's said that despite the improvement in liquidity,
Gogo's Caa1 CFR remains warranted given the company's high leverage
which Moody's expects at around 9.9x (Moody's adjusted debt/EBITDA)
by end 2019 along with the continued need for Gogo to invest
heavily in technology and equipment installs to pursue its growth
ambitions outside of North America. Gogo's Caa1 also reflects the
company's small scale relative to other players in the wider
telecommunications industry as well as the highly competitive
environment it operates in.
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Gogo
Inc., according to a TCR report dated April 19, 2019. S&P said the
company's proposed refinancing of the Company's capital structure
will boost its short-term liquidity by extending the maturity
profile of its obligations but the rating agency expects the
company to burn cash over the next year. The rating agency said it
affirmed its 'CCC+' issuer credit rating because it does not
envision a default within the next year.
GOGO INC: S&P Puts CCC+ ICR on Watch Neg. on Low Passenger Volume
-----------------------------------------------------------------
S&P Global Ratings placed all of its ratings on Gogo Inc.,
including its 'CCC+' issuer credit rating, on CreditWatch with
negative implications
S&P has placed its ratings on Gogo on CreditWatch with negative
implications because the company does not have sufficient liquidity
cushion to absorb a significant and prolonged cut to global air
travel. Additionally, the CreditWatch placement reflects the very
high level of uncertainty regarding the duration and impact the
coronavirus pandemic poses to commercial airline passenger volumes
in 2020, as discussed in S&P's report titled "Coronavirus' Global
Spread Poses More Serious Challenges For Airlines" published March
12, 2020. The company's commercial service revenue (about 50% of
total) is dependent on in-flight WiFi usage and is highly
correlated with passenger volume," S&P said.
Moreover, the company's cost structure is largely fixed, which will
result in significantly lower cash flow from reduced passenger
volume. The company had $170 million of cash on Dec. 31, 2019, but
S&P projected a cash burn of about $70 million in 2020 before the
impact of the virus, with some additional liquidity available from
its $30 million asset-based lending (ABL) revolver. While there are
temporary measures the company can take to preserve liquidity, the
magnitude of the cash impact from the virus is unclear at this
point. The company's next maturity is 2022 but under a stress
scenario, it is possible that cash could be depleted before then.
Furthermore, given volatility in the capital markets, S&P believes
access to capital may be limited.
"We plan to resolve the CreditWatch listing once we can better
assess the duration and impact the coronavirus will have on global
air passenger volumes, and the expected impact on Gogo's
profitability and liquidity, likely following the company's first
quarter earnings call," S&P said.
GOOD NOODLES: Unsecureds to Recover 30% in Plan
-----------------------------------------------
Good Noodles Inc. d/b/a Sfoglini, submitted a Chapter 11
Liquidating Plan and a Disclosure Statement.
During the course of the Debtor's Chapter 11 Case, the Debtor
engaged in a sale process by which it sold substantially all of its
assets the proceeds from which will be used to pay all
administrative, secured, and priority claims with the remainder to
be distributed on a pro rata basis to the allowed general unsecured
creditors.
Holders of Class 1 secured claims received a partial payment from
the Sale Proceeds which was provided for in the Sale Approval
Order. Class 1 Claims are impaired.
Class 3 Allowed General Unsecured Claims will receive a
distribution on a pro rata basis on their allowed claims, on the
Effective Date from the Plan Distribution Fund, after distribution
to all Unclassified Claims, Class 1 and 2 Claims, and funding of
the Post-Confirmation Reserve. The Debtor estimates these claims
to total approximately $660,000 and the Debtor estimates that such
holders will receive approximately 30% on account of their Allowed
Claims. Class 3 Claims are Impaired.
The Plan shall be funded with the net Sale Proceeds. Such assets
shall constitute the Plan Distribution Fund, which shall be
distributed by Kirby Aisner & Curley LLP in accordance with the
terms of the Plan.
A full-text copy of the Disclosure Statement dated March 9, 2020,
is available at https://tinyurl.com/w64jk3a from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Erica R. Aisner, Esq.
KIRBY AISNER & CURLEY LLP
700 Post Road, Suite 237
Scarsdale, New York 10583
Tel: (914) 401-9500
E-mail: eaisner@kacllp.com
About Good Noodles
Good Noodles Inc., d/b/a Sfoglini LLC, is a producer of classic
Italian style pasta made with organic grains. Good Noodles sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-36441) in
Poughkeepsie, New York, on Sept. 4, 2019. Judge Cecelia G. Morris
administers the Debtor's case. In the petition signed by Scott
Ketchum, president, the Debtor was estimated to have $500,000 to $1
million in assets, and $1 million to $10 million in liabilities.
KIRBY AISNER & CURLEY LLP is the Debtor's counsel.
GRIMM BROTHERS: Seeks to Hire Real World Law as Counsel
-------------------------------------------------------
Grimm Brothers Realty Co. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to hire Real World
Law, P.C. as its counsel.
Grimm Brothers requires Real World Law to:
a. advise the Debtor with respect to its rights and
obligations pursuant to the Code;
b. assist the Debtor to prepare and submit all necessary
schedules and statement of financial affairs, as well as amendments
thereto;
c. prepare all necessary applications, motions, answers,
responses, orders, reports, and any other type of necessary
pleading or documents;
d. assist the debtor in formulating and confirming a plan of
reorganization and disclosure materials; and
e. perform all other legal services for the Debtor which may
be necessary or desirable in connection with this case.
Presently, the billing rate is $325 per hour for Glenn A. Brown,
Esq. and $185 per hour for paralegal fees.
Real World Law, P.C. does not represent any interest adverse to the
Debtor, the Debtor's estate, the Debtor's creditors, or any party
in interest to this case in the matters for which it is to be
engaged by the Debtor, and its employment in the best interests of
the Debtor, according to court filings.
The firm can be reached through:
Glenn A. Brown, DMD, Esq.
Real World Law, P.C.
6778 Market Street
Upper Darby, PA 19082
Phone: (610) 734-0750
About Grimm Brothers Realty Co.
Grimm Brothers Realty Co. is a privately-held company in
Norristown, Pennsylvania, and is a wholesale building materials
supplier.
Grimm Brothers sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Pa. Case No. 17-13697) on May 26, 2017. In the
petition signed by Gary Grimm, officer, the Debtor estimated assets
of $1 million to $10 million and liabilities of less than $1
million. Judge Magdeline D. Coleman presides over the case. The
Debtor employed Joshua L. Thomas & Associates and Jensen Bagnato,
P.C. as its legal counsel.
HAWAIIAN HOLDINGS: S&P Places 'BB-' ICR on CreditWatch Negative
---------------------------------------------------------------
S&P Global Ratings placed all ratings, including its 'BB-' issuer
credit rating, on Hawaiian Holdings Inc. on CreditWatch with
negative implications.
The global spread of the coronavirus has led to a significant
reduction in demand for air travel in recent weeks. As a result,
S&P expects Hawaiian Holdings Inc.'s, the parent company of
Hawaiian Airlines, business to materially weaken from its prior
assumptions.
Hawaiian has announced the suspension of its routes to South Korea
and a delay to its planned capacity expansion to Japan. Over time,
S&P also expects the company to reduce capacity on its domestic
routes between the continental U.S. and the Hawaiian islands.
Although the company should also benefit from lower fuel prices,
S&P does not believe the reduced capacity and cost savings will be
adequate to offset sharply lower traffic. As a result, S&P now
expects funds from operations (FFO) to debt to decline to the
low-20% area in 2020 from 35% in 2019. This compares with the
rating agency's previous expectation for FFO to debt in the low-30%
area for 2020.
CreditWatch
S&P expects to resolve the CreditWatch placement when it has more
information regarding the degree and timing of the return of
passenger travel. If it expects that FFO to debt is likely to
average below 25% over the 2020-2021 period, S&P would likely lower
the ratings.
HERTZ CORP: Moody's Cuts CFR to B3 & Alters Outlook to Negative
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of the Hertz
Corporation, including: 1) at Hertz, corporate family rating to B3
from B2; first-lien secured debt to Ba3 from Ba2; second-lien
secured debt to B2 from B1; unsecured notes to Caa1 from B3; and,
the covenant-stripped unsecured notes to Caa2 from Caa1; and 2) at
Hertz Holding Netherlands BV unsecured notes to Caa1 from B3. The
speculative grade liquidity rating is unchanged at SGL-3. The
outlook is negative.
RATINGS RATIONALE
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The car rental
sector has been one of the sectors most significantly affected by
the shock given its sensitivity to consumer demand and sentiment.
More specifically, the weaknesses in Hertz's credit profile,
including its exposure to Europe have left it vulnerable to shifts
in market sentiment in these unprecedented operating conditions and
the company remains vulnerable to the outbreak continuing to
spread. Moody's regards the coronavirus outbreak as a social risk
under its ESG framework, given the substantial credit implications
of public health and safety. The action reflects the impact on
Hertz of the breadth and severity of the shock, and the broad
deterioration in credit quality it has triggered.
Hertz's revised ratings and negative outlook reflect the heightened
vulnerability of the company to the impact of the coronavirus on
the travel and leisure sectors, which are critical drivers of
demand in the car rental industry. Moreover, the coronavirus impact
comes at a time when Hertz is well along in the process of
rebuilding its franchise following an extended period of
underinvestment in critical fleet management processes as well as
accounting and control systems. The company has been making steady
progress as reflected in the improvement in its earnings, returns
on assets and customer satisfaction measures.
Even with the improvement, further progress was expected but that
trajectory will now be reversed by the corona-related downturn in
car rental demand and by the potentially prolonged slowdown in the
economy. As a consequence, Hertz's pre-tax earnings (which was
about breakeven in 2019 after sizable losses from 2016 through
2018) could erode significantly in 2020, and the ratio of
EBIT-to-interest (which stood at 1.0x at year-end 2019) could fall
materially below 1 times.
The negative outlook reflects the risk that weakness in demand will
extend through and potentially beyond the critical seasonal travel
season, and could be prolonged. The negative outlook also reflects
Moody's view that accurately right-sizing the size of Hertz's fleet
in line with lower demand will prove challenging over the near
term. During this period the company will face the risk of over
capacity within the car rental sector, and the possibility of
declines in vehicle residual values.
Hertz has adequate liquidity with: 1) a cash position of $865
million; 2) a revolving credit facility availability of $526
million; and, 3) a $4.1 billion US vehicle funding ABS facility.
Moody's believes that Hertz has sufficient committed ABS facilities
to fund expected fleet acquisitions over the coming year. In
addition, Hertz has the ability to defer planned fleet purchases in
the face of declining demand as well as sell vehicles out of its
existing fleet. These actions can be done quickly in response to
changes in the rental market. The overwhelming bulk of the
company's $2.4 billion in maturing debt is the securitization debt
which funded the fleet acquisitions and will be covered by normal
liquidation of the fleet. Maturing corporate debt is around $20
million.
The ratings could be downgraded with any erosion in Hertz's
liquidity position, particularly if Moody's anticipates that
weakness in demand and operating performance increases the risk of
a violation of covenants in its borrowing facilities. Hertz
currently has ample cushion under its first-lien leverage covenant
of 3.0 to 1, compared with a year-end 2019 measure of 0.5 to 1.
Given the rating action, an upgrade is not expected in the near
term. The outlook could be stabilized if Hertz demonstrates that it
can adequately contend with the much more stressful operating
environment, and clearly restore its track towards improved credit
metrics. Such indicators would include: 1) quickly and effectively
adjusting its fleet size in line with anticipated lower demand; 2)
sustaining its improved customer satisfaction position; and 3)
remaining on track to achieving pre-tax income well exceeding $100
million, and 4) an improved liquidity position.
The Hertz Corporation, headquartered in Estero, Florida, is one of
the world's leading vehicle rental companies operating in both the
on-airport and off-airport markets. The company's principal brands
include: Hertz, Dollar Car Rental and Thrifty Car Rental.
The principal methodology used in this rating was Equipment and
Transportation Rental Industry published in April 2017.
Downgrades:
Issuer: Hertz Corporation (The)
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Corporate Family Rating, Downgraded to B3 from B2
Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD2) from
Ba2 (LGD1)
Senior Secured Regular Bond/Debenture, Downgraded to B2 (LGD3) from
B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD5)
from B3 (LGD4)
Issuer: Hertz Corporation (The) (Old) debt assumed by Hertz
Corporation (The)
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD6)
from Caa1 (LGD6)
Issuer: Hertz Holdings Netherlands BV
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD5)
from B3 (LGD4)
Outlook Actions:
Issuer: Hertz Corporation (The)
Outlook, Changed To Negative From Stable
Issuer: Hertz Holdings Netherlands BV
Outlook, Changed To Negative From Stable
HERTZ GLOBAL: S&P Puts 'B+' ICR on Watch Negative on Reduced Travel
-------------------------------------------------------------------
S&P Global Ratings placed all ratings on Hertz Global Holdings
Inc., including its 'B+' issuer credit rating, on CreditWatch with
negative implications.
The sharp decline in air travel from the coronavirus pandemic will
hurt demand for car rentals at airports, the largest part of
Hertz's business. Furthermore, the pandemic and government actions
to combat it will hurt economic activity, an effect likely to
linger after cases of the virus decline. Car renters have some
flexibility to respond to sharp demand shocks and have done so in
the past. During the period following the Sept. 11, 2001, attacks,
the U.S. car rental industry was able to downsize its fleet by
about 20% in the following month by returning cars to the auto
manufacturers under agreements that allowed such returns. However,
most of Hertz's vehicles today are not covered under these
agreements, which could cause oversupply and thus pressure on
used-car prices.
Car renters can also reduce capital spending on new vehicles by
keeping their cars for longer periods. During the 2008-2009
financial crisis, Hertz had a substantial amount of near-term
maturities. Yet, it was able to refinance those through
asset-backed fleet financings, albeit at higher prices. S&P expects
Hertz to be able to refinance its upcoming maturities in a similar
fashion this time as well. S&P will be watching how Hertz reduces
its fleet to meet lower demand and refinances its maturities to
have a better idea of how it responds to the current situation.
CreditWatch
S&P expects to resolve the CreditWatch as it learns more about the
severity of the coronavirus impact and timing of the recovery on
Hertz's financial position.
HILL CONCRETE: Deadline for Plan & Disclosures Extended to May 31
-----------------------------------------------------------------
Judge Mark S. Wallace has ordered that in view of the Hill Concrete
Structures, the debtor in this case circumstance, feasibility and
other issues, the Court has set a new deadline of May 31, 2020 for
filing a plan and disclosure statement, and has continued the
disclosure statement hearing to June 29, 2020 at 2:00 p.m.
Objections to disclosure statement are due June 12, 2020. Replies
to objections are due June 19, 2020.
A full-text copy of the Order dated March 4, 2020, is available
at https://tinyurl.com/s4hf6db from PacerMonitor.com at no
charge.
About Hill Concrete Structures
Hill Concrete Structures is a privately held company in La Verne,
CA, that offers concrete and cinder building products. Hill
Concrete Structures sought Chapter 11 protection (Bankr. C.D. Cal.
Case No. 19-10212) on Jan. 21, 2019. The case is assigned to Mark
S. Wallace. In the petition signed by James A. Hill, president, the
Debtor disclosed total assets at $997,122 and $1,964,669 in debt.
The Debtor tapped Michael Jones, Esq., at M Jones & Associates, PC,
as counsel.
HOME MEDICAL: Brightwood Loan to Sell Equity on March 24
--------------------------------------------------------
Pursuant to the rights grated to the lenders under certain credit
documents and the Uniform Commercial Code, as enacted in the State
of New York, including, without limitation, Section 9-610,
Brightwood Loan Services LLC and lenders will sell all of the
equity of the borrower, Home Medical Equipments Specialists LLC, at
a public auction to be conducted on March 24, 2020, at 9:00 a.m.,
at the offices of King & Spalding LLP, 1185 Avenue of the Americas,
New York, New York 10036.
The property is currently owned by Autonomy Investments LLC.
The Debtors are entitled to an accounting of the unpaid
indebtedness secured by the property that the lenders intend to
sell. The accounting may be requested free of charge by
contacting:
Craig Gottesman
Brightwood Capital Advisors LLC
810 Seventh Avenue, 26th Floor
New York, New York 10019
Tel: 646-957-9525
E-mail: gottesman@brightwoodlp.com
Home Medical Equipment Specialists LLC manufactures medical
equipment. The Company offers manual and power wheelchairs, power
chairs and scooters, recliners, merry walkers, lift chairs,
walkers, rollators, canes, ramps, lifts and accessories.
HORIZON GLOBAL: Reports $80.7 Million Net Income for 2019
---------------------------------------------------------
Horizon Global Corporation filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting net income
attributable to the Company of $80.75 million on $690.45 million of
net sales for the 12 months ended Dec. 31, 2019, compared to a net
loss attributable to the company of $203.96 million on $714.01
million of net sales for the 12 months ended March 31, 2018.
"Since my appointment as CEO in September 2019, I am encouraged by
the progress we have made," stated Terry Gohl, Horizon Global's
president and chief executive officer. "We are executing our
operational improvement initiatives across all facets of the
business and we continue to identify new opportunities every day.
We are moving with speed and purpose to improve our underlying
operations and service to our customers. We expect that our
progress will result in substantially improved margins and free
cash flow, and, importantly, create value for our shareholders in
2020 and beyond."
Gohl added, "Horizon Global undertook a competitive process to
refinance our ABL. The process demonstrated significant lender
confidence in our operational improvement initiatives plan and the
operating and financial results that we expect to deliver. On
March 13, 2020, The Company entered into an agreement with Encina
Business Credit, LLC that will provide the Company with the
liquidity and financial flexibility necessary to drive our
operational improvement initiatives in 2020."
Gohl continued, "I am also pleased to announce the appointment of
Dennis Richardville as our Chief Financial Officer. Dennis is a
proven leader with extensive automotive experience. Dennis was
instrumental in the success of our recent refinancing and we look
forward to his significant contribution to our short- and long-term
strategic initiatives."
As of Dec. 31, 2019, the Company had $421.04 million in total
assets, $412.44 million in total liabilities, and $8.60 million in
total shareholders' equity.
Horizon Global said, "We have a substantial amount of debt. To
service our debt, we will require a significant amount of cash. Our
ability to generate cash depends on many factors beyond our
control. If we cannot generate the required cash, we may not be
able to make the necessary payments required under our debt.
"At December 31, 2019, we had total debt of $240.9 million (without
giving effect to the equity component of our convertible senior
notes or any debt discount). Our ability to make payments on our
debt, fund our other liquidity needs, and make planned capital
expenditures will depend on our ability to generate cash in the
future. Our historical financial results have been, and we
anticipate that our future financial results will be, subject to
fluctuations. Our ability to generate cash, to a certain extent,
is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond our
control. We cannot guarantee that our business will generate
sufficient cash flow from our operations or that future borrowings
will be available to us in an amount sufficient to enable us to
make payments of our debt, fund other liquidity needs and make
planned capital expenditures. Additionally, we cannot guarantee
that we will be able to refinance any of our debt on commercially
acceptable terms, or at all."
2019 Fourth Quarter Segment Results
Horizon Americas. Net sales were $72.1 million, representing an
increase of $1.2 million, or 1.6%, over prior-year comparable
period. Net sales in the automotive OEM and e-commerce sales
channels were up a combined $5.3 million, partially offset by a
combined $4.2 million decrease in sales in the retail, industrial
and aftermarket sales channels. Gross profit increased $3.4
million, in part due to reduced fines and penalties in the retail
sales channel, partially offset by $3.5 million of increased scrap
costs and inventory reserves. Operating loss was $(16.2) million
as compared to $(11.6) million during the prior-year comparable
period, with gross profit improvement more than offset by a
one-time $6.5 million SG&A expense due to the abandonment of an
automated stock retrieval system operating lease. Adjusted EBITDA
decreased to $(5.6) million as compared to $(1.8) million during
the prior-year comparable period, attributable to overall
operational underperformance after adjustments for special items.
Horizon Europe-Africa. Net sales were $70.2 million, representing
an increase of $3.4 million, or 5.1%, over prior-year comparable
period. Net sales in the automotive OEM, automotive OES and
aftermarket sales channels were up a combined $7.0 million. The
increase in net sales was partially offset by a $3.2 million
decrease attributable to sales in 2018 from a non-automotive
business that was divested in the first quarter of 2019. After
removing the impacts of currency translation, net sales on a
constant currency basis increased $5.7 million, or 8.6%. Gross
profit decreased $0.7 million, due to an unfavorable shift in sales
mix to lower margin automotive OEM business, coupled with $2.6
million of increased scrap costs and inventory reserves. Operating
loss was $(12.2) million as compared to $(16.5) million during the
prior-year comparable period. Adjusted EBITDA increased to $(5.9)
million as compared to $(8.5) million during the prior-year
comparable period, attributable to higher sales and cost savings.
Balance Sheet and Liquidity. Gross debt decreased to $236.6
million, a $145.7 million reduction from Dec. 31, 2018. Total
liquidity, which includes borrowing availability under the ABL and
cash on-hand, was $44.9 million, an increase of $20.7 million over
prior year end, after removing any prior-year impacts related to
the APAC discontinued operations reporting.
Refinancing of Revolving Credit Facility
On March 13, 2020, the Company entered into a Loan and Security
Agreement with Encina Business Credit, LLC, as agent for the
lenders party thereto. The Loan Agreement provides for an
asset-based revolving credit facility in the maximum aggregate
principal amount of $75,000,000, subject to customary borrowing
base limitations contained therein, which amount may be increased
at the Company's request by up to $25,000,000. A portion of the
proceeds received by the Company under the Loan Agreement were used
to pay in full all outstanding debt incurred under the Amended and
Restated Loan Agreement, dated as of June 30, 2015, with Bank of
America, N.A., as administrative agent, and the lenders party
thereto.
The interest on the loans under the Loan Agreement will be payable
in cash at the interest rate of LIBOR plus a margin of 4.00% per
annum, subject to a 1.00% LIBOR floor. There are no amortization
payments required under the Loan Agreement.
Borrowings under the Loan Agreement have a maturity of up to three
years, subject to the maturity of certain of the Company's other
debt facilities. Indebtedness under the Loan Agreement is and will
be secured by the inventory and receivables of the Company's U.S.
and Canadian subsidiaries.
Appointment of Chief Financial Officer
Dennis Richardville has been named the Company's chief financial
officer, effective immediately.
Mr. Richardville has served as vice president and corporate
treasurer for the Company since January 2020. Prior to joining the
Company, Mr. Richardville served as chief financial officer of Dura
Automotive Systems, LLC, from August 2019 to September 2019. Mr.
Richardville served as executive vice president and chief financial
officer of International Automotive Components Group, SA, a global
supplier of automotive components and systems, including interior
and exterior trim, from 2012 to 2019. From 2007 to 2012, Mr.
Richardville served as vice president and global corporate
controller for IAC. Prior to joining IAC, Mr. Richardville held
various finance positions with Lear Corporation, Wesley Industries,
Inc., MSX International, Inc. and Hayes Lemmerz International Inc.
from 1999 to 2007.
The Company also announced that Richard Jok, who is currently on
medical leave and has been serving as the Company's interim chief
financial officer since Dec. 13, 2019, will return to his role as
the Company's vice president, financial planning and analysis.
Gohl commented, "Horizon Global's 2019 results reflect the many
challenges we faced during the year. We are not satisfied with
this performance, we expect this company to be an industry leader
and we are confident that we have the team, brands and focus to
solidify ourselves as the supplier of choice across the markets we
serve. We will continue to execute our well defined operational
improvement initiatives and capitalize on new opportunities. Our
focus will continue to be on operational excellence, margin
expansion and free cash flow. In 2020, we are optimistic that
Horizon Global will deliver on its initiatives, meet and exceed
customer expectations and create value for our shareholders."
A full-text copy of the Form 10-K is available for free at:
https://is.gd/osrKMU
About Horizon Global
Horizon Global -- http://www.horizonglobal.com/-- is a designer,
manufacturer, and distributor of a wide variety of
custom-engineered towing, trailering, cargo management and other
related accessory products in North America, Australia and Europe.
The Company serves OEMs, retailers, dealer networks and the end
consumer.
* * *
As reported by the TCR on Dec. 16, 2019, S&P Global Ratings
affirmed the 'CCC' issuer credit rating on Horizon Global Corp. and
revised the outlook to negative from developing. The outlook
revision to negative reflects S&P's view that despite recent debt
reduction and temporary improvement in liquidity, Horizon's credit
metrics and liquidity remain quite weak and could worsen as the
rating agency expects the company to generate negative free flow.
As reported by the TCR on June 18, 2019, Moody's Investors Service
downgraded Horizon Global Corporation's Corporate Family Rating to
C from Caa3. The downgrade reflects Moody's expectations that
modest earnings improvement will not be sufficient to reduce
leverage to a sustainable level and that the sale of the
Asia-Pacific segment will, while reducing secured leverage,
increase total leverage and create greater reliance on a quick
turnaround in the more weakly performing U.S. and European
operations to diminish restructuring risk.
HOYA MIDCO: S&P Places 'B' ICR on CreditWatch Negative
------------------------------------------------------
S&P Global Ratings placed all its ratings on Hoya Midco LLC (d/b/a
Vivid Seats), including its 'B' issuer credit rating on CreditWatch
with negative implications.
The growing number of event cancellations and postponements related
to the coronavirus outbreak will hurt Vivid Seats' operating
performance.
The coronavirus outbreak has led to a growing number of live-event
postponements or cancelations across the sports and entertainment
sectors globally. S&P expects this to hurt companies that service
live events, including secondary ticketing platforms.
"The CreditWatch placement reflects the company's direct exposure
to live events such as sports, concerts, and theater that are
currently being affected by the coronavirus outbreak. These
disruptions could impair operating performance such that FOCF/debt
declines below our 5% threshold on a sustained basis. We expect to
resolve the CreditWatch placement as we continue to assess the
potential for further delays and disruptions to events that reduce
the value of resale tickets processed by Vivid Seats. In resolving
our CreditWatch listing, we will determine to what extent the
reduced secondary ticketing resale volumes hurt operating
performance and cash flow generation and whether Vivid Seats'
FOCF/debt will remain below our threshold over the next 12 months.
The company's inability to sustain FOCF/debt above 5% as expected
could result in a downgrade," S&P said.
HUDDLESTON VENTURES: Has Until April 6 to File Plan
---------------------------------------------------
On March 4, 2020, hearing was held on the Motion for Relief from
Stay of VJP Holdings, LLC.
Judge Jeffrey P. Norman has ordered Huddleston Ventures, LLC, the
Debtor, to file a Chapter 11 Plan and Disclosure Statement, not
later than April 6, 2020.
A continued hearing is set at 10:00 a.m. on April 7, 2020, on the
Motion to Lift and a determination as to if the debtor has filed a
plan of reorganization that has a reasonable possibility of being
confirmed within a reasonable time.
A full-text copy of the Order dated March 4, 2020, is available at
https://tinyurl.com/uypj8vc from PacerMonitor.com at no charge.
About Huddleston Ventures
Huddleston Ventures, LLC, is a single asset real estate (as defined
in 11 U.S.C. Section 101(51B)). Huddleston Ventures sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Case No. 20-30086) on Jan. 6, 2020. At the time of the
filing, the Debtor had estimated assets of between $1 million and
$10 million and liabilities of between $500,000 and $1 million.
Judge Jeffrey P. Norman oversees the case. The Debtor tapped the
Law Office of Margaret M. McClure as its legal counsel.
HUDDLESTON VENTURES: Taps Alliance Realty as Appraisers
-------------------------------------------------------
Huddleston Ventures, LLC, received approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire
Alliance Realty Advisors to prepare an appraisal on the 8.901
acres, Tract 33-6, Neal Martin Survey, Abstract 26 tract of land
located in Montgomery County, Texas.
Alliance Realty will charge a flat rate of $750 for preparing the
appraisal, plus a fixed rate of $750 to testify in court.
Alliance Realty 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, according to
court filings.
The firm can be reached through:
Malcolm W. Willey
Alliance Realty Advisors
3828 West Davis, Suite 314
Conroe, TX 77304
Phone: +1 936-756-1717
About Huddleston Ventures
Huddleston Ventures, LLC, is a single asset real estate (as defined
in 11 U.S.C. Section 101(51B)). Huddleston Ventures sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Case No. 20-30086) on Jan. 6, 2020. At the time of the
filing, the Debtor had estimated assets of between $1 million and
$10 million and liabilities of between $500,000 and $1 million.
Judge Jeffrey P. Norman oversees the case. The Debtor tapped the
Law Office of Margaret M. McClure as its legal counsel.
IFRESH INC: Signs Deal to Acquire 70% Equity Interests in Xiamen
----------------------------------------------------------------
iFresh, Inc., has entered into a purchase agreement, pursuant to
which the Company agreed to acquire 70% of equity interests in
Xiamen DL Medical Technology Co., Ltd., specializing in research
and development of technology, manufacturing, and distribution of
medical and non-medical protective masks, cotton spinning textiles,
knitwear, daily necessities, kitchen and toilet appliances, and
other related goods.
Pursuant to the terms of the Purchase Agreement, the Company shall
pay Xiamen DL $600,000 in cash and issue 900,000 shares of common
stock of the Company in consideration for the 70% equity interests
in Xiamen DL. The closing of the acquisition is subject to
customary terms and conditions as set forth in the Agreement.
Mr. Long Deng, chief executive officer and chairman of iFresh
commented: "This acquisition is a major step forward in broadening
our business into a new market. Our board of directors have been
extremely supportive of the transaction given the current COVID-19
outbreak and the surging demand of medical products. Currently,
Xiamen DL has been producing 400,000 pieces of medical and
non-medical masks daily using their maximum production capacity to
meet local demands as well as global orders. iFresh's commitment
to serve the community as a leading grocery supermarket chain has
allowed us to be innovative in not only providing our residents
with their daily life needs, but also necessary supplies during the
current coronavirus pandemic. The Company has been offering free
masks to the elderly residents to help prevent them from getting
sick. We believe the acquisition of Xiamen DL will enhance our
product offering range and will drive long-term growth
opportunities for our shareholders."
About iFresh Inc.
Headquartered in Long Island City, New York, iFresh Inc. --
http://www.ifreshmarket.com/-- is an Asian American grocery
supermarket chain and online grocer on the east coast of U.S. With
nine retail supermarkets along the US eastern seaboard (with
additional stores in Glen Cove, Miami and Connecticut opening
soon), and two in-house wholesale businesses strategically located
in cities with a highly concentrated Asian population, iFresh aims
to satisfy the increasing demands of Asian Americans (whose
purchasing power has been growing rapidly) for fresh and culturally
unique produce, seafood and other groceries that are not found in
mainstream supermarkets. With an in-house proprietary delivery
network, online sales channel and strong relations with farms that
produce Chinese specialty vegetables and fruits, iFresh is able to
offer fresh, high-quality specialty produce at competitive prices
to a growing base of customers.
iFresh reported a net loss of $12 million for the year ended March
31, 2019, compared to a net loss of $791,293 for the year ended
March 31, 2018. As of Dec. 31, 2019, the Company had $103.37
million in total assets, $104.38 million in total liabilities, and
a total shareholders' deficiency of $1 million.
Friedman LLP, in New York, the Company's auditor since 2016, issued
a "going concern" qualification in its report dated June 28, 2019,
citing that the Company incurred operating losses and did not meet
the financial covenant required in its credit agreement. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
IMAGEWARE SYSTEMS: Coronavirus Causes Delay in Form 10-K Filing
---------------------------------------------------------------
On March 4, 2020, the U.S. Securities and Exchange Commission
issued an order under Section 36 (Release No. 34-88318) of the
Securities Exchange Act of 1934, as amended, granting exemptions
from specified provisions of the Exchange Act and certain rules
thereunder. The Order provides that a registrant subject to the
reporting requirements of Exchange Act Section 13(a) or 15(d), and
any person required to make any filings with respect to such a
registrant, is exempt from any requirement to file or furnish
materials with the Commission under Exchange Act Sections 13(a),
13(f), 13(g), 14(a), 14(c), 14(f), 15(d) and Regulations 13A,
Regulation 13D-G (except for those provisions mandating the filing
of Schedule 13D or amendments to Schedule 13D), 14A, 14C and 15D,
and Exchange Act Rules 13f-1, and 14f-1, as applicable, where
certain conditions are satisfied.
ImageWare Systems, Inc. has furnished a Current Report on Form 8-K
to indicate its reliance on the Order in connection with the
Company's Annual Report on Form 10-K for the year ended Dec. 31,
2019 as a result of certain circumstances. After the diagnosis of
COVID-19 virus in close proximity of Company employees, the Company
has closed its corporate offices and has requested all employees to
work remotely until further notice. Employees affected include
certain of its key personnel responsible for assisting the Company
in the preparation of its financial statements. In view of these
circumstances, the Company has been unable to timely provide its
auditors and accountants with financial records to provide consent,
and therefore allow the Company to file a timely and accurate
Annual Report on Form 10-K for its year ended Dec. 31, 2019 by the
prescribed date without undue hardship and expense to the Company.
Accordingly, in reliance upon the Order, the Company expects to
file its Annual Report on Form 10-K no later than 45 days after
March 16, 2020.
The Company is supplementing the risk factors previously disclosed
in the Company's Annual Report on Form 10-K for the year ended Dec.
31, 2018 and its subsequent Quarterly Reports on Form 10-Q with the
following risk factor:
"Our business may suffer from the severity or longevity of the
Coronavirus/COVID-19 Global Outbreak.
"The Coronavirus ("Covid-19") is currently impacting countries,
communities, supply chains and markets, as well as the global
financial markets. To date, Covid-19 has not had a material impact
on the Company, other than as set forth above. However, the
Company cannot predict whether Covid-19 will have a material impact
on our financial condition and results of operations due to
understaffing, disruptions in government spending, among other
factors. In addition, at this time we cannot predict the impact of
Covid-19 on our ability to obtain financing necessary for the
Company to fund its working capital requirements. In most
respects, it is too early in the Covid-19 pandemic to be able to
quantify or qualify the longer-term ramifications on our business,
our customers and/or our potential investors."
About ImageWare Systems
Headquartered in San Diego, CA, ImageWare Systems, Inc. --
http://www.iwsinc.com/-- is a developer of mobile and cloud-based
identity management solutions, providing two-factor, biometric and
multi-factor cloud-based authentication solutions for the
enterprise. The company delivers next-generation biometrics as an
interactive and scalable cloud-based solution. ImageWare brings
together cloud and mobile technology to offer two-factor,
biometric, and multi-factor authentication for smartphone users,
for the enterprise, and across industries.
ImageWare reported a net loss available to common shareholders of
$16.46 million for the year ended Dec. 31, 2018, compared to a net
loss available to common shareholders of $13.71 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had
$11.76 million in total assets, $8.66 million in total liabilities,
$8.71 million in series C convertible redeemable preferred stock,
and a total shareholders' deficit of $5.61 million.
Mayer Hoffman McCann P.C., in San Diego, California, the Company's
auditor since 2011, issued a "going concern" qualification in its
report dated March 27, 2019, citing that the Company has incurred
recurring operating losses and is dependent on additional financing
to fund operations. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
IMPORT SPECIALTIES: Allowed to Use Charter Bank Cash Collateral
---------------------------------------------------------------
Judge Kathleen H Sanberg of the U.S. Bankruptcy Court for the
District of Minnesota entered an order approving the Stipulation
between Import Specialties Incorporated and Charter Bank
authorizing the Debtor's continued use of cash collateral.
Pursuant to the terms of the Stipulation, Judge Sanberg authorized
the Debtor to grant replacement liens, as well as the adequate
protection payments required to be made to Charter Bank.
About Import Specialties
Import Specialties Incorporated, d/b/a Heartland America, is a
privately held company in Chaska, Minnesota that sells products
using television, catalog, internet, and mail-order.
Import Specialties filed a voluntary Chapter 11 bankruptcy petition
(Bankr. D. Minn. Case No. 19-42563) on Aug. 22, 2019. In the
petition signed by CEO Mark R. Platt, the Debtor was estimated to
have $1 million to $10 million in both assets and liabilities. The
case has been assigned to Judge Kathleen H. Sanberg. John D. Lamey,
III, Esq. at Lamey Law Firm, P.A., is the Debtor's counsel.
The U.S. Trustee for Region 12 on Sept. 5, 2019, appointed three
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 case. The Committee retained Barnes & Thornburg
LLP, as counsel.
INTERIOR COMMERCIAL: Court Confirms Reorganization Plan
-------------------------------------------------------
Debtor Interior Commercial Installations, Inc.'s continued hearing
for approval and confirmation of its Plan of Reorganization
pursuant to Chapter 11 of the U.S. Bankruptcy Code came on for
hearing on Feb. 6, 2020.
Judge Charles Novack has ordered that the Plan filed by Debtor is
confirmed.
No objection to confirmation of the Plan was filed, and general
unsecured class, an impaired class, have accepted the Plan.
The Plan discharge provision set forth in Article IX of the Plan is
approved in all respects and will be effective on the Effective
Date of the Plan without further order or action on the part of the
court or any other party.
The stipulation with American Express National Bank, to be paid as
an administrative priority creditor is approved.
A full-text copy of the Order dated March 4, 2020, is available at
https://tinyurl.com/qkro8wl from PacerMonitor.com at no charge.
As reported in the TCR on Oct. 7, 2019, Interior Commercial
Installation filed a small business Chapter 11 plan and
accompanying disclosure statement. The Plan provides that general
unsecured claims will be payable in full (100% of allowed claim)
together with interest at 2.0% per annum from the Effective Date in
payments of $3,212.66/month over 84
months distributed pro rata. Payments and distributions under the
Plan will be funded by the continued operation of the business and,
though not factored into the feasibility assessment, the repayment
of the note receivable from Jens Jensen. A full-text copy of the
Disclosure Statement
dated Sept. 27, 2019, is available at https://tinyurl.com/yyylmfgp
from PacerMonitor.com at no charge.
About Interior Commercial
Interior Commercial Installation, Inc., offers commercial clients a
wide variety of countertop surfaces, all the latest trends and
traditional materials, colors, patterns, and finishes that meet
their business needs. Among the materials available are Natural
Stone, Caesarstone, Silestone, LG Hi-Macs, Icestone, Vetrazzo, LG
Viaterra, Cambria, Dekton, Lapitec, Zodiaq by Dupont, and Corian by
Dupont. The Company previously sought bankruptcy protection on Nov.
16, 2018 (Bankr. N.D. Cal. Case No. 18-42689).
Interior Commercial Installation filed a Chapter 11 petition
(Bankr. N.D. Cal. Case No. 18-42874) on Dec. 7, 2018. In the
petition signed by Jens C. Jensen, president, the Debtor disclosed
$1,944,548 in total assets and $1,408,103 in total debt. The Hon.
Charles Novack is the case judge. The Fuller Law Firm, P.C., is
serving as the Debtor's attorney, after substituting for The DebLaw
Offices of David C. Johnston.
INTERNAP CORP: S&P Downgrades ICR to 'D' After Bankruptcy Filing
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S. data
center operator Internap Corp. to 'D' from 'CCC+'. At the same
time, S&P lowered its issue-level ratings on the company's debt to
'D'. All of its recovery ratings remain unchanged.
The downgrade follows Internap's announcement that it has entered
into a restructuring support agreement with an ad hoc group of
lenders holding 77% of its outstanding term loans. In addition,
each of its U.S. subsidiaries have filed voluntary petitions under
Chapter 11 of the U.S. Bankruptcy Code.
INTERNATIONAL GAME TECHNOLOGY: S&P Lowers ICR to 'BB'
-----------------------------------------------------
S&P Global Ratings lowered ratings on International Game Technology
PLC (IGT) by one notch, including the issuer credit rating, to 'BB'
from 'BB+', and placed all ratings on Credit Watch with negative
implications.
The downgrade reflects a significant anticipated loss of revenue
and cash flow at least in 2020 compared with S&P's prior base case
estimates, stemming from country-specific measures that have been
put in place in response to the coronavirus pandemic, particularly
in Italy, and its likely impact on consumer discretionary spending.
Italy has implemented a countrywide lockdown, closing down all
commercial and retail businesses except those providing essential
services, like grocery stores and pharmacies. S&P believes these
actions will lead to a decline in consumer discretionary spend,
including on gaming, which could persist even once the lockdown
ends. IGT has a sizable revenue concentration in Italy, generating
between 30% to 40% of its revenues from its Italian operations.
"In resolving the CreditWatch placement, we plan to update our base
case forecast for IGT's EBITDA, cash flow, liquidity, and leverage
in light of the quarantine in Italy and the temporary closures of
casinos around the U.S. Additionally, we plan to assess the
potential for recovery in the second half of 2020 and 2021 given an
increasing likelihood that the pandemic could weigh on consumer
discretionary spending even after the virus is contained. We may
also reassess IGT's competitive position in light of its
concentration in Italy and the ongoing regulatory and economic
headwinds there. If we conclude that business risks are heightened
for a prolonged period, we may tighten leverage thresholds for
IGT," S&P said.
ITHRIVE HEALTH: Seeks to Hire Larry Strauss as Accountant
---------------------------------------------------------
iThrive Health, LLC, seeks approval from the US Bankruptcy Court
for the District of Maryland to hire Larry Strauss, Esq., CPA &
Associates, Inc. as its accountants.
Strauss will assist the Debtor, among other things, in the
preparation of tax returns and to provide general accounting
services.
Strauss' hourly rates are:
Partners $430
Managers $335
Supervisors $295
Seniors $240
Staff $140
Larry Strauss 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.
The firm can be reached through:
Larry Strauss, Esq, CPA
Larry Strauss, ESQ, CPA & Associates, Inc
2310 Smith Ave
Baltimore, MD 21209
Phone: 410-484-2142
Fax: 443-352-3282
Email: Larry@LarryStraussESQCPA.com
About iThrive Health, LLC
iThrive Health, LLC Village Green Apothecary is a pharmacy in
Bethesda, Maryland that provides prescription drugs,
over-the-counter medications, individualized nutrition, and healthy
living products.
iThrive Health filed a voluntary petition for relief under Chapter
11 of Title 11 of the Bankruptcy Code on Nov. 19, 2019. In the
petition signed by Marc Isaacson, managing member, the Debtor
estimated $500,000 to $1 million in assets and $1 million to $10
million in liabilities. Janet M. Nesse, Esq. at Mcnamee, Hosea, Et
Al. represents the Debtor as counsel.
J.T. SHANNON: Seeks to Hire Scott & Pohlman as Accountant
---------------------------------------------------------
J.T. Shannon Lumber Company, Inc., seeks approval from the U.S.
Bankruptcy Court for the Northern District of Mississippi to hire
Scott & Pohlman, P.C. as its accountants.
Services Scott & Pohlman will render are:
(a) provide tax advice and prepare federal and state tax
returns for the year ended Dec. 31, 2019 and subsequent years for
the Debtors and its subsidiaries;
(b) conduct the annual audit of the Debtor's 401(k) Plan and
prepare any applicable returns; and
(c) perform such other requested services as needed during the
course of the Chapter 11 case.
The accountant's hourly rates are:
Partners $225
Staff $150
Gregory Pohlman, CPA, at Scott Pohlman assures the court that he
and his firm are disinterested persons and are not connected with
the Debtor, its creditors, or other parties in interest, nor does
his firm represent or hold any interest adverse to the Debtor in
the matters upon which it is to be engaged.
The firm can be reached through:
Gregory Pohlman, CPA
Scott & Pohlman, P.C.
5100 Poplar Ave #617
Memphis, TN 38137
Phone: +1 901-761-4692
About J.T. Shannon Lumber
Memphis, Tenn.-headquartered J.T. Shannon Lumber Company, Inc. --
http://www.jtshannon.com/shannonlumber-- is a family-owned company
in the hardwood lumber business. It specializes in rough and
surfaced lumber, straight-line ripping, double-end trimming, width
sorts, and special length pulls.
J.T. Shannon Lumber Company sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Miss. Case No. 19-11428) on April
1, 2019. At the time of the filing, the Debtor disclosed
$11,026,770 in assets and $14,721,825 in liabilities. The case is
assigned to Judge Jason D. Woodard. Michael P. Coury, Esq., at
Glankler Brown PLLC, is the Debtor's legal counsel.
JJE INC: Seeks Continuance of Plan Hearing
------------------------------------------
JJE, Inc. and creditors the Secretary of the United States
Department of Health and Human Services and its component agency,
the Centers for Medicare & Medicaid Services, seek a continuance of
the hearing on the Debtor's Plan and Disclosure Statement.
On Feb. 5, 2020, the Debtor filed a Disclosure Statement and Plan
of Reorganization.
On Feb. 7, 2020, the Honorable Court entered an order conditionally
approving the Disclosure Statement and scheduling a confirmation
hearing for March 11, 2020.
On Feb. 21, 2020, the United States Department of Health and Human
Services (HHS) filed an objection to the small business Plan of
Reorganization.
The parties (Debtor and HHS) have been in meetings and in
communication to be able to reach an agreement.
The Department of Health and Human Services is the largest creditor
in the case and for the plan to be confirmed an agreement with this
creditor must be reached.
Good cause exists for the requested continuance to provide the
parties the opportunity to consensually resolve the issues pending.
The requested continuance is not requested for delay, but so that
justice may be better served.
The parties request the continuance of the Disclosure Statement and
Reorganization Plan hearing on March 11, 2020, and an extension to
file its Sec. 1129 statement seven days before the next available
date of the Court to conduct the hearing.
A full-text copy of the Disclosure Statement dated March 4, 2020,
is available at https://tinyurl.com/ry9rxak from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Victor Gratacos Diaz
GRATACOS LAW OFFICE
P.O. BOX 7571
CAGUAS, PUERTO RICO 00726
Tel: (787) 746-4772
Fax: (787) 746-3633
E-mail: bankruptcy@gratacoslaw.com
About JJE Inc.
JJE, Inc., is a home health care services provider based in Manati,
Puerto Rico. JJE, Inc., filed a Chapter 11 petition (Bankr. D.P.R.
Case No. 19-02034) on April 12, 2019, and is represented by Victor
Gratacos Diaz, Esq., in Caguas, Puerto Rico. In the petition
signed by Jenny Olivo, president, the Debtor disclosed $295,244 in
total assets and $1,953,718 in total liabilities.
KCIBT HOLDINGS: S&P Cuts ICR to 'CCC+' on Reduced Travel Demand
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on KCIBT
Holdings L.P. (CIBT) to 'CCC+' from 'B-'.
At the same time, S&P lowered its issue-level rating on the
company's first-lien debt to 'CCC+' from 'B-' and its issue-level
rating on the company's second-lien debt to 'CCC' from 'CCC+'.
S&P's '3' recovery rating on the first-lien debt and '5' recovery
rating on the second-lien debt remain unchanged.
"The downgrade reflects our view that CIBT's capital structure is
unsustainable and its deteriorating liquidity position exposes it
to further downside risk. The company is directly affected by the
immediate and potentially prolonged decline in demand for travel
visa services (about 77% of CIBT's total revenue) due to the spread
of the coronavirus. CIBT's adjusted leverage was already very high
at about 10x as of the end of fiscal year 2019. The sustainability
of the company's capital structure hinges on the resumption of
normal travel activity, the timing of which is highly difficult to
predict because much of the world is still reacting to the rapidly
advancing spread of the coronavirus," S&P said.
The negative outlook on CIBT reflects S&P's view that the company's
capital structure is unsustainable and would be further strained if
the company's very high debt leverage and cash flow deficits
deteriorate further. The outlook reflects S&P's concern that
prolonged travel suspensions and the uncertainty regarding the
resumption of normal business travel activity will increasingly
weigh on the company's ability to meet its debt payment
obligations.
"We could lower our rating on CIBT over the next 12 months if
liquidity continues to narrow, increasing the risk of a payment
default or a distressed exchange. We would also likely lower our
rating if we believe the peak of the coronavirus pandemic extends
past our current expectations, which delay business recovery," S&P
said.
"We could revise our outlook on CIBT to stable if we gain greater
insight into when the travel suspensions will be lifted and are
increasingly confident that the company's revenue and cash flow
will stabilize in the near term," S&P said.
KIMBLE DEVELOPMENT: Seeks to Hire Southeastern Commercial as Broker
-------------------------------------------------------------------
Kimble Development of Jackson, L.L.C., seeks authority from the
U.S. Bankruptcy Court for the Middle District of Louisiana to
employ Southeastern Commercial Properties, LLC as its cooperating
listing agent and real estate broker.
The Debtor requires the expertise of a local real estate broker to
assist Dowd CRE in the marketing and selling of Metro Crossing in
order to bring the highest price for the property. Southeastern
will provide valuable services to the Debtor, which include,
without limitation, advertising and marketing Metro Crossing,
assisting in the valuation of Metro Crossing, consulting various
offers, interfacing with other brokers and prospective purchasers,
and proving expert testimony on behalf of the Debtor’s estate (if
necessary).
Southeastern has agreed to a commission of $5,000.
Southeastern is a disinterested person as such term is defined in
11 U.S.C. Sec. 101(14) and as required by 11 U.S.C. Sec. 327(a),
according to court filings.
The firm can be reached through:
Gerald Peoples
Southeastern Commercial Properties, LLC
454 Monterrey Road, Suite 305
Ridgeland, MS 39218
About Kimble Development of Jackson
Kimble Development of Jackson, L.L.C., is primarily engaged in
renting and leasing real estate properties.
Kimble Development of Jackson, based in Baton Rouge, LA, filed a
Chapter 11 petition (Bankr. M.D. La. Case No. 20-10008) on Jan. 8,
2020. In the petition signed by Michael D. Kimble, manager, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. Ryan J. Richmond, Esq., at Richmond Law
Firm, LLC, serves as bankruptcy counsel.
KPH CONSTRUCTION: Modifies Plan After Settlement Reached
--------------------------------------------------------
KPH Construction, Corp., et al., modified their First Amended Join
Plan of Reorganization filed on Feb. 5, 2020. The modifications
are the result of negotiations with interested parties over
language in the plan to implement the resolution reached at the
mediation in January 2020.
The exhibits to the Disclosure Statement will be updated in a
subsequent pleading filed by March 20, 2020 that the Debtors
anticipate filing in response to objections to the Disclosure
Statement.
In January 2020, with the assistance of Hon. Susan V. Kelley, a
retired bankruptcy judge, the Debtors mediated their disputes with
the Receiver and Liberty with U.S. Bancorp Community Development
Corporation ("USBCDC") and the Octagon Parties participating by
phone with the Receiver. BMO also participated in negotiating
treatment of its Claims under the Plan. The mediation resulted in
an agreement that is incorporated into the First Amended Joint Plan
of Reorganization. The agreement is termed, "Settlement
Agreement", and is attached to the Plan as Addendum 6.12(g). Under
the Settlement Agreement, (1) the Octagon Parties agreed to provide
$450,000 to be allocated pursuant to the Plan; (2) the Receiver and
USBCDC agreed to waive any distribution on account of their Claims
of $556,498 and $587,345, respectively; (3) Liberty agreed to be
paid $200,000 from the $450,000 Octagon Payment (as defined in
Section 6.12 of the Plan), plus be paid $100,000 over 60 months by
the Debtors (the unpaid balance of the $100,000 to be secured by
the Kahler Litigation proceeds). Plan terms reached with BMO were
payment of $200,000 from the cash surrender value of the life
insurance policy in which BMO has a lien and payment of $1 million
by September 1, 2020, which may be from the sale or refinance of
216-218 S. 2nd Street, Milwaukee, Wisconsin. The balance of BMO's
claims estimated to be $860,000 with legal fees will be paid over 4
years with interest at 5.5%. The Debtors, or Creditors on their
Allowed Claims against the Debtors, will receive a total of
$450,000 from the Octagon Parties and the waiver of any
distribution on the Claims of the Receiver and USBCDC. This means
that approximately $1.2 million of unsecured claims will not share
in the proceeds available to unsecured creditors. The Debtors waive
all their claims against the Receiver, the Octagon Parties and
others, except as the Kahler Litigation. The Debtors' primary
motivation in reaching the Settlement Agreement was to avoid the
litigation costs and delay in reaching any resolution of the
litigation involving the Hotel Northland. The Debtors anticipated
that litigation, with appeals, would take years and legal costs
would exceed $500,000. All litigation has uncertainty. There was
no guaranty the results would be positive and creditors would
receive anything. The legal costs alone would bleed the Debtors of
any excess cash that would be available to pay any Claims. The
Settlement Agreement allows the Debtors to put this chapter behind
them and start fresh. The Debtors viewed the Kahler Litigation as
the best claim to yield the highest return and have preserved this
claim for the benefit of creditors and the Debtors.
A full-text copy of the Modified Disclosure Statement dated March
4, 2020, is available at https://tinyurl.com/waggrn2 from
PacerMonitor.com at no charge.
About KPH Construction Corp.
Founded in 1999, KPH Construction, KPH Environmental and KHP
Services are providers of commercial construction services. Triple
H is a holding company. Keith P. Harenda is the sole member and
manager of Triple H, and the sole shareholder and president of KPH
Construction and KPH Environmental. Harenda is the manager of KPH
Services. The companies collectively employ approximately 30
people in the operations of their construction business at projects
throughout Wisconsin.
KPH Construction Corp., based in Milwaukee, WI, filed a Chapter 11
petition (Bankr. E.D. Wis. Lead Case No. 19-20939) on Feb. 6, 2019.
In the petition signed by Keith P. Harenda, president, debtor KPH
Construction Corp. estimated $1 million to $10 million in assets
and $10 million to $50 million in liabilities. The Hon. Beth E.
Hanan oversees the case. Evan P. Schmit, Esq. at Kerkman & Dunn,
serves as bankruptcy counsel.
KRATON CORP: Moody's Alters Outlook on B1 CFR to Stable
-------------------------------------------------------
Moody's Investors Service changed Kraton Corporation's outlook to
stable from positive. At the same time, Moody's has affirmed
Kraton's B1 Corporate Family Rating, B1-PD Probability of Default
Rating and other debt instrument ratings. Kraton's Speculative
Grade Liquidity Rating is downgraded to SGL-3 from SGL-2.
Outlook Actions:
Issuer: Kraton Corporation
Outlook, Changed to Stable from Positive
Issuer: Kraton Polymers LLC
Outlook, Changed to Stable from Positive
Rating Actions:
Issuer: Kraton Corporation
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2
Issuer: Kraton Polymers LLC
Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5)
Issuer: Kraton Polymers Holdings B.V.
Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3)
RATINGS RATIONALE
"Kraton's B1 CFR with a stable outlook balances the challenging
market environment and lower earnings guidance with substantially
reduced gross debt following completion of the sale of its Cariflex
business in March, 2020 and management commitment to a prudent
financial policy. Kraton's debt leverage will continue to support
its credit rating. Its cost savings and expected free cash flow
will help weather against demand weakness and feedstock volatility
in 2020," says Jiming Zou, a Moody's Vice President and Lead
Analyst for Kraton.
Although the rapid and widening spread of the coronavirus outbreak
creates uncertainty over earnings, Moody's expects Kraton's
adjusted debt/EBITDA, including adjustments for pension and leases,
will likely be lower than 5.0x in 2020, versus 5.8x at the end of
2019. The divesture of Cariflex for $530 million in cash is
essential to the improved leverage. Kraton completed the divesture
in March and has recently paid off its $290 million senior secured
USD term loan and $85 million of its $277 Euro-denominated secured
term loan.
Management has been cautious on its 2020 outlook after the
company's 2019 EBITDA hit four-year low. Weakened demand in China,
broader Asia and Europe, constrained CTO availability, sales price
declines, as well as swings in raw material prices remain key
challenges to Kraton's business operations and cash flow
generation. Nevertheless, Kraton should still be able to generate
free cash flow thanks to its cost savings measures, reduced
interest expenses after debt repayment and moderate capital
spending.
Moody's expects management will refinance or extend the maturity of
its revolving credit facility in a timely manner. Kraton's $250
million asset based revolving credit facility, which was undrawn at
the end of 2019, will become mature in January 2021. The revolver
remains a critical component to Kraton's liquidity profile, given
its working capital needs and the financial cushion needed in a
volatile market environment. Kraton liquidity profile is still
adequate thanks to its expected free cash flow generation and a
large cash balance, which was boosted by the proceeds from Cariflex
divesture in March 2020. Kraton reported $35 million cash on hand
as of December 31, 2019. Moody's expects adequate cash flow from
operations to meet all of the company's needs, including its
expected capital expenditure of $90 million in 2020.
Kraton's B1 CFR is also supported by its leading market positions
in styrenic block copolymers and pine based specialty chemicals.
The company benefits from its long lived customer and supplier
relationships, diverse end-markets and customers, both hydrocarbon
and renewable raw materials. Its investment in high-margin products
and improved specialty offerings bode well for a prospectively
higher credit rating. Kraton's rating is constrained by earnings
volatility, working capital swings, some risk of product
substitution in pine chemicals and unexpected production outages.
Management needs to balance the competing demands of shareholder
return, capital reinvestment and deleveraging over time,
particularly after the disposal of a business growth
engine—Cariflex.
Environmental, social and governance factors are also factored in
Kraton's rating. Being a listed company, Kraton is transparent in
its financial reporting as well as financial policy. Kraton's
pine-based chemicals use coproducts from natural kraft pulps which
are renewable and environmentally friendlier than petrochemical
alternatives. While the company's operation involves the storage
and transportation of chemical substances subject to various
environmental regulations, there were no material expenditures for
environmental fines or remedial actions in the last three years.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The chemical
sector has been one of the sectors most significantly affected by
the shock given its sensitivity to consumer demand and sentiment.
More specifically, Kraton's exposure to Europe and Asia have made
it potentially vulnerable to shifts in market sentiment in these
unprecedented operating conditions and Kraton remains vulnerable to
the outbreak continuing to spread. Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety. The action
reflects the impact on Kraton of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
The rating could be upgraded if Kraton's adjusted debt/EBITDA is
sustainability below 4.5x. Additionally, Kraton's senior unsecured
notes, currently rated B3, could be upgraded, if management
continues to pay down senior secured debt and finance the company
mainly with senior unsecured debt.
The rating could be downgraded, if EBITDA margins deteriorate,
leverage exceeds 6.0x, or there is a lack of free cash flow
generation.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Kraton Corporation, headquartered in Houston, Texas, is a major
global producer of styrenic block copolymers (SBCs), which are
synthetic elastomers used in industrial and consumer applications
to impart favorable product characteristics such as flexibility,
resilience, strength, durability and processability. Major end uses
for Kraton's products include personal care products, packaging and
films, medical applications, adhesives, sealants, coatings, paving,
roofing and compounds. In January 2016, Kraton acquired Arizona
Chemical Holdings Corporation, a producer and seller of pine based
specialty chemicals for use in end-markets including adhesives,
fuel additives and roads. The company generated revenues of about
$1.8 billion in 2019. In March 2020, Kraton sold its Cariflex
business to Daelim Industrial Co., Ltd. (Baa2 stable).
KRATOS DEFENSE: S&P Alters Outlook to Negative, Affirms 'B+' ICR
----------------------------------------------------------------
S&P Global Ratings affirmed its ratings on Kratos Defense &
Security Solutions Inc., including the 'B+' issuer credit rating,
and revised the outlook to negative from stable.
Loss of the Saudi Arabia training contract, higher capital
expenditures, and continued working capital outflows will likely
result in free cash outflow in 2020. Although Kratos Defense &
Security Solutions Inc. has protested the loss of the training
contract and it could be extended, S&P forecasts incorporates the
existing contract expiring March 31, 2020, which results in about a
$40 million loss in revenues. Capital expenditures are now likely
to be almost $50 million in 2020, compared to its previous forecast
of $25 million, largely driven by investments for the Valkyrie
tactical drone program. All of these factors result in modest free
cash outflow for 2020, whereas S&P previously was forecasting free
cash inflow of about $30 million.
S&P's negative outlook reflects the possibility that the company's
elevated capital expenditures, additional delays in expected
contract starts, and timing of production ramp ups, and additional
working capital outflows could lead to FOCF to debt being negative
in 2020 and remaining below 5% in 2021.
"We could lower our ratings on Kratos during the next year if the
company's cash flow generation is weaker than we expect, resulting
in FOCF to debt in 2021 remaining below 5%. This could occur if
program costs are higher than anticipated, working capital outflows
are higher than expected, new programs are not awarded, or
performance on its new programs is weaker than we expect," S&P
said.
"We could return the outlook to stable if we expect FOCF to debt to
improve above 5% and debt to EBITDA is likely to improve to below
4x. This would likely result from continued program wins, strong
performance on new programs, or better working capital management,"
the rating agency said.
KRYSTAL COMPANY: Committee Taps Arnall Golden Gregory as Co-Counsel
-------------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Krystal
Company, and its debtor-affiliates seeks authority from
the U.S. Bankruptcy Court for the Northern District of Georgia to
retain Arnall Golden Gregory LLP as its co-counsel.
The Committee requires Arnall Golden to:
a. advise the Committee with respect to its rights, powers,
and duties in these bankruptcy cases;
b. assist and advise the Committee in its consultations with
the Debtors relative to the administration of these bankruptcy
cases;
c. assist the Committee in analyzing the claims of the
Debtors' creditors and in negotiating with such creditors;
d. assist the Committee's investigation the acts, conduct,
assets, liabilities, and financial condition of the Debtors and of
the operations of the Debtors' respective businesses;
e. advise and represent the Committee in connection with
administrative matters arising in these bankruptcy cases, including
the obtaining of credit by the Debtors, the reorganization of the
Debtors, including potential sale of the Debtors' assets, and the
rejection or assumption of executory contracts and unexpired
leases;
f. assist the Committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters related to,
among other things, the terms of a Chapter 11 plan or plans for the
Debtors;
g. assist and advise the Committee with respect to its
communications with the general creditor body regarding significant
matters in these bankruptcy cases;
h. review and analyze all applications, orders, statements of
operations, and schedules filed with the Court, and advise the
Committee as to their propriety;
i. assist the Committee in evaluating and pursuing, if
necessary, claims and causes of action against the Debtors' secured
lenders;
j. assist the Committee in preparing pleadings and
applications as may be necessary in furtherance of the Committee's
interests and objectives;
k. represent the Committee at all hearings and other
proceedings; and
l. perform other legal services as may be required and are
deemed to be in the interest of the Committee in accordance with
the Committee's powers and duties as set forth in the Bankruptcy
Code.
AGG will be paid at these hourly rates:
Darryl S. Laddin $670
Sean C. Kulka $625
Partners $515-$725
Of Counsel $425-$695
Associates $290-$495
Paralegals $180-$300
Arnall Golden will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Darryl S. Laddin, partner of Arnall Golden Gregory LLP, assured the
Court that AGG will not represent any other entity having an
adverse interest in connection with these bankruptcy cases,
consistent with section 1103(b) of the Bankruptcy Code.
AGG can be reached at:
Darryl S. Laddin, Esq.
ARNALL GOLDEN GREGORY LLP
171 17th Street, N.W., Suite 2100
Atlanta, GA 30363-1031
Tel: (404)873-8500
Fax: (404)873-8501
E-mail: darryl.laddin@agg.com
About The Krystal Company
Founded in Chattanooga, Tenn., in 1932, The Krystal Company --
http://www.krystal.com/-- is a quick-service restaurant chain with
locations in the Southeastern United States. It is known for its
small, square hamburgers, served fresh and hot off the grill on the
iconic squarebun at approximately 320 restaurants in nine states.
Krystal's Atlanta-based Restaurant Support Center serves a team of
7,500 employees.
The Krystal Company, and affiliates Krystal Holdings, Inc. and
K-Square Acquisition Co., LLC, sought Chapter 11 protection (Banks.
N.D. Georg. Case No. No. 20-61065) on Jan. 19, 2020.
The Debtors tapped King & Spalding LLP as legal counsel; Scroggins
& Williamson, P.C. as conflicts counsel; Piper Jaffray as
investment banker; and Kurtzman Carson Consultants, LLC as claims
agent. Alvarez & Marsal provides interim management to the
Debtors.
KRYSTAL COMPANY: Committee Taps FTI Consulting as Financial Advisor
-------------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Krystal
Company, and its debtor-affiliates seeks authority from
the U.S. Bankruptcy Court for the Northern District of Georgia to
retain FTI Consulting, Inc., as its financial advisor.
The Committee requires FTI Consulting to:
a. assist in the review of financial related disclosures
required by the Court, including the Schedules of Assets and
Liabilities, the Statement of Financial Affairs and Monthly
Operating Reports;
b. assist in the preparation of analyses required to assess
any proposed Debtor-In-Possession financing or use of cash
collateral;
c. assist with the assessment and monitoring of the Debtors'
short term cash flow, liquidity, and operating results;
d. assist with the review of the Debtors' proposed key
employee retention and other employee benefit programs;
e. assist with the review of the Debtors' analysis of core
business assets and the potential disposition or liquidation of
non-core assets;
f. assist with the review of the Debtors' cost/benefit
analysis with respect to the affirmation or rejection of various
executory contracts and leases;
g. assist with the review of the Debtors' identification of
potential cost savings, including overhead and operating expense
reductions and efficiency improvements;
h. assist in the review and monitoring of the asset sale
process, including, but not limited to an assessment of the
adequacy of the marketing process, completeness of any buyer lists,
review and quantifications of any bids;
i. assist with review of any tax issues associated with, but
not limited to, claims/stock trading, preservation of net operating
losses, refunds due to the Debtors, plans of reorganization, and
asset sales;
j. assist in the review of the claims reconciliation and
estimation process;
k. assist in the review of other financial information
prepared by the Debtors, including, but not limited to, cash flow
projections and budgets, business plans, cash receipts and
disbursement analysis, asset and liability analysis, and the
economic analysis of proposed transactions for which Court approval
is sought;
l. attend at meetings and assist in discussions with the
Debtors, potential investors, banks, other secured lenders, the
Committee and any other official committees organized in these
chapter 11 proceedings, the U.S. Trustee, other parties in interest
and professionals hired by the same, as requested;
m. assist in the review and/or preparation of information and
analysis necessary for the confirmation of a plan and related
disclosure statement in these chapter 11 proceedings;
n. assist in the evaluation and analysis of avoidance actions,
including fraudulent conveyances and preferential transfers;
o. assist in the prosecution of Committee responses/objections
to the Debtors' motions, including attendance at depositions and
provision of expert reports/testimony on case issues as required by
the Committee; and
p. render such other general business consulting or such other
assist as the Committee or its counsel may deem necessary that are
consistent with the role of a financial advisor and not duplicative
of services provided by other professionals in this proceeding.
FTI's customary hourly rates are:
Senior Managing Directors
$920-$1,295
Directors / Senior Directors / Managing Directors
$690-$905
Consultants/Senior Consultants
$370-$660
Administrative / Paraprofessionals
$150-$280
Clifford A. Zucker, senior managing director of FTI, attests that
the firm neither holds nor represents any interest adverse to the
Debtors' bankruptcy estates.
The firm can be reached through:
Clifford A. Zucker
FTI Consulting, Inc.
Suite 3500, 1301 McKinney Street
Houston, TX, 77010
Tel: +1 832 667 5160
Fax: +1 713 353 5459
Email: david.rush@fticonsulting.com
About The Krystal Company
Founded in Chattanooga, Tenn., in 1932, The Krystal Company --
http://www.krystal.com/-- is a quick-service restaurant chain with
locations in the Southeastern United States. It is known for its
small, square hamburgers, served fresh and hot off the grill on the
iconic squarebun at approximately 320 restaurants in nine states.
Krystal's Atlanta-based Restaurant Support Center serves a team of
7,500 employees.
The Krystal Company, and affiliates Krystal Holdings, Inc. and
K-Square Acquisition Co., LLC, sought Chapter 11 protection (Banks.
N.D. Georg. Case No. No. 20-61065) on Jan. 19, 2020.
The Debtors tapped King & Spalding LLP as legal counsel; Scroggins
& Williamson, P.C. as conflicts counsel; Piper Jaffray as
investment banker; and Kurtzman Carson Consultants, LLC as claims
agent. Alvarez & Marsal provides interim management to the
Debtors.
LADAN INC: Seeks and Obtains Nod on Interim Use of Cash Collateral
------------------------------------------------------------------
Ladan, Inc., sought authorization from the U.S. Bankruptcy Court
for the Northern District of California to use cash collateral to
pay the expenses described in the Budget.
The Debtor acknowledged that the only undisputed secured claim is
Bank of the West -- holder of a first priority perfected security
interest in all of the Debtor's personal property. The Debtor's
current monthly obligation to Bank of the West is about $522 per
month, interest only. The Debtor intended to propose a plan to
amortize this claim over five years with monthly payments of
principal and interest in the amount of approximately $1100 per
month.
As for the remaining alleged secured creditors, the Debtor has been
unable to determine which creditors claim what priority. However,
because the Debtor believes that the total value of these
creditors' collateral is no more than $75,000. Once liquidated and
determined, the Debtor will be proposing a plan that similarly
amortizes this disputed secured claim for over five years. Until
then, and as adequate protection for this disputed claim, the
Debtor proposes to deposit $1,100 a month into a segregated account
until plan confirmation.
Bankruptcy Judge Dennis Montali authorized the Debtor to use cash
collateral to pay its ongoing costs and expenses necessary to
maintain its operation on an interim basis pending a final hearing
to be held on April 16, 2020 at 11:30 a.m.
He further authorized the Debtor to make a monthly payment of $522
to Bank of the West for the months of February and March and will
retain in a segregated account all cash collateral received from
the sale of the Debtor's inventory that the Order does not
authorize the Debtor to spend. In addition, the Debtor will retain
in its Tax/Trust Account the sum of $1,200 per month from the net
proceeds of any special orders of products not available in the
Debtor's inventory at the time of such orders.
Judge Montali granted Bank of the West, Ace Funding Source LLC,
Addy Source, Bizfund LLC, GTR Source LLC, Influx Capital LLC,
Preferred Capital and Shopify Capital the following replacement
liens:
(a) The replacement lien will secure any postpetition
diminution in the value of each secured party's secured claim,
provided such lien will be subordinated to the compensation and
expense reimbursement (excluding professional fees) allowed to any
trustee hereafter appointed in the case.
(b) The offered replacement lien will encumber only non-trust
postpetition property of the same type as such creditor's
prepetition collateral, the cash proceeds of which the Debtor is
authorized to use.
(c) To the extent multiple creditors assert an interest in the
same collateral, the replacement lien is granted to each creditor
in the same priority as such creditors’ liens attach to the cash
collateral used.
A copy of the Order is available for free at https://is.gd/TkVrAL
from PacerMonitor.com.
About Ladan Inc.
Ladan, Inc. -- http://ludwigsfinewine.com/-- is a private held
company that owns and operates wine, beer, and liquor stores.
Ladan, Inc., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Cal. Case No. 20-30130) on Feb. 6, 2020. The
case is assigned to Judge Dennis Montali. In the petition signed
by Magid Nazari, president, the Debtor had $258,503 in assets and
$7,672,414 in liabilities. Jeffrey Goodrich, Esq., at GOODRICH &
ASSOCIATES, is the Debtor's counsel.
LAS CUMBRES: Seeks to Hire Peoples Law Office as Attorney
---------------------------------------------------------
Las Cumbres, LLC, seeks authority from the US Bankruptcy Court for
the Western District of Missouri to hire Peoples Law Office, LLC as
its attorneys.
Services the counsel will render are:
(a) advise the Debtor with respect to its powers and duties
as Debtor and Debtor-in-Possession in the continued management and
operation of its business;
(b) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(c) take all necessary action to protect and preserve the
estate, including the prosecution of actions on its behalf, the
defense of any actions commenced against the Debtor’s estate, and
objections to claims filed against the estate;
(d) prepare on behalf of Debtor all motions, applications,
answers, orders, reports and papers necessary to the administration
of the estate;
(e) negotiate and prosecute on the Debtor’s behalf all
contracts for the sale of assets, plan of reorganization,
disclosure statement, and all related agreements and/or documents,
and take any action that is necessary for the Debtor to obtain
confirmation of its Plan of Reorganization;
(f) appear before this Court and the United States Trustee;
and protect the interests of the Debtor's estate before the Court
and the U.S. Trustee; and
(g) perform all other necessary legal services and provide
all other necessary legal advice to the Debtor in connection with
this Chapter 11 proceeding.
People's hourly rates are $300 for attorneys and $65 for
paralegals.
Aunna L. Peoples of the Peoples Law Office, LLC, assures the court
that the firm does not represent or hold any interest adverse to
the estate and are disinterested for the purpose of representing
the Debtor in the Chapter 11 proceeding.
The firm can be reached through:
Aunna L. Peoples
Peoples Law Office, LLC
1221 West 103rd Street, #123
Kansas City, MO 64114
Phone: (816) 943-1825
Fax: (816) 293-9172
Email: peopleslawkc@sbcglobal.net
About Las Cumbres, LLC
Las Cumbres, LLC, sough protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-40423) on Feb. 28,
2020, listing under $1 million in both assets and liabilities.
Aunna L. Peoples, Esq. at PEOPLES LAW OFFICE, LLC represents the
Debtor as counsel.
LION DIVERSIFIED: Chapter 15 Case Summary
-----------------------------------------
Chapter 15 Debtor: Lion Diversified Holdings Berhad
Level 14, Lion Office Tower, No. 1 Jalan
Nagasari, 50200 Wilayah Persekuluan
Kuala, Lumpur, Malaysia
About the Business: The Company is an investment holding
corporation, primarily involved in
the manufacturing of high-grade
steel. The Company faced
difficulties after the Chinese govt.
funneled state money into the
steel industry.
Foreign Proceeding: Liquidation proceeding in Malaysia
pursuant to Sec. 465 and 466 of
Companies Act 2016 pending before the
High Court of Malaya at Kuala Lumpur.
Chapter 15 Petition Date: March 18, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-13029
Judge: Hon. Sandra R. Klein
Foreign Representative: Datuk Tee Guan Pian
Foreign
Representative's
Counsel: Bradley M. Rose
KAYE ROSE & PARTNERS, LLP
169 South Rodeo Drive
Beverly Hills, CA 90212
Tel: (310) 551-6555
E-mail: brose@kayerose.com
Estimated Assets: Unknown
Estimated Debts: Unknown
LIVE NATION: S&P Places 'BB-' ICR on CreditWatch Negative
---------------------------------------------------------
S&P Global Ratings placed all its ratings on Live Nation
Entertainment Inc., including the 'BB-' issuer credit rating, on
CreditWatch with negative implications.
The CreditWatch placements reflect the growing number of postponed
live events in the live music industry and the pace of the spread
of COVID-19 across the globe. In S&P's view, these scheduling
disruptions could affect live event companies such as Live Nation
Entertainment Inc. that depend on robust festival and music venue
attendance.
The CreditWatch placements reflect the company's direct exposure to
live music events that are being adversely affected by the COVID-19
outbreak. In resolving its CreditWatch placements, S&P will
determine to what extent COVID-19 affects the company's revenue
growth, profitability, and leverage relative to its expectations
for the rating.
"We could lower the rating if we believe the COVID-19 outbreak will
be prolonged or worsen live event attendance through additional
postponements or cancellations, or if Live Nation cannot
successfully manage its cost structure, keeping leverage above 5x,"
S&P said.
"We could affirm the 'BB-' rating once we believe that Live Nation
can successfully manage its events schedule and cost structure such
that it can comfortably maintain leverage below 5x," the rating
agency said.
MADAME PAULETTE 65TH: Hires Morrison Tenenbaum as Counsel
---------------------------------------------------------
Madame Paulette 65th St, Inc. seeks authority from the US
Bankruptcy Court for the Eastern District of New York to hire
Morrison Tenenbaum PLLC, as its counsel.
Madame Paulette requires Morrison Tenenbaum to:
a. advise the Debtor with respect to its powers and duties as
debtor-in-possession in the management of its estate;
b. assist in any amendments of Schedules and other financial
disclosures and in the preparation/review/amendment of a disclosure
statement and plan of reorganization;
c. negotiate with the Debtor's creditors and taking the
necessary legal steps to confirm and consummate a plan of
reorganization;
d. prepare on behalf of the Debtor all necessary motions,
applications, answers, proposed orders, reports and other papers to
be filed by the Debtor in this case;
e. appear before the Bankruptcy Court to represent and protect
the interests of the Debtor and its estate; and
f. perform all other legal services for the Debtor that may be
necessary and proper for an effective reorganization.
Morrison Tenenbaum will be paid at these hourly rates:
Lawrence F. Morrison $525
Brian J. Hufnagel $425
Associates $380
Paraprofessionals $200
On or about Feb. 3, 2020, MT Law received a retainer fee in the
amount of $20,000.
Morrison Tenenbaum will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Lawrence F. Morrison, a partner at Morrison Tenenbaum, PLLC,
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.
Morrison Tenenbaum can be reached at:
Lawrence F. Morrison, Esq.
Brian J. Hufnagel, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Tel: (212) 620-0938
E-mail: lmorrison@m-t-law.com
bjhufnagel@m-t-law.com
About Madame Paulette 65th St, Inc.
Madame Paulette Valet Services, Inc., filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 20-40841) on Feb. 10, 2020, listing under $1 million in
both assets and liabilities. The Debtor is represented by Lawrence
F. Morrison, Esq., at Morrison Tenenbaum, PLLC.
MADAME PAULETTE VALET: Hires Morrison Tenenbaum as Counsel
----------------------------------------------------------
Madame Paulette Valet Services, Inc., seeks authority from the US
Bankruptcy Court for the Eastern District of New York to hire
Morrison Tenenbaum PLLC, as its counsel.
Madame Paulette requires Morrison Tenenbaum to:
a. advise the Debtor with respect to its powers and duties as
debtor-in-possession in the management of its estate;
b. assist in any amendments of Schedules and other financial
disclosures and in the preparation/review/amendment of a disclosure
statement and plan of reorganization;
c. negotiate with the Debtor's creditors and taking the
necessary legal steps to confirm and consummate a plan of
reorganization;
d. prepare on behalf of the Debtor all necessary motions,
applications, answers, proposed orders, reports and other papers to
be filed by the Debtor in this case;
e. appear before the Bankruptcy Court to represent and protect
the interests of the Debtor and its estate; and
f. perform all other legal services for the Debtor that may be
necessary and proper for an effective reorganization.
Morrison Tenenbaum will be paid at these hourly rates:
Lawrence F. Morrison $525
Brian J. Hufnagel $425
Associates $380
Paraprofessionals $200
On or about Feb. 3, 2020, MT Law received a retainer fee in the
amount of $20,000.
Morrison Tenenbaum will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Lawrence F. Morrison, a partner at Morrison Tenenbaum, PLLC,
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.
Morrison Tenenbaum can be reached at:
Lawrence F. Morrison, Esq.
Brian J. Hufnagel, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Tel: (212) 620-0938
E-mail: lmorrison@m-t-law.com
bjhufnagel@m-t-law.com
About Madame Paulette Valet Services, Inc.
Madame Paulette Valet Services, Inc., operates dry cleaning and
general cleaning service at 1255 Second
Avenue, New York, New York 10021.
Madame Paulette Valet Services, Inc., filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y.
Case No. 20-40843) on Feb. 10, 2020, listing under $1 million in
both assets and liabilities. The Debtor is represented by Lawrence
F. Morrison, Esq., at Morrison Tenenbaum, PLLC.
MADAME PAULETTE: Seeks to Hire Morrison Tenenbaum as Counsel
------------------------------------------------------------
Madame Paulette LIC, LLC, seeks authority from the US Bankruptcy
Court for the Eastern District of New York to hire Morrison
Tenenbaum PLLC, as its counsel.
Madame Paulette requires Morrison Tenenbaum to:
a. advise the Debtor with respect to its powers and duties as
debtor-in-possession in the management of its estate;
b. assist in any amendments of Schedules and other financial
disclosures and in the reparation/review/amendment of a disclosure
statement and plan of reorganization;
c. negotiate with the Debtor's creditors and taking the
necessary legal steps to confirm and consummate a plan of
reorganization;
d. prepare on behalf of the Debtor all necessary motions,
applications, answers, proposed orders, reports and other papers to
be filed by the Debtor in this case;
e. appear before the Bankruptcy Court to represent and protect
the interests of the Debtor and its estate; and
f. perform all other legal services for the Debtor that may be
necessary and proper for an effective reorganization.
Morrison Tenenbaum will be paid at these hourly rates:
Lawrence F. Morrison $525
Brian J. Hufnagel $425
Associates $380
Paraprofessionals $200
On or about Feb. 3, 2020, MT Law received a retainer fee in the
amount of $20,000.
Morrison Tenenbaum will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Lawrence F. Morrison, a partner at Morrison Tenenbaum, PLLC,
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.
Morrison Tenenbaum can be reached at:
Lawrence F. Morrison, Esq.
Brian J. Hufnagel, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Tel: (212) 620-0938
E-mail: lmorrison@m-t-law.com
bjhufnagel@m-t-law.com
About Madame Paulette LIC, LLC
Madame Paulette LIC, LLC, operates dry cleaning and general
cleaning service at 42-20 12th Street, Long Island City, New York
11101.
Madame Paulette LIC, LLC, filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-40714) on Feb. 4, 2020, listing under $1 million in both assets
and liabilities. The Debtor is
represented by Lawrence F. Morrison, Esq., at Morrison Tenenbaum,
PLLC.
MARIA EUGENIA: Seeks to Hire Eric A. Liepins as Counsel
-------------------------------------------------------
Maria Eugenia Enterprises, Inc. seeks authority from the U.S.
Bankruptcy Court for the Eastern District of Texas to employ Eric
A. Liepins, P.C., as counsel to the Debtor.
The Debtor requires Eric A. Liepins to provide legal services and
represent the Debtor in the Chapter 11 proceedings.
Eric A. Liepins will be paid at these hourly rates:
Attorneys $275
Paralegals $30 to $50
Eric A. Liepins received from the Debtor a retainer in the amount
of $5,000, plus $1,717 filing fee.
Eric A. Liepins will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Eric A. Liepins, a partner of Eric A. Liepins, 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.
Eric A. Liepins can be reached at:
Eric Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
About Maria Eugenia Enterprises, Inc.
Maria Eugenia Enterprises, Inc. filed its Voluntary Petition for
relief under Chapter 11 of the United States Bankruptcy Code
(Bankr. N.D. Tex. Case No. 20-30745) on March 2, 2020, listing
under $1 million in both assets and liabilities. Eric A. Liepins,
Esq., at partner of Eric A. Liepins, P.C., serves as bankruptcy
counsel.
MCIG INC: Delays Filing of Form 10-Q for Period Ended Jan. 31
-------------------------------------------------------------
mCig, Inc. filed a Form 12b-25 with the Securities and Exchange
Commission notifying the delay in the filing of its Quarterly
Report on Form 10-Q for the period ended Jan. 31, 2020.
mCig said, "Registrant has been unable to complete its Form 10-Q
for the quarter ended Jan. 31, 2020, within the prescribed time
because of delays in completing the review by its auditors. The
preparation of its financial statements and its management
discussion and analysis must be reviewed by the auditors prior to
filing. Such delays are primarily due to Registrant's management's
dedication of such management's time to business matters. This has
taken a significant amount of management's time away from the
preparation of the Form 10-Q and delayed the preparation of the
unaudited financial statements for the quarter ended January 31,
2020. The Registrant expects to file the Quarterly Report within
the extension period of five calendar days provided under Rule
12b-25 of the Securities Exchange Act of 1934, as amended."
About mCig
Headquartered in Jacksonville, Florida, mCig, Inc. is a diversified
company servicing the legal cannabis, hemp and CBD markets via its
lifestyle brands.
mCig reported a net loss attributable to controlling interest of
$3.06 million for the year ended April 30, 2019, compared to a net
loss attributable to controlling interest of $1.08 million for the
year ended April 30, 2018. As of Oct. 31, 2019, the Company had
$5.42 million in total assets, $944,679 in total liabilities, and
$4.48 million in total equity.
Weinstein International CPA, in Tel Aviv, Israel, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 19, 2019, citing that the Company has negative
cash flow and there are no assurances the Company will generate a
profit or obtain positive cash flow, in addition the Company has a
nominal working capital deficit. These and other factors raise
substantial doubt about the Company's ability to continue as a
going concern.
MEDIACOM ILLINOIS: Moody's Rates New $2.17BB Secured Loans 'Ba1'
----------------------------------------------------------------
Moody's Investors Service assigns a Ba1 rating to $2.170 billion in
new senior secured credit facilities at MCC Iowa LLC and Mediacom
Illinois, subsidiaries of Mediacom Communications Corporation. The
facilities consist of 5-year instruments due 2025, including a new
$375 million revolving credit facility, $500 million Term Loan A2,
and $425 million Term Loan A, A3, issued at MCC Iowa. Mediacom also
plans to issue a new $370 million revolving credit facility and
$500 million Term Loan A2, issued at Mediacom Illinois. The
existing Term Loan A and M will be withdrawn at close. Mediacom's
Ba1 Corporate Family Rating and Ba1-PD Probability of Default
Rating are unaffected by the transaction. The outlook is stable.
Moody's views the transaction as credit positive. The refinancing
will improve the maturity profile, extending weighted average
maturities by about 2 years, and lower weighted average borrowing
costs. Otherwise, Moody's does not expect the transaction to
materially change the leverage ratio or the priority of claims in
the capital structure. Moody's expects the proceeds of the senior
secured credit facilities will be principally used to repay
existing debt, including the outstanding Term Loan A1 (due 2022)
and Term Loan M (due 2025) at MCC Iowa and the outstanding Term
Loan A1 (due 2023) and a portion of the Term Loan N (due 2024) at
Mediacom Illinois. Moody's believes the key terms and conditions of
the new facilities to be materially the same as the existing credit
facilities.
Assignments:
Issuer: MCC Iowa LLC
Senior Secured Bank Credit Facility, Assigned Ba1 (LGD3)
Issuer: Mediacom Illinois LLC
Senior Secured Bank Credit Facility, Assigned Ba1 (LGD3)
RATINGS RATIONALE
Mediacom's credit profile is supported by very strong credit
metrics and a conservative financial policy, reflected in the
allocation of most available cash flow toward debt repayment. The
company benefits from technological superiority, with a high-speed
data network that attracts and retains residential and commercial
broadband customers. The contribution from broadband generates
strong EBITDA margins close to 40%. Mediacom also has a very good
liquidity profile. Constraints to the Mediacom's credit profile
include the smaller size of the company, and regional footprint in
rural markets with less favorable demographics than its larger
peers. The company is also challenged by its weakening video
business, and high CAPEX and programming costs.
The instrument ratings reflect the probability of default of the
company, as reflected in the Ba1-PD PDR, an average expected family
recovery rate of 50%, and the particular instruments' ranking in
the capital structure. The senior secured credit facility is rated
Ba1- LGD3, the same as the CFR, with one class of debt and no
significant rated junior debt to provide additional lift.
Mediacom's liquidity is very good, supported by strong operating
cash flows, good back up liquidity with more than $500 million
available under the company's revolving credit facilities, and
significant covenant cushion. Additionally, the company has a
favorable maturity profile with the nearest due date in 2024. Free
cash flow to debt will approach 20% over the next 12 months.
Mediacom is closely owned and controlled, which can be a governance
risk. However, Mediacom has a sustained pattern of aggressively
deleveraging with financial policies that directs most all
available free cash flows to the repayment of debt. Mediacom's
leverage ratio (Moody's adjusted) was about 2.9x, as of 30
September 2019. Moody's expects debt repayment with available free
cash flow to continue over the next 12-18 months. Although
management has reduced leverage with free cash flows over the last
few years, it has not publicly articulated a leverage or other
financial policy target.
The stable outlook reflects its expectation that the company will
continue to use free cash flow to repay debt, resulting in leverage
that will approach 2.5x over the next 12-18 months. The stable
outlook also assumes that the company will maintain stable
subscriber metrics and strong liquidity.
An upgrade of Mediacom's long-term rating could occur if:
-- Management commits to support and defend a higher credit
rating,
-- The scale of the company increases, with significantly more
revenue,
-- Leverage (Moody's adjusted debt/EBITDA) is sustained below
2.5x, and
-- Free cash flow-to-debt (Moody's adjusted) is sustained above
15%
A positive rating action would also be considered if the company
maintains good liquidity, adopts more conservative financial
policies, there is a low probability of near-term event risks.
A downgrade of Mediacom's long-term rating could occur if:
-- Leverage (Moody's adjusted total debt/EBITDA) rises above
3.5x, or
-- Free cash flow-to-debt (Moody's adjusted) falls below 10%
A negative rating action would also be considered if liquidity
deteriorated, more aggressive financial policies were adopted, the
scale of the company declined, or operating trends were materially
worse than expected.
Mediacom Communications Corporation, headquartered in Mediacom
Park, New York, offers video, high-speed data, and phone service.
The company had about 710 thousand video subscribers, 1.3 million
high speed data subscribers, and 613 thousand phone subscribers as
of 31 December 2019. The company primarily serves smaller cities in
the midwestern and southern United States, operating through two
wholly owned subsidiaries, Mediacom Broadband LLC and Mediacom LLC.
Revenue for FY 2019 was about $2 billion.
The principal methodology used in these ratings was Pay TV
published in December 2018.
MLK ALBERTA: Case Summary & 2 Unsecured Creditors
-------------------------------------------------
Debtor: MLK Alberta, LLC
6931 NE Martin Luther King Jr. Blvd
Portland, OR 97211
Business Description: MLK Alberta, LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: March 18, 2020
Court: United States Bankruptcy Court
District of Oregon
Case No.: 20-31032
Judge: Hon. Trish M. Brown
Debtor's Counsel: Douglas R. Ricks, Esq.
VANDEN BOS & CHAPMAN, LLP
319 SW Washington
Suite 520
Portland, OR 97204
Tel: 503-241-4869
E-mail: doug@vbcattorneys.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Meron Alemseghed, sole member.
A copy of the petition containing, among other items, a list of the
Debtor's two unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/pmmqFL
MOMENTIVE PERFORMANCE: S&P Lowers ICR to 'B+'; Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Momentive Performance Materials Inc. to 'B+' from 'BB-'.
At the same time, S&P lowered its issue-level rating on the
company's senior secured credit facility to 'B+' from 'BB-'. The
'3' recovery rating remains unchanged, indicating S&P's expectation
for meaningful (50%-70%; rounded estimate: 50%) recovery in the
event of a payment default."
The downgrade follows Momentive's significantly weaker performance
in 2019 and S&P's expectation that the company's EBITDA and credit
metrics will remain relatively flat in 2020. The company has seen
a significant decrease in EBITDA through the first nine months of
2019, which S&P expects to continue for the full year. This will
likely cause 2020 to be weaker than S&P previously expected. The
company saw sales and EBITDA decline of approximately 5% and 20%,
respectively, year over year through the first nine months of 2019.
This was the result of significantly weaker siloxane prices because
of overcapacity and a slowing automotive sector. In addition to
siloxane pricing, Momentive's volumes weakened in 2019 due to soft
market conditions in Greater China, weaker automotive and textile
demand, as well as a network security incident in the first quarter
of 2019. This all contributed to operating performance that was
significantly weaker than S&P previously expected when the company
was acquired by KCC Corp. (BB+/Stable/--) and SJL Partners. With
continued weakness expected in the auto sector and uncertainty in
the global economy as the result of the coronavirus (COVID-19) S&P
is revising its 2020 expectations down from its previous
expectations, resulting in S&P Global weighted average debt to
EBITDA of around 6.0x (previously expected between 4x-5x).
The negative outlook reflects the potential for a downgrade in the
next 12 months if siloxane prices remain at their current depressed
levels for an extended period and it becomes evident the company's
credit measures will not improve as S&P's head into 2021. S&P's
base-case assumes 2020 credit metrics will remain depressed near
2019 levels of debt to EBITDA around 6.5x, before showing
improvement in 2021.
"We could lower the rating on Momentive over the next 12 months if
adjusted debt to EBITDA exceeds 6.5x on a sustained basis. Factors
that could contribute to weaker operating performance include
continued decline in automotive or other key end markets, a sharp
spike in raw material costs, further deterioration in the global
markets due to the coronavirus, or a significant reduction in or
loss of key customers leading to a decline in EBITDA margins by 200
basis points (bps). We could also lower the ratings should the
company engage in any further debt repurchases if we believe these
purchases are not opportunistic and debt repurchases that we
consider a distressed exchange. If we do not believe KCC will
provide adequate support to Momentive in a downturn, we could lower
ratings on Momentive. Lastly, we could consider a lower rating if
EBITDA cushion under the company's leverage covenant become
materially weaker than we project, leading to covenant compliance
concerns," S&P said.
"We could consider a positive rating action if the company improves
operating results because of better product mix and an uptick in
product global demand beyond our expectations. In an upside
scenario, we would expect an EBITDA margin improvement that is 200
bps above our base case, with adjusted debt to EBITDA trending
below 6x over the next 12 months. In addition, if our assessment of
Momentive's group status within KCC improves we could upgrade
Momentive," S&P said.
MORNINGSTAR MARKETPLACE: Seeks to Hire Mooney Law as Attorney
-------------------------------------------------------------
Morningstar Marketplace, LTD, seeks authority from the US
Bankruptcy Court for the Middle District of Pennsylvania to hire
Mooney Law as is attorneys.
Morningstar requires Mooney Law to:
a. give the Debtor legal advice regarding its powers and
duties as Debtor-in-Possession in the continued operation of its
business and management of its property;
b. prepare and file on behalf of the Debtor, as
Debtor-in-Possession, the original Petition and Schedules, and all
necessary applications, complaints, answers, orders, reports and
other legal papers;
c. represent the Debtor in any matters involving contests with
secured or unsecured creditors;
d. negotiate and prepare on behalf of the Debtor's plan or
reorganization and related documents;
e. perform all other legal services for the Debtor, as
Debtor-in-Possession, which may be necessary.
Mooney Law received a pre-petition retainer of $3,283.
The firm's hourly rates are:
Stephen Wade Parker, Esq. $275
Partners $275
Paralegal Time $135
Mooney Law is a "disinterested person" as that term is defined in
Sec. 101(14) of the Bankruptcy Code, and represents or holds no
interest adverse to the interests of the estate with respect to the
matters upon which it is to be employed, according to court
filings.
The firm can be reached through:
Stephen Wade Parker, Esq.
MOONEY LAW
230 York Street
Hanover, PA 17331
Phone: (717) 632-4656
Fax: (717) 632-3612
Email: swp@mooney4law.com
About Morningstar Marketplace
Morningstar Marketplace, LTD, owns a flea market business located
along Route 30 in Jackson Township, York County, Pennsylvania.
Andrew W. Lentz created the Marketplace to serve farmers,
antiquaries and vendors and the general consumer and collector
population within the surrounding area. Built in 1999, the
Marketplace site consists of 3 side-by-side buildings totaling
51,440 square feet, and two free standing pavilions measuring 30'
by 50' and 50' by 50'. The site has 190 vendor spaces in its shed
area and 200 outside vendor spaces in the upper parking lot.
Andrew Lentz is the general partner of Morningstar Marketplace,
LTD, and his wife owns the remaining 19%. Morningstar Marketplace,
Inc., a related company owned by Mr. Lentz, is the operator of the
site.
Morningstar Marketplace LTD filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Pa. Case No. 14-00451) in Harrisburg on Feb. 3, 2014.
The Debtor estimated $100 million to $500 million in assets and
liabilities.
Judge Mary D. France presides over the case. Attorneys at Smigel,
Anderson & Sacks, LLP serve as counsel to the Debtor.
MOVE OF GOD: Seeks to Hire M. Denise Dotson as Legal Counsel
------------------------------------------------------------
Move of God Miracle Cathedral, Inc., seeks authority from the US
Bankruptcy Court for the Northern District of Georgia to hire M.
Denise Dotson, LLC, as attorneys.
a. prepare pleadings and applications;
b. conduct examination;
c. advise the Debtor of its rights, duties and obligations as
a debtor-in-possession;
d. consult and represent the Debtor with respect to a Chapter
11 plan;
e. perform those legal services incidental and necessary to
the day-to-day operations of the Debtor's business, including,
institution and prosecution of necessary legal proceedings, and
general business and corporate legal advice and assistance;
f. take any and all other action incident to the proper
preservation and administration of the Debtor's estate and
business.
The firm will charge these fees:
Attorneys $275 per hour
Legal Assistants $75 per hour
M. Denise Dotson, Esq., disclosed in court filings that she and her
firm neither hold nor represent any interest adverse to the Debtor
and its bankruptcy estate.
The firm can be reached through:
M. Denise Dotson, Esq.
M. Denise Dotson, LLC
125 Clairemont Avenue, Suite 440
Decatur, GA 30030
Tel: 404-210-0166
Email: denise@mddotsonlaw.com
ddotsonlaw@me.com
About Move of God Miracle Cathedral, Inc.
Move of God Miracle Cathedral, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-10455) on
March 2, 2020, listing under $1 million in both assets and
liabilities. M. Denise Dotson, LLC, is the Debtor's counsel.
MRC GLOBAL: S&P Places 'B' ICR on CreditWatch Negative
------------------------------------------------------
S&P Global Ratings placed its 'B' issuer credit rating on
U.S.-based pipe, valve, and fittings distributor MRC Global (US)
Inc. and its 'B+' issue-level rating on its senior secured term
loan on CreditWatch with negative implications.
The CreditWatch placement comes after S&P lowered its Brent crude
oil price assumptions by 33% for 2020 and by 10% for 2021 due to
the intensifying turbulence in the global hydrocarbon markets. S&P
said lower prices could cause MRC's leverage to increase
significantly in 2020 as producers pull back on their capital
expenditure (capex) projects.
"We believe MRC's leverage may increase this year because depressed
oil prices will likely lead its customers to further reduce their
capex budgets and spending in 2020 and 2021. Oil prices plummeted
following the announcement that OPEC and Russia failed to agree to
further production cuts following a significant drop in global
demand due to the spread of the coronavirus. In response, we expect
MRC's customers to immediately cut capital and operating
expenditure budgets and sales volumes to decline within the coming
weeks and months. This potential downside to exploration and
production (E&P) budgets this year, compared to the 10% to 15%
decline in 2019, leads to a risk that leverage could increases
towards 7x," S&P said.
S&P aims to resolve the CreditWatch on MRC in the next couple of
months when the rating agency has more clarity around how the
recent oil price decline will effect the company's customers'
spending budgets and demand. S&P will also assess whether this
could lead the company's credit metrics to be weaker than the
rating agency currently expects in 2020.
"We could lower our rating on MRC if we believe its leverage will
increase to 7x, its EBITDA interest coverage will decline to 2x,
and that its free cash flow will be weaker than expected despite
the low-price environment and potential working capital inflows.
This could occur if the sudden downturn in the energy markets leads
to a significant decrease in North American drilling activity,
which could reduce the demand for the company's products and cause
its revenue and margin to contract," the rating agency said.
MY2011 GRAND: Seeks to Hire Backenroth Frankel as Counsel
---------------------------------------------------------
MY 2011 Grand LLC and S & B Monsey seek authority from the United
States Bankruptcy Court for the Southern District of New York
(White Plains) to hire Backenroth Frankel & Krinsky, LLP, as their
counsel.
Services Backenroth will render are:
a. provide each Debtor with legal counsel regarding its powers
and duties as a debtor-in possession in the continued operation of
its business and management of its property during the Chapter 11
case;
b. prepare on behalf of each Debtor all necessary
applications, answers, orders, reports, and other legal documents
which may be required with the Chapter 11 case;
c. provide each Debtor with legal services regarding
formulating and negotiating a plan of reorganization with
creditors; and
d. perform such other legal services for each Debtor as
required during the Chapter 11 case, including but not limited to,
the institution of actions against third parties, objections to
claims, and the defense of actions which may be brought by third
parties against each Debtor.
The firm's hourly rates are:
Paralegal time $125
Scott A. Krinsky $585
Mark A. Frankel $615
Abraham J. Backenroth $650
The firm received $12,500 from the Debtors.
Mark Frankel, Esq., a member of Backenroth, disclosed in court
filings that he and his firm are disinterested within the meaning
of Section 101(14) of the Bankruptcy Code and have no interest
adverse to the Debtors' estates.
The firm can be reached at:
Mark A. Frankel, Esq.
Backenroth Frankel & Krinsky, LLP
800 Third Avenue, 11th Floor
New York, NY 10022
Tel: (212) 593-1100
Fax: (212) 644-0544
Email: mfrankel@bfklaw.com
About MY 2011 Grand LLC
MY2011 Grand has an equitable interest in Grand Living LLC II, the
Mezz owner of Grand Living LLC, the owner of the property located
at 227 Grand Street Brooklyn, NY 11211. The current value of the
Debtor's interest is $12.80 million.
S & B Monsey has an equitable interest in Grand Living LLC II, the
Mezz owner of Grand Living LLC, the owner of the property located
at 227 Grand Street Brooklyn, NY 11211. The current value of the
Debtor's interest is $13.2 million.
MY 2011 Grand LLC and S & B Monsey filed voluntary petitions under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23957) on Nov. 6, 2019. The petitions were signed by David
Goldwasser, authorized signatory of GC Realty Advisors.
At the time of filing, MY2011 Grand and S & B Monsey each estimated
$10 million to $50 million in assets and $1 million to $10 million
in liabilities.
The Debtors are represented by Mark A. Frankel, Esq. at Backenroth
Frankel & Krinsky, LLP, as counsel.
NATEL ENGINEERING: S&P Downgrades ICR to 'B' on Elevated Leverage
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Natel
Engineering Co. to 'B' from 'B+'. At the same time, S&P lowered its
issue-level rating on the company's senior secured term loan to 'B'
from 'B+'. The '3' recovery rating remains unchanged, indicating
its expectation for meaningful (50%-70%; rounded estimate: 60%)
recovery in a default.
The downgrade reflects Chatsworth, Calif.-based vertically
integrated electronics manufacturing services (EMS) provider Natel
Engineering Co. Inc.'s (doing business as NEO Tech)
weaker-than-expected operating performance in fiscal year 2020
(ending in January) as the company's revenue declined due to
reduction in demand from a major customer and its EBITDA margins
weakened because of issues at one of its manufacturing plants. In
2018, NEO Tech explored a sale of the company. At that time, one of
its customers decided to slow its production with NEO Tech. While
NEO Tech ultimately did not proceed with a sale, the customer still
delayed certain orders, which reduced the company's revenue by the
mid-single-digit percent area in fiscal year 2020. This customer is
now engaging with NEO Tech, such that S&P believes it can recover
the volume over time to project modest revenue growth in fiscal
year 2021.
The negative outlook on NEO Tech reflects S&P's expectation that a
poor business performance in fiscal year 2021 due to macroeconomic
factors, such as those stemming from the coronavirus, could
negatively affect the company's credit metrics and covenants.
"We could downgrade NEO Tech if we believe that its S&P-adjusted
leverage will increase above 6.0x or unadjusted FOCF will be
sustained below $10 million. This could occur due to macroeconomic
impact related to the coronavirus that affect the company's supply
chain or customer demand, leading to reduced revenue from sustained
customer losses, profitability issues arising from its
manufacturing plants, or an inability to better manage its working
capital uses. We could also lower the rating if NEO Tech breaches
its covenants or if a covenant amendment weakens its ability to
perform to our credit metric expectations," S&P said.
"We could revise our outlook on NEO Tech to stable if it steadies
its business performance such that leverage approaches 5.0x,
generates more than $10 million of unadjusted FOCF, and we believe
its financial covenants are sustainable, preferably with EBITDA
cushion above 15%. This could occur if NEO Tech is able to fully
regain the business from its lost customer, generate new logo wins,
improve the profitability of its manufacturing plants, and better
manage its inventory," the rating agency said.
NATIONAL QUARRY: May Continue Using Cash Collateral Until March 30
------------------------------------------------------------------
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 through the earliest of:
(i) the entry of a final order authorizing the use of cash
collateral;
(ii) the entry of a further interim order authorizing the use
of cash collateral;
(iii) 9:30 a.m. on March 30, 2020;
(iv) the entry of an order denying or modifying the use of cash
collateral; or
(v) the occurrence of a Termination Event.
As adequate protection for the use of Cash Collateral:
(i) Pinnacle Bank and First National Bank of Pennsylvania
("FNB") are each granted a postpetition replacement lien in
Debtor's postpetition property of the same type which secured the
indebtedness of Pinnacle and FNB prepetition, 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.
(ii) The Debtor will pay Pinnacle an adequate protection
payment of $7,500 to compensate Pinnacle for the possible
diminution in value of its collateral.
(iii) The Debtor and its affiliate NQS Equipment Leasing
Company will keep repaired and maintain in good working order all
equipment serving as collateral for the Pinnacle Obligations.
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.
NEP GROUP: Fitch Lowers IDR to B-; On Rating Watch Negative
-----------------------------------------------------------
Fitch Ratings downgraded each of NEP Group, Inc.'s Issuer Default
Ratings to 'B-' and issue level ratings by one-notch, and has
placed all of the ratings on Rating Watch Negative, reflecting the
substantial impact coronavirus is having on NEP's liquidity and
cash flow profile, and the uncertainty for how long professional
sports and other live events will continue to be cancelled or
postponed in response.
The one-notch downgrade reflects the company's weakened liquidity
position that will result from its significant cash burn while live
events and professional sports broadcasts are postponed. The Rating
Watch Negative reflects the uncertainty over how long coronavirus
may continue to disrupt such events, and NEP's ability to maintain
sufficient liquidity to manage its cash burn through a prolonged
period of live event postponements and cancellations.
Fitch expects to resolve the rating watch with an affirmation of
the ratings if NEP can maintain sufficient liquidity to support its
obligations through this period. Fitch expects to resolve the watch
with a negative rating action if it becomes clear that NEP will not
be able to maintain sufficient liquidity, whether by internal cost
reductions or additional external funding, to support its
obligations. Fitch believes a severe degradation of liquidity may
warrant a multiple-notch downgrade.
KEY RATING DRIVERS
Live Event and Broadcast Cancellations: Fitch believes widespread
global cancellations of sporting events, music festivals, concerts,
and other large gatherings will materially impair NEP's cash flow
generation and will pressure liquidity in the near term. While a
significant portion of NEP's revenues are subject to multi-year
contracts, NEP will not collect revenue until its services are
ultimately provided. NEP can delay variable expenses related to
postponed events; however, fixed costs will still pressure cash
flow and liquidity in the near term while incoming cash flows
stall. NEP is not insured against the cancellations of live
events.
Fitch believes if high profile sporting events such as the Masters,
the Olympics, NBA Finals, NHL Stanley Cup Finals, UEFA Champions
League and others are ultimately cancelled in favor of
postponement, NEP's cash flow generation will be materially lower
in 2020. Conversely, Fitch expects a reasonably quick reversal in
cash flow generation when sports and live events ultimately
resume.
Liquidity: The exogenous shock created by the coronavirus pandemic
has materially weakened NEP's capacity to support obligations with
its existing liquidity. NEP will likely fully draw its $250 million
revolver to support its cash burn in the near term. If the social
impacts of the coronavirus outbreak extend through the summer and
beyond, NEP may be forced to rely on external funding sources or
more extreme cost reductions, which may increase leverage or
adversely affect operations moving forward.
Leading Market Position: Fitch's ratings incorporate NEP's position
as the largest global outsourced provider of production solutions
for broadcasts and live events. NEP provides the broadcast
equipment, post production, video display and software-based
creative technology to the largest live sports and entertainment
events including the NFL, ESPN, Super Bowl, Wimbledon, The Grammys,
and the Oscars. NEP's asset and global client base enables the
company to sustain a competitive advantage. The company estimates
their broadcast services segment to be 8.0x the size of the next
largest competitor; however, is of similar size to peers operating
in the live events space.
Aggressive Acquisition Strategy: NEP's growth is characterized by
strategic acquisitions, an important component to its growth
strategy. The company targets market leaders to penetrate a new
market and expand its global footprint and uses bolt-ons to expand
its suite of services in an established geography. For the first
three quarters of 2019, the company closed on four acquisitions
with an aggregate purchase price of approximately $125 million and
incremental EBITDA of $21 million. Fitch expects NEP to continue to
make acquisitions using cash and revolver borrowings. However,
Fitch believes that NEP will halt its acquisition strategy until
operations normalize.
Capital Intensive Nature: NEP has historically operated at a
capital intensity level of approximately 20%. Most of capex is
associated with new contract wins, making it success-based and tied
to revenue and cash flow growth. Upfront capex is required at
contract signing and the company targets a payback period of two
years for live events given their shorter-term nature and four
years for broadcast services. While the company generally
depreciates assets over a six to seven year period, it is able to
repurpose equipment past its depreciable asset life for second and
third-tier events. The success-based nature of NEP's capex provides
a lever to reduce run-rate expenditures to help preserve liquidity
during the coronavirus crisis.
Leveraged Capital Structure: At Sept. 30, 2019, pro forma for
completed acquisitions, gross leverage stood at 6.0x, down from
6.2x at Dec. 31, 2018. Management has guided to a
medium-to-longer-term gross leverage target of 5.0x; however,
prioritizes global expansion and growth through acquisitions. Fitch
recognizes that any future acquisition activity may slow the
company's delevering plan as debt repayment is a secondary goal.
Historically, the company has a track record of successfully
delevering post-acquisitions through EBITDA growth. Again, Fitch
expects NEP to delay acquisition activity until NEP returns to a
steady-state of cash flow generation.
Strong Revenue and Cash Flow Visibility: A significant portion of
NEP's revenues are derived from long-term contracts with clients
and generally range from three to 10 years with approximately 3%
price escalators built in and a "take or pay" arrangement. The
contracts are all event-based and cover specific events that recur
annually or throughout the year. The longer-term sports contracts
tend to be co-terminous with a network's broadcast rights for that
particular sport, while the entertainment events are shorter term
in nature. 75% of the revenue is recurring while most of the other
25% is predictable due to live events. The contractual nature of
revenues provides strong visibility and stability of future cash
flows.
Large and Growing End Markets: NEP focuses on the sports and
entertainment markets, both of which have demonstrated consistent
growth for a number of years, but will be pressured in the near
term as the coronavirus outbreak continues. Live sports programming
remains one of the few opportunities for broadcast and cable
networks to generate large viewing audiences in an increasingly
fragmented media landscape. There continues to be an increase in
value for sports rights, sports-dedicated channels and hours spent
watching sports content. On the live events side, there has been a
surge in number of tours as artists compensate for a loss in
recorded music revenue. Additionally, unscripted programming has
remained largely resilient to time-shifted and OTT viewing.
DERIVATION SUMMARY
The 'B-' IDR for NEP incorporates the company's weakened liquidity
caused by the economic and social responses to the coronavirus
pandemic.
The 'B-' IDR also reflects the elevated leverage profile pro forma
for debt-funded acquisitions completed in 2019. Fitch expects
leverage in the near term to be exacerbated by the number of
cancelled live events and professional sports events.
NEP's heavier cash interest burden driven by the 2019 refinancing
of the credit facilities depresses FCF in a steady operating
environment. While the company's capex requirements are high, Fitch
highlights that capex is largely success-based and funnels into
future revenues and cash flows. The ratings also incorporate NEP's
ability to generate meaningful organic revenue growth driven by new
contract wins, 75% of which come from new events and 25% from
competition. The contractual nature of NEP's revenues drives strong
cash flow visibility and stability over the forecasting horizon.
Contracts range between three to 10 years with approximately 3%
price escalators built in and a take-or-pay nature.
Fitch notes that as live event and professional sporting activities
eventually rebound FCF deficits should moderate.
NEP is 8.0x the size of its next largest competitor on the
broadcast solutions side and of comparable size to peers operating
in the U.S. live events business. Fitch notes that the company has
gained first-mover advantage in many of the markets abroad where
only small local players are present, providing strong
defensibility and high barriers to entry.
Additionally, Fitch believes the generally non-cyclical nature of
the live events and sports broadcasting industries support the
rating. Fitch acknowledges the current environment as a one-time
event caused by an exogenous shock. Artists have become
increasingly reliant on touring to make up for loss from album
sales and sports broadcasting rights continues to gain in value.
Fitch generally maintains a positive view of NEP's concentration to
sports and live events programming as this type of programming
should continue to deliver an aggregation of mass audience in a
media ecosystem that has become increasingly fragmented once
concerns of the virus outbreak have eased. Fitch does not rate any
of NEP's direct competitors.
KEY ASSUMPTIONS
The recovery analysis assumes that NEP would be considered a
going-concern in bankruptcy, and it would be reorganized rather
than liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
The GC LTM EBITDA of $281 million contemplates insolvency resulting
from inadequate liquidity amid recessionary stress. In this
scenario, Fitch assumed that the company is unable to integrate the
large number of acquisitions into the business. Additionally, the
company is unable to renew its large contracts, ceding share to
competitors in the space, leading to depressed EBITDA and an
unsustainable capital structure.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation.
An enterprise valuation multiple of 5.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
company's platform acquisitions are transacted on average between
4.8x-6.0x, while its smaller bolt-on acquisitions close in the
range of 3.5x-4.5x. Most recently, HDR Group was acquired by NEP at
5.8x EV/EBITDA in June 2019 and Aerial Video Systems at 4.4x in
September 2019. While the above transaction multiples are lower
than the 5.5x used for NEP, these targets operated on a smaller
scale with a less-developed footprint than NEP.
The recovery analysis assumes that the full $250 million is drawn
on the first lien revolver. The recovery analysis implies a
'BB-'/'RR2' rating on the senior first lien secured debt and a
'CCC+'/'RR6' on the senior second lien secured debt.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to a
Positive Rating Action
-- Fitch would stabilize the rating if there is evidence that NEP
will maintain adequate liquidity and funding to manage its
operations and cash burn through the widespread cancellations and
postponements of professional sports and live events.
-- A return to positive FCF generation.
-- FFO fixed charge coverage above 1.0x.
Developments That May, Individually or Collectively, Lead to a
Negative Rating Action
-- Widespread event cancellations and postponements extending
through the summer months.
-- Deteriorating liquidity with no evidence of internal levers to
support liquidity, or additional external funding sources.
-- FFO fixed charge coverage below 1.0x.
LIQUIDITY AND DEBT STRUCTURE
Strained Liquidity: At Sept. 30, 2019, the company had solid
liquidity supported by $47 million in balance sheet cash and
approximately $240 million in revolver borrowing capacity (net of
$10 million in outstanding letters of credit). NEP will fully draw
its revolver to support its cash burn in the near term. The company
had FCF deficits of $54 million for the LTM period reflective of
the capital intensive nature of the live events industry. Fitch had
previously forecasted minimally positive FCF in 2020; however,
Fitch now believes this is unlikely given the economic and social
responses to the coronavirus outbreak.
NEP has no significant maturities until 2025. Fitch believes the
sudden cancellation of a large number of high profile live events
and broadcasts due to the coronavirus outbreak will pressure cash
flow and liquidity in the near term. Fitch is uncertain as to what
the ultimate cash flow impact of the coronavirus outbreak will be.
Fitch will look for NEP to support liquidity via cost reductions or
external capital raises to handle its cash burn through the stall
in live events.
NEP/NCP HOLDCO: S&P Places 'B' ICR on CreditWatch Negative
----------------------------------------------------------
S&P Global Ratings placed all of its ratings on NEP/NCP Holdco
(NEP), including the 'B' issuer credit rating on CreditWatch with
negative implications.
The COVID-19 pandemic has led to a growing number of live event
postponements or cancelations across the corporate, sports, and
entertainment sectors globally. S&P expects this to adversely
affect companies that service live events.
The CreditWatch placements reflect the company's direct exposure to
major televised live events that are currently being affected by
the COVID-19 outbreak. These disruptions could hurt operating
performance, increasing adjusted leverage above S&P's mid-6.0x
threshold on a sustained basis. The CreditWatch placements also
reflect S&P's view that prolonged delays or outright cancellations
of these events could further deteriorate NEP's liquidity,
potentially affecting the sustainability of its capital structure.
"We expect to resolve the CreditWatch placements within the next 90
days as we continue to assess the potential for further delays and
disruptions of major events later in the year, including the
Olympics. In resolving the CreditWatch placements we will determine
if NEP's adjusted leverage would remain above our threshold over
the next 12 months. We could lower our ratings by up to two notches
if the company's liquidity situation deteriorates such that the
capital structure is unsustainable and/or we expect the company to
breach its covenants," S&P said.
NOVABAY PHARMACEUTICALS: Chief Financial Officer Resigns
--------------------------------------------------------
Jason Raleigh, the chief financial officer and treasurer of NovaBay
Pharmaceuticals, Inc., voluntarily resigned from those positions to
be effective as of March 31, 2020. The duties of chief financial
officer and treasurer will be fulfilled by a temporary professional
until a permanent replacement to fill such positions can be found.
About NovaBay Pharmaceuticals
Based in Emeryville, California, NovaBay Pharmaceuticals --
http://www.novabay.com/-- is a biopharmaceutical company focusing
on commercializing and developing its non-antibiotic anti-infective
products to address the unmet therapeutic needs of the global,
topical anti-infective market with its two distinct product
categories: the NEUTROX family of products and the AGANOCIDE
compounds. The Neutrox family of products includes AVENOVA for the
eye care market, NEUTROPHASE for wound care market, and CELLERX for
the aesthetic dermatology market. The Aganocide compounds, still
under development, have target applications in the dermatology and
urology markets.
Novabay reported a net loss and comprehensive loss of $6.54 million
for the year ended Dec. 31, 2018, compared to a net loss and
comprehensive loss of $7.40 million for the year ended Dec. 31,
2017. As of Sept. 30, 2019, the Company had $14.60 million in
total assets, $11.09 million in total liabilities, $584,000 in
series A non-voting convertible preferred stock, and total
stockholders' equity of $2.92 million.
OUM & CO. LLP, in San Francisco, California, the Company's auditor
since 2010, issued a "going concern" opinion in its report dated
March 29, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company has
experienced operating losses for most of its history and expects
expenses to exceed revenues in 2019. The Company also has
recurring negative cash flows from operations and an accumulated
deficit. All of these matters raise substantial doubt about its
ability to continue as a going concern.
NYGARD HOLDINGS: Chapter 15 Case Summary
----------------------------------------
Lead Debtor: Nygard Holdings (USA) Limited
1209 Orange Street
Wilmington, DE 19801
Business Description: Nygard -- https://www.nygard.com --
is a fashion company that designs and
markets women's fashion apparel.
Foreign Proceeding: Receivership Proceeding, Court of
Queen's Bench Manitoba, Canada, CI 20-
01-26627
Foreign Representative: Gilles Benchaya
RICHTER ADVISORY GROUP INC.
181 Bay Street #3510
Toronto, ON M5J 2T3
Chapter 15
Petition Date: March 18, 2020
Court: United States Bankruptcy Court
Southern District of New York
Nine affiliates that concurrently filed voluntary petitions seeking
relief under Chapter 15 of the Bankruptcy Code:
Debtor Case No.
------ --------
Nygard Holdings (USA) Limited 20-10828-ok
Nygard Inc. 20-10829-ok
Nygard NY Retail, LLC 20-10830-ok
Fashion Ventures, Inc. 20-10831-ok
Nygard International Partnership 20-10832-ok
Nygard Properties Ltd. 20-10833-ok
Nygard Enterprises Ltd. 20-10834-ok
4093879 Canada Ltd. 20-10835-ok
4093887 Canada Ltd. 20-10836-ok
Foreign
Representative's
US Counsel: Steven J. Reisman, Esq.
KATTEN MUCHIN ROSENMAN LLP
575 Madison Avenue
New York, NY 10022
Tel: (212) 940-8700
E-mail: sreisman@katten.com
Estimated Assets: Unknown
Estimated Debts: Unknown
A full-text copy of Nygard Holdings' Chapter 15 petition is
available for free at:
https://is.gd/64dxpa
OCCIDENTAL PETROLEUM: Moody's Lowers Sr. Unsec. Rating to Ba1
-------------------------------------------------------------
Moody's Investors Service downgraded Occidental Petroleum
Corporation's senior unsecured rating to Ba1 from Baa3, its senior
unsecured shelf rating to (P)Ba1 from (P)Baa3 and its commercial
paper program rating to Not Prime from Prime-3. Moody's also
assigned OXY a Corporate Family Rating of Ba1, a Probability of
Default Rating of Ba1-PD and a Speculative Grade Liquidity rating
of SGL-3. Ratings were placed on review for downgrade.
"Occidental Petroleum's August 2019 acquisition of Anadarko
Petroleum Corporation (Anadarko) continues to burden the company's
balance sheet with over $35 billion of debt and $10 billion of
preferred stock, significantly compromising its financial
flexibility to confront the collapse in oil prices," commented
Andrew Brooks, Moody's Vice President. "While OXY has made progress
capturing acquisition synergies, and is itself a low-cost operator
with attractive Permian Basin acreage, projected asset sales
required for debt reduction have slowed and face considerable
headwinds in a challenged oil and natural gas price environment,
leaving OXY with a significantly weakened credit profile whose
prospects for near-term improvement are uncertain."
The following ratings were downgraded.
Assignments:
Issuer: Occidental Petroleum Corporation
Probability of Default Rating, Assigned Ba1-PD; Placed Under Review
for further Downgrade
Speculative Grade Liquidity Rating, Assigned SGL-3
Corporate Family Rating, Assigned Ba1; Placed Under Review for
further Downgrade
Downgrades:
Issuer: Occidental Petroleum Corporation
Commercial Paper, Downgraded to NP from P-3; Placed Under Review
for Downgrade
Senior Unsecured Shelf, Downgraded to (P)Ba1 from (P)Baa3; Placed
Under Review for Downgrade
Senior Unsecured Medium-Term Note Program, Downgraded to (P)Ba1
from (P)Baa3; Placed Under Review for Downgrade
Senior Unsecured Notes, Downgraded to Ba1 from Baa3; Placed Under
Review for Downgrade
Issuer: Maryland Industrial Development Financ. Auth.
Senior Unsecured Revenue Bonds, Downgraded to Ba1 from Baa3; Placed
Under Review for Downgrade
Senior Unsecured Revenue Bonds, Downgraded to S.G. from VMIG 3;
Placed Under Review for Downgrade
Outlook Actions:
Issuer: Occidental Petroleum Corporation
Outlook, Changed To Rating Under Review From Stable
Withdrawals:
Issuer: Occidental Petroleum Corporation
Issuer Rating, Withdrawn , previously rated Baa3
RATINGS RATIONALE
OXY's Ba1 CFR takes into consideration that its acquisition of
Anadarko added meaningful production and proved reserves with
further development opportunities in its core Permian Basin asset,
reflecting the addition of Anadarko's sizable position in the
Delaware Basin. While the acquisition afforded strategic and cost
benefits to OXY, it came at an excessive price and at the very high
cost of a significantly eroded credit profile.
The stress imposed on OXY's credit metrics by approximately $40
billion of acquisition-related debt (the new OXY notes and term
loan, Anadarko's surviving debt which was exchanged into new OXY
debt, proportionately consolidated Western Midstream debt and the
50% debt equivalent allocated to the $10 billion preferred) has
materially weakened OXY's leverage metrics. The unsuitability of
OXY's over-levered balance sheet has been further exacerbated by
the sharp drop in crude oil prices and commensurate reduction in
cash flow. OXY has reacted to the currently challenged oil price
environment with several recent defensive measures including a long
overdue cut in its dividend of 86% and a reduction in planned
capital spending of about one-third, which together will reduce its
cash outflow by about $4 billion. The company has further noted
that additional planned cost reductions will lower its company-wide
cash flow breakeven into the low $30 per WTI barrel area. However,
without significant and immediate debt reduction beyond the $7
billion achieved in the latter half of 2019, on a run-rate basis
Moody's estimates that OXY's retained cash flow (RCF) to debt
metric will remain well under 15% and E&P debt on production over
$30,000 per Boe, neither measure supportive of an investment grade
rating. The value accorded OXY's $109 billion asset base (at
December 31), its operating footprint that extends beyond North
America and considerable EBITDA generated from non-E&P assets has
likely been compromised by the drop in commodity prices and global
demand stress. While Moody's expects that OXY will continue to
prioritize debt reduction through asset sales, that effort now
faces increasingly difficult headwinds.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The oil and gas
sector has been one of the sectors most significantly affected by
the shock given its sensitivity to consumer demand and sentiment.
More specifically, the weaknesses in OXY's credit profile has left
it vulnerable to shifts in market sentiment in these unprecedented
operating conditions and OXY remains vulnerable to the outbreak
continuing to spread. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial
implications for public health and safety. The action reflects the
impact on OXY of the breadth and severity of the shock, and the
broad deterioration in credit quality it has triggered.
Moody's regards OXY's near-term liquidity as adequate, comprised of
$3 billion of year-end balance sheet cash and an undrawn $5 billion
revolving credit facility having a January 2023 scheduled maturity
date. The company should retain full access to its revolver, which
does not have a MAC clause, nor stringent covenant limitations.
Moreover, the dividend and capital spending cut will relieve stress
on cash flow, and may enable OXY to operate in a modestly free cash
flow mode. OXY has no debt maturities coming due in 2020, but will
confront the high hurdle of $6.4 billion of debt maturities in
2021.
The review for downgrade will focus on OXY's near-term ability to
meaningfully improve its credit profile, deploying asset sale
proceeds to repay debt, with a continuing focus on further debt
reduction as well as its ability to generate positive free cash
flow in a stressed oil price environment. The review will also
consider the company's financial policies in the context of
addressing its significant debt levels and upcoming debt
maturities, as well as its scale, capital structure, operating
performance and the execution risk of integrating the large-scale
asset base and operations of Anadarko.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
Occidental Petroleum Corporation is a large, publicly traded
independent exploration and production (E&P) with operations
focused in the Permian Basin, Colorado's DJ Basin, the Middle East
in Oman, Qatar and the UAE, Algeria and Ghana, and Colombia. It
also has significant Midstream and Chemicals businesses. The
company is headquartered in Houston, Texas.
OLIN CORP: S&P Downgrades ICR to 'BB'; Outlook Negative
-------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Olin Corp.
to 'BB' from 'BB+'. At the same time, S&P lowered its issue-level
rating on the company's senior unsecured debt to 'BB' from 'BB+'.
The '3' recovery rating remains unchanged, indicating its
expectation for meaningful (50%-70%; rounded estimate: 50%)
recovery in the event of a payment default.
The downgrade follows Olin's significantly weaker performance in
2019 and S&P's expectation that its EBITDA and credit metrics will
deteriorate further in 2020. The company's adjusted EBITDA
declined by about $320 million, or 25%, in 2019 on pricing and
volume declines in its Chlor Alkali products and Vinyls segment and
reduced epoxy margins, which it marginally offset with lower raw
material costs, productivity improvements, and management's
cost-reduction initiatives. S&P expects that the company's
performance will continue to weaken in 2020 because export prices
for caustic soda were at 10-year lows as of the beginning of the
year. Additionally, the company faces several upcoming one-time
cash uses that it will need to take on debt to fund, though S&P
expects these uses to be credit positive after 2020. Specifically,
the company will finance a nearly $500 million payment to Dow
Chemical Co. for the final tranche of its cost-based ethylene
contract, pay costs and fund the working capital build associated
with a new contract win in its Winchester segment, and cover
expenses associated with its SAP implementation and the upcoming
call premium on its higher-interest rate bonds. Because of its
weaker EBITDA and higher debt levels, S&P expects Olin's funds from
operations (FFO)-to-debt ratio to fall to about 10% in 2020, which
is well below the company's 24% ratio as of December 2018. S&P
expects the company to gradually improve its EBITDA and credit
metrics starting in 2021 on a recovery in caustic soda prices,
reduced interest expense, contributions from the new Lake City
contract the company was awarded in its Winchester business, and
the run-off of other one-time expenses. To maintain the current
rating, S&P would expect the company to sustain weighted average
(based on 2018-2022) credit metrics in the 12%-20% range."
"The negative outlook reflects the potential that we will lower our
rating on Olin in the next 12 months if caustic soda prices remain
at their current depressed levels for an extended period and it
becomes evident the company's credit measures will not improve as
we head into 2021," S&P said.
S&P could lower its rating on Olin by one notch in the next 12
months if the prices for its key products--such as chlorine,
caustic soda, or epoxy--significantly decline, which could occur if
the U.S. housing market, global light vehicle sales, or global
industrial production are much weaker than the rating agency
expects. S&P could also consider downgrading the company if the
coronavirus has a significantly more material effect on the
company's EBITDA prospects or it experiences unplanned outages that
reduce its operating rates. Specifically, S&P would consider
lowering its rating if Olin's revenue is moderately weaker than the
rating agency projects and the company's EBITDA margins remain at
their depressed 2020 levels for an extended period. In such a
scenario, S&P would expect the company's FFO to debt to remain
below 12% beyond 2020 with no prospects for improvement. S&P could
also consider lowering its rating if the EBITDA cushion under the
company's covenants is tighter than S&P projects or if it fails to
maintain financial policies that the rating agency considers
commensurate with the current rating, including prioritizing the
company's 2021 free cash flow for growth initiatives and
shareholder rewards rather than debt reduction.
S&P could consider revising its outlook on Olin to stable in the
next 12 months if caustic soda, chlorine, and epoxy prices rebound
quicker than it expects, causing the company's revenue and EBITDA
margins to exceed the rating agency's base-case expectations by 10%
and at least 150 basis points (bps), respectively. S&P could also
take a positive rating action on the company if its cash flows are
stronger than the rating agency projects, leading the company's
credit metrics to improve beyond its base-case assumptions. Before
revising its outlook, S&P would need to be confident that Olin
would improve its FFO to debt to the 12%-20% range. S&P would also
need the company to commit to maintain its financial policies,
despite the presence of an activist investor, and sustain credit
metrics that the rating agency views as appropriate for the current
rating.
OPTIMAS OE: S&P Downgrades ICR to 'SD' on Distressed Exchange
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
U.S.-based engineered fastener distributor Optimas OE Solutions
Holding LLC to 'SD' (selective default) from 'CCC+'. At the same
time, S&P is lowered its issue-level rating on the company's senior
secured notes due 2021 to 'D' (default) from 'CCC'.
The downgrade follows the company's distressed repurchase of a
portion of its $225 million senior secured notes due 2021. The
company repurchased $33 million of the notes for $20 million of
cash. The face value it offered on the notes is about 60% of the
repurchased notes' original par value, thus S&P views the
transaction as distressed because the debt investors did not
receive the originally promised principal amount. Therefore, S&P is
lowering its issue-level rating on these notes to 'D'."
PHOENIX PRODUCTS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Phoenix Products, Inc.
106 Bethford Road
McKee, KY 40447
Business Description: Phoenix Products, Inc. --
https://acstuff.com/ -- provides components
and Technical Data Packages (TDP) for the
U.S. Government. PPI has significant,
relevant experience in the machining,
fabrication, and assembly of Helicopter Main
Rotor Blade Shipping and Storage Containers
(SSCs), Engine and Propulsion Systems
Containers, Aircraft Flight Worthy
Components, and Ground Support Equipment
(GSE), including Missile SSCs. Its customer
base includes the Department of Defense,
Defense Logistics Agency, Lockheed Martin,
Sikorsky, Rolls-Royce, and other OEMs.
Chapter 11 Petition Date: March 18, 2020
Court: United States Bankruptcy Court
Eastern District of Kentucky
Case No.: 20-60370
Judge: Hon. Gregory R. Schaaf
Debtor's Counsel: Dean A. Langdon, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper St.
Lexington, KY 40507
Tel: (859) 231-5800
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Peggy Wilson, CEO.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/nr7AyP
PIER 1 IMPORTS: Hires Epiq Corporate as Administrative Advisor
--------------------------------------------------------------
Pier 1 Imports, Inc. and its debtor-affiliates seek authority from
the United States Bankruptcy Court for the Eastern District of
Virginia to hire Epiq Corporate Restructuring, LLC as
administrative advisor.
The Debtors require Epiq to:
a. assist with, among other things, solicitation, balloting,
tabulation, and calculation of votes, as well as preparing any
appropriate reports, as required in furtherance of confirmation of
plan(s) of reorganization; and in connection with such services,
processing requests for documents from parties in interest,
including, if applicable, brokerage firms, bank back-offices and
institutional holders;
b. generate an official ballot certification and testifying,
if necessary, in support of the ballot tabulation results;
c. generate, provide, and assist with claims objections,
exhibits, claims reconciliation, and related matters;
d. provide assistance with preparation of the Debtors'
schedules of assets and liabilities and statements of financial
affairs and gathering data in conjunction therewith;
e. provide a confidential data room, if requested;
f. manage any distributions pursuant to a confirmed plan of
reorganization; and
g. provide such other claims processing, noticing,
solicitation, balloting, and administrative services described in
the Services Agreement, but not included in the Section 156(c)
Application, as may be requested from time to time by the Debtors,
the Court, or the Office of the Clerk of the Bankruptcy Court.
Epiq will charge these hourly fees:
Clerical/Administrative Support $25 - $45
IT/Programming $65 - $85
Case Managers $70 - $165
Consultants/Directors/VPs $160 - $190
Solicitation Consultant $190
Executive VP, Solicitation $190
Executives No Charge
Kate Mailloux, a senior director at Epiq, disclosed in court
filings that the firm is "disinterested" as defined in Section
101(14) of the Bankruptcy Code.
Epiq can be reached through:
Kate Mailloux
Epiq Bankruptcy Solutions, LLC
777 Third Avenue, 12th Floor
New York, NY 10017
Phone: (646) 282-2523
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 1 IMPORTS: Hires Guggenheim Securities as Investment Banker
----------------------------------------------------------------
Pier 1 Imports, Inc. and its debtor-affiliates seek authority from
the United States Bankruptcy Court for the Eastern District of
Virginia to hire Guggenheim Securities, LLC, as their investment
banker.
Pier 1 requires Guggenheim Securities to:
(a) review and analyse the business, financial condition, and
prospects of the Debtor;
(b) evaluate the liabilities of the Debtor, its debt capacity
and its strategic and financial alternatives;
(c) evaluate from a financial and capital markets perspective
of alternative structures
and strategies for implementing any applicable Transaction;
(d) prepare offering, marketing, or other transaction
materials concerning the Debtor and any applicable Transaction for
distribution and presentation to the relevant Transaction
Counterparties;
(e) develop and implement a marketing plan with respect to any
applicable Transaction;
(f) identify and solicit, and review proposals received from,
prospective Transaction Counterparties in connection with any
applicable Transaction;
(g) negotiate any applicable Transaction;
(h) provide financial advice and assistance to the Debtor in
developing and seeking approval of any applicable Transaction,
including a Plan, which may be a plan under chapter 11 of the
Bankruptcy Code confirmed in connection with any Bankruptcy Case in
Bankruptcy Court; and
(i) participate in hearings before any applicable Insolvency
Authority with respect to the matters upon which Guggenheim
Securities has provided advice, including, as relevant,
coordinating with the Debtor’s legal counsel with respect to
testimony in connection therewith.
Guggenheim Securities will be paid as follows:
(a) Monthly Fees.
i. The Debtors will pay Guggenheim Securities a
non-refundable cash fee of $150,000 per month, which will be due
and paid by the Debtors in advance promptly upon the signing of the
Engagement Letter and, thereafter, on the first day of each month
during the period of Guggenheim Securities' engagement under the
Amended Engagement Letter, in each case, whether or not any
Transaction is consummated.
ii. Commencing with the seventh Monthly Fee actually paid
under the Amended Engagement Letter, an amount equal to 50% of each
Monthly Fee payment shall be credited (to the extent actually paid
and only once) against any Restructuring Transaction Fee that
thereafter becomes payable pursuant to Section 4(b) of the Amended
Engagement Letter.
(b) Restructuring Transaction Fee.
i. If (A) any Restructuring Transaction is consummated or
(B) (I) an agreement (including any Plan) to effect a Restructuring
Transaction is entered into and (II) concurrently therewith or at
any time thereafter, any Restructuring Transaction is consummated,
then, in each case, the Debtors will pay Guggenheim Securities a
cash fee in an amount equal to $5,500,000.
(c) Financing Fee(s).
i. If (1) any Financing Transaction is consummated or (2)
(I) an agreement (including any Plan) to effect a Financing
Transaction is entered into and (II) concurrently therewith or at
any time thereafter, any Financing Transaction is consummated or
(III) the Debtors accepts written
commitments (including, but not limited to, pursuant to any
commitment letter, securities purchase agreement, backstop
agreement or other such definitive commitment documentation) with
respect to a Financing Transaction, then, in each case, the Debtors
will pay Guggenheim Securities one or more cash fees in an amount
equal to the sum of:
(A) 150 basis points (1.50%) of the aggregate face amount
of any new debt obligations to be issued or raised by the Debtors
in any Debt Financing (including the face amount of any related
commitments) that is secured by first priority liens over any
portion of the Debtors's or any other person's assets, plus
(B) 300 basis points (3.00%) of the aggregate face amount
of any new debt obligations to be issued or raised by the Debtors
in any Debt Financing (including the face amount of any related
commitments) that is not covered by by Section 4(c)(i)(A) of the
Amended Engagement Letter, plus
(C) 500 basis points (5.00%) of the aggregate amount of
gross proceeds raised by the Company in any Equity Financing, plus
(D) With respect to any other securities or indebtedness
issued that is not otherwise covered by Sections 4(c)(i)(A) to
4(c)(i)(C) of the Amended Engagement Letter, such financing fees,
underwriting discounts, placement fees or other compensation as
customary under the circumstances and mutually agreed in advance by
the Company and Guggenheim Securities.
(d) Expense Reimbursement. In addition to any fees payable by
the Debtors to Guggenheim Securities will promptly reimburse
Guggenheim Securities, on a monthly basis, for its travel and all
other reasonable out-of-pocket expenses incurred.
Durc Savini, senior managing director of Guggenheim Securities,
LLC, 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.
Guggenheim Securities can be reached at:
Durc Savini
GUGGENHEIM SECURITIES, LLC
330 Madison Avenue
New York, NY 10017
Tel: (212) 739-0700
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 1 IMPORTS: Hires Kirkland & Ellis as Bankruptcy Counsel
------------------------------------------------------------
Pier 1 Imports, Inc. and its debtor-affiliates seek authority from
the United States Bankruptcy Court for the Eastern District of
Virginia to hire Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their
attorneys.
Pier 1 Imports requires Kirkland & Ellis to:
a. advise the Debtors with respect to their powers and duties
as debtors in possession in the continued management and operation
of their businesses and properties;
b. advise and consult on the conduct of these chapter 11
cases, including all of the legal and administrative requirements
of operating in chapter 11;
c. attend meetings and negotiating with representatives of
creditors and other parties in interest;
d. take all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which the Debtors are involved, including objections to claims
filed against the Debtors' estates;
e. prepare pleadings in connection with these chapter 11
cases, including motions, applications, answers, orders, reports,
and papers necessary or otherwise beneficial to the administration
of the Debtors' estates;
f. represent the Debtors in connection with obtaining
authority to continue using cash collateral and postpetition
financing;
g. advise the Debtors in connection with any potential sale of
assets;
h. appear before the Court and any appellate courts to
represent the interests of the Debtors' estates;
i. advise the Debtors regarding tax matters;
j. take any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a chapter 11 plan and all documents related
thereto; and
k. perform all other necessary legal services for the Debtors
in connection with the prosecution of these chapter 11 cases,
including: (i) analyzing the Debtors' leases and contracts and the
assumption and assignment or rejection thereof; (ii) analyzing the
validity of liens against the Debtors; and (iii) advising the
Debtors on corporate and litigation matters.
Kirkland & Ellis will be paid at these hourly rates:
Partners $1,075-$1,845
Of Counsel $625-$1,845
Associates $610- $1,165
Paraprofessionals $245 to $460
Joshua A. Sussberg, the president of Joshua A. Sussberg, P.C., a
partner of Kirkland & Ellis LLP, and a partner of Kirkland & Ellis
International LLP, leads the engagement.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Sussberg disclosed that the firms have not agreed to a variation of
their standard billing arrangements for their employment with the
Debtors, and that no professional at the firms has varied his rate
based on the geographic location of the Debtors' bankruptcy cases.
The attorney also disclosed that the hourly rates used by Kirkland
in representing the Debtors are consistent with the rates that
Kirkland charges other comparable chapter 11 clients, regardless of
the location of the chapter 11 case.
Kirkland represented the Debtors during the eleven-month period
before the Petition Date, using its standard hourly rates.
Mr. Sussberg also disclosed that the Debtors have already approved
the firms' budget and staffing plan for the period Feb. 17, 2020
through April 28, 2020.
The firm can be reached at:
Joshua A. Sussberg
Kirkland & Ellis LLP
Kirkland & Ellis International LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
E-mail: joshua.sussberg@kirkland.com
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 1 IMPORTS: Seeks to Hire A&G Realty as Real Estate Advisor
---------------------------------------------------------------
Pier 1 Imports, Inc. and its debtor-affiliates seek authority from
the United States Bankruptcy Court for the Eastern District of
Virginia to hire A&G Realty Partners, LLC, as their real estate
consultant and advisor.
Services A&G will provide are:
a. consult with the Debtors to discuss the Debtors' goals,
objectives and financial parameters in relation to certain of the
Debtors' Leases;
b. provide ongoing advice and guidance related to individual
financial and non-financial lease restructuring opportunities and
risks, and guidance based upon the Debtors' goals and objectives as
determined from time-to-time;
c. negotiate with the Debtors' landlords on behalf of the
Debtors to obtain Early Termination Rights acceptable to Debtors;
d. negotiate with the landlords of the Properties on behalf of
the Debtors to obtain occupancy cost savings and non-monetary Lease
Modifications acceptable to Debtors;
e. market the Leases in a manner and form as determined by A&G
and agreed to by the Debtors in writing and assist in the
disposition of the Leases;
f. provide weekly update reports to the Debtors regarding the
status of the Services or more frequently as may be requested by
the Debtors;
g. develop, maintain and provide the necessary data and
reports to evaluate proposed lease restructurings, and track
performance as agreed to by the Parties; and
h. coordinate with the Debtors' internal team and legal
counsel to effectuate lease amendments and other necessary
documents, including reviewing documents if requested by Debtors,
and assisting in resolving business problems that may arise.
A&G Realty will be paid as follows:
a. Early Termination Rights - For each Early Termination Right
obtained by A&G on behalf of the Debtors, A&G shall earn and be
paid a fee of one-quarter (1/4) of one month’s Gross Occupancy
Cost per Lease.
b. Monetary Lease Modifications - For each Monetary Lease
Modification obtained by A&G on behalf of the Debtors, A&G shall
earn and be paid three percent (3%) of the Occupancy Cost Savings
per Lease; provided, however, if the Monetary Lease Modification is
a reduction in Lease term, then A&G shall earn and be paid a fee in
the amount of two percent (2%) of the Occupancy Cost Savings per
Lease.
c. Non-Monetary Lease Modifications - For each Non-Monetary
Lease Modification obtained by A&G on behalf of the Debtors, A&G
shall earn and be paid a fee of seven hundred and fifty dollars
($750.00).
d. Lease Sales - For each Lease Sale obtained by A&G on behalf
of the Debtors, A&G shall earn and be paid a fee of four percent
(4%) of the Gross Proceeds.
e. Landlord Consents - If requested by the Debtors, for each
Landlord Consent obtained by A&G to extend the Debtors’ time to
assume or reject a Lease as a part of the Debtors’ chapter 11
cases, A&G shall earn and be paid a fee in the amount of three
hundred dollars ($300) per Lease.
For any additional services, A&G shall charge an hourly rate of
$600 for partners and $400 for all other professionals, and provide
a written estimate prior to commencement of such additional
services.
Andrew Graiser, co-president of A&G Realty Partners, LLC, 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/its
estates.
A&G Realty can be reached at:
Andrew Graiser
A&G REALTY PARTNERS, LLC
445 Broadhollow Road, Suite 410
Melville, NY 11747
Tel: (631) 465-9506
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 1 IMPORTS: Seeks to Hire AP Services, Appoint SVP
------------------------------------------------------
Pier 1 Imports, Inc. and its debtor-affiliates seek authority from
the United States Bankruptcy Court for the Eastern District of
Virginia to hire AP Services, LLC and appoint William Lewis IV, as
Senior Vice President-Inventory Allocation and Planning.
Services Mr. Lewis and APS will provide are:
a. assist the Debtors in continuing to refine and implement
its restructuring initiatives, and evaluating strategic
alternatives;
b. assist the Debtors with refinement of its business plan,
and such other related forecasts as may be required by lenders in
connection with negotiations, or by the Debtors for other corporate
purposes;
c. assist the Debtors with maintaining its rolling 13-week
cash receipts and disbursements forecast and related liquidity
reporting;
d. assist the Debtors with its communications and/or
negotiations with outside parties including the Debtors's
stakeholders, lenders and potential acquirers of Debtors assets;
e. assist the Debtors and its other external advisors in
preparing for and filing a Bankruptcy Petition, coordinating and
providing administrative support for the proceeding;
f. assist the Debtors with the preparation of the statement of
affairs, schedules and other regular reports required by the
Bankruptcy Court as well as providing assistance in such areas as
testimony before the Bankruptcy Court on matters that are within
APS's areas of expertise; and
g. assist with such other matters as may be requested that
fall within APS's expertise and that are mutually agreeable.
APS's current standard hourly rates for 2020 are:
Managing Director $1,000 – $1,195
Director $800 – $950
Senior Vice President $645 – $735
Vice President $470 – $630
Consultant $175 – $465
Paraprofessional $295 – $315
APS and affiliates received unapplied advance payments from the
Debtors in the amount of $1,500,000. During the 90-day period prior
to the Petition Date, Debtors paid APS and affiliates $5,275,170.89
in aggregate for professional services performed and expenses
incurred, including the retainer.
William Lewis IV, Director of AlixPartners, 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 Debtors and their estates.
APS can be reached through:
William Lewis IV
AlixPartners, LLP
909 Third Avenue, Floor 30
New York, NY 10022
Phone: +1 (212) 561-4025
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 1 IMPORTS: Seeks to Hire Kutak Rock as Counsel
---------------------------------------------------
Pier 1 Imports, Inc. and its debtor-affiliates seek authority from
the United States Bankruptcy Court for the Eastern District of
Virginia to hire Kutak Rock LLP as their co-counsel.
Pier 1 requires Kutak to:
a) provide legal advice and services regarding local rules,
practices, and procedures and providing substantive and strategic
advice on how to accomplish the Debtors' goals in connection with
the prosecution of these chapter 11 cases, bearing in mind that the
Court relies on co-counsel such as Kutak Rock to be involved in all
aspects of these bankruptcy cases;
b) review, revise, and/or prepare drafts of documents to be
filed with the Court as co-counsel to the Debtors;
c) appear in Court and at any meeting with the U.S. Trustee
and any meeting of creditors at any given time on behalf of the
Debtors as their co-counsel;
d) perform various services in connection with the
administration of these chapter 11 cases, including, without
limitation, (i) preparing agendas, certificates of no objection,
certifications of counsel, notices of fee applications, motions and
hearings, and hearing binders of documents and pleadings, (ii)
monitoring the docket for filings and coordinating with Kirkland on
pending matters, (iii) preparing and maintaining critical dates
memoranda to monitor pending applications, motions, hearing dates,
and other matters and the deadlines associated therewith, and (iv)
handling inquiries from creditors, contract counterparties and
counsel to parties-in-interest regarding pending matters and the
general status of these chapter 11 cases and coordinating with
Kirkland on any necessary responses;
e) interact and communicate with the Court's chambers and the
Court's Clerk's Office;
f) assist the Debtors and Kirkland in preparing, reviewing,
revising, filing and prosecuting pleadings related to contested
matters, executory contracts and unexpired leases, asset sales,
plan and disclosure statement issues and claims administration and
resolving objections and other matters relating thereto, to the
extent requested by the Debtors or Kirkland and not duplicative of
services being provided by Kirkland; and
g) perform all other services assigned by the Debtors, in
consultation with Kirkland, as applicable, to Kutak Rock as
co-counsel to the Debtors, and to the extent Kutak Rock determines
that such services fall outside of the scope of services
historically or generally performed by the firm as co-counsel in a
bankruptcy proceeding, Kutak Rock will file a supplemental
declaration pursuant to Bankruptcy Rule 2014 and give parties in
interest opportunity to object.
In the 90 days prior to the Petition Date, the Debtors made classic
retainer payments to the Firm totaling $65,000 in the aggregate.
The firm's hourly rates are:
Attorneys
Michael A. Condyles, Partner $590
Peter J. Barrett, Partner $540
Jeremy S. Williams, Partner $450
Brian H. Richardson, Associate $330
Paralegals
Lynda Wood $190
Amanda Nugent $150
Kutak Rock is a "disinterested person," as that phrase is defined
in section 101(14) of the Bankruptcy Code, as required by section
327(a) of the Bankruptcy Code, and does not hold or represent any
interest adverse to the Debtors' estates, according to court
filings.
The firm can be reached through:
Michael A. Condyles, Esq.
Peter J. Barrett, Esq.
Jeremy S. Williams, Esq.
Brian H. Richardson, Esq.
KUTAK ROCK LLP
901 East Byrd Street, Suite 1000
Richmond, VA 23219-4071
Tel: (804) 644-1700
Fax: (804) 783-6192
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.
PINNACLE MULTI-ACQUISITION: Hires Crane Simon as Bankruptcy Counsel
-------------------------------------------------------------------
Pinnacle Multi-Acquisition I LLC seeks authority from the US
Bankruptcy Court for the Northern District of Illinois to hire the
law firm of Crane, Simon, Clar & Dan as its bankruptcy counsel,
retroactive to Feb. 28, 2020.
Services Crane Simon will render are:
a. prepare necessary applications, motions, answers, orders,
adversary proceedings, reports and other legal papers for
presentation to this Court;
b. provide the Debtor advice with respect to its rights and
duties involving its property as well as its reorganization
efforts;
c. appear in court and to litigate any issues, when necessary;
and
d. perform any and all other legal services that may be
required from time to time in the ordinary course of the Debtor's
business during the administration of this bankruptcy case.
The firm will be paid at these hourly rates:
Eugene Crane $520
Arthur Simon $520
Scott Clar $520
Karen Goodman $520
Jeffrey Dan $480
John Redfield $420
Crane Simon will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John H. Redfield, Esq., partner of Crane Simon Clar and Dan,
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.
Crane Simon can be reached at:
John H. Redfield, Esq.
CRANE SIMON CLAR AND DAN
135 S. LaSalle Street, Suite 3705
Chicago, IL 60603
Tel: (312) 641-6777
About Pinnacle Multi-Acquisition I LLC
Pinnacle Multi-Acquisition I LLC sought Chapter 11 protection
(Bankr. N.D. Ill. Case No. 20-03572) on Feb. 7, 2020, estimating
less than $1 million in both assets and liabilities. CRANE, SIMON,
CLAR & DAN, led by John H. Redfield, is the Debtor's counsel.
POPULUS FINANCIAL: S&P Alters Outlook to Negative, Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings said it revised its outlook on Populus Financial
Group Inc. to negative from stable. At the same time, S&P affirmed
the 'B' issuer credit rating on Populus.
S&P also affirmed its 'B' issue rating on Populus' $315 million in
senior secured notes due 2022. The recovery rating on the notes
remains '3', indicating its expectation for a meaningful recovery
(55%) in the event of a default.
Populus' EBITDA was lower than S&P's expectations for 2019 as a
result of higher-than-expected expenses, which squeezed the
company's margins (26% in 2019 versus 33% in 2018). On S&P's
adjusted basis, leverage was 3.4x as of year-end (up from 2.7x as
of year-end 2018), which was close to its downside threshold for
the rating of 3.5x. Additionally, interest coverage deteriorated to
2.5x as of year-end, another downside threshold it previously
cited.
On the company's debtholder call, the company guided to lower
EBITDA in 2020 (specifically $10 million to $12 million lower than
2019) which will pressure key metrics further. The trajectory for
EBITDA in 2021 remains unclear, although even modest improvement
from weaker 2020 levels could still result in leverage at or above
3.5x and interest coverage below 2.5x.
The negative outlook reflects S&P's expectation for EBITDA to
decline into 2020, potentially leading leverage to be sustained
above 3.5x and interest coverage to be sustained below 2.5x--S&P's
triggers for a downgrade.
"We could lower the ratings if we believe that leverage will be
sustained above 3.5x or interest coverage below 2.5x. We could also
lower the ratings if new, unanticipated regulations pose challenges
to Populus' business model within its markets of operation," S&P
said.
"A revision of the outlook back to stable would likely result from
leverage and interest coverage both returning closer to 3x on a
sustained basis. An upgrade is unlikely over the next 12 months,"
the rating agency said.
PUGNACIOUS ENDEAVORS: S&P Places 'B' ICR on CreditWatch Negative
----------------------------------------------------------------
S&P Global Ratings placed all its ratings, including its 'B' issuer
credit rating on Pugnacious Endeavors Inc., on CreditWatch with
negative implications.
The CreditWatch placement reflects the company's substantial
exposure to canceled or postponed live events due to the ongoing
COVID-19 pandemic. Specifically, the company's business model
depends on robust demand for sporting, music, and theater events
such that consumers continue to use its secondary ticketing
platform to gain access to these live events. Cancelation of an
event would result in zero-sum lost revenue to the company while
postponed events could result in less-than-expected demand for a
particular event in the future. Ultimately, the company's revenue
is driven by the combined price and volume of tickets sold through
its platform (i.e. gross ticket value).
The CreditWatch placement reflects the company's direct exposure to
live events (sports, music, theater, etc.) that are currently being
affected by the COVID-19 pandemic. In resolving the CreditWatch,
S&P will determine to what extent COVID-19 affects the company's
revenue growth, expected leverage, cash flow generation, and
liquidity.
"We could lower the rating by one notch to 'B-' if we believed that
Pugnacious would not be able to successfully manage its cost
structure in light of COVID-19's adverse impacts on the live events
industry, inhibiting the company's ability to sustain FOCF to debt
above 5%. We could lower the rating more than one notch if we
believed there were liquidity concerns or if we viewed the capital
structure as unsustainable," S&P said.
"We could affirm the 'B' rating and assign a stable outlook if we
believed the company would be able to manage revenue volatility and
optimize its cost structure in response to COVID-19's impact on the
secondary ticketing industry. An affirmation would likely include a
short duration of the COVID-19 pandemic, successful live event
rescheduling, and optimal cost management by Pugnacious such that
it could lower leverage to the high-5x area by 2021," the rating
agency said.
RIOT BLOCKCHAIN: Delays Filing of 2019 Annual Report
----------------------------------------------------
Riot Blockchain, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its Annual
Report on Form 10-K for the year ended Dec. 31, 2019.
Riot Blockchain has determined that it is unable to file with the
SEC the Company's Annual Report within the prescribed time period
without unreasonable effort or expense. The Company said it
requires additional time to ensure the accuracy of its 2019
financial information, and to complete the required discussion and
analysis of the Registrant's business, due to the current economic
environment, including circumstances related to the novel
coronavirus (COVID-19) global outbreak. The resulting delays have
rendered timely filing of the Form 10-K impracticable without undue
hardship and expense to the Registrant. The Registrant undertakes
the responsibility to file such report no later than 15 days after
its original prescribed due date.
About Riot Blockchain
Headquartered in Castle Rock, Colorado, Riot Blockchain --
http://www.RiotBlockchain.com/-- is focused on building,
operating, and supporting blockchain technologies. Its primary
operations consist of cryptocurrency mining, targeted development
of a cryptocurrency exchange, and the identification and support of
innovations within the sector.
Riot Blockchain reported a net loss of $60.21 million in 2018
following a net loss of $19.97 million in 2017. As of Sept. 30,
2019, the Company had $32.98 million in total assets, $4.79 million
in total liabilities, and $28.19 million in total stockholders'
equity.
Marcum LLP, in New York, the Company's auditor since 2018, issued a
"going concern" qualification in its report dated April 2, 2019, on
the Company's consolidated financial statements for the year ended
Dec. 31, 2018, citing that the Company has a significant working
capital deficiency, has incurred significant losses, and needs to
raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
RR DONNELLEY: Moody's Affirms B3 CFR & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed R.R. Donnelley & Sons Company's
B2 corporate family rating, B2-PD probability of default rating, B1
rating on its senior secured term loan B, and B3 ratings on its
senior unsecured notes and debentures, and changed the outlook to
negative from stable. The speculative grade liquidity rating was
maintained at SGL-3.
"The outlook was changed to negative to reflect expectations for
continuing commercial printing industry pressures on the company's
revenue and EBITDA in the next 12 to 18 months", said Peter Adu,
Moody's Vice President and Senior Analyst.
Ratings Affirmed:
Corporate Family Rating, Affirmed at B2
Probability of Default Rating, Affirmed at B2-PD
Senior Secured Term Loan B, Affirmed B1 (LGD3)
Senior Unsecured Notes and Debentures, Affirmed at B3 (LGD5)
Rating Unchanged:
Speculative Grade Liquidity Rating, SGL-3
Outlook Actions:
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
RRD's B2 CFR is constrained by: (1) high business risk from ongoing
pressures on profitability as replacement revenues from other
services (packaging, labels, direct marketing, digital print,
statements etc.) have not expanded sufficiently to compensate for
the decline in commercial print; (2) execution risks as it
transforms itself from a commercial printer focused on manuals,
publications, brochures, business cards etc. to higher margin
businesses; and (3) leverage (adjusted Debt/EBITDA) that is
expected to be sustained above 5x in the next 12 to 18 months (4.9x
for 2019), a level that is high given ongoing secular pressures.
The rating benefits from: (1) good market position, diversity and
scale; (2) prudent financial policy, focused on continued debt
repayment (3) flexible cost structure, which allows for continued
cost reduction; (4) adequate liquidity and lack of refinancing risk
until 2022.
RRD's environmental risk is low. The company has exposure to
hazardous substances and although there have been no material
environmental liabilities in the past few years, it could face
material costs related to remediation of contaminated manufacturing
facilities should that occur.
RRD's social risk is elevated. Technological advancement is
impacting the way customers consume information. RRD is adapting
its business model in response to the pressures in the printing
industry. The company's evolution towards digital products and
services exposes it to increasing data security and customer
privacy risk. Ongoing pressure in the print industry will lead to a
continuing focus on cost reduction for RRD.
RRD's governance risk is moderate. Although the company does not
have a publicly stated leverage target, its financial policy has
been prudent, characterized by management's attention to debt
repayment rather than shareholder-friendly actions. RRD does not
make share repurchases and dividend payments are minimal.
RRD has adequate liquidity (SGL-3). Sources approximate $825
million while uses in the form of mandatory debt repayment in the
next 4 quarters total about $70 million. Liquidity is supported by
$191 million of cash at December 31, 2019 and about $630 million of
availability under its $800 million revolving facility that matures
in September 2022. Free cash flow is expected to be about breakeven
in the next 12 months. Mandatory debt repayments in the next 12
months include about $6 million of term loan amortization and $66
million of senior unsecured notes. RRD is subject to a fixed
interest charge coverage covenant and cushion is expected to exceed
30% through the next four quarters. The company has limited ability
to generate liquidity from asset sales.
The negative outlook reflects the company's exposure to revenue and
EBITDA pressures due to excess capacity in the commercial printing
industry and as advertising dollars shift to digital and social
media platforms, together with challenges of reducing costs in line
with revenue declines in the next 12 to 18 month.
The rating could be upgraded if the company generates sustainable
positive organic growth in revenue and EBITDA and sustains leverage
below 4x (4.9x for 2019). The rating could be downgraded if
business fundamentals deteriorate due to digital substitution as
well as the impact of the coronavirus outbreak, evidenced by
accelerating revenue and EBITDA declines or if leverage is
sustained above 5x (4.9x for 2019). Weakening liquidity, possibly
due to negative free cash flow generation on a consistent basis
could also cause a downgrade.
The principal methodology used in these ratings was Media Industry
published in June 2017.
SEAWORLD PARKS: S&P Cuts ICR to B-; Ratings Put on Watch Developing
-------------------------------------------------------------------
S&P Global Ratings lowered its ratings on SeaWorld Parks &
Entertainment Inc. by two notches, including the issuer credit
rating to 'B-' from 'B+', and placed all ratings on Credit Watch
with developing implications.
S&P also lowered Cedar Fair L.P.'s ratings by two notches,
including the issuer credit rating to 'B+' from 'BB', and placed
them on CreditWatch with developing implications.
The rating agency also lowered Six Flags Entertainment Corp.'s
ratings two notches, including the issuer credit rating to 'B+'
from 'BB', and placed them on CreditWatch with negative
implications.
SeaWorld Parks & Entertainment Inc. Ratings Lowered Two Notches;
Issuer Rating 'B-'; On CreditWatch Developing.
S&P lowered SeaWorld's ratings to reflect the possibility the
company may have less-than-adequate liquidity over the next several
months if one or more of its parks close or attendance is depressed
for a period. As of December 2019, SeaWorld had $140 million
available under its previous $210 million revolving credit facility
commitment. The company upsized its revolver commitment to $332.5
million on March 11, 2020. Subsequent to the end of 2019 and as of
the 10-K filing on Feb. 27, 2020, SeaWorld had borrowed another $45
million for working capital purposes. As a result, S&P estimates
the company had approximately $237.5 million in pro forma
availability under its upsized $332.5 million commitment as of Feb.
27, 2020. However, the company probably increased its borrowings
since then, which is typical for this time of year. The company had
cash of $40 million aas of December 2019 and no material maturities
over the next several years. S&P believes the upsized commitment
was a prudent liquidity action by SeaWorld, and is presumably a
vote of confidence from the company's lenders. SeaWorld also
performed very well in 2019, significantly increasing attendance,
revenue, and EBITDA and reducing S&P's measure of lease adjusted
leverage to around 4x, which compares to the rating agency's
downgrade threshold of 5x on the company at the 'B+' rating level.
In addition, in the event one or more of SeaWorld's parks are
closed, or if attendance is depressed for a period of time, S&P
suspects the company can take short-term cost-cutting actions to
reduce its cash usage. However, given the cost of care for large
marine animals, S&P believes it may be difficult for SeaWorld to
make large enough cuts to avoid using substantial cash if the parks
close for a prolonged period. As a result, and given the current
seasonal use of cash in the business, S&P believes SeaWorld may
face thinning liquidity sources in the form of revolver
availability for as long as its operations are affected, unless it
can source alternative forms of liquidity. While the company may
obtain support from sponsors in such a scenario, S&P has currently
not factored this into its ratings.
"We placed the company's ratings on CreditWatch with developing
implications, indicating that we could lower ratings further if we
do not believe the company has sufficient liquidity to finance
anticipated negative cash flow for the duration of assumed park
closures. If the virus is contained, parks reopen, we believe
attendance can return to normal levels, liquidity is adequate, and
the negative leverage impact is moderate, we could raise ratings.
Over the next few weeks, we plan to review anticipated park
closures, potential cash usage, incremental revolver borrowings,
covenants, and the possibility for additional liquidity support
actions on the part of SeaWorld," S&P said.
Cedar Fair L.P. Ratings Lowered Two Notches; Issuer Rating 'B+'; On
CreditWatch Developing.
S&P lowered Cedar Fair's ratings to reflect the possibility the
company may have significantly higher leverage through 2021 than
the rating agency's previous base case. The downside risk of the
CreditWatch developing listing reflects the possibility of
less-than-adequate liquidity at some point this year if one or more
of its parks remain closed, or attendance is depressed, for a
prolonged period. Cedar Fair currently has one of its theme parks
open, Knott's Berry Farms, and Schlitterbahn water parks opened
this week. The majority of parks were set to open starting in May.
Cedar Fair had no outstanding borrowings and $260 million available
under its $275 million revolving credit facility commitment as of
December 2019. The maximum outstanding balances under the revolver
was $150 million in 2019. S&P believes the company is well below
this level of borrowings now because the company had cash of $182
million as of December 2019. Cedar Fair also performed very well in
2019, significantly increasing attendance, revenue and EBITDA and
reducing S&P's measure of the company's lease adjusted leverage to
around 4x, which was still weak compared to the rating agency's 4x
downgrade threshold on the company at the previous 'BB' rating. S&P
no longer believes the company can reduce leverage to below 4x this
year. Cedar Fair's heightened leverage was partly driven by the
acquisition of certain assets of Schlitterbahn Waterparks and
Resorts for $261 million, the purchase land beneath California's
Great America park for $150 million, and increased capital spending
in 2019. In addition, the company's large unitholder distributions
limit its ability to repay debt balances and reduce liquidity that
otherwise could help mitigate prolonged park closures. As a result,
the company is reliant on EBITDA growth to reduce anticipated weak
leverage. This exposes the company to event risk or an unexpected
downturn in the economy over the near term.
In the event one or more of Cedar Fair's parks are closed, or if
attendance is depressed for a period, S&P suspects the company can
take short-term cost-cutting actions to reduce its cash usage.
However, S&P believes it may be difficult for Cedar Fair to make
large enough cuts to avoid using cash. S&P has also not factored in
any potential for a reduction in limited partner distributions. As
a result, the company may face thinning liquidity sources in the
form of revolver availability for as long as its operations are
affected, unless it can source alternative forms of liquidity. S&P
placed the ratings on CreditWatch with developing implications to
reflect that it could lower ratings further if it does not believe
the company has sufficient liquidity to finance anticipated
negative cash flow for the duration of assumed park closures. If
the virus is contained, parks reopen, S&P believes attendance can
return to normal levels, liquidity is adequate, and the negative
leverage impact is moderate, it could raise ratings. Over the next
few weeks, S&P plans to review anticipated park closures, potential
cash usage, incremental revolver borrowings, covenants, and the
possibility for additional liquidity support actions on the part of
Cedar Fair.
Six Flags Entertainment Corp. Rating Lowered Two Notches; Issuer
Rating 'B+'; On CreditWatch Negative.
S&P lowered the issuer credit rating on Six Flags' two notches to
'B+' from 'BB' because the rating agency believes it is highly
unlikely the company can reduce its leverage in 2020 to under the
rating agency's 5x downgrade threshold at a 'BB-' rating. The
previous 'BB' rating was on CreditWatch with negative implications
since Feb. 21, 2020, and reflected S&P's previous downwardly
revised 2020 revenue and EBITDA forecast for Six Flags. The company
had lowered its 2020 adjusted EBITDA guidance to $435 million-$465
million as a result of lower revenue from international development
agreements, and higher assumed wage and park investment costs. Six
Flags cited a recent reduction in attendance, slow season-pass
sales, elevated park maintenance, and higher labor expenses for
hurting operating performance. In addition, the company said higher
wage costs led the parks to reduce marketing and other spending in
2019, which may have diminished the guest experience and revenues.
The company plans to invest in operational improvements and
marketing to increase single-day and season-pass visitation, as
well as improve the overall guest experience. Six Flags also
reduced its dividend by about $200 million annually starting with
the first quarter 2020 declaration, which will preserve liquidity
and increase discretionary cash flow. However, the dividend
reduction was also a signal that business risks are likely
heightened while the company pursues its investments. S&P stated on
Feb. 21 that the lower anticipated EBITDA and the dividend
reduction could result in its measure of lease-adjusted leverage
increasing to the mid- to high-4x range in 2020. S&P suspects that
leverage will be higher than this estimate for this year as a
result of lower attendance and potential park closures driven by
COVID-19.
The 'B+' rating is also on CreditWatch with negative implications
given the very high level of uncertainty regarding the severity and
longevity of the current virus outbreak and whether several or all
theme parks at Six Flags will remain closed, or experience a
reduction in attendance for a prolonged period. Six Flags, like all
regional theme parks, is currently experiencing its seasonal high
point of cash usage and low seasonal liquidity. The CreditWatch
listing also reflects the possibility the company may have
less-than-adequate liquidity at some point this year if one or more
of its parks close or attendance is depressed for a long time. Six
Flags had $329 million available under its $350 million revolving
credit facility commitment as of December 2019. The company had
cash of $174 million as of December 2019. S&P suspects Six Flags
has drawn under the revolver and reduced its availability since
Dec. 31, 2019, which is typical for the company this time of year.
Over the next few weeks, S&P plans to review attendance trends,
potential cash usage and incremental revolver borrowings,
covenants, and the possibility for additional liquidity support
actions on the part of Six Flags. However, given its expectation of
high leverage in 2020, which could potentially rise over 5x, S&P
does not foresee an upgrade even in a situation where liquidity
remains adequate and attendance trends improve.
CREDITWATCH
S&P plans to resolve the CreditWatch listings once it can assess
the potential future impact of the outbreak on revenue, EBITDA, and
liquidity for each company. The rating agency may resolve the
CreditWatch listings on SeaWorld, Cedar Fair, and Six Flags,
separately or at the same time, depending upon events.
SEVEN STARS: Asks for July 31 Extension for Plan & Disclosures
--------------------------------------------------------------
Seven Stars on the Hudson Corp. ask the Bankruptcy to extend the
March 31, 2020 deadline to file its plan and disclosure statement
to July 31, 2020.
As the plan deadline approaches, the Debtor has:
a. Demonstrated its ability to reach agreed cash collateral
orders with Wells Fargo, and to comply with the same continuously
since the Petition Date;
b. Fully complied with its disclosure and payment obligations to
the UST; and
c. Now resolved (subject to final documentation and the approval
of this Court) all of its issues with Rockin' Jump.
As a result, the Debtor has effectively now reduced the
contingencies in this case to just one -- the successful resolution
(either by litigation or settlement) of its dispute with its
landlord.
In this context, within the extension requested, the Debtor
believes it can more likely than not propose a plan that this Court
will confirm within a reasonable time.
A full-text copy of the Motion dated March 4, 2020, is available
at https://tinyurl.com/r2bxro3 from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Sonya S. Slott, Esq.
The Salkin Law Firm
PO Box 15580
Plantation, FL 33318
Tel: 954-423-4469
E-mail: sonya@msbankrupt.com
About Seven Stars on the Hudson Corp.
Seven Stars on the Hudson Corp. --
https://www.rockinjump.com/ftlauderdale/ -- is a trampoline
parkoperator based in Fort Lauderdale, Florida.
Seven Stars on the Hudson sought protection under Chapter 11 of
the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-17544) on June 5,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $500,000 and liabilities of between $1 million
and $10 million. The case is assigned to Judge Raymond B. Ray.
The Debtor is represented by The Salkin Law Firm, P.A.
SIMKAR LLC: Trustee Plan for Neo Lights Has April 13 Hearing
------------------------------------------------------------
Sandeep Gupta, the chapter 11 Trustee of the estate of Neo Lights
Holdings, Inc., filed a Modified Chapter 11 Plan of Liquidation and
a Disclosure Statement. The Debtor is an affiliate of Simkar LLC
and their chapter 11 cases are jointly administered.
The Bankruptcy Court has reviewed and conditionally approved the
Disclosure Statement and scheduled the combined hearing for April
13, 2020 at 10:00 a.m. (prevailing Eastern Time).
The Trustee, who also serves as the Court-appointed Chapter 11
trustee of Simkar has, in such capacity, investigated the transfer
of the Property from Simkar to the Debtor and has determined that
an action on behalf of the Simkar estate to void the transfer is
unwarranted.
The Trustee, in consultation with his advisors, entered into that
certain Agreement of Purchase and Sale, dated Jan. 6, 2020, between
the Trustee and SBG Real Estate, LLC, which contemplates a sale of
the Property to the Buyer for a purchase price of $8,500,000.
Under the Purchase Agreement, the Trustee may obtain the consent of
the Bankruptcy Court to the Sale pursuant to Section 363 of the
Code or through a confirmed plan of liquidation. The Purchase
Agreement contemplates a closing of the Sale following satisfaction
of closing conditions which include, inter alia, Bankruptcy Court
approval of the Sale. The Buyer has up to 60 days to conduct due
diligence with regard to the Property and during that time may
cancel the Purchase Agreement without any penalty. As of the date
hereof, the Buyer is in the process of conducting due diligence.
The Buyer's due diligence period expires on March 6, 2020.
Class 1 Philadelphia Secured Claim ($84,258), Class 2 Allowed DIP
Claim of Capstone ($300,000), Class 3 Allowed Newtex Secured Claim
($5,036,005), Class 4 Allowed MMP Claim ($445,993), and Class 5
Secured Claim of Capstone ($5,700,000) will be paid from the
proceeds of the sale, with the claims to be paid in accordance with
the priorities under the Bankruptcy Code.
Class 7 Allowed Unsecured Claims, which include any allowed
deficiency claims of Capstone, will receive no recovery inasmuch as
there will be no assets remaining from which to pay allowed Class 7
claims. Allowed unsecured claims are impaired under the Plan.
Because they are receiving no distributions under the Plan, holders
of Class 7 Claims are deemed to have rejected the Plan.
A full-text copy of the Disclosure Statement dated March 4, 2020,
is available at https://tinyurl.com/qsrcrmg from PacerMonitor.com
at no charge.
About Simkar LLC
and Neo Lights
Based in Tarrytown, New York, Simkar LLC -- http://www.simkar.com/
-- is an internationally known designer, developer, and
manufacturer of lighting products. Since 1952, the company has
provided a diverse selection of high-quality LED lighting fixtures,
along with other technologies to contractors, specifiers, and other
strategic partners. It designs and manufactures lighting fixtures
at its 283,500-square-foot manufacturing facility in Philadelphia,
Pa.
Neo Lights Holdings, Inc. -- http://neolightsholdings.com/-- is a
renewable energy technology company and global developer and
manufacturer of LED technologies, smart sensors and networking
systems, with innovative approaches to off-grid and on grid
emergency management networked solutions for commercial, domestic,
international, and government markets.
Simkar LLC filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y.
Case No. 19-22576) on March 6, 2019. In the petition signed by
Alfred Heyer, Neo Lights Holdings Inc., president of managing
member, the Debtor estimated assets and estimated liabilities of
$10 million to $50 million. The Debtor's counsel is H. Bruce
Bronson, Jr., Esq., in Harrison, N.Y. The official committee of
unsecured creditors retained Golenbock Eiseman Assor Bell & Peskoe
LLP as its counsel.
Neo Lights Holdings sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 19-22589) on March 8, 2019, estimating $1 million to $50
million in assets and liabilities. Anne J. Penachio, Esq., at
PENACHIO MALARA, LLP, is the Debtor's counsel.
Sandeep Gupta is Chapter 11 trustee for the Debtors. The Trustee's
counsel:
Christopher A. Lynch
REED SMITH LLP
599 Lexington Avenue
New York, NY 10022-7650
Telephone: (212) 521-5400
Facsimile: (212) 521-5450
E-mail:clynch@reedsmith.com
- and -
Claudia Springer
Three Logan Square
1717 Arch Street, Suite 3100
Philadelphia, PA 19103
Telephone: (215) 851-8100
Facsimile: (215) 851-1420
E-mail: cspringer@reedsmith.com
SPIRIT AIRLINES: S&P Cuts ICR to 'B+'; Ratings on Watch Negative
----------------------------------------------------------------
S&P Global Ratings downgraded its issuer credit rating on Spirit
Airlines Inc. to 'B+' from 'BB-'. At the same time, S&P lowered its
issue-level ratings on each of the company's enhanced equipment
trust certificates (EETCs) by one notch and placed all of its
ratings on Spirit on CreditWatch with negative implications.
S&P believes Spirit's capacity reductions and low-cost structure
will be insufficient to completely offset the decline in its travel
demand. Spirit announced that it has reduced its April capacity
growth and is assessing its May schedule. The company has also
lowered its fares on some routes to maintain its load factor. S&P
also expects the company to benefit from declining fuel prices and
its already low-cost structure relative to those of other industry
participants. However, S&P does not believe that Spirit's reduced
capacity and cost-savings initiatives will be adequate to offset
the sharp reduction in its traffic. Therefore, the rating agency
now expects the company's funds from operations (FFO) to debt to
decline to the mid-teens percent area in 2020 from 19.4% in 2019.
This compares with S&P's previous expectation for FFO to debt in
the low-20% area for 2020.
CreditWatch
S&P expects to resolve the CreditWatch placement when it has more
information regarding the effect of the coronavirus on Spirit's
credit metrics and liquidity. S&P would likely lower its rating on
Spirit if the rating agency expects the company's FFO to debt to
average below 12% or if the company's liquidity position
deteriorates.
STRUCTURED CABLING: Seeks to Hire Van Horn Law as Counsel
---------------------------------------------------------
Structured Cabling Solutions, Inc., seeks authority from the United
States Bankruptcy Court for the Southern District of Florida to
hire Chad T. Van Horn, Esq. and Van Horn Law Group Inc. as its
attorneys.
Structured Cabling requires Van Horn Law to:
a. give advice to the Debtor with respect to its powers and
duties as a debtor in possession and the continued management of
its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d. protect the interest of the debtor in all matters pending
before the court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a plan.
Van Horn Law will be paid at these hourly rates:
Chad Van Horn, Esq. $450
John Schank, Esq. $350
Associates $350
Jay Molluso $300
Law Clerks $175
Paralegals $175
Van Horn Law will be paid a retainer in the amount of $11,717.
Van Horn Law will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Chad T. Van Horn, the firm's founding partner, 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.
Van Horn Law can be reached at:
Chad T. Van Horn, Esq.
VAN HORN LAW GROUP, INC.
330 N. Andrews Ave., Suite 450
Fort Lauderdale, FL 33301
Tel: (954) 765-3166
E-mail: Chad@cvhlawgroup.com
About Structured Cabling Solutions, Inc.
Structured Cabling Solutions, Inc. is a telecommunications
contractor in Miami Gardens, Florida.
Structured Cabling Solutions, Inc.filed a voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
20-12551) on Feb. 26, 2020. In the petition signed by Syed A. Shah,
president, the Debtor estimated $944,176 in assets and $3,273,790
in liabilities.
The case is assigned to Judge Robert A. Mark.
Chad Van Horn, Esq. at Van Horn Law Group Inc., represents the
Debtor as counsel.
SUNYEAH GROUP: Seeks to Hire Sequoia Group as Accountant
--------------------------------------------------------
Sunyeah Group Corporation seeks approval from the U.S. Bankruptcy
Court for the Central District of California to hire Sequoia Group
CPAs, a Professional Corp. dba ZD Consulting Group as its
accountant, effective as of Feb. 1, 2020.
Sequoia Group will prepare and file the Debtor's federal and state
income tax returns for the period of June 1, 2018 to May 31, 2019,
and personal property 571L business property statement.
Sequoia Group has agreed to charge a flat fee of $2,350 to prepare
the Tax Returns.
Lily Yan, a partner of Sequoia Group, will be the professional
primarily responsible for providing the Debtor with the tax
services.
Ms. Yan assures the court that the firm is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Lily Yan, CPA
Sequoia Group CPAs
33 Valley Blvd #205
Alhambra, CA 91801
Phone: +1 626-281-6651
About Sunyeah Group Corporation
Sunyeah Group Corporation, a glass manufacturer in Ontario, Calif.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Cal. Case No. 19-21185) on Dec. 30, 2019. The petition was
signed by Xiaodong Shi, chief executive officer. At the time of the
filing, the Debtor estimated $1 million to $10 million in both
assets and liabilities. Judge Mark D. Houle oversees the case.
Levene, Neale, Bender, Yoo & Brill L.L.P. is the Debtor's
bankruptcy counsel.
SWEET WOLVERINE: Seeks to Hire Stark & Hammack as Special Counsel
-----------------------------------------------------------------
Sweet Wolverine Management, LLC and Sweet Wolverine Holdings, LLC
seeks approval from the U.S. Bankruptcy Court for the District of
Arizona to hire a special counsel.
Sweet Wolverine wishes to employ Richard A. Stark, of the law firm
of Stark & Hammack, as special counsel nunc pro tunc to Oct. 25,
2019, to provide legal services in connection with the settlement
negotiated between Sweet Wolverine Management, LLC and Sheree
Everett, DVM.
The current hourly rate for Mr. Stark is $350 per hour.
Mr. Stark assures the court that he does not hold or represent any
interest adverse to the estate and is a disinterested person
within the meaning of 11 U.S.C. Sec. 101(14).
The counsel can be reached through:
Richard A. Stark, Esq.
Stark & Hammack
100 East Main St. Suite M
Medford, OR 97501
Phone: +1 541-773-2213
About Sweet Wolverine
Sweet Wolverine Management LLC and Sweet Wolverine Holdings LLC
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Ariz. Lead Case No. 19-13670) on Oct. 25, 2019.
At the time of the filing, Sweet Wolverine Management disclosed
assets of between $100,001 to $500,000 and liabilities of the same
range. Meanwhile, Sweet Wolverine Holdings disclosed assets of
between $500,001 and $1 million and liabilities of the same range.
The Debtors tapped John C. Smith, Esq., at Smith and Smith PLLC.
No official committee of unsecured creditors has been appointed in
the Debtors' cases.
TAYLOR MORRISON: S&P Affirms 'BB' ICR; Ratings Off Watch Negative
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issuer credit rating and 'BB'
issue-level rating on Scottsdale-based Taylor Morrison Home Corp.
(TMHC) and removed them from CreditWatch with negative
implications, where S&P placed them following the announced merger
in November 2019.
TMHC significantly increased its size through the recently
completed acquisition of William Lyon Homes (WLH) in February. The
additional debt assumed from WLH in the purchase will pressure
leverage metrics in 2020, before improvement toward previous levels
next year.
Debt assumed in the recently completed acquisition of WLH pushes
the combined entity's leverage ratios sharply above S&P's downgrade
threshold of 4x. Although S&P expects cost synergies will help
steadily improve the company's overall credit metrics, its 2021
forecasts suggest debt to EBITDA only narrowly edges below the 4x
threshold.
The negative outlook on TMHC reflects S&P's view that debt to
EBITDA will remain above 4x well into 2021.
"We think EBITDA margin-based improvements of 100 basis points
above our 2020 estimates are the most direct path to a stable
outlook. This would evidence a smooth integration of the WLH
portfolio and should push debt to EBITDA below 4x," S&P said.
"We could lower the rating if debt to EBITDA looks like it will
remain above 4x for more than a year or two because planned
synergies from recent mergers fail to materialize or on diminished
demand across its now much larger base of operations. We may also
consider a downgrade if the company pursues additional large
acquisitions, keeping leverage higher than 4x EBITDA or debt to
capital above 45% on a sustained basis," S&P said.
THEE TREE HOUSE: Seeks to Hire McIntyre Thanasides as Counsel
-------------------------------------------------------------
Thee Tree House, LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of Florida to employ McIntyre Thanasides
Bringgold Elliott Grimaldi Guito & Matthews, P.A., as counsel to
the Debtor.
Thee Tree House requires McIntyre Thanasides to:
a. render legal advice with respect to Debtor's powers and
duties as debtor-in-possession, the continued operation of its
business and the management of its property;
b. prepare on behalf of Debtor any necessary petitions,
motions, applications, answers, orders, reports, and other legal
papers;
c. appear before the Bankruptcy Court and the U.S. Trustee to
represent and protect the interests of the Debtor;
d. take all necessary legal steps to confirm a proper plan of
reorganization;
e. represent the Debtor in all adversary suits, contested
matters and matters involving administration of the bankruptcy
case;
f. represent the Debtor in any negotiations with potential
financing sources and prepare contracts, security instruments, or
other documents necessary to obtain financing;
g. take any necessary action to recover any voidable transfers
and to avoid any liens against Debtor's property obtained within
ninety (90) days of the filing of the petition in Chapter 11 and at
a time when Debtor was insolvent;
h. enjoin or stay any and all suits against the Debtor
affecting the debtor-in-possession's ability to continue in
business or affecting property in which the Debtor has equity; and
i. perform all other legal services that may be necessary for
the proper preservation and administration of the Chapter 11 case.
McIntyre Thanasides will be paid based upon its normal and usual
hourly billing rates.
McIntyre Thanasides will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Richard J. McIntyre, Esq., a partner at the firm, 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.
McIntyre Thanasides can be reached at:
Richard J. McIntyre, Esq.
MCINTYRE THANASIDES BRINGGOLD
ELLIOTT GRIMALDI GUITO & MATTHEWS, P.A.
500 E. Kennedy Blvd., Suite 200
Tampa, FL 33602
Tel: (813) 223-0000
Fax: (813) 899-6069
About Thee Tree House
Thee Tree House, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-11768) on Dec. 13,
2019. At the time of the filing, the Debtor had estimated assets
of between $100,001 and $500,000 and liabilities of between
$500,001 and $1 million. Judge Caryl E. Delano oversees the case.
The Debtor is represented by McIntyre Thanasides Bringgold Elliott
Grimaldi Guito & Matthews, P.A.
TREEHOUSE FOODS: S&P Affirms 'BB-' ICR, Outlook Remains Negative
----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
U.S.-based TreeHouse Foods Inc., reflecting its expectations that
operating performance should improve in 2020 as the company
completes its restructuring programs and restores organic revenue
growth.
S&P affirmed its 'BB+' issue-level ratings on the company's senior
secured credit facilities. The recovery ratings remain '1',
indicating S&P's expectations for very (90%-100%) recovery in a
payment default. S&P affirmed its 'BB-' issue-level ratings on the
company's senior unsecured notes. The recovery ratings remain '4',
indicating S&P's expectations for average (30%-50%) recovery in a
payment default.
The affirmation reflects S&P's expectation that operating
performance will improve in fiscal 2020 given the near completion
of its TreeHouse 2020 restructuring program, which should lower
debt leverage.
The negative outlook reflects the risk for continued depressed
financial metrics in 2020 if the company cannot stem market share
losses and incurs additional restructuring charges. S&P expects
FOCF of at least $250 million to support additional debt repayment
in 2020.
"We could consider a downgrade if the company's operating
performance deteriorates and it is unable to realize the benefits
of its restructuring initiatives, resulting in debt leverage
remaining above 5x in 2020. We estimate this could occur if
TreeHouse continues to face revenue declines outside of its planned
SKU rationalization program, continues to spend heavily on
restructuring, and EBITDA margins do not improve to at least the
low double-digit percentages," S&P said.
"We could also revise the outlook to stable if the company makes
progress toward reducing leverage to below 5x. This could occur if
the company stabilizes revenues for a year, incurs less than $65
million in restructuring charges in 2020, and pays down about $200
million in debt," S&P said.
TRI-POINT OIL: Enters Ch.11 to Liquidate Biz as Buyer Backs Out
----------------------------------------------------------------
Unable to find a going-concern buyer for the business, Tri-Point
Oil & Gas Production Systems, LLC and three affiliated debtors
sought Chapter 11 protection to pursue a liquidation of their
assets.
The Debtors together form an oil and gas production and processing
equipment company headquartered in Houston, Texas. The Debtors
design and manufacture production equipment for the oil and gas
industry and their services include engineering and design,
installation, start-up, and after-market field maintenance to
provide custom engineered and configured solutions to upstream and
midstream customers. Production equipment is used by producers of
oil and gas for the purpose of promoting the separation of oil,
water and gas for discrete processing and handling. In some cases,
the Debtors provide modular production systems, comprising an
integrated field facility installed between the well and the
pipeline for oil and gas processing applications.
The Debtors also own and operate supply stores located in the
Permian Basin, Mid-Continent, and Rocky Mountain regions.
As of March 13, 2020, the Debtors had approximately 305 full-time
employees. As of the Petition Date, the Debtors intend to provide
WARN Act notice to 290 of these employees, informing them that they
will be terminated 60 days from the date of notification.
Orderly Liquidation
The Debtors filed Chapter 11 cases to conduct an orderly
liquidation of their assets and wind down the remaining operations
of the company. Like many companies in the oilfield services
industry, the ongoing downturn in oil and natural gas prices and
other industry-related challenges have negatively affected the
Debtors' liquidity position through 2019 and the beginning of 2020.
The Debtors retained a consultant to advise on potential liquidity
options on September 18, 2019. In early 2020, the Debtors
determined that there was no out-of-court restructuring or
refinancing option available to it.
On Jan. 16, 2020, the Debtors engaged Porter Hedges LLP to advise
the Debtors regarding their strategic alternatives and subsequently
instructed Porter Hedges to prepare for the filing of the Chapter
11 cases.
On Jan. 24, 2020, the Debtors engaged AlixPartners, LLP as their
restructuring financial advisor.
On Feb. 11, 2020, the Debtors retained Parkman Whaling LLC as their
investment banker to assist with identifying, and marketing to,
parties that would potentially be interested in acquiring some or
all of the Debtors' assets. The Debtors and their fiduciaries also
diligently worked to secure postpetition financing in order to
facilitate a going concern sale of the business.
Parkman Whaling created a data room of due diligence materials,
prepared a confidential information memorandum, contacted numerous
financial and strategic parties, and assisted the Debtors in
responding to diligence requests from these parties. The Debtors
received a draft term sheet from a potential stalking horse bidder
and conducted advanced due diligence with this party until March
13, 2020, when the party informed the Debtors that it was ceasing
diligence and would not become a stalking horse.
Without a commitment from a stalking horse bidder, the Debtors were
unable to secure sufficient postpetition financing to continue
ordinary course operations during an extended postpetition
marketing process. However, the Debtors were able to negotiate for
additional availability under its prepetition revolving facility
with Wells Fargo to conduct an orderly liquidation through these
chapter 11 cases.
The Debtors will (i) complete a limited amount of work in progress,
(ii) continue to collect accounts receivable, and (iii) retain a
liquidator and assist the liquidator with the process of preparing
the Debtors' assets for sale. Concurrent with the liquidation
process, the Debtors intend on seeking confirmation of a plan of
liquidation.
Capital Structure
The Debtors owe $36.9 million for borrowings under a Credit
Agreement with Wells Fargo Bank, National Association, as
administrative agent. The Debtors also owe $3 million on a bridge
loan provided by First Reserve on Feb. 13, 2020. Wells Fargo and
First Reserve have a lien on substantially all of the Debtors'
assets.
In addition, Tri-Point has unsecured debt to its immediate
parent, FR Tri-Point Holdings LLC, in the amount of $11.2 million,
which was used to fund the acquisition of certain assets and for
working capital.
The Debtors estimate that their general unsecured trade debt is
approximately $13,400,000
About Tri-Point Oil
Tri-Point Oil & Gas Production Systems, LLC, and its related
entities -- https://www.tri-pointllc.com/ -- together form an oil
and gas production and processing equipment company headquartered
in Houston, Texas. Their services include engineering and design,
installation, start-up, and after-market field maintenance to
provide custom engineered and configured solutions to upstream and
midstream customers. In addition, the Debtors provide services
including training, on-site service, testing services, and
aftermarket maintenance and repair. The Debtors also own and
operate supply stores, located in the Permian Basin, Mid-Continent,
and Rocky Mountain regions.
On March 16, 2020, Tri-Point Oil & Gas Production Systems, LLC and
three affiliates sought Chapter 11 protection (Bankr. S.D. Tex.
Lead Case No. 20-31777).
In the petition signed by Jeffrey Martini, CEO, Tri-Point Oil was
estimated to have $10 million to $50 million in assets and $50
million to $100 million in liabilities.
The Hon. David R. Jones is the case judge.
The Debtors tapped PORTER HEDGES LLP as counsel; ALIXPARTNERS, LLP
as financial advisor; and BANKRUPTCY MANAGEMENT SOLUTIONS, INC.,
d/b/a STRETTO, as claims agent.
TRIDENT TPI: S&P Alters Outlook to Negative, Affirms 'B-' ICR
-------------------------------------------------------------
S&P Global Ratings revised the outlook on Trident TPI Holdings Inc.
(d/b/a Tekni-Plex) to negative from stable. At the same time, S&P
affirmed its 'B-' issuer credit rating on the company.
In addition, S&P affirmed the 'B-' issue-level rating on the
company's $900 million first-lien term loans, and the 'CCC+' rating
on the company's senior unsecured notes. The respective '3' and '5'
recovery ratings remain unchanged, indicating S&P's expectation of
50%-70% and 10%-30% recovery in the event of payment default.
Tekni-Plex continued to underperform S&P's expectations despite a
relatively favorable economic climate through December 2019. In
S&P's view, continued operational challenges and reduced growth
prospects for the second half of fiscal 2020 and beyond will result
in leverage remaining above 10x for the foreseeable future. On a
consolidated basis, organic revenues were down nearly 6.5% year to
date through December, primarily reflecting volume declines
attributable to a slowdown in Europe within its liner business and
low egg prices within its food segment. Most notably, the company
continues to face operational challenges in its Winston-Salem
plant, which has weighed on profitability. Furthermore, the
company's health care segment's organic revenue has declined as
well. While less significant than the decline in the other
segments, health care has proven to be less resilient than
previously expected.
TUTOR PERINI: S&P Lowers Issuer Credit Rating to 'B'; Outlook Neg.
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Tutor Perini
Corp. to 'B' from 'B+'. The outlook is negative. At the same time,
S&P lowered its issue-level rating on the company's senior
unsecured notes to 'B' and its issue-level rating on the company's
convertible notes to 'CCC+'.
The downgrade takes into account Tutor Perini's weaker than
previously expected operating performance in 2019 and the
spring-forward maturity on the company's revolver. Tutor Perini
took two large charges and incurred losses in its specialty
contractors segment in 2019. In addition, the company has a
spring-forward maturity in Dec. 2020 on its revolver if the
company's $200 million convertible notes due 2021 remain
outstanding. As of Dec. 31, 2019, the company had a $114 million
outstanding revolver balance. Although the company expects to repay
its convertible notes and avoid the spring-forward maturity on the
revolver, in S&P's view the company's cash flow generation has been
volatile in the past.
The negative outlook reflects the volatility in Tutor Perini's
recent results and the upcoming maturity on its revolver within the
next 12 months if its convertible notes remain outstanding.
"We could lower our rating on Tutor Perini within the next 12
months if its operating performance does not improve and we come to
expect that its adjusted debt-to-EBITDA metric will be above 5x or
its FOCF-to-adjusted-debt ratio below 5%. We could also lower the
rating if the company fails to address the upcoming springing
maturity on its revolver in a timely manner," S&P said.
"We could revise the outlook to stable on Tutor Perini over the
next 12 months if the company's operating performance improves due
to strong project execution, leading it to maintain an adjusted
debt-to-EBITDA metric below 5x and FOCF-to-adjusted-debt ratio
above 5%. At the same time, we would expect the company to address
the upcoming springing maturity on its revolver," the rating agency
said.
TWM RACING: Seeks Court Approval to Hire Bankruptcy Attorney
------------------------------------------------------------
TWM Racing Products, Inc. seeks authority from the US Bankruptcy
Code for the Western District of Louisiana to hire a counsel.
Thomas R. Willson, as counsel, will give the Debtor legal advice
with respect to its power and duties as debtor-in-possession in the
continued operation of the its business and management to the its
property and to perform all legal services for the
debtor-in-possession.
Mr. Willson received the filing fee of $1,717.00, and a retainer of
$5,000.
Mr. Willson assures the court that he has no connection with the
debtor, the creditors or any other party in interest, or its
respective attorney.
The firm can be reached through:
Thomas R. Willson, Essq.
Thomas R. Willson
1330 Jackson St
Alexandria, LA 71301-6929
Phone: (318) 442-8658
E-mail: rocky@rockywillsonlaw.com
About TWM Racing Products, Inc.
TWM Racing Products, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. La. Case No. 20-80142) on March 3,
2020, listing under $1 million on both assets and liabilities. The
Debtor is represented by Thomas R. Willson, Esq.
UNIFIED PROTECTIVE: Has Until Aug. 3 to File Plan & Disclosures
---------------------------------------------------------------
The deadline for Unified Protective Services, Inc., to file its
Chapter 11 Disclosure Statement and Plan has been extended from
Jan. 18, 2020 to Aug. 3, 2020, according to an order entered by the
Court on March 4, 2020.
About Unified Protective
Unified Protective Services, Inc., is a security guard service
provider in Hawthorne, California. Its services include day and
night armed or unarmed security, vehicle security patrol, camera
surveillance and executive protection.
On June 1, 2019, Unified Protective Services sought Chapter 11
protection (Bankr. C.D. Cal. Case No. 19-16482). The Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities as of the bankruptcy filing. The
Hon. Neil W. Bason is the case judge. The LAW OFFICES OF MICHAEL
JAY BERGER is the Debtor's counsel.
UNITED AIRLINES: S&P Alters Outlook to Negative, Affirms 'BB' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on United Airlines Holdings
to negative from positive and affirmed the 'BB' issuer credit
rating on the airline.
S&P expects United's credit metrics to weaken in 2020 from previous
expectations because of the impact of the coronavirus. Although the
company is reducing capacity and some associated costs, and it is
benefiting from the steep decline in oil prices, S&P expects these
to be more than offset by sharply weaker traffic levels. S&P now
expects funds from operations (FFO) to debt to decline to the
mid-20% area in 2020, compared with its previous expectation of at
least 35%, assuming passenger traffic begins to recover later this
year.
United maintains strong liquidity. As of March 9, 2020, the company
had approximately $8 billion of liquidity, comprised of about $6
billion of cash and revolver capacity. This includes the proceeds
of a recently arranged and funded 364-day $2 billion secured term
loan. It also has $20 billion of unencumbered assets, and has
suspended share repurchases. The only covenant in its facilities is
the requirement to maintain $2 billion of liquidity.
United has an experienced management team that has been through
past financial crises. Many of its senior management team are
veterans of the airline industry who have experienced past
adversities, including the Sept. 11, 2001, attacks and the
2008-2009 financial crisis. They come from several other airlines,
including Continental and American, both of which successfully
reorganized after Chapter 11.
The negative outlook reflects United's weaker-than-expected credit
metrics due to the coronavirus outbreak and its negative impact on
travel. S&P expects FFO to debt to decline to about 25% in 2020
from 40% in 2019, and the rating agency's previous expectation in
the high-30% area, with improvement expected to begin in late 2020.
If that improvement is lower than expected or takes longer to
occur, S&P would likely lower its ratings.
"We would likely lower the rating if the impact of the coronavirus
is longer than expected, with reduced travel levels continuing into
the second half of 2020, resulting in FFO/debt below 20% for a
sustained period," S&P said.
"We could revise the outlook to stable if passenger traffic
recovers in late 2020 into 2021, resulting in credit metrics
returning to previous levels, including FFO/debt returning to at
least 30%," S&P said.
UNITI GROUP: Fitch Affirms CCC LongTerm IDR, Outlook Positive
-------------------------------------------------------------
Fitch Ratings affirmed the Long-Term Issuer Default Ratings and
security ratings of Uniti Group, Inc. and Uniti Fiber Holdings at
'CCC'. In addition, Fitch has assigned the IDRs a Positive Rating
Outlook and has removed the IDRs and security ratings from Rating
Watch Negative.
Uniti Group L.P.'s term loan B (B/RR1) rating was affirmed and
withdrawn as the debt was repaid with the issuance of $2.25 billion
of senior secured notes due 2025.
KEY RATING DRIVERS
Positive Outlook: The Positive Outlook reflects the agreement in
principle reached by Uniti, Windstream Holdings, Inc. and major
creditor groups on March 2, 2020 to resolve claims asserted by
Windstream against Uniti, including all litigation by Windstream
and certain of its creditors in Windstream's bankruptcy. Litigation
between the two companies will be stayed as the parties negotiate
and prepare final documentation to implement the settlement. A
court hearing in the case is scheduled for April 3, 2020 and the
agreement could be approved at that time.
Fitch believes the likelihood of approval is relatively high given
Judge Robert Drain, who is presiding over the bankruptcy case, has
repeatedly indicated a preference for a consensual agreement, and
the settlement was mediated by colleague Judge Shelley Chapman.
Certain first-lien noteholders and Elliott Investment Management
have supported the plan, although the ad hoc second-lien group has
raised concerns. Following the initial announcement, additional
creditors committed to the plan and as of March 16, first-lien
holders holding 94% of Windstream's first-lien claims and 54% of
the second-lien noteholders support the plan.
Capital Market Turmoil: While the settlement reduces the
uncertainty specific to the Windstream bankruptcy case, recent
capital market developments related to the coronavirus pandemic and
a slowing economy have raised capital market uncertainty for all
issuers, including Uniti . Fitch believes that with the tower sale
the company's liquidity should be adequate going into 2021, but
once Windstream emerges from bankruptcy, Uniti's funding needs will
increase in order to fund the growth capital investments for
Windstream per the agreement.
Slight Rise in Leverage: Acquisitions over the last couple of years
have impacted Uniti's leverage. For 2019, Fitch-calculated gross
leverage was approximately 6.5x. For acquisitions completed,
leverage incorporates EBITDA only from the date of acquisition.
Once the overhang of the Windstream bankruptcy process is behind
the company, and assuming capital markets are open, Fitch expects
Uniti to finance future transactions such that gross leverage will
remain relatively stable and should remain in the high-5x range to
approximately 6x over the longer term.
Cash Flow: Once the acceptance of the new master leases in the
settlement agreement are final and approved by the judge, Fitch
expects Uniti's cash flows to be very stable, owing to the fixed
nature of long-term lease payments from Windstream, and the
contractual nature of revenue streams in Uniti's Fiber and Tower
businesses. The master leases with Windstream are expected to
produce slightly more than $650 million in cash revenue annually.
As highlighted by recent sale-leaseback transactions, Fitch
believes similar master lease-based transactions are possible, as
are acquisitions of communications infrastructure.
Tenant Concentration: The Windstream Holdings master lease provided
approximately 61% of Uniti's revenue in 2019. At the time of the
spinoff, nearly all revenue was from Windstream Holdings. In
Fitch's view, the improved diversification is a positive for the
company's credit profile; major customer verticals outside of
Windstream consist of the large wireless carriers, national cable
operators, government agencies and education.
Tower Sale: The company reached an agreement for the sale of 486 of
672 domestic towers for approximately $190 million to an
infrastructure investor (at an economic gain of $23 million). The
price was approximately 30x annualized tower cash flow (a common
metric defined as gross revenues from tenant leases less direct
operating expenses). Under an offtake agreement, Uniti expects to
build and sell approximately 190 and approximately 170 towers,
respectively, in 2020 and has an option to extend the arrangement
in 2021. Not all towers were sold since the company sized the
transaction to the proceeds needed.
Geographic Diversification: The company's geographic
diversification is solid, given Windstream Holdings' geographically
diverse operations and the expanded footprint provided by
acquisitions since the spinoff.
ESG Commentary: 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.
DERIVATION SUMMARY
As fiber-based telecommunications REIT, Uniti currently has no
direct peers. Uniti is a telecom REIT that was formed through the
spin-off of a significant portion of Windstream Services, LLC's
fiber optic and copper assets. Windstream retained the electronics
necessary to continue as a telecommunications services provider.
Fitch believes Uniti's operations are geographically diverse,
spread across more than 30 states, and the assets under the master
lease with Windstream Holdings provide adequate scale.
Other close comparable telecommunications REITs are tower companies
including American Tower (BBB/Stable), Crown Castle (BBB/Stable)
and SBA Communications (not rated). The tower companies lease space
on towers and ground space to wireless carriers and are a key part
of the wireless industry infrastructure. However, the primary
difference is that the tower companies operate on a shared
infrastructure basis (multiple tenants) whereas a substantial
portion of Uniti's revenues are derived on an exclusive basis under
sale-leaseback transactions. Uniti's leverage is higher than
American Tower or Crown Castle but lower than SBA.
In the Uniti Fiber segment, the most direct comparable company
would be Zayo Group Holdings (not rated). While expanding primarily
through acquisitions, Uniti Fiber has relatively small scale. The
business models of Uniti Fiber and Zayo are unlike the wireline
business of communications services providers such as AT&T
(A-/Stable), Verizon (A-/Stable) or CenturyLink (BB/Stable). Uniti
Fiber and Zayo are providers of infrastructure, which may be used
by communications service providers to provide retail services
(wireless, voice, data and internet). Increasingly, Crown Castle is
becoming a larger participant in the fiber infrastructure business
through a series of acquisitions. The large communications services
providers do self-provision, and may use a fiber infrastructure
provider to augment their networks.
Communications services providers may sell dark fiber and
connectivity services on a wholesale basis, but Fitch believes they
have more of a focus on selling retail services to consumers and
businesses, as well as solutions to business customers.
Uniti's fiber acquisitions since the spin-off are a key credit
consideration as they have reduced the concentration of revenues
and EBITDA from the Windstream Holdings master lease.
Fitch believes aspects of Uniti's credit profile are similar to
cases in the gaming industry where there are single tenant or
concentrated leases between operating companies (OpCos) and their
respective REITs (PropCos). Both Uniti and gaming REITs benefit
from triple net leases. Fitch believes that the PropCos are better
positioned as rents may continue uninterrupted through the tenant's
bankruptcy because such rents are an operating expense and unlikely
to be rejected as a result of the master lease structure. However,
Fitch is also cognizant that such rents could renegotiated or other
proposals could be mutually agreed to that would affect Uniti's
credit profile.
KEY ASSUMPTIONS
-- Fitch's base case forecast does not include many of the
effects of the settlement agreement with Windstream (which includes
an upfront cash consideration, funding of certain Windstream tenant
capital improvements and cash consideration for the purchase of
certain fiber assets from Windstream) as it has
not yet been approved;
-- In 2020, Fitch expects revenues to decline due to the full
year effect of asset sales in 2019 (the sale of its Midwest fiber
operations, the sale of its towers in Latin America and certain
U.S. towers, the sale of the ground lease business) and the
de-emphasis or wind down of certain aspects of its construction
business, equipment sales and the consumer CLEC. In 2021 and 2022,
Fitch forecasts organic revenue growth in the low-single digits
annually;
-- Fitch expects EBITDA margins to be slightly over 80% as it
exits certain lower margin businesses.
-- Fitch has not assumed a rent reduction under the Windstream
master lease in its base case (prior to the settlement agreement)
and the settlement agreement does not reflect a reduction.
-- Uniti will target long-term net leverage in the mid-5x range
to 6x range; Fitch expects gross leverage to be in the high-5x
range to 6x longer term. Leverage is anticipated to come down
modestly as dark fiber and small cell projects are completed and
the contracted revenues come online.
-- Fitch expects net success-based capex to decline in 2020 as
certain fiber and small cell projects are completed.
-- Recovery Analysis: The recovery analysis assumes that Uniti
would be considered a going concern in a bankruptcy and that the
company would be reorganized rather than liquidated. Fitch has
assumed a 10% administrative claim.
-- Uniti's going concern EBITDA is based on Fitch's expectations
for 2020 results. The going-concern EBITDA estimate reflects
Fitch's view of a sustainable, post-reorganization EBITDA level,
upon which Fitch bases the valuation of the company. This leads to
a post-reorganization EBITDA estimate of $710 million. The reduced
EBITDA could come about by a rent reset at level whereby
Windstream's EBITDAR covers the lease payment by just over 1.6x,
and there are no immediate EBITDA generating benefits received by
Uniti in return for the reduction.
-- Post-reorganization valuation uses a 6.0x enterprise value
multiple. The 6.0x multiple reflects the high margin, large
contractual backlog of revenues, and high asset value of the fiber
networks.
Fitch uses this multiple for fiber-based infrastructure companies,
for which there have been historical transaction multiples in the
high single digit range. The multiple is in line with the range for
telecom companies published in Fitch's Telecom, Media and
Technology Bankruptcy Enterprise Values and Creditor Recoveries
report.
-- The revolver is assumed to be fully drawn. The recovery
analysis produces a Recovery Rating of 'RR1' for the secured debt,
reflecting strong recovery prospects (100%); the 'RR5' for the
senior unsecured debt reflects the lower recovery prospects of the
unsecured debt, given its position in the capital structure.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- The rating could be upgraded prior to Windstream's emergence
from bankruptcy if the bankruptcy court approves the settlement
agreement;
-- An upgrade of more than one notch could occur over time once
Windstream emerges from bankruptcy, Uniti demonstrates capital
market access, and if gross debt leverage is expected to be
sustained below 6.5x, FFO-adjusted leverage is sustained below 7.0x
and/or FFO charge coverage is 2.3x or higher.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Prolonged, uncertain access to the capital markets;
-- A Rating Watch Negative could be applied if the settlement
agreement is not approved;
-- Gross debt leverage is expected to be sustained in the high 6x
range or higher, FFO-adjusted leverage is sustained in the low to
mid 7x range and/or FFO charge coverage is 2.0x or lower;
-- In addition, if Windstream's rent coverage (EBITDAR -
capex)/rents approaches 1.2x, a negative rating action could occur,
but Fitch will also take into account Uniti's level of revenue and
EBITDA diversification at that time.
LIQUIDITY AND DEBT STRUCTURE
Moderate Liquidity: Uniti depends on its cash balance for
liquidity, which was $143 million at Dec. 31, 2019. Uniti has
virtually no availability on its revolving credit facility (RCF,
due 2022). An amendment in February 2020 increased the margin to a
range of 4.75% to 5.25%.
In February 2020, Uniti issued $2.25 billion of 7.875% senior
secured notes due 2025 and used the proceeds to pay down the entire
$2.05 billion outstanding on the term loan B and a portion of the
revolver.
Under the June 2019 amendment to its credit facility, a provision
was put in place limiting the payment of future cash dividends to
an amount that does not exceed 90% of REIT taxable income (without
regard to the dividends paid deduction and excluding any net
capital gains) while Windstream is in bankruptcy, or under certain
other conditions.
Another provision increased the pricing on the term loan facility
to LIBOR plus 500 bps, an increase of 200 bps, and this will be in
effect through the remaining term of the facility (Oct. 24, 2022).
Covenants: The principal financial covenants in the company's
credit agreement require Uniti to maintain a consolidated secured
leverage ratio of 5.0x. The company can also obtain incremental
term loan borrowings or increased commitments in an unlimited
amount as long as on a pro forma basis the consolidated secured
leverage ratio does not exceed 4x.
Maturities: Uniti's has no major maturities until 2022 when the
revolver matures (following the repayment of the term loan from the
$2.25 billion offering).
Other: Uniti had an at-the-market (ATM) common stock offering
program that allowed for the issuance of up to $250 million of
common equity to keep the capital structure in balance when funding
capex in the Tower or Fiber operating businesses as well as to
finance small transactions. However, the program was suspended
following the June 2019 expiration of its shelf registration.
REIT-required distributions reduce Uniti's FCF, although the
company has been able to reduce the dividend to relatively low
levels to maintain financial flexibility. Capital intensity varies
by business unit. In the leasing business, capital intensity is
virtually non-existent as capex is the responsibility of the
tenant. In the Fiber and Tower segments, intensity is high as the
company is in the process of completing projects in the Fiber
segment and has an ongoing build program in the Tower business.
UNIVERSITY OF THE ARTS: Fitch Assigns BB+ LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings affirmed the 'BB+' rating on approximately $51.7
million of series 2017 bonds issued by the Philadelphia Authority
for Industrial Development on behalf of The University of the Arts
(UArts).
In addition, Fitch has assigned UArts a Long-Term Issuer Default
Rating (IDR) of 'BB+'.
The Rating Outlook is Stable.
SECURITY
The bonds are secured by general, unrestricted revenues of UArts as
well as a first lien mortgage on certain university property (i.e.
three academic and/or residential buildings) in Philadelphia, PA.
ANALYTICAL CONCLUSION
The 'BB+' ratings reflect the university's relatively thin cushion
of available funds (AF) to adjusted debt in the context of Fitch's
'bbb' assessment of the university's revenue defensibility and
operating risk. Revenue defensibility is characterized by
historically moderate demand indicators with modest enrollment and
admissions volatility in recent years. Midrange operating risk
reflects limited cost management and expectations for thin cash
flow margins. Near-term capital projects are high but manageable.
The university exhibits a financial profile consistent with the
'bb' assessment, with AF to adjusted debt levels providing limited
but still adequate capacity to absorb revenue and investment
stresses.
KEY RATING DRIVERS
Revenue Defensibility:: 'bbb'
Moderate Demand in Niche Market
The university's 'bbb' revenue defensibility assessment is
characteristic of moderate demand indicators, a niche market, and
the relatively price elastic student base. Fall 2019 admissions are
down modestly from fall 2018, but are expected to meet budgeted
revenues. The university benefits from moderate, consistent donor
support for operations.
Operating Risk:: 'bbb'
Limited Cash Flow; High but Manageable Capital Needs
The 'bbb' operating risk assessment reflects Fitch's expectations
for sustained limited cash flow margins as the university works to
generate demand in new programs and scale expenses in the near to
intermediate term. Lifecycle investment needs are high but
manageable with near-term capital needs being addressed by 2017
bond proceeds.
Financial Profile:: 'bb'
Thin Balance Sheet Cushion
UArt's 'bb' financial profile assessment reflects relatively high
leverage compared to the moderate strength of the university's
business profile. AF have increased in recent years with limited
cash flow and donor support, positioning the university to absorb
moderate economic and revenue stresses at the current rating
level.
Asymmetric Additional Risk Considerations
No asymmetric additional risk considerations apply to UArt's
rating.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to a
Negative Rating Action:
-- Persistent or material enrollment declines or declining net
tuition and fee revenues;
-- Failure to maintain cash flow margins at levels consistently
above 5%;
-- Deterioration of AF to adjusted debt below 30%.
Developments That May, Individually or Collectively, Lead to a
Positive Rating Action:
-- Consistent trend of enrollment and net tuition revenue
growth;
-- A buildup in unrestricted cash and investment levels over time
resulting in sustained AF to adjusted debt at or above 50%.
CREDIT PROFILE
The University of the Arts is an independent, co-educational
university established in 1876, located in downtown Philadelphia.
UArts offers 29 undergraduate and 12 graduate programs through the
College of Art, Media & Design, the College of Performing Arts, and
the Division of Liberal Arts. Through its two colleges, the
university comprises six schools: Design, Art, Film, Dance,
Theater, and Music. UArts' student body is primarily undergraduates
and comprises more than 1,800 students on a full time equivalent
(FTE) enrollment basis, two-thirds of whom reside in either
Pennsylvania or New Jersey.
In 1969, the Middle States Commission on Higher Education first
accredited UArts institution-wide. The most recent reaccreditation
was in 2014. The university completed a self-study review during
the 2019 academic year, and management has reported smooth progress
in the accreditation process.
On March 13, due to the threat of the coronavirus pandemic, UArts'
President, David Yager, informed the university community that the
campus would transition to virtual instruction beginning March 22,
and the residence halls would close for all students except in
cases of housing hardship. Fitch will monitor the impacts of these
changes, but expects the rating to remain resilient through this
period of near term operating stress.
REVENUE DEFENSIBILITY
UArts' revenue defensibility is characterized by moderate demand
indicators within the university's niche performing and visual arts
demand base in the Northeast region. Enrollment has been somewhat
volatile in recent years while net tuition and fee revenues have
grown modestly, suggesting a moderate level of price elasticity.
The university's demand profile reflects the high levels of
self-selection consistent with an arts institution with high
acceptance rates (over 70%) and more moderate matriculation (over
30%). The university retains a solid reputation as a specialized
institution for performing and visual arts education in the region.
The university's draw within the Northeast region has remained
somewhat stable despite demographic challenges in Pennsylvania and
New Jersey, which are the university's primary market, and make up
more than half of UArts' enrollment base.
Full time equivalent (FTE) enrollment of around 1,800 is in line
with the average over the last five years following moderate
declines in prior years due to declining demographics and
competition from public institutions in the region. Soft enrollment
for fall 2019 was in line with budget expectations and management
indicated that discounting is modestly lower, putting revenues for
fiscal 2020 at or ahead of budget year to date.
UArts' revenues are largely tuition and fee driven, consistent with
many small academic institutions. Tuition and fee revenue has grown
at a consistent modest to moderate pace in recent years, despite
enrollment volatility. The university's five-year net tuition and
fee per FTE enrollment CAGR has remained positive but below 2%,
indicating a somewhat price sensitive enrollment base with some
capacity to generate additional revenues going forward.
Beyond student-generated revenue, the university's revenue picture
relies on stable, moderate annual giving and draws from its
endowment to support operations. Together, these revenue streams
make up more than 20% of the university's operating budget and,
though accretive to the university's main business line, may not
counter cyclicality in future years. Fitch considers UArts'
endowment draw rate to be sustainable at current rates and expects
the university to maintain prudent endowment management going
forward.
OPERATING RISK
UArts' operating cost flexibility has generally been somewhat
limited, with thin cash flow margins of below 10% in recent years.
However, cash flow at this level has been steady to improving in
recent years, as spending growth lags revenues. Management
indicates that efforts to scale spending to the university's
current enrollment and programming base will yield cost savings in
future years, allowing for ongoing modest cash flow growth.
The university's capital spending requirements are manageable but
elevated, reflecting the historic nature of many downtown campus
facilities. UArts recent capital improvements culminated in the
completion of major capital upgrades related to key program
offerings with the 2017 bond proceeds. Work was completed in fiscal
2019 and related facilities are operational in fiscal 2020. As
such, the university's high fiscal 2019 average age of plant (over
20 years) does not incorporate these upgrades, which came on line
in the current year. Further, UArts' campus comprises historic
buildings near Philadelphia's city center, which would generally
reflect a higher average age of plant even with routine capital
upkeep. Given these factors, Fitch will monitor the university's
investment in plant, and the effect that facilities upkeep has on
spending and student demand going forward.
FINANCIAL PROFILE
Fitch's base case assumes ongoing revenue and expense growth
consistent with five year historical CAGRs and spending for capital
investment at the level of depreciation. Investment returns based
on the university's asset allocation further support modest growth
in AF levels over the five year base case while the university pays
down the 2017 bonds. As a result, by year five of Fitch's base case
UArts' AF to adjusted debt grows to over 60%, reflecting an
improvement from the current level but consistent with recent
historical peaks.
Fitch's stress case incorporated a moderate economic stress to
UArts' investment portfolio, resulting in a year one investment
loss of -8.5%, reflecting UArt's fairly conservative asset
allocation. In addition, given the university's niche market
position, Fitch's stress includes a moderate revenue stress (2%
lower than base case growth in year one). During stressed years
Fitch assumes modest pull back on capital spending at around 70% of
depreciation before returning to trend in year three. Despite these
stresses, UArts maintains an adequate AF to adjusted debt cushion
for the current rating at around 40% by year five of the stress
case scenario.
In addition to the sources of information identified in Fitch's
applicable criteria specified, this action was informed by
information from Lumesis.
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).
US FOODS: Moody's Reviews Ba3 CFR for Downgrade on Apollo Deal
--------------------------------------------------------------
Moody's Investors Service placed US Foods, Inc.'s Ba3 corporate
family rating, Ba3-PD probability of default rating, Ba3 senior
secured bank facility and B2 senior unsecured notes rating on
review for downgrade. Its speculative grade liquidity rating
remains an SGL-1.
The review for downgrade reflects the announced purchase of Smart
Foodservice Warehouse Stores from funds managed by affiliates of
Apollo Global Management for $970 million in cash which will delay
its ability to deleverage. Moody's views the short timeframe
between USF's recent acquisition as being aggressive. The review
for downgrade also reflects the negative impact on demand for its
products due to the disruption caused the Covid-19 virus on its
restaurant customers. Moody's continues to view USF's solid
execution and very good liquidity favorably.
On Review for Downgrade:
Issuer: US Foods, Inc.
Probability of Default Rating, Placed on Review for Downgrade,
currently Ba3-PD
Corporate Family Rating, Placed on Review for Downgrade,
currently Ba3
Senior Secured Bank Credit Facility, Placed on Review for
Downgrade, currently Ba3 (LGD4)
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently B2 (LGD6)
Outlook Actions:
Issuer: US Foods, Inc.
Outlook, Changed To Rating Under Review From Positive
RATINGS RATIONALE
The review for downgrade will focus on USF's ability to reduce
Moody's adjusted debt/EBITDA consistently below 4.5x. Moody's has
previously cited debt/EBITDA sustained around 4.5x as a downward
rating factor. The review will also focus on the contraction of
demand related to Covid-19 given its exposure to independent
restaurants and the hospitality sector which are currently facing
widespread location closures. The company's financial policy will
also be considered given the timing of the acquisition shortly
after the completion of the $1.8 billion all cash acquisition of
SGA's Food Group of Companies, a leading foodservice distributor in
the West and Northwest, in September 2019.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The food service,
restaurant and hospitality sectors have been some of the sectors
most significantly affected by the shock given its sensitivity to
consumer demand and sentiment. More specifically, the weaknesses in
USF's credit profile, including its exposure to restaurant closures
have left it vulnerable to shifts in market sentiment in these
unprecedented operating conditions and USF remains vulnerable to
the outbreak continuing to spread. Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety. The action
reflects the impact on USF of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
US Foods, Inc. is a leading North American food service marketing
and distribution company, with annual revenues of around $29
billion (pro forma for the acquisition of SGA and Smart
Foodservice). The company operates as a national, broad-line
distributor, providing a complete range of products - from fresh
farm produce, frozen food, and specialty meat products to paper
products, restaurant equipment, and machinery.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
US SILICA: S&P Lowers ICR to 'CCC+' on Lower Oil, Gas Prices
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S. Silica
Co. to 'CCC+' from 'B'. S&P also lowered its issue-level rating on
the company's $1.28 billion senior secured term loan due 2025 to
'CCC+' from 'B'. The '3' recovery rating is unchanged, indicating
its expectation of meaningful recovery (50%-70%; rounded estimate:
60%) in the event of a payment default.
Lower oil and prices result in much weaker EBITDA and higher
leverage. S&P's revised forecast for U.S. Silica Co. acknowledges
far more challenging operating conditions in oil and gas end
markets than previously anticipated. S&P Global Ratings recently
cut its 2020 price assumption for West Texas Intermediate (WTI) by
36%, to $35 a barrel. This followed a sharp drop in prices after
OPEC meetings failed to yield an agreement on production cuts and
as the spread of the coronavirus dampens global demand. Exploration
and production (E&P) companies comprise 60%-65% of U.S. Silica's
oil and gas customer base. Given the current environment, S&P is
now assuming domestic producers will cut capital spending by 20% to
30% this year. This already compounds a difficult market
environment for frac sand producers who already faced oversupply
conditions, which led to weaker pricing and tighter E&P budgets
that reduced demand. About 60% of U.S. Silica's EBITDA is tied to
oil and gas end markets. S&P therefore expects the oil and gas
segment EBITDA to decline by $100 million to $120 million in 2020
from prior expectations of $40 million to $45 million growth. The
rating agency also anticipates leverage will deteriorate with debt
to EBITDA approaching 8x compared with its prior expectations of
3x-4x.
The negative outlook reflects that there is a one in three chance
S&P could lower its ratings on U.S. Silica over the next 12 months
given an anticipated 20%-30% reduction in capital spending cuts by
a large portion of the company's oil and gas customer base.
"We could lower our ratings on U.S. Silica if we anticipate a
near-term liquidity crisis, financial covenant breach, or believe
U.S. Silica will consider a distressed exchange. This could occur
if oil and gas prices decline further than we anticipate and its
customers cut capex budgets even further," S&P said.
"We could revise the outlook to stable or raise our rating on U.S.
Silica if we no longer believe that the company's capital structure
is unsustainable. This could be be case if industry conditions
improve including higher oil and gas prices and strengthening E&P
budgets leading to a clear path to refinancing over the next few
years," the rating agency said.
USA GYMNASTICS: Survivors' Comm. Taps Gibbins as Financial Advisor
------------------------------------------------------------------
The Additional Tort Claimants Committee of Sexual Abuse Survivors
of USA Gymnastics, seeks authority from the U.S. Bankruptcy Court
for the Southern District of Indiana to retain Gibbins Advisors,
LLC, as its financial advisor.
The Committee requires Gibbins to:
(a) advise in the review and/or preparation of information and
analyses necessary for approval of the Disclosure Statement and/or
Plan, or for any objection to the Disclosure Statement and/or
Plan;
(b) advise the Survivors' Committee in investigating the
assets, liabilities and financial condition of the USOPC;
(c) attend at meetings and assistance in discussions with the
Debtor, the Survivors' Committee, the UST, and other parties in
interest and professionals hired by the above-noted parties as
requested;
(d) attend at hearings and depositions, including providing
expert testimony, as needed;
(e) assist the Survivors' Committee and its counsel in
evaluating other potential expert testimony; and
(f) provide such other services to the Survivors’ Committee
as may be necessary in this case.
Gibbins will be charge its ordinary and customary hourly rates in
effect on the date the services are rendered, plus reimbursement of
actual and necessary out-of-pocket expenses.
Gibbins does not hold or represent any interest that is adverse to
the Survivors' Committee and the Debtor's estate, and 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:
Ronald M. Winters
GIBBINS ADVISORS, LLC
1900 Church Street, Suite 300
Nashville, TN 37203
Office Phone: (615) 696 6556
About USA Gymnastics
USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit
organization incorporated in Texas. Based in Indianapolis, Indiana,
USAG's organization encompasses six disciplines: women's
gymnastics, men's gymnastics, trampoline and tumbling, rhythmic
gymnastics, acrobatic gymnastics, and group gymnastics. USAG
provides educational opportunities for coaches and judges, as well
as gymnastics club owners and administrators, and sanctions
approximately 4,000 competitions and events throughout the United
States annually. More than 200,000 athletes, professionals, and
clubs are members of USAG. USAG sets the rules and policies that
govern the sport of gymnastics in the United States, including
selecting and training the United States gymnastics teams for the
Olympics and World Championships. As of the Petition Date, USAG
employs 53 individuals, nearly all of whom work for USAG
full-time.
USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case
No. 18-09108) on Dec. 5, 2018. USAG estimated $50 million to $100
million in assets and liabilities as of the bankruptcy filing. The
petition was signed by James Scott Shollenbarger, chief financial
officer.
The Hon. Robyn L. Moberly is the case judge.
USAG tapped Jenner & Block LLP as counsel; Hilder & Associates,
P.C., as ordinary course counsel; Alfers GC Consulting, LLC, and
Scramble Systems, LLC, as business consulting services providers;
and OMNI Management Group, Inc. as claims agent.
VASCULAR ACCESS: Trustee Hires Walsh Pizzi as Counsel
-----------------------------------------------------
Stephen V. Falanga, the chapter 11 trustee of Vascular Access
Centers, L.P., seeks authority from the U.S. Bankruptcy Court for
the Eastern District of Pennsylvania to retain Walsh Pizzi O'Reilly
Falanga LLP as his counsel.
The Trustee requires the counsel to:
a) advise the Trustee with respect to his powers and duties;
b) assist in the filing of a plan of reorganization and/or
sale and liquidation of the estate's assets;
c) prosecuting any claims and related motions that may arise;
d) evaluate the Debtor's rights under contracts;
e) take all necessary action to preserve and protect the
estate, including prosecuting and defending litigation matters,
negotiating disputes in which the Trustee is involved;
f) prepare on behalf of the Trustee all necessary motions,
applications, answers, orders, reports, and other papers in
connection with the administration of the Debtor's estate and
performing such other legal services as may be necessary and
appropriate for the efficient and economical administration of this
case.
Walsh's current standard hourly rates are:
a. Christopher M. Hemrick $450
b. Sydney J. Darling $400
c. Eric Padilla $350
d. Peter Pizzi (litigation counsel) $600
In the event that it becomes necessary to utilize other
professionals or paraprofessionals at Walsh, the current hourly
rates for partners/counsel is $400 to $600 and associates from $300
to $375. The hourly rates charged for paralegals shall not exceed
$185.
Walsh does not hold or represent any interest adverse to the
Debtor's estate, and is a "disinterested person" as that phrase is
defined in 11 U.S.C. Sec. 101(14), according to court filings.
The firm can be reached through:
Sydney J. Darling, Esq.
WALSH PIZZI O’REILLY FALANGA LLP
Three Gateway Center
100 Mulberry Street, 15th Floor
Newark, NJ 07102
Phone: (973) 757-1034
Fax: (973) 757-1090
Email: sdarling@walsh.law
About Vascular Access Centers
Vascular Access Centers -- https://www.vascularaccesscenters.com/
-- provides comprehensive dialysis access maintenance including
thrombectomy and thrombolysis, fistulagrams, fistula maturation
procedures, vessel mapping, central venous occlusion treatment and
complete catheter services. Its centers offer an alternative
setting for a wide spectrum of vascular interventional procedures,
including central venous access for oncology, nutritional and
medication delivery, venous insufficiency (including venous ulcer
and non-healing ulcer treatments), peripheral arterial disease
(PAD), limb salvage, uterine fibroid embolization and pain
management.
On Nov. 12, 2019, an involuntary petition was filed against
Vascular Access Centers under Chapter 11 of title 11 of the United
States Code (Bankr. E.D. Pa. Case Number. 19-17117). The petition
was filed by creditors Philadelphia Vascular Institute, LLC, Metter
& Company and Crestwood Associates, LLC. David Smith, Esq., at
Smith Kane Holman, LLC, is the petitioner's counsel.
On Nov. 13, 2019, the Debtor consented to the relief sought under
Chapter 11.
Judge Ashely M. Chan is the presiding judge.
The Debtor tapped Dilworth Paxson LLP as its legal counsel.
VELMO USA: April 7 Status Hearing on Non Filing of Plan Set
-----------------------------------------------------------
The Court will convene a hearing regarding the status of the case
based on the Disclosure Statement and Plan having not been filed by
Velmo USA, LLC, the Debtor in the case, which was due on or before
March 3, 2020. The satus hearing will be held on April 7, 2020 at
9:00 a.m. (Eastern Time) at Courtroom #3, 5th Fl. (6th St.
Elevators), 601 West Broadway, Louisville, KY 40202.
The Debtor has filed a motion to dismiss its Chapter 11 case. The
sale of substantially all the Debtor's property closed on Feb. 27,
2020, and the estate no longer has any assets to reorganize or
liquidate. Accordingly, the Debtor sought an order dismissing the
case.
About Velmo USA
Velmo USA, LLC, is a global sourcing ISO 9001:2008 certified
company serving a diverse range of industries including automotive,
construction, chemical & food industries and more. It offers hot
forged ring, castings, CNC machine parts, screw machine parts,
steel tubes, sheet metal fabrications, metal stamping parts and
forgings.
Velmo USA filed a petition under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Ky. Case No. 19-32515) on Aug. 6, 2019. The petition
was signed by J. Bradley Law, president. At the time of the
filing, the Debtor was estimated to have assets of between $1
million and $10 million and liabilities of the same range. Judge
Alan C. Stout oversees the case. Kaplan Johnson Abate & Bird LLP
is the Debtor's legal counsel.
VERIFONE SYSTEMS: S&P Lowers ICR to 'B-'; Outlook Stable
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on VeriFone
Systems Inc. to 'B-' from 'B'. At the same time, S&P lowered its
rating on the company's first-lien debt to 'B-' from 'B.'
S&P expects credit metrics to remain weak in fiscal 2020. Adjusted
leverage was 8.4x for fiscal 2019, and S&P envisions leverage
remaining above 8x for fiscal 2020 as the company continues to
spend on restructuring costs and experiences lower hardware sales
until the ramp on new products begins (the company expects a ramp
in the second half of fiscal 2020). Free operating cash flow (FOCF)
to debt is also likely to be weak in fiscal 2020, in the
low-single-digit percentage range. S&P does not envision any
material improvement in credit metrics until after fiscal 2020
(October 2020) as one-time restructuring costs roll off.
The stable outlook reflects S&P's view that leverage will remain
above 8x through fiscal 2020 and that FOCF to debt will be
negligible, although the rating agency expects the company to
maintain sufficient liquidity over the next 12 months. S&P expects
revenues to improve from the first quarter, declining in the
low-single-digits percent area for the year. S&P expects execution
risk on management's restructuring initiatives to remain elevated
for at least a year until the onetime costs to achieve savings
materially ramp down leading to leverage improvements after fiscal
2020.
"We could raise the rating if we believe the company will complete
its restructuring efforts in fiscal 2020, while displaying minimal
to no business operation disruptions related to supply chain
disruptions caused by the COVID-19 outbreak and it resumes supply
production without any meaningful decline in demand for point of
sale units. We believe these factors would place Verifone on the
path to delever below 7x and FOCF to debt approaching the
mid-single digits," S&P said.
"We could lower the rating if Verifone experiences a broad-based
deterioration in the company customer base or further significant
restructuring activities that lead to liquidity pressures, and
persistent negative FOCF generation or elevated leverage," the
rating agency said.
VERMILLION INC: Extends Term of Quest TSA Until March 2023
----------------------------------------------------------
Vermillion, Inc., its wholly-owned subsidiary, ASPiRA LABS, Inc.,
and Quest Diagnostics Incorporated, entered into an Amendment No. 4
to Testing and Services Agreement. The Amendment amends that
certain Testing and Services Agreement, dated as of March 11, 2015
(as previously amended as of April 10, 2015, March 11, 2017 and
March 1, 2018. The purpose of the Amendment was to extend the term
of the TSA from March 11, 2019 to March 11, 2023.
In addition, pursuant to the Amendment, the Company has agreed to
pay an annual fee of $75,000 for the services of a part-time Quest
project manager to provide certain services to resolve issues
arising from Quest's performance of services and with respect to
OVA1 and Overa specimens sourced to Quest's testing lab through its
Patient Service Centers and its In-office Phlebotomists (as each is
defined in the TSA). The fee is payable in four equal quarterly
installments.
About Vermillion
Headquartered in Austin, Texas, Vermillion, Inc. --
http://www.vermillion.com/-- is dedicated to the discovery,
development and commercialization of novel high-value diagnostic
and bio-analytical solutions that help physicians diagnose, treat
and improve gynecologic health outcomes for women. Vermillion,
along with its prestigious scientific collaborators, discovers,
develops, and delivers innovative diagnostic and technology tools
that help women with serious diseases.
Vermillion reported a net loss of $11.37 million for the year ended
Dec. 31, 2018, following a net loss of $10.50 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2019, the Company had $16.53
million in total assets, $4.71 million in total liabilities, and
$11.83 million in total stockholders' equity.
BDO USA, LLP, in Austin, Texas, the Company's auditor since 2012,
issued a "going concern" qualification in its report dated March
28, 2019, citing that the Company has suffered recurring losses
from operations and has net cash flows deficiencies that raise
substantial doubt about its ability to continue as a going concern.
VETERINARY CARE: Hires Wick Phillips as Special Corporate Counsel
-----------------------------------------------------------------
Veterinary Care, Inc. d/b/a Vitalpet, and its debtor-affiliates,
seek authority from the U.S. Bankruptcy Court for the Southern
District of Texas to employ Wick Phillips LLP as its special
corporate counsel.
Veterinary Care requires Wick Phillips to:
a) assist and advise the Debtors with any transactions and
provide general corporate advice;
b) assist and advise the Debtors with respect to the potential
sale of their assets in this case;
c) assist and advise the Debtors in its consultations relative
to the sale of their assets;
d) assist the Debtors in the analysis of and negotiations with
any third-party concerning matters relating to, among other things,
the terms of any applicable asset purchase agreement and related
documents and agreements;
e) assist the Debtors in the analysis of and negotiations with
any third-party concerning matters relating to, among other things,
the terms of plans of reorganization; and
f) perform such other legal services as may be required and
are deemed to be in the interests of the Debtors in accordance with
the Debtors' powers and duties as set forth in the Bankruptcy
Code.
Hourly rates for Wick Phillips personnel are:
Greg A. Young $560
Various Associates $335-$425
Paralegals and Legal Assistants $165-$195
Wick Phillips is "disinterested" as that term is defined in section
101 of the Bankruptcy Code, and does not represent or hold any
interest adverse to the interest of the Debtors' bankruptcy
estates, according to court filings.
The firm can be reached through:
Greg A. Young, Esq.
Wick Phillips LLP
3131 McKinney Ave #100
Dallas, TX 75204
Phone: +1 214-692-6200
About Veterinary Care
Veterinary Care Inc., d/b/a Vitalpet, offers pet care services.
Petitioning creditors Dr. Warren Resell, Dr. James H. Kelly, Dr.
Larry D. Wood, filed an involuntary Chapter 11 petition (Bankr.
S.D. Texas Case No. 19-35736) against Veterinary Care, Inc. on Oct.
10, 2019. The petitioners are represented by Richard L. Fuqua,
Esq., at Fuqua & Associates, P.C., in Houston.
On Nov. 18, 2019, TVET Management LLC filed a voluntary Chapter 11
petition (Bankr. S.D. Tex. Case No. 19-36430).
On Nov. 19, 2019, the court ordered the joint administration of
Veterinary Care's and TVET's bankruptcy cases. The cases are
jointly administered under Case No. 19-35736.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Okin Adams LLP as their legal counsel, and The
Claro Group, LLC as their financial advisor. Douglas Brickley,
managing director of Claro Group, is the chief restructuring
officer.
VIKING CRUISES: S&P Places 'B+' ICR on CreditWatch Negative
-----------------------------------------------------------
S&P Global Ratings placed all ratings on Viking Cruises Ltd.,
including its 'B+' issuer credit rating, on CreditWatch with
negative implications.
The CreditWatch placement reflects a heightened level of
uncertainty around Viking's 2020 EBITDA, cash flow, and credit
measures in light of its decision to suspend its river and ocean
cruise operations through April 30, 2020. The CreditWatch also is
based on as reduced demand for cruises and other travel stemming
largely from customer fears and travel restrictions and advisories
related to the COVID-19 pandemic. Further, given recent ship
quarantines, incidences of COVID-19 on cruise ships, and recent
travel advisories by the U.S. Department of State and the Centers
for Disease Control and Prevention (CDC) about the risks of travel
by cruise ship, S&P believes it is increasingly likely that demand
for cruises could remain weak even after the virus is contained. As
a result, Viking's recovery path is uncertain.
In resolving the CreditWatch, S&P plans to assess Viking's
liquidity position in light of the temporary suspension of
operations and update its base-case forecast for EBITDA, cash flow,
and leverage given currently weak demand for cruises and travel,
and assess the potential for recovery next year.
VILLAS OF WINDMILL: Trustee Taps Akerman LLP as Special Counsel
---------------------------------------------------------------
Leslie Osborne, Chapter 11 trustee for Villas of Windmill Point II
Property Owners Association, Inc., seeks authority from the U.S.
Bankruptcy Court for the Southern District of Florida to retain the
law firm of Akerman, LLP, as his special counsel.
The Trustee requires Akerman to:
(i) assist with prosecuting the following adversary claims:
(a) Adv. Pro. No. 19-01877-MAM filed against Defendant McDonald
Storey, Lisa Storey and Darren Storey; (b) Adv. Pro. No.
19-01876-MAM filed against Defendants Richard Mottley, Debra
Mottley and Christina D. Gross; (c) Adv. Pro. No. 19-01874-MAM
filed against Steven Goldfarb; and (d) Adv. Pro. No. 19-01822-MAM
filed against Thomas Lesko, Jennifer Lesko, Jessica Lesko and The
Kingdom Trust Company;
(ii) object to claims asserted against the Debtor's estate by
various parties to the pending Adversary Proceedings;
(iii) prosecute any potential causes of actions against
additional third parties as authorized by the Trustee; and
(iv) prosecute any contested matter in the main Bankruptcy Case
as authorized by the Trustee.
The hourly rates of the attorneys from the Akerman Law Firm who
will be working on this case for this matter are discounted rates
of $5000 for Eyal Berger, Esq. and the hourly rate for associates,
para-professionals, law clerks ranges from $200 to $350 per hour.
Eyal Berger, Esq., shareholder of Akerman, 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.
The firm can be reached through:
Eyal Berger, Esq.
AKERMAN LLP
Las Olas Centre II, Suite 1600
350 East Las Olas Boulevard
Fort Lauderdale, FL 33301
Tel: 954-463-2700
Fax: 954-463-2224
Email: eyal.berger@akerman.com
About Villas of Windmill Point II Property
Based in Port Saint Lucie, Fla., Villas of Windmill Point II
Property Owners Association, Inc. is a non-profit corporation with
volunteers that self manages 89 separately deeded, single family
residential villa units that are attached in four and five-unit
clusters within a Planned Unit Development (PUD).
Villas of Windmill filed a Chapter 11 petition (Bankr. S.D. Fla.
19-20400) on August 2, 2019. At the time of filing, the Debtor
estimated $1 million to $10 million in assets and $1 million to $10
million in liabilities.
The Debtor is represented by Brian K. McMahon, Esq., in West Palm
Beach, Fla.
Leslie S. Osborne was appointed as the Debtor's Chapter 11 trustee.
The trustee is represented by Rappaport Osborne Rappaport.
W.N.B. INVESTMENTS: Seeks to Hire Bielli & Klauder as Counsel
-------------------------------------------------------------
W.N.B. Investments, LLC, seeks authority from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to employ Bielli &
Klauder, LLC, as counsel to the Debtor.
W.N.B. Investments requires Bielli & Klauder to:
a. give the Debtor legal advice with respect to its powers and
duties as the Debtor and Debtor-in-Possession;
b. prepare on behalf of the Debtor necessary applications,
answers, orders, reports and other legal papers;
c. represent the Debtor in defense of any proceedings
instituted to reclaim property or to obtain relief from the
automatic stay under section 362(a) of the Bankruptcy Code;
d. assist the Debtor in the preparation of schedules,
statements of financial affairs, and any amendments thereto, which
the Debtor may be required to file in this case;
e. assist the Debtor in the preparation of a plan of
reorganization and disclosure statement;
f. assist the Debtor with any potential sales of its assets
pursuant to section 363 of the Bankruptcy Code; and
g. perform all other legal services for the Debtor which may
be necessary.
Bielli & Klauder will be paid at these hourly rates:
Thomas D. Bielli $350
David M. Klauder $350
Kathleen Seligman (Of counsel) $325
Prior to the Petition Date, Bielli & Klauder received a $8,000 as
retainer. Prior to the Petition Date, Bielli & Klauder drew down
$4,239.50 from the retainer for bankruptcy preparation fees and
expenses incurred prior to the filing, including the filing fee for
initiating the bankruptcy case.
Bielli & Klauder will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Thomas Bielli, Esq., a partner at Bielli & Klauder, LLC, disclosed
in a court filing that the firm is "disinterested" as defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Thomas Daniel Bielli, Esq.
BIELLI & KLAUDER, LLC
1500 Walnut Street, Suite 900
Philadelphia, PA 19102
Tel: 215-642-8271
Fax: 215-754-4177
E-mail: tbielli@bk-legal.com
About W.N.B. Investments, LLC
W.N.B. Investments, LLC, filed it voluntary petition under Chapter
11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 20-11355) on
March 3, 2020, listing under $1 million in both assets and
liabilities. The Debtor is
represented by Thomas Bielli, Esq., at Bielli & Klauder, LLC.
WELDED CONSTRUCTION: April 8 Hearing on Disclosure Statement
------------------------------------------------------------
Welded Construction, L.P., et al., intend to present the Disclosure
Statement for approval at a hearing before the Honorable
Christopher S. Sontchi on April 8, 2020 at 11:00 a.m. (ET) convened
at the Bankruptcy Court, 824 North Market Street, 5th Floor,
Courtroom No. 6, Wilmington, Delaware 19801.
Objections, if any, to the approval of the Disclosure Statement
must filed and served on or before April 1, 2020 at 4:00 p.m.
(ET).
Counsel to the Debtors:
Sean M. Beach
Matthew B. Lunn
Robert F. Poppiti, Jr.
Allison S. Mielke
Betsy L. Feldman
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
E-mail: sbeach@ycst.com
mlunn@ycst.com
rpoppiti@ycst.com
amielke@ycst.com
bfeldman@ycst.com
About Welded Construction
Perrysburg, Ohio-based Welded Construction, L.P., is a mainline
pipeline construction contractor capable of executing pipeline
construction projects in lengths ranging from a few hundred feet to
over 200 miles.
Welded Construction, L.P., and Welded Construction Michigan, LLC,
sought bankruptcy protection on Oct. 22, 2018 (Bankr. D. Del. Lead
Case No. 18-12378). The jointly administered cases are pending
before Judge Kevin Gross.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel;
and Kurtzman Carson Consultants LLC as claims and noticing agent
and administrative advisor. The Debtors also tapped Zolfo Cooper
Management, LLC and the firm's managing director Frank Pometti who
will serve as their chief restructuring officer.
An official committee of unsecured creditors was appointed on Oct.
30, 2018. The committee tapped Blank Rome LLP as its legal counsel
and Teneo Capital LLC as its investment banker and financial
advisor.
WESTJET AIRLINES: Moody's Reviews Ba3 CFR for Downgrade
-------------------------------------------------------
Moody's Investors Service placed the ratings of WestJet Airlines
Ltd. under review for downgrade including its Ba3 Corporate Family
Rating, Ba3-PD Probability of Default rating, and Ba2 senior
secured rating.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The passenger
airline sector has been one of the sectors most significantly
affected by the shock given its exposure to travel restrictions and
sensitivity to consumer demand and sentiment. The action reflects
the impact on WestJet of the breadth and severity of the shock, and
the broad deterioration in credit quality it has triggered.
In its review, Moody's will consider (i) the sufficiency of the
company's liquidity profile, which is substantial with about CAD1.3
billion of cash and short-term investments currently on hand; (ii)
WestJet's ability to aggressively reduce expenses and capital
investments to reduce cash outflows as new booking levels recede;
(iii) evolving market conditions, including demand patterns and
responsive additional capacity cuts; (iv) the potential for and
types of support the Canadian government might provide; and (v) the
potential to restore its credit metrics and a stronger cash buffer
in a timely manner following the coronavirus.
On Review for Downgrade:
Issuer: WestJet Airlines Ltd.
Corporate Family Rating, Placed on Review for Downgrade,
currently Ba3
Probability of Default Rating, Placed on Review for Downgrade,
currently Ba3-PD
Gtd Senior Secured First Lien Term Loan, Placed on Review for
Downgrade, currently Ba2 (LGD3)
Gtd Senior Secured First Lien Revolving Credit Facility, Placed
on Review for Downgrade, currently Ba2 (LGD3)
Outlook Actions:
Issuer: WestJet Airlines Ltd.
Outlook, Changed To Rating Under Review From Stable
LIQUIDITY
WestJet has adequate liquidity, supported by CAD1.3 billion of cash
and short-term investments and an undrawn US $350 million revolver
(due 2024). These sources are sufficient to fund its expectation at
this time of CAD800 million of negative free cash flow and
mandatory annual debt and lease repayments of CAD 226 million in
2020. Moody's negative free cash flow estimate does not include
WestJet Airlines' expectation of completing sale and operating
leaseback transactions for its future aircraft deliveries, which,
if completed, will provide additional liquidity. WestJet has over
80 unencumbered aircraft (almost half of its fleet) which could be
used to raise capital should the need arise.
RATINGS RATIONALE
The rating action was prompted by the very sharp decline in
passenger traffic since the outbreak of coronavirus started during
January 2020, which will result in a negative free cash flow in
2020, a weakening liquidity profile and a higher leverage. From a
regionally contained outbreak the virus has rapidly spread to many
different regions severely denting air travel. The International
Air Travel Association's (IATA) latest scenario analysis forecasts
a decline in passenger numbers of between 11% and 19% for the full
year 2020.
Moody's base case assumptions are that the coronavirus pandemic
will lead to a period of severe cuts in passenger traffic over at
least the next three months with partial or full flight
cancellations and aircraft groundings, with all regions affected
globally. The base case assumes there is a gradual recovery in
passenger volumes starting in the third quarter. However there are
high risks of more challenging downside scenarios and the severity
and duration of the pandemic and travel restrictions is uncertain.
WestJet has cut capacity and initiated a company-wide cost
reduction and capital deferral program to preserve cash. WestJet is
currently focusing on managing its way through this very volatile
market environment by reducing costs as much as possible and by
shoring up its liquidity profile.
WestJet's (Ba3 RUR down) credit benefits from its leading position
in the duopolistic Canadian market, falling fuel costs and
liquidity Moody's deems adequate through this difficult market. It
is constrained by the severe drop in passenger demand and
uncertainty regarding the length and impact of current market
conditions.
The airline sector currently accounts for about 2% of global carbon
emissions with 65% of its emissions coming from international
flights. Canada (and as a result WestJet) is one of the 70
countries that have voluntarily elected to early adopt the
International Civil Aviation Organization's (ICAO) Carbon
Offsetting and Reduction Scheme for International Aviation
(CORSIA), which targets capping carbon emissions at 2020 levels and
requires purchases of offsets for airlines' that exceed their
targets. Moody's expects that fuel expense will increase for carbon
offset costs incurred from 2021.
The principal methodology used in these ratings was Passenger
Airline Industry published in April 2018.
WestJet Airlines Ltd. is a private company owned by Onex
Corporation, headquartered in Calgary, Alberta, is the
second-largest Canadian air carrier, providing scheduled passenger
services to over 100 destinations in Canada, the US, Central
America, the Caribbean and Europe. Revenue for the twelve months
ending September 2019 was CAD 5 billion.
WESTJET AIRLINES: S&P Placed 'B+' ICR on CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings placed all of its ratings on WestJet Airlines
Ltd., including its 'B+' issuer credit rating on the company on
CreditWatch with negative implications.
S&P expects earnings and cash flow to fall significantly in 2020
primarily due to route suspensions and lower demand for air travel
from passenger concerns of contracting COVID-19. Starting on March
22, 2020, WestJet will suspend commercial international and
transborder flights for 30 days in the wake of the spread of
COVID-19. This follows yesterday's announcement by the Canadian
Prime Minister that the country will temporarily deny entry to
Canada to anyone who is not a Canadian citizen or permanent
resident, or who is not a U.S. citizen. International and
transborder routes represented about half of WestJet's capacity in
2019, while the other half is from domestic flights. S&P expects
demand on domestic routes to also drop meaningfully this year
(WestJet is currently operating at less than 60% of capacity on
these routes) because people are generally avoiding air travel out
of fear of contracting or spreading the coronavirus.
"In our view, the drop in air travel demand and temporary travel
restrictions being imposed around the world should result in a
significant drop in earnings and cash flow this year. Somewhat
mitigating the impact of weaker demand are our forecast for lower
jet fuel prices and other cost-saving measures we believe the
company is likely to take," S&P said.
"The CreditWatch with negative implications reflects our
expectation for WestJet's adjusted EBITDA to be down at least 25%
this year, contributing to credit measures that are weak for the
rating, including adjusted debt-to-EBITDA above 5x. As a result, we
are likely to downgrade the company within the next few weeks. We
could also downgrade WestJet if we no longer consider its liquidity
adequate," S&P said.
S&P expects to resolve the CreditWatch as it determines the
longevity and magnitude of the impact COVID-19 will have on
WestJet's financial position this year and the company's prospects
for recovery in 2021.
WestJet is the second-largest Canadian airline after Air Canada and
the eighth-largest in North America based on available seat miles.
It provides scheduled and charter air service to more than 100
destinations in Canada, the U.S., Central America, the Caribbean,
and Europe. The company's fleet is composed of 180 aircraft,
including 126 737s (37 of which are leased), 47 Q400s (two of which
are leased), four 767s, and three 787 Dreamliner aircraft that are
leased. WestJet also launched SWOOP last year, which is an
ultra-low-cost carrier that currently operates nine aircraft
serving 18 destinations.
WESTLAKE AUTOMOBILE 2019-1: S&P Affirms B+ (sf) Rating on F Notes
-----------------------------------------------------------------
S&P Global Ratings raised its ratings on 10 classes from Westlake
Automobile Receivables Trust 2017-2, 2018-1, and 2019-1. S&P also
affirmed its ratings on four classes from the transactions.
The rating actions reflect each series' collateral performance to
date and S&P's expectations regarding each transaction's future
collateral performance, structure, and credit enhancement.
Additionally, S&P incorporated secondary credit factors, including
credit stability, payment priorities under various scenarios, and
sector- and issuer-specific analyses.
Series 2017-2, 2018-1, and 2019-1 are performing better than S&P's
prior cumulative net loss (CNL) expectations, and it has revised
its loss expectations accordingly.
Table 1
Collateral Performance (%)
As of February 2020 distribution date
Pool Current 60-plus day
Series Month factor CNL delinq.
2017-2 30 23.77 11.02 1.92
2018-1 25 32.55 8.34 1.65
2019-1 12 66.50 3.88 1.39
Delinq.--Delinquencies.
CNL--Cumulative net loss.
Table 2
CNL Expectations (%)
Original Prior Current
lifetime lifetime lifetime
Series CNL exp. CNL exp. CNL exp.
2017-2 13.25-13.75 13.00-13.50(i) 12.75-13.25
2018-1 13.00-13.50 12.75-13.25(i) 12.00-12.50
2019-1 13.00-13.50 N/A 12.50-13.00
(i)Previously revised in March 2019.
CNL exp.--Cumulative net loss expectations.
N/A–-Not applicable.
Each transaction contains a sequential principal payment structure
in which the notes are paid principal by seniority. Each
transaction also has credit enhancement in the form of a
nonamortizing reserve account, overcollateralization, subordination
for the higher-rated tranches, and excess spread. The credit
enhancement is at the specified target or floor, and each class'
credit support continues to increase as a percentage of the
amortizing collateral balance.
The raised and affirmed ratings reflect S&P's view that the total
credit support, as a percentage of the amortizing pool balance and
compared with its expected remaining losses, is commensurate with
the raised and affirmed ratings.
Table 3
Hard Credit Support (%)
As of February 2020 distribution date
Total hard Current total hard
credit support credit support
Series Class at issuance(i) (% of current)(i)
2017-2 C 22.30 76.39
2017-2 D 12.80 36.42
2017-2 E 8.00 16.21
2018-1 C 24.00 70.52
2018-1 D 13.80 39.18
2018-1 E 9.50 25.97
2018-1 F 4.00 9.07
2019-1 A 43.25 67.78
2019-1 B 34.65 54.85
2019-1 C 23.75 38.46
2019-1 D 13.55 23.12
2019-1 E 9.25 16.65
2019-1 F 3.50 8.00
(i)Calculated as a percentage of the total gross receivable pool
balance, consisting of a reserve account, overcollateralization,
and, if applicable, subordination.
S&P compared the current hard credit enhancement with the remaining
expected CNLs. There were certain classes for which hard credit
enhancement alone, without giving credit to the excess spread, was
sufficient to raise or affirm the ratings to or at 'AAA (sf)'. For
the other classes, S&P incorporated cash flow analyses to assess
the loss coverage level, giving credit to excess spread. S&P's cash
flow scenarios included forward-looking assumptions on recoveries,
the timing of losses, and voluntary absolute prepayment speeds that
the rating agency believes are appropriate given the transaction's
performance to date.
In addition to its break-even cash flow analysis, S&P also
conducted sensitivity analyses to determine the impact that a
moderate ('BBB') stress scenario would have on its ratings if
losses began trending higher than its revised base-case loss
expectation.
"We will continue to monitor the performance of the outstanding
transactions to ensure that the credit enhancement remains
sufficient, in our view, to cover our CNL expectations under our
stress scenarios for each of the rated classes," S&P said.
RATINGS RAISED
Westlake Automobile Receivables Trust
Rating
Series Class To From
2017-2 D AAA (sf) AA- (sf)
2017-2 E A (sf) BBB (sf)
2018-1 C AAA (sf) AA+ (sf)
2018-1 D AAA (sf) A- (sf)
2018-1 E A (sf) BBB- (sf)
2018-1 F B+ (sf) B (sf)
2019-1 B AAA (sf) AA (sf)
2019-1 C AA+ (sf) A (sf)
2019-1 D A (sf) BBB (sf)
2019-1 E BBB (sf) BB (sf)
RATINGS AFFIRMED
Westlake Automobile Receivables Trust
Series Class Rating
2017-2 C AAA (sf)
2019-1 A-2-A AAA (sf)
2019-1 A-2-B AAA (sf)
2019-1 F B+ (sf)
WHEEL PROS: S&P Lowers ICR to 'B-'; Outlook Negative
----------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Wheel Pros
Inc. to 'B-' from 'B'. At the same time, S&P lowered its
issue-level ratings on the company's first-lien term loan to 'B-'
from 'B' and the second-lien term loan to 'CCC' from 'CCC+'.
The downgrade and negative outlook reflect a significant
anticipated loss of revenue and lower margins, at least in 2020,
compared with S&P's prior base-case estimates. This stems from
S&P's view that demand for Wheel Pros' discretionary products will
fall significantly in the near term as a result of the coronavirus.
In most cases, custom wheels are put on by a professional
installer, and S&P believes consumers will be avoiding nonessential
upgrades to their vehicles outside their home. Furthermore, S&P
believes there is a rising chance of a recession stemming from the
pandemic that could pressure consumer discretionary demand that
would slow recovery once the virus is contained. S&P believes these
increasing risks will lower both revenues and margins this year. As
a result, adjusted leverage will likely stay above S&P's 6.5x
threshold for a 'B' rating on Wheel Pros. The severity and
longevity of the pandemic's impact on Wheel Pros is very uncertain.
In its base case, S&P forecasts Wheel Pros will still generate some
free cash flow this year, but the rating agency's negative outlook
means there is at least a one-in-three risk demand falls
significantly more, leading to negative cash flows and even higher
leverage.
The negative outlook on Wheel Pros reflects the increased risk that
cash flow remains negative for multiple quarters, hurting its
liquidity. This could occur if sales and margins contract more than
S&P's current expectations for an extended period of time due to
weaker demand from consumers resulting from COVID-19.
"We could lower our rating on Wheel Pros if EBITDA contracts
significantly, causing its free operating cash flow (FOCF) to
remain negative for multiple quarters such that it affects
liquidity, or if debt leverage worsens from current levels. This
would cause us to view Wheel Pros financial commitments as
unsustainable. This could occur because of weaker discretionary
demand from consumers due to COVID-19 and a possible recession,"
S&P said.
"We could revise our outlook on Wheel Pros to stable if the demand
and margin impact of the current COVID-19 crisis appear to be less
severe, allowing the company to continue generating positive free
cash flow," S&P said.
WIRECO WORLDGROUP: S&P Places 'B' ICR on CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings places its 'B' issuer credit rating on
U.S.-based steel and synthetic rope manufacturer WireCo WorldGroup
Inc. on CreditWatch with negative implications following S&P
Global's revision of its West Texas Intermediate (WTI) price
assumption to $35 per barrel (bbl) in 2020 from $55/bbl.
The exact impact that lower capital spending by customers in the
oil and gas end market will have on WireCo's business is not known
at this time.
S&P Global Ratings slashed its WTI price assumption to $35/bbl and
$45/bbl in 2020 and 2021 from its previous assumption of $55/bbl
for both years. This followed a sharp drop in prices after OPEC
meetings failed to yield an agreement on production cuts and as the
spread of the coronavirus dampens global demand. Given the current
environment, S&P is now assuming domestic producers cut capital
spending by 20% to 30% this year. This could cause the company's
steel rope volumes and conversion spreads to contract. S&P
estimates a 10% fall in each factor would lead to adjusted debt to
EBITDA and EBITDA interest coverage moving closer to 8x and 1x,
respectively, from current expectations of about 7x and 1.5x.
WireCo's margins were already pressured in 2019 due a gradual
decline in the North American onshore rig count from 1,000 at the
beginning of the year to 800 by December.
S&P aims to resolve the CreditWatch placement over the next six
months, when it is more certain of the impact that the recent oil
price decline will have on WireCo's volumes and credit metrics in
2020.
“We would likely lower our rating on WireCo if total volumes and
conversions spread contract to the extent that leverage was
expected to remain above 7x, and EBITDA interest coverage below
1.5x," S&P said.
"We would likely remove the ratings from CreditWatch and assign a
stable outlook if the company is able to reduce leverage to around
6x, this could occur if the U.S rig count maintains its current
volumes, or a decline in oil and gas volumes is offset by growth in
other product lines, aided by the company continuing to use free
cash flow to pay down debt," S&P said.
WISE ESPRESSO: Unsecureds to Get 4% Dividend in Plan
----------------------------------------------------
Wise Espresso Bar, Corp., filed a Chapter 11 Plan of Reorganization
and a Disclosure Statement.
The Debtor plans to finance the plan payments through monetary
contributions by the Debtor' s managing member.
Class II will consist of the non-priority secured claim of American
Express National Bank in the amount of $183,100. The claim amount
will be paid in full, however it is impaired as the payment terms
have, by agreement of the parties, changed substantially, in that
the claim will be paid in 36 equal monthly installments of $5,086.
Class III will consist of the claims of general unsecured creditors
in the Debtors' case totaling approximately $409,448, inclusive of
two FLSA claims, in the aggregate amount of $403,146. The Debtor
proposes to pay a 4% dividend of their allowed claims in 36 equal
monthly installments upon the Effective Date of the Plan.
Treatment is being given to the only unsecured disputed claim which
filed a proof of claim prior to the expiration of the Court Ordered
Bar Date set in the case.
A full-text copy of the Small Business Disclosure Statement dated
March 4, 2020, is available at https://tinyurl.com/wgrolmg from
PacerMonitor.com at no charge.
Attorney for the Debtor:
ALLA KACHAN, ESQ.
3099 Coney Island Ave, 3rd Floor
Brooklyn, NY 11235
Tel: (718) 513-3145
Fax: (347) 342-315
E-mail: alla@kachanlaw.com
About Wise Espresso Bar
Wise Espresso Bar, Corp., operates a cafe and restaurant serving
Russian and European Fusion cuisine in Brooklyn, New York.
The Chapter 11 case stems from the filing of two claims under the
FLSA (Federal Labor Standards Act), by two former employees of the
business.
Wise Espresso filed for Chapter 11 bankruptcy protection on March
25, 2019. Alla Kachan, Esq., at LAW OFFICES OF ALLA KACHAN, P.C.,
is the Debtor's counsel.
WORK & SON INC: Trustee Hires Valuation Research Corporation
------------------------------------------------------------
Stanley Murphy, the Chapter 11 Trustee of Work & Son, Inc., and its
debtor-affiliates, seeks authority from the U.S. Bankruptcy Court
for the Middle District of Florida to retain Valuation Research
Corporation to perform business valuation services retroactive from
August 27, 2019.
The cost of the report $15,000.
The firm will charge $350 hour for any litigation/trial related
services and $350 per hour for any additional services.
Steven E. Schuetz, managing director for Valuation Research,
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.
The firm can be reached through:
Steven E. Schuetz
Valuation Research Corporation
777 South Harbour Island Boulevard, Suite 980
Tampa, Florida 33602
Phone: (813) 463-8510
About Work & Son, Inc
Wilson Metal Fabricators, Inc. -- http://www.wilsonmetalfab.com/--
owns a custom fabrication sheet metal shop specializing in curtain
wall systems and job shop fabrication. It was established by owner
Darold Wilson in 1997.
Wilson Metal Fabricators sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-31452) on April 30,
2019. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of between $1 million and $10
million. The case is assigned to Judge Stacey G. Jernigan.
Quilling, Selander, Lownds, Winslett & Moser, P.C., is the Debtor's
counsel.
[^] BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles
-------------------------------------------------------------
Author: Sallie Tisdale
Publisher: BeardBooks
Softcover: 270 pages
List Price: $34.95
Order your own personal copy at http://is.gd/9SAfJR
An earlier edition of "The Sorcerer's Apprentice" won an American
Health Book Award in 1986. The book has been recognized as an
outstanding book on popular science. Tisdale brings to her subject
of the wide nd engrossing field of health and illness the
perspective, as well as the special sympathies and sensitivities,
of a registered nurse. She is an exceptionally skilled writer.
Again and again, her descriptions of ill individuals and images of
illnesses such as cancer and meningitis make a lasting impression.
Tisdale accomplishes the tricky business of bringing the reader to
an understanding of what persons experience when they are ill; and
in doing this, to understand more about the nature of illness as
well. Her style and aim as a writer are like that of a medical or
science journalist for leading major newspaper, say the "New York
Times" or "Los Angeles Times." To this informative, readable style
is added the probing interest and concern of the philosopher trying
to shed some light on one of the central and most unsettling
aspects of human existence. In this insightful, illuminating,
probing exploration of the mystery of illness, Tisdale also
outlines the limits of the effectiveness of treatments and cures,
even with modern medicine's store of technology and drugs. These
are often called "miracles" of modern medicine. But from this
author's perspective, with the most serious, life-threatening,
illnesses, doctors and other health-care professionals are like
sorcerer's trying to work magic on them. They hope to bring
improvement, but can never be sure what they do will bring it
about. Tisdale's intent is not to debunk modern medicine, belittle
its resources and ways, or suggest that the medical profession
holds out false hopes. Her intent is do report on the mystery of
serious illness as she has witnessed it and from this, imagined
what it is like in her varied work as a registered nurse. She also
writes from her own experiences in being chronically ill when she
was younger and the pain and surgery going with this.
She writes, "I want to get at the reasons for the strange state of
amnesia we in the health professions find ourselves in. I want to
find clues to my weird experiences, try to sense the nature of
being sick." The amnesia of health professionals is their state of
mind from the demands placed on them all the time by patients,
employers, and society, as well as themselves, to cure illness, to
save lives, to make sick people feel better. Doctors, surgeons,
nurses, and other health-care professionals become primarily
technicians applying the wonders of modern medicine. Because of the
volume of patients, they do not get to spend much time with any one
or a few of them. It's all they can do to apply the prescribed
treatment, apply more of it if it doesn't work the first time, and
try something else if this treatment doesn't seem to be effective.
Added to this is keeping up with the new medical studies and
treatments. But Tisdale stepped out of this problem-solving
outlook, can-do, perfectionist mentality by opting to spend most of
her time in nursing homes, where she would be among old persons she
would see regularly, away from the high-charged atmosphere of a
hospital with its "many medical students, technicians,
administrators, and insurance review artists." To stay on her
"medical toes," she balanced this with working occasional shifts in
a nearby hospital. In her hospital work, she worked in a neonatal
intensive care unit (NICU), intensive care unit (ICU), a burn
center, and in a surgery room. From this combination of work with
the infirm, ill, and the latest medical technology and procedures
among highly-skilled professionals, Tisdale learned that "being
sick is the strangest of states." This is not the lesson nearly all
other health-care workers come away with. For them, sick persons
are like something that has to be "fixed." They're focused on the
practical, physical matter of treating a malady. Unlike this
author, they're not focused consciously on the nature of pain and
what the patient is experiencing. The pragmatic, results-oriented
medical profession is focused on the effects of treatment. Tisdale
brings into the picture of health care and seriously-ill patients
all of what the medical profession in its amnesia, as she called
it, overlooks.
Simply in describing what she observes, Tisdale leads those in the
medical profession as well as other interested readers to see what
they normally overlook, what they normally do not see in the
business and pressures of their work. She describes the beginning
of a hip-replacement operation, the surgeon "takes the scalpel and
cuts -- the top of the hip to a third of the way down the thigh --
and cuts again through the globular yellow fat, and deeper. The
resident follows with a cautery, holding tiny spraying blood
vessels and burning them shut with an electric current. One small,
throbbing arteriole escapes, and his glasses and cheek are
splattered." One learns more about what is actually going on in an
operation from this and following passages than from seeing one of
those glimpses of operations commonly shown on TV. The author
explains the illness of meningitis, "The brain becomes swollen with
blood and tissue fluid, its entire surface layered with pus...The
pressure in the skull increases until the winding convolutions of
the brain are flattened out...The spreading infection and pressure
from the growing turbulent ocean sitting on top of the brain cause
permanent weakness and paralysis, blindness, deafness...." This
dramatic depiction of meningitis brings together medical facts,
symptoms, and effects on the patient. Tisdale does this repeatedly
to present illness and the persons whose lives revolve around it
from patients and relatives to doctors and nurses in a light
readers could never imagine, even those who are immersed in this
world.
Tisdale's main point is that the miracles of modern medicine do not
unquestionably end the miseries of illness, or even unquestionably
alleviate them. As much as they bring some relief to ill
individuals and sometimes cure illness, in many cases they bring on
other kinds of pains and sorrows. Tisdale reminds readers that the
mystery of illness does, and always will, elude the miracle of
medical technology, drugs, and practices. Part of the mystery of
the paradoxes of treatment and the elusiveness of restored health
for ill persons she focuses on is "simply the mystery of illness.
Erosion, obviously, is natural. Our bodies are essentially
entropic." This is what many persons, both among the public and
medical professionals, tend to forget. "The Sorcerer's Apprentice"
serves as a reminder that the faith and hope placed in modern
medicine need to be balanced with an awareness of the mystery of
illness which will always be a part of human life.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
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Don't be fooled. Assets, for example, reported at historical cost
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then-ending.
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Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
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Copyright 2020. All rights reserved. ISSN: 1520-9474.
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